To Table of Contents City of Casa Grande, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2010 To Table of Contents City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2010 Prepared by the Finance Department Diane Archer, Finance Director Janice Rutherford, Supervising Accountant To Table of Contents To Table of Contents 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)....... 4 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. WIFA Financing............................................................................................................ 14. Changes in Long-Term Debt ......................................................................................... 15. Long-term Debt ............................................................................................................. 16. Landfill Closure and Postclosure Care Costs ................................................................ 17. Construction Commitments........................................................................................... 18. Summary of Interfund Transactions .............................................................................. 19. Deficit in Net Assets...................................................................................................... 20. Sales Tax Incentive Agreement..................................................................................... 21. Prior Period Adjustment ................................................................................................ 22. Subsequent Events......................................................................................................... Page 38 49 52 53 53 54 54 56 60 61 63 64 66 67 68 68 69 69 71 71 71 71 SUPPLEMENTARY INFORMATION – COMBINING FUND FINANCIAL STATEMENTS Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........... 72 74 Fiduciary Funds Combining Statement of Fiduciary Net Assets................................................................... Combining Statement of Changes in Assets and Liabilities – All Agency Funds .............. 76 77 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund Legal Level Compliance…………………… 78 Budgetary Comparison Schedules – Other Major Governmental Funds General Obligation/Special Assessment Debt Service Fund .............................................. Capital Replacement/Development Fund ........................................................................... Community Facilities Districts Capital Projects Fund........................................................ 79 80 81 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 ................................... 82 83 84 85 ii To Table of Contents TABLE OF CONTENTS (continued) OTHER SUPPLEMENTARY INFORMATION (continued) Page Budgetary Comparison Schedules – Non-Major Governmental Funds (continued) Promotion & Tourism Special Revenue Fund .................................................................... Court Enhancement/Probationary Special Revenue Fund .................................................. Housing Application, Development Fees, Rehabilitation and Preservation Grant Special Revenue Fund ....................................................................................... Public Safety Special Revenue Fund .................................................................................. Redevelopment Debt Service Fund .................................................................................... Recreation Debt Service Fund ............................................................................................ Airport Improvement Capital Projects Fund....................................................................... 88 89 90 91 92 Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch.............................................................................................. Wastewater .................................................................................................................. Wastewater Development Fees ................................................................................... Sanitation..................................................................................................................... Golf Course ................................................................................................................. 93 94 95 96 97 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule of Changes by Function and Activity.................................................................. 98 99 86 87 III. STATISTICAL SECTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Page 100 101 103 105 107 109 111 113 114 116 117 118 119 120 121 15 16 17 122 123 124 Schedule Index.................................................................................................................................. Net Assets by Component – Last Eight Fiscal Years ........................................................ Changes in Net Assets, Governmental - Last Eight Fiscal Years...................................... Changes in Net Assets, Business-type - Last Eight 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 Six 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 Six 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 Ten Years Ago ................................................. Authorized City Government Employee Positions by Function-Program – Last Ten Fiscal Years ................................................................. Operating Indicators by Function/Program – Last Ten Fiscal Years ............................... Capital Asset Statistics by Function/Program – Last Ten Fiscal Years............................. iii To Table of Contents TABLE OF CONTENTS (continued) SINGLE AUDIT SECTION SINGLE AUDIT REPORTS Report on Internal Control over Financial Reporting and on compliance and other matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 125 Independent Auditors Report on Compliance with Requirements that could have a direct and material effect on each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133............................................................................................................................... 127 Schedule of Expenditures of Federal Awards ............................................................................... 129 Schedule of Findings and Questioned Costs ................................................................................. 131 iv To Table of Contents City of Casa Grande November 22, 2010 Honorable Mayor, City Council, City Manager Citizens of Casa Grande, Arizona We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Casa Grande, Arizona (the City) for the fiscal year ended June 30, 2010. The report was prepared by the City’s Finance Department. This document 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 libraries 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 for 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 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 presented in this report is accurate in all material respects and fairly sets forth the financial position and results of operations of the City on both a city-wide and fund basis. We include all disclosures necessary to enable the reader to gain an understanding of the City’s financial activity and financial stability. These financial statements are prepared in accordance with generally accepted accounting principles 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). This letter of transmittal is designed to be read in conjunction with the Management’s Discussion and Analysis. Henry & Horne, L.L.P. audits the City of Casa Grande, Arizona’s financial statements. The independent audit report is presented as the first component in the financial section. 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. 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, 2010 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 a reasonable basis exists for rendering an unqualified opinion that the financial statements of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2010, are fairly presented, in all material respects, in conformity with GAAP. 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, 2010, 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 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 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 City Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations. The City of Casa Grande’s legal boundaries grew substantially over the past 4 years to just over 105 squares miles. The Voters approved the 2020 General Plan on November 3rd, 2009. The City’s population increased by 79% over the past nine years from 25,224 in 2000 to 45,116 in 2009. The City’s growth is attributed to affordable housing, proximity to labor opportunities in the metropolitan areas, and the rural quality of life offered to the residents. The City provides a full range of municipal services, including police and fire protection, maintenance of streets, recreational and cultural events, 2 libraries, planning and zoning, building inspection, code enforcement, wastewater, sanitation, airport, golf course and general administration. 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. Accordingly, the financial reporting entity consists of the City and four blended component units, 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 38 of the notes to the financial statements. vi To Table of Contents 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 operates under the Permanent Base Adjustment Alternative Expenditure Limit. The limit provides a cap on expenditures for the City. The base year is 1979-80 and the base amount is increased annually by population change and by the implicit price deflator. In May 2007, the voters approved a permanent base adjustment to the state imposed expenditure limit. This option allowed Casa Grande to adjust the state imposed expenditure base from the original 1979-80 base of $3,743,397 to $18,793,221. After adjustments for inflation and population growth, the City’s expenditure limitation for fiscal year 2009-10 is $162,515,732. 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 spend winters 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. 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 prior two fiscal years 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 economy and tax base. vii To Table of Contents 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. A cost impact proposal accompanies each annexation so the Council is aware of the financial impact before an annexation occurs. Casa Grande’s economy is reflective of the State and the nation in that housing development is reduced to about 15 new single family permits per month, sales tax revenue is down and state shared revenue is on the decline. 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 50% 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 construct park and recreation projects. Management is projecting the city’s sales tax to decrease by an additional 6.4% next year due to a decrease in spending 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 9.2% this next year due to a 25% reduction in state shared income tax. The State experienced 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 increased in FY11 to .8110 from .7135 per $100 of assessed valuation. Despite the increase in tax levy rate, most residential properties did not experience an increase due to decreasing property values. 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 and $19 million in 2009. The secondary tax levy beginning in fiscal year 2009 is .6308. MAJOR INITIATIVES AND ACCOMPLISHMENTS In 2010 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 Decreased call center response time by 17%. Part 1 UCR crimes increased by 6.3%. Held 16th annual “National Night Out” celebration. Citizen Survey rating for satisfaction with Police services increased from 75.2% to 80%. Maintained over a 90% victim contact rate for cases assigned to Criminal Investigations. Fire o o o o Responded to 5,703 emergencies, of which 4,289 (75.17%) involved emergency medical services, averaging a response time for all incidents of 5 minutes 44 seconds.. Maintained a department commitment for excellence in public education with public contacts of 15,812. Structure fires reduced by 11.5%. Continued mentoring of the Casa Grande Fire Explorers Program. viii To Table of Contents Public Works o Installed 2 in ground lighted crosswalks. o Cracksealed 305,000 sq yards. o Completed facility assessment and energy audit of all City Facilities. o Hosted the 52nd Annual Cactus Fly-In at the municipal airport. o Treatment of an average of 5 million gallons per day of wastewater. o Collected 18.3 tons of residential trash. o Collected 66.8 tons of solid waste at the landfill site. o Recycled 11% of the residential solid waste materials. o Complete preventative maintenance, when due on vehicles, 71% of the time. Community Services o Received a rate of 78% in the citizen survey for residents who feel the cleanliness of Casa Grande is excellent or good. o Provided a cost recovery rate of 93% on recreation programs. o Continued and expanded recreational participation by 12%. o Library visitors went over 366,000 at the two libraries. o Served a total of 39,864 meals and provided a total of 6,729 volunteer hours. o Maintained 1,392 acres of parkland. o Provided 292 swimming lessons. Development Center o Published digital Zoning map to City web site. o Created online Code Enforcement complaint form and case status report. o Received voluntary code compliance in 87% of cases. OTHER MATTERS The information presented in the financial statement is best understood when it is considered from the broader perspective of the specific environment within which the City operates. Debt Administration. On June 30, 2010, the City had a number of debt issues outstanding. Total bonded debt at June 30, 2010, was $98.1 million. The City’s general credit was rated A+ by Fitch Ratings and received an A- rating from Moody’s. The City is diligent in its efforts to maintain and improve these ratings. The ratings for the existing issues are as follows: Moody’s Investor Service ExciseTax Revenue Series 1997 Series 2003 Series 2009 General Obligation Bonds Aaa A3 nr A2 Fitch IBCA A+ AAAA- 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 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, 2010 the City had $71,540,540 of Excise Tax Revenue Obligations outstanding. ix To Table of Contents 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, 2010, the City has debt capacity of $67,781,620 for general obligation bonds subject under the 20% limitation based on the FY 2010 secondary assessed valuation. The City has $26,605,000 in outstanding General Obligation bonds, with voter approval to issue an additional $17 million over the next several years. 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 provides a reasonable return while meeting the daily cash flow demands of the City and conforms to 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 2010 fiscal year. The yield for the investment account averaged .0867 percent for the fiscal year. At June 30, 2010, the Pool consisted of $2.9 billion in total local government deposits, which included $116 million the City had invested in the Pool. With the issuance of GASB Statement No. 31, all investments are stated at fair value on the balance sheet. The State Treasurer’s Local Governmental Investment Pool includes liquid investments in which cost approximates the market. The Firemen’s Pension Fund is stated at fair value, which totals $568,187. 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 $50,000 deductible and a $13 million umbrella liability policy. The City began a self-insurance fund in fiscal year 2010 to account for and finance its uninsured risks of loss for medical claims and to account for all other insurance purchases. The City purchases commercial stop loss insurance to limit the claims liability for health insurance to $85,000 per individual claims. There is also an aggregate stop loss for health insurance of $3,574,213. 