To Table of Contents City of Casa Grande, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2014 To Table of Contents City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2014 Prepared by the Finance Department Doug Sandstrom, Finance Director Julie Scherer, Supervising Accountant Gay Barnhart, Assistant To Table of Contents TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................... GFOA Certificate of Achievement ......................................................................................................... City of Casa Grande Officials ................................................................................................................ Organizational Chart .............................................................................................................................. Page vii xiii xv xvi II. FINANCIAL SECTION Independent Auditors’ Report .............................................................................................................. 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (required supplementary information) ....... 7 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position ................................................................................................................ Statement of Activities .................................................................................................................... 19 20 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet ............................................................................................................................. Reconciliation of the Balance Sheet to the Statement of Net Position ....................................... 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 User Special Revenue Fund.................................................................................... Grants and Subsidies Special Revenue Fund.......................................................................... 24 27 28 30 31 32 33 Proprietary Fund Financial Statements Statement of Net Position .......................................................................................................... Statement of Revenues, Expenses and Changes in Fund Net Position ...................................... Statement of Cash Flows............................................................................................................ 36 38 40 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position .......................................................................................... Statement of Changes in Fiduciary Net Position ....................................................................... 46 47 TABLE OF CONTENTS (continued) Notes to Financial Statements: Note 1. Summary of Significant Accounting Policies................................................................ 2. Cash and Investments .................................................................................................... 3. Cash with Fiscal Agent/Restricted Investments ............................................................ 4. Receivables.................................................................................................................... 5. Direct Loans .................................................................................................................. 6. Property Taxes ............................................................................................................... 7. Capital Assets ................................................................................................................ 8. Retirement 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 Post Closure Care Costs .............................................................. 17. Construction Commitments ........................................................................................... 18. Summary of Interfund Transactions .............................................................................. 19. Deficit in Fund Balance ................................................................................................. 20. Sales Tax Incentive Agreement ..................................................................................... 21. Fund Balance Details by Classification ......................................................................... 22. Prior Period Adjustment ................................................................................................ Page 51 60 62 63 63 64 64 65 71 71 72 74 75 76 77 77 78 78 79 79 80 80 SUPPLEMENTARY INFORMATION Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statements of Revenues, Expenditures, and Changes in Fund Balances.......... 82 88 Fiduciary Funds Combining Statement of Fiduciary Net Position ................................................................ Combining Statement of Changes in Assets and Liabilities – All Agency Funds .............. 94 95 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund Legal Level Budget Compliance ............. 98 Budgetary Comparison Schedule – Major Capital Project Funds Capital Replacement/Recreation/Development Fund ......................................................... System Development Special Revenue Fund ..................................................................... 99 100 Budgetary Comparison Schedules – Non-Major Governmental Funds Municipal Airport Special Revenue Fund .......................................................................... Parks Development Special Revenue Fund ........................................................................ Community Arts Reserve Special Revenue Fund ............................................................... Redevelopment /Downtown Revitalization Special Revenue Fund ................................... Promotion & Tourism Special Revenue Funds................................................................... Court Enhancement/Probationary Special Revenue Fund .................................................. Housing Application & Development Fees Special Revenue Funds .................................. Community Development Block Grant Special Revenue Fund ......................................... Self-Help Technical Assistance Special Revenue Fund ..................................................... Home/HUD Special Revenue Fund .................................................................................... 101 102 103 104 105 106 107 108 109 110 TABLE OF CONTENTS (continued) OTHER SUPPLEMENTARY INFORMATION (continued) Page Budgetary Comparison Schedules – Non-Major Governmental Funds (continued) Wildland Firefighting/Public Safety Special Revenue Fund .............................................. General Obligation/Bond Debt Service Fund ..................................................................... Recreation Debt Service Fund ............................................................................................ Community Services Capital Project Fund ......................................................................... Transportation Capital Projects Fund ................................................................................. Public Safety Capital Projects Fund ................................................................................... Community Facilities Districts Capital Projects Fund ........................................................ Airport Improvement Capital Projects Fund....................................................................... 111 112 113 114 115 116 117 118 Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch.............................................................................................. Wastewater .................................................................................................................. Wastewater Development Fees ................................................................................... Sanitation/Development.............................................................................................. Golf Course ................................................................................................................. 119 120 121 122 123 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule of Changes by Function and Activity .................................................................. 124 125 III. STATISTICAL SECTION Index .................................................................................................................................. Net Position by Component – Last Ten Fiscal Years ....................................................... Changes in Net Position, Governmental – Last Ten Fiscal Years .................................... Changes in Net Position – Last Ten 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 Nine Fiscal Years.............................. Direct and Overlapping Governmental Activities Debt .................................................... Legal Debt Margin Information ........................................................................................ Pledged-Revenue Coverage – Last Eight Fiscal Years ..................................................... Real & Personal Property Tax Levies & Collections ........................................................ Tax Rate Data .................................................................................................................... Estimated Net Secondary Assessed Valuation of Major Taxpayers.................................. Demographic and Economic Statistics – Last Ten Fiscal Years ....................................... Schedule 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Page 129 130 132 134 136 138 140 142 144 146 147 148 149 150 151 152 153 TABLE OF CONTENTS (concluded) III. STATISTICAL SECTION (continued) 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............................. Schedule 17 Page 154 18 19 20 155 156 157 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 159 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............................................................................................................................... 161 Schedule of Expenditures of Federal Awards ............................................................................... 163 Notes to Schedule of Expenditures of Federal Awards................................................................. 165 Schedule of Findings and Questioned Costs ................................................................................. 166 To Table of Contents Introductory Section To Table of Contents To Table of Contents City of Casa Grande, Arizona January 15, 2015 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, 2014. This 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, 2014 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 report includes one finding regarding reconciliation of a cash account. 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, 2014, are fairly presented, in all material respects, in conformity with GAAP. (continued) vii 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, 2014, 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. 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. The single finding in the audit report recommends that procedures be put in place to reconcile all general ledger accounts, including those related to utility accounts receivable. Current controls were not adequate to prevent or detect material errors in the reconciliation of subsidiary ledgers to the general ledger. Immediate action has been taken to reconcile these ledgers monthly and long term organizational changes are being evaluated. 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 2013-2014 is $191,234,966. 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 and project level within each fund. 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 (continued) viii To Table of Contents PROFILE OF THE CITY (continued) major interstate highways, one services the Los Angeles and San Diego markets, one to the Phoenix & Tucson 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 several years to just over 110 squares miles. The Voters approved the 2020 General Plan on November 3rd, 2009. The City’s population has doubled from 25,224 in 2000 to 50,938 in 2014. The City’s growth is attributed to affordable housing, proximity to labor opportunities in the metropolitan areas, and the rural quality of life offered to the residents. The majority of this growth occurred prior to 2009. The City provides a full range of municipal services, including police and fire protection, maintenance of streets, recreational and cultural events, two 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 two downtown redevelopment districts. Financial Statement Structure The Comprehensive Annual Financial Report (CAFR) consists of three sections: Introductory, Financial, and Statistical. The Financial section begins with the Independent Auditors Report and is followed by the management’s discussion and analysis that provides summary information about the results of operations. 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 51 of the notes to the financial statements. 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. The Community has 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. (continued) ix To Table of Contents ECONOMIC CONDITIONS AND OUTLOOK (continued) Local indicators point to continued stability. Casa Grande is witness to 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 $14.0 million were issued in fiscal year 2014, although a decrease from FY2013, 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. The City continues to process annexations. The expansion of the city’s 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 remains at substantially reduced levels of about five (5) new single family permits per month. Although total sales tax revenue is down 28% from our peak collections in FY2008, when adjusted for the construction portion of the sales tax the City’s FY2014 collections are actually 2.5% higher than FY2008 collections. 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 45% of General Fund revenues. The City’s sales tax rate is currently at 1.8%, with an additional 0.2% pledged to park and recreation projects, or for economic development. Management is projecting the city’s sales tax collections to continue increasing slightly next year as the economy continues its recovery. State Shared Revenues. The City of Casa Grande receives revenue allocations 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. With the exception of the gas tax which must be kept in a separate fund for transportation related activities, all other state shared revenues are placed in the General Fund, where they support daily operations. Like our local sales tax, this revenue source is expected to increase gradually as the economy improves. Although a stable source of revenue for the City, state-shared revenues are distributed through the state and are subject to some level of attention from the state legislature each year. Property Tax. The City’s primary property tax rate increased in FY 2014 to $0.9999 from $0.9489 per $100 of assessed valuation. Despite the increase in the tax rate, most residential properties did not experience an increase due to decreasing property values. The amounts collected under 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. Of this amount $11 million was issued in FY2008 and an additional $19 million in FY2009. The city levies a secondary property tax to fund this debt service. The secondary rate continues to be $0.6308 per $100 of assessed valuation. The City has no immediate plans to issue debt that will result in an increase to the secondary levy. MAJOR INITIATIVES AND ACCOMPLISHMENTS In 2014 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 Fire o o o o Finalized remodeling of the Communications Center Dispatch response time continued to increase from 53 seconds from start to dispatch, to 60 seconds Part 1 UCR crimes per 1,000 decreased by 11% Cleared 43% of Part 1 UCR crimes 265 animals adopted Responded to 6,951 emergencies, of which 5,400 (78%) were emergency medical services and 232 (3%) were fire related 80% of ALS responses were under 5 minutes. 3.0 residential structure fires per 1,000 structures Continued mentoring of the Casa Grande Fire Explorers Program. (continued) x To Table of Contents MAJOR INITIATIVES AND ACCOMPLISHMENTS (continued) Public Works o Hosted the 56th Annual Cactus Fly-In at the municipal airport. o Treatment of an average of 5.0 million gallons per day of wastewater. o Collected 18.3 tons of residential trash. o Collected 62,295 tons of solid waste at the landfill site. o Recycled an average of 45.0 lbs per household per quarter in residential solid waste materials. Community Services o Finalized complete remodel of main library o Golfers played 68,071 rounds of nine hole equivalents o 98% of program participants rated programs as satisfactory or better o Library visitors of 311,357 at the two libraries o Served a total of 29,505 meals and received a total of 6,204 volunteer hours o Maintained 10.77 acres of parkland per 1,000 population at a cost of $1,108 per acre Development Center o Issued 1,653 building permits o Performed an average of 17 inspections per inspector per day OTHER MATTERS Debt Administration. On June 30, 2014, the City had a number of debt issues outstanding. Total debt at June 30, 2014, was $112.3 million. The City’s general credit was rated A+ by Fitch Ratings and received an A- rating from Standard & Poors. The City is diligent in its efforts to maintain and improve these ratings. The ratings for the existing issues are as follows: Standard & Poors Investor Service ExciseTax Revenue Series 2009 Series 2012 General Obligation Bonds nr AA nr Fitch IBCA AAnr AA 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, 2014 the City had $28.1 million of Excise Tax Revenue Obligations outstanding. Under State statutes the City can issue general obligation bonds for up to an amount not exceeding 20% of the secondary assessed valuation. As of June 30, 2014, the City has debt capacity remaining of $57.2 million for general obligation bonds subject under the 20% and 6% constitutional limitations based on the FY 2014 secondary assessed valuation. The City has $27.4 in outstanding General Obligation bonds, with voter approval to issue an additional $17 million over the next several years. FINANCIAL POLICIES 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 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. xi To Table of Contents 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, 2013. This was the 23rd consecutive year 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 principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The Government Finance Officers Association of the United States and Canada presented a Distinguished Budget Presentation Award to the City of Casa Grande, Arizona for its annual budget for the fiscal year beginning July 1, 2013. 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 17th 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 Julie Scherer, 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, Doug Sandstrom Finance Director xii To Table of Contents xiii To Table of Contents To Table of Contents City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2014 CITY COUNCIL Mayor Robert M. Jackson Mayor Pro-Tem Mary Kortsen Council Members Matt Herman Lisa Fitzgibbons Karl Montoya Dick Powell Ralph Varela City Manager James Thompson Deputy City Manager Larry Rains Finance Department Staff Doug Sandstrom, Finance Director Julie Scherer, Supervising Accountant James Fults, Accountant Gay Barnhart, Administrative Assistant xv To Table of Contents City of Cas a Grande Organizational Chart People of Cas a Grande Mayor and Council City Manager City Attorney Police Adminis tration Deputy City Manager Fire Departm ent Public Works Hum an Res ources Anim al Control Engineering Ris k Managem ent Communications Was tewater Police Patrol Sanitation Police Criminal Inves tigations Police Special Operations City Clerk City Court Finance Department Planning & Development Com munity Services Financial Services Planning Library Inform ation Sys tems Permits Senior Adult Services Geographical Inform ation Sys tem Ins pections Parks Maintenance Equipment Maintenance Hous ing Recreation Programs Streets Code Enforcement Len Colla Center Public Information Officer Water Aquatics Airport Women's Club Facilities Maintenance Golf Cours e General Recreation xvi 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 Report on the Financial Statements 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 City of Casa Grande, Arizona, as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 1 To Table of Contents We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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, 2014, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund, Highway Users Special Revenue Fund, and Grants & Subsidies Fund for the year then ended in accordance 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. