To Table of Contents City of Casa Grande, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2008 To Table of Contents City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2008 Prepared by the Finance Department Diane Archer, Finance Director To Table of Contents 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 .................................................................................................................... 12 13 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 ................................................................................................. 15 17 18 20 21 22 23 24 25 26 27 Proprietary Fund Financial Statements Statement of Net Assets ............................................................................................................. Statement of Revenues, Expenses and Changes in Fund Net Assets ......................................... Statement of Cash Flows............................................................................................................ 28 30 32 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets............................................................................................. Statement of Changes in Fiduciary Net Assets .......................................................................... i 36 37 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. Deficit in Net Assets...................................................................................................... Page 38 49 52 53 53 54 54 56 61 61 63 64 66 66 67 67 69 SUPPLEMENTARY INFORMATION – COMBINING FUND FINANCIAL STATEMENTS Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........... 70 72 Fiduciary Funds Combining Statement of Fiduciary Net Assets................................................................... Combining Statement of Changes in Assets and Liabilities – All Agency Funds .............. 74 75 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund Legal Level Compliance…………………… 76 Budgetary Comparison Schedules – Other Major Governmental Funds Special Assessment Debt Service Fund.............................................................................. Capital Replacement/Development Fund ........................................................................... Community Facilities Districts Capital Projects Fund........................................................ 77 78 79 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 80 81 82 83 84 85 86 To Table of Contents TABLE OF CONTENTS (continued) SUPPLEMENTARY INFORMATION (continued) Page 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....................................................................... 87 88 89 90 91 Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch.............................................................................................. Wastewater .................................................................................................................. Wastewater Development Fees ................................................................................... Sanitation..................................................................................................................... Golf Course ................................................................................................................. 92 93 94 95 96 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule of Changes by Function and Activity.................................................................. 97 98 Schedule of Expenditures of Federal Awards.............................................................................. 99 III. STATISTICAL SECTION Schedule Index.................................................................................................................................. Net Assets by Component – Last Six Fiscal Years ........................................................... Changes in Net Assets, Governmental - Last Six Fiscal Years ......................................... Changes in Net Assets, Business-type - Last Six 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 Four 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 Four 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 Eight 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Page 101 102 103 104 105 107 109 110 111 113 114 115 116 117 118 15 16 17 119 120 121 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 122 124 126 To Table of Contents City of Casa Grande November 7, 2008 Honorable Mayor, City Council, City Manager Citizens of Casa Grande, Arizona We are pleased to submit to you the fiscal year ended June 30, 2008 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 are sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies with an expressed 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 at www.casagrandeaz.gov. 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 established and maintains a comprehensive internal control framework designed to both 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 are 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). Henry & Horne, L.L.P. audits the City of Casa Grande, Arizona’s financial statements. The audit 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, 2008, 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, 2008, 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, 2008, 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. 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 102 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 2009. 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 2007 the City’s population increased by 68%, from approximately 25,224 to 42,422. The City’s growth these past seven 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, airport, golf course 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. 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. vi To Table of Contents 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) on page 40 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. 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 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, attract new revenue, and expand/maintain the community revenues essential to sustaining Casa Grande and improving the qualityof-life. vii To Table of Contents Local indicators point to continued stability. Casa Grande continues to witness a sustained, but lower number of issued building permits. While the City has witnessed strong growth in residential building permits the past three years, the current fiscal year brought anticipated slowing of the residential housing construction market. However, it also brought a recognized shift to non-residential building permits. The City documented 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 expands 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 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’s 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 51% of General Fund revenues. The City’s sales tax is currently at 1.8%, with an additional .2% pledged as collateral for the retirement of debt obtained to complete park and recreation construction projects. This .2% component of the tax rate is scheduled to “sunset” when the debt is retired. Management is projecting the city’s sales tax to decrease by 24% this next year due to a decrease in commercial development and a slow economic recovery. 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 source is expected to decrease by .31% this next year due to the economic downturn. The State has indicated negative 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 .8774 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. Net secondary valuation within the City has increased by approximately 60% since fiscal year 2004. 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. Eleven million was issued in fiscal year 2008. The secondary tax levy beginning in fiscal year 2009 is .6308. MAJOR INITIATIVES AND ACCOMPLISHMENTS In 2008 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 14th annual “National Night Out” celebration. Received 40,539 radio calls for service. Officer initiated calls were 69,500. viii To Table of Contents Fire o o o o o Responded to 5,642 emergencies of which 4,286 (76%) involved emergency medical services, averaging a response time for all incidents of 5 minutes 55 seconds. Maintained a department commitment for excellence in public education by initiating in excess of 19,801 public contacts. Secured grant funding from Office of Domestic Preparedness for equipment on the response vehicle. 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 Cleaned 276,827 feet of the wastewater collection system. o Replaced and installed 395 signs throughout the City. o Installed several new handicap ramps throughout City as warranted. o Conducted preventative maintenance on all traffic signals. . o Added an additional residential and commercial sanitation route. o Collected 3,628 tons of recycling material. o Open north fueling site. Community Services o Provided swimming classes to 45,078 participants. 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 participation by 12%. o Increased literacy resources through a tutoring program, a bookmobile and a 6% increase in literacy collections. o Prepared or delivered 48,798 senior meals. o Increased the lifelong learning materials by 20%. o Maintained 1,376 acres of parkland. Community Development o Code Enforcement implemented weed abatement program. o Deployed a centralized software system which is accessible to builders via the web. o Created plaza area in alleyway, bringing history into the alley through a variety of artistic designs. o Made the development application process available through the web. 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, 2008, the City had a number of debt issues outstanding. Total bonded debt at June 30, 2008, was $13,030,000. This amount includes one issue of special assessment debt with government commitment. The amount also includes the $11,000,000 in voter approved General Obligation Debt issued in June, 2008. 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 amount of principal outstanding at June 20, 2008 for excise tax revenue obligations is $20,054,820. The City’s general credit was rated A+ by Fitch Ratings and received an A- rating from Moody’s. ix To Table of Contents 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 General Obligation Bonds Moody’s Investor Service Baa3 Fitch IBCA - Aaa 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, 2008, the City had $20,054,820 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, 2008, the City has debt capacity of $83,317,084 for general obligation bonds subject under the 20% limitation based on the FY 2009 secondary assessed valuation. 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 2007/2008 fiscal year. The yield for the investment account averaged 3.5 percent for the fiscal year. At June 30, 2008, the Pool consisted of $2.2 billion in total local government deposits, which included $136 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 $713,312. 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. x To Table of Contents 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, 2007. This was the seventeenth 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, 2007. 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 tenth 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, Diane Archer Finance Director xi To Table of Contents xii To Table of Contents CITY COUNCIL ROBERT M. JACKSON, MAYOR DICK POWELL STEPHEN Q. MILLER MARY KORTSEN RALPH VARELA KARL MONTOYA MATT HERMAN CITY MANAGER JAMES THOMPSON FINANCE DEPARTMENT STAFF DIANE ARCHER JANICE RUTHERFORD FINANCE DIRECTOR SUPERVISING ACCOUNTANT xiii To Table of Contents City of Casa Grande Organizational Chart People of Casa Grande Mayor and Council City Manager City Attorney Police Department Animal Control Fire Department Deputy City Manager Public Works Administrative Services Engineering Wastewater Sanitation City Clerk City Court Finance Department Development Center Community Services Human Resources Financial Services Planning and Development Library Risk Management Information Systems Housing Improvement Senior Adult Services Geographical Information System Building Inspection Parks Maintenance Public Information Officer Equipment Maintenance Recreation Programs Streets Len Colla Center Water Aquatics Airport Women's Club Facilities Maintenance Golf Course General Recreation 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, 2008. 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 12 and the accompanying notes to the financial statements. Financial Highlights ƒ The City’s total net assets, on the government-wide basis, totaled $312 million at June 30, 2008, of which $37 million is unrestricted. This was an increase of $49 million in fiscal year 2008, $44 million in governmental activities and $5 million in business-type activities. ƒ The governmental activities revenues increased by approximately $1.5 million over the previous year. ƒ The business-type activities operating revenues decreased by $34 thousand from the previous year. ƒ The General Fund reported revenues in excess of expenditures and other financial sources and uses by $7.3 million for the year. ƒ At June 30, 2008, unreserved fund balance for the General Fund was $30.6 million, or 92% of General Fund expenditures for fiscal year 2008. ƒ At June 30, 2008, unreserved fund balance of the governmental funds was $80.5 million, or 153% of governmental fund expenditures for fiscal year 2008. ƒ The governmental activities general revenues of $71.9 million were $19.4 million more than the $52.5 million of expenditures before other financial sources and uses. ƒ The business-type activities net assets were $59.7 million as of June 30, 2008, which is an increase of $5.5 million from the previous year. OVERVIEW OF THE FINANCIAL STATEMENTS Required Components of the Annual Financial Report Management’s Discussion and Analysis GovernmentWide Financial Statements Basic Financial Statements Required Supplementary Information Fund Financial Statements Notes to the Financial Statements Summary Detail 3 Other Supplementary Information To Table of Contents Government-wide Financial Statements The government-wide financial statements (see pages 12-14) 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. 