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, 2009. This was the nineteenth 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. x To Table of Contents 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, 2009. To receive this award, a governmental unit must publish a budget document that meets program criteria. The Award is valid for a period of one year. This is the twelfth Distinguished Budget Presentation Award the City of Casa Grande received. We expect to continue to participate and meet the program requirements. 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 KARL MONTOYA – Mayor Pro-Tem LISA FITZGIBBONS MARY KORTSEN MATT HERMAN CITY MANAGER JAMES THOMPSON FINANCE DEPARTMENT STAFF DIANE ARCHER JANICE RUTHERFORD GAY BARNHART FINANCE DIRECTOR SUPERVISING ACCOUNTANT ASSISTANT xiii To Table of Contents City of Casa Grande Organizational Chart People of Casa Grande Mayor and Council City Manager City Attorney Police Administration Deputy City Manager Fire Department City Clerk City Court Public Works Administrative Services Finance Department Development Center Community Services Animal Control Engineering Human Resources Financial Services Planning and Development Library Police Communications Wastewater Risk Management Information Systems Housing Improvement Senior Adult Services Police Patrol Sanitation Geographical Information System Building Inspection Parks Maintenance Police Criminal Investigations Equipment Maintenance Recreation Programs Police Special Operations Streets Len Colla Center Water Aquatics Airport W omen's Club Facilities Maintenance Golf Course Public Information Officer General Recreation To Table of Contents FINANCIAL SECTION To Table of Contents To Table of Contents INDEPENDENT AUDITORS’ REPORT The Honorable Mayor and Council City of Casa Grande, Arizona We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Casa Grande (the City), Arizona, as of and for the year ended June 30, 2010, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Casa Grande, Arizona, as of June 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund and the Major Special Revenue Funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. In connection with our audit, nothing came to our attention that caused us to believe that the City of Casa Grande failed to use highway user revenue fund monies received by the City of Casa Grande pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2 and any other dedicated state transportation revenues received by the City of Casa Grande solely for the authorized transportation purposes. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. In accordance with Government Auditing Standards, we have also issued our report dated November 10, 2010 on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. www.henryandhorne.com To Table of Contents The Honorable Mayor and Council City of Casa Grande, Arizona Page Two That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 3 through 11 and 78 through 96 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. The accompanying schedule of expenditures of federal awards (required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Government, and Non-Profit Organizations) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Casa Grande, Arizona November 10, 2010 2 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, 2010. This discussion and analysis is designed to (1) assist the reader focus 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  The City’s total net assets, on the government-wide basis, totaled $324 million at June 30, 2010 of which $30 million is unrestricted. This was an increase of $3.5 million from fiscal year 2009, $3 million in the business-type activities and $.5 in governmental activities.  The governmental activities revenues decreased by approximately $3.4 million over the previous year.  The business-type activities operating revenues increased by $1.3 million from the previous year.  The General Fund reported expenses in excess of revenue and other financial sources and uses by $335 thousand for the year.  At June 30, 2010, unreserved fund balance for the General Fund was $25.3 million, or 75% of General Fund expenses.  At June 30, 2010, unreserved fund balance of the governmental funds was $65.9 million, or 85% of governmental fund expenses for fiscal year 2010.  The governmental activities general revenues of $56.4 million were $1.1 million greater than the $55.3 million of expenses before other financial sources and uses.  The business-type activities net assets were $63.8 million as of June 30, 2010 which is an increase of $3 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 focus on major funds of the City. A major fund is determined based on the % a certain fund value is in relation to all of the same fund type – either governmental or proprietary. A fund is a grouping of related accounts used to maintain control over resources segregated for specific activities or conditions. Funds ensure and demonstrate compliance with finance-related 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, expenses, 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 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 four enterprise funds: The golf course, sanitation, water and wastewater funds. 4 To Table of Contents The internal service funds are used for activities in which the City is the customer. The fleet maintenance and self insurance fund are the two City’s internal service funds. Their purposes are to provide vehicle maintenance services to City departments and to provide cost accounting for insurance costs and risk. Fiduciary funds – Fiduciary funds 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 38-70) 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, 2010. 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, 2010 compared to the prior year. Condensed Statement of Net Assets (in Millions) Governmental Activities 2009 2010 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 Business-type Activities 2009 2010 Total Primary Government 2009 2010 $142.7 144.0 286.7 $117.1 201.2 318.3 $39.7 47.9 87.6 $22.8 99.5 122.3 $182.4 191.9 374.3 $139.9 300.7 440.6 9.5 17.6 27.1 5.7 52.5 58.2 4.6 22.1 26.7 3.6 55.0 58.6 14.1 36.7 53.8 9.3 107.5 116.8 166.6 63.8 29.2 $259.6 169.0 66.3 24.8 $260.1 42.8 16.8 1.2 $60.8 46.7 12.0 5.1 $63.8 209.4 80.6 30.4 $320.4 215.7 78.3 29.9 $323.9 5 To Table of Contents The net assets of the City increased by $3.5 million from June 30, 2009. At year end June 30, 2010 the net assets of the City totaled $323.9 million. Of this $323.9 million, $260.1 million was in the governmental activities, a .1% increase and $63.8 million was in the business-type activities, a 5% increase. Net Assets consist of three components. The largest portion of net assets ($215.7 million or 67%) 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 ($78.3 million or 24%) 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 ($29.9 million or 9%), 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, 2010 were $69,802,604. The total cost of all programs and services was $66,931,719. The following table presents a summary of the changes in net assets for the year ended June 30, 2010. 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 2009 2010 Business-type Activities 2009 2010 Total 2009 2010 $5,685 8,859 7,361 $5,719 7,469 4,841 $10,834 717 $12,430 896 $16,519 8,859 8,078 $18,149 7,469 5,737 6,265 23,314 1,910 9,503 1,255 64,152 7,423 19,776 1,947 8,523 733 56,431 - - 525 12,097 19 13,371 6,265 23,335 1,910 9,503 1,780 76,249 7,423 19,802 1,947 8,523 752 69,802 Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Other Water Golf course Sewer Sanitation Total expenses 7,824 20,385 12,198 2,337 7,697 4,367 973 55,781 6,962 20,367 12,008 2,336 6,828 4,700 2,145 55,346 153 1,267 4,610 5,466 11,496 160 1,243 5,529 4,653 11,585 7,824 20,385 12,198 2,337 7,697 4,367 973 153 1,267 4,610 5,466 67,277 6,962 20,367 12,008 2,336 6,828 4,700 2,145 160 1,243 5,529 4,653 66,931 Excess before transfer Transfers In (Out) Increase in Net Assets 8,371 (563) $7,808 1,085 (631) $ 454 601 563 $1,164 1,786 631 $2,417 8,972 $8,972 2,871 $2,871 6 21 26 - 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. The expenses do not 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 84% of the total revenues of the City and 83% of the total expenses in fiscal year 2010. This compares to 83% of total revenues and 80% of expenses in fiscal year 2009. Governmental Programs Revenues and Expenses $30,000,000 $25,000,000 $20,000,000 Revenues Expenditures $15,000,000 $10,000,000 $5,000,000 $0 General Government Public safety Streets/Transportation Public works Culture & recreation Economic development 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 71-74. For fiscal year ended June 30, 2010, the governmental funds reflect a combined fund balance of $109.7 million, an increase of $11 million. A portion of the fund balance, $43.8 million is reserved for specific expenses or is legally segregated for a specific future use. The remaining $65.9 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 2009 Capital Other 2010 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 $33 million, a decrease of $3 million, in fiscal year 2010. The primary decreases are in local sales tax, license and permits and investment earnings revenues. The expenses, before other financing sources and uses, totaled $33.7 million, a decrease of $1.5 million. Transfers to other funds were a net of ($4.1) million resulting in a decrease to fund balance of $4.5 million. 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 must 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 $4.6 million, a decrease of $.4 million, while expenses totaled $3.1 million, a decrease of $1.9 million in fiscal year ended June 30, 2010. Another governmental fund of the City is the System Development Fee Fund which collects impact fees for public safety, parks and recreational facilities, library facilities, and general government. The fund balance is planned to finance capital improvements over the next several years. The Capital Development and Replacement Fund accounts for accumulated proceeds and capital expense of those proceeds for the construction of capital projects and for replacement of equipment. The fund balance increased in this fund due to year bond proceeds. 8 To Table of Contents Other governmental funds include the Grants Fund which accounts for the various state and federal grants awarded to the City for specific purposes and services in public safety, parks and recreation, and library; the CDBG, Self Help, and Home Funds provide a variety of housing and neighborhood improvement 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 $63.8 million, an increase of $3 million as of June 30, 2010. This increase includes an increase to unrestricted assets of $3.9 million. Operating revenues in fiscal year 2010 were $12.4 million, an increase of $1.4 million from the prior fiscal year, while operating expenses totaled $10.6 million, a decrease of $.2 million, resulting in $1.8million of net 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). Use of contingency is required for capital projects with budget overages, and other unanticipated expenses. 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 when the funding is received. The City’s total adopted budget was $221,082,560 during fiscal year 2010. Budget amendments between funds or departments or from budgeted contingencies into operational expense/expenditure accounts did occur. However, the adopted budget can not be increased. General Fund inflows (revenues and other sources) of $33.3 million, on a budgetary basis, were the same as budgeted inflows of $33.3 million, while actual outflows (expenditures and other uses) of $33.7 million were only 84% of final budgeted outflows. The decrease in General Fund outflows over budgeted amounts is primarily due to an emphasis on cost reductions. 9 To Table of Contents CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2010, the City had $300.8 million invested in various capital assets, net of accumulated depreciation and related debt, up $91.8 million. Of the $300.8 million $201.2 million (67%) is invested in governmental activities and $99.5 million (33%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following:      Continued construction of wastewater treatment plant expansion and renovation - work in progress amounted to $34,266,900. Sanitation equipment - $1,257,900 Cottonwood Lane widening - $5,109,200 Construction of sports complex - $11,623,150 Began construction of Public Safety facility - $9,156,000 The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2010. Additional information on the City’s capital assets may be found in Note 7 on pages 54-56. Capital Assets (In Thousands) Governmental Activities 2009 2010 Land & Const. in progress Building and improvements Machines and equipment Total $ 33,045 134,300 9,662 $177,007 $ 37,023 155,051 9,171 $201,245 10 Business-type Activities 2009 2010 $14,416 42,944 4,989 $62,349 $52,092 41,992 5,424 $99,508 Total 2009 2010 $ 47,461 177,244 14,651 $239,356 $ 89,115 197,043 14,595 $300,753 To Table of Contents Long-Term Debt The City’s outstanding long-term debt, including bonds, notes, capital leases, and compensated absences, was $105.4 million at June 30, 2010, with $6.8 million due within one year. Of this total, $52.6 million was in governmental activities and $52.8 million was in business-type activities. Of the outstanding debt, $72.8 million is excise tax revenue obligation bond collateralized by the City’s excise tax stream. 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, 2010. Further details can be found in Notes 10 to 15 on pages 61-67. Outstanding Debt (In Thousands) Governmental Activities 2009 2010 Compensated absences Capital leases Bonds payable Notes/loans payable Total $ 1,615 2,909 13,000 $17,524 Business-type Activities 2009 2010 $ 1,668 2,599 48,335 $52,602 $ 241 58 14,575 4,352 $19,226 $ 215 5 14,118 38,502 $52,840 Total 2009 2010 $ 1,856 2,967 27,575 4,352 $36,750 $ 1,883 2,604 62,453 38,502 $105,442 ECONOMIC FACTORS Casa Grande’s population has grown steadily since 2000. The growth rate over the course of the past 9 years was 82% and is expected to be 2% in 2011. The unemployment rate in Casa Grande for June 2010 was 10.5%, which is higher than the state (9.6%) and higher than the national average (9.5%). While the local economy witnessed a solid year, it has been largely driven by commercial construction. The retail sales tax remained stable due to the regional nature of Casa Grande. Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. The regional economy is slowing further due to sluggish building activity in both residential and commercial. Population growth is reduced to less than 1,000 persons in 2009 and personal income is declining. Within Casa Grande, the local economy is experiencing a temporary reduction in sales tax collection as the economy changes focus from one of spending to one of saving and repaying debt. Casa Grande continues to be a potential site for industrial and manufacturing companies. Total assessed value in Casa Grande has increased progressively, showing a 326% overall increase from 2000 to 2010. For tax year 2011 the values decreased by 5.3% reflective of home value decreases and commercial building increases. Residential value in 2010 represented about 45% 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 85122 or send an e-mail to darcher@casagrandeaz.gov. 11 To Table of Contents BASIC FINANCIAL STATEMENTS To Table of Contents To Table of Contents City of Casa Grande, Arizona Statement of Net Assets June 30, 2010 Governmental Activities $ 11,569,968 78,111,090 5,403,994 1,298,233 960,000 328,180 ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Restricted assets: Restricted investments Deferred bond costs Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other current liabilities Deposits held Accrued wages and benefits Accrued interest payable Unearned revenue Noncurrent liabilities: Due within one year: Current portion of compensated absences Current portion of capital leases and notes Current portion of excise tax revenue obligations Current portion of bonds payable Due in more than one year: Noncurrent portion of capital leases Noncurrent portion of notes payable Noncurrent portion of excise tax revenue obligations Noncurrent portion of bonds payable Less: Deferred amount on refunding Closure and postclosure liability Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Highways and streets Grant purposes Community development Debt service Capital projects Unrestricted Total net assets Total 12,594,532 99,074,512 6,774,134 1,298,233 351,189 18,838,237 569,053 125,332 262,144 18,963,569 831,197 37,022,894 52,184,437 89,207,331 164,222,412 318,324,061 47,323,396 122,316,444 211,545,808 440,640,505 4,754,078 632,152 286,599 (8,272) 2,955,426 15,004 81,336 515,514 - 7,709,504 15,004 713,488 802,113 (8,272) 1,668,315 268,616 646,753 1,086,363 215,408 2,224,571 583,247 113,638 1,883,723 2,493,187 1,230,000 1,200,001 2,330,254 20,609,173 25,992,820 (26,517) 58,240,334 36,281,846 12,438,613 1,293,096 (135,806) 1,970,031 58,551,924 2,330,254 36,281,846 33,047,786 27,285,916 (162,323) 1,970,031 116,792,258 169,037,582 46,698,154 215,735,736 9,581,098 1,363,054 34,603,491 673,782 20,038,321 24,786,399 $260,083,727 11,962,381 5,103,985 $63,764,520 9,581,098 1,363,054 34,603,491 673,782 32,000,702 29,890,384 $323,848,247 The accompanying notes are an integral part of the financial statements 12 Primary Government Business-type Activities $ 1,024,564 $ 20,963,422 1,370,140 (960,000) 23,009 To Table of Contents City of Casa Grande, Arizona Statement of Activities For the Year Ended June 30, 2010 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 $ 6,961,775 20,366,672 12,007,921 2,335,926 6,828,387 4,700,480 2,145,146 55,346,307 $ 153,150 1,135,284 1,144,798 9,736 469,536 2,806,359 5,718,863 159,718 1,243,440 5,528,871 4,653,383 11,585,412 162,094 1,066,642 6,049,625 5,151,563 12,429,924 $66,931,719 $18,148,787 $ 26,155 707,476 4,631,873 164,300 403,698 1,535,671 7,469,173 $ 161,486 4,438,207 241,319 4,841,012 $7,469,173 895,826 895,826 $5,736,838 General revenues: Property taxes Sales taxes Franchise taxes Shared revenues - unrestricted: State sales taxes Urban revenue sharing Auto-in-lieu Investment earnings Miscellaneous Transfers in (out) Total general revenues and transfers Change in net assets Net assets-beginning Prior period adjustment Net assets-beginning - restated Net assets-ending The accompanying notes are an integral part of the financial statements 13 To Table of Contents Net (Expense) Revenue and Changes in Net Assets Governmental Activities Business-type Activities $ $ (6,782,470) (18,362,426) (1,793,043) (2,161,890) (5,713,834) (358,450) (2,145,146) (37,317,259) ($37,317,259) 7,422,710 19,776,002 1,947,031 2,382,825 4,106,244 2,034,181 107,521 625,779 (631,320) 37,770,973 453,714 259,630,013 259,630,013 $260,083,727 - 2,376 (176,798) 1,416,580 498,180 1,740,338 $1,740,338 Total $ (6,782,470) (18,362,426) (1,793,043) (2,161,890) (5,713,834) (358,450) (2,145,146) (37,317,259) 2,376 (176,798) 1,416,580 498,180 1,740,338 ($35,576,921) 26,657 - 7,422,710 19,802,659 1,947,031 8,383 10,473 631,320 676,833 2,417,171 60,821,850 525,499 61,347,349 $63,764,520 2,382,825 4,106,244 2,034,181 115,904 636,252 38,447,806 2,870,885 320,451,863 525,499 320,977,362 $323,848,247 14 To Table of Contents City of Casa Grande, Arizona Balance Sheet Governmental Funds June 30, 2010 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 $ 8,176,797 16,752,794 Highway Users $ 10,259 9,229,852 3,841,116 15,600 1,630,277 12,314 541,939 - $30,428,898 $9,782,050 $ 534,649 538,465 271,979 5,800 1,350,893 $ 3,815,142 - 93,275 31,606 224 125,105 - System Development $ 27,357,863 - $ Grants & Subsidies $ 150,253 142,631 $ CDBG 183,431 - 191,341 - 570,927 11,924 - $27,357,863 $484,225 $766,282 231,227 231,227 $ 45,930 15,931 113,270 175,131 - $ 214,781 4,424 219,205 309,094 - 547,077 - 25,262,863 29,078,005 9,656,945 9,656,945 27,126,636 27,126,636 309,094 547,077 $30,428,898 $9,782,050 $27,357,863 $484,225 $766,282 The accompanying notes are an integral part of the financial statements 15 To Table of Contents Self-help Technical Assistance $ 7,415 - Capital General Obligation Replacement/ /Special Recreation/ Home/HUD Assessments Development $ 8,598 $ 776,780 $ 28,326 107,210 21,009,170 Community Other Facilities Districts Governmental Capital Projects Funds $ 190,918 $ 325,898 3,511,570 Total Governmental Funds $ 9,858,675 78,111,090 103,617 - 51,402 - 45,423 - 131,129 495,734 - 2,453 - 271,007 428,614 42,817 5,403,994 1,298,232 1,630,277 55,131 $111,032 $60,000 $929,413 18,223,224 $39,887,583 615,013 $808,384 $4,579,906 18,838,237 $115,195,636 $ 11 4,479 100,000 19,469 123,959 $ 60,000 40,000 100,000 $ - $ 2,676,857 2,676,857 2,000 - $ 98,262 3,419 330,000 2,000 660,169 3,896,992 593,900 490,000 677,630 6,024 5,664,546 806,384 23,822 27,816 - 3,815,142 879,993 957,229 38,017,110 25,262,863 40,446,857 151,896 109,531,090 $115,195,636 228,488 - - 929,413 - (12,927) (12,927) (40,000) (40,000) 929,413 37,210,726 806,384 3,716,203 151,896 3,919,737 $60,000 $929,413 $39,887,583 $808,384 $4,579,906 $111,032 37,210,726 $ - 16 - $ To Table of Contents City of Casa Grande, Arizona Reconciliation of the Balance Sheet to the Statement of Net Assets Governmental Funds June 30, 2010 Fund balance - total governmental funds balance sheet $109,531,090 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 $289,919,070 (88,786,010) 376,958 (264,712) 201,245,306 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 Bond discount Deferred Loss Bond premium (1,668,315) (2,598,870) (48,532,066) 569,053 310,929 26,517 (113,972) (52,006,724) Deferred revenue is shown on the governmental funds, but is not deferred on the statement of net assets. Special Assessments Property Tax Grant Revenue 3,152 268,822 405,651 677,625 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 (286,599) 923,029 $260,083,727 To Table of Contents 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, 2010 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 discount Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Highway Users General $ 2,981,577 16,677,293 2,076,517 656,902 8,557,763 616,958 978,765 28,021 2,300 534,812 234,930 33,345,838 $ 4,569,263 8,436 6,800 4,584,499 System Development $ Grants & Subsidies 1,366,846 25,261 1,392,107 $ 2,522,143 115 1,677 2,523,935 CDBG $ 435,942 84,999 520,941 6,532,603 18,063,834 1,767,317 4,791,110 2,036,572 405,327 2,521,337 19,680 406,605 425,000 314,621 219,624 863,435 636,109 311,019 893,483 429,357 - 54,031 30,170 33,680,964 123,866 74,606 3,146,094 959,245 2,704,046 429,357 (335,126) 1,438,405 432,862 (180,111) 91,584 2,106,704 (6,250,065) (4,143,361) (4,478,487) 33,556,492 $29,078,005 (636,000) (636,000) 802,405 8,854,540 $9,656,945 22,000 (375,000) (353,000) 79,862 27,046,774 $27,126,636 846,607 (22,000) 824,607 644,496 (335,402) $309,094 91,584 455,493 $547,077 The accompanying notes are an integral part of the financial statements 18 To Table of Contents Self-help Technical Assistance $ 219,328 7,875 227,203 General Obligation/ Special Home/HUD Assessments $ 160,409 160,409 $ 3,140,640 8,883 180 3,149,703 Capital Replacement/ Recreation/ Development $ 2,893,220 41,295 2,934,515 Community Facilities Districts Capital Projects $ 708,217 282 708,499 Other Governmental Funds $ 405,990 205,489 304,574 74,916 3,931 1,571,715 175,892 2,742,507 Total Governmental Funds $ 7,236,424 19,776,002 2,076,517 656,902 16,769,422 2,058,720 978,765 8,883 107,521 3,977 2,106,527 510,496 52,290,156 246,672 - 181,820 - 651 - 6,268 29,166,297 12,785 - 1,522,669 29,857 30,811 325,794 867,465 8,055,272 18,957,126 2,521,337 2,192,317 5,792,331 3,550,938 31,958,801 246,672 181,820 1,502,270 1,149,621 2,652,542 100,108 29,272,673 85,000 156,380 254,165 719,470 714,518 4,210,584 100,108 2,484,637 2,125,295 77,738,162 (19,469) (21,411) 497,161 (26,338,158) 454,334 (1,468,077) (25,448,006) (19,469) 6,542 $ (12,927) (21,411) (18,589) ($40,000) 497,161 432,252 $929,413 8,442,248 (6,346,000) 37,800,000 (371,958) 39,524,290 13,186,132 24,024,594 $37,210,726 454,334 352,050 $806,384 1,411,562 (336,188) - 12,829,121 (13,965,253) 37,800,000 (371,958) 36,291,910 10,843,904 98,687,186 $109,531,090 19 - 1,075,374 (392,703) 4,312,440 $3,919,737 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, 2010 Net change in fund balances - total governmental funds $10,843,904 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 $31,722,706 (11,670,667) 20,052,039 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 4,437,135 (223,266) 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 56,800 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 of current year bond issuance costs and bond discount . 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 445,602 (37,800,000) 2,217,271 360,821 (35,221,908) 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 The internal service fund net revenue is reported with governmental activities. (9,224) (306,908) 691,043 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 (53,418) (258,085) Change in net assets of governmental activities $453,714 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, 2010 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 Original $ 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 $ 2,566,600 17,255,000 1,720,000 725,000 8,388,400 710,000 1,099,000 240,000 57,000 228,000 310,000 33,299,000 Final $ 2,566,600 17,255,000 1,720,000 725,000 8,388,400 710,000 1,099,000 240,000 228,000 310,000 33,242,000 Actual Amounts $ 2,981,577 16,677,293 2,076,517 656,902 8,557,763 616,958 978,765 28,021 2,300 534,812 234,930 33,345,838 Variance with Final BudgetPositive (Negative) $ 414,977 (577,707) 356,517 (68,098) 169,363 (93,042) (120,235) (211,979) 2,300 306,812 (75,070) 103,838 3,208,770 856,560 665,030 397,310 1,030,890 1,746,010 896,680 2,691,670 956,560 665,030 479,580 1,030,890 1,746,010 896,680 1,322,249 945,949 622,644 430,936 994,471 1,489,716 726,638 1,369,421 10,611 42,386 48,644 36,419 256,294 170,042 10,943,710 6,460,290 530,950 286,520 1,812,200 4,992,810 2,162,690 3,604,600 11,153,900 6,460,290 530,950 286,520 1,886,200 5,210,810 2,162,690 3,560,850 11,142,961 6,149,516 502,531 268,826 1,767,317 4,791,110 2,036,572 405,327 10,939 310,774 28,419 17,694 118,883 419,700 126,118 3,155,523 54,040 30,170 39,679,230 54,050 30,170 39,802,850 54,031 30,170 33,680,964 19 6,121,886 (6,380,230) (6,560,850) (335,126) 1,806,710 (1,251,400) 555,310 (5,824,920) 5,824,920 - 1,806,710 (2,379,360) (572,650) (7,133,500) 7,133,500 $ - 2,106,704 (6,250,065) (4,143,361) (4,478,487) 33,556,492 $29,078,005 The accompanying notes are an integral part of the financial statements 21 6,225,724 299,994 (3,870,705) (3,570,711) 2,655,013 26,422,992 $29,078,005 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, 2010 Variance with Final BudgetBudgeted Amounts Positive Actual Amounts (Negative) REVENUES Original Final Taxes: State-shared gas tax $ 2,745,620 $ 2,745,620 $ 2,692,007 $ (53,613) Local transportation assistance 196,800 196,800 108,944 (87,856) County sales tax 2,300,000 2,300,000 1,768,312 (531,688) Investment earnings 100,000 100,000 8,436 (91,564) Miscellaneous 270,000 270,000 6,800 (263,200) Total revenues 5,612,420 5,612,420 4,584,499 (1,027,921) EXPENDITURES Culture and recreation Contractual services - 19,680 19,680 - - 19,680 19,680 - 1,333,780 1,261,010 799,460 2,407,000 68,830 1,375,160 1,232,450 873,260 2,232,820 199,330 1,325,907 369,555 825,875 406,605 198,472 49,253 862,895 47,385 1,826,215 858 Total Streets/Transportation 5,870,080 5,913,020 3,126,414 2,786,606 Total expenditures 5,870,080 5,932,700 3,146,094 2,786,606 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 USES Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ (257,660) (320,280) 1,438,405 1,758,685 (625,500) (625,500) (883,160) 883,160 - (625,500) (625,500) (945,780) 945,780 - (636,000) (636,000) 802,405 8,854,540 $9,656,945 (10,500) (10,500) 1,748,185 7,908,760 $9,656,945 $ 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, 2010 Budgeted Amounts Variance with Final BudgetPositive (Negative) ($660,154) (274,739) (934,893) REVENUES Charges for services Investment earnings Total revenues Original $2,027,000 300,000 2,327,000 Final $2,027,000 300,000 2,327,000 Actual Amounts $1,366,846 25,261 1,392,107 EXPENDITURES Public works Culture and recreation Capital outlay Total expenditures 315,000 12,421,000 12,736,000 425,000 315,000 11,496,000 12,236,000 425,000 314,621 219,624 959,245 379 11,276,376 11,276,755 (10,409,000) (9,909,000) 432,862 10,341,862 (375,000) (375,000) (10,784,000) 10,784,000 $ - (375,000) (375,000) (10,284,000) 10,284,000 $ - 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 The accompanying notes are an integral part of the financial statements 23 22,000 (375,000) (353,000) 79,862 27,046,774 $27,126,636 22,000 22,000 10,363,862 16,762,774 $27,126,636 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, 2010 Variance with Budgeted Amounts Final BudgetPositive REVENUES Original Final Actual Amounts (Negative) Intergovernmental revenues $5,169,000 $5,169,000 $2,522,143 ($2,646,857) Investment earnings 115 115 Contributions and donations 15,000 15,000 1,677 (13,323) Total revenues 5,184,000 5,184,000 2,523,935 (2,660,065) 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 Total Community Development Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES 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 1,235,240 1,250,000 2,485,240 653,340 100 2,213,260 1,356,180 4,222,880 651,212 215 212,008 355,090 1,218,525 2,128 (115) 2,001,252 1,001,090 3,004,355 155,250 200,000 119,500 1,778,000 2,252,750 165,600 255,530 310,770 1,491,100 2,223,000 123,353 255,466 257,290 538,393 1,174,502 42,247 64 53,480 952,707 1,048,498 200,000 200,000 4,937,990 311,810 311,810 6,757,690 311,019 311,019 2,704,046 791 791 4,053,644 246,010 (1,573,690) - $ 246,010 246,010 (1,573,690) 1,573,690 $ - The accompanying notes are an integral part of the financial statements 24 (180,111) 1,393,579 846,607 (22,000) 824,607 644,496 (335,402) $309,094 846,607 (22,000) 824,607 2,218,186 (1,909,092) $309,094 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, 2010 Original $300,000 300,000 Final $300,000 300,000 Actual Amounts $435,942 84,999 520,941 Variance with Final BudgetPositive (Negative) $135,942 84,999 220,941 300,000 300,000 45,200 382,000 2,800 430,000 45,123 381,676 2,558 429,357 77 324 242 643 (130,000) 91,584 221,584 455,493 $547,077 325,493 $547,077 Budgeted Amounts REVENUES Intergovernmental revenues Program income Total revenues EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year - $ - $ 130,000 - The accompanying notes are an integral part of the financial statements 25 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, 2010 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 $219,328 7,875 227,203 281,760 281,760 229,420 21,000 2,000 252,420 224,714 20,763 1,195 246,672 125,240 154,580 (19,469) - $ (154,580) - The accompanying notes are an integral part of the financial statements 26 $ 6,542 (12,927) Variance with Final BudgetPositive (Negative) ($180,672) 875 (179,797) 4,706 237 805 5,748 (174,049) $ 161,122 (12,927) 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, 2010 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues EXPENDITURES Community development Personal services Contractual services Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original $750,000 750,000 Final $750,000 750,000 750,000 750,000 8,000 653,710 661,710 - $ - $ 7,600 174,220 181,820 400 479,490 479,890 88,290 (21,411) (109,701) (88,290) - (18,589) ($40,000) 69,701 ($40,000) The accompanying notes are an integral part of the financial statements 27 Actual Amounts $160,409 160,409 Variance with Final BudgetPositive (Negative) ($589,591) (589,591) To Table of Contents City