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 7-15 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Casa Grande, Arizona’s basic financial statements. The introductory section, supplementary information, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The 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 basic financial statements. 2 To Table of Contents 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 basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary information and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2015, 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Casa Grande, Arizona’s, internal control over financial reporting and compliance. Casa Grande, Arizona January 15, 2015 3 To Table of Contents 4 To Table of Contents Financial Section MANAGEMENT’S DISCUSSION & ANALYSIS 5 To Table of Contents 6 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, 2014. 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 - xii of this report as well as the City’s financial statements beginning on page 19 and the accompanying notes to the financial statements. Financial Highlights  The City’s total net position, on the government-wide basis, totaled $299.2 million at June 30, 2014 of which $66.4 million is unrestricted. This is a decrease of $9 million from fiscal year 2013, a decrease of $8.2 million of unrestricted in the government activities and decrease of $0.8 million in the business-type activities.  The governmental activities revenues increased by approximately $1.0 million over the previous year.  The business-type activities operating revenues increased by $1.8 million over the previous year due mainly to increased rates and collection efforts.  The General Fund reported a change in fund balance of $0.9 million for the year.  At June 30, 2014, restricted, assigned and non-spendable balance for the General Fund was $18.6 million, or 50% of General Fund expenses for fiscal year 2014.  At June 30, 2014, unassigned fund balance of the General Fund was $6.9 million.  The governmental activities general revenues of $53.7 million were $4.3 million less than expenses before other financial sources and uses.  The business-type activities net position was $62.8 million as of June 30, 2014 which is a decrease of $0.8 million from the previous year. OVERVIEW OF THE FINANCIAL STATEMENTS Required Components of the Annual Financial Report Management’s Discussion and Analysis Government‐ Wide Financial Statements Summary Basic Financial Statements Fund Financial Statements Required Supplementary Information Other Supplementary Information Notes to the Financial Statements Detail 7 To Table of Contents Government-wide Financial Statements The government-wide financial statements (see pages 19-21) 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 other general revenues support the majority of these activities. Business-type activities include the private sector type activities such as golf course, sanitation, water and wastewater. These activities are primarily supported through user charges and fees. The statement of net position presents information on all of the City’s assets and liabilities, both current and longterm. The difference between assets and liabilities is reported as net position. The focus on net position is designed to focus on government as a business. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. However, to accurately assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of infrastructure, must also be considered. The statement of activities presents information showing how the City’s net position changed over the most recent fiscal year. Full accrual accounting is used for the government-wide financial statements and all changes to net position 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. The statement is designed to show the extent to which the various functions depend on general taxes and revenue for support. Fund Financial Statements Also presented in the basic financial statements are the traditional fund financial statements for 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 (3) 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, we provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on page 27 and 30, 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 for which fees are charged. The City has four enterprise funds: golf course, sanitation, water and wastewater funds. 8 To Table of Contents The internal service funds reflect activities in which the City is the customer. The fleet services, facilities maintenance and risk management funds are the City’s three internal service funds. Their purpose is to provide vehicle maintenance and facilities 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 51-80) 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 and in the supplementary information. 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, 2014. Statement of Net Position Net position may serve over time as a useful indicator of the City’s financial position. The following table reflects the condensed statement of net position as of June 30, 2014. The City has chosen to account for its golf course, water, wastewater and sanitation operations in enterprise funds which are shown as Business Activities. Statement of Net Position (in Millions) Current and other assets Capital assets Total assets Deferred Outflow of Resources Other liabilities Long-term liabilities Total liabilities Deferred Inflows of Resources Net position: Invested Capital assets net of related debt Restricted Unrestricted Total net position Governmental Activities 2013 2014 $ 97.1 $ 91.9 206.3 201.3 303.4 293.2 Business-type Activities 2013 2014 $ 19.1 $ 16.0 110.8 110.2 129.9 126.2 Total Primary Government 2013 2014 $ 116.2 $ 107.9 317.1 311.5 433.3 419.4 0.0 0.0 0.0 0.0 0.1 0.0 4.5 54.3 58.8 3.5 53.3 56.8 1.5 66.0 67.5 1.6 61.7 63.3 6.0 120.3 126.3 5.1 115.0 120.1 0.0 0.0 0.0 0.0 0.0 0.0 157.4 40.5 46.7 $ 244.6 151.7 23.4 61.3 $ 236.4 47.6 9.3 5.5 62.4 51.5 6.2 5.2 62.9 205.0 49.8 52.2 $ 307.0 203.2 29.6 66.5 $ 299.3 $ $ 9 To Table of Contents At year end June 30, 2014 the net position of the City totaled $299.3 million, a decrease of $8.9 million from June 30, 2013. Of this $299.3 million, $236.4 million was in governmental activities, a 3.4% decrease and $62.9 million was in the business-type activities, a 1.1% decrease from the prior fiscal year. Net Position consists of three components. The largest portion of net position ($203.2 million or 68%) 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 restricted portion of the City’s net position ($29.6 million or 13%) represents resources subject to external restrictions on how they may be spent. This component is primarily made up of required fund balance reserves and accumulated development impact fees collected by the City. These 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 position ($66.5 million or 20%), which may be used to meet the City’s ongoing obligation to citizens and creditors. Changes in Net Position The City’s total revenues for the year ended June 30, 2014 were $69.6 million. The total cost of all programs and services was $78.7 million. The following table presents a summary of the changes in net position for the year ended June 30, 2014. Changes in Net Position (in millions) 10 To Table of Contents The following graph 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 76% of the total revenues of the City and 79% of the total expenses in fiscal year 2014. This compares to 81% of total revenues and 79% of expenses in fiscal year 2013. Governmental Programs Revenues and Expenses FY2014 $30 Millions $25 Revenues Expenses $20 $15 $10 $5 $0 FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental Funds The focus of governmental fund financial statements (pages 24-33) is to provide information on near-term inflows, outflows and balances of spendable resources. All major governmental funds are discreetly presented in 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 82-91. For fiscal year ended June 30, 2014, the governmental funds reflect a combined fund balance of $86.4 million, a decrease of $3.5 million. A portion of the fund balance, $37.5 million is restricted for specific expenses or is legally segregated for a specific future use. The remaining $48.9 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. 11 To Table of Contents The following graph indicates fund balances for select governmental funds for the past two fiscal years. Governmental Fund Balances $35 $30 FY2013 FY2014 Millions $25 $20 $15 $10 $5 $0 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 $38.0 million, an increase of $1.3 million, in fiscal year 2014. The primary increases are in local sales taxes and state shared revenues. The expenses, before other financing sources and uses, totaled $37.1 million, an increase of $2.1 million. Transfers to other funds were a net of $17,667 resulting in an increase to fund balance of $0.9 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 $5.0 million, an increase of $0.2 million from the prior fiscal year, while expenses totaled $7.2 million, an increase of $2.0 million in the fiscal year ended June 30, 2014. The increased expenditures were directly tied to the completion of major street projects. Another governmental fund of the City is the System Development Fee Fund which collected impact fees for public safety, parks and recreational facilities, library facilities, and general government. The fees in this fund are generally no longer collected due to modifications to state law. Fees directly attributable to debt service continue to be collected and all remaining fund balances are planned to finance eligible growth related capital improvements over the next several years. Fund balance will decrease annually as no additional revenues are being collected within this fund. The Capital Development and Replacement Fund accounts for accumulated proceeds and capital expense of proceeds for the construction of capital projects and replacement of equipment. Other governmental funds include the Grants Fund which accounts for the various state and federal grants awarded to the City for specific purposes in public safety, parks and recreation, and library; the Construction Sales Tax Fund accounts for capital construction as authorized via ordinance 1397.03.07; all non-major governmental funds of the City are combined into the “Non-Major Governmental Funds” column on the governmental fund statements. 12 To Table of Contents Proprietary Funds The proprietary funds financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each enterprise fund is shown individually on the fund statement. Net position of the enterprise funds were $62.9 million, a decrease of $0.7 million as of June 30, 2014. Overall there is a $0.2 million decrease to unrestricted assets leaving a balance of $5.2 million. Operating revenues in fiscal year 2014 were $16.4 million, showing a $1.9 million increase from the prior fiscal year, while operating expenses totaled $16.3 million, an increase of $0.6 million, resulting in a $0.1 million net operating gain. 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 98. 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 (E) on page 55 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 $150,137,210 during fiscal year 2014. Budget amendments between funds or departments or from budgeted contingencies into operational expense/expenditure accounts did occur. However, the adopted budget cannot be increased. General Fund inflows (revenues and other sources) of $38.0 million, on a budgetary basis, were slightly more than budgeted inflows of $37.9 million, while actual outflows (expenditures and other uses) of $37.1 million were 97% of original budgeted outflows, reflecting an efficiently allocated budget. 13 To Table of Contents CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2014, the City had $311.5 million invested in various capital assets, net of accumulated depreciation. Of the $311.5 million $201.3 million (64%) is invested in governmental activities and $110.2 million (36%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following:     Completion of major street improvements for $4.4 million. Completion of additional Solar panel parking structure for $1.2 million. Completion of the Main Library expansion $1.6 million Completion of the Public Safety Communications Center expansion for $1.4 million. The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2014. Additional information on the City’s capital assets may be found in Note 7 on pages 64-66. Capital Assets (In Millions) Governmental Activities 2013 2014 Land & Construction in Progress Construction in Progress Building & improvements Machines & equipment Total $ 23.1 $ 175.8 7.4 206.3 $ 19.7 $ 174.3 7.3 201.3 Business-type Activities 2013 2014 $ 3.0 $ 98.5 9.3 110.8 $ 3.0 $ 97.2 10.0 110.2 Total 2013 $ 26.1 $ 274.3 16.7 317.1 2014 $ 22.7 $ 271.5 17.3 311.5 14 To Table of Contents Long-Term Debt Long term debt was restated in the current fiscal year to match actual outstanding principal balances. Bond funds associated with WIFA borrowing have not yet been completely drawn down and long term debt was overstated by $1.3 million. The City’s outstanding long-term debt, including bonds, notes, capital leases, and compensated absences, was $112.2 million at June 30, 2014, with $6.1 million due within one year. Of this total, $53.2 million was in governmental activities and $59.0 million was in business-type activities. Of the outstanding debt, $28.1 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, 2014. Further details can be found in Notes 10 to 15 on pages 72-77. Outstanding Debt (In Millions) Governmental Activities 2013 2014 Compensated Absences Leases/Notes Payable Bonds Payable Notes/loans payable Total $ $ 2.0 7.8 44.5 0.0 54.3 $ $ 2.6 7.5 43.1 0.0 53.2 Business-type Activities 2013 2014 $ $ 0.3 50.0 13.2 0.0 63.5 $ $ 0.3 46.4 12.3 0.0 59.0 Total 2013 $ $ 2.3 57.9 57.7 0.0 117.8 2014 $ $ 2.9 53.9 55.4 0.0 112.2 ECONOMIC FACTORS Casa Grande’s population has grown steadily since 2000. The growth rate over the course of the past 10 years was 60%. The unemployment rate in Casa Grande (Pinal County) for June 2014 was approximately 8.4%, which is higher than both the state (7.5%) and the national averages (6.1%). 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. Within Casa Grande, the local economy is experiencing a small increase in sales tax collection as the economy changes focus from one of spending to one of saving and repaying debt. Casa Grande has been selected as the site for a global sourcing center which will open within the next two years, in addition to a Sam’s Club and several new industrial and manufacturing companies which opened in FY2014. Though total assessed values for Casa Grande have decreased in recent years, property values have essentially doubled from 2004 to 2013. For tax year 2014, the primary assessed value decreased by 7.5% and is anticipated to stabilize for tax year 2015. Residential values account for slightly more than one-third of the total assessed valuation. 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 dsandstrom@casagrandeaz.gov. Copies of this report and other financial information can also be found on the city’s website www.casagrandeaz.gov. 15 To Table of Contents 16 To Table of Contents Financial Section BASIC FINANCIAL STATEMENTS Government-wide Financial Statements 17 To Table of Contents 18 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF NET POSITION June 30, 2014 Primary Government ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Restricted assets: Restricted investments Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total assets DEFERRED OUTFLOWS OF RESOURCES Loss on Refunding LIABILITIES Accounts payable and other current liabilities Deposits held Accrued wages and benefits Accrued interest payable 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 compensated absences Noncurrent portion of capital leases and notes Noncurrent portion of excise tax revenue obligations Noncurrent portion of bonds payable Closure and postclosure liability Total liabilities NET POSITION Net investment in capital assets Restricted for: Highways and streets Grant purposes Community development Debt service Capital projects Unrestricted Total net position Governmental Activities $ 3,355,308 81,261,159 5,509,215 404,962 140,273 305,945 941,621 Business-type Activities $ 663,194 12,289,980 3,031,351 (140,273) 53,322 - $ Total 4,018,502 93,551,139 8,540,566 404,962 359,267 941,621 19,689,804 2,983,724 22,673,528 181,628,953 293,237,240 107,214,122 126,095,420 288,843,075 419,332,660 2,946 15,090 18,036 1,634,644 12,975 1,643,338 396,979 793,424 11,846 165,088 661,837 2,428,068 24,821 1,808,426 1,058,816 885,021 484,087 765,718 655,454 136,524 2,448,386 684,282 54,546 1,021,545 2,932,473 1,450,000 710,000 1,744,598 6,986,748 16,154,252 25,500,864 56,864,678 166,863 43,953,001 10,502,853 1,079,224 2,640,156 63,298,030 1,911,461 50,939,749 26,657,105 26,580,088 2,640,156 120,162,708 151,713,255 51,371,884 203,085,139 5,806,306 468,440 5,163,565 5,233,682 6,641,582 61,348,678 $ 236,375,508 4,678,660 1,508,479 5,253,457 $ 62,812,480 5,806,306 468,440 5,163,565 9,912,342 8,150,061 66,602,135 $299,187,988 19 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF ACTIVITIES For the Year Ended June 30, 2014 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Functions/Programs Primary government: Governmental activities: General government Public safety Streets/Transportation Public works Culture and recreation Economic development Interest on long-term debt Total governmental activities $ 7,010,252 25,534,564 13,511,907 2,666,121 7,859,818 3,269,820 2,333,855 62,186,337 Business-type activities: Water Golf course Wastewater Sanitation Total business-type activities 286,210 1,212,036 9,559,101 5,410,150 16,467,497 181,120 1,076,014 8,027,267 6,385,562 15,669,963 $ 78,653,834 $ 19,953,436 Total primary government Expenses $ 304,629 1,345,626 960,368 33,133 502,803 1,136,914 4,283,473 $ 98,699 869,749 4,965,034 100,044 404,869 725,322 7,163,717 - $ 7,163,717 $ 121,708 533,595 553,771 124,623 1,333,697 587,959 587,959 $ 1,921,656 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 position Net Position-beginning Prior period adjustment Net Position-beginning - restated Net Position-ending 20 To Table of Contents Net (Expense) Revenue and Changes in Net Position Governmental Activities $ (6,485,216) (22,785,594) (7,032,734) (2,532,944) (6,827,523) (1,407,584) (2,333,855) (49,405,450) Business-type Activities $ $ (49,405,450) $ $ (105,090) (136,022) (943,875) 975,412 (209,575) $ 6,197,813 19,650,998 2,248,466 4,227,755 5,413,854 2,259,469 330,546 112,756 725,460 41,167,117 (8,238,333) 244,613,841 244,613,841 236,375,508 - Total (209,575) (105,090) (136,022) (943,875) 975,412 (209,575) $ 29,098 - $ 8,917 57,654 (725,460) (629,791) (839,366) 62,382,140 1,269,706 63,651,846 62,812,480 (6,485,216) (22,785,594) (7,032,734) (2,532,944) (6,827,523) (1,407,584) (2,333,855) (49,405,450) (49,615,025) 6,197,813 19,680,096 2,248,466 $ 4,227,755 5,413,854 2,259,469 339,463 170,410 40,537,326 (9,077,699) 306,995,981 1,269,706 308,265,687 299,187,988 21 To Table of Contents 22 To Table of Contents Financial Section BASIC FINANCIAL STATEMENTS Governmental Fund Financial Statements 23 To Table of Contents CITY OF CASA GRANDE, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2014 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 Accounts payable and other current liabilities Accrued wages and benefits Due to other funds Compensated absences Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenue FUND BALANCES: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balance General $ 67,566 22,252,415 Highway Users $ 707 5,682,448 Grants & Subsidies $ 604 328,156 3,890,664 774 1,387,336 6,281 588,136 - 274,907 - $ 27,605,036 $ 6,271,291 $ 603,667 $ $ $ 