Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2008 City of Peoria, Arizona City Council: Bob Barrett, Mayor Cathy Carlat, Vice Mayor Ron Aames Joan Evans Vicki Hunt Carlo Leone Dave Pearson Administrative Staff: Carl Swenson, City Manager John Wenderski, Deputy City Manager Susan Thorpe, Deputy City Manager Susan Daluddung, Deputy City Manager Prepared By: Brent D. Mattingly, Chief Financial Officer, Finance Director Kent Meredith, Financial Services Manager Dan Leahy, Accounting Supervisor Core Values “The City of Peoria team members share a commitment to provide quality service for our community.” Professional Demonstrates professional skills and knowledge needed to perform the job; keeps informed of developments in the professional field and applies this knowledge to the job; encourages and supports the development of subordinate personnel. Ethical Maintains the highest standards of personal integrity, truthfulness, honesty, and fairness in carrying out public duties; avoids any improprieties; trustworthy, maintains confidentiality; never uses City position or power for personal gain. Open Communicates effectively orally and in writing; involves appropriate individuals and keeps others informed; acts as a team member; participates and supports committees/boards/commissions/task forces; approachable; receptive to new ideas; supports diversity and treats others with respect; actively listens. Responsive Consistently emphasizes and supports customer service; takes responsibility to respond to all customers in a prompt, efficient, friendly, and patient manner; represents the City in an exemplary manner with civic groups/organizations and the public. Innovative Demonstrates original thinking, ingenuity, and creativity by introducing new ideas or courses of action; supports innovative problem-solving by identifying and implementing better methods and procedures; takes responsible risks; demonstrates initiative and “follows through” on development and completion of assignments. Accountable Accepts responsibility; committed to providing quality service to our community; plans, organizes, controls and delegates appropriately; work produced is consistent and completed within required timeframes; implements or recommends appropriate solutions to problems; acknowledges mistakes; manages human and financial resources appropriately. CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2008 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting City of Peoria Organizational Chart Principal Officials of the City City Council pictures and biographies v-xv xvi xvii xviii xix-xxii II. FINANCIAL SECTION Independent Auditors’ Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS (required supplementary information) 3 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets Statement of Activities 19 20 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet to the Statement of Net Assets - Governmental Activities 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 - Governmental Activities Budgetary Comparison Statements - General Fund and major Special Revenue Funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Development Fee Fund Transportation Sales Tax Fund 22 25 26 29 30 32 33 34 35 Proprietary Fund Financial Statements Statement of Net Assets Statement of Revenues, Expenses, and Changes in Fund Net Assets Statement of Cash Flows 36 38 40 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to the Financial Statements 44 45 47 i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2008 Page C. SUPPLEMENTARY INFORMATION - COMBINING FUND FINANCIAL STATEMENTS AND BUDGETARY SCHEDULES Major Governmental Funds Budgetary Comparison Schedules – Major Debt Service & Capital Projects Funds General Obligation Bonds Debt Service Fund Special Assessment Debt Service Fund General Obligation (GO) Bond Capital Projects Fund Non-Major Governmental Funds Combining Statements: Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Budgetary Comparison Schedules Public Transit Fund Section 8 Housing Fund Other Grants Fund Storm Drainage Fund Municipal Development Authority (MDA) Bonds Debt Service Fund Community Facilities District (CFD) Bonds Debt Service Fund Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Improvement District Bonds Capital Projects Fund Non-Bond Capital Projects Fund 90 91 92 96 98 100 101 102 103 104 105 106 107 108 109 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Public Housing Fund 112 113 114 115 116 Internal Service Funds Combining Statement of Net Assets Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Combining Statement of Cash Flows Schedules of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 118 119 120 121 122 123 124 Fiduciary Funds Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities – All Agency Funds ii 126 127 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2008 Page D. OTHER SUPPLEMENTARY INFORMATION Federal Financial Data Schedule Debt Service Schedules Schedule of Changes in Debt – Governmental Activities Schedule of Changes in Debt – Business-type Activities Schedule of Debt Service Requirements to Maturity Capital Assets Schedules Schedule of Capital Assets by Function and Classification Schedule of Changes in Capital Assets by Function – Governmental Activities Schedule of Interfund Transfers Table III. 130 132 133 134 138 140 141 STATISTICAL SECTION Net Assets By Component I Changes in Net Assets II Program Revenues III Fund Balances, Governmental Funds IV Changes in Fund Balances, Governmental Funds V Government-wide Revenues By Function VI Tax Revenues By Source, Governmental Funds VII Intergovernmental Revenues By Source, Governmental Funds VIII Development/Expansion Fees By Type IX City Transaction Privilege Taxes By Category X Direct and Overlapping Sales Tax Rates XI Sales Tax Payers - By Category XII Secondary Assessed Value and Full Cash Value of Taxable Property XIII Direct and Overlapping Property Tax Rates XIV Direct and Overlapping Property Tax Levies XV Principal Property Tax Payers XVI Property Tax Levies and Collections XVII Utility Statistical Data XVIII Outstanding Debt By Type XIX Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita XX Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XXI Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XXII Legal Debt Margin XXIII Pledged Revenue Coverage - Municipal Development Authority Bonds Governmental Portion XXIV Pledged Revenue Coverage – Revenue Bonds XXV Pledged Revenue Coverage - Special Assessment Bonds XXVI Special Assessment Collections XXVII Ratio of Annual Debt Service Expenditures for Governmental Debt To Total Governmental Expenditures and Revenues XXVIII Bond Authorizations – Issued and Unissued XXIX Demographic and Economic Statistics XXX Major Employers Within the City XXXI Authorized Full-time Equivalent City Government Employees By Function XXXII Building Permits and Home Sales XXXIII Schedule of Insurance in Force XXXIV Property Insurance Schedule XXXV Operating Indicators By Function/Program XXXVI Capital Asset Statistics By Function/Program XXXVII iii 149 150 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 City of Peoria 8401 West Monroe Street, Peoria, Arizona 85345 October 7, 2008 Honorable Mayor, City Council, City Manager and Citizens of Peoria, Arizona: We are pleased to submit to you the Comprehensive Annual Financial Report (CAFR) of the City of Peoria, Arizona (the City) for the fiscal year ended June 30, 2008. The report was prepared by the Financial Services Division of the Finance Department. This report represents management’s report to its governing body, constituents, legislative and oversight bodies, and investors and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies which have expressed interest in the City’s financial matters. Copies of this financial report will also be placed in the City libraries, as well as on the City’s website, for use by the general public. Managements Discussion and Analysis presented on pages 3-17 has a different focus and purpose than this transmittal letter and should be read in conjunction with this transmittal. THE FINANCIAL REPORTING ENTITY The City of Peoria, chartered in 1954, has a Council-Manager form of government with the City Council consisting of the Mayor and six Council Members. Pursuant to an amendment to the City Charter approved by the voters in 1997, the Mayor is elected at-large for a four-year term. Council members are elected, by district, for four-year terms. The City Council is vested with policy and legislative authority and is responsible for passing ordinances, adopting the budget, appointing committee, commission, and board members, and appointing the positions of City Manager, City Attorney, and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City encompasses approximately 179 square miles in the northwestern portion of Maricopa County, and is one of several major cities comprising the greater Phoenix metropolitan area. Between the 1990 census and the 2000 census the City’s population increased by over 100 percent, from approximately 50,600 to approximately 108,300. The estimated current population is approximately 158,227. The City’s tremendous growth is attributable to the comparatively affordable housing, an excellent school district, and the expansion of the metropolitan freeway systems, allowing Peoria residents to commute effectively to other cities in the metropolitan area. Based on current projections, population growth trends are expected to continue, although at a slower pace. While having a positive impact, this growth will continue to present challenges to the City in providing its current high level of services. The City provides a full range of municipal services, including police and fire protection, solid waste services, water and sewer services, construction and maintenance of streets, recreational and cultural events, library services, public transportation, planning and zoning services, and general administrative services. Peoria offers a wide range of community facilities including two community centers, three swimming pools, two libraries and 26 parks encompassing 264 acres. In addition, the Peoria Sports Complex operated by the City is the nation’s first two-team baseball spring training facility - home to the San Diego Padres and Seattle Mariners. Lake Pleasant, in northern Peoria, is the second largest lake in v Arizona. The City opened its first large community park, Rio Vista Community Park, in the southern part of the City in fiscal year 2004. This 50 plus acre facility has athletic fields, playgrounds, ramadas and other amenities for the citizens’ enjoyment. Phase two of Rio Vista Park, including a recreation center and additional fields were completed in 2007. The City also opened a performing arts center with a 250 seat main auditorium, 80 seat black box theater, classroom and administrative space, in the downtown area of the City in 2007 as part of the downtown revitalization plan. This report includes financial statements on both a government-wide and fund basis for the primary government as well as its component units. Component units are separate legal entities included in the reporting entity due to the significance of their financial or operational relationship with the City. Criteria used by the City for inclusion of activities in preparing its financial statements are in conformity with GASB Statement No.14, The Financial Reporting Entity. Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. Accordingly, the financial reporting entity consists of the City and two blended component units, the City of Peoria Municipal Development Authority, Inc. and the Vistancia Community Facilities District as discussed further in Note 1.A of the notes to the financial statements. MAJOR INITIATIVES AND SERVICE EFFORTS AND ACCOMPLISHMENTS For The Year In fiscal year 2008 the City continued to invest in programs and amenities that keep Peoria a very livable community. Emphasis was placed on public safety, parks and open space, neighborhood preservation, and human services. The following are some of the service efforts and accomplishments of the City during the fiscal year: Police ƒ Re-districted the department patrol beats to provide more efficient and effective use of personnel and resources. ƒ Began operation of a red light enforcement camera program. To date four intersections are monitored by red light enforcement cameras. ƒ Enhanced the Strategic analysis Section to provide more timely statistical analysis for resource deployment, crime suppression and public information through the media. ƒ Participant in the valley-wide Unified Command for Super Bowl XLII. Fire ƒ Fire Station #7 was opened in October 2007 to serve the citizens of northern Peoria. The 11,000 square foot station is the second fire station to open in northern Peoria in two years and has a unique architectural design to compliment the surrounding communities. ƒ The Peoria Fire Department assisted in providing emergency medical response teams and terrorism liaison officer support for Super Bowl XLII. ƒ The Emergency Management Division implemented new National Incident Management System (NIMS) software to track safety training classes for all city employees and ensure the City remains in compliance with Federal Emergency Management Administration (FEMA) guidelines. ƒ Peoria firefighters were deployed to nine wildfires throughout the western United States as part of the Central Arizona Wildland Response Team (CAWRT). ƒ The Fire Department hosted the sixth annual Peoria Regional Battalion Chief Academy with former Marshal University football coach Jack Lengyell as the keynote speaker. Communications and Public Affairs ƒ Completed equipping a 4,000 square foot television studio for Peoria Channel 11. The studio features state-of-the-art video production equipment including high definition cameras, switchers, a news set, and editing equipment. The newly equipped studio will be utilized for filming and broadcasting news and information to Peoria residents about city programs and services. ƒ The Marketing and Special Event Division won an AZTEC Gold Medal Award from the Arizona Festival and Events Association for a public service announcement created to promote on television Peoria’s Pioneer Days event. vi ƒ ƒ The department dedicated two new public art sculptures in the fall of 2007. The Peoria Pioneer Memorial, a bronze sculpture created by artist Emanuel Martinez, is located at a major focal point in Old Town Peoria. The project involved a grassroots fundraising effort by the Peoria Historical Society. The second sculpture is entitled “Leading the Way” by artist Ann LaRose and depicts a farmer, his wife, and child in a garden area in front of City Hall. Peoria Channel 11 received three Telly Awards in 2008. Telly Awards honor the best local, regional and cable television commercials and programs. Peoria Channel 11 earned the awards for two public service announcements, “Festival of the Arts” and “Spring Training 2008,” and a video short, “Building Peoria.” Engineering ƒ In collaboration with MCDOT the intersection of 91st Ave and Pinnacle Peak Road was widened and signalized. ƒ Completed the installation of the signal at the intersection of 91st Ave and Monroe Street. ƒ Completed construction of the Rose Garden channel drainage improvements. ƒ Completed construction of the sound wall adjacent to the Parkridge subdivisions. ƒ Installed 7 additional CCTV cameras surrounding the sports complex to assist with managing event traffic. ƒ Purchased 4 portable trailers with dynamic message signs. Public Works ƒ Implemented Curbside recycling service to all City residents. The recycling diversion rate exceeds 20 percent and contamination rate is very low. ƒ Completed renovation of the City’s Municipal Operation Center including a new Administration Building a new Warehouse and a Vehicle Wash Building. ƒ Completed the construction of a new 75,000 square foot Development and Community Services Building. ƒ Began construction of the City’s new branch library. ƒ Maintained compliance with PM-10 air quality requirements by sweeping approximately 19,000 miles of street and removing 2,100 tons of debris. ƒ Applied pavement preservative seals to over 40 miles of streets. ƒ Expanded the City’s fiber optic traffic signal system by 23 miles. ƒ Began a process of self-assessment as the initial step toward accreditation through the American Public Works Association. Finance ƒ Partnered with Information Technology and Human Resource departments to complete a major upgrade to the human resource and payroll system. ƒ Completed an upgrade to the Utility Billing System to provide encryption of customer credit card information and ensure compliance with Payment Card Industry (PCI) standards. ƒ Implemented an Accounts Receivable module to the Utility Billing System to assist in the collection process for miscellaneous customer accounts. ƒ Teamed with the Budget Office to facilitate a Citizens Bond Committee process for the review and recommendation of capital projects to City Council for an upcoming bond election. ƒ Began a project to restructure the City’s meter reading and utility billing processes to more evenly distribute internal staff workloads and provide enhanced customer service. Human Resources ƒ Teamed with Finance and Information Technology departments on the implementation of the benefits administration module for the PeopleSoft HRMS software system. ƒ Implementation of the Water’s Classification and Compensation study covering all technical/professional staff of the City. Community Development ƒ Adopted a new comprehensive list of design guidelines. ƒ Continued Neighborhood Grant Program to allow neighborhoods to complete improvement projects that enhance the neighborhoods. vii ƒ ƒ ƒ ƒ ƒ Awarded the Mercedes Benz of Arrowhead the City’s first Environmental Stewardship Award for their LEED Silver dealership facility. Took action to reduce the impacts of home foreclosures on our neighborhoods through the City’s Foreclosure Task Force. Received Community Housing Development Funds grant from Maricopa County to assist in redeveloping multi-family housing units. Developed and administered a down-payment assistance program to assist first-time home buyers. Assisted 7,234 persons through services funded with Community Development Block Grant funds. Community Services ƒ Completion of the Rio Vista Recreation Center, Veterans Memorial Wall and pedestrian bridge over New River and Rio Vista Community Park. ƒ Completed construction of four miles of Sunrise Mountain Trail and 3.5 miles of West Wing Mountain Trail and began construction of two miles of New River Trail between Grand Avenue and Olive Avenue. ƒ Completed five miles of the Lake Pleasant Parkway median landscape improvements. ƒ Peoria Sports Complex was named Westmarc’s “Best of the West” in the Attractions, Destinations and Tourism category. ƒ The Rio Vista Recreation Center received the Gold Award from the Construction Owners Association of America and was named the Southwest Contractor Arizona Best of 2007 for project management. ƒ Recreation program attendance continued to grow with 118,550 participants. ƒ The Peoria Public Library System circulated over one million items and had 1.1 million visitors, either virtually or physically. Utilities ƒ The Utilities Department received nine safety awards from the Arizona Water & Pollution Control Association (AWPCA). ƒ The wastewater collection section was recognized by the American Water Works Association (AWWA) for best practice in maintaining a wastewater collection system. ƒ Began operation of the new Butler Water Reclamation Facility. ƒ Developed “Principles of Sound Water Management”, an integrated set of 17 policies designed to demonstrate leadership in the stewardship of our limited water resources while emphasizing the importance of water conservation and a redundant and replenishable water supply, maintaining compliance with state and federal water quality and management laws, as well as a guide for longterm planning. ƒ Completed construction of the expansion of the Jomax Water Reclamation Facility. ƒ Development of a 3D radio path model for the Utilities Department’s remote sites, which has led to significant savings in consulting fees and staff time. Information Technology ƒ The City’s Intranet website was enhanced and redesigned. The new features include an Enouncements section, an events calendar with rollover popups, a condensed and reorganized main menu, and a web based internal phone directory. The site also includes online employee access to the City’s policies, procedures, forms, and various reports. ƒ The 2008 Impact Fee Calculator was published to the public website. The calculator allows developers and other interested parties to estimate impact fees for various project sizes and complexities, with many selectable variables. ƒ Channel 11’s new live streaming project was launched, which includes live and archived City Council meetings. A portal page provides links to on-demand and live, 24/7 streaming video from Channel 11. ƒ Wireless access points have been installed in most buildings across the City Hall campus and other City facilities. The wireless network is available for employees as well as guests. ƒ Implemented the Mobile Computing Solution for Public Works linking the City’s Geographical Information System (GIS) and Computerized Maintenance Management System (CMMS). This allows field staff to update spatial information (redline) as appropriate; open, close, and initiate work orders; and open, close, and initiate service requests in the field and update wirelessly from the field. viii ƒ ƒ The new Citywide Electronic Document Management System was implemented in the City Clerk’s Office. Work continues to implement this system with other City departments and systems, including Utilities, Fire, and Finance. The new Capital Improvement Process (CIP) project management system was implemented and is being used citywide for CIP projects. Economic Development ƒ Park West 1st phase opened during the 1st quarter of 2008. Construction will continue and the remaining phase is scheduled to open within the upcoming year. ƒ Construction of Empire Business Park is completed and offers 500,000 square feet of commercial and light industrial space. ƒ Construction of Mack Rio Vista Business Park is completed and offers over 600,000 square feet of commercial and light industrial space. ƒ Super Wal-Mart located in northern Peoria is completed and offers over 200,000 square feet of retail space. ƒ Lake Pleasant Town Center and Lake Pleasant Crossing are completed and open for business. Lake Pleasant Pavilions and Lake Pleasant Towne Center are currently under construction and will open by 1st quarter 2009. ƒ Peoria Place multi-use development is currently in the planning stage and construction is anticipated to start by the 1st quarter 2009. For The Future The Council utilizes a process to assist in the identification, prioritization, and management of emerging strategic issues that, by virtue of their scope, complexity, and/or potential impact, require a coordinated multi-departmental action plan and budget. The City Council works closely with City management to implement specific objectives and tasks designed to meet these goals. The following summarizes the goals identified by the City Council in the 12-Month Business Plan: ƒ ƒ ƒ ƒ ƒ Economic Development ƒ Support a State Land Reform bill. ƒ Continue efforts to support and protect Luke Air Force Base and assure its future mission. ƒ Develop a strategy to create new large spec office space per Greater Phoenix Economic Council (GPEC) recommendations. Growth and Development in Peoria ƒ Further advance the Loop 303 economic development strategy. ƒ Collaborate with State lands to improve on a disposition /development plan for strategic Loop 303 State Lands property in Peoria. ƒ Develop a fast-track permitting system for high value economic development projects. ƒ Develop and implement a strategy to bring one or more colleges to Peoria. ƒ Identify and acquire key properties for purchase throughout the city as a catalyst for development, redevelopment or for future municipal needs. Communities and Neighborhood ƒ Develop a strategic plan for aesthetic improvements and passive recreational opportunities along high voltage transmission corridors. ƒ Develop and implement a program to improve street right-of-way quality and maintenance. ƒ Develop neighborhood programs to do additional right-of-way beautification. Transportation ƒ Create a comprehensive multi-modal transportation plan that incorporates regional connections. ƒ Identify and develop a new truck route for west of the Agua Fria River. Downtown Redevelopment ƒ Develop a redevelopment study/strategy for the Grand Avenue Corridor and Downtown to include Grand Avenue, Peoria Avenue old town and rail opportunities. ƒ Implement the Historic Preservation Program. ƒ Implement the façade program. ix ƒ Creating the Preferred Peoria ƒ Implement the City of Peoria identity project. LOCAL ECONOMIC CONDITION AND OUTLOOK Peoria continues to face many important growth issues, and its citizens and municipal government are committed to finding solutions for the future. This commitment has helped to make 2008 another successful year and continues to provide a foundation for success in the years to come. The American League Seattle Mariners and the National League San Diego Padres, professional major league baseball teams, continue their Cactus League Spring Training and minor league activities in Peoria. The City owns and operates a ten thousand-seat stadium and sports complex used by both teams. The teams have six years remaining on a twenty-year joint use contract to share the facilities. Each team has the option of extending their contract for an additional ten years. This agreement contributes significantly to the economic impact of the Spring Training Cactus League of Maricopa County. Numerous restaurants and entertainment facilities have been developed in the area surrounding the Sports Complex, making this area an important part of the City’s economy. The City is currently undertaking a study to reevaluate the overall economic factors of this area to ensure that the area remain a thriving part of the City’s economy. The City experienced a downturn in the overall economy in fiscal year 2008. However, the City is continuing to attract and develop major commercial and retail areas. The ongoing development of a major retail center located at Happy Valley Road and Lake Pleasant Road is continuing to reach completion. This area will offer approximately 1.5 million square feet of retail space. Also, two major commercial areas (Empire Business Park and Mack Rio Vista) located in central Peoria have been completed and offer over 1.2 million square feet of commercial and light industrial space. These areas will offer employment opportunities in the City in the upcoming years. Two more auto dealerships, Mercedes and Infiniti, opened in the City in fiscal year 2008. Also, a Volkswagen dealership is planned in the near future. Southern Peoria, which is considered south of Bell Road, is somewhat reaching maturity and saturation for future developments. New opportunities for this area are limited due to the lack of available land to develop. However, a few new developments did come into play during this fiscal year. Park West, which is considered a major upscale retail center, opened this year and supports high end shops and restaurants. When completed, this center will offer over 450,000 square feet of retail and office space. Other potential commercial projects include 50,000 square feet of office at 75th Avenue and Paradise Lane and 90,000 square feet of office space at Skunk Creek and 83rd Avenue. Growth in northern Peoria is slowing due to the reduced number of new housing starts. However, some new office commercial developments totaling 90,000 square feet have recently been completed. Also, a hospital is being planned for the area. The hospital will be built in two phases. The first phase will start within the next 6 months and consist of 77,000 square feet of hospital space and 30,000 square feet of medical support facilities. The second phase, still being planned, will consist of approximately 300,000 square feet of support medical office space. Economic Outlook The regional economy has remained subdued during fiscal year 2008 with continued declines in housing construction and home prices. Because construction employment accounts for a larger share of Arizona’s economy than for the nation as a whole, job growth has been stagnate with only moderate gains in the business, healthcare and education sectors. Employment growth in the Phoenix metro area slowed to a 3% pace, down from the previously brisk 6-7% growth rates. In June 2008, the unemployment rate in the metropolitan Phoenix region was 4.3%, which remains below the state (4.4%) and national (5.5%) unemployment rates. Locally, Peoria has maintained a steady level of commercial construction, continuing to provide services and facilities to the new neighborhoods developed over the last several years. New housing construction in Peoria has continued at a slower pace than in previous x years as the state’s housing market continues to self-adjust home values down to more realistic and affordable levels. Specific revenues are described in further detail in the following paragraphs. Retail Sales: The City of Peoria, like all Arizona cities, places significant reliance on City-collected sales tax. Overall, sales tax revenues comprise over 34% of General Fund revenues in fiscal year 2008. The City’s sales tax rate (including the .03% transportation sales tax discussed below) is currently at 1.8%, with a 5.6% charge on hotel/motel service, 3.3% on utilities and 2.8% for restaurant/bar and amusement activities. Over 44% of sales tax collection is derived through retail sales. Over the last few years, strong automobile sales along with commercial development along the Bell Road corridor and several new power centers in northern Peoria have generated significant revenues for the City. Retail store and restaurant activity near the Peoria Sports Complex area, as well as the 91st Avenue and Northern area and the Jomax and Lake Pleasant area, have helped the City support its current service standards. Looking forward, new commercial activity has slowed significantly with the credit crunch and lower consumer confidence is having an impact on sales tax revenues, especially in the sale of automobiles. Fiscal year 2009 sales tax revenues are anticipated to be flat, or below, fiscal 2008 levels. Dedicated City Sales Tax for Transportation: During fiscal year 2005, a Citizens’ Bond Committee recommended to City Council that voters be asked to consider an increase to the sales tax rate of .03% (three-tenths of one percent) to be dedicated to transportation needs of the City. This includes construction and maintenance of streets as well as expansion of the City’s transit program. On September 13, 2005, the citizens approved the sales tax increase by an affirmative vote of 68%. The dedicated transportation sales tax, which became effective January 1, 2006, generated $10.3 million in revenue in fiscal year 2008. As with other sales tax revenues, little or no growth is expected in fiscal year 2009. State Shared Revenues: The City of Peoria receives significant 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. Much of this revenue is placed in the City’s General Fund, where it helps support the City’s day-to-day activities. The City projects an overall increase of 2% in these revenues in fiscal year 2009, reflective of a sluggish statewide economy. As the State continues to deal with budget shortages, changes to the formulas used to allocate revenues to the cities are part of the budget balancing conversations. To date, the state legislature has not looked to these revenues to balance the state budget at the expense of the cities. Property Tax: The City’s property tax rate was $1.49 per $100 of assessed valuation for fiscal year 2008. Of this, $.24, or about 16% of the total, was levied as the City’s primary property tax. The primary tax can be used for any general government purpose, but is limited in size by State statute. The primary tax generated $3.3 million in revenue for the General Fund in fiscal year 2008. After a reduction in the total tax rate of $.11 in fiscal year 2007 ($.01 primary and $.10 secondary), the City maintained the $1.49 tax rate for fiscal year 2008. However, City Council approved adjusting five cents from the primary property tax rate to the secondary property tax rate for fiscal year 2008. The primary rate was decreased an additional $.05 for fiscal year 2009, making the overall tax rate $1.44. With the decreased tax rate and increasing assessed value, primary property tax revenue projections for fiscal year 2009 are $2.8 million. Based on current development patterns, as well as expected decreases in the assessed value of existing properties, primary property tax revenue is expected to decrease over the next several years. Labor Force: Peoria has a well-educated and available labor force. This economic resource is at the forefront of our economic development efforts. The City is a member of the Greater Phoenix Economic Council (GPEC) which has been successful introducing new businesses to the City. In addition, the City has an Economic Development Department that is aggressively pursuing economic development in a tough market. xi FINANCIAL CONTROLS Internal Controls The management of the City of Peoria 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) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City’s financial statements. All internal control evaluations occur within the above framework. The City's internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary Controls The City of Peoria, 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. At a general election held in March 2003 the citizens of Peoria approved a permanent adjustment of the expenditure base from the original 1979-80 base of $3,247,857 to a new base of $18,247,857. The permanent adjustment eliminated the need for voter approval every four years. After adjustment for inflation and population growth, the city’s expenditure limitation for fiscal year 2008 was $639.7 million. The City may utilize the additional expenditure authority for any local budgetary purposes. 