of Casa Grande, Arizona Statement of Net Assets Proprietary Funds June 30, 2010 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 $ 889,722 10,187 899,909 1,036,504 (423,999) 612,505 612,505 1,512,414 LIABILITIES Current liabilities: Accounts payable Deposits held Accrued wages and benefits Accrued interest payable Due to other funds Compensated absences Capital leases Notes payable GO Bond/Excise tax revenue obligations Total current liabilities Noncurrent liabilities: Notes payable General obligation bond Excise tax revenue obligations 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 $ 108,606 1,225 6,773,908 756,116 7,639,855 232,176 54,203,469 1,374,132 44,685,621 (15,339,554) 84,923,668 85,155,844 92,795,699 $ 12,503,860 12,503,860 2,700,724 200,256 4,515,092 (10,599) 7,405,473 7,405,473 19,909,333 5,863 15,004 1,481 2,724 10,931 36,003 2,328,865 12,472 512,790 900,000 23,047 2,208,988 583,247 6,569,409 542,704 542,704 116,929 116,929 152,932 36,164,917 12,438,613 (135,806) 48,467,724 55,037,133 542,704 484,645 33,527,903 7,405,473 874,837 $1,359,482 1,225 4,229,438 $37,758,566 11,961,156 $19,366,629 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 10,893 1,684,986 600,419 2,296,298 138,496 6,753,017 (2,641,872) 4,249,641 4,249,641 6,545,939 $ 14,118 668 3,418 125,332 23,009 166,545 29,968 283,000 2,378,830 596,798 (942,082) 2,316,546 2,346,514 2,513,059 17,236 58,082 161,188 4,652 241,158 60,758 9,301 60,000 31,173 113,638 274,870 1,970,031 1,970,031 2,211,189 4,244,989 89,761 $4,334,750 Total $ 1,023,339 1,225 20,963,422 1,370,140 125,332 23,009 23,506,467 262,144 2,983,724 57,757,299 8,924,203 49,200,713 (19,358,106) 99,507,833 99,769,977 123,276,444 $ 1,711,293 273,049 1,984,342 52,354 324,604 (264,712) 112,246 112,246 2,096,588 2,955,426 15,004 81,336 515,514 960,000 215,408 4,652 2,219,919 696,885 7,664,144 859,085 13,148 170,000 19,080 1,061,313 1,293,096 1,293,096 1,567,966 36,281,846 1,293,096 12,438,613 (135,806) 1,970,031 51,847,780 59,511,924 1,061,313 1,035,144 46,698,154 (90,051) $945,093 11,962,381 5,103,985 $63,764,520 29 1,035,275 $1,035,275 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, 2010 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Operating revenues: Service fees Connection fees Recycling revenue Department Insurance charges Rental Green fees Impact fees Miscellaneous Total operating revenue $ 162,094 162,094 Operating expenses: Personal services Contractual services Materials and supplies Depreciation Closure and postclosure costs Total operating expenses Operating income (loss) Nonoperating revenues (expense): Loss 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 Prior period adjustment Total net assets-beginning of year-restated Total net assets-end of year 5,041,530 14,664 17,717 5,073,911 $ 983,431 983,431 55,673 17,175 37,754 44,540 155,142 627,378 1,209,077 916,755 1,796,786 4,549,996 4,005 4,005 6,952 523,915 979,426 (4,576) (4,576) 7,165 (974,870) (967,705) 13,932 13,932 2,376 (443,790) 993,358 (23,788) (21,412) 1,380,894 - 895,826 2,092,748 (416,608) 2,128,176 35,630,390 - (1,997,748) (1,004,390) 20,371,019 - $1,359,482 The accompanying notes are an integral part of the financial statements 30 $ $37,758,566 $19,366,629 To Table of Contents Business-type Activities-Enterprise Funds Sanitation $4,990,348 97,117 64,098 5,151,563 2,384,717 931,487 614,733 580,182 141,145 4,652,264 499,299 (14,277) 1,354 (1,119) (14,042) 485,257 1,625,000 (827,424) 1,282,833 2,526,418 525,499 3,051,917 $4,334,750 Golf Course $ Total Governmental Activities Internal Service Funds 125,398 941,928 2,075 1,069,401 $10,193,972 1,095,212 125,398 941,928 64,098 19,792 12,440,400 $1,398,768 5,540,900 - 479,865 149,200 469,229 144,440 1,242,734 3,547,633 2,306,939 2,038,471 2,569,953 141,145 10,604,141 2,134,322 4,001,583 628,171 27,365 6,791,441 1,836,259 186,231 (173,333) 209 (706) 26,657 26,160 (147,173) 326,000 (146,860) 31,967 913,126 $945,093 (14,277) 22,660 (981,271) 26,657 (946,231) 890,028 895,826 4,043,748 (3,412,428) 2,417,174 60,821,847 525,499 61,347,346 $63,764,520 31 38,004 6,977,672 - 186,231 600,000 (95,188) 691,043 344,232 344,232 $1,035,275 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2010 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 $173,388 (51,661) (55,465) Net cash provided (used) by operating activities 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 CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets Purchases of capital assets Proceeds from capital debt Principal paid on capital debt Interest paid on capital debt Net cash provided (used) by capital and related 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 $4,666,924 (2,786,204) (666,895) $997,323 - 66,262 1,213,825 997,323 (23,788) - (416,608) 2,092,748 (1,997,748) - (23,788) 1,676,140 (1,997,748) - (2,789,812) (10,567) (4,576) 11,875 (33,856,525) 35,417,458 (1,826,860) (1,213,236) (15,143) (1,467,288) (2,789,812) - - 60,296 13,932 - 60,296 13,932 27,331 862,391 1,482,973 5,400,766 (3,776,305) 16,280,165 $ 889,722 $ 6,883,739 $ 12,503,860 $ 889,722 $889,722 $ 108,606 1,225 6,773,908 $6,883,739 $ 12,503,860 $12,503,860 The accompanying notes are an integral part of the financial 32 To Table of Contents Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation Golf Course $4,975,833 (1,729,207) (2,375,535) Total $1,068,140 (542,134) (472,063) $11,881,608 (5,109,206) (3,569,958) 871,091 53,943 3,202,444 (827,424) 1,625,000 26,657 (146,860) 326,000 26,657 (3,412,428) 4,043,748 797,576 205,797 $6,977,672 (3,678,028) (2,130,785) 1,168,859 (95,188) 600,000 657,977 14,625 (1,257,911) (139,145) (53,138) (1,119) (216,745) (706) 26,500 (38,043,393) 35,417,458 (2,107,310) (1,219,637) (1,297,543) (356,596) (5,926,382) 504,812 - - 1,356 209 75,793 - 1,356 209 75,793 - 372,480 1,323,399 (96,647) 236,765 (1,990,168) 24,103,486 1,673,671 37,622 $ 1,695,879 $ 140,118 $ 22,113,318 $ 1,711,293 $ 10,893 1,684,986 $1,695,879 $ 14,118 126,000 $140,118 $ 1,023,339 1,225 21,088,754 $22,113,318 $ 1,711,293 $1,711,293 33 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2010 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 44,540 10,880 3,268 414 208 59,310 Net cash provided (used) by operating activities 66,262 $ 6,952 Noncash investing, capital, and financing activities: Contributions of capital assets - The accompanying notes are an integral part of the financial statements 34 $ 523,915 $ 1,796,786 (406,987) (1,560,372) (3,232) 900,000 (36,285) 689,910 $ 1,213,825 $905,826 979,426 4,005 13,892 17,897 $ 997,323 - To Table of Contents Business-type Activities-Enterprise Funds Sanitation $ Golf Course 499,299 $ 141,145 580,182 (175,730) (182,987) 4,870 4,312 371,792 $ 871,091 - (173,333) Total $ 144,440 (1,261) (10,091) 26,386 1,572 60,000 6,230 227,276 $ 53,943 - 1,836,259 Governmental Activities Internal Service Fund $ 141,145 2,569,953 (559,206) (10,091) (1,713,705) 414 3,418 960,000 (25,743) 1,366,185 $ 3,202,444 $905,826 35 186,231 27,365 (23,218) 804,944 1,706 170,000 1,831 982,628 $ 1,168,859 To Table of Contents City of Casa Grande, Arizona Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2010 Agency Funds ASSETS Cash Investments, at fair value $ Total assets 30,220 1,780,844 Part-Time Firemen's Pension $ 1,811,064 LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for pension benefits and other purposes 569,501 1,811,064 - 1,811,064 - $ The accompanying notes are an integral part of the financial statements 36 1,314 568,187 - $ 569,501 To Table of Contents City of Casa Grande, Arizona Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2010 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 - 7,069 70,975 78,044 (5,328) 72,716 Total additions 72,716 DEDUCTIONS Pension payments Administrative expenses Total deductions 31,500 1,526 33,026 Change in net assets 39,690 Net assets-beginning of year Net assets-end of year $ The accompanying notes are an integral part of the financial statements 37 529,811 569,501 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, 2010 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 Units – 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, 2010 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, 2010 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 General Obligation/Special Assessment Debt Service Fund is a major fund presented in the basic financial statements. This fund accounts for the receipts of revenues from property taxes and payment of the 2008 general obligation bonds and 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/Recreation/Development Fund is a major fund presented in the basic financial statements. This fund is used to account for the replacement of various capital items, recreation facilities construction and development of 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, 2010 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 two internal services funds: Equipment Mechanics is used to account for the maintenance and operations of City owned vehicles and Risk Management is used for self insurance activities. 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, 2010 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, 2010 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, 2010 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, 2010 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, 2010, 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, 2010 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 2009-2010. 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. (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. (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, 2010 NOTE 1: Summary of Significant Accounting Policies (continued) (H) Investments (continued) 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. 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. Interest of $564,379 was capitalized for the wastewater treatment plant expansion. (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, 2010 NOTE 1: Summary of Significant Accounting Policies (continued) (J) Capital Assets (continued) 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 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 288 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. (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. (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, 2010 NOTE 1: Summary of Significant Accounting Policies (continued) (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 $ 12,626,066 101,423,543 18,963,569 $133,013,178 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. The carrying amount of the City’s cash in bank totaled $12,626,066 and the bank balance was $13,360,247. Federal Depository Insurance covered the City’s deposits at June 30, 2010, to the extent of $250,000. Deposits of $13,110,247 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. (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, 2010 NOTE 2: Cash and Investments (continued) Custodial Credit Risk (continued) Cash and cash equivalents include restricted and unrestricted amounts and are included in the financial statements as follows: Cash Investments Restricted investments Governmental Activities Business Activities Fiduciary Fund Total $ 11,569,968 78,111,090 18,838,237 $108,519,295 $1,024,564 20,963,422 125,332 $22,113,318 $ 31,534 2,349,031 $2,380,565 $ 12,626,066 101,423,543 18,963,569 $133,013,178 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, 2010 was $2,916,987,191. 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, 2010 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 $116,203,912 Ratings at year end Unrated $116,203,912 Money Market Money Market/Mut Fnds Money Market Money Market 4,662 563,525 3,000,000 615,013 $120,387,112 4,662 563,525 3,000,000 615,013 $120,387,112 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 $116,203,912 4,662 563,525 3,000,000 615,013 $120,387,112 (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, 2010 NOTE 3: Cash with Fiscal Agent/Restricted Investments In November 2006 and December 2008 the Villago Community Facilities District issued long-term revenue obligations. Certain resources set aside for repayment are classified as restricted cash on the statement of net assets and on the balance sheet because their use is limited by applicable bond covenants. Description of Designated Balance at Fund Type Capital June 30, 2010 Capital - CFD Infrastructure $376,556 In April 2005, the Mission Royale Community Facilities District issued long-term revenue obligations. Certain resources set aside for repayment are classified as restricted cash on the statement of net assets and on the balance sheet because their use is limited by applicable bond covenants. Fund Type Capital - CFD Description of Designated Capital Sewer Line Balance at June 30, 2010 $238,457 In August 2009, 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 purpose of the funds is to finance a courthouse, a sports complex and street improvements. Fund Type Capital Project Description of Designated Capital Courthouse Balance at June 30, 2010 $2,937,890 In June 2008 and August 2009 the City issued general obligation bonds. A portion of the bonds has been spent on infrastructure and a public safety complex and the balance is a restricted investment. Fund Type Capital Project Enterprise – Golf Course Capital Project Description of Designated Capital Infrastructure Irrigation System Public Safety Complex Balance at June 30, 2010 $2,773,487 125,332 $12,511,847 $18,963,569 (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, 2010 NOTE 4: Receivables The following table summarizes the City’s governmental activities receivables as of June 30, 2010: General Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables $3,815,115 26,251 3,841,366 Special Revenue $ 563,596 810,383 9,894 1,383,873 (250) $3,841,116 Debt Service Capital $44,575 848 45,423 - $ 131,765 1,817 133,582 - $1,383,873 Total $4,555,051 839,299 9,894 5,404,244 - $45,423 (250) $133,582 $5,403,994 The following table summarizes the City’s business-type activities receivables as of June 30, 2010 Wastewater Sanitation Golf Course Total $10,187 10,187 $2,080,425 2,080,425 $1,640,913 1,640,913 $3,418 3,418 $3,734,943 3,734,943 - (1,324,309) (1,040,494 ) - (2,364,803) $10,187 $ 756,116 $ 600,419 Water Receivables: Accounts Gross Receivables Less: allowance for uncollectible Net total receivables $3,418 $ 1,370,140 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: $ 543,795 58,794 $ 602,589 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, 2010, there were 62 of these loans outstanding, totaling $561,033. (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, 2010 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 2009-2010 maximum primary levy limit was $2,968,634. The primary tax levy was $2,566,600. The City’s secondary tax levy was $2,941,870. 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, 2010, are $42,631 and $268,822 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2010 follows: Capital assets not being depreciated: Land/Constr in progress Capital assets being depreciated: Building & Improvements Machinery & Equipment Total Capital Assets Less: accumulated depreciation Net Capital Assets Balance June 30, 2009 Additions & Adjustments $14,416,023 $37,768,414 56,851,473 8,229,158 79,496,654 Disposals & Adjustments $ Balance June 30, 2010 - $52,184,437 905,826 1,123,024 39,797,264 (427,979) (427,979) 57,757,299 8,924,203 118,865,939 (17,147,468) (2,567,450) 356,812 (19,358,106) $62,349,186 $37,229,814 $(71,167) $99,507,833 (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, 2010 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, 2009 $13,907,404 3,240,064 $17,147,468 Balance Additions Disposals June 30, 2010 $1,848,339 $ $15,755,743 719,111 (356,812) 3,602,363 $2,567,450 $(356,812) $19,358,106 A summary of changes in governmental activities capital assets follows: Balance June 30, 2009 Adjustments & Additions Adjustments & Disposals Balance June 30, 2010 Capital assets not being depreciated: Land & construction in progress $33,044,946 $4,163,623 $(185,675) $37,022,894 Capital assets being depreciated: Buildings Improvements Heavy machinery & equipment Operational Equipment Total General Capital Assets 19,248,467 181,482,565 1,799,445 18,923,972 254,499,395 16,433,175 14,050,247 1,512,795 36,159,840 (177,532) (363,207) 35,681,642 195,532,812 1,799,445 20,259,235 290,296,028 7,495,028 58,935,843 1,334,052 9,727,708 77,492,631 $177,006,764 1,156,551 8,575,877 144,927 1,820,577 11,697,932 $24,461,808 (139,941) (139,941) $(223,266) 8,651,579 67,511,720 1,478,979 11,408,444 89,050,722 $201,245,306 Less Accumulated Depreciation for: Buildings Improvements Heavy machinery & equipment Operational equipment Total Accumulated Depreciation Total General Capital Assets (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, 2010 NOTE 7: Capital Assets (continued) The City had additions to contributed capital assets during the fiscal year 2009-2010. The Governmental Activities Capital Assets include a total of $4,437,135 in contributed capital assets received in fiscal year 2009-2010. 