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 17 and 20, 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 4 To Table of Contents 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 38-69) 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. 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, 2008. 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, 2008 compared to the prior year. Condensed Statement of Net Assets (in Millions) Current and other assets Capital assets Total assets Other liabilities Long-term liabilities Total liabilities Net assets: Invested Capital assets net of related debt Restricted Unrestricted Total net assets Governmental Activities 2007 2008 Business-type Activities 2007 2008 Total Primary Government 2007 2008 $ 90.6 134.0 224.6 $120.5 156.1 276.6 $27.2 44.4 71.6 $29.7 49.0 78.7 $117.8 178.4 296.2 $150.2 205.1 355.3 5.0 11.7 16.7 5.2 19.5 24.7 1.4 16.0 17.4 1.6 17.4 19.0 6.4 27.7 34.1 6.8 36.9 43.7 121.4 61.6 24.9 $207.9 144.5 77.4 29.9 $251.8 29.5 15.3 9.4 $54.2 33.2 19.3 7.2 $59.7 150.9 76.9 34.3 $262.1 177.7 96.7 37.1 $ 311.5 5 To Table of Contents The net assets of the City increased by $50 million (19%) from June 30, 2008. At year end June 30, 2008 the net assets of the City totaled $311.5 million. Of this $311.5 million, $251.8 million was in the governmental activities, a 21% increase and $59.7 million was in the business-type activities, a 10% increase. Net Assets consist of three components. The largest portion of net assets ($177.7 million or 57%) 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. The second portion of the City’s net assets ($96.7 million or 31%) 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 ($37.1 million or 12%), 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, 2008 were $108,492,489. The total cost of all programs and services was $59,102,906. The following table presents a summary of the changes in net assets for the year ended June 30, 2008. 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 2008 Business-type Activities 2007 2008 Total 2007 2008 $21,599 9,067 14,852 $14,470 9,303 22,403 $11,944 2,130 $11,950 2,581 $33,543 9,067 16,982 $26,420 9,303 24,984 2,475 22,709 1,512 8,879 5,343 86,436 3,106 28,083 1,687 9,776 4,044 92,872 2,124 1,241 17,439 1,075 15,620 2,475 24,833 1,512 8,879 6,584 103,875 3,106 28,097 1,687 9,776 5,119 108,492 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 6,958 17,800 10,615 1,653 5,854 5,932 642 49,454 115 1,108 5,413 3,903 10,539 118 968 4,522 4,041 9,649 5,196 14,766 9,650 2,145 5,248 5,565 610 115 1,108 5,413 3,903 53,719 6,958 17,800 10,615 1,653 5,854 5,932 642 118 968 4,522 4,041 59,103 Excess before transfer Transfers In (Out) Increase in Net Assets 43,256 450 $43,706 43,418 526 $43,944 6,900 (450) $6,450 5,971 (526) $5,445 50,156 $50,156 49,389 $49,389 6 14 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 2008. This compares to 80.6% of total revenues and 82.0% of expenses in fiscal year 2007. Governmental Programs Revenues and Expenses $3 0,000,000 $2 5,000,000 $2 0,000,000 Revenues Expenditures $1 5,000,000 $1 0,000,000 $ 5,000,000 $0 General G overnment Public safety Streets/Transportation Public works Culture & recreation Economic de velopment 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 15-27) 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 70-73. For fiscal year ended June 30, 2008, the governmental funds reflect a combined fund balance of $115.9 million, an increase of $29.7 million. Of this, $35.4 million is reserved because it is not appropriate for expenditure or is legally segregated for a specific future use. The remaining $80.5 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. 7 To Table of Contents The following graph indicates fund balances for select governmental funds for the past two fiscal years. Governmental Fund Balances $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 General Streets System Development 2007 Capital Other 2008 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 $40.7 million, an increase of $2.6 million, in fiscal year 2007-2008. The primary increase is from local sales tax revenues. The expenditures, before other financing sources and uses, totaled $33.3 million, an increase of $5 million. The increase in fund balance is because expenditures were greater than revenues. 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 $6.4 million, a decrease of $.4 million, while expenses totaled $5.3 million, an increase of $.7 million in fiscal year ended June 30, 2008. The decrease in revenues is a result of a weaker county sales tax base and fewer investment earnings. Another governmental fund of the City is the System Development Fee Fund which collects governmental impact fees for public safety, parks and recreational facilities, library facilities, and general government. The fund balance increased in this fund to finance planned capital improvements over the next several years. The Capital Development and Replacement Fund accounts for accumulated proceeds and capital expenditure of those proceeds for the construction of capital projects. The fund balance increased in this fund due to the sale of General Obligation Bonds in the amount of $9,000,000 to finance capital projects in the next couple fiscal years. Other governmental funds include the Grants Fund which accounts for the various state and federal grants 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 8 To Table of Contents 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 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. 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 $59.7 million, an increase of $5.5 million as of June 30, 2008. 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 2007-2008 were $12.0 million, no change from the prior fiscal year, while operating expenses totaled $9.0 million, a decrease of $.8 million, resulting in $3,021,088 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 21. 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 45 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 2008. 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 $40.7 million, on a budgetary basis, were less than budgeted inflows of $40.9 million by $.2 million (.5%) while actual outflows (expenditures and other uses) of $33.3 million were only 82% 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 cost savings derived from Department operational efficiencies. 9 To Table of Contents CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2008, the City had $205 million invested in various capital assets, net of accumulated depreciation, up $48.9 million. Of the $205 million $156 million (76%) is invested in governmental activities and $49 million (24%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following: 9 9 9 9 9 9 9 9 9 9 Completed construction on a regional dog park for a total cost of $74,300. Completed the downtown streets reconstruction project for a total cost of $2,722,990. Purchased a fire department platform tower truck in the amount of $1,039,653. Completed the Kiwanis park project for a total cost of $220,036. Leased property at Central Arizona College Casa Grande location and constructed a teen center with a capital project cost of $95,110. Purchased two Broom Bear street sweepers and a motor grader for the streets department for a total cost of $629,930. Constructed apron design and improvement at the municipal airport using FAA funds in the amount of $938,005. Began the golf course irrigation renovation project. Work in progress amounted to $1,268,372. Began construction of the wastewater treatment plant expansion phase 3. Work in progress amounted to $1,748,370. Began construction of three sewer projects. Work in progress amounted to $433,942. The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2008. Additional information on the City’s capital assets may be found in Note 7 on pages 54-56. Capital Assets (In Thousands) Governmental Activities 2007 2008 Land & Const. in progress Building and improvements Machines and equipment Total $ 9,979 118,884 5,170 $134,033 $ 13,089 134,080 8,915 $156,084 Business-type Activities 2007 2008 $ 283 40,196 3,909 $44,388 $ 3,734 42,118 3,093 $48,945 Total 2007 2008 $ 10,262 159,080 9,079 $178,421 $ 16,823 176,198 12,008 $205,029 Long-Term Debt The City’s outstanding long-term debt, including bonds, notes, contracts, and compensated absences, was $37.6 million at June 30, 2008, with $2.6 million due in one year. Of this total, $21.3 million was in governmental activities and $16.3 million was in business-type activities. Of the outstanding debt, $20 million is excise tax revenue obligation bond collateralized by the City’s excise tax stream. An additional $255,000 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, 2008. Further details can be found in Notes 10, 11, 12, 13, & 14 on pages 61-66. 10 To Table of Contents Outstanding Debt (In Thousands) Governmental Activities 2008 2007 Compensated absences Capital leases Bonds payable Notes payable Total $ 764 3,754 8,882 $13,400 Business-type Activities 2008 2007 $ 881 3,180 17,229 $21,290 $ 91 296 14,388 159 $14,934 $ 112 179 15,856 149 $16,296 Total 2008 $ 855 4,050 23,270 159 $28,334 2007 $ 993 3,359 33,085 149 $37,586 ECONOMIC FACTORS Casa Grande’s population has grown steadily since 2000. The growth rate over the course of the past 7 years has been 68% and is expected to be 2% in 2009. The unemployment rate in Casa Grande for June 2008 was 6.1%, which is slightly higher than the state (4.8%) and higher than the national average (5.5%). 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 opened with of 550,000 square foot of retail establishments in midNovember 2007. As of November, 2008, the mall has 883,000 square feet of retail space. It is anticipated retail sales will replace the slowing construction markets in the local tax base. The regional economy is slow 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 326% overall increase from 2000 to 2009. This is largely due to the new housing development. Residential value in 2008 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: City of Casa Grande, 510 E. Florence Blvd. Casa Grande, AZ 85222 or send an e-mail to darcher@casagrandeaz.gov. 11 To Table of Contents BASIC FINANCIAL STATEMENTS To Table of Contents City of Casa Grande, Arizona Statement of Net Assets June 30, 2008 Governmental Activities $ 4,199,435 96,770,260 7,672,956 2,118,982 374,251 ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Due from other governments 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 2003/2008 issue Less: Deferred amount on refunding Closure and postclosure liability Total liabilities Primary Government Business-type Activities Total $ 857,368 $ 5,056,803 27,506,074 124,276,334 227,080 7,900,036 2,118,982 9,883 384,134 8,993,081 381,569 785,217 320,952 9,778,298 702,521 13,088,756 3,733,683 16,822,439 142,994,911 276,594,201 45,211,097 78,651,354 188,206,008 355,245,555 2,619,192 492,715 148,561 132,173 517,169 14,825 66,669 159,843 - 3,136,361 14,825 559,384 308,404 132,173 880,353 271,195 543,900 135,000 112,243 131,549 551,100 - 992,596 402,744 1,095,000 135,000 2,909,162 5,655,318 10,895,000 127,568 (38,303) 24,771,834 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 2,966,952 138,427 18,959,820 12,895,000 483,672 (234,467) 1,779,961 43,765,852 144,539,605 33,189,049 177,728,654 9,045,987 1,063,776 43,518,034 3,614,535 20,110,100 29,930,330 $251,822,367 19,276,562 7,191,725 $59,657,336 9,045,987 1,063,776 43,518,034 3,614,535 39,386,662 37,122,055 $311,479,703 The accompanying notes are an integral part of the financial statements 12 57,790 138,427 13,304,502 2,000,000 356,104 (196,164) 1,779,961 18,994,018 To Table of Contents City of Casa Grande, Arizona Statement of Activities For the Year Ended June 30, 2008 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 Business-type activities: Water Golf course Wastewater Sanitation Total business-type activities Total primary government Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Expenses $ 6,958,153 17,799,896 10,614,899 1,652,940 5,853,610 5,932,564 641,914 49,453,976 $ 144,550 1,214,170 1,345,035 100,784 378,268 11,287,725 14,470,532 117,638 967,750 4,522,025 4,041,517 9,648,930 190,125 797,501 5,972,329 4,990,169 11,950,124 $59,102,906 $26,420,656 $ 2,983 127,823 6,384,928 501,901 2,285,406 9,303,041 $ 151,649 22,121,516 129,789 22,402,954 $9,303,041 2,580,813 2,580,813 $24,983,767 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 Net assets-ending The accompanying notes are an integral part of the financial statements 13 To Table of Contents Net (Expense) Revenue and Changes in Net Assets Governmental Activities Business-type Activities $ $ (6,810,620) (16,306,254) 19,236,580 (1,552,156) (4,843,652) 7,640,567 (641,914) (3,277,449) ($3,277,449) 3,105,864 28,082,890 1,687,014 2,984,122 4,592,697 2,199,266 3,202,760 452,693 388,409 525,942 47,221,657 43,944,208 207,878,159 $251,822,367 - 72,487 (170,249) 4,031,117 948,652 4,882,007 Total $ (6,810,620) (16,306,254) 19,236,580 (1,552,156) (4,843,652) 7,640,567 (641,914) (3,277,449) 72,487 (170,249) 4,031,117 948,652 4,882,007 $4,882,007 $1,604,558 14,203 - 3,105,864 28,097,093 1,687,014 919,273 155,834 (525,942) 563,368 5,445,375 54,211,961 $59,657,336 2,984,122 4,592,697 2,199,266 4,122,033 452,693 544,243 47,785,025 49,389,583 262,090,120 $311,479,703 14 To Table of Contents City of Casa Grande, Arizona Balance Sheet Governmental Funds June 30, 2008 ASSETS Cash Investments Accounts receivable (less allowance for uncollectibles) Due from other governments Due from other funds Inventories Restricted assets: Cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities 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 Total liabilities and fund balances General $ 3,628,805 25,168,457 Highway Users $ 1,161 8,133,523 System Development $ 37,225,519 Grants & Subsidies $ 1,871 44,080 6,051,933 441,000 13,532 701,146 - 150,566 - 471 296,350 - 575,052 262,822 - $35,303,727 $8,835,830 $37,376,085 $342,772 $1,006,596 59,915 59,915 $ 110,433 1,344 251,831 363,608 $ 1,553,993 434,087 189,358 5,696 2,183,134 $ 2,511,678 36,443 28,688 22,897 361 51,946 $ - - 30,572,472 33,120,593 8,783,884 8,783,884 37,316,170 37,316,170 $35,303,727 $8,835,830 $37,376,085 The accompanying notes are an integral part of the financial statements 15 $ $ CDBG 168,722 - 450,536 450,536 - 556,060 - (20,836) (20,836) 556,060 $342,772 $1,006,596 To Table of Contents Self-help Technical Assistance $ 830 - $ Home/HUD $ 4,816 - Special Assessments $ 31,538 1,084,061 Capital Replacement/ Development $ 32,019 18,697,271 82,732 - 365,460 - 30,822 - 87,619 823,620 - 1,441 - 73,906 287,998 76,619 7,672,956 2,118,982 441,000 90,151 $83,562 $370,276 $1,146,421 8,890,992 $28,531,521 102,089 $113,859 $7,151,216 8,993,081 $120,261,865 68,842 68,842 962 962 28,462,679 112,897 2,787 3,232 71,000 82,731 159,750 - $ 276 370,000 279,097 649,373 - $ 26,247 26,247 1,120,174 - $ - Community Other Facilities Districts Governmental Capital Projects Funds $ 10,329 $ 295,344 6,417,349 236,692 4,095 316,720 2,513,124 465,655 441,000 905,197 6,057 4,331,033 28,449 2,616,674 - 2,511,678 584,509 3,736,848 28,612,019 30,572,472 49,835,900 77,406 115,930,832 $120,261,865 75,933 (76,188) (76,188) (279,097) (279,097) 1,120,174 28,462,679 112,897 4,111,967 77,406 6,834,496 $83,562 $370,276 $1,146,421 $28,531,521 $113,859 $7,151,216 16 - $ Total Governmental Funds $ 4,175,435 96,770,260 $ To Table of Contents City of Casa Grande, Arizona Reconciliation of the Balance Sheet to the Statement of Net Assets Governmental Funds June 30, 2008 Fund balance - total governmental funds balance sheet $115,930,832 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 222,930,086 (67,009,628) 372,724 (209,515) 156,083,667 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 (880,353) (3,180,357) (17,229,218) 381,569 38,303 (127,568) (20,997,624) Deferred revenue is shown on the governmental funds, but is not deferred on the statement of net assets. Special Assessments Property Tax Grant Revenue 26,248 57,185 689,594 773,027 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 17 (148,561) 181,026 $251,822,367 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, 2008 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: Bond issuance costs Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Bond issuance Bond premium Sale of land Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Highway Users General $ 2,520,236 20,861,853 1,687,014 1,881,951 9,776,085 1,726,480 815,081 970,128 2,510 160,679 256,087 40,658,104 $ 6,092,742 282,926 65,464 6,441,132 System Development $ Grants & Subsidies 8,272,278 1,274,721 9,546,999 $ 1,684,186 2,313 23,915 1,710,414 CDBG $ 518,761 88,868 607,629 6,665,135 16,755,693 1,684,699 4,529,708 2,461,291 630,453 2,323,097 67,974 2,805,330 242,258 2,472,452 188,680 582,105 587,822 979,523 608,905 - 492,219 124,624 33,343,822 62,717 58,297 5,317,415 2,714,710 2,338,130 608,905 7,314,282 1,123,717 6,832,289 (627,716) (1,276) 1,994,677 (3,668,613) (1,673,936) 5,640,346 27,480,247 $33,120,593 (846,077) (846,077) 277,640 8,506,244 $8,783,884 (1,708,872) (1,708,872) 5,123,417 32,192,753 $37,316,170 500,731 500,731 (126,985) 106,149 ($20,836) (1,276) 557,336 $556,060 The accompanying notes are an integral part of the financial statements 18 To Table of Contents Self-help Technical Assistance $ 262,309 1,106 263,415 Home/HUD $ 754,330 754,330 Special Assessments $ 29,691 39,187 68,878 Capital Replacement/ Development $ Community Facilities Districts Capital Projects 6,098,330 461,911 6,560,241 $146,782 93,592 1,940 242,314 Other Governmental Funds $ 403,748 1,122,707 1,709,997 79,540 169,634 1,386,256 170,750 5,042,632 Total Governmental Funds $ 3,070,766 28,082,890 1,687,014 1,881,951 20,798,409 10,171,890 815,081 29,691 3,202,760 26,425 1,546,935 582,275 71,896,087 339,603 - 864,818 - 1,594 - 719 2,452,081 23,238 - 1,411,226 39,134 41,826 77,782 1,690,336 8,076,361 16,983,507 2,323,097 1,684,699 5,463,871 4,965,772 11,030,175 339,603 864,818 115,000 19,980 136,574 150,721 2,603,521 116,131 139,369 556,612 288,319 4,105,235 150,721 1,226,548 607,351 52,512,102 (76,188) (110,488) (67,696) 3,956,720 102,945 937,397 19,383,986 (76,188) $ (76,188) (110,488) (168,609) ($279,097) (67,696) 1,187,870 $1,120,174 50,000 (727,077) (677,077) (574,132) 687,029 $112,897 325,000 (33,200) - 5,231,572 (500,000) 9,000,000 120,520 13,852,092 17,808,812 10,653,867 $28,462,679 19 578,989 870,789 1,808,186 5,026,310 $6,834,496 8,101,980 (7,483,839) 9,000,000 120,520 578,989 10,317,650 29,701,636 86,229,196 $115,930,832 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, 2008 Net change in fund balances - total governmental funds $29,701,636 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 Less current year depreciation 11,030,175 (9,448,881) 1,581,294 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 20,593,458 (230,046) 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 35,088 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 bond premium received. 30,201 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 Bond payments Lease payments (9,000,000) 605,000 621,101 (7,773,899) 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 (27,155) 25,825 The internal service fund net revenue is reported with governmental activities 186,140 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 Change in net assets of governmental activities (116,461) (61,873) $43,944,208 The accompanying notes are an integral part of the financial statements 20 To Table of Contents City of Casa Grande, Arizona General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2008 Budgeted Amounts 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 Administrative Services Public safety Police Fire Court Animal Control 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 Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ 2,396,100 20,850,000 1,454,000 1,995,000 9,379,900 2,984,500 824,000 710,000 153,000 181,300 40,927,800 Final $ 2,396,100 20,850,000 1,454,000 1,995,000 9,379,900 2,984,500 824,000 710,000 153,000 181,300 40,927,800 Actual Amounts $ 2,520,236 20,861,853 1,687,014 1,881,951 9,776,085 1,726,480 815,081 970,128 2,510 160,679 256,087 40,658,104 Variance with Final BudgetPositive (Negative) $ 124,136 11,853 233,014 (113,049) 396,185 (1,258,020) (8,919) 260,128 2,510 7,679 74,787 (269,696) 4,010,300 639,300 587,000 344,100 1,215,900 1,437,900 1,656,400 2,883,700 639,300 587,000 344,100 1,209,300 1,444,500 1,656,400 1,445,834 586,022 532,188 331,841 896,685 1,443,479 1,429,086 1,437,866 53,278 54,812 12,259 312,615 1,021 227,314 10,992,600 6,015,300 494,100 284,400 2,337,900 5,329,700 2,525,900 3,609,700 10,992,600 6,015,300 494,100 284,400 2,342,500 5,329,700 2,525,900 3,019,900 10,664,848 5,409,557 428,745 252,543 1,684,699 4,529,708 2,461,291 630,453 327,752 605,743 65,355 31,857 657,801 799,992 64,609 2,389,447 194,300 41,674,800 654,876 124,624 40,548,200 492,219 124,624 33,343,822 162,657 7,204,378 379,600 7,314,282 6,934,682 (747,000) 1,312,400 (3,681,500) (2,369,100) (3,116,100) 3,116,100 $ - $ 1,312,400 (3,681,500) (2,369,100) (1,989,500) 1,989,500 - The accompanying notes are an integral part of the financial statements 21 1,994,677 (3,668,613) (1,673,936) 5,640,346 27,480,247 $33,120,593 682,277 12,887 695,164 7,629,846 25,490,747 $33,120,593 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, 2008 Variance with Final BudgetBudgeted Amounts Positive Actual Amounts (Negative) REVENUES Original Final Taxes: State-shared gas tax $ 2,874,400 $ 2,874,400 $ 3,348,474 $ 474,074 Local transportation assistance 316,000 316,000 238,125 (77,875) County sales tax 2,000,000 2,000,000 2,506,143 506,143 Investment earnings 290,000 290,000 282,926 (7,074) Miscellaneous 65,464 65,464 Total revenues 5,480,400 5,480,400 6,441,132 960,732 EXPENDITURES Culture and recreation Contractual services 25,000 68,000 67,974 26 25,000 68,000 67,974 26 1,430,500 750,100 701,700 6,811,500 162,100 1,430,500 750,100 852,700 6,246,000 162,100 1,144,798 325,605 852,694 2,805,330 121,014 285,702 424,495 6 3,440,670 41,086 Total Streets/Transportation 9,855,900 9,441,400 5,249,441 4,191,959 Total expenditures 9,880,900 9,509,400 5,317,415 4,191,985 (4,400,500) (4,029,000) 1,123,717 5,152,717 (556,400) (556,400) (4,956,900) 4,956,900 $ - (927,900) (927,900) (4,956,900) 4,956,900 $ - (846,077) (846,077) 277,640 8,506,244 $8,783,884 81,823 81,823 5,234,540 3,549,344 $8,783,884 Total Culture and recreation Streets/Transportation Personal services Contractual services Materials and supplies Capital outlay Debt service Excess (deficiency) of revenues over (under) expenditures 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 The accompanying notes are an integral part of the financial statements 22 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, 2008 Budgeted Amounts Variance with Final BudgetPositive (Negative) ($1,662,722) 574,721 (1,088,001) REVENUES Charges for services Investment earnings Total revenues Original $9,935,000 700,000 10,635,000 Final $9,935,000 700,000 10,635,000 Actual Amounts $8,272,278 1,274,721 9,546,999 EXPENDITURES Culture and recreation Capital outlay Total expenditures 980,000 13,592,200 14,572,200 980,000 12,297,200 13,277,200 242,258 2,472,452 2,714,710 737,742 9,824,748 10,562,490 (3,937,200) (2,642,200) 6,832,289 9,474,489 (375,000) (375,000) (4,312,200) 4,312,200 $ - (1,670,000) (1,670,000) (4,312,200) 4,312,200 $ - Excess (deficiency) of revenues over (under) expenditures 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 The accompanying notes are an integral part of the financial statements 23 (1,708,872) (1,708,872) 5,123,417 32,192,753 $37,316,170 (38,872) (38,872) 9,435,617 27,880,553 $37,316,170 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, 2008 Variance with Final BudgetBudgeted Amounts Positive Actual Amounts (Negative) REVENUES Original Final Intergovernmental revenues $3,443,200 $3,443,200 $1,684,186 ($1,759,014) Investment earnings 2,313 2,313 Contributions and donations 11,500 11,500 23,915 12,415 Total revenues 3,454,700 3,454,700 1,710,414 (1,744,286) 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 Capital outlay Total Culture and Recreation Community Development Contractual services Capital outlay 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 $ 318,600 10,000 917,000 80,000 1,325,600 318,600 10,000 917,000 80,000 1,325,600 119,090 6,593 62,997 65,206 253,886 199,510 3,407 854,003 14,794 1,071,714 121,700 250,600 166,800 539,100 121,700 250,600 320,000 179,100 871,400 105,867 157,215 319,023 178,484 760,589 15,833 93,385 977 616 110,811 1,735,200 1,735,200 3,599,900 711,700 736,000 1,447,700 3,644,700 587,822 735,833 1,323,655 2,338,130 123,878 167 124,045 1,306,570 (145,200) (190,000) (627,716) (437,716) 190,000 (44,800) 145,200 - 190,000 190,000 - 500,731 500,731 (126,985) 106,149 ($20,836) 310,731 310,731 (126,985) 106,149 ($20,836) $ The accompanying notes are an integral part of the financial statements 24 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, 2008 Budgeted Amounts REVENUES Intergovernmental revenues Program income Total revenues $ EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures $ 752,000 752,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 752,000 752,000 - $ Final 752,000 752,000 Actual Amounts $518,761 88,868 607,629 28,000 712,300 9,700 750,000 27,433 571,808 9,664 608,905 2,000 - $ (2,000) - The accompanying notes are an integral part of the financial statements 25 (1,276) 557,336 $556,060 Variance with Final BudgetPositive (Negative) ($233,239) 88,868 (144,371) 567 140,492 36 141,095 (3,276) 559,336 $556,060 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, 2008 Budgeted Amounts REVENUES Intergovernmental revenues Miscellaneous 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 $400,000 7,000 407,000 Final $400,000 7,000 407,000 Actual Amounts $262,309 1,106 263,415 328,000 39,500 39,500 407,000 310,400 94,250 2,350 407,000 243,066 94,187 2,350 339,603 - $ - - $ - The accompanying notes are an integral part of the financial statements 26 Variance with Final BudgetPositive (Negative) ($137,691) (5,894) (143,585) 67,334 63 67,397 (76,188) $ (76,188) (76,188) $ (76,188) 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, 2008 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 $1,075,000 1,075,000 Final $1,075,000 1,075,000 1,075,000 1,075,000 31,000 1,043,100 900 1,075,000 - $ - $ The accompanying notes are an integral part of the financial statements 27 Actual Amounts $754,330 754,330 Variance with Final BudgetPositive (Negative) ($320,670) (320,670) 30,934 833,000 884 864,818 66 210,100 16 210,182 - (110,488) (110,488) - (168,609) ($279,097) (168,609) ($279,097) To Table of Contents City of Casa Grande, Arizona Statement of Net Assets Proprietary Funds June 30, 2008 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees ASSETS Current assets: Cash Cash with fiscal