678,209 1,228,400 8,030 1,914,639 244,088 407,285 57,589 111 464,985 - 26,780 39,950 77 66,807 68,420 6,281 5,163,565 13,384,358 6,892,105 25,446,309 5,806,306 5,806,306 468,440 468,440 $ 27,605,036 $ 6,271,291 $ 603,667 24 To Table of Contents System Development $ 571 7,233,405 Capital Replacement/ Recreation/ Development $ 197,550 26,121,492 - Non-Major Governmental Funds $ 886,201 19,606,383 Total Governmental Funds $ 1,153,199 81,224,299 579,035 129,281 93,031 5,473,250 404,962 1,973,617 99,312 415,415 586,281 - $ 7,233,976 $ 27,320,738 941,621 $ 22,235,552 941,621 $ 91,270,260 $ $ $ $ 6,113 586,281 592,394 - 196,018 196,018 - 6,641,582 6,641,582 27,124,720 27,124,720 $ 7,233,976 $ 27,320,738 216,473 13,874 1,084,927 1,315,274 48,703 93,031 19,311,170 2,044,220 (576,846) 20,871,575 $ 22,235,552 1,530,878 1,339,813 1,671,208 8,218 4,550,117 361,211 99,312 37,391,063 42,553,298 6,315,259 86,358,932 $ 91,270,260 25 To Table of Contents 26 To Table of Contents CITY OF CASA GRANDE, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS June 30, 2014 Fund balance - total governmental funds balance sheet $86,358,932 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 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 discount Deferred Loss Bond premium Delayed revenue is shown on the governmental funds, but is not on the statement of net position. Grants Property Tax 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 position of governmental activities - statement of net position $ 342,832,905 (141,531,022) 466,622 (449,748) (2,586,273) (7,470,835) (42,978,051) (287,367) 2,946 189,130 117,123 244,088 201,318,757 (53,130,450) 361,211 (396,979) 1,864,037 $236,375,508 27 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, 2014 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: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Lease purchase proceeds Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year General $ 3,281,709 17,237,234 2,441,242 1,055,340 12,001,952 773,970 707,660 297,741 785 127,050 95,583 38,020,266 $ Highway Users Grants & Subsidies 4,965,034 4,287 7,361 4,976,682 $ 1,250,114 115 513,490 1,763,719 6,621,023 21,576,010 1,346,502 5,587,412 1,814,914 149,985 2,645,606 4,422,136 984,398 557,155 33,187 185,964 37,095,846 57,865 40,375 7,165,982 1,760,704 924,420 2,328,862 (2,346,529) (17,667) 906,753 24,539,556 $ 25,446,309 (2,189,300) 3,015 (457,580) (457,580) (2,646,880) 8,453,186 $ 5,806,306 89,498 89,498 92,513 375,927 $ 468,440 28 To Table of Contents System Development Capital Replacement/ Recreation/ Development Non-Major Governmental Funds $ $ $ 105,900 4,270 110,170 2,370,345 25,402 278,952 2,674,699 2,739,053 234,722 949,437 1,734,363 7,913 409,551 72,142 6,147,181 Total Governmental Funds $ 6,020,762 19,842,301 2,441,242 1,055,340 19,166,537 2,614,233 707,660 339,728 514,275 536,601 454,038 53,692,717 251,229 74,081 3,600 4,256,737 1,180,480 113,056 18,194 678,451 1,562,993 7,801,503 22,673,464 2,645,606 1,350,102 6,413,990 2,526,552 10,651,896 325,310 127,123 232,898 4,620,358 1,343,356 2,175,175 7,071,705 1,528,344 2,448,448 58,039,905 (215,140) (1,945,659) (924,524) (4,347,188) (954,513) (954,513) (1,169,653) 7,811,235 $ 6,641,582 2,204,220 (3,674,492) (1,470,272) (3,415,931) 30,540,651 $ 27,124,720 4,195,610 (570,655) 3,624,955 2,700,431 18,171,144 $ 20,871,575 8,818,190 (8,003,769) 814,421 (3,532,767) 89,891,699 86,358,932 $ 29 To Table of Contents CITY OF CASA GRANDE, ARIZONA RECONILIATION OF THE STATEMENT OF REVENUES, EXPENDTURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended June 30, 2014 Net change in fund balances - total governmental funds ($3,532,767) 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 $10,651,899 (15,586,775) (4,934,876) 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 (15,725) Bond discounts are expended in the governmental funds when paid, and are capitalized and amortized in the statement of net position. This is the amount of current year bond discount. (33,672) 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. Bond payments Lease payments 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. Unavailable Revenue 1,383,319 360,785 1,744,104 (468,762) The internal service fund net revenue is reported with governmental activities (417,309) 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 (557,843) (21,483) Change in net position of governmental activities ($8,238,333) 30 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, 2014 Budgeted Amounts REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Investment earnings Contributions and donations Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Mayor and Council City manager Attorney Clerk Finance Information Technology Administrative Services Public safety Police Fire Court Animal Control Public works Culture and Recreation Planning and Economic Development Capital Outlay Debt Service: Principal Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ 3,229,750 17,420,250 2,380,000 862,000 11,830,200 1,071,630 819,650 50,000 5,500 113,000 131,240 37,913,220 Final $ 3,229,750 17,420,250 2,380,000 862,000 11,830,200 1,071,630 819,650 50,000 113,000 131,240 37,907,720 Variance with Actual Amounts Final Budget$ 3,281,709 17,237,234 2,441,242 1,055,340 12,001,952 773,970 707,660 297,741 785 127,050 95,583 38,020,266 $ 51,959 (183,016) 61,242 193,340 171,752 (297,660) (111,990) 247,741 785 14,050 (35,657) 112,546 2,099,510 879,000 731,580 404,030 1,033,050 1,722,440 807,530 1,276,510 904,000 731,580 404,030 1,033,050 1,732,440 807,530 1,175,481 929,325 698,648 315,526 1,029,901 1,764,367 707,775 101,029 (25,325) 32,932 88,504 3,149 (31,927) 99,755 12,721,870 6,959,950 675,840 335,900 1,305,370 5,833,240 1,737,990 1,142,000 12,796,870 7,709,950 675,840 355,900 1,313,870 5,646,240 1,737,990 1,142,000 12,787,147 7,764,887 670,732 353,244 1,346,502 5,587,412 1,814,914 149,985 9,723 (54,937) 5,108 2,656 (32,632) 58,828 (76,924) 992,015 71,920 38,461,220 73,420 38,341,220 37,095,846 73,420 1,245,374 924,420 1,357,920 (548,000) (433,500) 1,611,500 (2,338,510) (727,010) (1,275,010) 24,539,556 $ 23,264,546 1,611,500 (2,353,510) (742,010) (1,175,510) 24,539,556 $ 23,364,046 2,328,862 (2,346,529) (17,667) 906,753 24,539,556 $ 25,446,309 717,362 6,981 724,343 2,082,263 $ 2,082,263 31 To Table of Contents CITY OF CASA GRANDE, ARIZONA HIGHWAY USER SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Taxes: State-shared gas tax County sales tax Investment earnings Miscellaneous Total revenues Variance with Actual Amounts Final Budget- Original Final $ 3,157,400 1,700,000 6,000 11,000 4,874,400 $ 3,157,400 1,700,000 6,000 11,000 4,874,400 $ 3,141,098 1,823,936 4,287 7,361 4,976,682 1,323,760 409,560 1,014,220 5,000,000 126,860 1,323,760 409,560 986,260 5,000,000 98,420 1,273,540 416,716 955,350 4,422,136 98,240 50,220 (7,156) 30,910 577,864 180 Total Streets/Transportation 7,874,400 7,818,000 7,165,982 652,018 Total expenditures 7,874,400 7,818,000 7,165,982 652,018 (3,000,000) (2,943,600) (2,189,300) 754,300 (457,580) (3,457,580) 8,453,186 (457,580) (3,401,180) 8,453,186 (457,580) (2,646,880) 8,453,186 754,300 - EXPENDITURES 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 Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ 4,995,606 $ 5,052,006 $ 5,806,306 $ (16,302) 123,936 (1,713) (3,639) 102,282 $ 754,300 32 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 TO ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Intergovernmental revenues Investment earnings Contributions and donations Total revenues 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 Net change in fund balance Fund balance - beginning of year Fund balance - end of year Actual Amounts $ 1,250,114 115 513,490 1,763,719 Variance with Final Budget$ (3,527,306) 115 484,790 (3,042,401) Original $ 4,658,620 28,700 4,687,320 Final $ 4,777,420 28,700 4,806,120 448,010 4,995,000 5,443,010 566,810 4,712,400 5,279,210 790,731 10,174 183,493 180,170 1,164,568 (223,921) (10,174) (183,493) 4,532,230 4,114,642 153,640 10,570 120,100 284,310 153,640 10,570 120,100 95,400 379,710 117,358 167,250 272,547 5,794 562,949 36,282 (156,680) (152,447) 89,606 (183,239) 5,727,320 5,658,920 33,187 33,187 1,760,704 (33,187) (33,187) 3,898,216 (1,040,000) (852,800) 3,015 855,815 40,000 (1,000,000) 375,927 $ (624,073) 40,000 (812,800) 375,927 $ (436,873) 89,498 92,513 375,927 468,440 49,498 905,313 905,313 $ $ 33 To Table of Contents 34 To Table of Contents Financial Section BASIC FINANCIAL STATEMENTS Proprietary Fund Financial Statements 35 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2014 ASSETS Current assets: Cash Investments Receivables, net of uncollectibles Inventories Total current assets Noncurrent assets: Capital assets: Land Buildings and improvements Machinery and equipment Less accumulated depreciation Total capital assets, net Total noncurrent assets Total assets Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees $ 1,249,047 (613,801) 635,246 635,246 1,271,635 DEFERRED OUTFLOWS OF RESOURCES Loss on Refunding - 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: Compensated absences Notes/Loans payable General obligation bond Excise tax revenue obligations Closure and postclosure liability Total noncurrent liabilities Total liabilities NET POSITION Net Investment in Capital Assets Restricted for: Debt service Construction Unrestricted Total net position 628,997 7,392 636,389 $ $ 557 6,960,246 2,029,902 8,990,705 $ 119,255,341 1,570,517 (26,452,443) 94,373,415 94,373,415 103,364,120 5,157 1,503,322 1,508,479 2,700,724 5,339,988 (344,768) 7,695,944 7,695,944 9,204,423 15,090 - 7,493 11,846 1,822 2,724 12,513 36,398 356,449 38,673 659,113 140,273 21,187 2,435,873 684,282 4,335,850 - 69,318 69,318 105,716 25,895 43,883,683 10,502,853 54,412,431 58,748,281 - 553,415 36,881,814 7,695,944 612,504 1,165,919 4,678,660 3,070,455 $ 44,630,929 1,508,479 9,204,423 $ 36 To Table of Contents Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation $ 27,112 3,748,970 989,560 4,765,642 Golf Course $ 138,496 9,618,226 (4,412,201) 5,344,521 5,344,521 10,110,163 283,000 2,640,378 717,521 (1,492,179) 2,148,720 2,148,720 2,285,352 - $ 1,371 77,442 4,497 53,322 136,632 - Total $ 663,194 12,289,980 3,031,351 53,322 16,037,847 $ 2,983,724 123,283,262 17,246,252 (33,315,392) 110,197,846 110,197,846 126,235,693 2,202,109 36,860 35,964 206,633 2,481,566 52,354 414,268 (449,748) 16,874 16,874 2,498,440 15,090 - 389,684 103,676 97,168 590,528 39,798 20,917 18,170 54,546 133,431 793,424 11,846 165,088 661,837 140,273 136,524 2,448,386 738,828 5,096,206 134,748 297,300 142,138 43,346 617,532 118,760 2,640,156 2,758,916 3,349,444 22,207 1,079,224 1,101,431 1,234,862 166,863 43,953,001 1,079,224 10,502,853 2,640,156 58,342,097 63,438,303 617,532 5,225,761 1,014,950 51,371,884 16,874 1,534,958 6,760,719 35,540 1,050,490 4,678,660 1,508,479 5,253,457 $ 62,812,480 1,864,034 1,880,908 $ $ 37 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For the Year Ended June 30, 2014 Operating revenues: Service fees Department Insurance charges Rental Green fees Miscellaneous Total operating revenue Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees $ Operating expenses: Personal services Contractual services Materials and supplies Depreciation Closure and postclosure costs Other expenses Total operating expenses 71,163 91,273 56,320 64,433 283,189 Operating income (loss) (101,874) Nonoperating revenues (expense): Investment earnings Interest expense City sales tax Total nonoperating revenues (expense) Income (loss) before contributions and transfers Developer fees Transfers in Transfers out Change in Net Position Total Net Position-beginning of year Prior period adjustment Total net assets-beginning of year-restated Total Net Position-end of year 181,120 195 181,315 $ $ 8,043,846 45,860 8,089,706 881,171 1,548,267 1,389,592 3,344,193 7,163,223 926,483 $ 86,690 86,690 (86,690) (3,021) (3,021) 4,750 (2,309,188) (2,304,438) 1,869 1,869 (104,895) (1,377,955) (84,821) (15,520) (120,415) 1,286,334 1,286,334 1,165,919 7,068,770 (3,851,990) 1,838,825 41,522,398 1,269,706 42,792,104 $ 44,630,929 569,621 (3,630,000) (3,145,200) 12,349,623 12,349,623 $ 9,204,423 38 To Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 6,385,551 10,760 6,396,311 Golf Course $ 2,410,337 1,260,492 739,767 910,748 88,806 5,410,150 $ Total 144,415 931,599 2,609 1,078,623 $ 14,610,517 144,415 931,599 59,424 15,745,956 392,253 212,095 378,761 182,032 1,165,141 3,754,924 3,112,127 2,564,440 4,588,096 88,806 14,108,393 Governmental Activities Internal Service Funds $ 1,676,424 1,507,401 118,990 3,302,815 734,289 1,780,098 804,738 19,948 215,760 3,554,833 986,161 (86,518) 1,637,563 (252,018) 2,298 2,298 (46,895) 29,098 (17,797) 8,917 (2,359,104) 29,098 (2,321,089) (81,741) (81,741) 988,459 (104,315) (683,526) (333,759) 254,191 (668,971) 573,679 6,187,040 6,760,719 222,000 (103,940) 13,745 1,036,745 1,036,745 1,050,490 569,621 7,544,961 (8,270,421) (839,366) 62,382,140 1,269,706 57,464,806 $ 62,812,480 84,489 (173,450) (422,720) 2,303,628 2,303,628 1,880,908 $ $ 39 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended June 30, 2014 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Payments to suppliers Payments to employees Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees $ 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 Purchases of capital assets Contributions Principal paid on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities 183,983 (151,489) (72,636) (15,520) - (3,851,990) 7,068,770 (3,630,000) - (15,520) 3,216,780 (3,630,000) (12,096) (3,021) (2,261,270) (3,181,994) (2,279,009) 569,621 - (15,117) (7,722,273) 569,621 Net increase (decrease) in cash (70,779) Cash Investments 3,290 (302,069) - 4,184,896 - Cash and cash equivalents at end of year $ (40,142) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received Cash and cash equivalents at beginning of year $ 7,673,466 (2,639,300) (849,270) (298,779) 4,750 1,869 (315,847) (3,357,289) 699,776 7,276,650 4,865,768 $ 628,997 $ 6,960,803 $ 1,508,479 $ 628,997 628,997 $ $ $ 557 6,960,246 $ 6,960,803 5,157 1,503,322 $ 1,508,479 40 To Table of Contents Total Governmental Activities Internal Service Funds $ 14,997,815 (5,491,732) (3,651,757) $ 3,349,516 (2,432,376) (427,951) Business-type Activities-Enterprise Funds Sanitation $ 6,059,433 (1,759,952) (2,356,629) Golf Course $ 1,942,852 1,077,643 (638,922) (373,222) 65,499 5,854,326 489,189 (668,971) 254,191 29,098 (103,940) 222,000 29,098 (8,270,421) 7,544,961 (173,450) 84,489 (414,780) 147,158 (696,362) (88,961) (1,664,153) - (31,885) (56,005) (46,895) (3,957,308) 569,621 (3,250,095) (2,328,925) (81,741) (1,664,153) (134,785) (8,966,707) (81,741) 2,298 - (133,783) 8,917 77,872 3,909,865 (3,799,826) 318,487 941 16,753,000 1,920,482 $ 3,776,082 $ 78,813 $ 12,953,174 $ 2,238,969 $ $ 1,371 77,442 78,813 $ $ 2,202,109 36,860 $ 2,238,969 27,112 3,748,970 $ 3,776,082 $ 663,194 12,289,980 $ 12,953,174 41 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED) For the Year Ended June 30, 2014 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 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees $ (101,874) 64,434 1,423 (3,897) 1,245 (1,473) 61,732 $ (40,142) $ 926,483 3,344,193 (416,240) 158,286 12,740 140,273 19,161 3,258,413 $ 4,184,896 $ (86,690) 86,690 3,290 (302,069) (212,089) $ (298,779) 42 To Table of Contents Total Governmental Activities Internal Service Fund 1,637,562 $ Business-type Activities-Enterprise Funds Sanitation $ 986,161 Golf Course $ 88,806 910,748 (336,878) 243,807 30,175 (3,500) 23,533 956,691 $ 1,942,852 (86,518) $ 182,032 (980) (1,202) 4,794 9,682 (51,658) 9,349 152,017 $ 65,499 88,806 4,588,097 (749,385) (1,202) 100,921 1,245 51,124 85,115 52,043 4,216,764 $ 5,854,326 (252,018) 19,948 335,183 46,701 (6,566) (100,967) 282,650 140,570 23,688 741,207 $ 489,189 43 To Table of Contents 44 To Table of Contents Financial Section BASIC FINANCIAL STATEMENTS Fiduciary Fund Financial Statements 45 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS June 30, 2014 ASSETS Cash Investments Agency Funds $ 115,961 1,752,205 Part-Time Firemen's Pension $ 2,186 451,174 Total assets 1,868,166 LIABILITIES Other liabilities 1,868,166 - 1,868,166 - Total liabilities NET POSITION Held in trust for pension benefits and other purposes $ - 453,360 $ 453,360 46 To Table of Contents CITY OF CASA GRANDE, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS For the Year Ended June 30, 2014 ADDITIONS Contributions: Employer Plan members Total contributions Part-Time Firemen's Pension $ - Investment earnings: Misc Revenue 8,490 Total additions 8,490 DEDUCTIONS Pension payments Administrative expenses Total deductions 21,260 1,862 23,122 Change in net position Net position-beginning of year Net position-end of year (14,632) $ 467,992 453,360 47 To Table of Contents 48 To Table of Contents Notes to the Financial Statements 49 To Table of Contents 50 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 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 specific geographic 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 non-fiduciary 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 on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses for a given function or segments 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. 51 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 governmentwide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. A fund is considered a major fund if it meets several threshold tests based on size and proportionate share. Generally, the effect of interfund activity is removed from the government-wide financial statements. Net interfund activity and balances between governmental activities and businesstype activities are shown in the government-wide financial statements. The “doubling up” effect of internal service fund activity is 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 chief operating 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 the Highway Users Fund that accounts for the City’s share of tax revenues legally restricted to the maintenance of highways within the City’s boundaries and the Grant Fund, used to account for various grants. Debt Service Funds - Debt Service Funds account for the accumulation of resources for and the payment of general obligation long-term debt principal, interest and related costs. 52 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 C. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation – Fund Accounting (Continued) Capital Project Funds - Capital Project Funds 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 accounts for the replacement of fleet, recreation facilities construction and development of infrastructure. The System Development Fund collects fees to defray the costs of specific growth related development. PROPRIETARY FUNDS Enterprise Funds - Enterprise Funds account for operations financed and operated in a manner similar to private business enterprises - the intent of the governing body is for the costs of providing the specific service 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 - accounts for the Copper Mountain water related activities. Wastewater Fund - accounts for the activities of the wastewater treatment, operations and maintenance. Wastewater Development Fees Fund - impact fees pay their proportionate share for development of the wastewater system. Sanitation Fund - accounts for the operations of the City’s trash and landfill services. Golf Course Fund - accounts 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. 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 three internal services funds: Fleet Maintenance is used to account for the maintenance and operations of City owned vehicles, Facilities Maintenance is used to account for the maintenance and operations of City owned buildings, and Risk Management is used for insurance activities. Each cost center is charged their proportional share of the cost for these services. 53 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 C. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation – Fund Accounting (Continued) 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. D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 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. Revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers revenues available if they are earned by June 30 and the revenue is expected to be collected within 60 days after 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. 54 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 D. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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 essentially two types of these revenues. In one, monies must be expended on the 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 legal and contractual arrangement, 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, 2014, are recorded as receivable, net of allowance for un-collectibles. The balance of the tax levy not collected within 60 days after year-end are reflected as deferred revenue. 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. 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. E. Budgetary Data   In the spring of each year, the City Manager submits to City Council an estimate of the expenditures necessary to conduct the affairs of the City for the fiscal year commencing July 1st. The Council holds open work sessions relating to budget preparation. 55 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 E. Budgetary Data (Continued)         F. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) After required public hearings are held, a budget for all governmental and proprietary funds (excluding internal service and pension funds) is legally enacted prior to the third Monday of July as required by Arizona Revised Statutes. The budget specifies expenditure amounts by activity with each Fund. Transfer of budgeted amounts within a department may be authorized by the Director of each department, unless the transfer involves personnel services. This type of budgetary transfer requires City Manager approval. In the adoption of the budget the City Council delegates authority to transfer budget amounts between funds and departments to the City Manager. The original budget was amended for the year ending June 30, 2014. All funds are subject to the comprehensive appropriated budget. Encumbrances used by the City during the budget year. All appropriations lapse at fiscal year-end unless re-appropriated as a carry-over. Invoices for goods and services received on or before June 30 must be paid within 60 days of the fiscal year-end. The budget for the City is adopted on a basis consistent with generally accepted accounting principles. Under State statutes, certain annual expenditure limitations must be adhered to. Several supplemental appropriations were necessary during the year. Expenditures may not exceed budgeted appropriations at the total budget level. 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. G. 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. 56 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 G. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments (Continued) 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. H. Inventory 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. I. Capital Assets Capital Assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Assets contributed (donated) to those funds are recorded by reference to historical costs of the donor if recently purchased or constructed, or if such records are not available, at estimated fair market value on the date of receipt. General government infrastructure capital assets include those assets acquired or constructed since 1980. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. 57 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets (Continued) Depreciation of all assets is recorded and calculated using the straight-line method over the following estimated useful lives: Buildings .............................................................. 40 years Sewer system ............................................. 20 to 50 years Street system .............................................. 20 to 30 years Building and facility improvements ...................... 20 years Streetlights and traffic control devices ................. 20 years Other Improvements and landscaping ................. 15 years Vehicles ........................................................ 3 to 15 years Equipment..................................................... 5 to 10 years Furniture and fixtures .................................... 5 to 10 years Computers/software............................................... 3 years J. Compensated Absences Employees are entitled to accumulate vacation to a maximum allowable limit depending on the number of years of service. In the event of termination, an employee is reimbursed for the accumulated vacation leave. Different measurement focuses for governmental and proprietary funds were considered when determining the compensated absences liability. Because the measurement focus for proprietary funds is the determination of net income, current and long-term liabilities are recorded in the accounting records. The measurement focus for governmental funds is the flow of financial resources; expenditures for vacation time are accrued as current liabilities only if they have matured (i.e., unused reimbursable leave still outstanding following an employee’s resignation or retirement). City employees with less than ten years of service are granted non-vesting 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 or 180 hours for firefighters working 24 hour shifts. 15 – 19 years of service will receive 40% up to a maximum of 288 hours or 404 hours for firefighters working 24 hour shifts. 20 or more years of service will receive 50% up to a maximum of 640 hours or 896 hours for firefighters working 24 hour shifts. Sick leave compensation is accounted for in the period in which the event takes place. 58 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 K. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. Long-term obligations expected to be financed from proprietary fund operations are accounted for in the fund as a long term liability. L. Interfund Activity 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 service is revenue to the fund providing the service and expenditure to the fund receiving the service. Other interfund transactions are classified as transfers. Transfers usually reflect ongoing operating subsidies between funds. M. Fund Equity Reserves represent those portions of fund equity not appropriable for expenditures or legally segregated for a specific future use. N. 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 Non-spendable, Restricted, Committed, Assigned and Unassigned. Non-spendable and Restricted fund balances represent the restricted classifications and Committed, Assigned and Unassigned represent the unrestricted classifications. Non-spendable 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 through the adoption of an Ordinance is required to commit resources or to rescind the commitment. Assigned fund balance represents limitations imposed by the City Council. 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. 59 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 1 N. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance Policies (Continued) When both restricted and unrestricted resources are available for specific expenditures, restricted resources are considered spent before unrestricted resources. Within fund balance committed is spent first and then assigned resources are used. For fund balance details by classification, see note 21. NOTE 2 CASH AND INVESTMENTS Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, an entity will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The carrying amount of the City’s cash in bank totaled $4,136,649 and the bank balance was $4,287,801. Federal Depository Insurance covered the City’s deposits at June 30, 2014, to the extent of $522,193. Deposits of $3,765,608 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 as follows: Cash and cash equivalents Investments Restricted investments Governmental Activities $ 3,355,308 81,261,159 941,621 $ 85,558,088 $ Business Activities 663,194 12,289,980 - $ 12,953,174 $ Fiduciary Fund 118,147 2,203,379 - $ $ 2,321,526 $ Total 4,136,649 95,754,518 941,621 100,832,788 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 fair value of the City’s position is the same as the value of the pool shares. The State Board of Investment has oversight responsibilities of the investment pool pursuant to ARS 35-311. The pool’s investments include securities with the full faith and credit of the United State Government with a final maturity less than 24 months 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, 2014 was $1.1 billion in assets. 60 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 2 CASH AND INVESTMENTS (Continued) 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 has a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. 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. The following table shows the actual rating as of year-end by investment type. Governmental funds Investment Type LGIP Money market U.S. Treasury Notes $ Total 81,015,056 941,621 246,103 82,202,780 $ $ Total 12,289,980 12,289,980 $ $ Unrated 81,015,056 941,621 246,103 82,202,780 $ $ Unrated 12,289,980 12,289,980 $ Proprietary funds LGIP Investment Type Fiduciary funds Investment Type LGIP Money market $ $ Total 1,752,205 451,174 2,203,379 Total $ 96,696,139 $ Unrated 1,752,205 451,174 2,203,379 $ 96,696,139 $ 61 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 2 CASH AND INVESTMENTS (Continued) 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: Investment Type LGIP Money Market Funds U.S. Treasury Notes Total NOTE 3 $ $ Total 95,057,241 1,392,795 246,103 Concentration 98.31% 1.44% 0.25% 96,696,139 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. Fund Type Capital - CFD Description of Designated Capital Infrastructure Balance at $ 30-Jun-14 305,052 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 $ 30-Jun-14 636,569 62 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 4 RECEIVABLES The following table is a summary of the City’s governmental activities receivables. General Fund $ 3,737,490 153,424 3,890,914 Receivables: Taxes Interest Accounts Less: Allowance Highway User $ 588,136 588,136 (250) Total receivables $ 3,890,664 Grants & Subsidies $ - $ 588,136 Capital Replacement/ Recreation/ Development $ 324,993 90,422 415,415 $ - Non-Major Total System Governmental Governmental Development Funds Funds $ $ 54,283 $ 4,704,902 12,552 12,552 512,200 756,046 579,035 5,473,500 $ - 415,415 $ - - $ 579,035 (250) $ 5,473,250 The following table is a summary of the City’s business-type activities receivables. Wastewater Water Receivables: Wastewater Fund Accounts Development Fund $ 7,392 $ 7,392 $ 3,759,457 Sanitation Fund $ Golf Course Fund - $ 2,181,096 Fund Total $ 4,497 $ 4,497 $ 5,952,442 Less: Allowance - Net receivables (1,729,555) $ 2,029,902 $ - (1,191,536) $ 989,560 - (2,921,091) $ 3,031,351 Revenues of wastewater and sanitation are reported net of uncollectible amounts. uncollectible amounts related to revenues of the current period are as follows: Uncollectibles related to wastewater Uncollectibles related to sanitation $ 44,343 30,901 Total uncollectibles for the current year $ 75,244 NOTE 5 Total 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, 2014 these loans outstanding totaled $462,464. 63 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 6 PROPERTY TAXES Arizona Revised Statutes 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 2013-2014 maximum primary levy limit was $3,459,965. The primary tax levy was $3,229,750. The City’s secondary tax levy was $1,775,000. 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, 2014, are $38,226 and $244,088 respectively. NOTE 7 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2014 follows: Governmental Activities Capital assets, not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated: Buildings Improvements Heavy machinery & equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements Heavy machinery & equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Beginning Balance $ 19,531,684 3,586,855 Increases $ 158,120 Decreases $ (3,586,855) $ Ending Balance 19,531,684 158,120 23,118,539 158,120 (3,586,855) 19,689,804 66,967,030 219,862,151 23,605,983 310,435,164 3,258,168 8,873,715 1,928,802 14,060,685 (1,012,607) (1,012,607) 70,225,198 228,735,866 24,522,178 323,483,242 (14,109,192) (96,950,855) (16,220,075) (127,280,122) (2,531,523) (11,087,778) (1,967,473) (15,586,774) 1,012,607 1,012,607 (16,640,715) (108,038,633) (17,174,941) (141,854,289) 183,155,042 (1,526,089) $ 206,273,581 $ (1,367,969) $ (3,586,855) 181,628,953 $ 201,318,757 64 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 7 CAPITAL ASSETS (Continued) Business-Type Activities Capital assets, not being depreciated: Land Total capital assets not being depreciated Capital assets, being depreciated: Buildings and improvements Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Business-Type activities capital assets, net Beginning Balance $ 2,983,724 Increases $ 2,983,724 - Ending Balance Decreases $ - - $ - 2,983,724 2,983,724 121,555,868 15,961,435 137,517,303 2,199,711 1,757,594 3,957,305 (945,097) (945,097) 123,755,579 16,773,932 140,529,511 (23,052,378) (6,620,012) (29,672,390) (3,510,298) (1,077,798) (4,588,096) 945,097 945,097 (26,562,676) (6,752,713) (33,315,389) 107,844,913 $ 110,828,637 (630,791) $ (630,791) $ - 107,214,122 $ 110,197,846 Depreciation Expense was charged to the functions/programs of the government as follows: Governmental activities: General government $ 473,072 Public safety 2,582,381 Streets/Transportation 9,900,419 Public Works 737,902 Culture and recreation 1,622,442 Economic Development 250,610 Internal Service 19,948 Total depreciation expense $ 15,586,774 Business-type activities: Water $ Wastewater Sanitation 910,748 Golf Course 182,032 Total depreciation and amortization expense NOTE 8 64,433 3,430,883 $ 4,588,096 RETIREMENT 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. 65 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 8 RETIREMENT PLANS (Continued) Plan Description Arizona State Retirement Plan - The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefits 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 ARS 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 Arizona State Retirement System, 3300 N. Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling (602) 240-2200 or (800) 621-3778. Arizona Public Safety Personnel Retirement System - The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer 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 five-member board, known as The Fund Manager, and 167 local boards according to the provisions of ARS Title 38, Chapter 5, Article 4. The City contributes to one PSPRS plan for police and one for firefighters. 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, 3010 E. Camelback Rd., Suite 200, Phoenix, AZ 85016-4416 or by calling (602) 255-5575. Funding Policy Cost-sharing plan – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2014, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.54% (11.30% retirement and 0.24% long-term disability) of the member’s annual covered payroll and the City was required by statute to contribute at the actuarially determined rate of 11.54% (10.70% retirement, 0.60% for health insurance premium, and 0.24% long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2014, 2013, and 2012 were $1,496,418, $1,443,868, and $1,393482, respectively. The City contribution for the current and two preceding years, all of which were equal to the required contributions, were as follows: Years ended June 30, 2014 2013 2012 Retirement $ 1,387,494 1,328,514 1,280,602 Long-term Disability Health Insurance $ 77,803 84,247 81,741 $ 31,121 31,107 31,139 Total $ 1,496,418 1,443,868 1,393,482 66 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 8 RETIREMENT PLANS (Continued) Funding Policy (Continued) Agent plans – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2014, active PSPRS members were required by statute to contribute 10.35% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 31.10% (30.08% retirement and 1.02% health insurance premium) of the covered payroll to the Plan for the Police and 22.15% (21.34% retirement and 0.81% health insurance premium) of the covered payroll to the Plan for the Firefighters. Annual Pension Cost The City’s pension cost for the agent plan for the year ended June 30, 2014, and related information follows: Contribution Rates: City – retirement City – health insurance premium Plan members Annual pension cost Retirement Health insurance premium Pension 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 adjustment Amortization method Remaining amortization period Asset valuation method Post retirement benefit increases PSPRS – Police 30.08% 1.02% 7.65% PSPRS - Fire 21.34% 0.81% 7.65% $ $ 1,664,257 56,434 $ $ 920,873 34,953 $ $ 1,664,257 56,434 June 30, 2012 Projected Unit Credit $ $ 920,873 34,953 June 30, 2012 Projected Unit Credit 8.0% 5.0% - 9.0% 8.0% 5.0% - 8.0% None Level Percent Closed 24 years underfunded 20 years overfunded 7-year smoothed market Based on Income None Level Percent Closed 24 years underfunded 20 years overfunded 7-year smoothed market Based on Income 67 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 8 RETIREMENT PLANS (Continued) Annual Pension Cost (Continued) Trend Information - Information for the PSPRS plan as of the most recent actuarial valuations follows: Annual Pension Cost (APC) Plan PSPRS - Police - Pension June 30, 2014 June 30, 2013 June 30, 2012 $ Percentage of APC Contributed Net Pension Obligation 1,664,257 1,422,932 1,219,694 100.0% 100.0% 100.0% - 56,434 61,190 61,361 100.0% 100.0% 100.0% - 920,873 937,506 769,175 100.0% 100.0% 100.0% - 34,953 38,171 37,873 100.0% 100.0% 100.0% - PSPRS - Police - Health Insurance June 30, 2014 June 30, 2013 June 30, 2012 PSPRS - Fire - Pension June 30, 2014 June 30, 2013 June 30, 2012 PSPRS - Fire - Health Insurance June 30, 2014 June 30, 2013 June 30, 2012 Schedule of Funding Progress - An analysis of funding progress for each of the agent plans as most recent actuarial valuations; June 30, 2012 reporting period determines the rates for fiscal year 2014. For this valuation, fiscal years prior to 2008 (which were prior to the implementation of GASB Statement Nos. 43 and 45), the pension and health insurance benefit amounts were aggregated. In fiscal year 2008, GASB Statement Nos. 43 and 45 measurements are made and reported, these benefits are disaggregated and reported separately. Actuarial Accrued Liability PSPRS – Casa Grande Police Pension Plan: Actuarial Unfunded AAL Valuation Actuarial Accrued Unfunded Date Value of Liability AAL Funded (b-a) June 30, Assets (a) 2012 $ 16,848,670 2011 16,383,157 2010 15,562,591 (AAL) (b) $ Annual as a Percent of Covered Covered Payroll Ratio (a/b) Payroll (c) ([b-a]/c) 17,391,354 49.2% $ 5,196,630 334.7% 30,320,506 13,937,349 54.0% 5,077,868 274.4% 27,269,561 11,706,970 57.1% 5,079,289 230.5% 34,240,024 $ 68 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 8 RETIREMENT PLANS (Continued) Actuarial Accrued Liability (Continued) PSPRS – Casa Grande Police Health Insurance Plan: Actuarial Valuation Actuarial Unfunded AAL Accrued Unfunded Annual as a Percent of Date Value of Liability AAL Funded Covered Covered Payroll June 30, Assets (a) (AAL) (b) (b-a) Ratio (a/b) Payroll (c) ([b-a]/c) 2012 668,875 0.0% $ 5,196,630 12.87% 2011 $ - $ 666,368 668,875 $ 666,368 0.0% 5,077,868 13.12% 2010 - 525,879 525,879 0.0% 5,079,289 10.35% PSPRS – Casa Grande Fire Pension Plan: Actuarial Actuarial Valuation Value of Accrued Unfunded Date Plan Assets Liability AAL Funded (b-a) June 30, (a) 2012 $ 11,686,671 2011 10,640,220 2010 9,807,667 Unfunded AAL (AAL) (b) $ Annual as a Percent of Covered Covered Payroll Ratio (a/b) Payroll (c) ([b-a]/c) 7,816,373 59.9% $ 4,559,461 171.4% 17,765,323 7,125,103 59.9% 4,394,082 162.2% 15,651,942 5,844,275 62.7% 4,250,258 137.5% 19,503,044 $ PSPRS – Casa Grande Fire Health Insurance Plan: Actuarial Actuarial Valuation Value of Accrued Date Plan Assets Liability AAL June 30, (a) (AAL) (b) (b-a) 2012 $ - $ 460,054 Unfunded AAL Unfunded $ Annual as a Percent of Funded Covered Covered Payroll Ratio (a/b) Payroll (c) ([b-a]/c) 10.09% 460,054 0.0% $ 4,559,461 2011 - 424,902 424,902 0.0% 4,394,082 9.67% 2010 - 335,710 335,710 0.0% 4,250,258 7.90% Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. 69 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 8 RETIREMENT PLANS (Continued) Annual Required Contribution PSPRS – Casa Grande Police Health Insurance Plan: Valuation Fiscal Year Date Ended Normal Actuarial Accrued June 30, 30-Jun Cost (a) Liability (b) (a+b) 2012 2014 0.34% 0.68% 1.02% 2011 2013 0.43% 0.71% 1.14% 63,821 2010 2012 0.62% 0.52% 1.14% 64,448 Total Dollar Amount $ 58,439 PSPRS – Casa Grande Fire Health Insurance Plan: Valuation Fiscal Year Date Ended Normal Actuarial Accrued June 30, 30-Jun Cost (a) Liability (b) (a+b) 2012 2014 0.27% 0.54% 0.81% 2011 2013 0.30% 0.52% 0.82% 39,725 2010 2012 0.44% 0.40% 0.84% 39,737 Total Dollar Amount $ 40,717 The Health Insurance Subsidy payments reported for valuation year 2012 were $22,206 and $16,625 for the Police plan and the Fire plan, respectively. 