City of Scottsdale, Arizona

Comprehensive Annual Financial Report
for the fiscal year ended June 30, 2007
Prepared by:
Financial Services Department
Craig Clifford, CPA
Chief Financial Officer
Richard D. Chess, MBA
Accounting & Tax Audit Director

City of Scottsdale, Arizona

City of Scottsdale, Arizona
Comprehensive Annual Financial Report
For the Fiscal Year ended June 30, 2007
Table of Contents
Page

INTRODUCTORY SECTION
Letter of Transmittal – Chief Financial Officer, Financial Services .............................................................................. 1
Certificate of Achievement - Government Finance Officers Association ..................................................................... 6
Organizational Chart/List of Principal Officials..................................................................................................................7
FINANCIAL SECTION
Independent Auditors’ Report ............................................................................................................................................... 9
Management’s Discussion and Analysis .............................................................................................................................. 11
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets ............................................................................................................................................. 28
Statement of Activities ............................................................................................................................................... 29
Fund Financial Statements
Balance Sheet - Governmental Funds ...................................................................................................................... 30
Reconciliation of the Governmental Funds Balance Sheet to the Statement
of Net Assets ............................................................................................................................................................ 32
Statement of Revenues, Expenditures, and Changes in Fund Balances –
Governmental Funds ............................................................................................................................................... 33
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities ......................................................... 35
Statement of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual - General Fund........................................................................................................................ 36
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance -Budget and Actual ......................................................................................................................... 37
Statement of Net Assets - Proprietary Funds ......................................................................................................... 38
Statement of Revenues, Expenses, and Changes in Fund Net Assets –
Proprietary Funds..................................................................................................................................................... 40
Statement of Cash Flows - Proprietary Funds ....................................................................................................... 41
Statement of Fiduciary Net Assets - Fiduciary Funds........................................................................................... 43
Statement of Changes in Fiduciary Net Assets - Fiduciary Funds ...................................................................... 44
Notes to the Financial Statements........................................................................................................................................ 45
I Summary of Significant Accounting Policies .......................................................................................................... 45
II Reconciliation of Government-wide and Fund Financial Statements ................................................................ 52
III Stewardship, Compliance and Accountability ......................................................................................................... 58
IV Detailed Notes on All Funds ..................................................................................................................................... 60
A. Cash and Investments .................................................................................................................................. 60
B. Receivables ..................................................................................................................................................... 63
C. Capital Assets................................................................................................................................................. 64
D. Interfund Balances and Interfund Transfers. ........................................................................................... 66
E. Short-Term Liabilities................................................................................................................................... 68
F. Leases. ............................................................................................................................................................. 68
G. Bonds, Loans, and Other Payables ............................................................................................................ 69
City of Scottsdale, Arizona

Page
V Other Information....................................................................................................................................................... 81
A. Risk Management .......................................................................................................................................... 81
B. Contingent Liabilities .................................................................................................................................... 81
C. Commitments and Subsequent Events ...................................................................................................... 81
D. Joint Venture .................................................................................................................................................. 83
E. Related Organization ..................................................................................................................................... 83
F. Retirement and Pension Plans...................................................................................................................... 83
G. Other Post-Employment Benefits ............................................................................................................... 86
H. Post-Employment Benefits Other Than Pensions ................................................................................... 86
Required Supplementary Information:
Schedule of Funding Progress – Public Safety Personnel Retirement System.......................................................... 89
Schedule of Funding Progress – Other Post-Employment Benefit Plan .................................................................. 90
Schedule of Employer Contribution – Other Post-Employment Benefit Plan ........................................................ 90
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds .................................................................................... 93
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Governmental Funds ................................................................................................. 94
Combining Balance Sheet - Nonmajor Special Revenue Governmental Funds ....................................................... 96
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Special Revenue Governmental Funds.................................................................... 97
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:
Highway User Fuel Tax – Special Revenue Fund ................................................................................................... 98
Preserve Privilege Tax – Special Revenue Fund ..................................................................................................... 99
Combining Balance Sheet - Nonmajor Debt Service Governmental Funds ........................................................... 100
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Debt Service Governmental Funds............................................................... 101
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:
General Obligation Bond – Debt Service Fund ................................................................................................... 102
Municipal Property Corporation Bond – Debt Service Fund ............................................................................ 103
Special Assessments Bond – Debt Service Fund ................................................................................................. 104
Scottsdale Preserve Authority Bond – Debt Service Fund ................................................................................. 105
Combining Balance Sheet - Nonmajor Capital Projects Governmental Funds ...................................................... 106
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Capital Projects Governmental Funds .................................................................. 107
Combining Statement of Net Assets - Internal Service Funds ................................................................................. 110
Combining Statement of Revenues, Expenses and Changes in
Fund Net Assets – Internal Service Funds. ........................................................................................................... 111
Combining Statement of Cash Flows - Internal Service Funds ................................................................................ 112
Combining Statement of Fiduciary Net Assets ........................................................................................................... 114
Combining Statement of Changes in Assets and Liabilities – Fiduciary Funds ..................................................... 115
Other Supplementary Information:
Schedule of Changes in Long-Term Debt........................................................................................................................ 118

City of Scottsdale, Arizona

STATISTICAL SECTION
Page
Financial Trends
Net Assets by Component – Last Six Fiscal Years (accrual basis of accounting) ................................................. 122
Changes in Net Assets – Last Six Fiscal Years (accrual basis of accounting) ........................................................ 123
Governmental Activities Tax Revenue by Source – Last Six Fiscal Years
(accrual basis of accounting)...................................................................................................................................... 126
Fund Balances of Governmental Funds – Last Six Fiscal Years
(modified accrual basis of accounting)..................................................................................................................... 127
Changes in Fund Balances of Governmental Funds – Last Six Fiscal Years
(modified accrual basis of accounting)..................................................................................................................... 128
Governmental Activities Tax Revenue by Source – Last Six Fiscal Years
(modified accrual basis of accounting) .................................................................................................................... 131
Revenue Capacity
Taxable Sales Subject to Privilege (Sales) Tax by Category - Last Six Fiscal Years ................................................ 132
Direct and Overlapping Sales Tax Rates - Last Six Fiscal Years ............................................................................... 133
Sales Tax Revenue Payers by Industry - Current Year and Nine Years Ago ........................................................... 134
Property Tax Rates – Direct and Overlapping Governments – Last Six Fiscal Years .......................................... 135
Principal Property Tax Payers – June 30, 2007 ............................................................................................................ 136
Assessed Value and Estimated Actual Value of Taxable Property –
Last Six Fiscal Years..................................................................................................................................................... 137
Property Tax Levies and Collections – Last Six Fiscal Years .................................................................................... 138
Debt Capacity
Ratios of Outstanding Debt by Type – Last Six Fiscal Years ................................................................................... 139
Ratios of General Bonded Debt Outstanding – Last Six Fiscal Years .................................................................... 140
Direct and Overlapping Governmental Activities Debt as of June 30, 2007 ......................................................... 141
Legal Debt Margin Information – Last Six Fiscal Years ............................................................................................ 142
Pledged-Revenue Coverage – Last Six Fiscal Years .................................................................................................... 144
Economic and Demographic Information
Demographic and Economic Statistics – Last Six Fiscal Years ................................................................................ 145
Principal Employers – Current Year and Nine Years Ago ........................................................................................ 146
Operating Information
Full-time Equivalent City Government Employees by Function – Last Six Fiscal Years ..................................... 147
Operating Indicators by Function – Last Six Fiscal Years ......................................................................................... 148
Capital Asset Statistics by Function – Last Six Fiscal Years ...................................................................................... 151

City of Scottsdale, Arizona

City of Scottsdale, Arizona

Table of Contents

September 14, 2007
To the Honorable Mayor, Members of the City Council,
and Citizens of the City of Scottsdale, Arizona:

Transmittal
Letter
For the Fiscal Year
Ended June 30, 2007
City of Scottsdale
Scottsdale, Arizona

The Comprehensive Annual Financial Report of the City of Scottsdale, Arizona,
(the City) for the ﬁscal year ended June 30, 2007, is submitted in accordance with
Article 6, Section 14, of the City Charter. Management assumes full responsibility
for the completeness and reliability of all information presented in this report,
based upon a comprehensive framework of internal control that it established for
this purpose. Because the cost of internal controls should not outweigh their
anticipated beneﬁts, the objective is to provide reasonable rather than absolute
assurance that the ﬁnancial statements are free of any material misstatements.
Cronstrom, Osuch & Company, PC, have issued an unqualiﬁed (“clean”) opinion
on the City of Scottsdale, Arizona’s ﬁnancial statements for the year ended June
30, 2007. 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 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 Scottsdale Proﬁle
Scottsdale is centrally located in Maricopa County, Arizona, with its boundaries
encompassing an area approximately 184.2 square miles, stretching 31 miles from
north to south. The City is bordered to the west by Phoenix, the state capital,
by Tempe to the south, and by the Salt River/Pima Maricopa Indian Community
to the east. Scottsdale, together with its neighboring cities, forms the greater
metropolitan Phoenix area, which is the economic, political, and population
center of the state.
Scottsdale was founded in the 1800’s when retired Army Chaplain Major Winﬁeld
Scott homesteaded what is now the center of the City. The City incorporated in
1951 and the City Charter, under which it is presently governed, was adopted in
1961. The City has experienced signiﬁcant increases in population, with the 1950
census reporting 2,032 residents, and the 2000 census reporting 202,705. The
City’s population for 2007 was estimated at 238,270.

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Scottsdale operates under a council-manager form of government as provided by its Charter. The Mayor
and six City Council members are elected at large on a non-partisan ballot for a four-year term. The
City Council appoints the City Manager, who has full responsibility for carrying out Council policies
and administering City operations. The City Manager, in turn, appoints City employees and department
General Managers under service procedures speciﬁed by Charter. City service departments provide a
full range of services including police and ﬁre protection, sanitation/solid waste service, water and sewer
services, construction and maintenance of streets, recreational activities, and cultural events.
The annual budget serves as the foundation for Scottsdale’s ﬁnancial planning and control. The City
Council formally adopts the budget and legally allocates, or appropriates, available monies for the City’s
various funds. Therefore, these funds have appropriated budgets, and budget to actual information is
presented. On or before the second regular Council meeting in May, the City Manager submits to the
City Council a proposed budget for the ﬁscal year commencing the following July 1. The budget includes
proposed expenditures and the means of ﬁnancing them. Two public hearings are held prior to the budget’s
ﬁnal adoption in order to obtain taxpayer comments. In June, the budget is legally enacted through
passage of an ordinance. The ordinance sets the limit for expenditures during the ﬁscal year. Additional
expenditures may be authorized for expenditures directly necessitated by a natural or man-made disaster
as prescribed in the State Constitution, Article 9, Section 20. During ﬁscal year (FY) 2006/07, there were
no supplemental budgetary appropriations to the original budget.
The expenditure appropriations in the adopted budget are by department. The maximum legal expenditure
permitted for the ﬁscal year is the total budget as adopted. Departmental appropriations may be amended
during the year. Upon the recommendation of the City Manager, and with the approval of the City
Council: (1) transfers may be made from the appropriations for contingencies to departments; and (2)
unexpended appropriations may be transferred from one department to another. Management control of
budgets is further maintained at a line item level within the department.
Local Economy
The City of Scottsdale’s tax revenue base consists of a variety of tax categories, the most signiﬁcant being
revenue collections from retail sales and tourism activity. The City also beneﬁts from other favorable
conditions associated with Scottsdale, including a stable, diversiﬁed economic base and a desirable location
for work, destination, and living. Low commercial vacancy rates and the attractive developments within
Scottsdale continue to bring high-end residential growth and commercial development. Scottsdale is past
its historic period of peak expansion and the long-term economic outlook for the City must recognize
this fact. Revitalization eﬀorts have resulted in a rebirth of the City’s downtown area, as well as renewed
interest in redevelopment of the more mature, southern parts of the City. Commercial successes are due,
in part, to Scottsdale’s commitment to targeted recruitment eﬀorts that focus on industry segments that
complement the existing business mix, including: corporate headquarter and regional oﬃces; high-tech,
research and development; bio-med; high-end resorts and hotels, and business and professional services.
The following categories represent key factors aﬀecting Scottsdale’s economic and ﬁnancial success:
Retail Sales
Scottsdale’s largest revenue source is sales tax generated from a well-balanced variety of business categories
including automotive, construction, food stores, hotels/motels, department stores, retail stores, restaurants,
utilities and rentals. The City saw retail sales tax revenues slow to single-digit growth (5.4 percent) after
two consecutive years of double-digit increases indicating that the local economy is experiencing slowdown
similar to the national level economy.

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Employment and Job Growth
Scottsdale is creating jobs faster than it is adding to its labor force and thus remains a net importer of
labor. This creates employment opportunities for Scottsdale residents and creates a signiﬁcant business
component to the local tax base. Scottsdale’s unemployment rate was lower than state and metropolitan
levels and was approximately 2.2 percent as of June 2007. Scottsdale recruited 10 new, targeted ﬁrms with
about 1,500 new jobs over the past year, with average annual salaries of approximately $60,000. The City
beneﬁted from population growth as well as higher income levels due to the addition of higher wage jobs.
Major new employers to announce moves to Scottsdale last year included EBay/PayPal, Quicken Loans,
and CareerBuilder.com, as well as the announcement that Dial Corp. will be expanding and relocating
their corporate headquarters to a new site in Scottsdale.
Commercial Vacancy Rates
Scottsdale’s citywide oﬃce vacancy rate was about 12 percent at the end of FY 2007, well below the
Valley-wide average. Scottsdale has nearly half of all new oﬃce space in the Valley that is currently under
construction.
Tourism
Tourism is one of Scottsdale’s largest and most vibrant industries, and is a signiﬁcant contributor to the
City’s economy. A variety of lodging properties, including several world-class resorts and “boutique”
hotels, provide nearly 10,000 guest rooms, along with spectacular spas, trend-setting dining and oneof-a kind Sonoran desert golf courses. With the exception of the new 225-room W Hotel opening in
late 2007, room supply in Scottsdale is expected to remain relatively stable in 2008. Scottsdale visitors
contribute slightly over 20 percent of the City’s overall privilege tax revenue. With over 17,000 retail
shops, nearly 600 restaurants, national and international events, and spectacular southwest Sonoran desert
setting, Scottsdale continues to be a popular destination for visitors year-round.
Hotel/motel transient occupancy tax receipts increased approximately 9.0 percent in FY 2006/07 over the
previous year – the fourth straight year of revenue growth after post 9/11 levels. Room rates and room
occupancy continue to near levels experienced by the industry in the late 1990s and the early 2000s. The
current assessment for tourism in FY 2007/08 is that these positive trends should continue, although
factors such as high energy costs, inﬂationary pressures, a slumping housing market, and geopolitical
instability could all impact future industry performance.
Long-term Financial Planning
Scottsdale’s Strategic Financial Plan is balanced upon sound ﬁnancial reserves and conservative revenue
growth forecasts for the foreseeable future. Potential for State legislative impacts to revenue-sharing
or local revenues and additional demands for essential City services such as police, ﬁre, transportation
and social services remain. Financial Services management plays a pivotal role in maintaining and
recommending enhancements to ﬁnancial plan elements to ensure the continued ﬁnancial stability for
the City of Scottsdale. Achieving and maintaining ﬁscal stability requires many elements all working in
concert with one another. The following identiﬁes the ﬁnancial plan elements that Scottsdale uses to chart
a course for the future.
Adopted Comprehensive Financial Policies
Financial policies establish the framework for Scottsdale’s overall ﬁscal planning and management. They
set forth guidelines against which current budgetary performance can be measured and proposals for
future programs can be evaluated. These policies set the tone for all ﬁscal decisions made by staﬀ and
City Council. We currently identify 51 ﬁnancial policies governing operations, capital planning, debt
management, reserves and contingencies and ﬁnancial reporting – regular review and enhancement of
these policies is done in conjunction with ﬁnancial plan development and are adopted annually by the
City Council.
City of Scottsdale, Arizona

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Financial Resource Planning
Scottsdale’s strategic ﬁnancial planning begins with determining the City’s ﬁscal capacity based upon longterm ﬁnancial forecasts of recurring available revenues. Conservative ﬁnancial forecasts coupled with ﬁnancial
trend analysis techniques and careful reserve analysis help preserve the ﬁscal wellbeing of Scottsdale. Strategic
ﬁnancial capacity planning is a critical element to reach long-term ﬁnancial stability goals and to determine
special ﬁnancial needs for critical objectives of the City Council.
Multi-Year Operating Budget Planning
Multi-year budget planning encompasses long-range operating expenditure plans (including the operating
impacts of planned capital projects), which are linked to community expectations and broad goals of the City
Council. The multi-year approach provides a better opportunity for staﬀ to change its ﬁnancial paradigm
from what do we need this year to how do we accomplish our service objectives over time, given our ﬁnancial
capacity. While the City is required to adopt an annual budget to meet State statutory requirements, Scottsdale
builds a ﬁve-year ﬁnancial plan to help anticipate future impacts and ensure achievement of City objectives.
Strategic Capital Improvement Project Planning
Scottsdale Capital Improvement Projects are planned for ﬁve or more years and analyzed using City speciﬁc
prioritization criteria. The operating cost impacts of projects are also planned and considered in developing
future operating budget plans. Projects with signiﬁcant operating impacts are carefully timed to avoid
contingent liabilities, which future operating resources cannot meet. Pay-as-you-go funding sources are also
conservatively estimated to avoid over-committing to capital construction using revenues that are not certain.
To the extent debt ﬁnancing is used and/or required, capital project plans are sized to conform to existing
debt management policies.
Debt Management
Scottsdale has a ﬁnancial policy, which prohibits the issuance of debt for operating expenses. With that as a
governing framework, all debt issuances are for the purposes of ﬁnancing capital infrastructure (or long-lived
costly assets). Each debt issuance is evaluated against multiple additional policies addressing: debt service as
a percent of operating expenditures, tax and revenue bases for the repayment of debt, the overall debt burden
on the community, statutory limitations and market factors aﬀecting tax-exempt interest costs. In all cases a
long-term analysis is made considering the ﬁnancial (debt) capacity that ﬁts the wherewithal (and willingness)
of our community to pay for the capital projects. Sizing of the City’s Capital Improvement Project Plan based
on debt capacity in conjunction with conservatively estimated pay-as-you-go revenues helps stabilize per
capita debt and lower annual debt service costs to the City over the long-term.
Major Initiatives
The City of Scottsdale’s FY 2007/08 budget reﬂects a slowing economy at the local level, which is also mirrored
at the state and national levels. Current economic conditions allow the City to maintain its core services and
to provide some enhancements to existing service levels. However, prudent long-term ﬁscal planning dictates
a conservative approach to budgeting by funding only those enhancements that are ﬁnancially sustainable.
The FY 2007/08 budget continues to fund the highest priorities for our community, including the hiring
of additional police oﬃcers and ﬁreﬁghters, and the opening of new City capital facilities to meet service
demands.
To remain competitive with other area communities, the adopted budget included a staggered employee
market pay adjustment of 6.0% (3.5% eﬀective July 1, 2007 and 2.5% eﬀective January 1, 2008). The eﬀective
annual rate of the 6.0% adjustment in FY 2007/08 is 4.75%. The January 1, 2008 market adjustment of
2.5% will have a funding tail in the FY 2008/09 General Fund budget and citywide of approximately $1.9
million and $2.3 million, respectively.

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City of Scottsdale, Arizona

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The adopted budget includes program enhancements added by the City Council: Year-round Festive Lighting,
Downtown Marketing Program, After Schools Program Expansion, the addition of a Trails Planner and bed
tax funding for Seasonal Marketing Opportunities. Budget contingencies were also increased to create
funding ﬂexibility related to the possible implementation of the Air Quality Compliance Planning Program,
continuation of the Loop 101 Photo Enforcement Program and a City contribution towards the Heard
Museum project.
The City Council also added funding for capital projects in the adopted budget: Center for the Performing
Arts Renovation, Fire Station #608 (land acquisition), Downtown Utility Cabinet Relocation, New Civic
Center Oﬃce Building, Public Art Conservation and Restoration, New Rose Garden, WestWorld Show
Oﬃces and Restroom, WestWorld PA System, WestWorld Shading, WestWorld Fencing, WestWorld Horse
Barn Repairs, WestWorld Equidome Lighting, WestWorld Paving, WestWorld Additional and Upgrade RVs,
City Court Main Entry/Security Remodel and New Justice Facility Space Program Study.
Awards and Acknowledgements
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 Scottsdale for its Comprehensive Annual
Financial Report (CAFR) for the ﬁscal year ended June 30, 2006. This was the 34th consecutive year that
the government has achieved this prestigious award. In order to be awarded a Certiﬁcate of Achievement, a
government must publish an easily readable and eﬃciently organized CAFR. This report must satisfy both
generally accepted accounting principles and applicable legal requirements. A Certiﬁcate of Achievement is
valid for a period of one year only. We believe that our current CAFR continues to meet the Certiﬁcate of
Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for
another certiﬁcate.
The City of Scottsdale received the Distinguished Budget Presentation Award for the ﬁscal year beginning
July 1, 2006 from the GFOA for our conformity in budget presentation. We believe that our current
budget continues to conform to the program requirements and expect to receive this award for the ﬁscal
year beginning July 1, 2007. In addition, credit ratings of “AAA”, “Aaa”, and “AAA” from the three major
credit rating agencies, Fitch Ratings, Moody’s Investors Service, and Standard and Poor’s Ratings Services,
respectively, were re-aﬃrmed in Fall 2006 on the City’s outstanding general obligation bonds. These are the
highest ratings possible and this distinction, originally earned by the City in 2001, is held by only a handful
of local governments across the nation.
The preparation of this report could not have been accomplished without the dedicated service of the entire
staﬀ of the Accounting and Budget divisions, the assistance of administrative personnel in the various
departments, and through the competent service of our independent auditors. I also wish to express my
sincere appreciation to the City Council, the City Manager, and the Assistant City Managers for their interest
and support in planning and conducting the ﬁnancial aﬀairs of the City of Scottsdale in a responsible and
progressive manner.
Respectfully submitted,

Craig Clifford, CPA, CGFM
Chief Financial Officer

City of Scottsdale, Arizona

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City of Scottsdale, Arizona
List of Elected and Appointed Officials
City Council
Mary Manross, Mayor
Betty Drake
Wayne Ecton
W.J. “Jim” Lane
Robert W. Littlefield
Ron McCullagh
Tony Nelssen

Comprehensive
Annual
Financial
Report
For the Fiscal Year
Ended June 30, 2007
City of Scottsdale
Scottsdale, Arizona

City of Scottsdale, Arizona

Charter Offices
Deborah Robberson, City Attorney
Cheryl Dreska, City Auditor
Carolyn Jagger, City Clerk
B. Monte Morgan, City Judge
Janet M. Dolan, City Treasurer

Administrative Staff
Janet M. Dolan, City Manager
Roger Klingler, Assistant City Manager
Neal Shearer, Assistant City Manager

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8
Citizens of Scottsdale
Mayor and City Council

City Manager

Citizen Advisory Boards
Citizen Advisory Commissions

Other Council-Appointed Staff
City Attorney - Deborah Robberson 480-312-7994
City Auditor - Cheryl Dreska 480-312-7867
City Clerk - Carolyn Jagger 480-312-2411
City Judge - B. Monte Morgan 480-312-2442
City Treasurer - Janet M. Dolan 480-312-2800

Janet M. Dolan
480-312-2800
Administrative Support

Assistant
City Manager

Assistant
City Manager

Assistant
City Manager

VACANT

Roger Klingler
480-312-5830

Neal Shearer
480-312-2604

Executive Assistant
Kroy Ekblaw
480-312-7064

Citizen &
Transportation The Downtown Planning &
Preservation
Group
Development Neighborhood
Services
Resources
Mary O’Connor John C. Little
Frank Gray
Vacant
Bob Cafarella
480-312-2334 480-312-2539 480-312-2890 480-312-2454 480-312-2577

City of Scottsdale, Arizona

Administration
*
Aviation
*
Transportation
Planning
*
Traffic
Engineering
-Intelligent
Transportation
Systems

Administration Preservation
Downtown
Customer
*
Services &
Marketing &
*
Customer Environmental
Promotion Administration
Service &
*
*
Office
Communication
Planning &
Downtown
*
Design Services
Project
Neighborhood
*
Planning &
Services
Coordination Current Planning
Services
*
*
Downtown
Plan Review &
Parking
Program Permit Services/
One Stop Shop
*
*
Cultural
Inspection &
Council
Land Survey
Contract
Services
Administration
*
Planning
Technology

Police

Fire

Alan Rodbell
480-312-1900

William L.
McDonald
480-312-1880

Office of
the Chief
*
Uniformed
Services
*
Special
Programs
*
Investigative
Services
*
Administrative
Services
*
Personnel
Development

Fire
Administration
*
Fire Emergency
Services
*
Fire Support
Services
*
Emergency
Management

Economic
Vitality
Dave Roderique
480-312-7601

Economic
Development
*
Tourism
*
Revitalization
*
Business
Services

Water
Resources

Municipal
Services

WestWorld

David Mansfield Dan Worth Brian Dygert
480-312-5681 480-312-5555 480-312-6825

Water
Resources
Administration
*
Water
Operations
*
Water
Quality
*
Water
Treatment

Community
Services

Financial
Services

Constituent & Communications
Information Human
Systems Resources Intergovernmental
and Public
Relations
Affairs
Neal Shearer
Debra Baird Craig Clifford Brad Hartig
(Acting) Bridget Schwartz-Manock Pat Dodds
480-312-2480 480-312-2364 480-312-7615 480-312-2604 480-312-2423 480-312-2336

Administration Operations & Administration Administration
*
*
*
Facilities
Capital
Parks &
Accounting
Management
Project
Recreation
*
*
Management
*
Budget
Events
*
Human
*
Management
Solid
Services
Risk
Waste
*
Management
Management
Library
*
*
Systems
Purchasing
Traffic
*
*
Operations
Parks & Ground
Customer
*
Management
Service
Fleet
*
Management
Facilities
Management
*
Stormwater
Management
*
Street
Operations

IS Admin
Administration Federal
Relations
*
*
*
Application Dev.
Human
St a te
Integration,
Resources
Relations
Mgt. & Support
*
Training &
*
*
Network
Development Regional
Operations
*
Relations
*
Diversity &
GIS
Dialogue
Data Services
*
*
Benefits
Project Office
Management
*
*
Application Human Resouirces
Support
Operations & Admin
*
Help Desk/
Desktop
Technical
Support

Public
Relations
*
Media
Relations
*
CityCable 11

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M

ANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the City of Scottsdale’s (the City) Comprehensive Annual Financial Report
presents a narrative overview and comparative analysis of the financial activities of the
City for the fiscal years ended June 30, 2007 and 2006. We encourage readers to consider
the information presented here in conjunction with additional information that we have
furnished in our letter of transmittal and the basic financial statements.

FINANCIAL HIGHLIGHTS
Key Financial highlights for fiscal year 2007 are as follows:
•

The assets of the City exceeded its liabilities at the close of the fiscal years 2007 and 2006 by $3.7
billion and $3.4 billion (net assets), respectively. Of these amounts, $431.0 million and $316.7 million
(unrestricted net assets), respectively, may be used to meet the government’s ongoing obligations to
citizens and creditors.

•

The City’s total net assets increased by $289.6 million and $232.0 million during fiscal years 2007 and
2006, respectively.

•

As of June 30, 2007 and 2006, the City’s governmental funds reported combined ending fund
balances of $343.5 million and $348.0 million, respectively. Approximately 93.6 percent of the fund
balance at June 30, 2007, $321.5 million, is unreserved fund balance available for spending at the
government’s discretion, compared to $324.1 million at June 30, 2006.

•

At the close of the current fiscal year, unreserved fund balance for the General Fund was $89.5
million or 39.2 percent of total General Fund expenditures of $228.6 million. At the close of fiscal
year 2006, unreserved fund balance for the General Fund was $93.2 million or 45.3 percent of total
General Fund expenditures of $205.7 million.

•

During fiscal years 2007 and 2006, the City’s total bonded debt increased by approximately $2.5
million and $247.2 million, respectively. The City issued $42.5 million of new Municipal Property
Corporation bonds (Governmental activities) in fiscal year 2007. The new bond costs were partially
offset by the reduction of bond payable balances due to principal payments made in fiscal year
2007.

City of Scottsdale, Arizona

11

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements.
The City’s basic financial statements comprise three components:
(1) Government-wide financial statements,
(2) Fund financial statements, and
(3) Notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
Relationship Between
Comprehensive Annual
Financial Report (CAFR)
and
Basic Financial Statements and
Required Supplementary Information (RSI)
General Information on the government structure, Introductory
services and environment
Section

+
Management's Discussion and Analysis

CAFR

Government-wide Financial Statements

Basic
Financial
Statements
and
RSI

Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements

Financial
Section

Notes to the Financial Statements
Additional Required Supplementary Information
Information on individual funds and discretely
presented component units and other supplementtary information not required by GAAP

+
Trend data and nonfinancial data

Statistical
Section

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.
The statement of net assets and the statement of activities provide information about the whole City,
presenting both an aggregate view of the City’s finances and a longer-term view of those assets. Major
fund financial statements provide the next level of detail. For governmental funds, these statements reflect
how services were financed in the short term as well as what dollars remain for future spending. The fund
financial statement also displays the City’s most significant funds with all other major funds presented in
total in one column.
The statement of net assets presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may serve
as a useful indicator of whether or not the financial position of the City is improving or deteriorating.

12

City of Scottsdale, Arizona

Table of Contents

The government-wide financial statements are for the City itself. However, included within the governmental
activities of the government-wide financial statements are the operations of the City of Scottsdale Municipal
Property Corporation (MPC), the Scottsdale Preserve Authority (SPA), and the Scottsdale Mountain,
McDowell Mountain Ranch, DC Ranch, Via Linda Road, and Waterfront Commercial Community Facilities
Districts. Although legally separate from the City, these component units are blended with the primary
government because of their governance or financial relationships to the City.
Separate financial statements of the MPC, SPA and the Scottsdale Mountain, McDowell Mountain Ranch,
DC Ranch, Via Linda Road and Waterfront Commercial Community Facilities Districts may be obtained at
the City’s Financial Services Department, Accounting Division, 7447 East Indian School Road, Suite 210,
Scottsdale, Arizona 85251.

Management’s Discussion and Analysis

Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the City include general government, police, financial services,
transportation, community services, information systems, planning and development, fire, municipal
services, citizen and neighborhood resources, human resources and economic vitality. The business-type
activities of the City include water, sewer, solid waste, and airport operations.

For the Fiscal Year Ended June 30, 2007

The statement of activities presents information showing how the City’s net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported
in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues
pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave.

The government-wide financial statements can be found on pages 28 and 29 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, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds
of the City can be divided into the following three categories: Governmental Funds, Proprietary Funds,
and Fiduciary Funds.
Gover nmental 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 and outflows 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 determining what financial resources are available in the near future to finance the City’s
programs.
Because the focus of governmental funds is narrower than that of the government-wide financial statements,
it is useful to compare the information presented for governmental funds with similar information
presented for governmental activities in the government-wide financial statements. By doing so, readers
may better understand the long-term impact of the government’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.

City of Scottsdale, Arizona

13

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

The City maintains several individual governmental funds organized according to their type (special revenue,
debt service, and capital projects). 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, General Obligation Bond Debt Service Fund, and General Capital Improvement Plan
(CIP)Capital Project Fund which are considered to be major funds. Data from the remaining governmental
funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major
governmental funds is provided in the form of combining statements in a separate section of this report.
The basic governmental fund financial statements begin on page 30 of this report.
Proprietar y Funds
Proprietary Funds are generally used to account for services for which the City charges customers–either
outside customers, internal units or departments of the City. Proprietary Funds provide the same type of
information as shown in the government-wide financial statements, only in more detail. The City maintains
the following two types of Proprietary Funds:
Enterprise Funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City uses Enterprise Funds to account for the operations of
the Water, Sewer, Solid Waste and Airport operations of the City. All Enterprise Funds are considered
to be major funds of the City.
Internal Service Funds are used to report activities that provide supplies and services for certain City
programs and activities. The City uses Internal Service Funds to account for its fleet of vehicles and
self-insurance. Because these services predominantly benefit governmental rather than business-type
functions, they have been included within governmental activities in the government-wide financial
statements. The Internal Service Funds are combined into a single, aggregated presentation in the
Propriety Fund financial statements. Individual fund data for the Internal Service Funds is provided in
the form of combining statements in a separate section of this report.
The basic Proprietary Fund financial statements begin on page 38 of this report.
Fiduciar y Funds
Fiduciary Funds are used to account for resources held for the benefit of parties outside the City. The City
has one private-purpose trust funds and two agency funds, which are reported under the Fiduciary Funds.
Fiduciary Funds are not reflected in the government-wide financial statement because the resources of
those funds are not available to support the City’s own programs. The accounting used for Fiduciary Funds
is much like that used for Proprietary Funds.
The basic Fiduciary Fund financial statements begin on page 43 of this report.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding
of the data provided in the government-wide and fund financial statements. The notes can be found
beginning on page 45 of this report.
Required Supplementar y Infor mation
In addition to the basic financial statements and accompanying notes, this report presents certain required
supplementary information concerning the City’s progress in funding its obligation to provide pension
benefits to its employees. This information can be found on page 89 of this report.

14

City of Scottsdale, Arizona

Table of Contents

These two statements report the City’s net assets and the changes in those assets. The change in assets is
important because it tells the reader whether the financial position of the City as a whole has improved
or diminished. However, in evaluating the overall position of the City, non-financial information such as
changes in the City’s tax base and the condition of the City’s capital assets will also need to be evaluated.
Analysis of Net Assets
As noted earlier, net assets may serve as a useful indicator of a government’s financial position. For the
City, assets exceeded liabilities by $3.7 billion and $3.4 billion at the close of the fiscal years 2007 and
2006, respectively.

Management’s Discussion and Analysis

GOVERNMENT-WIDE FINANCIAL ANALYSIS
While this document contains information about the funds used by the City to provide services to our
citizens, the Statement of Net Assets and the Statement of Activities serve to provide an answer to the
question of how the City, as a whole, did financially throughout the year. These statements include all assets
and liabilities using the accrual basis of accounting similar to the accounting used by the private sector. The
basis for this accounting takes into account all of the current year’s revenues and expenses regardless of
when the cash is received or paid.

For the Fiscal Year Ended June 30, 2007

Combining Statements
The combining statements referred to earlier in connection with non-major Governmental Funds, Internal
Service Funds, and Fiduciary Funds are presented immediately following the required supplementary
information on pensions and other post-employment benefits.

Net Assets
For the Years Ended June 30, 2007 and 2006 (in thousands of dollars)
Governmental

Business-Type

Activities
2007

Assets
Current and Other Assets
Capital Assets
Total Assets

Liabilities
Long-term Liabilities Outstanding
Other Liabilities
Total Liabilities
Net Assets
Invested in Capital Assets, Net of Related Debt
Restricted *
Unrestricted *
Total Net Assets

$

510,038
2,918,477
3,428,515

Activities
2006

$

497,118
2,685,292
3,182,410

2007

$

294,955
1,119,910
1,414,865

Total
2006

$

307,886
1,039,230
1,347,116

2007

$

804,993
4,038,387
4,843,380

2006

$

805,004
3,724,522
4,529,526

762,601
152,712
915,313

740,077
138,135
878,212

223,823
37,150
260,973

231,584
42,248
273,832

986,424
189,862
1,176,286

971,661
180,383
1,152,044

2,198,130
108,686
206,386
$ 2,513,202

2,029,375
102,293
176,530
$ 2,304,198

895,636
33,649
224,607
$ 1,153,892

806,749
27,000
239,535
$ 1,073,284

3,093,766
142,335
430,993
$ 3,667,094

2,836,124
224,691
316,667
$ 3,377,482

* Restated Restricted and Unrestricted Net Assets related to the classification of unspent bond proceeds.

The largest portion of the City’s net assets reflects its investment in capital assets (e.g. land, buildings, and
equipment) of $3.1 billion (84.4 percent) and $2.8 billion (84.0 percent), less any related outstanding debt
used to acquire those assets, for the fiscal years 2007 and 2006, respectively. Although the City’s investment
in its capital assets is reported net of related debt, the resources needed to repay this debt must be provided
from other sources because the City uses these assets to provide services to citizens and; therefore, cannot
liquidate them.
City of Scottsdale, Arizona

15

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

An additional portion of the City’s net assets, $142.3 million (3.9 percent) for fiscal year 2007 and $224.7
million (6.7 percent) for fiscal year 2006 represent resources that are subject to external restrictions on how
they may be used. The remaining balance of unrestricted net assets for fiscal years 2007 and 2006, $431.0
million (11.8 percent) and $316.7 million (9.4 percent), respectively, may be used to meet the government’s
ongoing obligations to citizens and creditors.
At the end of both the current and previous fiscal years, the City was able to report positive balances in
all three categories of net assets, both for the government as a whole, as well as for the business-type
activities.
Analysis of Changes in Net Assets
The City’s total net assets increased by $289.6 million and $232.0 million during the fiscal years 2007 and
2006, respectively. These increases are explained in the government and business-type activities discussion
herein, and are primarily a result of contributions from developers of infrastructure assets.