agent Investments Receivables, net of uncollectibles Restricted assets - investments Inventories Total current assets Noncurrent assets: Deferred bond costs Capital assets: Land Buildings and improvements Machinery and equipment Construction in progress Less accumulated depreciation Total capital assets, net Total noncurrent assets Total assets $ 821,994 18,367 840,361 1,036,504 (334,918) 701,586 701,586 1,541,947 LIABILITIES Current liabilities: Accounts payable Deposits held Accrued wages and benefits Accrued interest payable Compensated absences Capital leases Notes payable Excise tax revenue obligations Total current liabilities Noncurrent liabilities: Capital leases Notes payable General obligation bond 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 10,723 14,825 2,724 10,216 38,488 $ 30,656 1,476 6,082,902 67,898 6,182,932 287,458 52,551,940 1,039,095 1,748,369 (11,855,661) 43,483,743 43,771,201 49,954,133 94,413 14,268 152,604 28,096 551,100 840,481 $ 18,611,272 71,391 18,682,663 150,256 433,942 (3,005) 581,193 581,193 19,263,856 191,318 191,318 138,427 138,427 176,915 13,304,502 329,321 (196,164) 13,437,659 14,278,140 191,318 552,943 29,298,820 581,193 812,089 $1,365,032 1,476 6,375,697 $35,675,993 18,491,345 $19,072,538 The accompanying notes are an integral part of the financial statements 28 To Table of Contents Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation $ Golf Course 1,977 2,795,018 63,086 2,860,081 138,496 4,459,443 (2,202,204) 2,395,735 2,395,735 5,255,816 $ 2,741 16,882 6,338 783,741 9,883 819,585 33,494 Total $ 857,368 1,476 27,506,074 227,080 783,741 9,883 29,385,622 320,952 $ 24,000 284,101 308,101 - 283,000 483,137 469,335 1,268,372 (721,321) 1,782,523 1,816,017 2,635,602 283,000 54,210,077 6,118,129 3,450,683 (15,117,109) 48,944,780 49,265,732 78,651,354 52,354 320,369 (209,515) 163,208 163,208 471,309 78,721 45,119 70,582 121,333 315,755 141,994 7,282 4,515 13,565 167,356 517,169 14,825 66,669 159,843 112,243 121,333 10,216 551,100 1,553,398 106,068 8,572 12,435 127,075 57,790 1,779,961 1,837,751 2,153,506 2,000,000 26,783 2,026,783 2,194,139 57,790 138,427 2,000,000 13,304,502 356,104 (196,164) 1,779,961 17,440,620 18,994,018 127,075 2,216,612 539,481 33,189,049 885,698 $3,102,310 783,741 (881,759) $441,463 19,276,562 7,191,725 $59,657,336 29 344,234 $344,234 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, 2008 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Operating revenues: Service fees Connection fees Rental Green fees Miscellaneous Total operating revenue $ 190,125 190,125 Operating expenses: Personal services Contractual services Materials and supplies Depreciation Closure and postclosure costs Total operating expenses 23,294 44,525 44,540 112,359 Operating income (loss) Nonoperating revenues (expense): Gain on sale of assets 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 2,639,680 201,668 24,738 2,866,086 682,750 648,231 834,322 1,687,419 3,852,722 $ 3,130,981 3,130,981 3,005 3,005 77,766 (986,636) 3,127,976 (5,279) (5,279) 240,177 (666,298) (426,121) 587,176 587,176 (1,412,757) 3,715,152 72,487 (21,900) 50,587 1,314,445 $1,365,032 The accompanying notes are an integral part of the financial statements 30 $ 2,580,813 (153,600) 1,014,456 34,661,537 $35,675,993 (83,942) 3,631,210 15,441,328 $19,072,538 To Table of Contents Business-type Activities-Enterprise Funds Sanitation $4,524,729 301,798 166,331 4,992,858 2,201,099 535,791 843,045 426,420 25,287 4,031,642 961,216 121,826 83,815 (9,875) 195,766 Golf Course $ Total Governmental Activities Internal Service Funds 133,217 664,284 6,581 804,082 $7,354,534 3,634,447 133,217 664,284 197,650 11,984,132 $1,416,108 30 1,416,138 509,559 57,486 350,045 46,226 963,316 3,393,408 1,264,802 2,071,937 2,207,610 25,287 8,963,044 448,062 169,699 498,995 21,041 1,137,797 (159,234) 3,021,088 278,341 8,105 (4,434) 14,203 17,874 1,156,982 (141,360) 500,000 (961,200) 695,782 2,406,528 $3,102,310 300,000 (105,300) 53,340 388,123 $441,463 121,826 919,273 (685,886) 14,203 369,416 3,390,504 2,580,813 800,000 (1,325,942) 5,445,375 54,211,961 $59,657,336 31 - 278,341 (92,200) 186,141 158,093 $344,234 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2008 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 $193,186 (59,149) - Net cash provided (used) by operating activities $3,100,595 (1,660,484) (670,191) $3,158,481 180,410 - 134,037 769,920 (21,900) - (153,600) - (83,942) - (21,900) (153,600) (83,942) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets Proceeds from bond sales / lease purchase Purchases of capital assets Principal paid on capital debt Interest paid on capital debt (9,877) (5,279) (1,822,168) (532,730) (646,127) (433,945) - Net cash provided (used) by capital and related financing activities (15,156) (3,001,025) (433,945) 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 CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received Net cash provided by investing activities 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 3,338,891 - 252,115 587,176 - 252,115 587,176 96,981 725,013 (2,132,590) 8,247,624 3,408,180 15,203,092 $ 821,994 $ 6,115,034 $ 18,611,272 $ 821,994 $821,994 $ 30,656 1,476 6,082,902 $6,115,034 $ 18,611,272 $18,611,272 The accompanying notes are an integral part of the financial statements 32 To Table of Contents Governmental Activities Internal Service Fund Business-type Activities-Enterprise Funds Sanitation Golf Course Total $5,003,993 (1,384,213) (2,172,678) $799,177 (448,677) (505,322) 1,447,102 (154,822) 5,535,128 239,475 (961,200) 500,000 14,203 (105,300) 300,000 14,203 (1,325,942) 800,000 (92,200) - (461,200) 208,903 (511,739) (92,200) 24,691 2,000,000 (4,085,475) (659,383) (667,994) (127,173) - (3,388,161) (127,173) 24,691 (560,990) (116,776) (9,875) $12,255,432 (3,372,113) (3,348,191) 2,000,000 (1,268,372) (6,713) (662,950) 724,915 $1,416,138 (729,407) (447,256) 83,815 8,105 931,211 - 83,815 8,105 931,211 - 406,767 2,390,228 787,101 16,263 2,566,439 26,582,220 20,102 3,898 $ 2,796,995 $ 803,364 $ 29,148,659 $ 24,000 $ 1,977 2,795,018 $2,796,995 $ 2,741 800,623 $803,364 $ 857,368 1,476 28,289,815 $29,148,659 $ 24,000 $24,000 33 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2008 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Closure and postclosure costs Depreciation expense (Increase) decrease in accounts receivable (Increase) decrease in inventory Increase (decrease) in accounts payable Increase (decrease) in deposits held Increase (decrease) in accrued wages Increase (decrease) in due to other funds Increase (decrease) in compensated absences Total adjustments Net cash provided (used) by operating activities $ 77,766 44,540 3,541 8,670 (480) 56,271 134,037 Noncash investing, capital, and financing activities: Contributions of capital assets - The accompanying notes are an integral part of the financial statements 34 $ (986,636) $ 1,687,419 234,509 (177,931) 5,346 7,213 1,756,556 $ 769,920 $2,580,813 3,127,976 3,005 27,503 180,407 210,915 $ 3,338,891 - To Table of Contents Business-type Activities-Enterprise Funds Sanitation $ Golf Course 961,216 $ 25,287 426,420 11,135 (5,377) 17,592 10,829 485,886 $ 1,447,102 - (159,234) Total $ 46,226 (4,905) 82 108,772 1,463 (150,000) 2,774 4,412 $ (154,822) - 3,021,088 Governmental Activities Internal Service Fund $ 25,287 2,207,610 271,783 82 114,541 (480) 24,401 (150,000) 20,816 2,514,040 $ 5,535,128 $2,580,813 35 278,341 21,041 (101,516) 60,803 1,505 (20,000) (699) (38,866) $ 239,475 To Table of Contents City of Casa Grande, Arizona Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2008 Agency Funds ASSETS Cash Interest receivable Investments, at fair value Money market Mutual funds $ Total assets LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for pension benefits and other purposes $ The accompanying notes are an integral part of the financial statements 36 20,365 6,430 Part-Time Firemen's Pension $ 2,884 - 1,687,083 - 13,097 700,215 1,713,878 716,196 1,713,878 - 1,713,878 - - $ 716,196 To Table of Contents City of Casa Grande, Arizona Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2008 Part-Time Firemen's Pension ADDITIONS Contributions: Employer Plan members Total contributions $ Investment earnings: Interest Change in the fair value of investments Total investment earnings Less investment expense Net investment earnings - 18,372 (90,902) (72,530) (6,200) (78,730) Total additions (78,730) DEDUCTIONS Pension payments Administrative expenses Total deductions 30,000 1,837 31,837 Change in net assets (110,567) Net assets-beginning of year Net assets-end of year $ The accompanying notes are an integral part of the financial statements 37 826,763 716,196 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, 2008 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) 38 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, 2008 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 self-balancing 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) 39 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, 2008 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) 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, 2008 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) 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, 2008 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) 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, 2008 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) 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, 2008 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. 7. Governmental Accounting Standards Board Statement No. 50 The City adopted the provisions of GASB Statement No. 50, Pension Disclosures. This statement amends GASB Statements No. 25 and No. 27 and establishes more comprehensive disclosure requirements related to financial reporting by pension plans and by employers that provide defined benefit and defined contribution pensions. (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) 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, 2008 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, 2008, 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) 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, 2008 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 2007-2008. 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. (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) 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, 2008 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) 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, 2008 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 2007-2008 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) 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, 2008 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 $ 5,080,052 126,676,729 9,778,298 $141,535,079 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) 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, 2008 NOTE 2: Cash and Investments (continued) Custodial Credit Risk (continued) The carrying amount of the City’s cash in bank totaled $5,077,168 and the bank balance was $5,395,126. Federal Depository Insurance covered the City’s deposits at June 30, 2008, to the extent of $200,000. Deposits of $5,195,126 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 $ 4,199,435 96,770,260 8,993,081 $109,962,776 Business Activities $ 857,368 27,506,074 785,217 $29,148,659 Fiduciary Fund $ 23,249 2,400,395 $2,423,644 Total $ 5,080,052 126,676,729 9,778,298 $141,535,079 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, 2008 was $2,177,226,000. 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) 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, 2008 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 $135,638,150 Ratings as of Year-End AAA Unrated $ $135,638,150 Money Market Money Market/Mut Fnds Money Market Money Market 13,097 700,215 1,476 102,089 $136,455,027 $ - 13,097 700,215 1,476 102,089 $136,455,027 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 $135,638,150 13,097 700,215 1,476 102,089 $136,455,027 (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, 2008 NOTE 3: Cash with Fiscal Agent/Restricted Investments 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, 2008 $33,512 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, 2008 $68,577 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, 2008 $1,476 In June 2008, the City issued a general obligation bond in the amount of $11,000,000. A portion of the bond has been spent on infrastructure and the balance is a restricted investment. Fund Type Capital Projects Enterprise – Golf Course Description of Designated Capital Infrastructure Irrigation System Balance at June 30, 2008 $8,890,992 $ 783,741 $9,674,733 (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, 2008 NOTE 4: Receivables The following table summarizes the City’s governmental activities receivables as of June 30, 2008: Special Revenue General Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables $4,655,770 1,299,924 107,641 6,063,335 Capital Total $ 694,558 592,216 206,225 1,492,999 $ 26,247 12,717 38,964 $ 1,441 87,619 89,060 - - - (11,402) $6,051,933 Debt Service $1,492,999 $38,964 $5,351,769 1,918,387 414,202 7,684,358 (11,402) $89,060 $7,672,956 The following table summarizes the City’s business-type activities receivables as of June 30, 2008 Water Receivables: Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables 18,367 18,367 $18,367 Wastewater Wastewater Dev Fees Sanitation Golf Course 713,480 22,831 736,311 71,391 71,391 861,740 8,655 870,395 856 5,482 6,338 (668,413) $67,898 $71,391 (807,309) $63,086 $6,338 Total 1,594,443 108,359 1,702,802 (1,475,722) $227,080 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: $ 127,642 67,761 $ 195,403 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, 2008, there were 67 of these loans outstanding, totaling $564,128. (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, 2008 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 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 2007-2008 maximum primary levy limit was $2,926,370. The primary tax levy was $2,206,034. The City did not have a secondary tax levy. 