To Table of Contents City of Casa Grande, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2011 To Table of Contents City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2011 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)....... 3 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets .................................................................................................................. Statement of Activities .................................................................................................................... 12 13 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet............................................................................................................................. Reconciliation of the Balance Sheet to the Statement of Net Assets ......................................... Statement of Revenues, Expenditures and Changes in Fund Balances...................................... Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances Of Governmental Funds to the Statement of Activities.......................................................... Budgetary Comparison Statements – General Fund and major Special Revenue funds: General Fund .......................................................................................................................... Highway Users Special Revenue Fund .................................................................................. 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 Proprietary Fund Financial Statements Statement of Net Assets ............................................................................................................. Statement of Revenues, Expenses and Changes in Fund Net Assets ......................................... Statement of Cash Flows............................................................................................................ 27 29 31 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets............................................................................................. Statement of Changes in Fiduciary Net Assets .......................................................................... i 35 36 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 Obligations .............................................................................. 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. Fund Balance Details by Classification......................................................................... Page 37 49 52 53 53 54 54 56 61 61 63 64 66 67 68 68 69 69 71 71 72 SUPPLEMENTARY INFORMATION – COMBINING FUND FINANCIAL STATEMENTS Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........... 73 75 Fiduciary Funds Combining Statement of Fiduciary Net Assets................................................................... Combining Statement of Changes in Assets and Liabilities – All Agency Funds .............. 77 78 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund Legal Level Budget Compliance .................. 79 Budgetary Comparison Schedules – Other Major Governmental Funds General Obligation/Bond Debt Service Fund ..................................................................... Capital Replacement Recreation/Development Fund ......................................................... System Development Special Revenue Fund ..................................................................... Community Facilities Districts Capital Projects Fund........................................................ 80 81 82 83 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 ................................... 84 85 86 87 ii To Table of Contents TABLE OF CONTENTS (continued) OTHER SUPPLEMENTARY INFORMATION (continued) Page Budgetary Comparison Schedules – Non-Major Governmental Funds (continued) Performance Institute/Promotion & Tourism Special Revenue Fund................................. Court Enhancement/Probationary Special Revenue Fund .................................................. Housing Application & Development Fees Special Revenue Funds.................................. Wildland Firefighting/Public Safety Special Revenue Fund .............................................. Redevelopment Debt Service Fund .................................................................................... Recreation Debt Service Fund ............................................................................................ Airport Improvement Capital Projects Fund....................................................................... 88 89 90 91 92 93 94 Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch.............................................................................................. Wastewater .................................................................................................................. Wastewater Development Fees ................................................................................... Sanitation..................................................................................................................... Golf Course ................................................................................................................. 95 96 97 98 99 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule of Changes by Function and Activity.................................................................. 100 101 III. STATISTICAL SECTION 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Page 102 103 105 107 109 111 113 115 116 118 119 120 121 122 123 15 16 17 124 125 126 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 127 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............................................................................................................................... 129 Schedule of Expenditures of Federal Awards ............................................................................... 131 Schedule of Findings and Questioned Costs ................................................................................. 133 iv To Table of Contents City of Casa Grande November 22, 2011 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, 2011. 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). 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, 2011 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, 2011, 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, 2011, found no instances of material weakness in the internal control structure, or significant violations of applicable laws and regulations with respect to major programs. The reports from Henry & Horne L.L.P. are available in the City of Casa Grande, Arizona’s separately issued Single Audit Report. PROFILE OF THE CITY The City of Casa Grande was founded in 1879 and is named for the famous Hohokam Indian Ruins. Since its incorporation in 1915, Casa Grande has grown to be the largest community in western Pinal County. Casa Grande is located in central Arizona, approximately halfway between the State’s two largest metropolitan areas of Phoenix and Tucson, and is surrounded by three Indian Reservations. In addition, the City is located at the intersection of two major interstate highways, which service the Los Angeles, and San Diego markets. The City is a dynamic, involved city with a rural heritage and old-fashioned values. The economic base is a mix of retail trade, manufacturing and agriculture. The City of Casa Grande, chartered in December 1974, has a Council-Manager form of government consisting of the Mayor and six Council members. The Mayor is elected at-large for a two-year term and cannot serve 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 5 years to just over 110 squares miles. The Voters approved the 2020 General Plan on November 3rd, 2009. The City’s population increased by 93% over the past ten years from 25,224 in 2000 to 48,571 in 2010. 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. Most of the growth occurred prior to 2009. Housing starts averaged 7 per month the past fiscal year. 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. 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. The Comprehensive Annual Financial Report (CAFR) 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 $166,555,670. 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. The prior three fiscal years brought anticipated slowing of the residential housing construction market. Non-residential building permits with a value of $22.7 million were issued in fiscal year 2011. The continued commercial development conveys the actuality that sufficient roof-tops 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 annexations. 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 49% 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 6.5% 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 increase by 12% this next year due to the 2010 census population reallocation. 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 .8988 from .8110 per $100 of assessed valuation. Despite the increase in tax levy rate, most residential properties will 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 2011 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 o Moved operations to a new facility. Maintained dispatch response rate of 44 seconds from start to dispatch. Part 1 UCR crimes decreased by 1.5%. 225 animals adopted. Established a partnership with the U.S. Marshal’s Services to increase arrests of felony fugitives. Maintained over a 98% victim contact rate for cases assigned to Criminal Investigations. Fire o o o o Responded to 6,397 emergencies, of which 4,887 (76.4%) involved emergency medical services, averaging a response time for all incidents of under 5 minutes 51% of the time. Responded to 14.68 structure fires per 1,000 structures. Structure fires reduced by 4.8%. Continued mentoring of the Casa Grande Fire Explorers Program. viii To Table of Contents Public Works o Responded to 5,737 service requests. o Demolished 9 condemned or burned buildings. o Cleaned 70% of drainage structures. o Crack sealed 290,000 sq yards of pavement. o Hosted the 53rd Annual Cactus Fly-In at the municipal airport. o Treatment of an average of 5 million gallons per day of wastewater. o Collected 18.4 tons of residential trash. o Collected 61.6 tons of solid waste at the landfill site. o Recycled an average of 46.5 lbs per household in residential solid waste materials. o Complete preventative maintenance, when due on vehicles, 60% of the time. Community Services o Golfers played 77,470 rounds of nine hole equivalents. o Provided a cost recovery rate of 63% on recreation programs. o Library visitors of 364,760 at the two libraries. o Served a total of 33,757 meals and provided a total of 6,879 volunteer hours. o Maintained 10.95 acres of parkland per 1,000 population at a cost of $1,105 per acre. o Provided 294 swimming lessons. Development Center o Completed 4,380 plan reviews for 1,530 building permits. o Reviewed 93% of plans within established timeframes. 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, 2011, the City had a number of debt issues outstanding. Total bonded debt at June 30, 2011, was $116.4 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, 2011 the City had $84.6 million 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, 2011, the City has debt capacity of $51,773,569 for general obligation bonds subject under the 20% limitation based on the FY 2011 secondary assessed valuation. The City has $29.7 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 direct treasury purchases, certificates of deposits and 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 2011 fiscal year. The yield for the investment account averaged .1075 percent for the fiscal year. At June 30, 2011, the Pool consisted of $1.8 billion in total local government deposits, which included $93.7 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 $581,158. 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 $25,000 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 $100,000 per individual claim. There is also an aggregate stop loss for health insurance claims of $3,880,253. 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, 2010. This was the twentieth consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easy to read 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, 2010. 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 thirteenth 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, 2011, 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, 2011, 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 23, 2011 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. 1 Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m To Table of Contents 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 on pages 3 through 11 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, supplementary information, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The supplementary information and the schedule of expenditures of federal awards 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. Casa Grande, Arizona November 23, 2011 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, 2011. 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 $317 million at June 30, 2011 of which $28 million is unrestricted. This was a decrease of $6.4 million from fiscal year 2010, a decrease of $7.4 million in the government activities and an increase of $1 million in the business-type activities.  The governmental activities revenues decreased by approximately $8.2 million over the previous year.  The business-type activities operating revenues increased by $1.0 million from the previous year.  The General Fund reported expenses in excess of revenue and other financial sources and uses by $3.4 million for the year.  At June 30, 2011, committed balance for the General Fund was $22.6 million, or 65% of General Fund expenses for fiscal year 2011.  At June 30, 2011, unassigned fund balance of the governmental funds was $1.6 million.  The governmental activities general revenues of $47.6 million were $7.4 million less than the $55.0 million of expenses before other financial sources and uses.  The business-type activities net assets were $64.8 million as of June 30, 2011 which is an increase of $1.0 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 37-72) 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, 2011. 