Changes in Net Assets
For the Years Ended June 30, 2007 and 2006 (in thousands of dollars)
Governmental
Activities
2007
2006
Revenues
Program Revenues
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
General Revenues
Property Taxes
Business Taxes
Intergovernmental Taxes
Interest and Investment Income
Other
Total Revenues
Expenses
General Government
Police
Financial Services
Transportation
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Services Districts
Interest on Long-term Debt
Water Utility
Sewer Utility
Airport
Solid Waste
Total Expenses
Increase in Net Assets Before
Special Items and Transfers
Transfers
Increase in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year

16

$

Business-Type
Activities
2007
2006

Total
2007

2006

51,944 $
29,293
211,707

50,225 $
26,355
136,745

138,572 $
55,111

129,141 $
55,580

190,516 $
29,293
266,818

179,366
26,355
192,325

50,961
198,450
60,520
23,013
5,377
631,265

50,610
190,121
54,481
13,714
5,786
528,037

195
9,265
496
203,639

119
6,581
686
192,107

50,961
198,645
60,520
32,278
5,873
834,904

50,610
190,240
54,481
20,295
6,472
720,144

45,682
81,375
9,843
95,214
70,527
13,329
28,054
17,698
3,727
3,800
9,475
15,133
597
38,981
433,435

42,729
74,408
8,343
82,047
57,931
14,589
26,943
14,746
3,419
3,615
7,549
12,883
617
37,192
387,011

64,915
26,089
2,958
17,895
111,857

53,961
27,854
2,922
16,412
101,149

45,682
81,375
9,843
95,214
70,527
13,329
28,054
17,698
3,727
3,800
9,475
15,133
597
38,981
64,915
26,089
2,958
17,895
545,292

42,729
74,408
8,343
82,047
57,931
14,589
26,943
14,746
3,419
3,615
7,549
12,883
617
37,192
53,961
27,854
2,922
16,412
488,160

197,830
141,026
91,782
90,958
289,612
231,984
11,174
10,536
(11,174)
(10,536)
209,004
151,562
80,608
80,422
289,612
231,984
2,304,198
2,152,636
1,073,284
992,862
3,377,482
3,145,498
$ 2,513,202 $ 2,304,198 $ 1,153,892 $ 1,073,284 $ 3,667,094 $ 3,377,482

City of Scottsdale, Arizona

Table of Contents

220,000

Revenues
Expenses

200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000

Management’s Discussion and Analysis

Program Revenues and Expenses for Governmental Activities
Fiscal Year 2006-07
(in thousands)

For the Fiscal Year Ended June 30, 2007

Governmental Activities
Governmental activities increased the City’s net assets by $209.0 million in fiscal year 2007
and $151.6 million in fiscal year 2006, thereby accounting for 72.2 percent and 65.3 percent,
respectively, of the total growth in the net assets of the City. The key factors of this increase
include tax revenue growth, improved interest earnings rates and increased developer contributions.

20,000

Interest on Long-term
Debt

Streetlight and
Services Districts

Planning and
Development

Economic Vitality

Human Resources

Citizen &
Neighborhood
Resources

Municipal Services

Fire

Information Systems

Community Services

Transportation

Financial Services

Police

General Government

-

Revenues by Source - Governmental Activities
Fiscal Year 2006/07

Interest and investment
income
3.65%

Charges for services
8.23%

Operating grants and
contributions
4.64%

Other taxes
9.59%

Capital grants and
contributions
33.54%

Business taxes
31.44%
Other
0.84%

City of Scottsdale, Arizona

Property taxes
8.07%

17

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

As shown in the “Program Revenues and Expenses for Governmental Activities” chart and the “Revenues
by Source for Governmental Activities” chart, transportation is the largest function in expense (22.0
percent), followed by police (18.8 percent), and community services (16.3 percent). General revenues such
as property, business, and privilege taxes are not shown by program, but are effectively used to support
program activities citywide. For governmental activities overall, without regard to program, capital grants
and contributions are the largest single source of funds (33.5 percent), followed by business taxes, which
includes Sales and Use Taxes and Franchise Taxes (31.4 percent), intergovernmental taxes (9.6 percent),
charges for services (8.2 percent) and property taxes (8.1 percent).
The Transportation department ensures that Scottsdale neighborhoods, businesses and visitors are provided
an accessible, environmentally sensitive, safe and efficient transportation system. Projects and operations for
street, transit and non-motorized travel are developed in cooperation with the public and promote economic
sustainability for the community, preserves and enhances neighborhood quality of life and ensures seamless
connections to the regional network.
The Scottsdale Police Department, in partnership with the citizens of Scottsdale, recognizes the changing
needs of our community and law enforcement’s role in addressing those needs. Furthermore, they pledge
excellence, initiative and integrity to enhance the quality of life throughout our City knowing those they
serve deserve no less.
The City’s Community Services Department improves and preserves Scottsdale’s quality of life through
development of safe and highly maintained facilities and imaginative services that provide opportunities for
family interaction, cultural enrichment, and development of lifetime skills which build self-esteem, promote
healthy lifestyles and are a catalyst for community involvement. They provide assistance and guidance to
those in need and link our citizens with information and resources throughout the world.
Business-Type Activities
Business-type activities increased the City’s net assets in fiscal years 2007 and 2006 by $80.6 million and
$80.4 million, respectively, accounting for 27.8 percent and 34.7 percent, respectively, of the total growth in
the City’s net assets. The key factor of this increase is as follows:
The Water and Sewer Utility and Airport Funds had capital contributions from developers and grantors
resulting in $55.1 million and $54.9 million in revenue for fiscal years 2007 and 2006, respectively. The
majority of this amount is from infrastructure donated from developers and development fees received
as development continues throughout the City.
Program Revenues and Expenses - Business-Type Activities
Fiscal Year 2006/07
(In Millions)
Program Revenues
Expenses

120,000
100,000
80,000
60,000
40,000
20,000
-

18

Water Utility Sewer Utility

Airport

Solid Waste

City of Scottsdale, Arizona

Table of Contents

Capital grants and
contributions
27.06%

Charges for
services
68.05%

Interest and
investment income
4.55%

As shown in “Program Revenues and Expenses for Business Type Activities” and the “Revenues by Source
for Business Type Activities” charts, the largest of Scottsdale’s business-type activities, Water and Sewer
utilities, each had expenses of $64.9 million and $26.1 million, respectively, in fiscal year 2007, followed by
Solid Waste with operating expenses of $17.9 million. For the fiscal year, revenues exceeded expenses in
all four areas of business activity. Revenues exceed expenditures due to multi-year financial planning and
pay-as-you-go contributions to capital projects. Charges for services provided the largest share of revenues
(68.0 percent) followed by capital grants and contributions (27.1 percent), which are largely developer
contributions and development fees, for all of the business-type activities.

Management’s Discussion and Analysis

Business Taxes &
Other Income
0.34%

For the Fiscal Year Ended June 30, 2007

Revenues by Source - Business-Type Activities
Fiscal Year 2006/07

The City’s Water Resources Department plans, manages and operates a safe, reliable water supply and
wastewater reclamation system and provides efficient, high quality customer service to Scottsdale citizens.
The Solid Waste Department provides effective and responsive leadership that ensures the delivery of safe,
efficient and environmentally sound solid waste services to approximately 77,800 residential customers and
1,439 commercial and roll-off customers.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental Funds
Funds are created and segregated for the purpose of carrying on specific activities or attaining certain
objectives in accordance with special regulations, restrictions, or limitations. An activity not required to be
reported in a separate fund is included in the general fund. Governmental funds are used to account for
tax-supported activities.
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows,
and balances of resources that are available for spending. Such information is useful in assessing the
City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
government’s net resources available for spending at the end of the fiscal year. These funds are accounted
for by using the modified accrual basis of accounting. Types of governmental funds reported by the City
include the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Project Funds.
City of Scottsdale, Arizona

19

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $343.5 million, a decrease of $4.5 million in comparison to the combined ending fund balances
for fiscal year 2006 of $348.0 million. Approximately $321.5 million of the total for fiscal year 2007
and $324.1 million of the total for fiscal year 2006 constitutes unreserved fund balance. Portions of
this unreserved balance are designated in the City’s budget plan for in pay-as-you-go capital projects and
operational contingency funding. The remainder of fund balance is reserved to indicate that it is not
available for new spending because it has already been committed, (1) to pay debt service ($21.2 million
and $23.1 million for fiscal years 2007 and 2006, respectively) or; (2) to pay for the ongoing cost of the
streetlight and services districts ($754,000 and $805,000 for fiscal years 2007 and 2006, respectively).
Revenues for governmental functions overall totaled approximately $425.7 million in fiscal year 2007,
an increase of 8.6 percent ($33.6 million) over the previous year total of $392.2 million. In fiscal year
2007 expenditures for governmental functions, totaled $484.4 million, a decrease of 5.6 percent ($28.6
million) over the fiscal year 2006 total of $513.0 million. In the fiscal years ended June 30, 2007 and 2006
expenditures for governmental functions exceeded revenues by approximately $58.7 million (13.8 percent)
and $120.8 million (30.8 percent), respectively. The excess in both years was due to the City financing some
capital projects with debt proceeds received in prior years and reflected in beginning fund balance.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the
unreserved fund balance of the General Fund was $89.5 million, while total fund balance was $90.3 million.
The unreserved and total balances for the General Fund at the end of fiscal year 2006 were $93.2 million
and $94.0 million, respectively. As a measure of the General Fund’s liquidity, it may be useful to compare
both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance
represents 39.2 percent of the total General Fund expenditures of $228.6 million in fiscal year 2007 and
45.3 percent of the total General Fund expenditures of $205.7 million in fiscal year 2006. Total fund
balance represents 39.5 percent and 45.7 percent of total fund expenditures for fiscal years 2007 and 2006,
respectively. In fiscal year 2007 management has designated $26.9 million of the General Fund unreserved
fund balance for various uses. See note section III.D in the Notes to the Financial Statements for further
information regarding reservations and designations.
The General Fund Balance decrease in fiscal year 2007 by $3.8 million is due primarily to a reduction in the
designated balance set aside in prior years as a contingency for taxpayer refund claims, which were settled in
2007. General Fund performance also reflects a slowing economy and more modest revenue growth than
previous growth years. Overall, the General Fund’s performance resulted in revenues over expenditures in
the fiscal year ended June 30, 2007, of $44.0 million, a decrease of 22.3 percent over the comparable figure
from the prior year of $56.6 million.
The General Obligation Bond Debt Service Fund is used to account for the accumulation of resources
for, and the payment of, general obligation long-term debt principal, interest and related costs. At the end
of the current fiscal year, the fund balance of the General Obligation Bond Debt Service Fund was $9.4
million, a decrease of $3.0 million from the $12.4 million at the end of fiscal year 2006 due to planned debt
service payments.
The General CIP Construction Capital Projects Fund accounts for the resources used to acquire, construct
and improve major capital facilities, other than those financed by Proprietary Funds. At the end of the
current fiscal year, the fund balance of the General CIP Construction Capital Projects Fund was $100.4
million, compared to a fund balance of $57.1 million at the end of fiscal year 2006. The increase in fund
balance is primarily due to increased pay-as-you-go transfers to help fund planned capital projects. Capital
improvement expenditures in 2007 and 2006 were $84.1 million and $176.0 million, respectively, a decrease
of $91.9 million.

20

City of Scottsdale, Arizona

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The total growth in net assets for the Enterprise Funds was $80.6 million and $80.4 million for fiscal years
2007 and 2006, respectively. Factors concerning the finances of these funds have been addressed previously
in the discussion of the City’s business-type activities. In particular, the Scottsdale Water and Sewer net assets
increased by $79.4 million due to capital contributions of $54.9 million as well as increased revenues.
Fiduciar y Funds
The City maintains Fiduciary Funds for the assets of the Family Self-Sufficiency Agency Fund, the Retainage
Escrow Agency Fund, and the Handicap Scholarship Private Purpose Trust Fund. As of the end of fiscal
year 2007, the net assets of the Handicap Scholarship Private Purpose Trust Fund totaled $7,000.
General Fund Budgetar y Highlights
The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement
has been provided for the General Fund to demonstrate compliance with this budget.

Management’s Discussion and Analysis

At the end of the fiscal years 2007 and 2006, the unrestricted net assets for the Water and Sewer Utility
were $214.0 million and $230.5 million, respectively; Scottsdale Airport were $4.4 million and $3.5 million,
respectively; and the Solid Waste Utility Fund were $6.2 million and $5.5 million, respectively. The Internal
Service Funds, which are used to account for certain governmental activities, also had unrestricted net assets
of $20.2 million and $15.8 million, respectively.

For the Fiscal Year Ended June 30, 2007

Proprietar y Funds
The City’s Proprietary Funds provide the same type of information found in the government-wide financial
statements, but in more detail.

The City’s final budget differs from the original budget due to adjustments that were made during the fiscal
year. In fiscal year 2007, there was an increase in expenditure budgets; however, the City maintained an excess
of revenues over expenditures and did not exceed the total appropriations for the year. The majority of
these changes were related to Reactivation of the Photo Enforcement Loop 101 Program, and Contingency
Transfers approved by City Council for Downtown Marketing, School Sports Field Maintenance, Villa
Monterey operating expenses, legal fees related to a Retirement System class-action lawsuit and budgetary
transfers to the Fleet Management Fund for vehicle acquisitions. Net budget increases for expenditures
by department totaled $1.5 million and $5.1 million for fiscal years 2007 and 2006, respectively. The net
increase is defined as follows:
$

$

121,000
800,000
281,000
373,000
(58,000)
(33,000)
50,000
(52,000)
1,482,000

General Government
Police
Financial Services
Community Services
Information Systems
Fire
Economic Vitality
Planning and Development

** Note: Amounts are the difference between the final and adopted budget for each department See CAFR "Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual"

Actual revenues and other resources exceeded budgetary estimates by $12.8 million in fiscal year 2007 and
$11.5 million in fiscal year 2006.
City of Scottsdale, Arizona

21

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

Capital Assets and Debt Administration
Capital Assets
The City’s capital assets for its governmental and business-type activities as of June 30, 2007 and 2006,
amount to $4.0 billion and $3.7 billion, respectively (net of accumulated depreciation). Capital assets include
land, buildings and improvements, water and sewer systems, water rights, vehicles, machinery and equipment,
furniture and fixtures, and construction in progress. The total increase in the City’s capital assets (net of
accumulated depreciation) for the fiscal years 2007 and 2006 was 8.4 percent as shown in the table below.

Capital Assets, Net of Depreciation
June 30, 2007 (in thousands of dollars)

Land
Buildings and Land Improvements
Streets and Storm Drains
Machinery and Equipment
Water Rights
Water System
Sewer System
Motor Vehicles and Maintenance by Fleet
Furniture, Fixtures and Office Equipment
Construction in Progress
Total

$

$

Governmental
Activities
2007
2006
1,050,083 $
898,941 $
246,723
150,789
1,453,131
1,427,769
30,529
25,579
27,856
24,486
110,155
157,728
2,918,477 $ 2,685,292 $

Business-type
Activities
2007
2006
32,693 $
24,822
11,596
11,778
13,462
4,332
64,688
64,688
628,872
415,199
303,472
266,624
25
71
65,102
251,716
1,119,910 $ 1,039,230

$

$

Total
2007
1,082,776 $
258,319
1,453,131
43,991
64,688
628,872
303,472
27,856
25
175,257
4,038,387 $

2006
923,763
162,567
1,427,769
29,911
64,688
415,199
266,624
24,486
71
409,444
3,724,522

Major capital asset events during the current fiscal year included the following:

22

•

Construction in progress on the design and construction of the Police Operational Support
facilities at 76th Street and McKellips Road. Expenditures totaled $5.1 million this year against a
budget of $31.9 million.

•

Construction in progress on the Arabian Library – a 20,000 square foot branch library in the
McDowell Mountain Ranch park area. Expenditures totaled $6.8 million this year against a
budget of $10.4 million.

•

Construction completed this year totaling $8.1 million on the Spring Training Stadium, Club SAR
and at Indian School Park. The project includes construction of a Spring Training Clubhouse at
Club SAR, reconstruction of the baseball fields at Indian School Park and reconstruction of the
practice baseball fields at the Spring Training Stadium.

•

Construction in progress on the infrastructure improvements and 157,000 square foot building at
the SkySong ASU Scottsdale Center for Innovation Center located at Scottsdale and McDowell
Road. Expenditures totaled $9.7 million this year against a budget of $20 million.

•

Construction completed this year totaling $9.9 million on Pima Road. The project includes
design and construction of a six-lane parkway cross-section with landscaped median, turn lanes,
grade-separated path crossing, bike lanes, sidewalks, curb and gutter, roadway drainage, intelligent
transportation system facilities and noise mitigation. The project extends to approximately 1400
feet north of Thompson Peak Parkway in the Grayhawk and DC Ranch neighborhoods and also
includes a new alignment of Pima Road at the Pima Freeway interchange on the south.

City of Scottsdale, Arizona

Table of Contents

•

Arsenic Mitigation Treatment ($8.0 million) – design and construction of arsenic removal
treatment facilities and related distribution systems at various satellite sites throughout
the City to comply with the Safe Drinking Water Act Arsenic Rule. The Safe Drinking
Water Act lowered the maximum allowable levels for arsenic in drinking water from 50
ppb to 10 ppb as of January 2006. This new level for arsenic will require the City to
utilize arsenic mitigation treatment systems in accordance with the 2001 Water Resources
Master Plan.

•

CAP Plant expansion ($11.8 million) – expansion of the existing CAP Water Treatment
Plant from its current capacity of 50 million gallons per day (mgd) to a minimum capacity
of 75 mgd to meet planned demand. This will further reduce the use of groundwater
and increase use of surface water.

•

CAP Plant regulatory compliance ($23.2 million) – of granular activated carbon facility
at the CAP Water Treatment Plant in order to ensure compliance with the new Federal
water quality rule regarding disinfection by-products (DBP). The use of surface water
will also require the addition of a granular activated carbon facility to the plant, in order to
comply with the Federal rule regarding disinfection by-products. The Rule was finalized
during fall 2005, and municipalities will need to meet the 120 parts-per-billion by fall
2008. The second part of the rule requires municipalities to meet the 80 parts-per-billion
by fall 2011.

Management’s Discussion and Analysis

The City’s water and sewer 5-year capital improvement plan includes significant cost impacts
from “unfunded” federal water quality mandates for treatment of arsenic and disinfection byproduct requirements, in addition to plant and infrastructure expansion to accommodate growth.
The most significant CIP cash expenditures, forecasted in the 5-year plan include:

For the Fiscal Year Ended June 30, 2007

•

For government-wide financial statement presentation, all depreciable capital assets were depreciated from
acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases
as expenditures. See Section IV in the Notes to the Financial Statements for further information regarding
capital assets.
Debt Administration
At the end of the fiscal years 2007 and 2006, the City had total long-term obligations outstanding of
$1,030.0 million and $1,018.0 million, respectively. Of these amounts, $476.2 million and $499.4 million,
respectively, are General Obligation Bonds backed by the full faith and credit of the City. The remainder
includes revenue bonds, certificates of participation, and other obligations of $553.8 million and $518.6
million, respectively.

City of Scottsdale, Arizona

23

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Table of Contents

Outstanding Debt
For the Years Ended June 30, 2007 and 2006 (in thousands of dollars)

General Obligation Bonds
Revenue Bonds
Municipal Property Corporation Bonds
Scottsdale Preserve Authority Bonds
Special Assessments Bonds
Certificates of Participation
Community Facilities Districts General
Obligation Bonds
Add Deferred Issuance Premiums
Less Deferred Amounts on Refunding
Total Bonds Payable
Contracts Payable
Capital Lease
Compensated Absences
Post Employment Benefit - Implied Subsidy
Total Long-Term Liabilities

$

$

Governmental
Activities
2007
2006
476,200 $ 499,365
2,990
149,176
108,225
77,605
80,570
4,670
5,505
6,401
7,090
40,330
21,084
(13,432)
762,034
19,819
172
20,684
535
803,244 $

$

41,945
15,859
(10,234)
751,315
13,136
18,889
783,340 $

Business-Type
Activities
2007
2006
- $
- $
58,930
62,405
155,650
161,965
20,635
(11,128)
224,087
139
2,364
72
226,662 $

Total
2007
2006
476,200 $ 499,365
58,930
65,395
304,826
270,190
77,605
80,570
4,670
5,505
6,401
7,090

40,330
41,945
9,177
41,719
25,036
(1,245)
(24,560)
(11,479)
232,302
986,121
983,617
19,819
13,136
179
311
179
2,181
23,048
21,070
607
234,662 $ 1,029,906 $ 1,018,002

During fiscal years 2007 and 2006, the City’s total bonded debt increased by approximately $2.5 million and
$247.2 million, respectively. The City issued $42.5 million of new Municipal Property Corporation bonds
(Governmental activities) in fiscal year 2007. The new bond costs were partially offset by the reduction of
bond payable balances due to principal payments made in fiscal year 2007.
The State constitution imposes certain debt limitations on the City of six percent (6%) and twenty percent
(20%) of the outstanding assessed valuation of the City. The City’s available debt margin at June 30, 2007
and 2006 is $199.8 million and $157.3 million, respectively, in the 6% capacity and $678.4 million and $574.6
million, respectively, in the 20% capacity. Additional information on the debt limitations and capacities may
be found in Section IV of the Notes to the financial statements and also in Table XVIIa in the statistical
section of this report.
The City early implemented Statement No. 45 of the Governmental Accounting Standards Board (Accounting
and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions) effective
for fiscal year ending June 30, 2007. In connection with that accounting standard, the Net Other PostEmployment Benefit Obligation (NOPEBO) included in the Outstanding Debt table (above) represents
the City’s actuarial required contribution (ARC) pursuant to the actuarial calculations for the accrued cost
of retiree health insurance as of June 30, 2007. The NOPEBO at June 30, 2007 is $607,000. The City is
self insured and funds employee benefit costs with current funds and designates a reserve for actuarially
determined incurred but not reported claims (IBNR), a risk corridor, and partial funding for the ARC.

24

City of Scottsdale, Arizona

Table of Contents

General Obligation (GO)
Municipal Property Corp (MPC)
Water and Sewer Revenue (W&S)
Highway User Revenue Fund (HURF)
Scottsdale Preserve Authority (SPA)

Moody's
Investors
Service
Aaa
Aa1
Aa1
Aa3
Aa3

Standard
and Poor's
Rating Group
AAA
AAA
AAA
AA
AA-

Fitch
Investors
Service, Inc.
AAA
AA+
AA+
Not Rated
AA

Additional information in the City’s long-term debt can be found in Section IV of the Notes to the Financial
Statements.

Management’s Discussion and Analysis

City of Scottsdale Bonded Debt Ratings
As of June 30, 2007

For the Fiscal Year Ended June 30, 2007

The City’s most recent bond ratings as provided by the three major credit rating agencies; Moody’s Investors
Service, Standard & Poor’s Rating Services, and Fitch Ratings, are shown in the following table:

Economic Factors and Next Year’s Budget and Rates
The City of Scottsdale’s fiscal year 2008 budget continues to fund the highest priorities of the City Council
and our citizens, including the hiring of additional police officers and firefighters, and the opening of new
City capital facilities to meet service demands. Current economic conditions allow the City to maintain core
services, and, in some cases, to provide enhancements to existing service levels. In developing the fiscal
2008 budget, staff sought to use realistic revenue forecasts without relying on one-time construction related
revenues to fund ongoing operating budget expenditures, and to limit staff additions to high priority service
areas and citizen demands. The budget also continues to fund needed investment in the City’s infrastructure
and facilities while maintaining prudent financial reserves.
The adopted fiscal year 2008 budget includes a total of 72 new positions citywide with an estimated personal
service cost of $4.0 million. With these new positions the City will have 2,794 full time equivalent positions
citywide. The positions address service needs in the following areas:
•
•
•
•

Community Facilities – staffing for the Arabian library expansion and expanded capital facilities
primarily constructed with voter-approved Bond 2000 funding.
Public Safety – staff additions of sworn Police officers, enhanced gang investigation and detective
staffing and additional firefighters to staff a third ambulance.
Citizen Services and Community Growth – increased staff to support customer service demands,
growth in the community, and federal and state environmental regulations. Also included is additional
staffing to expand the After School Program to address service level needs.
Internal Service Demands – additional staffing to support the day-to-day needs of other operating
departments, i.e., Solid Waste, Information Systems and Financial Services.

The fiscal 2008 budget also includes funding to support changes in health care and retirement system
costs as well as a market and merit compensation adjustments for City staff. The adopted budget includes
a staggered market adjustment of 3.5 percent, effective July 1, 2007 and 2.5 percent, effective January 1,
2008.
City of Scottsdale, Arizona

25

Table of Contents

A separate, key component of the annual financial plan is the City’s five-year Capital Improvement Plan
(CIP) for infrastructure and public facilities including roads, water and sewer improvements, parks, buildings
and information technology. The adopted CIP appropriation for fiscal year 2008 is $906.3 million, which
includes $658.8 million (or 72.2 percent of the total) re-budgeted from the prior year. Under Arizona
law, the City must re-budget for a capital project until it is completed. Some examples of major projects
included in the CIP budget are:
•
•
•
•
•
•

•

Community Facilities – Acquire, preserve and restore desert lands along Scottsdale Road to
promote its designation as a Scenic Corridor, infrastructure to support site development of the Sky
Song facility, design and construction of the Appaloosa library.
Preservation – Construction of trails supporting the gateway to the preserve and expansion of
preserve lands.
Drainage and Flood Control – Drainage improvement to several areas within Scottsdale including
the Granite Reef Watershed, Indian School Road drainage, and a Powerline Interceptor channel.
Public Safety – Construction of the Downtown Fire Station #602, Fire Engine Reserve Apparatus,
and Police Portable and Vehicle Radio replacement.
Service Facilities – Civic Center Mall renovation and improvements, McKellips Fleet Service
Center facility and Computer Facility Infrastructure improvements.
Transportation – Improvements to several main Scottsdale thorough ways including Pinnacle
Peak – Miller to Pima Road, Indian School Road – Drinkwater to Pima Freeway, and Indian Bend
Road – Scottsdale to Hayden. Additionally, improvements will be made to bicycle lanes, enhanced
sidewalks, and provide for Loop 101 Park and Ride lot.
Water Services – Expansion of the existing CAP Water Treatment Plant, modification and
improvements to water distribution and sewer collection system improvements.

The adopted budget continues the practice of designating a reserve equal to 10 percent of the General
Fund and Highway User Fund program budgets to ensure the City can provide basic services in the event
of major emergencies.

Requests For Infor mation
This financial report is designed to provide a general overview of the City’s finances for all of those with
an interest in the government’s finances. If you have questions about this report or need additional financial
information, contact:
City of Scottsdale
Financial Services Department
Accounting Division
7447 E. Indian School Road, Suite 210
Scottsdale, AZ 85251
(480) 312-2437
Or visit our website at:
http://www.scottsdaleaz.gov/finance/

26

City of Scottsdale, Arizona

Table of Contents

Basic Financial Statements

City of Scottsdale, Arizona

27

Table of Contents

Statement of Net Assets
June 30, 2007 (in thousands of dollars)

Governmental
Activities

Business-type
Activities

$

$

Total

ASSETS
Current Assets
Cash and Investments
Cash with Fiscal Agent
Receivable (net of uncollectible amounts of $14,899)
Property Taxes and Penalties
Other Local Taxes
Intergovernmental
Charges for Services
Interest and Other
Deposits
Supplies Inventory
Restricted Cash, Cash Equivalents, and Investments:
Customer Advances and Deposits

374,614
60,019

108,265
13,998

$

482,879
74,017

9,413
21,718
25,144
15,436
770

80
15,877
2,916
16,010
-

9,413
21,718
25,224
15,877
18,352
16,010
770

-

1,608

1,608

507,114

158,754

665,868

2,924

94,751
1,145

94,751
4,069

-

6,656
24,105
9,544

6,656
24,105
9,544

1,160,238
1,758,239
2,918,477

162,483
957,427
1,119,910

1,322,721
2,715,666
4,038,387

Total Noncurrent Assets

2,921,401

1,256,111

4,177,512

Total Assets

3,428,515

1,414,865

4,843,380

Current Liabilities
Accounts Payable
Accrued Payroll and Benefits
Accrued Compensated Absences-Current
Accrued Compensated Absences-Due within One Year
Claims Payable
Due to Other Governments
Customer Advances and Deposits
Matured Bonds, Loans, Other Payables
Matured Bonds, Loans, Other Interest Payable
Bonds, Loans, and Other Payables-Due within One Year
Unearned Revenue
Other Liabilities
Total Current Liabilities

26,683
6,188
37
10,235
14,347
102
3,895
31,852
18,262
33,408
5,295
2,408
152,712

11,583
469
1,072
1,608
8,010
5,985
8,423
37,150

38,266
6,657
37
11,307
14,347
102
5,503
39,862
24,247
41,831
5,295
2,408
189,862

Noncurrent Liabilities
Accrued Compensated Absences-Due in More Than One Year
Deferred Revenue
Bonds, Loans, and Other Payables-Due in More Than One Year
Total Noncurrent Liabilities

10,449
752,152
762,601

1,292
6,656
215,875
223,823

11,741
6,656
968,027
986,424

915,313

260,973

1,176,286

2,198,130

895,636

3,093,766

21,249
75,691
445
135
10,412
754
206,386
2,513,202

24,105
9,544
224,607
1,153,892

21,249
75,691
445
135
10,412
754
24,105
9,544
430,993
$ 3,667,094

Total Current Assets

Noncurrent Assets
Equity in Joint Venture
Deferred Charges
Restricted Cash, Cash Equivalents, and Investments:
Deferred Revenue
Water and Sewer System Replacement
Acquisition and Construction Reserve Development Fees
Capital Assets
Land, Water Rights, and Construction in Progress
Facilities, Infrastructure, and Equipment (net of depreciation)
Total Capital Assets (net of accumulated depreciation)

LIABILITIES

Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt
Restricted
Debt Service
Transportation and Preserve Privilege Tax Activities
Capital Projects
Grants
Special Programs
Streetlight and Service District
Water and Sewer System Replacement
Acquisition and Construction
Unrestricted
Total Net Assets

$

$

The notes to the financial statements are an integral part of this statement.

28

City of Scottsdale, Arizona

Table of Contents

Statement of Activities
For the Year Ended June 30, 2007 (in thousands of dollars)

Function/Programs
Governmental Activities
General Government
Police
Financial Services
Transportation
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Services Districts
Interest on Long-term Debt
Total Governmental Activities

Expenses

Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Services
Contributions
Contributions

Governmental
Activities

$

$

$

Business-Type Activities
Water Utility
Sewer Utility
Airport
Solid Waste
Total Business-Type Activities
Total Government

45,682
81,375
9,843
95,214
70,527
13,329
28,054
17,698
3,727
3,800
9,475
15,133
597
38,981
433,435

64,915
26,089
2,958
17,895
111,857
$

545,292

14,102
15,071
326
4,388
1,155
228
16,128
546
51,944

$

84,381
32,250
3,451
18,490
138,572
$

190,516

949
2,066
1
17,471
8,327
458
21
29,293

$

$

29,293

General Revenues
Taxes
Property Taxes
Sales and Use Taxes
Franchise Taxes
Intergovernmental
State Shared Sales
State Revenue Sharing
Other
Interest and Investment Income
Other Revenue
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets - Beginning, as restated
Net Assets - Ending

$

3,694
99
202,811
762
92
4,215
34
211,707

Business-type
Activities

(26,937) $
(64,139)
(9,842)
125,394
(57,050)
(13,329)
(26,349)
(13,483)
(3,478)
(3,800)
(9,441)
995
(51)
(38,981)
(140,491)

Total
-

$

(26,937)
(64,139)
(9,842)
125,394
(57,050)
(13,329)
(26,349)
(13,483)
(3,478)
(3,800)
(9,441)
995
(51)
(38,981)
(140,491)

31,812
23,072
227
55,111

-

51,278
29,233
720
595
81,826

51,278
29,233
720
595
81,826

266,818

(140,491)

81,826

(58,665)

50,961
187,635
10,815

$

22,312
26,653
11,555
23,013
5,377
11,174
349,495
209,004
2,304,198
2,513,202

195
-

$

9,265
496
(11,174)
(1,218)
80,608
1,073,284
1,153,892 $

50,961
187,830
10,815
22,312
26,653
11,555
32,278
5,873
348,277
289,612
3,377,482
3,667,094

The notes to the financial statements are an integral part of this statement.

City of Scottsdale, Arizona

29

Table of Contents

30
Balance Sheet
Governmental Funds
June 30, 2007 (in thousands of dollars)
General
Obligation Bond
Debt Service

General
Fund
ASSETS
Cash and Investments
Cash with Fiscal Agent
Receivables (net of allowance for
uncollectibles)
Interest
Privilege Tax
Hotel/Motel Tax
Property Tax
State Shared Sales Tax
Franchise Fee
Court Receivable
Highway User Tax
Auto Lieu Tax
Intergovernmental
Grants
Special Assessments
Miscellaneous
Due from Other Funds
Supplies Inventory
Total Assets

City of Scottsdale, Arizona

(continued)

$

$

83,009
459

1,157
9,635
504
592
1,857
2,529
7,814
977
7,123
553
355
116,564

$

$

8,975
34,674

867
44,516

Total
Nonmajor
Governmental
Funds

General CIP
Construction
Capital Projects

$

$

105,204
6,405

832
112,441

$

$

141,720
18,481

1,507
4,704
140
1,512
3,854
2,328
3,937
548
178,731

Total
Governmental
Funds

$

$

338,908
60,019

3,496
14,339
504
1,599
1,857
2,529
7,814
1,512
977
3,854
2,328
3,937
7,671
553
355
452,252

Table of Contents

City of Scottsdale, Arizona

Balance Sheet
Governmental Funds
June 30, 2007 (in thousands of dollars)
General
Obligation Bond
Debt Service

General
Fund
LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable
Accrued Payroll and Benefits
Due to Other Funds
Matured Bond Interest Payable
Matured Bonds Payable
Deferred Revenue
Property Tax
Special Assessments
Court
Tax Audit
Intergovernmental
Other
Due to Other Governments
Guaranty and Other Deposits
Other
Total Liabilities

$

4,629
5,924
111
347

$

11,509
23,165

Total
Nonmajor
Governmental
Funds

General CIP
Construction
Capital Projects

$

11,969
18
-

$

8,734
168
553
6,642
8,340

Total
Governmental
Funds

$

25,332
6,110
553
18,262
31,852

311
7,814
2,321
345
73
2,027
2,374
26,276

459
35,133

6
29
12,022

103
3,937
4,944
1,868
34
35,323

873
3,937
7,814
2,321
4,944
351
102
3,895
2,408
108,754

754
-

9,383

-

11,866

754
21,249

26,123
63,411
90,288
116,564

9,383
44,516

79,058
52,484
143,408
178,731

26,123
63,411
179,477
52,484
343,498
452,252

Fund Balances
Reserved for
Streetlight and Services Districts
Debt Service
Unreserved, Reported in
General Fund - Designated
General Fund - Undesignated
Capital Projects Funds
Special Revenue Funds
Total Fund Balances
Total Liabilities and Fund Balances

$

$

The notes to the financial statements are an integral part of this statement.

$

100,419
100,419
112,441 $

$

31

Table of Contents

Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets
June 30, 2007 (in thousands of dollars)
Fund Balances -Total Governmental Funds

$

343,498

Amounts reported for governmental activities in the statement of net assets
are different because (see Section II A):
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds.
Bond issuance costs are not financial resources and, therefore, are not
reported in the funds.
Long-term receivables are not due and receivable in the current
period and, therefore, are not reported in the funds.
Long-term liabilities, including bonds payable, are not due and payable
in the current period and, therefore, are not reported in the funds.

2,889,569

2,924

18,962

(805,756)

Because the focus of governmental funds is on short-term financing,
some assets will not be available to pay for current period expenditures.
Those assets are offset by deferred revenue in the funds.

14,945

Internal Service Funds are used by management to charge the costs of
certain activities, such as, insurance and vehicles to individual funds.
The assets and liabilities of the Internal Service Funds are included in
governmental activities in the statement of net assets.

49,060

Net Assets of Governmental Activities

$ 2,513,202

The notes to the financial statements are an integral part of this statement.