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, 2008, are $36,464 and $57,185 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2008 follows: Balance 6/30/07 Capital assets not being depreciated: Land Capital assets being depreciated: Building & Improvements Machinery & Equipment Total Capital Assets Less: accumulated depreciation Net Capital Assets $ Additions & Adjustments Disposals & Adjustments $ - Balance 6/30/08 283,000 $ 3,450,683 $ 3,733,683 50,747,516 8,509,402 59,539,918 3,462,561 45,214 6,958,458 (2,436,487) (2,436,487) 54,210,077 6,118,129 64,061,889 (15,151,801) (2,207,610) 2,242,302 (15,117,109) $44,388,117 $4,750,848 $(194,185) $48,944,780 (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, 2008 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, 2007 $ 108,090 10,443,455 4,600,256 $15,151,801 Balance Additions Disposals June 30, 2008 $ 3,142 $ $ 111,232 1,537,770 11,981,225 666,698 (2,242,302) 3,024,652 $2,207,610 $(2,242,302) $15,117,109 A summary of changes in governmental activities capital assets follows: Balance June 30, 2007 Adjustments & Additions Adjustments & Disposals Balance June 30, 2008 Capital assets not being depreciated: Land & construction in progress $ 9,979,192 $ 6,855,685 $(3,746,123) $13,088,754 Capital assets being depreciated: Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total General Capital Assets 14,459,417 153,686,719 1,430,671 5,876,116 6,779,610 $192,211,725 3,350,504 19,959,417 519,715 (214,158) 798,584 (33,629) 3,826,024 (224,934) $35,309,929 $(4,218,844) 17,809,921 173,646,136 1,736,228 6,641,071 10,380,700 $223,302,810 Less Accumulated Depreciation for: Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total Accumulated Depreciation Total General Capital Assets $ 5,734,941 43,528,039 968,149 4,172,701 3,775,068 58,178,898 $134,032,827 $ 727,596 7,385,220 461,712 135,835 759,559 9,469,922 $25,840,007 $ (247,190) (182,487) (429,677) $(3,789,167) $ 6,462,537 50,913,259 1,182,671 4,308,536 4,352,140 67,219,143 $156,083,667 (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, 2008 NOTE 7: Capital Assets (continued) The City had additions to contributed capital assets during the fiscal year 2007-2008. The Governmental Activities Capital Assets include a total of $23,174,271 in contributed capital assets received in fiscal year 2007-2008. 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 $ 252,513 855,318 7,008,387 56,249 551,282 725,132 21,041 $9,469,922 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 44,540 1,690,424 426,420 46,226 $2,207,610 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) 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, 2008 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, 2008, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 9.6 percent (9.1 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, 2008, 2007 and 2006 were $1,142,516, $976,996 and $717,228, respectively, which were equal to the required contributions for those years. Prior year’s rates are 9.1% for 2007 and 7.4% for 2006. (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, 2007 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 20.98 percent and 19.44 percent for covered payroll totaling $4,264,393 and $2,918,183 to the plan for police and fire respectively. The City contributed the required amount. (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, 2008 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, 2007, 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 20.98% 7.65% 572,490 572,490 June 30, 2007 Entry Age PSPRS - Fire 19.44% 7.65% 342,549 342,549 June 30, 2007 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 2007 $572,490 100% - 2006 534,794 100% - 2005 397,049 100% - 2007 $342,549 100% - 2006 303,654 100% - 2005 253,646 100% - (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, 2008 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, 2007, follows: PSPRS - Police Actuarial Valuation Date 6/30/07 6/30/06 6/30/05 Actuarial Value of Plan Assets (a) $13,287,359 13,392,641 13,126,047 Actuarial Accrued Liability Funding Liability (Excess) Funded Ratio Annual Covered Payroll Unfunded Liability as Percentage of Covered Payroll (b) $22,057,218 19,728,857 18,198,459 (b-a) $8,769,859 6,336,216 5,072,412 (a/b) 60.2% 67.9% 72.1% (c) $4,264,393 3,739,428 3,481,906 ([b-a]/c) 205.7% 169.4% 145.7% 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) $12,800,685 11,192,351 10,213,654 $5,219,000 3,440,898 2,628,532 59.2% 69.3% 74.3% $2,918,183 2,544,227 2,231,531 178.8% 135.2% 117.8% PSPRS – Fire Actuarial Valuation Date 6/30/07 6/30/06 6/30/05 Actuarial Value of Plan Assets (a) $7,581,685 7,751,453 7,585,122 (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) 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, 2008 NOTE 8: Retirement and Pension Plans (continued) (C) Casa Grande Part-time Firemen’s Pension Plan (continued) 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, 2008, there were 15 eligible employees participating in the plan. The plan is administered by The Innes Associates. As of June 30, 2008, the plan’s assets consisted of the following: Cash Money Market Funds Mutual Funds Total Assets $ 2,884 13,097 700,215 $716,196 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) 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, 2008 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, 2008, included the following: Governmental activities: Lease with option to purchase Public Works Facility. Quarterly installments of $74,375 including interest of 4.887%, due through May 9, 2020. Lease with option to purchase 2 fuel trucks ($32,383 Airport) and 1 street sweeper ($37,365 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 $2,690,020 69,748 420,588 $3,180,356 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. $120,619 Lease with option to purchase a garbage truck. Quarterly installments of $6,868, including interest at 4.461%, due through August 20, 2010. 58,503 Total Business-type Activities Capital Lease Obligation 179,122 Total Long-Term Lease Payable $3,359,478 (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, 2008 NOTE 10: Capital Leases (continued) The future minimum lease payments by year are: Fiscal Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2020 Government Activities $ 422,031 422,032 397,466 389,278 389,278 1,510,448 595,002 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion Business-type Activities $ 126,651 52,267 6,869 - $ Total 548,682 474,299 404,335 389,278 389,278 1,510,448 595,002 4,125,535 (945,179) 185,787 (6,665) 4,311,322 (951,844) 3,180,356 (271,195) $2,909,161 179,122 (121,333) $ 57,789 3,359,478 (392,528) $2,966,950 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 $(327,594) (327,594) $3,689,345 3,689,345 201,169 (108,390) 92,779 743,265 944,434 $4,961,373 (338,814) (447,204) $(774,798) 404,451 497,230 $4,186,575 (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, 2008 NOTE 11: Bond Debt A summary of long-term bond debt transactions for the year ended June 30, 2008, follows: Governmental Activities General obligation bonds Special assessment bonds Total Bonds Outstanding Balance July 1, 2007 $1,790,000 370,000 $2,160,000 Issued $9,000,000 $9,000,000 Retired $ ( 15,000) (115,000) $(130,000) - $2,000,000 $2,000,000 - Business-type Activities General obligation bonds Total Bonds Outstanding Balance June 30, 2008 $10,775,000 255,000 $11,030,000 $2,000,000 $2,000,000 Summarization of the long-term bond debt payable at June 30, 2008, follows: Original Amount Date Balance Issue of Interest of Final June 30, Amount Installment Rate Payment 2008 $12,790,000 $10,000 – 2,170,000 3.50% - 5.80% 07/15/32 $12,775,000 Bond Description General obligation Special Assessment: ID #38 1,030,000 Total Bonds Outstanding 75,000 - 130,000 5.40% 01/01/10 255,000 $13,030,000 The following table summarizes the City’s future bond debt service requirements as of June 30, 2008: Governmental Activities General Special Obligation Assessment Bonds (1) (3) Fund (2) Bonds Interest Bonds Interest Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2032 $ 10,000 1,820,451 1,052,270 561,363 250,454 1,558,634 2,577,267 2,624,561 320,000 $10,775,000 $300,055 412,723 361,702 332,673 317,677 1,414,959 970,241 328,484 49,807 $4,488,321 $125,000 130,000 $255,000 $13,770 7,020 $20,790 Business-type Activities General Obligation Bonds (3) Bonds Interest 394,549 222,730 113,637 44,546 276,366 482,733 465,439 $2,000,000 $ 45,152 70,500 59,697 53,811 51,043 226,405 148,813 39,839 $695,260 Total Bonds Interest 135,000 2,345,000 1,275,000 675,000 295,000 1,835,000 3,060,000 3,090,000 320,000 $13,030,000 $ 358,977 490,243 421,399 386,484 368,720 1,641,364 1,119,054 368,323 49,807 $5,204,371 $ (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, 2008 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 began 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. 3) In June 2008 the City issued $11,000,000 of General Obligation bond debt to finance golf course improvements of $2,000,000, recreation center improvements of $1,500,000, construction of a new public safety building of $2,000,000, new fire station of $2,500,000 and new library of $3,000,000. The 20-year bond has interest rates ranging from 3.50% to 4.25%. Principal payments ranging from $2,170,000 to $675,000 are paid annually with interest paid semiannually on July 1 and January 1. 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) 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, 2008 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, 2008: Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2022 Governmental Activities Principal Interest 543,900 292,501 565,530 267,979 596,753 242,676 623,790 215,466 650,828 187,019 2,660,761 457,483 557,656 69,518 $6,199,218 $1,732,642 Business-type Activities Principal Interest 551,100 618,896 569,470 602,363 583,248 583,856 606,210 561,984 629,173 539,251 4,629,241 2,282,197 6,287,160 783,482 $13,855,602 $5,972,029 Total Principal Interest 1,095,000 911,397 1,135,000 870,342 1,180,001 826,532 1,230,000 777,450 1,280,001 726,270 7,290,002 2,739,680 6,844,816 853,000 $20,054,820 $7,704,671 (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, 2008 NOTE 13: Changes in Long-Term Obligations Governmental Activities: Compensated absences Bonds payable Excise tax revenue obligations Capital leases Total Governmental Activities Business-type Activities: Compensated absences Bond payable Capital leases Excise tax revenue obligations Notes payable (1) Total Business-type Activities Balance July 1, 2007 $ 763,892 2,160,000 6,721,488 3,754,188 $13,399,568 Balance July 1, 2007 $ 91,427 295,899 14,388,332 158,520 $14,934,178 Obligations Incurred $ 964,369 9,000,000 $9,964,369 Additions $ 141,216 2,000,000 $2,141,216 Obligations Paid $ (847,908) (130,000) (522,270) (573,831) $(2,074,009) Reductions $(120,400) (116,776) (532,730) (9,877) $(779,783) Balance June 30, 2008 $ 880,353 11,030,000 6,199,218 3,180,357 $21,289,928 Balance June 30, 2008 $ 112,243 2,000,000 179,123 13,855,602 148,643 $16,295,611 Amounts Due Within One Year $ 880,353 135,000 543,900 271,195 $1,830,448 Amounts Due Within One Year $112,243 121,333 551,100 10,216 $794,892 (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 $13,900,177. Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2032 Governmental Activities Principal Interest 950,095 757,163 2,800,674 825,062 1,923,047 727,822 1,464,460 658,110 1,194,645 600,610 5,433,547 2,168,738 3,698,546 1,071,136 2,624,561 328,484 320,000 49,807 $20,409,574 $7,186,932 Business-type Activities Principal Interest 682,649 679,617 1,025,583 679,979 823,701 647,836 731,153 619,620 685,414 593,723 4,970,395 2,519,326 6,799,034 933,305 465,439 39,839 $16,183,368 $6,713,245 Total Principal 1,632,744 3,826,257 2,746,747 2,195,613 1,880,059 10,403,942 10,497,580 3,090,000 320,000 $36,592,942 (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, 2008 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, 2008 the City has reported a $1,779,961 landfill closure and postclosure care liability that represents the total current cost based on 41 percent of estimated capacity of the landfill. The remaining cost of $2,552,777 will be recognized in the future periods as the remaining capacity is filled. The City expects the remaining capacity to extend for 22 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 2008 valuation of the total closure and postclosure costs were estimated to be $4,332,738. NOTE 16: Summary of Interfund Transactions Interfund transactions as of June 30, 2008, were as follows: Interfund Receivable/Payable: Fund General Special Revenue Fund: Self-help Technical Asst. Home/HUD Total Receivable Amount $441,000 $441,000 Payable Amount $ 71,000 370,000 $441,000 (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, 2008 NOTE 16: Summary of Interfund Transactions (continued) The interfund balances at June 30, 2008 are short-term loans to cover temporary cash deficits in various funds. Transfers: Fund Governmental Funds: General Highway Users Grants System Development Capital Replacement CFD Capital Projects 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 $3,668,613 846,077 1,708,872 500,000 727,077 33,200 7,483,839 $1,994,677 500,731 5,231,572 50,000 325,000 8,101,980 21,900 105,300 237,541 961,200 1,325,941 300,000 500,000 800,000 92,200 $8,901,980 $8,901,980 There were no significant transfers during fiscal year 2008 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. (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, 2008 Note 17: Deficit in Net Assets The Grants and Subsidies fund has a deficit of ($20,836) in net assets because $251,831 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. Two Housing Funds have deficits in net assets. The Home/HUD fund has a deficit of ($279,097) because $279,097 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. The Self-help Technical Assistance fund has a deficit of ($76,188) because $82,731 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. 