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, 2011 compared to the prior year. Condensed Statement of Net Assets (in Millions) Governmental Activities 2010 2011 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 2010 2011 Total Primary Government 2010 2011 $117.1 201.2 318.3 $ 96.2 213.3 309.5 $ 22.8 99.5 122.3 $ 22.6 112.2 134.8 $139.9 300.7 440.6 $118.8 325.5 444.3 5.7 52.5 58.2 4.0 52.8 56.8 3.6 55.0 58.6 2.4 67.7 70.1 9.3 107.5 116.8 6.4 120.5 126.9 169.0 66.3 24.8 $260.1 163.9 68.0 20.8 $252.7 46.7 12.0 5.1 $63.8 46.9 10.3 7.5 $64.7 215.7 78.3 29.9 $323.9 210.9 78.3 28.2 $317.4 5 To Table of Contents The net assets of the City decreased by $6.4 million from June 30, 2010. At year end June 30, 2011 the net assets of the City totaled $317.4 million. Of this $317.4 million, $252.7 million was in the governmental activities, a 2.8% decrease and $64.7 million was in the business-type activities, a 1.2% increase. Net Assets consist of three components. The largest portion of net assets ($210.8 million or 66%) 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 25%) 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 ($28.2 million or 8.8%), 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, 2011 were $60,571,908. The total cost of all programs and services was $66,977,913. The following table presents a summary of the changes in net assets for the year ended June 30, 2011. 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 Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Other Water Golf course Sewer Sanitation Total expenses Excess before transfer Transfers In (Out) Increase (decrease) in Net Assets Governmental Activities 2010 2011 Business-type Activities 2010 2011 Total 2010 2011 $5,719 7,469 4,841 $5,050 6,267 316 $12,430 896 $13,449 - $18,149 7,469 5,737 $18,499 6,267 316 7,423 19,776 1,947 8,523 733 56,431 6,570 18,973 2,196 7,480 190 47,042 - - - - 19 13,371 51 13,529 7,423 19,802 1,947 8,523 752 69,802 6,570 19,002 2,196 7,480 241 60,571 6,962 20,367 12,008 2,336 6,828 4,700 2,145 55,346 6,876 20,265 12,555 2,067 7,104 3,731 2,436 55,034 160 1,243 5,529 4,653 11,585 150 1,203 5,562 5,028 11,943 6,962 20,367 12,008 2,336 6,828 4,700 2,145 160 1,243 5,529 4,653 66,931 6,876 20,265 12,555 2,067 7,104 3,731 2,436 150 1,203 5,562 5,028 66,977 1,085 (631) $454 (7,992) 593 ($7,399) 1,786 631 $2,417 1,586 (593) $993 2,871 $2,871 (6,406) ($6,406) 6 26 29 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 78% of the total revenues of the City and 82% of the total expenses in fiscal year 2011. This compares to 80% of total revenues and 82% of expenses in fiscal year 2010. Governmental Programs Revenues and Expenses Fiscal Year 2011 $30,000,000 $27,000,000 $24,000,000 $21,000,000 Revenues $18,000,000 Expenditures $15,000,000 $12,000,000 $9,000,000 $6,000,000 $3,000,000 $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 73-76. For fiscal year ended June 30, 2011, the governmental funds reflect a combined fund balance of $89.0 million, a decrease of $20.7 million. A portion of the fund balance, $37.1 million is reserved for specific expenses or is legally segregated for a specific future use. The remaining $51.9 million is classified as assigned or unassigned. 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 2010 Capital Other 2011 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, community services, development services and general administrative services. The General Fund revenues total $31.4 million, a decrease of $1.9 million, in fiscal year 2011. The primary decreases are in local sales tax, state shared revenue and license and permits. The expenses, before other financing sources and uses, totaled $34.9 million, an increase of $1.2 million. Transfers to other funds were a net of ($1.0) million resulting in a decrease to fund balance of $4.4 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 only. 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 $4.5 million, a decrease of $.1 million, while expenses totaled $3.1 million, no change from the fiscal year ended June 30, 2011. 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 decreased in this fund due to planned expenditures for capital projects. 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 $64.8 million, an increase of $1 million as of June 30, 2011. This increase includes an increase to unrestricted assets of $2.3 million. Operating revenues in fiscal year 2011 were $13.5 million, an increase of $1.1 million from the prior fiscal year, while operating expenses totaled $11.2 million, an increase of $.6 million, resulting in $2.3million 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 $177,426,730 during fiscal year 2011. 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 $31.4 million, on a budgetary basis, were less than budgeted inflows of $33.6 million, while actual outflows (expenditures and other uses) of $34.9 million were 93% of original budgeted outflows. The decrease in General Fund outflows over budgeted amounts is primarily due to a continued emphasis on cost reductions. 9 To Table of Contents CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2011, the City had $325.5 million invested in various capital assets, net of accumulated depreciation, up $24.7 million. Of the $325.5 million $213.3 million (66%) is invested in governmental activities and $112.2 million (34%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following:     Completed construction of wastewater treatment plant for $14.3 million. Completed construction of Public Safety facility for $10.3 million. Construction in progress of the City Court building for $2.9 million. Completed remodeling of the Len Colla Recreation center for $450,000. The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2011. Additional information on the City’s capital assets may be found in Note 7 on pages 55 & 56. Capital Assets (In Thousands) Governmental Activities 2010 2011 Land & Const. in progress Building and improvements Machines and equipment Total $ 37,023 155,051 9,171 $201,245 $ 22,126 183,066 8,095 $213,287 10 Business-type Activities 2010 2011 $52,092 41,992 5,424 $99,508 $62,671 44,243 5,306 $112,220 Total 2010 2011 $ 89,115 197,043 14,595 $239,356 $ 84,797 227,309 13,401 $325,507 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, 2011, 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, 2011. Further details can be found in Notes 10 to 15 on pages 61-68. Outstanding Debt (In Thousands) Governmental Activities 2010 2011 Compensated absences Capital leases Bonds payable Notes/loans payable Total $ 1,668 2,599 48,335 $52,602 Business-type Activities 2010 2011 $ 1,767 2,332 48,999 $53,098 $ 215 5 14,118 38,502 $52,840 $ 222 13,113 51,739 $65,074 Total 2010 2011 $ 1,883 2,604 62,453 38,502 $105,442 $ 1,989 2,332 62,112 51,739 $118,172 ECONOMIC FACTORS Casa Grande’s population has grown steadily since 2000. The growth rate over the course of the past 10 years was 92% and is expected to be 1% in 2012. The unemployment rate in Casa Grande for June 2011 was 11%, which is higher than the state (9.3%) and higher than the national average (9.2%). While the local economy witnessed a solid year, it has been largely driven by commercial construction. The retail sales tax remained fairly 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 sluggish. Population growth is reduced to less than 1,000 persons in 2010 and personal income increased by less than 1%. 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 considered the site for a global sourcing center, in addition to new industrial and manufacturing companies. Total assessed value in Casa Grande has historically increased progressively, showing a 326% overall increase from 2000 to 2010. For tax year 2011 the values decreased by 5.3% and decreased another 6.5% for tax year 2012 reflective of home value decreases. Residential value in 2011 represented about 43% 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, 2011 Governmental Activities $ 9,367,301 77,691,323 5,213,404 969,112 100,000 330,241 304,903 ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Prepaids 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 10,486,783 97,378,434 6,749,716 969,112 359,334 304,903 1,645,357 600,199 125,332 232,741 1,770,689 832,940 22,126,491 62,671,435 84,797,926 191,160,370 309,508,702 49,549,168 134,850,674 240,709,538 444,359,376 2,862,651 759,569 364,406 1,854 1,621,971 16,104 94,001 634,234 - 4,484,622 16,104 853,570 998,640 1,854 1,766,775 262,564 908,790 820,454 222,368 2,309,262 606,210 44,546 1,989,143 2,571,826 1,515,000 865,000 2,069,117 19,699,928 27,328,096 (20,624) 56,823,580 49,429,499 11,811,157 1,247,140 (105,627) 2,162,685 70,093,550 2,069,117 49,429,499 31,511,085 28,575,236 (126,251) 2,162,685 126,917,130 163,072,110 47,003,748 210,075,858 10,177,366 1,002,501 28,057,076 1,662,366 27,918,412 20,795,291 $252,685,122 10,324,306 7,429,067 $64,757,120 10,177,366 1,002,501 28,057,076 1,662,366 38,242,718 28,224,358 $317,442,242 The accompanying notes are an integral part of the financial statements 12 Primary Government Business-type Activities $ 1,119,482 $ 19,687,111 1,536,312 (100,000) 29,093 - To Table of Contents City of Casa Grande, Arizona Statement of Activities For the Year Ended June 30, 2011 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 $ 6,875,962 20,265,216 12,554,956 2,067,097 7,103,723 3,731,265 2,436,221 55,034,440 $ 215,969 1,028,639 1,213,808 12,018 771,516 1,808,489 5,050,439 150,493 1,203,084 5,561,882 5,028,014 11,943,473 167,772 1,119,396 6,304,052 5,858,238 13,449,458 $66,977,913 $18,499,897 $ 14,790 719,263 4,484,180 385,468 663,155 6,266,856 $ $6,266,856 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 Net assets-ending The accompanying notes are an integral part of the financial statements 13 211,558 83,098 20,957 315,613 $315,613 To Table of Contents Net (Expense) Revenue and Changes in Net Assets Governmental Activities Business-type Activities $ $ (6,645,203) (18,305,756) (6,773,870) (2,055,079) (5,925,782) (1,259,621) (2,436,221) (43,401,532) ($43,401,532) 6,570,203 18,973,408 2,196,398 2,590,692 2,897,028 1,992,071 108,552 81,130 593,445 36,002,927 (7,398,605) 260,083,727 $252,685,122 - 17,279 (83,688) 742,170 830,224 1,505,985 $1,505,985 28,802 45,969 5,289 (593,445) (513,385) 992,600 63,764,520 $64,757,120 Total $ (6,645,203) (18,305,756) (6,773,870) (2,055,079) (5,925,782) (1,259,621) (2,436,221) (43,401,532) 17,279 (83,688) 742,170 830,224 1,505,985 ($41,895,547) 6,570,203 19,002,210 2,196,398 2,590,692 2,897,028 1,992,071 154,521 86,419 35,489,542 (6,406,005) 323,848,247 $317,442,242 14 To Table of Contents City of Casa Grande, Arizona Balance Sheet Governmental Funds June 30, 2011 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: Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities and fund balances Self-help Technical Assistance $ 7,567 - General 5,555,444 15,831,824 Highway Users $ 92,303 10,207,133 Grants & Subsidies $ 5,159 105,501 3,583,680 31,148 1,166,000 7,411 547,554 - 362,217 - 516,137 6,819 - 30,579 - $26,175,507 $10,846,990 $472,877 $584,290 $38,146 $ $ 442,050 640,390 452,260 10,063 1,544,763 $ $ 336,131 33,835 120 370,086 $ 18,931 33,973 257,139 310,043 7,411 33,225 22,625,496 1,964,612 24,630,744 10,476,904 10,476,904 162,834 162,834 496,612 496,612 6,542 6,542 $26,175,507 $10,846,990 $472,877 $584,290 $38,146 The accompanying notes are an integral part of the financial statements 15 $ CDBG 61,334 - 87,678 87,678 $ 1,604 30,000 31,604 To Table of Contents Home/HUD $ 7,363 - General Obligation $ 1,040,654 125,346 Capital Replacement/ Recreation/ Development $ 12,231 27,629,817 52,637 - 50,815 - 254,845 363,808 - $60,000 $1,216,815 853,574 $29,114,275 $ 60,000 8,855 68,855 (8,855) (8,855) $60,000 $ - $ 1,195,857 254,845 1,450,702 System Development $ 20,179,088 Community Other Facilities Districts Governmental Capital Projects Funds $ 287,906 $ 340,624 3,612,666 - 7,827 - $20,179,088 $ 199,517 199,517 791,782 $1,087,515 $ 4,000 4,000 1,216,815 1,216,815 27,663,573 27,663,573 19,979,571 19,979,571 1,083,515 1,083,515 $1,216,815 $29,114,275 $20,179,088 $1,087,515 16 $ $ Total Governmental Funds $ 7,410,586 77,691,374 238,129 121,905 57,949 5,198,987 969,112 1,166,000 65,360 4,371,272 1,645,356 $94,146,775 138,029 4,208 741,000 177,528 1,060,766 57,949 890,542 2,731,505 (369,490) 3,310,506 $4,371,272 $ 2,422,193 714,010 831,000 1,150,627 10,183 5,128,014 65,360 34,346,560 22,625,496 30,395,078 1,586,267 89,018,760 $94,146,775 To Table of Contents City of Casa Grande, Arizona Reconciliation of the Balance Sheet to the Statement of Net Assets Governmental Funds June 30, 2011 Fund balance - total governmental funds balance sheet $89,018,760 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 $314,421,870 (101,221,368) 376,958 (290,599) 213,286,861 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 (1,766,775) (2,331,681) (49,004,634) 600,199 354,540 20,624 (107,174) (52,234,901) Deferred revenue is shown on the governmental funds, but is not deferred on the statement of net assets. Property Tax Grant / Sales Tax / Facility Use Revenue 260,956 887,816 1,148,772 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 (370,402) 1,836,032 $252,685,122 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, 2011 REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Investment earnings Contributions and donations Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government 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 General $ 3,222,289 16,202,385 2,196,397 546,628 7,580,679 611,247 807,884 32,927 6,371 149,200 91,943 31,447,950 Highway Users 1,359,959 174 54,405 1,414,538 6,409,828 18,442,122 1,959,265 5,065,524 1,865,645 1,027,597 2,770,032 2,055 189,849 1,103,431 532,672 63,485 295,630 169,747 - 165,766 - 54,031 30,170 34,854,182 82,292 72,297 3,116,525 1,995,218 169,747 165,766 (3,406,232) 1,369,127 (580,679) (50,465) 19,469 434,419 434,419 (146,260) 309,094 $162,834 (50,465) 547,077 $496,612 (549,168) (549,168) 819,959 9,656,945 $10,476,904 The accompanying notes are an integral part of the financial statements 18 $ CDBG $ 74,074 45,209 119,282 Self-help Technical Assistance 4,447,252 11,680 26,720 4,485,652 1,708,744 (2,749,773) (1,041,029) (4,447,261) 29,078,005 $24,630,744 $ Grants & Subsidies $ 182,235 3,000 185,235 19,469 (12,927) $ 6,542 To Table of Contents General Obligations Home/HUD $ 188,135 188,135 $ 2,793,944 136 2,794,080 Capital Replacement/ Recreation/ Development $ 2,343,098 30,730 43,140 2,416,968 System Development $ 994,666 28,769 1,023,436 Community Facilities Districts Capital Projects $ 561,836 24 561,860 Other Governmental Funds $ 236,622 319,248 55,425 4,109 1,340,626 78,809 2,034,839 Total Governmental Funds $ 6,578,069 18,782,105 2,196,397 546,628 14,151,581 1,661,339 807,884 108,549 60,776 1,489,826 288,821 46,671,975 156,990 - 750 - 18,735 18,871,273 997 232,005 1,706,758 17,412 2,059,000 1,616,434 144,710 15,516 194,433 527,363 8,026,262 19,691,260 2,770,032 1,959,265 5,847,772 2,652,964 24,677,470 156,990 1,011,362 1,158,206 2,170,318 18,890,008 1,939,760 67,655 75,000 199,662 2,418,729 677,075 1,066,147 4,241,679 67,655 1,899,760 2,526,482 70,118,923 31,145 623,762 (16,473,040) (916,324) (1,856,869) (2,206,840) (23,446,948) 7,941,232 (1,127,329) 6,813,903 (9,659,137) 37,322,710 $27,663,573 (6,230,741) (6,230,741) (7,147,065) 27,126,637 $19,979,571 2,200,000 (66,000) 2,134,000 277,131 806,384 $1,083,515 1,705,996 (108,389) - 11,790,392 (11,101,760) 2,200,000 (66,000) 2,822,632 (20,624,316) 109,643,076 $89,018,760 31,145 (40,000) ($8,855) (336,360) (336,360) 287,402 929,413 $1,216,815 19 - 1,597,607 (609,233) 3,919,738 $3,310,505 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, 2011 Net change in fund balances - total governmental funds ($20,624,316) 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 $24,610,352 (12,539,254) 12,071,098 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 (7,866) 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 . 