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 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, benefit 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 (50) or fifteen years of credited service. This plan was fully vested as of June 30, 2014. As of June 30, 2014, there were 12 eligible employees participating in the plan. The plan is administered by TD Ameritrade. 70 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 8 RETIREMENT PLANS (Continued) Casa Grande Part-Time Firemen’s Pension Plan (Continued) As of June 30, 2014, the plan’s assets consisted of the following: Plan Assets Cash Money Market Funds Mutual Funds NOTE 9 $ Total Assets $ 2,186 10,300 440,874 453,360 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 Human Resources 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 2014 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. Liability for claims and judgments for June 30, 2014 is $820 and for June 30, 2013 is $0. NOTE 10 CAPITAL LEASES Leases at June 30, 2014, 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. $1,539,358 Lease to finance Energy Improvements. The lease qualifies as an Energy Conservation Bond where tax credits are available annually to reduce interest. Payments are due semi-annually at an interest rate of 4.25%, due through July 1, 2027. 2,607,000 Lease to finance Solar Panels. Payments are due semi-annually at an interest rate of 3.59%, due through April 2031. Total Governmental Activities Capital Lease Obligation 3,324,477 $7,470,835 71 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 10 CAPITAL LEASES (Continued) The future minimum lease payments by year are: Fiscal Year Ending June 30, 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2031 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion Government Activities $785,766 787,687 796,905 806,856 811,049 2,960,425 2,316,373 470,395 Business-type Activities $ - 9,735,456 (2,264,621) 7,470,835 (484,087) $ 6,986,748 $ - Total $785,766 787,687 796,905 806,856 811,049 2,960,425 2,316,373 470,395 9,735,456 (2,264,621) $ 7,470,835 (484,087) 6,986,748 Leased Capital Assets The following is an analysis of the leased assets included in capital assets: Building and Improvements: Governmental Activities Assets Total Building and Improvement NOTE 11 Cost $ 11,958,599 $ 11,958,599 Accumulated Depreciation $ $ (1,892,535) (1,892,535) Net Balance $ $ 10,066,064 10,066,064 BOND DEBT General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City. 72 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 11 BOND DEBT (Continued) General Obligation Bonds (Continued) 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 began 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. 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. 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. 73 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 11 BOND DEBT (Continued) General Obligation Bonds (Continued) The following table is a summary of the City’s future general obligation bond debt service requirements: Fiscal year ending June 30, NOTE 12 Governmental Activities Principal Interest Business-Type Activities Principal Interest 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 2035-2038 $ 655,454 765,454 786,818 881,817 927,726 5,718,176 7,514,110 8,560,000 445,000 $ 1,241,612 1,214,035 1,181,993 1,145,416 1,103,927 4,846,573 3,338,568 1,479,300 40,500 $ 54,546 54,546 58,182 78,183 87,274 541,824 240,890 - $ 46,445 44,399 42,354 39,445 35,536 118,087 15,307 - Total $ 26,254,555 $ 15,591,921 $ 1,115,445 $ 341,573 EXCISE TAX REVENUE OBLIGATIONS 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. These bonds were advance refunded for maturities in 2017 to 2022. The present value savings was $868,776. In August, 2009 the City issued $18,800,000 in excise tax revenue obligations consisting of: $7,175,000 in tax exempt obligations 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 constructed 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. In 2012 the City issued Refunding obligations maturing in 2022. These bonds were issued to advance refund the 2003 issue. The interest rates range from 2% to 5%. The net refunding savings was $868,776. Debt service payments were reduced by $949,608. The 2003, 2009, and 2012 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. 74 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 12 EXCISE TAX REVENUE OBLIGATIONS (Continued) The following table summarizes the City’s future revenue obligation debt service requirements as of June 30,2014: Fiscal year ending Governmental Activities June 30, Principal 2015 $ 765,718 $ 914,548 Principal $ Interest 684,282 $ 429,537 2016 802,755 877,577 707,245 402,163 2017 878,087 834,740 1,106,913 373,870 2018 950,356 789,098 1,414,644 351,732 2019 1,001,868 735,393 1,488,132 281,000 2020-2024 5,646,186 2,710,132 4,583,813 414,151 2025-2029 6,875,000 1,037,988 Total NOTE 13 Business-Type Activities Interest $ 16,919,970 $ 7,899,475 $ 9,985,029 $ 2,252,453 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 which was completed in 2011. The original loan was authorized for a total of $62,555,540; however the final balance disbursed to the City of Casa Grande at June 30, 2014 is $59,224,517. The following schedule shows estimated payments based on the amount due of $46,319 556. Fiscal Year Ending June 30, 2015 2016 2017 2018 2019 2020-2024 2025-2029 Principal Interest $ 2,435,873 2,534,014 2,636,109 2,742,318 2,852,806 16,083,587 17,034,849 $ 1,917,371 1,819,230 1,717,134 1,610,925 1,500,437 5,682,888 2,162,065 $ 46,319,556 $ 16,410,050 The twenty year loan has an interest rate of 4.029%. Principal payments ranging from $2,390,542 to $4,497,459 are paid annually with interest paid semi-annually on October 1 and April 1. 75 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 14 CHANGES IN LONG-TERM OBLIGATIONS Beginning Balance Governmental activities: Compensated absences G.O Bonds Excise tax revenue obligations Capital leases Bonds premiums Bonds discounts Governmental activities long-term liabilities Additions Due Within One Year $ 2,028,430 26,905,009 17,652,835 7,831,620 208,806 (309,761) $ 601,189 - $ (650,454) (732,865) (360,785) (19,676) 22,394 $ 2,629,619 26,254,555 16,919,970 7,470,835 189,130 (287,367) $ $ 54,316,939 $ 601,189 $ (1,741,386) $ 53,176,742 $ 2,790,280 Beginning Balance Business-type activities Compensated absences Bonds payable Excise tax revenue obligations Notes payable (1) Loan payable Bond premiums Postclosure liability Business-type activities long-term liabilities Ending Balance Reductions Additions Ending Balance Reductions 885,021 655,454 765,718 484,087 - Due Within One Year $ 251,344 1,169,991 10,637,165 93,927 48,661,088 1,386,204 2,551,350 $ 52,043 88,806 $ (54,545) (652,135) (12,096) (2,341,532) (165,775) - $ 303,387 1,115,446 9,985,030 81,831 46,319,556 1,220,429 2,640,156 $ 136,524 54,546 684,282 12,513 2,435,872 - $ 64,751,069 $ 140,849 $ (3,226,083) $ 61,665,835 $ 3,323,737 (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 paid from various funds in the same proportion that those funds pay payroll costs. During the year ended June 30, 2014, the City primarily paid for compensated absences from the General Fund. 76 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 15 LONG-TERM DEBT The following summarizes the annual debt service requirements to maturity for all bonds, loans, and notes are as follows: Fiscal year ending Governmental Activities June 30, 2015 $ 1,905,259 Business-Type Activities Interest $ 2,454,839 Principal $ Interest 3,174,701 $ 2,393,353 2016 2,078,726 2,368,781 3,295,805 2,265,792 2017 2,207,312 2,271,231 3,801,204 2,133,358 2018 2,408,678 2,164,865 4,235,145 2,002,102 2019 2,535,781 2,044,180 4,428,212 1,816,973 2020-2024 13,617,859 8,263,632 21,209,224 6,215,126 2025-2029 16,436,429 4,645,610 17,275,739 2,177,372 2030-2034 9,010,316 1,502,378 - 2035-2038 445,000 40,500 - Total NOTE 16 Principal $ 50,645,360 $ 25,756,016 $ 57,420,030 $ 19,004,076 LANDFILL CLOSURE AND POST CLOSURE 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 post closure care costs. The City of Casa Grande owns and operates one landfill. Closure and post closure 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, 2014 the City has reported a $2,640,156 landfill closure and postclosure care liability that represents the total current cost based on 55.0 percent of estimated capacity of the landfill. The remaining cost of $2,130,489 will be recognized in the future periods as the remaining capacity is filled. The City expects the remaining capacity to extend for 17 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 2014 valuation of the total closure and postclosure costs were estimated to be $4,770,645. 77 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 17 CONSTRUCTION COMMITMENTS The City has active construction projects as of June 30, 2014. At year end the City’s significant commitments included sewer improvements and road construction. At year end the City’s commitments with contractors are as follows: Project Remaining commitment Spent-to-date Gila Bend Hwy Sewer $ Traffic signals 2,037,880 $ 433,769 48,437 75,985 I-10/Kortsen Rd Traffic Interchange 104,032 479,560 Sewer Modeling & Master Planning 145,300 4,700 NOTE 18 SUMMARY OF INTERFUND TRANSACTIONS Interfund transactions as of June 30, 2014, were as follows: Interfund Receivable/Payable: Receivable Amount Fund General Fun $ System Development Payable Amount 1,387,336 $ - Capital Replacement 586,281 586,281 - Non-Major Funds - 1,104,925 Wastewater Internal Service Fund - 140,273 142,138 Total $ 1,973,617 $ 1,973,617 The inter fund balances at June 30, 2014 are short-term loans to cover temporary cash deficits in various funds. Transfers: Fund General Fund Highway Users Fund System Development Grant & Subsidies Capital Replacement Non-Major Governmental Funds Water Fund Wastewater Fund Wastewater Development Fees Sanitation Fund Golf Course Internal Service Funds Total $ Transfers Out 2,346,529 457,580 954,513 Transfers In 2,328,862 - 3,674,492 570,655 15,520 3,851,990 3,630,000 668,971 103,940 173,450 89,498 2,204,220 4,195,610 16,447,640 7,068,770 254,191.00 222,000 84,489 $ 16,447,640 Transfers between funds are required to move cash as payment for services, or to move cash from fund where revenue is recorded to fund where cost is incurred. 78 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 19 DEFICIT IN FUND BALANCE Three funds had deficits in fund balance. The HOME/HUD fund deficit decreased from $38,875 in the prior year to the current year balance of $557. It is expected that this deficit balance continue to decrease as intergovernmental revenues increase. The Municipal Airport operating fund deficit decreased by $44,056 to a total of $462,311. The Municipal Airport is supported through fuel sales and hanger rentals which continue to be lower than expected. The decrease in the deficit was attributed to the decrease in lease expense for T-hangers which was paid off in FY2014 . The Promotion & Tourism Funds experienced a deficit fund balance of $121,132. Future revenues are expected to cover this deficit. 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 uncommitted tax collected during that quarter. The first payment to WP Casa Grande Retail was made in September, 2008. As of June 30, 2014 $5,472,134 (including $3,062,159 in interest) has been paid. 79 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014 NOTE 21 FUND BALANCE DETAILS BY CLASSIFICATION Major Governmental Non-Major Governmental Funds Funds General Fund balances: Nonspendable: Inventories Restricted for: Highway User Revenue Fund Grants Systems Development Community Services Transportation Debt Services Court Enhancement Housing Public Safety CFD Debt Downtown Revitalization Aesthetic Revitalization Economic Redevelopment Committed to: Assigned to: General Fund Reserves Parks Development Capital Replacement Redevelopment Community Arts Unassigned Total fund balances NOTE 22 $ 6,281 $ - 333,849 4,579,716 250,000 5,806,306 468,440 6,641,582 - 13,384,358 6,892,105 $ 25,446,309 27,124,720 $ 40,041,048 $ 93,031 6,542 2,953,278 5,979,545 3,786,650 209,623 624,896 4,303,604 1,447,032 - 916,867 1,113,017 14,336 (576,846) $ 20,871,575 Total Governmental Funds $ 99,312 5,806,306 474,982 6,641,582 2,953,278 5,979,545 3,786,650 209,623 624,896 4,303,604 1,447,032 333,849 4,579,716 250,000 13,384,358 916,867 27,124,720 1,113,017 14,336 6,315,259 $ 86,358,932 PRIOR PERIOD ADJUSTMENT The beginning net position of the Wastewater Enterprise Fund has been restated on the financial statements to record a prior period adjustment to correct long-term debt recorded in prior years. Long-term debt was overstated and net position was understated by $1,269,706. 80 To Table of Contents Supplementary Information Non-Major Governmental Funds 81 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30, 2014 ASSETS Cash Investments Receivables (less allowance for uncollectibles) Due from other governments Inventory 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 Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred/Delayed revenue Total Deferred Inflows of Resources Fund balances: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balance Municipal Airport $ 50 - Special Revenue Parks Community Develop. Arts $ 82 $ 279 924,747 14,057 16,906 8,948 93,031 $ 118,935 1,830 $ 926,659 $ $ 71,674 6,096 503,476 581,246 $ $ 93,031 (555,342) (462,311) $ 118,935 9,792 9,792 - - 916,867 916,867 $ 926,659 14,336 14,336 14,336 $ 14,336 82 To Table of Contents Redevelopment $ 1,803 1,124,389 Special Revenue Promotion Court & Tourism Enhancement $ $ 67,231 332,078 139,941 $ 1,126,192 $ $ $ 13,175 13,175 - 5,843 506,298 512,141 $ $ - 1,113,017 1,113,017 $ 1,126,192 58,931 391,009 391,009 1,332 1,332 - (121,132) (121,132) $ 3,783 210,955 209,623 209,623 $ 210,955 83 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (Continued) June 30, 2014 ASSETS Cash Investments Receivables (less allowance for uncollectibles) Due from other governments Inventory 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 Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred/Delayed revenue Total Deferred Inflows of Resources Fund balances: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balance Housing Programs $ 55,869 139,265 Special Revenue CDBG $ - Self-help Technical Asst $ 6,542 - 321 $ 195,455 475,016 13,394 $ 488,410 $ $ $ $ 11,600 11,600 - 5,120 3,644 24,654 33,418 6,542 - 13,394 13,394 - 183,855 183,855 441,598 441,598 6,542 6,542 $ 195,455 $ 488,410 $ 6,542 84 To Table of Contents Special Revenue Wildland Fire/ Home/HUD Public Safety $ $ 83,738 13,313 $ 63,220 63,220 13,092 2,186 48,499 63,777 $ $ - 63,220 102 1,948 2,050 359 359 (557) (557) $ 4,986 102,037 $ Debt Service General 2009 Obligation Recreation $ 2,435 $ 3,760,187 24,028 $ 3,786,650 $ $ $ - 99,628 99,628 3,786,650 3,786,650 102,037 $ 3,786,650 - - $ - 85 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (Continued) June 30, 2014 ASSETS Cash Investments Receivables (less allowance for uncollectibles) Due from other governments Inventory 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 Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred/Delayed revenue Total Deferred Inflows of Resources Fund balances: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balance Community Services $ 1,156 2,952,122 Capital Projects Transportation $ 295 5,832,461 $ 2,953,278 $ $ $ - 14,524 14,524 - 2,953,278 2,953,278 $ 2,953,278 5,832,756 5,818,232 5,818,232 $ 5,832,756 86 To Table of Contents Public Safety $ 4,373,823 $ 4,373,823 70,219 70,219 Capital Projects Community Airport Facilities Improvemen $ 505,408 $ 161,313 - $ $ - 2,000 2,000 - 4,303,604 4,303,604 $ 4,373,823 2,003 941,621 1,449,032 $ Total Nonmajor Governmental Funds $ 886,201 19,606,383 34,950 $ 196,263 579,035 129,281 93,031 941,621 $ 22,235,552 $ $ 34,950 34,950 1,447,032 1,447,032 161,313 161,313 1,449,032 $ 196,263 216,473 13,874 1,084,927 1,315,274 48,703 48,703 93,031 19,311,170 2,044,220 (576,846) 20,871,575 $ 22,235,552 87 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended June 30, 2014 REVENUES Taxes: Property taxes Sales Tax Intergovernmental revenues Charges for services Investment earnings Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Municipal Airport $ 742,940 210,321 11,514 964,775 Parks Develop. $ 509 21,012 21,521 Special Revenue Community RedevelopArts ment $ - $ 6 7,287 7,293 645 645 Promotion & Tourism $ 234,722 251 178,218 697 413,888 865,944 - 429 18,124 14,265 - 66,080 - 314,536 - 17,902 218 884,064 18,553 14,265 66,080 314,536 80,711 2,968 (6,972) (65,435) 99,352 2,968 913,899 $ 916,867 5,000 5,000 (1,972) 16,308 14,336 (65,435) 1,178,452 $ 1,113,017 9,375 (46,030) (36,655) 44,056 (506,367) $ (462,311) $ (280,000) (280,000) (180,648) 59,516 $ (121,132) 88 To Table of Contents Court Enhancement Housing Programs $ $ $ 8,452 87,328 82 95,862 83,750 7,798 66 3,420 95,034 CDBG $ 196,330 19,342 215,672 Special Revenue Self Help Wildland Fire/ Tech Asst Home/HUD Public Safety $ - $ 358,149 358,149 $ Debt Service General 2009 Excise Obligation Recreation 130,463 9 29,432 159,904 $ 2,260,916 70 2,260,986 $ - 37,970 - 43,411 - 234,583 - - 318,831 - 75,086 - 4,500 - 3,500 - 37,970 43,411 234,583 - 318,831 75,086 545,454 1,023,901 1,573,855 675,000 907,535 1,586,035 57,892 51,623 (18,911) - 39,318 84,818 687,131 (18,911) 460,509 $ 441,598 $ 6,542 6,542 0 (50,000) (50,000) 7,892 201,731 209,623 51,623 132,232 $ 183,855 39,318 (39,875) $ (557) $ 84,818 14,810 99,628 427,368 (102,000) 325,368 1,012,499 2,774,151 $ 3,786,650 (1,586,035) 1,589,095.00 1,589,095 3,060 (3,060) $ - 89 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS (Continued) For the Year Ended June 30, 2014 REVENUES Taxes: Property taxes Sales Tax Intergovernmental revenues Charges for services Investment earnings Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Community Services $ 129,539 1,621 131,160 Capital Projects Public Safety Transportation $ 484,365 3,162 487,527 $ 282,393 1,467 283,860 - 149,032 1,357,573 - 149,032 1,357,573 131,160 338,495 (1,073,713) 131,160 2,822,118 $ 2,953,278 338,495 5,479,737 $ 5,818,232 2,163,062 (9,325) 2,153,737 1,080,024 3,223,580 $ 4,303,604 90 To Table of Contents Capital Projects Community Airport Facilities Improvement $ 478,137 25 450 478,612 172,293 172,293 $ 2,739,053 234,722 949,437 1,734,363 7,913 409,551 72,142 6,147,181 11,046 - 38,264 1,180,480 113,056 18,194 678,451 1,562,993 105,000 243,521 359,567 38,264 1,343,356 2,175,175 7,071,705 119,045 134,029 (924,524) 1,710 1,710 135,739 25,574 161,313 4,195,610 (570,655) 3,624,955 2,700,431 18,171,144 $ 20,871,575 (83,300) (83,300) 35,745 1,411,287 $ 1,447,032 $ Total Nonmajor Governmental Funds $ 91 To Table of Contents 92 To Table of Contents Supplementary Information Fiduciary Funds 93 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION ALL AGENCY FUNDS June 30, 2014 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 $ 1,752,205 $ 41,685 - Sun Corridor MPO Fund $ 74,276 - Total $ 115,961 1,752,205 1,752,205 41,685 74,276 1,868,166 1,752,205 41,685 74,276 1,868,166 1,752,205 41,685 74,276 1,868,166 - $ - $ - $ - 94 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS June 30, 2014 Balance June 30, 2011 Performance Bond Fund Assets: Cash Investments Total Assets Liabilities: Other Liabilities Accounts Payable Flexible Spending Plan Fund Assets: Cash Total Assets Liabilities: Other Liabilities Accounts Payable Sun Corridor MPO Assets: Cash Total Assets Liabilities: Other Liabilities Accounts Payable Totals - All Agency Funds Assets: Cash Investments Total Assets Liabilities: Other Liabilities Accounts Payable Total Liabilities $ 1,687,445 1,687,445 Additions $ Deductions Balance June 30, 2012 262,152 263,597 525,749 $ (262,152) (198,837) (460,989) $ 1,752,205 1,752,205 1,684,818 2,627 1,687,445 64,584 198,837 263,421 (198,661) (198,661) 1,749,402 2,803 1,752,205 17,725 17,725 178,241 178,241 (154,281) (154,281) 41,685 41,685 11,075 6,650 17,725 30,610 30,610 (6,650) - 41,685 41,685 - 137,303 137,303 (63,027) (63,027) 74,276 74,276 - 67,750 6,526 74,276 - 67,750 6,526 74,276 1,687,445 1,687,445 137,303 