69 To Table of Contents COMBINING STATEMENTS To Table of Contents City of Casa Grande, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2008 ASSETS Cash Investments Receivables (less allowance for uncollectibles) Due from other governments Fuel Inventory Total assets Parks Develop. $ 10,243 773,525 20,809 76,619 385,379 445 $ 784,213 $ 125,297 4,095 129,392 $ $ $ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Accrued wages and benefits Deferred revenue 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 Community RedevelopArts ment $ 1,975 $ 11,845 281 2,249,332 Municipal Airport $ 10,596 277,355 - $ 12,746 12,746 - 255,987 255,987 771,467 771,467 385,379 $ 784,213 70 1 2,257 - - $ Promotion & Tourism $ 9,088 175,077 Court Enhancement $ 12,376 414,655 25,873 210,038 1,602 428,633 16,614 $ 2,277,791 $ $ $ - - 2,257 2,257 2,277,791 2,277,791 2,257 $ 2,277,791 - $ $ - - 210,038 210,038 $ 210,038 - 428,633 428,633 $ 428,633 To Table of Contents Special Revenue Housing Public Safety Programs Programs $ 76,539 $ 17,152 88,929 13,919 326 $ 165,794 $ $ $ - 165,794 165,794 $ 165,794 $ 94 31,165 2,716 2,716 Debt Service Capital Projects Recreation Airport Improvement Improvement $ 1,156 $ 115,891 - Redevelopment $ 17,691 - Recreation $ 10,792 2,424,276 17,691 8,142 155,773 $ 2,598,983 $ $ $ $ $ - - 1,156 $ - 132,225 248,116 95,933 75,933 171,866 Total Nonmajor Governmental Funds $ 295,344 6,417,349 $ $ 73,906 287,998 76,619 7,151,216 236,692 4,095 75,933 316,720 28,449 - 17,691 2,598,983 - - 28,449 2,616,674 28,449 17,691 2,598,983 1,156 1,156 76,250 76,250 4,111,967 77,406 6,834,496 17,691 $ 2,598,983 31,165 $ 71 $ 1,156 $ 248,116 $ 7,151,216 To Table of Contents City of Casa Grande, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds For the Year Ended June 30, 2008 REVENUES Taxes: Property taxes Sales Tax Intergovernmental revenues Charges for services Investment earnings Rental and sale of city property Miscellaneous Total revenues Parks Municipal Airport $ EXPENDITURES Current: General government Public safety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures 7,129 Special Revenue Community Redevelop- Develop. $ 4,295 Arts $ ment 1,344,505 2,706 34,861 130,486 1,354,340 169,642 238 238 1,311,226 - 41,259 90,095 81,612 25,372 1,418,210 $ 403,748 68,981 Promotion Court & Tourism Enhancement $ $ 479,619 166,442 3,403 169,845 567 15,000 59,343 78,317 100,000 - - 131,354 15,567 137,660 100,000 - 6,890 8,722 61,976 12,865 83,563 Excess (deficiency) of revenues over (under) expenditures (63,870) 38,288 (15,329) 341,959 69,845 83,563 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 (33,200) (33,200) (97,070) 353,057 255,987 578,989 578,989 617,277 154,190 771,467 5,000 5,000 (10,329) 12,586 2,257 341,959 1,935,832 $ 2,277,791 69,845 140,193 210,038 83,563 345,070 428,633 $ $ 72 $ $ $ To Table of Contents Special Revenue Housing Programs $ $ 155,516 17,564 2,916 2,130 178,126 Debt Service Public Safety Programs $ 835 35,428 36,263 Redevelopment $ - 6,214 - 39,134 - 2,700 - 6,214 39,134 185,000 118,326 306,026 171,912 (2,871) (306,026) 171,912 (6,118) 165,794 (2,871) 31,320 28,449 320,000 320,000 13,974 3,717 17,691 $ $ Recreation $ 956,265 68,972 1,025,237 Capital Projects Recreation Airport Improvement Improvement $ - $ - $ 1,545,759 1,545,759 Total Nonmajor Governmental Funds $ - 1,506,924 1,411,226 39,134 41,826 77,782 1,690,336 290,000 144,621 434,621 - 1,516,449 556,612 288,319 4,105,235 590,616 - 29,310 937,397 1,156 1,156 29,310 46,940 76,250 325,000 (33,200) 578,989 870,789 1,808,186 5,026,310 6,834,496 590,616 2,008,367 2,598,983 73 $ - 403,748 1,122,707 1,709,997 79,540 169,634 1,386,256 170,750 5,042,632 9,525 $ $ To Table of Contents City of Casa Grande, Arizona Combining Statement of Fiduciary Net Assets All Agency Funds June 30, 2008 Flexible Spending Plan Fund Performance Bond Fund ASSETS Cash Interest receivable Investments, at fair value $ Total assets LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for other purposes 6,430 1,687,083 $ 20,365 - Total $ 20,365 6,430 1,687,083 1,693,513 20,365 1,713,878 1,693,513 20,365 1,713,878 1,693,513 20,365 1,713,878 $ - 74 $ - $ - 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, 2008 Balance June 30, 2007 Performance Bond Fund Assets: Cash Investments Interest Receivable Total Assets $ Liabilities: Other Liabilities Accounts Payable 526,434 3,662 530,096 Additions $ 1,160,649 2,768 1,163,417 519,355 10,741 530,096 1,118,577 44,840 1,163,417 19,445 19,445 61,200 61,200 19,445 19,445 920 920 Totals - All Agency Funds Assets: Cash Investments Interest Receivable Total Assets 19,445 526,434 3,662 549,541 61,200 1,160,649 2,768 1,224,617 Liabilities: Other Liabilities Accounts Payable Total Liabilities 538,800 10,741 549,541 1,119,497 44,840 1,164,337 Flexible Spending Plan Fund Assets: Cash Total Assets Liabilities: Other Liabilities $ $ 75 Deductions $ - Balance June 30, 2008 $ - 1,637,932 55,581 1,693,513 (60,280) (60,280) 20,365 20,365 - 20,365 20,365 (60,280) (60,280) $ - 1,687,083 6,430 1,693,513 20,365 1,687,083 6,430 1,713,878 $ 1,658,297 55,581 1,713,878 To Table of Contents City of Casa Grande, Arizona General Fund Schedule of Expenditures - Legal Level Budget Compliance For the Year Ended June 30, 2008 Budgeted Amounts EXPENDITURES General Government Mayor and Council Personal services Other expenditures City Manager Personal services Other expenditures Attorney Personal services Other expenditures Clerk Personal services Other expenditures Finance Personal services Other expenditures Information Technology Personal services Other expenditures Administrative Services Personal services Other expenditures Public Safety Police Personal services Other expenditures Fire Personal services Other expenditures Court Personal services Other expenditures Animal Control Personal services Other expenditures Public Works Personal services Other expenditures Culture and Recreation Personal services Other expenditures Planning and Economic Development Personal services Other expenditures Capital Outlay Debt service Total expenditures Original $ 155,400 3,854,900 Final $ 2,728,300 144,052 1,301,782 28,900 610,400 28,900 572,085 13,937 38,315 14,963 541,700 45,300 541,700 45,300 495,519 36,669 46,181 8,631 253,800 90,300 285,800 58,300 285,697 46,144 103 12,156 1,058,000 157,900 1,048,900 160,400 736,324 160,361 312,576 39 711,200 726,700 554,200 890,300 553,215 890,264 985 36 599,200 1,057,200 599,200 1,057,200 533,540 895,546 65,660 161,654 9,683,800 1,308,800 9,575,200 1,417,400 9,247,494 1,417,354 327,706 46 5,051,500 963,800 5,051,500 963,800 4,666,768 742,789 384,732 221,011 414,400 79,700 414,400 79,700 353,063 75,682 61,337 4,018 213,900 70,500 213,900 70,500 189,678 62,865 24,222 7,635 1,402,500 935,400 1,402,500 940,000 1,057,378 627,321 345,122 312,679 3,403,600 1,926,100 3,403,600 1,926,100 2,734,192 1,795,516 669,408 130,584 2,179,200 346,700 3,609,700 194,300 $ 41,674,800 1,884,200 641,700 3,019,900 1,822,452 638,839 630,453 61,748 2,861 2,389,447 162,657 7,204,378 610,400 155,400 Actual Amounts $ Variance with Final Budget Positive (Negative) 779,500 $ 40,548,200 76 $ 616,843 $ 33,343,822 $ 11,348 1,426,518 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, 2008 Budgeted Amounts REVENUES Special assessments Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Debt Service Principal retirement Interest Total expenditures 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 $ 29,691 39,187 68,878 7,200 7,200 1,594 5,606 115,000 20,000 142,200 115,000 20,000 142,200 115,000 19,980 136,574 20 5,626 Original 140,200 2,000 142,200 $ - $ Variance with Final BudgetPositive (Negative) $ (110,509) 37,187 (73,322) - - $ 77 - (67,696) $ 1,187,870 1,120,174 (67,696) $ 1,187,870 1,120,174 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, 2008 Final 170,000 2,000,000 2,170,000 Actual Amounts $ 461,911 6,098,330 6,560,241 Variance with Final BudgetPositive (Negative) $ 291,911 4,098,330 4,390,241 75,700 35,510,000 35,585,700 75,700 150,800 34,671,200 34,897,700 719 150,721 2,452,081 2,603,521 74,981 79 32,219,119 32,294,179 (33,415,700) (32,727,700) 3,956,720 36,684,420 3,897,700 29,518,000 33,415,700 - (500,000) 3,897,700 29,518,000 32,915,700 188,000 (188,000) - (500,000) 5,231,572 120,500 9,000,020 13,852,092 17,808,812 10,653,867 28,462,679 Budgeted Amounts REVENUES Investment earnings Construction sales tax Total revenues Original 170,000 2,000,000 2,170,000 EXPENDITURES Materials and supplies Bond issuance costs Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Transfers in Bond premium Proceeds from obligations Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ 78 $ $ $ 1,333,872 120,500 (20,517,980) (19,063,608) 17,620,812 10,841,867 $ 28,462,679 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, 2008 Budgeted Amounts REVENUES Property Tax Sewer Capacity Fees Investment Earnings Total revenues EXPENDITURES Contractual services Capital outlay Debt Service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfer in Transfers out Bond issuance 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) $ (161,218) 93,592 1,940 (65,686) Final 308,000 308,000 Actual Amounts $ 146,782 93,592 1,940 242,314 33,000 70,000,000 275,000 33,000 39,272,000 275,000 23,238 116,131 70,308,000 39,580,000 139,369 9,762 39,272,000 158,869 39,440,631 (70,000,000) (39,272,000) 102,945 39,374,945 (728,000) 40,000,000 39,272,000 - 50,000 (727,077) (677,077) (574,132) 687,029 112,897 Original $ 308,000 308,000 $ 40,000,000 40,000,000 (30,000,000) 30,000,000 $ - 79 $ $ 50,000 923 (40,000,000) (39,949,077) (574,132) 687,029 $ 112,897 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, 2008 Budgeted Amounts REVENUES Investment earnings Rental and sale of city property Miscellaneous Total revenues $ EXPENDITURES Current: General government: Personal services Contractual services Materials and supplies Capital outlay Debt service Total expenditures Excess (deficiency) of revenues over (under) expenditures 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 $ Variance with Final BudgetPositive (Negative) $ (12,871) $ 394,905 (497,294) (115,260) Final 20,000 949,600 500,000 1,469,600 Actual Amounts $ 7,129 1,344,505 2,706 1,354,340 189,600 35,500 529,200 1,737,200 107,000 2,598,500 189,600 48,200 1,197,700 1,048,800 107,000 2,591,300 165,488 48,116 1,097,622 106,984 1,418,210 (1,128,900) (1,121,700) (63,870) 1,057,830 (33,200) (33,200) (1,162,100) 1,162,100 - (40,400) (40,400) (1,162,100) 1,162,100 - (33,200) (33,200) (97,070) 353,057 255,987 7,200 7,200 1,065,030 (809,043) 255,987 Original 20,000 949,600 500,000 1,469,600 80 $ $ $ 24,112 84 100,078 1,048,800 16 1,173,090 $ 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, 2008 Budgeted Amounts REVENUES Investment earnings Rental and sale of City property Miscellaneous Total revenues $ EXPENDITURES Current: Culture and recreation: Contractual services Materials and supplies Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES Sale of land Total other financing sources Net change in fund balances Fund balance - beginning of year Fund balance - end of year $ Variance with Final BudgetPositive (Negative) $ (705) 861 105,486 105,642 Final 5,000 34,000 25,000 64,000 Actual Amounts $ 4,295 34,861 130,486 169,642 1,000 138,000 139,000 27,700 13,700 97,600 139,000 27,671 13,588 90,095 131,354 29 112 7,505 7,646 (75,000) (75,000) 38,288 113,288 (75,000) 75,000 - (75,000) 75,000 - 578,989 578,989 617,277 154,190 771,467 578,989 578,989 692,277 79,190 771,467 Original 5,000 34,000 25,000 64,000 81 $ $ $ $ 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, 2008 Budgeted Amounts Variance with Final BudgetPositive (Negative) $ (262) (262) 500 500 Actual Amounts $ 238 238 5,500 24,200 29,700 1,200 24,200 25,400 567 15,000 15,567 633 9,200 9,833 Excess (deficiency) of revenues over (under) expenditures (29,200) (24,900) (15,329) 9,571 OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year 5,000 5,000 (24,200) 24,200 - 5,000 5,000 (19,900) 19,900 - 5,000 5,000 (10,329) 12,586 2,257 9,571 (7,314) 2,257 REVENUES Investment earnings Total revenues $ EXPENDITURES Current: Culture and recreation: Contractual services Capital outlay Total expenditures $ Original 500 500 82 Final $ $ $ $ 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, 2008 Budgeted Amounts REVENUES Local taxes Investment earnings Rental and sale of city property Total revenues $ EXPENDITURES Current: Economic development: Contractual services Materials and supplies Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Variance with Final BudgetPositive (Negative) $ 223,748 38,981 (68,110) 194,619 Final 180,000 30,000 75,000 285,000 Actual Amounts $ 403,748 68,981 6,890 479,619 110,000 10,000 1,500,000 1,620,000 98,100 11,900 1,500,000 1,610,000 47,536 11,807 78,317 137,660 50,564 93 1,421,683 1,472,340 (1,335,000) (1,325,000) 341,959 1,666,959 Original 180,000 30,000 75,000 285,000 1,335,000 - 83 $ $ 1,325,000 - $ 1,935,832 2,277,791 $ 610,832 2,277,791 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, 2008 Budgeted Amounts REVENUES Local taxes Investment earnings Total revenues $ EXPENDITURES Current: General government Total expenditures $ 85,000 85,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 