85,970 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 (2,200,000) 1,733,114 412,483 (54,403) 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. Grants 482,164 The internal service fund net revenue is reported with governmental activities. 887,116 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences Interest expense on long-term debt Change in net assets of governmental activities (98,460) (139,908) ($7,398,605) 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, 2011 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 $ 3,129,000 16,775,000 2,220,000 925,000 7,676,760 919,000 1,196,000 115,000 280,000 365,000 33,600,760 Final $ 3,129,000 16,775,000 2,220,000 925,000 7,676,760 919,000 1,196,000 115,000 280,000 365,000 33,600,760 Actual Amounts $ 3,222,289 16,202,385 2,196,397 546,628 7,580,679 611,247 807,884 32,927 6,371 149,200 91,943 31,447,950 Variance with Final BudgetPositive (Negative) $ 93,289 (572,615) (23,603) (378,372) (96,081) (307,753) (388,116) (82,073) 6,371 (130,800) (273,057) (2,152,810) 3,547,600 819,770 639,710 431,870 972,310 1,647,690 705,690 1,895,910 939,370 633,270 406,140 1,001,592 1,436,460 631,690 1,374,880 937,300 630,246 404,689 1,001,199 1,435,116 626,397 521,030 2,070 3,024 1,451 393 1,344 5,293 10,875,480 6,331,840 590,310 288,350 2,106,940 5,025,210 2,035,030 1,081,000 11,346,600 6,342,310 498,940 290,267 2,284,810 5,332,040 1,883,340 1,110,490 11,326,562 6,333,048 498,551 283,962 1,959,265 5,065,524 1,865,645 1,027,597 20,038 9,262 389 6,305 325,545 266,516 17,695 82,893 84,220 37,183,020 56,260 30,170 36,119,659 54,031 30,170 34,854,182 2,229 1,265,477 (3,582,260) (2,518,899) (3,406,232) (887,333) 1,708,760 (1,849,510) (140,750) (3,723,010) 3,723,010 - 1,708,760 (2,851,690) (1,142,930) (3,661,829) 3,661,829 $ - 1,708,744 (2,749,773) (1,041,029) (4,447,261) 29,078,005 $24,630,744 (16) 101,917 101,901 (785,432) 25,416,176 $24,630,744 The accompanying notes are an integral part of the financial statements 21 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, 2011 Variance with Final BudgetBudgeted Amounts Positive Actual Amounts (Negative) REVENUES Original Final Taxes: State-shared gas tax $ 2,702,630 $ 2,702,630 $ 2,708,673 $ 6,043 Local transportation assistance 180,000 180,000 (180,000) County sales tax 2,300,000 2,300,000 1,738,579 (561,421) Investment earnings 20,000 20,000 11,680 (8,320) Miscellaneous 20,000 20,000 26,720 6,720 Total revenues 5,222,630 5,222,630 4,485,652 (736,978) EXPENDITURES Culture and recreation Contractual services - 2,060 2,055 5 - 2,060 2,055 5 1,304,940 1,748,540 1,273,130 3,453,000 159,250 1,236,930 1,748,540 1,238,660 3,453,000 259,670 1,223,548 719,099 827,385 189,849 154,589 13,382 1,029,441 411,275 3,263,151 105,081 Total Streets/Transportation 7,938,860 7,936,800 3,114,470 4,822,330 Total expenditures 7,938,860 7,938,860 3,116,525 4,822,335 (2,716,230) (2,716,230) 1,369,127 4,085,357 (549,170) (549,170) (3,265,400) 3,265,400 $ - (549,170) (549,170) (3,265,400) 3,265,400 $ - 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 The accompanying notes are an integral part of the financial statements 22 (549,168) (549,168) 819,959 9,656,945 $10,476,904 2 2 4,085,359 6,391,545 $10,476,904 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, 2011 Variance with Budgeted Amounts Final BudgetPositive REVENUES Original Final Actual Amounts (Negative) Intergovernmental revenues $3,509,840 $3,509,840 $1,359,959 ($2,149,881) Investment earnings 174 174 Contributions and donations 8,050 8,050 54,405 46,355 Total revenues 3,517,890 3,517,890 1,414,538 (2,103,352) 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 $ 465,800 3,500 161,000 2,210,000 2,840,300 944,270 20,610 208,470 1,573,500 2,746,850 882,444 17,525 203,462 295,630 1,399,060 61,826 3,085 5,008 1,277,870 1,347,790 175,920 252,300 373,750 75,500 877,470 199,690 246,230 401,510 75,000 922,430 109,183 167,388 256,101 532,672 90,507 78,842 145,409 75,000 389,758 180,000 180,000 3,897,770 63,490 63,490 3,732,770 63,485 63,485 1,995,217 5 5 1,737,553 (379,880) (214,880) (580,679) (365,799) 124,000 153,650 277,650 (102,230) 102,230 - 124,000 124,000 (90,880) 90,880 - 434,419 434,419 (146,260) 309,094 $162,834 310,419 310,419 (55,380) 218,214 $162,834 $ The accompanying notes are an integral part of the financial statements 23 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, 2011 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 $ Variance with Final BudgetPositive (Negative) ($641,926) 45,209 (596,718) Original $716,000 716,000 Final $716,000 716,000 Actual Amounts $74,074 45,209 119,282 700,000 700,000 20,840 666,070 2,340 689,250 20,835 146,584 2,328 169,747 5 519,486 12 519,503 16,000 26,750 (50,465) (77,215) (16,000) - $ (26,750) - The accompanying notes are an integral part of the financial statements 24 547,077 $496,612 573,827 $496,612 To Table of Contents 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, 2011 Original $300,000 300,000 Final $300,000 300,000 Actual Amounts $182,235 3,000 185,235 Variance with Final BudgetPositive (Negative) ($117,765) 3,000 (114,765) 277,970 277,970 206,550 270 1,520 208,340 163,972 267 1,527 165,766 42,578 3 (7) 42,574 22,030 91,660 19,469 (72,191) 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 $ - $ (91,660) - The accompanying notes are an integral part of the financial statements 25 $ (12,927) 6,542 $ 78,733 6,542 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, 2011 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 $330,000 330,000 Final $330,000 330,000 330,000 330,000 2,490 280,760 283,250 2,490 154,500 156,990 46,750 31,145 (15,605) (46,750) - (40,000) ($8,855) 6,750 ($8,855) - $ Variance with Final BudgetPositive (Negative) ($141,865) (141,865) - $ The accompanying notes are an integral part of the financial statements 26 Actual Amounts $188,135 188,135 126,260 126,260 To Table of Contents City of Casa Grande, Arizona Statement of Net Assets Proprietary Funds June 30, 2011 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees ASSETS Current assets: Cash Investments Receivables, net of uncollectibles Restricted assets - investments Prepaid Expense 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 $ 918,734 9,747 928,481 1,023,139 (446,207) 576,932 576,932 1,505,413 LIABILITIES Current liabilities: Accounts payable Deposits held Accrued wages and benefits Accrued interest payable Due to other funds Compensated absences Notes/Loans payable GO Bond/Excise tax revenue obligations Total current liabilities Noncurrent liabilities: Notes/Loans 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 $ 78,485 7,235,370 872,360 8,186,215 204,536 54,203,468 1,401,823 58,979,351 (17,113,885) 97,470,757 97,675,293 105,861,508 $ 10,319,148 5,158 10,324,306 2,700,724 4,149,274 708,360 (84,697) 7,473,661 7,473,661 17,797,967 1,418 16,104 1,686 2,724 11,306 33,238 1,455,967 17,904 631,510 100,000 22,622 2,297,957 606,210 5,132,171 - 105,623 105,623 138,861 49,323,876 11,811,157 (105,627) 61,029,406 66,161,577 - 460,003 33,537,184 7,473,661 906,547 $1,366,550 6,162,747 $39,699,931 10,324,306 $17,797,967 The accompanying notes are an integral part of the financial statements 27 To Table of Contents Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation $ Golf Course 59,720 2,017,747 644,862 2,722,329 138,497 7,413,703 (3,270,911) 4,281,289 4,281,289 7,003,618 $ 62,544 114,846 4,186 125,332 29,093 336,001 28,205 283,000 2,527,770 629,812 (1,022,620) 2,417,962 2,446,167 2,782,167 24,757 64,480 166,221 255,458 139,828 9,931 33,525 44,546 227,829 2,162,685 2,162,686 2,418,143 Total $ 1,119,483 19,687,111 1,536,313 125,332 29,093 22,497,331 232,741 2,983,724 57,892,873 13,594,612 59,687,711 (21,938,319) 112,220,601 112,453,342 134,950,674 $ 1,956,663 14,416 304,903 264,886 2,540,868 52,354 324,604 (290,599) 86,359 86,359 2,627,227 1,621,970 16,104 94,001 634,234 100,000 222,368 2,309,263 650,756 5,648,696 444,458 14,585 225,000 20,793 704,836 1,247,140 1,247,140 1,474,969 49,429,499 1,247,140 11,811,157 (105,627) 2,162,685 64,544,855 70,193,554 704,836 4,281,289 1,251,608 47,003,745 86,359 304,183 $4,585,471 55,591 $1,307,199 10,324,306 7,429,068 $64,757,119 1,836,032 $1,922,391 28 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, 2011 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Operating revenues: Service fees Connection fees Department Insurance charges Rental Green fees Impact fees Miscellaneous Total operating revenue $ 167,772 167,772 Operating expenses: Personal services Contractual services Materials and supplies Depreciation Closure and postclosure costs Total operating expenses Operating income (loss) Nonoperating revenues (expense): Investment earnings Interest expense City sales tax Total nonoperating revenues (expense) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets Total net assets-beginning of year Total net assets-end of year 5,801,697 7,566 8,443 5,817,706 $ - 54,326 7,073 39,720 45,167 146,286 567,338 1,307,675 1,104,349 1,774,330 4,753,692 68,941 68,941 21,486 1,064,014 (68,941) (4,207) (4,207) 10,266 (739,250) (728,984) 12,859 12,859 17,279 335,030 (56,082) 3,924,071 (2,317,735) 1,941,366 37,758,566 $39,699,932 488,696 (2,001,276) (1,568,662) 19,366,628 $17,797,967 15,037 (25,248) 7,068 1,359,482 $1,366,550 The accompanying notes are an integral part of the financial statements 29 $ To Table of Contents Business-type Activities-Enterprise Funds Sanitation $5,643,879 35,790 28,624 5,708,293 2,316,463 1,032,152 832,661 654,084 192,654 5,028,014 Golf Course $ Total 142,412 976,866 3,057 1,122,335 $11,613,348 7,566 142,412 976,866 35,790 40,124 12,816,106 $1,539,384 5,470,502 - 474,621 172,164 430,812 125,133 1,202,730 3,412,748 2,519,064 2,407,542 2,667,655 192,654 11,199,664 2,030,188 3,418,584 650,988 25,887 6,125,647 1,616,443 982,304 680,279 (80,395) 2,416 2,416 178 (353) 28,802 28,627 25,719 (743,810) 28,802 (689,288) 682,695 (51,768) 927,155 170,194 538,596 (1,140,764) 250,721 4,334,750 $4,585,471 Governmental Activities Internal Service Funds 563,894 (150,020) 362,106 945,093 $1,307,199 658,890 5,041,598 (5,635,043) 992,600 63,764,519 $64,757,119 30 98,065 7,107,951 - 982,304 (95,188) 887,116 1,035,275 $1,922,391 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2011 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 $169,312 (51,238) (54,121) 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 Contributions 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 $5,701,462 (4,084,922) (562,331) $ (542,704) - 63,953 1,054,209 (542,704) (25,248) 15,037 (2,317,735) 3,924,071 (2,001,276) - (10,211) 1,606,336 (2,001,276) 2,721 (15,037) (10,931) (1,483) (14,321,421) 15,456,886 (2,792,206) (583,956) (142,288) 488,696 - (24,730) (2,240,697) 346,408 - 10,268 12,860 - 10,268 12,860 29,012 889,722 430,116 6,883,739 (2,184,712) 12,503,860 $ 918,734 $ 7,313,855 $ 10,319,148 $ 918,734 $918,734 $ 78,485 7,235,370 $7,313,855 $ 10,319,148 $10,319,148 The accompanying notes are an integral part of the financial 31 To Table of Contents Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation Golf Course $5,663,850 (1,857,292) (2,305,032) Total $1,121,567 (589,990) (471,639) $12,656,191 (7,126,146) (3,393,123) $7,093,535 (4,725,939) (2,027,038) 1,501,526 59,938 2,136,922 340,558 (1,140,764) 538,596 28,802 (150,020) 563,894 28,802 (5,635,043) 5,041,598 (95,188) - (564,643) (95,188) (602,168) 442,676 (685,731) 170,194 (4,651) - (227,960) (111,875) (353) 2,721 (15,392,437) 15,456,886 658,890 (2,919,663) (585,792) - (520,188) (340,188) (2,779,395) - 2,418 178 25,724 - 2,418 178 25,724 - 381,588 1,695,879 162,604 140,118 (1,181,392) 22,113,318 245,370 1,711,293 $ 2,077,467 $ 302,722 $ 20,931,926 $ 1,956,663 $ 59,720 2,017,747 $2,077,467 $ 62,544 240,178 $302,722 $ 1,119,483 19,812,443 $20,931,926 $ 1,956,663 $1,956,663 32 To Table of Contents City of Casa Grande, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2011 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 prepaid expense (Increase) decrease in accounts receivable (Increase) decrease in inventory Increase (decrease) in accounts payable Increase (decrease) in deposits held Increase (decrease) in accrued wages Increase (decrease) in due to other funds Increase (decrease) in compensated absences Total adjustments Net cash provided (used) by operating activities $ 21,486 45,167 440 (4,445) 1,100 205 42,467 $ 63,953 The accompanying notes are an integral part of the financial statements 33 $ 1,064,014 $ 1,774,330 (116,244) (872,898) 5,432 (800,000) (425) (9,805) $ 1,054,209 (68,941) 68,941 (542,704) (473,763) $ (542,704) To Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 680,279 Golf Course $ 192,654 654,084 (44,443) 7,521 6,398 5,033 821,247 $ 1,501,526 (80,395) Total $ 125,133 (768) (6,084) 79,070 630 (60,000) 2,352 140,333 $ 59,938 1,616,443 Governmental Activities Internal Service Fund $ 192,654 2,667,655 (161,015) (6,084) (1,333,456) 1,100 12,665 (860,000) 6,960 520,479 $ 2,136,922 34 982,304 25,887 (304,903) (14,416) 8,163 (414,627) 1,437 55,000 1,713 (641,746) $ 340,558 To Table of Contents City of Casa Grande, Arizona Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2011 Agency Funds ASSETS Cash Investments, at fair value $ Total assets 31,075 1,663,367 Part-Time Firemen's Pension $ 1,694,442 LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for pension benefits and other purposes 583,946 1,694,442 - 1,694,442 - $ The accompanying notes are an integral part of the financial statements 35 2,788 581,158 - $ 583,946 To Table of Contents City of Casa Grande, Arizona Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2011 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 - 13,209 127,312 140,521 (9,477) 131,044 Total additions 131,044 DEDUCTIONS Pension payments Administrative expenses Total deductions 115,000 1,600 116,600 Change in net assets 14,444 Net assets-beginning of year Net assets-end of year $ The accompanying notes are an integral part of the financial statements 36 569,501 583,946 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, 2011 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) 37 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, 2011 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; 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) 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, 2011 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 System Development Fund collects fees to defray the costs of specific growth related development. 