32

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
General
Obligation Bond
Debt Service

General
Fund
REVENUES
Taxes - Local
Property
Transaction Privilege
Transient Occupancy
Light and Power Franchise
Cable TV Franchise
Salt River Project In-Lieu
Other Taxes
Taxes - Intergovernmental
State-Shared Sales
State Revenue Sharing
Auto Lieu Tax
Highway User Tax
Local Transportation Assistance Fund
Business and Liquor Licenses
Charges for Current Services
Building and Related Permits
Fire Fees
Recreation Fees
Westworld Equestrian Facility Fees
Fines, Fees and Forfeitures
Code Enforcement
Court Fines
Parking
Photo Radar
Court Enhancement
Library
Special Assessments
Property Rental
Interest Earnings
Intergovernmental
Federal Grants
State Grants
Miscellaneous
Developer Contributions
Streetlight and Services Districts
Contributions and Donations
Reimbursements from Outside Sources
Indirect Costs
Other
Total Revenues

33

(continued)

$

19,611
120,803
1,970
7,284
3,355
176
753

$

Total
Nonmajor
Governmental
Funds

General CIP
Construction
Capital Projects

27,933
-

$

-

$

3,188
58,191
7,753
-

Total
Governmental
Funds

$

50,732
178,994
9,723
7,284
3,355
176
753

22,312
26,653
9,728
1,626

-

-

16,778
1,074
-

22,312
26,653
9,728
16,778
1,074
1,626

16,057
1,155
2,768
2,268

-

-

71
972
-

16,128
1,155
3,740
2,268

6,039
360
6,056
648
3,536
7,019

8

5,503

228
7
1,441
1,825
332
8,553

228
6,046
360
6,056
1,441
648
1,825
3,868
21,083

2
685
1
546
12
338
10,208
568
272,537

1
27,942

767
1,013
101
157
22
7,563

9,420
929
3,960
1,010
1,765
72
110
117,679

9,420
1,698
4,645
2,024
546
1,878
568
10,208
700
425,721

Table of Contents

34

Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
General
Obligation Bond
Debt Service

General
Fund

EXPENDITURES
Current
General Government
Police
Financial Services
Transportation
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Services Districts
Debt Service
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Capital Improvements
Total Expenditures

Total
Nonmajor
Governmental
Funds

General CIP
Construction
Capital Projects

Total
Governmental
Funds

City of Scottsdale, Arizona

24,332
77,505
9,080
52,042
8,931
26,275
509
3,212
3,838
1,395
14,307
597

-

-

606
756
13,439
9,736
339
9,183
42
17
7,621
24
-

24,938
78,261
9,080
13,439
61,778
8,931
26,614
9,692
3,254
3,855
9,016
14,331
597

1,214
4,342
984
228,563

23,165
23,030
46,195

84,113
84,113

9,873
10,907
735
62,270
125,548

34,252
38,279
735
147,367
484,419

Excess (Deficiency) of Revenues Over
Expenditures

43,974

(18,253)

(76,550)

(7,869)

(58,698)

OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Refunding Bonds Issued
Long-term Capital-Related Debt Issued
Premium on Bonds Issued
Payment to Bond Refunding Escrow Agent
Proceeds from Capital Lease
Proceeds from Notes Payable
Total Other Financing Sources and (Uses)

9,133
(57,042)
175
(47,734)

15,200
15,200

78,662
(856)
42,050
119,856

59,970
(97,397)
55,450
450
7,199
(61,845)
3,000
(33,173)

162,965
(155,295)
55,450
42,500
7,199
(61,845)
175
3,000
54,149

(3,760)

(3,053)

43,306

(41,042)

(4,549)

94,048

12,436

57,113

184,450

Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

$

90,288

$

The notes to the financial statements are an integral part of this statement.

9,383

$

100,419

$

143,408

348,047
$

343,498

Table of Contents

Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to
the Statement of Activities
For the Year Ended June 30, 2007 (in thousands of dollars)
Net Change in Fund Balances - Total Governmental Funds

$

(4,549)

Amounts reported for governmental activities in the statement of activities
are different because (see Section II B):
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount by which capital outlay exceeded depreciation in the current period.

24,784

Donations of capital assets are not reflected on the governmental fund
statements but are shown in the statement of activities.

204,867

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.

(2,306)

Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds.

(1,588)

Bond issuance costs are expended in the governmental funds when paid,
and are capitalized and amortized in the statement of net assets. This
is the amount by which current year bond issuance costs exceed amortization
expense in the current period.

477

The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds. Neither
transaction; however, has any effect on net assets. This is the amount by
which debt proceeds exceeded principal retirement in the current period.

(12,227)

Additional accrued interest calculated on bonds and notes payable.

(444)

Long-term contracts initiated during the current year are not reported in
governmental funds and thus do not contribute to the change in fund
balance. In the government-wide statements, however, entering into a
contract payable increases long-term liabilities in the statement of net
assets.

(7,903)

The net revenues of certain activities of internal service funds is reported
with governmental activities.

7,893

Changes in Net Assets of Governmental Activities

$

209,004

The notes to the financial statements are an integral part of this statement.

City of Scottsdale, Arizona

35

Table of Contents

General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)
Budgeted Amounts
Original
REVENUES
Taxes - Local
Property
Transaction Privilege
Transient Occupancy
Light and Power Franchise
Cable TV Franchise
Salt River Project In-Lieu
Other Taxes
Taxes - Intergovernmental
State-Shared Sales
State Revenue Sharing
Auto Lieu Tax
Business and Liquor Licenses
Charges for Current Services
Building and Related Permits
Fire Fees
Recreation Fees
Westworld Equestrian Facility Fees
Fines, Fees and Forfeitures
Court Fines
Parking
Photo Radar
Library
Property Rental
Interest Earnings
Intergovernmental
State Grants
Miscellaneous
Developer Contributions
Streetlight and Services Districts
Contributions and Donations
Reimbursements from Outside Sources
Indirect Costs
Other
Total Revenues

$

$

20,066
121,315
1,869
6,050
3,283
203
721

Actual Amounts
Budgetary Basis

$

Budget to GAAP
Differences

19,611
120,803
1,970
7,284
3,355
176
753

$

Actual Amounts
GAAP Basis

-

$

19,611
120,803
1,970
7,284
3,355
176
753

$

(455)
(512)
101
1,234
72
(27)
32

20,630
20,848
9,579
2,088

20,630
20,848
9,579
2,088

22,312
26,653
9,728
1,626

-

22,312
26,653
9,728
1,626

1,682
5,805
149
(462)

17,000
1,000
2,800
2,275

17,000
1,000
2,800
2,275

16,057
1,155
2,768
2,268

-

16,057
1,155
2,768
2,268

(943)
155
(32)
(7)

5,304
306
4,525
650
3,100
2,300

5,304
306
4,525
650
3,100
2,300

6,039
360
6,056
648
3,536
5,348

1,671

6,039
360
6,056
648
3,536
7,019

735
54
1,531
(2)
436
3,048

600
10,208
300
257,020

600
10,208
300
257,020

1
546
10,208
568
269,829

2
685
12
338
2,708

2
685
1
546
12
338
10,208
568
272,537

1
(54)
268
12,809

26,033
77,475
9,367
53,096
9,574
29,679
495
3,396
4,379
1,432
15,004
600

26,154
78,275
9,648
53,469
9,516
29,646
495
3,396
4,379
1,482
14,952
600

24,196
76,970
8,759
51,778
8,897
26,255
444
3,210
3,841
1,394
14,221
597

24,332
77,505
9,080
52,042
8,931
26,275
509
3,212
3,838
1,395
14,307
597

1,958
1,305
889
1,691
619
3,391
51
186
538
88
731
3

1,825
4,221
236,576

1,825
4,221
238,058

1,214
4,342
984
227,102

1,461

1,214
4,342
984
228,563

611
(121)
(984)
10,956

Excess (Deficiency) of Revenues Over
Expenditures

20,444

18,962

42,727

1,247

43,974

23,765

OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Proceeds from Capital Lease
Total Other Financing Sources and (Uses)

8,481
(56,496)
(48,015)

8,481
(56,496)
(48,015)

9,133
(57,042)
(47,909)

175
175

9,133
(57,042)
175
(47,734)

(27,571)

(29,053)

(5,182)

1,422

(3,760)

23,871

70,798

70,798

94,048

94,048

23,250

EXPENDITURES
Current
General Government
Police
Financial Services
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Services Districts
Debt Service
Principal
Interest and Fiscal Charges
Capital Improvements
Total Expenditures

Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

36

20,066
121,315
1,869
6,050
3,283
203
721

Final

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

$

43,227

$

41,745

$

88,866

136
535
321
264
34
20
65
2
(3)
1
86
-

$

1,422

$

90,288

652
(546)
106

$

47,121

City of Scottsdale, Arizona

Table of Contents

General Fund
Reconciliation of Statement of Revenues, Expenditures,
and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)

Explanation of Differences:
Items recorded as revenues for GAAP purposes that are not recorded
for budget purposes:
Change in Fair Value of Investments
Miscellaneous Items

$

Total Revenue Reconciling Items:

2,708

The City budgets for certain expenditures on the cash basis, rather than
on the modified accrual basis:
Claims and Compensated Absences
Bad Debt Expense
Total Expenditure Reconciling Items:

1,250
211
1,461

Other Financing Sources (Uses):
Capital Lease
Net Increase in Fund Balance - Budget to GAAP

1,671
1,037

175
$

1,422

The notes to the financial statements are an integral part of this statement.

City of Scottsdale, Arizona

37

Table of Contents

Statement of Net Assets
Proprietary Funds
June 30, 2007 (in thousands of dollars)

Water and
Sewer
Utility

Airport

Solid Waste

Total

Governmental
Activities Internal
Service Funds

ASSETS
Current Assets
Cash and Investments
Cash with Fiscal Agent
Receivables
Charges for Services
Intergovernmental
Interest
Miscellaneous
Deposits
Supplies Inventory
Restricted Cash, Cash Equivalents, and Investments:
Customer Advances and Deposits
Total Current Assets
Noncurrent Assets
Equity in Joint Venture
Deferred Charges
Restricted Cash, Cash Equivalents, and Investments:
Deferred Revenue
Water and Sewer System Replacement
Acquisition and Construction Reserve
Capital Assets
Land
Water Rights
Water System
Sewer System
Buildings and Improvements
Motor Vehicles
Machinery and Equipment
Furniture and Fixtures
Construction in Progress
Less Accumulated Depreciation

$

98,448
13,998

$

4,261
-

$

5,556
-

$

108,265
13,998

$

35,706
-

14,057
6
1,410
1,171
16,010
-

74
30
183
-

1,820
54
68
-

15,877
80
1,494
1,422
16,010
-

323
9
415

1,541

67

-

1,608

-

146,641

4,615

7,498

158,754

36,453

94,751
1,145

-

-

94,751
1,145

-

6,656
24,105
9,544

-

-

6,656
24,105
9,544

-

22,018
64,688
813,315
391,949
13,953
621
64,912
(275,838)

9,564
15,772
939
190
(5,935)

1,111
3,005
1,905
(2,259)

32,693
64,688
813,315
391,949
18,777
16,797
621
65,102
(284,032)

1,846
64,161
687
(37,786)

Total Capital Assets (net of
accumulated depreciation)

1,095,618

20,530

3,762

1,119,910

28,908

Total Noncurrent Assets

1,231,819

20,530

3,762

1,256,111

28,908

11,260

$ 1,414,865

Total Assets

$ 1,378,460

$

25,145

$

$

65,361

The notes to the financial statements are an integral part of this statement.
(continued on next page)

38

City of Scottsdale, Arizona

Table of Contents

Statement of Net Assets
Proprietary Funds
June 30, 2007 (in thousands of dollars)

Water and
Sewer
Utility

Airport

Solid Waste

Total

Governmental
Activities Internal
Service Funds

LIABILITIES
Current Liabilities
Accounts Payable
Accrued Payroll and Benefits
Accrued Compensated Absences - Current
Accrued Compensated Absences - Due Within One Year
Claims Payable
Customer Advances and Deposits
Matured Bonds Payable
Matured Bond Interest Payable
Bonds Payable and Other Payables - Due within One Year
Total Current Liabilities
Noncurrent Liabilities
Accrued Compensated Absences - Due in More Than One Year
Deferred Revenue
Bonds Payable and Other Payables - Due in More Than One Year
Total Noncurrent Liabilities
Total Liabilities

$

11,084
336
752
1,541
8,010
5,985
8,419

$

56
20
49
67
1

$

443
113
271
3

$

11,583
469
1,072
1,608
8,010
5,985
8,423

$

1,351
95
20
231
14,347
-

36,127

193

830

37,150

16,044

838
6,656
215,855

46
2

408
18

1,292
6,656
215,875

243
14

223,349

48

426

223,823

257

259,476

241

1,256

260,973

16,301

871,344

20,530

3,762

895,636

28,908

24,105
9,544
213,991
$ 1,118,984

4,374
24,904

6,242
10,004

24,105
9,544
224,607
$ 1,153,892

20,152
49,060

NET ASSETS
Invested in Capital Assets, Net of Related Debt
Restricted for Water and Sewer
System Replacement
Restricted for Acquisition and Construction
Unrestricted
Total Net Assets

$

$

$

The notes to the financial statements are an integral part of this statement.

City of Scottsdale, Arizona

39

Table of Contents

Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

Water and
Sewer
Utility
Operating Revenues
Charges for Sales and Services
Water Service Fees
Sewer Service Fees
Proprietary - Non-Potable Water Fees
Groundwater Treatment Plant
Solid Waste Fees
Airport Fees
Other Services
Other

$

Total Operating Revenues
Operating Expenses
Costs for Sales and Services
Water Operations
Sewer Operations
Solid Waste Operations
Airport Operations
Other Services
Indirect Costs
Depreciation
Total Operating Expenses
Operating Income
Non-Operating Revenues (Expenses)
Transaction Privilege Tax
Investment Income
Gain on Sale of Capital Assets
Net Non-Operating Revenues (Expenses)
Income Before Contributions and Transfers
Capital Contributions
Transfers In
Transfers Out
Change in Net Assets
Total Net Assets - Beginning
Total Net Assets - Ending

78,148
32,250
5,766
467
494

Airport

$

3,451
-

Solid Waste

$

18,490
2

Total

$

78,148
32,250
5,766
467
18,490
3,451
496

Governmental
Activities Internal
Service Funds

$

39,945
742

117,125

3,451

18,492

139,068

40,687

39,304
17,374
7,411
26,915

1,495
592
871

15,494
2,204
197

39,304
17,374
15,494
1,495
10,207
27,983

34,690
5,542

91,004

2,958

17,895

111,857

40,232

26,121

493

597

27,211

455

8,755
-

195
191
-

319
-

195
9,265
-

1,930
241

8,755

386

319

9,460

2,171

34,876

879

916

36,671

2,626

54,884
358
(10,704)

227
(431)

(397)

55,111
358
(11,532)

1,763
3,692
(188)

79,414

675

519

80,608

7,893

1,039,570

24,229

9,485

1,073,284

41,167

10,004

$ 1,153,892

$ 1,118,984

$

24,904

$

$

49,060

The notes to the financial statements are an integral part of this statement.

40

City of Scottsdale, Arizona

Table of Contents

Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

Water and
Sewer
Utility
Cash Flows from Operating Activities
Cash Received from Customers
Cash Paid to Suppliers
Cash Paid to Employees
Other Operating

$

Net Cash Provided by (Used for) Operating Activities

114,738
(49,941)
(13,427)
495

Airport

$

51,865

Cash Flows from Non-Capital
Financing Activities
Transaction Privilege Tax
Transfers In
Transfers Out
Net Cash Provided by (Used for)
Non-Capital Financing Activities

3,482
(1,127)
(948)
-

Solid Waste

$

1,407

18,154
(12,309)
(5,184)
2

Total

$

136,374
(63,377)
(19,559)
497

Governmental
Activities Internal
Service Funds

$

40,029
(31,024)
(3,715)
742

663

53,935

6,032

358
(10,704)

195
(431)

(397)

195
358
(11,532)

3,692
(188)

(10,346)

(236)

(397)

(10,979)

3,504

17,878
4
(62,818)
122,505
(128,299)
(8,692)
(8,719)
(12,717)
121

153
(636)
-

(8)
-

17,878
157
(63,462)
122,505
(128,299)
(8,692)
(8,719)
(12,717)
121

(7,432)
360

(80,737)

(483)

(8)

(81,228)

(7,072)

8,360

173

303

8,836

1,849

8,360

173

303

8,836

1,849

Net Increase (Decrease) in Cash and Cash Equivalents

(30,858)

861

561

(29,436)

4,313

Cash and Cash Equivalents at Beginning of Year

185,150

3,467

4,995

193,612

31,393

Cash Flows from Capital and Related
Financing Activities
Capital Contributions from Other
Water and Sewer Development Fees
Capital Grants
Acquisition and Construction of Property and Equipment
Proceeds from Bonds
Payments to Bond Refunding Escrow
Principal Payments on Capital Debt
Interest Paid on Capital Debt
Investment in Joint Venture & CIP Deposit
Sale of Capital Assets
Net Cash Provided by (Used for)
Capital and Related Financing Activities
Cash Flows from Investing Activities
Income Received on Investments
Net Cash Provided by Investing Activities

Cash and Cash Equivalents at End of Year

$

154,292

$

4,328

$

5,556

$

164,176

$

35,706

The notes to the financial statements are an integral part of this statement.

(continued on next page)

City of Scottsdale, Arizona

41

Table of Contents

Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

(Concluded)

Water and
Sewer
Utility

Airport

Solid Waste

Total

Governmental
Activities Internal
Service Funds

Cash and Cash Equivalents
at End of Year Includes
Cash and Investments
Cash with Fiscal Agent
Restricted Cash and Investments

$

98,448
13,998
41,846

$

4,261
67

$

5,556
-

$

108,265
13,998
41,913

$

35,706
-

Total Cash and Cash Equivalents

$

154,292

$

4,328

$

5,556

$

164,176

$

35,706

$

26,121

$

493

$

597

$

27,211

$

455

Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities
Operating Income
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided
by (Used for) Operating Activities
Depreciation and Amortization
Changes In Assets and Liabilities
Sources (Uses) of Cash
Accounts Receivable
Miscellaneous Receivables
Supplies Inventory
Accounts Payable
Accrued Payroll and Benefits
Claims Payable
Deferred Revenue
Other Liabilities

26,915

(2,577)
(197)
554
167
684
198

Total Adjustments
Net Cash Provided by (Used for) Operating Activities
Supplemental Disclosure of Non-Cash
Financing Activities
Additions to Property, Plant, and Equipment
Contributions from Developers
Contributions from Other Government Units
Amortization of Deferred Charges
Total Non-Cash Financing Activities

871

29
(9)
18
5

25,744

914

197

27,983

(327)
(9)
94
90
21

(2,904)
(177)
639
275
684
224

66

26,724

5,542

84
11
257
56
(387)
14
5,577

$

51,865

$

1,407

$

663

$

53,935

$

6,032

$

36,998
(409)

$

-

$

-

$

36,998
(409)

$

1,763
-

$

36,468

$

-

$

-

$

36,468

$

1,763

The notes to the financial statements are an integral part of this statement.

42

City of Scottsdale, Arizona

Table of Contents

Statement of Fiduciary Net Assets

Fiduciary Funds
June 30, 2007 (in thousands of dollars)

Private Purpose
Trust Funds
ASSETS
Cash and Cash Equivalents

$

Total Assets

LIABILITIES
Accounts Payable
Designated Escrow Payable
Total Liabilities

NET ASSETS
Held in Trust for Other Purposes

$

Agency Funds

7

$

4,743

7

4,743

-

86
4,657

-

4,743

7

$

-

The notes to the financial statements are an integral part of this statement.

City of Scottsdale, Arizona

43

Table of Contents

Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

Private Purpose
Trust Funds
ADDITIONS
Contributions:
Private Donations

$

Total Additions

9

DEDUCTIONS
Scholarships

6

Total Deductions

6

Change in Net Assets

3

Net Assets - Beginning
Net Assets - Ending

9

4
$

7

The notes to the financial statements are an integral part of this statement.

44

City of Scottsdale, Arizona

Table of Contents

The City of Scottsdale, Arizona (City) was incorporated in 1951. The current City Charter was adopted in
1961, which established the Council/Manager form of government. The City provides basic government
services to its citizens including roads, water, sewer, solid waste management, public transit, parks and
recreation facilities, police and fire.
The accounting policies of the City conform to accounting principles generally accepted in the United
States of America (GAAP) as applicable to governmental units. The following is a summary of the more
significant policies.
The financial reporting entity presented in these financial statements consists of the City of Scottsdale,
Arizona (the primary government) and its component units. The component units discussed below are
included in the City’s reporting entity because of the significance of their operational or financial relationships
with the City.
Component Unit
City of Scottsdale
Municipal Property
Corporation (MPC)

Scottsdale Preserve
Authority (SPA)

Scottsdale Mountain
Community Facilities
District (CFD)

Description and Criteria for Inclusion
•

Non-profit corporation created in 1967.

•

Sole purpose is to construct, acquire, and equip
buildings, structures or land improvements for the
City.

•

Governed by Board of Directors appointed by the
City Council.

•

For financial reporting purposes, transactions are
included as a governmental and proprietary fund
type, as if part of the City’s operation.

•

Non-profit corporation created in 1997.

•

Sole purpose is to finance land acquisitions for
McDowell Sonoran Preserve.

•

Governed by a Board of Directors appointed by the
City Council.

•

For financial reporting purposes, transactions are
included as a governmental fund type, as if part of
the City’s operation.

•

Formed by 1992 petition to City Council.

•

Created to acquire and improve public infrastructure
in specified land area.

•

Able to levy taxes and issue bonds independent of
the City.

•

Property owners within the designated area are
assessed for District taxes and costs of operation.

•

City Council serves as the Board of Directors.

•

The City has no liability for the District debt.

•

For financial reporting purposes, transactions are
included as a governmental fund type, as if part of
the City’s operation.

City of Scottsdale, Arizona

Reporting
Method

For Separate Financial
Statements

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

Notes to Financial Statements

A. Financial Reporting Entity

For the Fiscal Year Ended June 30, 2007

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

45

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

McDowell
Ranch Mountain
Community
Facilities District
(CFD)

DC Ranch
Community
Facilities District
(CFD)

Via Linda Road
Community
Facilities District
(CFD)

Waterfront
Commercial
Community
Facilities District
(CFD)

46

•

Formed by 1994 petition to City Council.

•

Created to acquire and improve public
infrastructure in specified land area.

•

Able to levy taxes and issue bonds independent of
the City.

•

Property owners within the designated area are
assessed for District taxes and costs of operation.

•

City Council serves as the Board of Directors.

•

The City has no liability for the District debt.

•

For financial reporting purposes, transactions are
included as a governmental fund type, as if part of
the City’s operation.

•

Formed by 1997 petition to City Council.

•

Created to acquire and improve public
infrastructure in specified land area.

•

Able to levy taxes and issue bonds independent of
the City.

•

Property owners within the designated area are
assessed for District taxes and costs of operation.

•

City Council serves as the Board of Directors.

•

The City has no liability for the District debt.

•

For financial reporting purposes, transactions are
included as a governmental fund type, as if part of
the City’s operation.

•

Formed by 1998 petition to City Council.

•

Created to acquire and improve public
infrastructure in specified land area.

•

Able to levy taxes and issue bonds independent of
the City.

•

Property owners within the designated area are
assessed for District taxes and costs of operation.

•

City Council serves as the Board of Directors.

•

The City has no liability for the District debt.

•

For financial reporting purposes, transactions are
included as a governmental fund type, as if part of
the City’s operation.

•

Formed by 2005 petition to City Council.

•

Created to acquire and improve public
infrastructure in specified land area.

•

Able to levy taxes and issue bonds independent of
the City.

•

Property owners within the designated area are
assessed for District taxes and costs of operation.

•

City Council serves as the Board of Directors.

•

The City has no liability for the District debt.

•

For financial reporting purposes, transactions are
included as a governmental fund type, as if part of
the City’s operation.

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

Blended

City of Scottsdale
Finance Department
Accounting Division
7447 E. Indian School Rd. Ste. 210
Scottsdale, AZ 85251

City of Scottsdale, Arizona

Table of Contents

The statement of activities demonstrates the degree to which the direct expenses for 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 and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation

Notes to Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities)
report information on all of the non-fiduciary activities of the primary government and its component units.
For the most part, the effect of interfund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported separately
from business-type activities, which rely to a significant extent on fees and charges for support.

For the Fiscal Year Ended June 30, 2007

B. Gover nment-wide and Fund 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 and trust fund financial statements. Agency funds do not
have a measurement focus. 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 revenue as soon as all eligibility
requirements have been met.
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. The City considers revenues to be available if they
are collected within 30 days of the end of the current fiscal period. Expenditures generally are recorded
when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to vacation, sick leave, claims, and judgments, are recorded only when payment is due.
Property taxes, other local taxes, licenses, and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
All other revenue items are considered to be measurable and available only when the City receives cash.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of
the general government, except those required to be accounted for in another fund.
The General Obligation Bond Debt Service Fund is used to account for the accumulation of resources for,
and the payment of, long-term obligation debt principal, interest, and related costs.
The General CIP Construction Capital Projects Fund accounts for the resources used to acquire, construct
and improve major capital facilities, other than those financed by proprietary funds. Capital Projects
Funds allow the City to compile project cost data and demonstrate that legal or contractual requirements
regarding the use of the resources are fully satisfied.
City of Scottsdale, Arizona

47

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

The government reports the following major proprietary funds:
The Water and Sewer Utility, Airport and Solid Waste Funds account for the operating revenues and expenses
of the City’s water and sewer utility systems, airport and sanitation services (solid waste, brush removal,
container maintenance, etc.), respectively.
Additionally, the government reports the following fund types:
The Internal Service Funds account for fleet management and self-insurance services provided to other
departments or units of the City, on a cost-reimbursement basis.
The Agency Funds are purely custodial (assets equal liabilities) and do not involve measurement of
results of operations. The City’s agency funds are used to record the Family Self-Sufficiency activity and
Retainage Escrow activity.
The Private-Purpose Trust Funds are used to account for assets held in a trustee capacity for scholarships
and other purposes as designated by the donors or by legal restrictions. Both the principal and earnings
of these expendable trust funds can be expended for the trusts’ intended purposes.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in both the government-wide and proprietary fund financial statements to the extent that those
standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board.
Governments also have the option of following subsequent private-sector guidance for their business-type
activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent
private-sector guidance.
In general, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this rule are payments-in-lieu of taxes, indirect costs and franchise fees and other
charges between the City’s Water and Sewer Utility Fund, Airport Fund, and Solid Waste Fund, because
elimination of these charges would distort the direct costs and program revenues reported in the statement
of activities.
Amounts reported as 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 and other items not properly included among program revenues are reported
instead as general revenues.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services in connection with the fund’s principal
ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds
are charges for customer services including: water, sewer, airport, and solid waste fees, vehicle purchase
amounts and risk management charges. Operating expenses for enterprise funds and internal service funds
include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted
resources first; then unrestricted resources as they are needed.

48

City of Scottsdale, Arizona

Table of Contents

GASB Statement No. 31 provides that governmental entities may report all investments at fair value or
they may elect to report certain money market investments and participating interest-earning investment
contracts at amortized cost. The City has elected to report all investments at fair value. The City’s policy
is to invest in certificates of deposit, repurchase agreements, commercial paper, direct U.S. Treasury debt,
securities guaranteed by the United States Government or any of its agencies, and the State of Arizona
Local Government Investment Pool (LGIP). The LGIP is overseen by the State of Arizona. The fair value
of each share in the LGIP is $1.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are classified as “due to/from other funds” (i.e., the current portion of interfund loans).
Any residual balances outstanding between the governmental activities and business-type activities are
reported in the government-wide financial statements as “internal balances.”
All accounts, property tax and court receivables are shown net of an allowance for uncollectibles. All
receivables in excess of one year comprise the allowance for uncollectibles at June 30, 2007.

Notes to Financial Statements

1. Deposits and Investments
Cash equivalents for purposes of the statements of cash flows are investments (including restricted assets)
in mutual funds, demand deposits, repurchase agreements, and U.S. Treasury bills and notes with maturities
of three months or less at acquisition date.

For the Fiscal Year Ended June 30, 2007

D. Assets, Liabilities, and Net Assets or Equity

The City’s property tax is levied each year on or before the third Monday in August based on the previous
January 1 full cash value as determined by the Maricopa County Assessor. Levies are due and payable in two
installments, on October 1 and March 1, and become delinquent on November 1 and May 1, respectively.
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 following the May 1 date upon which the second half taxes become delinquent.
Property taxes levied for current operation and maintenance expenses on residential property are limited to
1.0 percent of the primary full cash value of such property. In addition, taxes levied for current operation
and maintenance expenses on all types of property are limited to a maximum increase of 2.0 percent over
the prior year’s levy, adjusted for new construction and annexations. Property taxes levied to pay principal
and interest on bonded indebtedness are not limited.
3. Inventories
Inventories of the governmental funds are recorded under the consumption method. Inventories are
recorded as expenditures when consumed rather than when purchased. Inventories are valued at year-end
based on cost, with cost determined using an average cost method.
4. Restricted Assets
Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain resources set aside for their
repayment, are classified as restricted assets on the statement of net assets because they are maintained in
separate bank accounts and their use is limited by applicable bond covenants. The revenue bond renewal
and replacement account is used to report resources set aside to meet unexpected contingencies or to fund
asset renewals and replacements.

City of Scottsdale, Arizona

49

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

5. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks
and similar items), are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements. The government defines capital assets, as assets with an initial,
individual cost of more than $5,000 and an estimated useful life in excess of two years. Assets contributed
(donated) to those funds are recorded by reference to historical costs of the donor if recently purchased or
constructed, or if such records are not available, at estimated fair market value on the date of receipt.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business-type activities is included as part of the
capitalized value of the assets constructed.
Depreciation and amortization of all assets are recorded and calculated using the straight-line method over
the following estimated useful lives:
Asset Type
Water System
Sewer System
Buildings and Improvements
Streets and Storm Drains
Land Improvements
Machinery and Equipment
Motor Vehicles
Furniture, Fixtures and Office Equipment

Estimated Life
10 to 75 Years
25 to 50 Years
25 to 50 Years
30 Years
25 Years
5 to 20 Years
3 to 15 Years
5 to 10 Years

The excess purchase price over fair market value of assets acquired in the Water and Sewer Utility Enterprise
Fund is amortized on the straight-line method over 20 to 60 years.
When capital assets are disposed of, the cost and accumulated depreciation or amortization is removed from
the accounts, and any resultant gain or loss is recognized in the government-wide and proprietary fund
financial statements.
6. Compensated Absences
Compensated absences consist of vacation leave and a calculated amount of sick leave earned by employees
based on services already rendered. Employees may accumulate up to a maximum number of hours of
vacation depending on years of service, but any vacation hours in excess of the maximum amount unused
at year-end are forfeited. The City’s policy is to pay employees for unused accumulated vacation hours at
termination or retirement. Sick leave time can be accumulated without limit. The City’s policy, however,
is that only those employees hired full-time before July 1, 1982 are paid for unused sick leave at death or
retirement. Employees who retire on or after July 1, 1996, and who have accumulated 300 or more hours
of sick leave, may elect to apply the value of the sick leave toward their City medical plan premiums.

50

All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements.
A liability for the current amount of compensated absences is recorded as a current liability at June 30
in the governmental and proprietary funds. The current liability represents compensated absences that
have matured but were not paid as of June 30 that resulted from employee resignations and retirements.
The current compensated absences amount in the governmental funds is combined with accrued payroll
and other payroll related amounts in the accrued payroll and benefits line item. The City calculates this
current amount based on vacation taken and an actuarial valuation dated January 1, 2007, for medical leave
conversion. There is no long-term liability for compensated absences in the governmental funds.
City of Scottsdale, Arizona

Table of Contents

8. Fund Equity
In the fund financial statements, governmental funds report reservation of fund balance for amounts that
are not available for appropriation or are legally restricted by outside parties for use for a specific purpose.
Designations of fund balance represent tentative management plans that are subject to change.
9. Net Assets
The government-wide and proprietary fund financial statements utilize a net assets presentation. Net assets
are categorized as invested in capital assets (net of related debt), restricted, and unrestricted.

Notes to Financial Statements

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.

For the Fiscal Year Ended June 30, 2007

7. Long-term Obligations
In the government-wide financial statements and the proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund statement of net assets. Bond premiums and discounts,
as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line
method. Bonds payable are reported net of the applicable bond premium or discount and deferred amounts
on refundings. Bond issuance costs are reported as deferred charges and amortized over the term of the
related debt.

Invested in Capital Assets, Net of Related Debt – This category groups all capital assets, including infrastructure,
into one component of net assets. Accumulated depreciation and the outstanding balances of debt that
are attributable to the acquisition, construction, or improvement of these assets reduce the balance in
this category.
Restricted Net Assets – This category represents net assets that have external restrictions imposed by
creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed
by law through constitutional provisions or enabling legislation.
Unrestricted Net Assets – The category represents net assets of the City, not restricted for any project or
other purpose.

City of Scottsdale, Arizona

51

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

II. RECONCILIATION OF GOVERNMENT-WIDE AND
FUND FINANCIAL STATEMENTS
A. Explanation of certain differences between the governmental funds balance sheet and the
government-wide statement of nets assets.
The City’s total governmental fund balances, $343,498, differs from net assets of governmental activities,
$2,513,202, reported in the statement of net assets. The difference primarily results from the long-term
economic focus in the statement of net assets versus the current financial resources focus in the governmental
fund balance sheets.
Reconciliation of Governmental Funds Balance Sheet and the Government-wide Statement of Net Assets
(in thousands of dollars)

Total
Governmental
Funds

ASSETS
Cash and Investments
Cash with Fiscal Agent
Receivables (net of allowance for uncollectibles)
Interest
Privilege Tax
Hotel/Motel Tax
Property Tax
State Shared Sales Tax
Franchise Fee
Court Receivable
Highway User Tax
Auto Lieu Tax
Intergovernmental
Grants
Special Assessments
Miscellaneous
Due from Other Funds/Internal Balances
Supplies Inventory
Capital Assets (net of accumulated depreciation)
Deferred charges and other assets
Total Assets

LIABILITIES
Accounts Payable
Accrued Payroll and Benefits
Accrued Compensated Absences - Current
Accrued Compensated Absences - Due Within One Year
Accrued Compensated Absences - Due in More Than One Year
Claims Payable
Due to Other Funds
Matured Bond Interest Payable
Matured Bonds Payable
Deferred Revenue
Property Tax
Special Assessments
Court
Tax Audit
Intergovernmental
Other
Due to Other Governments
Guaranty and Other Deposits
Other
Bonds, Loans, Capital Leases, and Other Payables
Total Liabilities
Fund Balances/Net Assets
Total Fund Balances/Net Assets
Total Liabilities and Fund Balances/Net Assets

52

$

$

$

Internal
Service
Funds (2)

Reclassifications
and
Eliminations

Statement of
Net Assets
Totals

338,908 $
60,019

- $
-

35,706 $
-

- $
-

374,614
60,019

3,496
14,339
504
1,599
1,857
2,529
7,814
1,512
977
3,854
2,328
3,937
7,671
553
355
452,252 $

18,962
2,889,569
2,924
2,911,455 $

323
9
415
28,908
65,361 $

(553)
(553) $

3,819
14,339
504
1,599
1,857
2,529
7,814
1,512
977
22,816
2,328
3,937
7,680
770
2,918,477
2,924
3,428,515

25,332 $
6,110
553
18,262
31,852

- $
(17)
17
10,004
10,206
-

1,351 $
95
20
231
243
14,347
-

- $
(553)
-

26,683
6,188
37
10,235
10,449
14,347
18,262
31,852

14
16,301

(553)

49,060
65,361 $

(553) $

873
3,937
7,814
2,321
4,944
351
102
3,895
2,408
108,754

$

Long-Term
Assets/
Liabilities (1)

343,498
452,252 $

(873)
(3,937)
(7,814)
(2,321)
785,546
790,811

2,120,644
2,911,455 $

4,944
351
102
3,895
2,408
785,560
915,313

2,513,202
3,428,515

City of Scottsdale, Arizona

Table of Contents

Cost of capital assets
Accumulated depreciation

$
$

4,019,693
(1,130,124)
2,889,569

Bond issuance costs are expended in governmental funds when paid, and are capitalized and amortized over the life of the corresponding bonds
for purpose of the statement of net assets.
Bond issuance costs @ 7/1/06
Bond issuance cost for fiscal year 2007
Amortization of bond issuance costs

$

$

2,447
735
(258)
2,924

$

18,962

$

(3,000)
(19,991)
(754,382)
13,432
(21,084)
(20,210)
(521)
(805,756)

Long-term receivables applicable to the City's governmental activities are not due and receivable in the current period and accordingly are not
reported as fund receivables in the governmental funds. All receivables, both current and long-term, are reported in the statement of net assets.

Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported
as fund liabilities in the governmental funds. All liabilities, both current and long-term, are reported in the statement of net assets. Balances at
June 30, 2007 were:

Notes Payable
Contract and capital lease payables
Bonds payable
Deferred amount on refunding
Deferred issuance premium
Accrued vacation and sick leave pay
Post Employment - Implied Subsidy

$

Notes to Financial Statements

assets are reported as expenditures in governmental funds. However, the statement of net assets includes those capital assets among the assets of
the City as a whole.

For the Fiscal Year Ended June 30, 2007

(1) When capital assets (land, buildings, equipment, etc) that are to be used in governmental activities are purchased or constructed, the costs of those

Because the focus of governmental funds is on short-term financing, some assets will not be available to pay for current period expenditures.
Those assets (for example, receivables) are offset by deferred revenues in the governmental funds and thus are not included in fund balance.
Deferred revenue for the long-term special assessment receivables shown on the governmental fund statements is not deferred on the statement of
net assets. Certain tax and other revenues deferred under modified accrual for governmental fund statements, is recognized as revenue under
accrual accounting for the government-wide statements.

Deferred special assessment revenue
Deferred court revenue
Deferred tax revenue

$

$

3,937
7,814
3,194
14,945

$

49,060

(2) Internal Service Funds are used by management to charge the costs of certain activities, such as fleet management and self insurance, to individual

funds. The assets and liabilities of certain Internal Service Funds are included in governmental activities in the statement of net assets.

City of Scottsdale, Arizona

53

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

B.

Explanation of certain differences between the gover nmental funds statement of
revenues, expenditures, and changes in fund balances and the gover nment-wide
statement of activities.