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 $ 376,109 1,349,528 8,224,527 69,385 971,264 679,754 27,365 $11,697,932 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 44,540 1,800,789 580,183 141,938 $2,567,450 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, 2010 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, 2010, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 9.4 percent (9.0 percent retirement and 0.4 percent long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2010, 2009 and 2008 were $1,281,990, $1,263,961 and $1,142,516, respectively, which were equal to the required contributions for those years. Prior year’s rates are 9.45% for 2009 and 9.6% for 2008. (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, 2009 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 22.05 percent and 17.38 percent for covered payroll totaling $4,958,997 and $3,980,691 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, 2010 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, 2009, 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 22.05% 7.65% 1,111,706 1,111,706 June 30, 2009 Entry Age PSPRS - Fire 17.38% 7.65% 825,836 825,836 June 30, 2009 Entry Age 8.50% 5.5% - 8.5% 5.5% Level Percentage Open Open 20 Years Smoothed Market Based on Inv. Income 8.50% 5.5% - 8.5% 5.5% 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 2009 $1,111,706 100% - 2008 804,354 100% - 2007 572,490 100% - 2009 $825,836 100% - 2008 524,248 100% - 2007 342,549 100% - (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, 2010 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, 2009, follows: PSPRS - Police Actuarial Valuation Date 6/30/09 6/30/08 6/30/07 Actuarial Value of Plan Assets (a) $14,941,827 13,843,134 13,287,359 Actuarial Accrued Liability Funding Liability (Excess) Funded Ratio Annual Covered Payroll Unfunded Liability as Percentage of Covered Payroll (b) $25,601,105 23,975,402 22,057,218 (b-a) $10,659,278 10,132,268 8,769,859 (a/b) 58.4% 57.7% 60.2% (c) $5,045,343 4,958,997 4,264,393 ([b-a]/c) 211.3% 204.3% 205.7% 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) $14,493,872 13,175,141 12,800,685 $5,409,265 5,004,062 5,219,000 62.7% 62.0% 59.2% $4,130,364 3,980,691 2,918,183 131.0% 125.7% 178.8% PSPRS – Fire Actuarial Valuation Date 6/30/09 6/30/08 6/30/07 Actuarial Value of Plan Assets (a) $9,084,607 8,171,079 7,581,685 (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, 2010 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, 2010, there were 15 eligible employees participating in the plan. The plan is administered by The Innes Associates. As of June 30, 2010, the plan’s assets consisted of the following: Cash $ 1,314 Money Market Funds 4,662 Mutual Funds 563,525 Total Assets $569,501 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. NOTE 9: Risk Management The City operates with traditional commercial insurance programs against major losses in property, plant, equipment and liability. Administrative responsibility for the safety program, education and loss prevention resides with the Administrative Services Department. Insurance is procured on a competitive quotation basis, using the services of an independent broker as a consultant. The City processes all claims and evaluates their validity to determine if insurance reporting and investigation are warranted or if the claim can be resolved administratively. Claims settled administratively are paid from the funds where the claims occurred. During fiscal year 2010 there was no reduction in insurance coverage from prior years and settlements have not exceeded insurance coverage during any of the last three fiscal years. On July 1, 2009 the City established a self-insurance fund (internal service) to account for and finance its uninsured risks of loss for medical claims. The City purchases commercial stop loss insurance to limit the claims liability to the employee benefit self-insurance fund. The stop loss insurance provides specific (individual member) coverage for claims incurred in excess of $85,000 on the plan year and aggregate (plan wide) coverage for claims incurred over $3,574,213 on the plan year. During fiscal year 2010 the plan did incur and receive recoveries for $19,492 through specific stop loss coverage. For policy year 2009/2010 no liability for incurred but not reported (IBNR) claims is calculated because the plan is fully funded to maximum liability. (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, 2010 NOTE 10: Capital Leases Leases at June 30, 2010, 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 Airport fuel trucks. Final installments of $4,903 including interest of 4.461%, due August 20, 2010. Lease with option to purchase Airport T-hangers. Quarterly installments of $20,972 including interest of 5.081%, due through August 20, 2013. Total Governmental Activities Capital Lease Obligation $2,343,016 4,903 250,951 $2,598,870 Business-Type Activities: Sanitation: Lease with option to purchase a garbage truck. Final installment of $4,727, including interest at 4.461%, due August 20, 2010. Total Business-type Activities Capital Lease Obligation Total Long-Term Lease Payable 4,652 4,652 $2,603,522 (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, 2010 NOTE 10: Capital Leases (continued) The future minimum lease payments by year are: Fiscal Year Ending June 30, 2011 2012 2013 2014 2015 2016-2020 Government Activities $390,422 381,388 381,388 315,619 297,500 1,487,504 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion Business-type Activities $4,727 - Total $ 395,149 381,388 381,388 315,619 297,500 1,487,504 3,253,821 (654,951) 4,727 (75) 3,258,548 (655,026) 2,598,870 (268,616) $2,330,254 4,652 (4,652) $ - 2,603,522 (273,268) $2,330,254 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 $(528,955) (528,955) $3,487,984 3,487,984 96,096 (68,068) 28,028 164,408 260,504 $4,277,443 (126,046) (194,114) $(723,069) 38,362 66,390 $3,554,374 (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, 2010 NOTE 11: Bond Debt A summary of long-term bond debt transactions for the year ended June 30, 2010, follows: Governmental Activities General obligation bonds Special assessment bonds Total Bonds Outstanding Balance July 1, 2009 $9,739,549 130,000 $9,869,549 Issued $19,000,000 $19,000,000 Business-type Activities General obligation bonds Total Bonds Outstanding $1,605,451 $1,605,451 - Retired $(1,457,271) (130,000) $(1,587,271) Balance June 30, 2010 $27,282,278 $27,282,278 $(222,730) $(222,730) $1,382,721 $1,382,721 Summarization of the long-term bond debt payable at June 30, 2010, follows: Original Amount Date Issue of Interest of Final Amount Installment Rate Payment $32,540,000 $10,000 – 2,170,000 3.50% - 5.80% 07/15/32 Bond Description General obligation Special Assessment: ID #38 1,030,000 Total Bonds Outstanding 75,000 - 130,000 5.40% 01/01/10 The following table summarizes the City’s future bond debt service requirements as of June 30, 2010: Y ear Ending June30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2032 Governmental Activities General Obligation Bonds Bonds Interest $1,086,363 575,454 650,454 630,454 635,454 4,268,632 6,008,106 7,117,291 6,310,070 $27,282,278 $1,242,325 1,205,329 1,180,785 1,154,126 1,128,034 5,138,080 4,024,538 2,536,927 808,815 $18,418,959 Business- Activities General Obligation Bonds Bonds Interest $113,638 44,546 54,546 54,546 54,546 376,368 561,824 122,707 $1,382,721 $53,811 51,043 49,308 47,399 45,422 185,637 84,681 2,610 $519,911 Total Bonds Interest $1,200,001 620,000 705,000 685,000 690,000 4,645,000 6,569,930 7,239,998 6,310,070 $28,664,999 $1,296,136 1,256,372 1,230,093 1,201,525 1,173,456 5,323,717 4,109,219 2,539,537 808,815 $18,938,870 (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, 2010 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 and in December 2008 issued $750,000 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 bonds began in July, 2007 and 2009. 2) 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. 3) In July 2009 the City issued $19,000,000 of General Obligation bond debt to design and construct a new public safety facility. The 25-year bond has interest rates ranging from 4% to 5%. Principal payments ranging from $370,000 to $1,700,000 are paid annually on July 1, with payments beginning July 2010 and with interest paid semiannually on July 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. (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, 2010 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. In August, 2009 the City issued $18,800,000 in excise tax revenue obligations consisting of: $7,175,000 in tax exempt obligations will be used to construct a new courthouse and make road improvements. The 20-year obligation has interest rates ranging from 4.4% to 4.9% with principal payments beginning April 1, 2024. $11,625,000 in taxable obligations will be used to construct a multi-use sports complex. The 15-year obligation has interest rates ranging from 2.3% to 6.4% with principal payments beginning April 1, 2010. The 1997, 2003 and 2009 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, 2010: Year Ending June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2029 Governmental Activities Principal Interest $646,753 $1,106,081 908,790 1,082,941 940,828 1,049,829 982,865 1,009,051 1,025,718 962,686 5,275,094 3,977,314 5,844,740 2,366,348 5,625,000 707,287 $21,249,788 $12,261,537 Business-type Activities Principal Interest $583,248 $583,856 606,210 561,984 629,173 539,251 652,135 514,084 684,283 487,999 6,424,909 1,832,363 3,155,074 231,232 $12,735,032 $4,750,769 Total Principal Interest $1,230,001 $1,689,937 1,515,000 1,644,925 1,570,001 1,589,080 1,635,000 1,523,135 1,710,001 1,450,685 11,700,003 5,809,677 8,999,814 2,597,580 5,625,000 707,287 $33,984,820 $17,012,306 (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, 2010 NOTE 13: WIFA Financing In January, 2009 the City of Casa Grande received financing from the Water Infrastructure Finance Authority (WIFA) of Arizona to finance a wastewater treatment plant expansion project expected to be completed in 2011. The loan is for a total of $62,555,540; however the balance disbursed to the City of Casa Grande at June 30, 2010 is $38,373,905. The following schedule shows estimated payments based on the amount due of $38,373,905. Year Ending June 30, 2011 2012 2013 2014 2015 2016-20 Principal $2,208,988 2,297,957 2,390,542 2,486,857 2,587,052 14,585,314 Interest $1,495,796 1,406,773 1,314,166 1,217,827 1,117,607 3,937,569 2021-24 Total 11,817,195 $38,373,905 2,434,352 $12,924,090 The twenty year loan has an interest rate of 4.029%. Principal payments ranging from $1,257,390 to $4,497,458 are paid annually with interest paid semiannually on October 1 and April 1. (continued) 66 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 14: Changes in Long-Term Obligations Governmental Activities: Compensated absences Bonds payable Excise tax revenue obligations Capital leases Bond premium Bond discount Total Governmental Activities Business-type Activities: Compensated absences Bond payable Capital leases Excise tax revenue obligations Notes payable (1) Loan payable – see note 13 Bond premium Total Business-type Activities Balance July 1, 2009 $1,614,897 9,869,549 3,130,318 2,909,161 120,770 (43,594) $17,601,101 Balance July 1, 2009 $241,151 1,578,668 57,790 12,996,427 138,476 4,213,836 334,858 $19,561,206 Additions $61,418 19,000,000 18,800,000 (268,741) 38,492,677 Additions $69,257 35,417,459 $35,486,716 Reductions $(908,000) (1,587,271) (680,530) (310,291) (6,798) 1,406 $(3,491,484) Reductions $(95,000) (195,947) (53,138) (569,470) (10,567) (1,257,390) (26,783) $(2,208,295) Balance June 30, 2010 $1,668,315 27,282,278 21,249,788 2,598,870 113,972 (310,929) $52,602,294 Amounts Due Within One Year $1,668,315 1,086,363 646,753 268,616 $3,670,047 Balance June 30, 2010 $215,408 1,382,721 4,652 12,426,957 127,909 38,373,905 308,075 $52,839,627 Amounts Due Within One Year $215,408 113,638 4,652 583,247 10,931 2,208,988 $3,136,864 (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%. Compensated absences are liquidated when mature by the various operating funds accruing the liability. (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, 2010 NOTE 15: Long-Term Debt The following summarizes the annual debt service requirements to maturity for all long-term debt excluding compensated absences, including interest of $49,553,486. Year Ending June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2032 NOTE 16: Governmental Activities Principal Interest 2,001,732 2,470,212 1,756,807 2,397,094 1,877,379 2,325,904 1,846,981 2,245,135 1,887,655 2,161,737 10,855,175 9,291,450 11,852,846 6,390,886 12,742,291 1,516,102 6,310,070 2,536,927 $51,130,936 $31,335,447 Business-type Activities Principal Interest 2,921,457 2,137,745 2,960,019 2,023,624 3,085,955 1,906,154 3,205,635 1,782,330 3,338,394 1,653,625 21,455,908 5,961,686 15,534,144 2,750,265 122,707 2,610 $52,624,219 $18,218,039 Total Principal 4,923,189 4,716,826 4,963,334 5,052,616 5,226,049 32,311,083 27,386,990 12,864,998 6,310,070 $103,755,155 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, 2010 the City has reported a $2,118,018 landfill closure and postclosure care liability that represents the total current cost based on 47.2 percent of estimated capacity of the landfill. The remaining cost of $2,361,857 will be recognized in the future periods as the remaining capacity is filled. The City expects the remaining capacity to extend for 21 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 2010 valuation of the total closure and postclosure costs were estimated to be $4,479,875. (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, 2010 NOTE 17: Construction Commitments The City has four significant construction commitments as of 6/30/10: Hunter Contracting Company is constructing a wastewater plant expansion. The contract sum is $49,228,273 and of that amount $39,948,697 has been paid. Core Construction Services is constructing the following: The Len Colla Recreation Center expansion original contract sum is $1,937,166 and of that amount $1,472,469 has been paid. The Fire Station #504 construction original contract sum is $3,734,840 and of that amount $310,353 has been paid. The Public Safety building original contract sum is $19,672,951 and of that amount $8,267,548 has been paid. NOTE 18: Summary of Interfund Transactions Interfund transactions as of June 30, 2010, were as follows: Interfund Receivable/Payable: Fund General Airport Promotion & Tourism Housing Golf course WWTP expansion Equipment maintenance Total Receivable Amount $1,620,000 $1,620,000 Payable Amount $ 120,000 200,000 170,000 60,000 900,000 170,000 $1,620,000 (continued) 69 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 18: Summary of Interfund Transactions (continued) The interfund balances at June 30, 2010 are short-term loans to cover temporary cash deficits in various funds. Transfers: Fund Governmental Funds: General Highway Users System Development Capital