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) 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, 2011 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) 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, 2011 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) 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, 2011 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) 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, 2011 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. 8. Governmental Accounting Standards Board Statement No. 54 The City adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This statement provides more clearly defined categories to make the nature and extent of constraints placed on a government’s fund balance more transparent. (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. (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, 2011 NOTE 1: Summary of Significant Accounting Policies (continued) (E) Measurement Focus and Basis of Accounting (continued) The City considers revenues available if they are earned by June 30 and the revenue is expected to be collected within 60 days after year-end. 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. 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, 2011, 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. (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, 2011 NOTE 1: Summary of Significant Accounting Policies (continued) (E) Basis of Accounting (continued) 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) 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. (2) The Council holds open work sessions relating to budget preparation. (3) 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. (4) 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 2010-2011. (5) All funds except internal service funds are subject to the comprehensive appropriated budget except as provided under state law. (6) 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. (7) The budget for the City is adopted on a basis consistent with generally accepted accounting principles. (8) Under State statutes, there are certain annual expenditure limitations to which the City adheres. (9) Several supplemental appropriations were necessary during the year. (10) 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. (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, 2011 NOTE 1: Summary of Significant Accounting Policies (continued) (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. 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. (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, 2011 NOTE 1: Summary of Significant Accounting Policies (continued) (J) Capital Assets (continued) 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 $1,715,112 was capitalized for the wastewater treatment plant expansion. 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. (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, 2011 NOTE 1: Summary of Significant Accounting Policies (continued) (K) Compensated Absences (continued) 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. (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. (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, 2011 NOTE 1: Summary of Significant Accounting Policies (continued) (N) Fund Equity Reserves represent those portions of fund equity not appropriable for expenditures or legally segregated for a specific future use. (O) Fund Balance Policies In the fund financial statements, fund balance is reported in classifications that comprise a hierarchy based the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The classifications of fund balance are Nonspendable, Restricted, Committed, Assigned and Unassigned. Nonspendable and Restricted fund balances represent the restricted classifications and Committed, Assigned and Unassigned represent the unrestricted classifications. Nonspendable fund balance includes amounts that cannot be spent because it is not in a spendable form such as inventory or prepaid items. Restricted fund balance is externally (outside the City) enforceable limitations imposed by creditors, grantors, contributors and laws and regulations of other governments. Committed fund balance is self-imposed limitations imposed at the highest level of decision making authority, the City Council. Council approval is required to commit resources or to rescind the commitment. Assigned fund balance represents limitations imposed by management. Unassigned fund balance represents the residual net resources in excess of the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance and any governmental fund can report a negative unassigned fund balance. When both restricted and unrestricted resources are available for specific expenditures, restricted resources are considered spent before unrestricted resources. Within unrestricted resources, committed and assigned are considered spent (if available) before unassigned amounts. For fund balance details by classification, see note 21 on page 73. NOTE 2: Cash and Investments At year-end, the City had the following cash and investments: Cash Investments Restricted investments Total cash and investments $ 10,520,646 99,622,959 1,770,689 $111,914,294 Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, an entity will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. (continued) 49 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2011 NOTE 2: Cash and Investments (continued) The carrying amount of the City’s cash in bank totaled $10,520,646 and the bank balance was $11,120,409. Federal Depository Insurance covered the City’s deposits at June 30, 2011, to the extent of $250,000. Deposits of $10,870,409 were collateralized with securities held by the pledging financial institution or by its trust department or agent but not in the City’s name. Casa Grande does not have a deposit policy for custodial credit risk. Cash and cash equivalents include restricted and unrestricted amounts and are included in the financial statements as follows: Cash Investments Restricted investments Governmental Activities $ 9,367,301 77,691,323 1,645,357 $88,703,981 Business Activities $ 1,119,482 19,687,111 125,332 $20,931,925 Fiduciary Fund $ 33,863 2,244,525 $2,278,388 Total $ 10,520,646 99,622,959 1,770,689 $111,914,294 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, 2011 was $1.8 billion in assets. 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, 2011 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 National Bank of AZ Great Western Bank US Treasury Wells Fargo Investment Type State Investment Pool Money Market Money Market/Mut Fnds Money Market Cert of Deposit Cert of Deposit Treasury bill Money Market Amount $93,670,925 6,662 574,496 853,577 250,000 250,000 4,996,206 791,782 $101,393,648 Ratings at year end Unrated $93,670,925 6,662 574,496 853,577 250,000 250,000 4,996,206 791,782 $101,393,648 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 Firefighter Pension: American Funds Linsco Bank of New York National Bank of AZ Great Western Bank US Treasury Wells Fargo Investment Type State Investment Pool Reported Amount $93,670,925 Money Market Money Market/Mut Fnds Money Market Cert of Deposit Cert of Deposit Treasury bill Money Market 6,662 574,496 853,577 250,000 250,000 4,996,206 791,782 $101,393,648 (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, 2011 NOTE 3: Cash with Fiscal Agent/Restricted Investments In November 2006, December 2008 and August 2010 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, 2011 Capital - CFD Infrastructure $494,862 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, 2011 $296,920 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, 2011 $853,575 In June 2008 and August 2009 the City issued general obligation bonds. The purpose of the funds is to finance an irrigation system at the Golf Course. Fund Type Enterprise – Golf Course Description of Designated Capital Irrigation System Balance at June 30, 2011 125,332 $1,770,689 (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, 2011 NOTE 4: Receivables The following table summarizes the City’s governmental activities receivables as of June 30, 2011: Special Revenue General Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables $3,553,993 29,936 3,583,929 $ 572,614 721,632 7,574 1,301,820 (250) $3,583,679 Debt Service Capital $50,034 782 50,816 - $ 255,715 21,374 277,089 - $1,301,820 Total $4,432,356 773,724 7,574 5,213,654 - $50,816 (250) $277,089 $5,213,404 The following table summarizes the City’s business-type activities receivables as of June 30, 2011 Wastewater Sanitation Golf Course Total $9,747 9,747 $2,662,648 2,662,648 $1,885,313 1,885,313 $4,186 4,186 $4,561,894 4,561,894 - (1,785,130) (1,240,451 ) Water Receivables: Accounts Gross Receivables Less: allowance for uncollectible Net total receivables $9,747 $ 877,518 $ 644,862 - (3,025,581) $4,186 $ 1,536,313 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: $ 460,821 199,957 $ 660,778 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, 2011, there were 56 of these loans outstanding, totaling $508,563. (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, 2011 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 2010-2011 maximum primary levy limit was $3,153,508. The primary tax levy was $3,129,000. The City’s secondary tax levy was $2,710,000. 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, 2011, are $60,110 and $260,956 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2011 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, 2010 Additions & Adjustments Disposals & Adjustments Balance June 30, 2011 $52,184,437 $14,293,730 $(3,806,732) $62,671,435 57,757,299 8,924,203 118,865,939 4,125,651 804,454 19,223,835 (124,120) (3,930,852) 61,882,950 9,604,537 134,158,922 (19,358,106) (2,686,423) 106,210 (21,938,319) $99,507,833 $16,537,412 $(3,824,642) $112,220,603 (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, 2011 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, 2010 $15,755,743 3,602,363 $19,358,106 Additions $1,884,539 801,884 $2,686,423 Balance Disposals June 30, 2011 $ $17,640,282 (106,210) 4,298,037 $(106,210) $21,938,319 A summary of changes in governmental activities capital assets follows: Balance June 30, 2010 Adjustments & Additions Adjustments & Disposals Balance June 30, 2011 Capital assets not being depreciated: Land & construction in progress $37,022,894 $2,913,323 $(17,809,726) $22,126,491 Capital assets being depreciated: Buildings Improvements Heavy machinery & equipment Operational Equipment Total General Capital Assets 35,681,642 195,532,812 1,799,445 20,259,235 290,296,028 27,899,062 10,662,081 945,612 (107,551) 42,420,078 (17,917,277) 63,580,704 206,194,893 1,799,445 21,097,296 314,798,829 8,651,579 67,511,720 1,478,979 11,408,444 89,050,722 $201,245,306 1,518,847 9,027,500 128,820 1,893,629 (107,551) 12,568,796 (107,551) $29,851,282 $(17,809,726) 10,170,426 76,539,220 1,607,799 13,194,522 101,511,967 $213,286,862 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, 2011 NOTE 7: Capital Assets (continued) 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 $ 408,758 1,569,197 8,483,694 37,877 1,287,640 752,178 29,452 $12,568,796 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 45,167 1,862,039 654,084 125,133 $2,686,423 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, 2011 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, 2011, active ASRS members were each required by statute to contribute at the actuarially determined rate of 9.85 percent (9.6 percent retirement and 0.25 percent long-term disability) of the members’ annual covered payroll and the City was required by statute to contribute at the actuarially determined rate of 9.85% (9.01% retirement, .59% for health insurance premium and .25% long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2011, 2010 and 2009 were $1,310,650, $1,281,990 and $1,263,961, respectively, which were equal to the required contributions for those years. Prior year’s rates are 9.4% for 2010 and 9.45% for 2009. The City contribution for the current year is as follows: June 30, 2011 Retirement $1,198,879 Health Insurance $ 78,505 Disability $33,266 Total $1,310,650 (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, 2010 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 23.80 percent and 17.90 percent for covered payroll totaling $5,079,289 and $4,250,259 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, 2011 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, 2010, the date of the most recent actuarial valuation, and related information follow. Contribution rates: City - retirement City – health insurance premium Plan members Annual pension cost: Retirement Health insurance premium Contributions made: Retirement Health insurance premium 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 22.66% 1.14% 7.65% 1,048,059 997,858 50,201 1,048,059 997,858 50,201 June 30, 2010 Entry Age PSPRS - Fire 17.06% .84% 7.65% 690,680 658,268 32,412 690,680 658,268 32,412 June 30, 2010 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 2010 $1,048,059 100% - 2009 1,068,355 100% - 2008 804,354 100% - 2010 $690,680 100% - 2009 886,339 100% - 2008 524,248 100% (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, 2011 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, 2010 determines the fiscal year 2011 rates. Beginning in fiscal year 2008, GASB statement Nos. 43 and 45 measurements were made and reported and these benefits are disaggregated and reported separately. For fiscal year 2007 the benefits are aggregated and shown in pension plan amounts. PSPRS – Police Pension Plan: 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 (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 Annual Covered Payroll (c) 5,045,343 4,958,997 4,264,393 Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) 211.3% 204.3% 205.7% PSPRS – Police Health Insurance Plan: Actuarial Valuation Date Actuarial Value of Plan Assets (a) 6/30/09 6/30/08 0 0 Actuarial Accrued Liability Funding Liability (Excess) (b) 518,058 562,969 (b-a) 518,058 562,969 Funded Ratio (a/b) 0% 0% Annual Covered Payroll (c) 5,045,343 4,958,997 Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) 10.27% 11.35% PSPRS – Fire Pension Plan: 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 Actuarial Accrued Liability (b) Funding Liability (Excess) (b-a) 14,493,872 13,175,141 12,800,685 5,409,265 5,004,062 5,219,000 Funded Ratio (a/b) 62.7% 62.0% 59.2% Annual Covered Payroll (c) 4,130,364 3,980,691 2,918,183 Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) 131.0% 125.7% 178.8% (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, 2011 NOTE 8: Retirement and Pension Plans (continued) (B) Arizona Public Safety Personnel Retirement System (continued) PSPRS – Fire Health Insurance Plan: Actuarial Valuation Date 6/30/09 6/30/08 Actuarial Value of Plan Assets (a) 0 0 Actuarial Accrued Liability (b) Funding Liability (Excess) (b-a) 312,242 281,771 312,242 281,771 Funded Ratio (a/b) 0% 0% Annual Covered Payroll (c) 4,130,364 3,980,691 Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) 7.56% 7.08% (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. 