The net change in fund balances for governmental funds, $(4,549), differs from the change in net assets for
the governmental activities, $209,004, reported in the statement of activities. The differences arise primarily
from the long-term economic focus in the statement of activities versus the current financial resources
focus in the governmental funds. The effect of the differences is illustrated below.
Reconciliation of Governmental Statement of Revenues, Expenditures, and Changes
in Fund Balances and the Government-wide Statement of Activities (in thousands of dollars)

Total
Governmental
Funds

REVENUES:
Taxes - Local:
Property
Transaction Privilege
Transient Occupancy
Light and Power Franchise
Cable TV Franchise
Salt River Project In-Lieu
Other Taxes
Taxes - Intergovernmental:
State-Shared Sales
State Revenue Sharing
Auto Lieu Tax
Highway User Tax
Local Transportation Assistance Fund
Business and Liquor Licenses
Charges for Current Services:
Building and Related Permits
Fire Fees
Recreation Fees
Westworld Equestrian Facility Fees
Fines and Forfeitures:
Code Enforcement
Court Fines
Parking
Photo Radar
Court Enhancement
Library
Special Assessments
Property Rental
Interest Earnings
Intergovernmental:
Federal Grants
State Grants
Miscellaneous
Developer Contributions
Streetlight and Services Districts
Contributions and Donations
Reimbursements from Outside Sources
Indirect Costs
Other
Total

$

50,732 $
178,994
9,723
7,284
3,355
176
753

Long-Term
Revenue/
Expenses (3)

Capital
Related
Items (4)

229 $
(1,082)
-

Internal
Service
Funds (5)

Long-Term
Debt
Transactions (6)

Statement of
of
Activities

- $
-

- $
-

- $
-

50,961
177,912
9,723
7,284
3,355
176
753

22,312
26,653
9,728
16,778
1,074
1,626

-

-

-

-

22,312
26,653
9,728
16,778
1,074
1,626

16,128
1,155
3,740
2,268

-

-

-

-

16,128
1,155
3,740
2,268

228
6,046
360
6,056
1,441
648
1,825
3,868
21,083

886
109
173
(1,499)
-

-

1,930

-

228
6,932
469
6,229
1,441
648
326
3,868
23,013

9,420
1,698
4,645
2,024
546
1,878
568
10,208
700
425,721

(404)
(1,588)

-

-

-

9,420
1,698
4,241
2,024
546
1,878
568
10,208
700
426,063

-

1,930

(continued)

54

City of Scottsdale, Arizona

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EXPENDITURES/EXPENSES
Current:
General Government
Police
Financial Services
Transportation
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Services Districts
Debt Service:
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Capital Improvements
Total Expenditures/Expenses
OTHER FINANCING USES/CHANGES
IN NET ASSETS
Net Transfers (to) From Other Funds
Capital Contibutions
Sales of Capital Assets
Refunding Bonds Issued
Long-term Capital-Related Debt Issued
Premium on Bonds Issued
Payment to Bond Refunding Escrow Agent
Proceeds from Capital Lease
Proceeds from Notes Payable
Total
Net Change for the Year

$

$

24,938 $
78,261
9,080
13,439
61,778
8,931
26,614
9,692
3,254
3,855
9,016
14,331
597

Long-Term
Revenue/
Expenses (3)

Capital
Related
Items (4)

142 $
1,011
108
43
392
116
249
119
51
(120)
9
186
-

12,853 $
2,460
681
81,880
8,390
4,299
1,115
7,649
422
77
452
636
-

Internal
Service
Funds (5)

(154) $
(357)
(26)
(148)
(33)
(17)
76
238
(12)
(2)
(20)
-

Long-Term
Debt
Transactions (6)

7,903 $
-

Statement of
of
Activities

45,682
81,375
9,843
95,214
70,527
13,329
28,054
17,698
3,727
3,800
9,475
15,133
597

34,252
38,279
735
147,367
484,419

2,306

(147,367)
(26,453)

(455)

(34,252)
702
(735)
(26,382)

38,981
433,435

7,670
55,450
42,500
7,199
(61,845)
175
3,000
54,149

-

(1,669)
204,867
203,198

5,173
94
241
5,508

(55,450)
(42,500)
(7,199)
61,845
(175)
(3,000)
(46,479)

11,174
204,961
241
216,376

229,651 $

7,893 $

(20,097) $

209,004

(4,549) $

(3,894) $

Notes to Financial Statements

Total
Governmental
Funds

For the Fiscal Year Ended June 30, 2007

Reconciliation of Governmental Statement of Revenues, Expenditures, and Changes
in Fund Balances and the Government-wide Statement of Activities (in thousands of dollars)

(continued)

City of Scottsdale, Arizona

55

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Reconciliation of Governmental Statement of Revenues, Expenditures, and Changes
in Fund Balances and the Government-wide Statement of Activities (in thousands of dollars)

(3)

Reconciling Items Description:
Because some property taxes will not be collected for several months after the City's fiscal year ends, they are not considered as "available" revenues
in the governmental funds. Similarly, other revenues are not currently available at year-end and are not reported as revenue in the governmental
funds.
Property taxes
Court revenue
Tax audit revenue
Special Assessment revenue
Intergovernmental revenue

$

$

229
1,168
(1,082)
(1,499)
(404)
(1,588)

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.
Accrual for long-term compensated absences
Accrual for long-term post employment implied subsidy

$
$

(4)

(1,785)
(521)
(2,306)

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are
reported as expenditures in governmental funds. However, in the statement of activities, the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of financial resources expended, whereas net
assets decrease by the amount of depreciation expense charged for the year, and the loss on disposal of capital assets.

Capital expenditures
Depreciation Expenses
Loss on disposal of capital assets
Difference

$

$

118,130
(92,994)
(352)
24,784

$

204,867

$

7,893

Donations of capital assets are not shown on the governmental fund statements, but are included in the assets of the City. On the statement of
activities, these donations are shown as capital contributions.
Capital Contributions
(5)

Internal Service funds are used by management to charge the costs of certain activities, such as insurance and motor pool, to the individual funds.
The adjustments for internal service funds close those funds by charging additional amounts to participating governmental activities to completely
cover the internal service funds' costs for the year. Capital assets contributed by the governmental funds ($1,763) are treated as capital contribution
revenue in the Internal Service fund statements and capital outlay expenditures in the governmental funds statements. For government-wide
purposes, the capital contribution is reclassified as a transfer in in the Internal Service Fund column and a transfer out in the Capital Related Items
column.
Change in Net Assets

(continued)

56

City of Scottsdale, Arizona

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Bond issuance costs are reported as an expenditure in governmental funds in the year of bond issuance and thus, have the effect of reducing fund
balance because current financial resources have been used. For the government-wide statements; however, the bond issuance costs are deferred
and amortized (expensed) over the life of the bonds.
Bond issuance costs for fiscal year 2007
Amortization of bond issuance costs
Difference

$
$

735
(258)
477

Repayment of bond principal is reported as an expenditure in governmental funds and, thus, has the effect of reducing fund balance because
current financial resources have been used. For the government-wide statements, however, the principal payments reduce the liabilities in the
statement of net assets and do not result in an expense in the statement of activities.
Transferred to the paying agent:
For bond principal
Principal payments made

$
$

61,845
34,252
96,097

Interest expense in the statement of activities differs from the amount reported in governmental funds because additional accrued and accreted
interest was calculated for bonds and notes payable, and additional interest expense was recognized on the amortization of bond discount and
premiums which are expended within the fund statements.
Amortization of deferred charges on refundings
Interest accretion and amortization
Amortization of bond premium and discounts

$

$

(1,747)
(671)
1,974
(444)

Notes to Financial Statements

(6)

For the Fiscal Year Ended June 30, 2007

Reconciliation of Governmental Statement of Revenues, Expenditures, and Changes
in Fund Balances and the Government-wide Statement of Activities (in thousands of dollars)

Bond proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the governmentwide statements, however, issuing debt increases long-term liabilities in the statement of net assets and does not affect the statement of activities.
Proceeds were received from:
Notes Payable
Capital Lease
Refunding Revenue Bonds
Revenue Bonds
Premium on Bonds

$

$

(3,000)
(175)
(55,450)
(42,500)
(7,199)
(108,324)

$

(7,903)

Long-term contracts initiated during the current year are not reported in governmental funds and thus do not contribute to the change in fund
balance. In the government-wide statements, however, entering into a contract payable increases long-term liabilities in the statement of net assets
and incurs an expense.

City of Scottsdale, Arizona

57

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budget And Budgetar y Accounting
The City prepared an annual budget that covered fiscal year 2006/07. The 2006/07 budget appropriation
is established and reflected in the financial statements as follows:
The City Council formally adopts the budget and legally allocates, or appropriates, available monies for
the General Fund, Special Revenue Funds (Highway User Fuel Tax and Preserve Privilege Tax), and Debt
Service Funds (except for the Community Facilities Districts Debt Service Funds). Therefore, these funds
have appropriated budgets, and budget to actual information is presented.
The Community Development Block Grant, Home, Grants, Section 8, and Special Programs Special
Revenue Funds, Community Facilities Districts Funds, Capital Projects Funds, Enterprise Funds, Internal
Service Funds, and Trust and Agency Funds have non-appropriated budgets. Accordingly, no comparison
of budget to actual is presented in the financial statements for these funds. Budgets for the Community
Development Block Grant, Grants, and Section 8 Funds are established pursuant to the terms of the related
grant awards. Budgets for the Community Facilities Districts are established in accordance with Arizona
Revised Statutes, which do not require their inclusion in the City budget or adoption by the City Council.
Budgets for Capital Projects Funds are established for individual projects and unexpended funds are reappropriated each year until the project is completed and capitalized. Budgets for Enterprise and Internal
Service Funds are established in order to help departments control operational costs. Budgets for Trust and
Agency Funds are established in accordance with the trust/agency agreements.
On or before the second regular Council meeting in May, the City Manager submits to the City Council
a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed
expenditures and the means of financing them.
Two public hearings are held prior to the budget’s final adoption in order to obtain taxpayer comments.
In June, the budget is legally enacted through passage of an ordinance. The ordinance sets the limit for
expenditures during the fiscal year. Additional expenditures may be authorized for expenditures directly
necessitated by a natural or man-made disaster as prescribed in the State Constitution, Article 9, Section 20.
During 2006/07, there were no supplemental budgetary appropriations to the original budget.
The expenditure appropriations in the adopted budget are by department. The maximum legal expenditure
permitted for the fiscal year is the total budget as adopted. Departmental appropriations may be amended
during the year.
Upon the recommendation of the City Manager, and with the approval of the City Council: (1) transfers
may be made from the appropriations for contingencies to departments; and (2) unexpended appropriations
may be transferred from one department to another.
Management control of budgets is further maintained at a line item level within the department.
All expenditure appropriations that have not been expended lapse at year-end. Beginning July 1, 1998, the
City discontinued the use of encumbrance accounting. As such, fund balance amounts are not reserved for
purchase orders, contract or other commitments.
B. Excess of Expenditures over Appropriations
For the year ended June 30, 2007 there were no instances of excess expenditures over appropriations.

58

City of Scottsdale, Arizona

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Fund Balance Reservations and Designations (in thousands of dollars)
General Fund
Reserved\Restricted for Streetlight and Service Districts
$
Designated for Economic Stabilization Reserve
Total
$

Major

Nonmajor

754
26,123
26,877

Special Revenue Fund
Designated for Tourism
Debt Service
Reserved for Debt Service

Restricted Net Asset and Unrestricted Net Asset Designations
Water and Sewer
Restricted for Repair and Replacement
Restricted for Acquisition and Construction
Total Restricted

$

9,383

$

24,105
9,544
33,649

$

$

1,956

$

11,866

Notes to Financial Statements

D. Fund Balance/Net Assets Reser vations and Designations
Only restrictions imposed by external sources are shown as restricted net assets on the governmentwide financial statements. Reservations or designations of fund balances are shown in aggregate on the
governmental fund financial statements, but not on the proprietary fund financial statements. The City
does, however, reserve or designate portions of net assets in other funds to demonstrate the government’s
intended use of those net assets. Designations are created by administrative policy. The following are the
reservations and designations of fund balance/net assets included in the unreserved fund balance/net
assets at June 30, 2007:

For the Fiscal Year Ended June 30, 2007

C. Deficit Fund Equity
The CDBG and Home Funds had deficit fund balances of $1,000 and $1,000, respectively, caused by certain
grant reimbursements due which may not be available in the upcoming period. Since these reimbursements
are not assured, no revenue was accrued in the current fiscal year. These reimbursements due will be
recognized as revenue when actually received.

The amounts presented below detail the City's planned use of the following Unrestricted Net Asset amounts:
Water and Sewer
Designated for Operating Reserve

$

16,735

Solid Waste
Designated for Operating Reserve

$

4,093

$

1,150
580
1,730

Airport
Repair and Replacement
Designated for Operating Reserve

$
Self-Insurance
Designated for General Liability Claims
Designated for Benefits
Fleet Management
Designated for Capital Equipment Replacement

City of Scottsdale, Arizona

$
$

2,501
2,057
4,558

$

10,169

59

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

IV. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
The City maintains a cash and investment pool for use by all funds except the Community Facilities Districts
Funds, which have investments held separately by a trustee.
City Charter, Ordinance, and Trust Agreements authorize the City to invest in obligations of the U.S.
Treasury, U.S. Government agencies, Certificates of Deposit, bankers’ acceptances, commercial paper (A1, P-1), repurchase agreements, mutual funds consisting of the foregoing, and the State of Arizona Local
Government Investment Pool (LGIP).
Deposits
At June 30, 2007, the carrying amount of the City’s deposits was $96,198,574, and the bank balance was
$94,349,489. The $1,849,085 difference represents outstanding checks and other reconciling items.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of a bank failure, the government’s deposits
may not be returned to it. As of June 30, 2007, in accordance with the City’s policy, the City’s deposits
were covered by federal depository insurance or by collateral held by the City’s agent or pledging financial
institution’s trust department or agent in the name of the City, and thus had no deposits that were exposed
to custodial credit risk.
The custodial credit for investments is the risk that, in the event of the failures of the counterparty (e.g.
broker-dealer) to a transaction, the City will not be able to recover the value of its investment or collateral
securities that are in the possession of another party. The City’s investment policy limits its exposure to
custodial credit risk by requiring that all security transactions entered into by the City be conducted on a
delivery-versus-payment basis. Securities are to be held by a third party custodian.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. As a means of limiting its exposure to fair value losses arising from
rising interest rates, the City’s investment policy limits the City’s investment portfolio to maturities of less
than three years unless matched to a specific cash flow. The following table summarizes the City’s interest
rate risk, based on maturity dates of various investments:
(in thousands of dollars)

Investment Maturities (in Years)

Investment Type
U.S. Government Securities
Federal Agency Securities
Guaranteed Investment
Contracts
Money Market Funds

Fair Value
$
30,084
476,801

Total Investments

$

Less
Than 1
1-2
2-3
3+
$ 9,974
$ 20,110
$
$
312,441 *
95,996 ** 68,349 ***
15

475
96,199

475
96,199

-

-

603,559

$ 419,089

$116,106

$ 68,349

$

15

*$4,973 of these bonds are callable July 19, 2007
**$5,481 of these bonds are callable August 15, 2007
***$37,911 of these bonds are callable between July 16, 2007 and November 21, 2007

60

City of Scottsdale, Arizona

Table of Contents

(in thousands of dollars)

Investment Type
U.S. Government Securities
Federal Agency Securities
Guaranteed Investment
Contracts
Money Market Funds

$

Total
30,084
476,801
475
96,199

$

Total Investments

A-1+
$

603,559

Not Rated
$
-

96,199

-

475
-

AAA

93,549

$

$

383,252

Exempt
from
Disclosure
$ 30,084
-

93,549

$

479,451

$

30,084

$

475

Concentration of Credit Risk
The City’s investment policy contains no limitations on the amount that can be invested in
any one issuer.

Notes to Financial Statements

Generally, 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 nationally recognized statistical rating
organizations (NRSROs). It is the City’s policy to invest in securities with the highest rating issued by
NRSROs. Presented below is the rating as of June 30, 2007 for each investment type:

For the Fiscal Year Ended June 30, 2007

Credit Risk

The following is a listing by issuer of the City’s investments at June 30, 2007:
(in thousands of dollars)

Issuer
U.S. Government
Federal Home Loan Bank (FHLB)
Federal Home Loan Mortgage Corp. (FHLMC)
Federal National Mortgage Assocation (FNMA)
Government National Mortgage Association (GNMA)
Pacific Life Insurance Company
Wells Fargo and Company

Investment Type
U.S. Government Securities
Federal Agency Securities
Federal Agency Securities
Federal Agency Securities
Federal Agency Securities
Guaranteed Investment Contract
Money Market Funds
Total Investments

City of Scottsdale, Arizona

Market
Value
$
30,084
187,536
161,331
127,919
15
475
96,199
$

603,559

Percent of
Holdings
4.98%
31.07%
26.73%
21.20%
0.00%
0.08%
15.94%
100.00%

61

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Investments
Total City cash and investments at fair value are as follows (in thousands of dollars):
Carrying Amount of City Deposits
Investments

$

96,199
507,360

Total Cash and Investments

$

603,559

Total City cash and investments are reported as follows (in thousands of dollars):
Primary Government
Cash and Investments
Cash with Fiscal Agent
Restricted Cash
Handicap Scholarship Private Purpose Trust Fund
Family Self-Sufficiency Agency Fund
Retainage Escrow Agency Fund
Total Cash and Investments

$

482,879
74,017
41,913
7
86
4,657

$

603,559

Investment income comprises the following for the year ended June 30, 2007 (in thousands of dollars):
Net Interest and Dividends
Net Increase in the Fair Value of Investments

$

25,910
6,368

Total Net Investment Income

$

32,278

The net increase in the fair value of investments during fiscal year 2006/2007 was $6,368,776. This amount
takes into account all changes in fair value (including purchases and sales) that occurred during the year. The
unrealized gain on investments held at June 30, 2007, was $2,022,490.
In the previous year, the City reported a decrease in fair value of $7,864,309 consisting of the City’s share
of a loss on an investment within the Local Government Investment Pool. The State and numerous other
bondholders filed suit against the principals, underwriters, trustees, accountants and others in May 2003.
The case is presently pending in federal court in Ohio. No reliable assessment of the litigation outcome is
available; however, the City has received $4,066,506 plus interest of $37,218 as a partial recovery.

62

City of Scottsdale, Arizona

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Governmental and Governmental Activities Internal Service Funds:

Receivables
Property Taxes and Penalties:
Property
Court
Subtotal Property Taxes and Penalties

$

General

General CIP

Nonmajor

Total

General

Obligation Bond

Construction

and Other

Governmental

Fund

Debt Service

Capital Projects

Funds

Funds

592 $
22,714
23,306

867 $
867

- $
-

140 $
140

1,599
22,714
24,313

Other local taxes:
Privilege
Hotel/Motel
State Shared Sales Tax
Franchise Fee
Auto Lieu
Highway User
Subtotal Other Local Taxes

9,635
504
1,857
2,529
977
15,502

-

-

4,704
1,512
6,216

14,339
504
1,857
2,529
977
1,512
21,718

Intergovernmental/Grants

-

-

-

6,182

6,182

Charges for services

-

-

-

-

-

1,157
7,123
8,280

-

832
832

1,830
3,937
557
6,324

3,819
3,937
7,680
15,436

47,088
(14,900)

867
-

832
-

18,862
-

67,649
(14,900)

32,188 $

867 $

832 $

18,862 $

52,749

Interest and Other:
Interest
Special Assessments
Miscellaneous
Subtotal Interest and Other
Gross Receivable
Less: Allowance for Uncollectibles
Net Total Receivables

$

Notes to Financial Statements

(in thousands of dollars)

For the Fiscal Year Ended June 30, 2007

B. Receivables
Receivables as of year end for the government’s individual major governmental funds and nonmajor
governmental and internal service funds in the aggregate, including the applicable allowances for uncollectible
accounts, are as follows:

Enterprise Funds:
Water and
Sewer
Utility

Receivables
Charges for services
Intergovernmental
Interest
Miscellaneous
Gross Receivable
Net Total Receivables

City of Scottsdale, Arizona

Airport

Solid Waste

Total
Enterprise
Fund

$

14,057 $
6
1,410
1,171
16,644

- $
74
30
183
287

1,820 $
54
68
1,942

15,877
80
1,494
1,422
18,873

$

16,644 $

287 $

1,942 $

18,873

63

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the
end of the fiscal year, the various components of deferred revenue and unearned revenue reported in the
governmental funds were as follows:
(in thousands of dollars)

Property Tax
Special Assessments
Court
Tax Audit
Intergovernmental
Other
Community Services
Other
West World
Total

Unavailable
$
873
3,937
7,814
2,321
-

Unearned
$
4,944

-

286
6
59

$

14,945

$

5,295

C. Capital Assets
Capital asset activity for the year ended June 30, 2007, was as follows (in thousands of dollars):

Beginning
Governmental Activities

Balance

Ending
Increases

Decreases

Balance

Capital Assets, not being depreciated:
Land

$

Construction In Progress
Total Capital Assets, not being depreciated:

898,941 $

151,328 $

157,728

108,922

(156,495)

(186) $

1,050,083
110,155

1,056,669

260,250

(156,681)

1,160,238

Capital Assets, being depreciated:
Buildings and Land Improvements

295,730

107,706

(1,107)

402,329

2,284,561

100,061

-

2,384,622

55,073

8,925

(3,387)

60,611

3,631

-

(82)

3,549

65,145

11,745

(1,852)

75,038

2,704,140

228,437

(6,428)

2,926,149

Buildings and Land Improvements

144,941

11,748

(1,083)

155,606

Streets and Storm Drains

856,792

74,699

-

931,491

31,452

5,171

(3,272)

33,351

2,766

265

(78)

2,953

39,566

6,653

(1,710)

44,509

Total Accumulated depreciation:

1,075,517

98,536

(6,143)

1,167,910

Total Capital Assets, being depreciated, net:

1,628,623

129,901

(285)

1,758,239

2,685,292 $

390,151 $

(156,966) $

2,918,477

Streets and Storm Drains
Vehicles
Maintenance by Fleet
Machinery and Equipment
Total Capital Assets, being depreciated:
Less Accumulated depreciation for:

Vehicles
Maintenance by Fleet
Machinery and Equipment

Governmental activities Capital Assets, net:

64

$

City of Scottsdale, Arizona

Table of Contents

Ending
Balance

Decreases

Capital Assets, not being depreciated:
Land

$

Water Rights

24,822 $
64,688

7,992 $

(121) $

32,693

-

-

64,688

Construction In Progress

251,716

71,412

(258,026)

65,102

Total Capital Assets, not being depreciated:

341,226

79,404

(258,147)

162,483

Water System

582,245

231,070

-

813,315

Sewer System

345,834

46,115

-

391,949

18,051

726

-

18,777

7,312

9,495

(10)

16,797

621

-

-

621

954,063

287,406

(10)

1,241,459

Water System

167,046

17,397

-

184,443

Sewer System

79,210

9,267

-

88,477

Buildings and Land Improvements

6,273

908

-

7,181

Machinery and Equipment

2,980

365

(10)

3,335

550

46

-

596

Total Accumulated depreciation:

256,059

27,983

(10)

284,032

Total Capital Assets, being depreciated, net:

698,004

259,423

-

957,427

Capital Assets, being depreciated:

Buildings and Land Improvements
Machinery and Equipment
Furniture, Fixtures and Office Equipment
Total Capital Assets, being depreciated:
Less Accumulated depreciation for:

Furniture, Fixtures and Office Equipment

Business-type activities capital assets, net

$

1,039,230 $

338,827 $

(258,147) $

Notes to Financial Statements

Increases

For the Fiscal Year Ended June 30, 2007

Beginning
Balance

Business-type Activities

1,119,910

During fiscal year 2006/07, the Water and Sewer Utility Enterprise Fund capitalized net interest costs of
$8,324,304. Total interest expense in this fund before capitalization was $8,723,442.
Depreciation expense was charged to functions/programs of the primary government as follows (in
thousands of dollars):
Governmental Activities
General Government
Police
Financial Services
Transportation
Community Services
Information Services
Fire
Municipal Services
Citizen and Neighborhoods Resources
Human Resources
Economic Vitality

$

Planning and Development

43

Capital Assets Held by the Government's Internal Service Funds
are Charged to the Various Functions Based on their Usage of the Assets
Total Depreciation Expense - Government Activities

City of Scottsdale, Arizona

6,614
1,753
497
71,958
4,159
4,257
643
3,027
6
34
3

5,542
$

98,536

65

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Business-type Activities
Water and Sewer System

$

26,915

Airport

871

Solid Waste

197

Total Depreciation Expense - Business-type Activities

$

27,983

Construction Commitments
The City has active construction projects as of June 30, 2007. At year-end the government’s commitments
with contractors for specific projects are as follows (in thousands of dollars):
Construction Commitments
Streets

Remaining
Commitment

Spent to Date
$

128,176

$

20,029

Traffic

34,898

2,499

Fire

21,059

47

Police

11,371

29,745

Drain/Flood Control

17,254

5,888

Community/Preserve

202,981

17,188

82,068

5,594

Municipal Facilities

18,297

4,446

Technology

26,814

2,705

9,452

2,421

Parks/Recreation

Libraries
Airport

3,985

12

Transit

19,180

4,407

Water System

367,904

46,393

Sewer System

153,356

3,436

Total Construction Commitments

$

1,096,795

$

144,810

The traffic commitments are being financed by the .2% transportation sales tax, which is reported in the
special revenue fund financial statements. All water and sewer system improvement projects are being
financed through the use of water or sewer development fees and water or sewer rates.
D. Interfund Balances and Interfund Transfers
Due To and Due From Other Funds
“Due to” and “due from” balances have primarily been recorded when funds overdraw their share of
pooled cash. The composition of interfund balances as of June 30, 2007, is as follows:

66

Receivable Fund
(in thousands of dollars)
General

$

Amount
553

Total

$

553

Payable Fund
(in thousands of dollars)
Nonmajor Governmental Funds

$

Amount
553

Total

$

553

City of Scottsdale, Arizona

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Transfers are used to fund capital projects and debt service, reallocate special revenue funds to operating
centers or other operations and for indirect administrative cost allocations (including in-lieu property tax
and franchise fees) charges to Enterprise Funds.
Net transfers (in thousands of dollar):

Transfers Out
From:
Major Governmental Funds
General

Transfers In
To:
$

Capital Projects
General CIP Construction
Total Major Governmental Funds
Major Enterprise Funds
Water and Sewer

$

57,042

Major Governmental Funds
Capital Projects
General CIP Construction

6,271

Internal Service Funds

3,352

856

Nonmajor Governmental funds

856

57,898

Total Major Governmental Funds

57,898

10,704

Major Governmental Funds
General Fund

Internal Service
431

397

11,532

8,925
1,462
317
62

Capital Projects
General CIP Construction

11
358

Major Governmental Funds
General Fund

15

Capital Projects
General CIP Construction

91

Nonmajor Governmental Funds
Total Major Enterprise Funds

$

Major Governmental Funds
General Fund

Major Enterprise Funds
Water and Sewer
Solid Waste

47,419

Nonmajor Governmental Funds

Capital Projects
General CIP Construction

Airport

$

Total Major Enterprise Funds

Notes to Financial Statements

Interfund Transfers

For the Fiscal Year Ended June 30, 2007

The Home Fund had a deficit cash balance of $363,000, the Community Develop Block Grant of $73,000
and other Grants of $117,000 due to grants being received on a reimbursement basis.

291
11,532

(continued)

City of Scottsdale, Arizona

67

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Transfers Out
From:

Transfers In
To:

Nonmajor Governmental Funds

97,397

Major Governmental Funds
General Fund

131

Capital Projects
General CIP Construction
General Obligation Bond

29,503
15,200

Nonmajor Governmental funds

52,540

Internal Service
Total Nonmajor Governmental Funds

97,397

Internal Service

188

23

Total Nonmajor Governmental Funds

97,397

Major Governmental Funds
Capital Projects
General CIP Construction

176

Nonmajor Governmental funds
Total Internal Service Funds
Total

188
$

167,015

12

Total Internal Service Funds

188

Total

$

167,015

E. Short Ter m Liabilities
The City has entered into a contract related to economic development in the amount of $3,000,000, with
interest at 7.5 percent. The contract is to be paid with bond proceeds. The following is a schedule of the
changes in short-term liabilities reported in the government-wide financial statements for the year ended
June 30, 2007 (in thousands of dollars).

Beginning
Balance
Governmental Activities:
Note Payable
Governmental Activities Short-term Liabilities

$

-

Additional
Obligations
and Net
Increases

$

3,000
3,000

Maturities,
Retirements,
and Net
Decreases

$

-

Ending
Balance

$

3,000
3,000

F. Leases
Operating Leases
The City has entered into rental agreements of retail and parking facilities. Rental payments on these
facilities during fiscal year 2006/07 were $3,910,175. Payments are contingent upon sales tax revenues
received on the properties; thus, future payments cannot be determined.
Capital Leases
The City has entered into a lease agreement as lessee for financing the acquisition of a modular office
building for its fire department training facility. The lease agreement qualifies as a capital lease for accounting
purposes and, therefore, has been recorded in the General Fund at the present value of the future minimum
lease payments as of the inception date. The building acquired by this lease agreement is recorded in
Buildings and Land Improvements at a value of $174,713, less accumulated depreciation of $755.
The City has entered into a lease agreement as lessee for financing the acquisition of a modular office
building for its water operations. The lease agreement qualifies as a capital lease for accounting purposes
and, therefore, has been recorded in the Water and Sewer Fund at the present value of the future minimum
lease payments as of the inception date. The building acquired by this lease agreement is recorded in the
Water System at a value of $212,654, less accumulated depreciation of $4,607.

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There are a number of limitations and restrictions contained in the various bond indentures. The City is in
compliance with all significant limitations and restrictions.
General Obligation Bonds
General obligation (GO) bonds are issued, after approval by City of Scottsdale voters at an authorized bond
election, to finance the construction of water and sewer systems, artificial lighting, parks and open spaces,
recreational facilities, and general purpose improvements. At June 30, 2007, the City had $157,200,000
of unissued various purpose GO bonds, which were authorized in September 2000. The City had no
unissued Preservation GO bonds from the September 1999 authorization. In May 2004, voters authorized
$500,000,000 of additional Preservation GO bonds, as well as, an additional .15% sales tax increase to
be used to finance Preserve land acquisitions. At June 30, 2007, the City had $480,000,000 of unissued
Preservation GO bonds from the May 2004 authorization. GO bonds are backed by the full faith and
credit of the City, and are repaid through the City’s levying of property (ad valorem) taxes. However, the
Preservation GO bonds are repaid through the two-tenths of one percent City sales tax approved by voters
in September 1996 to be used specifically to finance land acquisitions for the McDowell Sonoran Preserve.
Additionally, a portion of the City’s GO bonds are recorded in the Water and Sewer Enterprise Fund as
described below, and are repaid through revenues of that fund unless such revenues are insufficient.

Notes to Financial Statements

The following are brief descriptions of bonds outstanding at June 30, 2007. The totals shown are the
principal amount outstanding, net of the current portion due July 1, 2007.

For the Fiscal Year Ended June 30, 2007

G. Bonds, Loans, and Other Payables

HURF Revenue Bonds
Highway User Revenue Fee (HURF) bonds are issued specifically for the purpose of constructing street and
highway projects. These bonds are repaid out of the Special Revenue Fund by gas tax revenues collected
by the State of Arizona and distributed to cities and towns based on a formula of population and gas sales
within each county.
Municipal Property Corporation Bonds
The City of Scottsdale Municipal Property Corporation (MPC) is a nonprofit corporation created by the
City in 1967 to finance the construction or acquisition of certain capital improvement projects. The MPC
issues its own bonds, which are repaid through the City’s excise tax collections and other unrestricted
revenues. The use of property taxes to repay these bonds is specifically prohibited by law. Most of these
bonds are recorded as governmental activities long-term debt. The 2001 MPC Scottswater bonds, the 2004
MPC bonds, the 2005E MPC bonds and a portion of the 2006 MPC Refunding bonds are recorded in and
paid out of the revenues of the Water and Sewer Enterprise Fund.
Scottsdale Preser ve Authority Bonds
The Scottsdale Preserve Authority (SPA) is a nonprofit corporation created by the City in 1997 to finance
land acquisitions for the McDowell Sonoran Preserve. The SPA issues its own bonds, which are repaid
through the two tenths of one percent City sales tax approved by voters in September 1996 to be used
specifically for this purpose. In May 2004, voters approved an additional .15% sales tax increase. SPA
bonds are recorded as governmental activities long-term debt and are paid out of the SPA Debt Service
Fund.
Water and Sewer Revenue Bonds
Water and sewer revenue bonds are issued as authorized by the voters for the construction, acquisition,
furnishing and equipping of water and sewer facilities and related systems. The water and sewer revenue
bonds are collateralized by revenue in excess of operating and maintenance expenses of the City’s water
and sewer utility system, and are repaid via user charges or fees for service. Property taxes cannot be used
to pay the debt service on these bonds.
City of Scottsdale, Arizona

69

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Water and sewer revenue bond covenants require that the City accumulate sufficient reserves to cover
the eventual replacement of the water and sewer system. The City has continued to meet this reserve
requirement. At June 30, 2007, the funds reserved for this purpose were $24,105,268.
Special Assessment Bonds
Special assessment bonds are issued by the City on behalf of improvement districts created by property
owners for a specific purpose, such as to finance local street, water or sewer improvements, or to acquire an
existing water or sewer operation. Property owners in the designated districts agree to be assessed for the
principal and interest costs of repaying the bonds. As trustee for improvement districts, the City is responsible
for collecting the assessments levied against the owners of property within the improvement districts and
for disbursing these amounts to retire the bonds issued to finance the improvements. The receivables,
revenues, and debt service expenses related to these bonds are recorded in the Special Assessments Debt
Service Fund. At June 30, 2007, special assessments receivable, together with amounts paid in advance and
interest to be received over the life of the assessment period, were adequate for the scheduled maturities of
the bonds payable and the related interest.
These bonds are secured by a lien on the property and improvements of all parcels within each district. In
the event of default by the property owner, the City may enforce auction sale to satisfy the debt service
requirements of the improvement bonds. The City is contingently liable on special assessment bonds to the
extent that proceeds from auction sales are insufficient to retire outstanding bonds.
The City Council’s adopted policy is that special assessment improvement debt is permitted only when the
ratio of the full cash value of the property (prior to improvements being installed) when compared to debt is
a minimum of 3 to 1 prior to issuance of debt, and 5 to 1 or higher after construction of improvements. In
addition, cumulative improvement district debt is not permitted to exceed 5 percent of the City’s secondary
assessed valuation.
At June 30, 2007, there were 2 separate series of special assessment improvement bonds outstanding, each
series issued as serial bonds to be repaid over 10 years.
Certificates of Participation
Certificates of Participation are issued to finance acquisition and improvements of real property that is
leased to the City. The City’s obligation to make lease payments are subject to, and dependent upon, annual
appropriations made by the City Council. In the event any such appropriation is not made, the lease will
terminate and the lessor will have legal right to take possession of the property. The City’s obligation to make
lease payments does not constitute a debt or liability of the City within the meaning of any constitutional or
statutory limitation. Neither the full faith and credit nor the general taxing power of the City is pledged to
make payments of principal or interest due with respect to the Certificates of Participation. Such payments
will be made solely from amounts derived under the terms of the lease, including lease payments, and
amounts from time to time on deposit under the terms of the declaration of trust.
Community Facilities Districts General Obligation Bonds
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 community facilities district bonds.

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The table reflects CFD refunded debt outstanding at June 30, 2007, and net of any amounts to be paid or
retired by the trustee on July 1, 2007 (in thousands of dollars).

Refunded Debt Outstanding
(in thousands of dollars)
Scottsdale Mountain CFD:
General Obligation Series Series 1993B

$

25

Total CFD Bonds Refunded in Prior Years

$

25

City of Scottsdale, Arizona

Notes to Financial Statements

CFD Advance Refundings
There were no CFD refundings during fiscal year 2006/07. In prior years, the Scottsdale Mountain CFD
refinanced other bond issues through the issuance of refunding bonds. The proceeds from the refunding
bonds have been deposited in irrevocable trusts at commercial banks and invested in U.S. Government
securities which, together with interest earned thereon, will provide amounts sufficient for future redemption
or payment of principal and interest of the issues refunded. The assets, liabilities, and financial transactions
of all of these trust accounts and the liability for refunded (defeased) bonds are not reflected in the financial
statements of the City.

For the Fiscal Year Ended June 30, 2007

CFDs are created only by petition to the City Council by property owners within the district areas. As board
of directors for the CFDs, the City Council has adopted a formal policy that CFD debt will be permitted
only when the ratio of the full cash value of the unimproved district property to the proposed district debt,
is a minimum of 3 to 1, and 5 to 1 or higher after construction of improvements. These ratios are verified
by an appraisal paid for by the CFD and administered by the City. In addition, cumulative debt of all CFDs
cannot exceed 5 percent of the City’s secondary assessed valuation.

71

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

72

Bonds payable at June 30, 2007, are comprised of the following:
Classified in Governmental Activities on the Government-wide Financial Statements:

General Obligation Bonds

Bonds
Outstanding
(in thousands of
dollars)

1993 Refunding Bonds due in annual installments of $1,010,000 to $8,150,000 through July 1,
2009; interest at 4.0 percent to 5.5 percent. $28,399,993 of these bonds are recorded in and
paid out of the Water and Sewer Fund. On June 15, 2004, $2,505,000 due 2007 through 2009
were defeased. The original issue amount for the 1993 Refunding Bonds was $45,015,000.