Replacement Grants 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 $6,250,065 636,000 375,000 6,346,000 22,000 336,188 13,965,253 $2,106,704 22,000 8,442,248 846,607 1,411,562 12,829,121 23,788 146,860 2,414,356 827,424 3,412,428 326,000 2,092,748 1,625,000 4,043,748 95,188 $17,472,869 600,000 $17,472,869 There were no significant transfers during fiscal year 2010 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. (continued) 70 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2010 Note 19: Deficit in Net Assets Four funds had deficits in net assets. The Self-help housing fund has a deficit of ($12,927) in net assets because $19,469 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. The Home/HUD fund has a deficit of ($40,000) because $40,000 in Due from other governments was not received within 60 days of year end and is shown in deferred revenue. The Municipal Airport operating fund had a deficit of ($75,847) because air traffic and fuel sales were less than anticipated. The Promotion and Tourism has a deficit of ($41,578) because $175,965 in receivables was not received within 60 days of year end and is shown in deferred revenue. Note 20: Sales Tax Incentive Agreement In March, 2006 the City entered a tax-incentive agreement with WP Casa Grande Retail LLC in order to develop the Promenade at Casa Grande mall. WP Casa Grande Retail is paid 50% of the retail sales and construction activities tax collected by the City from Promenade sales. The agreement only applies to the portion of tax that is not a dedicated or special tax. The agreement is in effect for twenty years up to a maximum payment of $19,950,000 plus interest of 7%. There is a provision to extend the agreement for an additional three years if the amount remaining unpaid after twenty years is $3,000,000 or more (including accrued but unpaid interest). Payments are made to WP Casa Grande Retail within forty-five days after the end of each calendar quarter for 50% of the tax collected during that quarter. The first payment to WP Casa Grande Retail was made in September, 2008. As of June 30, 2010 $2,537,188 (including $936,027 in interest) has been paid. Note 21: Prior Period Adjustment The City made a prior period adjustment to the Sanitation fund in order to correct an error in the year ended June 30, 2009 calculation of the landfill closure and postclosure expense and liability. The expense and liability were overstated by $525,499. Note 22: Subsequent Events In August, 2010 the Villago Community Facilities District issued $2,200,000 in General Obligation Debt for infrastructure. The 25 year obligation has interest rates ranging from 2% to 6% with principal payments beginning in July, 2011. 71 To Table of Contents To Table of Contents COMBINING STATEMENTS To Table of Contents City of Casa Grande, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2010 ASSETS Cash Investments Receivables (less allowance for uncollectibles) Due from other governments Fuel Inventory Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Due to other funds 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 Municipal Airport $ 17,148 50 Parks Develop. $ 5,672 818,441 34,404 42,817 94,419 $ 12,500 836,613 $ 92 $ $ 46,847 120,000 3,419 170,266 (75,847) (75,847) $ 94,419 Special Revenue Community RedevelopArts ment $ 1,403 $ 10,844 16,003 1,875,091 $ 17,406 $ - $ 72 $ 28,723 $ - - - 17,406 17,406 17,406 2,720 606,065 $ 28,723 $ 197,622 351,301 $ - 836,613 Court Enhancement $ 9,131 594,214 26,481 359,607 2,272,023 92 836,521 836,521 Promotion & Tourism $ 15,192 138,487 2,272,022 $ - (41,578) (41,578) $ 351,301 - - 2,243,299 2,243,299 $ 16,914 200,000 175,965 392,879 $ 606,065 606,065 $ 606,065 To Table of Contents Special Revenue Housing Wildland Fire/ Programs Public Safety $ 76,307 $ 19,645 64,045 5,239 $ $ 7,000 147,352 15 10,000 7,000 17,015 $ 24,884 $ 1,062 130,337 130,337 147,352 $ 27,816 $ - $ $ - $ - Capital Projects Recreation Airport Improvement Improvement $ 1,156 $ 141,584 - $ 1,156 $ $ - $ 59,287 200,871 - - - 4,609 45,523 50,132 23,822 - 27,816 - - - 23,822 27,816 - 1,156 1,156 1,062 - $ Debt Service 2009 Excise Recreation Redevelopment $ 27,816 $ - 24,884 $ 27,816 $ - 73 $ 1,156 Total Nonmajor Governmental Funds $ 325,898 3,511,570 $ $ 200,872 98,262 330,000 3,419 228,488 660,169 23,822 27,816 150,740 150,740 $ 271,007 428,614 42,817 4,579,906 3,716,203 151,896 3,919,737 $ 4,579,906 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, 2010 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 52 1,137,998 1,971 1,140,021 Special Revenue Community Redevelop- Develop. $ 760 32,405 25,000 58,165 Arts $ ment - $ 50,000 50,006 405,990 2,183 359,607 767,780 6 Court & Tourism Enhancement $ $ 205,489 302 - 35,457 252,496 64,851 530 100,838 41,705 5,000 1,173,526 - 12,706 - 18,105 40,450 17,952 802,337 349,143 - 6,750 - 89,470 16,643 1,279,639 12,706 58,555 820,289 349,143 6,750 (52,509) (96,647) 94,088 (52,509) 2,295,808 $ 2,243,299 (300,000) (300,000) (396,647) 355,069 $ (41,578) 94,088 511,977 606,065 Excess (deficiency) of revenues over (under) expenditures (139,618) 45,459 (8,549) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year (36,188) (36,188) (175,806) 99,959 (75,847) 45,459 791,062 836,521 15,500 15,500 6,951 10,455 17,406 $ Promotion $ 74 $ $ To Table of Contents Special Revenue Housing Programs $ $ 166,340 10,065 78 81,885 258,368 Debt Service Wildland Fire/ Public Safety $ 1,974 20 12,036 14,030 Redevelopment $ - 304,642 - 23,107 - 2,700 - 304,642 23,107 200,000 99,920 302,620 (46,274) (9,077) (46,274) 176,611 130,337 (9,077) 32,899 23,822 $ $ Recreation $ - Capital Projects Recreation Airport Improvement Improvement $ - - $ 100,803 100,803 Total Nonmajor Governmental Funds $ 405,990 205,489 304,574 74,916 3,931 1,571,715 175,892 2,742,507 - 500 24,678 1,522,669 29,857 30,811 325,794 867,465 430,000 597,955 1,027,955 - 25,178 719,470 714,518 4,210,584 (302,620) (1,027,955) - 75,625 (1,468,077) 299,920 299,920 (2,700) 30,516 27,816 1,027,955 1,027,955 - 1,156 1,156 68,187 68,187 143,812 6,928 150,740 1,411,562 (336,188) 1,075,374 (392,703) 4,312,440 3,919,737 $ 75 $ $ $ To Table of Contents City of Casa Grande, Arizona Combining Statement of Fiduciary Net Assets All Agency Funds June 30, 2010 Flexible Spending Plan Fund Performance Bond Fund ASSETS Cash Investments, at fair value $ Total assets LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for other purposes 1,780,844 $ 30,220 - Total $ 30,220 1,780,844 1,780,844 30,220 1,811,064 1,780,844 30,220 1,811,064 1,780,844 30,220 1,811,064 $ - 76 $ - $ - To Table of Contents City of Casa Grande, Arizona Combining Statement of Changes in Assets and Liabilities All Agency Funds For the Year Ended June 30, 2010 Balance June 30, 2009 Performance Bond Fund Assets: Investments Interest Receivable Total Assets $ Liabilities: Other Liabilities Accounts Payable 1,767,554 1,412 1,768,966 Additions $ 13,290 13,290 Deductions $ (1,412) (1,412) Balance June 30, 2010 $ 1,730,808 38,158 1,768,966 46,254 46,254 19,407 19,407 10,813 10,813 - 30,220 30,220 19,407 19,407 10,813 10,813 - 30,220 30,220 Totals - All Agency Funds Assets: Cash Investments Interest Receivable Total Assets 19,407 1,767,554 1,412 1,788,373 10,813 13,290 24,103 (1,412) (1,412) 30,220 1,780,844 1,811,064 Liabilities: Other Liabilities Accounts Payable Total Liabilities 1,750,215 38,158 1,788,373 57,067 57,067 (34,376) (34,376) 1,807,282 3,782 1,811,064 Flexible Spending Plan Fund Assets: Cash Total Assets Liabilities: Other Liabilities $ $ 77 (34,376) (34,376) 1,780,844 1,780,844 $ 1,777,062 3,782 1,780,844 $ To Table of Contents City of Casa Grande, Arizona General Fund Schedule of Expenditures - Legal Level Budget Compliance For the Year Ended June 30, 2010 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 $ $ 154,190 3,054,580 Final $ 154,190 2,537,480 Actual Amounts $ 135,725 1,186,524 Budget Variance Positive (Negative) $ 18,465 1,350,956 679,850 176,710 779,850 176,710 655,635 290,314 124,215 (113,604) 597,920 67,110 597,920 67,110 581,906 40,738 16,014 26,372 323,410 73,900 326,460 153,120 324,187 106,749 2,273 46,371 828,170 202,720 832,770 198,120 826,596 167,875 6,174 30,245 733,000 1,013,010 733,000 1,013,010 675,035 814,681 57,965 198,329 615,200 281,480 622,000 274,680 548,550 178,088 73,450 96,592 9,779,570 1,164,140 9,796,150 1,357,750 9,784,275 1,358,686 5,709,240 751,050 5,709,240 751,050 5,443,715 705,801 265,525 45,249 442,330 88,620 442,330 88,620 427,470 75,061 14,860 13,559 236,200 50,320 221,270 65,250 212,980 55,846 8,290 9,404 1,093,910 718,290 1,091,190 795,010 987,027 780,290 104,163 14,720 3,206,870 1,785,940 3,278,600 1,932,210 3,078,918 1,712,192 199,682 220,018 2,027,040 135,650 3,604,600 84,210 39,679,230 2,027,040 135,650 3,560,850 1,998,621 37,951 405,327 28,419 97,699 3,155,523 19 6,121,886 84,220 $ 78 39,802,850 11,875 (936) 84,201 $ 33,680,964 $ To Table of Contents OTHER SUPPLEMENTARY INFORMATION To Table of Contents City of Casa Grande, Arizona General Obligation Bond/Special Assessments Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2010 Actual Amounts $ 8,883 3,140,640 180 3,149,703 Variance with Final BudgetPositive (Negative) $ (126,117) 198,770 180 72,833 651 (651) Budgeted Amounts REVENUES Special assessments Property tax Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Debt Service Principal retirement Interest Total expenditures $ - Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING USES Transfers Out Total other financing uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original 135,000 2,941,870 3,076,870 $ Final 135,000 2,941,870 3,076,870 - 1,725,000 1,271,790 2,996,790 1,725,000 1,271,090 2,996,090 1,502,270 1,149,621 2,652,542 222,730 121,469 343,548 80,080 80,780 497,161 416,381 - 80,780 (80,780) - 497,161 432,252 929,413 416,381 513,032 929,413 - $ 79 $ $ To Table of Contents City of Casa Grande, Arizona Capital Replacement/Recreation/Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2010 Budgeted Amounts REVENUES Investment earnings Construction sales tax Total revenues $ EXPENDITURES Contractual services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Transfers in Bond issuance costs Proceeds from obligations 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) $ (88,205) (606,780) (694,985) Final 129,500 3,500,000 3,629,500 Actual Amounts $ 41,295 2,893,220 2,934,515 71,945,500 71,945,500 553,330 72,159,600 72,712,930 6,268 29,166,297 29,172,565 547,062 42,993,303 43,540,365 (68,316,000) (69,083,430) (26,238,050) 42,845,380 (1,720,000) 1,442,260 59,000,000 58,722,260 (9,593,740) 9,593,740 - (1,720,000) 1,442,260 59,000,000 58,722,260 (10,361,170) 10,361,170 $ - (6,346,000) 8,442,248 (472,066) 37,800,000 39,424,182 13,186,132 24,024,594 37,210,726 Original 129,500 3,500,000 3,629,500 80 $ $ (4,626,000) 6,999,988 (472,066) (21,200,000) (19,298,078) 23,547,302 13,663,424 $ 37,210,726 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, 2010 Budgeted Amounts Final 255,200 255,200 Actual Amounts $ 708,217 282 708,499 241,380 241,380 12,785 241,380 (12,785) - 241,380 241,380 254,165 (12,785) 13,820 13,820 454,334 440,514 REVENUES Property Tax Investment Earnings Total revenues Original $ 255,200 255,200 EXPENDITURES Contractual services Debt Service Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Variance with Final BudgetPositive (Negative) $ 453,017 282 453,299 (13,820) - 81 $ $ (13,820) - $ 352,050 806,384 $ 365,870 806,384 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, 2010 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) Proceeds from obligations Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original 2,000 1,394,000 1,000 1,397,000 $ Final 2,000 1,032,000 1,000 1,035,000 Actual Amounts $ 52 1,137,998 1,971 1,140,021 Variance with Final BudgetPositive (Negative) $ (1,948) 105,998 971 105,021 196,440 55,140 1,000,900 1,220,000 106,840 2,579,320 196,440 75,270 1,080,900 1,210,000 106,840 2,669,450 (1,182,320) (1,634,450) (139,618) 1,494,832 1,150,000 (36,190) 1,113,810 (68,510) 68,510 - 158,640 (36,190) 122,450 (1,512,000) 1,512,000 - (36,188) (36,188) (175,806) 99,959 (75,847) (158,640) 2 (158,638) 1,336,194 (1,412,041) (75,847) 82 $ 192,723 52,113 928,690 106,113 1,279,639 $ 3,717 23,157 152,210 1,210,000 727 1,389,811 $ 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, 2010 Budgeted Amounts REVENUES Investment earnings Rental and sale of City property Miscellaneous Total revenues $ EXPENDITURES Current: Culture and recreation: Contractual services Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Variance with Final BudgetPositive (Negative) $ (7,240) 1,405 25,000 19,165 Final 8,000 31,000 39,000 Actual Amounts $ 760 32,405 25,000 58,165 580,000 580,000 580,000 580,000 12,706 12,706 567,294 567,294 (541,000) (541,000) 45,459 586,459 Original 8,000 31,000 39,000 541,000 - 83 $ $ 541,000 - $ 791,062 836,521 $ 250,062 836,521 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, 2010 Budgeted Amounts Variance with Final BudgetPositive (Negative) $ 30,000 6 30,006 Final 20,000 20,000 Actual Amounts $ 50,000 6 50,006 48,000 48,000 17,000 48,000 65,000 1,142 16,963 40,450 58,555 (1,142) 37 7,550 6,445 Excess (deficiency) of revenues over (under) expenditures (28,000) (45,000) (8,549) 36,451 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 (23,000) 23,000 - 5,000 5,000 (40,000) 40,000 - 15,500 15,500 6,951 10,455 17,406 REVENUES Contributions and Donations Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Materials and supplies Capital outlay Total expenditures $ Original 20,000 20,000 84 $ $ $ $ 10,500 10,500 46,951 (29,545) 17,406 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, 2010 Final 250,000 20,000 270,000 Actual Amounts $ 405,990 2,183 359,607 767,780 Variance with Final BudgetPositive (Negative) $ 155,990 (17,817) 359,607 497,780 250,000 2,136,280 2,386,280 250,000 2,136,280 2,386,280 17,827 125 802,337 820,289 232,173 (125) 1,333,943 1,565,991 (2,116,280) (2,116,280) (52,509) 2,063,771 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 $ Original 250,000 20,000 270,000 2,116,280 - 85 $ $ 2,116,280 - $ 2,295,808 2,243,299 $ 179,528 2,243,299 To Table of Contents City of Casa Grande, Arizona Performance Institute / Promotion and Tourism Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2010 Budgeted Amounts REVENUES Local taxes Facility Use Contributions Investment earnings Total revenues $ EXPENDITURES Contractual services Materials & supplies Total expenditures $ 100,000 100,000 Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original 100,000 2,000 102,000 2,000 $ 86 Actual Amounts $ 205,489 41,705 5,000 302 252,496 174,690 174,530 349,220 174,682 174,461 349,143 (247,220) 2,000 (2,000) - Final 100,000 2,000 102,000 $ 8 69 77 (96,647) (247,220) 247,220 - Variance with Final BudgetPositive (Negative) $ 105,489 41,705 5,000 (1,698) 150,496 $ 150,573 (300,000) (300,000) (396,647) 355,069 (41,578) (149,427) 107,849 (41,578) $ 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, 2010 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 $ Variance with Final BudgetPositive (Negative) $ 26,457 10,851 (3,470) 33,838 Final 9,000 54,000 4,000 67,000 Actual Amounts $ 35,457 64,851 530 100,838 87,950 518,670 606,620 87,950 536,670 624,620 6,750 6,750 81,200 536,670 617,870 (539,620) (557,620) 94,088 651,708 Original 9,000 54,000 4,000 67,000 539,620 - 87 $ $ 557,620 - $ 511,977 606,065 $ (45,643) 606,065 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, 2010 Budgeted Amounts REVENUES Charges for service Intergovernmental Investment earnings Loan fees Total revenues Original $ 350,000 250,000 600,000 EXPENDITURES Current: Economic development: Personal services Contractual services Total expenditures 50,000 550,000 600,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ - $ - 88 $ Variance with Final BudgetPositive (Negative) $ (339,935) (83,660) 78 81,885 (341,632) Final 350,000 250,000 600,000 Actual Amounts $ 10,065 166,340 78 81,885 258,368 3,550 473,340 476,890 304,642 304,642 3,550 168,698 172,248 123,110 (46,274) (169,384) (123,110) - $ 176,611 130,337 $ 299,721 130,337 