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, 2011, there were 15 eligible employees participating in the plan. The plan is administered by The Innes Associates. As of June 30, 2011, the plan’s assets consisted of the following: Cash $ 2,788 Money Market Funds 6,662 Mutual Funds 574,496 Total Assets $583,946 The plan has never had an actuarial valuation; however, benefits cannot exceed plan assets. The market values of mutual funds are determined from readily available market quotations. The fund uses the accrual basis of accounting. Contributions are recognized when earned; benefits and refunds are expensed when incurred. (continued) 60 To Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2011 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 2011 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. For policy year 2010/2011 no liability for incurred but not reported (IBNR) claims is calculated because the plan is fully funded to maximum liability. NOTE 10: Capital Leases Leases at June 30, 2011, 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 Airport T-hangers. Quarterly installments of $20,972 including interest of 5.081%, due through August 20, 2013. Total Governmental Activities Capital Lease Obligation Total Long-Term Lease Payable $2,156,474 175,206 $2,331,680 $2,331,680 (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, 2011 NOTE 10: Capital Leases (continued) The future minimum lease payments by year are: Fiscal Year Ending June 30, 2012 2013 2014 2015 2016 2017-2020 Government Activities $381,388 381,388 315,619 297,500 297,500 1,190,003 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion Business-type Activities - 2,863,398 (531,718) - 2,331,680 (262,564) $2,069,117 Total $381,388 381,388 315,619 297,500 297,500 1,190,003 2,863,398 (531,718) 2,331,680 (262,564) $2,069,117 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 $4,016,939 4,016,939 Accumulated Depreciation $(629,638) (629,638) Net Balance $3,387,301 3,387,301 (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, 2011 NOTE 11: Bond Debt A summary of long-term bond debt transactions for the year ended June 30, 2011, follows: Governmental Activities General obligation bonds Total Bonds Outstanding Balance July 1, 2010 $27,282,278 $27,282,278 Issued $2,200,000 $2,200,000 Retired $(1,086,363) $(1,086,363) Balance June 30, 2011 $28,395,915 $28,395,915 Business-type Activities General obligation bonds Total Bonds Outstanding $1,382,721 $1,382,721 - $(113,638) $(113,638) $1,269,083 $1,269,083 Summarization of the long-term bond debt payable at June 30, 2011, follows: Original Amount Date Issue of Interest of Final Bond Description Amount Installment Rate Payment General obligation $34,740,000 $10,000 – 2,170,000 3.50% - 5.80% 07/15/35 Total Bonds Outstanding The following table summarizes the City’s future bond debt service requirements as of June 30, 2011: Year Ending June30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032 Governmental Activities General Obligation Bonds Bonds Interest $820,454 670,454 650,454 655,454 765,454 4,688,177 6,630,498 7,645,000 5,869,970 $28,395,915 $1,313,869 1,290,810 1,263,651 1,237,009 1,209,432 5,473,078 4,250,151 2,631,804 685,955 $19,355,759 Business Activities General Obligation Bonds Bonds Interest 44,546 54,546 54,546 54,546 54,546 431,823 574,530 $1,269,083 51,043 49,308 47,399 45,422 43,377 168,177 61,374 $466,100 Total Bonds Interest $865,000 725,000 705,000 710,000 820,000 5,120,000 7,205,028 7,645,000 5,869,970 $29,664,998 $1,364,912 1,340,118 1,311,050 1,282,431 1,252,809 5,641,255 4,311,525 2,631,804 685,955 $19,821,859 (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, 2011 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. Villago Community Facilities District issued General Obligation bonds to finance construction of $455,000 in November 2006, $750,000 in December, 2008 and $2,200,000 in August, 2010. 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, 2011 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, 2011: Year Ending June 30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2030 Governmental Activities Principal Interest 908,790 1,082,941 940,828 1,049,829 982,865 1,009,051 1,025,718 962,686 1,077,755 912,192 5,326,892 3,681,913 6,025,190 2,035,648 4,314,998 421,196 $20,603,036 $11,155,456 Business-type Activities Principal Interest 606,210 561,984 629,173 539,251 652,135 514,084 684,283 487,999 707,245 460,628 7,403,112 1,529,487 1,469,626 73,480 $12,151,784 $4,166,913 Total Principal Interest 1,515,000 1,644,925 1,570,001 1,589,080 1,635,000 1,523,135 1,710,001 1,450,685 1,785,000 1,372,820 12,730,004 5,211,400 7,494,816 2,109,128 4,314,998 421,196 $32,754,820 $15,322,369 (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, 2011 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 $51,621,835. The following schedule shows estimated payments based on the amount due of $51,621,835. Year Ending June 30, 2012 2013 2014 2015 2016 2017-21 2022-26 2027-28 Total Principal $2,208,958 2,297,957 2,390,542 2,486,857 2,587,052 14,585,314 17,734,018 7,331,138 $51,621,835 Interest $2,080,360 1,991,339 1,898,731 1,802,393 1,702,172 6,860,397 3,674,901 429,897 $20,440,190 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, 2011 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, 2010 $1,668,315 27,282,278 21,249,788 2,598,870 113,972 (310,929) $52,602,294 Balance July 1, 2010 $215,408 1,382,721 4,652 12,426,957 127,909 38,373,905 308,075 $52,839,627 Additions $998,460 2,200,000 (66,000) $3,132,460 Additions $101,960 15,456,886 $15,558,846 Reductions $(900,000) (1,086,363) (641,070) (267,189) (6,798) 22,389 $(2,879,031) Reductions $(95,000) (91,035) (4,652) (290,882) (10,980) (2,208,958) (26,783) $(2,728,290) Balance June 30, 2011 $1,766,775 28,395,915 20,608,718 2,331,681 107,174 (354,540) $52,855,723 Amounts Due Within One Year $1,766,775 820,454 908,790 262,564 $3,758,583 Balance June 30, 2011 $222,368 1,291,686 12,136,075 116,929 51,621,833 281,292 $65,670,183 Amounts Due Within One Year $222,368 44,546 606,210 11,306 2,297,957 $3,182,387 (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, 2011 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 $56,116,136. Year Ending June 30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032 NOTE 16: Governmental Activities Principal Interest $1,991,808 $2,505,634 1,897,379 2,435,929 1,866,980 2,354,660 1,907,655 2,270,712 2,080,948 2,181,385 11,100,205 9,269,859 12,655,688 6,285,799 11,959,998 3,053,000 5,869,970 685,955 $51,330,631 $31,042,933 Business-type Activities Principal Interest $2,859,714 $2,693,387 2,981,676 2,579,898 3,097,223 2,460,214 3,225,686 2,335,814 3,348,843 2,206,177 22,420,249 8,558,061 19,778,174 3,809,755 7,331,138 429,897 $65,042,703 $25,073,203 Total Principal $4,851,522 4,879,055 4,964,203 5,133,341 5,429,791 33,520,454 32,433,862 19,291,136 5,869,970 $116,373,334 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, 2011 the City has reported a $2,162,685 landfill closure and postclosure care liability that represents the total current cost based on 47.8 percent of estimated capacity of the landfill. The remaining cost of $2,359,838 will be recognized in the future periods as the remaining capacity is filled. The City expects the remaining capacity to extend for 19 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 2011 valuation of the total closure and postclosure costs were estimated to be $4,522,523. (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, 2011 NOTE 17: Construction Commitments The City has one significant construction commitment as of June 30, 2011: Hunter Contracting Company is constructing a wastewater plant expansion. The contract sum is $51,160,812 and of that amount $50,306,897 has been paid. NOTE 18: Summary of Interfund Transactions Interfund transactions as of June 30, 2011, were as follows: Interfund Receivable/Payable: Fund General Airport Wildland Fire Housing Performance Institute Flexible Spending Plan Debt Service WWTP expansion Equipment maintenance Total Receivable Amount $1,166,000 $1,166,000 Payable Amount $ 300,000 100,000 110,000 320,000 10,000 1,000 100,000 225,000 $1,166,000 (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, 2011 NOTE 18: Summary of Interfund Transactions (continued) The interfund balances at June 30, 2011 are short-term loans to cover temporary cash deficits in various funds. Transfers: Fund Governmental Funds: General Highway Users System Development Capital Replacement GO Debt 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 $2,749,773 549,168 6,230,741 1,127,329 336,360 108,389 11,101,760 $1,708,744 7,941,232 434,419 1,705,997 11,790,392 25,248 150,020 4,319,011 1,140,764 5,635,043 15,037 563,894 3,924,072 538,596 5,041,599 95,188 $16,831,991 $16,831,991 There were no significant transfers during fiscal year 2011 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, 2011 Note 19: Deficit in Net Assets Four funds had deficits in net assets. The Home/HUD fund has a deficit of ($8,855) because $8,855 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 ($299,539) because air traffic and fuel sales were less than anticipated. The Promotion and Tourism has a deficit of ($11,057) because $175,965 in receivables was not received within 60 days of year end and is shown in deferred revenue. The Recreation Debt Service fund has a deficit of ($945) because transfers were not sufficient to cover debt payments. The Municipal Airport is supported through fuel sales and hanger rentals. The mark-up on fuel was increased and more hangers are going to be built. Also, the lease expense for T-hangers will be paid off in 2013. For the other fund deficits management expects to receive revenue in the subsequent year. 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, 2011 $3,313,482 (including $1,249,533 in interest) has been paid. (continued) 71 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, 2011 Note 21: Fund Balance Details by Classification General Fund Major Funds Non-Major Funds Total Government Funds Fund Balances Nonspendable: Inventories Restricted: City Court JCEF Highway Users System Development Grants Housing Funds Debt Service Court Enhancement Housing Funds Public Safety Debt Service Capital Projects CFD Capital projects Committed: Downtown Revitalization Aesthetic Revitalization Economic Redevelopment 50% general fund exp budget Assigned: Capital Replacement/Dev. Parks Development Community Arts Development Unassigned: 7,411 57,949 33,225 10,476,904 19,979,571 162,834 503,154 1,216,815 589,900 78,815 852 25,116 195,858 1,083,515 247,560 3,088,191 250,000 19,039,745 65,360 33,225 10,476,904 19,979,571 162,834 503,154 1,216,815 589,900 78,815 852 25,116 195,858 1,083,515 247,560 3,088,191 250,000 19,039,745 27,663,573 1,964,612 24,630,744 (8,855) 61,077,511 72 877,753 13,762 1,839,990 (369,490) 3,310,505 27,663,573 877,753 13,762 1,839,990 1,586,267 89,018,760 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, 2011 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: Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities and fund balance Municipal Airport $ 35,788 50 Parks Develop. $ 18,382 859,371 19,421 57,949 113,208 877,753 $ $ 108,538 300,000 4,208 412,746 $ $ (357,488) (299,539) 113,208 $ 13,762 $ - - 57,949 - $ - Special Revenue Community RedevelopArts ment $ 2,747 $ 12,939 11,015 1,838,375 $ $ 11,323 $ 11,323 1,839,990 877,753 13,762 1,839,990 73 589,901 $ 13,762 13,762 218,017 493,983 $ - $ Court Enhancement $ 8,006 581,895 1,851,314 877,753 877,753 Promotion & Tourism $ 36,371 239,594 $ 1,851,314 $ 9,073 320,000 175,967 505,040 $ $ - - 589,901 - (11,057) (11,057) 589,901 493,983 $ 589,901 To Table of Contents Special Revenue Housing Wildland Fire/ Programs Public Safety $ 13,918 $ 13,730 68,106 14,259 $ $ 691 16,100 98,815 20,000 20,000 $ $ 78,815 78,815 $ 98,815 $ 79,738 107,727 6,875 100,000 106,875 Debt Service 2009 Excise Recreation Redevelopment $ 25,116 $ 55 - $ 25,116 $ $ - $ 55 - 1,000 1,000 852 - 25,116 - 852 25,116 107,727 $ 25,116 Capital Projects Recreation Airport Improvement Improvement $ 1,156 $ 172,416 - $ 1,156 $ $ - $ - (945) (945) $ 55 74 $ 26,067 198,483 2,220 1,561 3,781 1,156 - 194,702 - 1,156 194,702 1,156 $ 198,483 Total Nonmajor Governmental Funds $ 340,624 3,612,666 $ $ 238,129 121,905 57,949 4,371,273 138,029 741,000 4,208 177,528 1,060,766 57,949 890,542 2,731,505 (369,490) 3,310,505 $ 4,371,272 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, 2011 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 $ 14 1,195,624 Develop. $ Arts 1,203,324 929 32,607 12,500 46,036 1,297,831 - 4,805 - 10,711 - 82,075 10,922 1,390,828 4,805 7,686 EXPENDITURES Current: General government Public safety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Special Revenue Community Redevelop- $ 12 2,055 2,067 ment $ 2,284 2,284 $ 236,622 107 - 11,189 318,603 - 6,845 - 10,711 405,593 318,603 6,845 30,521 56,037 (8,644) (403,309) 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) (223,692) (75,847) (299,539) 41,231 836,521 877,752 5,000 5,000 (3,644) 17,406 13,762 (403,309) 2,243,299 $ 1,839,990 75 $ 12,517 393,076 41,231 $ Enhancement 349,124 (187,504) $ Court & Tourism 51,012 681 62,882 Excess (deficiency) of revenues over (under) expenditures $ Promotion 112,395 0 $ 30,521 (41,578) (11,057) - (72,201) $ (72,201) (16,164) 606,065 589,901 To Table of Contents Special Revenue Housing Programs $ $ 76,633 4,413 62 44,499 125,607 Wildland Fire/ Public Safety $ 102,804 19 12,069 114,892 Debt Service Redevelopment $ - 177,127 - 137,865 - 2,700 - 177,127 137,865 215,000 90,120 307,820 (51,520) (22,974) (51,520) 130,337 78,817 (22,974) 23,822 848 $ $ Recreation $ - Capital Projects Recreation Airport Improvement Improvement $ - - $ 128,622 128,622 Total Nonmajor Governmental Funds $ 236,622 319,248 55,425 4,109 1,340,626 78,809 2,034,839 - 2,089 134,287 1,616,434 144,710 15,516 194,433 527,363 380,000 965,105 1,345,105 - 136,376 677,075 1,066,147 4,241,679 (307,820) (1,345,105) - 305,120 305,120 (2,700) 27,816 25,116 1,344,160 1,344,160 (945) (945) 1,156 1,156 $ 76 $ (7,754) $ 51,716 51,716 43,962 150,740 194,702 (2,206,840) $ 1,705,996 (108,389) 1,597,607 (609,233) 3,919,738 3,310,505 To Table of Contents City of Casa Grande, Arizona Combining Statement of Fiduciary Net Assets All Agency Funds June 30, 2011 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 1,663,367 $ 31,075 - Total $ 31,075 1,663,367 1,663,367 31,075 1,694,442 1,663,367 31,075 1,694,442 1,663,367 31,075 1,694,442 $ - 77 $ - $ - 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, 2011 Balance June 30, 2010 Performance Bond Fund Assets: Cash Investments Total Assets $ Liabilities: Other Liabilities Accounts Payable 1,780,844 1,780,844 Additions $ - 1,777,062 3,782 1,780,844 915 915 30,220 30,220 855 855 30,220 30,220 Totals - All Agency Funds Assets: Cash Investments Total Assets Liabilities: Other Liabilities Accounts Payable Total Liabilities Flexible Spending Plan Fund Assets: Cash Total Assets Liabilities: Other Liabilities Accounts Payable $ Deductions $ (117,477) (117,477) Balance June 30, 2011 $ (118,392) 1,663,367 1,663,367 1,658,670 4,697 1,663,367 (118,392) - 31,075 31,075 10,000 10,000 (9,145) - 21,075 10,000 31,075 30,220 1,780,844 1,811,064 855 855 (117,477) (117,477) 31,075 1,663,367 1,694,442 1,807,282 3,782 1,811,064 10,915 10,915 (127,537) (127,537) 1,679,745 14,697 1,694,442 $ 78 $ $ To Table of Contents City of Casa Grande, Arizona General Fund Schedule of Expenditures - Legal Level Budget Compliance For the Year Ended June 30, 2011 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 $ $ 148,300 3,399,300 Final $ 141,280 1,754,630 Actual Amounts $ 139,354 1,235,526 Budget Variance Positive (Negative) $ 1,926 519,104 681,960 137,810 667,550 271,820 666,542 270,758 1,008 1,062 604,800 34,910 591,980 41,290 589,853 40,393 2,127 897 320,270 111,600 318,280 87,860 318,079 86,609 201 1,251 823,620 148,690 846,550 155,042 846,145 155,054 405 (12) 723,230 924,460 683,650 752,810 682,832 752,284 818 526 546,460 159,230 496,460 135,230 494,230 132,167 2,230 3,063 9,569,960 1,305,520 9,847,990 1,498,610 9,842,136 1,484,426 5,854 14,184 5,593,080 738,760 5,579,230 763,080 5,576,846 756,202 2,384 6,878 513,190 77,120 417,900 81,040 417,887 80,664 13 376 235,680 52,670 214,990 75,277 210,630 73,332 4,360 1,945 1,079,690 1,027,250 1,120,420 1,164,390 1,117,998 841,267 2,422 323,123 3,087,010 1,938,200 3,187,230 2,144,810 3,122,835 1,942,690 64,395 202,120 1,967,450 67,580 1,081,000 84,220 37,183,020 1,824,110 59,230 1,110,490 1,819,697 45,948 1,027,597 4,413 13,282 82,893 2,229 1,265,477 86,430 $ 79 36,119,659 84,201 $ 34,854,182 $ To Table of Contents OTHER SUPPLEMENTARY INFORMATION To Table of Contents City of Casa Grande, Arizona General Obligation Bond Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2011 Budgeted Amounts REVENUES Property tax Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Debt Service Principal retirement Interest Total expenditures Final 2,710,000 2,710,000 - 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 2,710,000 2,710,000 $ Actual Amounts $ 2,793,944 136 2,794,080 - 750 (750) 8 4 (738) 1,011,370 1,158,210 2,169,580 1,011,370 1,158,210 2,169,580 1,011,362 1,158,206 2,170,318 540,420 540,420 623,762 (113,630) (113,630) 426,790 (426,790) - 540,420 (540,420) - (336,360) (336,360) 287,402 929,413 1,216,815 80 $ $ Variance with Final BudgetPositive (Negative) $ 83,944 136 84,080 83,342 $ (336,360) (336,360) (253,018) 1,469,833 1,216,815 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, 2011 Budgeted Amounts REVENUES Investment earnings Vista Grande Library Miscellaneous revenue 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 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) $ (51,270) 2,650,000 2,732,000 Actual Amounts $ 30,730 10,588 32,552 2,343,098 2,416,968 300,000 36,083,000 36,383,000 318,430 35,785,140 36,103,570 18,735 18,871,273 18,890,008 299,695 16,913,867 17,213,562 (33,651,000) (33,371,570) (16,473,040) 16,887,942 (1,989,500) 1,817,820 20,000,000 19,828,320 (13,822,680) 13,822,680 $ - (1,989,500) 1,817,820 20,000,000 19,828,320 (13,543,250) 13,543,250 $ - (1,127,329) 7,941,232 6,813,903 (9,659,137) 37,322,710 27,663,573 $ Original 82,000 2,650,000 2,732,000 81 $ Final 82,000 $ 32,552 (306,902) (325,620) 862,171 6,123,412 (20,000,000) (13,014,417) 3,884,113 23,779,460 $ 27,663,573 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, 2011 REVENUES Charges for services Investment earnings Total revenues Original $1,618,000 100,000 1,718,000 Final $1,618,000 100,000 1,718,000 Actual Amounts $994,666 28,769 1,023,436 Variance with Final BudgetPositive (Negative) ($623,334) (71,231) (694,564) EXPENDITURES Public Safety Culture and recreation Capital outlay Total expenditures 325,000 11,164,320 11,489,320 325,000 5,308,580 5,633,580 997 232,005 1,706,758 1,939,760 (997) 92,995 3,601,822 3,693,820 (9,771,320) (3,915,580) (916,324) (375,000) (375,000) (10,146,320) 10,146,320 $ - (6,230,740) (6,230,740) (10,146,320) 10,146,320 $ - (6,230,741) (6,230,741) (7,147,065) 27,126,636 $19,979,571 Budgeted Amounts Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES ( USES) Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year 82 2,999,256 (1) (1) 2,999,255 16,980,316 $19,979,571 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, 2011 Budgeted Amounts Final 539,000 539,000 Actual Amounts $ 561,836 24 561,860 8,000 1,840,000 533,620 17,410 2,059,000 271,180 17,412 2,059,000 274,662 (2) (3,482) 2,381,620 2,347,590 2,351,074 (3,484) (1,842,620) (1,808,590) (1,789,214) 19,376 1,840,000 1,840,000 (2,620) 2,620 - 1,840,000 1,840,000 31,410 (31,410) - 2,200,000 (133,655) 2,066,345 277,131 806,384 1,083,515 REVENUES Property Tax Investment Earnings Total revenues Original $ 539,000 539,000 EXPENDITURES Contractual services Capital outlay Debt Service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Bond issuance Bond issuance costs Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Variance with Final BudgetPositive (Negative) $ 22,836 24 22,860 83 $ $ $ $ 360,000 (133,655) 226,345 245,721 837,794 1,083,515 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, 2011 14 1,195,624 7,686 1,203,324 Variance with Final BudgetPositive (Negative) $ 14 160,624 (4,314) 156,324 203,386 59,740 1,034,705 92,997 1,390,828 324 60 (3,995) 1,138,010 2,523 1,136,922 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 1,403,000 12,000 1,415,000 Actual Amounts Final $ 1,035,000 12,000 1,047,000 $ 195,260 52,600 990,140 1,195,000 95,520 2,528,520 203,710 59,800 1,030,710 1,138,010 95,520 2,527,750 (1,113,520) (1,480,750) (187,504) 1,293,246 1,150,000 (35,420) 1,114,580 1,060 (1,060) - 1,150,000 (36,190) 1,113,810 (366,940) 366,940 - (36,188) (36,188) (223,692) (75,847) (299,539) (1,150,000) 2 (1,149,998) 143,248 (442,787) (299,539) 84 $ $ $ 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, 2011 Budgeted Amounts REVENUES Investment earnings Rental and sale of City property Miscellaneous Total revenues $ EXPENDITURES Contractual services 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) $ (1,071) (393) 12,500 11,036 Final 2,000 33,000 35,000 Actual Amounts $ 929 32,607 12,500 46,036 570,000 100,000 670,000 570,000 100,000 670,000 4,805 4,805 565,195 100,000 665,195 (635,000) (635,000) 41,231 676,231 Original 2,000 33,000 35,000 635,000 - 85 $ $ 635,000 - $ 836,521 877,752 $ 201,521 877,752 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, 2011 Budgeted Amounts Variance with Final BudgetPositive (Negative) $ (14,945) 12 (14,933) Final 17,000 17,000 Actual Amounts $ 2,055 12 2,067 3,360 25,000 28,360 5,690 8,150 20,210 34,050 5,688 5,023 10,711 2 3,127 20,210 23,339 Excess (deficiency) of revenues over (under) expenditures (11,360) (17,050) (8,644) 8,406 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 (6,360) 6,360 - 5,000 5,000 (12,050) 12,050 - 5,000 5,000 (3,644) 17,406 13,762 8,406 5,356 13,762 REVENUES Contributions and Donations Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Materials and supplies Capital outlay Total expenditures $ Original 17,000 17,000 86 $ $ $ $ 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, 2011 Final 270,000 10,000 280,000 Actual Amounts $ 2,284 2,284 Variance with Final BudgetPositive (Negative) $ (270,000) (7,716) (277,716) 250,000 1,600,000 1,850,000 235,130 1,614,520 1,849,650 12,164 353 393,076 405,593 222,966 (353) 1,221,444 1,444,057 (1,570,000) (1,569,650) (403,309) 1,166,341 Budgeted Amounts REVENUES Local taxes Investment earnings 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 270,000 10,000 280,000 1,570,000 - 87 $ $ 1,569,650 - $ 2,243,299 1,839,990 $ 673,649 1,839,990 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, 2011 Budgeted Amounts REVENUES Local taxes Facility Use Investment earnings Total revenues $ EXPENDITURES Contractual services Materials & supplies 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 $ Variance with Final BudgetPositive (Negative) $ 131,622 112,395 (893) 243,124 Final 105,000 1,000 106,000 Actual Amounts $ 236,622 112,395 107 349,124 100,000 265,000 365,000 161,690 203,310 365,000 120,292 198,311 318,603 41,398 4,999 46,397 621,000 (259,000) 30,521 289,521 Original 105,000 880,000 1,000 986,000 (500,000) (500,000) 121,000 (121,000) - 88 $ - $ (259,000) 259,000 - - $ 30,521 (41,578) (11,057) - $ 289,521 (300,578) (11,057) 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, 2011 Final 60,000 60,000 400 120,400 Actual Amounts $ 11,189 51,012 681 62,882 Variance with Final BudgetPositive (Negative) $ (48,811) (8,988) 281 (57,518) 83,000 518,670 601,670 83,000 464,470 547,470 6,831 14 6,845 76,169 (14) 464,470 540,625 (481,270) (427,070) 56,037 (598,143) (481,270) 481,270 - (427,070) 427,070 - (72,201) (72,201) (16,164) 606,065 589,901 (72,201) (72,201) 410,906 178,995 589,901 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment earnings Total revenues $ EXPENDITURES Current: Public safety: Contractual services Materials and supplies Capital outlay 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 60,000 60,000 400 120,400 89 $ $ $ $ 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, 2011 Budgeted Amounts REVENUES Charges for service Intergovernmental Investment earnings Loan fees Total revenues Original $ - EXPENDITURES Current: Economic 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 $ Final $ - Actual Amounts $ 4,413 76,633 62 44,499 125,607 50,000 50,000 59,990 116,430 710 177,130 59,984 116,430 713 177,127 (50,000) (177,130) (51,520) 50,000 - 90 $ 177,130 - $ 130,337 78,817 Variance with Final BudgetPositive (Negative) $ 4,413 76,633 62 44,499 125,607 6 (3) 3 125,610 $ (46,793) 78,817 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, 2011 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 $60,000 100 28,200 88,300 Final $60,000 100 28,200 88,300 60,000 28,650 88,650 121,180 28,650 149,830 119,942 17,923 137,865 1,238 10,727 11,965 (61,530) (22,974) 38,556 (350) $ Actual Amounts $102,804 19 12,069 114,892 Variance with Final BudgetPositive (Negative) $42,804 (81) (16,131) 26,592 350 - 91 $ 61,530 - $ 23,822 848 $ (37,708) 848 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, 2011 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) $ - 2,700 2,700 - 215,000 90,120 305,120 215,000 90,120 307,820 215,000 90,120 307,820 - (305,120) (307,820) (307,820) - 305,120 305,120 - 305,120 305,120 (2,700) 2,700 - 305,120 305,120 (2,700) 27,816 25,116 25,116 25,116 92 $ $ $ 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, 2011 Budgeted Amounts REVENUES Total revenues $ EXPENDITURES Current: Contractual services Debt Service: Principal retirement Interest Total expenditures Final $ - 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 - $ - Actual Amounts $ - - Variance with Final BudgetPositive (Negative) $ - 950 (950) 380,000 964,160 1,344,160 380,000 964,160 1,344,160 380,000 964,155 1,345,105 5 (945) (1,344,160) (1,344,160) (1,345,105) (945) 1,344,160 1,344,160 - 1,344,160 1,344,160 - 1,344,160 1,344,160 (945) (945) (945) (945) 93 $ $ - $ 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, 2011 Final 4,668,950 4,668,950 Actual Amounts $ 128,622 128,622 Variance with Final BudgetPositive (Negative) $ (4,540,328) (4,540,328) 5,017,000 5,017,000 2,089 134,287 136,376 (2,089) 4,882,713 4,880,624 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues Original $ 4,668,950 4,668,950 EXPENDITURES Contractual services Capital outlay Total expenditures 5,017,000 5,017,000 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 $ $ (348,050) (348,050) 307,280 307,280 - 153,650 153,650 (194,400) 194,400 - 94 $ (7,754) $ 51,716 51,716 43,962 150,740 194,702 340,296 $ (101,934) (101,934) 238,362 (43,660) 194,702 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, 2011 Budgeted Amounts Original OPERATING REVENUES: Service fees Total operating revenues $ 200,000 200,000 Actual Amounts Final $ 200,000 200,000 $ 167,772 167,772 Variance with Final BudgetPositive (Negative) $ (32,228) (32,228) OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 54,600 26,490 43,600 2,230,500 2,355,190 54,850 6,720 39,960 2,171,690 2,273,220 54,326 7,073 39,720 45,167 146,286 524 (353) 240 2,126,523 2,126,934 Operating Income (2,155,190) (2,073,220) 21,486 (2,159,162) (15,300) (15,300) (4,300) (4,300) (2,170,490) (2,077,520) 30,500 (19,750) 30,500 (25,250) (2,159,740) (2,072,270) NONOPERATING REVENUE (EXPENSES): Interest expense Total nonoperating revenue (expense) Income (loss) before transfers Transfers in Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 2,159,740 - 95 $ 2,072,270 - (4,207) (4,207) 93 93 17,279 2,094,799 15,037 (25,248) (15,463) 2 7,068 $ 1,359,482 1,366,550 2,079,338 $ (712,788) 1,366,550 To Table of Contents City of Casa Grande, Arizona Wastewater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2011 Budgeted Amounts Original OPERATING REVENUES: Service fees Connection fees Miscellaneous Total operating revenues $ 5,428,000 11,000 1,000 5,440,000 Actual Amounts Final $ 5,428,000 11,000 1,000 5,440,000 $ 5,801,697 7,566 8,443 5,817,706 Variance with Final BudgetPositive (Negative) $ 373,697 (3,434) 7,443 377,706 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 756,450 2,137,090 940,860 20,048,000 23,882,400 567,340 1,308,660 1,104,360 21,774,330 24,754,690 567,338 1,307,675 1,104,349 1,774,330 4,753,692 2 985 11 20,000,000 20,000,998 Operating Income (18,442,400) (19,314,690) 1,064,014 20,378,704 5,000 (5,848,340) (5,843,340) 5,000 (3,053,260) (3,048,260) 10,266 (739,250) (728,984) 5,266 2,314,010 2,319,276 (24,285,740) (22,362,950) 335,030 22,697,980 20,000,000 3,120,000 (394,950) 3,120,000 3,120,000 (2,317,740) 3,924,071 (2,317,735) 804,071 5 (1,560,690) (24,680,690) 1,941,366 22,697,985 24,680,690 - 37,758,566 $ 39,699,932 13,077,876 $ 39,699,932 NONOPERATING REVENUE (EXPENSES): Interest income Interest expense Total nonoperating