$

4,910

1997 Refunding Bonds (issued September 3, 1997) due in annual installments of $50,000 to
$3,510,000 through July 1, 2014, interest at 4.45 percent to 5.5 percent. Original issue amount
$19,900,000.

15,800

1989 Capital Improvement Project Serial Bonds (issued April 6, 1998) due in annual
installments of $445,000 to $1,340,000 through July 1, 2018, interest at 4.3 percent to 6.5
percent. On September 26, 2002, $8,180,000 due 2009 through 2015 were refunded. Original
issue amount $20,500,000.

5,415

1999A Transportation, Storm Sewer, Flood Protection and Pima Road Improvements Serial
Bonds (issued June 29, 1999) due in annual installments of $675,000 to $1,900,000 through
July 1, 2019; interest at 4.6 percent to 6.5 percent. On September 26, 2002, $15,525,000 due
2010 through 2019 were refunded. Original issue amount $25,200,000.

2,350

1999 Preservation Bonds (issued November 16, 1999) due in annual installments of $800,000
to $4,225,000 through July 1, 2024; interest at 7.5 percent to 5.0 percent. On July 18, 2001,
$32,375,000 due 2012 through 2022 were refunded, on September 26, 2002, an additional
$4,125,000 due 2010 and 2011 were refunded, and on March 29, 2005 an additional
$8,225,000 due 2023 and 2024 were refunded. Original issue amount $59,600,000.

3,750

2001 Preservation Bonds (issued March 29, 2001) due in annual installments of $920,000 to
$2,455,000 through July 1, 2024; interest at 4.0 percent to 6.0 percent. On September 26,
2002, $3,920,000 due 2010 through 2012 were refunded, and on March 29,2005 an additional
$22,680,000 due 2013 through 2024 were refunded. Original issue amount $35,000,000.

2,350

2001 Refunding Bonds (issued July 18, 2001) due in annual installments of $70,000 to
$5,030,000 through July 1, 2022; interest at 3.875 percent to 5.375 percent. On April 15, 2004,
$5,490,000 due 2010 and 2014 through 2018 were defeased. Original issue amount
$51,155,000.

36,550

2002 Various Purpose Bonds (issued
to $5,000,000 through July 1, 2024;
$3,000,000 due 2010 through 2011
$42,665,000 due 2012 through 2019
amount $68,000,000.

12,360

May 16, 2002) due in annual installments of $1,740,000
interest at 4 percent to 5 percent. On June 15, 2004,
were defeased, and on March 29, 2005 an additional
and 2021 through 2024 were refunded. Original issue

2002 Refunding Bonds (issued September 26, 2002) due in annual installments of $1,625,000
to $8,795,000 through July 1, 2019; interest at 2 percent to 5 percent. On April 15, 2004,
$1,510,000 due 2010 were defeased. Original issue amount $72,000,000.

55,120

2003 Refunding Bonds (issued September 24, 2003) due in annual installments of $45,000 to
$5,515,000 through July 1, 2013; interest at 2 percent to 4.5 percent. Original issue amount
$16,265,000.

13,340

City of Scottsdale, Arizona

Table of Contents

107,900

2005 Refunding Bonds (issued March 29, 2005) due in annual installments of $2,715,000 to
$11,075,000 through July 1, 2024; interest at 3.85 percent to 5 percent. Original issue amount
$74,630,000.

74,630

2005A Various Purpose Bonds (issued December 1, 2005) due in annual installments of
$2,500,000 to $10,750,000 through July 1, 2024; interest at 3.5 percent to 5 percent. Original
issue amount $125,000,000.

122,500

2005B Preservation Bonds (issued December 1, 2005) due in annual installments of $775,000
to $1,575,000 through July 1, 2024; interest at 3.5 percent to 5 percent. Original issue amount
$20,000,000.

19,225

Total General Obligation Bonds Outstanding

$

476,200

$

-

$

180

The 1999 and 2001 Preservation Bonds of $18,400,000 and $29,210,000, respectively, and
portions of the 2001 Refunding Bonds, 2002 Various Purpose Bonds, 2002 Refunding
Bonds, 2004 Various Purpose Bonds and 2005 Refunding Bonds of $33,235,000, $40,000,000,
$8,100,000, $65,400,000 and $66,090,000, respectively, are paid from the .2% Preservation
Sales Tax. The 2005B Preservation Bonds of $20,000,000 are paid from the .15%
Preservation Sales Tax.

Notes to Financial Statements

2004 Various Purpose Bonds (issued May 13, 2004) due in annual installments of $1,600,000
to $30,300,000 through July 1, 2025; interest at 3 percent to 5 percent. Original issue amount
$113,400,000.

For the Fiscal Year Ended June 30, 2007

Bonds
Outstanding
(in thousands of
dollars)

HURF Revenue Bonds
1993 Highway User Revenue Refunding Serial Bonds due in annual installments of $405,000
to $2,990,000 through July 1, 2007; interest at 4.25 percent to 5.5 percent. Original issue
amount, $26,690,000.

Municipal Property Corporation Bonds
1998 Municipal Property Corporation Excise Tax Revenue Bonds (issued December 2, 1998)
due in annual installments of $3,500,000 to $180,000 through July 1, 2008; interest at 4.0
percent. Original issue amount, $9,150,000.
2004A Municipal Property Corporation Excise Tax Revenue Bonds (issued September 15,
2004) due in annual installments of $920,000 to $2,715,000 through July 1, 2034; interest at
3.25 percent to 5.25 percent. On November 29, 2006, $30,975,000 due 2017 and 2020
through 2034 were refunded. Original issue amount, $40,760,000.

9,785

2005 Municipal Property Corporation Excise Tax Revenue Bonds (issued June 15, 2005) due
in annual installments of $35,026 to $4,925,019 through July 1, 2021; interest at 3.22 percent
to 5 percent. Original issue amount, $19,945,322.

21,286

2005D Municipal Property Corporation Excise Tax Revenue Bonds (issued December 1,
2005) due in annual installments of $200,000 to $3,625,000 through July 1, 2035; interest at
3.25 percent to 5 percent. On November 29, 2006, $25,925,000 due 2017 through 2030 were
refunded. Original issue amount, $46,500,000.

20,375

2006 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued
November 29, 2006) due in annual installments of $1,105,000 to $2,730,000 through July 1,
2034; interest at 5 percent. Original issue amount, $55,450,000.

55,450

2006A Municipal Property Corporation Excise Tax Revenue Bonds (issued November 29,
2006) due in annual installments of $240,000 to $625,000 through July 1, 2031; interest at 4
percent to 5 percent. Original issue amount, $10,000,000.

9,600

2006B Municipal Property Corporation Excise Tax Revenue Bonds (issued November 29,
2006) due in annual installments of $950,000 to $2,475,000 through July 1, 2031; interest at 4
percent to 5 percent. Original issue amount, $32,500,000.

32,500

Total MPC Bonds Outstanding

City of Scottsdale, Arizona

$

149,176

73

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Scottsdale Preserve Authority Bonds
1998 Scottsdale Preserve Authority Excise Tax Revenue Bonds due in annual installments of
$1,015,000 to $6,585,000 beginning July 1, 1999, through July 1, 2024; interest at 6.0 percent
to 4.75 percent. On March 30, 2004, $22,770,000 due 2009 through 2016 were refunded.
Original issue amount $77,000,000.

Bonds
Outstanding
(in thousands of
dollars)

$

39,010

2001 Scottsdale Preserve Authority Excise Tax Revenue Refunding Bonds issued July 18,
2001, due in annual installments of $60,000 to $1,465,000 beginning July 1, 2002, through July
1, 2022; interest at 4.375 percent to 5.25 percent. Original issue amount $17,495,000.

15,820

2004 Scottsdale Preserve Authority Excise Tax Revenue Refunding Bonds issued March 30,
2004, due in annual installments of $75,000 to $3,315,000 through July 1, 2016; interest at 2
percent to 5 percent. Original issue amount $22,925,000.

22,775

Total Scottsdale Preserve Authority Bonds

$

77,605

$

4,670

$

6,401

$

4,265

Special Assessment Bonds

Special Assessment Bonds issued September 28, 1998, through December 20, 2001, maturing
January 1, 2009, through January 1, 2013; due in annual installments of $85,000 to $750,000;
interest at 4.5 percent to 4.625 percent. Total original issue amount, $8,350,000.

Certificates of Participation
2005 Certificates of Participation issued January 26, 2005, due in annual installments of
$223,832 to $450,965 beginning January 1, 2006, through July 1, 2015. Original issue amount
$7,650,000.

Community Facilities Districts General Obligation Bonds
1998 DC Ranch Community Facilities District General Obligation Bonds due in annual
installments of $155,000 to $385,000 beginning July 15, 2005 through July 15, 2023; interest at
4.75% to 5.5%. Original issue amount $4,750,000.
1999 Via Linda Road Community Facilities District General Obligation Bonds due in annual
installments of $95,000 to $255,000 beginning July 15, 2004 through July 15, 2023; interest at
5.0% to 5.75%. Original issue amount $3,225,000.

2,815

1999 McDowell Mountain Ranch Community Facilities District General Obligation
Refunding Bonds due in annual installments of $320,000 to $1,455,000 beginning July 15,
1999 through July 15, 2022; interest at 4.0% to 6.0%. Original issue amount $20,245,000.

15,495

1999 DC Ranch Community Facilities District General Obligation Bonds (issued November
1, 1999) due in annual installments of $85,000 to $260,000 beginning July 15, 2005 through
July 15, 2011. Interest at 5.45% to 6.50%. Original issue amount $3,085,000.

2,815

2002 Scottsdale Mountain Community Facilities District General Obligation Refunding Bonds
(issued May 15, 2002) due in annual installments of $160,000 to $455,000 beginning July 15,
2003 through July 15, 2018; interest at 3.0 percent to 4.7 percent. Original issue amount
$5,375,000.

4,005

2002 DC Ranch Community Facilities District General Obligation Bonds (issued December
17, 2002) due in annual installments of $245,000 to $1,395,000 beginning July 15, 2004
through July 15, 2027. Interest at 3% to 5%. Original issue amount $12,165,000.

10,935

Total Community Facilities Districts General Obligation Bonds Outstanding
Total Bonds Payable Recorded in Governmental Activities

74

$

40,330

$

754,382

City of Scottsdale, Arizona

Table of Contents

Water and Sewer Revenue Bonds
1996 Water and Sewer Revenue Refunding Serial Bonds (issued March 1, 1996) due in
annual installments of $325,000 to $1,000,000 beginning July 1, 1997 through July 1, 2014;
interest at 3.5 percent to 5.625 percent. Original issue amount, $9,815,000.

$

3,850

1989 Water and Sewer Revenue Bonds (Series D issued November 1, 1997) due in annual
installments of $425,000 to $1,375,000 through July 1, 2022; interest at 4.75 percent to 7.25
percent. On March 30, 2004, $6,775,000 due 2009 through 2016 were refunded. Original
issue amount $20,000,000.

7,925

1989 Water and Sewer Revenue Bonds (Series E issued December 2, 1998) due in annual
installments of $1,015,000 to $4,615,000 through July 1, 2023; interest at 4.5 percent to 7.0
percent. On March 30, 2004, $9,210,000 due 2009 through 2013 were refunded. Original
issue amount $50,000,000.

29,095

2004 Water and Sewer Revenue Refunding Bonds (Series 2004 issued March 30, 2004) due
in annual installments of $80,000 to $3,175,000 through July 1, 2016 ; interest at 2 percent
to 5 percent. Original issue amount $18,880,000.

18,060

Total Water and Sewer Revenue Bonds Outstanding

$

58,930

$

1,835

Notes to Financial Statements

Bonds
Outstanding
(in thousands of
dollars)

For the Fiscal Year Ended June 30, 2007

Classified in Business-type Activities on the Government-wide Financial Statements:

Municipal Property Corporation Bonds
2001 Municipal Property Corporation Scottswater Excise Tax Revenue Serial Bonds (issued
October 10, 2001) due in annual installments of $1,160,000 to $1,835,000 through July 1,
2008; interest at 3.5 percent to 5 percent. These bonds are recorded in and paid out of the
Water and Sewer Enterprise Fund. Original issue amount, $10,500,000.
2004 Municipal Property Corporation Excise Tax Revenue Bonds (Series 2004 issued May
13, 2004) due in annual installments of $2,190,000 to $5,435,000 through July 1, 2024;
interest at 3.25 percent to 5.25 percent. These bonds are recorded and paid out of the Water
and Sewer Enterprise Fund. On November 29, 2006, $44,835,000 due 2015 through 2024
were refunded. Original issue amount $75,000,000.

22,400

2005E Municipal Property Corporation Excise Tax Revenue Bonds (issued December 1,
2005) due in annual installments of $2,275,000 to $6,305,000 through July 1, 2030; interest
at 5 percent. These bonds are recorded in and paid out of the Water and Sewer Enterprise
Fund. On November 29, 2006 $67,455,000 due 2015 through 2030 were refunded. Original
issue amount $88,360,000.

20,905

2006 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued
November 29, 2006) due in annual installments of $3,600,000 to $10,140,000 through July 1,
2030; interest at 5 percent. Original issue amount, $110,510,000.

110,510

Total Municipal Property Corporation Bonds Outstanding
Total Bonds Payable Recorded in Business-type Activities
Total Long-term Bonds Payable

City of Scottsdale, Arizona

$

155,650

$

214,580

$

968,962

75

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Statutor y Debt Limitation
Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt issued for
water, sewer, light, parks, and open space purposes may not exceed 20 percent of a city’s net secondary
assessed valuation. Outstanding general obligation bonded debt for all other purposes may not exceed
6 percent of a city’s net secondary assessed valuation. Accretion on capital appreciation bonds, which
is included for GAAP purposes as outstanding debt, is excluded for this calculation. General obligation
bonds of community facilities districts also are not subject to or included in this calculation. The following
summarizes the City of Scottsdale, Arizona’s legal general obligation bonded debt borrowing capacity at
June 30, 2007 (in thousands of dollars):

General Obligation Bonds Issued
to Provide Water, Sewer, Light,
20% Constitutional Limit
$ 1,041,889

General Obligation Bonds Issued for
All Other Purposes
6% Constitutional Limit
$
312,567

Less General Obligation
20% Bonds Outstanding

(363,455)

Less General Obligation
6% Bonds Outstanding

678,434

Available 6% Limitation
Borrowing Capacity

Available 20% Limitation
Borrowing Capacity

$

(112,745)

$

199,822

Arbitrage
Under U.S. Treasury Department regulations, all governmental tax-exempt debt issued after August 31,
1986, is subject to arbitrage rebate requirements. The requirements stipulate, in general, that the earnings
from the investment of tax-exempt bond proceeds, which exceed related interest expenditures on the bonds,
must be remitted to the Federal government on every fifth anniversary of each bond issue. The City used
an independent consultant to evaluate the City’s outstanding tax-exempt debt for arbitrage liability and
determined that there is no arbitrage liability due as of June 30, 2007.
Advance Refundings and Defeasances
The City issued $165,960,000 of Excise Tax Revenue Refunding Bonds, Series 2006, (advance refunding)
dated November 29, 2006, with an interest rate 5 percent, to refund $169,190,000 of Series 2004, 2004A,
2005D and 2005E MPC Excise Tax Revenue Bonds with an average interest rate of 5%. The City will
reduce its total debt service payments over the next 27 years by approximately $10,017,013, and obtain an
economic gain (difference between the present values of the debt service payments on the old and new
debt) of $7,222,187.
The proceeds from the issuance of the bonds were used to purchase U.S. government securities that were
placed in an irrevocable trust with an escrow agent to provide debt service payments on the bonds being
refunded. As a result, the refunded bonds are considered to be defeased and the liability has been removed
from the governmental activities column of the City’s financial statements.
In prior years, the City refinanced other bond issues through the issuance of refunding bonds. The proceeds
from the refunding bonds have been deposited in irrevocable trusts at commercial banks and invested in
U.S. Government securities which, together with interest earned thereon, will provide amounts sufficient for
future redemption or payment of principal and interest of the issues refunded.
The assets, liabilities, and financial transactions of all of these trust accounts and the liability for refunded
(defeased) bonds are not reflected in the financial statements of the City.

76

City of Scottsdale, Arizona

Table of Contents

1998 General Obligation Bonds
1999A General Obligation Bonds
1999 Preservation General Obligation Bonds
2001 Preservation General Obligation Bonds
2002 General Obligation Bonds
1998 Scottsdale Preserve Authority Excise Tax Revenue Bonds
1997 Water and Sewer Revenue Bonds
1998 Water and Sewer Revenue Bonds

$

8,180
15,525
44,725
26,600
42,665
22,770
6,775
9,210

$

176,450

Contracts Payable
The City has entered into various purchase contracts related to economic development, acquisition of water
system facilities, acquisition of recreational facilities and patents. The contract for the acquisition of water
system facilities is payable only from the operating revenue of the water and sewer utility system. The
following is a summary of debt service to maturity for all long-term contracts payable at June 30, 2007.
Classified in Governmental Activities on the Governmentwide Financial Statements:

Contract payable to the U.S. Army Corps of Engineers for the construction of flood control
and recreation facilities; due in annual installments through 2032; interest at 5.1 percent.

Contracts
Payable
(in thousands of
dollars)

$

3,035

Contract payable for the construction of public infrastructure relating to completion of the
Dial Corporation new corporate headquarters; due in annual installments beginning
September 1998 through September 2007; non-interest bearing.

37

Contract payable for the maintenance of a federal patent; due in three year installments
beginning January 1, 2001 through January 1, 2009; non-interest bearing.

3

Contract payable for the oversight and management of the Tournament Players Club
Recreational Land Use Agreement; due in annual installments beginning March 1999 through
June 2035; non-interest bearing.

5,840

Contract payable for the oversight and management of the Westworld Cost-share and Land
Use Agreement; due in annual installments beginning December 2000 through December
2032; non-interest bearing.

5,111

Contract payable for the undergrounding of 69kv power lines; due in annual installments
beginning January 1999 through January 2010; interest at 10.0 percent.

38

Contract payable for the purchase of a portion of 2,685 acres of land for the McDowell
Sonoran Preserve; due in fifteen annual installments beginning July 1, 1999 through July 1,
2013; interest from 3.75 percent to 6.0 percent.

4,855

Contract payable for marketing of car dealerships located in southern Scottsdale; due in
annual installments beginning January 2006; non-interest bearing.

900

Total Contracts Payable Recorded in Governmental Activities

City of Scottsdale, Arizona

Notes to Financial Statements

Refunded in Prior Years
(in thousands of dollars)

For the Fiscal Year Ended June 30, 2007

The table below reflects refunded debt outstanding at June 30, 2007, and net of any amounts to be paid or
retired by the trustee on July 1, 2007.

$

19,819

77

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Changes in Long-Ter m Liabilities
The following is a summary of changes in long-term liabilities reported in the government-wide financial
statements for the year ended June 30, 2007 (in thousands of dollars).

Beginning
Balance
Governmental Activities:
Bonds payable:
General Obligation Bonds
HURF Revenue Bonds
Municipal Property Corporation Bonds
Scottsdale Preserve Authority Bonds
Special Assessments Bonds
Certificates of Participation
Community Facilities Districts General
Obligation Bonds
Add Deferred Issuance Premiums
Less Deferred Amounts on Refunding
Total Bonds Payable
Contracts Payable
Capital Lease
Compensated Absences
Post Employment Benefit - Implied Subsidy
Governmental Activity Long-term Liabilities

$

$

499,365
2,990
108,225
80,570
5,505
7,090
41,945
15,859
(10,234)
751,315
13,136
18,889
783,340

Additional
Obligations,
Interest
Accretion
and Net
Increases

Current
Maturities,
Retirements,
and Net
Decreases

$

$

$

98,621
7,199
(4,945)
100,875
7,903
175
11,300
535
120,788

$

(23,165)
(2,990)
(57,670)
(2,965)
(835)
(689)
(1,615)
(1,974)
1,747
(90,156)
(1,220)
(3)
(9,505)
(100,884)

Amounts
Due Within
One Year

Ending
Balance

$

$

476,200
149,176
77,605
4,670
6,401
40,330
21,084
(13,432)
762,034
19,819
172
20,684
535
803,244

$

$

21,755
849
3,110
835
712
1,685
28,946
1,347
30
10,235
85
40,643

Internal Service Funds serve primarily the governmental funds, the long-term liabilities of which are
included as part of the governmental activities. For the year ended June 30, 2007, $473,274 of accrued
compensated absences is included in the above amount. For the governmental activities, the General Fund,
Special Revenue Funds and Capital Projects Funds generally liquidate accrued compensated absences. The
compensated absences presented in this note are net of the current liability of $17,000 in the governmental
funds and $20,000 in the Internal Service funds.

Beginning
Balance
Business-type Activities:
Bonds Payable:
Water and Sewer Revenue Bonds
Municipal Property Corporation Bonds
Add Deferred Issuance Premiums
Less Deferred Amounts on Refunding
Total Bonds Payable
Capital Lease
Compensated Absences
Post Employment Benefit - Implied Subsidy
Business-type Activity Long-term Liabilities

78

$

$

62,405
161,965
9,177
(1,245)
232,302
179
2,181
234,662

Additional
Obligations,
Interest
Accretion
and Net
Increases

Current
Maturities,
Retirements,
and Net
Decreases

$

$

$

110,510
12,604
(10,524)
112,590
1,142
72
113,804

$

(3,475)
(116,825)
(1,146)
641
(120,805)
(40)
(959)
(121,804)

Amounts
Due Within
One Year

Ending
Balance

$

$

58,930
155,650
20,635
(11,128)
224,087
139
2,364
72
226,662

$

$

3,635
4,735
8,370
42
1,072
11
9,495

City of Scottsdale, Arizona

Table of Contents

Governmental Activities
(in thousands of dollars)
General Obligation Bonds Issued
To Provide Water, Sewer, Light
Parks, and Open Spaces
20% Limitation
Fiscal
Year
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2025
Total

Fiscal
Year
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
2033-2037
Capital
Appreciation **
Total

Principal
$
8,590
11,445
13,450
21,890
21,205
81,200
119,100
86,575

$

Interest
16,802
16,374
15,856
15,202
14,182
57,142
36,228
8,024

$

General Obligation Bonds Issued
For All Other Purposes
6% Limitation

Total
25,392
27,819
29,306
37,092
35,387
138,342
155,328
94,599

$ 363,455 $ 179,810 $ 543,265

Principal
$ 13,165
11,220
10,115
3,995
4,500
52,000
17,750
-

$

$ 112,745 $

Interest
5,157
4,598
4,081
3,607
3,446
11,746
1,087
-

$

Total General
Obligation Bonds

Total
18,322
15,818
14,196
7,602
7,946
63,746
18,837
-

33,722 $ 146,467

Municipal Property
Corporation Bonds

Scottsdale Preserve Authority Excise
Tax Revenue Bonds

Principal
Interest
Total
$
6,201 $
7,050
849 $
510
6,160
6,670
1,703
6,191
7,894
1,513
6,100
7,613
3,091
6,229
9,320
22,396
31,518
53,914
36,193
30,068
66,261
30,355
16,449
46,804
36,155
8,420
44,575
15,070
1,306
16,376

Principal
Interest
Total
$
3,110 $
3,672 $
6,782
3,260
3,500
6,760
3,365
3,367
6,732
3,470
3,229
6,699
3,625
3,061
6,686
20,940
12,443
33,383
26,980
6,759
33,739
12,855
875
13,730
-

1,341

(1,341)

-

-

$ 149,176 $ 117,301 $ 266,477

$

77,605 $

-

Principal
$ 21,755
22,665
23,565
25,885
25,705
133,200
136,850
86,575

Interest
21,959 $
20,972
19,937
18,809
17,628
68,888
37,315
8,024

Total
43,714
43,637
43,502
44,694
43,333
202,088
174,165
94,599

$ 476,200 $ 213,532 $

689,732

Special Assessment Bonds
Principal
Interest
$
835 $
192 $
835
154
750
118
750
84
750
50
750
17
-

-

36,906 $ 114,511

$

$

-

-

4,670 $

615 $

Notes to Financial Statements

The following is a summary of debt service requirements to maturity for long-term liabilities at June 30,
2007. Deferred issuance costs and deferred amounts on refunding are not included.

For the Fiscal Year Ended June 30, 2007

Debt Ser vice Requirements to Maturity

Total
1,027
989
868
834
800
767
5,285

** For GAAP financial statement reporting, accretion of capital appreciation bonds is added to the principal balance outstanding.

Fiscal
Year
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
2033-2037
Total

Certificates of Participation

Community Facilities Districts
General Obligation Bonds

Principal
Interest
Total
$
712 $
205 $
917
735
181
916
760
157
917
785
132
917
811
106
917
2,598
152
2,750
-

Principal
Interest
Total
$
1,685 $
1,978 $
3,663
1,760
1,907
3,667
1,870
1,830
3,700
1,965
1,747
3,712
2,040
1,658
3,698
6,741
18,521
11,780
12,645
3,718
16,363
6,585
1,007
7,592
-

Principal
Interest
$
1,347 $
393 $
1,357
355
1,399
314
1,145
272
1,201
227
2,860
662
2,492
464
3,186
267
3,426
49
1,406
-

$

$

$

6,401 $

933 $

7,334

40,330 $

20,586 $

60,916

Contracts Payable

19,819 $

3,003 $

Total
1,740
1,712
1,713
1,417
1,428
3,522
2,956
3,453
3,475
1,406
22,822

(continued)

City of Scottsdale, Arizona

79

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Governmental Activities (concluded)
(in thousands of dollars)
Capital Lease
Fiscal
Year
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
2033-2037
Capital
Appreciation
Total

Principal
Interest
Total
$
30 $
11 $
41
33
8
41
35
6
41
37
4
41
37
1
38
$

-

172 $

-

30 $

202

Principal
Interest
$ 30,323 $
34,611 $
31,155
33,237
33,447
31,920
35,550
30,377
37,260
28,960
194,524
120,421
215,160
78,324
139,556
26,622
39,581
8,469
16,476
1,306
1,341
$ 774,373 $

(1,341)

Total
64,934
64,392
65,367
65,927
66,220
314,945
293,484
166,178
48,050
17,782
-

392,906 $

1,167,279

Business-type Activities
(in thousands of dollars)

Fiscal
Year
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
Total

Fiscal
Year
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
Total

80

Total

Water and Sewer
Revenue Bonds

Municipal Property
Corporation Bonds

Principal
Interest
Total
$
3,635 $
2,801 $
6,436
3,785
2,598
6,383
3,260
2,420
5,680
3,380
2,255
5,635
3,550
2,099
5,649
16,675
8,015
24,690
20,030
3,924
23,954
4,615
208
4,823
-

Principal
Interest
Total
$
4,735 $
7,764 $
12,499
5,255
7,545
12,800
5,380
7,283
12,663
5,580
7,014
12,594
5,795
6,735
12,530
33,275
29,087
62,362
42,780
19,811
62,591
35,255
9,001
44,256
17,595
1,786
19,381

$

$

58,930 $

24,320 $

83,250

155,650 $

96,026 $

251,676

Capital Lease

Total

Principal
Interest
Total
$
42 $
5 $
47
43
4
47
46
2
48
8
8
-

Principal
Interest
Total
$
8,412 $
10,570 $
18,982
9,083
10,147
19,230
8,686
9,705
18,391
8,968
9,269
18,237
9,345
8,834
18,179
49,950
37,102
87,052
62,810
23,735
86,545
39,870
9,209
49,079
17,595
1,786
19,381

$

$

139 $

11 $

150

214,719 $

120,357 $

335,076

City of Scottsdale, Arizona

Table of Contents

The City is exposed to various risks of loss related to public, property, and aviation premises liability, selfinsured benefits and workers compensation. Public liability includes public officials’ errors and omissions,
automobile and general liability. The City is self-insured for the first $2,000,000 of public liability, the
first $100,000 of property coverage, the first $150,000 of health benefits claims and the first $750,000 of
workers compensation. Coverage in excess of these respective amounts is provided through the purchase
of commercial insurance. As for claim expenditures, settlements for each of the past five fiscal years have
not exceeded the City’s excess insurance coverage amounts for any claims.
The City reports its self-insurance activity in its Self-Insurance Internal Service Fund. Claims liabilities
are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably
estimated.
The claims liabilities amount recorded in the accompanying financial statements is based on reported
pending claims; and an actuarial analysis and projection of the accrued liability amounts necessary to fund
the claims as well as a corridor reserve for the self-insured benefits. At June 30, 2007, the general liability
claims payable totaled $8,167,224 and the self-insured benefits claims payable totaled $6,180,150. The City
began to administer all self-insured health and dental plans in January of 2004.
Years Ended June 30
(in thousands of dollars)

2007

Notes to Financial Statements

A. Risk Management

For the Fiscal Year Ended June 30, 2007

V. OTHER INFORMATION

2006

Claims Payable, July 1
Current Year Claims Incurred
Current Year Claim Payments

$

14,734
18,679
(19,066)

$

15,565
16,366
(17,197)

Claims Payable, June 30

$

14,347

$

14,734

B. Contingent Liabilities
The City is a party to several lawsuits incidental to its normal operations. Management, with concurrence of
the City Attorney, and outside legal counsel, is of the opinion that settlement of these lawsuits will not have
a material effect on the financial position of the City. Therefore, no specific provision has been reflected in
the accompanying basic financial statements for these matters.
C. Commitments and Subsequent Events
Only July 11th, 2006, the City agreed to the sale of Planet Ranch, including all related water rights, farm
infrastructure and equipment to Phelps Dodge Corporation. Planet Ranch is land that was purchased
by the City in 1984 to secure future water supplies. It is located along the Bill Williams River in western
Arizona, east of Parker. It consists of 8,300 acres of land and has 14,400 acre-feet of surface water rights
to the Bill Williams River. When all conditions are satisfied and the sale of the property closes, the City is
expected to receive a total value of $24.65 million, consisting of $12 million cash and water rights valued at
$12.65 million. The major conditions for closure are:
•
•
•

Deposit of remaining cash balance into the City’s Water and Sewer Fund.
Arizona Department of Water Resources approval of sever and transfer and change of use of a
portion of Planet Ranch water rights for habitat restoration.
Arizona Department of Water Resources approval of sever and transfer and change of use of a
Horseshoe Dam water credits to the City of Scottsdale water service area.

City of Scottsdale, Arizona

81

For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

•
•
•

Completion of assignment agreement for Horseshoe Dam water credits between the Corporation,
the City and Salt River Project.
Creation of a conservation easement on Planet Ranch property.
Completion of Lower Colorado River Multi-Species Conservation Program habitat Development
Agreement insuring use of Planet Ranch property for habitat restoration purposes.

On November 19, 2002, the City Council approved a development agreement with John Lund relating to a
new automotive complex at the southeast corner of Scottsdale Road and Loop 101 Freeway. The terms of
this agreement require the City to reimburse Lund for up to $5.5 million in public benefits relating to the
project including the acquisition of public lands, reimbursement of the City’s water and sewer development
fees, and reimbursement of the City’s stormwater retention payment in lieu. The actual amount will be
dependent upon actual costs. However, the reimbursement amount may not exceed $5.5 million even if
actual costs are higher. The City has also agreed to pay interest costs on Lund’s cost of borrowing on the
unpaid balance beginning at 8.5% in the first year and dropping by .5% per year. The reimbursement of
the costs listed above, will be accomplished by paying Lund quarterly payments equal to 67% of the City’s
General Fund sales tax receipts received from the new dealership in that quarter, for a maximum of 10 years.
The first payment is not due until the calendar quarter after the calendar quarter in which the first certificate
of occupancy is issued. Payments are expected to be during or after fiscal year 2007/08.
The City has a Service Agreement with the Scottsdale Cultural Council (Council) that provides that the
Council will manage the arts and cultural affairs within the Scottsdale community for a ten-year period,
automatically renewable for two five-year periods. In return, the City will pay service fees to the Council
based on the Service Agreement between the City and the Council. Payments to Scottsdale Cultural Council
amounted to $3,456,639 for the year ended June 30, 2007. Contractual payments due in fiscal year 2007/08
are budgeted for $4,001,852.
The City has a Service Agreement with the Scottsdale Convention and Visitors’ Bureau (SCVB) that provides
that SCVB will manage the tourism promotion within the Scottsdale community for a ten-year period. In
return, the City will pay service fees to SCVB based on the Service Agreement with the City. Payments to
SCVB amounted to $7,402,653 for the year ended June 30, 2007. Contractual payments due in fiscal year
2007/08 are budgeted for $7,123,766.
The City has entered into several agreements whereby it will reimburse developers for construction costs
of certain public infrastructure improvements. The funding source for the reimbursements will come from
Water and Sewer development fees paid over the life of the development. Only amounts paid subsequent
to January 13, 1997 are eligible for reimbursement. The City does not become liable under the agreements
until the City has accepted the cost, a development fee has been paid and a water meter has been set. The
City has limited its liability to the lesser of the cost accepted by the City or the development fees paid. The
City’s maximum contingent liability at June 30, 2007, is $14,966,544.
The City has entered into several agreements whereby it will reimburse developers a portion of the sales
tax collected on their site for a time period up to a maximum dollar amount. The funding source for the
reimbursements will come from sales tax collected on the site over the life of the agreement. The City does
not become liable under the agreements until the developer has collected and remitted the tax to the City.
The City’s probable contingent liability at June 30, 2007, is $63,043,043.

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The City records its share of SROG’s cash operating expenses, and its equity in the joint venture in the City’s
Water and Sewer Fund. For the year ended June 30, 2006, (the latest audited information available from
SROG), the City’s net investment in SROG was $79,016,000. SROG’s net cash operating expenses for the
year ended June 30, 2006, were $33,750,107, of which the City’s share was $3,839,574, or 11.4 percent. For
the year ended June 30, 2007, the City paid $15,440,351 for SROG capital contributions, and $4,979,319 for
SROG operating expenses, including adjustments to the operating and replacement reserves.
The Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2006 for the multi-city
Sub-Regional Operating Group (the latest SROG CAFR available) may be obtained from the Arizona
Municipal Water Users Association, 4041 N. Central Avenue, Suite 900, Phoenix, AZ 85012.

Notes to Financial Statements

The City participates with the cities of Phoenix, Glendale, Mesa, and Tempe in the multi-city Sub-Regional
Operating Group (SROG). SROG was formed pursuant to the Joint Exercise of Powers Agreement
(JEPA) in order to govern the construction, operation, and maintenance of jointly used sewage treatment
and transportation facilities. The facilities include the 91st Avenue Wastewater Treatment Plant, the Salt
River Outfall Sewer, the Southern Avenue Interceptor, and related transportation facilities. The City of
Phoenix acts as lead agency and is responsible for the planning, budgeting, construction, operation, and
maintenance of the facilities. In addition, the City of Phoenix provides all management, personnel, and
financing arrangements and accepts federal grants on behalf of the participants. The JEPA requires each
city to pay for its share of the actual cash costs of operating and maintaining the facilities based on relative
sewage flows and strengths.

