To Table of Contents City of Casa Grande, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2007 To Table of Contents City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2007 Prepared by the Finance Department Larry D. Rains, Finance Director To Front Cover TABLE OF CONTENTS I. INTRODUCTORY SECTION Page Letter of Transmittal............................................................................................................................... GFOA Certificate of Achievement......................................................................................................... City of Casa Grande Officials ................................................................................................................ Organizational Chart .............................................................................................................................. v xii xiii xiv II. FINANCIAL SECTION Independent Auditors’ Report .............................................................................................................. 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (required supplementary information)....... 3 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets .................................................................................................................. Statement of Activities .................................................................................................................... 14 15 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet............................................................................................................................. Reconciliation of the Balance Sheet to the Statement of Net Assets ......................................... Statement of Revenues, Expenditures and Changes in Fund Balances...................................... Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances Of Governmental Funds to the Statement of Activities.......................................................... Budgetary Comparison Statements – General Fund and major Special Revenue funds: General Fund .......................................................................................................................... Highway Users Special Revenue Fund .................................................................................. System Development Special Revenue Fund ......................................................................... Grants and Subsidies Special Revenue Fund.......................................................................... Community Development Block Grant Special Revenue Fund ............................................. Self-Help Technical Assistance Special Revenue Fund ......................................................... Home Special Revenue Fund ................................................................................................. 17 19 20 22 23 24 25 26 27 28 29 Proprietary Fund Financial Statements Statement of Net Assets ............................................................................................................. Statement of Revenues, Expenses and Changes in Fund Net Assets ......................................... Statement of Cash Flows............................................................................................................ 30 32 34 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets............................................................................................. Statement of Changes in Fiduciary Net Assets .......................................................................... i 38 39 To Table of Contents TABLE OF CONTENTS (continued) Notes to Financial Statements: Note 1. Summary of Significant Accounting Policies................................................................ 2. Cash and Investments .................................................................................................... 3. Cash with Fiscal Agent.................................................................................................. 4. Receivables.................................................................................................................... 5. Direct Loans .................................................................................................................. 6. Property Taxes............................................................................................................... 7. Capital Assets ................................................................................................................ 8. Retirement and Pension Plans ....................................................................................... 9. Risk Management.......................................................................................................... 10. Capital Leases................................................................................................................ 11. Bond Debt ..................................................................................................................... 12. Excise Tax Revenue Obligations................................................................................... 13. Changes in General Long-Term Obligations................................................................. 14. Long-Term Debt............................................................................................................ 15. Landfill Closure and Postclosure Care Costs ................................................................ 16. Summary of Interfund Transactions .............................................................................. 17. Prior Period Adjustment ................................................................................................ 18. Deficit in Net Assets...................................................................................................... 19. Commitments ................................................................................................................ Page 40 51 54 55 55 56 56 58 63 63 65 66 68 68 69 69 71 71 71 SUPPLEMENTARY INFORMATION – COMBINING FUND FINANCIAL STATEMENTS Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........... 72 74 Fiduciary Funds Combining Statement of Fiduciary Net Assets................................................................... Combining Statement of Changes in Assets and Liabilities – All Agency Funds .............. 76 77 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules – Other Major Governmental Funds Special Assessment Debt Service Fund.............................................................................. Capital Replacement/Development Fund ........................................................................... Community Facilities Districts Capital Projects Fund........................................................ Budgetary Comparison Schedules – Non-Major Governmental Funds Municipal Airport Special Revenue Fund .......................................................................... Parks Development Special Revenue Fund ........................................................................ Community Arts Reserve Special Revenue Fund............................................................... Redevelopment /Downtown Revitalization Special Revenue Fund ................................... Promotion & Tourism Special Revenue Fund .................................................................... Court Enhancement/Probationary Special Revenue Fund .................................................. Housing Application, Development Fees, Rehabilitation and Preservation Grant Special Revenue Fund ........................................................................................ ii 78 79 80 81 82 83 84 85 86 87 To Table of Contents TABLE OF CONTENTS (continued) Page SUPPLEMENTARY INFORMATION (continued) Budgetary Comparison Schedules – Non-Major Governmental Funds (continued) Public Safety Special Revenue Fund .................................................................................. Redevelopment Debt Service Fund .................................................................................... Recreation Debt Service Fund ............................................................................................ Recreation Improvements Capital Projects Fund ............................................................... Airport Improvement Capital Projects Fund....................................................................... 88 89 90 91 92 Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch.............................................................................................. Wastewater .................................................................................................................. Wastewater Development Fees ................................................................................... Sanitation..................................................................................................................... Golf Course ................................................................................................................. 93 94 95 96 97 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule by Function and Activity..................................................................................... Schedule of Changes by Function and Activity.................................................................. 98 99 100 Schedule of Expenditures of Federal Awards.............................................................................. 101 III. STATISTICAL SECTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Page 103 104 105 106 107 109 111 112 113 115 116 117 118 119 120 15 16 17 121 122 123 Schedule Index.................................................................................................................................. Net Assets by Component – Last Four Fiscal Years ......................................................... Changes in Net Assets, Governmental - Last Four Fiscal Years....................................... Changes in Net Assets, Business-type - Last Four Fiscal Years ....................................... Fund Balances, Governmental Funds - Last Ten Fiscal Years.......................................... Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years ....................... Sales Tax Revenue by Industry - Last Three Fiscal Years ................................................ Direct and Overlapping Sales Tax Rates........................................................................... Ratios of Outstanding Debt by Type – Last Ten Fiscal Years .......................................... Ratio of General Bonded Debt Outstanding – Last Two Fiscal Years .............................. Direct and Overlapping Governmental Activities Debt .................................................... Legal Debt Margin Information ........................................................................................ Pledged-Revenue Coverage – Last Ten Fiscal Years........................................................ Demographic and Economic Statistics - Last Ten Fiscal Years........................................ Principal Employers – Current Year and Six Years Ago .................................................. Authorized City Government Employee Positions by Function-Program – Last Ten Fiscal Years ................................................................. Operating Indicators by Function/Program – Last Ten Fiscal Years ............................... Capital Asset Statistics by Function/Program – Last Ten Fiscal Years............................. iii To Table of Contents TABLE OF CONTENTS (continued) SINGLE AUDIT SECTION SINGLE AUDIT REPORTS Report on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.......................... Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133........................ Schedule of Findings and Questioned Costs ................................................................................. iv 124 126 128 To Table of Contents City of Casa Grande October 31, 2007 Honorable Mayor, City Council, City Manager Citizens of Casa Grande, Arizona We are pleased to submit to you the fiscal year ended June 30, 2007 Comprehensive Annual Financial Report (CAFR) of the City of Casa Grande, Arizona (the City). The report was prepared by the City’s Finance Department. This report represents management’s report to its governing body, constituents, legislative and oversight bodies, investors, and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies, which have expressed an interest in the City’s financial matters. Copies of this financial report will be placed in the City library for use by the general public, and posted on the City’s web page. Responsibility for the accuracy of the presented data and the completeness and fairness of the presentations, including all disclosures, rests with the management of the City. The City has established and maintains a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of financial statements. We believe the data, as presented in this report, is accurate in all material respects and is presented in a manner which fairly sets forth the financial position and results of operations of the City on both a city-wide and fund basis. Furthermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City’s financial activity and financial stability have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United State of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). The City of Casa Grande, Arizona’s financial statements have been audited by Henry & Horne, L.L.P., whose report is included herein. The examination satisfies Article VI, Section 6, of the City Charter, which requires an annual audit of all accounts of the City by an independent certified public accountant. As stated in the independent auditors’ report, the goal of the independent audit is to provide reasonable assurance that the financial statements of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2007, are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the financial statements of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2007, are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. v To Table of Contents Additionally, the City is required to have an independent audit (“Single Audit”) of federal financial assistance received by the City directly from federal agencies, or passed through to the City by the State of Arizona or other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the government’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. The results of the City’s Single Audit for the fiscal year ended June 30, 2007, found no instances of material weakness in the internal control structure or significant violations of applicable laws and regulations with respect to major programs. The reports from Henry & Horne L.L.P. are available in the City of Casa Grande, Arizona’s separately issued Single Audit Report. Presentation These financial statements are prepared and presented in conformity with GASB Statement #34 – Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments (the new reporting model). The City first implemented this new reporting model with the financial statements for the fiscal year ended June 30, 2003. More information about this change can be found in Management’s Discussion and Analysis (MD&A) beginning on page 3 and also discussed in the notes to the financial statements (See Note 1D on page 44). This transmittal letter is designed to complement the MD&A and should be read in conjunction with it. PROFILE OF THE CITY The City of Casa Grande was founded in 1879 and is named for the famous Hohokam Indian Ruins. Since its incorporation in 1915, Casa Grande has grown to be the largest community in western Pinal County. Casa Grande is located in central Arizona approximately halfway between the State’s two largest metropolitan areas of Phoenix and Tucson, and is surrounded by three Indian Reservations. In addition, the City is located at the intersection of two major interstate highways, which service the Los Angeles, and San Diego markets. The City is a dynamic, involved city with a rural heritage and old-fashioned values. The economic base is a mix of retail trade, manufacturing and agriculture. The City of Casa Grande, chartered in December 1974, has a Council-Manager form of government consisting of the Mayor and six Council members. The Mayor is elected at-large for a two-year term and cannot serve for more than four consecutive terms. Council members are elected to four-year terms. The City Council is vested with policy and legislative authority and is responsible for appointing the positions of City Manager, City Attorney and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-today operations. The City of Casa Grande’s legal boundaries have grown substantially over the past 3 years to just over 100 squares miles. Because the City’s existing General Plan was developed in 2002 utilizing 68 square miles, as well as an area directly surrounding the City limits for planning purposes, the City will engage in a General Plan update in Fiscal Year 2007-08. The process will result in a new plan being submitted to voters, which includes both the existing City limits, as well as a planning area that has been established and agreed upon with neighboring municipalities. This process will be conducted in accordance with State Law as was the case when the existing General Plan went to a public vote and was overwhelmingly approved in 2002. Between 2000 and 2006 the City’s population increased by 52.5%, from approximately 25,224 to 38,785. The City’s growth these past six years is attributed to affordable housing, proximity to labor opportunities in the metropolitan areas, and the rural quality of life offered to the residents. Although slowing, population growth trends are expected to continue. The City provides a full range of municipal services, including police and fire protection, construction and maintenance of streets, recreational and cultural events, library services, planning and zoning services, sewer services, sanitation services, and general administration services. The City invests in its historic downtown with the administration of three downtown redevelopment districts, of which two are funded through Tax Increment Financing. vi To Table of Contents In 2002, the City completed the process of updating its Strategic Agenda. In its most fundamental form, this process provides a structure for management staff to think about the current condition of the City of Casa Grande, the issues and challenges expected to confront the City in the next five years and beyond, the appropriate role for the City Government in responding to those issues and challenges, and the resources needed by the City government to fulfill this role. This report includes financial statements on both a government-wide and fund basis for the primary government as well as its component units. Component units are separate legal entities included in the reporting entity due to the significance of their financial or operational relationship with the City. Criteria used by the City for inclusion of activities in preparing its financial statements are in conformity with GASB Statement No. 14, The Financial Reporting Entity. Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. Accordingly, the financial reporting entity consists of the City and four blended component unit, the Copper Mountain Ranch Community Facilities District, the Mission Royale Community Facilities District, the Villago Community Facilities District and the Post Ranch Community Facilities District as discussed further in Note 1.A of the notes to the financial statements. FINANCIAL CONTROLS Internal Controls As previously noted, the management of the City of Casa Grande is responsible for establishing and maintaining a system of internal control. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) safeguarding of assets against loss from unauthorized use or disposition, and 2) reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City’s financial statements. All internal control evaluations occur within the above framework. The City’s internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary Controls The City of Casa Grande, like all cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the City’s legal budget capacity. The City currently operates under the Alternative Expenditure Limitation – Home Rule Option. This option allows the City Council to establish the budgetary limits locally. The voters must authorize this option every four years. It was last authorized by the citizens of Casa Grande in March 2005. This alternative will be utilized by the City through Fiscal Year 2008-2009. In May 2007, the voters approved a permanent base adjustment to the state imposed expenditure limit. This option allows a municipality to adjust the state imposed expenditure base from the original 1979-80 base of $3,743,397 to $18,793,221. After adjustment for inflation and population growth, the City’s expenditure limitation for fiscal year 2009-10 will be $145,266,635. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated operating budget approved by the Mayor and Council. Activities of the general fund, special revenue funds, debt service funds, capital projects funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total operating budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. vii To Table of Contents ECONOMIC CONDITIONS AND OUTLOOK The information presented in the financial statement is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. The economy of Casa Grande is a diverse combination of agriculture, manufacturing, commercial and service activities, as well as a haven for retired individuals who winter in Arizona. The community also serves as the provider of many goods and services to the rural areas surrounding the City, as well as several growing communities located in the area. This combination of diverse economic activities keeps the community from becoming overly dependent on any single segment of the economy. In March 2004, the Community adopted a Strategic Plan for Community and Economic Development with the purpose of developing a process to successfully implement diverse type of businesses, attracting new revenue, and expanding/maintaining the community revenues essential to sustaining Casa Grande and improving the quality-of-life. Local indicators point to continued stability. Casa Grande continues to witness a sustained number of issued building permits. While the City has witnessed strong growth in residential building permits the past three years, the second half of the year brought the anticipated slowing of the residential housing construction market. However, it also brought a recognized shift to non-residential building permits. The City documented very strong numbers in commercial building permits for the year. The emergence of the commercial development conveys the actuality that sufficient rooftops have been constructed to expand the commercial markets, which in turn expand the City’s economic and tax base. The City continues to process several annexations annually. The expansion of the boundaries comes with new development activities and land entitlements. Many of these areas have had development proposals submitted in conjunction with the annexation petitions. This combination of existing subdivided lots, coupled with the newly proposed, should allow Casa Grande to witness a continued positive trend in new housing starts in the near term. During the past year, Casa Grande economic foundation was firmly in place. Specific revenues are described in further detail in the following paragraphs. Retail Sales. The City of Casa Grande, like all Arizona cities, places a heavy reliance on City sales tax. Overall, local sales tax revenues comprise approximately 44% of General Fund revenues. The City’s sales tax is currently at 1.8%, with an additional .2%, which has been pledged as collateral for the retirement of debt obtained to complete park and recreation construction projects. This particular component of the tax rate is scheduled to “sunset” when the debt is retired. Management is projecting the city’s sales tax to grow by 15% this next year due to the growth in population and new commercial retail development. State Shared Revenues. The City of Casa Grande receives revenue allocation from the State. These “State Shared Revenues” include allocations of the state-collected income tax, sales tax, gas tax, and motor vehicle in-lieu taxes based on population formulas that are created on official census data. The majority of these revenues are placed in the General Fund, where it supports daily operations. This revenue service is expected to grow by 12% this next year due to a middecade redistribution of revenues based on population. The State has indicated positive growth patterns in the majority of these revenue sources. One disadvantage to placing a heavy reliance on state-shared revenues is the state legislature controls the distribution to municipalities each year. Property Tax. The City’s primary property tax levy has been decreased to .9102 per $100 of assessed valuation. The decrease in the levy is principally the result of the voter initiative which limits the growth of the maximum taxable assessed valuation to 2% each year. Despite the reduction in tax levy, the City’s property tax revenue is growing due to the number of new properties being added to the tax rolls. Total assessed property value within the City has increased by approximately 100% since fiscal year 2000. The primary levy can be used for any general government purpose, but is limited in size by State statute. The City has received voter authorization to issue $47 million in General Obligation debt. However, this debt has not been issued. As such, the City currently does not levy a secondary tax levy. viii To Table of Contents MAJOR INITIATIVES AND ACCOMPLISHMENTS In 2007 the City continued to invest in programs and services that make Casa Grande a better community. The following are some of the efforts and accomplishments of the City during the year: Police o o o o o Maintained 5 certifications of Apartment Complexes in the Crime Free Multi-Housing Program. Expanded participants in our volunteer programs to assist with clerical duties, enforce disabled parking violations, monitor traffic speeds in the neighborhoods, assist with the vacation house watch program, and conduct fingerprinting. Held 13th annual “National Night Out” celebration. Participated in Pinal County Emergency Management Exercise. Recruited and hired 12 Police Officers. Fire o o o o o Responded to 5,194 emergencies of which 3,778 (73%) involved emergency medical services, averaging a response time for all incidents of 5 minutes 39 seconds. Maintained a department commitment for excellence in public education by initiating in excess of 9,482 public contacts. Secured grant funding from State Highway Safety and Homeland Security for generators and communications equipment. Continued advisory role in Arizona Emergency Management Systems. Continued mentoring of the Casa Grande Fire Explorers Program. Public Works o Continued annual maintenance of roadways and alleys. o Commenced design for Water Reclamation Expansion Project. o Replaced numerous feet of sidewalks and installed handicapped ramps. o Replaced and installed 557 signs throughout the City. o Installed in-ground crosswalk lighting at Mission Valley development. o Commenced construction of Ash Street. o Commenced Downtown Street Improvement Project. Community Services o Hosted 12 Sunday Socials and 24 Tag Along field trips for senior adult population. o Continued and expanded the Halloween Carnival, Desert Grande Duathlon/Triathlon, Christmas Tree Lighting Ceremony, Electric Light Parade, and Downtown Party. o Continued and expanded recreational programming opportunities for community. o Increased literacy resources through a tutoring program and bookmobile. o Continued Senior Meals Program. o Increased the lifelong learning materials by 20%. o Re-surfaced tennis courts, basketball courts and re-roofed ramadas. Community Development o Created Development Center by combining four divisions to centralize development applications. o Deployed a centralized software system which is accessible to builders via the web. o Implemented the Interactive Voice Recognition System for contractors to call in an inspection request. o Made the development application process available through the web. ix To Table of Contents OTHER MATTERS The information presented in the financial statement is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. Debt Administration. On June 30, 2007, the City had a number of debt issues outstanding. Total bonded debt at June 30, 2007, was $2,160,000. This included two issues of special assessment debt with government commitment. In fiscal years 1997, 1999 and 2003 the City issued Excise Tax Revenue Obligations for the renovations of City Hall, construction of recreation facilities, and expansion of the water reclamation facility respectively. The City’s general credit was rated A+ by Fitch Ratings and received an A- rating from Moody’s. The City is diligent in its efforts to maintain and improve these ratings. The ratings for the existing issues are as follows: ID #38 Special Assessment Excise Tax Revenue Obligation Series 1997 Series 1999 Series 2003 Moody’s Investor Service Baa3 Standard and Poor’s Corporation - Fitch IBCA - Aaa Aaa Aaa - AAA AAA In October 1997, the City issued $3,590,000 of Excise Tax Revenue Obligations to refurbish and restore a 1921 vintage school building for use as a new City Hall. In April 1999, the City issued $5,000,000 of Excise Tax Revenue Obligations to finance the acquisition, construction and equipping of two public recreational complexes and improvements to existing recreational facilities. In 2003, the City issued $18,120,000 of Excise Tax Revenue Obligations for the purpose of expanding the wastewater treatment plant and refunding the 1994 and 1995 Obligations. All Excise Tax Revenue Obligations are secured by a pledge of and first lien on all excise, transaction, franchise, privilege and business taxes, state shared sales and income taxes, fees for licenses and permits and state revenue sharing, which the City presently or in the future validly imposes or receives from other entities. As of June 30, 2007, the City had $21,109,820 of Excise Tax Revenue Obligations outstanding. Under State statutes the City can issue general obligation bonds for up to an amount not exceeding 20% of the secondary assessed valuation. As of June 30, 2007, the City has debt capacity of $43,958,060 for general obligation bonds subject under the 20% limitation. Cash Management. The Finance Department manages the City’s investment portfolio. The City’s investment strategy is to invest public funds with maximum security in a manner which will provide the highest return while meeting the daily cash flow demands of the City and conform with all applicable state and local statutes. Idle cash is pooled into a single investment account except for the Casa Grande Part-time Firemen’s Pension Plan. The City of Casa Grande is a participant in the Local Government Investment Pool operated by the State Treasurer for the benefit of counties, cities, towns and other political subdivisions of the State. The deposits are pooled together and invested in U.S. Government securities, certificates of deposit, repurchase agreements and high-grade corporate issues. Earnings are apportioned monthly based on total “dollar days” of the participant’s account balance for each day of the month. At the first of each month the earnings are automatically reinvested and a statement is sent to each participant. The investment policy of the City is to keep risk as low as possible and then consider the yield. The majority of the City’s funds are idle for less than 90 days at a time; therefore, liquidity also plays a major role. For these reasons and the fact that the pool has a diverse portfolio, the City invested all of its idle funds with the Pool during the 2006/2007 fiscal year. x To Table of Contents The yield for the investment account averaged 5.02 percent for the fiscal year. At June 30, 2007, the Pool consisted of $1.9 billion in total local government deposits, which included $102 million the City had invested in the Pool. With the issuance of GASB Statement No. 31, all investments are stated at fair value in the balance sheet. The State Treasurer’s Local Governmental Investment Pool includes liquid investments which cost approximates market. The Firemen’s Pension Fund is stated at fair value, which totals $822,085. The current year’s net change in fair value totaled $49,462. Risk Management. The City is exposed to various risks of loss, related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City’s liability risks are covered by commercial insurance purchased from independent third parties. The City is fully insured with per occurrence limit at $2 million general liability coverage with a $10,000 deductible and a $10 million umbrella liability policy. The City continues to carry commercial insurance for all other risks of loss, including workers’ compensation, employee health and accident, airport activities and fuel use bond. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past five fiscal years. The City of Casa Grande has an aggressive safety program that promotes employee safety on the job and focuses on risk control techniques designed to minimize accident-related losses. OTHER INFORMATION Awards. 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 Casa Grande, Arizona, for its comprehensive annual financial report for the fiscal year ended June 30, 2006. This was the sixteenth consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principals and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The Government Finance Officers Association of the United States and Canada presented a Distinguished Budget Presentation Award to the City of Casa Grande, Arizona for its annual budget for the fiscal year beginning July 1, 2006. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a plan, and as a communication device. A Distinguished Budget Presentation Award is valid for a period of one year only. This is the ninth Distinguished Budget Presentation Award the City of Casa Grande has received. We expect to continue to participate and meet the program requirements, and we will be submitting it to GFOA next budget year. ACCOMPLISHMENT. The preparation of the City's Comprehensive Annual Financial Report was only made possible by the dedication and hard work of Janice Rutherford, Supervising Accountant, the Finance Department, and the firm of Henry and Horne, L.L.P. We give them our sincere thanks for their effort in the creation of this report. We wish to express our appreciation to the City Manager, the Mayor and City Council for their support and leadership. Sincerely, Larry D. Rains Finance Director xi To Table of Contents xii To Table of Contents CITY COUNCIL ROBERT M. JACKSON, MAYOR KARL PETERSON STEPHEN Q. MILLER KARL MONTOYA DICK POWELL RALPH VARELA MARY KORTSEN CITY MANAGER JAMES THOMPSON FINANCE DEPARTMENT STAFF LARRY D. RAINS JANICE RUTHERFORD FINANCE DIRECTOR SUPERVISING ACCOUNTANT xiii To Table of Contents City of Casa Grande Organizational Chart People of Casa Grande Mayor & Council Members City Attorney Police Department Animal Control Fire Department Public Works City Manager Administrative Services City Clerk City Court Finance Department Planning & Development Community Services Engineering Personnel Financial Services Planning & Development Library Wastewater Risk Management Information Systems Housing Improvement Senior Adult Services Geographical Information Systems Building Inspection Parks Maintnenance Sanitation Equipment Maintenance Recreation Programs Streets Len Colla Center Water Aquatics Airport General Recreation Facilities Maintenance Woman's Club Golf Course To Table of Contents FINANCIAL SECTION To Table of Contents To Table of Contents To Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS To Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Casa Grande, Arizona (the City), we offer this narrative overview and analysis of the financial activities of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2007. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the approved annual budget, and (5) identify individual fund issues or concerns. Please read it in conjunction with the transmittal letter presented on pages v - xi of this report as well as the City’s financial statements beginning on page 14 and the accompanying notes to the financial statements. Financial Highlights ƒ The City’s total net assets, on the government-wide basis, totaled $262 million at June 30, 2007, of which $34.2 million is unrestricted. This was an increase of $82.9 million in fiscal year 2007, $76.5 million in governmental activities and $6.4 million in business-type activities. ƒ The governmental activities revenues increased by approximately $13.5 million from the previous year. ƒ The business-type activities operating revenues decreased by $1.1 million over the previous year. ƒ The General Fund reported revenues in excess of expenditures and other financial sources and uses by $8.2 million for the year. ƒ At June 30, 2007, unreserved fund balance for the General Fund was $25.5 million, or 88% of General Fund expenditures for fiscal year 2007. ƒ At June 30, 2007, unreserved fund balance of the governmental funds was $79.9 million, or 177% of governmental fund expenditures for fiscal year 2007. ƒ The governmental activities general revenues of $72.2 million were $27.8 million more than the $44.4 million of expenditures before other financial sources and uses. ƒ The business-type activities net assets were $54.2 million as of June 30, 2007, which is an increase of $6.4 million from the previous year. OVERVIEW OF THE FINANCIAL STATEMENTS The City implemented the Governmental Accounting Standards Board (GASB) Statement 34 – Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments (the new model) with the financial statements for the year ended June 30, 2003. The new model contains a number of changes to the requirements for governmental reporting. The major changes are as follows: ƒ Government-wide reporting – while governments have traditionally focused reporting on groupings of funds (i.e. General Fund, Special Revenue Funds, Capital Project Fund, etc.), the new model also contains financial statements on a government-wide basis. ƒ Fund financial statements – the new model maintains governmental, proprietary and fiduciary fund financial statements, but the focus is on major funds within each fund type. ƒ New focus for governmental activities – in the government-wide financial statements all activities, including the governmental activities, are reported using the economic resource measurement focus and accrual basis of accounting. The traditional current financial resources focus and modified accrual basis of accounting are maintained for the governmental fund financial statements in the new model. 3 To Table of Contents ƒ Infrastructure reporting – the new model requires governments to report the value of infrastructure assets of governmental activities (roads, bridges, storm drainage systems, parks, etc.) These assets are reported in the governmental activities on the government-wide financial statements. ƒ Changes in budgetary reporting – the new model requires the display of both the original adopted budget and the amended budget in the budgetary comparison schedules. These schedules are only required for the general fund and major special revenue funds, although they may be presented for other funds as additional information. ƒ Required narrative analysis – the new model requires that the financial statements be accompanied by narrative introduction and analytical overview of the government’s financial activities in the form of “management’s discussion and analysis” (MD&A). Required Components of the Annual Financial Report Management’s Discussion and Analysis Basic Financial Statements GovernmentWide Financial Statements Required Supplementary Information Fund Financial Statements Other Supplementary Information Notes to the Financial Statements Summary Detail As pictured above, the financial section of the Comprehensive Annual Financial Report (CAFR) for the City of Casa Grande, Arizona consists of this discussion and analysis, the basic financial statements, required supplementary information and other supplementary information. The basic financial statements include the government-wide financial statements, fund financial statements, and notes to the financial statements. Government-wide Financial Statements The government-wide financial statements (see pages 14-16) are designed to provide a broad overview of the City’s finances in a manner similar to those used by private businesses. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. The activities of the City are broken into two columns on these statements – governmental activities and businesstype activities. A total column is also provided. Governmental activities include the basic services of the City including general government (administration), parks and recreation, police, fire, planning and development and streets. Taxes and general revenues generally support these activities. 4 To Table of Contents Business-type activities include the private sector type activities such as golf course, sanitation, and wastewater. These activities are primarily supported through user charges and fees. The statement of net assets presents information on all of the City’s assets and liabilities, both current and long-term, with the difference between assets and liabilities reported as net assets. The focus on net assets is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. To assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of infrastructure, should be considered. The statement of activities presents information showing how the City’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time that the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the City, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenue for support. Fund Financial Statements Also presented are the traditional fund financial statements for governmental funds, proprietary funds and fiduciary funds. The fund financial statements now focus on major funds of the City, rather than fund type used prior to GASB-34. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or conditions. Funds are used to ensure and demonstrate compliance with financerelated legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the City. The City has three kinds of funds: Governmental funds – Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets can readily be converted to cash flow in and out and (2) the balances left at the year end that are available for spending. Consequently, the governmental funds statements provided a detailed short-term view that helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on page 19 and 22, respectively. Proprietary funds – Proprietary funds are used to account for business-type activities of the City. Proprietary funds, like the government-wide statements, provide both long and short-term financial information. Enterprise funds are used for activities that primarily serve customers outside the governmental unit for which fees are charged. The City has three enterprise funds: The golf course, sanitation and wastewater funds. The internal service fund is used for activities in which the City is the customer. The equipment mechanics fund is the City’s only internal service fund. Its purpose is to provide vehicle maintenance services to City departments. Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of others. Fiduciary funds are not included in the government-wide financial statements because the resources of those funds are not available to support projects of the City. Notes to the financial statements – The notes to the financial statements (pages 40-71) provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements and should be read with the financial statements. 5 To Table of Contents Required supplementary information other than MD&A – Governments have an option of including the budgetary comparison statements for the general fund and major special revenue funds as either part of the fund financial statements within the basic financial statements, or as required supplementary information after the notes. The City has chosen to present these budgetary statements as part of the basic financial statements. Additionally, governments are required to disclose certain information about employee pension funds. The City has disclosed this information in Note 8 to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position for the City as a whole as of and for the year ended June 30, 2007. Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets for the City for June 30, 2007 compared to the prior year. Condensed Statement of Net Assets (in Millions) Governmental Activities 2007 2006 Current and other assets Capital assets Total assets Business-type Activities 2007 2006 Total Primary Government 2007 2006 $ 90.6 134.0 224.6 $ 60.0 87.3 147.3 $27.2 44.4 71.6 $22.4 43.2 65.6 $117.8 178.4 296.2 $ 82.4 130.5 212.9 Other liabilities Long-term liabilities Total liabilities 5.0 11.7 16.7 3.8 12.1 15.9 1.4 16.0 17.4 1.3 16.6 17.9 6.4 27.7 34.1 5.1 28.7 33.8 Net assets: Invested Capital assets net of related debt Restricted Unrestricted 121.4 61.6 24.9 74.3 39.5 17.6 29.5 15.3 9.4 27.7 11.5 8.5 150.9 76.9 34.3 102.0 51.0 26.1 $207.9 $131.4 $54.2 $47.7 $262.1 $179.1 Total net assets The net assets of the City increased by $83 million (46%) at June 30, 2007. At year end June 30, 2007 the net assets of the City totaled $262.1 million. Of this $262.1 million, $262.1 million was in the governmental activities, a 58% increase and $54.2 million was in the business-type activities, a 14% increase. Net Assets consist of three components. The largest portion of net assets ($150.9 million or 58%) reflects the City’s investment in capital assets net of accumulated depreciation and any related outstanding debt used to acquire or construct those assets. The City uses these capital assets to provide services to its citizens; consequently, it is not the City’s intention to sell these assets and they are therefore not available for future spending. 6 To Table of Contents The second portion of the City’s net assets ($76.9 million or 29%) represents resources that are subject to external restrictions on how they may be used. This component is primarily made up of accumulated development impact fee collected by the City and funds are specifically reserved for capital improvements pertaining to growth as it relates to maintaining a consistent level of service to all citizens. The third portion consists of unrestricted net assets ($34.3 million or 13%), which may be used to meet the City’s ongoing obligation to citizens and creditors. Changes in Net Assets. The City’s total revenues for the year ended June 30, 2007 were $103,875,217. The total cost of all programs and services was $53,719,502. The following table presents a summary of the changes in net assets for the year ended June 30, 2007. The primary increase in net assets is the result of sustained economic growth including developer investment in city infrastructure. Changes in Net Assets (In Thousands) Revenues Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Property taxes Sales taxes Franchise taxes Shared revenues Other Total revenues Governmental Activities 2007 2006 Business-type Activities 2007 2006 Total 2007 2006 $21,599 9,067 14,852 $21,824 2,615 43,675 $11,944 2,130 $13,084 7,991 $33,543 9,067 16,982 $34,908 2,615 51,666 2,475 22,709 1,512 8,879 5,343 86,436 2,401 14,974 1,236 12,286 2,532 101,543 2,124 1,241 17,439 2,677 694 24,446 2,475 24,833 1,512 8,879 6,584 103,875 2,401 17,651 1,236 12,286 3,226 125,989 Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Other Water Golf course Sewer Sanitation Total expenses 5,196 14,766 9,650 2,145 5,248 5,565 610 43,180 4,464 13,504 5,486 1,869 4,978 4,468 501 35,270 115 1,108 5,413 3,903 10,539 98 928 3,138 3,539 7,703 5,196 14,766 9,650 2,145 5,248 5,565 610 115 1,108 5,413 3,903 53,719 4,464 13,504 5,486 1,869 4,978 4,468 501 98 928 3,138 3,539 42,973 Excess before transfer Transfers In (Out) Increase in Net Assets 43,256 450 $43,706 66,273 349 $66,622 6,900 (450) $6,450 16,743 (349) $16,394 50,156 $50,156 83,016 $83,016 7 To Table of Contents The graph below shows the functional revenues and expenses of governmental activities to demonstrate the extent to which the governmental functions produce direct revenues to offset the program costs. It should be noted that this is not intended to represent full cost allocation to these functions. Expenses not covered by direct program revenues are covered by general revenues of the City, primarily taxes and state shared revenues. Governmental activities account for 83.2% of the total revenues of the City and 80.3% of the total expenditures in fiscal year 2007. This compares to 80.6% of total revenues and 82.0% of expenses in fiscal year 2006. Governmental Programs Revenues and Expenses 20,000,000 10,000,000 Revenues de ve lo pm ic Ec on om Expenditures en t n Cu l tu re & Pu bl ic re cr ea tio wo rk s n ra ns po rta tio St re et s/ T sa fe ty Pu bl ic G en er al G ov er nm en t 0 FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental Funds The focus of governmental fund financial statements (pages 17-29) is to provide information on near-term inflows, outflows and balances of spendable resources. All major governmental funds are discreetly presented on these financial statements, while the non-major funds are combined into a single column. Combining statements for the non-major funds may be found on pages 72-74. 