85,000 85,000 - $ - 84 Final 85,000 85,000 Actual Amounts $ 166,442 3,403 169,845 100,000 100,000 100,000 100,000 (15,000) $ 15,000 - Variance with Final BudgetPositive (Negative) $ 81,442 3,403 84,845 - 69,845 $ 140,193 210,038 84,845 $ 125,193 210,038 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, 2008 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment earnings Total revenues $ EXPENDITURES Current: Public safety: Contractual services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 8,000 51,500 10,000 69,500 $ Final 8,000 51,500 10,000 69,500 Actual Amounts $ 8,722 61,976 12,865 83,563 Variance with Final BudgetPositive (Negative) $ 722 10,476 2,865 14,063 65,500 416,000 481,500 65,500 416,000 481,500 - 65,500 416,000 481,500 (412,000) (412,000) 83,563 495,563 412,000 - 85 $ 412,000 - $ 345,070 428,633 $ (66,930) 428,633 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, 2008 Budgeted Amounts REVENUES Charges for service Intergovernmental Investment earnings Loan fees Total revenues Original $ 250,000 550,000 6,000 806,000 EXPENDITURES Current: Economic development: Personal services Contractual services Materials and supplies Total expenditures 50,000 756,000 806,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ - $ - 86 Final 250,000 550,000 6,000 806,000 Actual Amounts $ 17,564 155,516 2,916 2,130 178,126 49,700 756,000 300 806,000 5,985 229 6,214 49,700 750,015 71 799,786 171,912 171,912 - $ Variance with Final BudgetPositive (Negative) $ (232,436) (394,484) (3,084) 2,130 (627,874) - $ (6,118) 165,794 $ (6,118) 165,794 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, 2008 Budgeted Amounts REVENUES Investment earnings Contributions Total revenues $ EXPENDITURES Current: Public safety activities Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 800 15,000 15,800 Final $ 800 15,000 15,800 15,800 15,800 44,800 44,800 - (29,000) - 87 $ 29,000 - Actual Amounts $ 835 35,428 36,263 Variance with Final BudgetPositive (Negative) $ 35 20,428 20,463 39,134 39,134 5,666 5,666 (2,871) $ 31,320 28,449 26,129 $ 2,320 28,449 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, 2008 Budgeted Amounts REVENUES Total revenues $ EXPENDITURES Current: Contractual services Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original - Final $ - Actual Amounts $ - Variance with Final BudgetPositive (Negative) $ - 16,600 16,600 2,700 185,000 118,400 320,000 185,000 118,400 320,000 185,000 118,326 306,026 74 13,974 (320,000) (320,000) (306,026) 13,974 320,000 320,000 - 320,000 320,000 - 320,000 320,000 13,974 3,717 17,691 13,974 3,717 17,691 88 $ $ 13,900 - $ 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, 2008 Final 600,000 60,000 660,000 Actual Amounts $ 956,265 68,972 1,025,237 Variance with Final BudgetPositive (Negative) $ 356,265 8,972 365,237 228,200 228,200 2,916 225,284 290,000 141,800 660,000 290,000 141,800 660,000 290,000 141,705 434,621 95 225,379 590,616 590,616 Budgeted Amounts REVENUES Local taxes Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Debt Service: Principal retirement Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 600,000 60,000 660,000 $ - $ - 89 - $ - $ 2,008,367 2,598,983 - $ 2,008,367 2,598,983 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, 2008 Budgeted Amounts REVENUES Investment earnings Total revenues $ EXPENDITURES Contractual services Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Variance with Final BudgetPositive (Negative) $ - - Actual Amounts $ - - - - - - - - - Original - - 90 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, 2008 Final 500,000 500,000 Actual Amounts $ 1,545,759 1,545,759 Variance with Final BudgetPositive (Negative) $ 1,045,759 1,045,759 9,600 1,579,000 1,588,600 9,525 1,506,924 1,516,449 75 72,076 72,151 29,310 1,117,910 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues Original $ 500,000 500,000 EXPENDITURES Contractual services Capital outlay Total expenditures 500,000 500,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ - $ - 91 (1,088,600) $ 1,088,600 - $ 46,940 76,250 $ (1,041,660) 76,250 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, 2008 Budgeted Amounts Original OPERATING REVENUES: Service fees Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 196,000 196,000 Actual Amounts Final $ 196,000 196,000 $ 190,125 190,125 Variance with Final BudgetPositive (Negative) $ (5,875) (5,875) 57,400 34,800 69,300 165,500 327,000 57,400 34,800 69,300 160,000 321,500 23,294 44,525 44,540 112,359 57,400 11,506 24,775 115,460 209,141 (131,000) (125,500) 77,766 203,266 NONOPERATING REVENUE (EXPENSES): Interest expense Total nonoperating revenue (expense) (15,200) (15,200) (5,300) (5,300) Income (loss) before transfers (146,200) (130,800) 72,487 (21,900) (27,400) (21,900) (168,100) (158,200) 50,587 Operating Income Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 168,100 - 92 $ 158,200 - (5,279) (5,279) $ 1,314,445 1,365,032 21 21 203,287 5,500 208,787 $ 1,156,245 1,365,032 To Table of Contents City of Casa Grande, Arizona Wastewater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2008 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 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 2,630,000 170,000 61,500 2,861,500 $ 2,630,000 170,000 61,500 2,861,500 $ 2,639,680 201,668 24,738 2,866,086 $ 9,680 31,668 (36,762) 4,586 934,200 517,800 682,700 343,300 2,478,000 933,600 649,400 834,700 1,688,600 4,106,300 682,750 648,231 834,322 1,687,419 3,852,722 250,850 1,169 378 1,181 253,578 383,500 (1,244,800) (986,636) 258,164 150,000 (1,546,200) 1,166,300 (229,900) 150,000 (1,204,900) 1,166,300 111,400 240,177 (666,298) (426,121) 90,177 538,602 (1,166,300) (537,521) 153,600 (1,133,400) (1,412,757) (279,357) (153,600) (153,300) 2,580,813 (153,600) 2,580,813 (300) (1,286,700) 1,014,456 2,301,156 1,286,700 - 34,661,537 $ 35,675,993 33,374,837 $ 35,675,993 Net change in net assets Net Assets - beginning of year Net Assets - end of year Actual Amounts Final Variance with Final BudgetPositive (Negative) - $ 93 $ 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, 2008 Budgeted Amounts Original OPERATING REVENUES: Connection fees Total operating revenues $ OPERATING EXPENSES: Depreciation Total operating expenses 5,572,000 5,572,000 (500,000) NONOPERATING REVENUE : Interest income Total nonoperating revenue 500,000 500,000 Income (loss) before transfers - Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 6,072,000 6,072,000 Operating Income - 94 5,572,000 5,572,000 $ $ (2,441,019) (2,441,019) 3,005 3,005 4,356,995 4,356,995 1,212,000 3,127,976 1,915,976 500,000 500,000 587,176 587,176 87,176 87,176 1,712,000 3,715,152 2,003,152 (83,942) 1,628,000 $ 3,130,981 3,130,981 4,360,000 4,360,000 (84,000) - $ Actual Amounts Final Variance with Final BudgetPositive (Negative) (1,628,000) - 58 3,631,210 $ 15,441,328 19,072,538 2,003,210 $ 17,069,328 19,072,538 To Table of Contents City of Casa Grande, Arizona Sanitation Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2008 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): Gain on sale of assets Interest income Interest expense Total nonoperating revenue (expense) Income before transfers Transfers in Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 4,593,000 244,000 10,000 4,847,000 Actual Amounts Final $ 4,593,000 244,000 10,000 4,847,000 $ 4,524,729 301,798 166,331 4,992,858 Variance with Final BudgetPositive (Negative) $ (68,271) 57,798 156,331 145,858 2,427,800 665,000 1,000,400 270,000 300,000 4,663,200 2,427,800 544,600 843,400 427,000 300,000 4,542,800 2,201,099 535,791 843,045 426,420 25,287 4,031,642 226,701 8,809 355 580 274,713 511,158 183,800 304,200 961,216 657,016 80,000 (167,700) (87,700) 80,000 (126,700) (46,700) 121,826 83,815 (9,875) 195,766 121,826 3,815 116,825 242,466 96,100 257,500 (961,200) (1,081,600) (865,100) (824,100) 865,100 - 95 $ 824,100 - 1,156,982 899,482 500,000 (961,200) 500,000 120,400 695,782 $ 2,406,528 3,102,310 1,519,882 $ 1,582,428 3,102,310 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, 2008 Budgeted Amounts Original OPERATING REVENUES: Rental Green fees Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses $ 563,400 39,800 535,700 1,138,900 Operating Income Transfers in Transfers out Net change in net assets 133,217 664,284 6,581 804,082 $ 509,559 57,486 350,045 46,226 963,316 (67,483) (60,716) (3,419) (131,618) 53,841 514 75,455 74 129,884 (159,234) (22,500) 8,500 (14,000) 8,105 (4,434) 14,203 17,874 8,105 18,066 5,703 31,874 (194,700) (171,500) (141,360) 30,140 300,000 (105,300) 300,000 (128,500) 300,000 (105,300) 23,200 53,340 - $ $ (157,500) 8,500 8,500 Income (loss) before transfers 200,700 725,000 10,000 935,700 563,400 58,000 425,500 46,300 1,093,200 (203,200) NONOPERATING REVENUE (EXPENSE): Interest income Interest expense City sales tax Total nonoperating revenue Net assets - beginning of year Net assets - end of year 200,700 725,000 10,000 935,700 Actual Amounts Final Variance with Final BudgetPositive (Negative) - 96 - $ - (1,734) 53,340 $ 388,123 441,463 $ 388,123 441,463 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Source June 30, 2008 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 $ 13,088,755 17,757,567 173,646,132 1,702,419 16,735,213 $ 222,930,086 $ 459,863 1,529,993 12,175,293 95,197,021 21,490,051 92,077,865 $ 222,930,086 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. 97 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, 2008 Function and Activity General government General Capital Assets June 30, 2007 $ Public safety 2,280,246 Additions $ General Capital Assets June 30, 2008 Disposals 6,935,422 $ - $ 9,215,668 10,198,707 2,613,781 (166,908) 12,645,580 149,043,321 19,799,577 (214,158) 168,628,740 1,645,925 - Culture and recreation 12,375,250 747,658 (229,373) 12,893,535 Economic development 16,389,694 1,527,197 (16,253) 17,900,638 (626,692) $ 222,930,086 Streets/Transportation Public works Total $ 191,933,143 $ 31,623,635 - $ 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. 98 To Table of Contents City of Casa Grande, Arizona Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2008 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 - 2008 Community Development Block Grant - 2008 HOME - 2007 HOME - 2008 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 Total Department of Transportation U.S. Department of Homeland Security Federal Emergency Management Agency Federal Emergency Management Agency Passed through Arizona Division of Emergency Management Office of Domestic Preparedness Total Department of Homeland Security Total Federal Financial Assistance and Expenditures of Federal Awards *Denotes major program 99 Grant Number Federal CFDA Number 121-07 157-07 101-08 113-08 310-07 303-08 14.228 14.228 14.228 14.228 14.239 14.239 10 461200 10.420 10.561 327,025 * 3,073 330,098 5-237 5-237 5-237 5-237 93.044 93.045 93.667 93.053 14,337 70,766 8,028 16,184 109,315 2005-DJBX0880 2006BUBX 2006-DJBX1098 16.592 16.607 16.592 382 4,145 9,952 14,479 3-04-0007-10-2006 3-04-0007-11 20.106 20.106 900,154 414,785 1,314,939 EMW-2006-FP-01416 EMW-2007-FF-00468 97.044 97.044 2005-GE-T5-0030 97.067 Expenditures $ 16,344 209,958 142,989 12,777 561,722 133,000 1,076,790 * * * * 62,120 * 33,133 * 27,285 122,538 $ 2,968,159 To Table of Contents City of Casa Grande Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2008 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. 100 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. 102 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. 109 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. 111 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. 117 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. 119 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. 101 To Table of Contents Schedule 1 City of Casa Grande Net Assets by Component Last Six Fiscal Years (accrual basis of accounting) June 30 2003 2004 2005 2006 2007 2008 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 $ 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 $ 144,539,605 77,352,432 29,930,330 $ 251,822,367 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 $ 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 $ 33,189,049 19,276,562 7,191,725 $ 59,657,336 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 $ 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 $ 177,728,654 96,628,994 37,122,055 $ 311,479,703 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 102 To Table of Contents Schedule 2 City of Casa Grande Changes in Net Assets Last Six Fiscal Years (accrual basis of accounting) June 30 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 2005 2006 2007 2008 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 $ 6,958,153 17,799,896 10,614,899 1,652,940 5,853,610 5,932,564 641,914 49,453,976 102,276 823,583 142,848 28,440 303,358 1,511,684 959,975 583,532 213,613 4,584,394 4,312,801 13,566,504 113,317 810,216 424,308 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 45,518,433 144,550 1,214,170 1,345,035 100,784 378,268 8,272,278 1,692,576 694,885 627,986 9,303,041 22,402,954 46,176,527 $ (9,958,607) $ (10,311,090) $ (1,806,916) $ 38,095,195 $ 2,338,585 $ (3,277,449) 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 3,105,864 28,082,890 1,687,014 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 2,984,122 4,592,697 2,199,266 3,202,760 452,693 388,409 525,942 47,221,657 $ 7,761,830 $ 10,216,932 $ 20,605,740 $ 66,621,747 $ 43,705,787 $ 43,944,208 $ 3,627,359 9,888,543 2,702,484 697,449 3,778,926 2,289,429 540,921 23,525,111 2004 $ Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 103 To Table of Contents Schedule 3 City of Casa Grande Changes in Net Assets Last Six Fiscal Years (accrual basis of accounting) June 30 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 $ 197,109 698,909 2,465,665 2,638,820 6,000,503 