To Table of Contents City of Casa Grande, Arizona Wildland Firefighting/Public Safety Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2010 Budgeted Amounts REVENUES Intergovernmental revenue Investment earnings Contributions Total revenues EXPENDITURES Current: Wildland firefighting Public safety activities Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original $60,000 200 26,200 86,400 Final $60,000 200 26,200 86,400 60,000 21,000 81,000 60,000 21,000 81,000 5,400 5,400 (5,400) - 89 $ (5,400) - Actual Amounts $1,974 20 12,036 14,030 Variance with Final BudgetPositive (Negative) ($58,026) (180) (14,164) (72,370) 2,568 20,539 23,107 57,432 461 57,893 (9,077) $ 32,899 23,822 (14,477) $ 38,299 23,822 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, 2010 Budgeted Amounts REVENUES Total revenues $ EXPENDITURES Current: Contractual services Debt service: Principal Interest and fiscal charges Total expenditures Final $ - 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 - $ - Actual Amounts $ - Variance with Final BudgetPositive (Negative) $ - 3,000 2,700 300 200,000 99,920 299,920 200,000 99,920 302,920 200,000 99,920 302,620 300 (299,920) (302,920) (302,620) 300 299,920 299,920 - 299,920 299,920 (3,000) 3,000 - 299,920 299,920 (2,700) 30,516 27,816 300 27,516 27,816 90 $ $ $ 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, 2010 Actual Amounts $ - Variance with Final BudgetPositive (Negative) $ - - 950 Budgeted Amounts REVENUES Total revenues $ EXPENDITURES Current: Contractual services Debt Service: Principal retirement Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original - Final $ - - 950 - 430,000 597,960 1,028,910 430,000 597,955 1,027,955 5 955 - (1,028,910) (1,027,955) 955 - 1,028,910 - 1,027,955 1,027,955 - 91 $ $ - $ 1,027,955 1,027,955 1,028,910 (1,028,910) - 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, 2010 Final 1,718,920 1,718,920 Actual Amounts $ 100,803 100,803 Variance with Final BudgetPositive (Negative) $ (1,618,117) (1,618,117) 1,751,080 1,751,080 500 24,678 25,178 (500) 1,726,402 1,725,902 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues Original $ 1,718,920 1,718,920 EXPENDITURES Contractual services Capital outlay Total expenditures 1,763,000 1,763,000 Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ $ (44,080) (32,160) 75,625 107,785 44,080 44,080 - 44,080 44,080 11,920 (11,920) - 68,187 68,187 143,812 6,928 150,740 24,107 24,107 131,892 18,848 150,740 92 $ $ $ 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, 2010 Budgeted Amounts Original OPERATING REVENUES: Service fees Total operating revenues $ 121,000 121,000 Actual Amounts Final $ 121,000 121,000 $ 162,094 162,094 Variance with Final BudgetPositive (Negative) $ 41,094 41,094 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 54,680 27,400 61,200 2,200,000 2,343,280 56,250 25,830 61,200 2,200,000 2,343,280 Operating Income (2,222,280) (2,222,280) (15,400) (15,400) (4,900) (4,900) (2,237,680) (2,227,180) (23,790) (23,790) (23,788) 2 (2,261,470) (2,250,970) (21,412) 2,229,558 NONOPERATING REVENUE (EXPENSES): Interest expense Total nonoperating revenue (expense) Income (loss) before transfers Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 2,261,470 - 93 $ 2,250,970 - 55,673 17,175 37,754 44,540 155,142 577 8,655 23,446 2,155,460 2,188,138 6,952 2,229,232 (4,576) (4,576) 324 324 2,376 $ 1,380,894 1,359,482 2,229,556 $ (870,076) 1,359,482 To Table of Contents City of Casa Grande, Arizona Wastewater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2010 Budgeted Amounts Original OPERATING REVENUES: Service fees Connection fees Miscellaneous Total operating revenues $ 4,531,000 20,000 30,000 4,581,000 Actual Amounts Final $ 4,531,000 20,000 30,000 4,581,000 $ 5,041,530 14,664 17,717 5,073,911 Variance with Final BudgetPositive (Negative) $ 510,530 (5,336) (12,283) 492,911 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 856,390 980,690 896,630 39,153,000 41,886,710 709,830 1,641,810 959,230 39,373,180 42,684,050 627,378 1,209,077 916,755 1,796,786 4,549,996 82,452 432,733 42,475 37,576,394 38,134,054 Operating Income (37,305,710) (38,103,050) 523,915 38,626,965 3,000 (3,773,460) (3,770,460) 3,000 (2,946,120) (2,943,120) 7,165 (974,870) (967,705) 4,165 1,971,250 1,975,415 (41,076,170) (41,046,170) (443,790) 40,602,380 2,092,750 (416,610) 2,092,750 (416,610) 895,826 2,092,748 (416,608) 895,826 (41,492,780) (41,462,780) 2,128,176 43,590,956 41,462,780 - 35,630,390 $ 37,758,566 (5,832,390) $ 37,758,566 NONOPERATING REVENUE (EXPENSES): Interest income Interest expense City sales tax Total nonoperating revenue (expense) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 41,492,780 - 94 $ 2 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, 2010 Budgeted Amounts Original OPERATING REVENUES: Connection fees Total operating revenues $ OPERATING EXPENSES: Depreciation Total operating expenses 1,475,000 1,475,000 375,000 NONOPERATING REVENUE : Interest income Total nonoperating revenue 175,000 175,000 Income (loss) before transfers 175,000 175,000 (550,000) - 95 $ 983,431 983,431 $ (491,569) (491,569) 4,005 4,005 2,801,155 2,801,155 979,426 2,309,586 13,932 13,932 (1,155,160) 550,000 $ $ (1,330,160) (1,997,750) Net change in net assets 1,475,000 1,475,000 2,805,160 2,805,160 550,000 Transfers out Net Assets - beginning of year Net Assets - end of year $ 1,100,000 1,100,000 Operating Income Actual Amounts Final Variance with Final BudgetPositive (Negative) (161,068) (161,068) 993,358 2,148,518 (1,997,750) (1,997,748) 2 (3,152,910) (1,004,390) 2,148,520 3,152,910 - $ 20,371,019 19,366,629 $ 17,218,109 19,366,629 To Table of Contents City of Casa Grande, Arizona Sanitation/Development Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2010 Budgeted Amounts Original OPERATING REVENUES: Service fees Recycling revenue Impact fees Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Closure and postclosure costs Total operating expenses $ 2,531,410 921,110 1,110,820 1,921,000 150,000 6,634,340 Operating Income NONOPERATING REVENUE (EXPENSES): Loss 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 Prior period adjustment Net Assets - beginning of year restated Net Assets - end of year 5,683,000 278,000 10,000 5,971,000 $ Actual Amounts Final 5,683,000 278,000 10,000 5,971,000 $ 2,503,270 943,760 1,025,300 2,012,250 150,000 6,634,580 4,990,348 97,117 64,098 5,151,563 Variance with Final BudgetPositive (Negative) $ (692,652) (180,883) 64,098 (10,000) (819,437) 2,384,717 931,487 614,733 580,182 141,145 4,652,264 118,553 12,273 410,567 1,432,068 8,855 1,982,316 499,299 1,162,879 (663,340) (663,580) 6,500 (54,510) (48,010) 6,500 (53,860) (47,360) (711,350) (710,940) 485,257 1,625,000 (827,430) 1,625,000 (827,450) 1,625,000 (827,424) (1,538,780) (1,538,390) 1,282,833 2,821,223 1,538,780 1,538,390 2,526,418 525,499 3,051,917 4,334,750 988,028 525,499 1,513,527 4,334,750 - 96 $ - (14,277) 1,354 (1,119) (14,042) $ (14,277) (5,146) 52,741 33,318 1,196,197 26 $ 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, 2010 Budgeted Amounts Original OPERATING REVENUES: Rental Green fees Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses $ 487,020 107,280 426,150 265,500 1,285,950 Operating Income Income (loss) before transfers Transfers in Transfers out Net change in net assets $ 210,000 857,550 10,000 1,077,550 $ 487,020 149,280 459,790 189,860 1,285,950 (208,400) NONOPERATING REVENUE (EXPENSE): Interest income Interest expense City sales tax Total nonoperating revenue Net assets - beginning of year Net assets - end of year 210,000 857,550 10,000 1,077,550 Actual Amounts Final 125,398 941,928 2,075 1,069,401 Variance with Final BudgetPositive (Negative) $ 479,865 149,200 469,229 144,440 1,242,734 (208,400) (84,602) 84,378 (7,925) (8,149) 7,155 80 (9,439) 45,420 43,216 (173,333) 35,067 - - 16,380 16,380 16,380 16,380 (192,020) (192,020) (147,173) 44,847 200,000 (146,860) 200,000 (146,860) 326,000 (146,860) 126,000 - (138,880) (138,880) 31,967 170,847 138,880 - 97 $ 138,880 - 209 (706) 26,657 26,160 $ 913,126 945,093 209 (706) 10,277 9,780 $ 774,246 945,093 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Source June 30, 2010 Governmental funds capital assets: Land and construction in progress Buildings Improvements other than buildings Machinery and 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 $ 37,022,894 35,629,288 195,532,715 21,734,073 $ 289,918,970 $ 459,861 1,529,993 13,333,761 111,145,808 59,998,147 103,451,400 $ 289,918,970 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 98 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule of Changes By Function and Activity For the Year Ended June 30, 2010 Function and Activity General government General Capital Assets June 30, 2009 $ Public safety 10,040,166 Additions $ 1,062,050 15,733,482 10,271,158 181,780,777 10,419,783 1,710,442 13,037 Culture and recreation 26,471,599 14,312,507 Economic development 18,385,971 81,204 Streets/Transportation Public works Total $ 254,122,437 $ 36,159,739 General Capital Assets June 30, 2010 Adjustments/ Disposals $ - $ 11,102,216 (160,729) - 25,843,911 192,200,560 (16,802) 1,706,677 - $ 40,784,106 (185,675) 18,281,500 (363,206) $ 289,918,970 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 99 To Table of Contents STATISTICAL SECTION To Table of Contents 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. 100 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. 107 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. 109 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. 115 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. 117 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. 100 To Table of Contents Schedule 1 City of Casa Grande Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) 2003 2004 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ 21,646,269 7,492,999 3,935,234 $ 33,074,502 $ 24,413,490 13,846,429 5,857,139 $ 44,117,058 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 15,329,786 1,983,310 97,231 $ 17,410,327 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 36,976,055 9,476,309 4,032,465 $ 50,484,829 June 30 2005 2006 2007 $ 28,136,615 25,705,254 10,880,929 $ 64,722,798 $ 74,265,031 39,505,454 17,574,060 $ 131,344,545 $ 121,397,151 61,600,770 24,880,238 $ 207,878,159 $ 9,650,425 11,289,359 1,030,876 $ 21,970,660 $ 19,179,454 7,202,857 4,985,723 $ 31,368,034 $ 27,728,464 11,541,534 8,492,036 $ 47,762,034 $ 29,545,366 15,292,233 9,374,364 $ 54,211,963 $ 34,063,915 25,135,788 6,888,015 $ 66,087,718 $ 47,316,069 32,908,111 15,866,652 $ 96,090,832 $ 101,993,495 51,046,988 26,066,096 $ 179,106,579 $ 150,942,517 76,893,003 34,254,602 $ 262,090,122 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 101 To Table of Contents 2008 2009 2010 $ 144,539,605 77,352,432 29,930,330 $ 251,822,367 $ 166,666,266 63,759,736 29,204,011 $ 259,630,013 $ 169,037,582 66,259,746 24,786,399 $ 260,083,727 $ $ $ $ 33,189,049 19,276,562 7,191,725 59,657,336 $ 177,728,654 96,628,994 37,122,055 $ 311,479,703 $ 42,819,605 16,814,023 1,188,222 60,821,850 $ 209,485,871 80,573,759 30,392,233 $ 320,451,863 $ 46,698,154 11,962,381 5,103,985 63,764,520 $ 215,735,736 78,222,127 29,890,384 $ 323,848,247 102 To Table of Contents Schedule 2 City of Casa Grande Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) 2003 Governmental Activities: Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Interest on long-term debt Total expenses Program Revenues Charges for services: General government Public safety Streets/Transportation Public works Culture and recreation Development fees Building permits Development and engineering Other economic development Operating grants and contributions Capital grants and contributions Total program revenues Total Governmental Activities Net Program Expense General Revenues and Other Changes in Net Assets Property taxes Sales taxes Franchise taxes Shared revenues: State sales taxes Urban revenue sharing Auto-in-lieu Investment earnings Gain on sales of assets Miscellaneous Transfers Total general revenues and other changes in net assets Total Governmental Activities Change in Net Assets June 30 2005 2004 $ 3,627,359 9,888,543 2,702,484 697,449 3,778,926 2,289,429 540,921 23,525,111 $ 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 2006 $ 4,463,957 13,504,033 5,486,251 1,868,890 4,978,247 4,468,076 500,879 35,270,333 2007 $ 5,196,569 14,765,435 9,650,354 2,144,675 5,247,404 5,564,781 610,630 43,179,848 102,276 823,583 142,848 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 $ (9,958,607) $ (10,311,090) $ (1,806,916) $ 38,095,195 1,536,606 9,477,906 850,839 1,799,803 10,573,489 899,604 2,333,638 12,094,301 954,853 2,401,386 14,973,622 1,236,366 2,475,296 22,708,648 1,511,751 1,972,714 2,650,450 999,433 (163,059) 221,721 200,444 (26,617) 17,720,437 2,122,100 2,278,117 1,189,494 124,545 (77,414) 277,201 1,341,083 20,528,022 2,336,759 2,345,507 1,221,188 466,925 414,900 145,585 99,000 22,412,656 2,721,554 2,728,207 1,585,116 1,508,717 660,798 361,586 349,200 28,526,552 3,086,185 3,760,034 2,032,801 3,222,176 1,846,201 274,310 449,800 41,367,202 $ 7,761,830 $ 10,216,932 $ 20,605,740 $ 66,621,747 $ 43,705,787 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 103 133,192 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 $ 2,338,585 To Table of Contents 2008 $ 6,958,153 17,799,896 10,614,899 1,652,940 5,853,610 5,932,564 641,914 49,453,976 2009 $ 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 $ (3,277,449) 7,824,380 20,384,692 12,198,334 2,336,854 7,696,876 4,367,403 972,791 55,781,330 2010 $ 131,394 1,410,573 1,297,796 23,399 378,961 1,332,296 635,045 96,008 379,636 8,859,174 7,360,861 21,905,143 $ (33,876,187) 6,961,775 20,366,672 12,007,921 2,335,926 6,828,387 4,700,480 2,145,146 55,346,307 153,150 1,135,284 1,144,798 9,736 469,536 1,414,107 494,055 55,896 842,301 7,469,173 4,841,012 18,029,048 $ (37,317,259) 3,105,864 28,082,890 1,687,014 6,264,879 23,313,628 1,910,594 7,422,710 19,776,002 1,947,031 2,984,122 4,592,697 2,199,266 3,202,760 452,693 388,409 525,942 47,221,657 2,583,416 4,793,336 2,126,092 815,213 0 440,101 (563,426) 41,683,833 2,382,825 4,106,244 2,034,181 107,521 0 625,779 (631,320) 37,770,973 $ 43,944,208 $ 7,807,646 $ 453,714 104 To Table of Contents Schedule 3 City of Casa Grande Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) 2003 Business-type Activities: Expenses Water Golf course Wastewater Sanitation Total expenses Revenues Charges for services: Water Golf course Wastewater Sanitation Sales taxes Investment earnings Miscellaneous Capital grants and contributions Total revenues $ June 30 2005 2004 197,109 698,909 2,465,665 2,638,820 6,000,503 $ 142,327 716,703 2,981,091 2,797,052 6,637,173 $ 158,397 844,434 2,487,685 3,148,693 6,639,209 2006 $ 98,048 928,321 3,138,128 3,538,650 7,703,147 2007 $ 115,599 1,107,942 5,413,331 3,902,782 10,539,654 194,782 420,799 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 $ 2,780,739 $ 5,755,565 $ 9,496,374 $ 16,743,202 $ 6,899,728 26,617 (1,341,083) (99,000) (349,200) (449,800) Total Business-type Activities Change in Net Assets $ 2,807,356 $ 4,414,482 $ 9,397,374 $ 16,394,002 $ 6,449,928 Total Primary Government Change in Net Assets $ 10,569,186 $ 14,631,414 $ 30,003,114 $ 83,015,749 $ 50,155,715 Total Business-type Activities Net Program Expense Other Changes in Net Assets Transfers 105 To Table of Contents 2008 $ 117,638 967,750 4,522,025 4,041,517 9,648,930 2009 $ 190,125 797,501 5,972,329 4,990,169 14,203 919,273 155,834 2,580,813 15,620,247 $ 5,971,317 $ (525,942) $ 153,147 1,266,986 4,610,789 5,465,908 11,496,830 2010 $ 159,718 1,243,440 5,528,871 4,653,383 11,585,412 196,410 962,206 5,119,786 4,555,927 20,612 202,016 323,560 717,407 12,097,924 162,094 1,066,642 6,049,625 5,151,563 26,657 8,383 10,473 895,826 13,371,263 601,094 $ 1,785,851 563,426 631,320 5,445,375 $ 1,164,520 $ 2,417,171 $ 49,389,583 $ 8,972,166 $ 2,870,885 106 To Table of Contents Schedule 4 City of Casa Grande Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2001 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 $ Fiscal Year 2003 2002 2004 143,871 4,422,980 $ 4,566,851 $ 176,526 3,338,675 $ 3,515,201 $ 486,826 3,823,320 $ 4,310,146 $ $ 2,186,274 $ 2,311,916 2,761,029 1,406,775 $ 6,354,078 3,758,330 1,214,043 $ 7,284,289 107 2005 $ $ 801,965 6,343,317 7,145,282 1,115,310 11,150,642 $ 12,265,952 $ 2,341,307 $ 2,368,606 $ 4,328,235 372,078 $ 7,041,620 9,013,364 1,066,167 $ 12,448,137 6,252,078 15,594,386 2,479,265 $ 24,325,729 To Table of Contents 2006 $ Fiscal Year 2008 2007 2010 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 $ 3,153,554 30,402,947 $ 33,556,501 3,815,142 25,262,863 $ 29,078,005 $ $ 4,413,184 $ 32,896,933 $ 25,327,803 $ 39,966,314 43,633,806 10,701,962 $ 58,748,952 49,835,900 77,406 $ 82,810,239 39,794,807 8,084 $ 65,130,694 40,446,857 151,896 $ 80,565,067 4,250,108 28,612,756 5,365,147 $ 38,228,011 $ 2009 108 $ 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) 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 2001 2002 Fiscal Year 2003 2004 2005 $ 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 $ 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 Expenditures General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt service Principal Interest Total expenditures 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 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 4,526,914 979,300 465,622 27,997,997 956,448 620,054 25,662,322 932,344 559,527 26,974,445 960,801 471,539 25,937,272 799,546 477,428 29,988,535 Other Financing Sources (Uses) Transfers in Transfers out Capital leases Bond issuance Bond issuance costs Sale of land Total other financing sources (uses) 2,391,189 (2,649,899) 369,137 110,427 1,010,817 (1,097,185) (86,368) 1,618,327 (1,644,944) 150,000 123,383 2,919,819 (1,578,736) 1,056,839 2,397,922 2,686,632 (2,530,831) 3,500,000 1,335,000 (159,557) 4,831,244 7,416,028 $ 16,998,260 5.97% 5.02% Net change in fund balances $ (1,937,887) $ (121,439) Debt service as a percentage of noncapital expenditures Not Available* Not Available* $ 512,075 6.63% $ *Prior to implementation of GASB 34 in 2003, the Capital outlay number from the CAFR may not include all capital asset purchases. 