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 project 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 budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal year-end and are rebudgeted as needed in the next fiscal year. OTHER MATTERS Employee Pension Plans The City maintains two employee pension plans and a pension plan for elected officials. The general employee plan is administered through the Arizona State Retirement System. The Public Safety Pension Plan and the Elected Officials Retirement Plan are administered by the Arizona Public Safety Personnel Retirement System. Both the employee and the employer make contributions directly to these organizations. Financial information about these plans can be found in Note 17 of the notes to the financial statements included in the Financial Section of this report. The City also administers a small pension fund that provides retirement income for volunteer firemen. The City no longer utilizes volunteer firemen, and only six former members currently receive payments under the plan. The plan for volunteer firemen is sufficiently funded with assets of $229,909 at June 30, 2008. For fiscal year 2008, investment income and other revenues were $11,552 while expenditures for retirement payments and administrative expenses were $34,475. xii Debt Administration Under current State Statutes, cities can issue general obligation bonds for purposes of water, sewer, artificial lighting, open space, parks, playground and recreational facilities, public safety and transportation up to an amount not exceeding 20 percent of the secondary assessed valuation. Cities can also issue general obligation bonds for all other purposes up to an amount not exceeding 6 percent of the secondary assessed valuation. As of June 30, 2008, the City’s general obligation debt of $126,195,000 was below the combined legal limit of $426,968,744. A detailed computation of this legal debt margin is included in Table XXIII in the statistical section of this report. Two standard indicators of a City’s debt position and debt burden include: 1) the ratio of general obligation bonded debt, supported by the City’s general tax revenues, to secondary assessed valuation, and 2) the amount of bonded debt per capita. The following is a summary of these two indicators at June 30, 2008. Percent of General Obligation Debt to Secondary Assessed Value: General Obligation Debt $ 126,195,000 Secondary Assessed Value $ 1,642,187,476 G.O. debt to secondary assessed 7.7% value Bonded Debt Per Capita: General Obligation Debt Estimated Population G.O. debt per capita $ $ 126,195,000 158,227 797.56 In June 2003, the City received an upgrade to its Utility Revenue Bonds from Moody’s from A2 to A1. In September 2006, the City received an upgrade to its Municipal Development Authority bond rating from Standard & Poor’s from AA to AA+. In February 2007, the City received an upgrade to its General Obligation bond rating from Standard & Poor’s from AA- to AA as well as its Utility Revenue Bonds from A+ to AA-. In March 2007, the City received ratings for its Improvement District bond ratings from each of the rating agencies. Moody’s rated them at A1, Standard & Poor’s upgraded the rating from A- to A, and Fitch upgraded the rating from A+ to AA-. In September 2007, Fitch upgraded the Water and Wastewater bond rating for the City from A+ to AA-. In February 2008, the City issued Municipal Development Authority Transportation Sales Tax Revenue Bonds and received initial ratings of AA from Standard & Poor’s, A+ from Fitch Ratings and Aa3 from Moody’s Investors Service. Also in February 2008, the City received an upgrade from A1 to Aa3 for its existing Municipal Development Authority debt and an upgrade from Aa3 to Aa2 for its existing General Obligation debt from Moody’s Investors Service. All of the City’s bonds are rated in the “A” or better category. The City is diligent in its efforts to maintain or improve its bond ratings. General obligation debt is serviced by secondary property taxes. Revenue supported debt is serviced with the user fees associated with the particular fund activity. The City’s bond ratings are indicated in the table below. General Obligation Bonds Current rating Prior rating Date of current rating Water & Wastewater Bonds Current rating Prior rating Date of current rating Moody’s Investors Service Standard & Poor’s Fitch Ratings Aa2 Aa3 2/15/2008 AA AA2/2/2007 AA AA 2/5/2007 A1 A2 6/2/2003 AAA+ 2/6/2007 AAA+ 9/5/2007 xiii Moody’s Investors Service Municipal Development Authority (Utility) Bonds Current rating Aa3 Prior rating A1 Date of current rating 2/15/2008 Municipal Development Authority (Transportation) Bonds Current rating Aa3 Prior rating Not rated Date of current rating 2/15/2008 Highway User Revenue Bonds Current rating A Prior rating not rated Date of current rating 6/25/1988 Improvement District Bonds Current rating A1 Prior rating Not rated Date of current rating 3/23/2007 Standard & Poor’s Fitch Ratings AA+ AA 9/26/2006 AAAA2/13/2006 AA Not rated 2/15/2008 A+ Not rated 2/15/2008 A not rated 2/10/1988 A+ A3/13/2000 A A3/26/2007 AAA+ 3/26/2007 Cash Management The Finance Department manages the City’s investment portfolio with the assistance of an external investment advisory firm and ensures compliance with the City’s Investment and Portfolio Policies. The City’s investment policy is to invest public funds with maximum security in a manner which will provide a reasonable return while meeting the daily cash flow demands of the City and conform with all applicable state and local statutes. The primary objectives, in priority order, are safety of principal, liquidity, and attaining a market rate of return. The City is permitted to invest in certificates of deposit, money market mutual funds, repurchase agreements, commercial paper, direct U.S. Treasury debt, securities guaranteed by the U.S. Government or any of its agencies and instrumentalities, and the State of Arizona’s Local Government Investment Pool. Temporary idle cash during the year was invested in the State Treasurer's Investment Pool and overnight repurchase agreements collateralized by U.S. Government securities. The average yield on unrestricted investments was 3.39% for the year ended June 30, 2008. The book value of the City’s unrestricted investment portfolio at June 30, 2008 was $335,368,051. For further information on the City’s investments please refer to Note 4 of the notes to the financial statements. Risk Management The City is exposed to various risks of loss related to public and property liability and workers’ compensation. Public liability includes public officials’ errors and omissions, automobile and general liability. During fiscal year 2008 the City was self-insured for the first $500,000 of each public liability claim. Coverage in excess of these amounts up to $40,000,000 was provided through the purchase of commercial insurance. During the fiscal year ended June 30, 2008 there was no significant reduction in excess insurance coverage. The Risk Management Division of the City Attorney’s Office administers the City’s liability insurance program. Workers’ compensation claims are reviewed by the Human Resources Department and handled through the State Compensation Fund. The City of Peoria has an aggressive safety program that promotes employee safety on the job and focuses on risk control techniques designed to minimize accident-related losses. For further information xiv on risk management and insurance coverage, please refer to Note 1.P of the notes to the financial statements and Tables XXXIV and XXXV in the statistical section of this report. OTHER INFORMATION Responsibility for the accuracy of the presented data and the completeness and fairness of the presentations, including all disclosures, rests with the management of the City. The City has established and maintains a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft or misuse and to allow the compilation of sufficient reliable information for the preparation of financial statements. We believe the data, as presented in this report, is accurate in all material respects and is presented in a manner which fairly sets forth the financial position and results of operations of the City on both a city-wide and fund basis. Furthermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activity and financial stability have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). The basic financial statements and related notes have been audited by an independent firm of certified public accountants, Heinfeld, Meech & Co., P.C., whose report is included herein. The audit satisfies Article VI, Section 7, of the City Charter, which requires an annual audit of all accounts of the City by an independent certified public accountant. As stated in the independent auditors’ report, the goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Peoria, Arizona for the fiscal year ended June 30, 2008, are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the financial statements of the City of Peoria, Arizona for the fiscal year ended June 30, 2008, are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. Additionally, the City is required to have an independent audit (“Single Audit”) of federal financial assistance received by the City directly from federal agencies, or passed through to the City by the State of Arizona or other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the government’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. The results of the City’s single audit for the fiscal year ended June 30, 2008 found no instances of material weakness in the internal control, or violations of applicable laws and regulations with respect to major programs. The reports from Heinfeld, Meech & Co., P.C. are available in the City of Peoria, Arizona’s separately issued Single Audit Report. Award The Government Finance Officer's Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Peoria, Arizona for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2007. This is the 23rd consecutive year the City of Peoria has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. That report must satisfy both generally accepted accounting principles and applicable legal requirements. xv A Certificate of Achievement is valid for one year only. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement program's requirements. As such, we are submitting this report to the GFOA to determine its eligibility for a certificate. Acknowledgments The preparation of this Comprehensive Annual Financial Report could not have been accomplished without the efficient and dedicated services of the staff of the Finance Department, especially the Financial Services Division. We want to give special recognition to the City’s accounting team for their diligent efforts and superior contributions to this report. We also wish to thank the members of the City Council for their interest and support in planning and conducting the financial affairs of the City in a responsible and progressive manner. Sincerely, Brent Mattingly Chief Financial Officer xvi Peoria Citizens City of Peoria Organizational Chart May 2008 Mayor and City Council Citizen Advisory Boards & Commissions City Manager Municipal Court Intergovernmental Affairs City Attorney Assistant to the City Manager Deputy City Manager Deputy City Manager Deputy City Manager Finance, Economic Development & Utilities Development & Community Services Public Safety & Administrative Services Budget Economic Development Engineering Community Services Police City Clerk Finance Utilities Public Works Community Development Fire Human Resources Communications & Public Affairs Information Technology Safety Management City of Peoria Principal Officials of the City Fiscal Year 2008 Bob Barrett Mayor Cathy Carlat Vice-Mayor Ron Aames Councilmember Joan Evans Councilmember Vicki Hunt Councilmember Carlo Leone Councilmember Dave Pearson Councilmember Carl Swenson City Manager John Wenderski Deputy City Manager – Finance & Economic Development Susan Thorpe Deputy City Manager – Safety & Administrative Services Susan Daluddung Deputy City Manager – Development & Community Services George Anagnost Municipal Judge Stephen M. Kemp City Attorney J.P. de la Montaigne Community Services Director Dan Nissen Acting Engineering Director Wynette Reed Human Resources Director Glen Van Nimwegen Community Development Director Robert McKibben Fire Chief Larry Ratcliff Chief of Police Mary Jo Kief City Clerk Brent D. Mattingly Chief Financial Officer, Finance Director Stephen Bontrager Utilities Director Grady Miller Communications & Public Affairs Director Bill Mattingly Public Works Director Steve Prokopek Economic Development Director Sandy Teetsel Information Technology Director Jeff Tyne Budget Director xvii --6-- Mayor and City Council City Council Districts Mayor Bob Barrett Carefree Highway Cathy Carlat Mesquite District Litchfield Rd. Dave Pearson Ironwood District Mesquite District Ron Aames Palo Verde District Ironwood District RI AF REEWAY - LOOP 101 Vicki Hunt Acacia District UA AG Willow District F Palo Verde District Joan Evans Willow District .U. S. 60 Carlo Leone Pine District E AV GRA ND Acacia District Pine District For more information visit www.peoriaaz.gov/council City Mayor and Council City of Peoria, Arizona Bob Barrett Mayor Barrett was first elected to the City Council representing the Ironwood District in 2001 and was reelected to a second term in 2004. A resident of Peoria since 1993, Mayor Barrett served in the US Army and was awarded the Bronze Star in Vietnam in 1971. Mayor Barrett graduated with honors from Arizona State University with a degree in Mass Communications-Journalism and worked for the Arizona Republic for more than 20 years as a magazine writer, reporter and editor. He currently works in the Communications Department of Central Arizona Project. Mayor Barrett received the Meritorious Service Medal-National Guard in 2001 and was Media Relations Coordinator for the International Workshop for Emergency Response. He is a member of the International Association of Business Communicators, the Public Relations Society of America, Colorado River Water Users Association, Valley Forward, and has served as the Chairman-Media Relations for the Statewide Emergency Taskforce. He served as Vice Mayor from 2003-2004 and 2005-2006 when he resigned to run for mayor. He also served as Chairperson of the Not-for-Profit subcommittee and Chairperson of the Boards and Commissions subcommittee of the City Council. He is currently a member of the Peoria Sunrise Lions Club and is a Melvin Jones Fellow. Cathy Carlat Vice Mayor Mesquite District Cathy Carlat was elected to the Peoria City Council representing the Mesquite District in 2005. She was born and raised in the Valley, graduating from Paradise Valley High School. Councilor Carlat moved to Texas in 1984 and has been a Peoria resident since returning to Arizona in 2001. Cathy and her husband Dennis have two children Adam, 20 and Natalie, 13. As a businesswoman, Councilor Carlat has spent many years in management, including positions as a District Manager for a Fortune 500 Company and Vice President of a real estate leasing firm. She was also the owner of her own business for six years in Dallas, Texas. She currently works in the Communications Department of Central Arizona Project managing special events and public relations. Prior to running for office, Councilor Carlat served on the Mayor's Ad Hoc Rose Valley Water Committee. Councilor Carlat also serves as Chair of the Council Ad Hoc Recycling Subcommittee and is a member of the Council Subcommittee of Boards and Commissions, which screens residents who are seeking appointments. Vicki Hunt Acacia District As a native to the West Valley, Vicki Hunt was elected to City Council in 2003 representing the Acacia District. Councilor Hunt retired as an educator, completing her award-winning career in the classroom at Peoria High School where she taught English. She is also a published writer and editor of educational materials. Councilor Hunt opened the Old Town Bed and Breakfast in the downtown area of Peoria after her retirement. She and her husband operated the business until they sold it in 2006. She earned her Bachelor’s Degree in English at Grand Canyon College, and subsequently graduated from Chapman University Summa Cum Laude with a Master’s in Curriculum and Instruction. She also did advanced graduate work at Bread Loaf School of English in Vermont and Oxford University in England. Councilor Hunt’s family includes her husband Tom, three grown children and four beautiful grandchildren. Councilor Hunt’s past and current community involvement includes: State Participation: Arizona English Teachers Association 1984-2000; Regional Participation: Commissioner, WESTMARC Enterprise Zone Commission – 2005-Present; Peoria Participation: Board of Directors, Theater Works – 2003-2005; Member, Peoria Historical Society – 1998Present; Member, Peoria Women’s Club – 2001-Present; President, Peoria Main Street Partnership – 2002-2003; Board of Directors, Friends of Peoria Public Library – 2002-Present; Member, Peoria Rotary Club – 2003-Present; City Participation: Co-Chair, Central Peoria Revitalization Ad Hoc Committee – 2001-2003; Graduate, City of Peoria’s Inaugural Leadership Institute – Spring 2002; Member, Not-for-Profit Funding subcommittee – 2004Present; Member, Boards and Commissions subcommittee – 2003-Present; Council Liaison, Economic Development Advisory Board – 2004-Present; Chair – Ethic Committee. xxi City Mayor and Council City of Peoria, Arizona Dave Pearson Councilmember Ironwood District Councilor Dave Pearson was elected in November 2006 and re-elected in 2008 to represent the Ironwood Council District. He previously served two terms on the Peoria City Council from June 1991 through June 1997, and was Vice Mayor in 1993. Councilor Pearson was Chairperson of the Peoria Municipal Sports Complex Authority during the construction of the Peoria Sports Complex, the spring training site of the San Diego Padres and the Seattle Mariners Major League Baseball teams. He was also a founding member of the Peoria Diamond Club, a major community volunteer group. He has served on the Peoria Housing Commission and various other civic and bond committees. Councilor Pearson is currently a teacher/librarian in the Peoria Unified School District where he has been an educator for 26 years. Prior to teaching, Mr. Pearson was a newspaper reporter and editor. He holds a bachelor’s degree in journalism and elementary education from Arizona State University and holds a school library endorsement from the State of Arizona. He is a 19 year resident of Peoria where he and his wife have raised three children. Ron Aames Councilmember Palo Verde District Councilor Ron Aames joined the Peoria City Council on January 2, 2007 as the representative of the Palo Verde District. He was elected to a four year term in November 2006. His goal is to champion the needs and wishes of his fellow citizens in the Palo Verde District and Peoria. Ron and wife Jacqueline, who is a college professor and writer, moved to Arizona and Peoria in August 2002. They both love the variety and wonderful climate of the Valley of the Sun. They have a large extended family in the Northwest Valley. Educationally, Councilor Aames has a background in planning and city development, areas he anticipates will benefit him in his work as a councilmember. His degrees include a Ph.D., which focused on urban development, from the University of Wisconsin-Madison, and a Master’s from California State Polytechnic University-Pomona, which focused on transportation planning. In business, Councilor Aames has been a corporate executive for hi-tech, banking, and marketing companies. In the marketing area, he was a managing consultant for eight years for The Gallup Organization, where his clients included federal government agencies. Councilor Aames is currently an independent marking consultant. Carlo Leone Councilmember Pine District First elected in 1999 as the Pine District representative to the Peoria City Council, Councilor Leone was re-elected in 2003 and 2006. He and his wife, Joan, have been residents of Peoria since 1988. Married since 1955, they have five children, 13 grandchildren, and two great grandchildren. Councilor Leone retired in 1994 after 20 years as a Union Manager. He was a Political Science Major at Mt. San Antonio College in Walnut, California, and attended UCLA and Loyola Colleges studying Labor Law. Councilor Leone is a member of the following boards and commissions: National Participation: National League of Cities: Human Development Committee; National League of Cities: Leadership Institute-Bronze & Silver certificates. State Participation: Member, Board of Manufactured Housing-appointed by Governor Napolitano. City Participation: Member, Boards and Commissions Subcommittee; Member, Ethics Committee; Member, Impact Fee Ad-Hoc Committee; Member, Peoria Chamber of Commerce Military Affairs Committee. Volunteer: Volunteer Coach, City of Peoria Youth Basketball Program - 2002-Present; Peoria Diamond Club-Peoria Sports Complex – 1993-Present; Knights of Columbus; Habitat for Humanity of the West Valley; Country Meadows Lions Club; Peoria Kiwanis Club (former member). xxii City Mayor and Council City of Peoria, Arizona Joan Evans Councilmember Willow District Councilor Evans was elected to her first four-year term on the Peoria City Council in November 2004 and re-elected in 2008. Education, personal growth and continuous learning are accurate words to describe the experience of Councilor Joan Evans of the Willow District. With a bachelor’s degree from Arizona State University in Elementary Education and a master’s degree from Northern Arizona University in Educational Leadership, Councilor Evans has devoted herself to education. After teaching 4th and 5th grades for 18 years in the Peoria Unified School District (PUSD), she served five years in educational administration as an Assistant Principal. Now retired from primary education and PUSD, Councilor Evans is a certified Myers-Briggs Type Indicator Consultant. She is also involved with the Northwest Valley Young Life Committee, a faith based ministry for youth, as well as the Women’s Ministry Team at Trinity Bible Church. Currently, Councilor Evans is involved in many aspects of the City of Peoria. She serves on the Peoria City Council Ethics Committee, the Ad Hoc Recycling Committee, and the Boards and Commissions Subcommittee. Councilor Evans has raised her family in the Phoenix area for the past 53 years, with the last 11 years being spent in Peoria. Now in her 40th year of marriage to husband David, Councilor Evans enjoys spending time with her family which includes two married daughters and seven grandchildren. Natalie and husband Arvid have four children while Lisa and husband Christopher have three children. xxiii MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Peoria, Arizona (the City), we offer this narrative overview and analysis of the financial activities of the City of Peoria, Arizona for the fiscal year ended June 30, 2008. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the financial plan (the approved annual budget), and (5) identify individual fund issues or concerns. This discussion and analysis (MD&A) has a different focus and purpose than the transmittal letter presented on pages v-xv of this report and is designed to be read in conjunction with the transmittal letter as well as the financial statements beginning on page 19 and the accompanying notes to the financial statements. Financial Highlights ♦ The City’s total net assets increased $113.1 million (8.9%) in fiscal year 2008, $82.2 million (a 10.2% increase) in governmental activities and $30.9 million (a 6.6% increase) in business-type activities. ♦ Total net assets of the City are $1,390.9 million, of which $262.4 million is unrestricted (up $19.6 million, 8.1%, from last year’s $242.8 million unreserved net assets). ♦ The governmental activities program revenues decreased by approximately $15.4 million (15.9%) from the previous year due primarily to decreased capital grants in highways and streets. ♦ The business-type activities program revenues increased by approximately $4.2 million (5.2%) over the previous year. ♦ At June 30, 2008, total fund balance of the governmental funds was $307.4 million, up $9.2 million (3.1%) from the previous year. Of this, $63.8 million (up 22.6%) was unreserved/undesignated (available for spending at the government’s discretion). ♦ General Fund inflows (on a budgetary basis) were less than budgeted inflows by $2.8 million for fiscal year 2008. Budgetary basis outflows of the General Fund were only 82.1% ($27.5 million in savings) of the final budgeted outflows. ♦ At June 30, 2008, unreserved/undesignated fund balance for the General Fund was $33.9 million, or 30.5% of General Fund expenditures for fiscal year 2008. ♦ During fiscal year 2008, the City issued $47.0 million in Municipal Development Authority (MDA) Bonds and $42.7 million in Water Infrastructure Financing Authority (WIFA) debt. OVERVIEW OF THE FINANCIAL STATEMENTS As pictured below, the financial section of the Comprehensive Annual Financial Report (CAFR) for the City of Peoria, Arizona consists of this discussion and analysis, the basic financial statements, other required supplementary information and other non-required financial schedules. The basic financial statements include the government-wide financial statements, fund financial statements, including the budgetary statements for the general fund and major special revenue funds, and notes to the financial statements. The additional non-required information includes combining schedules and other supplementary schedules presented after the basic financial statements (Combining Statements, Supplemental Information and Statistical Sections of this report). 3 Required Components of the Annual Financial Report Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Governmentwide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail 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. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are broken into two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. • The governmental activities include the basic services of the City including general government (administration), culture and recreation, police, fire, development services, highways and streets, public works, and human services. These activities are generally supported by taxes and general revenues. • The business-type activities include the private sector type activities such as the water, wastewater and solid waste utilities, the stadium and public housing. These activities are primarily supported through user charges or fees. The statement of net assets presents information on all of the City’s assets and liabilities (excluding fiduciary funds), both current and long-term, with the difference between assets and liabilities reported as net assets. The focus on net assets is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of how the financial position of the City may be changing. Increases in net assets may indicate an improved financial position; however, even decreases in net assets may reflect a changing manner in which the City may have used previously accumulated funds (i.e. cash funding of capital projects). To assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of its infrastructure, should also be considered. The statement of activities presents information showing how the City’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the City, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenues for support. 4 Fund Financial Statements Also presented are fund financial statements for governmental funds, proprietary funds and fiduciary funds. The fund financial statements focus on major funds of the City. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or conditions. Funds are used to ensure and demonstrate compliance with finance-related legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the City. Governmental funds – Governmental funds are used to account for most of the City’s basic services. These are essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmental activities column on the government-wide financial statements, these fund financial statements (pages 22-35) focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs. Since the governmental fund financial statements focus on near-term spendable resources, while the governmental activities on the government-wide financial statements have a longer-term focus, it may be useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. To facilitate this comparison, reconciliations of the differences between the two are provided immediately following the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances and in Note 2 (pages 59-63). The City maintains several individual governmental funds organized according to their type (special revenue, debt service, and capital projects). Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Half-Cent Sales Tax Fund, Highway User Revenue Fund, Development Fee Fund, Transportation Sales Tax Fund, GO Bond Debt Service Fund, Special Assessment Debt Service Fund, and General Obligation Bond Capital Projects Fund, which are considered to be major funds of the City. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements (page 96-99). Proprietary funds – Proprietary funds are used to account for services primarily supported by user fees. The proprietary fund financial statements (pages 36-43) are prepared on the same long-term focus as the government-wide financial statements. The City maintains the following two types of proprietary funds. Enterprise funds are used for activities that primarily serve customers outside the governmental unit. The enterprise funds generally provide information similar to the business-type activities column of the government-wide financial statements, but provide more detail and additional information such as cash flows. Any reconciliation necessary between the enterprise funds and the business-type activities column of the government-wide financial statements is provided with the fund statements. The City’s enterprise funds are the Water, Wastewater, and Solid Waste utilities, as well as the sports complex (Stadium Fund) and public housing activities. All of the enterprise funds are considered to be major funds of the City. Internal service funds are used for activities where the primary customer is the City itself. Because the primary customers of the internal service funds are the governmental activities, the assets and liabilities of those funds are included in the governmental activities column of the government-wide statement of net assets. The costs of internal service funds are allocated to the various user functions on the government-wide statement of activities. The internal service funds are combined into a single column on the proprietary fund statements. Additional detail of the internal service funds is provided in combining statements (pages 118-120). The internal service funds of the City include the Motor Pool, Self-Insurance, Facilities Maintenance, and Information Technology Funds. 5 Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of others. Fiduciary funds are not included in the government-wide financial statements because the resources of those funds are not available to support programs of the City. The fiduciary fund statements (pages 4445 and 126-127) are prepared on the same basis as the government-wide and proprietary fund statements. Notes to the financial statements – The notes to the financial statements (pages 47-85 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 footnotes. The City has chosen to present these budgetary statements as part of the basic financial statements. Additionally, governments are required to disclose certain information about employee pension funds. The City has disclosed this information in Note 17 to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position for the City as a whole as of and for the year ended June 30, 2008, with comparative information for the previous year. Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets of the City for June 30, 2008, compared to the prior year. Statement of Net Assets As of June 30 (in millions of dollars) Current and other assets Capital assets Total assets Other liabilities Long-term liabilities outstanding Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets Governmental Activities 2007 2008 $ 393.5 $ 378.3 767.8 867.0 1,260.5 1,146.1 $ Business-type Activities 2008 2007 $ 102.2 $ 135.5 564.6 461.5 666.8 597.0 Total Primary Government 2008 2007 $ 495.7 $ 513.8 1,431.6 1,229.3 1,927.3 1,743.1 Percent Change (3.5)% 16.5 10.6 53.7 318.2 371.9 48.9 290.8 339.7 9.3 155.2 164.5 9.5 116.2 125.7 63.0 473.4 536.4 58.4 407.0 465.4 7.9 16.3 15.3 602.7 65.5 220.4 888.6 591.8 40.8 173.8 806.4 427.3 33.0 42.0 502.3 369.6 32.7 69.0 471.3 1,030.0 98.5 262.4 $ 1,390.9 961.4 73.5 242.8 $ 1,277.7 7.1 34.0 8.1 8.9 $ $ $ The net assets of the City increased $113.1 million (8.9%) in fiscal year 2008. Of this increase, $82.2 million was in the governmental activities, a 10.2% increase, and $30.9 million was in the business-type activities, a 6.6% increase. Net Assets consists of three components. The largest portion of net assets ($1,030.0 million or 74.0%) 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. Although the capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since 6 the capital assets themselves are not intended to be used to liquidate these liabilities. This category of Net Assets increased $68.6 million in fiscal year 2008 primarily as a result of the purchase, construction and donation of additional capital assets, notably the completion of the Butler Water Reclamation Facility. The second portion of the City’s net assets ($98.5 million or 7.1%) represents resources that are subject to external restrictions on how they may be used. The increase of $25.0 million is primarily due to an increase of $14.9 million in restricted for capital projects in the governmental activities and $8.9 million in net assets restricted for development fees in the governmental activities. The third portion consists of Unrestricted Net Assets of $262.4 million (18.9%). These net assets may be used to meet the City’s ongoing obligations to citizens and creditors. This category increased $19.6 million (8.1%) in fiscal year 2008. Unrestricted net assets is the balance of net assets remaining after calculating the other two categories discussed above. Unrestricted net assets of governmental activities increased $46.6 million, while unrestricted net assets of business-type activities decreased $27.1 million. Much of the increase in unrestricted net assets comes from the following funds: general fund $2.9 million, half-cent sales tax fund $1.3 million, highway user revenue fund $1.6 million, and transportation sales tax fund $9.7 million. Changes in Net Assets The following table compares the revenue and expenses for the current and previous fiscal year. Changes in Net Assets (in millions of dollars) Governmental Business-type Activities Activities 2007 2008 2007 2008 REVENUES: Program revenues: Fees, fines & charges for services $ Federal grants Other grants and entitlements Capital contributions General revenues: Property taxes Sales and use taxes Franchise taxes State shared sales tax Urban revenue sharing Auto-in-lieu taxes Miscellaneous Investment earnings Total revenues EXPENSES: Program activities: Governmental activities: General government Culture and recreation Police Fire Development services Highways and streets Public works Human services Interest expense on debt Unallocated depreciation Business-type activities: Water utility Wastewater utility Solid Waste utility Stadium Housing Total expenses Excess before transfers Transfers Increase (decrease) in net assets $ 25.5 2.9 33.4 19.7 $ 23.2 3.1 49.2 21.4 $ 62.0 .1 22.3 $ 61.9 .1 18.2 Total Primary Government 2008 2007 $ 87.5 3.0 33.4 42.0 $ 85.1 3.2 49.2 39.6 2.8% (6.3) (32.1) 6.1 45.3 (0.6) (5.0) (3.1) 21.9 (1.8) (20.0) (7.8) (1.1) 26.3 68.5 3.8 12.7 19.5 5.6 6.0 13.3 237.2 18.1 68.9 4.0 13.1 16.0 5.7 7.5 12.1 242.3 3.3 87.7 5.9 86.1 26.3 68.5 3.8 12.7 19.5 5.6 6.0 16.6 324.9 18.1 68.9 4.0 13.1 16.0 5.7 7.5 18.0 328.4 17.1 21.8 34.5 19.9 6.5 22.9 7.8 2.9 11.2 .6 24.5 17.9 28.5 17.4 5.6 23.0 6.3 2.3 8.1 .6 - - 17.1 21.8 34.5 19.9 6.5 22.9 7.8 2.9 11.2 .6 24.5 17.9 28.5 17.4 5.6 23.0 6.3 2.3 8.1 .6 145.2 92.0 (9.8) 82.2 134.2 108.1 2.0 110.1 28.7 17.3 13.3 6.9 .4 66.6 21.1 9.8 30.9 27.1 14.5 9.5 5.4 .4 56.9 29.2 (2.0) 27.2 28.7 17.3 13.3 6.9 .4 211.8 113.1 113.1 27.1 14.5 9.5 5.4 .4 191.1 137.3 137.3 $ $ 7 $ $ $ Percent Change (30.2)% 21.8 21.1 14.4 16.1 (0.4) 23.8 26.1 38.3 5.9 19.3 40.0 27.8 10.8 (17.6) (17.6) The general revenues of governmental activities increased $10.3 million (7.1%) from the previous year. This increase is due to increased secondary property tax revenues (restricted for GO Bond debt service) and Urban revenue sharing revenues. Secondary property tax revenues increased by $8.2 million (56.8%) in fiscal year 2008. Urban revenue sharing revenues increased by $3.5 million (22.1%). The program revenues of governmental activities decreased $15.4 million (15.9%) largely due to a decrease in donations of capital assets in the highways and streets function. Charges for services increased by $2.3 million in fiscal year 2008, due to one-time public works repayment zone revenues of $4.4 million. Without these one-time revenues, charges for services decreased $2.1 million (9.1%) as follows: $1.1 million in development services, $1.1 million in public works, and $1.1 million in other functions while culture and recreation increased $1.2 million. The program revenues of business-type activities increased $4.2 million (5.2%). The increase of $4.1 million in capital contributions (impact fees and donations of capital assets) almost entirely accounts for this increase. For fiscal year 2008, total governmental revenues decreased $5.1 million (2.1%) and total business-type revenues increased $1.6 million (1.9%). Expenses increased $11.0 million (8.2%) and $9.7 million (17.0%) for the governmental activities and business-type activities, respectively. Culture and recreation expenses increased by $3.9 million (21.8%), police expenses increased by $6.0 million (21.1%), fire expenses increased by $2.5 million (14.4%), interest expense on debt increased $3.1 million (38.3%), while general government expenses decreased by $7.4 million (30.2%). 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. It should be noted that this is not intended to represent full cost allocation to these functions. Expenses not covered by direct program revenues are covered by general revenues of the City, primarily taxes and state shared revenues. In the governmental activities, the program revenues of $81.5 million are 56.1% of the governmental expenses for fiscal year 2008, down from 72.2% in fiscal year 2007. Much of this decrease is due to an $18.2 million decrease in governmental activities capital grants and contributions from fiscal year 2007 to fiscal year 2008. This is a direct result of decreased new development during fiscal year 2008. Governmental Activities Program Revenues & Expenses 45 40 (millions $) 35 30 25 20 15 10 5 G en er al C go ul ve tu rn re m & en re t cr ea tio n D Po ev l ic el e op m en Fi H ig re ts hw er vi ay ce s & s s tr Pu ee bl ts i H um c w or an ks se r U v D na ic eb es llo ti c. nt e de pr res t ec ia tio n 0 Program revenues Expenses In the business-type activities, program revenues of $84.4 million are 126.7% of the business-type expense for fiscal year 2008. This compares to $80.2 million and 140.9% in fiscal year 2007. 8 Governmental activities account for 73.0% of the total revenues of the City and 68.6% of the total expenses in fiscal year 2008. These percentages were 73.8% and 70.2% respectively in fiscal year 2007. As seen in the following graph, one of the largest financing sources for the City is charges for services (26.9%), primarily because this is the major funding source of the business-type activities (70.7% of business-type revenues). Contributed capital represents 12.9% of the fiscal year 2008 revenues, of which approximately $35.7 million (85.0%) is non-spendable resources. The major funding sources of the governmental activities are taxes (30.4% of total revenues, 41.6% of governmental revenues) and state shared revenues (11.6% of total revenues, 15.9% of governmental revenues). Property taxes increased 45.3% from fiscal year 2007 to fiscal year 2008. The city’s primary assessed valuation increased 20.4%, while the secondary assessed valuation increased 47.2%. Meanwhile, the primary tax rate decreased from $.28 per $100 assessed value to $.24 per $100 assessed value for fiscal year 2008 while the secondary tax rate increased from $1.20 per $100 assessed value to $1.25 per $100 assessed value for fiscal year 2008. The increase in property taxes resulted primarily from the secondary tax rate increase, combined with the increase in the secondary assessed valuation. Government-Wide Revenue Sources Fiscal Year 2008 Other grants & entitlements 10.3% Investment earnings 5.1% Property taxes 8.1% Sales & use taxes 21.1% Federal grants 0.9% Charges for services 26.9% Franchise taxes 1.2% Other 1.9% Contributed capital 12.9% State shared revenues 11.6% Business-type activities account for 31.4% of the functional expenses of the City for fiscal year 2008, while governmental activities account for 68.6% of the functional expenses. For the governmental activities, the largest users of resources are public safety (25.7% of total expense, 37.5% of governmental expenses), highways and streets (10.8% of total expenses, 15.8% of governmental expenses), culture and recreation (10.3% of total expenses, 15.0% of governmental expenses), and general government (8.1% of total expenses, 11.8% of governmental expenses). Total government-wide expenses (not including transfers out) of the City increased $20.7 million (10.8%) in fiscal year 2008. Expenses of the governmental activities increased $11.0 million (8.2%). This includes increases of $8.5 million (18.5%) for public safety (police and fire), $3.9 million (21.8%) for culture and recreation, $3.1 million (38.3%) for interest expense, $1.5 for public works (23.8%), $.9 for development services (16.1%), $.5 million for human services (24.7%) and a decrease of $7.4 million (30.2%) for general government. The increases reflect the Council’s goals of public safety, transportation, and recreational opportunities. Expenses in Business-type activities increased $9.7 million (17.0%). The increase is primarily caused by the following: sanitation supplies increased by $2.8 million due to costs associated with instituting the recycling program; sewage disposal services increased $.9 million; other utility costs increased $.6 million; service charges from governmental activities increased by $2.7 million; personnel costs increased by $1.4 million and depreciation expense increased by $1.0 million. The remaining $.3 million of the increase is numerous small changes. 