8 To Table of Contents For fiscal year ended June 30, 2007, the governmental funds reflect a combined fund balance of $86.2 million, an increase of $28.7 million. Of this, $6.4 million, an increase of $.7 million, is reserved because it is not appropriate for expenditure or is legally segregated for a specific future use. The remaining $79.8 million is classified as “Unreserved”. This balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. The General Fund is the chief operating fund of the City and accounts for many of the major functions of the government, including public safety, parks and recreation, community development and general administrative services. The General Fund revenues total $38.1 million, an increase of $3.6 million, in fiscal year 2006-2007. The primary increase is from local sales tax revenues. The expenditures, before other financing sources and uses, totaled $28.3 million, an increase of $3 million. Governmental Fund Balances 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 General Highway User System Development Grants CDB Grant Special Assessments Capital Replacement Other Governmental The Highway User Revenue Fund is required by state statute to track the state allocation of gasoline taxes and other state revenues shared with local governments and required to be used for transportation purposes. The City also accounts for a half-cent sales tax that is collected and distributed by Pinal County for the purposes of construction and improvements of major roadways within the City. Revenue in this fund totaled $6.8 million, an increase of $1.3 million, while expenses totaled $4.6 million, an increase of $1.3 million in fiscal year ended June 30, 2007. The increase in revenues is a result of a stronger county sales tax base. Other major governmental funds of the City include the System Development Fee Fund which collects governmental impact fees for public safety, parks and recreational facilities, library facilities, and general government; the Grants Fund is utilized to account for the various state and federal grants that are awarded to the City for the purposes of providing specific programming and services in public safety, parks and recreation, and library; the CDBG, Self Help, and Home Funds provides a variety of housing and neighborhood improvements services ranging from housing rehab to infrastructure improvements; the Special Assessment Fund collects special assessments levied through improvement districts and services the debt on the improvement district bond; the Capital Replacement Fund accounts for accumulated proceeds and capital expenditure of those proceeds for the construction of capital projects; the CFD Capital Projects Fund accounts for capital construction within the CFD; all non-major governmental funds of the City are combined into the “Other Governmental Funds” column on the governmental fund statements. 9 To Table of Contents Proprietary Funds The proprietary funds financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each major enterprise fund is shown individually on the fund statement. Net assets of the enterprise funds were $54.2 million, an increase of $6.4 million as of June 30, 2007. This increase is largely due to the increase in donations of capital assets (which do not result in spendable resources). Operating revenues in fiscal year 2006-2007 were $12.0 million, a decrease of $1.1 million, while operating expenses totaled $9.8 million, an increase of $2.5 million, resulting in $2,174,363 of operating income. BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. A statement showing the budget amounts for the general fund is provided as required supplementary information on page 23. This statement compares the original adopted budget, the budget as amended throughout the fiscal year, and the actual expenditures prepared on a budgetary basis. Amendments to the adopted budget may occur throughout the year in a legally permissible manner (see Note 1 (F) on page 47 for more information on budget policies). Some of these include transfers from contingency to cover approved carryovers from previous budget, capital projects with budget overages, and other unanticipated costs. Also, budget amendments are processed to provide expenditure authority from unanticipated revenue sources. These include new or increased grants and intergovernmental agreements. It is generally the policy of the City to not include revenues and operational expenditure authority for these types of items in the operational budgets unless the funding is reasonably assured at the time of completion of the annual budget. Instead, the City budgets contingency accounts to allow for later transfer to operational budgets of and when the funding is received. No amendments increasing the City’s total adopted budget of $89,932,641 occurred during fiscal year 2007. Budget amendments between funds or departments or from budgeted contingencies into operational expense/expenditure accounts did occur. General Fund inflows (revenues and other sources) of $38.1 million, on a budgetary basis, exceeded budgeted inflows of $36.1 million by $2.1 million (5%) while budgetary outflows (expenditures and other uses) of $28.3 million were only 75.1% of final budgeted outflows. The excess of General Fund inflows over budgeted amounts is primarily due to higher sales tax collections and investment earnings yield than were planned for in the budget. Local sales tax collections, especially construction sales tax, continue to exceed expectations due to a growing residential housing base. Reduced General Fund outflows resulted primarily from contingency savings and delayed opening of a fire station. There were no General Fund budget transfers which significantly amended the original General Fund budget. 10 To Table of Contents CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2007, the City had $150.9 million invested in various capital assets, net of accumulated depreciation and related debt, up $48.9 million. Of the $150.9 million $121.4 million (80%) is invested in governmental activities and $29.5 million (20%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following: ¾ Acquired a new financial accounting software application for the Finance Department in the amount of $218,100. ¾ Acquired a new computer added dispatching (CAD) system and equipment for the police and fire communications department in the amount of $62,169. ¾ Acquired new thermal imaging camera and “Lifpak” defibrillator for fire apparatus in the amount of $41,907. ¾ Completed a Parks and Recreation Master Plan in the amount of $79,025. ¾ Commenced construction on a regional dog park. Work in progress amounted to $59,560. ¾ Continue implementation of the permitting software application in the amount of $135,205. ¾ Completed improvements to various arterial roadways in the amount of $1,372,030. ¾ Acquired a chassis for fire apparatus in the amount of $123,623. ¾ Purchased a new hazmat response vehicle with Homeland Security Funds in the amount of $360,211. ¾ Constructed parameter fencing and Papi lighting at the municipal airport in the amount of $247,924 and $119,986 with FAA funds. ¾ Completed infrastructure improvements in Phase III of the Airport Industrial Park in the amount of $1.8 million. ¾ Acquired a sewer hydrovac vehicle in the amount of $244,149. 11 To Table of Contents The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2007. Additional information on the City’s capital assets may be found in Note 7 on pages 56-58. Capital Assets (In Thousands) Governmental Activities 2007 2006 Land & Const. in progress Building and improvements Machines and equipment Total $ 9,979 118,884 5,170 $134,033 Business-type Activities 2007 2006 $ 6,559 76,544 4,225 $87,328 $ 283 40,196 3,909 $44,388 Total $ 283 39,285 3,649 $43,217 2007 2006 $ 10,262 159,080 9,079 $178,421 $ 6,842 115,829 7,874 $130,545 Long-Term Debt The City’s outstanding long-term debt, including bonds, notes, contracts, and compensated absences, was $28.3 million at June 30, 2007, with $2.4 million due in one year. Of this total, $13.4 million was in governmental activities and $14.9 million was in business-type activities. Of the outstanding debt, $21.1 million is excise tax revenue obligation bond collateralized by the City’s excise tax stream. An additional $370,000 is special assessment bonds where the City is contingently liable in the event that the assessment revenue is insufficient to pay the debt payments. All other outstanding debt is secured by pledges of specific revenue sources of the City. The following schedule shows the outstanding debt of the City (both current and long term) as of June 30, 2007. Further details can be found in Notes 10, 11, 12, 13, & 14 on pages 63-69. Outstanding Debt (In Thousands) Governmental Activities 2007 2006 Compensated absences Capital leases Bonds payable Notes payable Total $ 764 3,754 8,882 $13,400 Business-type Activities 2007 2006 $ 705 4,030 9,033 $13,768 12 $ 91 296 14,388 159 $14,934 $ 96 408 14,912 168 $15,584 Total 2007 $ 855 4,050 23,270 159 $28,334 2006 $ 801 4,438 23,945 168 $29,352 To Table of Contents ECONOMIC FACTORS Casa Grande’s population has grown steadily since 2000. The growth rate over the course of the past 7 years has been 46% and is expected to be 5% in 2008. The unemployment rate in Casa Grande for June 2007 was 4.3%, which is slightly higher than the state (3.4%) and lower than the national average (4.5%). While the local economy witnessed a solid year, it has been largely driven by construction of residential dwellings. The Promenade in Casa Grande, a 1 million square foot retail mall has broken ground and is scheduled to open a minimum of 550,000 square foot of retail establishments in mid-November 2007. It is anticipated that the retail sales will replace the slowing construction markets in the local tax base. The regional economy appears to be slowing due to sluggish building activity. Population growth continues to be steady as does personal income. Within Casa Grande, the local economy remains healthy as residential and commercial activity continues to expand the City’s sales tax base. Casa Grande continues to be a potential site for industrial and manufacturing companies. Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. Total assessed value in Casa Grande has increased progressively, showing a 71% overall increase from 1995 to 2005. This is largely due to the new housing development. Residential value in 2007 represented about 40% of the total. FINANCIAL CONTACT This financial report is designed to provide a general overview of the City of Casa Grande, Arizona’s finances and to demonstrate accountability for the use of public funds. Questions about any of the information provided in this report, or requests for additional information should be addressed to the City’s Finance Director at the following address: Finance Director, City of Casa Grande, 510 E. Florence Blvd. Casa Grande, AZ 85222. 13 To Table of Contents BASIC FINANCIAL STATEMENTS To Table of Contents City of Casa Grande, Arizona Statement of Net Assets June 30, 2007 Governmental Activities $ 3,366,552 76,053,938 8,700,293 1,217,571 150,000 232,421 ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Restricted assets: Restricted investments Deferred bond costs Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other current liabilities Deposits held Accrued wages and benefits Accrued interest payable Unearned revenue Noncurrent liabilities: Due within one year: Current portion of compensated absences Current portion of capital leases and notes Current portion of excise tax revenue obligations Current portion of bonds payable Due in more than one year: Noncurrent portion of capital leases Noncurrent portion of notes payable Noncurrent portion of excise tax revenue obligations Noncurrent portion of bonds payable Bond premium 2003 issue Less: Deferred amount on refunding Closure and postclosure liability Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Highways and streets Grant purposes Community development Debt service Capital projects Unrestricted Total net assets Primary Government Business-type Activities Total $ 820,477 $ 4,187,029 25,760,583 101,814,521 498,860 9,199,153 1,217,571 (150,000) 9,965 242,386 576,728 243,514 1,161 315,099 577,889 558,613 9,979,192 283,000 10,262,192 124,053,635 224,573,844 44,105,117 71,644,262 168,158,752 296,218,106 2,819,005 250 333,774 104,795 74,986 402,628 15,305 42,268 159,022 - 3,221,633 15,555 376,042 263,817 74,986 763,892 276,184 522,270 130,000 91,427 126,653 532,730 - 855,319 402,837 1,055,000 130,000 3,478,004 6,199,218 2,030,000 7,503 (44,196) 16,695,685 3,657,127 148,643 20,054,820 2,030,000 358,070 (270,539) 1,754,674 34,127,984 121,397,151 29,545,366 150,942,517 8,786,449 1,349,118 36,538,146 3,148,566 11,778,491 24,880,238 $207,878,159 15,292,233 9,374,364 $54,211,963 8,786,449 1,349,118 36,538,146 3,148,566 27,070,724 34,254,602 $262,090,122 The accompanying notes are an integral part of the financial statements 14 179,123 148,643 13,855,602 350,567 (226,343) 1,754,674 17,432,299 To Table of Contents City of Casa Grande, Arizona Statement of Activities For the Year Ended June 30, 2007 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Functions/Programs Primary government: Governmental activities: General government Public safety Streets/Transportation Public works Culture and recreation Economic development Interest on long-term debt Total governmental activities $ 5,196,569 14,765,435 9,650,354 2,144,675 5,247,404 5,564,781 610,630 43,179,848 Business-type activities: Water Golf course Wastewater Sanitation Total business-type activities 115,599 1,107,942 5,413,331 3,902,782 10,539,654 193,909 784,983 6,001,607 4,963,964 11,944,463 $53,719,502 $33,543,455 Total primary government Expenses $ 133,192 1,091,960 996,571 33,994 328,163 19,015,112 21,598,992 $ 3,135 110,809 6,205,511 310,415 2,437,054 9,066,924 $9,066,924 $ 340,305 14,512,212 14,852,517 2,129,515 2,129,515 $16,982,032 General revenues: Property taxes Sales taxes Franchise taxes Shared revenues - unrestricted: State sales taxes Urban revenue sharing Auto-in-lieu Investment earnings Gain on sale of assets Miscellaneous Transfers in (out) Total general revenues and transfers Change in net assets Net assets-beginning Prior period adjustment Net assets-beginning - restated Net assets-ending The accompanying notes are an integral part of the financial statements 15 To Table of Contents Net (Expense) Revenue and Changes in Net Assets Governmental Activities Business-type Activities $ (5,060,242) (13,222,361) 12,063,940 (2,110,681) (4,608,826) 15,887,385 (610,630) 2,338,585 $ - - 78,310 (322,959) 2,717,791 1,061,182 3,534,324 Total $ (5,060,242) (13,222,361) 12,063,940 (2,110,681) (4,608,826) 15,887,385 (610,630) 2,338,585 78,310 (322,959) 2,717,791 1,061,182 3,534,324 $2,338,585 $3,534,324 $5,872,909 2,475,296 22,708,648 1,511,751 2,124,036 - 2,475,296 24,832,684 1,511,751 3,086,185 3,760,034 2,032,801 3,222,176 1,846,201 274,310 449,800 41,367,202 43,705,787 131,344,545 32,827,827 164,172,372 $207,878,159 1,167,957 73,411 (449,800) 2,915,604 6,449,928 47,762,035 47,762,035 $54,211,963 3,086,185 3,760,034 2,032,801 4,390,133 1,846,201 347,721 44,282,806 50,155,715 179,106,580 32,827,827 211,934,407 $262,090,122 16 To Table of Contents City of Casa Grande, Arizona Balance Sheet Governmental Funds June 30, 2007 ASSETS Cash Investments Accounts receivable (less allowance for uncollectibles) Due from other governments Due from other funds Inventories Prepaids Restricted assets: Cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Deposits held Accrued wages and benefits Due to other funds Deferred revenue Compensated absences Total liabilities Fund balances: Reserved for: Court and development Special revenue Debt service Capital projects Unreserved, reported in: General fund Special revenue funds Capital projects funds Total fund balances General $ 1,975,737 20,596,896 Highway Users $ 29,180 8,302,880 System Development $ 32,200,760 Grants & Subsidies $ 13,001 95,907 5,445,798 1,286 1,080,000 10,448 - 885,684 - 206,344 - 758 67,054 - 661,896 174,612 - $29,110,165 $9,217,744 $32,407,104 $176,720 $1,318,916 $ 1,237,676 250 281,808 97,074 13,108 1,629,916 $ $ $ 33,149 1,611 35,811 70,571 $ 1,922,791 36,443 584,903 13,812 112,494 293 711,502 - 214,351 214,351 - $ CDBG 482,408 - 666,409 95,169 761,578 106,149 - 557,338 - 25,521,015 27,480,249 8,506,242 8,506,242 32,192,753 32,192,753 106,149 557,338 Total liabilities and fund balances $29,110,165 $9,217,744 $32,407,104 $176,720 $1,318,916 The accompanying notes are an integral part of the financial statements 17 To Table of Contents Self-help Technical Assistance $ 15,125 - $ Home/HUD $ 21,404 - Special Assessments $ 14,739 1,165,432 Capital Community Other Replacement/ Facilities Districts Governmental Development Capital Projects Funds $ 31,752 585,121 $ 194,187 8,921,288 4,770,775 Total Governmental Funds $ 3,362,654 76,053,938 77,317 - 398,596 - 61,105 - 1,227,052 - 342 - 211,314 498,706 39,389 - 8,700,293 1,217,571 1,080,000 49,837 - $92,442 $420,000 $1,241,276 475,163 $10,655,255 101,565 $687,028 $5,714,371 576,728 $91,041,021 671 1,771 90,000 92,442 $ 420,000 168,609 588,609 $ 53,402 53,402 $ 1,388 1,388 - 35,205 1,170 400,000 688,061 2,773,752 250 300,172 910,000 814,245 13,401 4,811,820 31,320 2,012,084 - 1,922,791 526,198 3,199,958 723,471 25,521,015 43,633,806 10,701,962 86,229,201 $91,041,021 251,686 (168,609) - 1,187,874 - - (168,609) 1,187,874 10,653,867 10,653,867 687,028 2,934,811 48,095 5,026,310 $1,241,276 $10,655,255 $687,028 $5,714,371 $420,000 18 687,028 $ - $92,442 - $ - $ To Table of Contents City of Casa Grande, Arizona Reconciliation of the Balance Sheet to the Statement of Net Assets Governmental Funds June 30, 2007 Fund balance - total governmental funds balance sheet $86,229,201 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets Less accumulated depreciation Internal service capital assets Less accumulated depreciation 191,932,546 (57,956,794) 279,179 (222,104) 134,032,827 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Compensated absences Capital leases Bonds payable Bond issuance costs Deferred Loss Bond premium (763,892) (3,754,188) (8,881,488) 243,514 44,196 (7,503) (13,119,361) Deferred revenue is shown on the governmental funds, but is not deferred on the statement of net assets. Special Assessments Property Tax Grant Revenue 53,403 22,097 663,769 739,269 Interest payable on long-term debt is not reported in the governmental funds. Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds (excluding capital assets) are reported with governmental activities. Net assets of governmental activities - statement of net assets The accompanying notes are an integral part of the financial statements 19 (104,795) 101,018 $207,878,159 To Table of Contents City of Casa Grande, Arizona Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2007 REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Special assessments Investment earnings Contributions and donations Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Bond issuance Sale of land Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year General $ 2,080,258 17,024,306 1,511,751 2,756,899 8,879,020 3,473,127 826,533 1,053,925 2,860 333,182 192,199 38,134,060 Highway Users $ 6,068,663 373,545 352,813 6,795,021 System Development $ 13,115,227 1,239,341 14,354,568 Grants & Subsidies $ 960,565 7,119 2,099 969,783 CDBG $ 433,456 85,570 519,026 4,921,405 14,027,499 2,063,253 4,230,356 2,119,252 613,575 2,846,301 15,713 1,635,109 195,148 547,020 112,703 377,017 240,000 495,697 558,756 - 183,344 159,896 28,318,580 61,231 60,086 4,618,440 742,168 1,225,417 558,756 9,815,480 2,176,581 13,612,400 (255,634) (39,730) (574,900) (574,900) 1,601,681 6,904,561 $8,506,242 (500,000) (500,000) 13,112,400 19,080,353 $32,192,753 153,191 (44,834) 108,357 (147,277) 253,426 $106,149 (39,730) 597,068 $557,338 1,734,934 (3,342,891) (1,607,957) 8,207,523 19,272,726 $27,480,249 The accompanying notes are an integral part of the financial statements 20 To Table of Contents Self-help Technical Assistance $ $ 290,931 7,850 298,781 Home/HUD $ 853,473 853,473 Special Assessments $ 28,907 58,318 87,225 Capital Replacement/ Development $ Community Facilities Districts Capital Projects 4,623,220 253,388 47,924 4,924,532 $106,223 3,992 110,215 Other Governmental Funds $ 299,818 1,061,122 521,165 90,449 232,548 1,078,654 77,244 3,361,000 Total Governmental Funds $ 2,486,299 22,708,648 1,511,751 2,756,899 18,007,273 16,678,803 826,533 28,907 3,222,176 4,959 1,459,760 715,676 70,407,684 298,781 - 1,022,082 - 978 - 2,147 2,267,742 6,681 376,000 1,000,044 15,663 10,060 572,379 2,316,278 5,921,449 14,155,865 2,846,301 2,063,253 4,828,294 4,821,056 8,251,421 298,781 1,022,082 110,000 25,920 136,898 2,269,889 149,162 531,843 527,672 312,437 4,754,533 882,247 707,501 44,477,387 (421,628) (1,393,533) 25,930,297 455,000 455,000 33,372 653,656 $687,028 2,123,473 (1,848,473) 1,809,371 2,084,371 690,838 4,335,472 $5,026,310 6,844,898 (6,311,098) 455,000 1,809,371 2,798,171 28,728,468 57,500,733 $86,229,201 - (168,609) (49,673) 2,654,643 - (168,609) ($168,609) (49,673) 1,237,547 $1,187,874 2,833,300 2,833,300 5,487,943 5,165,924 $10,653,867 21 To Table of Contents City of Casa Grande, Arizona 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 Net change in fund balances - total governmental funds $28,728,468 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. Expenditures for capital assets 8,251,422 Less current year depreciation (7,949,402) 302,020 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net assets. Contributed capital assets Sale of capital assets Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the fund statements. Deferred property tax 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. 