109 To Table of Contents 2006 2007 Fiscal Year 2008 $ 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 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 1,206,388 484,775 38,209,861 5,808,434 (5,374,834) 433,600 $ 20,909,057 5.27% 2009 31,334,264 808,414 17,188,146 2,188,466 1,092,331 21,092 815,213 1,645,235 536,204 55,629,365 $ 29,088,943 656,902 16,769,422 2,058,720 978,765 8,883 107,521 2,106,527 514,473 52,290,156 8,076,361 16,983,507 2,323,097 1,684,699 5,463,871 4,965,772 11,030,175 8,996,033 18,594,022 2,991,139 1,716,458 5,222,719 3,425,837 27,511,902 8,055,272 18,957,126 2,521,337 2,192,317 5,792,331 3,550,938 31,846,819 882,247 707,501 44,477,387 1,226,548 607,351 52,361,381 5,313,821 955,207 74,727,138 2,484,637 2,125,295 77,526,072 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 5,630,797 (5,922,924) 12,829,121 (13,965,253) 750,000 (103,736) 1,500,000 1,854,137 37,800,000 (472,067) 36,191,801 $ 28,728,468 4.30% $ 29,701,636 $ 2010 $ (17,243,635) 4.44% 13.28% 110 $ 10,955,886 10.04% To Table of Contents Schedule 6 City of Casa Grande Sales Tax Revenue by Industry, Fiscal Years 2010, 2009, 2008, 2007, 2006 and 2005 Fiscal Year 2005 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% 1,220,019 195,610 7,027,208 923,817 1,485,089 275,550 373,228 59,128 Total $ 14,244,753 Fiscal Year 2006 Percentage Tax Paid of Total $ 3,164,234 599,880 17.93% 3.40% 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 1,732,572 316,538 427,755 328,240 100.00% $ 17,650,253 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 111 Fiscal Year 2007 Percentage Tax Paid of Total $ 8,405,855 624,116 33.85% 2.51% 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% 100.00% $ 24,832,684 100.00% To Table of Contents Fiscal Year 2008 Percentage Tax Paid of Total $ 11,087,874 750,711 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% $ 28,307,984 100.00% Fiscal Year 2009 Percentage Tax Paid of Total $ 6,722,392 597,311 1,761,603 277,315 9,585,867 1,221,532 1,869,128 462,489 560,571 276,032 28.81% 2.56% 0.00% 7.55% 1.19% 41.08% 5.23% 8.01% 1.98% 2.40% 1.18% $ 23,334,240 100.00% 112 Fiscal Year 2010 Percentage Tax Paid of Total $ 3,558,323 594,982 17.82% 2.98% 2,053,502 238,731 9,361,417 1,228,270 1,751,628 390,430 433,326 355,036 10.29% 1.20% 46.89% 6.15% 8.77% 1.96% 2.17% 1.78% $ 19,965,645 100.00% To Table of Contents Schedule 7 City of Casa Grande Direct and Overlapping Sales Tax Rates 6/30/2010 City Rates State and Pinal County * Combined Privilege tax, except retail, utilities and telecommunication 1.80% 7.70% 9.50% Retail 2.00% 7.70% 9.70% Retail - privilege tax for single item over $5000 1.50% 7.70% 9.20% Hotel/Motel 3.80% 7.70% 11.50% Restaurant/Bar 1.80% 7.70% 9.50% Utilities/Telecommunications 2.00% 7.70% 9.70% Construction 4.00% 7.70% 11.70% Type of Tax Sources: City of Casa Grande Finance Department and Arizona Department of Revenue *Includes temporary 1% increase as of June 1, 2010 113 To Table of Contents To Table of Contents Schedule 8 City of Casa Grande Ratios of Outstanding Debt by Type, Last Ten Fiscal Years Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 General Obligation Bonds 1,335,000 1,335,000 1,790,000 10,775,000 9,739,549 27,282,278 Street & Hwy User Revenue Bonds - Governmental Activities Excise Tax Special Revenue Assessment Obligations Bonds 9,435,000 8,980,000 8,495,000 8,138,000 7,688,583 7,217,943 6,721,488 6,199,218 3,130,318 21,249,788 955,000 870,000 780,000 685,000 585,000 480,000 370,000 255,000 130,000 - Capital Leases Mortgages 1,130,019 761,093 566,744 1,236,062 4,485,933 4,029,980 3,754,188 3,180,356 2,909,161 2,598,870 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. 114 119,472 - To Table of Contents General Obligation Bonds 2,000,000 1,605,451 1,382,721 Business-type Activities Excise Tax Revenue Capital Obligations Leases 8,220,000 7,625,000 7,005,000 15,926,820 15,426,237 14,911,877 14,388,332 13,855,602 13,304,502 12,735,032 1,162,818 787,125 459,286 404,534 593,795 408,291 295,899 179,122 57,790 6,793 Notes Payable 203,193 178,170 178,170 177,300 168,069 158,520 148,643 4,352,312 38,501,765 115 Total Primary Government 21,022,309 19,226,411 17,484,200 26,568,586 30,291,848 28,551,160 27,478,427 36,592,941 35,229,083 103,757,247 Percentage of Personal Income (a) 4.33% 3.94% 3.21% 4.32% 4.22% 3.59% 3.12% 3.61% 3.16% 8.55% To Table of Contents Schedule 9 City of Casa Grande Ratio of General Bonded Debt Outstanding Last Six 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% $ N/A 1,335,000 8,183,338 16.31% N/A 2007 1,790,000 39,939,824 4.48% 1,584 2008 2008 1,775,000 11,000,000 (1) (2) 93,675,428 2,295,221,460 1.89% 0.48% 664 267 2009 2009 2,515,000 8,830,000 (1) (2) 167,571,141 2,928,179,559 1.50% 0.30% 836 192 2010 2010 2,430,000 20,634,999 (1) (2) 249,681,000 3,680,064,800 0.97% 0.56% 807 449 (a) Source: Pinal County Assessor's records (b) Estimated population of Mission Royale CFD 6/30/09 Estimated population of Villago CFD 6/30/09 Provided by Sales Offices. No population data are available for years prior to 2007 Population of Casa Grande 1,970 1,040 45,993 (1) General obligation bonds were issued by the Mission Royale Community Facilities District in 2005 and the Villago Community Facilities District in 2006 and 2008. These bonds will be repaid by the property owners within the CFDs and are obligations of the districts only. (2) General obligation bonds were issued by the City of Casa Grande in June, 2008 and July, 2009. 116 To Table of Contents Schedule 10 City of Casa Grande Direct and Overlapping Governmental Activities Debt As of June 30, 2010 Estimated Share of Overlapping Debt Governmental Unit Bonded Debt Outstanding Estimated Percentage Applicable School District #4 $ 23,615,000 75.45% $17,816,931 School District #82 37,940,000 55.56% 21,079,122 Central Arizona Community College 40,000,000 13.91% 5,562,039 Mission Royale CFD 1,300,000 100.00% 1,300,000 Villago CFD 1,130,000 100.00% 1,130,000 Subtotal, overlapping debt 46,888,091 City direct debt 24,852,278 Total direct and overlapping debt $ 71,740,369 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. 117 To Table of Contents Schedule 11 City of Casa Grande Legal Debt Margin Information June 30, 2010 Net Secondary Assessed Valuation as of June 30, 2010 $460,008,100 Debt limit (6% of assessed value) Debt applicable to limit: General obligation bonds 27,600,486 10,494,000 Legal 6% debt margin $ Debt limit (20% of assessed value) Debt applicable to limit: General obligation bonds 17,106,486 92,001,620 15,741,000 Legal 20% debt margin $ 76,260,620 Note: The City issued General Obligation bonds for $11,000,000 in June, 2008 and $19,000,000 in August, 2009. No retroactive reporting of the legal debt margin is provided because the City had no prior general obligation debt since 1997. 118 To Table of Contents Schedule 12 City of Casa Grande Pledged-Revenue Coverage Last Ten Fiscal Years Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Special Assessment Bonds Special Debt Service Assessment Collections Principal Interest Coverage 308,629 290,054 174,365 137,642 217,895 354,840 28,907 29,691 21,092 8,883 215,000 85,000 90,000 95,000 100,000 105,000 110,000 115,000 135,000 130,000 37,785 51,570 56,147 42,120 36,990 31,590 25,920 19,980 17,280 3,510 1.22 2.12 1.19 1.00 1.59 2.60 0.21 0.22 0.14 0.07 Excise Tax Revenue Obligations Pledged Debt Service Revenue Collected (a) Principal Interest Coverage 23,176,964 22,402,363 23,444,022 25,645,893 29,267,707 37,727,237 44,984,571 52,450,264 43,338,764 39,278,843 1,000,000 1,050,000 1,105,000 1,165,000 950,001 985,000 1,020,000 1,070,000 3,630,000 1,276,783 1,010,013 957,807 901,980 594,321 1,054,202 1,022,252 987,632 1,039,517 1,008,269 1,039,772 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (a) The 1997and 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. 119 11.53 11.16 11.68 14.58 14.60 18.80 22.41 24.86 9.34 16.96 To Table of Contents Schedule 13 City of Casa Grande Demographic and Economic Statistics, Last Ten Fiscal Years Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Population 27,815 27,290 29,715 31,315 34,260 36,450 38,785 42,422 45,116 45,993 County Per Capita Personal Income 17,436 17,889 18,354 19,646 20,959 21,800 22,672 23,905 25,000 26,373 Total Personal Income School Enrollment Unemployment Rate 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 1,127,900,000 1,212,973,389 7,680 7,784 7,895 8,120 8,930 9,049 10,290 11,066 11,652 10,700 4.20% 6.80% 6.20% 5.00% 5.20% 5.10% 4.30% 6.10% 11.10% 11.50% 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. 120 To Table of Contents Schedule 14 City of Casa Grande Principal Employers, Current Year and Nine Years Ago Employer Casa Grande Elementary School District Casa Grande Regional Medical Center Wal-Mart Distribution Center Wal-Mart Supermarket Frito-Lay Inc. City of Casa Grande Abbott Laboratories/Ross Products Hexcel Corporation National Vitamin Company Casa Grande Valley Newspapers 2010 (a) Percentage of Total City Employees Employment 2001 Percentage of Total City Employees Employment 1050 850 560 450 450 429 425 350 160 150 5.00% 4.05% 2.67% 2.14% 2.14% 2.04% 2.02% 1.67% 0.76% 0.71% 625 788 302 251 397 562 100 4.52% 5.70% 0.00% 0.00% 2.19% 1.82% 2.87% 4.07% 0.00% 0.72% 4,874 23.21% 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 2001; AZ Dept of Economic Security 121 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 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 24.5 26 22.75 23 24 26 30 39.25 39.5 37.25 91.5 93.5 98.5 97.5 103.5 107.5 123.05 139 137.23 128.75 Fire Culture and Recreation Planning and Development Public Works Total 27 30 33 37 38 41 54.75 60.5 62.08 63.25 43 43 44 44 44 44 48 61.25 61.75 68.25 16 17 17 17 19 22 26.5 34.5 34 31 66 76 80 80 79 84.25 96.25 104.5 104.5 100.5 268.00 285.50 295.25 298.50 307.50 324.75 378.55 439.00 439.06 429.00 Source: City Budget Note: Information is based on authorized positions. 122 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 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 2001 2002 2003 2004 2005 2006 2007 2008 2009 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 20,805 2,400 20805 2400 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 4,689 5,050 1,505 25,064 4,289 5,703 883 15,812 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 40,893 76,263 939,398 991 7,025 3,981 38,629 72,807 983,100 974 6,107 4,738 99,414 422,063 733,582 100,619 374,840 734,852 100,655 149,210 825,000 90,826 52,240 172,391 86,364 51,915 170,875 73,984 49,718 187,063 74,311 73,079 225,043 75,863 75,840 229,446 79,920 78,727 270,473 113,480 98,937 329,790 279 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 85 114 329 25 25 12 1,331 95 90 369 12 12 12 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. 123 2010 1,317 90 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 2001 2002 2003 2004 2005 2006 2007 2008 3 3 3 3 3 3 3 3 3 3 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 26 1,396 5 1 26 93 27 1,566 5 1 26 95 22 18 22 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 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 3,500 410 455 10 38 3,363 410 455 10 39 Sources: Various City departments 124 2009 2010 To Table of Contents SINGLE AUDIT REPORTS To Table of Contents To Table of Contents 125 To Table of Contents 126 To Table of Contents 127 To Table of Contents 128 To Table of Contents City of Casa Grande, Arizona Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2010 U.S. Department of Housing and Urban Development: Passed through Arizona Department of Housing: Community Development Block Grant - 2008 Community Development Block Grant - 2008 Community Development Block Grant - 2009 Community Development Block Grant - 2009 HOME - 2010 HOME - 2008 Total Department of Housing and Urban Development U.S. Department of Agriculture: Self Help Housing Technical Assistance Grant Self Help Housing Technical Assistance Grant Housing preservation grant Total Department of Agriculture U.S. Department of Health & Human Services: Passed through Pinal-Gila Council for Senior Citizens: Aging cluster: Special Programs for the Aging Special Programs for the Aging Stimulus Congregate meals Stimulus Home Delivered Meals Nutritional Services Incentive Program Subtotal - aging cluster Social Services Block Grant Total Department of Health & Human Services U.S. Department of Energy: Stimulus Energy Efficiency Conservation Block Grant Total Department of Energy Grant Number Federal CFDA Number 101-08 113-08 100-09 156-09 301-10 303-08 14.228 14.228 14.228 14.228 14.239 14.239 10 12 40 10.420 10.420 10.433 135,180 * 103,617 * 29,340 268,137 5-237 5-237 5-237 5-237 5-237 93.044 93.045 93.707 93.705 93.053 5-237 93.667 12,425 61,607 5,111 3,131 20,929 103,203 11,678 114,881 DE-RW0000128 Expenditures $ 81.128 3,162 47,703 112,102 265,399 40,000 141,820 610,186 77,222 77,222 U.S. Department of Justice: Stimulus JAG Grant JAG Grant Bulletproof Vest Grant JAG Grant Total Department of Justice 2009-SB-B9-3190 2007-DJBX 2006BUBX 2006-DJBX1098 16.804 16.592 16.607 16.592 38,821 225 9,988 400 49,434 U.S. Department of Transportation: FAA Airport Grant FAA Airport Grant Total Department of Transportation 3-04-0007-12-2008 3-04-0007-13-2009 20.106 20.106 12,120 475 12,595 EMW-2007-FF-00468 97.044 202,380 07-AZDOHS-HSGP333303-01 09-ACDOHS-OPSG555312-01,02,03 97.067 22,979 U.S. Department of Homeland Security Federal Emergency Management Agency Passed through Arizona Division of Emergency Management: Arizona Department of Homeland Security Passed through Arizona Department of Homeland Security: Operation Stonegarden Grant Program 97.067 109,013 334,372 Total Department of Homeland Security Total Federal Financial Assistance and Expenditures of Federal Awards *Denotes major program 129 $ 1,466,827 * * * * * * * * * To Table of Contents City of Casa Grande Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2010 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. 130 To Table of Contents 131 To Table of Contents 132