9 Government-Wide Functional Expenses Fiscal Year 2008 General government 8.1% Business-type activities 31.4% Culture & recreation 10.3% Highways & streets 10.8% Public safety 25.7% Interest 5.3% Development services 3.1% Public works 3.7% Other 1.6% 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 the governmental fund financial statements (pages 22-27) is to provide information on nearterm inflows, outflows and balances of spendable resources. All major governmental funds are discretely presented on these financial statements, while the non-major funds are combined into a single column. Combining statements for the non-major funds may be found on pages 96-99. The fund balance of the governmental funds is $307.4, an increase of $9.2 million, or 3.1%, from the previous year. Of this, $143.9 million (down $11.3 million (7.3%) from the previous year) is classified as “Reserved” because it is not appropriable for expenditure or is legally segregated for a specific future use. The increase in total fund balance is primarily due to increased property tax revenues which are a result of increased assessed values and continued new growth and increased urban revenue sharing. An additional $99.7 million of the governmental fund balance (up $8.7 million (9.6%) from the previous year) has been designated or committed for specific purposes by council policy or administrative action. These designations include encumbrances ($35.1 million), economic stabilization reserves ($38.0 million), debt service reserves ($1.0 million), and current capital projects and equipment replacement reserves ($25.6 million). The designations are further described in Note 11 to the financial statements (pages 69-70). The remaining $63.8 million of governmental fund balance is classified as “Unreserved, Undesignated”. This balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. By Council policy, these resources are used to fund one-time needs of the City including capital facilities and transportation improvements. The unreserved, undesignated fund balance increased 22.6% during fiscal year 2008, primarily due to an $11.4 million increase in the unreserved, undesignated fund balance of the General Fund. The General Fund is the chief operating fund of the City and accounts for many of the major functions of the government, including public safety, parks and recreation, community development and general administrative services. The General Fund revenues increased $3.8 million (3.6%) over the previous year. Urban revenue sharing increased $3.5 million (22.1%) while charges for service increased $2.0 million due to repayment zone revenues. Much of the repayment zones revenues are likely one-time 10 revenues. The City’s sales tax revenues in the General Fund decreased $1.3 million (3.2%) while state shared sales tax revenues decreased $434,226 (3.3%). General Fund expenditures increased $6.8 million (6.5%). Personnel costs increased $8.4 million while other costs (contractual, commodities and capital out lay) decreased. The increased personnel costs are due to the following: the City granted a 2.5% increase in salaries and wages in fiscal year 2008, plus eligible employees received salary step increases; employer retirement contributions, health insurance and other personnel benefit costs continued to increase in fiscal year 2008; there were 69 additional employees approved in the General Fund for fiscal year 2008. The unreserved/undesignated fund balance of the General Fund was 30.5% of expenditures at June 30, 2008 compared to 21.6% at June 30, 2007. The increase was largely due to a decrease in fiscal year 2008 designations for encumbrances (leaving more fund balance undesignated). The Half-Cent Sales Tax Fund tracks the revenues from certain sales taxes designated for specific purposes by Council policy. Revenues in this fund increased $74,772 (0.4%) from the previous year primarily due to increased investment earnings. Expenditures in this fund decreased $7.0 million (59.9%) due to a $6.8 million decrease in capital outlay expenditures with the completion of the Community and Development Services Building (CDSB). Total fund balance of the Half-Cent Sales Tax Fund increased by $1.3 million (8.6%) in fiscal year 2008 while the unreserved/undesignated fund balance increased $3.8 million. 90 80 70 60 50 40 30 20 10 0 FY07 FY08 G en H al f-C era lF en t S un d al es H Ta U Tr Dev x R an F el Fu op sp nd m or en ta G t t i O on Fe B es Sa on Sp le d ec s D ia Ta l A eb x t ss Se es rv ic tm e G en O t B D on eb d t C ap O ita th er l Fu nd s Millions Governmental Funds - Fund Balance The Highway User Revenue Fund (HURF Fund) is required by state statute to the track the receipt of the state allocation of gasoline taxes and other state revenues shared with local governments and required to be used for transportation purposes. Also, there is a sales tax on utilities and property tax revenues from street light improvement districts included in this fund. Revenues decreased by $86,909 (0.6%) due to increased sales tax ($279,457 or 10.3%) and decreased highway user revenues ($381,835). The sales tax revenue in this fund is the tax on utilities, which has not been impacted as strongly by the economic slow down as sales taxes in other funds. Expenditures increased by $1.2 million (9.6%) in fiscal year 2008. The increased expenditures are split between personnel costs, contractual services, and commodities costs. Fund balance increased $1.7 million (13.6%) in fiscal year 2008. Another major governmental fund of the City is the Development Fee Fund, which collects governmental impact fees for parks and recreational facilities, public safety, streets and intersections and general government. Revenues in the Development Fee Fund decreased $6.2 million (23.3%) with slower, but continuing development, while expenditures decreased $6.1 million (24.0%) in fiscal year 2008 due to decreased capital outlay. Fund balance increased $1.1 million in fiscal year 2008. All fund balance in this fund is restricted or designated (encumbrances). 11 The Transportation Sales Tax Fund tracks the collection and expenditure of the .3% voter approved sales tax to fund transportation issues. Revenues in this fund increased $914,108 (9.1%) while expenditures decreased $761,847 (68.8 %) with lower capital outlay expenditures. The fund balance increased $9.7 million (80.6%) in the first full year of this fund. The GO Bond Debt Service Fund accounts for the payment of general obligation bonds and the related interest. Revenues in this fund increased $8.5 million (57.7%) due to increased property taxes. The secondary assessed value of the City increased 47.2% in fiscal year 2008 coupled with a $.05 increase in the secondary property tax rate. Expenditures increased by $15.8 million (280.2%) due to the issuance of $94.4 million of GO Bonds in fiscal year 2007. Debt payments were required on these new bonds in fiscal year 2008. Fund balance increased $1.7 million (5.0%) in fiscal year 2008. The Special Assessment Debt Service Fund collects special assessments levied through improvement districts and pays the debt service on the improvement district bonds. Both revenues and expenditures in this fund dropped slightly in fiscal year 2008 as the debt payments decreased. The fund balance increased $.1 million due to investment earnings and some early payoffs of assessments. The GO Bond Capital Projects Fund accounts for bond proceeds of general obligation bonds and the expenditure of those proceeds. Revenues in the fund increased $739,085 with higher investment earnings while expenditures increased by $942,275 primarily due to increased capital outlays. Fund balance decreased $35.9 million as the 2007 bond proceeds are expended. All non-major governmental funds of the City are combined into one column on the governmental fund statements. Proprietary funds The proprietary fund financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each major enterprise fund is shown discretely. Although the Public Housing Fund does not meet the GASB 34 criteria of a major fund, the City has chosen to present it as a major fund. Total net assets of the enterprise funds increased $30.6 million (6.5%) in fiscal year 2008. The increase is due to a $57.7 million (15.6%) increase in net assets invested in capital assets, net of related debt, and a decrease in unrestricted net assets of $27.3 million (39.8%). The Water Utility and the Wastewater Utility Funds experienced increases in total net assets of $.5 million (.2%) and $31.8 million (16.5%) respectively, while the Solid Waste Fund decreased $1.5 million (7.8%), the Stadium Fund decreased $19,957 (0.1%) and the Public Housing Fund decreased $75,698 (2.9%). The Water Utility unrestricted net assets decreased $20.9 million (47.7%), and the Wastewater Utility unrestricted net assets decreased $7.3 million (42.2%). Operating revenues of the enterprise funds decreased $.1 million (0.1%) in fiscal year 2008. The Water Utility had one-time miscellaneous revenue of $3.7 million in fiscal year 2007. This caused a decrease in operating revenues of $1.7 million in the Water Utility in fiscal year 2008 from the fiscal year 2007 level. Without the one-time revenue shown in fiscal year 2007, the Water Utility would have shown an increase in operating revenues of $2.0 million. The Wastewater and Solid Waste Utility Funds, as well as the Stadium Fund, experienced increased operating revenues in fiscal year 2008 of $.5 million (3.5%), $.7 million (6.9%), and $.3 million (11.0%), respectively. Operating expenses of the enterprise funds increased $9.4 million (17.1%) in fiscal year 2008. In 2008 in the Water Utility Fund, contractual services/commodities expenses increased by $.6 million (4.3%), while personnel expenses increased by $.5 million (9.8%). The contractual services/commodities expenses increase is primarily explained by the General Fund service charge increase of $.4 million and internal service fund service charge increases of $.3 million. The Wastewater Utility Fund contractual services/commodities expenses increased by $2.2 million (24.7%), while personnel expenses increased by $.4 million (28.6%). In the Wastewater Utility Fund, sewage disposal costs increased $.9 million in fiscal year 2008, administrative service charges increased $.8 million, and utility costs increased $.3 12 million. Contractual services/commodities expenses increased $3.0 million (50.0%) in the Solid Waste Fund, due to initial recycling container purchases of $2.8 million. In the Stadium Fund, contractual services/commodities expenses increased by $1.3 million (37.4%), due increases of $.6 million for facilities service charges, $.2 million for General Fund service charges, and $.4 million for repairs and maintenance. Operating income for the Water Utility Fund decreased $3.2 million (38.9%) compared to 2007, due to the fiscal year 2007 $3.7 million one-time revenue discussed earlier. Operating income for the Wastewater Utility decreased $2.3 million (252.9%) as a result of operating expense increases previously mentioned. The Solid Waste Utility Fund operating income decreased $2.8 million (428.5%) due to recycling expenses previously discussed. The Stadium Fund and Public Housing Fund had operating losses in fiscal year 2008 of $3.7 million (a $1.1 million increase from the previous fiscal year) and $85,489, respectively. The Stadium Fund’s operating loss is substantially covered by transfers from the Half-Cent Sales Tax Fund for governmental use and support of this facility. The Public Housing Fund operating loss is due solely to depreciation costs associated with capital assets. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2008. Fiscal year 2008 Enterprise Fund Operating Revenues and Expenses 35 30 Millions 25 Revenues 20 Expenses 15 10 5 ng ou si H St ad iu m W as te So l id at er W as te w W at er 0 BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. Budgetary comparison statements are required for the General Fund and all major special revenue funds and may be found on pages 30-35. These statements compare the original adopted budget, the budget as amended throughout the fiscal year, and the actual expenditures prepared on a budgetary basis. Budgetary schedules for the other governmental funds as well as the proprietary funds are also presented on pages 90-92, 100-109, 112-116, and 121-124. Amendments to the adopted budget may occur throughout the year in a legally permissible manner (see Note 1.E on page 53 for more information on budget policies). Some of these amendments include transfers from contingency to cover approved carryovers from the previous budget, capital projects with budget overages (or whose timing was accelerated), and other unanticipated costs. Also, throughout the year, 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 13 budget. Instead, the City budgets contingency accounts to allow for later transfer to operational budgets if and when the funding is received. No amendments increasing the City’s total adopted budget of $690 million occurred during fiscal year 2008. Budget amendments between funds or departments or from budgeted contingencies into operational expense/expenditure accounts did occur. General Fund inflows (revenues and other sources) of $130.8 million, on a budgetary basis, fell below budgeted inflows of $133.6 million by $2.8 million (2.1%) while budgetary basis outflows (expenditures and other uses) of $126.0 million were only 82.1% of final budgeted outflows. The excess of General Fund inflows over budgeted amounts is primarily due to lower than budgeted sales and use taxes, state shared sales taxes, and licenses and permits. Reduced General Fund outflows resulted primarily from delayed capital projects and unspent contingency. During the fiscal year, the original General Fund expenditures and other uses budget of $155.9 million was amended by $2.4 million to the final expenditure and other uses budget of $153.5 million. Notable General Fund transfers are as follows: ¾ Carryover transfers netted to $11.2 million transferred from other funds back to the General Fund contingency for items budgeted in the prior year. Of that, $3.9 million was transferred from the General Fund to other funds, mostly for capital projects, but some for operational purposes. $15.1 million represents appropriation transferred back to contingency, frequently because the project completed earlier than expected when carryovers were originally programmed into the fiscal year 2008 budget. ¾ Appropriation of $1.7 million was returned to General Fund contingency for trail improvements that will be done by the state rather than by the City through a grant. ¾ General Fund contingency of $1.3 million was returned due to correcting recycling program grant and lease appropriations. ¾ Trail improvements appropriation of $.7 million was transferred back to the General Fund from the Development Fee Fund. ¾ Contingency appropriation of $10.1 million was transferred from the General Fund to the MDA Bond Fund to accelerate beginning the Happy Valley Road project from fiscal year 2009 to fiscal year 2008. ¾ Appropriations of $2.5 were transferred to the Non-Bond Capital Projects Fund from the General Fund contingency for projects funded by outside sources. ¾ A transfer of $2.0 million was transferred from General Fund contingency to the Development Fee Fund for payment to a developer for the construction and dedication of a fire station. ¾ Grant-funded expenditures resulted in General Fund contingency of $.6 million being transferred to the Other Grants Fund. ¾ Wastewater effluent volume required a $.6 million transfer from General Fund contingency to the Wastewater Utility Fund. ¾ General Fund contingency of $.5 million was transferred to Non-Bond Capital Projects Fund for an interchange improvements project being funded by HELP loan proceeds. ¾ Appropriation of $.4 million was transferred from General Fund Contingency to the Motor Pool Fund for increased fuel and other operating costs and for a new ethanol tank. ¾ General Fund contingency of $.3 million was transferred to the Stadium Fund for increased utility costs, team payouts, and maintenance costs. 14 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2008, the City had $1,030 million invested in various capital assets, net of accumulated depreciation and related debt, up 7.1% from the previous year. The capital assets of the City (net of depreciation, but not capital debt) are $1.43 billion. This is a net increase of $202.3 million from June 30, 2007. Of the increase, $99.2 million resulted from governmental activities and $103.1 million resulted from business-type activities. Major additions to capital assets during the fiscal year included the following: 9 The City spent an additional $72.7 million on the construction of the Butler Drive Water Reclamation Facility. This 10 million gallon per day (MGD) reclamation facility is designed to redirect all of Peoria’s wastewater flow from the regional Tolleson Wastewater Treatment Plant to a city facility. It will also provide an additional 6 MGD of capacity for future growth. Total costs of phase I of this project are expected to be $136.2 million with an additional $3.5 million for phase II expansion. 9 The City finished the construction of the 52,000 square foot Recreation Center at the City’s first large community park, Rio Vista Park. This center includes fitness equipment, reception rooms, basketball facilities, a rock climbing wall and a day care. The Recreation Center opened in early fiscal year 2008. An additional $1.7 million was spent on the project during fiscal year 2008. 9 Acquisition, design and construction of a northern branch library commenced in fiscal year 2008. The 25,000 square feet branch library is in response to citizens’ desire for a full service library in the northern portion of the city. The total cost of the project, including funds to purchase the books for the new branch is estimated at $9.6 million. In fiscal year 2008, the city spent $2.2 million on the project. 9 The City spent $8.5 million in fiscal year 2008 to purchase additional water supplies. This additional land will address the identifiable future shortage of renewable water resources. Water from this land will assist the City to maintain its designation as an Assured Water Supplier by the Arizona Department of Water Resources. This project was approved for Bonds in 2000 for a total of $13.6 million. 9 The City spent an additional $3.9 million on the renovation and expansion of the Municipal Operations Center (total expected costs $15.6 million). This project both expands the facility and brings the 20 year old facility up to current regulatory standards for municipal facilities. The following table provides a breakdown of the capital assets of the City at June 30, 2008 and 2007. Additional information on the City’s capital assets may be found in Note 12 on pages 70-71. Capital Assets at June 30 (Net of depreciation) Buildings and building improvements Furniture Equipment Vehicles Storm drainage system Street system Park system Water system Wastewater system Land Work in progress Total (in millions) Governmental Business-type Activities Activities 2008 2007 2008 2007 $ 116.7 $ 56.6 $ 27.4 $ 18.9 1.2 .9 .1 .1 21.4 12.3 1.6 1.7 9.2 8.7 5.1 6.1 44.0 41.2 241.3 222.1 19.3 15.4 202.9 184.2 250.3 120.1 298.6 283.7 25.3 16.7 126.8 51.9 113.7 115.2 $ 564.6 $ 461.5 $ 866.9 $ 767.7 15 Total Primary Government 2008 2007 $ 144.1 $ 75.5 1.3 1.0 23.0 14.0 14.3 14.8 44.0 41.2 241.3 222.1 19.3 15.4 202.9 184.2 250.3 120.1 323.9 300.4 167.1 240.5 $ 1,431.5 $ 1,229.2 Percent Change 90.9 30.0 64.3 -3.4 6.8 8.6 25.3 10.2 108.4 7.8 -30.5 16.5 The City has adopted a ten year capital improvement plan budgeted at $1.02 billion, including $340.5 million in fiscal year 2009. Anticipated funding for this plan is through a combination of impact fees (9%), utility revenue bonds (7%), general obligation bonds (48%), municipal development authority bonds (3%), operating revenues (17%), City (6%) and County (2%) transportation sales taxes and other outside funding sources (8%). The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $36.6 million. The capital improvement plan is updated annually as part of the City’s budget process. Long-term Debt The City’s outstanding non-current long-term debt, including bonds, loans, notes, contracts, compensated absences, and net of deferred loss on bond refunding, was $434.8 million at June 30, 2008. Of this total, $285.8 million was in governmental activities and $149.0 million was in business-type activities. The City’s outstanding non-current debt increased $68.3 million in fiscal year 2008. Water Infrastructure Finance Authority Revenue Bonds were issued in the amount of $42.7 million for the acquisition of a public water infrastructure and construction of the Butler Water Reclamation Facility. In addition, Municipal Development Authority (MDA) Bonds in the amount of $47.0 million were issued for Happy Valley Road and 83rd Avenue street improvements, and a long-term loan of $1.2 million was secured for new recycling containers and trucks. Of the total outstanding bonds of $421.0 million, $126.2 million is general obligation bonds backed by the full faith and credit of the City. An additional $12.0 million is special assessment bonds where the City is contingently liable in the event that the assessment revenues are insufficient to pay the debt payments. The outstanding debt also includes $64.6 million in Community Facilities District bonds where the City has no obligation for payment. All other outstanding debt is secured by pledges of specific revenue sources of the City. The State constitution imposes certain debt limitations on the City of six percent (6%) and twenty percent (20%) of the assessed valuation of the City. The City’s available debt margin at June 30, 2008 is $85.2 million in the 6% category and $215.6 million in the 20% category. Additional information on the debt limitations and capacities may be found in Note 14 (page 72) and also in Table XXIII in the statistical section of this report (page 175). The following schedule shows the outstanding debt of the City (both current and long-term) as of June 30, 2008 and 2007. Further detail on the City’s outstanding debt may be found in Note 14 on pages 72-77. Outstanding Debt (in millions) Governmental Activities 2008 2007 General obligation debt Municipal Development Authority debt Highway User Revenue bonds Special assessment debt Water/Sewer Revenue bonds Community Facilities District bonds Long-term loan payable Contracts payable Compensated absences Total $ $ 126.2 65.8 3.3 12.0 64.6 42.5 4.9 319.3 $ $ Business-type Activities 2008 2007 142.8 21.6 3.6 13.3 66.1 40.3 4.4 292.1 $ $ 1.6 147.5 1.2 4.3 .6 155.2 $ $ 1.9 109.1 4.7 .6 116.3 Total Primary Government 2008 2007 $ $ 126.2 67.4 3.3 12.0 147.5 64.6 1.2 46.8 5.5 474.5 $ $ 142.8 23.5 3.6 13.3 109.1 66.1 45.0 5.0 408.4 Percent Change (11.6%) 186.8 (8.3) (9.8) 35.2 (2.3) 4.0 10.0 16.2 The City currently maintains the following ratings on its general obligation debt: “AA” from Standard & Poor’s, “Aa2” from Moody’s and “AA“ from Fitch. For the water and sewer revenue bonds, the ratings are “AA” from Standard & Poor’s, “A1” from Moody’s and “AA-” from Fitch. 16 ECONOMIC FACTORS The unemployment rate in the metropolitan Phoenix region for June 2008 was 4.3%, which remains below both the state (4.4%) and national average (5.5%). The regional economy remains subdued with slower building activity and population growth. Overall employment growth for the Phoenix area slowed to a 3% pace with some moderate gains realized in the business, healthcare and education sectors, which has helped to offset job losses within the construction and financial services industries. Within Peoria, the local economy has remained stable with decreased residential construction and slower but steady commercial activity continuing to provide services to the neighborhoods and planned communities that have developed over the past few years. The adopted fiscal year 2009 budget is $680 million, a decrease of 1.4% from 2008. The operating budget totals $233.9 million, which is an increase of 1.9% over 2008. The capital projects portion of the budget, $340.5 million, is divided in the following manner: $31.3 million for drainage projects, $30.7 for operational facilities, $42.3 million for parks, trails and open space, $11.6 million for public safety projects, $162.0 million for streets projects, $4.8 million for traffic control projects, $27.8 million for wastewater projects, $29.4 million for water projects, $.6 million for other projects. In the context of a slowing economy and a previously overheated housing market, with the ensuing credit crunch, the 2009 budget was developed to slow the growth of services and spending, while maintaining basic core service levels. The budget included a $.05 reduction in the City’s Primary Property tax rate, which follows a similar reduction in the primary rate in fiscal year 2008. Even including all these factors, the budget is balanced, whereby all expenditures are supported by revenues. Overall, there are 12.7 new FTE (full-time equivalent) staff positions in the fiscal year 2009 budget. Of the additional positions, 4.95 are to staff the new branch library currently under construction, 3 in the Stadium Fund, 1 in Police, 1 in Traffic Engineering, 1.5 in Facilities, .25 in Transit, and 1 in the Water Utility. The City has built cash balances over the last few years, both for financial stability and in anticipation of the capital and ongoing operational needs of an ever-changing city. The City has established Economic Stabilization Reserves within the General Fund and Half-Cent Sales Tax Fund in accordance with the City’s adopted financial policies – The Principles of Sound Financial Management. These reserves totaled $32.4 million in the General Fund and $5.6 million in the Half-Cent Sales Tax Fund at June 30, 2008. The City also maintains a working capital policy reserve in the Utility Funds. At June 30, 2008, those reserves were $16.0 million in the Water Utility, $7.8 million in the Wastewater Utility, and $1.45 million in the Solid Waste Utility. FINANCIAL CONTACT This financial report is designed to provide a general overview of the City of Peoria, 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 financial information should be addressed to the City’s Finance Director at the following address: City of Peoria, 8401 W. Monroe Street, Peoria, Arizona 85345. 17 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS JUNE 30, 2008 Governmental Activities ASSETS Cash and cash equivalents $ 113,812,571 Cash with fiscal agents 3,487,675 Investments 159,781,977 Accounts receivable, net 8,793,208 Interest receivable 1,839,291 Internal balances (759,561) Due from other governments 5,707,354 Prepaid items 317,924 Supply inventories 255,385 Deferred bond issuance costs, net 3,487,494 Restricted cash and cash equivalents 38,770,339 Restricted investments 41,477,174 Other assets 5,100,000 Special assessments receivable 11,477,307 Capital assets: Non-depreciable 413,738,801 Depreciable (net) 453,243,758 Total assets 1,260,530,697 LIABILITIES Accounts payable 19,720,212 Accrued payroll 2,256,713 Interest payable 5,881,282 Due to other governments 2,288,338 Claims payable 3,100,000 Customer deposits 3,317 Unearned revenue 10,462,031 Arbitrage liability 722,493 Unamortized bond premium 3,105,604 Other liabilities 6,187,652 Non-current liabilities: Due within one year: Current portion of compensated absences 4,460,990 Current portion of contracts payable 8,088,716 Current portion of loans payable Current portion of bonds payable 19,849,874 Due in more than one year: Noncurrent portion of compensated absenc 444,660 Noncurrent portion of contracts payable 34,450,715 Noncurrent portion of loans payable Noncurrent portion of bonds payable 252,073,206 Less: Deferred loss on bond refunding (1,184,072) Total liabilities 371,911,731 NET ASSETS Invested in capital assets, net of related debt 602,715,532 Restricted for: Capital projects 14,875,126 Development fees 48,826,365 Revenue bond retirement Grant purposes 1,827,234 Unrestricted 220,374,709 Total net assets $ 888,618,966 Primary Government Business-type Activities $ 30,485,196 387,779 42,711,643 9,626,003 436,926 759,561 105,734 221,672 200,296 497,945 16,200,000 540,671 - Total $ 144,297,767 3,875,454 202,493,620 18,419,211 2,276,217 5,813,088 539,596 455,681 3,985,439 54,970,339 41,477,174 5,640,671 11,477,307 77,177,173 487,454,469 666,805,068 490,915,974 940,698,227 1,927,335,765 4,786,143 321,746 2,018,904 250,888 1,136,971 18,600 145,028 656,376 24,506,355 2,578,459 7,900,186 2,539,226 3,100,000 1,140,288 10,480,631 722,493 3,250,632 6,844,028 563,460 564,185 170,368 4,851,181 5,024,450 8,652,901 170,368 24,701,055 58,310 3,798,980 1,064,632 144,200,661 (67,797) 164,538,636 502,970 38,249,695 1,064,632 396,273,867 (1,251,869) 536,450,367 427,331,359 1,030,046,891 20,061,642 12,438,769 467,291 41,967,371 $ 502,266,432 34,936,768 48,826,365 12,438,769 2,294,525 262,342,080 $ 1,390,885,398 The accompanying notes are an integral part of the financial statements 19 CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2008 Expenses Functions/Programs Primary government: Governmental activities: General government Culture and recreation Police Fire Development services Highways and streets Public works Human services Interest on long-term debt Unallocated depreciation Total governmental activities Business-type activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Housing programs Total business-type activities Total primary government $ $ Fees, Fines & Charges for Services 17,077,115 21,834,144 34,513,465 19,914,716 6,542,413 22,909,823 7,782,967 2,887,625 11,168,041 574,942 145,205,251 $ 28,677,086 17,324,471 13,250,526 6,921,044 382,067 66,555,194 211,760,445 31,866,685 15,423,188 11,216,061 3,279,780 150,737 61,936,451 $ 87,460,347 2,293,928 8,111,802 790,269 1,717,319 3,526,784 345,417 8,607,833 130,544 25,523,896 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 165,750 415,247 621,895 25,712 621,794 9,488,625 321,728 2,721,733 14,382,484 145,841 145,841 $ 14,528,325 General revenues: Taxes: Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes State shared sales taxes- unrestricted Urban revenue sharing- unrestricted Auto in-lieu taxes- unrestricted Investment earnings Gain on sale of capital assets Elimination of development agreement debt Miscellaneous Transfers in (out) Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The accompanying notes are an integral part of the financial statements 20 $ 1,413,319 4,146,302 2,056,086 1,459,487 32,523,305 41,598,499 12,501,350 9,361,059 458,804 22,321,213 $ 63,919,712 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Activities $ $ $ $ Business-type Activities - Total (13,204,118) (9,160,793) (31,045,215) (16,712,198) (2,393,835) 19,447,524 1,146,594 (35,348) (11,168,041) (574,942) (63,700,372) $ (63,700,372) 15,690,949 7,459,776 (1,575,661) (3,641,264) (85,489) 17,848,311 $ 17,848,311 $ 3,728,615 22,569,309 68,466,910 3,848,746 12,695,890 19,539,768 5,546,558 13,328,215 40,953 2,358,431 3,555,171 (9,779,262) 145,899,304 82,198,932 806,420,034 888,618,966 $ $ 3,314,515 9,779,262 13,093,777 30,942,088 471,324,344 $ 502,266,432 $ (13,204,118) (9,160,793) (31,045,215) (16,712,198) (2,393,835) 19,447,524 1,146,594 (35,348) (11,168,041) (574,942) (63,700,372) 15,690,949 7,459,776 (1,575,661) (3,641,264) (85,489) 17,848,311 (45,852,061) 3,728,615 22,569,309 68,466,910 3,848,746 12,695,890 19,539,768 5,546,558 16,642,730 40,953 2,358,431 3,555,171 158,993,081 113,141,020 1,277,744,378 $ 1,390,885,398 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2008 Major Funds Half-Cent Sales Tax Fund General Fund ASSETS Cash and cash equivalents Cash with fiscal agents Investments Accounts receivable, net Interest receivable Due from other governments Prepaid items Supply inventories Restricted cash and cash equivalents Restricted investments Special assessments receivable Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other governments Claims/deposits payable Deferred revenue Arbitrage liability Other liabilities Total liabilities Fund balances: Reserved for: Debt service Capital projects Development fees Grant purposes Supply inventories Prepaid items Unreserved, designated (see note 11): General fund Capital projects funds Special revenue funds Unreserved, undesignated, reported in: General fund Capital projects funds Special revenue funds Total fund balance Total liabilities and fund balance $ $ $ $ $ $ $ Highway User Revenue Fund Development Fee Fund $ $ 34,299,384 47,247,726 4,312,708 442,645 3,277,222 141,394 123,095 89,844,174 6,051,442 8,599,122 1,297,241 115,901 4,783 $ 16,068,489 $ 2,620,399 1,930,365 2,283,523 3,317 790,020 4,210,334 11,837,958 $ 257,110 257,110 $ 123,095 141,394 $ 4,783 $ $ $ 5,882,135 8,358,537 243,579 78,462 792,843 49,495 15,405,051 $ 1,241,371 82,601 63,946 1,387,918 $ 49,495 - $ $ 20,242,308 28,764,396 296,411 111,747 49,414,862 588,497 588,497 40,610,712 111,747 43,839,827 - 7,027,841 124,933 8,103,906 33,901,900 78,006,216 89,844,174 8,778,755 15,811,379 $ 16,068,489 13,842,705 14,017,133 15,405,051 48,826,365 49,414,862 $ The accompanying notes are an integral part of the financial statements 22 $ Transportation Sales Tax Fund $ $ $ $ $ 8,676,789 12,329,750 779,352 86,315 21,872,206 GO Bond Debt Service Fund $ $ 47,687 47,687 $ - $ $ 14,728,493 $ 7,096,026 21,824,519 21,872,206 14,836,180 21,082,268 361,468 144,941 401,521 36,826,378 Special Assessment Debt Service Fund $ $ 530 361,468 361,998 $ 36,464,380 - $ $ - $ 36,464,380 36,826,378 GO Bond Capital Projects Fund 494,585 702,808 7,121 11,477,307 12,681,821 $ $ 11,476,365 11,476,365 $ 1,205,456 - $ $ - $ 1,205,456 12,681,821 $ 23 Non-Major Governmental Funds Total Governmental Funds $ 9,343,452 3,487,675 12,822,790 1,795,008 481,488 1,235,768 30,361,019 36,454,324 95,981,524 $ 101,206,646 3,487,675 141,868,910 8,789,356 1,679,355 5,707,354 317,924 172,590 38,770,339 41,477,174 11,477,307 $ 354,954,630 2,849,219 42,241 4,620 4,826,086 994,687 8,716,853 $ 18,876,661 2,055,207 2,288,143 3,317 17,453,939 722,493 6,187,652 $ 47,587,412 11,253,338 52,200,274 1,640,458 - $ 48,923,174 52,200,274 40,610,712 1,640,458 172,590 317,924 3,887,099 - 19,775,860 2,254,752 43,839,827 23,662,959 32,239,925 3,947,099 16,860,125 (73,263) 213,252 87,264,671 95,981,524 1,380,371 1,961,513 26,071 60,000 8,409,320 5,022,850 16,860,125 $ 11,271,848 722,493 918,685 12,913,026 $ 60,000 $ $ $ 33,901,900 (73,263) 29,930,738 307,367,218 $ 354,954,630 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL ACTIVITIES JUNE 30, 2008 Fund balances - total governmental funds balance sheet $ 307,367,218 Amounts reported for governmental activities in the statements of net assets are different because (also see note 2): 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 $ 1,015,498,666 (176,086,190) 839,412,476 Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Deferred bond issuance costs Deferred loss on bond refunding 3,487,494 1,184,072 4,671,566 Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds. Governmental bonds payable Governmental contracts payable Compensated absences 271,923,080 42,539,431 4,375,190 (318,837,701) Certain long-term debt is offset by an intangible asset (goodwill) for government-wide reporting 5,100,000 Deferred revenue for long-term special assessments is shown on the governmental funds balance sheet, but is not deferred on the statement of net assets 6,526,366 Bond premiums are recognized at the time of issuance in the governmental funds, but is deferred and recognized over the life of the bonds for government-wide reporting Property tax revenue earned but not received within 60 days of year-end is deferred for the governmental statements, but is recognized as revenue for the government-wide statements (3,105,604) 465,542 Interest payable on long-term debt is not reported in the governmental funds. (5,881,282) 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 that are reported with the governmental activities. 