2004 $ 142,327 716,703 2,981,091 2,797,052 6,637,173 2005 $ 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 2008 $ 117,638 967,750 4,522,025 4,041,517 9,648,930 194,782 420,799 2,767,417 2,687,498 1,681,957 (77,534) 7,157 1,099,166 8,781,242 193,006 433,686 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 17,439,382 190,125 797,501 5,972,329 4,990,169 14,203 919,273 155,834 2,580,813 15,620,247 $ 2,780,739 $ 5,755,565 $ 9,496,374 $ 16,743,202 $ 6,899,728 $ 5,971,317 26,617 (1,341,083) (99,000) (349,200) (449,800) (525,942) Total Business-type Activities Change in Net Assets $ 2,807,356 $ 4,414,482 $ 9,397,374 $ 16,394,002 $ 6,449,928 $ 5,445,375 Total Primary Government Change in Net Assets $ 10,569,186 $ 14,631,414 $ 30,003,114 $ 83,015,749 $ 50,155,715 $ 49,389,583 Total Business-type Activities Net Program Expense Other Changes in Net Assets Transfers 104 To Table of Contents Schedule 4 City of Casa Grande Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 1999 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 2000 Fiscal Year 2001 2002 2003 $ 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 $ $ 6,795,532 $ 4,096,314 $ 2,186,274 $ 2,311,916 $ 2,341,307 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 4,328,235 372,078 $ 7,041,620 105 486,826 3,823,320 $ 4,310,146 To Table of Contents 2004 $ Fiscal Year 2006 2005 $ 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 2,548,121 30,572,472 $ 33,120,593 $ 2,368,606 $ $ $ 4,413,184 $ 32,896,933 43,633,806 10,701,962 $ 58,748,952 49,835,900 77,406 $ 82,810,239 6,252,078 15,594,386 2,479,265 $ 24,325,729 $ 4,250,108 28,612,756 5,365,147 $ 38,228,011 $ 2008 801,965 6,343,317 7,145,282 9,013,364 1,066,167 $ 12,448,137 $ 2007 106 $ To Table of Contents Schedule 5 City of Casa Grande Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2001 2002 2003 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 $ 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 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 3,641,912 9,499,759 1,987,200 657,785 3,352,211 1,871,266 4,472,441 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 25,662,322 932,344 559,527 26,974,445 844,605 (701,105) 321,826 5,000,000 - 1,874,832 (1,659,139) 2,001,127 - 2,391,189 (2,649,899) 369,137 - 1,010,817 (1,097,185) - 1,618,327 (1,644,944) 150,000 - 5,465,326 2,216,820 1999 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) 8,207,129 698,453 8,947,070 877,478 827,765 242,998 376,637 104,288 384,429 20,666,247 Net change in fund balances $ 4,416,603 Debt service as a percentage of noncapital expenditures Not Available* 2000 $ $ 110,427 (86,368) (666,976) $ (1,937,887) $ (121,439) Not Available* Not Available* Not Available* *Prior to implementation of GASB 34 in 2003, the Capital outlay number from the CAFR may not include all capital asset purchases. 107 123,383 $ 512,075 6.63% To Table of Contents 2004 2005 Fiscal Year 2006 2007 2008 $ 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 $ 32,840,670 1,881,951 20,798,409 10,171,890 815,081 29,691 3,202,760 1,546,935 608,700 71,896,087 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 8,076,361 16,983,507 2,323,097 1,684,699 5,463,871 4,965,772 11,030,175 960,801 471,539 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 1,226,548 607,351 52,361,381 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) - 2,397,922 4,831,244 433,600 6,844,898 (6,311,098) 455,000 1,809,371 2,798,171 8,101,980 (7,483,839) 9,000,000 (30,201) 578,989 10,166,929 7,416,028 $ 16,998,260 $ 20,909,057 $ 5.97% 5.02% $ 28,728,468 5.27% 4.30% 108 $ 29,701,636 4.44% To Table of Contents Schedule 6 City of Casa Grande Sales Tax Revenue by Industry, Fiscal Years 2008, 2007, 2006 and 2005 Fiscal Year 2005 Percentage Tax Paid of Total Fiscal Year 2006 Percentage Tax Paid of Total Fiscal Year 2007 Percentage Tax Paid of Total Fiscal Year 2008 Percentage Tax Paid of Total Construction Manufacture Transportation/Communication/ Utilities Wholesale Trade Retail Trade Restaurants/Bars Insurance/Real Estate Hotels/Lodging Services All Other $ 2,187,722 497,382 15.36% 3.49% $ 3,164,234 599,880 17.93% 3.40% $ 8,405,855 * 624,116 33.85% 2.51% $ 11,087,874 750,711 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 8.33% 1.20% 47.46% 5.79% 9.82% 1.79% 2.42% 1.86% 1,762,783 271,980 8,778,705 1,027,918 2,122,802 348,177 521,470 968,878 7.10% 1.10% 35.35% 4.14% 8.55% 1.40% 2.10% 3.90% 1,987,604 233,859 9,562,653 1,118,248 2,052,131 316,241 546,058 652,605 39.17% 2.65% 0.00% 7.02% 0.83% 33.78% 3.95% 7.25% 1.12% 1.93% 2.31% Total $ 14,244,753 100.00% $ 17,650,253 100.00% $ 24,832,684 100.00% $ 28,307,984 100.00% Source: Arizona State Department of Revenue Note: The categories presented are intended to provide alternative information regarding the sources of the City's revenue. Information prior to 2005 is not available. *Construction sales tax rate changed from 1.8% to 4% effective June 15, 2006 109 To Table of Contents Schedule 7 City of Casa Grande Direct and Overlapping Sales Tax Rates 6/30/2008 City Rates State and Pinal County Combined Privilege tax, except retail, utilities and telecommunication 1.80% 6.70% 8.50% Retail 2.00% 6.70% 8.70% Retail - privilege tax for single item over $5000 1.50% 6.70% 8.20% Hotel/Motel 3.80% 6.70% 10.50% Restaurant/Bar 1.80% 6.70% 8.50% Utilities/Telecommunications 2.00% 6.70% 8.70% Construction * 4.00% 6.70% 10.70% Type of Tax Sources: City of Casa Grande Finance Department and Arizona Department of Revenue *Changed from 1.8% effective 6/15/2006 110 To Table of Contents Schedule 8 City of Casa Grande Ratios of Outstanding Debt by Type, Last Ten Fiscal Years Fiscal Year General Obligation Bonds Street & Hwy User Revenue Bonds 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1,335,000 1,335,000 1,790,000 10,775,000 410,000 - Governmental Activities Excise Tax Special Revenue Assessment Obligations Bonds 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 6,199,218 280,000 1,170,000 955,000 870,000 780,000 685,000 585,000 480,000 370,000 255,000 Capital Leases 463,944 1,042,071 1,130,019 761,093 566,744 1,236,062 4,485,933 4,029,980 3,754,188 3,180,356 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. 111 To Table of Contents General Obligation Bonds 2,000,000 Business-type Activities Excise Tax Revenue Capital Obligations Leases 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 13,855,602 605,180 638,216 1,162,818 787,125 459,286 404,534 593,795 408,291 295,899 179,122 Notes Payable Total Primary Government Percentage of Personal Income (a) 203,193 178,170 178,170 177,300 168,069 158,520 148,643 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 36,592,941 5.56% 4.84% 4.33% 3.94% 3.21% 4.32% 4.22% 3.59% 3.12% 3.61% 112 To Table of Contents Schedule 9 City of Casa Grande Ratio of General Bonded Debt Outstanding Last Four Fiscal Years Fiscal Year General Obligation Bonds 2005 $ 1,335,000 2006 Estimated Actual Value of Property (a) $ Percentage of Estimated Actual Value of Property General Bonded Debt Per Capita (b) 1,942,707 68.72% 1,335,000 8,183,338 16.31% N/A 2007 1,790,000 39,939,824 4.48% 1,584 2008 2008 1,790,000 11,000,000 93,675,428 2,295,221,460 1.91% 0.48% 670 267 (1) (2) $ N/A (a) Source: Pinal County Assessor's records (b) Estimated population of Mission Royale CFD 6/30/08 Estimated population of Villago CFD 6/30/08 Provided by Sales Offices. No population data are available for years prior to 2007 Population of Casa Grande 1,682 990 42,422 (1) 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. (2) General oblication bonds were issued by the City of Casa Grande in June, 2008 113 To Table of Contents Schedule 10 City of Casa Grande Direct and Overlapping Governmental Activities Debt As of June 30, 2008 Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt $ 169,886,000 14.49% $ 24,623,578 School District #4 30,100,000 63.06% 18,980,165 School District #82 26,335,000 46.73% 12,305,367 Central Arizona Community College 17,270,000 11.85% 2,046,407 1,335,000 100.00% 1,335,000 440,000 100.00% 440,000 Governmental Unit Pinal County Mission Royale CFD Villago CFD Subtotal, overlapping debt 59,730,516 City direct debt 18,634,575 Total direct and overlapping debt $ 78,365,091 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. 114 To Table of Contents Schedule 11 City of Casa Grande Legal Debt Margin Information June 30, 2008 Net Secondary Assessed Valuation as of June 30, 2008 $276,565,097 Debt limit (6% of assessed value) Debt applicable to limit: General obligation bonds 16,593,906 4,500,000 Legal 6% debt margin $ Debt limit (20% of assessed value) Debt applicable to limit: General obligation bonds 12,093,906 55,313,019 6,500,000 Legal 20% debt margin $ Note: The City issued General Obligation bonds for $11,000,000 in June, 2008. No retroactive reporting of the legal debt margin is provided because the City had no prior general obligation debt since 1997. 115 48,813,019 To Table of Contents Schedule 12 City of Casa Grande Pledged-Revenue Coverage Last Ten Fiscal Years Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Special Assessment Bonds Special Debt Service Assessment Collections Principal Interest Coverage 447,993 204,394 308,629 290,054 174,365 137,642 217,895 354,840 28,907 29,691 232,500 142,500 215,000 85,000 90,000 95,000 100,000 105,000 110,000 115,000 37,553 25,320 37,785 51,570 56,147 42,120 36,990 31,590 25,920 19,980 1.66 1.22 1.22 2.12 1.19 1.00 1.59 2.60 0.21 0.22 Excise Tax Revenue Obligations Pledged Debt Service Revenue Collected (a) Principal Interest Coverage 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 52,450,264 715,000 945,000 1,000,000 1,050,000 1,105,000 1,165,000 950,001 985,000 1,020,000 1,070,000 (b) 865,073 1,058,859 1,010,013 957,807 901,980 594,321 1,054,202 1,022,252 987,632 1,039,517 11.42 9.96 11.53 11.16 11.68 14.58 14.60 18.80 22.41 24.86 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. (b) Includes $15,000 principal and $89,660 interest for Community Facilities District debt payments. 116 To Table of Contents Schedule 13 City of Casa Grande Demographic and Economic Statistics, Last Ten Fiscal Years Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Population 23,175 26,490 27,815 27,290 29,715 31,315 34,260 36,450 38,785 42,422 County Per Capita Personal Income 16,563 16,994 17,436 17,889 18,354 19,646 20,959 21,800 22,672 23,905 Total Personal Income School Enrollment Unemployment Rate 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 1,014,097,910 7,241 7,442 7,680 7,784 7,895 8,120 8,930 9,049 10,290 11,066 4.00% 3.90% 4.20% 6.80% 6.20% 5.00% 5.20% 5.10% 4.30% 6.10% 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. 117 To Table of Contents Schedule 14 City of Casa Grande Principal Employers, Current Year and Eight Years Ago Employer Casa Grande Elementary School District Casa Grande Regional Medical Center Wal-Mart Distribution Center Wal-Mart Supermarket Frito-Lay Inc. Mobile-Mini City of Casa Grande Abbott Laboratories/Ross Products Hexcel Corporation Casa Grande Valley Newspapers 2008 (a) Percentage of Total City Employees Employment 2000 (b) Percentage of Total City Employees Employment 950 850 569 450 450 450 439 400 350 150 5.40% 4.83% 3.23% 2.56% 2.56% 2.56% 2.49% 2.27% 1.99% 0.85% 625 788 302 251 397 562 100 4.52% 5.70% 0.00% 0.00% 2.19% 0.00% 1.82% 2.87% 4.07% 0.72% 5,058 28.74% 2,400 17.37% 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. 118 To Table of Contents Schedule 15 City of Casa Grande Authorized City Government Employee Positions by Function/Program Last Ten Fiscal Years Function/Program Fiscal Year General Government Police, City Attorney and Court 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 17.5 22 24.5 26 22.75 23 24 26 30 39.25 86.5 88.5 91.5 93.5 98.5 97.5 103.5 107.5 123.05 139 Fire Culture and Recreation Planning and Development Public Works Total 25 27 27 30 33 37 38 41 54.75 60.5 37 39 43 43 44 44 44 44 48 61.25 15.75 15.75 16 17 17 17 19 22 26.5 34.5 62 61 66 76 80 80 79 84.25 96.25 104.5 243.75 253.25 268.00 285.50 295.25 298.50 307.50 324.75 378.55 439.00 Source: City Budget Note: Information is based on authorized positions. 119 To Table of Contents Schedule 16 City of Casa Grande 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 2000 2001 2002 Fiscal Year 2003 2004 2005 2006 2007 2008 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 19,331 2,364 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 4,286 5,642 1,512 19,801 26,788 98,206 657,807 791 9,216 4,228 26,019 59,332 649,745 817 9,163 4,785 27,602 63,362 654,370 853 10,561 4,338 29,705 71,814 700,884 796 9,495 4,673 33,076 68,677 671,030 886 8,408 4,773 37,674 69,588 716,138 928 8,607 4,387 38,869 69,412 702,062 1,046 7,068 4,614 39,365 69,936 706,375 1,213 6,127 4,055 42,412 72,028 802,935 1,121 6,136 3,840 41,126 71,626 864,421 1,104 6,943 4,015 95,610 18,229 380,942 799,622 94,523 17,199 332,691 391,308 99,414 18,912 422,063 733,582 100,619 22,647 374,840 734,852 100,655 18,940 149,210 825,000 90,826 5,776 52,240 172,391 86,364 6,415 51,915 170,875 73,984 14,959 49,718 187,063 74,311 80,950 73,079 225,043 75,863 149,296 75,840 229,446 274 892 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 16 724 114 262 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 12 984 193 195 777 25 26 12 1,150 85 1999 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. 120 To Table of Contents Schedule 17 City of Casa Grande 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 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2 2 3 3 3 3 3 3 3 3 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 26 1,387 5 1 25 93 22 18 22 18 22 18 22 18 52 18 52 18 52 18 52 18 52 18 52 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 3,130 375 375 9 31 3,302 389 450 9 35 Sources: Various City departments 121 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