13,802,727 (211,431) (11,001) 73,220 The issuance of long-term debt (e.g., bonds, leases) 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 has any effect on net assets. Issuance of bond debt (455,000) Bond payments 606,455 Lease payments 275,792 427,247 Certain revenues in the governmental funds that provide current financial resources are not included in the statement of activities because they were recognized in a prior period. However, other revenues that are deferred in the governmental funds because they do not provide current financial resources due to unavailability are recognized in the statement of activities. Special assessments Grants (25,283) 663,769 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. Compensated absences Interest expense on long-term debt (59,209) 15,260 Change in net assets of governmental activities $43,705,787 The accompanying notes are an integral part of the financial statements 22 To Table of Contents City of Casa Grande, Arizona General Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Actual Am ounts Variance w ith Final BudgetPositive (Negative) $ $ Budgeted Am ounts REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Investment earnings Contributions and donations Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Mayor and Council City manager Attorney Clerk Finance Information Technology Personnel Public safety Police Fire Court Animal Control Public w orks Culture and Recreation Planning and Economic Development Capital Outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original Final $ 2,190,000 16,760,000 820,400 3,142,000 8,181,196 3,818,850 741,400 150,000 156,000 107,500 36,067,346 $ 2,190,000 16,760,000 820,400 3,142,000 8,181,196 3,818,850 741,400 150,000 156,000 107,100 36,066,946 3,716,614 567,373 520,279 319,277 903,953 1,217,964 1,268,465 2,415,014 567,373 520,279 392,377 885,853 1,217,964 1,266,488 483,737 438,465 492,581 391,651 865,779 1,099,060 1,155,532 1,931,277 128,908 27,698 726 20,074 118,904 110,956 9,975,304 7,314,048 409,408 307,045 1,574,175 4,617,882 1,680,094 3,143,800 9,974,904 7,314,048 415,508 307,045 2,153,952 4,653,182 2,243,894 2,992,900 9,117,695 4,263,162 415,314 231,328 2,057,853 4,230,356 2,119,252 613,575 857,209 3,050,886 194 75,717 96,099 422,826 124,642 2,379,325 237,452 37,773,133 228,752 160,000 37,709,533 183,344 159,896 28,318,580 45,408 104 9,390,953 (1,705,787) (1,642,587) 9,815,480 11,458,067 1,690,100 (2,705,000) (1,014,900) (2,720,687) 2,720,687 $ - 1,690,100 (2,768,200) (1,078,100) (2,720,687) 2,720,687 $ - The accompanying notes are an integral part of the financial statements 23 2,080,258 17,024,306 1,511,751 2,756,899 8,879,020 3,473,127 826,533 1,053,925 2,860 333,182 192,199 38,134,060 1,734,934 (3,342,891) (1,607,957) 8,207,523 19,272,726 $27,480,249 (109,742) 264,306 691,351 (385,101) 697,824 (345,723) 85,133 903,925 2,860 177,182 85,099 2,067,114 44,834 (574,691) (529,857) 10,928,210 16,552,039 $27,480,249 To Table of Contents City of Casa Grande, Arizona Highway Users Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Variance with Final BudgetBudgeted Amounts Positive REVENUES Original Final Actual Amounts (Negative) Taxes: State-shared gas tax $ 3,041,122 $ 3,041,122 $ 3,140,776 $ 99,654 Local transportation assistance 157,390 157,390 251,614 94,224 County sales tax 2,144,956 2,144,956 2,676,273 531,317 Investment earnings 41,082 41,082 373,545 332,463 Miscellaneous 352,813 352,813 Total revenues 5,384,550 5,384,550 6,795,021 1,410,471 EXPENDITURES Culture and recreation Contractual services 24,200 24,200 15,713 8,487 24,200 24,200 15,713 8,487 1,228,587 935,628 603,883 5,426,500 162,763 1,084,787 1,321,128 766,483 5,063,500 121,463 1,084,742 1,054,509 707,050 1,635,109 121,317 45 266,619 59,433 3,428,391 146 Total Streets/Transportation 8,357,361 8,357,361 4,602,727 3,754,634 Total expenditures 8,381,561 8,381,561 4,618,440 3,763,121 Excess (deficiency) of revenues over (under) expenditures (2,997,011) (2,997,011) 2,176,581 5,173,592 OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year (325,900) (325,900) (3,322,911) 3,322,911 $ - (325,900) (325,900) (3,322,911) 3,322,911 $ - (574,900) (574,900) 1,601,681 6,904,561 $8,506,242 (249,000) (249,000) 4,924,592 3,581,650 $8,506,242 Total Culture and recreation Streets/Transportation Personal services Contractual services Materials and supplies Capital outlay Debt service The accompanying notes are an integral part of the financial statements 24 To Table of Contents City of Casa Grande, Arizona System Development Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Charges for services Investment earnings Total revenues EXPENDITURES Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Variance with Final BudgetPositive (Negative) $4,218,127 1,169,341 5,387,468 Original $9,920,000 70,000 9,990,000 Final $8,897,100 70,000 8,967,100 Actual Amounts $13,115,227 1,239,341 14,354,568 140,000 9,350,000 9,490,000 201,700 8,265,400 8,467,100 195,148 547,020 742,168 6,552 7,718,380 7,724,932 500,000 500,000 13,612,400 13,112,400 OTHER FINANCING SOURCES (USES) Transfers out (500,000) Total other financing sources and uses (500,000) Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ - (500,000) (500,000) $ - The accompanying notes are an integral part of the financial statements 25 (500,000) (500,000) 13,112,400 19,080,353 $32,192,753 13,112,400 19,080,353 $32,192,753 To Table of Contents City of Casa Grande, Arizona Grants and Subsidies Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Variance with Final BudgetBudgeted Amounts Positive REVENUES Original Final Actual Amounts (Negative) Intergovernmental revenues $1,660,464 $1,660,464 $960,565 ($699,899) Investment earnings 7,119 7,119 Contributions and donations 11,500 21,500 2,099 (19,401) Total revenues 1,671,964 1,681,964 969,783 (712,181) EXPENDITURES Public safety Personal services Contractual services Materials and supplies Capital outlay Total Public Safety Culture and recreation Personal services Contractual services Materials and supplies Total Culture and Recreation Community Development Contractual services Total Community Development Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ 302,004 5,000 61,000 218,000 586,004 325,004 5,000 126,600 608,300 1,064,904 37,262 75,441 495,697 608,400 287,742 5,000 51,159 112,603 456,504 131,300 6,700 186,600 324,600 115,400 38,840 253,700 407,940 101,591 38,833 236,593 377,017 13,809 7 17,107 30,923 851,360 851,360 1,761,964 253,960 253,960 1,726,804 240,000 240,000 1,225,417 13,960 13,960 501,387 (90,000) (44,840) (255,634) (210,794) 90,000 90,000 - 90,000 (44,900) 45,100 260 (260) - 153,191 (44,834) 108,357 (147,277) 253,426 $106,149 63,191 66 63,257 (147,537) 253,686 $106,149 $ The accompanying notes are an integral part of the financial statements 26 To Table of Contents City of Casa Grande, Arizona Community Development Block Grant Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Intergovernmental revenues Program income Total revenues EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original $750,000 750,000 Final $300,000 300,000 Actual Amounts $433,456 85,570 519,026 750,000 750,000 26,500 712,800 10,700 750,000 26,472 522,005 10,279 558,756 28 190,795 421 191,244 (39,730) 410,270 - $ Variance with Final BudgetPositive (Negative) $133,456 85,570 219,026 (450,000) - $ 450,000 - The accompanying notes are an integral part of the financial statements 27 597,068 $557,338 147,068 $557,338 To Table of Contents City of Casa Grande, Arizona Self-Help Technical Assistance Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Intergovernm ental revenues Mis cellaneous Total revenues Original $400,000 400,000 Final $400,000 400,000 316,450 41,775 41,775 400,000 296,250 61,975 41,775 400,000 EXPENDITURES Com m unity developm ent Pers onal services Contractual s ervices Materials and s upplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year - $ Actual Amounts $290,931 7,850 298,781 233,153 61,951 3,677 298,781 - - $ - 63,097 24 38,098 101,219 - $ The accom panying notes are an integral part of the financial statem ents 28 Variance with Final BudgetPositive (Negative) ($109,069) 7,850 (101,219) - - $ - To Table of Contents City of Casa Grande, Arizona Home/HUD Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original $750,000 750,000 Final $1,022,900 1,022,900 750,000 750,000 47,000 975,900 1,022,900 - $ - $ 46,691 975,391 1,022,082 309 509 818 - (168,609) (168,609) - ($168,609) ($168,609) The accompanying notes are an integral part of the financial statements 29 Actual Amounts $853,473 853,473 Variance with Final BudgetPositive (Negative) ($169,427) (169,427) To Table of Contents City of Casa Grande, Arizona Statement of Net Assets Proprietary Funds June 30, 2007 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees ASSETS Current assets: Cash Cash with fiscal agent Investments Receivables, net of uncollectibles Inventories Total current assets Noncurrent assets: Deferred bond costs Capital assets: Land Buildings and improvements Machinery and equipment Less accumulated depreciation Total capital assets, net Total noncurrent assets Total assets $ 725,014 21,908 746,922 1,036,504 (290,378) 746,126 746,126 1,493,048 LIABILITIES Current liabilities: Accounts payable Deposits held Accrued wages and benefits Accrued interest payable Due to other funds Compensated absences Capital leases Notes payable Excise tax revenue obligations Total current liabilities Noncurrent liabilities: Capital leases Notes payable Excise tax revenue obligations Bond premium 2003 issue Deferred amount on refunding Closure and postclosure liability Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Construction Unrestricted Total net assets $ 2,053 15,305 2,724 9,877 29,959 24,643 1,161 8,221,820 302,407 8,550,031 315,099 49,921,758 1,435,097 (10,589,526) 40,767,329 41,082,428 49,632,459 272,344 8,922 156,217 20,883 532,730 991,096 $ 15,203,092 98,891 15,301,983 150,256 150,256 150,256 15,452,239 10,911 10,911 148,643 148,643 178,602 13,855,602 350,567 (226,343) 13,979,826 14,970,922 10,911 587,606 26,378,997 150,256 726,840 $1,314,446 1,161 8,281,379 $34,661,537 15,291,072 $15,441,328 The accompanying notes are an integral part of the financial statements 30 To Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 54,557 2,335,671 74,221 2,464,449 167,092 5,335,779 (3,338,841) 2,164,030 2,164,030 4,628,479 Golf Course $ 16,263 1,433 9,965 27,661 - Total $ 820,477 1,161 25,760,583 498,860 9,965 27,091,046 315,099 Governmental Activities Internal Service Funds $ 3,898 182,585 186,483 - 283,000 508,411 702,023 (933,058) 560,376 560,376 588,037 283,000 50,747,517 8,509,403 (15,151,803) 44,388,117 44,703,216 71,794,262 52,354 226,825 (222,103) 57,076 57,076 243,559 84,098 27,527 59,753 116,776 288,154 33,222 5,819 81 150,000 10,791 199,913 402,628 15,305 42,268 159,022 150,000 91,427 116,776 9,877 532,730 1,520,033 45,265 7,067 20,000 13,134 85,466 179,123 1,754,674 1,933,797 2,221,951 199,913 179,123 148,643 13,855,602 350,567 (226,343) 1,754,674 16,062,266 17,582,299 85,466 1,868,131 560,376 29,545,366 - 538,397 $2,406,528 (172,252) $388,124 15,292,233 9,374,364 $54,211,963 31 158,093 $158,093 To Table of Contents City of Casa Grande, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2007 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Operating revenues: Service fees Connection fees Rental Green fees Miscellaneous Total operating revenue Operating expenses: Personal services Contractual services Materials and supplies Depreciation Closure and postclosure costs Total operating expenses Operating income (loss) Nonoperating revenues (expense): Investment earnings Interest expense City sales tax Total nonoperating revenues (expense) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets Total net assets-beginning of year Total net assets-end of year $193,909 193,909 $2,591,660 167,049 54,337 2,813,046 19,739 39,699 50,713 110,151 630,037 1,730,864 818,602 1,557,392 4,736,895 83,758 (1,923,849) 3,242,898 (5,448) (5,448) 403,414 (676,436) 2,110,364 1,837,342 658,506 658,506 (86,507) 3,901,404 2,129,515 (153,300) 1,889,708 32,771,829 $34,661,537 3,901,404 11,539,924 $15,441,328 78,310 (21,900) 56,410 1,258,036 $1,314,446 The accompanying notes are an integral part of the financial statements 32 $ 3,242,898 3,242,898 - To Table of Contents Business-type Activities-Enterprise Funds Sanitation $4,679,330 284,634 10,245 4,974,209 Golf Course 217,405 567,578 8,829 793,812 $7,464,899 3,694,581 217,405 567,578 73,411 12,017,874 $1,111,637 183 1,111,820 531,238 49,624 484,924 42,156 1,107,942 3,218,141 2,460,521 1,970,609 2,064,362 129,878 9,843,511 420,605 143,068 447,879 16,268 1,027,820 (314,130) 2,174,363 84,000 13,673 13,673 1,167,956 (696,143) 2,124,037 2,595,850 - 1,177,463 (300,457) 4,770,213 84,000 (481,600) 695,863 1,710,665 $2,406,528 300,000 (93,000) (93,457) 481,581 $388,124 2,056,866 660,294 627,384 414,101 129,878 3,888,523 1,085,686 106,036 (14,259) 91,777 $ Total Governmental Activities Internal Service Funds 2,129,515 300,000 (749,800) 6,449,928 47,762,035 $54,211,963 33 (84,000) 158,093 $158,093 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2007 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Payments to suppliers Payments to employees $195,072 (60,109) - Net cash provided (used) by operating activities $3,151,309 (2,319,119) (630,848) 134,963 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES City sales tax Transfers to other funds Transfers from other funds Net cash provided (used) by noncapital financing activities $3,209,341 4,246 - 201,342 (21,900) - 2,110,364 (153,300) - (21,900) 1,957,064 3,213,587 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets Purchases of capital assets Principal paid on capital debt Interest paid on capital debt (9,549) (5,612) (486,719) (523,545) (645,945) (150,256) - Net cash (used) by capital and related financing activities (15,161) (1,656,209) (150,256) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received - 386,420 658,506 Net cash provided by investing activities - 386,420 658,506 888,617 7,359,007 3,721,837 11,481,255 $ 15,203,092 Net increase (decrease) in cash Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Cash Cash with fiscal agent Investments 97,902 627,112 $ 725,014 $ 8,247,624 $ 725,014 $725,014 $ 24,643 1,161 8,221,820 $8,247,624 The accompanying notes are an integral part of the financial statements 34 $ 15,203,092 $15,203,092 To Table of Contents Governmental Activities Internal Service Fund Business-type Activities-Enterprise Funds Sanitation Golf Course Total $4,954,291 (1,431,195) (2,059,932) $793,594 (434,622) (533,249) 1,463,164 (174,277) 4,838,779 78,726 (481,600) - 13,673 (93,000) 300,000 2,124,037 (749,800) 300,000 (84,000) - (481,600) 220,673 1,674,237 (84,000) 7,148 (435,356) (112,393) (14,259) (41,079) - 7,148 (1,113,410) (645,487) (665,816) - (554,860) (41,079) (2,417,565) - 100,948 - 1,145,874 - 100,948 - 1,145,874 - 527,652 1,862,576 $12,303,607 (4,240,799) (3,224,029) $1,111,820 (615,236) (417,858) 5,317 10,946 5,241,325 21,340,896 $ 26,582,221 $ 3,898 $ $ 3,898 $3,898 $ 2,390,228 $ 16,263 $ 54,557 2,335,671 $2,390,228 $ 16,263 $16,263 820,477 1,161 25,760,583 $26,582,221 (5,274) 9,172 (continued) 35 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2007 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating incom e (loss ) $ Adjustm ents to reconcile operating incom e (los s) to net cash provided (used) by operating activities : Closure and postclos ure costs Depreciation expense (Increase) decrease in accounts receivable (Increase) decrease in inventory Increase (decreas e) in accounts payable Increase (decreas e) in depos its held Increase (decreas e) in accrued wages Increase (decreas e) in due to other funds Increase (decreas e) in com pens ated absences Total adjustm ents Net cash provided (used) by operating activities Noncash investing, capital, and financing activities: Contributions of capital as sets $ 83,758 $ (1,923,849) 50,713 188 1,557,392 338,263 230,347 1,573 (2,384) 2,125,191 (671) 975 51,205 134,963 $ - The accom panying notes are an integral part of the financial statem ents 36 201,342 $2,129,515 $ 3,242,898 (33,557) 4,246 (29,311) $ 3,213,587 - To Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 1,085,686 Golf Course $ 129,878 414,101 (19,918) (143,517) (1,077) (1,989) 377,478 $ 1,463,164 - (314,130) Total $ 42,156 (218) (1,013) 10,939 (1,464) 90,000 (547) 139,853 $ (174,277) - 2,174,363 Governmental Activities Internal Service Fund $ 129,878 2,064,362 284,758 (1,013) 101,344 975 (968) 90,000 (4,920) 2,664,416 $ 4,838,779 $2,129,515 37 84,000 16,268 (28,323) (15,966) 404 20,000 2,343 (5,274) $ 78,726 To Table of Contents City of Casa Grande, Arizona Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2007 Agency Funds ASSETS Cas h Interest receivable Investm ents, at fair value Money m arket Mutual funds $ Total assets LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for pension benefits and other purposes $ 19,445 3,662 $ 4,678 - 526,434 - 12,810 809,275 549,541 826,763 549,541 - 549,541 - - The accom panying notes are an integral part of the financial statem ents 38 Part-Time Firemen's Pension $ 826,763 To Table of Contents City of Casa Grande, Arizona Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2007 Part-Time Firemen's Pension ADDITIONS Contributions : Em ployer Plan m em bers Total contributions $ Inves tm ent earnings : Interes t Change in the fair value of inves tm ents Total inves tm ent earnings Les s inves tm ent expens e Net inves tm ent earnings 32 32 64 14,481 105,663 120,144 (6,153) 113,991 Total additions 114,055 DEDUCTIONS Pens ion paym ents Adm inis trative expens es Total deductions 58,079 1,837 59,916 Change in net as s ets 54,139 Net assets-beginning of year Net assets-end of year $ The accom panying notes are an integral part of the financial s tatem ents 39 772,624 826,763 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies The accounting policies and financial reporting practices of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the City’s significant accounting policies: (A) Reporting Entity The reporting entity of the City includes the following services as authorized by its charter: general government, public safety (police, court and fire), streets/transportation, public works, culture and recreation and economic development. In addition, the City owns and operates four major enterprise activities: wastewater system, sanitation operations, golf course and water system. Individual Component Unit – Blended The Mission Royale Community Facilities District, Villago Community Facilities District, Copper Mountain Community Facilities District and Post Ranch Community Facilities District (the Districts) were formed for the purpose of acquiring or constructing public infrastructure in specified areas of the City. As special purpose districts and separate political subdivisions under the Arizona Constitution, the Districts can levy taxes and issue bonds independently of the City. Property owners in the designated areas are assessed for District taxes, and thus for the costs of operating the Districts. The City Council serves as the Board of Directors; however, the City has no liability for the District’s debt. For reporting purposes, the transactions of the Districts are combined together and included as governmental type funds as if they were part of the City’s operations. No separate financial statements were prepared for the Districts. (B) Government-wide and Fund 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 nonfiduciary activities of the primary government and its component units. 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. The statement of activities demonstrates the degree to which the direct expenses for a given function or segment are 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. (continued) 40 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (B) Government-wide and Fund Financial Statements (continued) 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. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between governmental activities and business-type activities are shown in the government-wide financial statements. The “doubling up” effect of internal service fund activity has been removed from the government-wide statements with the expenses shown in the various functions and segments on the Statement of Activities. (C) Basis of Presentation – Fund Accounting The accounts of the City are organized on the basis of funds each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of selfbalancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures (expenses). The various funds are summarized by type in the combined financial statements. The City uses the following fund types: GOVERNMENTAL FUNDS General Fund - The General Fund is the general operation fund of the City. It is used to account for all financial resources except for those required to be accounted for in another fund. Special Revenue Funds - The Special Revenue Funds are used to account for revenues derived from specific taxes, grants or other restricted revenue sources. City Ordinances or Federal and State Statutes specify the uses and limitations of each special revenue fund. The Special Revenue Funds presented as major funds in the basic financial statement are as follows: Highway Users Fund, used to account for the city’s share of tax revenues that are legally restricted to the maintenance of highways within the city’s boundaries; Systems Development Fund, used for fees collected to help defray the costs of development of general government; Grants and Subsidies Fund, used to account for various grants; Community Development Block Grant Fund (CDBG), used to account for intergovernmental grants, which are used to improve and develop neighborhoods by developing housing; Self-help Technical Assistance Fund, used to account for the activity related to the Rural Development Self-Help Technical Assistance Grant; Home/HUD Fund, used to account for intergovernmental grants used to rehabilitate owner occupied homes and to provide counseling services. (continued) 41 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (C) Basis of Presentation – Fund Accounting (continued) GOVERNMENTAL FUNDS (continued) Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for and the payment of general obligation long-term debt principal, interest and related costs. The Special Assessment Debt Service Fund is a major fund presented in the basic financial statements. This fund accounts for the receipts of revenues from special assessment districts and the payment of special assessment bonds. Capital Project Funds - Capital Project Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). The Capital Replacement Fund is a major fund presented in the basic financial statements. This fund is used to account for the replacement of various capital items or development of infrastructure. The Construction Sales Tax Capital account will use revenue from construction sales tax for infrastructure. The Community Facilities Districts (CFD) Capital Projects Fund accounts for capital construction activities within the CFDs. PROPRIETARY FUNDS Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The enterprise funds presented as major funds in the basic financial statement are as follows: Water Fund - Used to account for water related activities. Wastewater Fund – This fund is used to account for the activities of the sewer (wastewater) operations and maintenance. Wastewater Development Fees Fund – Fees collected to help defray the costs of development of the wastewater system. Sanitation Fund – This fund is used to account for the operations of the City’s trash and landfill services. Golf Course Fund – This fund is used to account for the operations of the City’s public golf course. On the proprietary fund financial statements, operating revenues are those that flow directly from the operations of that activity, i.e. charges to customers or users who purchase or use the goods or services of that activity. Operating expenses are those that are incurred to provide those goods or services. Non-operating revenues and expenses are items like investment income and interest expense that are not a result of the direct operations of the activity. (continued) 42 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (C) Basis of Presentation – Fund Accounting (continued) PROPRIETARY FUNDS (continued) Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, generally on a cost-reimbursement basis. The City has one internal services fund, Equipment Mechanics. This fund is used to account for the maintenance and operations of City owned vehicles. FIDUCIARY FUNDS Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others and therefore are not available to support City programs. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary Funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. Pension Trust Funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post employment benefit plans, or other employee benefit plans. The City has one Pension Trust Fund to account for the activities of the part-time firemen’s pension plan. Agency Funds account for assets the City holds as an agent for individuals, private organizations, other governments or other funds in a temporary custodial capacity. The City currently maintains two agency funds, one to account for deposits received from various businesses in order to conduct business within the City, and the other to account for employee deposits into a flexible spending plan. The two agency funds are aggregated in the statements. NON-CURRENT GOVERNMENTAL ASSETS AND LIABILITIES Non-Current Governmental Assets and Liabilities - GASB Statement #34 eliminates the presentation of account groups in the financial statements (formerly the general fixed asset account group and the general long-term debt account group). The governmental long-term assets and liabilities continue to be maintained in a separate fund for tracking purposes, but are presented with the governmental activities in the government-wide Statement of Net Assets. (continued) 43 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (D) Implementation of GASB Statement No.34 1. Governmental Accounting Standards Board Statement No. 34 In fiscal year 2002/2003 the City adopted the provisions of GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This statement affects the manner in which the City records transactions and presents financial information. State and local governments have traditionally used a financial reporting model substantially different from the one used to prepare private sector financial reports. GASB Statement No. 34 establishes new requirements and a new reporting model for the annual financial reports of state and local governments. The statement was developed to make annual reports of state and local governments easier to understand and more useful to the people who use governmental financial information to make decisions and include the following sections, which were not previously included in the Comprehensive Annual Financial Statements. The governmental fund financial statements continue to be presented as a building block for the new GASB Statement No. 34 statements. a. Management’s Discussion and Analysis – GASB Statement No. 34 requires that financial statements be accompanied by a narrative introduction and analytical overview of the City’s financial activities in the form of “management’s discussion and analysis” (MD&A). This analysis is similar to the analysis provided in the annual reports of private-sector organizations. b Government-Wide Financial Statements – The reporting model includes financial statements prepared using full accrual accounting for all of the City’s activities. This approach includes not just current assets and liabilities but also capital and other long-term assets as well as long-term liabilities. Accrual accounting also reports all of the revenues and costs of providing services each year, not just those received or paid in the current year or soon thereafter. Statement of Net Assets – The statement of net assets is designed to display the financial position of the primary government (government and businesstype activities). The City now reports all capital assets in the governmentwide statement of net assets and reports depreciation expense – the cost of “using up” capital assets – in the statement of activities. The net assets of the City are broken down into three components: 1) invested in capital assets, net of related debt, 2) restricted and 3) unrestricted. (continued) 44 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (D) Implementation of GASB Statement No.34 (continued) 1. Governmental Accounting Standards Board Statement No. 34 (continued) b. Statement of Net Assets (continued) Restricted net assets are those with constraints placed on their use by either: 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation. All net assets not otherwise classified as restricted, are shown as unrestricted. Generally, the City would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Statement of Activities – The government-wide statement of activities reports expenses and revenues in a format that focuses on the cost of each of the City’s functions. The expense of individual functions is compared to the revenue generated directly by the function. Accordingly, the City has recorded capital and certain other long-term assets and liabilities in the statement of net assets, and has reported all revenues and the cost of providing services under the accrual basis of accounting in the statement of activities. 