52,900,385 Net assets of governmental activities - statement of net assets The accompanying notes are an integral part of the financial statements 25 $ 888,618,966 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Major Funds REVENUES: Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto in-lieu taxes Highway user revenue Local transportation aid From federal government Other Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Special assessments Miscellaneous Total revenues EXPENDITURES: Current: General government Culture and recreation Police Fire Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Capital-related debt issued Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Development Fee Fund $ 37,881,888 3,286,331 3,848,746 $ 17,269,938 - $ $ 12,695,890 19,539,768 5,546,558 5,000 292,786 16,063,108 3,020,436 2,404,459 358,215 3,291,328 1,153,930 109,388,443 874,363 18,144,301 9,488,625 34,384 74,339 569,582 13,717,317 18,060,416 2,243,791 20,304,207 13,856,153 21,266,822 33,038,321 19,081,561 6,078,175 5,620,571 - 496,546 - 12,337,123 - 53,989 102,634 26,550 36,289 1,307,428 - 42,420 11,752,771 110,736,794 1,847,756 16,040 2,300,873 4,661,215 275,000 195,560 527,144 13,334,827 6,740,841 10,919,971 19,187,702 (1,348,351) 13,483,086 382,490 1,116,505 8,719,517 (4,424,188) 4,295,329 1,047,888 (13,273,531) (12,225,643) 1,765,900 (472,392) 1,293,508 2,946,978 1,257,443 1,675,998 1,092,704 75,059,238 14,553,936 12,341,135 47,733,661 $ 78,006,216 $ 15,811,379 $ 14,017,133 $ 48,826,365 2,993,427 556,960 - The accompanying notes are an integral part of the financial statements 26 - (23,801) (23,801) Transportation Sales Tax Fund GO Bond Debt Service Fund Special Assessment Debt Service Fund $ 10,321,657 - $ $ 1,392 655,404 10,978,453 120,923 - 20,425,846 1,675,245 1,086,344 23,187,435 - 225,039 345,962 16,640,000 4,810,086 21,450,086 10,632,491 1,737,349 (893,096) (893,096) GO Bond Capital Projects Fund - $ $ 1,773,469 - $ 68,466,910 26,042,606 3,848,746 739,085 739,085 666,237 2,899,788 1,443,513 1,735,437 262,272 2,610,821 6,729,017 18,120,554 12,695,890 19,539,768 5,546,558 9,488,625 666,237 2,904,788 1,770,683 37,609,937 3,020,436 2,666,731 358,215 12,125,018 1,803,344 7,882,947 216,437,439 22 617,864 - 137,337 399,857 275,885 3,141 591,804 248,949 787,579 2,817,716 14,544,047 21,769,313 33,340,756 19,120,991 6,669,979 14,632,287 6,408,150 2,817,716 1,264,637 702,035 1,966,694 28,634,980 29,252,844 4,332,877 4,616,983 19,781,638 33,993,766 31,143,531 10,340,704 74,142,416 234,929,890 (109,050) (28,513,759) (15,873,212) (18,492,451) 217,574 217,574 (7,387,546) (7,387,546) 47,000,000 273,310 4,675,836 (9,560,490) 42,388,656 47,000,000 273,310 16,426,715 (36,035,044) 27,664,981 (35,901,305) 26,515,444 9,172,530 39,848,404 60,749,227 298,194,688 87,264,671 $ 307,367,218 9,739,395 1,737,349 108,524 12,085,124 34,727,031 1,096,932 $ 21,824,519 $ 36,464,380 $ - Total Governmental Funds 54,300 1,803,344 1,857,644 - - Non-Major Governmental Funds 1,205,456 $ 27 3,947,099 $ CITY OF PEORIA, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2008 Net change in fund balances - total governmental funds $ 9,172,530 Amounts reported for governmental activities in the statement of activities are different because (also see note 2): 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. (480,980) Certain revenues are deferred in the governmental funds because they do not provide current financial resources, but are considered revenue on the statement of activities. (2,018,478) Interest expense in the statement of activities differs from the amount reported in governmental funds because accrued interest was calculated for bonds and notes payable for the statement of activities, but is expensed when due for the governmental fund statements. (699,581) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays ($74,826,477) exceeded depreciation ($18,656,579) in the current period. 56,169,898 In the statement of activities, only the gain on the sale of capital assets is reported, whereas in the governmental funds, the proceeds from the sale of fixed assets increase financial resources Thus, the change in net assets differs from the change in fund balance by the cost of the assets sold or disposed of. 31,094 Gains/losses on sales of capital assets are not shown in the governmental funds, but are revenues or expenses, on the statement of activities. (77,548) Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 19,653,768 A development agreement (long-term debt) expired during the year. This had no effect on the governmental financial statements, but creates an other financing source on the statement of activities. 2,358,431 The issuance of long-term debt provides current financial resources in the governmental funds, but creates a long-term liability in the statement of activities. (47,000,000) Repayment of bond principal is an expenditure in the governmental funds, but reduces long-term liabilities in the statement of net assets. No effect on net assets. 31,143,531 The costs of issuing bonds are reported as an expenditure in governmental funds in the year of bond issuance and thus has the effect of reducing fund balance because current financial resources have been used. For the City as a whole, however, the bond issuance costs are deferred and amortized (expensed) over the life of the bonds. (401,066) Interfund transactions between governmental activities are eliminated in the statement of activities unless the transfers are between governmental and business-type activities. 9,726,162 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 4,621,171 Change in net assets of governmental activities- statement of activities The accompanying notes are an integral part of the financial statements 29 $ 82,198,932 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto in-lieu taxes From federal government Other Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government: Mayor and council City manager Human resources Attorney City clerk Court Economic development Finance Non-departmental Culture and recreation Police Fire Development services Public works Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 62,898,576 $ 62,898,576 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 62,898,576 $ - 41,877,000 3,182,802 3,815,000 41,877,000 3,182,802 3,815,000 38,406,470 3,274,117 3,830,605 (3,470,530) 91,315 15,605 13,807,200 19,357,750 5,768,500 224,642 27,813,185 4,225,380 2,463,990 494,850 2,150,165 279,966 8,135,415 133,595,845 196,494,421 13,807,200 19,357,750 5,768,500 224,642 27,813,185 4,225,380 2,463,990 494,850 2,150,165 279,966 8,135,415 133,595,845 196,494,421 12,741,737 19,440,867 5,863,642 37,205 290,421 28,744,164 3,020,436 2,404,459 367,307 3,191,890 1,153,930 8,063,206 130,830,456 193,729,032 (1,065,463) 83,117 95,142 37,205 65,779 930,979 (1,204,944) (59,531) (127,543) 1,041,725 873,964 (72,209) (2,765,389) (2,765,389) 1,169,727 3,973,744 2,711,781 3,017,601 1,108,545 2,406,104 662,706 12,339,857 1,838,163 21,983,859 34,690,425 20,487,493 6,803,766 6,634,019 18,231,752 13,385,000 4,458,400 155,902,942 1,169,727 3,965,344 2,814,171 3,024,611 1,114,809 2,406,104 662,706 12,482,512 2,015,298 22,280,689 34,735,894 20,588,384 6,780,058 6,756,422 19,938,149 8,324,360 4,458,400 153,517,638 1,090,316 3,588,715 2,441,615 2,830,197 1,037,225 1,985,758 592,430 10,915,937 2,021,355 20,944,520 32,546,401 18,796,958 5,988,016 5,537,200 11,266,680 4,457,905 126,041,228 (79,411) (376,629) (372,556) (194,414) (77,584) (420,346) (70,276) (1,566,575) 6,057 (1,336,169) (2,189,493) (1,791,426) (792,042) (1,219,222) (8,671,469) (8,324,360) (495) (27,476,410) 40,591,479 $ 42,976,783 $ 67,687,804 The accompanying notes are an integral part of the financial statements 30 $ 24,711,021 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 193,729,032 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (62,898,576) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (8,063,206) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules (13,259,181) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (119,626) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 109,388,443 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 126,041,228 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 430,330 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,284,638 Capital outlay recognized as expenditures in proprietary fund for budgetary purposes, but assets reclassified to expenditure in governmental funds for financial reporting purposes Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes 697,684 Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (13,259,181) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (4,457,905) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 110,736,794 31 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government- non-departmental Debt service: Principal payments Interest and other charges Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 14,900,187 $ 14,900,187 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 14,900,187 $ - 18,451,180 479,000 18,930,180 33,830,367 18,451,180 479,000 18,930,180 33,830,367 17,420,254 864,109 18,284,363 33,184,550 (1,030,926) 385,109 (645,817) (645,817) 539,933 505,984 416,237 (89,747) 2,444,599 19,724 9,756,031 3,000,000 12,732,909 28,493,196 2,444,599 19,724 8,796,053 3,012,561 12,732,909 27,511,830 1,845,576 15,914 2,551,512 13,019,348 17,848,587 (599,023) (3,810) (6,244,541) (3,012,561) 286,439 (9,663,243) 5,337,171 $ 6,318,537 $ 15,335,963 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 33,184,550 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (14,900,187) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (140,062) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 18,144,301 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 17,848,587 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 86,159 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (254,183) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (13,019,348) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,661,215 The accompanying notes are an integral part of the financial statements 32 $ 9,017,426 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Intergovernmental: Highway user revenue Other Charges for services Licenses and permits Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Debt service: Principal payments Interest and other charges Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 12,084,395 $ 12,084,395 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,084,395 $ - 3,240,000 554,371 3,240,000 554,371 2,977,194 579,609 (262,806) 25,238 9,796,787 405,000 3,500 550,600 2,320,271 16,870,529 28,954,924 9,796,787 405,000 3,500 550,600 2,320,271 16,870,529 28,954,924 9,594,351 34,384 431,385 568,637 2,320,269 16,505,829 28,590,224 (202,436) 34,384 26,385 (3,500) 18,037 (2) (364,700) (364,700) 10,372,767 10,373,776 9,224,781 (1,148,995) 275,000 295,510 4,736,296 1,000,000 1,014,762 17,694,335 275,000 295,510 4,753,548 975,729 1,014,762 17,688,325 275,000 195,560 3,231,381 1,013,897 13,940,619 (99,950) (1,522,167) (975,729) (865) (3,747,706) 11,260,589 $ 11,266,599 $ 14,649,605 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 28,590,224 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (12,084,395) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (2,320,269) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB 34's allocation rules. (290,000) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (178,243) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 13,717,317 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,940,619 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 16,907 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 681,669 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (471) Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (290,000) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (1,013,897) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 13,334,827 The accompanying notes are an integral part of the financial statements 33 $ 3,383,006 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Impact/expansion fees Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government-non departmental Culture and recreation Police Fire Highways and streets Debt service: Principal payments Capital outlay Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 48,086,732 $ 48,086,732 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 48,086,732 $ - 12,675,793 1,585,600 14,261,393 62,348,125 12,675,793 1,585,600 14,261,393 62,348,125 17,684,086 2,609,065 20,293,151 68,379,883 5,008,293 1,023,465 6,031,758 6,031,758 74,045 328,221 77,532 42,065 66,869 275,004 98,697 17,697 269,831 67,173 111,564 31,311 48,758 1,317,444 304 (163,440) (67,386) 31,061 1,047,613 5,835,853 36,652,831 3,140,000 46,150,547 7,835,853 34,379,549 2,147,417 45,090,917 8,336,403 15,528,143 25,440,796 500,550 (18,851,406) (2,147,417) (19,650,121) 16,197,578 $ 17,257,208 $ 42,939,087 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 68,379,883 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (48,086,732) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 11,056 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 20,304,207 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 25,440,796 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (6,229,293) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (23,801) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 19,187,702 The accompanying notes are an integral part of the financial statements 34 $ 25,681,879 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Charges for service Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 9,071,643 $ 9,071,643 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 9,071,643 $ - 11,129,404 275,000 11,404,404 20,476,047 11,129,404 275,000 11,404,404 20,476,047 10,404,348 1,392 616,846 11,022,586 20,094,229 (725,056) 1,392 341,846 (381,818) (381,818) 84,889 4,855,006 1,000,000 889,046 6,828,941 195,948 4,816,875 836,634 889,046 6,738,503 120,923 296,218 889,046 1,306,187 (75,025) (4,520,657) (836,634) (5,432,316) 13,647,106 $ 13,737,544 $ 18,788,042 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 20,094,229 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (9,071,643) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (44,133) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 10,978,453 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,306,187 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (67,129) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (4,050) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (889,046) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 345,962 The accompanying notes are an integral part of the financial statements 35 $ 5,050,498 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2008 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund ASSETS Current assets: Cash and cash equivalents Restricted cash with fiscal agents Investments Accounts receivable, net Interest receivable Due from other governments Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Cash equivalents Capital assets: Buildings and improvements Distribution and collection systems Equipment Vehicles Furniture Less accumulated depreciation Land and improvements Construction in progress Capital assets, net Unamortized bonds costs Other assets Total non-current assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll Accrued interest payable Due to other governments Other current liabilities Claims payable Current portion of compensated absences Current portion of bonds, contracts & notes payable Total current liabilities Non-current liabilities: Deposits payable Unearned revenue Deferred bond premium Compensated absences Long-term portion of bonds, contracts & notes payable Less: Deferred loss on bond refunding Total non-current liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted: Capital projects Revenue bond retirement Grant purpose Unrestricted Total net assets $ 16,250,089 195,106 23,044,320 5,443,815 290,045 74,481 176,141 45,473,997 16,200,000 1,642,283 244,287,111 1,686,837 1,944,774 126,603 (43,704,563) 14,287,029 21,882,982 242,153,056 188,380 415,023 258,956,459 304,430,456 $ 7,308,196 49,402 10,384,973 2,426,337 46,594 147,191 20,362,693 $ 6,036,202 8,577,466 1,735,761 93,291 33,916 24,155 16,500,791 7,659,795 292,830,380 1,076,558 922,694 29,004 (43,401,627) 3,878,001 30,015,462 293,010,267 307,351 125,648 293,443,266 313,805,959 1,755,061 157,745 1,026,929 250,618 291,080 285,930 3,750,018 7,517,381 2,525,760 65,781 953,777 360,135 95,490 1,536,131 5,537,074 1,125,399 3,000 72,969 29,830 63,599,576 (27,774) 64,803,000 72,320,381 18,476 9,340 83,670,028 (7,034) 83,690,810 89,227,884 10,799 43,338 7,030,795 8,013 (3,299,548) 3,793,397 3,793,397 20,294,188 360,907 66,071 24,144 119,350 170,368 740,840 12,810 1,340,371 1,353,181 2,094,021 $ 500,882 143,271 704,884 2,872 6,996 1,358,905 25,781,679 749,922 406,380 (9,992,086) 6,703,349 23,649,244 2,214 23,651,458 25,010,363 144,415 32,149 14,054 270 5,161 62,690 129,217 387,956 15,600 53,583 6,330 454,298 (32,989) 496,822 884,778 190,984,395 207,813,091 3,438,439 23,069,756 12,440,939 5,713,696 22,971,045 $ 232,110,075 6,725,073 10,039,911 $ 224,578,075 7,106,959 7,654,769 $ 18,200,167 513,744 542,085 $ 24,125,585 Some amounts reported for business-type activities in the statement of net assets are different because certain internal service fund assets and liabilities are included with business-type activities. Net Assets of business-type activities The accompanying notes are an integral part of the financial statements 36 Public Housing Fund $ 389,827 17,218 71,818 478,863 Total $ - 16,200,000 3,276,922 136,523 9,613 (1,807,730) 410,350 2,025,678 2,025,678 2,504,541 $ 30,485,196 387,779 42,711,643 9,626,003 436,926 105,734 221,672 200,296 84,175,249 Governmental Activities Internal Service Funds $ 12,605,925 17,913,067 3,852 159,936 82,795 30,765,575 - 38,371,478 537,117,491 3,693,178 10,304,643 173,233 (102,205,554) 25,278,729 51,898,444 564,631,642 497,945 540,671 581,870,258 666,045,507 148,102 32,007,301 19,708,958 72,701 (28,097,953) 3,730,974 27,570,083 27,570,083 58,335,658 - 4,786,143 321,746 2,018,904 250,888 656,376 563,460 5,585,734 14,183,251 843,551 201,506 195 3,100,000 476,600 4,621,852 11,572 11,572 11,572 1,136,971 18,600 145,028 58,310 149,064,273 (67,797) 150,355,385 164,538,636 53,860 53,860 4,675,712 2,025,678 427,331,359 27,570,083 467,291 2,492,969 $ 20,061,642 12,438,769 467,291 41,207,810 501,506,871 26,089,863 $ 53,659,946 $ 759,561 502,266,432 37 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund OPERATING REVENUES Charges for services Rents From federal government Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) 31,476,024 364,576 31,840,600 15,423,087 101 15,423,188 $ 11,066,957 11,066,957 $ 1,542,628 1,727,079 8,090 3,277,797 1,790,293 11,095,358 3,904,280 16,789,931 (1,366,743) 3,205,188 9,144,996 875,585 13,225,769 (2,158,812) 1,338,378 4,888,264 748,546 6,975,188 (3,697,391) 353,916 (567,420) (213,504) 703,345 (53,386) 149,104 799,063 52,681 (24,520) (7,498) 20,663 5,241,944 (1,580,247) (1,359,749) (3,676,728) Capital contributions Transfers in Transfers out Change in net assets 12,501,350 284,311 (17,499,286) 528,319 9,361,059 24,247,256 (263,868) 31,764,200 458,804 36,066 (681,988) (1,546,867) 3,999,038 (342,267) (19,957) Total net assets - beginning 231,581,756 192,813,875 $ 232,110,075 $ 224,578,075 NON-OPERATING REVENUES (EXPENSES) Investment income Interest expense Gain (loss) on sale of capital assets Total non-operating revenues (expenses) Income (loss) before contributions and transfers Total net assets - ending 5,897,927 15,504,173 5,353,362 26,755,462 5,085,138 $ 2,194,782 (2,064,061) 26,085 156,806 19,747,034 $ 18,200,167 24,145,542 $ 24,125,585 Some amounts reported for business-type activities on the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities. Change in net assets of business-type activities The accompanying notes are an integral part of the financial statements 38 Public Housing Fund $ 146,682 145,841 4,055 296,578 Total $ 296,578 85,489 382,067 (85,489) $ 59,508,696 1,873,761 145,841 376,822 61,905,120 Governmental Activities Internal Service Funds $ 26,844,128 217,609 27,061,737 12,231,786 40,929,369 10,967,262 64,128,417 (2,223,297) 8,840,071 12,589,444 1,993,966 4,089,655 27,513,136 (451,399) 9,791 9,791 3,314,515 (2,709,387) 167,691 772,819 1,203,197 (77,547) 1,125,650 (75,698) (1,450,478) 674,251 (75,698) 22,321,213 28,566,671 (18,787,409) 30,649,997 11,987,822 (2,158,755) 10,503,318 2,568,667 470,856,874 43,156,628 2,492,969 $ 501,506,871 $ 53,659,946 292,091 $ 30,942,088 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Payments to internal service funds Net cash provided (used) by operating activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Net acquisition and construction of capital assets Capital contributions Proceeds from sale of bonds Proceeds (reduction) from contracts payable Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities $ 32,520,916 (15,087,532) (5,827,741) (1,841,540) 9,764,103 $ 15,407,798 (9,591,596) (1,724,053) (477,571) 3,614,578 $ 284,311 (17,499,286) (17,214,975) 24,247,256 (263,868) 23,983,388 36,066 (681,988) (645,922) 3,999,038 (342,267) 3,656,771 (11,365,120) 3,957,569 532,088 (3,210,300) (2,131,100) (86,486,149) 1,864,274 42,741,541 (5,877) (2,195,166) 126,332 210,388 458,804 1,235,000 (33,062) (29,242) (114,013) (120,862) (31,659) (12,216,863) (43,955,045) 1,841,888 (266,534) 83,125,471 (59,734,189) 2,350,946 25,742,228 37,498,010 (37,555,760) 528,177 470,427 30,906,563 (27,323,293) 731,531 4,314,801 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 6,074,493 26,570,702 $ 32,645,195 (15,886,652) 23,244,250 $ 7,357,598 $ Classified as: Cash and cash equivalents Restricted cash with fiscal agents Non-current restricted cash and cash equivalents Totals $ 16,250,089 195,106 16,200,000 $ 32,645,195 $ $ $ 7,308,196 49,402 7,357,598 $ The accompanying notes are an integral part of the financial statements 40 10,924,351 (6,566,468) (3,190,184) (3,300,357) (2,132,658) 3,378,109 2,658,093 6,036,202 6,036,202 6,036,202 $ 3,300,110 (3,752,437) (1,334,273) (1,075,013) (2,861,613) 2,563,341 (2,756,017) 53,469 (139,207) $ $ $ 389,417 254,736 644,153 500,882 143,271 644,153 Public Housing Fund $ $ $ $ 221,614 (296,578) (74,964) Total $ 62,374,789 (35,294,611) (12,076,251) (6,694,481) 8,309,446 Governmental Activities Internal Service Funds $ 27,057,885 (12,442,799) (8,745,125) (1,993,966) 3,875,995 - 28,566,671 (18,787,409) 9,779,262 11,987,822 (2,158,755) 9,829,067 - (97,754,894) 6,280,647 42,741,541 1,761,211 (5,559,390) (2,065,669) (12,586,494) - - (54,596,554) (12,586,494) 9,791 9,791 154,093,385 (127,369,259) 3,673,914 30,398,040 64,669,420 (59,442,410) 1,202,391 6,429,401 (65,173) 455,000 389,827 389,827 389,827 $ $ $ (6,109,806) 53,182,781 47,072,975 30,485,196 387,779 16,200,000 47,072,975 $ $ $ 7,547,969 5,057,956 12,605,925 12,605,925 12,605,925 (continued) 41 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund 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 by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets: Accounts receivable Due from other governments Prepaid items Supplies inventory Other assets Increase (decrease) in liabilities: Accounts payable Accrued payroll Due to other governments Other liabilities Deposits payable Deferred revenue Compensated absences Total adjustments 5,085,138 $ 5,353,362 (1,366,743) $ 3,904,280 (2,158,812) $ (3,697,391) 875,585 748,546 604,626 (6,589) 31,228 - (15,390) (147,191) (20,143) (108,690) (33,916) (20,020) - 12,638 443 (1,640,294) 47,006 83,467 107,289 72,690 3,000 23,180 4,678,965 833,429 42,530 (39) 360,135 23,710 4,981,321 41,423 8,944 (743,232) 6,060 26,154 60,169 5,675 177 25 9,675 (1,570) 835,778 Net cash provided (used) by operating activities $ 9,764,103 $ 3,614,578 $ (2,132,658) $ (2,861,613) Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers Increase (decrease) in fair market value of investments Total non-cash investing, capital and financing activities $ 8,543,781 (10,489) 8,533,292 $ 7,496,785 4,919 7,501,704 $ (4,340) (4,340) $ (385) (385) $ $ $ The accompanying notes are an integral part of the financial statements 42 $ Public Housing Fund $ (85,489) Total $ 85,489 (2,223,297) Governmental Activities Internal Service Funds $ 10,967,262 (2,066) (71,818) - 491,118 (105,734) (153,780) 11,208 (19,700) (1,080) 10,525 (705,273) 104,155 83,605 (275,783) 71,610 12,675 51,380 10,532,743 4,089,655 (3,852) (12,749) 159,199 46,616 195 48,330 4,327,394 $ (74,964) $ 8,309,446 $ $ - $ 16,040,566 (10,295) 16,030,271 $ $ $ (451,399) $ 3,875,995 (9,631) (9,631) (concluded) 43 CITY OF PEORIA, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2008 Firemen's Pension Fund ASSETS Cash and cash equivalents Investments (pooled), at fair value Due from other governments Interest receivable Total assets $ LIABILITIES Accounts payable Other liabilities Total liabilities 94,194 133,849 386 1,480 229,909 - NET ASSETS Held in trust for pension benefits and other purposes $ 229,909 The accompanying notes are an integral part of the financial statements 44 Agency Funds $ 195,274 277,485 472,759 1,922 470,837 472,759 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Firemen's Pension Fund ADDITIONS Contributions: State insurance premium tax rebate Total contributions Investment earnings: Interest and investment income Total investment earnings Less investment expenses: Investment management fees Net investment earnings Total additions $ 386 386 $ 11,291 11,291 125 11,166 11,552 DEDUCTIONS Retirement payments Total deductions 34,475 34,475 Change in net assets Net assets - beginning of the year Net assets - end of the year (22,923) $ 252,832 229,909 The accompanying notes are an integral part of the financial statements 45 Notes to the Financial Statements The Notes to the Basic Financial Statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying financial statements. Note Page 1 Summary of Significant Accounting Policies 47 2 Reconciliation of Governmental Fund Financial Statements to Government-wide Statements 59 3 Budget Basis of Accounting 63 4 Deposits and Investments 63 5 Property Taxes 66 6 Due from Other Governments 67 7 Accounts Receivable and Allowance for Doubtful Accounts 67 8 Interfund Transactions, Receivable and Payable Balances 68 9 Segment Information for Enterprise Funds 68 10 Deficits in Fund Equity/Excess of Expenditures Over Appropriations69 11 Fund Balance/Net Assets Reservations and Designations 69 12 Capital Assets 70 13 Community Facilities District Debt 71 14 Long-Term Debt 72 15 Advance Refundings 77 16 Pledged Revenues 77 17 Retirement and Pension Plans 78 18 Operating Leases 82 19 Deferred Compensation Plan 83 20 Commitments and Contingencies 83 21 Other Matters 84 22 Subsequent Event 85 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 The City of Peoria (City) was incorporated in 1954 under the Arizona Revised Statutes. The current City charter provides for the Council - Manager form of government and provides such services as authorized by the charter as limited by the constitution of the State of Arizona. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City conform to accounting principles generally accepted in the United States of America (“GAAP”) 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. GASB Statement #20 requires that governments’ enterprise activities apply all applicable GASB pronouncements as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (“FASB”) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins. Governments are given the option whether or not to apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with or contradict GASB pronouncements. The City has elected not to implement FASB Statements and Interpretations issued after November 30, 1989. The following is a summary of other significant accounting policies: A. Financial Reporting Entity The City's major operations include police and fire protection, parks and recreation, development services, public works, certain social services and general administrative services. In addition, the City owns and operates enterprise funds, which include water, wastewater and solid waste operations, a baseball stadium complex, and the public housing operations. The financial reporting entity presented in these financial statements consists of the City and two blended component units. In accordance with GASB Statement #14, these component units, discussed below, are included in the City’s reporting entity because of the significance of their operational or financial relationship with the City. These component units are governed by boards, substantially or wholly, comprised of the government’s elected council. Individual Component Units - Blended City of Peoria Municipal Development Authority, Inc. City of Peoria Municipal Development Authority, Inc. (Authority), an Arizona not-for-profit corporation, was organized for the purpose of financing the construction of municipal facilities within the City through the issuance of bonds. Concurrent with these bond issues, the City entered into contracts with the Authority whereby the City will pay, to the Authority, amounts sufficient to retire the Authority's bonds and related interest. The outstanding Municipal Development Authority, Inc. bonds are reported as a debt service fund in the City’s financial statements. No separate financial statements are prepared for the Municipal Development Authority, Inc. Vistancia Community Facilities District The Vistancia Community Facilities District (the District) was formed by petition to the City Council in 2002. The district’s purpose is to acquire or construct public infrastructure in a specified area of the City. As a special purpose district and separate political subdivision under the Arizona Constitution, the District can levy taxes and issue bonds independently of the City. Property owned in the designated areas is assessed for the District’s property taxes, and thus for the costs of operating the District. The City Council serves as the Board of Directors of the District. The City has no liability for the District’s debt. For reporting purposes, the transactions of the District are included as governmental type funds as if they were part of the City’s operations. 47 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Stand-alone financial statements are prepared for the Vistancia Community Facilities District. The accounting records of the District are maintained by the City and the financial statements for the District are available from the City of Peoria, Finance Department at 8401 West Monroe Street, Peoria, AZ 85345. B. Basic Financial Statements The basic financial statements include both government-wide and fund financial statements. The government-wide financial statements (statement of net assets and statement of activities) report on the City and its component units as a whole, excluding fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. All activities, both governmental and business type, are reported in the government-wide financial statements using the economic resources measurement focus and the accrual basis of accounting, which includes long-term assets and receivables as well as long-term debt and obligations. The government-wide financial statements focus more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between governmental activities and business-type activities are shown in the government-wide financial statements. The “doubling up” effect of internal service fund activity has been removed from the government-wide statements with the expenses shown in the various functions and segments on the Statement of Activities. The City does not currently employ an indirect cost allocation system. The General Fund and certain other funds charge administrative service fees to other operating funds to support general services used by the other operating funds (like purchasing, accounting and administration). These administrative fees are eliminated from the financial statements at both the government-wide and fund level like a reimbursement, by reducing revenues and expenditures/expenses in the allocating fund. The government-wide Statement of Net Assets reports all financial and capital resources of the government (excluding fiduciary funds). It is displayed in a format of assets less liabilities equals net assets, with the assets and liabilities shown in order of their relative liquidity. Net assets are required to be displayed in three components: 1) invested in capital assets, net of related debt, 2) restricted and 3) unrestricted. Invested in capital assets, net of related debt, is capital assets net of accumulated depreciation and reduced by outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted net assets are those with constraints placed on their use by either: 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation. All net assets not otherwise classified as restricted, are shown as unrestricted. Generally, the City would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Reservations or designations of net assets imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are not shown on the government-wide financial statements. Note 11 discusses the internal reservations and designations of net assets in the various funds to demonstrate the government’s intended use of those net assets. The government-wide Statement of Activities demonstrates the degree to which the direct expenses of the various functions and segments of the City are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Interest on long-term debt and depreciation expense on assets shared by multiple functions are not allocated to the various functions. Program revenues include: 1) charges to customers or users who purchase, use or directly benefit from goods, services or privileges provided by a particular function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, investment income and other revenues not identifiable with 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 particular functions or segments are included as general revenues. State shared revenues, such as sales taxes, urban revenue sharing and auto-in-lieu taxes, that are not restricted for use in any function, are included as general revenues. The general revenues support the net costs of the functions and segments not covered by program revenues. Also part of the basic financial statements are fund financial statements for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The focus of the fund financial statements is on major funds. Although GASB Statement #34 sets forth minimum criteria for the determination of major funds (a percentage of assets, liabilities, revenues, or expenditures/expenses of the fund category and of the governmental and enterprise funds combined), it also gives governments the option of displaying other funds as major funds. The City has opted to add some funds as major funds because of outstanding debt or community focus. Other non-major funds, as well as the internal service funds, are combined in a single column on the fund financial statements and are detailed in combining statements included as supplementary information after the basic financial statements. The internal service funds, which provide services to the other funds of the government, are presented in a single combined column in the proprietary fund financial statements. Because the principal users of the internal service funds are the City’s governmental activities, the assets and liabilities of the internal service funds are consolidated into the governmental activities column of the government-wide Statement of Net Assets. The costs of the internal service fund services are spread to the appropriate function or segment on the government-wide Statement of Activities and the revenues and expenses within the internal service funds are eliminated from the government-wide financial statements to avoid any doubling up effect of these revenues and expenses. The governmental fund financial statements are prepared on a current financial resources measurement focus and modified accrual basis of accounting. This is the traditional basis of accounting for governmental funds and also is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to 1) demonstrate legal and covenant compliance, 2) demonstrate the sources and uses of liquid resources, and 3) demonstrate how the City’s actual revenues and expenditures conform to the annual budget. Since the governmental fund financial statements are presented on a different basis than the governmental activities column of the government-wide financial statements, a reconciliation is provided immediately following each fund statement. These reconciliations briefly explain the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements. Additional reconciliations are also provided in Note 2. The proprietary fund and fiduciary fund financial statements are prepared on the same basis (economic resources measurement focus and accrual basis of accounting) as the government-wide financial statements. Therefore, most lines for the total enterprise funds on the proprietary fund financial statements will directly reconcile to the business-type activities column on the governmentwide financial statements. Because the enterprise funds are combined into a single business-type activities column on the government-wide financial statements, certain interfund activities between these funds may be eliminated in the consolidation for the government-wide financial statements, but are included in the fund columns in the proprietary fund financial statements. The net costs/income of the internal service funds are also partially allocated to the business-type activities column on the government-wide financial statements. A reconciliation of the total enterprise funds on the fund financial statements to the business-type activities column on the government-wide financial statements is provided on the face of the fund statements. 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. 49 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 C. Basis of Presentation The accounts of the City are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts, which includes assets, liabilities, fund equity, revenues and expenditures/expenses. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with financerelated legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The following fund categories (further divided by fund type) are used by the City: Governmental Funds Governmental funds are used to account for the City’s general government activities. The focus of Governmental Fund measurement, in the fund financial statements, is upon determination of financial position and changes in financial position rather than upon net income. The following are the Governmental Funds of the City: General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Special Revenue Funds account for revenue sources that are restricted to expenditures for specific purposes (not including major capital projects). The restrictions may be imposed by outside parties or by the governing body. The special revenue funds presented as major funds in the basic financial statements are as follows: Half-Cent Sales Tax Fund accounts for the revenues generated from a sales tax increase designated for specific uses per Council policy; Highway User Revenue Fund is required by state statute to track receipts of specific state shared revenues and the expenditure of those funds; the Development Fee Fund accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities; and the Transportation Sales Tax Fund accounts for the revenues generated from a sales tax increase designated by public vote for use in funding transportation needs throughout the City. Debt Service Funds account for the resources accumulated and the servicing of long-term debt not being financed by proprietary funds. The debt service funds presented as major funds in the basic financial statements are as follows: GO Bond Debt Service Fund accounts for the principal and interest requirements of the City's general obligation bonds, with revenues generated from the general property tax levy sufficient to meet the debt service; and the Special Assessment Debt Service Fund accounts for the receipt of revenues from special assessment districts and the payment of the special assessment bonds. Capital Projects Funds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary funds. One capital projects fund is presented as a major fund in the basic financial statements. The GO Bond Capital Projects Fund accounts for the bond proceeds from general obligation bonds and the expenditure of those monies. Proprietary Funds Proprietary funds account for activities of the City similar to those found in the private sector, where cost recovery and the determination of net income is useful or necessary for sound fiscal management. The focus of Proprietary Fund measurement is upon the determination of operating income, changes in net assets, financial position and cash flows. The following are the Proprietary Funds of the City: Enterprise Funds are used to account for those operations that provide services to the general public for a fee. Enterprise funds are required for any activity whose principal revenue sources meet any of the following criteria: 1) any activity that has issued debt backed solely by the fees and charges of the activity, 2) if the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered through fees and charges, or 3) it is the policy of the City to 50 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 establish activity fees or charges to recover the cost of providing services, including capital costs. All of the enterprise funds of the City are presented discretely in the basic financial statements. The enterprise funds of the City are as follows: The Water Utility, Wastewater Utility and Solid Waste Utility Funds all account for the revenues from charges to the customers of these services and the costs of these services. The Stadium Fund accounts for the revenues generated by and the costs of operation of a sports complex owned by the City. This facility is used for spring training by two major league baseball teams as well as multiple other uses throughout the year. The Public Housing Fund accounts for the revenues and expenses of the low income housing program operated by the City. While this program does receive Federal subsidies through the Department of Housing and Urban Development, it also generates substantial user fees. Internal Service Funds account for operations that provide services to other departments or agencies of the government or to other governments on a cost-reimbursement basis. The internal service funds are presented as one column on the proprietary fund financial statements. Combining financial statements are also presented for the internal service funds, but are not part of the basic financial statements. The internal service funds of the City are as follows: Motor Pool Fund – accounts for the costs of operating the City garage. These costs are charged out to user departments based on direct charges for services used. This fund also accounts for the vehicle replacement fund for all of the City’s general governmental vehicles. Self-Insurance Fund – accounts for the Risk Management function of the City as well as maintaining the costs of the City’s liability insurance and any claims paid under the City’s selfinsurance program. These costs are allocated to all operational activities of the City. Facilities Maintenance Fund – allocates the costs of operations and maintenance of the City’s facilities to the user departments. Information Technology Fund – maintains the costs of operation and maintenance of the City’s computer systems. The computer replacement fund for all governmental functions is also in this fund. Revenues are charges to user departments. Fiduciary Funds Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others. 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. The City maintains the following types of fiduciary funds: 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 volunteer firemen’s retirement 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 five agency funds. One fund accounts for the monies collected from developers in one area of the City and held in trust by the City until reimbursed by the City to a developer that made certain infrastructure improvements in that area. Three funds account for monies held on behalf of separate not-for-profit agencies for which the City operates as an administrator. These are Neighborhood Pride, PLAY Peoria, and Peoria Citizens Corp Council. The fifth fund accounts for monies held on 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 behalf of Westside Fire Training IGA, a consortium of area fire departments that pool monies for training activities, for which the City acts as the administrator. D. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All funds are reported in the government-wide financial statements on the flow of economic resources measurement focus and accrual basis of accounting. Governmental fund types are presented, in the fund financial statements, using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets, and unreserved fund balance is a measure of available spendable resources. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e. when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon thereafter to pay liabilities of the current period. The City considers revenues available under modified accrual, if they are earned by June 30 (all eligibility requirements have been met) and the revenue is expected to be collected within six months after year-end, except for property taxes. For property taxes, the City uses a 60 day collection period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. When applying the “susceptible to accrual” concept to intergovernmental revenues pursuant to GASB Statement #33 – Recipient Reporting for Certain Shared Non-exchange, receivables and revenues are recognized when the applicable eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met are reported as deferred revenue. Property taxes and special assessments are susceptible to accrual when an enforceable legal claim has arisen. As noted above, the City recognizes property taxes received within 60 days of fiscal year-end to be revenues under modified accrual. The remaining taxes levied are considered deferred revenue on the governmental fund financial statements. State Shared Sales Taxes, Highway User revenues and State Shared Income taxes collected and held by the state at year-end on behalf of the City are also recognized as revenue. City levied transaction privilege taxes (sales taxes) are considered susceptible to accrual at the time of the underlying transaction (sale). In practice, taxes collected by local businesses in June and remitted to the City in July are recognized as revenue in the previous fiscal year. Other receipts become measurable and available when cash is received by the City and are recognized as revenue at that time. Interest and dividend income is recognized on the modified accrual basis. Changes in fair value of investments are recognized in investment income at the end of the year. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. For the governmental fund statements, grant revenue earned but not expected to be received within six months of year end is deferred. Proprietary funds and pension trust funds are accounted for on the flow of economic resources measurement focus. This measurement focus emphasizes the determination of net income. The accrual basis of accounting is used for proprietary fund types and pension trust funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 E. Budgets and Budgetary Accounting The City uses the following procedures in establishing the budgetary data reflected in the accompanying financial statements: • According to the laws of the State of Arizona, all operating budgets must be approved by their governing board on or before the second Monday in August to allow sufficient time for legal announcements and hearings required for the adoption of the property tax levy on the third Monday in August. • In April, the proposed budget for the following fiscal year is presented by the City Manager to the City Council. The budget includes proposed expenditures and the means of financing them. Public meetings are held to obtain citizen comment. • Prior to June 30, the City Council legally enacts the budget, through the passage of an ordinance. The ordinance sets the limit for expenditures for the year, within the voter mandated state expenditure limitation (see Note 1.F). Additional expenditures may be authorized if directly necessitated by a natural or man-made disaster as prescribed in the state constitution. There were no supplemental appropriations made during fiscal year 2008. • The maximum legal expenditure permitted for the year is the total budget as adopted. The expenditure appropriations in the adopted budget are maintained in the City’s financial system by department within individual funds. Departmental appropriations may be amended during the year, within administrative guidelines and adopted Council policies. • The initial budget for the fiscal year may be amended during the year in a legally permissible manner. • The City Manager is generally authorized to transfer budgeted amounts within any specific department’s expenditure appropriation. Any budget revisions requiring a transfer between departments must be approved by the City Council. Additionally, budget revisions involving personnel or capital asset expenditures/expenses must be approved by the City Council. • All unencumbered expenditure appropriations expire at the end of the fiscal year. • Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office staff. Budgetary carry forwards are approved by the City Council. • All funds of the City, except the agency funds, have legally adopted budgets. Formal integration of these budgets into the City’s financial systems is employed as a management control device during the year for all funds. The City prepares its annual budget on a modified cash basis, which differs from GAAP. GASB Statement #34 requires that budgetary comparison statements for the General Fund and major special revenue funds be presented in the annual financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis). The City has also shown this information as supplementary schedules for other governmental funds as well as enterprise funds and internal service funds. F. Expenditure Limitation On June 3, 1980, the voters of Arizona approved an expenditure limitation for all local governments. The limitation restricts the annual growth of expenditures to a percentage determined by population and inflation. Certain types of expenditures are excluded from the limitation. Article 9, Sections 20 53 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 and 21 of the Arizona Constitution require the Economic Estimate Commission to determine each year the expenditure limitation for the following fiscal year for all cities in Arizona. The limitation is calculated based on the amount of fiscal year 1979-1980 actual payments of local revenues, referred to as the “base limit”. Each year, the base limits for local jurisdictions are adjusted for population growth and inflation to calculate the new expenditure limitations for the cities. Local governments may carry forward revenues which were not subject to the expenditure limitation, and which were not expended in the year of receipt, to later years. The State Constitution also gives local jurisdictions several methods of seeking approval from their citizens to override the state expenditure limitation. One of these is local approval of a permanent base adjustment. In March 2003, the voters of Peoria approved a $15 million permanent adjustment of the expenditure base. This permanent base adjustment was effective beginning in fiscal year 20052006. The City of Peoria’s state calculated expenditure limitation for fiscal year 2007-2008, including the permanent base adjustment, was $639,664,707. G. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed by the City. In the governmental funds, encumbrances are reported as designations of fund balances at June 30 in the fund financial statements, since they do not constitute expenditures or liabilities. No restrictions of net assets for encumbrances are shown in the government-wide financial statements. Encumbrance accounting is employed in the proprietary fund types for budget purposes only, but is not shown as restricted net assets in the financial statements. H. Deposits and Investments The City generally reports investments at fair value in the balance sheet and recognizes the corresponding change in the fair value of investments in the year in which the change occurred. It is generally the City’s policy to hold investments to maturity. Investment Policy The City’s funds are invested through the City’s Finance Department in accordance with the City’s investment policy and Arizona Revised Statutes. The City's policy is to invest in certificates of deposit, money market mutual funds, repurchase agreements, corporate securities, direct U.S. Treasury debt, securities guaranteed by the U.S. Government or any of its agencies and the State of Arizona local government investment pool. In addition, the function of the Finance Department is to review and monitor the City’s investment policy and to monitor compliance with the investment policy and reporting provisions of the law through an annual audit. The investment balances are comprised of two components: 1) pooled deposits and investments and 2) dedicated investment funds. The dedicated investment funds represent restricted funds and relate to bond issuances of the Enterprise funds and the General Fund’s cash reserve requirements. In addition to these, the City has other funds that are held by trustees. These funds are related to the issuance of bonds and certain loan programs of the City. Investment Valuation Local Government Investment Pool - Investments are carried at fair value. The fair value of pooled investments is determined annually and is based on current market prices. The fair value of participants’ position in the pool approximates the value of the pool shares. The method used to determine the value of participants’ equity withdrawn is based on the book value of the participants’ percentage participation at the date of such withdrawal. Other Investments - Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market price are reported at estimated fair value. 54 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 The City’s investment policy permits the City to invest in fixed coupon dollar repurchase agreements, that is, a sale of securities with a simultaneous agreement to repurchase similar securities in the future at a lower price that reflects a financing rate. The fair value of securities underlying fixed coupon dollar repurchase agreements must equal at least 102% the cash received. If the dealers default on their obligations to resell these securities to the City at the agreed upon buyback price, the City could suffer an economic loss if the securities have to be purchased in the open market at a price higher than the agreed-upon buyback price. Other non-pooled investments are also generally carried at fair value. However, money market investments (such as short-term, highly liquid debt instruments including commercial paper, banker’s acceptances, and U.S. Treasury and agency obligations) and participating interest-earning investment contracts (such as negotiable certificates of deposit, repurchase agreements and guaranteed or bank investment contracts) that have a remaining maturity at the time of purchase of one year or less, are carried at amortized cost. The fair value of non-pooled investments is determined annually and is based on current market prices. The fair value of investments in openend mutual funds is determined based on the funds’ current share price. Investment Income Except for certain specific investments, generally those held in trust for a specific purpose, the City maintains pooled cash and investments. Income from pooled cash and investments is allocated to the individual funds based on the fund’s month end cash balance in relation to the total pooled investments. City management has determined that the investment income related to certain Special Revenue Funds should be allocated to the General Fund. Each fund’s equity in the pooled cash and investments is tracked on an ongoing basis. In the event that a certain fund overdraws its share of pooled cash, the overdraft is reported as a due to the General Fund at year-end. Income from non-pooled investments is recorded based on the specific investments held by the fund. The interest income is recorded in the fund that earned the interest. I. Inventory and Prepaid items Inventories are valued at cost and the City uses the first-in, first-out (FIFO) flow assumption in determining cost. Inventory in the governmental funds, which consists of expendable supplies held for consumption, is recorded as an expenditure at the time individual inventory items are consumed and is offset by a fund balance reserve in the governmental fund financial statements indicating it does not constitute available expendable resources. No reservation of net assets is shown in the proprietary fund statements or the government-wide financial statements for inventories. Prepaid items are generally for payments made by the City in the current fiscal year for goods or services to be received in the subsequent fiscal year. Such items are recorded as prepaid at the time of the payment and recognized as expenditures/expenses when the related goods or services are received. Prepaid items are offset by a reservation of fund balance in governmental funds to indicate it does not constitute available expendable resources. No reservation of net assets is shown in the proprietary fund statements or the government-wide financial statements for prepaid items. J. Capital Assets All capital assets, whether owned by governmental activities or business-type activities, are recorded and depreciated in the government-wide financial statements. The City has chosen not to apply the modified approach to any networks or subsystems of infrastructure assets. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are defined as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. 55 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Major outlays for capital assets and improvements are capitalized as the projects are constructed. Interest incurred during the construction phase of projects is reflected in the capitalized value of the asset constructed. For the year ended June 30, 2008, the City capitalized net interest costs of $800,615 in the business-type activities of the government-wide financial statements (also in the Enterprise Funds on the proprietary fund statements). Total interest incurred of the business-type activities (and the Enterprise Funds on the proprietary fund statements) before capitalization was $3,454,348. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives: Assets Buildings and improvements Water and sewer systems Storm drainage systems Street system Park facilities and streetscape Streetlights and traffic control devices Equipment Furniture and fixtures Vehicles Computers/software Useful life (Years) 40 40 40 40 25 10 7-15 7-15 3-12 3 Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) or net realizable value, if lower, as of the date of the transfer. K. Transactions Between Funds Transactions that would be treated as revenue, expenditures or expenses if they involved organizations external to the governmental unit, like the sale of water from the Water Utility to various functions of the General Fund, are accounted for as revenue and expenditures or expenses in the funds involved. Transactions which constitute reimbursements of a fund for expenditures or expenses initially made from that fund, which are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed. Administrative service fees that are charged to other operating funds to support general services used by the other operating funds (like purchasing, accounting and administration) are treated as reimbursement transactions and the revenue and expenditures/expenses reduced in the allocating fund. Transfers between funds are included in the results of both governmental and proprietary funds (as other sources/uses in governmental funds and as non-operating revenues/expenses in proprietary funds). Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds” for the current portion and “interfund receivables and payables” for the non-current portion (if applicable). Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. These transactions include transfers between funds and interdepartmental service charges. In the government-wide financial statements, only the net interfund activity and balances between governmental activities and business-type activities are shown (reported as “internal balances”). Also see Note 8. 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 L. Receivables All receivables are shown net of an allowance for uncollectible accounts. For trade accounts receivable (miscellaneous receivables and utility billing receivables), amounts outstanding in excess of 90 days are included in the allowance. Also see Notes 5 and 7. M. Restricted Assets Certain proceeds of the City’s bonds, as well as certain resources set aside for their repayment, are classified as restricted on the balance sheet, or statement of net assets, because they are maintained in separate bank accounts and their use is limited by applicable debt covenants. N. Long-Term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the life of the bonds. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, in the period in which the bonds are issued. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. The long-term debt of the City is serviced by various funds, according to the type of debt and the funds benefiting from that debt. The General Obligation Bonds Debt Service Fund, Municipal Development Authority Bonds Debt Service Fund, Community Facilities District Bonds Debt Service Fund, and Special Assessment Debt Service Fund are all specifically established to service those specific types of debt obligations of the City. The Highway User Revenue Fund services the highway user revenue bonds, which are funded by state shared gas tax revenues. The Half-Cent Sales Tax Fund services debt obligations from development agreements. Each enterprise fund individually accounts for and services the applicable bonds and contracts payable that benefit that fund. O. Compensated Absences Annual leave, based on a graduated scale of years of employment, is credited to each employee as it accrues. The maximum annual leave accrual for permanent employees is 320 hours. Upon employment termination, payment is made to the employee for the unused leave. For the governmental fund financial statements, compensated absences are accrued only when due. For the government-wide financial statements, as well as the proprietary fund financial statements, all of the outstanding vacation, compensatory time and benefits are recorded as a liability. Compensated absences are liquidated when mature by the various operating funds accruing the liability. City employees are granted one sick leave day per month. The maximum an employee may accumulate varies according to union status; however, the City makes no payment on the unused portion upon employment termination except on the condition of retirement. The City is not able to reasonably estimate any potential liability for retiree sick time payout, therefore, no sick leave obligation is accrued. Any sick time accrued above the maximum allowed to be carried is paid out annually in May at a rate of 25% and the employees’ sick leave is reduced to the allowable maximum. 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 P. 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; and natural disasters. The City maintains a Self-Insurance Fund (accounted for in the Internal Service Funds) to account for and finance its uninsured risks of loss. Premiums are paid into the internal service fund by the other operating funds and are available to pay claims, claim reserves and administrative costs of the program. These interfund premiums are used to fund claim expenses reported in the internal service fund. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. The claims liability of $3,100,000 reported in the Self-Insurance Fund at June 30, 2008 is based on the requirements of Governmental Accounting Standards Board Statement #10 which requires that liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. The City is self-insured for property and public liability up to $500,000 and for damage to City vehicles valued up to $50,000. Vehicles with a value in excess of $50,000 have a $5,000 deductible. Excess coverage insurance policies purchased through commercial insurance carriers cover individual claims in excess of these amounts up to $40,000,000. For additional information on insurance amounts, see Table XXXIV on page 186. The claims liability includes an estimated amount for claims that have been incurred but not reported (IBNR). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends, including frequency and amount of payouts, and other economic and social factors. Non-incremental claims adjustment expenses are not included in the calculation. During the fiscal year ended June 30, 2008, there was no significant reduction in excess insurance coverage. Additionally, settlements for each of the last three fiscal years have not exceeded the City’s insurance coverage. Changes in the Self-Insurance Fund’s claims liability amount in fiscal years 2007 and 2008 were: Beginning of Years Ended, Fiscal Year Changes in June 30 Liability Estimates 2007 $3,100,000 $ 2008 3,100,000 - Current Year Claims $490,535 727,954 Claim Payments $ (490,535) $ (727,954) Balance at Fiscal Year-end $3,100,000 3,100,000 Q. Cash Equivalents The City considers short-term investments (including restricted assets) in the State of Arizona investment pool, mutual fund-money market, U.S. Treasury bills and notes with maturities of three months or less at acquisition date to be cash equivalents. R. New Accounting Standards During fiscal year 2008, the City implemented the following new accounting standard issued by the Governmental Accounting Standards Board: Statement No. 48 – “Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues”. See footnote 16 further detail. S. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of net assets/balance sheet and the reported amounts of revenues and expenses/expenditures during the reporting period. Specifically, the city has made certain estimates and assumptions relating to the collectibility of its receivables (including accounts receivable), valuation of capital assets and depreciation expense, and the ultimate outcome of claims payable. Actual results could differ from those estimates. 58 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 2. RECONCILIATION OF GOVERNMENTAL FUND FINANCIAL STATEMENTS TO GOVERNMENTWIDE STATEMENTS The governmental fund financial statements are presented on a current financial resources measurement focus and modified accrual accounting basis while the government-wide financial statements are prepared on a long-term economic resources measurement focus and accrual accounting basis. Reconciliations briefly explaining the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements immediately follow each fund financial statement. Additional reconciliations are provided below. Reconciliation of Governmental Funds Balance Sheet and the government-wide Statement of Net Assets: Total Governmental Funds Assets Cash and cash equivalents Cash with fiscal agents Investments Accounts receivable, net Interest receivable Internal balances Due from other governments Prepaid items Supply inventories Deferred bond issuance costs, net Other assets Restricted cash/cash equivalents Restricted investments Special assessment receivables Capital assets Total assets Liabilities Accounts payable Accrued payroll Interest payable Due to other governments Claims/deposits payable Deferred revenue Arbitrage liability Other liabilities Unamortized bond premium Compensated absences-current Current bonds/contracts payable Long-term liabilities (net of deferred loss) Total liabilities Fund Balance/Net Assets Total fund balance/net assets Total liabilities and fund balance/net assets (1) $ 101,206,646 3,487,675 141,868,910 8,789,356 1,679,355 5,707,354 317,924 172,590 38,770,339 41,477,174 11,477,307 $ 354,954,630 $ 18,876,661 2,055,207 2,288,143 3,317 17,453,939 722,493 6,187,652 - Long-term Assets/ Liabilities (1) 3,487,494 5,100,000 839,412,476 847,999,970 5,881,282 (6,991,908) 3,105,604 3,984,390 27,938,590 Internal Service Funds (2) Statement of Net Assets Totals 12,605,925 17,913,067 3,852 159,936 (759,561) 82,795 27,570,083 57,576,097 113,812,571 3,487,675 159,781,977 8,793,208 1,839,291 (759,561) 5,707,354 317,924 255,385 3,487,494 5,100,000 38,770,339 41,477,174 11,477,307 866,982,559 1,260,530,697 843,551 201,506 195 3,100,000 476,600 - 19,720,212 2,256,713 5,881,282 2,288,338 3,103,317 10,462,031 722,493 6,187,652 3,105,604 4,460,990 27,938,590 47,587,412 285,730,649 319,648,607 53,860 4,675,712 285,784,509 371,911,731 $ 307,367,218 528,351,363 52,900,385 888,618,966 $ 354,954,630 847,999,970 57,576,097 1,260,530,697 $ When capital assets (land, buildings, equipment, etc.) that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in governmental funds, and thus a reduction in fund balance. However, the statement of net assets includes those capital assets among the assets of the City as a whole. Costs of capital assets Accumulated depreciation Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expense when paid. Interest payable $ 1,015,498,666 (176,086,190) $ 839,412,476 $ 5,881,282 Bond issuance costs are expensed when incurred in governmental funds, but are deferred and amortized over the life of the bonds in the statement of net assets. $ 3,487,494 Bond premiums are recognized at the time of issuance in the governmental funds, but are deferred and amortized over the life of the bonds on the statement of net assets 3,105,604 59 $ CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Long-term liabilities applicable to the City’s governmental activities are not due and payable in the current period, and accordingly are not reported as fund liabilities in the governmental fund statement. All liabilities, both current and long-term are reported in the statement of net assets. Contracts payable Bonds payable Compensated absences Subtotal Less: current compensated absences current portion of bonds/contracts $ $ Loss on refunding bonds is expensed at the time of issuance in the governmental funds, but is deferred and expensed over the life of the bonds on the statement of net assets. $ (1,184,072) Certain long-term debt obligations that are booked for the government-wide statements are offset by goodwill. $ 5,100,000 $ $ (6,526,366) (465,542) (6,991,908) $ 52,900,385 Deferred revenue for the long-term special assessment receivables shown on the governmental fund statements is not deferred on the statement of net assets. Also, certain property tax revenues deferred under modified accrual for the governmental fund statements, is recognized as revenue in the year received under accrual accounting for the government-wide statements. Deferred special assessment revenue Deferred property tax revenue (2) 42,539,431 271,923,080 4,375,190 318,837,701 3,984,390 27,938,590 286,914,721 Internal service funds are used by management to charge the costs of certain activities, such as insurance, motor pool, information technology and facilities maintenance, to the individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net assets, but are not included on the governmental fund balance sheet. ISF Net Assets Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance and the government-wide Statement of Activities: Total Governmental Funds Revenues and Other Sources Taxes: Sales and use taxes $ 68,466,910 Property taxes 26,042,606 Franchise taxes 3,848,746 Intergovernmental: State shared sales taxes 12,695,890 Urban revenue sharing 19,539,768 Auto-in-lieu taxes 5,546,558 Highway user revenue 9,488,625 Local transportation aid 666,237 From federal government 2,904,788 Other 1,770,683 Charges for services 37,609,937 Licenses and permits 3,020,436 Fines and forfeitures 2,666,731 Rents 358,215 Investment earnings 12,125,018 Special assessments 1,803,344 Miscellaneous 7,882,947 Other sources: Gain on sale of capital assets Capital contributions Capital-related debt issued 47,000,000 Premium on bonds issued 273,310 Expired debt agreement Transfers in 16,426,715 Total revenues and other sources 280,137,464 Long-term Revenues/ Expenses(1) Capitalrelated Items(2) 151,204 - - - - 31,094 1,203,197 - - 40,953 19,653,768 11,130,249 419,652 30,856,064 1,622,849 (2,016) (1,306,029) (381,637) (1,538,478) Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities 60 104,114 - 68,466,910 26,297,924 3,848,746 2,884,277 113 (14,230) (3,977,233) 12,695,890 19,539,768 5,546,558 9,488,625 666,237 2,904,788 1,770,683 40,492,198 3,020,549 2,652,501 358,215 13,328,215 497,315 3,555,171 (47,000,000) (273,310) 2,358,431 47,408,826 (73,686,993) 40,953 19,653,768 2,358,431 1,698,449 2,493,947 (74,689,952) 238,881,894 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Total Governmental Funds Expenditures/Expenses Current: General government 14,544,047 Culture and recreation 21,769,313 Police 33,340,756 Fire 19,120,991 Development services 6,669,979 Highways and streets 14,632,287 Public works 6,408,150 Human services 2,817,716 Debt service: Principal payments 31,143,531 Interest and other charges 10,340,704 Capital outlay 74,142,416 Unallocated depreciation Total expenditures/ expenses 234,929,890 Other financing uses/changes in net assets Transfers out 36,035,044 Total expenditures/expenses & other financing uses 270,964,934 Net change for the year $ 9,172,530 (1) Long-term Revenues/ Expenses(1) Capitalrelated Items(2) 569,900 35,580 246,170 25,860 23,490 12,950 37,040 9,990 2,049,495 1,622,751 1,865,228 1,432,395 62,734 8,954,951 1,456,200 72,323 699,581 - (74,142,416) 574,942 1,660,561 (56,051,397) 1,660,561 (3,199,039) 11,130,249 (44,921,148) 75,777,212 Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities (210,720) (475,385) (928,386) (675,201) (213,444) (692,800) (106,729) (12,404) (3,315,069) 316,747 (2,998,322) 4,621,171 (31,143,531) 127,756 - 124,393 (1,118,115) (10,303) 10,671 (346) 2,435 (11,694) - 17,077,115 21,834,144 34,513,465 19,914,716 6,542,413 22,909,823 7,782,967 2,887,625 - 11,168,041 574,942 (31,015,775) (1,002,959) 145,205,251 47,408,826 (83,413,155) 11,477,711 16,393,051 (13,899,104) (84,416,114) 9,726,162 156,682,962 82,198,932 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. Accrual of long-term compensated absences Interest expense on long-term debt is accrued for the statement of activities but is not accrued for the governmental fund statements. Amortization of bond premiums and deferred loss on refunding is also included in the statement of activities, but not the governmental fund statements. Accrued interest Amortization of loss on refunding Amortization of bond premium $ 480,980 $ $ 887,090 155,220 (342,729) 699,581 Property taxes revenues not received within 60 days of year-end are deferred for governmental fund reporting, but are not deferred for government-wide reporting. When these revenues are subsequently received, they are recognized in the governmental operating statement and reversed in the statement of activities. $ 151,204 Revenues earned, but not expected to be received within six months, are deferred in the governmental operating statement, but recognized when earned on the statement of activities. When revenues are subsequently received, they are recognized in the governmental operating statement and reversed in the statement of activities. $ (381,637) Certain development agreements received in the governmental funds are deferred in the governmentwide statements until the matching assets are accepted. $ (2,016) Special assessment principal payments received are reported as revenue on the governmental fund statements, but are reductions to the outstanding special assessment debt for government-wide reporting. Also, the sale of additional special assessment bonds is reported as a receivable and deferred revenue in the governmental funds, but on the government-wide financial statements, it is reported as an increase in outstanding debt and the revenue is recognized. Current year principal payments received $ Certain long-term debt obligations are offset by a goodwill asset that is amortized over the life of the debt. Goodwill amortization is included