263,597 400,900 (63,027) (198,837) (261,864) 115,961 1,752,205 1,868,166 1,695,893 9,277 $ 1,705,170 162,944 205,363 368,307 (205,311) $ (205,311) 1,858,837 9,329 $ 1,868,166 $ 95 To Table of Contents 96 To Table of Contents Other Supplementary Information 97 To Table of Contents CITY OF CASA GRANDE, ARIZONA GENERAL FUND SCHEDULE OF EXPENDITURES - LEGAL LEVEL BUDGET COMPLIANCE Year Ended June 30, 2014 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 $ 153,650 1,945,860 Final $ 153,650 1,122,860 Actual Amounts $ 154,573 1,020,908 Budget Variance $ (923) 101,952 753,450 125,550 753,450 150,550 762,380 166,945 (8,930) (16,395) 677,610 53,970 677,610 53,970 658,754 39,894 18,856 14,076 298,740 105,290 298,740 105,290 249,290 66,236 49,450 39,054 845,880 187,170 845,880 187,170 838,843 191,058 7,037 (3,888) 816,960 905,480 816,960 915,480 779,360 985,007 37,600 (69,527) 557,310 250,220 557,310 250,220 557,029 150,746 281 99,474 10,701,630 2,020,240 10,806,630 1,990,240 10,918,430 1,868,717 (111,800) 121,523 5,964,210 995,740 6,714,210 995,740 6,765,136 999,751 (50,926) (4,011) 509,740 166,100 509,740 166,100 517,910 152,822 (8,170) 13,278 256,300 79,600 256,300 99,600 258,963 94,281 (2,663) 5,319 1,184,120 121,250 1,192,120 121,750 1,234,519 111,983 (42,399) 9,767 3,503,620 2,329,620 3,316,620 2,329,620 3,257,773 2,329,639 58,847 (19) 1,571,390 166,600 1,142,000 71,920 $ 38,461,220 1,571,390 166,600 1,142,000 73,420 $ 38,341,220 1,620,649 194,265 149,985 37,095,846 (49,259) (27,665) 992,015 73,420 1,245,374 $ $ 98 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, 2014 Budgeted Amounts REVENUES Investment earnings Miscellaneous revenue Construction sales tax Total revenues EXPENDITURES Contractual services Lease Purchase Principal & Interest Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Proceeds from obligations Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Final 13,200 3,684,000 3,697,200 Actual Amounts $ 25,402 278,952 2,370,345 2,674,699 Variance with Final Budget $ 12,202 278,952 (1,313,655) (1,022,501) 360,490 35,567,170 35,927,660 4,000 127,170 35,563,290 35,694,460 3,600 360,021 4,256,737 4,620,358 400 (232,851) 31,306,553 31,074,102 (33,400,460) (31,997,260) (1,945,659) 30,051,601 2,313,670 (2,220,000) 36,000,000 36,093,670 2,693,210 30,540,651 $ 33,233,861 2,313,670 (2,220,000) 36,000,000 36,093,670 4,096,410 30,540,651 $ 34,637,061 2,204,220 (3,674,492) (1,470,272) (3,415,931) 30,540,651 $ 27,124,720 Original $ 13,200 2,514,000 2,527,200 $ (109,450) (1,454,492) (36,000,000) (37,563,942) (7,512,341) $ (7,512,341) 99 To Table of Contents CITY OF CASA GRANDE, ARIZONA SYSTEM DEVELOPMENT FUND SCHEULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET TO ACTUAL June 30, 2014 Budgeted Amounts Original ($678,000) (11,850) (689,850) Final ($678,000) (11,850) (689,850) EXPENDITURES Culture and recreation Capital outlay Total expenditures 1,840,000 (1,063,800) 776,200 1,840,000 (976,030) 863,970 251,229 74,081 325,310 1,588,771 (1,050,111) 538,660 (1,466,050) (1,553,820) (215,140) 1,338,680 (1,466,050) 7,811,235 $ 6,345,185 (1,553,820) 7,811,235 $ 6,257,415 (954,513) (954,513) (1,169,653) 7,811,235 $ 6,641,582 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 Actual Amounts $105,900 4,270 110,170 Variance with Final Budget$783,900 16,120 800,020 REVENUES Charges for services Investment earnings Total revenues (954,513) (954,513) 384,167 $ 384,167 100 To Table of Contents CITY OF CASA GRANDE, ARIZONA MUNICIPAL AIRPORT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET TO ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Investment earnings Charge for service Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government: Personal services Contractual services Materials and supplies Capital outlay Debt service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Proceeds from obligations Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year 1,295,000 235,000 10,000 1,540,000 Actual Amounts $ 742,940 210,321 11,514 964,775 Variance with Final Budget $ (552,060) (24,679) 1,514 (575,225) 182,960 143,440 1,098,630 1,211,000 18,120 2,654,150 182,960 143,440 1,098,630 1,211,000 18,120 2,654,150 124,130 76,465 665,349 18,120 884,064 (58,830) (66,975) (433,281) (1,211,000) 1,770,086 (1,113,550) (1,114,150) 80,711 1,194,861 10,000 (46,030) 1,150,000 1,113,970 420 (506,367) $ (505,947) 10,000 (46,030) 1,150,000 1,113,970 (180) (506,367) $ (506,547) Original $ 1,295,000 235,600 10,000 1,540,600 $ Final 9,375 (46,030) (36,655) 44,056 (506,367) $ (462,311) (625) (1,150,000) (1,150,625) 44,236 $ 44,236 101 To Table of Contents CITY OF CASA GRANDE, ARIZONA PARKS DEVELOPMENT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET TO ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Investment earnings Rental and sale of City property Miscellaneous Total revenues EXPENDITURES Current: Culture and recreation: Contractual services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Final 500 36,000 36,500 Actual Amounts $ 509 21,012 0 21,521 Variance with Final Budget $ 9 (14,988) (14,979) 80,000 80,000 80,000 80,000 429 18,124 18,553 (429) 61,876 61,447 (43,500) (43,500) 2,968 46,468 Original $ 500 36,000 36,500 $ 913,899 870,399 $ $ 913,899 870,399 $ 913,899 916,867 $ 46,468 102 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 TO ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts Final 15,000 15,000 Actual Amounts $ 7,287 6 7,293 Variance with Final Budget $ (7,713) 6 (7,707) 7,700 15,000 22,700 6,400 17,700 5,000 29,100 14,251 14 14,265 (7,851) 17,686 5,000 14,835 Excess (deficiency) of revenues over (under) expenditures (7,700) (14,100) (6,972) 7,128 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 (2,700) 16,308 13,608 5,000 5,000 (9,100) 16,308 7,208 5,000 5,000 (1,972) 16,308 14,336 7,128 7,128 REVENUES Miscellaneous Investment earnings Total revenues Original $ 15,000 15,000 EXPENDITURES Current: Culture and recreation: Contractual services Materials and supplies Capital outlay Total expenditures $ $ $ $ $ 103 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, 2014 Budgeted Amounts REVENUES Investment earnings Total revenues Original $ - EXPENDITURES Current: Economic development: Contractual services Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ $ Final - Actual Amounts $ 645 645 Variance with Final Budget $ 645 645 250,000 250,000 70,000 70,000 66,080 66,080 3,920 3,920 (250,000) (70,000) (65,435) 4,565 1,178,452 928,452 1,178,452 $ 1,108,452 1,178,452 $ 1,113,017 $ 4,565 104 To Table of Contents CITY OF CASA GRANDE, ARIZONA PROMOTION AND TOURISM SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Local taxes Miscellaneous Facility Use Investment earnings Total revenues EXPENDITURES Current: General government: Contractual services Materials & supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING USES Transfers out Net change in fund balance Fund balance - beginning of year Fund balance - end of year Final 253,000 200 253,200 Actual Amounts $ 234,722 697 178,218 251 413,888 Variance with Final Budget $ (18,278) 697 178,218 51 160,688 100,000 100,000 100,000 100,000 119,266 195,270 314,536 (19,266) (195,270) (214,536) 153,200 153,200 99,352 (53,848) Original $ 253,000 200 253,200 (280,000) (126,800) 59,516 $ (67,284) $ (280,000) 153,200 59,516 $ 212,716 (280,000) (180,648) 59,516 $ (121,132) $ (333,848) (333,848) 105 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, 2014 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment earnings Total revenues EXPENDITURES Current: Public safety: Personal services Contractual services Materials and supplies Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING USES Transfers in Transfers out Total other financing uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Final 7,000 43,000 50,000 Actual Amounts $ 8,452 87,328 82 95,862 Variance with Final Budget $ 1,452 44,328 82 45,862 24,000 500 24,500 18,900 13,300 500 32,700 5,427 19,355 13,188 37,970 (5,427) (455) 112 500 (5,270) 25,500 17,300 57,892 40,592 25,500 201,731 227,231 17,300 201,731 219,031 (50,000) (50,000) 7,892 201,731 209,623 (50,000) (50,000) (9,408) (9,408) Original $ 7,000 43,000 50,000 $ $ $ $ $ 106 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, 2014 Budgeted Amounts REVENUES Charges for service Intergovernmental Investment earnings Loan fees Total revenues 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 2,000 - Actual Amounts $ 7,798 83,750 66 3,420 95,034 Variance with Final Budget $ 7,798 83,750 66 1,420 93,034 - 200 32,000 200 32,400 6,170 36,818 423 43,411 (5,970) (4,818) (223) (11,011) 2,000 (32,400) 51,623 82,023 Original $ 2,000 2,000 $ 132,232 134,232 $ $ Final 132,232 99,832 $ 132,232 183,855 $ 82,023 107 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Intergovernmental revenues Program income Total revenues EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original $500,000 500,000 Final $500,000 500,000 495,000 495,000 495,000 960 495,960 5,000 4,040 460,509 $ 465,509 460,509 $ 464,549 Actual Amounts $196,330 19,342 215,672 Variance with Final Budget ($303,670) 19,342 (284,328) 70,597 159,775 4,211 234,583 (70,597) 335,225 (3,251) 261,377 (18,911) (22,951) 460,509 $441,598 ($22,951) 108 To Table of Contents CITY OF CASA GRANDE, ARIZONA SELF-HELP TECHNICAL ASSISTANCE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original $131,790 131,790 Final $131,790 131,790 131,790 131,790 131,790 131,790 $ 6,542 6,542 Actual Amounts - - $ 6,542 6,542 Variance with Final Budget ($131,790) (131,790) 131,790 131,790 $ 6,542 6,542 $ - 109 To Table of Contents CITY OF CASA GRANDE, ARIZONA HOME/HUD SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original - Final - Actual Amounts 358,149 358,149 Variance with Final Budget 358,149 358,149 - - 56,839 261,246 746 318,831 (56,839) (261,246) (746) (318,831) - - 39,318 39,318 (39,875) (39,875) (39,875) (39,875) (39,875) (557) 39,318 110 To Table of Contents CITY OF CASA GRANDE, ARIZONA WILDLAND FIREFIGHTING/PUPLIC SAFETY SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 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 Final $236,620 19,000 255,620 Actual Amounts $130,463 9 29,432 159,904 236,620 19,000 255,620 236,620 25,100 261,720 50,159 24,927 75,086 186,461 173 186,634 84,818 90,918 $ Variance with Final Budget ($106,157) 9 10,432 (95,716) Original $236,620 19,000 255,620 14,810 14,810 (6,100) $ 14,810 8,710 $ 14,810 99,628 $ 90,918 111 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, 2014 Budgeted Amounts REVENUES Property tax Investment earnings Total revenues EXPENDITURES Current: Contractual services Debt Service Principal retirement Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other financing uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ 1,775,000 1,775,000 - Final 1,775,000 1,775,000 - Actual Amounts $ 2,260,916 70 2,260,986 Variance with Final Budget $ 485,916 70 485,986 4,500 (4,500) 600,000 1,072,260 1,672,260 600,000 1,072,260 1,672,260 545,454 1,023,901 1,573,855 54,546 48,359 98,405 102,740 102,740 687,131 584,391 (102,000) (102,000) 740 2,774,151 $ 2,774,891 (102,000) (102,000) 740 2,774,151 $ 2,774,891 427,368 (102,000) 325,368 1,012,499 2,774,151 $ 3,786,650 $ 427,368 427,368 584,391 584,391 112 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, 2014 Budgeted Amounts REVENUES Total revenues EXPENDITURES Current: Contractual services Debt Service: Principal retirement Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ - $ Final - Actual Amounts $ - Variance with Final Budget $ - 4,000 4,000 3,500 500 675,000 907,540 1,586,540 675,000 907,540 1,586,540 675,000 907,535 1,586,035 5 505 (1,586,540) (1,586,540) (1,586,035) 505 1,587,110 1,587,110 570 (3,060) $ (2,490) 1,587,110 1,587,110 570 (3,060) $ (2,490) 1,589,095 1,589,095 3,060 (3,060) $ - 1,985 1,985 2,490 2,490 - $ 113 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMMUNITY SERVICES CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Charges for Services Investment earnings Total revenues EXPENDITURES Culture and recreation Capital Outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures 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 $ 4,550 4,550 $ Final 4,550 4,550 Actual Amounts $ 129,539 1,621 131,160 Variance with Final Budget $ 129,539 (2,929) 126,610 2,500,000 2,500,000 - - - (2,495,450) 4,550 131,160 126,610 (2,495,450) 2,822,118 $ 326,668 4,550 2,822,118 $ 2,826,668 131,160 2,822,118 $ 2,953,278 126,610 126,610 $ 114 To Table of Contents CITY OF CASA GRANDE, ARIZONA TRANSPORTATION CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Charges for Services Investment earnings Total revenues EXPENDITURES Capital Outlay Total expenditures Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ 6,650 6,650 6,650 5,479,737 $ 5,486,387 $ 6,650 6,650 Actual Amounts $ 484,365 3,162 487,527 312,230 312,230 149,032 149,032 163,198 163,198 338,495 5,479,737 5,818,232 644,075 644,075 Final (305,580) 5,479,737 $ 5,174,157 $ Variance with Final Budget $ 484,365 (3,488) 480,877 $ 115 To Table of Contents CITY OF CASA GRANDE, ARIZONA PUBLIC SAFETY CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Charges for Services Investment earnings Total revenues EXPENDITURES Capital Outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ 6,650 6,650 $ Final 6,650 6,650 Actual Amounts $ 282,393 1,467 283,860 Variance with Final Budget $ 282,393 (5,183) 277,210 - - 1,357,573 1,357,573 1,357,573 1,357,573 6,650 6,650 (1,073,713) (1,080,363) 6,650 3,223,580 $ 3,230,230 6,650 3,223,580 $ 3,230,230 2,163,062 (9,325) 2,153,737 1,080,024 3,223,580 $ 4,303,604 2,163,062 (9,325) 2,153,737 1,073,374 $ 1,073,374 116 To Table of Contents CITY OF CASA GRANDE, ARIZONA COMMUNITY FACILITIES DISTRICTS - CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended June 30, 2014 Budgeted Amounts REVENUES Property Tax Developer Contribution Investment Earnings Total revenues EXPENDITURES Contractual services Capital outlay Debt Service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfer in Transfers out Bond issuance Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Final 579,800 579,800 Actual Amounts $ 478,137 450 25 478,612 Variance with Final Budget $ (101,663) 450 25 (101,188) 16,000 10,000,000 347,920 9,914,200 284,170 11,046 348,521 (11,046) 9,914,200 (64,351) 10,363,920 10,198,370 359,567 9,838,803 (9,784,120) (9,618,570) 119,045 9,737,615 Original $ 579,800 579,800 10,000,000 10,000,000 215,880 1,411,287 $ 1,627,167 $ (45,400) 10,000,000 9,954,600 336,030 1,411,287 $ 1,747,317 (83,300) (83,300) 35,745 1,411,287 $ 1,447,032 (37,900) (10,000,000) (10,037,900) (300,285) $ (300,285) 117 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, 2014 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues EXPENDITURES Contractual services Capital outlay Total expenditures 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 Original $ 8,500,000 8,500,000 Final $ 8,500,000 8,500,000 Actual Amounts $ 172,293 172,293 Variance with Final Budget $ (8,327,707) (8,327,707) 9,000,000 9,000,000 9,000,000 9,000,000 38,264 38,264 8,961,736 8,961,736 (500,000) (500,000) 134,029 634,029 (500,000) 25,574 $ (4,102,726) (500,000) 25,574 $ (4,106,626) 1,710 1,710 135,739 25,574 161,313 1,710 1,710 635,739 635,739 $ $ 118 To Table of Contents CITY OF CASA GRANDE, ARIZONA COPPER MOUNTAIN RANCH WATER ENTERPRISE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - BUDGET BASIS For the Year Ended June 30, 2014 Budgeted Amounts OPERATING REVENUES: Service fees Miscellaneous Total operating revenues OPERATING EXPENSES: Personal services Contractual Materials and supplies Capital outlay Depreciation Total operating expenses Operating Income NONOPERATING REVENUE (EXPENSES): Interest expense Total nonoperating revenue (expense) Income (loss) before transfers Transfers out Net change in Fund Balance Fund Balance - beginning of year Fund Balance - end of year Original $ 185,800 185,800 Actual Amounts Final $ 185,800 185,800 $ 181,120 195 181,315 Variance with Final Budget $ (4,680) 195 (4,485) 19,540 121,090 64,000 100,500 305,130 71,740 101,600 66,000 34,600 273,940 71,163 91,273 56,320 24,380 243,136 577 10,327 9,680 10,220 30,804 (119,330) (88,140) (61,821) 26,319 (14,110) (14,110) (3,090) (3,090) (3,021) (3,021) 69 69 (133,440) (91,230) (64,842) 26,388 (15,520) (15,520) (15,520) - (148,960) (106,750) (80,362) 26,388 1,286,334 $ 1,137,374 1,286,334 $ 1,179,584 1,286,334 $ 1,205,972 $ 26,388 119 To Table of Contents CITY OF CASA GRANDE, ARIZONA WASTEWATER ENTERPRISE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - BUDGET BASIS For the Year Ended June 30, 2014 Budgeted Amounts OPERATING REVENUES: Service fees Connection fees Miscellaneous Total operating revenues Original Final Actual Amounts $ 7,216,000 5,000 6,000 7,227,000 $ 7,216,000 5,000 6,000 7,227,000 $ 8,047,043 (3,198) 45,860 8,089,705 OPERATING EXPENSES: Personal services Contractual Materials and supplies Capital outlay Depreciation Total operating expenses 872,510 2,655,190 1,728,530 1,298,000 6,554,230 872,510 2,384,390 2,003,530 147,300 5,407,730 881,171 1,548,267 1,389,592 253,016 4,072,046 (8,661) 836,123 613,938 (105,716) 1,335,684 672,770 1,819,270 4,017,659 2,198,389 (5,100) (4,314,720) (4,319,820) (5,100) (5,461,220) (5,466,320) 4,750 (2,309,188) (2,304,438) 9,850 3,152,032 3,161,882 (3,647,050) (3,647,050) 1,713,221 5,360,271 Transfers in Transfers out 1,500,000 (3,884,350) 1,500,000 (3,884,350) 4,938,770 (3,851,990) 3,438,770 32,360 Excess (deficiency) of revenues Net change in Fund Balance (6,031,400) (6,031,400) 2,800,001 8,831,401 41,522,397 1,269,706 42,792,103 $ 45,592,104 1,269,706 1,269,706 $ 10,101,107 Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense Total nonoperating revenue (expense) Income (loss) before contributions and transfers Fund Balance - beginning of year Prior period adjustment Net Assets - beginning of year - restated Fund Balance - end of year 41,522,397 41,522,397 $ 35,490,997 41,522,397 41,522,397 $ 35,490,997 Variance with Final Budget $ 831,043 (8,198) 39,860 862,705 120 To Table of Contents CITY OF CASA GRANDE, ARIZONA WASTEWATER DEVELOPMENT FEES ENTERPRISE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - BUDGET BASIS For the Year Ended June 30, 2014 Budgeted Amounts OPERATING REVENUES: Fees Total operating revenues OPERATING EXPENSES: Depreciation Total operating expenses Operating Income NONOPERATING REVENUE : Interest income Total nonoperating revenue Income (loss) before transfers Impact fees Transfers out Net change in Fund Balance Fund Balance - beginning of year Fund Balance - end of year Original $ - Actual Amounts Final $ - $ - Variance with Final Budget $ - 193,000 193,000 193,000 193,000 86,690 86,690 106,310 106,310 (193,000) (193,000) (86,690) 106,310 (4,000) (4,000) (4,000) (4,000) (197,000) (197,000) (84,821) 193,000 (1,500,000) 193,000 (1,500,000) 569,621 (3,630,000) 376,621 (2,130,000) (1,504,000) (1,504,000) (3,145,200) (1,641,200) 12,349,623 $ 10,845,623 12,349,623 $ 10,845,623 1,869 1,869 12,349,623 $ 9,204,423 5,869 5,869 112,179 $ (1,641,200) 121 To Table of Contents CITY OF CASA GRANDE, ARIZONA SANITATION/DEVELOPMENT ENTERPRISE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - BUDGET BASIS For the Year Ended June 30, 2014 Budgeted Amounts OPERATING REVENUES: Service fees Recycling revenue Miscellaneous Total operating revenues OPERATING EXPENSES: Personal services Contractual Materials and supplies Capital outlay Depreciation Closure and postclosure costs Total operating expenses Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense Total nonoperating revenue (expense) Income before transfers Transfers in Transfers out Net change in Fund Balance Fund Balance - beginning of year Fund Balance - end of year Original Final Actual Amounts Variance with Final Budget $ 6,500,000 116,000 3,000 6,619,000 $ 6,500,000 116,000 3,000 6,619,000 $ 6,230,286 155,266 10,750 6,396,302 2,528,240 1,314,940 930,570 2,456,750 150,000 7,380,500 2,528,240 1,314,940 930,570 2,456,750 150,000 7,380,500 2,410,337 1,260,492 739,767 650,001 88,806 5,149,403 117,903 54,448 190,803 1,806,749 61,194 2,231,097 $ (269,714) 39,266 7,750 (222,698) (761,500) (761,500) 1,246,899 2,008,399 (2,000) (2,240) (4,240) (2,000) (2,240) (4,240) 2,298 2,298 4,298 2,240 6,538 (765,740) (765,740) 1,249,197 2,014,937 860,000 (1,238,770) 860,000 (1,238,770) (668,971) (2,004,510) (2,004,510) 580,226 2,584,736 6,187,043 $ 6,767,269 $ 2,584,736 6,187,043 $ 4,182,533 6,187,043 $ 4,182,533 (860,000) 569,799 122 To Table of Contents CITY OF CASA GRANDE, ARIZONA GOLF COURSE ENTERPRISE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - BUDGET BASIS For the Year Ended June 30, 2014 Budgeted Amounts OPERATING REVENUES: Rental Green fees Miscellaneous Total operating revenues Original $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Capital outlay Depreciation Total operating expenses 143,520 1,084,010 3,000 1,230,530 Final $ 516,840 205,350 437,800 130,000 1,289,990 Operating Income 143,520 1,084,010 3,000 1,230,530 484,940 205,350 436,800 161,900 1,288,990 $ Actual Amounts Variance with Final Budget 144,415 931,599 2,609 1,078,623 $ 392,253 212,095 378,761 55,102 1,038,211 895 (152,411) (391) (151,907) 92,687 (6,745) 58,039 106,798 250,779 (59,460) (58,460) 40,412 98,872 NONOPERATING REVENUE (EXPENSE): Interest expense City sales tax Total nonoperating revenue (102,000) (19,000) (121,000) (19,000) (122,000) (46,895) 29,098 (17,797) (46,895) 48,098 104,203 Income (loss) before transfers (180,460) (180,460) 22,615 203,075 222,000 (103,940) 222,000 (103,940) 222,000 (103,940) (62,400) (62,400) 140,675 Transfers in Transfers out Net change in Fund Balance Fund Balance - beginning of year Fund Balance - end of year $ 1,036,745 974,345 $ 1,036,745 974,345 1,036,745 $ 1,177,420 203,075 $ 203,075 123 To Table of Contents CITY OF CASA GRANDE, ARIZONA CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE June 30, 2014 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 $ 19,689,804 70,120,490 228,808,168 24,214,443 $ 342,832,905 $ 6,531,784 4,724,444 12,282,625 122,527,289 88,469,448 108,297,315 $ 342,832,905 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 position. 