revenue (expense) Income (loss) before contributions and transfers Bond issuance Transfers in Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 1,560,690 - 96 $ 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, 2011 Budgeted Amounts Original OPERATING REVENUES: Connection fees Total operating revenues $ 847,000 847,000 Actual Amounts Final $ 847,000 847,000 $ 488,696 488,696 Variance with Final BudgetPositive (Negative) $ (358,304) (358,304) OPERATING EXPENSES: Depreciation Total operating expenses 3,700,000 3,700,000 3,700,000 3,700,000 68,941 68,941 3,631,059 3,631,059 Operating Income (2,853,000) (2,853,000) 419,755 3,272,755 NONOPERATING REVENUE : Interest income Total nonoperating revenue 14,000 14,000 Income (loss) before transfers Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 14,000 14,000 12,859 12,859 (1,141) (1,141) (2,839,000) (2,839,000) (3,120,000) (3,120,000) (2,001,276) 1,118,724 (2,839,000) (5,959,000) (1,568,662) 4,390,338 2,839,000 - 97 $ 5,959,000 - 432,614 $ 19,366,629 17,797,967 3,271,614 $ 13,407,629 17,797,967 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, 2011 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 $ 2,322,650 1,106,770 758,970 1,735,000 150,000 6,073,390 Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense Total nonoperating revenue (expense) Income before transfers Transfers in Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year 5,556,000 184,000 10,000 5,750,000 $ Actual Amounts Final 5,556,000 184,000 10,000 5,750,000 $ 2,319,530 1,034,979 842,621 1,685,850 192,650 6,075,630 5,643,879 170,194 35,790 28,624 5,878,487 (325,630) 850,473 5,000 (9,020) (4,020) 5,000 (6,780) (1,780) 2,416 2,416 (327,410) (327,410) 852,889 1,435,000 (1,140,770) 1,435,000 (1,140,770) (1,468,180) (1,468,180) 98 $ 1,468,180 - $ 2,316,463 1,032,152 832,661 654,084 192,654 5,028,014 (323,390) 1,468,180 - Variance with Final BudgetPositive (Negative) 3,067 2,827 9,960 1,031,766 (4) 1,047,616 1,176,103 (2,584) 6,780 4,196 1,180,299 538,596 (1,140,764) (896,404) 6 250,721 $ 4,334,750 4,585,471 87,879 (13,806) 35,790 18,624 128,487 1,718,901 $ 2,866,570 4,585,471 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, 2011 Budgeted Amounts Original OPERATING REVENUES: Rental Green fees Miscellaneous Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses $ 452,300 132,880 412,800 413,500 1,411,480 Operating Income Income (loss) before transfers Transfers in Transfers out Net change in net assets $ 138,000 1,013,700 5,000 1,156,700 $ 474,990 172,600 435,250 328,290 1,411,130 (254,780) NONOPERATING REVENUE (EXPENSE): Interest income Interest expense City sales tax Total nonoperating revenue Net assets - beginning of year Net assets - end of year 138,000 1,013,700 5,000 1,156,700 Actual Amounts Final 142,412 976,866 3,057 1,122,335 Variance with Final BudgetPositive (Negative) $ 474,621 172,164 430,812 125,133 1,202,730 (254,430) 369 436 4,438 203,157 208,400 (80,395) 174,035 (113,630) (113,630) (350) 178 (353) 28,802 28,627 (368,410) (254,780) (51,768) 203,012 288,630 (150,020) 288,630 (150,020) 563,894 (150,020) 275,264 - (229,800) (116,170) 362,106 478,276 229,800 - 99 - 4,412 (36,834) (1,943) (34,365) $ 116,170 - $ 945,093 1,307,199 178 (353) 28,802 28,977 $ 828,923 1,307,199 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Source June 30, 2011 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 $ 22,126,491 63,528,350 206,194,895 22,572,134 $ 314,421,870 $ 459,862 1,529,993 14,406,223 113,730,614 80,843,778 103,451,400 $ 314,421,870 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 100 To Table of Contents City of Casa Grande, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule of Changes By Function and Activity For the Year Ended June 30, 2011 Function and Activity General government General Capital Assets June 30, 2010 $ Public safety 11,102,216 Additions $ 3,310,334 Adjustments/ Disposals $ - General Capital Assets June 30, 2011 $ 14,412,550 25,843,911 14,081,034 (51,826) 39,873,119 192,200,560 1,893,541 (31,516) 194,062,585 1,706,677 1,602,240 Culture and recreation 40,784,106 1,271,127 Economic development 18,281,500 2,452,175 Streets/Transportation Public works Total $ 289,918,970 $ 24,610,451 3,308,917 (24,209) 42,031,024 20,733,675 $ (107,551) $ 314,421,870 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. 101 To Table of Contents 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. 103 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. 113 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. 116 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. 122 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. 125 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. 102 To Table of Contents Schedule 1 City of Casa Grande Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) June 30 2006 2004 2005 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets 2007 2008 $ 24,413,490 13,846,429 5,857,139 $ 44,117,058 $ 28,136,615 25,705,254 10,880,929 $ 64,722,798 74,265,031 39,505,454 17,574,060 $ 131,344,545 $ 121,397,151 61,600,770 24,880,238 $ 207,878,159 $ 144,539,605 77,352,432 29,930,330 $ 251,822,367 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 9,650,425 11,289,359 1,030,876 $ 21,970,660 $ 19,179,454 7,202,857 4,985,723 $ 31,368,034 $ 27,728,464 11,541,534 8,492,036 47,762,034 $ 29,545,366 15,292,233 9,374,364 $ 54,211,963 $ 33,189,049 19,276,562 7,191,725 $ 59,657,336 $ Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 34,063,915 25,135,788 6,888,015 $ 66,087,718 $ 47,316,069 32,908,111 15,866,652 $ 96,090,832 $ 101,993,495 51,046,988 26,066,096 $ 179,106,579 $ 150,942,517 76,893,003 34,254,602 $ 262,090,122 $ 177,728,654 96,628,994 37,122,055 $ 311,479,703 $ Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 103 To Table of Contents 2009 2010 2011 $ 166,666,266 63,759,736 29,204,011 $ 259,630,013 $ 169,037,582 66,259,746 24,786,399 $ 260,083,727 $ 163,843,269 68,025,939 20,815,914 $ 252,685,122 $ $ $ $ 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 $ 47,003,748 10,324,306 7,429,067 64,757,120 $ 210,847,017 78,350,244 28,244,981 $ 317,442,242 104 To Table of Contents Schedule 2 City of Casa Grande Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) 2004 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 2006 2005 4,117,835 10,732,674 2,942,777 765,497 4,078,279 2,422,140 499,031 25,558,233 $ 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 4,100,221 11,789,718 3,437,830 778,974 4,147,490 2,716,784 477,956 27,448,973 $ 4,463,957 13,504,033 5,486,251 1,868,890 4,978,247 4,468,076 500,879 35,270,333 109,340 904,202 505,948 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 (1,806,916) $ 38,095,195 1,799,803 10,573,489 899,604 2,333,638 12,094,301 954,853 2,122,100 2,278,117 1,189,494 124,545 (77,414) 277,201 1,341,083 20,528,022 $ 10,216,932 $ (10,311,090) $ 5,196,569 14,765,435 9,650,354 2,144,675 5,247,404 5,564,781 610,630 43,179,848 2008 $ 6,958,153 17,799,896 10,614,899 1,652,940 5,853,610 5,932,564 641,914 49,453,976 133,192 1,091,960 996,571 33,994 328,163 13,115,223 2,580,633 2,456,074 863,185 9,066,924 14,852,514 45,518,433 144,550 1,214,170 1,345,035 100,784 378,268 8,272,278 1,692,576 694,885 627,986 9,303,041 22,402,954 46,176,527 2,338,585 $ (3,277,449) 2,401,386 14,973,622 1,236,366 2,475,296 22,708,648 1,511,751 3,105,864 28,082,890 1,687,014 2,336,759 2,345,507 1,221,188 466,925 414,900 145,585 99,000 22,412,656 2,721,554 2,728,207 1,585,116 1,508,717 660,798 361,586 349,200 28,526,552 3,086,185 3,760,034 2,032,801 3,222,176 1,846,201 274,310 449,800 41,367,202 2,984,122 4,592,697 2,199,266 3,202,760 452,693 388,409 525,942 47,221,657 $ 20,605,740 $ 66,621,747 $ 43,705,787 $ 43,944,208 $ Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 105 2007 $ To Table of Contents 2009 $ 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 2011 $ 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) 6,875,962 20,265,216 12,554,956 2,067,097 7,103,723 3,731,265 2,436,221 55,034,440 215,969 1,028,639 1,213,808 12,018 771,516 1,023,436 342,553 65,715 376,785 6,266,856 315,613 11,632,908 $ (43,401,532) 6,264,879 23,313,628 1,910,594 7,422,710 19,776,002 1,947,031 6,570,203 18,973,408 2,196,398 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 2,590,692 2,897,028 1,992,071 108,552 0 81,130 593,445 36,002,927 7,807,646 $ 453,714 $ (7,398,605) 106 To Table of Contents Schedule 3 City of Casa Grande Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) 2004 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 2006 2005 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 $ 98,048 928,321 3,138,128 3,538,650 7,703,147 2007 $ 115,599 1,107,942 5,413,331 3,902,782 10,539,654 2008 $ 117,638 967,750 4,522,025 4,041,517 9,648,930 193,006 433,686 3,703,613 3,056,414 1,885,485 88,214 1,895,607 1,136,713 12,392,738 186,225 584,429 7,618,055 3,804,163 2,150,452 183,584 47,086 1,561,589 16,135,583 197,834 781,464 7,533,801 4,571,127 2,676,631 635,533 58,502 7,991,457 24,446,349 193,909 784,983 6,001,607 4,963,964 2,124,036 1,167,957 73,411 2,129,515 17,439,382 190,125 797,501 5,972,329 4,990,169 14,203 919,273 155,834 2,580,813 15,620,247 $ 5,755,565 $ 9,496,374 $ 16,743,202 $ 6,899,728 $ 5,971,317 (1,341,083) (99,000) (349,200) (449,800) (525,942) Total Business-type Activities Change in Net Assets $ 4,414,482 $ 9,397,374 $ 16,394,002 $ 6,449,928 $ 5,445,375 Total Primary Government Change in Net Assets $ 14,631,414 $ 30,003,114 $ 83,015,749 $ 50,155,715 $ 49,389,583 Total Business-type Activities Net Program Expense Other Changes in Net Assets Transfers 107 To Table of Contents 2009 $ 153,147 1,266,986 4,610,789 5,465,908 11,496,830 2010 $ 196,410 962,206 5,119,786 4,555,927 20,612 202,016 323,560 717,407 12,097,924 $ 601,094 $ 563,426 159,718 1,243,440 5,528,871 4,653,383 11,585,412 2011 $ 150,493 1,203,084 5,561,882 5,028,014 11,943,473 162,094 1,066,642 6,049,625 5,151,563 26,657 8,383 10,473 895,826 13,371,263 167,772 1,119,396 6,304,052 5,858,238 28,802 45,969 5,289 0 13,529,518 1,785,851 $ 1,586,045 631,320 (593,445) $ 1,164,520 $ 2,417,171 $ 992,600 $ 8,972,166 $ 2,870,885 $ (6,406,005) 108 To Table of Contents Schedule 4 City of Casa Grande Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2002 General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total general fund All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds $ 2003 $ 176,526 3,338,675 3,515,201 $ 486,826 3,823,320 $ 4,310,146 $ 2,311,916 $ 3,758,330 1,214,043 7,284,289 2004 $ 1,115,310 11,150,642 $ 12,265,952 1,476,273 17,796,454 $ 19,272,727 $ 2,341,307 $ 2,368,606 $ $ 4,328,235 372,078 $ 7,041,620 9,013,364 1,066,167 $ 12,448,137 109 $ 2006 801,965 6,343,317 7,145,282 *FY2011: Implementation of GASB-54 Fund Balance Classification $ 2005 6,252,078 15,594,386 2,479,265 $ 24,325,729 $ 4,250,108 28,612,756 5,365,147 $ 38,228,011 To Table of Contents 2007 $ Fiscal Year 2009 2008 $ $ 2010 $ 2011* 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 7,411 33,225 23,342,866 1,247,242 $ 24,630,744 $ 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 57,949 13,250,249 1,083,515 50,374,649 (378,345) $ 64,388,017 110 $ - - 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 2002 2003 Fiscal Year 2004 2005 2006 $ 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 $ 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 Expenditures General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt service Principal Interest Total expenditures 3,689,262 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 5,230,006 12,957,767 2,168,597 1,650,860 4,446,967 3,914,867 6,149,634 956,448 620,054 25,662,322 932,344 559,527 26,974,445 960,801 471,539 25,937,272 799,546 477,428 29,988,535 1,206,388 484,775 38,209,861 Other Financing Sources (Uses) Transfers in Transfers out Capital leases Bond issuance Bond issuance costs Sale of land Total other financing sources (uses) 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 5,808,434 (5,374,834) 433,600 7,416,028 $ 16,998,260 $ 20,909,057 5.97% 5.02% 5.27% Net change in fund balances $ (121,439) Debt service as a percentage of noncapital expenditures 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. 111 To Table of Contents Fiscal Year 2009 2007 2008 $ 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 5,921,449 14,155,865 2,846,301 2,063,253 4,828,294 4,821,056 8,251,421 8,076,361 16,983,507 2,323,097 1,684,699 5,463,871 4,965,772 11,030,175 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 8,026,262 19,691,260 2,770,032 1,959,265 5,847,772 2,652,964 24,677,470 882,247 707,501 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 1,899,760 2,594,138 70,118,923 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 11,790,392 (11,101,760) 2,200,000 (66,000) 2,822,632 $ 28,728,468 4.30% $ 29,701,636 4.44% $ 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 $ (17,243,635) 2010 $ $ 13.28% 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 10,955,886 10.06% 112 2011 $ 27,556,571 546,628 14,151,581 1,661,339 807,884 0 108,549 1,489,826 349,597 46,671,975 $ (20,624,316) 9.87% To Table of Contents Schedule 6 City of Casa Grande Sales Tax Revenue by Industry, Fiscal Years 2011, 2010, 2009, 2008, 2007 and 2006 Fiscal Year 2006 Percentage Tax Paid of Total Construction Manufacture Transportation/Communication/ Utilities Wholesale Trade Retail Trade Restaurants/Bars Insurance/Real Estate Hotels/Lodging Services All Other $ 3,164,234 599,880 17.93% 3.40% 1,470,192 211,865 8,377,108 1,021,869 1,732,572 316,538 427,755 328,240 Total $ 17,650,253 Fiscal Year 2007 Percentage Tax Paid of Total $ Fiscal Year 2008 Percentage Tax Paid of Total 8,405,855 624,116 33.85% 2.51% $ 11,087,874 750,711 8.33% 1.20% 47.46% 5.79% 9.82% 1.79% 2.42% 1.86% 1,762,783 271,980 8,778,705 1,027,918 2,122,802 348,177 521,470 968,878 7.10% 1.10% 35.35% 4.14% 8.55% 1.40% 2.10% 3.90% 1,987,604 233,859 9,562,653 1,118,248 2,052,131 316,241 546,058 652,605 39.17% 2.65% 0.00% 7.02% 0.83% 33.78% 3.95% 7.25% 1.12% 1.93% 2.31% 100.00% $ 24,832,684 100.00% $ 28,307,984 100.00% Source: Arizona State Department of Revenue Note: The categories presented are intended to provide alternative information regarding the sources of the City's revenue. Information prior to 2005 is not available. *Construction sales tax rate changed from 1.8% to 4% effective June 15, 2006 113 To Table of Contents 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% 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 $ 19,965,645 Fiscal Year 2011 Percentage Tax Paid of Total 2,545,580 575,026 13.36% 3.02% 10.29% 1.20% 46.89% 6.15% 8.77% 1.96% 2.17% 1.78% 2,009,759 246,612 9,430,292 1,227,699 1,793,481 449,581 432,552 336,162 10.55% 1.29% 49.51% 6.45% 9.42% 2.36% 2.27% 1.76% 100.00% $ 19,046,744 100.00% 114 $ To Table of Contents Schedule 7 City of Casa Grande Direct and Overlapping Sales Tax Rates 6/30/2011 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 115 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 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 General Obligation Bonds 1,335,000 1,335,000 1,790,000 10,775,000 9,739,549 27,282,278 28,395,915 Governmental Activities Excise Tax Special Revenue Assessment Obligations Bonds 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 20,603,035 870,000 780,000 685,000 585,000 480,000 370,000 255,000 130,000 - Capital Leases 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 2,331,681 Business-type Activities Excise Tax/ General GO Bond Obligation Revenue Bonds Obligations 2,000,000 1,605,451 1,382,721 1,269,083 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. 