in the statement of activities, but not the governmental fund statements. $ 61 (1,306,029) 480,000 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 (2) When capital assets that are to be used in the governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the cost of those assets is allocated over their useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of the financial resources expended, whereas net assets decrease by the amount of depreciation expense charged for the year. Capital outlay Other capital Depreciation expense $ (74,142,416) (684,061) 18,656,579 $ (56,169,898) The proceeds from the sale of capital assets are reported as revenue in the governmental funds. However, the cost of the capital assets is removed from the capital assets account in the statement of net assets and offset against the sales proceeds resulting in a “gain on sale of capital assets” in the statement of activities. Thus, more revenue is reported in the governmental funds than gain in the statement of activities. Cost of capital assets disposed of: $ 31,094 Donations of capital assets are not shown on the governmental funds, but are included in the assets of the City. On the statement of activities, these donations are shown as capital contributions. Capital contributions $ 19,653,768 Gains and losses on sales of fixed assets are not shown on the governmental fund statements, but are included in the statement of activities. Gains Losses $ $ The donation of governmental capital assets from Proprietary Funds is not shown in the governmental fund statements but is a transfer in on the statement of activities. Transfers out Transfers in (3) (4) $ (11,130,249) 11,130,249 $ - Internal service funds are used by management to charge the costs of certain activities, such as insurance, motor pool, information technology and facilities maintenance, to the individual funds. The adjustments for internal service funds “close” those funds by charging the additional amounts to participating governmental activities to completely cover the internal service funds’ costs for the year. Revenue and other sources Expenditures and other uses Change in net assets $ Repayment of bond principal is reported as an expenditure in governmental funds and thus has the effect of reducing fund balance because current financial resources have been used. For the City as a whole however, the principal payments reduce the long-term liabilities in the statement of net assets and do not result in an expense in the statement of activities. Principal payments made $ (31,143,531) The issuance of additional debt is reported as a revenue in the governmental funds, but is an increase in outstanding debt, not a revenue, for government-wide reporting. Bonds issued $ (47,000,000) Certain bond transactions, like issuance costs, bond premiums and loss on refunding, are reported as revenues or expenditures in the governmental funds because they provide, or use, current financial resources. However, for the City as a whole, these costs are deferred and recognized or amortized (expensed) over the life of the bonds. Issuance costs for new debt Amortization of bond issuance costs Bond premium $ $ $ A development agreement (long term debt not carried in the governmental funds) expired without meeting the revenue requirements necessary to cause the City to pay out the entire amount of the agreement. This transaction has no effect on the governmental fund statements, but creates an other financing source on the statement of activities. Certain debt transactions caused transfers to occur between funds. Transfers out Transfers in (5) 40,953 (118,501) (77,548) Certain other transactions are treated differently under modified accrual accounting used in the governmental funds and full accrual accounting used for the statement of activities. Also interfund transactions between 62 $ $ 1,622,849 2,998,322 4,621,171 135,516 (263,272) (273,310) (401,066) 2,358,431 47,408,826 (47,408,826 $ - CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 governmental funds or between business-type activities are eliminated in the statement of activities and only net transactions between governmental and business-type activities remain. The allowance for uncollectible accounts receivable reduces revenues in the governmental funds statement of revenues, expenditures and changes in fund balances, but under full accrual accounting used in the statement of activities, the offset is bad debt expense. Bad debt expense Allowance for uncollectible accounts receivable $ 114,501 (114,501) - $ Interfund charges for service between governmental activities are eliminated in the consolidation of these activities for the statement of activities. The elimination is reflected as a reduction of revenues and expenditures in the charging fund so that the expenses remain in the charged activity. Interfund charges for services revenue Interfund service charges $ $ Interfund transfers between governmental activities, other than Internal Service Funds, are eliminated in the consolidation of these activities for the statement of activities. The elimination is reflected as a reduction of transfers in and transfers out to eliminate the doubling up effect of these transactions within the governmental activities. Elimination of transfers to/from the Internal Service Funds is netted into the results of the Internal Service Funds in (3) above. Transfers out Transfers in 1,117,460 (1,117,460) - $ 83,413,155 (73,686,993) $ 9,726,162 3. BUDGET BASIS OF ACCOUNTING The City prepares the annual budget on a modified cash basis, which differs from GAAP, as discussed in Note 1.E. Budgetary comparison statements for the General Fund and major Special Revenue Funds are included with the basic financial statements. Budgetary comparison schedules for all other governmental funds as well as schedules of operation – budget and actual for the proprietary funds are presented as supplementary information. In all cases, the budgetary statements or schedules include a reconciliation of the adjustments required to convert the budgetary revenues and expenditures or change in net assets on a budgetary basis, to revenues and expenditures/expenses or change in net assets on a GAAP basis. 4. DEPOSITS AND INVESTMENTS A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the government-wide Statement of Net Assets, and on the fund financial statements, as “Cash and cash equivalents” and “Investments”. At June 30, 2008, the carrying amount of the City's deposits was $11,974,960 and the bank balance was $14,921,065. The entire bank balance was covered by federal depository insurance or by collateral held by the City’s agent in the City’s name or in the Municipal Development Authority, Inc.'s trust name. The difference of $2,946,105 represents deposits in transit, outstanding checks and other reconciling items. B. Investments City charter, ordinance, and trust agreements authorize the City to invest in obligations of the U.S. Treasury or its agencies and instrumentalities. In addition, the City may invest in certificates of deposit, mutual fund money market, repurchase agreements, corporate securities and the State of Arizona local government investment pool. The State Treasurer’s Investment Pool is overseen according to Arizona State Statute by the State Board of Deposit. Governmental Accounting Standards Board Statement No. 40 – Deposit and Investment Risk Disclosures (Statement 40) requires the City to disclose its deposit and investment policies regarding certain types of investment risks. The City’s adopted investment policy is in compliance with Statement 40. 63 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Interest rate risk: In order to limit interest and market rate risk, State law and the City’s investment policy sets a maximum maturity on any investment of five years with a minimum of 35% invested for a period of one year or less and no more than 20% of the City’s portfolio be invested for a period greater than three years. At June 30, 2008, 66.4% of the City’s investments have a maturity of less than one year and 4.4% have maturities greater than three years. The City’s investment policy also sets a maximum weighted average maturity (WAM) not to exceed one year. The WAM at June 30, 2008 was 328 days. Credit risk: State law and the City’s investment policy limits the purchase of Commercial Paper to those securities rated A-1/P-1 or the equivalent by two nationally recognized statistical rating agencies. The City’s investment policy also limits the purchase of Banker’s Acceptances to those securities rated Aa or better by two nationally recognized rating agencies and with a maximum maturity of 180 days. At June 30, 2008, the City’s investments include $25.9 million in Commercial Paper and no Banker’s Acceptance securities. State law and the City’s investment policy also restricts investments in certificates of deposit (CD) to fully collateralized or insured from eligible Arizona depositories limited on a statewide basis by their capital structure on a quarterly basis. Such CDs are further collateralized to 110% with pledged securities held by an independent custodian approved by the City. City policy requires that securities underlying repurchase agreements must have a market value of at least 102 percent of the cost of the repurchase agreement. The market values of securities underlying repurchase agreements were at or above the required level during the fiscal year. Investment Type Federal Farm Credit Bank - Agency Note Federal Home Loan Bank - Agency Note Federal Home Loan Bank - Callable Agency Note Federal Home Loan Mortgage Corp - Agency Note Federal National Mortgage Assoc-Agency Note Federal National Mortgage Assoc-Callable Agency Note Federal National Mortgage Assoc-Discount Note Moody’s Rating Aaa Aaa Aaa Aaa Aaa Aaa P-1 S&P Rating AAA AAA AAA AAA AAA AAA A-1 % of Investments 3.4 21.2 .5 17.2 11.9 2.5 3.4 The City’s investment in the State of Arizona local government investment pool is limited to a pool that invests only in government securities. At June 30, 2008, all investments of that pool were U.S. Government Obligations and Agencies, and it therefore does not carry a credit rating. Concentration of credit risk: The City’s investment policy sets diversification limits on both security types and length of maturity. As of June 30, 2008, the City’s investments include 56.7% invested in U.S. Agency Coupon securities, 3.4% in U.S. Agency Discount Notes, 1.2% in U.S. Treasury Notes, 5.9% in Commercial Paper, and 32.8% in City of Peoria Improvement District Bonds, money market funds, cash with fiscal agent, and the Arizona State Investment Pool. Custodial credit risk: To control custodial credit risk, State law and the City’s investment policy requires all securities and collateral to be held by an independent third party custodian in the City’s name. The custodian provides the City with monthly market values along with original safekeeping receipts. The City's investment in the State of Arizona's local government investment pool is stated at fair value, which also approximates the value of the investment upon withdrawal. 64 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 At June 30, 2008, the City’s investments included the following: Investment Maturities in Years Less than 1 1-2 2-3 Over 3 Fair Value Unrestricted Investments: City of Peoria Bonds $ 264,615 280,492 297,320 -$ U.S. Treasury notes and strips 5,012,500 Agency coupon securities 69,892,054 61,019,088 55,683,933 19,115,930 Agency discount notes 14,932,335 Commercial Paper 14,918,021 - State of Arizona local government investment pool Mutual fund-money market Total unrestricted investments 2,983,155 90,968,607 198,971,28 61,299,580 59,981,254 19,115,930 7 Less: amount included in cash and cash equivalents Unrestricted investments, net Total investments per statement of net assets Investments in Fiduciary Funds 2,983,155 90,968,607 335,368,051 $ 132,463,097 202,904,954 $ 202,493,620 411,334 Total unrestricted investments Restricted Assets (1): Agency coupon securities Commercial paper Mutual fund-money market Subtotal Restricted Assets Water Infrastructure loans not yet drawn Less amount due to cash and cash equivalents Total Restricted Assets 842,428 5,012,500 205,711,005 14,932,335 14,918,021 241,416,289 31,433,267 10,043,907 10,977,798 31,802,943 74,214,008 10,043,907 - $ 202,904,954 -$ -$ 41,477,174 10,977,798 31,802,943 84,257,915 16,200,000 134,948 $ 100,322,967 (1) Includes restricted cash and cash equivalents and restricted investments as reported in the statement of net assets. Cash and cash equivalents at June 30, 2008 consisted of the following: Investments included in cash and cash equivalents Carrying amount of City deposits Amounts due from restricted cash Petty cash on hand Total cash and cash equivalents Less: Cash and cash equivalents of Fiduciary funds Total cash and cash equivalents per statement of net assets $ $ 132,463,097 11,974,960 134,948 14,230 144,587,235 289,468 144,297,767 Fair value fluctuates with interest rates, and increasing rates could cause fair value to decline below original cost. City management believes the liquidity in the portfolio is adequate to meet cash flow requirements and to preclude the City from having to sell investments below original cost. 65 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Investment income comprises the following for the year ended June 30, 2008: Net interest and dividends Net decrease in the fair value of investments Total net investment income Less: net investment income of Fiduciary funds Total net investment income per statement of activities $ $ 16,756,936 (103,040) 16,653,896 11,166 16,642,730 The net decrease in the fair value of investments during fiscal year 2007-2008 was approximately $103,040. This amount takes into account all changes in fair value (including purchases and sales) that occurred during the year. The unrealized loss on investments held at June 30, 2008 was approximately $234,037. 5. PROPERTY TAXES Arizona law provides for a two tiered tax system: (1) a primary system for taxes levied to pay for current operation and maintenance expenses, and (2) a secondary system for taxes levied to pay principal and interest on bonded indebtedness as well as for the determination of maximum permissible bonded indebtedness. Specific provisions are made under each system for determining full cash values of property, the basis of assessment, and the maximum annual tax levies on certain types of property and by certain taxing authorities. Under the primary system, the full cash value of locally assessed real property (consisting of residential, commercial, industrial, agricultural and unimproved property) may increase by more than 10% annually only under certain circumstances. Under the secondary system, there is no limitation on annual increases in full cash value of any property. Primary levies on residential property are limited to one percent of the primary full cash value of such property. Additionally, primary taxes on all types of property are limited to a maximum increase of two percent over the prior year's levy, adjusted for new construction and annexations. Secondary property taxes levied to pay principal and interest on bonded indebtedness are not limited. The City’s primary and secondary assessed valuation for fiscal year 2008 are $1,250,895,733 and $1,642,187,476 respectively. The Arizona tax year has been defined as a calendar year, notwithstanding the fact that tax procedures begin prior to January 1 of the tax year and continue through May of the succeeding calendar year. The definition of the tax year is a function of the fact that the tax lien for the year attaches to the real property as of January 1 of the year in question. The City Council adopts the annual tax levy each year on or before the third Monday in August. The basis of this levy is the full cash value as determined by the Maricopa County Assessor. For locally assessed property, the value is determined as of January 1 of the preceding year, known as the valuation year. For utilities and other centrally valued properties, the full cash value is determined as of January 1 of the tax year. The City has an enforceable claim on the property when the property tax is levied. Levies are due and payable in two installments, on October 1 and March 1, and become delinquent on November 1 and May 1, respectively. Delinquent amounts bear interest at the rate of 16 percent. A lien is placed on the property at the time the tax bill is sold. Maricopa County, at no charge to the taxing entities, bills and collects all property taxes. Public auctions for sale of delinquent real estate taxes are held in February following the May 1 date upon which the second half taxes become delinquent. The purchaser is given a Certificate of Purchase issued by the County Treasurer. Five years from the date of sale, the holder of a Certificate of Purchase that has not been redeemed may demand a County Treasurer's Deed from the County Treasurer. Property taxes are recognized as revenue in the government-wide financial statements when an enforceable legal claim has arisen. Therefore, the City recognizes revenue and a receivable, less any allowance for doubtful accounts deemed appropriate, for the entire tax levy in the year it is levied. For the governmental fund financial statements, property tax revenues not collected within 60 days of year end are deferred. Unsecured taxes on personal property, which are assessed on a monthly basis using 66 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 different procedures than those mentioned above, are recognized as revenue on a cash basis for both the governmental fund statements and the government-wide statements. 6. DUE FROM OTHER GOVERNMENTS The following amounts are due from other governments at June 30, 2008: Governmental activities: General Fund: Due from Maricopa County for: Property tax Due from State of Arizona for: State shared sales tax State revenue sharing Auto lieu tax Miscellaneous other Due from Peoria Unified School District Subtotal Highway User Revenue Fund: Due from State of Arizona (Highway user revenue) Due from Maricopa County – Property tax (SLIDS) Subtotal GO Bond Debt Service Fund: Due from Maricopa County (Property tax) Subtotal Non-major Governmental Fund: Due from US Department of Housing & Urban Development Due from US Department of Transportation Due from US Department of Homeland Security Due from other Federal agencies Due from Maricopa County: Home grant Property tax Other Due from State of Arizona Subtotal Total governmental activities Proprietary activities Solid Waste Fund: Due from Other Municipality Subtotal Public Housing Fund: Due from US Department of Housing & Urban Development Subtotal Total proprietary activities $ 61,278 1,047,165 1,718,985 257,785 102,706 89,303 3,277,222 783,675 9,168 792,843 401,521 401,521 191,131 38,840 403,635 173,109 $ $ $ 12,594 40,632 56,047 319,780 1,235,768 5,707,354 33,916 33,916 71,818 71,818 105,734 7. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded in the various funds and displayed in the financial statements net of an allowance for uncollectible accounts as follows at June 30, 2008. Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Receivables $ 4,457,916 1,297,241 263,895 779,352 672,219 67 Allowance 145,208 20,316 310,751 Net 4,312,708 1,297,241 243,579 779,352 361,468 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Other Governmental Funds Total governmental funds Fund Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Public Housing Fund Total enterprise funds Internal Service funds Grand totals $ 1,856,741 9,327,364 Receivables 61,733 538,008 Allowance 1,795,008 8,789,356 Net 6,556,141 2,769,187 1,985,576 10,962 17,218 11,339,084 3,852 20,670,300 1,112,326 342,850 249,815 8,090 1,713,081 2,251,089 5,443,815 2,426,337 1,735,761 2,872 17,218 9,626,003 3,852 18,419,211 $ $ 8. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES Net interfund receivables and payables between governmental activities and business-type activities of $759,561 are included in the government-wide financial statements at June 30, 2008. These internal balances are between the proprietary funds (business-type activities) and the internal service funds (governmental activities). Other interfund payables and receivables, if any, shown on the financial statements are primarily represent short-term cash loans at year end. All such balances are expected to be repaid in the next fiscal year. The net transfers of $9,779,262 from business-type activities to governmental activities on the government-wide statement of activities are primarily debt service and operational subsidies from the General Fund and Half-Cent Sales Tax Fund to the Stadium Fund. The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2008: Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Development Fee Fund Transportation Sales Tax Fund Special Assessment Debt Service Fund GO Bond Capital Projects Fund Non-Major Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Total enterprise funds Internal Service funds Grand totals $ $ Transfers out Transfers in 4,424,188 13,273,531 472,392 23,801 893,096 7,387,546 9,560,490 36,035,044 8,719,517 1,047,888 1,765,900 217,574 4,675,836 16,426,715 17,499,286 263,868 681,988 342,267 18,787,409 2,158,755 56,981,208 284,311 24,247,256 36,066 3,999,038 28,566,671 11,987,822 56,981,208 The interfund transfers generally fall within one of the following categories: 1) debt service payments made from a debt service fund but funded from an operating fund; 2) subsidy transfers; 3) transfers to fund internal service equipment replacement funds; or 4) capital assets purchased or constructed in one fund, but capitalized in another. There were no significant transfers during fiscal year 2008 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. For further detail on interfund transfers, refer to Exhibit 6 on pages 141-145. 9. SEGMENT INFORMATION FOR ENTERPRISE FUNDS 68 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Both the Water Utility Fund and the Wastewater Utility Fund have revenue streams pledged in support of outstanding revenue bonds but since both segments are discretely presented in the proprietary fund financial statements, all required segment information is disclosed on the face of those statements. 10. DEFICITS IN FUND EQUITY/EXCESS OF EXPENDITURES OVER APPROPRIATIONS At June 30, 2008, the Improvement District Bonds Capital Projects Fund had a fund deficit of $73,263. The City intends to remedy this situation in the next fiscal year. For the year ended June 30, 2008, expenditures, including capital outlay and transfers, did not exceed budget at the department level (i.e. the level of budgetary control) in any funds. 11. FUND BALANCE/NET ASSETS RESERVATIONS AND DESIGNATIONS Only restrictions imposed by external sources are shown as Restricted Net Assets on the governmentwide financial statements. Additionally, reserves for encumbrances, inventories and pre-paid items are shown on the governmental fund financial statements. Reservations or designations of fund balances imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are shown in aggregate on the governmental fund financial statements, but not on the proprietary fund financial statements. The City does, however, reserve or designate portions of net assets in other funds to demonstrate the government’s intended use of those net assets. Reservations are created by legislative action of the City Council while designations are created by administrative policy. The following are the reservations or designations of fund balance/net assets included in unreserved fund balance/net assets at June 30, 2008: General Fund: Designated for economic stabilization reserve Designated for encumbrances Designated for capital construction Designated for branch library equipment Designated for economic development Designated for municipal office complex reserve $ 32,400,000 2,276,825 1,923,500 110,010 571,242 6,558,250 43,839,827 $ 5,600,000 427,841 1,000,000 7,027,841 Highway User Revenue Fund: Designated for encumbrances $ 124,933 Development Fee Fund: Designated for encumbrances $ 8,103,906 $ 14,231,351 497,142 14,728,493 $ 3,887,099 $ 188,680 2,066,072 2,254,752 Half-Cent Sales Tax Fund: Designated for economic stabilization reserve Designated for encumbrances Designated for debt service retirement Transportation Sales Tax Fund: Designated for capital construction Designated for encumbrances GO Bond Capital Projects Fund: Designated for encumbrances Non-major Funds: Other Grants Fund: Designated for encumbrances Designated for arts capital sub-total MDA Bonds Capital Projects Fund: Designated for encumbrances 17,350,370 69 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Non-Bond Capital Projects Fund: Designated for encumbrances Designated for capital construction sub-total Non-major funds total Total governmental funds $ Water Utility Fund: Designated for working capital policy reserve Designated for capital equipment replacement Designated for capital construction $ Wastewater Utility Fund: Designated for working capital policy reserve 16,000,000 2,165,676 2,044,739 20,210,415 7,800,000 Solid Waste Utility Fund: Designated for working capital policy reserve Designated for capital equipment replacement Stadium Fund: Designated for capital equipment replacement Total proprietary funds Internal Service Funds: Designated for capital equipment replacement 2,284,721 140,769 2,425,490 22,030,612 99,742,711 1,450,000 6,030,738 7,480,738 $ 540,474 36,031,627 $ 17,890,491 12. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2008 follows: Governmental activities: Non-depreciable assets: Work in Progress – Parks $ Work in Progress – Buildings Work in Progress – Storm drains Work in Progress – Streets Work in Progress – Technology Work in Progress – Vehicles Work in Progress – CFD Land Total non-depreciable assets Depreciable assets: Buildings & Improvements Furniture Equipment Vehicles Storm drain system Street system Park system Total depreciable assets at historical cost Less accumulated depreciation for: Buildings & Improvements Furniture Equipment Vehicles Storm drain system Street system Park system Total accum. depreciation assets, net Governmental activities capital assets, net $ Balances June 30, 2007 Additions/ Transfers in Disposals/ Transfers out 32,833,533 39,881,098 9,977,817 39,341,979 4,740,769 283,691,070 410,466,266 4,075,182 3,018,114 7,610,436 30,480,771 1,081,368 366,114 1,853,271 14,893,253 63,378,509 (10,025,523) (39,589,756) (2,440,550) (6,256,399) (1,793,746) (60,105,974) 26,883,192 3,309,456 15,147,703 63,566,351 4,028,391 366,114 1,853,271 298,584,323 413,738,801 77,054,426 2,742,390 39,050,326 17,828,238 53,404,941 332,745,518 20,919,069 62,034,483 544,482 12,238,110 2,901,783 4,000,963 28,426,714 4,655,702 (104,353) (1,014,889) - 139,088,909 3,286,872 51,184,083 19,715,132 57,405,904 361,172,232 25,574,771 543,744,908 114,802,237 (1,119,242) 657,427,903 (20,488,961) (1,808,826) (26,736,643) (9,129,366) (12,173,829) (110,608,020) (5,479,731) (186,425,376) 357,319,532 (1,863,725) (231,790) (3,099,661) (2,179,035) (1,263,129) (9,232,544) (786,695) (18,656,579) 96,145,657 767,785,798 159,524,166 70 87,310 810,500 897,810 (221,432) (60,327,405) Balances June 30, 2008 (22,352,686) (2,040,616) (29,748,994) (10,497,901) (13,436,958) (119,840,564) (6,266,426) (204,184,145) 453,243,758 866,982,559 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Business-type activities: Non-depreciable assets: Work in Progress - Water $ Work in Progress - Wastewater Land Total non-depreciable assets Depreciable assets: Buildings & improvements Furniture Equipment Vehicles Water system Wastewater system Total depreciable assets at historical cost Less accumulated depreciation for: Buildings & improvements Furniture Equipment Vehicles Water system Wastewater system Total accum. depreciation Total depreciable assets, net Business-type activities capital assets, net $ 36,014,165 77,742,429 16,654,772 130,411,366 1,790,340 12,203,833 8,623,957 22,618,130 (15,921,523) (59,930,800) (75,852,323) 21,882,982 30,015,462 25,278,729 77,177,173 29,157,431 158,880 3,385,843 11,229,347 220,803,327 158,953,176 9,214,047 14,353 367,079 381,588 23,483,784 133,877,204 (59,744) (1,306,292) - 38,371,478 173,233 3,693,178 10,304,643 244,287,111 292,830,380 423,688,004 167,338,055 (1,366,036) 589,660,023 (10,243,515) (60,784) (1,727,834) (5,153,350) (36,606,093) (38,828,380) (92,619,956) 331,068,048 (729,520) (22,206) (384,106) (1,230,504) (4,798,774) (3,645,813) (10,810,923) 156,527,132 45,438 1,179,887 1,225,325 (140,711) (10,973,035) (82,990) (2,066,502) (5,203,967) (41,404,867) (42,474,193) (102,205,554) 487,454,469 461,479,414 179,145,262 (75,993,034) 564,631,642 Depreciation expense was charged to governmental functions in the government-wide financial statements as follows: General government Culture and recreation Police Fire Development services Highways and streets Public works Human services Unallocated $ 2,051,431 1,673,304 1,821,049 1,432,395 62,734 9,561,445 1,406,956 72,323 574,942 Total depreciation expense $ 18,656,579 13. COMMUNITY FACILITIES DISTRICT DEBT Community Facilities Districts (CFD’s), 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) or revenue bonds to be repaid by property (ad valorem) taxes levied on property within the district (for GO debt), or by specified revenues generated within the districts (revenue bonds). CFD’s 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. On October 15, 2002 the City Council formed the Vistancia Community Facilities District (VCFD) pursuant to Title 48, Chapter 4, Article 6, Arizona Revised Statutes. VCFD was subsequently authorized, by the voters of the district on November 12, 2002, to issue up to $100,000,000 in general obligation bonds to construct public infrastructure within VCFD. VCFD issued $21,250,000 in fiscal year 2003 and $23,550,000 in fiscal year 2005 and $22,760,000 in fiscal year 2007 of general obligation bonds against this authorization. These bonds will be repaid by the property owners within VCFD. The bonds are obligations of the district only. The City has no obligation for VCFD debt other than the administration of the collection of the property taxes and payment of the debt service on behalf of VCFD. 71 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 14. LONG-TERM DEBT A. General Obligation bonds General: General obligation (GO) bonds are issued, after approval of the City of Peoria voters at an authorized bond election, to finance the purchase or construction of major capital facilities. While GO bonds may be issued for both governmental and business-type activities, at June 30, 2008, there are no outstanding GO bonds in the business-type activities. GO bonds are backed by the “full faith and credit” of the City and are repaid through the City’s levying of property (ad valorem) taxes. There is no legal limit on the secondary property tax used for debt service on GO bonds. Statutory Debt Limitation: Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for combined water, sewer, light, (after January 1, 1974) parks and open space, and (after December 7, 2006) public safety and transportation purposes may not exceed 20 percent of a City's net secondary assessed valuation. Also outstanding general obligation bonded debt for all other purposes may not exceed 6 percent of a City's net secondary assessed valuation. The City's computation of legal debt margins available for creation of additional debt at June 30, 2008 was $85,221,249 and $215,552,495 for the 6 percent and 20 percent debt limits, respectively. Also see Table XXIII in the Statistical Section. B. Revenue bonds Highway User Revenue Bonds: Highway User Revenue Bonds are used to construct street and highway projects. The debt service is repaid through the Highway User Revenue Fund, a special revenue fund, from the City’s share of the gasoline taxes that are collected by the State of Arizona and distributed to cities and towns based on a formula of population and gasoline sales within the county. Water and Sewer Revenue Bonds: Water and Wastewater Revenue Bonds are issued, pursuant to voter authorization, for the construction, acquisition, and equipping of water and wastewater facilities and related systems and infrastructure. The bonds are backed by the revenues of the water and wastewater utilities. Also see Table XXV in the Statistical Section of this report. C. Municipal Development Authority bonds Municipal Development Authority (MDA) Bonds are issued by a non-profit corporation created by the City for the purpose of financing certain capital construction projects. The MDA issues its own bonds, which are repaid through a lease purchase agreement with the City equal to the debt service requirements. The City utilizes the City’s excise tax and other unrestricted revenues to pay the lease payments. Also see Table XXIV in the Statistical Section of this report. D. Special assessment bonds Special Assessment Bonds are used to construct projects within special assessment districts created by the City after property owners within these districts agree to be assessed for the costs of debt service on these bonds. Payments made by the assessed property owners within the districts are pledged to pay the debt service on the bonds. In the event of default by a property owner, the lien created by the assessment is sold at public action, and the proceeds are used to offset the defaulted assessment. If there is no purchase at the public auction, the City is required to buy the property, and pay off the assessment, with funds appropriated from the General Fund. As trustee for improvement districts, the City is responsible for collection of assessments levied against the owners of property within the improvement districts and for disbursement of these amounts for retirement of the respective bonds issued to finance the improvements. The City is 72 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. At June 30, 2008, special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, are adequate to meet the scheduled maturities of the bonds payable and related interest. Special assessment receivables that were delinquent at June 30, 2008 totaled $942. Also see Tables XXVI and XXVII in the Statistical Section of this report. E. Community Facilities District bonds Community Facilities District (CFD) bonds are issued by separate legal entities formed for the purposes of financing public infrastructure improvement within a specific area of the City. The repayment of these bonds is the responsibility of the district, not the City. As the administrator for the district, the City collects the property taxes and makes the debt payments on behalf of the district. See further discussion of CFD bonds outstanding in Note 13. F. Authorized and issued debt The voters of the City authorized $22,080,000 of general obligation bonds at a special bond election in March 1990, and $75,150,000 in September 1994 of which $592,560 and $12,000,657, respectively, was unissued at June 30, 2008. In September 1996, the voters authorized $75,550,000 in either general obligation bonds or utility revenue bonds. To date, the City has not issued general obligation bonds against this authorization; however, $58,292,154 in utility revenue bonds has been issued against the 1996 authorization, leaving $17,257,846 unissued against the authorization. In September 2000, the voters authorized $282,000,000 in bonds as follows: $164,000,000 in general obligation, utility revenue bonds or Water Infrastructure Finance Authority of Arizona Revolving Fund Loan for the acquisition and construction of water and wastewater facilities; $22,300,000 in general obligation or utility revenue bonds for storm drainage projects; $47,150,000 in general obligation or highway user revenue bonds for street, bridges and traffic control projects; and $48,550,000 in general obligation bonds for parks, open space, public safety and public service projects. General obligation bonds in the amount of $21,681,456 in 2003 and $59,472,631 in 2007 and water infrastructure debt of $13,965,546 in 2008 have been issued against the 2000 authorization, leaving $186,880,367 unissued. In May 2005, the voters authorized $196,000,000 in general obligation bonds as follows: $52,000,000 for public safety and municipal operations, $109,000,000 for streets, bridges and traffic control projects, and $35,000,000 for parks, recreation and library projects. Also in May 2005 the voters authorized $160,000,000 in revenue bonds for water treatment, water system, wastewater and storm drainage projects. General obligation bonds in the amount of $24,087,416 were issued in 2007, leaving $171,912,584 unissued at June 30, 2008. Water infrastructure debt of $40,831,066 in 2007 and $28,775,995 in 2008 have been issued against the 2006 authorizations, leaving $90,392,939 of the authorization unissued at June 30, 2008. Additionally, in 1996 the citizens of Peoria approved $42,480,000 in Water Infrastructure Finance Authority of Arizona revolving fund loan for the acquisition and construction of water and wastewater facilities. These projects are financed by utility rates for water and wastewater. $28,150,000 remains available of this authorization at June 30, 2008. For further detail of authorized, issued and unissued bonds, see Table XXIX in the Statistical Section of this report. G. Bond covenants and restrictions There are various limitations and restrictions contained in debt covenants on some bonds requiring that the City maintain certain reserves or other restrictions. No violations of those covenants occurred during the fiscal year ending June 30, 2008. 