2. Governmental Accounting Standards Board Statement No. 36 The City adopted the provisions of GASB Statement No. 36, Receipt Reporting for Certain Shared Nonexchange Revenues. This statement amends GASB Statement No. 33 with respect to the manner in which shared nonexchange revenues are accounted for by recipient governments. 3. Governmental Accounting Standards Board Statement No. 37 The City adopted the provisions of GASB Statement No. 37, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments: Omnibus. This statement amends GASB Statement No. 34 to either 1) clarify certain provisions or 2) modify other provisions that GASB believes may have unintended consequences in some circumstances. Accordingly, the City considered the effects of this statement when adopting the provisions of GASB Statement No. 34 as previously described. 4. Governmental Accounting Standards Board Statement No. 38 The City adopted the provisions of GASB Statement No. 38, Certain Financial Statement Note Disclosures. This statement modifies, establishes, and rescinds certain financial statement disclosure requirements. Accordingly, certain footnote disclosures have been revised to conform to the provisions of GASB Statement No. 38. (continued) 45 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (D) Implementation of GASB Statement No.34 (continued) 5. Governmental Accounting Standards Board Statement No. 40 The City adopted the provisions of GASB Statement No. 40, Deposit and Investment Risk Disclosures. This statement amends GASB Statement No. 3 and establishes more comprehensive disclosure requirements addressing common risks of the deposits and investments of state and local governments. 6. Governmental Accounting Standards Board Statement No. 44 The City adopted the provisions of GASB Statement No. 44, Economic Condition Reporting: The Statistical Section. This statement amends National Council on Governmental Accounting Statement 1 and establishes and modifies requirements related to the supplementary information presented in a Statistical section in order to improve the understandability and usefulness of the information. (E) Measurement Focus and Basis of Accounting Different measurement focuses are applied to governmental, proprietary and fiduciary funds. The governmental fund measurement focus is on determination of financial position and changes in financial position. Governmental funds focus on the flow of resources. The proprietary and pension fund measurement focus is on determination of net income, financial position, and changes in financial position. Agency funds are custodial in nature and do not measure results of operation or have a measurement focus. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The modified accrual basis of accounting is followed by the governmental funds. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers revenues available if they are earned by June 30 and the revenue is expected to be collected within 60 days after yearend. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. In applying the susceptible to accrual concept to intergovernmental revenues (grants, subsidies and shared revenues), the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. In one, monies must be expended on specific purpose of the project before any amounts will be paid to the City; therefore, revenues are recognized based upon the expenditures recorded. (continued) 46 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (E) Basis of Accounting (continued) In the other, monies are virtually unrestricted as to purpose of expenditures and nearly irrevocable, i.e., revocable only for failure to comply with prescribed compliance requirements, e.g., equal employment opportunity. These resources are reflected as revenues at the time of receipt or earlier if they meet the criterion of availability. Licenses and permits, charges for services, fines, forfeitures and miscellaneous revenues are recorded as revenues when received. Investment interest is recorded as earned since they are measurable and available. City sales tax, collected by the State of Arizona, and property taxes are accrued in the accounting period they become both measurable and available. The portion of property tax levies available on June 30, 2007, are recorded as receivable, net of allowance for uncollectibles. The balance of the tax levy not collected within 60 days after yearend are reflected as deferred revenue. Special assessments and notes receivables are recorded as revenue as installments are received. The balances of these receivables are reflected as deferred revenue. Direct loans made through Community Development Block Grants are reflected as a reserve in fund balance. All proprietary and pension funds are accounted for using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the accounting period in which they are earned and become measurable. Expenses are recorded in the accounting period incurred. Pursuant to GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting, the City follows GASB guidance as applicable to its proprietary funds, and Financial Accounting Standards Boards Statements and Interpretations, Accounting Principals Board Opinions, and Accounting Research Bulletins issued on or before November 30, 1989 that do not conflict with or contradict GASB Pronouncements. The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (F) Budgetary Data (1) (2) In the spring of each year, the City Manager submits to City Council an estimate of the expenditures necessary to conduct the affairs of the City for the fiscal year commencing July 1st. The Council holds open work sessions relating to budget preparation. (continued) 47 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (F) Budgetary Data (continued) (3) (4) (5) (6) (7) (8) (9) (10) After required public hearings are held, budget for all governmental and proprietary funds (excluding internal service and pension funds) are legally enacted prior to the third Monday of July as required by Arizona Revised Statutes. The budget specifies expenditure amounts by activity. Transfers of budgeted amounts within a department can be authorized by the Director of Finance upon the City Manager’s approval unless the transfer involves a transfer from personal services. This type of budgetary transfer requires Council approval. Council approval is required for transfers of budgeted amounts from one department or fund to another. The original budget has been amended for the year ending 2006-2007. All funds except internal service funds are subject to the comprehensive appropriated budget except as provided under state law. Encumbrances are not used by the City. All appropriations lapse at fiscal year-end. Invoices for goods and services received on or before June 30, must be paid within 60 days of the fiscal year-end. The budget for the City is adopted on a basis consistent with generally accepted accounting principles. Under State statutes, there are certain annual expenditure limitations to which the City adheres. Several supplemental appropriations were necessary during the year. Expenditures may not legally exceed budgeted appropriations at the department level. GASB #34 requires that budgetary comparison statements for the general fund and major special revenue funds be presented in the annual financial statements. These statements must display original budget, final budget and actual results. The City has also shown this information as supplementary schedules for other governmental funds as well as enterprise funds. For fiscal year 2006/2007 some transfer amounts have negative variances due to differences in budget and GAAP. (G) Cash and Cash Equivalents Cash represents amounts in demand deposits and amounts held in trust by financial institutions. The funds held in trust are available to the City upon demand. Cash equivalents are defined as short-term (original maturities of three months or less), highly liquid investments that are 1) readily convertible to known amounts of cash and 2) so near maturity that they present insignificant risk of changes in value because of changes in interest rates (continued) 48 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (H) Investments The City adheres to the Arizona Revised Statutes (A.R.S. §35-323) that governs the investment of City funds. Eligible investments include certificate of deposits in eligible depositories, interest bearing accounts in qualified banks, repurchase agreements, pooled investments by the State Treasurer, bonds of the U.S. Government that are guaranteed as to principal and interest, and bonds of the state, county, city, town or school district. All investments except for the Part-time Firemen’s Pension funds are invested in the State’s Local Government Investment Pool. The State’s investment pool is managed by the State Treasurer’s office. The pool is not required to register with the Securities and Exchange Commission under the 1940 Investments Advisors Act. The activity and performance of the pool is reviewed monthly by the State Board of Investment in accordance with A.R.S. §35-311. The Arizona State Treasurer issues a publicly available financial report that includes financial statements and required supplementary information. Copies may be obtained by contacting the Arizona State Treasurer, 1700 West Washington, Phoenix, Arizona 85007. In accordance with GASB Statement No. 31 “Accounting and Financial Reporting for Certain Investments and External Investment Pools,” the City records all its investments at fair value as defined in the statement. The Part-time Firemen’s Pension investments are valued from quoted market prices at year-end. (I) Inventories Inventories for Governmental and Proprietary Funds consist primarily of expendable supplies. Governmental funds maintain inventories using the consumption method of accounting. All inventories are valued at cost, which approximates market, using the first-in/first-out method. Physical inventories are conducted at year-end for financial statements purposes. (J) 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. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. 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. General government infrastructure capital assets include those assets acquired or constructed since 1980. 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. (continued) 49 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (J) Capital Assets (continued) 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. No interest was capitalized for the 2006-2007 fiscal year. Depreciation of all assets is recorded and calculated using the straight-line method over the following estimated useful lives: Buildings ............................................................................ 40 years Sewer system............................................................. 20 to 50 years Street system ............................................................. 20 to 30 years Building and facility improvements .................................... 20 years Streetlights and traffic control devices ................................ 20 years Other Improvements and landscaping ................................. 15 years Vehicles....................................................................... 3 to 15 years Equipment ................................................................... 5 to 10 years Furniture and fixtures .................................................. 5 to 10 years Computers/software............................................................... 3 years (K) Compensated Absences City employees are granted one day of vacation leave per month. Employees are entitled to accumulate vacation to a maximum allowable limit depending on the number of years of service. In the event of termination, an employee is reimbursed for the accumulated vacation leave. Different measurement focuses for governmental and proprietary funds were considered when determining the compensated absences liability. Because the measurement focus for proprietary funds is the determination of net income, current and long-term liabilities are recorded in the accounting records. The measurement focus for governmental funds is the flow of financial resources; expenditures for vacation time are accrued as current liabilities only if they have matured (i.e., unused reimbursable leave still outstanding following an employee’s resignation or retirement). City employees with less than ten years of service are granted nonvesting sick leave. Employees with ten or more years of service will be paid the unused accrued sick leave as follows: 10 – 15 years of service will receive 30% up to a maximum of 128 hours 15 – 19 years of service will receive 40% up to a maximum of 218 hours 20 or more years of service will receive 50% up to a maximum of 640 hours. Sick leave compensation is accounted for in the period in which the event takes place. (continued) 50 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 1: Summary of Significant Accounting Policies (continued) (L) Long-term Obligations A distinction is made between proprietary fund long-term liabilities and governmental long-term debt. Governmental funds’ long-term obligations are recognized as a liability in the governmental funds when due and expected to be financed from expendable available financial resources. Longterm obligations expected to be financed from proprietary fund operations are accounted for in those funds. (M) Interfund Transactions Interfund transactions are categorized as loans, reimbursements, interfund services provided and used or transfers. Loans between funds are reported in the balance sheet of the borrowing and lending funds as a liability and receivable, respectively. Reimbursements are expenditures or expenses of one fund but are attributable to another fund. An example of this type of transaction is when one fund purchases a supply in which another fund uses, thus reimbursing the original funds expenditure/ expense. An interfund services provided and used transaction is a revenue or expenditure/expense if the transaction involved an outside party. Utility receipts and payments are examples of transactions where the fund receiving the service records an expenditure/expense and the fund supplying the service records a revenue. Other interfund transactions are classified as transfers. Transfers usually reflect ongoing operating subsidies between funds. (N) Fund Equity Reserves represent those portions of fund equity not appropriable for expenditures or legally segregated for a specific future use. NOTE 2: Cash and Investments At year-end, the City had the following cash and investments: Cash Investments Restricted investments Total cash and investments $ 4,211,152 103,163,040 577,889 $107,952,081 Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, an entity will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. (continued) 51 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 2: Cash and Investments (continued) Custodial Credit Risk (continued) The carrying amount of the City’s cash in bank totaled $4,211,152 and the bank balance was $5,409,648. Federal Depository Insurance covered the City’s deposits at June 30, 2007, to the extent of $200,000. Deposits of $5,209,648 were collateralized with securities held by the pledging financial institution or by its trust department or agent but not in the City’s name. Casa Grande does not have a deposit policy for custodial credit risk. Cash and cash equivalents include restricted and unrestricted amounts and are included in the financial statements as follows: Cash Investments Restricted investments Governmental Activities $ 3,366,552 76,053,938 576,728 $79,997,218 Business Activities $ 820,477 25,760,583 1,161 $26,582,221 Fiduciary Fund $ 24,123 1,348,519 $1,372,642 Total $ 4,211,152 103,163,040 577,889 $107,952,081 Investments The City’s policy is to invest unrestricted cash in the Local Government Investment Pool (LGIP), an investment pool managed by the State Treasurer’s Office that allows governments within the State to pool their funds for investment purposes. The LGIP is not registered with the Securities Exchange Commission under the 1940 Investment Advisors Act. The State Board of Investment has oversight responsibilities of the investment pool in accordance with ARS 35-311. The pool’s policy is to invest in fixed-rate securities with a final maturity less than 24 months from the settlement date of the purchase and variable-rate securities with final maturity less than 5 years. The dollar weighted average portfolio maturity is less than 180 days. Only securities backed by the full faith and credit of the U.S. Government may be purchased for this pool. The fair value balance of the pool at June 30, 2007 was $1,903,282,000. 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. All investments have a remaining maturity of 12 months or less. Casa Grande does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. (continued) 52 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 2: Cash and Investments (continued) Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of year-end for each investment type. Issuer LGIP Firefighter Pension: American Funds Linsco Bank of New York Wells Fargo Investment Type State Investment Pool Amount $102,340,955 Ratings as of Year-End AAA Unrated $ $102,340,955 Money Market Money Market/Mut Fnds Money Market Money Market 12,810 809,275 476,324 101,565 $103,740,929 $ - 12,810 809,275 476,324 101,565 $103,740,929 Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer. Investments in any one issuer are as follows: Issuer LGIP Fire Fighter Pension Plan: American Funds Linsco/Private Ledger Bank of New York Wells Fargo Investment Type State Investment Pool Money Market Money Market & Mutual Funds Money Market Money Market Reported Amount $102,340,955 12,810 809,275 476,324 101,565 $103,740,929 (continued) 53 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 3: Cash with Fiscal Agent In November 2006, the Villago Community Facilities District issued long-term revenue obligations in which the funds received were placed with a third party trustee in an interest bearing escrow account. The purpose of the funds is to finance construction. Fund Type Capital - CFD Description of Designated Capital Infrastructure Balance at June 30, 2007 $43,493 In May 2005, the City purchased a Public Works Facility with issuance of lease purchase debt. A portion of the debt to be used for building improvements was placed in an interest bearing escrow account. Fund Type Capital - Development Description of Designated Capital Public Works Facility Balance at June 30, 2007 $475,163 In April 2005, the Mission Royale Community Facilities District issued long-term revenue obligations in which the funds received were placed with a third party trustee in an interest bearing escrow account. The purpose of the funds is to finance the construction of sewer line. Fund Type Capital - CFD Description of Designated Capital Sewer Line Balance at June 30, 2007 $58,072 In January 2003, the City issued long-term revenue obligations in which the funds received were placed with a third party trustee in an interest bearing escrow account. The funds are being used to finance the Wastewater Treatment Plant. Fund Type Enterprise - Wastewater Description of Designated Capital Wastewater Treatment Plant Balance at June 30, 2007 $1,161 (continued) 54 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 4: Receivables The following table summarizes the City’s governmental activities receivables as of June 30, 2007: General Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables $4,235,502 1,064,757 162,352 5,462,611 Special Revenue Debt Service $ 858,601 659,120 296,570 1,814,291 $139,946 53,441 19,423 212,810 - - $1,814,291 $212,810 (16,813) $5,445,798 Capital Total $1,194,023 33,371 1,227,394 $6,428,072 1,777,318 511,716 8,717,106 - (16,813) $1,227,394 $8,700,293 The following table summarizes the City’s business-type activities receivables as of June 30, 2007 Water Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables Wastewater Wastewater Dev Fees $ 21,908 21,908 $201,162 583,676 58,340 843,178 $ - (540,771) - $21,908 $302,407 $98,891 Sanitation $ 798,224 98,891 15,545 98,891 813,769 (739,548) $74,221 Golf Course $ Total $ 201,162 1,433 1,405,241 172,776 1,433 1,779,179 - $1,433 (1,280,319) $498,860 Revenues of wastewater and sanitation are reported net of uncollectible amounts. Total uncollectible amounts related to revenues of the current period are as follows: Uncollectibles related to wastewater Uncollectibles related to sanitation Total uncollectibles of the current fiscal year NOTE 5: $ 48,106 88,326 $ 136,432 Direct Loans The City issues loans to provide housing for low-income families, which are funded by Community Development Block Grants from the U.S. Department of Housing and Urban Development through the Arizona Department of Commerce. These loans are paid back on a monthly basis and have varying terms and maturity dates. At June 30, 2007, there were 72 of these loans outstanding, totaling $652,506. (continued) 55 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 6: Property Taxes Arizona Revised Statues require that property taxes be levied on or before the third Monday in August. Taxes are levied and collected by the Pinal County Treasurer on real and personal property. Real property taxes, payable in two installments, are due November 1 and May 1. Personal property taxes are billed throughout the year. Interest and penalties are assessed if a taxpayer fails to pay the tax within a period of time specified by law. Taxes are considered a lien against real property at the date of levy. The property tax levy as described in the Arizona Revised Statutes is divided into two levies, a limited levy known as the primary levy and an unlimited levy known as the secondary levy. The secondary taxes are levied strictly for the retirement and redemption of bond indebtedness, while the primary taxes are imposed for all purposes. The primary tax levy is limited to a 2% increase over the previous year’s maximum allowable primary levy plus an increased dollar amount due to a net gain in property not taxed the previous year. The primary levy is further limited in that the primary tax from all jurisdictions may not exceed 1% of the homeowner’s market value of the home. Secondary taxes are levied to retire voter approved general obligation bonds. The City’s 2006-2007 maximum primary levy limit was $3,170,639. The primary tax levy was $1,917,300. The City did not have a secondary tax levy. The City’s total tax levy for 2006-2007 was $1,917,300. Using the modified accrual basis of accounting, property tax revenue is recognized when it becomes both measurable and available to finance expenditures as of June 30, and expected to be collected within 60 days after year-end. Available means taxes due or past due at the end of the fiscal year. Deferred revenue includes the balance of the property tax levy that does not meet the accrual criteria. Property tax receivable and deferred revenue at June 30, 2007, are $45,406 and $22,087 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2007 follows: Land Building & Improvements Machinery & Equipment Total Capital Assets Less: accumulated depreciation Net Capital Assets Balance 6/30/06 $ 83,000 48,309,640 7,918,632 56,511,272 Additions & Adjustments $ 2,461,076 781,847 3,242,923 Disposals & Adjustments $ (23,200) (191,077) (214,277) Balance 6/30/07 $ 283,000 50,747,516 8,509,402 59,539,918 (13,294,571) (2,064,362) 207,132 (15,151,801) $ 43,216,701 $ 1,178,561 $ (7,145) $ 44,388,117 (continued) 56 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 7: Capital Assets (continued) Business-type capital assets changes in Accumulated Depreciation by class: Buildings Improvements Machinery & equipment Total Accumulated Depreciation Balance June 30, 2006 $ 104,948 8,919,796 4,269,827 $13,294,571 Additions $ 3,142 1,523,659 537,561 $2,064,362 Balance Disposals June 30, 2007 $ $ 108,090 10,443,455 (207,132) 4,600,256 $15,151,801 $(207,132) A summary of changes in governmental activities capital assets follows: Land & construction in progress Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total General Capital Assets Balance June 30, 2006 $ 6,559,450 13,685,188 78,253,522 1,441,801 5,439,633 5,739,686 $111,119,280 Adjustments Adjustments Balance & Additions & Disposals June 30, 2007 $ 3,542,742 $(123,000) $ 9,979,192 774,229 14,459,417 75,433,197 153,686,719 (11,130) 1,430,671 436,483 5,876,116 1,520,030 (480,106) 6,779,610 $81,706,681 $(614,236) $192,211,725 Less Accumulated Depreciation for: Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total Accumulated Depreciation Total General Capital Assets $ 5,183,390 10,211,947 876,388 3,808,433 3,711,168 23,791,326 $87,327,954 $ 551,551 33,316,092 104,282 364,268 522,068 34,858,261 $46,848,420 $ (12,521) (458,168) (470,689) $(143,547) $ 5,734,941 43,528,039 968,149 4,172,701 3,775,068 58,178,898 $134,032,827 Adjustments and Additions includes $26,892,592 accumulated depreciation for infrastructure acquired prior to July 1, 2002. (continued) 57 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 7: Capital Assets (continued) The City had additions to contributed capital assets during the fiscal year 2006-2007. The Governmental Activities Capital Assets include a total of $13,802,727 in contributed capital assets received in fiscal year 2006-2007. Depreciation Expense was charged to the functions/programs of the government as follows: Governmental Activities: General Government Public Safety Streets/Transportation Public Works Culture and Recreation Economic Development Internal Service Total Depreciation Expense Governmental Activities $ 211,974 616,646 5,898,816 64,943 524,938 632,085 16,267 $7,965,669 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 50,713 1,557,392 414,101 42,156 $2,064,362 Retirement and Pension Plans All full-time City employees are covered by one of two contributory retirement and pension plans, which are administered by the State of Arizona under State Statute. Part-time firefighters participate in the Casa Grande Part-time Firemen’s Pension Plan. The following summarizes each plan. (A) Arizona State Retirement Plan Plan Description. The Arizona State Retirement System (ASRS) administers a cost sharing multiple-employer defined benefit pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. ASRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at ASRS, 3300 N. Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling 602-240-2200 or 1-800621-3778. (continued) 58 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 8: Retirement and Pension Plans (continued) (A) Arizona State Retirement Plan (continued) Funding Policy. The Arizona State Legislature has the authority to establish and amend benefits provisions and contributions for active plan members. For the year ended June 30, 2007, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 9.1 percent (8.6 percent retirement and 0.5 percent long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2007, 2006 and 2005 were $976,996, $717,228 and $529,908, respectively, which were equal to the required contributions for those years. Prior years rates are 7.4% for 2006 and 5.7% for 2005. (B) Arizona Public Safety Personnel Retirement System Plan Description. The Public Safety Personnel Retirement System (PSPRS) is an agent multipleemployer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a fivemember board, known as The Fund Manager, and 167 local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The City contributes to one PSPRS plan for police and one for fire fighters. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. PSPRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at PSPRS, 1020 E. Missouri Avenue, Phoenix, Arizona 85014. Funding Policy - The Arizona State Legislature has the authority to establish and amend benefits provisions and contributions for active plan members. For the year ended June 30, 2006 active PSPRS members were required by statute to contribute 7.65 percent of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 16.53 percent for police and 15.19 percent for fire. The City contributed the required amount. (continued) 59 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 8: Retirement and Pension Plans (continued) (B) Arizona Public Safety Personnel Retirement System (continued) Annual Pension Cost - The City’s pension cost for the year ended June 30, 2006, the date of the most recent actuarial valuation, and related information follow. Contribution rates: City Plan members Annual pension cost Contributions made Actuarial valuation date Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at cost-of-living adjustments Amortization method Remaining amortization period from 7/1/00 Asset valuation method Post retirement benefit increases PSPRS - Police 16.53% 7.65% 534,794 534,794 June 30, 2006 Entry Age PSPRS - Fire 15.19% 7.65% 303,654 303,654 June 30, 2006 Entry Age 8.50% 5.5% - 8.5% 5.0% Level Percentage Open Open 20 Years Smoothed Market Based on Inv. Income 8.50% 5.5% - 8.5% 5.0% Level Percentage Open Open 20 Years Smoothed Market Based on Inv. Income Trend Information - Information of the PSPRS plan as of the most recent actuarial valuation follows: Plan PSPRS - Police PSPRS - Fire Year Ended June 30 Annual Pension Cost (APC) Percentage of APC Contribution Net Pension Obligation 2006 $534,794 100% - 2005 397,049 100% - 2004 343,162 100% - 2006 $303,654 100% - 2005 253,646 100% - 2004 206,291 100% - (continued) 60 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 8: Retirement and Pension Plans (continued) (B) Arizona Public Safety Personnel Retirement System (continued) Required Supplementary Information (unaudited) Schedule of Funding progress - An analysis of funding progress for each of the plans as of the most recent actuarial valuations, June 30, 2006, follows: PSPRS - Police Actuarial Valuation Date 6/30/06 6/30/05 6/30/04 Actuarial Value of Plan Assets (a) $13,392,641 13,126,047 12,673,016 Actuarial Accrued Liability Funding Liability (Excess) Funded Ratio Annual Covered Payroll Unfunded Liability as Percentage of Covered Payroll (b) $19,728,857 18,198,459 15,091,351 (b-a) $6,336,216 5,072,412 2,418,335 (a/b) 67.9% 72.1% 83.9% (c) $3,739,428 3,481,906 3,098,436 ([b-a]/c) 169.4% 145.7% 78.1% Actuarial Accrued Liability (b) Funding Liability (Excess) (b-a) Funded Ratio (a/b) Annual Covered Payroll (c) Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) $11,192,351 10,213,654 8,640,456 $3,440,898 2,628,532 1,356,658 69.3% 74.3% 84.3% $2,544,227 2,231,531 1,959,300 135.2% 117.8% 69.2% PSPRS – Fire Actuarial Valuation Date 6/30/06 6/30/05 6/30/04 Actuarial Value of Plan Assets (a) $7,751,453 7,585,122 7,283,798 (C) Casa Grande Part-time Firemen’s Pension Plan The Casa Grande Part-time Firemen’s Pension Plan is a single-employer defined contribution plan, which was approved by the City Council on August 21, 1989, under Arizona Revised Statutes Section 9-981. The authority to establish and amend benefit provisions rests with the City Council. In December 1999, the council revised the pension and benefit program for the part-time firefighters. The City discontinued using part-time firefighters as of December 31, 2005. (continued) 61 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 8: Retirement and Pension Plans (continued) (C) Casa Grande Part-time Firemen’s Pension Plan (continued) Previous trend information is shown below: Part-time Firemen Fiscal Year June 30, 2004 2005 2006 Annual Pension Cost $7,117 7,129 1,584 Percent Contributed 100.0% 100.0% 100.0% The assets of the plan are valued annually and the earnings or loss is distributed among the participant’s accounts in the plan. The only expenditures being made from this fund are administration fees, retirement payments, and refunds to those firefighters who leave the service of the Fire Department before becoming eligible for pension benefits. The cost of administering the plan is financed from investment earnings. Retirement with full benefits can be at age fifty-five (55) or twenty years of credited service. This plan was fully vested as of June 30, 2005. As of June 30, 2007, there were 15 eligible employees participating in the plan. The plan is administered by The Innes Associates. As of June 30, 2007, the plan’s assets consisted of the following: Cash Money Market Funds Mutual Funds Total Assets $ 4,678 12,810 809,275 $826,763 The plan has never had an actuarial valuation; however, benefits cannot exceed plan assets. The market values of mutual funds are determined from readily available market quotations. The fund uses the accrual basis of accounting. Contributions are recognized when earned; benefits and refunds are expensed when incurred. (continued) 62 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 9: Risk Management The City is exposed to various risks of loss, related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City’s liability risks are covered through membership in the Arizona Municipal Risk Retention Pool. The City is responsible for the first $10,000 of all insured claims inclusive of all loss adjustment expenses. Settled claims from these risks have not exceeded insurance coverage for the past five years. The City has $2 million general liability coverage with $10,000 deductible and a $10 million umbrella liability policy. The City continues to carry commercial insurance for all other risks of loss, including workers’ compensation, employee health and accident, airport activities and fuel use bond. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past four fiscal years. NOTE 10: Capital Leases Leases at June 30, 2007, included the following: Governmental activities: Lease with option to purchase Public Works Facility. Quarterly installments of $82,605 including interest of 4.887%, due through May 9, 2020. Lease with option to purchase 2 fuel trucks ($45,770 Airport) and 1 street sweeper ($52,812 Streets). Quarterly installments of $8,189 including interest of 4.461%, due through August 20, 2010. Lease with option to purchase Airport T-hangers. Quarterly installments of $22,944 including interest of 5.081%, due through August 20, 2013. Total Governmental Activities Capital Lease Obligation $3,166,793 98,582 488,813 $3,754,188 Business-Type Activities: Sanitation: Lease with option to purchase Tractor and Compactor. Quarterly installments of $24,795, including interest at 3.685%, due through September 3, 2009. $213,210 Lease with option to purchase a garbage truck. Monthly installments of $6,868, including interest at 4.461%, due through August 20, 2010. 82,689 Total Business-type Activities Capital Lease Obligation 295,899 Total Long-Term Lease Payable $4,050,087 (continued) 63 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 10: Capital Leases (continued) The future minimum lease payments by year are: Fiscal Year Ending June 30, 2008 2009 2010 2011 2012 2013-2017 2018-2020 Governmenta Activities $ 454,950 454,950 454,950 430,385 422,196 1,766,817 991,259 BusinessActivities $ 126,651 126,651 52,268 6,869 - 4,975,507 (1,221,319) 312,439 (16,540) 5,287,946 (1,237,859) 3,754,188 (276,184) $3,478,004 295,899 (116,776) $ 179,123 4,050,087 (392,960) $ 3,657,127 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion $ Total 581,601 581,601 507,218 437,254 422,196 1,766,816 991,259 Leased Capital Assets The following is an analysis of the leased assets included in capital assets: Cost Building and Improvements: Governmental Activities Assets Total Building and Improvement Machinery and Equipment Governmental Activities Assets Business-type Activities Assets: Sanitation Total Machinery and Equipment Total Leased Capital Assets Accumulated Depreciation Net Balance $4,016,939 4,016,939 $(226,911) (226,911) $3,790,028 3,790,028 201,169 (88,273) 112,896 743,265 944,434 $4,961,373 (264,489) (352,762) $(579,673) 478,776 591,672 $4,381,700 A portion of the Public Works Facility lease ($475,163) has not been spent and will be used for building improvements. (continued) 64 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 11: Bond Debt A summary of long-term bond debt transactions for the year ended June 30, 2007, follows: Balance July 1, 2006 $1,335,000 480,000 $1,815,000 Governmental Activities General obligation bonds Special assessment bonds Total Bonds Outstanding Issued $455,000 $455,000 Balance June 30, 2007 $1,790,000 370,000 $2,160,000 Retired (110,000) $(110,000) $ Summarization of the long-term bond debt payable at June 30, 2007, follows: Original Issue Amount $1,790,000 Bond Description General obligation Special Assessment: ID #38 1,030,000 Total Bonds Outstanding Amount of Interest Installment Rate $10,000 – 105,000 5.00% - 5.80% 75,000 - 130,000 5.40% Date of Final Payment 07/15/31 Balance June 30, 2007 $1,790,000 01/01/10 370,000 $2,160,000 The following table summarizes the City’s future bond debt service requirements as of June 30, 2007: General Obligation Bonds (1) Bonds Interest Year Ending June 30, 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 2028-2032 $ 15,000 10,000 45,000 50,000 50,000 295,000 385,000 505,000 435,000 $1,790,000 Special Assessment Fund (2) Bonds Interest $ 89,660 96,872 95,480 93,068 90,528 411,151 321,970 200,187 49,806 $1,448,722 $115,000 125,000 130,000 $370,000 $19,980 13,770 7,020 $40,770 Total Bonds Interest $ 130,000 135,000 175,000 50,000 50,000 295,000 385,000 505,000 435,000 $2,160,000 $ 109,640 110,642 102,500 93,068 90,528 411,151 321,970 200,187 49,806 $1,489,492 (continued) 65 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 11: Bond Debt (continued) 1) Community Facilities Districts (CFDs), special purpose districts created specifically to acquire or construct public infrastructure within specified areas of the City, are authorized under state law to issue General Obligation (GO) bonds to be repaid by property taxes levied on property within the district. CFDs are created by petition to the City Council by property owners within the area to be covered by the district and debt may be issued only after approval of the voters within the district. In April 2005 the Mission Royale Community Facilities District issued $1,335,000 of General Obligation bonds to finance the construction of a sewer line. These bonds will be repaid by the property owners within Mission Royale CFD. The bonds are obligations of the district only. The City has no obligation for the debt other than administration of the collection of property taxes and payment of the debt service on behalf of Mission Royale. Principal payments on the bond begin in July, 2009. In November 2006 the Villago Community Facilities District issued $455,000 of General Obligation bonds to finance construction. These bonds will be repaid by the property owners within Villago CFD. The bonds are obligations of the district only. The City has no obligation for the debt other than administration of the collection of property taxes and payment of the debt service on behalf of Villago. Principal payments on the bond begin in July, 2007. 2) The Special Assessment Bonds are secured and payable from special assessments levied against the real property benefited by said improvements. If the assessments are not paid, the properties subject to such assessments are sold at auction. If there is no purchaser for any property offered for sale, the City will get ownership of the property subject to any tax liens and will be liable for the remaining debt. The City Council is required to appropriate from the General Fund of the City the amount of the total unpaid assessments or the amount of each semiannual assessment until the total debt is paid. NOTE 12: Excise Tax Revenue Obligations In October 1997, the City issued $3,590,000 of Excise Tax Revenue Obligations Series 1997 to finance the restoration of a 1921 vintage school building for use as a new City Hall. The 20-year revenue obligations have interest rates that range from 4.80 to 6.00 percent. Principal payments ranging from $110,000 to $290,000 are paid annually with interest paid semiannually on April 1, and October 1. In April 1999, the City issued $5,000,000 of Excise Tax Revenue Obligations Series 1999 to finance the acquisition, construction and equipping of two public recreational complexes and improvements to existing recreational facilities. The 15-year revenue obligations have interest rates that range from 4.40 to 4.80 percent. Principal payments ranging from $200,000 to $410,000 are paid annually with interest paid semiannually on April 1, and October 1. (continued) 66 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 12: Excise Tax Revenue Obligations (continued) On December 1, 2003, the City issued $18,120,000 of Excise Tax Revenue Obligations Series 2003. The 20-year revenue obligations have interest rates that range from 2.00 to 5.00 percent. Principal payments ranging from $780,000 to $1,600,000 are paid annually on April 1. $9,300,000 was used to finance the construction of a wastewater treatment plant. $8,820,000 was used to advance refund $4,560,000 of Series 1994 and $3,830,000 of Series 1995 Excise Tax Revenue Obligations with interest rates ranging from 4.35 to 6.00 and 5.00 to 6.20 percent, respectively. The 1997, 1999, and 2003 revenue obligations are secured by a pledge of and first lien on all excise, transaction, franchise, privilege and business taxes, state shared sales and income taxes, fees for licenses and permits and state revenue sharing which the City presently or in the future validly imposes or receives from other entities. The following table summarizes the City’s future revenue obligation debt service requirements as of June 30, 2007: Year Ending June 30, 2008 2009 2010 2011 2012 2013-2017 2018-2022 Governmental Activities Principal Interest $ 522,270 $ 316,311 543,900 292,501 565,530 267,979 596,753 242,676 623,790 215,466 3,182,411 610,150 686,834 103,870 $6,721,488 $2,048,953 Business-type Activities Principal Interest $ 532,730 $ 633,546 551,100 618,896 569,470 602,363 583,248 583,856 606,210 561,984 3,802,591 2,434,300 7,742,983 1,170,630 $14,388,332 $6,605,575 Total Interest Principal $ 1,055,000 $ 949,857 1,095,000 911,397 1,135,000 870,342 1,180,001 826,532 1,230,000 777,450 6,985,002 3,044,450 8,429,817 1,274,500 $21,109,820 $8,654,528 (continued) 67 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 13: Changes in Long-Term Obligations Governmental Activities: Compensated absences Bonds payable Excise tax revenue obligations Capital leases Total Governmental Activities Balance July 1, 2006 $ 704,683 1,815,000 7,217,943 4,029,980 $13,767,606 Business-type Activities: Compensated absences Capital leases Excise tax revenue obligations Notes payable (1) Total Business-type Activities Balance July 1, 2006 $ 96,347 408,291 14,911,877 168,069 $15,584,584 Obligations Incurred $ 887,116 455,000 $1,342,116 Additions $113,402 $113,402 Obligations Paid $ (827,907) (110,000) (496,455) (275,792) $(1,710,154) Reductions $(118,322) (112,392) (523,545) (9,549) $(763,808) Balance June 30, 2007 $ 763,892 2,160,000 6,721,488 3,754,188 $13,399,568 Balance June 30, 2007 $ 91,427 295,899 14,388,332 158,520 $14,934,178 Amounts Due Within One Year $ 763,892 130,000 522,270 276,184 $1,692,346 Amounts Due Within One Year $ 91,427 116,776 532,730 9,877 $750,810 (1) In January, 2002 the Water Fund received financing from the Water Infrastructure Finance Authority of Arizona. The note is paid semi-annually until July 2019 with an interest rate of 3.437%. Long-term compensated absences of governmental activities are expected to be liquidated by the operating funds (primarily the General Fund) as they become due. NOTE 14: Long-Term Debt The following summarizes the annual debt service requirements to maturity for all long-term debt excluding compensated absences, including interest of $11,419,862. Year Ending June 30, 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 2028-2032 Governmental Activities Principal Interest $ 928,454 $ 604,717 968,827 568,165 1,044,886 521,073 941,417 471,465 974,764 427,217 4,848,564 1,416,966 1,988,764 500,171 505,000 200,186 435,000 49,807 $12,635,676 $4,759,767 Business-type Activities Principal Interest $ 659,383 $ 648,699 682,649 629,147 631,034 608,210 600,971 588,138 617,516 565,808 3,865,227 2,447,214 7,785,971 1,172,879 $14,842,751 $6,660,095 Total Principal $ 1,587,837 1,651,476 1,675,920 1,542,388 1,592,280 8,713,791 9,774,735 505,000 435,000 $27,478,427 (continued) 68 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 15: Landfill Closure and Postclosure Care Costs The U.S. Environmental Protection Agency and the Arizona Department of Environmental Quality require municipal solid waste landfill (MSWLF) owners and operators to provide for landfill closure and postclosure care costs. The City of Casa Grande owns and operates one landfill. Closure and postclosure care costs include cost of equipment expected to be installed and facilities expected to be constructed, cost of final cover and cost of monitoring and maintaining the expected useable MSWLF area. These costs are expected to be paid near or after the date that the MSWLF stops accepting solid waste and during the postclosure period. The Environmental Protection Agency has established the postclosure period to be 30 years. Closure and postclosure care costs are recognized in the current period based on landfill capacity used to date. On June 30, 2007 the City has reported a $1,754,674 landfill closure and postclosure care liability that represents the total current cost based on 41.80 percent of estimated capacity of the landfill. The remaining cost of $2,436,033 will be recognized in the future periods as the remaining capacity is filled. The City expects the remaining capacity to extend for 23 years, which will be through the year 2030. Total closure and postclosure costs are based on current costs, and are reevaluated annually for changes in inflation or deflation, technology, and applicable laws or regulations. The 2007 valuation of the total closure and postclosure costs were estimated to be $4,190,707. NOTE 16: Summary of Interfund Transactions Interfund transactions as of June 30, 2007, were as follows: Interfund Receivable/Payable: Fund General Special Revenue Fund: Housing Rehabilitation Home/FMHA Equipment Maintenance Enterprise Fund: Golf Course Total Receivable Amount $1,080,000 Payable Amount $ - $1,080,000 400,000 510,000 20,000 150,000 $1,080,000 (continued) 69 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 NOTE 16: Summary of Interfund Transactions (continued) The interfund balances at June 30, 2007 are short-term loans to cover temporary cash deficits in various funds. Transfers: Fund Governmental Funds: General Highway Users Grants System Development Capital Replacement Other Non-major Governmental Total Governmental Funds Enterprise Funds: Water Golf Course Wastewater Sanitation Total Enterprise Funds Internal Service Fund Grand Totals Transfers Out Transfers In $3,342,891 574,900 44,834 500,000 1,848,473 6,311,098 $1,734,934 153,191 2,833,300 2,123,473 6,844,898 21,900 93,000 153,300 481,600 749,800 300,000 300,000 84,000 $7,144,898 $7,144,898 There were no significant transfers during fiscal year 2007 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. (continued) 70 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2007 Note 17: Prior Period Adjustment The July 1, 2006 beginning net assets of the governmental activities on the government-wide financial statements do not agree to the prior year financial statements due to the addition of the general government infrastructure assets acquired prior to July 1, 2002 in accordance with GASB Statement No. 34, totaling $59,720,418 less accumulated depreciation of $26,892,592. Note 18: Deficit in Net Assets Two Housing Funds have deficits in net assets. The Home/HUD fund has a deficit of ($168,609) because $168,609 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. The Housing Program fund has a deficit of ($6,118) because $155,516 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. Note 19: Commitments The City has a contract with Gardner Achen Contracting in the amount of $2,021,300 to complete Phase One of the Downtown Streets Reconstruction Project. 