For the Fiscal Year Ended June 30, 2007

D. Joint Venture

E. Related Organization
The Industrial Development Authority (Authority) is a nonprofit corporation established by the City in 1984
to promote industry and develop trade by inducing manufacturing, industrial and commercial enterprises to
locate and remain in Scottsdale. The Board of Directors of the Authority is appointed by the City Council;
however, the City’s accountability for the authority does not extend beyond making the appointments.
F. Retirement and Pension Plans
All full-time employees of the City, the Mayor, and City Council are covered by one of three pension plans.
All full-time City employees, except public safety personnel, participate in the Arizona State Retirement
System, a multiple-employer cost sharing pension plan. All public safety personnel participate in the Public
Safety Personnel Retirement System, which is an agent multiple-employer pension plan. The Mayor and
Council participate in the Elected Officials’ Retirement Plan, a multiple-employer cost sharing pension plan.
All three pension plans are administered by the State of Arizona.
Arizona State Retirement System
Plan Description
All full-time City employees, except public safety personnel, participate in the Arizona State Retirement
System (System), a multiple-employer cost sharing defined benefit pension plan. The System was established
by the State of Arizona to provide pension benefits for employees of the state and employees of participating
political subdivisions and school districts. The System is administered in accordance with Title 38, Chapter
5, of the Arizona Revised Statutes. The System provides for retirement, disability, health insurance premium
benefits, and death and survivor benefits. The Arizona State Retirement System issues a publicly available
financial report that includes financial statements and required supplementary information for the System.
That report may be obtained by writing to Arizona State Retirement System, P. O. Box 33910, Phoenix, AZ
85067-3910, or by calling 1-800-621-3778.
City of Scottsdale, Arizona

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Notes to Financial Statements

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Funding Policy
The Arizona Revised Statutes (ARS) provide statutory authority for determining the employees’ and
employers’ contribution amounts as a percentage of covered payroll. Employers are required to contribute
at the same rate as employees. Although the statutes prescribe the basis of making the actuarial calculation,
the Arizona legislature is able to legislate a contribution rate other than the actuarially determined rate. The
actuarially determined contribution rate for the years ended June 30, 2007, 2006, and 2005, were 9.10%
(8.60% retirement and .50% long-term disability) 7.40% and 5.70%, respectively, for both employers and
employees. The City’s contributions to the System for the years ending June 30, 2007, 2006, and 2005 were
$9,226,983, $6,876,822, and $4,944,354, respectively, equal to the required contributions for each year.
Public Safety Personnel Retirement System
Plan Description
All of the City’s public safety personnel (police officers and firefighters) participate in the Public Safety
Personnel Retirement System (PSPRS), an agent multiple-employer defined benefit pension plan. PSPRS
was established by Title 38, Chapter 5, Article 4 of the Arizona Revised Statutes to provide pension benefits
for public safety employees of certain state and local governments. The PSPRS is jointly administered by
the fund manager and 171 local boards. PSPRS provides retirement benefits, as well as death and disability
benefits. The Public Safety Personnel Retirement System of the State of Arizona issues a publicly available
financial report that includes financial statements and required supplementary information. That report
may be obtained by writing to Public Safety Personnel Retirement System, 1020 East Missouri Avenue,
Phoenix, AZ 85014 or by calling (602) 255-5575.
Funding Policy
The System for both police and fire is funded through a member contribution of 7.65% of gross payroll, an
employer contribution set by an actuarial valuation expressed as a percent of gross payroll, and a distribution
of the net earnings of the Fund. The City’s current contribution rate for police is 12.50% of annual covered
payroll. Contribution rates for police were 11.56% and 7.65% in 2006 and 2005, respectively. The City’s
current contribution rate for fire is 11.03% of annual covered payroll. The City’s contribution rate for fire
was 11.03% in 2006. The fire department was formed during fiscal year 2005.
Annual Pension Cost
For 2007, the City’s annual pension costs of $3,460,241 for police and $1,870,467 for fire were equal to the
City’s required and actual contributions. The required contribution was determined as part of the June 30,
2006 actuarial valuation using the projected unit credit cost method.
Three-Year Trend Information for PSPRS (Police)
(in thousands of dollars)
Fiscal Year
Ending
2005
2006
2007

84

Annual Pension
Cost (APC)
2,102
2,897
3,460

Percentage of
APC
Contributed
100%
100%
100%

Net Pension
Obligation
-

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Annual Pension
Cost (APC)
$
1,601
$
1,870

Net Pension
Obligation
-

The actuarial assumptions for both police and fire include (a) a rate of return on the investment of present
and future assets of 8.50% per year compounded annually, (b) projected salary increases of 5.50% per
year compounded annually, attributable to inflation and other across-the-board factors, and (c) additional
projected salary increases ranging from 5.50% to 8.50% per year, attributable to seniority/merit. Included
in (b) is an inflation component of 5.00%. The actuarial value of PSPRS assets was determined using
techniques that smooth the market value of assets over a 4-year period. PSPRS’ unfunded accrued liability
is being amortized as a level percent of projected payroll on an open basis. The remaining amortization
period at July 1, 2006 was 30 years.
There are two years of actuarial information available for the Fire Department as it was formed during fiscal
year 2005.
Elected Officials’ Retirement Plan

Notes to Financial Statements

Fiscal Year
Ending
2006
2007

Percentage of
APC
Contributed
100%
100%

For the Fiscal Year Ended June 30, 2007

Two-Year Trend Information for PSPRS (Fire)
(in thousands of dollars)

Plan Description
The City’s Mayor and Council participate in the Elected Officials’ Retirement Plan (EORP), a multipleemployer cost sharing defined benefit pension plan. The EORP was established and is administered by
the State of Arizona to provide pension benefits for state and county elected officials, judges, and certain
City-elected officials. The fund manager of the PSPRS is also the administrator for the EORP. EORP
provides retirement benefits, as well as death and disability benefits. The Elected Officials’ Retirement Plan
issues a publicly available financial report that includes financial statements and required supplementary
information for EORP. That report may be obtained by writing to Elected Officials’ Retirement Plan, 1020
East Missouri Avenue, Phoenix, Arizona 85014 or by calling (602) 255-5575.
Funding Policy
Covered employees are required by state statute to contribute an amount equal to 7.00% of gross salary.
Incorporated city or town employers are required to contribute an amount sufficient to meet both the normal
cost of a level-cost method attributable to the EORP, plus the amount required to amortize the unfunded
accrued liability for the employer. Such amount is to be determined each year by actuarial valuation and
paid as a level percent of compensation. The contribution requirements for plan members are established
and may be amended by the Fund Manager, a five-member board. The City’s rates for fiscal years ended
June 30, 2007, 2006, and 2005, were 18.55%, 20.54%, and 13.49%, respectively. The City’s contributions to
EORP for the years ending June 30, 2007, 2006, and 2005, were $26,711, $29,720, and $19,425, respectively,
equal to the required contributions for each year.

City of Scottsdale, Arizona

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Notes to Financial Statements

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G. Other Post-Employment Benefits
In addition to the pension benefits described in F (above) the City provides an option of post-retirement
health care benefits, in accordance with Chapter 14 of the City Code. At retirement, employees with
medical leave accumulated prior to September 6, 1976 are eligible for payment of medical leave at one
hundred percent cash value at current rate of pay. Employees hired before July 1, 1982 can elect to receive
cash equal to fifty percent of the first five hundred twenty hours of unused medical leave plus twenty-five
percent of all hours in excess of five hundred twenty. The conversion rate is the employee’s average hourly
base pay rate for the five years immediately preceding retirement. Any retiring employee with 300 or more
hours of accumulated medical leave, who chooses to remain on the City medical plan, may elect to apply the
value of the sick leave to the employee’s portion of the health care premiums, up until age 65. The value of
the accumulated medical leave is calculated at the employee’s hourly rate of pay at the time of retirement.
Twenty-eight participants were added and thirty-nine were removed during fiscal year 2006/07 reducing the
total number of participants to 127 at June 30, 2007. The actual liability for retirees, as of June 30, 2007,
for medical conversion was $2,421,582. The projected liability for active employees, as of June 30, 2007,
was $10,826,925. Of this liability, $238 was considered current and reflected in the governmental fund
statements. An additional $9,389,134 was considered payable within one year or greater and was considered
non-current in the government-wide financial statements. The projected liability is based on a January
1, 2007, actuarial valuation, as adjusted, based on the actuarial projection that for every additional 100
participants, future normal costs increase by an additional 3% per annum. Significant actuarial assumptions
of the January 1, 2007 actuarial valuation include a) mortality rates based on the RP 2000 male and female
rates, b) interest compounded 4.0 percent annually, c) salaries increase at a rate of 3.0% to 7.0% based on
years of service per annum, d) projected unit credit cost method based on participant data as of January 1,
2007.
H. Post-employment Benefits Other Than Pensions
The cost of post-employment healthcare benefits, from an accrual accounting perspective, similar to the
cost of pension benefits, should be associated with the periods in which the cost occurs, rather than in
the future year when it will be paid. In early implementing the requirements of GASB Statement No. 45
during the fiscal year ended June 30, 2007, the City recognizes the cost of post-employment healthcare in
the year the employee services are received, reports the accumulated liability from prior years, and provides
information useful in assessing potential demands on the City’s future cash flows. Recognition of the
liability accumulated from prior years will be amortized over 30 years, the first period commencing with the
fiscal year ending June 30, 2007.
Plan Description
The City provides post-employment medical care (OPEB) for retired employees through a single-employer
defined benefit medical plan. The plan provides medical benefits for eligible retirees, their spouses and
dependents though the City’s group health insurance plans, which covers both active and retired members.
The benefits, benefit levels and contribution rates are determined annually by the City’s Benefit Coordination
Committee and approved by the Scottsdale City Council. The plan is not accounted for as a trust fund, as
an irrevocable trust has not been established to account for the plan. The plan does not issue a separate
financial report.
Benefits Provided
The City provides post-employment medical care benefits to its retirees. To be eligible for benefits, an
employee must qualify for retirement under one of the state retirement plans for public employees and be
covered under the City’s medical plan during their active status. Retirees can enroll in a City plan up to 60
days after they retire, after that their eligibility for this benefit ceases.

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227
2,457
2,684

Participating Employers

1

Funding Policy
The plan premium rates are determined annually by the City’s Benefit Coordinating Committee, in
collaboration with an outside employee benefits actuarial and consulting firm, and approved by the Scottsdale
City Council. City code requires the City Council to authorize the contribution rates for employee health
benefits. The retiree’s contribution is 100% of the actuarially determined blended premium rate. The City
makes no contribution to the retirees’ premiums other than allowing them to participate through the City’s
pooled benefits. By providing retirees with access to the City’s healthcare plans based on the same rates it
charges to active employees, the City is in effect providing a subsidy to retirees. This implied subsidy exists
because, on average, retiree health care costs are higher than active employee healthcare costs. By the City
not contributing anything toward this plan in advance, the City employs a pay-as-you-go method through
paying the higher rate for active employees each year. As of June 30, 2007, retirees contributed $359,000
and the City contributed $96,000.

Notes to Financial Statements

As of June 30, 2007, Membership Consisted of:
Retirees and Beneficiaries Receiving Benefits
Terminated Employees Eligible for Benefits, But Not Yet Enrolled
Active Employees
Total

For the Fiscal Year Ended June 30, 2007

All medical care benefits are provided through the City’s self-insured health plan. The benefit levels are the
same as those afforded to active employees. Upon a retiree reaching 65 years of age, the retiree and related
dependents are no longer eligible for City coverage.

Annual OPEB costs and Net OPEB Obligation
The City’s annual other post-employment benefit (OPEB) cost for each plan is calculated based on the
annual required contribution of the employer (ARC), an amount actuarially determined in accordance with
the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities over
a period not to exceed thirty years. The City’s annual OPEB cost for the current year and the related
information for each plan are as follows at June 30, 2007 (dollar amounts in thousands):
Annual Required Contribution

$

703

Interest on Net OPEB Obligation

-

Adjusted to Annual Required Contribution

-

Annual OPEB Cost

703

Contributions Made

96

Increase in Net OPEB Obligation

607

Net OPEB Obligation - Beginning of year
Net OPEB Obligation - End of year

607

$

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2007 were as follows (dollar amounts in thousands):
Employer
Annual OPEB
Contributions
Fiscal Year Ended
Cost
2007
$
703 $
96
City of Scottsdale, Arizona

Percentage of
OPEB Cost
Contributed
13.70%

Net OPEB
Obligation
$
607

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For the Fiscal Year Ended June 30, 2007

Notes to Financial Statements

Table of Contents

Funded Status and Funding Progress
The funded status of the plan as of June 30, 2007 was as follows (dollar amounts in thousands):

Actuarial Accrued Liability
Actuarial Value of Plan Assets
Unfunded actuarial accrued liability

$
$

5,440
5,440

Funded ratio
Covered payroll
Unfunded actuarial accrued liability
as a percentage of covered payroll

0%
$

134,280
4.1%

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events in the future. Amounts determined regarding the status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared to
past expectations and new estimates are made about the future. The schedule of funding progress, presented
as required supplementary information following the notes to the financial statements, presents multiyear
trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liabilities for benefits. Due to this being the first year of implementation, for
fiscal year ending June 30, 2007, no prior year information is available.
Actuarial Methods and Assumptions
Projections of benefits are based on the substantive plan (the plan understood by the employer and plan
members) and include the type of benefits in force at the valuation date and the pattern of sharing benefits
between the City and the plan members at 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. Significant method and assumptions used for this fiscal year
valuation were as follows:
Actuarial Valuation Date
Actuarial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation Method

June 30, 2007
Projected Unit Credit
Closed
29 years
N/A

Actuarial Assumptions:
Investment Rate of Return
Projected Salary Increases
Healthcare Inflation Rate

4%*
2.99-7.02%+
10% initial rate, 5% ultimate rate, 6 yr grade-in period

* Investment rate of return based on City's own investments.
+

Projected salary increases based on City's past salary increases.

Medical Reimbursements
The federal government may provide the City subsidies per the Medicare Part D Prescription Drug Subsidy
Program for providing healthcare for Medicare eligible employees. Any current and future year subsidies
are recorded as revenue in the year received and is not recognized as a reduction to the actuarial accrued
liability.

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(in thousands of dollars)

Actuarial
Valuation
June 30
2000
2001
2002
2003
2004
2005*
2006

(1)
Actuarial
Value of
Assets
84,435
93,684
94,784
98,287
99,394
102,153
105,440

(2)
Entry Age
Actuarial
Accrued
Liability
(AAL)
65,021
73,216
80,997
91,841
103,136
117,270
131,775

(3)
Percent
Funded
(1)/(2)
129.9%
128.0%
117.0%
107.0%
96.4%
87.1%
80.0%

(4)
Unfunded
AAL
(2) - (1)
(19,414)
(20,468)
(13,787)
(6,446)
3,742
15,117
26,335

(5)
Annual
Covered
Payroll
18,547
20,406
20,930
21,996
22,647
23,816
25,435

(6)
Unfunded
AAL as a
Percentage
of Covered
Payroll
(4)/(5)
0.0%
0.0%
0.0%
0.0%
16.5%
63.5%
103.5%

Required Supplementary Information

Public Safety Personnel Retirement System
(Police)
Schedule of Funding Progress

For the Fiscal Year Ended June 30, 2007

Required Supplementary Information

* The 2005 values for (2), (3) and (4) have been restated per the 6/30/2006 actuarial valuation.

Public Safety Personnel Retirement System
(Fire)
Schedule of Funding Progress
(in thousands of dollars)

Actuarial
Valuation
June 30
2005*
2006

(1)
Actuarial
Value of
Assets
2,205
7,860

(2)
Entry Age
Actuarial
Accrued
Liability
(AAL)
1,308
5,996

(3)
Percent
Funded
(1)/(2)
168.5%
131.1%

(4)
Unfunded
AAL
(2) - (1)
(897)
(1,864)

(5)
Annual
Covered
Payroll
1,791
14,440

(6)
Unfunded
AAL as a
Percentage
of Covered
Payroll
(4)/(5)
0.0%
0.0%

* The 2005 values for (2), (3) and (4) have been restated per the 6/30/2006 actuarial valuation.

City of Scottsdale, Arizona

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Required Supplementary Information

For the Fiscal Year Ended June 30, 2007

Table of Contents

Required Supplementary Information
City of Scottsdale, Arizona
Other Post-Employment Benefit Plan
Schedule of Funding Progress
(in thousands of dollars)

Actuarial
Valuation
June 30
2007

(2) Projected
Unit
Actuarial
(1)
Accrued
Actuarial Value
Liability
of Assets
(AAL)
$
- $
5,440

(3)
Percent
Funded
(1)/(2)
0.0%

(4)
(5)
Unfunded
Annual
AAL
Covered
(2) - (1)
Payroll
$
5,440 $ 134,280

(6)
Unfunded
AAL as a
Percentage
of Covered
Payroll
(4)/(5)
4.1%

The City implemented GASB Statement No. 45 for the fiscal year ended June 30, 2007. Information for prior
years is not available.

City of Scottsdale, Arizona
Other Post-Employment Benefit Plan
Schedule of Employer Contribution

Actuarial
Valuation
June 30
2007

(in thousands of dollars)
(2)
Annual
(3)
Required
(1)
Percent
Employer
Contribution Contributed
Contributions
(ARC)
(1)/(2)
$
96 $
703
13.7%

The City implemented GASB Statement No. 45 for the fiscal year
ended June 30, 2007. Information for prior years is not available

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Nonmajor Governmental Funds

SPECIAL REVENUE FUNDS
Special Revenue Funds are established to finance
particular activities and are created out of receipts
of specific taxes or other earmarked revenue.
Such funds are authorized by statutory or charter
provisions to pay for certain activities with some
form of continuing revenue.
Highway User Fuel Tax Fund
This fund receives and expends the City’s allocation
of the Arizona Highway User Revenue tax and
other transportation related revenue. The amount
available to each city is allocated on a population
basis, which is determined by the latest federal
census. These monies must be used for street
construction, reconstruction, maintenance, or
transit.
Community Development Block Grant Fund
This fund receives and expends the City’s
Community Development Block Grant revenues.
The amount of the grant is awarded annually
by the U.S. Department of Housing and Urban
Development (HUD) upon application for funding
by the City. Community Development Block
Grant revenues may be used only for those projects
approved in the grant budget and are subject to
agency expenditure guidelines.
Home Fund
This fund receives and expends monies from the
Maricopa County Home Consortium. Expenditures
are made to provide affordable housing, expand
the capacity of nonprofit housing providers,
strengthen the ability of local governments to
provide housing, and leverage private-sector
participation in housing.
Grants Fund
This fund receives and expends the City’s grant
revenues. The amount of grants received is generally
based upon application to granting agencies by
the City and upon availability of funding by the
grantors. Grant revenues may be used only for the
stated purpose in the approved grant agreement
and are subject to grantor expenditure guidelines.
City of Scottsdale, Arizona

Section 8 Fund
This fund receives and expends the City’s Section
8 Housing revenues. Assistance contracts are
awarded by the U.S. Department of Housing and
Urban Development (HUD) upon application by
the City, and covers a five year period. Budgets are
approved annually by HUD. Section 8 revenues
may be used only for assistance approved by HUD
and are subject to agency expenditure guidelines.
Preserve Privilege Tax Fund
This fund receives a 0.35 percent Preservation
Privilege (Sales) Tax revenue approved by the
voters in 1995 (.2%) and 2004 (.15%). Revenues
are transferred to Capital Projects Funds for land
purchase and improvements in the McDowell
Sonoran Preserve or are used for related debt
service payments.
Special Programs Fund
This fund receives monies from a variety of
sources. The monies are required to be expended
for specific purposes related to the source of the
revenue.

DEBT SERVICE FUNDS
These funds record the accumulation of resources
for, and the payment of, long-term debt principal
and interest not serviced by the proprietary funds.
Municipal Property Corporation Fund
This fund accounts for the principal and interest
requirements of the City’s Municipal Property
Corporation (MPC) bonds. Financing is provided
primarily by transaction privilege tax.

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Special Assessments Fund
This fund accounts for the principal and interest
requirements of special assessment bonds.
Financing is provided by special assessment levies
against the benefited property holders.

Municipal Property Corporation Bond Fund
Accounts for the proceeds of Municipal Property
Corporation bonds issued for acquisition or
construction of capital improvements.
Preserve Privilege Tax Fund

Community Facilities Districts Funds:
Scottsdale Mountain Community Facilities District
Fund
McDowell Mountain Community Facilities District
Fund
DC Ranch Community Facilities District Fund
Via Linda Road Community Facilities District
Fund
Waterfront Community Facilities District Fund
These funds account for the principal and interest
of general obligation bonds issued by community
facilities districts. Although these bonds are
not obligations of the City, generally accepted
accounting principles indicate that the bonds
should be disclosed herein.
Scottsdale Preserve Authority Fund
This fund accounts for the principal and interest
requirements of excise tax revenue bonds issued
by the Scottsdale Preserve Authority. Financing
is provided by a 0.2 percent Preservation Privilege
(Sales) Tax.

CAPITAL PROJECTS FUNDS
Capital Projects Funds account for the resources
used to acquire, construct and improve major capital
assets, other than those financed by proprietary
funds. Capital Projects Funds allow the City to
compile project cost data and demonstrate that
legal or contractual requirements regarding the use
of the resources are fully satisfied.

Accounts for the resources used to acquire and
improve land within the McDowell Sonoran
Preserve. Resources are provided by the proceeds
from the sale of bonds and the .15% 2004approved Preserve Privilege Tax. Capital Projects
Funds allow the City to compile project cost
data and demonstrate that legal or contractual
requirements regarding the use of the resources
are fully satisfied.
Transportation Privilege Tax Fund
Accounts for the authorized 0.2 percent
Transportation Privilege (Sales) Tax dedicated
to transportation capital improvements. Voters
approved the tax on November 7, 1989.
Community Facilities Districts Funds:
McDowell Mountain Community Facilities District
Fund
DC Ranch Community Facilities District Fund
Waterfront Commercial Community Facilities
District Fund
Accounts for the proceeds issued by community
facilities districts to acquire and improve public
infrastructure in specified areas.

General Obligation Bond Fund
Accounts for proceeds of the sale of 1989, 1992
and 2000 voter-approved general obligation bonds
that are used for authorized capital improvements.

92

City of Scottsdale, Arizona

Table of Contents

Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2007 (in thousands of dollars)

Special
Revenue
Funds
ASSETS
Cash and Investments
Cash with Fiscal Agent
Receivables
Interest
Privilege Tax
Property Tax
Highway User Tax
Intergovernmental
Grants
Special Assessments
Miscellaneous
Total Assets

LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable
Accrued Payroll and Benefits
Due to Other Funds
Matured Bond Interest Payable
Matured Bonds Payable
Deferred Revenue
Property Tax
Special Assessments
Intergovernmental
Guaranty and Other Deposits
Other
Total Liabilities

$

$

$

50,322
3,072
422
4,704
1,512
3,854
1,123
548
65,557

2,456
152
553
82
2,990

Debt
Service
Funds

$

$

$

8,541
15,215
140
3,937
27,833

11
6,560
5,350

Total
Nonmajor
Governmental
Funds

Capital
Projects
Funds

$

$

$

82,857
194
1,085
1,205
85,341

6,267
16
-

$

$

$

141,720
18,481
1,507
4,704
140
1,512
3,854
2,328
3,937
548
178,731

8,734
168
553
6,642
8,340

4,944
1,868
28
13,073

103
3,937
6
15,967

6,283

103
3,937
4,944
1,868
34
35,323

Fund Balances
Reserved for
Debt Service
Unreserved, Undesignated

52,484

11,866
-

79,058

11,866
131,542

Total Fund Balances

52,484

11,866

79,058

143,408

Total Liabilities and Fund Balances

City of Scottsdale, Arizona

$

65,557

$

27,833

$

85,341

$

178,731

93

Table of Contents

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

Special
Revenue
Funds
REVENUES
Taxes - Local
Property
Transaction Privilege
Transient Occupancy
Highway User Tax
Local Transportation Assistance Fund
Charges for Current Services
Building and Related Permits
Recreation Fees
Fines, Fees and Forfeitures
Code Enforcement
Court Fines
Court Enhancement
Special Assessments
Property Rental
Interest Earnings
Intergovernmental
Federal Grants
State Grants
Miscellaneous
Developer Contributions
Contributions and Donations
Reimbursements From Outside Sources
Other
Total Revenues

$

Debt
Service
Funds

58,191
7,753
16,778
1,074

$

Total
Nonmajor
Governmental
Funds

Capital
Projects
Funds

3,188
-

$

-

$

3,188
58,191
7,753
16,778
1,074

71
972

-

-

71
972

228
7
1,441
192
2,395

1,825
140
242

5,916

228
7
1,441
1,825
332
8,553

8,215
929
661
1,276
70
109
100,362

1,328
2
1
6,726

1,205
1,971
1,010
489
10,591

9,420
929
3,960
1,010
1,765
72
110
117,679

(continued)

94

City of Scottsdale, Arizona

Table of Contents

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

Special
Revenue
Funds
EXPENDITURES
Current
General Government
Police
Transportation
Community Services
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Debt Service
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Capital Improvements
Total Expenditures

Debt
Service
Funds

Total
Nonmajor
Governmental
Funds

Capital
Projects
Funds

485
756
13,439
9,736
339
9,183
42
17
7,621
24

121
-

-

606
756
13,439
9,736
339
9,183
42
17
7,621
24

3,675
432
4,599
50,348

6,198
10,474
735
17,528

1
57,671
57,672

9,873
10,907
735
62,270
125,548

Excess (Deficiency) of Revenues Over
Expenditures

50,014

(10,802)

(47,081)

(7,869)

OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Refunding Bonds Issued
Long-term Capital-Related Debt Issued
Premium on Bonds Issued
Payment to Bond Refunding Escrow Agent
Proceeds from Notes Payable
Total Other Financing Sources and (Uses)

3,679
(42,161)
(38,482)

10,781
(73)
55,450
450
7,199
(61,845)
11,962

45,510
(55,163)
3,000
(6,653)

59,970
(97,397)
55,450
450
7,199
(61,845)
3,000
(33,173)

11,532

1,160

(53,734)

(41,042)

40,952

10,706

132,792

184,450

Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

City of Scottsdale, Arizona

$

52,484

$

11,866

$

79,058

$

143,408

95

Table of Contents

96
Combining Balance Sheet
Nonmajor Special Revenue Governmental Funds
June 30, 2007 (in thousands of dollars)
Highway
User Fuel
Tax
ASSETS
Cash and Investments
Cash with Fiscal Agent
Receivables
Interest
Privilege Tax
Highway User Tax
Intergovernmental
Grants
Miscellaneous
Total Assets

LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable
Accrued Payroll and Benefits
Due to Other Funds
Matured Bond Interest Payable
Matured Bonds Payable
Deferred Revenue
Intergovernmental
Guaranty and Other Deposits
Other
Total Liabilities

$

$

$

1,685
1,512
8,950

2,041
135
82
2,990

$

$

$

93
5,341

Fund Balances
Unreserved, Undesignated
Total Fund Balances (Deficit)

City of Scottsdale, Arizona

Total Liabilities and Fund Balances

2,681
3,072

Community
Development
Block Grant

8,950

241
241

165
4
73
-

$

$

$

242

3,609
3,609
$

HOME

241

362
362

363
-

$

$

$

363

(1)
(1)
$

Grants

(1)
(1)
$

362

$

Preserve
Privilege
Tax

Section 8

520
9
529

57
5
117
-

$

$

$

886
886

2
7
-

$

$

$

Special
Programs

34,941
368
3,019
38,328

-

$

$

$

Total

11,814
54
3,854
539
16,261

191
1
-

$

$

$

50,322
3,072
422
4,704
1,512
3,854
1,123
548
65,557

2,456
152
553
82
2,990

213
392

877
886

-

3,854
1,775
28
5,849

4,944
1,868
28
13,073

137
137

-

38,328
38,328

10,412
10,412

52,484
52,484

529

$

886

$

38,328

$

16,261

$

65,557

Table of Contents

City of Scottsdale, Arizona

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
Highway
User Fuel
Tax
REVENUES
Taxes - Local
Transaction Privilege
Transient Occupancy
Highway User Tax
Local Transportation Assistance Fund
Charges for Current Services
Building and Related Permits
Recreation Fees
Fines, Fees and Forfeitures
Code Enforcement
Court Fines
Court Enhancement Fee
Property Rental
Interest Earnings
Intergovernmental
Federal Grants
State Grants
Miscellaneous
Contributions and Donations
Reimbursements From Outside Sources
Other
Total Revenues

$

EXPENDITURES
Current
General Government
Police
Transportation
Community Services
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Debt Service
Principal
Interest and Fiscal Charges
Capital Improvements
Total Expenditures

Community
Development
Block Grant

20,910
16,778
1,074

$

HOME

-

$

-

$

37,281
-

$

7,753
-

$

58,191
7,753
16,778
1,074

-

-

-

71
972

71
972

-

-

-

-

10

2,141

228
7
1,441
192
244

228
7
1,441
192
2,395

693
68
42
39,565

1,975
1,975

547
547

1,180
236
15
720
1
2,152

4,513
14
4,537

39,422

646
556
1
53
12,164

8,215
929
661
1,276
70
109
100,362

13,439
9,183
-

1,980
-

448
-

116
289
772
337
-

4,842
-

2
-

367
467
1,694
2
42
17
7,621
24

485
756
13,439
9,736
339
9,183
42
17
7,621
24

2,990
165
4,052
29,829

1,980

448

320
1,834

4,842

685
267
954

227
10,461

3,675
432
4,599
50,348

99

318

38,468

1,703

50,014

(30,475)
(30,475)

3,385
(1,112)
2,273

3,679
(42,161)
(38,482)

OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing Sources and (Uses)

292
(10,500)
(10,208)

-

(472)
4,081

97

$

-

Total

-

(5)

Fund Balances - Ending

$

Special
Programs

-

9,736

Fund Balances - Beginning

-

Section 8

-

Excess (Deficiency) of Revenues Over
Expenditures

Net Change in Fund Balances

$

Grants

Preserve
Privilege
Tax

3,609

$

-

(305)

2
(74)
(72)

-

(5)

99

246

(305)

7,993

3,976

11,532

4

(100)

(109)

305

30,335

6,436

40,952

(1) $

(1) $

137

$

-

$

38,328

$

10,412

$

52,484

Table of Contents

98

Highway User Fuel Tax - Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)
Budgeted Amounts
Original
REVENUES
Taxes - Local
Transaction Privilege
Taxes - Intergovernmental
Highway User Tax
Local Transportation Assistance Fund
Intergovernmental
State Grants
Reimbursement From Outside Sources
Other
Total Revenues

$

EXPENDITURES
Current
Transportation
Municipal Services
Debt Service
Principal
Interest and Fiscal Charges
Capital Improvements
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing Sources and Uses
Net Change in Fund Balance
Fund Balance - Beginning

City of Scottsdale, Arizona

Fund Balance - Ending

$

Actual Amounts
Budgetary Basis

Final

22,057

$

22,057

$

20,910

Budget to GAAP
Differences

Actual Amounts
GAAP Basis

$

$

-

$

(1,147)

15,644
1,073

15,644
1,073

16,778
1,074

-

16,778
1,074

1,134
1

282
39,056

282
39,056

693
39,455

68
42
110

693
68
42
39,565

411
399

14,332
13,624

14,314
13,618

13,375
9,116

64
67

13,439
9,183

939
4,502

2,990
165
31,111

2,990
165
31,087

2,990
165
4,052
29,698

131

2,990
165
4,052
29,829

(4,052)
1,389

7,945

7,969

9,757

(21)

9,736

1,788

3,152
(11,097)
(7,945)

3,152
(11,097)
(7,945)

292
(10,500)
(10,208)

292
(10,500)
(10,208)

(2,860)
597
(2,263)

(472)

(475)

-

24

-

-

-

$

24

-

(451)

(21)

4,081
$

3,630

$

(21)

Explanation of Differences:
The City does not budget for certain revenues:
Reimbursement From Outside Sources
Other

68
42
110

The City budgets for certain expenditures on the cash basis, rather than on the modified accrual basis:
Compensated Absences
Net (Decrease) in Fund Balance - Budget to GAAP

20,910

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

131
$

(21)

4,081
$

3,609

4,081
$

3,606

Table of Contents

City of Scottsdale, Arizona

Preserve Privilege Tax - Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)
Budgeted Amounts
Original
REVENUES
Taxes - Local
Transaction Privilege
Interest Earnings
Total Revenues

$

EXPENDITURES
Current
General Government
Debt Service
Principal
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing Sources and Uses
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

$

Actual Amounts
Budgetary Basis

Final

38,600
798
39,398

$

38,600
798
39,398

$

37,281
1,712
38,993

429
429

$

37,281
2,141
39,422

$

(1,319)
914
(405)

-

-

2

2

-

685
267
952

685
267
952

685
267
952

2

685
267
954

-

38,446

38,446

38,041

427

38,468

(24,120)
(24,120)

(24,120)
(24,120)

(30,475)
(30,475)

14,326

14,326

7,566

34,266

34,266

30,335

48,592

$

48,592

$

37,901

$

429

$

2

$

427

Items recorded as revenues for GAAP purposes:
Unrealized Loss on Investments
The City budgets for certain expenditures on the cash basis, rather than on the modified
accrual basis:

Net Increase in Fund Balance - Budget to GAAP

$

Actual Amounts
GAAP Basis

-

Explanation of Differences:

Audit Expense

Budget to GAAP
Differences

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

-

$

(405)

(30,475)
(30,475)

(6,355)
(6,355)

427

7,993

(6,760)

-

30,335

(3,931)

427

$

38,328

$

(10,691)

99

Table of Contents

100
Combining Balance Sheet
Nonmajor Debt Service Governmental Funds
June 30, 2007 (in thousands of dollars)
Municipal
Property
Corporation
ASSETS
Cash and Investments
Cash with Fiscal Agent
Receivables (net of allowance for
uncollectibles)
Property Tax
Special Assessments
Total Assets

LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable
Matured Bond Interest Payable
Matured Bonds Payable
Deferred Revenue
Property Tax
Special Assessments
Other
Total Liabilities

$

$

$

Fund Balances
Reserved for
Debt Service
Total Fund Balances
Total Liabilities and Fund Balances

$

Special
Assessments

Scottsdale
Mountain
CFD

McDowell
Mountain
CFD

DC Ranch
CFD

Via Linda
Road
CFD

Scottsdale
Preserve
Authority

Waterfront
CFD

Total

7,448 $
4,332

1,093 $
105

- $
920

- $
2,039

- $
1,847

- $
1,089

- $
-

4,883

11,780 $

3,937
5,135 $

14
934 $

24
2,063 $

96
1,943 $

6
1,095 $

- $

4,883

- $
3,513
770

11 $
105
-

- $
92
305

- $
380
675

- $
470
525

- $
82
110

- $
-

1,918
2,965

$

$

$

8,541
15,215

140
3,937
27,833

11
6,560
5,350

4,283

3,937
6
4,059

9
406

13
1,068

72
1,067

9
201

-

4,883

103
3,937
6
15,967

7,497
7,497

1,076
1,076

528
528

995
995

876
876

894
894

-

-

11,866
11,866

5,135 $

934 $

11,780 $

2,063 $

1,943 $

1,095 $

- $

4,883

$

27,833

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Debt Service Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
Municipal
Property
Corporation
REVENUES
Taxes - Local
Property
Special Assessments
Property Rental
Interest Earnings
Intergovernmental
Miscellaneous
Reimbursements from Outside Sources
Other
Total Revenues

$

EXPENDITURES
Current
General Government
Debt Service
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Total Expenditures

Scottsdale
Mountain
CFD

Special
Assessments

140
17

$

1,825
-

$

1,205
70

$

422
44

$

17
-

$

2

$

3,188
1,825
140
242

1
1,232

1
1,276

1
467

1
18

2

1,328
2
1
6,726

-

1

10

23

54

17

16

-

121

770
4,331
735
5,836

848
235
1,084

305
187
502

675
759
1,457

525
953
1,532

110
166
293

16

2,965
3,843
6,808

6,198
10,474
735
17,528

174

2

(6,806)

(10,802)

-

2
(73)
(71)

6,806
6,806

10,781
(73)
55,450
450
7,199
(61,845)
11,962

174

(69)

-

1,160

720

69

-

10,706

OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Refunding Bonds Issued
Long-term Capital-Related Debt Issued
Premium on Bonds Issued
Payment to Bond Refunding Escrow Agent
Total Other Financing Sources and (Uses)

3,970
55,450
450
7,199
(61,845)
5,224

3
3

$

1,159
72

Total

422

741

Fund Balances - Ending

$

Scottsdale
Preserve
Authority

Waterfront
CFD

1,825

(4,352)

Fund Balances - Beginning

385
37

Via Linda
Road
CFD

DC Ranch
CFD

1,327
1,484

Excess (Deficiency) of Revenues Over
Expenditures

Net change in Fund Balances

$

McDowell
Mountain
CFD

(80)

-

872

744

(80)

6,625

332

608

7,497

$

1,076

(225)

$

528

(256)

-

-

(225)

(256)

1,220
$

995

1,132
$

876

$

894

$

-

$

-

$

11,866

101

Table of Contents

102
General Obligation Bond Debt Service
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)

Actual Amounts
Budgetary Basis

Budget to GAAP
Differences

Actual Amounts
GAAP Basis

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

$

$

$

$

Budgeted Amounts
Original
REVENUES
Taxes - Local
Property
Interest Earnings
Reimbursements from Outside Sources
Total Revenues

$

EXPENDITURES
Debt Service
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Total Other Financing Sources and Uses
Net Change in Fund Balance
Fund Balance - Beginning

City of Scottsdale, Arizona

Fund Balance - Ending

$

28,712
28,712

Final

$

28,712
28,712

27,933
8
1
27,942

-

27,933
8
1
27,942

23,165
23,033
46,198

23,165
23,033
46,198

23,165
23,030
46,195

-

23,165
23,030
46,195

(17,486)

(17,486)

(18,253)

-

(18,253)

15,201
15,201

15,201
15,201

15,200
15,200

-

15,200
15,200

(2,285)

(2,285)

(3,053)

-

(3,053)

8,271

8,271

12,436

-

12,436

5,986

$

5,986

$

9,383

$

-

$

9,383

(779)
8
1
(770)

3
3

(767)

(1)
(1)
(768)
4,165
$

3,397

Table of Contents

City of Scottsdale, Arizona

Municipal Property Corporation Bond Debt Service
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)

Actual Amounts
GAAP Basis

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

$

$

Budgeted Amounts
Original
REVENUES
Property Rental
Interest Earnings
Intergovernmental
Total Revenues

$

EXPENDITURES
Debt Service
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Refunding Bonds Issued
Long-term Capital-Related Debt Issued
Premium on Bonds Issued
Payment to Bond Refunding Escrow Agent
Total Other Financing Sources and Uses
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

$

392
392

Actual Amounts
Budgetary Basis

Final

$

392
392

$

Budget to GAAP
Differences

140
17
1,327
1,484

$

-

140
17
1,327
1,484

140
17
935
1,092

837
5,095
5,932

837
5,095
5,932

770
4,331
735
5,836

-

770
4,331
735
5,836

(5,540)

(5,540)

(4,352)

-

(4,352)

1,188

6,280
6,280

6,280
6,280

3,970
55,450
450
7,199
(61,845)
5,224

-

3,970
55,450
450
7,199
(61,845)
5,224

(2,310)
55,450
450
7,199
(61,845)
(1,056)

740

740

872

-

872

132

5,587

5,587

6,625

-

6,625

1,038

6,327

$

6,327

$

7,497

$

-

$

7,497

67
764
(735)
96

$

1,170

103

Table of Contents

104
Special Assessments Bond Debt Service
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)

Actual Amounts
GAAP Basis

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

$

$

Budgeted Amounts
Original
REVENUES
Special Assessments
Total Revenues

$

EXPENDITURES
Current:
General Government
Debt Service
Principal
Interest and Fiscal Charges
Total Expenditures

Actual Amounts
Budgetary Basis

Final

1,085
1,085

$

1,085
1,085

$

Budget to GAAP
Differences

1,825
1,825

$

-

1,825
1,825

740
740

-

-

1

-

1

849
236
1,085

849
236
1,085

848
235
1,084

-

848
235
1,084

1
1
1

Excess (Deficiency) of Revenues Over
Expenditures

-

-

741

-

741

741

OTHER FINANCING SOURCES (USES)
Transfers In
Total Other Financing Sources and Uses

-

-

3
3

-

3
3

3
3

-

-

744

-

744

744

381

381

332

-

332

(49)

Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

$

381

$

381

$

1,076

$

-

$

1,076

(1)

$

695

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

Scottsdale Preserve Authority Bond Debt Service
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2007 (in thousands of dollars)

Actual Amounts
Budgetary Basis

Budget to GAAP
Differences

Actual Amounts
GAAP Basis

Variance Between
Final Budget and
Actual Amounts
Budgetary Basis

$

$

$

$

Budgeted Amounts
Original
REVENUES
Interest Earnings
Total Revenues

$

EXPENDITURES
Debt Service
Principal
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Total Other Financing Sources and Uses
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

$

Final

-

$

-

2
2

-

2
2

2
2

2,965
3,844
6,809

2,965
3,844
6,809

2,965
3,843
6,808

-

2,965
3,843
6,808

1
1

(6,809)

(6,809)

(6,806)

-

(6,806)

3

6,809
6,809

6,809
6,809

6,806
6,806

-

6,806
6,806

(3)
(3)

-

-

-

-

-

-

-

-

-

-

-

-

-

$

-

$

-

$

-

$

-

$

-

105

Table of Contents

106
Combining Balance Sheet
Nonmajor Capital Projects Governmental Funds
June 30, 2007 (in thousands of dollars)
General
Obligation
Bond
ASSETS
Cash and Investments
Cash with Fiscal Agent
Receivables
Interest
Grants
Total Assets

LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable
Accrued Payroll and Benefits
Total Liabilities

$

$

$

Fund Balances
Unreserved, Undesignated
Total Fund Balances
Total Liabilities and Fund Balances

Municipal
Property
Corporation

43,784
760
44,544

-

$

$

$

44,544
44,544
$

44,544

Preserve
Privilege Tax

120
1
121

-

$

$

$

121
121
$

121

972
972

502
502

$

$

$

470
470
$

972

McDowell
Mountain
CFD

Transportation
Privilege Tax

37,536
324
1,205
39,065

5,765
16
5,781

$

$

$

33,284
33,284
$

39,065

107
107

-

$

$

$

107
107
$

Waterfront
Commercial
CFD

DC Ranch
CFD

107

87

445
-

87

445

-

$

$

87
87
$

Total

87

-

$

$

$

445
445
$

445

82,857
194
1,085
1,205
85,341

6,267
16
6,283

79,058
79,058
$

85,341

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Capital Projects Governmental Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
General
Obligation
Bond
REVENUES
Interest Earnings
Intergovernmental
Federal Grants
Miscellaneous
Developer Contributions
Contributions and Donations
Total Revenues

$

Municipal
Property
Corporation

3,982

$

Preserve
Privilege Tax

6

$

McDowell
Mountain
CFD

Transportation
Privilege Tax

-

$

1,924

$

Waterfront
Commercial
CFD

DC Ranch
CFD

4

$

-

$

Total

-

$

5,916

3,982

6

-

1,205
1,971
1,010
489
6,599

4

-

-

1,205
1,971
1,010
489
10,591

-

-

8,117
8,117

46,487
46,487

1
1

67
67

3,000
3,000

57,672
57,672

Excess (Deficiency) of Revenues Over
Expenditures

3,982

6

(8,117)

(39,888)

3

(67)

(3,000)

(47,081)

OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Proceeds from Notes Payable
Total Other Financing Sources and (Uses)

350
(54,813)
(54,463)

-

8,274
8,274

36,441
(350)
36,091

-

445
3,000
3,445

45,510
(55,163)
3,000
(6,653)

(50,481)

6

157

(3,797)

3

445

(53,734)

115

313

37,081

EXPENDITURES
Capital Improvements
Total Expenditures

Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

95,025
$

44,544

$

121

$

470

$

33,284

(67)

104
$

107

$

154

-

87

445

132,792
$

79,058

107

Table of Contents

108

City of Scottsdale, Arizona

Table of Contents

INTERNAL SERVICE FUNDS
Internal Services Funds are established to finance and account for services and/or commodities furnished
by one department or unit to other departments or units within the City.
Fleet Management Fund
The Fleet Management Fund is responsible for the maintenance and operations of various automobiles
and other equipment of the City. Revenue to this fund is derived from charges to user programs.
Self-Insurance Fund
The Self-Insurance Fund is responsible for the administration of the City’s self-insurance program.
Revenue to this fund is derived from charges to user programs and employee contributions for health
and dental coverage. This fund provides coverage of unemployment, self-insured benefits, workmen’s
compensation, property, and liability claims.