73 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 H. Arbitrage Under U.S. Treasury Department regulations, all government tax-exempt debt issued after August 31, 1986 is subject to arbitrage rebate requirements. In general the requirements stipulate that the earnings from investments of tax-exempt bond proceeds that exceed related interest expenditures on the bonds, must be remitted to the Federal government on every fifth anniversary of each bond issue. The City has evaluated each general obligation bond and revenue bond issue subject to the arbitrage rebate requirement as of June 30, 2008. The City has an arbitrage liability of $722,493 at June 30, 2008. Bonds and loans payable at June 30, 2008 are comprised of the following: Delivery Date Description Maturity Dates Purpose Net Interest Rate Ave. Life (Yrs) Original Principal Balance Principal Balance Outstanding CLASSIFIED IN GOVERNMENTAL ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: General Obligation Bonds 03/30/93 Series 1993 Refunding portions of Series 1985, 1986, 1989, 1990A 07/01/98 Series A (1998) Various improvements 07/01/98 Series B (1998) Refunding portions of Series 1994, 1992A/B 04/02/03 Series A (2003) Various improvements 03/01/07 Series A (2007) Various improvements 03/01/07 Series B (2007) Refunding portions of Series 1995, 1996, 2000 Total General Obligation Bonds 7/1/93-11 7/1/99-18 7/1/99-14 7/1/04-22 7/1/07-26 7/1/07-20 5.84 4.82 4.64 4.04 4.27 4.00 10.5 $ 9,900,000 $ 2,555,000 12.2 5,930,000 3,995,000 9.8 4,030,000 1,815,000 9.5 27,570,000 18,775,000 20 94,380,000 80,915,000 14 18,365,000 18,140,000 170,870,000 126,195,000 Municipal Development Authority Bonds 06/12/03 Series 2003 Refunding 1993 MDA & MSCA Series B 03/09/06 Series 2006 Revenue Bonds MDA Series 2006 03/12/08 Series 2008 Revenue Bonds MDA Series 2008 7/1/04-13 7/1/06-25 7/1/08-26 2.74 4.2 4.6 5.1 10.9 10.5 22,255,141 6,675,000 47,000,000 75,930,141 12,735,653 6,060,000 47,000,000 65,795,653 Highway User Revenue Bonds 07/10/96 Series C (1996) 7/1/97-16 5.81 14.1 4,600,000 3,295,000 Street, bridge, traffic signal improvements Special Assessment Bonds with governmental commitment (collateralized by the special assessments levied on the property benefiting from the improvements) 06/30/91 ID# 8801 North Valley Power Center ID-Water & street improvements 1/1/94-13 7.30 13.4 5,015,000 12/30/92 ID# 8802 Bell Road ID-Street improvements 1/1/95-13 7.20 13.3 5,610,000 11/21/91 ID# 9002 Sunny Boy Water & Sewer ID-acquire private water company 1/1/93-11 6.35 12.4 2,575,000 09/17/97 ID# 9601 83rd Ave ID-Water, wastewater & street improvements 1/1/99-12 5.30 8.7 2,285,000 08/13/97 ID# 9603 Arrowhead Fountains ID-Water, wastewater & street 1/1/99-12 5.20 8.7 3,800,000 improvements 08/28/01 ID# 9303 75th Ave & Paradise Ln ID-Street & bridge improvements 1/1/03-11 6.00 5.7 2,270,000 04/01/07 ID# 0601 99tth Ave & Northern ID-Street improvements 7/1/07-22 4.25 15 4,950,000 Total Improvement District Bonds 26,505,000 842,427 4,950,000 12,027,427 Community Facility District Bonds (collateralized by ad valorem property taxes levied on the property benefiting from the improvements) 12/17/02 Series 2002 Vistancia Community Facilities District infrastructure 7/15/05-22 6.69 04/27/05 Series 2005 Vistancia Community Facilities District infrastructure 7/15/07-24 5.47 12/28/06 Series 2006 Vistancia Community Facilities District Infrastructure 7/15/09-26 4.26 21,250,000 23,550,000 22,760,000 19,000,000 22,850,000 22,760,000 67,560,000 64,610,000 12.7 13.2 20 Total Community Facilities District Bonds Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 1,975,000 2,315,000 205,000 685,000 1,055,000 271,923,080 (19,849,874) $252,073,206 CLASSIFIED IN BUSINESS-TYPE ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: Municipal Development Authority Bonds 06/12/03 Series 2003 Refunding 1993 MDA & MSCA Series B 7/1/04-13 2.74 Revenue Bonds 08/24/95 WIFA Series 1995 08/06/97 WIFA Series 1997 09/10/98 Series A (1998) 07/06/00 Series 2000 07/07/00 WIFA Series 2000 (ph 1) 07/26/01 WIFA Series 2000 (ph 2) 7/1/96-15 7/1/98-17 7/1/01-18 7/1/02-20 7/1/02-20 7/1/02-21 3.15 2.95 4.73 5.33 3.94 3.94 11.5 11.5 12.7 12.6 11.8 11.7 07/26/02 12/08/06 12/07/06 02/15/08 7/1/03-22 7/1/07-26 7/1/07-26 1/1/08-27 3.94 3.27 3.06 3.06 11.8 20 20 20 Wastewater treatment facilities Beardsley wastewater treatment plant & assoc. improvements Water system improvements Water & wastewater system improvements Greenway water treatment plant construction Greenway water treatment plant expansion & water improvements WIFA Series 2000 (ph 3) Water system improvements WIFA Series 2006 DW Acquisition of Public Water Infrastructure WIFA Series 2006 CW 1 Butler Water Treatment Plant WIFA Series 2006 CW 2 Butler Water Treatment Plant Total Revenue Bonds 74 5.1 $ 2,759,859 $ 1,579,347 11,405,081 14,330,000 16,730,000 16,590,000 20,150,000 14,500,000 5,422,385 8,210,864 11,940,000 7,615,000 15,298,839 11,254,909 1,964,789 1,605,615 16,200,000 16,200,000 27,183,342 27,183,342 42,741,541 42,741,541 181,794,753 147,472,495 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Agreement Date Type Nature of Improvements Expiration Interest Date Rate Loans Payable 02/29/08 Suntrust Leasing Recycle containers 1/15/08-14 Interest Cap 3.91 7 Principal Balance Outstanding Original Amount 1,235,000 Total bonds and loans payable recorded in business-type activities Less current portion Long-term portion of bonds and loans payable recorded in business-type activities Total long-term portion of bonds and loans payable Reconciliation to total bonded debt principal: Total long-term portion of bonds and loans payable Add: Current portion of bonds and loans payable Total bonded debt principal as of June 30, 2008 1,235,000 150,286,842 (5,021,549) 145,265,293 $397,338,499 $397,338,499 24,871,423 $422,209,922 Contracts Payable Other debt at June 30, 2008 consists of the following: Agreement Date Type Expiration Interest Interes Date Rate t Cap Nature of Improvements Original Amount Principal Balance Outstanding CLASSIFIED IN GOVERNMENTAL ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: Planned area retail 05/22/90 project Planned area retail 02/20/92 project Planned area retail 06/01/94 project Offsite improvements-Bell Rd-IDs 8801 and 8802 08/28/18 Prime Offsite improvements-Bell Rd-ID 8802 Offsite improvements-Bell Rd & Paradise Ln-IDs 8802 and 9303 01/20/11 Prime 9.0 5,305,975 821,667 06/20/17 Prime 7.0 4,538,097 1,365,570 Master-planned 03/16/99 community Street & infrastructure improvements-Westwing Pkwy 03/16/14 - - 1,103,272 234,331 Street & infrastructure improvements-91st Ave & Northern Fire station building, equipment & land; Street & infrastructure improvements-parts of El Mirage Road, Ridgeline Rd, Vistancia Blvd, Jomax Rd, Ln Mtn Rd, Westland Rd Modular building at Municipal Operations Center 02/09/09 - - 900,000 84,130 10/22/26 09/01/07 4.95 - 18,219,667 122,925 8,349,136 0 Offsite improvements-91st Ave & Bell Rd 05/20/20 - - 2.400,000 2,135,389 04/30/14 - - 1,800,000 1,479,489 02/18/14 03/01/09 07/15/11 - - 1,093,379 164,548 1,006,311 47,550 279,565 24,682 1,082,013 19,416 07/29/18 01/21/10 4.00 - 1,800,000 259,728 1,800,000 87,922 2/11/15 - - 7,056,354 6,784,720 09/14/10 - - 559,184 354,645 - - - 81,597 3,457,084 138,036 6,700,931 10/01/16 - - - 5,343,820 72,613 6,743,603 72,613 - - - 472,483 132,409 42,539,431 (8,088,716) 34,450,715 Planned area retail 01/02/01 project Master-planned 10/22/01 community 08/07/02 Capital lease Planned area retail 07/01/03 project Planned area retail 11/18/03 project st Offsite improvements-91 Ave & Bell Rd Neighborhood park land & improvements; Right of way land on 02/17/04 Residential development 67th Ave 03/17/04 Capital lease Sixteen Copiers 10/19/04 Residential development Street & infrastructure improvements; Right of way land 10/24/04 Capital lease Pay Printers & Copiers Planned area retail 12/14/04 project Offsite improvements-92nd Ave & Bell Rd 01/21/05 Capital lease Modular building at Beardsley Treatment Plant Master-planned 2/11/05 community Offsite improvements; Right of way land Offsite improvements-Lake Pleasant Pkwy, Deer Valley to 09/14/05 Residential development Williams Planned area retail 12/22/05 project Street & infrastructure improvements; Right of way land 08/22/06 Residential development Street & infrastructure improvements; Right of way land Planned area retail Offsite improvements & Right of way land-Peoria east of 83rd 10/12/06 project Ave 04/19/07 Residential development Street & infrastructure improvements; Right of way land Planned area retail 11/24/07 project Street & infrastructure improvements; Right of way land Total contracts payable recorded in governmental activities Less estimated current portion Long-term portion of contracts payable in governmental activities 75 10.5 $ 13,137,805 $ 3,849,164 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Agreement Date Type Expiration Interest Interes Date Rate t Cap Nature of Improvements Principal Balance Outstanding Original Amount CLASSIFIED IN BUSINESS-TYPE ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: Master-planned 12/14/00 community Water and wastewater treatment plant facilities and lift stations Master-planned 10/22/01 community Residential 02/17/04 development Master-planned 02/11/05 community - - - 661,005 626,568 Water rights-4,200 acre feet of assured water supply 10/22/26 - - 4,841,000 2,921,177 Wastewater infrastructure improvements 02/18/14 - - 1,243,129 249,990 Offsite improvements; Right of way land 02/11/15 - - 308,801 275,739 - - - 255,248 289,691 4,363,165 (564,185) 3,798,980 Residential 08/22/06 development Water rights-947 acre feet water allocation Total contracts payable recorded in business-type activities Less estimated current portion Long-term portion of contracts payable Total long-term contracts payable as of June 30, 2008 $ 38,249,695 The following is a summary of changes in long-term liabilities reported in the government-wide financial statements for the year ended June 30, 2008: Additions Reductions Governmental activities: Bonds payable: General obligation bonds $ 142,835,000 MDA Bonds 21,653,530 Highway user revenue bonds 3,570,000 Special assessment bonds 13,292,064 CFD bonds 66,085,000 Total bonds payable 247,435,594 Contracts payable 40,264,731 Compensated absences 4,376,340 Governmental activities totals $ 292,076,665 47,000,000 47,000,000 13,264,148 5,192,625 65,456,773 16,640,000 2,857,877 275,000 1,264,637 1,475,000 22,512,514 10,989,448 4,663,315 38,165,277 126,195,000 65,795,653 3,295,000 12,027,427 64,610,000 271,923,080 42,539,431 4,905,650 319,368,161 11,575,000 4,810,260 290,000 1,624,614 1,550,000 19,849,874 8,088,716 4,460,990 32,399,580 Business-type activities: Bonds payable: MDA bonds Revenue bonds Total bonds payable Loans payable Contracts payable Compensated absences Business-type activities totals 42,741,541 42,741,541 1,235,000 526,211 1,096,731 45,599,483 327,123 4,340,866 4,667,989 891,401 1,045,351 6,604,741 1,579,347 147,472,495 149,051,842 1,235,000 4,363,165 621,770 155,271,777 349,740 4,501,441 4,851,181 170,368 564,185 563,460 6,149,194 $ 1,906,470 109,071,820 110,978,290 4,728,355 570,390 $ 116,277,035 Ending Balance Amounts Due Within One Year Beginning Balance The following is a summary of bond debt service requirements, including interest requirements, to maturity for long-term debt at June 30, 2008: Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General Obligation Bonds $16,621,885 11,022,470 11,051,938 10,630,612 10,290,228 10,298,197 10,304,040 10,014,231 9,616,216 9,065,066 9,076,363 8,593,796 8,617,900 7,448,739 Municipal Development Authority Bonds 7,686,227 8,110,219 8,359,319 5,832,469 5,850,269 5,833,944 4,417,381 4,409,306 4,402,831 4,402,681 4,388,981 4,378,931 4,383,141 4,382,486 Highway User Revenue Bonds 469,810 468,295 470,574 466,702 466,663 470,244 467,531 468,525 468,080 - Special Assessment Bonds 2,300,572 2,432,844 2,481,152 2,034,995 1,550,595 474,600 475,788 476,338 476,250 480,525 478,950 481,738 483,675 484,763 76 Revenue Bonds 8,678,559 13,569,757 12,233,557 12,226,599 12,216,340 12,207,560 12,195,318 12,189,570 12,483,632 12,471,812 11,540,776 10,156,300 10,174,858 7,249,456 Community Facilities District Bonds 4,966,955 5,499,455 5,497,392 5,493,336 5,490,974 5,484,633 5,476,311 5,475,713 5,468,074 5,462,674 5,725,359 5,445,671 5,443,926 5,432,718 Long Term Loans 217,007 217,007 217,007 217,007 217,007 217,007 108,504 - Total 40,941,015 41,320,047 40,310,939 36,901,720 36,082,076 34,986,185 33,444,873 33,033,683 32,915,083 31,882,758 31,210,429 29,056,436 29,103,500 24,998,162 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 General Obligation Bonds 7,439,338 5,713,288 5,708,500 5,717,500 5,732,400 - Fiscal Year 2023 2024 2025 2026 2027 2028 Less Interest (46,767,707) $126,195,000 Municipal Development Authority Bonds 4,386,453 4,374,193 4,370,288 4,349,237 - Highway User Revenue Bonds - (26,943,356) 67,375,000 (921,424) 3,295,000 Special Assessment Bonds - Revenue Bonds 6,205,784 6,062,221 6,059,661 6,057,020 6,054,298 4,094,761 (3,085,358) (46,655,344) 12,027,427 147,472,495 Community Facilities District Bonds 5,425,388 5,427,431 5,419,936 5,437,175 5,430,802 (38,893,923) 64,610,000 Long Term Loans (175,546) 1,235,000 Total 23,456,963 21,577,133 21,558,385 21,560,932 17,217,500 4,094,761 (163,442,658) 422,209,922 A portion of the Municipal Development Authority bonds debt service balance includes amounts that are recorded in and paid by the business-type activities. The following table discloses the bond debt service requirements as of June 30, 2008, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal year 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 Totals Principal $ 24,871,423 24,463,105 25,062,535 22,655,310 22,773,158 113,784,002 109,413,054 79,187,335 $ 422,209,922 Interest 16,069,592 16,856,942 15,248,404 14,246,410 13,308,918 52,478,580 28,412,436 6,821,376 163,442,658 Total 40,941,015 41,320,047 40,310,939 36,901,720 36,082,076 166,262,582 137,825,490 86,008,711 585,652,580 The City had no outstanding variable rate bonds at June 30, 2008. The City had $6,036,400 in variable rate outstanding contracts payable at June 30, 2008. Interest on this debt is tied to the prime rate with an interest rate cap that varies per agreement. The City had no short-term debt activity during the year ended June 30, 2008. Long-term compensated absences of governmental activities are expected to be liquidated by the operating funds (primarily the General Fund, Highway User Revenue Fund and Transit Fund) as they come due. 15. ADVANCE REFUNDINGS In prior years, the City refinanced various bond issues through advance refunding arrangements. Under the terms of the refunding bond issues, sufficient assets to pay all principal and interest on the refunded bond issues have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities which, together with interest earned thereon, will provide amounts sufficient for future payment of principal and interest of the issues refunded. Prior Years Refundings (amounts not yet callable) 2000 2007 Water/Sewer Revenue Bonds (partially defeased) General Obligation Bonds (partially defeased) $ 5,475,000 11,385,000 $ 16,860,000 16. PLEDGED REVENUES The City has pledged certain future revenues to repay specific bonded debt as follows: The City has pledged future water utility and wastewater utility revenues, net of specific operating expenses, to repay $2,759,859 in Municipal Development Refunding Bonds issued in 2003, as well as 77 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 $33,320,000 in Revenue Bonds issued in 1998 and 2000 and $148,474,753 in Water Infrastructure Financing Authority Bonds issued in 1995-2008. The various bonds were issued for the purchase or construction of various water or wastewater infrastructure including wells, treatment plants, pumping stations and water and wastewater distribution or collection lines. At June 30, 2008, $149,051,842 in bonds remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2008, the net revenues available for service of this debt were $15,516,366. The debt principal and interest paid on this debt in fiscal year 2008 was $7,924,103 (51.1% of available net pledged revenues). For further information on long-term debt, refer to Note 14. For additional information on pledged revenues for revenue bonds, refer to Table XXV (page 177). The City has pledged certain revenues for the repayment of $28,930,141 in Municipal Development Authority (MDA) Bonds issued in 2003 and 2006. Pledged revenues for these bonds include excise taxes and state shared revenues not specifically reserved by law or other regulation to be expended for other purposes. At June 30, 2008, $18,795,653 in bonds remain outstanding to be repaid by these future revenues. The bonds were issued to construct various City operational facilities. For the fiscal year ended June 30, 2008, the net revenues available to service this debt were $122,039,417. The debt principal and interest paid on this debt in fiscal year 2008 was $3,803,053 (3.2% of available pledged revenues). For further information on long-term debt, refer to Note 14. For additional information on pledged revenues for MDA bonds, refer to Table XXIV (page 176). The City has pledged certain revenues for the repayment of $47,000,000 in Municipal Development Authority Bonds issued in 2008. The bonds were issued to construct transportation infrastructure. The bonds have a senior lien on the .03% transportation sales tax and a secondary lien on the excise taxes and state shared revenues not specifically reserved by law or other regulation to be expended for other purposes (secondary after the MDA Bonds discussed above). At June 30, 2008, all of the bonds remain outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2008, the net revenues available to service this debt were $129,214,817. No debt principal or interest was paid on this debt in fiscal year 2008. For further information on long-term debt, refer to Note 14. For additional information on pledged revenues for revenue bonds, refer to Table XXIV (page 176). 17. RETIREMENT AND PENSION PLANS All full-time employees of the City are covered by one of three pension plans. Benefits are established by state statute and the plans generally provide retirement, long-term disability, and health insurance benefits, including death and survivor benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the retirees average compensation. Long-term disability benefits vary by circumstances, but generally pay a percentage of the employee’s monthly compensation. Health insurance premium benefits are generally paid as a flat dollar amount per month towards the retiree’s health care insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The Arizona State Retirement System is for the benefit of the employees of the state and certain other governmental jurisdictions. All full-time City employees, except sworn fire and police personnel, are included in the Arizona State Retirement System plan, which is a cost sharing multiple-employer defined benefit plan. Sworn police and fire personnel participate in the Public Safety Retirement System, which is an agent multiple-employer defined benefit plan. In addition, the Mayor and City Council members are covered by the State’s Elected Officials Plan, which is also a multiple-employer defined benefit cost sharing pension plan. Arizona State Retirement System: a. Plan Description All of the City’s full-time employees, other than those covered by one of the other retirement plans, participate in the Arizona State Retirement System (System), a cost sharing multiple-employer defined benefit pension plan; health insurance premium plan; and long-term disability plan. The System was established by the State of Arizona to provide benefits for employees of the state and employees of participating political subdivisions and school districts. The System is administered in 78 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 accordance with Title 38, Chapter 5, Article 2 of the Arizona Revised Statutes. The System provides for retirement, disability, and death and survivor benefits. The System issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to the Arizona State Retirement System, 3300 N. Central Ave., Suite 1300, Phoenix, Arizona, 85012 or by calling 1-800-621-3778 or 602-2402000. b. Funding Policy Covered employees were required by state statute to contribute 9.6 percent (9.1 percent for retirement and 0.5 percent for long-term disability) of their salaries to the System during fiscal year 2007-2008 and the City was required to match it (8.05 percent for retirement, 1.05 percent for health insurance premium, and 0.5 percent for long-term disability). The Arizona Revised Statutes (A.R.S.) provide statutory authority for determining the employees’ and employers’ contribution amounts as a percentage of covered payroll. Employers are required to contribute at the same rate as employees. Although the statutes prescribe the basis of making the actuarial calculation, the Arizona legislature is able to impose a contribution rate other than the actuarially determined rate The City’s contributions for the current year and two preceding years, all of which were equal to the required contributions, were as follows: Fiscal Year Ended 2006 2007 2008 Retirement Fund $ Health Benefit Supplement Fund 2,476,441 3,384,935 4,153,934 $ 484,998 470,799 541,968 Long-Term Disability Fund $ 214,708 223,976 258,104 Elected Officials Retirement Plan: a. Plan Description The City’s Mayor and Council members participate in the Elected Officials Retirement System (EORP), a cost sharing multiple-employer defined benefit pension plan and insurance premium plan. The Fund Manager of the Public Safety Personnel Retirement System (PSPRS) is the administrator for the EORP which was established by Title 38, Chapter 5, Article 3 of the Arizona Revised Statutes to provide pension benefits for state and county elected officials, judges and certain elected city officials. EORP provides retirement benefits as well as death and disability benefits as well as insurance premium benefits. Because the health insurance premium plan benefit of the EORP is not established as a formal trust, it is reported in accordance with GASB Statement 45 as an agent multiple-employer plan. Accordingly, the disclosures that follow reflect the EORP as if it were an agent multiple-employer plan. EORP issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by writing to the Elected Officials Retirement Plan, 3010 E. Camelback Rd., Ste 200, Phoenix, Arizona, 85016, by calling 602-255-5575, or on the internet at www.psprs.com. b. Funding Policy The EORP’s funding policy (required by State Statutes) provides for periodic employer contributions at actuarially determined rates and employee contributions of 7.0 percent of their annual covered salary. The employer rate for fiscal year 2007-2008 was 20.21 percent. The health insurance premium portion of the contribution rate was actuarially set at 1.05 percent of covered payroll. The City’s employees contributed $10,093, $9,479, and $9,864 for the fiscal years ended June 30, 2008, 2007, and 2006 respectively. 79 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Public Safety Personnel Retirement System: a. Plan Description The City contributes to the Public Safety Personnel Retirement System (PSPRS), an agent multiple-employer defined benefit pension plan and insurance premium plan, which acts as a common investment and administrative agent for the various fire and police agencies within the state. Sworn police and fire personnel are eligible to participate in the plan. The plan provides retirement and disability benefits, and death benefits, as well as insurance premium benefits, to plan members and beneficiaries. The PSPRS is jointly administered by the Fund Manager and 209 Local Boards and was established by Title 38, Chapter 5, Article 4 of the Arizona Revised Statutes. The PSPRS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by writing to Public Safety Personnel Retirement System 3010 East Camelback Rd., Ste 200, Phoenix, Arizona, 85016, by calling 602-255-5575, or on the internet at www.psprs.com. b. Funding Policy PSPRS fire personnel are required to contribute 7.65 percent of their annual covered salary and police personnel are required to contribute 7.65 percent while the City is required to contribute an actuarially determined rate. Police personnel contributed $931,355 and fire personnel $723,725 during fiscal year 2007-2008. The City rate for fiscal year 2008 was 10.37 percent for fire personnel and 11.12 percent for police members. The health insurance premium portion of the contribution rate was actuarially set at 0.41 percent of covered payroll for both police and fire for fiscal year 2008. Benefit and contribution provisions are established by state law and may be amended only by the State of Arizona Legislature (A.R.S. Section 38-843). Actuarial Methods and Assumptions: The required contribution was determined as part of the June 30, 2007 actuarial valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 8.50 percent investment rate of return, (b) projected salary increases of 5.5 percent per year compounded annually, attributable to inflation, and (c) additional projected salary increases ranging from 1 percent to 3.5 percent per year, depending on age, attributable to seniority/merit. The actuarial value of PSPRS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a four-year period. PSPRS’s assets in excess of actuarial accrued liabilities are amortized as level percents of payroll over an open period of 20 years, while unfunded actuarial liabilities are amortized as level percents of payroll over a closed period of 30 years from July 1, 2007 (29 years from June 30, 2007). Annual Pension/OPEB Cost - Agent Plans: The City’s pension/OPEB costs for the agent plans for the year ended June 30, 2008 follows: Annual pension/OPEB cost Contributions made PSPRS - Police Health Pension Insurance PSPRS - Fire Health Pension Insurance $1,348,263 1,348,263 $931,874 931,874 $51,657 51,657 80 $38,323 38,323 EORP Pension $27,537 27,537 Health Insurance $1,510 1,510 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Three Year Trend Information for Agent Plans: (Latest Available Information) Annual pension cost information for the current and two preceding years follows for each of the agent plans. The pension systems implemented GASB Statement 45 in fiscal year 2008. Annual OPEB cost information is not available for years before fiscal year 2008. PSPRP - Police - Pension Fiscal Year Ended 2006 2007 2008 Percentage of Annual Costs Contributed Annual Pension/ OPEB Cost $1,302,044 1,358,007 1,348,263 Net Pension/OPEB Obligation 100% 100 100 $ 0 0 0 51,657 100% $ 0 $ 212,819 645,244 931,874 100% 100 100 $ 0 0 0 PSPRP - Police – Health Insurance 2008 $ PSPRP - Fire - Pension 2006 2007 2008 PSPRP - Fire – Health Insurance 2008 $ 38,323 100% $ 0 $ 28,944 25,118 27,537 100% 100 100 $ 0 0 0 100% $ 0 EORP – Pension 2006 2007 2008 EORP – Health Insurance 2008 $ 1,510 Required Supplementary Information (unaudited): The funded status of the plans as of the most recent valuation date, June 30, 2007 follow. For this valuation, which was prior to the implementation of GASB Statement Nos. 43 and 45, the pension and health insurance benefit amounts were aggregated. In future years when GASB statements Nos. 43 and 45 measurements are made and reported, these benefits will be disaggregated and reported separately. The EORP, by statute, is a cost-sharing plan. However, because of its statutory construction, in accordance with GASB Statement No. 43, paragraphs 5 and 41, the EORP is reported for such purposes as an agent multiple-employer plan. The Fund Manager obtains an actuarial valuation for the EORP on its statutory basis as a cost-sharing plan and therefore, actuarial information for the City, as a participating government, is not available. 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Schedule of Funding Progress (Latest Available Information) – Includes pension and health insurance Police Valuation Actuarial Date Value of June 30, Plan Assets 2005 2006 2007 Entry Age Actuarial Accrued Liability (AAL) $23,820,328 $29,123,964 26,520,019 32,127,887 28,125,150 41,246,496 Percent Unfunded Funded AAL 81.8% $5,303,636 82.5 5,607,868 68.2 13,121,346 Annual Covered Payroll $9,134,408 10,276,601 11,417,698 Unfunded AAL as a % of Covered Payroll 58.1% 54.6 114.9 Fire Valuation Actuarial Date Value of June 30, Plan Assets 2005 2006 2007 Entry Age Actuarial Accrued Liability (AAL) $20,431,901 $21,134,923 21,755,244 22,910,255 22,779,501 29,484,683 Unfunded AAL or Percent (Funded Funded Excess) 96.7% 95.0 77.3 $703,022 1,155,011 6,705,182 Annual Covered Payroll Unfunded AAL as a % of Covered Payroll $6,847,788 7,134,565 8,627,756 10.3% 16.2 77.7 Volunteer Firemen's Pension Trust Fund The Volunteer Firemen’s Pension Trust plan covers participants in a volunteer firemen program formerly sponsored by the City. There are currently six individuals receiving monthly benefits of $400 each. There are no potential additional demands upon the fund since the volunteer program has been discontinued. An actuarial valuation of this pension plan has not been performed. The City believes the unfunded liability, if any, is not material. 18. OPERATING LEASES The City leases copiers, books, vehicles and land under certain non-cancelable operating leases. Operating leases do not give rise to property rights or lease obligations (long-term debt), and therefore the results of the lease agreements are not reflected in the City’s Statement of Net Assets. Lease costs for the fiscal year ended June 30, 2008 were $67,522. The following is a schedule of the future minimum lease payments on the operating leases. Year Ending June 30, 2009 2010 2011 2012 2013 Total $ $ Amount 100,602 91,417 70,506 58,438 24,900 345,863 The City is the lessor on several operating leases of land. The cost of the real property associated with these leases is $2,218,519. Operating lease revenues for fiscal year 2008 were $277,084. 82 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 The following is a schedule of minimum future rental revenues on these leases: Year Ending Amount June 30, 2009 $ 216,442 2010 273,688 2011 288,160 2012 300,862 2013 325,835 19. DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. Additionally, the City offers its management employees an additional deferred compensation plan created in accordance with Internal Revenue Code Section 401a. The deferred compensation is not available to employees, under either plan, until termination, retirement, death or unforeseeable emergency. The City’s fiduciary responsibility is that of exercising “due care” in selecting a third-party administrator. Federal legislation requires that Section 457 and 401a plan assets be held in trust for employees. This means that employee assets held in Section 457 and 401a plans are not the property of the City and are not subject to claims of the City’s general creditors. Therefore, the deferred compensation assets are not included in the City’s Basic Financial Statements. 20. COMMITMENTS AND CONTINGENCIES The City is involved in litigation arising in the ordinary course of its operations. The City believes that it’s ultimate liability, if any, in connection with these matters will not have a material adverse effect on the City's financial position, changes in financial position, or liquidity. The City is self-insured for the first $500,000 of any occurrence and then has additional coverage up to $40.0 million. Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The following table presents the City’s commitments as of June 30, 2008: Remaining Construction Commitment Fund/Description General Fund: Municipal facilities construction/remodeling Parks and recreation facilities Half-Cent Sales Tax Fund: Municipal facilities construction/remodeling Public safety facilities/systems Highway User Revenue Fund: Streets/Traffic infrastructure $ 1,412,414 677,638 2,090,052 386,423 10,632 397,055 121,093 Development Fee Fund: Parks and recreation facilities Branch library Public safety facilities/systems Streets/Traffic infrastructure 747,158 5,326,997 324,468 1,615,098 8,013,721 83 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Transportation Sales Tax Fund: Streets/Traffic infrastructure GO Bond Capital Projects Fund: Parks and recreation facilities Branch library Drainage infrastructure Streets/Traffic infrastructure Municipal facilities construction/remodeling Non-Major Governmental Funds: Other Grants - Streets/Traffic infrastructure MDA Bonds Capital Projects - Streets/Traffic infrastructure Improvement District Bonds - Streets/Traffic infrastructure Non-Bond Capital Projects – Drainage infrastructure Non-Bond Capital Projects – Streets/Traffic infrastructure Non-Bond Capital Projects – water infrastructure Water Utility Fund: Water facilities Water lines Wells and reservoirs Wastewater Utility Fund: Wastewater facilities and infrastructure Total construction commitments 435,234 162,371 280,904 1,289,987 12,394,456 1,070,222 15,197,940 11,673 17,266,183 20,643 413,419 1,854,069 17,233 19,583,220 217,684 859,355 95,483 1,172,522 413,748 $ 47,424,585 21. OTHER MATTERS The City signed a development agreement with DJN Eagle Mountain, LLC on July 5, 2005, and amended on April 15, 2008, with provisions that reimbursement will be made by the City to the developer for certain public infrastructure improvements related to the retail component of a mixed use project called Parke West in the southwest area of the City. The developer is required by the agreement to complete construction of 150,000 square feet of retail business space by July 31, 2008, and an additional 360,000 square feet of retail business space by March 31, 2010, and to have a capital investment of at least fortyfive million dollars in the project within 36 months of the construction commencement date. Reimbursements will begin once certain construction obligations are met by the developer. The agreement caps the reimbursement amount at no more than $9,000,000. Payments will be made quarterly, consisting of fifty percent of one percent of sales tax revenues generated by the project. No liability will be recorded by the City until such time as the developer has met all obligations of the agreement. On June 19, 2007, a development agreement was signed with Arizona Motors, LLC, for the development of a Volkswagen automotive dealership and service center, on the northwest corner of 84th Avenue and Bell Road. The City agreed to reimburse the dealer an amount not to exceed $500,000. Payments will be made quarterly and will equal fifty percent of one percent of sales tax revenues from the project. Reimbursements will cease when the reimbursement amount has been paid in full, or on November 30, 2010, whichever is sooner. The reimbursement amounts specified in the foregoing agreements will not be recorded as a liability of the City until such time as the developments open for business. The City approved a development agreement with Shea Sunbelt Pleasant Point LLC on October 22, 2001, for development of a master-planned community north of Happy Valley Road and west of the Agua Fria River. Included in the agreement are certain infrastructure improvements, right-of-way and land dedications, water rights acquisition, fire station building and equipment, and park and trail development. In return the City agreed to certain impact fee reimbursements. Individual liabilities will not be recorded until the developer has met City requirements associated with each agreed-upon item. As of June 30, 84 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2008 2008, there are currently estimated potential impact fee reimbursements of the following that are not yet recorded as liabilities: One neighborhood park site currently estimated at $750,000; one community park site currently estimated at $2,450,000; one library site currently estimated at $750,000; and street and intersection improvements and associated ROW land dedications currently estimated at $45,773,692. The City approved a development agreement with Diamond Ventures Inc. on December 24, 2002 for a master-planned community located on the southwest corner of 163rd Avenue and State Highway 74. Included in the agreement are certain infrastructure improvements, right-of-way and land dedications, and provision of certain equipment. Associated with some of these requirements, the City has agreed to credit the developer from impact fees and other sources. As of June 30, 2008, no building activities have commenced and the credits could not be reliably estimated. The agreement is in force for 25 years from the signing of the agreement. The City approved a development agreement with TDR LLC on February 11, 2005, for a residential and commercial development between Happy Valley Road and 107th Avenue east of the Agua Fria River. Included in the agreement are certain infrastructure improvements, right-of-way and land dedications. Individual liabilities will not be recorded until the developer has met City requirements associated with each agreed-upon item. As of June 30, 2008, there are currently estimated impact fee credits of the following: Wastewater improvement credits currently estimated at $2,992,188, but could potentially increase up to $4,792,065; and credits for future street infrastructure improvements and right-of-way land dedications estimated at $2,415,415. On December 19, 2005, the City approved a development agreement with Group Three Properties, Noranda Properties Inc., and Pleasant Views LLC, which terminated an existing development agreement and enabled the developer to rely on existing City ordinances related to infrastructure improvements, right-of-way and land dedications. The development is a master-planned community east of Vistancia North and south of State Route 74. As the developer moves forward with the project, there may be infrastructure and land dedications resulting in impact fee credits due them from the City. As of June 30, 2008, those potential credits could not be reliably estimated. The City approved a development agreement with WalMart Stores, Inc. on October 12, 2006, for a commercial development located on Peoria east of 83rd Avenue. Included in the agreement are certain infrastructure improvements, right-of-way and land dedications. As of June 30, 2008, the total reimbursement is capped at $7,270,000. Of that $228,934 is related to future infrastructure dedications. A repayment of $3,000,000 will occur upon the completion of Phase II infrastructure (Cotton Crossing), followed by quarterly installments on the remaining balance based on fifty percent of one percent of sales tax revenues from the project. The City approved a development agreement with Peoria place 100, LLC on December 12, 2006, for a mixed-use development located at the Southeast corner of 83rd Avenue and Monroe Street. The developer is required to construct and dedicate Cotton Crossing from Mountain View to Grand Avenue. Developer is required to dedicate all ROW and begin construction by July 1, 2008. The City agreed to reimburse the developer up to $6,443,000 on August 1, 2011, through a combination of cash reimbursement for ROW and Impact Fee Credits. In addition to formal development agreements there are certain other development-related land and/or infrastructure dedications that may result in impact fee offsets and/or reimbursements. As of June 30, 2008, the estimated value of the currently anticipated offsets and or/reimbursements is $1,262,345 for streets and right-of-way infrastructure and trail improvements. 