71 To Table of Contents COMBINING STATEMENTS To Table of Contents City of Casa Grande, Arizona Com bining Balance Sheet Non-Major Governm ental Funds June 30, 2007 ASSETS Cash Investments Receivables (less allow ance for uncollectibles) Due from other governments Fuel Inventory Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Accrued w ages and benefits Deferred revenue Due to other funds Total liabilities Fund balances: Reserved for: Special revenue Debt service Unreserved, reported in: Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balance Special Revenue Com m unity RedevelopArts m ent $ 1,542 $ 13,295 10,972 1,906,603 Municipal Airport $ 10,298 324,892 Parks Develop. $ 3,573 149,689 10,101 386 39,389 $ 385,066 985 $ 154,247 $ $ 30,838 1,170 32,008 $ $ - 57 57 - 353,058 353,058 154,190 154,190 $ 385,066 $ 154,247 72 72 12,586 - - $ Prom otion & Tourism $ 10,210 100,422 Court Enhancem ent $ 8,678 334,191 16,091 $ 1,935,989 29,562 $ 140,194 $ 2,201 345,070 $ $ $ 158 158 - - - 12,586 12,586 1,935,831 1,935,831 140,194 140,194 12,586 $ 1,935,989 $ 140,194 - 345,070 345,070 $ 345,070 To Table of Contents Special Revenue Housing Public Safety Program s Program s $ 91,111 $ 7,375 73,899 24,020 439 384,000 $ 549,449 $ $ $ 51 155,516 400,000 555,567 158 31,553 233 233 Debt Service Capital Projects Recreation Airport Im provem ent Im provem ent $ 1,156 $ 32,657 - Redevelopm ent $ 3,717 - Recreation $ 10,575 1,846,087 3,717 151,705 $ 2,008,367 $ $ $ $ $ - - 1,156 - $ $ 114,320 146,977 3,868 96,170 100,038 Total Nonm ajor Governm ental Funds $ 194,187 4,770,775 $ $ 211,314 498,706 39,389 5,714,371 35,205 1,170 251,686 400,000 688,061 - 31,320 - 3,717 2,008,367 - - 31,320 2,012,084 (6,118) (6,118) 31,320 3,717 2,008,367 1,156 1,156 46,939 46,939 2,934,811 48,095 5,026,310 3,717 $ 2,008,367 $ 549,449 $ 31,553 $ 73 $ 1,156 $ 146,977 $ 5,714,371 To Table of Contents City of Casa Grande, Arizona Com bining Statem ent of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governm ental Funds For the Year Ended June 30, 2007 Special Revenue REVENUES Taxes: Property taxes Sales Tax Intergovernmental revenues Charges for services Investment earnings Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Sale of land Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Municipal Airport Parks Develop. $ $ 38,769 995,971 1,034,740 6,083 56,486 62,569 Com m unity Arts $ 558 558 Redevelopm ent Prom otion & Tourism Court Enhancem ent $ $ $ 299,818 82,323 82,683 464,824 183,251 2,585 185,836 7,990 61,367 14,698 84,055 900,044 - 1,585 - 8,475 - 21,655 54,930 100,000 - - 77,672 29,312 1,007,028 1,585 8,475 76,585 100,000 - 27,712 60,984 (7,917) 388,239 85,836 84,055 60,984 93,206 $ 154,190 5,000 5,000 (2,917) 15,503 12,586 388,239 1,547,592 $ 1,935,831 85,836 54,358 $ 140,194 84,055 261,015 345,070 (1,848,473) 1,809,371 (39,102) (11,390) 364,448 $ 353,058 74 $ $ To Table of Contents Special Revenue Debt Service Housing Program s Public Safety Program s Rede velopm ent Re cre ation $ $ $ $ 228,484 29,082 8,611 1,065 267,242 1,092 19,693 20,785 - 548,024 17,056 15,663 - 2,700 - 565,080 15,663 175,000 128,690 306,390 (306,390) (297,838) 5,122 (297,838) 291,720 $ (6,118) 5,122 26,198 31,320 $ $ 310,000 310,000 3,610 107 3,717 877,871 77,829 955,700 Re cre ation Im provem e nt $ - $ Total Nonm ajor Capital Proje cts - Airport Im provem ent $ 284,691 284,691 Governm ental Funds $ 299,818 1,061,122 521,165 90,449 232,548 1,078,654 77,244 3,361,000 - 2,244,292 1,000,044 15,663 10,060 572,379 2,316,278 275,000 154,435 429,435 - 2,244,292 527,672 312,437 4,754,533 526,265 - (1,959,601) (1,393,533) 1,156 1,156 1,808,473 1,808,473 (151,128) 198,067 46,939 2,123,473 (1,848,473) 1,809,371 2,084,371 690,838 4,335,472 5,026,310 526,265 1,482,102 2,008,367 75 $ $ $ To Table of Contents City of Casa Grande, Arizona Combining Statement of Fiduciary Net Assets All Agency Funds June 30, 2007 Flexible Spending Plan Fund Perform ance Bond Fund ASSETS Cas h Interes t receivable Inves tm ents , at fair value $ Total assets LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for other purposes 3,662 526,434 $ 19,445 - Total $ 19,445 3,662 526,434 530,096 19,445 549,541 530,096 19,445 549,541 530,096 19,445 549,541 $ - 76 $ - $ - To Table of Contents City of Casa Grande, Arizona Combining Statement of Changes in Assets and Liabilities All Agency Funds For the Year Ended June 30, 2007 Balance June 30, 2006 Performance Bond Fund Assets: Cash Investments Interest Receivable Total Assets $ Liabilities: Other Liabilities Accounts Payable 509,145 2,958 512,103 Additions $ 17,289 704 17,993 Deductions $ - Balance June 30, 2007 $ 526,434 3,662 530,096 511,766 337 512,103 7,589 10,404 17,993 - 15,631 15,631 55,769 55,769 (51,955) (51,955) 19,445 19,445 15,631 15,631 3,814 3,814 - 19,445 19,445 Totals - All Agency Funds Assets: Cash Investments Interest Receivable Total Assets 15,631 509,145 2,958 527,734 55,769 17,289 704 73,762 (51,955) (51,955) 19,445 526,434 3,662 549,541 Liabilities: Other Liabilities Accounts Payable Total Liabilities 527,397 337 527,734 11,403 10,404 21,807 - 538,800 10,741 549,541 Flexible Spending Plan Fund Assets: Cash Total Assets Liabilities: Other Liabilities $ $ 77 $ 519,355 10,741 530,096 $ To Table of Contents OTHER SUPPLEMENTARY INFORMATION To Table of Contents City of Casa Grande, Arizona Special Assessments Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Special as s es s m ents Inves tm ent earnings Total revenues Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Final 140,200 2,000 142,200 Actual Amounts $ 28,907 58,318 87,225 5,200 5,200 978 4,222 105,000 32,000 142,200 110,000 27,000 142,200 110,000 25,920 136,898 1,080 5,302 Original $ 140,200 2,000 142,200 EXPENDITURES Current: Contractual s ervices Debt Service Principal retirem ent Interest Total expenditures $ - $ Variance with Final BudgetPositive (Negative) $ (111,293) 56,318 (54,975) - - $ 78 - (49,673) $ 1,237,547 1,187,874 (49,673) $ 1,237,547 1,187,874 To Table of Contents City of Casa Grande, Arizona Capital Replacement/Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Actual Amounts $ 253,388 4,623,220 47,924 4,924,532 Variance with Final BudgetPositive (Negative) $ 253,388 4,623,220 47,924 4,924,532 Budgeted Amounts REVENUES Inves tm ent earnings Construction s ales tax Sale of City property Total revenues Original $ - EXPENDITURES Materials and s upplies Capital outlay Total expenditures Final $ - 7,620,000 7,620,000 2,200 4,882,700 4,884,900 2,147 2,267,742 2,269,889 53 2,614,958 2,615,011 Excess (deficiency) of revenues over (under) expenditures (7,620,000) (4,884,900) 2,654,643 7,539,543 OTHER FINANCING SOURCES (USES) Trans fers in Proceeds from obligations Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year 2,000,000 5,500,000 7,500,000 (120,000) 120,000 - 2,000,000 4,755,600 6,755,600 1,870,700 (1,870,700) - 2,833,300 2,833,300 5,487,943 5,165,924 $ 10,653,867 $ 79 $ 833,300 (4,755,600) (3,922,300) 3,617,243 7,036,624 $ 10,653,867 To Table of Contents City of Casa Grande, Arizona Community Facilities Districts - Capital Projects Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Final 221,000 6,000 227,000 Actual Amounts $ 106,223 3,992 110,215 27,000 60,000,000 200,000 27,000 60,000,000 200,000 6,681 376,000 149,162 60,227,000 60,227,000 531,843 20,319 59,624,000 50,838 59,695,157 (60,000,000) (60,000,000) (421,628) 59,578,372 59,900,000 (100,000) 59,800,000 (200,000) 200,000 $ - 59,900,000 (100,000) 59,800,000 (200,000) 200,000 $ - REVENUES Property Tax Investment Earnings Total revenues Original $ 221,000 6,000 227,000 EXPENDITURES Contractual services Capital outlay Debt Service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Bond issuance Bond issuance costs Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Variance with Final BudgetPositive (Negative) $ (114,777) (2,008) (116,785) 80 $ $ 455,000 455,000 33,372 653,656 687,028 (59,445,000) 100,000 (59,345,000) 233,372 453,656 $ 687,028 To Table of Contents City of Casa Grande, Arizona Municipal Airport Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Investm ent earnings Rental and s ale of city property Miscellaneous Total revenues Original $ 1,849 584,519 238,155 824,523 EXPENDITURES Current: General governm ent: Pers onal services Contractual s ervices Materials and s upplies Debt s ervice Total expenditures 174,240 19,699 493,200 106,984 794,123 Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Proceeds from obligations Sale of land Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ 30,400 $ (1,030,400) 1,150,000 119,600 150,000 (150,000) - 81 Final 1,849 584,519 238,155 824,523 Actual Amounts $ 38,769 995,971 1,034,740 174,240 828,199 737,700 106,984 1,847,123 149,777 12,648 737,619 106,984 1,007,028 24,463 815,551 81 840,095 27,712 1,050,312 (1,022,600) $ Variance with Final BudgetPositive (Negative) $ 36,920 411,452 (238,155) 210,217 (1,000,000) (1,000,000) (2,022,600) 2,022,600 - $ (1,848,473) 1,809,371 (39,102) (11,390) 364,448 353,058 $ (848,473) 1,809,371 960,898 2,011,210 (1,658,152) 353,058 To Table of Contents City of Casa Grande, Arizona Parks Development Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 30,000 30,000 Actual Amounts $ 6,083 56,486 62,569 Variance with Final BudgetPositive (Negative) $ 6,083 26,486 32,569 30,000 30,000 30,000 30,000 1,585 1,585 28,415 28,415 - - 60,984 60,984 Budgeted Amounts REVENUES Investment earnings Miscellaneous Total revenues Original $ 30,000 30,000 EXPENDITURES Current: Culture and recreation: Contractual services Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ - Final $ $ 82 - $ 93,206 154,190 $ 93,206 154,190 To Table of Contents City of Casa Grande, Arizona Community Arts Reserve Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Actual Amounts $ 558 558 Variance with Final BudgetPositive (Negative) $ 558 558 Budgeted Amounts REVENUES Inves tment earnings Total revenues Original $ - EXPENDITURES Current: Culture and recreation: Contractual s ervices Materials and s upplies Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Final $ - 24,200 24,200 1,200 23,000 24,200 350 8,125 8,475 850 14,875 15,725 (24,200) (24,200) (7,917) 16,283 5,000 5,000 (19,200) 19,200 - 5,000 5,000 (19,200) 19,200 - 5,000 5,000 (2,917) 15,503 12,586 16,283 (3,697) 12,586 83 $ $ $ To Table of Contents City of Casa Grande, Arizona Redevelopment/Downtown Revitalization Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Final 140,000 15,000 75,000 230,000 Actual Amounts $ 299,818 82,323 82,683 464,824 Variance with Final BudgetPositive (Negative) $ 159,818 67,323 7,683 234,824 110,000 10,000 1,620,000 1,740,000 125,000 10,000 1,605,000 1,740,000 21,655 54,930 76,585 103,345 10,000 1,550,070 1,663,415 (1,510,000) (1,510,000) 388,239 1,898,239 Budgeted Amounts REVENUES Local taxes Inves tm ent earnings Rental and s ale of city property Total revenues Original $ 140,000 15,000 75,000 230,000 EXPENDITURES Current: Econom ic developm ent: Contractual s ervices Materials and s upplies Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ 1,510,000 - 84 $ $ 1,510,000 - $ 1,547,592 1,935,831 $ 37,592 1,935,831 To Table of Contents City of Casa Grande, Arizona Promotion and Tourism Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Local taxes Inves tm ent earnings Total revenues Original $ 85,000 85,000 EXPENDITURES Current: General governm ent Total expenditures 85,000 85,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ - $ - 85 Final 100,000 100,000 Actual Amounts $ 183,251 2,585 185,836 100,000 100,000 100,000 100,000 - - 85,836 - $ Variance with Final BudgetPositive (Negative) $ 83,251 2,585 85,836 $ 54,358 140,194 85,836 $ 54,358 140,194 To Table of Contents City of Casa Grande, Arizona Court Enhancement/Probationary Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Intergovernm ental Charges for s ervices Inves tm ent earnings Total revenues Original $ 8,000 46,500 1,700 56,200 EXPENDITURES Current: Public s afety: Contractual s ervices Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ $ Final 8,000 25,500 1,700 35,200 62,200 400,000 462,200 100,000 379,000 479,000 (406,000) (443,800) 406,000 - 86 $ 443,800 - Actual Amounts $ 19,655 61,367 3,033 84,055 Variance with Final BudgetPositive (Negative) $ 11,655 35,867 1,333 48,855 - 100,000 379,000 479,000 84,055 $ 261,015 345,070 527,855 $ (182,785) 345,070 To Table of Contents City of Casa Grande, Arizona Housing Application and Development Fees Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Charges for service Intergovernmental Investment earnings Loan fees Total revenues Original $ 250,000 550,000 800,000 EXPENDITURES Current: Economic development: Personal services Contractual services Materials and supplies Capital outlay Total expenditures 50,000 750,000 800,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ - $ - 87 Final 250,000 550,000 800,000 Actual Amounts $ 29,082 228,484 8,611 1,065 267,242 46,300 736,000 600 17,100 800,000 2,823 544,694 507 17,056 565,080 43,477 191,306 93 44 234,920 (297,838) (297,838) - $ Variance with Final BudgetPositive (Negative) $ (220,918) (321,516) 8,611 1,065 (532,758) - $ 291,720 (6,118) $ 291,720 (6,118) To Table of Contents City of Casa Grande, Arizona Public Safety Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Inves tm ent earnings Contributions Total revenues $ EXPENDITURES Current: Public s afety activities Total expenditures Final $ 10,000 10,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 200 9,800 10,000 - 88 Actual Amounts $ 1,092 19,693 20,785 24,800 24,800 - $ 200 12,600 12,800 (12,000) $ 12,000 - $ Variance with Final BudgetPositive (Negative) $ 892 7,093 7,985 15,663 15,663 9,137 9,137 5,122 17,122 26,198 31,320 $ 14,198 31,320 To Table of Contents City of Casa Grande, Arizona Redevelopment Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Total revenues Original $ - EXPENDITURES Current: Contractual s ervices Debt s ervice: Principal Interes t and fis cal charges Total expenditures Final $ - Actual Amounts $ - Variance with Final BudgetPositive (Negative) $ - 3,100 2,700 2,700 167,400 139,500 310,000 175,200 132,100 310,000 175,000 128,690 306,390 200 3,410 3,610 Excess (deficiency) of revenues over (under) expenditures (310,000) (310,000) (306,390) 3,610 OTHER FINANCING SOURCES (USES) Trans fers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year 310,000 310,000 - 310,000 310,000 - 310,000 310,000 3,610 107 3,717 3,610 107 3,717 $ 89 $ $ - $ To Table of Contents City of Casa Grande, Arizona Recreation Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Local taxes Investment earnings Total revenues Original $ 430,000 430,000 EXPENDITURES Current: Contractual services Debt Service: Principal retirement Interest Total expenditures 4,300 - 275,000 155,000 430,000 - $ Actual Amounts $ 877,871 77,829 955,700 - 232,200 193,500 430,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Final 430,000 430,000 - - $ 90 - Variance with Final BudgetPositive (Negative) $ 447,871 77,829 525,700 $ - 275,000 154,435 429,435 565 565 526,265 526,265 1,482,102 2,008,367 $ 1,482,102 2,008,367 To Table of Contents City of Casa Grande, Arizona Recreation Improvements Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts REVENUES Investm ent earnings Total revenues Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year - Actual Amounts $ - - - - - - - - - Original $ - EXPENDITURES Contractual services Total expenditures $ Variance with Final BudgetPositive (Negative) $ - - 91 Final $ $ - $ 1,156 1,156 $ 1,156 1,156 To Table of Contents City of Casa Grande, Arizona Airport Improvement Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Variance with Final BudgetPositive (Negative) $ (215,309) (215,309) Final 500,000 500,000 Actual Amounts $ 284,691 284,691 1,500,000 1,500,000 2,244,400 2,244,400 2,244,292 2,244,292 Excess (deficiency) of revenues over (under) expenditures (1,000,000) (1,744,400) (1,959,601) (215,201) OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balances 1,000,000 1,000,000 - 1,744,400 1,744,400 - 1,808,473 1,808,473 (151,128) 64,073 64,073 (151,128) REVENUES Intergovernmental revenues Total revenues Original $ 500,000 500,000 EXPENDITURES Capital outlay Total expenditures Fund balance - beginning of year Fund balance - end of year $ - 92 $ $ - $ 198,067 46,939 108 108 $ 198,067 46,939 To Table of Contents City of Casa Grande, Arizona Copper Mountain Ranch Water Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Original OPERATING REVENUES: Service fees Total operating revenues $ 206,500 206,500 $ 206,500 206,500 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 52,861 44,000 53,100 160,000 309,961 Operating Income (103,461) (98,461) (15,161) (15,161) (5,612) (5,612) (118,622) (104,073) (21,900) (21,900) (140,522) (125,973) NONOPERATING REVENUE (EXPENSES): Interest expense Total nonoperating revenue (expense) Income (loss) before transfers Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 140,522 - 93 Actual Amounts Final $ 52,861 39,000 53,100 160,000 304,961 $ 125,973 - 193,909 193,909 Variance with Final BudgetPositive (Negative) $ 19,739 39,699 50,713 110,151 52,861 19,261 13,401 109,287 194,810 83,758 182,219 (5,448) (5,448) 164 164 78,310 182,383 (21,900) - 56,410 $ (12,591) (12,591) 1,258,036 1,314,446 182,383 $ 1,132,063 1,314,446 To Table of Contents City of Casa Grande, Arizona Wastewater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Original OPERATING REVENUES: Service fees Connection fees Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses $ 741,812 692,851 828,000 244,000 2,506,663 Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense City sales tax Total nonoperating revenue (expense) Income (loss) before contributions and transfers Capital contributions Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year 2,334,645 130,489 28,418 2,493,552 $ Actual Amounts Final 3,885,345 130,489 1,058,418 5,074,252 741,812 1,964,551 828,000 1,560,800 5,095,163 $ 2,591,660 167,049 54,337 2,813,046 630,037 1,730,864 818,602 1,557,392 4,736,895 Variance with Final BudgetPositive (Negative) $ (1,293,685) 36,560 (1,004,081) (2,261,206) 111,775 233,687 9,398 3,408 358,268 (13,111) (20,911) (1,923,849) (1,902,938) 55,000 (1,278,769) 1,170,180 (53,589) 55,000 (1,270,969) 1,170,180 (45,789) 403,414 (676,436) 2,110,364 1,837,342 348,414 594,533 940,184 1,883,131 (66,700) (66,700) (86,507) (153,300) (153,300) 2,129,515 (153,300) 2,129,515 - (220,000) (220,000) 1,889,708 2,109,708 32,771,829 $ 34,661,537 32,551,829 $ 34,661,537 220,000 - 94 $ 220,000 - (19,807) To Table of Contents City of Casa Grande, Arizona Wastewater Development Fees Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Original OPERATING REVENUES: Connection fees Total operating revenues $ OPERATING EXPENSES: Depreciation Total operating expenses $ 3,125,000 3,125,000 Operating Income NONOPERATING REVENUE : Interest income Total nonoperating revenue Net change in net assets Net Assets - beginning of year Net Assets - end of year 3,100,000 3,100,000 $ Actual Amounts Final 519,300 519,300 544,300 544,300 (25,000) (25,000) 25,000 25,000 25,000 25,000 - 95 $ $ 3,242,898 3,242,898 - Variance with Final BudgetPositive (Negative) $ 2,723,598 2,723,598 544,300 544,300 3,242,898 3,267,898 658,506 658,506 633,506 633,506 - 3,901,404 3,901,404 - 11,539,924 $ 15,441,328 11,539,924 $ 15,441,328 To Table of Contents City of Casa Grande, Arizona Sanitation Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Original OPERATING REVENUES: Service fees Recycling revenue Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Closure and postclosure costs Total operating expenses Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense Total nonoperating revenue (expense) Income before transfers Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 4,856,262 337,123 4,845 5,198,230 Actual Amounts Final $ 4,856,262 337,123 4,845 5,198,230 $ 4,679,330 284,634 10,245 4,974,209 Variance with Final BudgetPositive (Negative) $ (176,932) (52,489) 5,400 (224,021) 2,062,103 1,703,639 531,100 200,000 4,496,842 2,076,303 1,300,639 627,500 592,800 154,600 4,751,842 2,056,866 660,294 627,384 414,101 129,878 3,888,523 19,437 640,345 116 178,699 24,722 863,319 701,388 446,388 1,085,686 639,298 8,307 (423,035) (414,728) 8,307 (126,651) (118,344) 286,660 328,044 481,600 (481,600) (481,600) 768,260 (153,556) 695,863 (768,260) - 96 $ 153,556 - 106,036 (14,259) 91,777 97,729 112,392 210,121 1,177,463 $ 1,710,665 2,406,528 849,419 849,419 $ 1,557,109 2,406,528 To Table of Contents City of Casa Grande, Arizona Golf Course Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2007 Budgeted Amounts Original OPERATING REVENUES: Rental Green fees Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal s ervices Contractual Materials and supplies Depreciation Total operating expenses $ Trans fers in Trans fers out Net change in net assets 217,405 567,578 8,829 793,812 $ 531,238 49,624 484,924 42,156 1,107,942 33,612 (209,098) 10,429 (165,057) 44 27,276 19,976 22,344 69,640 (314,130) 8,513 8,513 (95,417) 13,673 13,673 5,160 5,160 (207,000) (210,200) (300,457) (90,257) 300,000 (93,000) 300,000 (93,000) 300,000 (93,000) (3,200) (93,457) (90,257) - $ $ (218,713) 8,513 8,513 Income (loss) before transfers 183,793 776,676 (1,600) 958,869 531,282 76,900 504,900 64,500 1,177,582 (215,513) NONOPERATING REVENUE: City s ales tax Total nonoperating revenue Net assets - beginning of year Net assets - end of year 183,793 776,676 1,600 962,069 515,682 55,600 541,800 64,500 1,177,582 Operating Income Actual Amounts Final Variance with Final BudgetPositive (Negative) - $ 97 3,200 - $ 481,581 388,124 $ 478,381 388,124 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Source June 30, 2007 Governmental funds capital assets: Land and construction in progress Buildings Improvements other than buildings Heavy machinery and equipment Operational equipment $ Total governmental funds capital assets Investments in governmental funds capital assets by source: General obligation bonds Grants General Fund revenues Special Revenue Fund revenues Capital Project Funds Gifts and donations Total investments in governmental funds capital assets 9,979,193 14,407,063 153,686,716 1,396,862 12,462,712 $ 191,932,546 $ 459,863 1,529,993 11,717,784 89,298,641 17,441,858 71,484,407 $ 191,932,546 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 98 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Function and Activity June 30, 2007 Land and Buildings Function and Activity General government $ 1,650,154 Improvements Other Than Buildings $ 145,632 Machinery and Equipment $ 484,460 Total $ 2,280,246 Public safety 2,068,499 703,921 7,426,287 10,198,707 Streets/Transportation 3,318,663 141,181,815 4,542,843 149,043,321 959,626 402,767 283,532 1,645,925 Culture and recreation 3,519,570 6,452,733 2,402,947 12,375,250 Economic development 8,968,273 6,675,824 745,000 16,389,097 $ 20,484,785 $ 155,562,692 $ 15,885,069 $ 191,932,546 Public works Total This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 99 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule of Changes By Function and Activity For the Year Ended June 30, 2007 Function and Activity General government Public safety General Capital Assets June 30, 2006 $ 2,062,146 Additions $ General Capital Assets June 30, 2007 Disposals 218,100 $ 2,280,246 7,856,844 2,821,968 (480,105) 10,198,707 71,913,775 77,252,546 (123,000) 149,043,321 1,628,316 17,609 Culture and recreation 12,096,188 290,192 (11,130) 12,375,250 Economic development 15,282,831 1,174,151 (67,885) 16,389,097 (682,120) $ 191,932,546 Streets/Transportation Public works Total $ 110,840,100 $ 81,774,566 - $ 1,645,925 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 100 To Table of Contents City of Casa Grande, Arizona Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2007 Grant Number Federal CFDA Number 121-07 157-07 164-06 142-06 302-06 567-05 14.228 14.228 14.228 14.228 14.239 14.250 10 461200 10.420 10.561 298,781 7,501 306,282 5-237 5-237 5-237 5-237 93.044 93.045 93.667 93.053 15,901 62,510 12,791 20,049 111,251 2005-DJBX0880 2006BUBX 2006-DJBX1098 16.592 16.607 16.592 3,276 5,349 5,185 13,810 3-04-0007-07 3-04-0007-08 3-04-0007-10-2006 3-04-0007-11 20.106 20.106 20.106 20.106 133,577 113,986 8,482 96,170 352,215 2004-GE-T4-0051 97.004 265,305 * U.S. Department of Housing and Urban Development: Passed through Arizona Department of Commerce: Community Development Block Grant - 2007 Community Development Block Grant - 2007 Community Development Block Grant - 2006 Community Development Block Grant - 2006 HOME - 2006 Rural Housing and Economic Development Total Department of Housing and Urban Development U.S. Department of Agriculture: Self Help Housing Technical Assistance Grant State Administrative Matching Grants for Food Stamp Program Total Department of Agriculture U.S. Department of Health & Human Services Passed through Pinal-Gila Council for Senior Citizens: Special Programs for the Aging Special Programs for the Aging Social Services Block Grant Nutritional Services Incentive Program Total Department of Health & Human Services U.S. Department of Justice: JAG Grant Bulletproof Vest Grant Local Law Enforcement Block Grant Total Department of Justice U.S. Department of Transportation: FAA Airport Grant FAA Airport Grant FAA Airport Grant FAA Airport Grant Total Department of Transportation U.S. Department of Homeland Security Passed through Arizona Division of Emergency Management Total Federal Financial Assistance and Expenditures of Federal Aw ards *Denotes major program 101 Expenditures $ $ 126,135 90,000 214,530 246,093 599,213 * 189,853 1,465,824 2,514,687 To Table of Contents City of Casa Grande Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2005 NOTE 1 BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Casa Grande and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with requirements of OMB Circular A-133, Audits of States, Local Governments, and NonProfit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the financial statements. 