124 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, 2014 Function and Activity General government Public safety General Capital Assets June 30, 2013 $ 17,197,576 Additions $ General Capital Assets June 30, 2014 Adjustments/ Disposals 1,811,829 $ - $ 43,631,922 1,645,614 206,842,335 5,156,273 7,099,275 2,038,183 (19,404) 9,118,054 Culture and recreation 40,030,494 - (38,545) 39,991,949 Economic development 18,408,691 - $ 333,210,293 $ 10,651,899 Streets/Transportation Public works Total (971,338) 19,009,405 44,306,198 - 211,998,608 $ (1,029,287) 18,408,691 $ 342,832,905 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 position. 125 To Table of Contents 126 To Table of Contents Statistical Section 127 To Table of Contents 128 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 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. Page 130 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. 140 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. 144 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. 153 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. 156 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 129 To Table of Contents Schedule 1 City of Casa Grande Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) 2005 2006 June 30 2007 2008 2009 Governmental activities Net investment in Capital Assets Restricted Unrestricted Total governmental activities net assets $ 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 $ 166,666,266 63,759,736 29,204,011 $ 259,630,013 Business-type activities Net investment in Capital Assets Restricted Unrestricted Total business-type activities net assets $ 19,179,454 7,202,857 4,985,723 $ 31,368,034 $ $ $ $ $ Primary government Net investment in Capital Assets Restricted Unrestricted Total primary government net assets $ 47,316,069 32,908,111 15,866,652 $ 96,090,832 $ 101,993,495 51,046,988 26,066,096 $ 179,106,579 27,728,464 11,541,534 8,492,036 47,762,034 $ 29,545,366 15,292,233 9,374,364 54,211,963 $ 150,942,517 76,893,003 34,254,602 $ 262,090,122 $ 33,189,049 19,276,562 7,191,725 59,657,336 $ 177,728,654 96,628,994 37,122,055 $ 311,479,703 $ 42,819,605 16,814,023 1,188,222 60,821,850 $ 209,485,871 80,573,759 30,392,233 $ 320,451,863 130 To Table of Contents 2010 2011 2012 2013 2014 $ 169,037,582 66,259,746 24,786,399 $ 260,083,727 $ 163,072,110 68,817,721 20,795,291 $ 252,685,122 $ 161,430,232 37,158,304 48,679,263 $ 247,267,799 $ 157,440,959 40,395,789 46,777,093 $ 244,613,841 $ 151,713,255 23,313,575 61,348,678 $ 236,375,508 $ $ $ $ $ $ 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 $ 49,361,435 11,742,168 3,708,031 64,811,634 $ 210,791,667 48,900,472 52,387,294 $ 312,079,433 $ 47,631,810 9,245,649 5,504,681 62,382,140 $ 205,072,769 49,641,438 52,281,774 $ 306,995,981 $ 50,220,938 6,187,139 5,332,500 61,740,577 $ 201,934,193 29,500,714 66,681,178 $ 298,116,085 131 To Table of Contents Schedule 2 City of Casa Grande Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) 2005 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 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 $ General Revenues and Other Changes in Net Position 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 position Total Governmental Activities Change in Net Position 4,100,221 11,789,718 3,437,830 778,974 4,147,490 2,716,784 477,956 27,448,973 $ (1,806,916) June 30 2007 2006 $ 4,463,957 13,504,033 5,486,251 1,868,890 4,978,247 4,468,076 500,879 35,270,333 $ 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 $ 38,095,195 5,196,569 14,765,435 9,650,354 2,144,675 5,247,404 5,564,781 610,630 43,179,848 133,192 1,091,960 996,571 33,994 328,163 13,115,223 2,580,633 2,456,074 863,185 9,066,924 14,852,514 45,518,433 $ 2,338,585 2008 $ 6,958,153 17,799,896 10,614,899 1,652,940 5,853,610 5,932,564 641,914 49,453,976 2009 $ 144,550 1,214,170 1,345,035 100,784 378,268 8,272,278 1,692,576 694,885 627,986 9,303,041 22,402,954 46,176,527 $ (3,277,449) 7,824,380 20,384,692 12,198,334 2,336,854 7,696,876 4,367,403 972,791 55,781,330 131,394 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) 2,333,638 12,094,301 954,853 2,401,386 14,973,622 1,236,366 2,475,296 22,708,648 1,511,751 3,105,864 28,082,890 1,687,014 6,264,879 23,313,628 1,910,594 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 2,583,416 4,793,336 2,126,092 815,213 20,605,740 $ 66,621,747 $ 43,705,787 $ 43,944,208 440,101 (563,426) 41,683,833 $ 7,807,646 132 To Table of Contents 2010 $ 2011 6,961,775 20,366,672 12,007,921 2,335,926 6,828,387 4,700,480 2,145,146 55,346,307 $ 153,150 1,135,284 1,144,798 9,736 469,536 1,414,107 494,055 55,896 842,301 7,469,173 4,841,012 18,029,048 $ (37,317,259) 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) 2013 6,943,378 22,629,105 13,442,435 2,542,009 7,247,394 3,186,873 2,670,881 58,662,075 $ 173,396 1,370,883 1,369,817 26,595 601,627 161,576 290,999 40,880 429,012 7,420,053 3,507,353 15,392,191 $ (43,269,884) 2014 6,766,944 24,280,544 12,494,463 3,205,901 7,273,320 3,117,655 2,367,185 59,506,012 $ 342,086 1,182,158 1,112,963 60,757 443,652 2,198,089 988,908 74,375 416,676 6,823,705 10,177,899 23,821,268 $ (35,684,744) 7,010,252 25,534,564 13,511,907 2,666,121 7,859,818 3,269,820 2,333,855 62,186,337 304,629 1,345,626 960,368 33,133 502,803 110,170 846,542 16,393 163,809 7,163,717 1,333,697 12,780,887 $ (49,405,450) 7,422,710 19,776,002 1,947,031 6,570,203 18,973,408 2,196,398 6,439,021 18,901,163 2,201,312 6,877,452 19,242,309 2,248,227 6,197,813 19,650,998 2,248,466 2,382,825 4,106,244 2,034,181 107,521 2,590,692 2,897,028 1,992,071 108,552 3,795,352 4,099,428 2,137,645 67,705 3,975,626 4,961,423 2,129,894 3,586 4,227,755 5,413,854 2,259,469 330,546 - - 625,779 (631,320) 37,770,973 $ 2012 453,714 - 81,130 593,445 36,002,927 $ (7,398,605) - 121,530 94,464 37,857,620 $ (5,412,264) 49,172 1,337,500 40,825,189 $ 5,140,445 112,756 725,460 41,167,117 $ (8,238,333) 133 To Table of Contents Schedule 3 City of Casa Grande Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) 2005 Business-type Activities: Expenses Water Golf course Wastewater Sanitation Total expenses $ Revenues Charges for services: Water Golf course Wastewater Sanitation Sales taxes Investment earnings Miscellaneous Capital grants and contributions Total revenues Total Business-type Activities Net Program Expense $ Other Changes in Net Position Transfers 158,397 844,434 2,487,685 3,148,693 6,639,209 $ 98,048 928,321 3,138,128 3,538,650 7,703,147 186,225 584,429 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 9,496,374 $ 16,743,202 (99,000) June 30 2007 2006 $ 115,599 1,107,942 5,413,331 3,902,782 10,539,654 2008 $ 193,909 784,983 6,001,607 4,963,964 2,124,036 1,167,957 73,411 2,129,515 17,439,382 $ (349,200) 6,899,728 $ 9,397,374 $ 16,394,002 $ 6,449,928 Total Primary Government Change in Net Position $ 30,003,114 $ 83,015,749 $ 50,155,715 $ 190,125 797,501 5,972,329 4,990,169 14,203 919,273 155,834 2,580,813 15,620,247 $ (449,800) Total Business-type Activities Change in Net Position 117,638 967,750 4,522,025 4,041,517 9,648,930 2009 5,971,317 196,410 962,206 5,119,786 4,555,927 20,612 202,016 323,560 717,407 12,097,924 $ (525,942) $ 153,147 1,266,986 4,610,789 5,465,908 11,496,830 601,094 563,426 5,445,375 $ 1,164,520 $ 49,389,583 $ 8,972,166 134 To Table of Contents 2010 $ 159,718 1,243,440 5,528,871 4,653,383 11,585,412 2011 $ 162,094 1,066,642 6,049,625 5,151,563 26,657 8,383 10,473 895,826 13,371,263 $ 1,785,851 2012 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 28,802 45,969 5,289 - 631,320 1,586,045 $ (593,445) $ 2,417,171 $ $ 2,870,885 $ 992,600 (6,406,005) $ 185,176 1,066,136 6,871,045 6,264,192 29,539 15,397 21,139 2,337,217 16,789,841 13,529,518 $ 190,786 1,303,013 9,786,826 5,060,239 16,340,864 2013 448,977 354,513 $ (5,057,751) $ 173,935 994,534 6,541,782 6,151,881 25,737 40,519 60,209 545,163 14,533,760 $ (94,464) $ 226,382 1,299,400 9,188,433 4,953,994 15,668,209 2014 $ $ 286,210 1,212,036 9,361,298 5,410,150 16,269,694 181,120 1,076,014 8,027,267 6,385,562 29,098 8,917 57,654 587,959 16,353,591 (1,134,449) $ 83,897 (1,337,500) (725,460) (2,471,949) $ (641,563) 2,668,496 $ (8,879,896) 135 To Table of Contents Schedule 4 City of Casa Grande Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2005 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 $ 2006 1,115,310 11,150,642 $ 2007 1,476,273 17,796,454 - $ - 2008 1,959,234 25,521,015 - $ 2009 2,548,121 30,572,472 - $ 3,153,554 30,402,947 - $ 12,265,952 $ 19,272,727 $ 27,480,249 $ 33,120,593 $ 33,556,501 $ $ $ 4,413,184 $ 32,896,933 $ 25,327,803 43,633,806 10,701,962 49,835,900 77,406 39,794,807 8,084 6,252,078 15,594,386 2,479,265 4,250,108 28,612,756 5,365,147 $ 24,325,729 $ 38,228,011 $ 58,748,952 $ 82,810,239 $ 65,130,694 *FY2011: Implementation of GASB-54 Fund Balance Classification 136 To Table of Contents 2010 $ Fiscal Year 2012 2011* 3,815,142 25,262,863 - $ - $ - - 1,247,242 $ 24,630,744 $ 39,966,314 $ $ 40,446,857 151,896 $ 80,565,067 57,949 13,250,249 1,083,515 50,374,649 (378,345) $ 64,388,017 - 60,783 33,542,117 15,628,386 13,156,163 (385,290) $ 62,002,159 - $ 6,264 4,701,221 - $ 29,078,005 2014 - 6,023 4,202,039 19,251,625 502,264 $ 23,961,951 - $ - 7,411 33,225 23,342,866 - 2013 - - 14,550,404 5,281,667 $ 24,539,556 $ $ $ - 66,983 35,694,573 2,523,457 27,643,540 (576,410) $ 65,352,143 6,281 5,163,565 13,384,358 6,892,105 25,446,309 - - $ 93,031 32,227,498 29,168,940 (576,846) 60,912,623 137 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 Expenditures General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt service Principal Interest Total expenditures Other Financing Sources (Uses) Transfers in Transfers out Capital leases Bond issuance Bond issuance costs Sale of land Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures 2005 2006 2007 2008 2009 $ 15,388,557 2,156,170 11,911,931 9,853,065 739,283 217,895 466,925 701,633 720,093 42,155,552 $ 18,585,602 3,632,214 15,208,404 16,390,930 734,495 354,840 1,508,717 1,071,511 1,198,605 58,685,318 $ 26,706,698 2,756,899 18,007,273 16,678,803 826,533 28,907 3,222,176 1,459,760 720,635 70,407,684 $ 32,840,670 1,881,951 20,798,409 10,171,890 815,081 29,691 3,202,760 1,546,935 608,700 71,896,087 $ 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 4,300,175 11,344,629 1,908,050 734,391 3,654,964 2,242,438 4,526,914 5,230,006 12,957,767 2,168,597 1,650,860 4,446,967 3,914,867 6,149,634 5,921,449 14,155,865 2,846,301 2,063,253 4,828,294 4,821,056 8,251,421 8,076,361 16,983,507 2,323,097 1,684,699 5,463,871 4,965,772 11,030,175 8,996,033 18,594,022 2,991,139 1,716,458 5,222,719 3,425,837 27,511,902 799,546 477,428 29,988,535 1,206,388 484,775 38,209,861 882,247 707,501 44,477,387 1,226,548 607,351 52,361,381 5,313,821 955,207 74,727,138 2,686,632 (2,530,831) 3,500,000 1,335,000 (159,557) 5,808,434 (5,374,834) 6,844,898 (6,311,098) 8,101,980 (7,483,839) 5,630,797 (5,922,924) - - 455,000 - 4,831,244 433,600 1,809,371 2,798,171 $ 16,998,260 $ 20,909,057 $ 28,728,468 5.02% 5.27% 4.39% 9,000,000 (30,201) 578,989 10,166,929 $ 29,701,636 4.44% 750,000 (103,736) 1,500,000 1,854,137 $ (17,243,635) 13.28% 138 To Table of Contents 2010 2011 Fiscal Year 2012 2013 2014 $ 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 $ 27,556,571 546,628 14,151,581 1,661,339 807,884 $ 27,524,503 494,921 17,627,429 2,856,201 756,454 $ 28,352,139 1,263,721 20,814,430 4,024,127 735,217 $ 28,304,305 1,055,340 19,166,537 2,614,233 707,660 108,549 1,489,826 349,597 46,671,975 67,707 502,054 1,599,077 51,428,346 3,586 537,055 477,857 56,208,132 339,728 536,601 968,313 53,692,717 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 7,932,235 20,516,232 3,287,682 1,913,991 5,939,441 2,467,005 8,999,838 7,473,914 22,089,961 2,717,802 2,040,691 6,041,037 2,424,452 10,215,671 7,801,503 22,673,464 2,645,606 1,350,102 6,413,990 2,526,552 10,651,896 2,484,637 2,125,295 77,526,072 1,899,760 2,594,138 70,118,923 3,669,732 2,733,203 57,459,359 1,718,222 2,343,898 57,065,648 1,528,344 2,448,448 58,039,905 12,829,121 (13,965,253) 11,790,392 (11,101,760) 17,492,942 (17,303,578) 7,243,155 (5,786,655) 3,328,600 8,818,190 (8,003,769) - 37,800,000 (472,067) 36,191,801 $ 10,955,886 10.09% - - - 2,787,000 2,200,000 (66,000) - 9.89% - - - 2,822,632 $ (20,624,316) - 2,976,364 $ (3,054,649) 13.21% 4,785,100 $ 3,927,584 8.67% - 814,421 $ (3,532,767) 8.39% 139 To Table of Contents Schedule 6 City of Casa Grande Sales Tax Revenue by Industry Fiscal Years 2009 - 2014 Fiscal Year 2009 Percentage Tax Paid of Total Construction Manufacture Transportation/Communication/ Utilities Wholesale Trade Retail Trade Restaurants/Bars Insurance/Real Estate Hotels/Lodging Services All Other $ 6,722,392 597,311 28.81% 2.56% 1,761,603 277,315 9,585,867 1,221,532 1,869,128 462,489 560,571 276,032 Total $ 23,334,240 Fiscal Year 2010 Percentage Tax Paid of Total $ 3,558,323 594,982 17.82% 2.98% 7.55% 1.19% 41.08% 5.23% 8.01% 1.98% 2.40% 1.18% 2,053,502 238,731 9,361,417 1,228,270 1,751,628 390,430 433,326 355,036 100.00% $ 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% Source: Arizona State Department of Revenue Note: The categories presented are intended to provide alternative information regarding the sources of the City's revenue. 140 To Table of Contents Fiscal Year 2012 Percentage Tax Paid of Total $ 1,802,508 461,262 9.41% 2.41% 2,217,902 287,453 9,836,562 1,285,661 1,897,474 483,410 500,029 391,070 $ 19,163,329 Fiscal Year 2013 Percentage Tax Paid of Total $ 2,151,068 427,104 11.04% 2.19% 11.57% 1.50% 51.33% 6.71% 9.90% 2.52% 2.61% 2.04% 2,220,570 276,385 9,549,885 1,348,805 1,941,221 564,426 603,372 405,733 100.00% $ 19,488,568 Fiscal Year 2014 Percentage Tax Paid of Total $ 2,590,980 423,393 12.90% 2.11% 11.39% 1.42% 49.00% 6.92% 9.96% 2.90% 3.10% 2.08% 2,279,738 390,045 9,453,064 1,411,036 1,955,194 445,971 577,454 561,765 11.35% 1.94% 47.06% 7.02% 9.73% 2.22% 2.87% 2.80% 100.00% $ 20,088,640 100.00% 141 To Table of Contents Schedule 7 City of Casa Grande Direct and Overlapping Sales Tax Rates As of June 30, 2014 City Rates State and Pinal County Combined Privilege tax, except retail, utilities and telecommunication 1.8% 6.7% 8.5% Retail (excluding food sales) 2.0% 6.7% 8.7% Retail - privilege tax for single item over $5000 1.5% 6.7% 8.2% Hotel/Motel 3.8% 6.7% 10.5% Restaurant/Bar 1.8% 6.7% 8.5% Utilities/Telecommunications 2.0% 6.7% 8.7% Construction 4.0% 6.7% 10.7% Jet Fuel 1.8% $.366/gal NA Real Property Rental Commercial Residential 1.8% 1.8% 0.5% 0.0% 2.3% 1.8% All Other Services Not Specified 1.8% 6.7% 8.5% Type of Tax (b) (a) (a) Includes a 2.2% tax on construction contracting activities the use of which is restricted to paying costs related to acquisition of capital assets and improvements included in the City's Capital Improvement Plan. (b) Includes the two-tenths (0.2) of one percent (1%) Economic Development and Recreation Excise Tax. The sale of a single item over $5,000 is taxed at 2.0% for the first $5,000, then the rate drops to 1.5% for the taxable amount exceeding $5,000. Sources: City of Casa Grande Finance Department and Arizona Department of Revenue 142 To Table of Contents 143 To Table of Contents Schedule 8 City of Casa Grande Ratios of Outstanding Debt by Type Last Ten Fiscal Years Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 General Obligation Bonds 1,335,000 1,335,000 1,790,000 10,775,000 9,739,549 27,282,278 28,395,915 27,575,463 26,903,389 26,252,044 Governmental Activities Excise Tax Special Revenue Assessment Obligations Bonds 7,688,583 7,217,943 6,721,488 6,199,218 3,130,318 21,249,788 20,603,035 18,358,670 17,554,432 16,824,237 585,000 480,000 370,000 255,000 130,000 - Capital Leases 4,485,933 4,029,980 3,754,188 3,180,356 2,909,161 2,598,870 2,331,681 4,846,117 7,831,620 7,470,835 Business-type Activities Excise Tax/ General GO Bond Obligation Revenue Bonds Obligations 2,000,000 1,605,451 1,382,721 1,269,083 1,224,537 1,189,726 1,133,770 15,426,237 14,911,877 14,388,332 13,855,602 13,304,502 12,735,032 12,125,001 11,266,335 12,002,655 11,187,135 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. 144 To Table of Contents Business-type Activities Capital Leases 593,795 408,291 295,899 179,122 57,790 6,793 - Notes Payable 177,300 168,069 158,520 148,643 4,352,312 38,501,765 51,738,811 56,896,857 50,024,722 47,671,092 Total Primary Government 30,291,848 28,551,160 27,478,427 36,592,941 35,229,083 103,757,247 116,463,526 120,167,979 115,506,544 110,539,113 Percentage of Personal Income (a) 4.22% 3.59% 3.12% 3.61% 3.16% 8.55% 8.66% 8.93% 8.59% 8.22% Per Capita (a) 884.18 783.30 708.48 886.78 780.86 2,255.94 2,397.80 2,412.82 2,296.54 2,170.07 145 To Table of Contents Schedule 9 City of Casa Grande Ratio of General Bonded Debt Outstanding Last Nine 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) Restricted for Principal Payment 2006 1,335,000 8,183,338 16.31% NA 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% 836 173 2010 2010 2,430,000 26,234,999 (1) (2) 249,681,000 3,680,064,800 0.97% 0.71% 807 515 2011 2011 4,555,000 25,109,998 (1) (2) 235,284,000 3,209,485,830 1.94% 0.78% 1,469 493 320,000 545,000 2012 2012 4,235,000 24,565,000 (1) (2) 313,880,004 3,145,296,113 1.35% 0.78% 1,366 482 100,000 625,000 2013 2013 4,135,000 23,940,000 (1) (2) 269,324,094 2,788,057,728 1.54% 0.86% 820 470 105,000 600,000 2014 2014 4,030,000 23,340,000 (1) (2) 279,975,183 2,833,543,388 1.44% 0.82% 799 458 110,000 595,000 (a) Source: Pinal County Assessor's records (b) Estimated population of Mission Royale CFD 6/30/14 Estimated population of Villago CFD 6/30/14 Source: City of Casa Grande Development Center (c) Includes all City Bonded debt, net of assets restricted for payment of principal, Population of Casa Grande 3,417 1,625 50,938 (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. 146 To Table of Contents Schedule 10 City of Casa Grande Direct and Overlapping Governmental Activities Debt As of June 30, 2014 Bonded Debt Outstanding Governmental Unit Elementary School District #4 $ Estimated Share of Overlapping Debt Estimated Percentage Applicable 7,800,000 82.26% Union High School District #82 27,045,000 65.40% 17,688,665 Central Arizona Community College 88,680,000 16.54% 14,671,186 Mission Royale CFD 1,135,000 100.00% 1,135,000 Villago CFD 2,895,000 100.00% 2,895,000 Subtotal, overlapping debt City direct debt $ $ 46,517,123 100.00% Total direct and overlapping debt 6,417,120 42,806,971 46,517,123 $ 89,324,094 Sources: Assessed value data used to estimate applicable percentages provided by Pinal County Assessor's Office. Debt outstanding data provided by Pinal County Finance. 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. 