City of Scottsdale, Arizona

109

Table of Contents

Combining Statement of Net Assets
Internal Service Funds
June 30, 2007 (in thousands of dollars)

Fleet
Management

SelfInsurance

Total

ASSETS
Current Assets
Cash and Investments
Receivables (net of allowance for uncollectibles)
Interest
Miscellaneous
Supplies Inventory

$

Total Current Assets
Noncurrent Assets
Capital Assets
Buildings and Improvements
Motor Vehicles
Machinery and Equipment
Less Accumulated Depreciation

11,527

$

24,179

$

35,706

117
415

206
9
-

323
9
415

12,059

24,394

36,453

1,846
64,161
687
(37,786)

-

1,846
64,161
687
(37,786)

Total Capital Assets (net of
accumulated depreciation)

28,908

-

28,908

Total Noncurrent Assets

28,908

-

28,908

40,967

24,394

65,361

1,115
82
20
166
-

236
13
65
14,347

1,351
95
20
231
14,347

1,383

14,661

16,044

182
12
194

61
2
63

243
14
257

1,577

14,724

16,301

28,908
10,482

9,670

28,908
20,152

Total Assets

LIABILITIES
Current Liabilities
Accounts Payable
Accrued Payroll and Benefits
Accrued Compensated Absences - Current
Accrued Compensated Absences - Due Within One Year
Claims Payable
Total Current Liabilities
Noncurrent Liabilities
Accrued Compensated Absences - Due in More Than One Year
Other Payables - Due in More Than One Year
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt
Unrestricted
Total Net Assets

110

$

39,390

$

9,670

$

49,060

City of Scottsdale, Arizona

Table of Contents

Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets
Internal Service Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
Fleet
Management
Operating Revenues
Charges for Sales and Services
Billings To User Programs
Self Insurance Contributions-Employee
State Contributions
Other

$

Total Operating Revenues

14,295
136

SelfInsurance

$

21,171
3,795
684
606

Total

$

35,466
3,795
684
742

14,431

26,256

40,687

9,816
5,542

2,847
1,358
18,679
1,990
-

9,816
2,847
1,358
18,679
1,990
5,542

15,358

24,874

40,232

(927)

1,382

455

679
241

1,251
-

1,930
241

920

1,251

2,171

2,633

2,626

1,763
1,192
(167)

2,500
(21)

1,763
3,692
(188)

Change in Net Assets

2,781

5,112

7,893

Total Net Assets - Beginning

36,609

4,558

41,167

Operating Expenses
Costs of Sales and Services
Fleet Management Operations
Self-Insurance Administration
Self-Insurance Claims
Self-Insurance Benefits
Insurance and Bond Premiums
Depreciation
Total Operating Expenses
Operating Income (Loss)
Non-Operating Revenues
Investment Income
Gain on Sale of Capital Assets
Total Non-Operating Revenues
Income (Loss) Before Contributions and Transfers

(7)

Capital Contributions
Transfers In
Transfers Out

Total Net Assets - Ending

City of Scottsdale, Arizona

$

39,390

$

9,670

$

49,060

111

Table of Contents

Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2007 (in thousands of dollars)

Cash Flows from Operating Activities
Cash Received from Customers
Cash Paid to Suppliers
Cash Paid to Employees
Other Operating

Fleet
Management

SelfInsurance

$

$

Net Cash Provided by (Used for) Operating Activities
Cash Flows from Non-Capital Financing Activities
Transfers In
Transfers Out
Net Cash Provided by (Used) for Non-Capital Financing Activities
Cash Flows from Capital and Related
Financing Activities
Acquisition and Construction
of Property and Equipment
Sale of Capital Assets
Net Cash (Used) for Capital and Related
Financing Activities
Cash Flows from Investing Activities
Income Received on Investments
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities
Operating Income (Loss)
Adjustments to Reconcile Operating
Income to Net Cash Provided by
(Used for) Operating Activities
Depreciation
Changes in Assets and Liabilities
Sources (Uses) of Cash
Miscellaneous Receivables
Supplies Inventory
Accounts Payable
Accrued Payroll and Benefits
Other Payables
Claims Payable

$

$

Supplemental Disclosure of Noncash
Financing Activities
Additions to Property, Plant, and Equipment
Contributions from Other Government Units
Total Non-Cash Financing Activities

112

25,734
(24,533)
(646)
606

$

40,029
(31,024)
(3,715)
742

4,871

1,161

6,032

1,192
(167)

2,500
(21)

3,692
(188)

1,025

2,479

3,504

(7,432)
360

-

(7,432)
360

(7,072)

-

(7,072)

660

1,189

1,849

(516)

4,829

4,313

19,350

31,393

12,043
11,527

(927)

$

24,179

$

35,706

$

1,382

$

455

5,542

Total Adjustments
Net Cash Provided by (Used for) Operating Activities

14,295
(6,491)
(3,069)
136

Total

-

11
179
54
12
-

84
78
2
2
(387)

5,798

(221)

5,542

84
11
257
56
14
(387)
5,577

$

4,871

$

1,161

$

6,032

$
$

1,763
1,763

$
$

-

$
$

1,763
1,763

City of Scottsdale, Arizona

Table of Contents

FIDUCIARY FUNDS
Private Purpose Trust Funds and Agency Funds administer resources received and held by the City as the
trustee or as the agent for others. Use of these funds facilitates the discharge responsibilities placed upon
the governmental unit by virtue of law or other similar authority.
Handicap Scholarship Private Purpose Trust Fund
This fund accounts for monies received and expended for college scholarships for individuals with
handicaps.
Family Self-Sufficiency Agency Fund
This fund accounts for monies in escrow for Section 8 Housing Program participants.
Retainage Escrow Agency Fund
This fund accounts for monies held in escrow for construction contract retainage payable.

City of Scottsdale, Arizona

113

Table of Contents

114
Combining Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2007 (in thousands of dollars)

Private Purpose Trust Funds
Handicap Scholarship
Private Purpose
Trust Fund
ASSETS
Cash and Cash Equivalents

$

Total Assets

LIABILITIES
Accounts Payable
Designated Escrow Payable
Total Liabilities

NET ASSETS
Held in Trust for Other Purposes

$

7

Agency Funds
Family
Self-Sufficiency
Agency Fund

Total

$

7

$

Retainage
Escrow
Agency Fund

86

$

Total

4,657

$

4,743

7

7

86

4,657

4,743

-

-

86
-

4,657

86
4,657

-

-

86

4,657

4,743

7

$

7

$

-

$

-

$

-

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

Combining Statement of Changes in Assets and Liabilities
Fiduciary Funds
For the Year Ended June 30, 2007 (in thousands of dollars)
Family Self-Sufficiency

Balance
July 1, 2006

Additions

Retainage Escrow

Balance
June 30, 2007

Deductions

Balance
July 1, 2006

Additions

Balance
June 30, 2007

Deductions

ASSETS
Cash and Cash Equivalents
Total Assets

$

86

$

50

$

50

$

86

$

5,195

$

4,657

$

5,195

$

4,657

$

86

$

50

$

50

$

86

$

5,195

$

4,657

$

5,195

$

4,657

$

86
-

$

50
-

$

50
-

$

86
-

$

5,195

$

4,657

$

5,195

$

4,657

$

86

$

50

$

50

$

86

$

5,195

$

4,657

$

5,195

$

4,657

LIABILITIES
Accounts Payable
Designated Escrow Payable
Total Liabilities

115

Table of Contents

116

City of Scottsdale, Arizona

Table of Contents

OTHER SUPPLEMENTARY INFORMATION
Debt Requirements
The supplemental debt service schedule provides a comprehensive overview of the City’s total debt. The
Schedule of Changes in Long-Term Debt for the current fiscal year presents the City’s debt by debt type
without regard to fund classification.
Debt issued by community facilities districts is included for full disclosure although such debt is not legally
an obligation of the City.

City of Scottsdale, Arizona

117

Table of Contents

118
Schedule of Changes in Long-Term Debt*
For the Year Ended June 30, 2007 (in thousands of dollars)

July 1, 2006
GENERAL OBLIGATION BONDS
Governmental Fund Type:
1993 Refunding
1997 GO Refunding
1989 Series I (1998)
1999A GO / Pima Road
1999 GO Preservation
2001 GO Preservation
2001 GO Refunding Various Purpose
2001 GO Refunding Preservation
2002 GO Various Purpose
2002 GO Preservation
2002 GO Refunding Various Purpose
2002 GO Refunding Preservation
2003 GO Refunding Various Purpose
2004 GO Various Purpose
2004 GO Preservation
2005 GO Refunding Various Purpose
2005 GO Refunding Preservation
2005A GO Various Purpose
2005B GO Preservation
2001 GO Refunding Series Deferred Issuance Premium
2001 GO Series Deferred Amount on Refunding
2002 GO Refunding Series Deferred Issuance Premium
2002 GO Series Deferred Amount on Refunding
2003 GO Series Deferred Amount on Refunding
2003 GO Refunding Series Deferred Issuance Premium
2004 GO Series Deferred Issuance Premium
2005 GO Series Deferred Amount on Refunding
2005 GO Refunding Series Deferred Issuance Premium
2005A GO Series Deferred Issuance Premium
2005B GO Series Deferred Issuance Premium
Total General Obligation Bonds

City of Scottsdale, Arizona

REVENUE BONDS
Governmental Fund Type
Highway User Revenue Fund Bonds
1993 HURF Refunding
Subtotal

$

$

$

Business Type - Revenue Bonds
1996 Utility Revenue Series Refunding
1989 Utility Series D (1998)
1989 Utility Series E (1998)
2004 Utility Revenue Series Refunding
1996 Revenue Series Deferred Amount on Refunding
2004 Revenue Series Deferred Amount on Refunding
2004 Refunding Series Deferred Issuance Premium
Subtotal
Total Revenue Bonds

Issued

7,590 $
18,780
6,345
3,450
5,500
3,455
7,905
28,715
8,770
5,755
50,345
8,100
14,925
48,000
62,100
8,540
66,090
125,000
20,000
950
(1,551)
1,867
(1,901)
(194)
266
924
(3,666)
2,812
2,364
378
501,614 $

-

2,990
2,990

-

$

4,750
8,575
30,645
18,435
(119)
(1,126)
1,241
62,401
$

Retired

65,391

$

$

$

$

-

2,680
2,980
930
1,100
1,750
1,105
70
2,165
3,325
1,585
2,200
2,500
775
23,165

2,990
2,990

Refunding
Bonds
Issued

$

$

$

900
650
1,550
375
3,475
$

6,465

Bonds
Defeased

-

-

$

$

$

$

*This exhibit includes both Governmental Activities and Business-Type Activities debt (paid out of Enterprise Funds).

Accretions,
Amortizations
& Contract
Adjustments

-

-

-

$

$

$

$

-

June 30, 2007

- $
(115)
187
(753)
766
59
(80)
(51)
278
(213)
(136)
(22)
(80) $

-

$

32
248
(273)
7
$

7

Governmental
Activities

4,910 $
15,800
5,415
2,350
3,750
2,350
7,835
28,715
6,605
5,755
47,020
8,100
13,340
48,000
59,900
8,540
66,090
122,500
19,225
835
(1,364)
1,114
(1,135)
(135)
186
873
(3,388)
2,599
2,228
356
478,369 $

-

$

3,850
7,925
29,095
18,060
(87)
(878)
968
58,933
$

58,933

Business
Type-Activities

4,910 $
15,800
5,415
2,350
3,750
2,350
7,835
28,715
6,605
5,755
47,020
8,100
13,340
48,000
59,900
8,540
66,090
122,500
19,225
835
(1,364)
1,114
(1,135)
(135)
186
873
(3,388)
2,599
2,228
356
478,369 $

-

$

$

-

-

07/01/09
07/01/14
07/01/18
07/01/09
07/01/09
07/01/09
07/01/22
07/01/22
07/01/24
07/01/24
07/01/19
07/01/19
07/01/13
07/01/25
07/01/25
07/01/24
07/01/24
07/01/24
07/01/24

-

07/01/07

3,850
7,925
29,095
18,060
(87)
(878)
968
58,933
$

Final
Payment Date

58,933

07/01/14
07/01/22
07/01/23
07/01/16

Table of Contents

Schedule of Changes in Long-Term Debt*

City of Scottsdale, Arizona

(continued here and on following page)
For the Year Ended June 30, 2007 (in thousands of dollars)

July 1, 2006
MUNICIPAL PROPERTY CORPORATION BONDS
Governmental Fund Type:
1998 MPC
2004A MPC
2005 MPC
2005D MPC
2006 MPC Refunding
2006A MPC
2006B MPC
2004A Series Deferred Issuance Premium
2005 Series Deferred Issuance Premium
2005D Series Deferred Issuance Premium
2006 Series Deferred Amount on Refunding
2006 Refunding Series Deferred Issuance Premium
2006A Series Deferred Issuance Premium
2006B Series Deferred Issuance Premium
Subtotal

$

Business Type - Municipal Property Corporation Bonds
2001 Scottswater
2004 Water/Sewer
2005E Water/Sewer
2006 MPC Refunding
2001 Scottswater Deferred Issuance Premium
2004 Water/Sewer Deferred Issuance Premium
2005E Water Deferred Issuance Premium
2006 Refunding Series Deferred Issuance Premium
2006 Series Deferred Amount on Refunding
Subtotal
Total Municipal Property Corporation Bonds
SCOTTSDALE PRESERVE AUTHORITY BONDS
Governmental Fund Type:
1998 Excise Tax Revenue
2001 Excise Tax Refunding
2004 Excise Tax Refunding
2001 Excise Tax Revenue Deferred Issuance Premium
2001 Excise Tax Revenue Deferred Amount on Refunding
2004 Excise Tax Revenue Deferred Issuance Premium
2004 Excise Tax Revenue Deferred Amount on Refunding
Total Scottsdale Preserve Authority Bonds
SPECIAL ASSESSMENT BONDS
Governmental Fund Type:
Pima Acres Paving & Drainage Series 105
Bell Road II Series 106
Total Special Assessment Bonds
CERTIFICATES OF PARTICIPATION
Governmental Fund Type:
2005 Certificates of Participation
Total Certificates of Participation

350
40,760
20,615
46,500
1,012
359
2,613
112,209

Issued

$

3,545
70,060
88,360
77
4,184
3,675
169,901
$

$

$

$

282,110

Retired

10,000
32,500
119
215
42,834

$

-

170
200
400
770

Refunding
Bonds
Issued

$

1,710
2,825
4,535

Bonds
Defeased

- $
55,450
(4,945)
6,865
57,370

110,510
12,604
(10,524)
112,590

$

42,834

$

5,305

$

169,960

41,175 $
16,545
22,850
98
(592)
2,135
(2,012)
80,199 $

-

$

2,165
725
75
2,965

$

-

$

255
5,250
5,505

$
$

7,090
7,090

$
$

-

$
$

-

$

$
$

85
750
835

$
$

689
689

$

$
$

-

$
$

-

*This exhibit includes both Governmental Activities and Business-Type Activities debt (paid out of Enterprise Funds).

Accretions,
Amortizations
& Contract
Adjustments

30,975
25,925
56,900

$

44,835
67,455
112,290
$ 169,190

$

$

$

June 30, 2007

- $
671
(36)
(24)
(92)
140
(194)
(3)
(5)
457

180
9,785
21,286
20,375
55,450
9,600
32,500
976
335
2,521
(4,805)
6,671
116
210
155,200

(37)
(247)
(157)
(432)
361
(512)

1,835
22,400
20,905
110,510
40
3,937
3,518
12,172
(10,163)
165,154

$

(55) $

- $
- $

- $
(6)
37
(237)
223
17 $

$

-

$
$

-

$

320,354

$

170
4,500
4,670

$
$

-

6,401
6,401

Business
Type-Activities

180
9,785
21,286
20,375
55,450
9,600
32,500
976
335
2,521
(4,805)
6,671
116
210
155,200

-

$

39,010
15,820
22,775
92
(555)
1,898
(1,789)
77,251 $

- $
- $

$
$

Governmental
Activities

155,200

1,835
22,400
20,905
110,510
40
3,937
3,518
12,172
(10,163)
165,154

Final
Payment Date

07/01/08
07/01/19
07/01/21
07/01/35
07/01/34
07/01/30
07/01/31

07/01/08
07/01/14
07/01/16
07/01/30

$

165,154

39,010
15,820
22,775
92
(555)
1,898
(1,789)
77,251 $

-

07/01/24
07/01/22
07/01/16

01/01/09
01/01/13

01/01/2015

$

170
4,500
4,670

$

-

$
$

6,401
6,401

$
$

-

119

Table of Contents

120
Schedule of Changes in Long-Term Debt*
(continued)
For the Year Ended June 30, 2007 (in thousands of dollars)

July 1, 2006
COMMUNITY FACILITIES DISTRICT BONDS
Governmental Fund Type:
McDowell Mtn Ranch Refunding Series 1999
DC Ranch Series 1998
Via Linda Road Series 1999
DC Ranch Series 1999
Scottsdale Mountain Refunding Series 2002
DC Ranch Series 2002
Scottsdale Mountain 2002 Deferred Issuance Premium
Scottsdale Mountain 2002 Deferred Amount on Refunding
DC Ranch 2002 Deferred Issuance Premium
Total Community Facilities District Bonds
Total Bonds
CONTRACTS PAYABLE
Governmental Fund Type:
US Corps of Engineers
Dial Corporation
US Patent Office
McDowell Sonoran Preserve
Bureau of Reclamation\Westworld
Bureau of Reclamation\TPC
Underground Improvement District Series 104
Motor Mile Marketing
Total Contracts
CAPITAL LEASES
Governmental Fund Type:
Modular Building - Fire Department Training Facility
Business Type:
Modular Building - Water Operations

TOTAL BONDS, CONTRACTS AND CAPITAL LEASES

$

Issued

16,170 $
4,435
2,925
2,910
4,310
11,195
24
(318)
57
41,708

Refunding
Bonds
Issued

Retired

Accretions,
Amortizations
& Contract
Adjustments

Bonds
Defeased

-

$

675
170
110
95
305
260
1,615

$

-

$

June 30, 2007

Governmental
Activities

15,495 $
4,265
2,815
2,815
4,005
10,935
20
(261)
54
40,143

Business
Type-Activities

15,495 $
4,265
2,815
2,815
4,005
10,935
20
(261)
54
40,143

-

Final
Payment Date

-

$

- $
(4)
57
(3)
50

07/15/22
07/15/23
07/15/23
07/15/24
07/15/18
07/15/27

$ 169,190

$

(61) $

986,121

$

762,034

$

224,087

$

$

3,035
37
3
4,855
5,111
5,840
38
900
19,819

$

$

-

2032
2008
2009
2013
2033
2035
01/01/10
2010

$

3,035
37
3
4,855
5,111
5,840
38
900
19,819

$

$

- $
(78)
3,681
4,300
7,903 $

$

983,617

$

42,834

$

41,039

$

169,960

$

$

$

72
40
685
55
55
13
300
1,220

$

$

-

$

$

3,107
155
3
5,540
1,485
1,595
51
1,200
13,136

$

-

$

-

$

-

$

175

$

3

$

-

$

-

$

-

$

172

$

172

$

-

2012

179
179

$

175

$

40
43

$

-

$

-

$

-

$

139
311

$

172

$

139
139

2010

$

$

996,932

$

43,009

$

42,302

$

169,960

$ 169,190

$

7,842

$

1,006,251

$

782,025

$

224,226

Compensated Absences
Other Post Employment Benefit - Implied Subsidy

City of Scottsdale, Arizona

Total Long-Term Debt
*This exhibit includes both Governmental Activities and Business-Type Activities debt (paid out of Enterprise Funds).

20,684
535

$

803,244

2,364
72

$

226,662

Table of Contents

Statistical Section
Contents

Page

Financial Trends

122

These schedules contain trend information to help the reader understand how the City’s
financial performance and well-being have changed over time.
Revenue Capacity

131

These schedules contain information to help the reader assess the City’s most significant
local revenue sources, property tax and sale and use taxes.
Debt Capacity

139

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.
Economic and Demographic Information

145

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

147

These schedules contain service and infrastructure data to help the reader understand how
the information in the City’s financial report relates to the services the City provides
and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.

City of Scottsdale, Arizona

121

Table of Contents

122
City of Scottsdale
Net Assets by Component
Last Six Fiscal Years
(accrual basis of accounting)
( in thousands)
Table I
Fiscal Year
2002
Governmental Activities
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Governmental Activities Net Assets
Business-type Activities
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Business-type Activities Net Assets
Primary Government
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Primary Government Net Assets

$

$

$

$

$

$

1,429,495
133,460
152,731
1,715,686

629,106
16,399
175,624
821,129

2,058,601
149,859
328,355
2,536,815

2003

2004

2005

$ 1,497,575
117,801
165,209
$ 1,780,585

$ 1,548,486
199,767
127,017
$ 1,875,270

$ 1,877,955
78,794
195,887
$ 2,152,636

$

$

$

659,130
16,721
186,147
861,998

$ 2,156,705
134,522
351,356
$ 2,642,583

City of Scottsdale, Arizona

(1) The increase from the prior period was caused by a substantial increase in capital asset contributions.
(2) Restated Restricted and Unrestricted Net Assets related to the classification of unspent bond proceeds.

$

653,351
$
20,842
272,431 (1)
946,624
$

$ 2,201,837
220,609
399,448
$ 2,821,894

756,433
23,472
212,957
992,862

$ 2,634,388
102,266
408,844
$ 3,145,498

2006

2007

$ 2,029,375
$ 2,198,130
108,686
102,293 (2)
206,386
172,530 (2)
$ 2,304,198
$ 2,513,202

$

806,749
27,000
239,535
$ 1,073,284

$

895,636
33,649
224,607
$ 1,153,892

$ 2,836,124
129,293
412,065
$ 3,377,482

$ 3,093,766
142,335
430,993
$ 3,667,094

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Changes in Net Assets
Last Six Fiscal Years
(accrual basis of accounting)
(in thousands)
Table IIa
Fiscal Year
2002
Expenses
Governmental Activities:
General Government
Police
Financial Services
Transportation
Community Services
Information Services
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Service Districts
Interest on Long-term Debt
Total Governmental Activities Expenses

$

Business-type Activities:
Water Utility
Sewer Utility
Airport
Solid Waste
Total Business-type Activities Expenses
Total Primary Government Expenses

26,982
52,719
7,464
72,159
53,325
10,821
16,494
11,482
2,484
18,269
1,044
28,063
301,306

2003

$

51,125
24,007
2,648
14,071
91,851
$

393,157

22,776
54,469
7,883
71,837
52,222
11,901
18,127
12,290
2,433
3,601
6,421
11,908
1,099
27,786
304,753

2004

$

50,406
22,862
2,476
13,783
89,527
$

394,280

23,839
60,027
7,655
78,373
55,087
11,135
19,570
13,024
2,812
3,462
6,130
11,697
1,024
28,028
321,863

$

51,095
24,678
2,622
15,153
93,548
$

415,411

(1) Increase from prior year was caused by the purchase of equipment, furnishing and clothing needed to start the city's
Fire Department on July 1, 2005.

$

2005

2006

30,943
$
63,076
8,315
85,835
57,519
7,941
28,620 (1)
16,520
3,496
3,333
8,026
12,522
1,094
32,466
359,706

42,729
74,408
8,343
82,047
57,931
14,589
26,943
14,746
3,419
3,615
7,549
12,883
617
37,192
387,011

59,723
28,324
3,346
15,508
106,901

53,961
27,854
2,922
16,412
101,149

466,607

$

488,160

2007

$

45,682
81,375
9,843
95,214
70,527
13,329
28,054
17,698
3,727
3,800
9,475
15,133
597
38,981
433,435

64,915
26,089
2,958
17,895
111,857
$

545,292

123

Table of Contents

124
City of Scottsdale
Changes in Net Assets
Last Six Fiscal Years
(accrual basis of accounting)
(in thousands)
Table IIb
Fiscal Year
2002
Program Revenue
Governmental Activities:
Charges for Services:
General Government
Police
Transportatiom
Community Services
Fire
Citizen and Neighborhood Resources
Planning and Development
Streetlight and Service Districts
Operating Grants and Contributions
Capital Grants and Contributions
Total Governmental Activities Program Revenues

$

Business-type Activities:
Charges for Services:
Water Utility
Sewer Utility
Airport
Solid Waste
Capital Grants and Contributions
Total Business-type Activities Revenues

11,243
5,706
3,229
15,764
1,012
22,200
77,412
136,566

2003

$

68,064
24,017
1,689
15,796
38,733
148,299

City of Scottsdale, Arizona

Total Primary Government Revenues

$

284,865

Net (Expense)/Revenue
Governmental Activities
Business-type Activities
Total Primary Government Net Expense

$ (164,740)
56,448
$ (108,292)

11,402
4,227
3,405
15,449
1,018
21,219
70,369
127,089

2004

$

66,626
25,316
2,424
16,250
28,487
139,103
$

266,192

$ (177,664)
49,576
$ (128,088)

12,742
6,760
3,759
17,314
1,000
24,508
105,794
171,877

2005

$

70,613
25,587
2,936
16,488
71,709
187,333
$

359,210

$ (149,986)
93,785
$ (56,201)

12,106
11,514
3,914
18,188
998
26,865
73,092
146,677

2006

$

72,612
27,503
3,162
16,984
38,313
158,574
$

305,251

$ (213,029)
51,673
$ (161,356)

13,783
9,938
277
4,028
1,010 (1)
163
20,515
511
26,355
136,745 (2)
213,325

2007

$

81,517
27,119
3,342
17,163
55,580
184,721
$

398,046

$ (173,686)
83,572
$ (90,114)

(1) The City's Fire Department was formed on July 1, 2005. Prior to this time the City contracted with an external fire service provider.
(2) Developer contributions increased significantly due to the increase in the assets donated and their valuation (increase in construction costs and land values).
(3) Developer contributions increased significantly due to the increase in the assets donated and their valuation (increase in construction costs).

14,102
15,071
326
4,388
1,155
228
16,128
546
29,293
211,707 (3)
292,944

84,381
32,250
3,451
18,490
55,111
193,683
$

486,627

$ (140,491)
81,826
$ (58,665)

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Changes in Net Assets
Last Six Fiscal Years
(accrual basis of accounting)
(in thousands)
Table IIc
Fiscal Year
2002
Governmental Revenues and Other Changes in
Net Assets
Governmental Activities:
Taxes
Intergovernmental
Interest and Investment Income
Miscellaneous and Special Items
Transfers
Total Governmental Activities

$

Business-type Activities:
Taxes
Interest and Investment Income
Miscellaneous
Transfers
Total Business-type Activities:
Total Primary Government
Change in Net Assets
Governmental Activities
Business-type Activities
Total Primary Government

167,105
44,918
11,485
5,382
6,288
235,178

2003

$

5,820
874
(6,289)
405

167,153
46,971
4,108
4,760
10,955
233,947

2004

$

1,493
755
(10,955)
(8,707)

183,039
45,163
2,655
2,777
11,037
244,671

$

973
905
(11,037)
(9,159)

2005

2006

217,325 (1) $
48,346
6,765
4,100
9,567
286,103

240,731
54,481
13,714
5,786
10,536
325,248

4,288
(156)
(9,567)
(5,435)

2007

$

119
6,581
686
(10,536)
(3,150)

249,411
60,520
23,013
5,377
11,174
349,495

195
9,265
496
(11,174)
(1,218)

$

235,583

$

225,240

$

235,512

$

280,668

$

322,098

$

348,277

$

70,438
56,853
127,291

$

56,283
40,869
97,152

$

94,685
84,626
179,311

$

73,074
46,238
119,312

$

151,562
80,422
231,984

$

209,004
80,608
289,612

$

$

$

$

(1) In May 2004, the City of Scottdale citizens approved an additional .15% Preservation Privilege Tax and a .10% Public Safety Tax. These
taxes were effective July 1, 2004.

$

$

125

Table of Contents

126
City of Scottsdale
Governmental Activities Tax Revenues By Source
Last Six Fiscal Years
(accrual basis of accounting)
(in thousands)
Table III

Fiscal
Year
2002
2003
2004
2005
2006
2007

City of Scottsdale, Arizona

Fiscal
Year
2002
2003
2004
2005
2006
2007

(1)

Property
$
39,485
42,218
46,371
48,416
50,610
50,961

Privilege &
Use General
$
81,871
79,483
87,422
94,407
106,019
109,143

Sales and Use Taxes
Privilege &
Privilege &
Use Use McDowell Mtn (1)
Transportation
$
15,814
$
15,587
15,645
15,335
16,981
16,628
31,301
18,115
35,483
20,020
37,281
20,910

Franchise Taxes
Cable TV
Light & Power
Franchise

$

2,223
2,440
2,740
2,859
3,157
3,355

State Shared

Franchise

$

5,238
5,147
5,488
5,596
6,308
7,284

$

Sharing

15,621
15,853
17,054
18,779
21,664
22,312

8,491
9,978
10,578

Intergovernmental
State Revenue

Sales

$

Privilege &
Use Public Safety (1)

$

21,142
21,574
18,278
18,634
21,223
26,653

Other

$

512
611
663
1,337
962
929

In May 2004, the City of Scottdale citizens approved an additional .15% Preservation Privilege Tax and a .10% Public
Safety Tax. These taxes were effective July 1, 2004.

Transient
Occupancy
$
6,691
6,688
7,227
7,939
8,970
9,723

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Fund Balances of Governmental Funds
Last Six Fiscal Years
(modified accrual basis of accounting)
(in thousands)
Table IV
Fiscal Year
2002

2003

2004

2005

2006

2007

General Fund
Reserved
Unreserved

$

2,006
74,363

$

1,992
71,236

$

2,153
$
59,707 (1)

872
72,772

$

805
93,243

$

754
89,534

Total General Fund

$

76,369

$

73,228

$

61,860

$

73,644

$

94,048

$

90,288

$

12,880

$

13,670

$

9,122

$

10,613

$

23,142

$

21,249

All Other Governmental Funds
Reserved
Unreserved, Reported in:
Special Revenue Funds
Capital Project Funds
Total All Other Governmental Funds

25,775
168,550
$

207,205

24,553
159,421
$

197,644

22,122
224,422 (2)
$

255,666

31,873
148,626
$

(1) The decrease from prior period was caused by a defeasance of debt.
(2) The increase from prior period was caused by unspent bond proceeds that were received in the last quarter of the fiscal year.

191,112

40,952
189,905
$

253,999

52,484
179,477
$

253,210

127

Table of Contents

128
City of Scottsdale
Changes in Fund Balances of Governmental Funds
Last Six Fiscal Years
(modified accrual basis of accounting)
(in thousands)
Table Va
Fiscal Year
2002
Revenues
Taxes - Local
Taxes - Intergovernmental
Business and Liquor Licenses
Charges for Current Services
Fines, Fees and Forfeitures
Special Assessments
Property Rental
Interest Earnings
Intergovernmental
Developer Contributions
Streetlight and Services Districts
Contributions and Donations
Reimbursements from Outside Sources
Indirect Costs
Other
City of Scottsdale, Arizona

Total Revenues

$

164,775
57,176
1,815
20,038
5,234
2,339
2,835
10,300
12,892
799
1,012
367
118
7,960
2,260
289,920

2003
$

167,153
59,694
1,816
19,990
6,047
1,970
2,836
3,830
9,609
762
1,018
439
1,032
8,045
850
285,091

2004
$

182,362
58,716
1,813
22,401
6,921
2,558
3,212
2,385
11,810
762
1,000
647
1,659
8,729
2,110
307,085

2005
$

218,189
61,948
1,633
23,300
9,649
2,029
3,617
6,053
11,771
4,708
998
917
461
8,635
9,079
362,987

2006
$

239,478
69,413
1,572
27,260
10,260
1,106
4,173
12,518
13,129
392
511
835
969
9,898
644
392,158

2007
$

251,017
76,545
1,626
23,291
14,779
1,825
3,868
21,083
15,763
2,024
546
1,878
568
10,208
700
425,721

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Changes in Fund Balances of Governmental Funds
Last Six Fiscal Years
(modified accrual basis of accounting)
(in thousands)
Table Vb
Fiscal Year
2002
Expenditures
General Government
Police
Financial Services
Transportation
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Streetlight and Services Districts
Debt Service:
Principal
Interest and Fiscal Charges
Bond Issuance Costs
Advance Refunding Escrow
Capital Improvements

2003

2004

19,528
49,362
7,135
10,016
49,276
7,380
16,281
11,214
2,235
18,040
1,044

16,010
52,371
7,752
10,869
48,950
7,386
17,745
11,553
2,446
3,375
6,268
11,746
1,099

16,121
55,510
7,222
9,399
50,494
7,328
19,265
8,774
2,754
3,290
6,199
11,218
1,024

26,216
29,062
597
339
68,638

30,305
29,759
1,046
68,338

31,905
25,452
586
81,149

Total Expenditures

316,363

327,018

Excess of Revenues over (under) Expenditures

(26,443)

(41,927)

(1) The increase from prior period was caused by land purchases related to capital improvement projects.