102 To Table of Contents STATISTICAL SECTION To Table of Contents Statistical Section This part of the City of Casa Grande's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 104 Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City's ability to generate its sales and property taxes. 111 Debt Capacity 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. 113 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 119 Operating Information These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 121 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year. 103 To Table of Contents Schedule 1 City of Casa Grande, Arizona Net Assets by Component Last Five Fiscal Years (accrual basis of accounting) 2003 2004 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ 21,646,269 7,492,999 3,935,234 $ 33,074,502 $ 24,413,490 13,846,429 5,857,139 $ 44,117,058 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 15,329,786 1,983,310 97,231 $ 17,410,327 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 36,976,055 9,476,309 4,032,465 $ 50,484,829 June 30 2005 2006 2007 $ 28,136,615 25,705,254 10,880,929 $ 64,722,798 $ 74,265,031 39,505,454 17,574,060 $ 131,344,545 $ 121,397,151 61,600,770 24,880,238 $ 207,878,159 $ 9,650,425 11,289,359 1,030,876 $ 21,970,660 $ 19,179,454 7,202,857 4,985,723 $ 31,368,034 $ 27,728,464 11,541,534 8,492,036 $ 47,762,034 $ 29,545,366 15,292,233 9,374,364 $ 54,211,963 $ 34,063,915 25,135,788 6,888,015 $ 66,087,718 $ 47,316,069 32,908,111 15,866,652 $ 96,090,832 $ 101,993,495 51,046,988 26,066,096 $ 179,106,579 $ 150,942,517 76,893,003 34,254,602 $ 262,090,122 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 104 To Table of Contents Schedule 2 City of Casa Grande, Arizona Changes in Net Assets Last Five Fiscal Years (accrual basis of accounting) 2003 Governmental Activities: Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Interest on long-term debt Total expenses Program Revenues Charges for services: General government Public safety Streets/Transportation Public works Culture and recreation Development fees Building permits Development and engineering Other economic development Operating grants and contributions Capital grants and contributions Total program revenues Total Governmental Activities Net Program Expense General Revenues and Other Changes in Net Assets Property taxes Sales taxes Franchise taxes Shared revenues: State sales taxes Urban revenue sharing Auto-in-lieu Investment earnings Gain on sales of assets Miscellaneous Transfers Total general revenues and other changes in net assets Total Governmental Activities Change in Net Assets $ 3,627,359 9,888,543 2,702,484 697,449 3,778,926 2,289,429 540,921 23,525,111 102,276 823,583 142,848 28,440 303,358 1,511,684 959,975 583,532 213,613 4,584,394 4,312,801 13,566,504 $ (9,958,607) June 30 2005 2006 2007 4,117,835 10,732,674 2,942,777 765,497 4,078,279 2,422,140 499,031 25,558,233 $ 4,100,221 11,789,718 3,437,830 778,974 4,147,490 2,716,784 477,956 27,448,973 $ 4,463,957 13,504,033 5,486,251 1,868,890 4,978,247 4,468,076 500,879 35,270,333 $ 5,196,569 14,765,435 9,650,354 2,144,675 5,247,404 5,564,781 610,630 43,179,848 113,317 810,216 424,308 11,632 288,714 2,139,152 1,263,355 430,876 572,326 4,993,835 4,199,412 15,247,143 109,340 904,202 505,948 2,273,085 285,592 4,667,542 2,017,707 1,876,291 795,721 5,834,031 6,372,598 25,642,057 119,514 984,555 832,940 84,424 340,272 11,353,338 3,468,682 3,357,825 1,282,294 7,866,501 43,675,183 73,365,528 133,192 1,091,960 996,571 33,994 328,163 13,115,223 2,580,633 2,456,074 863,185 9,066,924 14,852,514 45,518,433 $ 38,095,195 $ 2,338,585 2004 $ $ (10,311,090) $ (1,806,916) 1,536,606 9,477,906 850,839 1,799,803 10,573,489 899,604 2,333,638 12,094,301 954,853 2,401,386 14,973,622 1,236,366 2,475,296 22,708,648 1,511,751 1,972,714 2,650,450 999,433 (163,059) 221,721 200,444 (26,617) 17,720,437 2,122,100 2,278,117 1,189,494 124,545 (77,414) 277,201 1,341,083 20,528,022 2,336,759 2,345,507 1,221,188 466,925 414,900 145,585 99,000 22,412,656 2,721,554 2,728,207 1,585,116 1,508,717 660,798 361,586 349,200 28,526,552 3,086,185 3,760,034 2,032,801 3,222,176 1,846,201 274,310 449,800 41,367,202 $ 20,605,740 $ 66,621,747 $ 43,705,787 $ 7,761,830 $ 10,216,932 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 105 To Table of Contents Schedule 3 City of Casa Grande, Arizona Changes in Net Assets Last Five Fiscal Years (accrual basis of accounting) 2003 Business-type Activities: Expenses Water Golf course Wastewater Sanitation Total expenses Revenues Charges for services: Water Golf course Wastewater Sanitation Sales taxes Investment earnings Miscellaneous Capital grants and contributions Total revenues Total Business-type Activities Net Program Expense Other Changes in Net Assets Transfers $ June 30 2005 2004 197,109 698,909 2,465,665 2,638,820 6,000,503 194,782 420,799 2,767,417 2,687,498 1,681,957 (77,534) 7,157 1,099,166 8,781,242 $ 2,780,739 26,617 $ 142,327 716,703 2,981,091 2,797,052 6,637,173 $ 158,397 844,434 2,487,685 3,148,693 6,639,209 2006 $ 98,048 928,321 3,138,128 3,538,650 7,703,147 2007 $ 115,599 1,107,942 5,413,331 3,902,782 10,539,654 193,006 433,686 3,703,613 3,056,414 1,885,485 88,214 1,895,607 1,136,713 12,392,738 186,225 584,429 7,618,055 3,804,163 2,150,452 183,584 47,086 1,561,589 16,135,583 197,834 781,464 7,533,801 4,571,127 2,676,631 635,533 58,502 7,991,457 24,446,349 193,909 784,983 6,001,607 4,963,964 2,124,036 1,167,957 73,411 2,129,515 17,439,382 $ 5,755,565 $ 9,496,374 $ 16,743,202 $ 6,899,728 (1,341,083) (99,000) (349,200) (449,800) Total Business-type Activities Change in Net Assets $ 2,807,356 $ 4,414,482 $ 9,397,374 $ 16,394,002 $ 6,449,928 Total Primary Government Change in Net Assets $ 10,569,186 $ 14,631,414 $ 30,003,114 $ 83,015,749 $ 50,155,715 106 To Table of Contents Schedule 4 City of Casa Grande, Arizona Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 1998 General Fund Reserved Unreserved Total general fund All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Total all other governmental funds 1999 Fiscal Year 2000 2001 2002 $ 74,769 2,451,559 $ 2,526,328 $ 110,897 3,964,937 $ 4,075,834 $ 139,262 4,915,566 $ 5,054,828 $ 143,871 4,422,980 $ 4,566,851 176,526 3,338,675 $ 3,515,201 $ 1,560,637 $ 6,795,532 $ 4,096,314 $ 2,186,274 $ 2,311,916 4,817,397 218,851 $ 6,596,885 2,624,407 44,043 $ 9,463,982 3,181,985 539,713 $ 7,818,012 2,761,029 1,406,775 $ 6,354,078 3,758,330 1,214,043 $ 7,284,289 107 $ To Table of Contents 2003 2004 Fiscal Year 2005 2006 2007 $ 486,826 3,823,320 $ 4,310,146 $ 801,965 6,343,317 $ 7,145,282 $ 1,115,310 11,150,642 $ 12,265,952 $ 1,476,273 17,796,454 $ 19,272,727 $ 1,959,234 25,521,015 $ 27,480,249 $ 2,341,307 $ 2,368,606 $ 6,252,078 $ 4,250,108 $ 4,413,184 4,328,235 372,078 $ 7,041,620 9,013,364 1,066,167 $ 12,448,137 15,594,386 2,479,265 $ 24,325,729 28,612,756 5,365,147 $ 38,228,011 43,633,806 10,701,962 $ 58,748,952 108 To Table of Contents Schedule 5 City of Casa Grande, Arizona Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Revenues Taxes Licenses and permits Intergovernmental revenues Charges for services Fines Special assessments Investment earnings Rental and sale of city property Other revenues Total revenues Expenditures General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt service Principal Interest Total expenditures Other Financing Sources (Uses) Transfers in Transfers out Capital leases Bond issuance Bond issuance costs Sale of land Total other financing sources (uses) 1998 1999 Fiscal Year 2000 2001 2002 $ 7,368,958 389,569 7,719,748 432,094 667,303 433,972 405,490 155,228 242,448 17,814,810 $ 8,207,129 698,453 8,947,070 877,478 827,765 242,998 376,637 104,288 384,429 20,666,247 $ 9,647,104 644,487 9,361,703 760,096 772,079 588,862 649,120 288,542 216,622 22,928,615 $ 10,500,552 895,927 11,303,184 974,559 628,857 309,163 565,660 418,879 352,902 25,949,683 $ 10,565,836 801,910 10,763,681 1,578,990 801,690 244,872 233,207 405,717 231,348 25,627,251 2,615,082 6,451,991 1,478,014 472,821 2,220,546 1,477,070 3,900,673 2,750,694 6,831,027 1,221,041 460,161 2,279,233 1,788,326 4,929,355 2,753,142 7,502,776 1,446,023 797,824 2,669,541 1,352,047 7,716,638 3,348,830 8,237,440 1,956,566 766,460 3,076,334 2,859,626 6,307,819 3,689,262 9,639,754 1,798,580 777,291 3,349,200 2,238,132 2,593,601 1,350,340 271,536 20,238,073 1,058,750 396,383 21,714,970 1,003,291 571,129 25,812,411 979,300 465,622 27,997,997 956,448 620,054 25,662,322 2,391,189 (2,649,899) 369,137 - 1,010,817 (1,097,185) - 2,691,306 (2,647,806) 3,592,154 - 844,605 (701,105) 321,826 5,000,000 - 1,874,832 (1,659,139) 2,001,127 - 3,635,654 5,465,326 2,216,820 Net change in fund balances $ 1,212,391 $ 4,416,603 $ (666,976) $ (1,937,887) $ Debt service as a percentage of noncapital expenditures Not Available* Not Available* Not Available* Not Available* Not Available* 110,427 (86,368) (121,439) *Prior to implementation of GASB 34 in 2003, the Capital outlay number from the CAFR may not include all capital asset purchases. 109 To Table of Contents 2003 2004 Fiscal Year 2005 2006 2007 $ 11,851,114 1,074,991 10,358,329 2,528,275 690,177 211,787 (163,059) 536,538 274,985 27,363,137 $ 13,294,993 1,385,080 10,902,234 3,221,772 677,048 137,644 124,545 738,198 473,864 30,955,378 $ 15,388,557 2,156,170 11,911,931 9,853,065 739,283 217,895 466,925 701,633 720,093 42,155,552 $ 18,585,602 3,632,214 15,208,404 16,390,930 734,495 354,840 1,508,717 1,071,511 1,198,605 58,685,318 $ 26,706,698 2,756,899 18,007,273 16,678,803 826,533 28,907 3,222,176 1,459,760 720,635 70,407,684 3,641,912 9,499,759 1,987,200 657,785 3,352,211 1,871,266 4,472,441 4,451,216 10,309,036 1,672,165 730,486 3,450,403 1,952,308 1,939,318 4,300,175 11,344,629 1,908,050 734,391 3,654,964 2,242,438 4,526,914 5,230,006 12,957,767 2,168,597 1,650,860 4,446,967 3,914,867 6,149,634 5,921,449 14,155,865 2,846,301 2,063,253 4,828,294 4,821,056 8,251,421 932,344 559,527 26,974,445 960,801 471,539 25,937,272 799,546 477,428 29,988,535 1,206,388 484,775 38,209,861 882,247 707,501 44,477,387 1,618,327 (1,644,944) 150,000 - 2,919,819 (1,578,736) 1,056,839 - 2,686,632 (2,530,831) 3,500,000 1,335,000 (159,557) 5,808,434 (5,374,834) - 123,383 2,397,922 4,831,244 433,600 6,844,898 (6,311,098) 455,000 1,809,371 2,798,171 512,075 $ 7,416,028 $ 16,998,260 $ 20,909,057 $ 6.63% 5.97% 5.02% 5.27% 110 $ 28,728,468 4.30% To Table of Contents Schedule 6 City of Casa Grande, Arizona Sales Tax Revenue by Industry, Fiscal Years 2007, 2006, 2005 and 2004 Fiscal Year 2004 Percentage Tax Paid of Total Construction $ 2,267,707 Manufacture 355,169 Transportation/Communication/ Utilities 878,190 Wholesale Trade 194,389 Retail Trade 6,190,793 Restaurants/Bars 703,915 Insurance/Real Estate 830,953 Hotels/Lodging 266,437 Services 464,107 All Other 307,314 Total $ 12,458,974 Fiscal Year 2005 Percentage Tax Paid of Total Fiscal Year 2006 Percentage Tax Paid of Total 18.20% 2.85% $ 2,187,722 497,382 15.36% 3.49% $ 3,164,234 599,880 7.05% 1.56% 49.69% 5.65% 6.67% 2.14% 3.73% 2.47% 1,220,019 195,610 7,027,208 923,817 1,485,089 275,550 373,228 59,128 8.56% 1.37% 49.33% 6.49% 10.43% 1.93% 2.62% 0.42% 1,470,192 211,865 8,377,108 1,021,869 1,732,572 316,538 427,755 328,240 17.93% 3.40% 0.00% 8.33% 1.20% 47.46% 5.79% 9.82% 1.79% 2.42% 1.86% 100.00% $ 14,244,753 100.00% $ 17,650,253 100.00% Source: Arizona State Department of Revenue Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue. Information prior to 2004 is not available. *Construction sales tax rate changed from 1.8% to 4% effective June 15, 2006 111 Fiscal Year 2007 Percentage Tax Paid of Total $ 8,405,855 * 624,116 1,762,783 271,980 8,778,705 1,027,918 2,122,802 348,177 521,470 968,878 33.85% 2.51% 0.00% 7.10% 1.10% 35.35% 4.14% 8.55% 1.40% 2.10% 3.90% $ 24,832,684 100.00% To Table of Contents Schedule 7 City of Casa Grande, Arizona Direct and Overlapping Sales Tax Rates 6/30/2007 City Rates State and Pinal County (3) Combined Privilege tax, except retail, utilities and telecommunication 1.80% 6.60% 8.40% Retail 2.00% 6.60% 8.60% Retail - privilege tax for single item over $5000 1.50% 6.60% 8.10% Hotel/Motel 3.80% 6.60% 10.40% Restaurant/Bar 1.80% 6.60% 8.40% Utilities/Telecommunications 2.00% 6.60% 8.60% Construction * 4.00% 6.60% 10.60% Type of Tax Sources: City of Casa Grande Finance Department and Arizona Department of Revenue *Changed from 1.8% effective 6/15/2006 112 To Table of Contents Schedule 8 City of Casa Grande, Arizona Ratios of Outstanding Debt by Type, Last Ten Fiscal Years Fiscal Year General Obligation Bonds 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1,335,000 1,335,000 1,790,000 Street & Hwy User Revenue Bonds 785,000 410,000 - Governmental Activities Excise Tax Special Revenue Assessment Obligations Bonds 5,480,000 10,280,000 9,870,000 9,435,000 8,980,000 8,495,000 8,138,000 7,688,583 7,217,943 6,721,488 595,000 280,000 1,170,000 955,000 870,000 780,000 685,000 585,000 480,000 370,000 Capital Leases 391,382 463,944 1,042,071 1,130,019 761,093 566,744 1,236,062 4,485,933 4,029,980 3,754,188 Mortgages 265,000 119,472 - Notes: Details regarding the City's outstanding debt can be found in the financial statements. (a) See Schedule 13 for personal income and population data. Personal income is based on Pinal County information. 113 - To Table of Contents Business-type Activities Excise Tax Revenue Capital Notes Obligations Leases Payable 9,835,000 9,320,000 8,785,000 8,220,000 7,625,000 7,005,000 15,926,820 15,426,237 14,911,877 14,388,332 672,214 605,180 638,216 1,162,818 787,125 459,286 404,534 593,795 408,291 295,899 203,193 178,170 178,170 177,300 168,069 158,520 Total Primary Government Percentage of Personal Income (a) Per Capita (a) 17,758,596 21,359,124 21,770,287 21,022,309 19,226,411 17,484,200 26,568,586 30,291,848 28,551,160 27,478,427 4.94% 5.56% 4.84% 4.33% 3.94% 3.21% 4.32% 4.22% 3.59% 3.12% 794.92 921.65 821.83 755.79 704.52 588.40 848.43 884.18 783.30 708.48 114 To Table of Contents Schedule 9 City of Casa Grande, Arizona Ratio of General Bonded Debt Outstanding Last Three Fiscal Years Fiscal Year General Obligation Bonds Estimated Actual Value of Property (a) Percentage of Estimated Actual Value of Property 2005 $ 1,335,000 $ 1,942,707 68.72% 2006 1,335,000 8,183,338 16.31% N/A 2007 1,790,000 39,939,824 4.48% 1,584 General Bonded Debt Per Capita (b) $ N/A (a) Source: Pinal County Assessor's records (b) Population of Mission Royale CFD 6/30/07 1,130 Population of Villago CFD 6/30/07 Provided by Sales Office. No population data are available for prior years Note: The general obligation bonds were issued by the Mission Royale Community Facilities District in 2005 and the Villago Community Facilities District in 2006. These bonds will be repaid by the property owners within the CFDs and are obligations of the districts only. 115 To Table of Contents Schedule 10 City of Casa Grande, Arizona Direct and Overlapping Governmental Activities Debt As of June 30, 2007 Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt $ 160,420,000 14.93% $ 23,950,365 School District #4 26,245,000 67.28% 17,656,681 School District #82 26,335,000 54.45% 14,339,457 Central Arizona Community College 18,685,000 14.21% 2,654,666 1,335,000 100.00% 1,335,000 455,000 100.00% 455,000 Governmental Unit Pinal County Mission Royale CFD Villago CFD Subtotal, overlapping debt 59,936,170 City direct debt 10,845,676 $ 70,781,846 Total direct and overlapping debt Sources: Assessed value data used to estimate applicable percentages provided by Pinal County Assessor's Office. Debt outstanding data provided by each governmental unit. Notes: 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 Casa Grande. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire 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 Pinal County's taxable assessed value that is within the government's boundaries and dividing it by the County's total taxable assessed value. 116 To Table of Contents Schedule 11 City of Casa Grande, Arizona Legal Debt Margin Information June 30, 2007 Utility Purpose and Open Space 20% Assessed value $ 219,790,300 $ General obligation debt Legal debt margin 43,958,060 - $ 43,958,060 Note: No retroactive reporting of the legal debt margin is provided because the City has had no general obligation debt since 1997. 117 To Table of Contents Schedule 12 City of Casa Grande, Arizona Pledged-Revenue Coverage Last Ten Fiscal Years Special Assessment Bonds Fiscal Year Special Assessment Collections 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 465,175 447,993 204,394 308,629 290,054 174,365 137,642 217,895 354,840 28,907 Debt Service Principal Interest 372,500 232,500 142,500 215,000 85,000 90,000 95,000 100,000 105,000 110,000 65,725 37,553 25,320 37,785 51,570 56,147 42,120 36,990 31,590 25,920 Excise Tax Revenue Obligations Coverage Pledged Revenue Collected (a) 1.06 1.66 1.22 1.22 2.12 1.19 1.00 1.59 2.60 0.21 15,496,416 18,037,441 19,967,133 23,176,964 22,402,363 23,444,022 25,645,893 29,267,707 37,727,237 44,984,571 Debt Service Principal Interest Not Available 715,000 945,000 1,000,000 1,050,000 1,105,000 1,165,000 950,001 985,000 1,020,000 Coverage Not Available 865,073 1,058,859 1,010,013 957,807 901,980 594,321 1,054,202 1,022,252 987,632 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (a) The 1997, 1999 and 2003 revenue obligations are secured by a pledge of and first lien on all excise, transaction, franchise, privilege and business taxes, state shared sales and income taxes, fees for licenses and permits and state revenue sharing which the City presently or in the future validly imposes or receives from other entities. 118 11.42 9.96 11.53 11.16 11.68 14.58 14.60 18.80 22.41 To Table of Contents Schedule 13 City of Casa Grande, Arizona Demographic and Economic Statistics, Last Ten Fiscal Years Fiscal Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Population 22,340 23,175 26,490 27,815 27,290 29,715 31,315 34,260 36,450 38,785 County Per Capita Personal Income 16,099 16,563 16,994 17,436 17,889 18,354 19,646 20,959 21,800 22,672 Total Personal Income School Enrollment Unemployment Rate 359,651,660 383,847,525 450,171,060 484,982,340 488,190,810 545,389,110 615,214,490 718,055,340 794,610,000 879,333,520 7,079 7,241 7,442 7,680 7,784 7,895 8,120 8,930 9,049 10,290 3.80% 4.00% 3.90% 4.20% 6.80% 6.20% 5.00% 5.20% 5.10% 4.30% Sources: Population, County Per Capita Income and City Unemployment Rate - Arizona Department of Commerce and Arizona Department of Economic Security. School Enrollment - Casa Grande Elementary and Casa Grande Union High School Districts. 119 To Table of Contents Schedule 14 City of Casa Grande, Arizona Principal Employers, Current Year and Seven Years Ago Employer Casa Grande Regional Medical Center Casa Grande Elementary School District Wal-Mart Distribution Center Wal-Mart Supermarket Frito-Lay Inc. Abbott Laboratories/Ross Products Hexcel Corporation City of Casa Grande Mobile-Mini Palm Harbor Homes 2007 (a) Percentage of Total City Employees Employment 2000 (b) Percentage of Total City Employees Employment 1,000 890 569 489 450 425 365 379 300 200 6.00% 5.34% 3.41% 2.93% 2.70% 2.55% 2.19% 2.27% 1.80% 1.20% 788 625 302 397 562 251 200 5.70% 4.52% 0.00% 0.00% 2.19% 2.87% 4.07% 1.82% 0.00% 1.45% 5,067 30.39% 3,125 22.62% Sources: (a) Casa Grande Valley Economic Development Foundation; various employers; AZ Dept of Economic Security (b) Casa Grande Valley Economic Development Foundation, July 2000; AZ Dept of Economic Security Note: July, 2000 is the earliest year for which both employer and labor force information are available. 120 To Table of Contents Schedule 15 City of Casa Grande, Arizona Authorized City Government Employee Positions by Function/Program Last Ten Fiscal Years Function/Program Fiscal Year General Government Police, City Attorney and Court 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 17.5 17.5 22 24.5 26 22.75 23 24 26 30 85.5 86.5 88.5 91.5 93.5 98.5 97.5 103.5 107.5 123.05 Fire Culture and Recreation Planning and Development Public Works Total 24 25 27 27 30 33 37 38 41 54.75 37 37 39 43 43 44 44 44 44 48 14.75 15.75 15.75 16 17 17 17 19 22 26.5 60.5 62 61 66 76 80 80 79 84.25 96.25 239.25 243.75 253.25 268.00 285.50 295.25 298.50 307.50 324.75 378.55 Source: City Budget Note: Information is based on authorized positions. 121 To Table of Contents Schedule 16 City of Casa Grande, Arizona Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program General government Registered voters Votes cast last primary election Fire Medical support calls Total alarms Inspections/investigations Public education contacts Police Calls for service Officer initiated Patrolled miles Traffic accidents Traffic citations Arrests (adult and juvenile) Culture and recreation - library (a) Items in collections Reference questions Total items circulated Total circulation transactions Economic development Building permits - commercial Building permits - residential Self-help homes completed Self-help homes started Housing rehabilitations Code enforcement cases Planning cases 1998 Fiscal Year 1999 2000 2001 2002 2003 Fiscal Year 2004 2005 2006 2007 9,973 1,741 9,987 1,307 11,441 2,367 11,441 2,367 11,441 2,367 13,685 1,242 13,685 1,242 15,919 1,428 13,239 1,428 13,946 2,364 1,798 2,540 479 10,643 1,873 2,790 340 6,661 2,087 3,128 276 7,501 2,426 3,281 415 8,582 2,578 3,447 222 10,018 2,774 3,697 305 11,386 3,085 4,136 524 7,344 3,427 4,557 487 11,764 3,766 5,137 390 8,884 3,778 5,194 986 10,164 28,596 26,788 26,019 27,602 29,705 33,076 37,674 38,869 39,365 42,412 104,357 98,206 59,332 63,362 71,814 68,677 69,588 69,412 69,936 72,028 676,328 657,807 649,745 654,370 700,884 671,030 716,138 702,062 706,375 802,935 1,107 791 817 853 796 886 928 1,046 1,213 1,121 8,840 9,216 9,163 10,561 9,495 8,408 8,607 7,068 6,127 6,136 3,736 4,228 4,785 4,338 4,673 4,773 4,387 4,614 4,055 3,840 100,000 95,610 94,523 99,414 100,619 100,655 90,826 86,364 73,984 74,311 37,482 18,229 17,199 18,912 22,647 18,940 5,776 6,415 14,959 80,950 192,101 380,942 332,691 422,063 374,840 149,210 52,240 51,915 49,718 73,079 228,876 799,622 391,308 733,582 734,852 825,000 172,391 170,875 187,063 225,043 289 569 22 18 46 407 72 274 892 20 8 12 303 98 271 1,003 8 16 13 670 155 279 1,446 16 24 17 617 78 256 1,333 24 23 13 675 61 262 1,639 23 15 16 724 114 Sources: Various City departments Note: (a) In 2004 the library implemented a new system that tracks information more accurately. In 2007 the library changed Reference questions to include information transactions 122 262 1,983 22 13 12 660 161 273 2,565 6 26 9 1,059 154 339 3,501 20 27 12 1,704 334 143 1,454 25 25 12 984 193 To Table of Contents Schedule 17 City of Casa Grande, Arizona Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program Fire stations Parks and recreation Park areas Parkland acreage Community centers Golf courses Playgrounds Other maintenance areas Airport T-hangers T-shades Public works Total number of streetlights Miles of streets Miles of sewer Number of lift stations Number of signalized intersections 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2 2 2 3 3 3 3 3 3 3 25 2,152 2 1 19 38 25 2,152 2 1 19 38 25 2,152 2 1 19 38 25 2,152 3 1 19 71 24 1,787 4 1 19 85 23 1,783 4 1 20 85 24 1,790 4 1 22 85 24 1,370 4 1 22 85 24 1,370 4 1 24 87 25 1,371 4 1 24 88 22 18 22 18 22 18 22 18 22 18 52 18 52 18 52 18 52 18 52 18 1,283 228 153 7 18 1,315 237 104 7 18 1,336 243 105 10 25 1,525 243 108 10 26 1,638 307 121 10 26 1,638 307 121 10 27 1,893 321 145 10 27 2,011 354 160 10 27 2,217 375 300 9 31 7,130 375 375 9 31 Sources: Various City departments 123 To Table of Contents SINGLE AUDIT REPORTS To Table of Contents To Table of Contents To Table of Contents To Table of Contents To Table of Contents