147 To Table of Contents Schedule 11 City of Casa Grande Legal Debt Margin Information June 30, 2014 Net Secondary Assessed Valuation as of June 30, 2014 (a) $ Debt limit (6% of assessed value) Debt applicable to limit: General obligation bonds Legal 6% debt margin 19,513,076 0 $ Debt limit (20% of assessed value) Debt applicable to limit: General obligation bonds Legal 20% debt margin 325,217,937 19,513,076 65,043,587 27,370,000 $ 37,673,587 Arizona's Constitution states that a municipality cannot issue general obligation bonds in excess of 6% of the assessed valuation for general municipal purposes. Additional general obligation bonds for up to 20% of assessed valuation can be issued for specific purposes such as supplying water and sewer services, artificial lighting, acquisition and development of land for open space preserves, parks, playgrounds, recreation facilities, public safety, law enforcement, fire and emergency service facilities, and streets and transportation facilities. (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. 148 To Table of Contents Schedule 12 City of Casa Grande Pledged-Revenue Coverage Last Eight Fiscal Years Special Assessment Bonds Transaction State Excise Tax Revenue Obligations State Licenses & Fiscal Privilege (Sales) Shared Shared Franchise Permits/Fines Year Tax (a)(b) Sales Tax Income Tax Tax & Forfeitures Debt Service Principal Interest Coverage 2007 $23,954,813 $3,086,185 $3,760,034 $1,511,751 $3,583,432 $1,050,000 $957,807 17.88 2008 2009 27,140,828 22,375,653 2,984,122 2,583,416 4,592,697 4,793,336 1,687,014 1,910,594 2,697,032 1,900,745 1,105,000 1,165,000 901,980 594,321 19.48 19.08 2010 18,566,490 2,382,825 4,106,244 1,947,031 1,635,667 950,001 1,054,202 14.29 2011 17,599,226 2,590,692 2,897,028 2,034,471 1,354,512 985,000 1,022,252 13.19 2012 18,179,713 3,795,352 4,099,428 2,330,056 1,109,259 1,515,000 1,644,925 9.34 2013 18,533,580 3,975,626 4,961,423 2,248,227 1,951,976 1,570,000 1,457,260 10.46 2014 19,143,334 4,227,755 5,413,854 2,248,466 1,727,402 1,385,000 1,403,535 11.75 (a) The sale of a single item over $5,000 is taxed at 2.0% for the first $5,000, then the rate drops to 1.5% for the taxable amount exceeding $5,000. (b) Does not include the two-tenths of one percent (0.2%) Economic Development and Recreation Excise Tax which is pledged to the repayment of the 2009 Obligations and obligations issued on a parity therewith only (the "2009 Parity Obligations"). In connection with allocating the Excise Taxes among payments due with respect to the 2009 Parity Obligations and all Parity Obligations, the Economic Development and Recreation Excise Taxes will be applied first to the payments due with respect to the 2009 Parity Obligations and the Excise Taxes will then be allocated proportionately to the remaining payments due with respect to all Parity Obligations. The revenues from the Economic Development and Recreation Excise Tax for the last eight fiscal years have been: Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 Amount $877,870 956,265 958,587 936,142 946,029 983,656 954,988 945,306 149 To Table of Contents Schedule 13 City of Casa Grande Real & Personal Property Tax Levies and Collections Collected to June 30 End of Tax Fiscal Year (a) Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Tax Levy $1,844,115 1,943,065 2,324,339 5,293,078 5,969,191 5,760,833 5,455,768 5,592,066 5,357,693 5,369,128 Collections $1,843,113 1,941,729 2,321,785 5,286,963 5,938,792 5,745,748 5,432,627 5,564,595 5,257,807 2,514,902 Taxes Receivable 1,002 1,336 2,555 6,115 30,399 15,085 23,140 27,471 99,886 2,854,226 Percent of Tax Levy 99.9% 99.9% 99.9% 99.9% 99.5% 99.7% 99.6% 99.5% 98.1% 46.8% Adjustments ($5,388) ($1,818) (38,322) (109,585) (19,966) (20,266) (24,377) (46,578) (16,732) (9,079) (a) Reflects collections made through June 30, the end of the fiscal year, on such year's levy. Property taxes are payable in two installments. The first installment is due the first day of October and becomes delinquent on November 1. The second installment becomes due the first day of March and is delinquent on May 1. Interest at the rate of 16% per annum attaches on first and second installments following their delinquent dates unless the full year tax is paid by December 31. Penalties for delinquent payments are not included in the above collections figures. Source: Pinal County Treasuer's Office 150 To Table of Contents Schedule 14 City of Casa Grande Tax Rate Data Fiscal Year City's Primary Tax Rate Per $100 Assessed City's Secondary Tax Rate Per $100 Assessed City's Total Tax Rate Per $100 Assessed 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $0.9999 0.9999 0.9102 0.8774 0.7468 0.7135 0.8110 0.8988 $0.9489 $0.9999 $0.0000 0.0000 0.0000 0.0000 0.6308 0.6308 0.6308 0.6308 $0.6308 $0.6308 $0.9999 0.9999 0.9102 0.8774 1.3776 1.3443 1.4418 1.5296 1.5797 $1.6307 Source: City of Casa Grande 151 To Table of Contents Schedule 15 City of Casa Grande Estimated Net Secondary Assessed Valuation of Major Taxpayers Type of Business/Property Taxpayers (a)(b) Arizona Public Service Co. Wp Casa Grande Retail LLC Wal-Mart Stores East LP Daisy Brand LLC Abbott Manufacturing Inc. Southwest Gas Corp. CG Hanna LLC Hexel Corp. Arizona Water Co. Courtney Mann LLC Daisy Brand LP Wal-Mart Stores Inc. Lowes HIW Inc. HSL Desert Sands Properties LLC Target Corporation Property Dev. Electric Utility Retailer Retailer Dairy Product Manufacturing Gas Utility Pharmaceutical Manufacturing Real Estate Management Manufacturing Water Utility Vitamin Distributor Dairy Product Manufacturing Retailer Home Improvement & Construction Real Estate Management Retailer TOTAL Estimated 2013-14 Net Secondary Assessed Valuation As Percent of City's 2013-14 Net Secondary Assessed Valuation $11,928,844 10,113,728 8,224,465 5,040,933 5,029,705 3,483,062 3,767,786 3,255,127 2,819,962 2,334,540 2,462,642 2,382,379 1,916,710 2,116,873 1,972,857 $66,849,613 3.67% 3.11% 2.53% 1.55% 1.55% 1.07% 1.16% 1.00% 0.87% 0.72% 0.76% 0.73% 0.59% 0.65% 0.61% 20.56% (a) Some of such taxpayers or their parent companies are subject to the informational requirements of the Exchange Act, and in accordance therewith file reports, proxy statements and other information with Commission. The Filings may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth St. N.W., Washington, D.C. 20549 and at the Commission's regional offices at Northwestern Atrium Center, 500 W. West Madison St., Suite 1400, Chicago, Illinois 60661. Copies of the Filings can be obtained from the public reference section of the Commission at 450 Fifth St., N.W., Washington, D.C. 20549 at prescribed rates. In addition, the Filings may also be inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. The Filings may also be obtained through the Internet on the Commission's EDGAR database at http://www.sec.gov. (b) The assessed valuation of property owned by the Salt River Project Agricultural Improvement and Power District ("SRP") is not included in the assessed valuation of the City in the table. Because of SRP's quasi-governmental nature, property owned by SRP is exempt from property taxation. However, SRP may elect each year to make voluntary contributions in lieu of property tax with respect to certain of its electrical facilities (the "SRP Electric Plant"). If SRP elects to make the in lieu contribution for the year, the full cash value of the SRP Electric Plant and the in lieu contribution amount is determined in the same manner as the full cash value and property taxes owed is determined for similar nongovernmental public utility property, with certain special deductions. If after electing to make the in lieu contribution, SRP then failed to make the in lieu contribution when due, the Treasurer of the Treasurer of the County and the City have no recourse against the property of SRP and the City. Source: Pinal County Assessor's Office 152 To Table of Contents Schedule 16 City of Casa Grande Demographic and Economic Statistics, Last Ten Fiscal Years Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Population 34,260 36,450 38,785 42,422 45,116 45,993 48,571 49,804 50,296 50,938 County Per Capita Personal Income 20,959 21,800 22,672 23,905 25,000 26,373 27,690 21,716 21,419 21,409 Total Personal Income 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 1,081,543,664 1,077,290,024 1,090,531,642 School Enrollment Unemployment Rate 8,930 9,049 10,290 11,066 11,652 10,700 10,700 11,512 10,852 11,720 5.20% 5.10% 4.30% 6.10% 11.10% 11.50% 11.50% 11.20% 9.10% 8.40% Sources: Arizona Department of Commerce U.S. Bureau of Labor Statistics Casa Grande Elementary and Casa Grande Union High School Districts. U.S. Census Bureau 153 To Table of Contents Schedule 17 City of Casa Grande Principal Employers, Current Year and Ten Years Ago Employer Casa Grande Elementary School District Casa Grande Regional Medical Center Hexcel Corporation Wal-Mart Distribution Center Wal-Mart Supermarket Frito-Lay Inc. Abbott Laboratories/Ross Products City of Casa Grande National Vitamin Company Franklin Foods Sam's Club All Others 2014 Percentage of Total City Employees Employment 2001 (a) Percentage of Total City Employees Employment 1,076 900 550 574 340 450 435 444 270 175 144 14,034 5.55% 4.64% 2.84% 2.96% 1.75% 2.32% 2.24% 2.29% 1.39% 0.90% 0.74% 72.37% 625 788 562 302 397 251 10,891 4.52% 5.70% 4.07% 0.00% 0.00% 2.19% 2.87% 1.82% 0.00% 0.00% 0.00% 78.83% 19,392 100.00% 13,816 100.00% Sources: City of Casa Grande Access Arizona AZ Department of Commerce (a) Employment data from 2004 is not available - the information presented is from 2001 154 To Table of Contents Schedule 18 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 24.0 26.0 30.0 39.3 39.5 37.3 37.3 38.8 38.3 46.7 103.5 107.5 123.1 139.0 137.2 128.8 125.8 126.4 135.3 142.1 Fire Culture and Recreation Planning and Development Public Works 38.0 41.0 54.8 60.5 62.1 63.3 62.3 62.3 62.3 62.3 44.0 44.0 48.0 61.3 61.8 68.3 67.3 66.6 51.0 76.4 19.0 22.0 26.5 34.5 34.0 31.0 31.0 24.5 21.5 21.0 79.0 84.3 96.3 104.5 104.5 100.5 97.8 99.4 102.0 100.6 Total 307.5 324.8 378.6 439.0 439.1 429.0 421.3 417.9 410.3 449.1 Source: City Budget Note: Information is based on authorized positions. 155 To Table of Contents Schedule 19 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) (b) (c) Items in collections Total circulation transactions Total circulation items Economic development Building permits - commercial Building permits - residential Self-help homes completed Self-help homes started Housing rehabilitations Code enforcement cases Planning cases 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 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 20,805 4,182 20,417 3,886 20,417 3,886 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 4,941 6,515 1,458 18,743 5,155 6,685 910 26,225 5,400 6,951 687 15,556 38,869 69,412 702,062 1,046 7,068 4,614 39,365 69,936 706,375 1,213 6,127 4,055 42,412 72,028 802,935 1,121 6,136 3,840 41,126 71,626 864,421 1,104 6,943 4,015 40,893 76,263 939,398 991 7,025 3,981 38,629 72,807 983,100 974 6,107 4,738 38,660 85,032 1,005,416 942 5,171 3,737 34,213 78,125 974,867 938 6,008 4,052 31,308 88,023 991,778 874 7,836 4,098 22,079 74,271 696,743 843 7,912 4,760 86,364 170,875 51,915 73,984 187,063 49,718 74,311 225,043 73,079 75,863 229,446 75,840 79,920 270,473 78,727 113,480 329,790 98,937 114,257 368,693 70,820 117,108 361,334 69,376 454,700 376,405 129,695 645,813 359,585 124,944 273 2,565 6 26 9 1,059 154 339 3,501 20 27 12 1,704 334 143 1,454 25 25 12 984 193 195 777 25 26 12 1,150 85 114 329 25 25 12 1,331 95 90 369 12 12 12 1,317 90 95 291 12 12 12 2,104 121 63 259 11 14 11 1,203 110 94 264 0 0 21 1,206 133 63 215 0 0 17 1,349 152 Sources: Various City departments Note: (a) Effective 2007 Library circulation transactions includes information transactions (b) Effective 2013 Library data includes both print and digital media (including digital books available through the Greater Phoenix Digital Library) (c) Circulation transactions and items were recalculated in 2014. 156 To Table of Contents Schedule 20 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 (centerline)** Miles of sewer** Number of lift stations Number of signalized intersections* 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3 3 3 3 3 3 4 4 4 4 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 27 1,611 5 1 26 97 27 1,611 5 1 26 99 27 1,611 5 1 26 99 52 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 52 18 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 5,340 414 455 10 41 3,948 409 284 10 41 3,988 403 290 10 42 * Includes ADOT signalized intersections **Enhanced GIS information utilized beginning in FY2013 Sources: Various City departments 157 To Table of Contents 158 To Table of Contents Single Audit Section 159 To Table of Contents INDEPENDENT AUDITORS’ 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 Honorable Mayor and Council City of Casa Grande Casa Grande, AZ We have audited in accordance with the 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, the financial statements of the governmental activities, the business-type activities and each major fund of City of Casa Grande, Arizona as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise City of Casa Grande, Arizona’s basic financial statements, and have issued our report thereon dated January 15, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered City of Casa Grande, Arizona’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Casa Grande, Arizona’s internal control. Accordingly, we do not express an opinion on the effectiveness of City of Casa Grande, Arizona’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses. 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. We consider the deficiency described in the accompanying schedule of findings and questioned costs as 2014-001 to be a material weakness. 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 160 To Table of Contents Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Casa Grande, Arizona’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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Casa Grande, Arizona January 15, 2015 161 To Table of Contents INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 Honorable Mayor and Council City of Casa Grande Casa Grande, AZ Report on Compliance for Each Major Federal Program We have audited City of Casa Grande, Arizona’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of Casa Grande, Arizona’s major federal programs for the year ended June 30, 2014. City of Casa Grande, Arizona’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of City of Casa Grande, Arizona’s major federal programs based on our audit of the types of compliance requirements referred to above. 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 City of Casa Grande, Arizona’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 on compliance for each major federal program. However, our audit does not provide a legal determination of City of Casa Grande, Arizona’s compliance. 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 162 To Table of Contents Opinion on Each Major Federal Program In our opinion, City of Casa Grande, Arizona, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2014. Report on Internal Control Over Compliance Management of City of Casa Grande, Arizona, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered City of Casa Grande, Arizona’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program 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 City of Casa Grande, Arizona’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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Casa Grande, Arizona January 15, 2015 163 To Table of Contents CITY OF CASA GRANDE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2014 Grant Number U.S. Department of Housing and Urban Development: Passed through Arizona Department of Housing: Community Development Block Grant - 2014 Community Development Block Grant - 2012 Home Investment Partnership - 2013 Federal CFDA Number 106-14 132.12 14.228 14.228 Total 14.228 304-13 14.239 Total Department of Housing and Urban Development 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 Nutritional Services Incentive Program Total Aging Cluster Expenditures $ 19,829 163,867 183,696 324,130 * 507,826 5-237 5-237 5-237 93.044 93.045 93.053 13,222 57,927 20,418 91,567 5-237 93.667 14,313 105,880 AZ-12-011 15.904 1,060 1,060 2010-DJBS-3344 2012-DXBX-0808 2013-DJBX-0747 16.738 16.738 16.738 23,369 10,997 17,058 51,424 2006BUBX 2010RKWX003 16.607 16.710 4,192 328,397 * 384,013 3-04-0007-16-2012 20.106 34,845 Passed thru Arizona Dept. of Transportation Highway Safety Improvement Program CSG-0(202)T 20.205 18,925 Passed thru Governor's Office of Highway Safety DUI Enforcement DUI Enforcement LIDAR/Holsters Buckle UP Campaign 2013--410-005 2014-410-020 2014-PT-049 2013-OP-015 20.600 20.600 20.600 20.600 Total 20.600 88 16,575 15,013 7,500 39,176 Social Services Block Grant Total Department of Health & Human Services US Dept of Interior National Park Service: Passed thru State Historic Preservation Office Historic Perservation Total Department of Interior National Park Service U.S. Department of Justice: Justice Assistance Grant Program Justice Assistance Grant Program Justice Assistance Grant Program Total Justice Assistance Grant Cluster U.S. Department of Justice: Bulletproof Vest Grant ARRA -Community Oriented Policing Services (COPS) Total Department of Justice U.S. Department of Transportation: FAA Airport Grant 164 To Table of Contents DUI OT DUI Equip 2013-164-016 2013-164-017 20.608 20.608 Total 20.608 12,959 1,881 14,840 107,786 D08-12-2004 95.001 12,651 Total Department of Transportation Executive Office of the President High Intensity Drug Trafficking Areas Program Total Executive Office of the President U.S. Department of Homeland Security Passed through Arizona Division of Emergency Management: 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 12,651 12-AZDOHS-HSGP-999301-01 999316-01 999316-02 999316-03 888308-03 130316-01 Total Federal Financial Assistance and Expenditures of Federal Awards 97.067 64,280 * 97.067 97.067 97.067 97.067 97.067 27,086 125,000 25,000 20,000 85,433 346,799 $ * * * * * 1,466,015 *Denotes major program 165 To Table of Contents CITY OF CASA GRANDE, ARIZONA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year ended June 30, 2014 NOTE 1 BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Casa Grande (the “City”) 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 Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the financial statements. NOTE 2 CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBERS The program titles and CFDA numbers were obtained from the Catalog of Federal Domestic Assistance. 166 To Table of Contents CITY OF CASA GRANDE, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2014 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued: Internal control over financial reporting:  Material weakness(es) identified?  Significant deficiency(ies) identified that are not considered to be a material weakness(es)? Noncompliance material to financial statements noted? Unmodified _X__ yes __ _ no ____ yes __X_ none reported ____ 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)? ____ yes _X_ no ____ yes _X_ none reported Type of auditors’ report issued on compliance for each major program identified below: Unmodified 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 14.239 16.710 97.067 Name of Federal Program or Cluster Department of Housing – Home Investment Partnership Program Department of Justice ARRA – Community Oriented Policing Services Department of Homeland Security – Homeland Security Grant Program Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee? $300,000 _X_ yes ___ no 167 To Table of Contents CITY OF CASA GRANDE, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2014 SECTION II – FINDINGS RELATED TO FINANCIAL STATEMENTS REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS FINDING: 2014-001 CRITERIA Subsidiary ledgers should be reconciled to the general ledger at regular intervals (monthly). CONDITION/CONTEXT [ ] Compliance finding [ ] Significant deficiency [ X ] Material weakness The subsidiary ledgers for utility accounts receivable were not adequately reconciled to the general ledger throughout the year and at year end. EFFECT The interim and year end financial statements could have contained material errors as they were not properly supported with subsidiary ledgers. CAUSE Controls were not adequate to prevent or detect potential material errors. RECOMMENDATION It is recommended that management implement procedures to adequately reconcile all general ledger accounts, including those relating to utility accounts receivable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Management concurs with this recommendation and will implement policies and procedures to prevent this from occurring again. SECTION III – FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS None noted. SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None noted. 168