2005
21,793
59,874
7,631
8,760
49,941
7,674
21,320
11,813
2,831
3,261
6,506
12,111
1,094

2006

2007

23,516
66,278
7,769
10,099
53,535
8,253
24,296
8,850
3,070
3,507
7,510
12,436
617

24,938
78,261
9,080
13,439
61,778
8,931
26,614
9,692
3,254
3,855
9,016
14,331
597

33,173
31,948
878
213,585 (1)

27,632
36,382
351
218,897

34,252
38,279
735
147,367

337,690

494,193

512,998

484,419

(30,605)

(131,206)

(120,840)

(58,698)

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130
City of Scottsdale
Changes in Fund Balances of Governmental Funds
Last Six Fiscal Years
(modified accrual basis of accounting)
(in thousands)
Table Vc
Fiscal Year
2002
Other Financing Sources (Uses)
Transfers in
Transfers out
Refunding Bonds Issued
Long-term Capital-Related Debt Issued
Premium on Bonds Issued
Payment to Bond Refunding Escrow Agent
Proceeds from Capital Lease
Proceeds from Notes Payable
Sale of Capital Assets
Total Other Financing Sources and (Uses)
Net Change in Fund Balances
Debt Service as a Percentage of Noncapital
Expenditures

$

2003

2004

2005

2006

2007

71,095
(60,408)
74,025
75,500
2,390
(75,025)
-

107,441
(91,582)
102,570
12,165
6,284
(108,077)
424

137,043
(126,269)
39,190
113,400
4,429
(90,534)
-

141,783
(133,284)
74,630
68,355
4,536
(77,584)
-

147,643
(140,513)
191,500
5,501
-

162,965
(155,295)
55,450
42,500
7,199
(61,845)
175
3,000
-

87,577

29,225

77,259

78,436

204,131

54,149

61,134

22.7%

$

(12,702)

$

23.6%

City of Scottsdale, Arizona

(1) The change from the prior period was caused by the increase in spending for capital improvement projects.

46,654

22.6%

$

(52,770) (1) $

23.5%

83,291

21.9%

$

(4,549)

21.7%

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Governmental Activities Tax Revenues By Source
Last Six Fiscal Years
(modified accrual basis of accounting)
(in thousands)
Table VI

Fiscal
Year
2002
2003
2004
2005
2006
2007

Fiscal
Year
2002
2003
2004
2005
2006
2007

(1)

Property
38,413
41,583
46,088
48,249
49,651
50,732

Privilege &
Use General
80,297
79,704
86,547
94,302
104,949
110,225

Franchise Taxes
Cable TV
Light & Power
Franchise

2,223
2,440
2,740
2,859
3,157
3,355

Franchise

5,238
5,147
5,488
5,596
6,308
7,284

Sales and Use Taxes
Privilege &
Privilege &
Use Use McDowell Mtn (1)
Transportation
15,814
15,587
15,645
15,335
16,981
16,628
31,301
18,115
35,483
20,020
37,281
20,910

State Shared
Sales

Intergovernmental
State Revenue
Sharing

15,621
15,853
17,054
18,779
21,664
22,312

Privilege &
Use Public Safety (1)
8,491
9,978
10,578

21,142
21,574
18,278
18,634
21,223
26,653

Other

512
611
663
1,337
962
929

In May 2004, the City of Scottdale citizens approved an additional .15% Preservation Privilege Tax and a .10% Public
Safety Tax. These taxes were effective July 1, 2004.

Transient
Occupancy
6,691
6,688
7,227
7,939
8,970
9,723

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132
City of Scottsdale
Taxable Sales Subject to Privilege (Sales) Tax by Category
Last Six Fiscal years
(in thousands)
Table VII
Fiscal Year

Automotive
Construction
Food Stores
Hotel Motel
Major Department Stores
Miscellaneous Retail Stores
Other Taxable Activity
Rentals
Restaurants
Utilities

2002
$ 1,501,832
1,573,073
503,057
372,610
748,732
1,035,590
341,314
910,184
524,241
389,409

2003
$ 1,499,864
1,213,352
518,665
373,375
795,091
1,059,857
360,991
955,494
551,806
376,319

2004
$ 1,525,050
1,432,006
550,704
400,836
871,244
1,138,028
416,514
977,379
604,652
368,442

2005
$ 1,557,909
1,703,826
562,877
432,006
959,361
1,248,228
457,819
1,054,666
661,542
380,043

2006
$ 1,662,604
2,046,791
584,706
497,804
1,012,906
1,413,445
513,553
1,102,152
726,122
398,204

Total

$ 7,900,042

$ 7,704,814

$ 8,284,855

$ 9,018,277

$ 9,958,287

City of Scottsdale, Arizona

Note: In May 2004, the City of Scottsdale citizens approved an additional .15% Preservation Tax and a .10% Public
Safety Tax. These taxes were effective July 1, 2004.

$

$

2007
1,622,601
2,208,957
626,083
533,055
1,011,240
1,478,112
551,095
1,211,551
774,598
418,460
10,435,752

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Direct and Overlapping Sales Tax Rates
Last Six Fiscal Years
Table VIII
Privilege (Sales) Tax Rates
City Direct
Rate
County Rate State Rate
Fiscal Year
2002
1.40%
0.70%
5.60%
2003
1.40%
0.70%
5.60%
2004
1.40%
0.70%
5.60%
2005
1.65%
0.70%
5.60%
2006
1.65%
0.70%
5.60%
2007
1.65%
0.70%
5.60%

Use Tax Rates
City Direct
Fiscal Year
Rate
County Rate State Rate
2002
1.20%
0.00%
5.60%
2003
1.20%
0.00%
5.60%
2004
1.20%
0.00%
5.60%
2005
1.45%
0.00%
5.60%
2006
1.45%
0.00%
5.60%
2007
1.45%
0.00%
5.60%

Transient Occupancy Tax Rates
City Direct
Fiscal Year
Rate
County Rate State Rate
2002
3.00%
1.77%
5.50%
2003
3.00%
1.77%
5.50%
2004
3.00%
1.77%
5.50%
2005
3.00%
1.77%
5.50%
2006
3.00%
1.77%
5.50%
2007
3.00%
1.77%
5.50%

Jet Fuel Tax Rates (cents per gallon)
City Direct
Fiscal Year
Rate
County Rate State Rate
2002
1.80%
0.46%
2.90%
2003
1.80%
0.46%
2.90%
2004
1.80%
0.46%
2.90%
2005
1.80%
0.46%
2.90%
2006
1.80%
0.46%
2.90%
2007
1.80%
0.46%
2.90%

Source:

City Tax Audit Department

Note:

The following gives a general description of each tax. Complete details for each tax can be found in
Appendix C of the Scottsdale Revised City Code.
Privilege (Sales) Tax applies to the sale, lease, license for use and/or rental transactions.
Use Tax applies to the storage or use of items within the city on which no privilege tax has been paid.
Transient Occupancy Tax applies to transactions involving transient lodging.
Jet Fuel Tax applies to transactions involving the sale of jet fuel.

133

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134
City of Scottsdale
Sales Tax Revenue Payers by Industry
Fiscal Years 2007 and 1998
(in thousands)
Table IX

Automotive
Construction
Food Stores
Hotel Motel
Major Department Stores
Miscellaneous Retail Stores
Other Taxable Activity
Rentals
Restaurants
Utilities
Total

Number of
Filers
603
8,064
148
69
28
5,005
9,435
3,687
824
261
28,124

Fiscal Year 2007
Percentage
Percentage
of Total Tax Revenue of Total
2.14% $
26,711
15.18%
28.67%
35,499
20.17%
0.53%
10,390
5.90%
0.25%
9,199
5.23%
0.10%
16,951
9.63%
17.80%
26,433
15.02%
33.55%
10,116
5.75%
13.11%
20,827
11.83%
2.93%
12,895
7.33%
0.93%
6,966
3.96%
100.00% $
175,987
100.00%

Number of
Filers
490
5,355
211
68
9
5,174
2,132
2,158
674
203
16,474

Fiscal Year 1998
Percentage
Percentage
of Total Tax Revenue of Total
2.97% $
12,442
14.65%
32.51%
19,379
22.82%
1.28%
5,957
7.01%
0.41%
5,350
6.30%
0.05%
6,538
7.70%
31.41%
13,422
15.81%
12.94%
5,588
6.58%
13.10%
7,325
8.63%
4.09%
5,270
6.21%
1.23%
3,650
4.30%
100.00% $
84,921
100.00%

Note:
Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories are intended to provide alternative information regarding the sources
of the city's revenue.
The industry classifications were based on Standard Industrial Classification (SIC) in 1997 and the North American Industry Classification System (NAICS) classifications in
2007.

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Property Tax Rates
Direct and Overlapping Governments
Last Six Fiscal Years
Table X
City Direct Rate

Overlapping Rates
Scottsdale Unified School District

Fiscal
Year

Operating
Rate

2002
2003
2004
2005
2006
2007

$

0.49 $
0.51
0.48
0.45
0.44
0.38

Debt
Service
Rate

0.07
0.65
0.64
0.62
0.60
0.41

Total
City
Rate

$

Debt
Service
Rate

Operating
Rate

1.15
1.15
1.12
1.07
1.04
0.79

$

4.08 $
3.94
3.89
3.77
5.24
3.45

1.36
1.36
1.30
1.26
2.41
1.26

EVIT
Rate

$

0.11 $
0.11
0.10
0.10
0.06
0.05

Total
School
Rate

5.55
5.41
5.29
5.13
7.71
4.76

Overlapping Rates
County-Wide Jurisdictions
Fiscal
Year

2002
2003
2004
2005
2006
2007

County
County
Operating Debt Service
Rate
Rate

Community County County Education
College
Flood
Equalization
Rate
Rate
Rate

$

$

1.18 $
1.21
1.21
1.21
1.20
1.18

0.09
0.08
0.07
-

1.11 $ 0.23 $
1.11
0.21
1.08
0.21
1.04
0.21
1.03
0.21
0.88
0.20

Fire District
Assistance
Rate

0.50 $
0.49
0.47
0.46
0.44
-

Central AZ County Free
Project
Library
Rate
Rate

0.01 $
0.01
0.01
0.01
0.01
0.01

0.13
0.13
0.12
0.12
0.12
0.12

$

0.04 $
0.04
0.05
0.05
0.05
0.05

Total
County
Rate

3.29
3.28
3.22
3.09
3.06
2.44

Source:

Maricopa County Department of Finance Publications On-Line "Tax Levy 2006"

Note:

The City has Community Facilities Districts (CFD) that levy property taxes independent of the City to property owners within
a designated area. For FY 2006/07 the rates were as follows: Scottsdale Mountain CFD - $1.20, McDowell Mountain CFD $.60, DC Ranch CFD - $.70, and Via Linda Road CFD - $3.00 and the Waterfront Commercial CFD - $.30.

Total
Direct &
Overlapping
Rates

$

9.99
9.85
9.63
9.30
11.81
7.99

135

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136
City of Scottsdale
Principal Property Tax Payers
June 30, 2007
(in thousands)
Table XI
2007

Taxpayer
Scottsdale Fashion Square Partnership
DC Ranch LLC
Gainey Drive Associates
Scottsdale Acquisition LLC
Pederson/BVT Promenade Associates
Arizona Public Service Company
Scottsdale Princess Partnership
Gerneral Dynamics Decesion Systems Inc.
Motorola GEG
Qwest Corporation

Taxable
Assessed
Value
$
203,257
181,988
86,581
83,829
76,879
63,160
51,393
50,174
48,996
33,878

Rank
1
2
3
4
5
6
7
8
9
10

1998
Percentage of
Total Taxable
Assessed
Value
0.067%
0.060%
0.029%
0.028%
0.026%
0.021%
0.017%
0.017%
0.016%
0.011%

Taxable
Assessed
Value
$
22,981
933
45,863
42,657
48,606
-

Rank
4
5
2
3
1
-

Percentage of
Total Taxable
Assessed
Value
0.0190%
0.0001%
0.0380%
0.0000%
0.0000%
0.0350%
0.0000%
0.0000%
0.0400%
0.0000%

Source: 2007 information - The City of Scottsdale's Property Tax Auditor, as obtained from the Arizona Department of Revenue, Centrally Valued Property Department and the 2006
Maricopa County Treasurer's Roll.
Source: 1998 information - The City of Scottsdale's Property Tax Auditor, as obtained from the Arizona Department of Revenue, Division of Utilities and Mines and the tax rolls of
the Maricopa County Assessor's Office.

City of Scottsdale, Arizona

The Salt River Project Agricultural Improvement and Power District's (SRP) assessed valuation is not reflected in the total assessed valuation of the City. SRP is subject to a "voluntary
contribution" in lieu of ad valorem taxation. The 2006/07 secondary assessed valuation of the Salt River Project within the City is $38,229,602. The estimated secondary in lieu
contribution is $202,864.

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Assessed Value and Estimated Actual Value of Taxable Property
Last Six Fiscal Years
(in thousands)
Table XII
Fiscal
Year
Ended
June 30th

Residential
Property

Real Property
Commercial
Vacant
Property
Land

Historic &
Special Use

Personal Property:
Assessed
Value

Less:
Tax Exempt
Real Property

Total Taxable
Assessed
Value

Total
Direct
Tax
Rate

Estimated
Actual
Taxable
Value

Assessed
Value as a
Percentage of
Actual Value

2002 P
2002 S

10,673,395
10,888,029

5,977,552
6,535,049

2,328,121
3,544,114

103,791
109,608

3,862,100
3,491,019

(2,022,853)
(2,729,219)

20,922,106
21,838,600

0.49
0.67

164,740,992
173,322,222

12.7%
12.6%

2003 P
2003 S

11,932,856
12,193,504

6,593,240
7,318,601

2,764,179
3,969,053

106,542
122,750

3,909,604
3,909,592

(2,350,555)
(3,056,453)

22,955,865
24,457,048

0.51
0.65

180,904,152
194,235,322

12.7%
12.6%

2004 P
2004 S

13,499,027
14,679,461

7,165,744
7,689,888

3,383,706
4,614,770

136,185
145,789

4,208,603
4,208,603

(2,945,414)
(3,860,523)

25,447,851
27,477,988

0.48
0.64

204,584,524
226,293,569

12.4%
12.1%

2005 P
2005 S

15,058,765
15,528,621

7,867,052
8,780,686

4,034,306
5,590,181

153,302
166,594

4,385,258
4,385,258

(3,427,812)
(4,384,354)

28,070,871
30,066,986

0.45
0.62

227,626,828
245,835,672

12.3%
12.2%

2006 P
2006 S

16,962,279
18,025,501

8,919,192
9,596,223

4,658,184
5,794,820

122,530
133,256

4,114,717
4,115,455

(3,766,617)
(4,468,037)

31,010,285
33,197,218

0.45
0.60

253,264,911
273,817,028

12.2%
12.1%

2007 P
2007 S

18,635,905
19,057,275

9,754,576
10,943,592

5,488,913
7,585,471

110,634
118,257

4,082,806
4,082,793

(4,265,369)
(5,492,694)

33,807,465
36,294,694

0.45
0.55

279,211,428
301,474,323

12.1%
12.0%

Source: Maricopa County Assessor's Office, February 10th Abstract of the Assessment Roll.

Under Arizona law, there are two property valuation bases: PRIMARY (P) and SECONDARY (S). The primary (limited assessed valuation is used when levying for maintenance and
operation of cities, school districts, community college districts, counties, and the state. The secondary (full cash) assessed valuation is used when levying for debt retirement, voterapproved budget overrides, and maintenance and operation of special service districts.

137

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138
City of Scottsdale
Property Tax Levies and Collections
Last Six Fiscal Years
(in thousands)
Table XIII
Collected within the
Fiscal Year of the Levy
Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007

Source:

Total Tax
Levy for
Fiscal Year
$
36,166
39,159
42,756
44,731
47,659
78,778

Amount
$
34,895
37,583
40,739
44,160
46,431
47,105

Percentage
of Levy
96.5%
96.0%
95.3%
98.7%
97.4%
96.6%

Total Collections to Date
Collections
in Subsequent
Years
$
964
999
1,638
304
200
208

Amount
$
35,859
38,582
42,377
44,464
46,631
47,313

Percentage
of Levy
99.2%
98.5%
99.1%
99.4%
97.8%
97.0%

Maricopa County Treasurer's Office 2006 Secured Tax Levy Report and the City of Scottsdale Financial Services
Department. Amounts represent property taxes recorded in the General, Debt Service and the Self-Insurance Fund.

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Ratios of Outstanding Debt by Type
Last Six Fiscal Years
(in thousands)
Table XIV

Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007

Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007

Municipal
Property
Corporation
Bonds
$
49,870
41,955
4,850
61,253
108,225
149,176

General
Obligation
Bonds
$ 319,657
305,003
389,598
372,070
499,365
476,200

Revenue
Bonds
$
13,385
10,990
8,475
5,815
2,990
-

General
Obligation
Bonds
$
18,315
14,323
10,651
6,515
-

Business-Type Activities
Municipal
Property
Revenue
Corporation
Bonds
Bonds
$
73,945
$
11,555
71,230
10,010
68,365
83,365
65,735
79,430
62,405
161,965
58,930
155,650

Governmental Activities
Scottsdale
Preserve
Special
Authority
Assessment
Bonds
Bonds
$
90,585
$
13,061
88,270
11,140
85,980
8,755
83,385
6,340
80,570
5,505
77,605
4,670

Certificates
of
Participation
$
7,650
7,090
6,401

Community
Facilities
District
Bonds
$
34,935
46,355
44,950
43,480
41,945
40,330

Total
Primary
Government
$
646,724
618,903
718,691
745,997
983,375
989,092

Percentage
of Personal
Income
7.70%
7.04%
7.85%
7.84%
9.94%
9.54%

Per
Capita
$
3,080
2,891
3,303
3,374
4,344
4,151

Capital
Lease
$

179
139

Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See Table XIX - Schedule of Demographic and Economic Statistics for personal income and population data.

Contracts
Payable
$ 21,416
19,627
13,702
14,324
13,136
19,819

Capital
Lease
$

172

139

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140
City of Scottsdale
Ratios of General Bonded Debt Outstanding
Last Six Fiscal Years
Table XV

Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007

Governmental
Activities
General
Obligation
Bonds
$
319,657,000
305,003,000
389,598,000
372,070,000
499,365,000
476,200,000

Less: Amounts
Available
in Debt
Service Fund
$
8,448,962
9,006,329
3,468,780
5,601,739
12,435,797
9,382,702

$

Total
311,208,038
295,996,671
386,129,220
366,468,261
486,929,203
466,817,298

Percentage of
Total Taxable
Assessed
Value of
Property
9.5%
8.4%
9.7%
8.4%
10.3%
9.0%

$

Per
Capita
1,482.23
1,382.58
1,774.86
1,657.25
2,150.84
1,959.19

Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.

See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property on Table XII for property value data.
See the Schedule of Demographic and Economic Statistics (Table XIX) for population data.
City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Direct and Overlapping Governmental Activities Debt
As of June 30, 2007
(in thousands)
Table XVI

Governmental Unit
Debt repaid with property taxes
Maricopa County
Maricopa County Community College District
Tempe Elementary School District No. 3
Balsz Elementary School District No. 31
Scottsdale Unified School District No. 48
Paradise Valley Unified School District No. 69
Cave Creek Unified School District No. 93
Fountain Hills Unified School District No. 98
Phoenix Union High School District No. 210
Tempe Union High School District No 213
East Valley Institute of Technology District No. 401
Scottsdale Mountain Community Facilities District
McDowell Mountain Community Facilities District
DC Ranch Community Facilities District
Via Linda Road Community Facilities District

Debt
Outstanding
$

369,320
69,300
13,825
415,800
313,480
44,615
20,885
330,230
135,925
4,005
15,495
18,015
2,815

Estimated
Share of
Overlapping
Debt

Estimated
Percentage
Applicable
14.2655%
14.2655%
0.0002%
4.7528%
69.9434%
32.8795%
62.6405%
3.1612%
0.2930%
0.0001%
19.4538%
100.0000%
100.0000%
100.0000%
100.0000%

$

Subtotal, overlapping debt
City direct debt
Total direct and overlapping debt

52,689
657
290,825
103,071
27,947
660
968
4,005
15,495
18,015
2,815
517,147

282,315

100.0000%

282,315
$

799,462

Source: Maricopa County Assessor's Office
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 Scottsdale. 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.

141

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142
City of Scottsdale
Legal Debt Margin Information
Last Six Fiscal Years
(in thousands)
Table XVIIa
Fiscal Year
2002
20% Limitation
Debt Limit Equal to 20% of Assessed Valuation

$

Total Net Debt Applicable to 20% Limit
Legal 20% Debt Margin (Available
Borrowing Capacity)

$

City of Scottsdale, Arizona

Total Net Debt Applicable to the 6% Limit
as a Percentage of 6% Debt Limit

410,381

$

196,677

$

114,920

41.57%

$

467,921

$

211,596

$

139,901

33.88%

$

475,339

$

238,531

$

163,547

31.44%

$

554,905

$

36.12%

$

74,984

$

868,691

2006

313,786

40.22%

71,695

$

795,104

2005

319,765

33.66%

81,757

$

705,321

2004

237,400

37.40%

Total Net Debt Applicable to 6% Limit
Legal 6% Debt Margin (Available
Borrowing Capacity)

$

245,209

Total Net Debt Applicable to the 20% Limit
as a Percentage of 20% Debt Limit

6% Limitation
Debt Limit Equal to 6% of Assessed Valuation

655,590

2003

260,607

195,808

24.86%

947,151

$ 1,041,889

372,545

363,455

574,606

$

39.33%

$

64,799

$

2007

284,145

34.88%

$

126,820

$

157,325

44.63%

678,434

312,567
112,745

$

199,822

36.07%

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Legal Debt Margin Information
As of June 30, 2007
(in thousands)
Table XVIIb
Legal Debt Margin Calculation for Fiscal Year 2007
Net Secondary Assessed Valuation as of June 30, 2007

$

20% Limitation
Debt Limit Equal to 20% of Assessed Valuation

5,209,444

1,041,889

Debt applicable to limit:
General Obligation Bonds

363,455

Legal 20% Debt Margin (Available Borrowing Capacity)

$

678,434

6% Limitation
Debt Limit Equal to 6% of Assessed Valuation

$

312,567

Debt applicable to limit:
General Obligation Bonds
Legal 6% Debt Margin (Available Borrowing Capacity)

112,745
$

199,822

Source: City of Scottsdale Financial Services
Under Arizona law, cities can issue general obligation bonds for purposes of water, sewer, light, parks, and open space
purposes, but outstanding bonds issued for such purposes may not exceed 20 percent of the City's net secondary assessed
valuation. Outstanding general obligation bonded debt for all other purposes may not exceed 6 percent of the City's net
secondary assessed valuation.
General obligation bonds of community facilities districts are not subject to or included in this computation since they are
not bonds of the City of Scottsdale, Arizona.

143

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144
City of Scottsdale
Pledged-Revenue Coverage
Last Six Fiscal Years
(in thousands)
Table XVIII
Water and Sewer Revenue Bonds
Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007

Operating
Revenue(1)
$
97,802
95,064
97,813
105,078
115,374
125,880

Less:
Operating
Expenses
$
49,840
46,991
49,662
56,413
56,329
64,089

Net
Operating
Revenue
$
47,962
48,073
48,151
48,665
59,045
61,791

Development
Fee
Revenue
$
15,087
17,648
21,574
20,155
24,071
17,878

Net
Revenue
$
63,049
65,721
69,725
68,820
83,116
79,669

Special
Assessment
Collections
$
2,339
1,970
2,558
2,016
1,106
1,825

Debt Service
Principal
Interest
$
2,208
$
393
1,990
279
2,425
492
2,448
360
851
275
848
235

Debt Service
Principal
Interest
$
2,595
$
3,937
2,715
3,792
2,860
3,159
2,630
3,570
3,330
3,182
3,475
2,997

Coverage
9.65
10.10
11.58
11.10
12.76
12.31

Highway
User Tax
Revenue
$
12,574
13,137
14,034
14,738
15,708
16,778

Scottsdale Preserve Authority Bonds

Special Assessment Bonds
Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007

Highway User Revenue Bonds

Coverage (2)
0.90
0.87
0.88
0.72
0.98
1.69

0.2%
and 0.15%
Sales Tax (3)
$
6,839
6,881
6,267
7,014
6,811
6,806

Debt Service
Principal
Interest
$
2,185
$
4,704
2,315
4,566
2,445
3,825
2,595
4,437
2,815
3,997
2,965
3,843

Coverage
0.99
1.00
1.00
1.00
1.00
1.00

Excise
Tax
$ 188,548
189,516
199,889
239,284
268,134
277,366

(2) Coverage ratio is less than 1.0 due to prepayment of amounts that are currently in fund balance.
(3) In May 2004, the City of Scottdale citizens approved an additional .15% Preservation Privilege Tax and a .10% Public Safety Tax. These taxes were effective July 1, 2004.

City of Scottsdale, Arizona

Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.

Coverage
4.05
4.22
4.52
4.72
5.00
5.32

Municipal Property Corporation Bonds

(1) Includes investment income.

(4) Includes debt service payments paid out of revenue from the Water and Sewer Fund.

Debt Service
Principal
Interest
$ 2,275
$
828
2,395
715
2,515
592
2,660
460
2,825
317
2,990
165

Debt Service (4)
Principal
Interest
$ 8,325
$
3,775
3,045
9,145
7,170
1,108
8,265
6,413
5,995
10,017
5,305
10,057

Coverage
15.58
15.55
24.15
16.30
16.75
18.06

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Demographic and Economic Statistics
Last Six Fiscal Years
Table XIX

Fiscal
Year
2002
2003
2004
2005
2006
2007

Population (1)
209,960
214,090
217,555
221,130
226,390
238,270

Personal
Income (2)
(in thousands)
$
8,396,720
8,787,110
9,158,195
9,515,538
9,896,159
10,367,366

Per Capita
Personal
Income (3)
$
39,992
41,044
42,096
43,148
43,713
43,511

Data Sources:
1

Arizona Department of Economic Security

2

Sites USA (estimate)

3

Sites USA

4

US Census Bureau (estimate)

5

Sites USA

6

Arizona Department of Education

7

Arizona Department of Economic Security; Arizona Workforce

Median
Age (4)
41.1
40.5
40.2
39.9
39.5
41.0

Education
Level in Years
of Schooling (5)
13 to 16
13 to 16
13 to 16
13 to 16
13 to 16
13 to 16

School
Enrollment (6)
27,436
27,479
27,328
26,559
27,000
26,653

Unemployment
Rate (7)
4.1%
3.6%
3.9%
2.9%
3.0%
2.6%

145

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146
City of Scottsdale
Principal Employers
Current Year and Nine Years Ago
Table XX
2007

Employer

Scottsdale Healthcare
General Dynamics
Mayo Clinic - Scottsdale
Scottsdale Unified School District
City of Scottsdale
CareMark
Troon Golf LLC
Go Daddy Group
Scottsdale Fairmont Princess Resort
Scottsdale Insurance Company
Scottsdale Memorial Health Systems
Motorola
PCS Health Systems (Eli Lilly)
Dial Corporation
Hyatt Regency Gainey Rancy
Total

Employees

5,928
4,000
3,995
3,500
2,708
1,636
1,539
1,227
1,200
1,195
26,928

City of Scottsdale, Arizona

Source: City of Scottsdale, Economic Vitality Department
* 2007 labor force = 167,129; 1998 labor force = 98,592

Rank

1
2
3
4
5
6
7
8
9
10
-

1998
Percentage
of Total City
Employment*

3.50%
2.40%
2.40%
2.10%
1.60%
1.00%
0.09%
0.07%
0.07%
0.07%
13.30%

Employees

1,000
2,480
2,000
1,300
1,050
4,500
4,100
1,544
800
800
19,574

Rank

8
3
4
6
7
1
2
5
9
10

Percentage
of Total City
Employment*

1.00%
2.50%
2.00%
1.30%
1.10%
4.60%
4.20%
1.60%
0.80%
0.80%
19.90%

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Full-time Equivalent City Government Employees by Function
Last Six Fiscal Years
Table XXI
Full-time Equivalent Employees as of June 30
Function
General Government
Police
Financial Services
Transportation
Community Services
Information Systems
Fire
Municipal Services
Citizen and Neighborhood Resources
Human Resources
Economic Vitality
Planning and Development
Water Resources
Aviation
Solid Waste

2002
196.5
574.1
144.5
35.0
516.1
73.8
2.7
132.8
35.0
36.5
10.0
157.0
139.0
11.9
77.3

Source: The City of Scottsdale's Budget Department.

2003
195.5
591.1
144.5
34.0
516.1
73.8
2.7
132.8
35.0
35.5
10.0
151.0
136.0
12.4
80.3

2004
196.5
590.1
139.5
24.0
506.1
74.8
3.7
135.8
32.0
34.5
8.0
140.0
136.0
12.4
79.3

2005
202.0
631.1
143.0
25.0
513.6
78.8
3.7
139.8
37.0
36.5
10.0
140.0
139.0
12.4
79.3

2006
217.0
676.1
149.0
27.0
559.4
80.8
259.0
151.8
39.0
35.5
11.0
144.0
152.5
13.0
83.3

2007
222.2
705.6
151.0
30.0
580.3
83.8
268.0
170.5
40.0
36.5
11.0
161.0
162.0
15.0
85.3

147

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148
City of Scottsdale
Operating Indicators by Function
Last Six Fiscal Years
Table XXII
Fiscal Year
Function
General Government
Legislative and Constituent/Gov. Relations
% of survey respondents rating the "Overall Quality of Life in Scottsdale" as good to excellent
City Clerk's Office
# of legal postings
City Attorney's Office
% of cases resolved at first court appearance (arraignment)
City Auditor's Office
# of audits performed
City Court
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 Affairs
News releases, media updates, traffic alerts, construction updates released to news media
WestWorld
# of special events
The Downtown Group
# of downtown special events coordinated
Preservation
Acres of land acquired for inclusion in the McDowell Sonoran Preserve
Police
Scottsdale Uniform Crime Report, Part 1 (crimes per thousand)
Scottsdale
Valley Average
Achieve the standard of six minutes or less for response to emergency calls for service (includes medical
and accident related calls)
Provide initial contact to 100% of citizen traffic concerns within seven days
Financial Services
# of Accounts Payable checks issued

2002

2003

2004

2005

2006

2007

No Survey

No Survey

90%

93%

No Survey

90%

518

466

456

651

890

974

20%

26%

30%

30%

32%

35%

60

6

11

11

17

22

79,638 / 114,514

96,995 / 94,045

121,560 / 129,888

136,747 / 134,793

153,320 / 156,292

201,866 / 216,000

No Survey

No Survey

86%

89%

No Survey

90%

277

215

182

247

250

220

49

55

53

57

59

46

N/A

N/A

41

58

62

71

514

660

450

2,600

40

259

44.9
70.5

44.3
72.0

45.5
60.2

42.3
56.5

37.1
51.0

35.0
51.0

6:00

6:29

5:87

6:12

6:00

6:10

50%

60%

96%

98%

98%

100%

35,636

35,344

34,547

37,954

41,194

42,000

8,531

10,212

12,254

9,611

10,600

12,000

# of water meters read annually

943,212

971,508

986,080

1,000,870

1,033,600

1,030,368

# of customer contacts (utilities, taxes & licensing)

212,787

218,185

221,900

229,500

230,000

216,764

# of purchase orders

City of Scottsdale, Arizona

(continued)

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Operating Indicators by Function
Last Six Fiscal Years
Table XXII
Fiscal Year
Function
Transportation
Total citywide transit ridership
Actions to improve safety and efficiency of traffic flow (signal timing changes and traffic control and speed
limit studies)
Scottsdale Airport - Takeoffs and Landings
Community Services
# attending Parks & Recreation facilities, Human Services facilities and Libraries annually
# of square feet of medians and rights of way maintained
Facility inventory maintained (square feet)
Information Systems
# of SPAM emails blocked (monthly) from being delivered to the City (An average of 30 seconds per email
is expended by staff)
Annual Disk Storage size (DAS, NAS, and SAN) (Terabytes)
Fire
# of responses to calls for emergency services
Responses per capita
Average response time to urban calls for service (minutes)
Water Service
Water Service Connections

2002

2003

2004

2005

2006

2007

1,780,578

1,917,011

1,917,000

1,969,512

2,255,450

2,321,073

76

124

150

270

322

375

181,657

197,483

195,276

208,106

210,481

185,241

6,817,413

7,485,295

7,565,511

7,573,369

7,717,000

7,925,000

13,168,516

13,253,516

13,949,440

14,569,062

15,188,684

15,460,961

1,551,620

1,755,162

1,807,298

1,825,564

2,166,650

2,221,650

n/a

32,244

129,000

2,319,000

46,100,000

94,187,000

2.5

4.0

5.0

7.0

30.0

30.0

21,877

21,162

21,756

23,102

23,572

22,894

0.10

0.09

0.09

0.10

0.10

0.10

4:02

4:01

4:20

4:23

4:23

4:15

79,052

80,454

81,947

83,511

86,399

86,728

Drinking Water Supplied (million gallons per day)

70.4

67.6

70.0

67.7

73.1

72.1

Reclaimed Water Supplied (million gallons per day)
Sewer Service
Sewer Service Connections

11.8

14.2

11.8

11.6

11.5

11.4

69,121

70,732

72,034

73,232

74,143

76,092

24.0

24.5

24.2

25.5

24.2

25.3

101

118

116

183

199

202

# of homes serviced by Residential Refuse Collection

70,546

72,166

73,602

74,850

76,300

77,800

# of citizens serviced annually by Household Hazardous Waste collection program

1,708

1,900

2,201

1,718

1,900

2,100

Sewage Treated (million gallons per day)
Municipal Services
# of active Capital Projects

(continued)

149

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150
City of Scottsdale
Operating Indicators by Function
Last Six Fiscal Years
Table XXII
Fiscal Year
Function
Citizen & Neighborhood Resources
% increase of Neighborhood Watch groups annually

2002
n/a

15%

37%

37%

25%

5%

# of new Code Enforcement cases processed per year
Human Resources
Citywide turnover

7,357

10,000

10,000

11,336

14,000

16,900

120

6.8%

7.3%

7.9%

11.1%

11.5%

HR operating cost as a % of City payroll
Economic Vitality
Targeted job creation - number of companies / number of jobs

3.1%

2.6%

2.4%

2.3%

2.0%

2.0%

10 / 1,305

17 / 1,716

23 / 1,800

10 / 1,443

10 / 1,200

10 / 1,000

- 2%

55.0%

57.5%

60.0%

69.0%

70.0%

- 13%

0%

+ 3%

+ 5%

+ 5%

4%

n/a

n/a

45

25

15

20

Hotel/Motel average occupancy rate
Bed Tax growth (% annual change)
Planning & Development Services
Customer wait-time (in minutes) at One Stop Shop

2003

2004

2005

2006

2007

Provide applicant with pre-application meeting within 30 days of submitting request.

n/a

n/a

90%

100%

100%

100%

% of inspections performed within 24 hours of the request

99%

99%

97%

98%

99%

99%

Source: The City of Scottsdale's Budget Department and applicable City departments.

City of Scottsdale, Arizona

Table of Contents

City of Scottsdale, Arizona

City of Scottsdale
Capital Asset Statistics by Function
Last Six Fiscal Years
Table XXIII
Fiscal Year
Function
Public Safety
Police:
Stations
Police Vehicles
Fire Stations
Highways and Streets
Square Yards of Pavement
Equivalent 12' Wide Lane Miles
Streetlights
Traffic Signals
Culture and Recreation
Parks
Parks Acreage
Swimming Pools
Tennis Courts
Community Centers
Water
Water Mains (miles)
Fire Hydrants
Sewer
Sanitary Sewers (miles)
Storm Sewers (miles)

Source: City of Scottsdale departments.

2002

2003

2004

2005

2006

2007

3
261
10

3
295
12

3
286
12

3
290
13

3
345
13

3
375
13

19,100,000
2,713
9,510
250

19,100,000
2,713
10,300
253

19,231,553
2,732
10,500
258

19,231,553
2,732
10,650
262

19,660,273
2,793
10,828
276

20,393,288
2,897
11,022
276

40
869
3
49
6

40
869
3
49
6

40
849
3
49
6

40
849
3
49
6

40
937
3
49
6

40
937
4
51
5

1,738
8,659

1,815
8,928

1,854
9,193

1,897
9,541

1,933
9,839

1,997
10,147

1,155.0
68.7

1,262.0
68.7

1,280.0
137.7

1,287.4
142.8

1309.0
148.0

1,350.0
153.5

151

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152

City of Scottsdale, Arizona