116 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 12,125,001 To Table of Contents Business-type Activities Capital Leases 787,125 459,286 404,534 593,795 408,291 295,899 179,122 57,790 6,793 - Notes Payable Total Primary Government Percentage of Personal Income (a) Per Capita (a) 203,193 178,170 178,170 177,300 168,069 158,520 148,643 4,352,312 38,501,765 51,738,811 19,226,411 17,484,200 26,568,586 30,291,848 28,551,160 27,478,427 36,592,941 35,229,083 103,757,247 116,463,526 3.94% 3.21% 4.32% 4.22% 3.59% 3.12% 3.61% 3.16% 8.55% 8.66% 704.52 588.40 848.43 884.18 783.30 708.48 886.78 780.86 2,255.94 2,397.80 117 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 Estimated Actual Value of Property (a) Percentage of Estimated Actual Value of Property General Bonded Debt Per Capita (b) 2006 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% 836 182 2010 2010 2,430,000 26,234,999 (1) (2) 249,681,000 3,680,064,800 0.97% 0.71% 807 540 2011 2011 4,555,000 25,109,998 (1) (2) 235,284,000 3,209,485,830 1.94% 0.78% 1,469 517 (a) Source: Pinal County Assessor's records (b) Estimated population of Mission Royale CFD 6/30/11 Estimated population of Villago CFD 6/30/11 Provided by Sales Offices. No population data are available for years prior to 2007 Population of Casa Grande 2,000 1,100 48,571 (1) General obligation bonds were issued by the Mission Royale Community Facilities District in 2005 and the Villago Community Facilities District in 2006, 2008 and 2010. 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. 118 To Table of Contents Schedule 10 City of Casa Grande Direct and Overlapping Governmental Activities Debt As of June 30, 2011 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 1,260,000 100.00% 1,260,000 Villago CFD 3,295,000 100.00% 3,295,000 Subtotal, overlapping debt 49,013,091 City direct debt 23,840,915 Total direct and overlapping debt $ 72,854,006 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. 119 To Table of Contents Schedule 11 City of Casa Grande Legal Debt Margin Information June 30, 2011 Net Secondary Assessed Valuation as of June 30, 2011 (a) $405,970,566 Debt limit (6% of assessed value) Debt applicable to limit: General obligation bonds 24,358,234 9,169,200 Legal 6% debt margin $ Debt limit (20% of assessed value) Debt applicable to limit: General obligation bonds 15,189,034 81,194,113 13,753,800 Legal 20% debt margin $ 67,440,313 (a) Source: Pinal County Assessor's records 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. 120 To Table of Contents Schedule 12 City of Casa Grande Pledged-Revenue Coverage Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Special Assessment Bonds Special Debt Service Assessment Collections Principal Interest Coverage 290,054 174,365 137,642 217,895 354,840 28,907 29,691 21,092 8,883 - 85,000 90,000 95,000 100,000 105,000 110,000 115,000 135,000 130,000 - 51,570 56,147 42,120 36,990 31,590 25,920 19,980 17,280 3,510 - 2.12 1.19 1.00 1.59 2.60 0.21 0.22 0.14 0.07 0.00 Excise Tax Revenue Obligations Pledged Debt Service Revenue Collected (a) Principal Interest Coverage 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 35,676,711 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 1,256,784 957,807 901,980 594,321 1,054,202 1,022,252 987,632 1,039,517 1,008,269 1,039,772 1,689,937 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. 121 11.16 11.68 14.58 14.60 18.80 22.41 24.86 9.34 16.96 12.11 To Table of Contents Schedule 13 City of Casa Grande Demographic and Economic Statistics, Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Population 27,290 29,715 31,315 34,260 36,450 38,785 42,422 45,116 45,993 48,571 County Per Capita Personal Income 17,889 18,354 19,646 20,959 21,800 22,672 23,905 25,000 26,373 27,690 Total Personal Income School Enrollment Unemployment Rate 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 1,344,930,990 7,784 7,895 8,120 8,930 9,049 10,290 11,066 11,652 10,700 10,700 6.80% 6.20% 5.00% 5.20% 5.10% 4.30% 6.10% 11.10% 11.50% 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. 122 To Table of Contents Schedule 14 City of Casa Grande Principal Employers, Current Year and Ten 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 2011 (a) Percentage of Total City Employees Employment 2001 (b) Percentage of Total City Employees Employment 1030 860 560 450 450 421 425 350 160 150 5.96% 4.97% 3.24% 2.60% 2.60% 2.43% 2.46% 2.02% 0.93% 0.87% 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% 4,856 28.08% 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 (b) Employment data from 2002 is not available - the information presented is from 2001 123 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 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 26 22.75 23 24 26 30 39.25 39.5 37.25 37.25 93.5 98.5 97.5 103.5 107.5 123.05 139 137.23 128.75 125.75 Fire Culture and Recreation Planning and Development Public Works Total 30 33 37 38 41 54.75 60.5 62.08 63.25 62.25 43 44 44 44 44 48 61.25 61.75 68.25 67.31 17 17 17 19 22 26.5 34.5 34 31 31 76 80 80 79 84.25 96.25 104.5 104.5 100.5 97.75 285.50 295.25 298.50 307.50 324.75 378.55 439.00 439.06 429.00 421.31 Source: City Budget Note: Information is based on authorized positions. 124 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 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 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 20,805 2,400 20,805 4,182 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 4,849 6,397 1,051 12,622 29,705 33,076 37,674 38,869 39,365 42,412 41,126 40,893 38,629 38,660 71,814 68,677 69,588 69,412 69,936 72,028 71,626 76,263 72,807 85,032 700,884 671,030 716,138 702,062 706,375 802,935 864,421 939,398 983,100 1,005,416 796 886 928 1,046 1,213 1,121 1,104 991 974 942 9,495 8,408 8,607 7,068 6,127 6,136 6,943 7,025 6,107 5,171 4,673 4,773 4,387 4,614 4,055 3,840 4,015 3,981 4,738 3,737 100,619 100,655 90,826 86,364 73,984 74,311 75,863 79,920 113,480 374,840 149,210 52,240 51,915 49,718 73,079 75,840 78,727 98,937 734,852 825,000 172,391 170,875 187,063 225,043 229,446 270,473 329,790 256 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 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. 125 143 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 1,317 90 114,257 70,820 368,693 95 291 12 12 12 2,104 121 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 2002 2003 2004 2005 2006 2007 2008 3 3 3 3 3 3 3 3 3 4 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 27 1,611 5 1 26 97 22 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 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 5,340 410 455 10 41 Sources: Various City departments 126 2009 2010 2011 To Table of Contents SINGLE AUDIT REPORTS To Table of Contents To Table of Contents 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 The Honorable Mayor and Council City of Casa Grande, Arizona We have audited the 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), as of and for the year ended June 30, 2011, which collectively comprise the City’s basic financial statements and have issued our report thereon dated November 23, 2011. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 127 Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m To Table of Contents Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the City Council, management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Casa Grande, Arizona November 23, 2011 128 To Table of Contents 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 The Honorable Mayor and Council City of Casa Grande, Arizona Compliance We have audited the compliance of the City of Casa Grande (the City), Arizona with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2011. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City’s compliance with those requirements. In our opinion, the City of Casa Grande, Arizona, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2011. 129 Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-943 w w w . h e n r y a n d h o r n e . c o m To Table of Contents Internal Control Over Compliance Management of the City, is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, City Council, others within the entity, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Casa Grande, Arizona November 23, 2011 130 To Table of Contents City of Casa Grande, Arizona Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2011 U.S. Department of Housing and Urban Development: Community Development Block Grant - 2010 Community Development Block Grant - 2009 Community Development Block Grant - 2009 HOME - 2010 Total Department of Housing and Urban Development U.S. Department of Agriculture: Self Help Housing Technical Assistance Housing Preservation Grant Housing Preservation Grant Total Department of Agriculture U.S. Department of Health & Human Services Passed through Pinal-Gila Council for Senior Citizens: Special Programs for the Aging Special Programs for the Aging Stimulus Congregate Meals Stimulus Home Delivered Meals Nutritional Services Incentive Program Total Aging Cluster Social Services Block Grant Total Department of Health & Human Services Institute of Museum & Library Services Passed thru State Library Administrative Agencies Adult Literacy Total Institute of Museum & Library Services U.S. Department of Education: Passed thru Governor's Office of Economic Recovery Public Safety Stabilization Program Pinal County SWAT/Drug & Human Smuggling Total Department of Education U.S. Department of Energy: Stimulus Energy Effeciency Conservation Block Grant Total Department of Energy Grant Number Federal CFDA Number 140-10 100-09 156-09 301-10 14.228 14.228 14.228 14.239 22,504 24,544 22,601 145,644 215,293 12 40 40 10.420 10.433 10.433 162,766 31,033 38,600 232,399 5-237 5-237 5-237 5-237 5-237 93.044 93.045 93.707 93.705 93.053 5-237 93.667 15,544 82,125 1,095 775 17,554 117,093 10,127 127,220 2010-30043-02 45.310 8,700 8,700 OER-11-IGA-GS-55 OER-11-IGA-GS-164 84.397 84.397 24,595 12,605 37,201 81.128 63,260 63,260 2009-SB-B9-3190 2009DJBX0766 16.804 16.738 2006BUBX 2007-DJBX 2010RKWX003 16.607 16.592 16.710 62,318 20,295 82,613 8,031 71 75,604 166,319 3-04-0007-12-2008 3-04-0007-13-2009 3-04-0007-11 20.106 20.106 20.106 1,984 100,369 20,174 2011-OP-017 2011-AL-050 20.600 20.600 2,681 4,769 129,977 EMW-2010-FH-00356 EMW-2007-FF-00468 97.044 97.044 17,752 126,480 777301-01 555304-01 97.067 97.067 37,696 103,577 97.067 97.067 97.067 97.067 97.067 35,779 883 1,834 71,262 41,506 436,768 DE-RW0000128 U.S. Department of Justice: Stimulus JAG Grant JAG Grant Total Justice Assistant Grant Cluster Bulletproof Vest Grant JAG Grant Community Oriented Policing Services (COPS) Total Department of Justice U.S. Department of Transportation: FAA Airport Grant FAA Airport Grant FAA Airport Grant Passed thru Governor's Office of Highway Safety Occupant Protection Enforcement Education DUI Enforcement Total Department of Transportation U.S. Department of Homeland Security Federal Emergency Management Agency Federal Emergency Management Agency Passed through Arizona Division of Emergency Management: Arizona Dept of Homeland Security Arizona Dept of Homeland Security Passed through Arizona Department of Homeland Security: Operation Stonegarden Grant Program Operation Stonegarden Grant Program Operation Stonegarden Grant Program Operation Stonegarden Grant Program Operation Stonegarden Grant Program Total Department of Homeland Security 09-AZDOHS-OPSG-5553 09-AZDOHS-OPSG-5553 09-AZDOHS-OPSG-5553 10-AZDOHS-OPSG-7773 10-AZDOHS-OPSG-7773 Total Federal Financial Assistance and Expenditures of Federal Awards *Denotes major program 131 Expenditures $ 1,417,137 * * * * * * * To Table of Contents City of Casa Grande Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2011 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. 132 To Table of Contents CITY OF CASA GRANDE, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2011 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued: Unqualified Internal control over financial reporting: • Material weakness(es) identified? • Significant deficiency(ies) identified that are not considered to be a material weakness(es) reported? Noncompliance material to financial statements noted? ____ yes __X_ no __ _ yes __X_ none yes __X_ no Federal Awards Internal control over major programs: • Material weakness(es) identified? • Significant deficiency(ies) indentified that are not considered to be a material weakness(es) reported? ____ yes __X_ no __ _ yes __X_ none Type of auditors’ report issued on compliance for each major program listed below: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? ____ yes __X_ no Identification of major programs: CFDA Numbers 16.804 & 16.738 97.067 Name of Federal Program or Cluster Department of Justice – JAG Program Department of Homeland Security – Homeland Security Grant Program Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? __X_ yes _____ no 133 To Table of Contents CITY OF CASA GRANDE, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2011 SECTION II – FINDINGS RELATED TO FINANCIAL STATEMENTS REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS None Noted SECTION III – FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS None Noted SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 2010-1 U.S. Department of Agriculture – Self Help Housing Technical Assistance Grant (CFDA 10.420) Condition: A financial status report was not filed timely Criteria: Grant criteria include requirements to timely submit a financial status report for within 90 days of the completion of the grant. Effect: Grantor could delay disbursements until reports are filed. Cause: Management did not have proper oversight over the process of filing reports timely. Recommendation: We recommend that the Grants Coordinator be more involved in the reporting and compliance requirements of the Housing Department grants. Management’s response: The Grants Coordinator will work with the Housing Department Director to develop a schedule of due dates and reports to insure that reports are reviewed and filed on a timely basis. Status: Corrected. 134