22. SUBSEQUENT EVENT On July 14, 2008, the City received the final $8,575,253 in Water Infrastructure Finance Authority (WIFA) funding for the Butler Water Reclamation Facility. 85 Combining Fund Financial Statements and Budgetary Schedules This section contains the combining financial statements for non-major governmental funds, internal service funds and fiduciary funds as well as the budget schedules other than those for the general fund and major special revenue funds (which may be found immediately following the governmental fund financial statements). Page Major Governmental Funds Other than General Fund & Special Revenue Funds Budgetary Comparison Schedules General Obligation Bonds Debt Service Fund Special Assessment Debt Service Fund General Obligation (GO) Bond Capital Projects Fund 90 91 92 Non-Major Governmental Funds Combining Statements Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Budgetary Comparison Schedules Public Transit Fund Section 8 Housing Fund Other Grants Fund Storm Drainage Fund Municipal Development Authority (MDA) Bonds Debt Service Fund Community Facilities District (CFD) Bonds Debt Service Fund Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Improvement District Bonds Capital Projects Fund Non-Bond Capital Projects Fund 100 101 102 103 104 105 106 107 108 109 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Public Housing Fund 112 113 114 115 116 Internal Service Funds Combining Statements Combining Statement of Net Assets Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Combining Statement of Cash Flows 118 119 120 Schedule of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 96 98 121 122 123 124 Fiduciary Funds Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities - All Agency Funds 87 126 127 MAJOR FUNDS OTHER THAN GENERAL FUND & SPECIAL REVENUE FUNDS Budgetary Schedules Debt Service Funds These funds are established to account for the accumulation of resources for payment of bond principal and interest payable from governmental resources and special assessment levies when the government is obligated in some manner for the payment. Principal payments are due annually. Interest is due semiannually. General Obligation Bonds Debt Service Fund This fund accounts for the principal and interest requirements of the City's general obligation bonds. Provisions are made in the City's general property tax levy for funds sufficient to meet the general obligation debt service. Special Assessment Debt Service Fund This fund accounts for the collection of special assessment district revenues and the payment of the special assessment bonds. Capital Projects Funds A capital project fund is established to account for the acquisition and construction of major capital facilities other than those financed by Special Revenue Fund and Enterprise Fund resources. A capital project fund enhances reporting to ensure that requirements regarding the use of the revenue were fully satisfied. General Obligation (GO) Bond Capital Projects Fund This fund accounts for the receipt of proceeds from General Obligation bonds and the expenditure of those funds to purchase or construct capital assets for the City. 89 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Property taxes Charges for Service Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contingencies Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 31,190,552 $ 31,190,552 20,607,343 1,000,000 21,607,343 52,797,895 20,607,343 1,000,000 21,607,343 52,797,895 200,000 200,000 19,168,219 7,781,132 27,149,351 19,168,219 7,781,132 27,149,351 25,648,544 $ 25,648,544 $ 31,190,552 $ 20,259,031 1,675,245 1,118,524 23,052,800 54,243,352 (200,000) 16,640,000 4,808,047 21,448,047 $ 32,795,305 - (348,312) 1,675,245 118,524 1,445,457 1,445,457 - Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 54,243,352 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (31,190,552) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 134,635 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 23,187,435 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 21,448,047 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 2,039 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 21,450,086 90 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,528,219) (2,973,085) (5,701,304) $ 7,146,761 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Special assessments Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 1,193,953 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 1,193,953 $ 1,193,953 $ - 1,811,124 36,750 1,847,874 3,041,827 1,811,124 36,750 1,847,874 3,041,827 1,804,485 56,397 1,860,882 3,054,835 (6,639) 19,647 13,008 13,008 500 500 22 (478) 1,264,637 549,537 675,000 2,489,674 1,264,637 708,319 516,218 2,489,674 1,264,637 711,692 1,976,351 3,373 (516,218) (513,323) 552,153 $ 552,153 $ 1,078,484 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 3,054,835 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (1,193,953) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (3,238) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,857,644 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,976,351 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (9,657) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,966,694 91 $ 526,331 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ 31,878,570 $ 31,878,570 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 31,878,570 $ - RESOURCES (INFLOWS): Capital-related debt issued Investment earnings Total inflows Amounts available for appropriation 68,326,690 1,060,000 69,386,690 101,265,260 68,326,690 1,060,000 69,386,690 101,265,260 719,909 719,909 32,598,479 (68,326,690) (340,091) (68,666,781) (68,666,781) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Interest and fiscal charges Capital outlay Total charges to appropriations 1,429,304 99,106,305 100,535,609 1,496,399 97,429,481 98,925,880 617,864 52,000 26,853,875 27,523,739 (878,535) 52,000 (70,575,606) (71,402,141) Budgetary fund balance, June 30, 2008 $ 729,651 $ 2,339,380 $ 5,074,740 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 32,598,479 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a (31,878,570) a current year revenue for financial reporting purposes The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 19,176 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 739,085 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 27,523,739 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 9,116,651 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (7,387,546) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 29,252,844 92 $ 2,735,360 NON-MAJOR GOVERNMENTAL FUNDS OTHER GOVERNMENTAL FUNDS Special Revenue Funds A special revenue fund is established to account for specific revenues, which are legally restricted to expenditure for particular purposes and is created out of receipts of specific taxes or other earmarked revenue. Public Transit Fund This fund receives and expends the City's allocation of Federal Transit Authority grant money as well as the City's allocation of the Local Transportation Assistance Fund money. The amount of Federal Transportation Authority funds available to each city is based on the total funding available and the total requests for funds. The amount of Local Transportation Assistance funds available to each city is allocated on a population basis, which is determined by the latest federal census. Expenditures are for the administration and operating costs of the public transit system. Section 8 Housing Fund This fund is used to account for rental receipts and grant revenues and for expenditures for the administration, management, and maintenance of low cost housing for the elderly, handicapped, and low-income citizens of the City. The U.S. Department of Housing and Urban Development exercises indirect control over the activities of the City’s housing programs. Other Grants Fund This fund receives and expends much of the City's grant fund money. The amount of grants received is generally based upon application to granting agencies by the City and availability of funding by grantors. Grant money may be used only for the purpose of the approved budget and is subject to grantor expenditure guidelines. Storm Drainage Fund This fund collects and expends a storm water fee included on utility bills sent out by the City. The fee is to provide funding for the Storm Waster Management Plan to comply with the National Pollution Discharge Elimination System (NPDES). Debt Service Funds These funds are established to account for the accumulation of resources for payment of bond principal and interest payable from governmental resources and special assessment levies when the government is obligated in some manner for the payment. Principal payments are due annually. Interest is due semiannually. Municipal Development Authority Bonds Debt Service Fund This fund accounts for the principal and interest requirements of the Municipal Development Authority's bonds. Provisions are made in the City's transaction privilege tax for funds sufficient to meet the Municipal Development Authority's debt service. 93 Debt Service Funds (continued) Community Facilities District (CFD) Bonds Debt Service Fund This fund accounts for the principal and interest requirements of the Vistancia Communities Facilities District (a blended component unit) general obligation bonds. Provisions are made in the District's general property tax levy for funds sufficient to meet the general obligation debt service. Capital Projects Funds A capital project fund is established to account for the acquisition and construction of major capital facilities other than those financed by Special Revenue Fund and Enterprise Fund resources. A capital project fund enhances reporting to ensure that requirements regarding the use of the revenue were fully satisfied. Community Facilities District (CFD) Bonds Capital Projects Fund This fund accounts for the expenditure of Vistancia Community Facilities District bond proceeds for the construction of capital assets for the District. Once the capital assets are completed, they are turned over to the City for operation and maintenance. Municipal Development Authority (MDA) Bonds Capital Projects Fund This fund accounts for the construction or purchase of capital assets to be funded through the use of Municipal Development Authority Bonds. Improvement District Bonds Capital Projects Fund This fund accounts for the construction or purchase of capital assets funded through the use of Special Assessment Improvement District Bonds. Non-Bond Capital Projects Fund This fund accounts for the purchase or construction of capital assets with funds other than bond proceeds. This includes monies received from outside sources, i.e. developers or other governments, and also City pay-as-you-go monies. 94 CITY OF PEORIA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2008 Special Revenue Funds Section 8 Other Housing Grants Fund Fund Public Transit Fund ASSETS Cash and cash equivalents Cash with fiscal agents Investments Accounts receivable, net Interest receivable Due from other governments Restricted cash and cash equivalents Restricted investments Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other governments Deferred revenue Other liabilities Total liabilities Fund balances: Reserved for: Debt service Capital projects Grant Purposes Unreserved, designated (note 11) Capital projects funds Special revenue funds Unreserved, undesignated, reported in: Capital projects funds Special revenue funds Total fund balance Total liabilities and fund balance $ $ $ $ $ 236,098 335,496 3,755 4,322 38,188 617,859 2,777 19,916 500 23,193 594,666 $ $ $ $ $ - $ 594,666 617,859 319,697 93,306 413,003 75,881 31 17,358 93,270 319,733 $ $ $ $ $ - $ 319,733 413,003 899,894 1,278,752 14,571 1,063,642 3,256,859 92,264 16,686 4,589 74,668 188,207 726,059 Storm Drainage Fund $ $ $ $ $ 2,254,752 $ 87,841 3,068,652 3,256,859 The accompanying notes are an integral part of the financial statements 96 11,076 15,739 116,521 143,336 12,286 5,639 17,925 - $ 125,411 125,411 143,336 Debt Service Funds Municipal Development CFD Authority Bonds Bonds $ $ $ $ $ 3,487,675 3,487,675 - 3,487,675 - $ 3,487,675 3,487,675 $ Capital Projects Funds Improvement MDA District Bonds Bonds CFD Bonds 5,021 7,136 59,331 9,978 40,632 7,708,379 $ 7,830,477 28,254 19,329,013 $ 19,357,267 20,345 28,910 305,549 3,323,627 36,454,324 $ 40,132,755 $ 64,814 64,814 $ $ 1,203,867 52,426 $ 1,256,293 $ $ 7,765,663 - $ $ $ $ 7,765,663 $ 7,830,477 $ $ 936 416,678 417,614 18,939,653 - 18,939,653 $ 19,357,267 $ 21,526,092 - $ $ $ 17,350,370 38,876,462 $ 40,132,755 97 1,200 1,705 2,905 $ 7,850,121 11,155,052 1,615,401 118,814 $ 20,739,388 76,168 76,168 $ 1,385,040 4,669,246 525,083 $ 6,579,369 $ $ $ - $ Non-Bond Total Non-Major Governmental Funds (73,263) (73,263) 2,905 11,734,529 - $ $ $ 2,425,490 14,160,019 $ 20,739,388 9,343,452 3,487,675 12,822,790 1,795,008 481,488 1,235,768 30,361,019 36,454,324 95,981,524 2,849,219 42,241 4,620 4,826,086 994,687 8,716,853 11,253,338 52,200,274 1,640,458 19,775,860 2,254,752 $ (73,263) 213,252 87,264,671 95,981,524 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Special Revenue Funds Section 8 Other Housing Grants Fund Fund Public Transit Fund REVENUES: Taxes: Property taxes Intergovernmental: Local transportation aid From federal government Other Charges for service Fines and forfeitures Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current operating: General government Culture and recreation Police Fire Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Capital-related debt issued Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ - $ - $ Storm Drainage Fund - $ - 666,237 41,496 640,307 55,592 32,985 789 1,437,406 1,373,693 74,952 8,218 1,456,863 1,484,599 728,254 1,022,525 262,272 111,715 52,257 3,661,622 657,320 53 657,373 1,369,071 1,448,645 135,791 399,857 275,885 3,141 591,804 321,728 - 465,851 - 1,369,071 1,448,645 98,925 1,827,131 6,173 472,024 68,335 8,218 1,834,491 185,349 182,541 (23,012) 159,529 - 10,000 (1,209,637) (1,199,637) 4,417 (431,879) (427,462) 227,864 8,218 634,854 366,802 311,515 2,433,798 594,666 $ 319,733 $ 3,068,652 The accompanying notes are an integral part of the financial statements 98 (242,113) 367,524 $ 125,411 Debt Service Funds Municipal Development CFD Authority Bonds Bonds $ - $ 8,715 8,715 1,773,469 - 2,857,877 949,218 3,807,939 1,475,000 3,532,249 5,007,249 $ 637,317 637,317 $ - $ - - $ 1,773,469 893,838 4,262,327 5,156,165 666,237 2,899,788 1,443,513 1,735,437 262,272 2,610,821 6,729,017 18,120,554 702 194,827 - 1,799 - 52,323 - 137,337 399,857 275,885 3,141 591,804 248,949 787,579 2,817,716 1,853,271 1,853,271 135,516 8,371,981 8,703,026 2,518,430 2,520,229 6,932,858 6,985,181 4,332,877 4,616,983 19,781,638 33,993,766 (1,829,016) (15,873,212) - (1,215,954) (8,388,903) (2,450,399) 4,280,743 (5,180) 4,275,563 192,955 192,955 (7,452,116) (7,452,116) 47,000,000 273,310 5,180 (221,092) 47,057,398 (217,574) (217,574) 476,339 (93,154) (8,668,070) 38,668,495 $ $ 69,830 69,830 (286,109) 3,487,675 Non-Bond Total Non-Major Governmental Funds 314,123 314,123 (3,799,224) 3,011,336 $ CFD Bonds 534,027 2,413,644 4,721,140 844 - Capital Projects Funds Improvement MDA District Bonds Bonds 7,858,817 27,607,723 207,967 7,765,663 $ 18,939,653 $ 38,876,462 99 $ - 47,000,000 273,310 4,675,836 (9,560,490) 42,388,656 (2,667,973) (1,829,016) 26,515,444 2,594,710 15,989,035 60,749,227 (73,263) $ 14,160,019 $ 87,264,671 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ 707,487 $ 707,487 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 707,487 $ - RESOURCES (INFLOWS): Intergovernmental: Local transportation aid From federal government Other Charges for services Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation 699,836 407,822 42,640 15,000 226,150 1,391,448 2,098,935 699,836 407,822 42,640 15,000 226,150 1,391,448 2,098,935 666,237 229,898 232,485 57,129 34,763 789 182,541 1,403,842 2,111,329 (33,599) 229,898 (175,337) 14,489 19,763 789 (43,609) 12,394 12,394 CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Contingencies Transfers out Total charges to appropriations 1,503,819 50,000 90,621 1,644,440 2,085,594 50,000 90,621 2,226,215 1,390,806 23,012 1,413,818 (694,788) (50,000) (67,609) (812,397) Budgetary fund balance, June 30, 2008 $ 454,495 $ (127,280) $ 697,511 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 2,111,329 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (707,487) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 216,105 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (182,541) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 1,437,406 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,413,818 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 3,451 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (25,186) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (23,012) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,369,071 100 $ 824,791 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SECTION 8 HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ 622,918 $ 622,918 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 622,918 $ - RESOURCES (INFLOWS): Intergovernmental: From federal government Other Investment earnings Total inflows Amounts available for appropriation 1,643,099 11,000 1,654,099 2,277,017 1,643,099 11,000 1,654,099 2,277,017 1,287,486 98,640 8,218 1,394,344 2,017,262 (355,613) 98,640 (2,782) (259,755) (259,755) CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Total charges to appropriations 1,956,227 1,956,227 2,026,555 2,026,555 1,544,976 1,544,976 (481,579) (481,579) Budgetary fund balance, June 30, 2008 $ 320,790 $ 250,462 $ 472,286 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 2,017,262 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (622,918) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 62,519 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 1,456,863 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,544,976 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (96,331) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,448,645 101 $ 221,824 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Intergovernmental: From federal government Other Charges for services Fines and forfeitures Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): General government: Mayor and council Attorney City Manager Court Non-departmental Culture and recreation Police Fire Development services Public works Capital outlay Contingencies Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 1,858,709 $ 1,858,709 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,858,709 $ - 1,435,689 5,056,983 3,049,838 110,000 75,000 40,476 10,000 9,777,986 11,636,695 1,435,689 5,056,983 3,049,838 110,000 75,000 40,476 10,000 9,777,986 11,636,695 1,201,722 845,620 1,022,525 262,272 107,881 52,257 10,000 3,502,277 5,360,986 (233,967) (4,211,363) (2,027,313) 152,272 32,881 11,781 (6,275,709) (6,275,709) 1,500 35,225 19,000 518,688 232,147 7,500 1,211,232 2,993,420 1,550,000 25,000 6,593,712 1,500 103,510 62,565 20,850 19,000 521,743 799,670 24,500 1,226,232 321,728 678,953 296,620 25,000 4,101,871 800 93,567 62,565 (283) 12,961 388,031 405,376 2,154 588,541 321,728 489,395 2,364,835 (700) (9,943) (21,133) (6,039) (133,712) (394,294) (22,346) (637,691) (189,558) (296,620) (25,000) (1,737,036) 5,042,983 $ 7,534,824 $ 2,996,151 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 5,360,986 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (1,858,709) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 169,345 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (10,000) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 3,661,622 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 2,364,835 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 1,901 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (157,350) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (382,255) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,827,131 102 $ (4,538,673) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE STORM DRAINAGE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ - $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) - $ - $ - RESOURCES (INFLOWS): Intergovernmental: Charges for services Investment earnings Transfers from other funds Total inflows Amounts available for appropriation 600,410 2,000 4,417 606,827 606,827 600,410 2,000 4,417 606,827 606,827 626,347 1,269 4,417 632,033 632,033 25,937 (731) 25,206 25,206 CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Capital outlay Transfers out Total charges to appropriations 511,819 431,879 943,698 511,819 431,879 943,698 464,034 6,173 431,879 902,086 (47,785) 6,173 (41,612) Budgetary fund balance, June 30, 2008 $ (336,871) $ (336,871) $ (270,053) Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 632,033 Differences - budget to GAAP: The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 29,757 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (4,417) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 657,373 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 902,086 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis (125) The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,942 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (431,879) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 472,024 103 $ 66,818 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Contingencies Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 2,899,098 $ 2,899,098 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 2,899,098 $ - 3,923,936 3,923,936 6,823,034 3,923,936 3,923,936 6,823,034 8,715 4,280,157 4,288,872 7,187,970 200,000 200,000 844 - 844 (200,000) 2,857,877 1,741,178 4,799,055 2,857,877 1,741,178 4,799,055 2,857,877 949,218 3,807,939 (791,960) (991,116) 2,023,979 $ 2,023,979 $ 3,380,031 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 7,187,970 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (2,899,098) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (4,280,157) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 8,715 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 3,807,939 Differences - budget to GAAP: Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 3,807,939 104 8,715 356,221 364,936 364,936 $ 1,356,052 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ RESOURCES (INFLOWS): Property Taxes Investment earnings Miscellaneous Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2008 $ 7,827,930 $ 7,827,930 Actual Amounts (budgetary basis) Variance with Final Budget Over (Under) $ $ 7,827,930 1,905,580 248,300 2,853,371 5,007,251 12,835,181 1,905,580 245,200 2,853,371 5,004,151 12,832,081 1,759,501 533,755 2,413,644 4,706,900 12,534,830 1,475,000 3,532,251 5,007,251 1,475,000 3,532,251 5,007,251 1,475,000 3,532,249 5,007,249 7,827,930 $ 7,824,830 $ 7,527,581 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 12,534,830 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (7,827,930) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 14,240 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 4,721,140 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 5,007,249 Differences - budget to GAAP: Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 5,007,249 105 - (146,079) 288,555 (439,727) (297,251) (297,251) (2) (2) $ (297,249) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ 21,630,856 $ 21,630,856 RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 545,000 545,000 22,175,856 545,000 545,000 22,175,856 CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Capital outlay Total charges to appropriations 27,821,686 27,821,686 27,821,686 27,821,686 Budgetary fund balance, June 30, 2008 $ (5,645,830) $ (5,645,830) Actual Amounts (budgetary basis) Variance with Final Budget Over (Under) $ $ 21,630,856 614,616 614,616 22,245,472 13,181,704 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 22,245,472 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (21,630,856) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 22,701 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 637,317 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 9,063,768 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 48,664 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (7,259,161) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,853,271 106 69,616 69,616 69,616 (936) 9,064,704 9,063,768 $ - (936) (18,756,982) (18,757,918) $ 18,827,534 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ - $ - Actual Amounts (budgetary basis) Variance with Final Budget Over (Under) $ $ - - RESOURCES (INFLOWS): Investment earnings Capital related debt issued Premium on bonds issued Total inflows Amounts available for appropriation 35,000,000 35,000,000 35,000,000 35,000,000 35,000,000 35,000,000 35,635 47,000,000 273,310 47,308,945 47,308,945 35,635 12,000,000 273,310 12,308,945 12,308,945 CHARGES TO APPROPRIATIONS (OUTFLOWS): Culture and recreation Highways and Streets Capital outlay Interest and other charges Total charges to appropriations 382,348 17,492,246 350,000 18,224,594 382,348 27,564,710 350,000 28,297,058 702 194,827 7,220,540 135,516 7,551,585 702 (187,521) (20,344,170) (214,484) (20,745,473) Budgetary fund balance, June 30, 2008 $ 16,775,406 $ 6,702,942 $ 39,757,360 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 47,308,945 Differences - budget to GAAP: The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 278,488 Capital-related debt issued is a budgetary resource, but is not a revenue for financial reporting purposes (47,000,000) Premiums on bonds are a budgetary resource, but are not a revenue for financial reporting purposes (273,310) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 314,123 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,551,585 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,151,441 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 8,703,026 107 $ 33,054,418 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE IMPROVEMENT DISTRICT BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ 3,500,000 $ 3,500,000 Actual Amounts (budgetary basis) Variance with Final Budget Over (Under) $ $ 3,500,000 - RESOURCES (INFLOWS): Investment earnings Special assessments Total inflows Amounts available for appropriation 4,000,000 4,000,000 7,500,000 4,000,000 4,000,000 7,500,000 71,047 71,047 3,571,047 71,047 (4,000,000) (3,928,953) (3,928,953) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Capital outlay Total charges to appropriations 7,500,000 7,500,000 6,694,524 6,694,524 1,799 900,591 902,390 1,799 (5,793,933) (5,792,134) Budgetary fund balance, June 30, 2008 $ - $ 805,476 $ 2,668,657 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 3,571,047 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (3,500,000) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (1,217) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 69,830 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 902,390 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,617,839 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 2,520,229 108 $ 1,863,181 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2007 $ 1,318,677 $ 1,318,677 Actual Amounts (budgetary basis) $ 1,318,677 Variance with Final Budget Over (Under) $ - RESOURCES (INFLOWS): Intergovernmental revenue: Other governmental revenue Investment earnings Miscellaneous Total inflows Amounts available for appropriation 14,000,000 25,000 12,307,730 26,332,730 27,651,407 14,000,000 25,000 12,307,730 26,332,730 27,651,407 852,821 5,838,578 6,691,399 8,010,076 (14,000,000) 827,821 (6,469,152) (19,641,331) (19,641,331) CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services: Highways and streets Capital outlay Contingencies Total charges to appropriations 13,860 22,130,924 2,000,000 24,144,784 29,922 24,622,430 2,000,000 26,652,352 52,323 5,817,640 5,869,963 22,401 (18,804,790) (2,000,000) (20,782,389) Budgetary fund balance, June 30, 2008 $ 3,506,623 $ 999,055 $ 2,140,113 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 8,010,076 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (1,318,677) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (1,535,234) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 5,156,165 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 5,869,963 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,115,218 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 6,985,181 109 $ 1,141,058 ENTERPRISE FUNDS Budgetary Schedules Enterprise Funds Enterprise Funds are used to account for those operations that provide services to the general public for a fee. Enterprise funds are required for any activity whose principal revenue sources meet any of the following criteria: 1) any activity that has issued debt backed solely by the fees and charges of the activity, 2) if the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered through fees and charges, or 3) it is the policy of the City to establish activity fees or charges to recover the cost of providing services, including capital costs. All of the enterprise funds of the City are presented discretely in the basic financial statements. Water Utility Fund The Water Utility accounts for the revenues from charges to the customers of the City’s water services, as well as the expenditure of those funds to operate, maintain, and expand the water treatment and distribution systems. Wastewater Utility Fund The Wastewater Utility Fund accounts for the revenue from charges to the customers of the City’s wastewater services, as well as the expenditure of those funds to operate, maintain, and expand the wastewater collection and treatment systems. Solid Waste Utility Fund The Solid Waste Utility Fund accounts for the revenue from charges to the customers of the City’s solid waste services, as well as the expenditure of those funds to operate, maintain, and expand the solid waste collection and disposal systems. Stadium Fund The Stadium Fund accounts for the revenues generated by and the costs of operation of a sports complex owned by the City. This facility is used for spring training by two major league baseball teams as well as multiple other uses throughout the year. Public Housing Fund The Public Housing Fund accounts for the revenues and expenses of the low income housing program operated by the City. While this program does receive Federal subsidies through the Department of Housing and Urban Development, it also generates substantial user fees. 111 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Proceeds from bonds or contracts payable Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 33,420,863 363,000 33,783,863 $ 33,420,863 363,000 33,783,863 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 34,034,363 364,576 34,398,939 $ 613,500 1,576 615,076 6,697,961 16,926,202 48,436,208 14,000,000 86,060,371 6,656,495 17,513,998 46,776,567 8,844,960 79,792,020 5,827,741 18,409,439 28,178,266 52,415,446 (828,754) 895,441 (18,598,301) (8,844,960) (27,376,574) (52,276,508) (46,008,157) (18,016,507) 27,991,650 3,410,000 16,200,000 (2,713,919) (3,379,615) 13,516,466 3,410,000 16,200,000 (2,713,919) (3,379,615) 13,516,466 2,350,946 (2,131,100) (3,132,340) (2,912,494) (1,059,054) (16,200,000) 582,819 247,275 (16,428,960) (38,760,042) (32,491,691) (20,929,001) 11,562,690 8,800,000 164,478 (665,496) 8,800,000 164,478 (665,496) 3,957,569 164,478 (414,998) (30,461,060) $ (24,192,709) $ (17,221,952) (4,842,431) 250,498 $ 6,970,757 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Donations of capital assets are an other financing source for GAAP purposes, but are not a revenue for budget purposes. Debt principal payments are an expense for budgetary purposes, but are a reduction of long-term obligations and therefore not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Bond issuance costs are expensed in the year of issuance for budgetary purposes, but are amortized to interest expense over the life of the bonds for GAAP purposes. The gain on sale of fixed assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (836,480) (1,878,023) 1,878,023 (70,186) 1,499,408 27,719,857 8,543,781 3,132,340 (5,353,362) (7,470) 26,085 (16,903,702) $ 528,319 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 112 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WASTEWATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Proceeds from bonds or contracts payable Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Excess (deficit) revenues over expenses - budgetary basis $ 15,984,427 15,984,427 $ 15,984,427 15,984,427 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 15,497,124 101 15,497,225 $ (487,303) 101 (487,202) 1,929,134 11,206,817 77,198,866 4,075,000 94,409,817 1,915,134 11,327,729 72,520,821 15,596,842 101,360,526 1,724,053 10,099,435 61,622,405 73,445,893 (191,081) (1,228,294) (10,898,416) (15,596,842) (27,914,633) (78,425,390) (85,376,099) (57,948,668) 27,427,431 1,342,000 40,247,728 (2,727,226) (2,934,961) 35,927,541 1,342,000 40,247,728 (2,792,226) (2,934,961) 35,862,541 528,177 42,741,541 (400,172) (1,414,788) 41,454,758 (42,497,849) (49,513,558) (16,493,910) 4,500,000 90,074 (204,654) 4,500,000 90,074 (204,654) 1,864,274 90,074 (204,284) (38,112,429) $ (45,128,138) $ (14,743,846) (813,823) 2,493,813 2,392,054 1,520,173 5,592,217 33,019,648 (2,635,726) 370 $ 30,384,292 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Proceeds from the sale of bonds or contracts payable are revenues for budgetary purposes but are increases in long-term debt, and therefore not revenues, for GAAP purposes. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Donations of capital assets are an other financing source for GAAP purposes, but are not a revenue for budget purposes. Interest is capitalized on construction of capital assets for GAAP purposes, but is not a budgeted item. Debt principal payments are an expense for budgetary purposes, but are a reduction of long-term obligations, and therefore not an expense, for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Bond issuance costs are expensed in the year of issuance for budgetary purposes, but are amortized to interest expense over the life of the bonds for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (158,871) (42,741,541) (89,427) 89,427 (66,240) (1,706,692) 61,583,388 7,496,785 530,200 1,414,788 (3,904,280) (37,089) 24,097,598 $ 31,764,200 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 113 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SOLID WASTE UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 11,773,809 11,773,809 $ 11,773,809 11,773,809 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 11,841,488 11,841,488 $ 67,679 67,679 3,296,185 10,389,392 6,579,379 1,500,000 21,764,956 3,296,185 10,097,814 3,391,996 16,785,995 3,190,184 10,040,732 668,590 13,899,506 (106,001) (57,082) (2,723,406) (2,886,489) (9,991,147) (5,012,186) (2,058,018) 2,954,168 382,000 (10,800) 371,200 382,000 (29,242) (10,800) 341,958 731,531 (29,242) 702,289 349,531 10,800 360,331 (9,619,947) (4,670,228) (1,355,729) 3,314,499 2,049,538 (2,078,380) 2,049,538 (2,078,380) 458,804 64,794 (93,594) (9,648,789) $ (4,699,070) $ (925,725) 458,804 (1,984,744) 1,984,786 $ 3,773,345 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. The gain on sale of fixed assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets 114,420 (917,137) 917,137 (15,004) (45,545) 668,590 (875,585) 149,104 (617,122) $ (1,546,867) This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 114 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL STADIUM FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Rents Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 1,703,799 1,587,000 3,290,799 $ 1,703,799 1,587,000 3,290,799 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,545,591 1,727,079 8,090 3,280,760 $ (158,208) 140,079 8,090 (10,039) 1,295,604 4,910,032 228,735 150,000 6,584,371 1,375,604 5,047,672 228,735 135,000 6,787,011 1,334,273 4,827,893 171,240 6,333,406 (41,331) (219,779) (57,495) (135,000) (453,605) (3,293,572) (3,496,212) (3,052,646) 443,566 45,000 (31,480) (120,861) (107,341) 45,000 (31,480) (120,861) (107,341) 53,469 (31,217) (120,861) (98,609) 8,469 263 8,732 (3,400,913) (3,603,553) (3,151,255) 452,298 3,979,175 (292,651) 3,979,175 (292,651) 3,978,257 (291,849) 285,611 $ 82,971 $ 535,153 (918) 802 $ (452,182) Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Debt principal payments are an expense for budgetary purposes, but are a reduction of long-term obligations and therefore not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Bond issuance costs are expensed in the year of issuance for budgetary purposes, but are amortized to interest expense over the life of the bonds for GAAP purposes. The loss on sale of fixed assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (3,751) (4,105) (57,350) 171,240 120,861 (748,546) 3,676 (7,498) (29,637) $ (19,957) This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 115 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL PUBLIC HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Rent From federal government Miscellaneous Total operating revenues $ OPERATING EXPENSES: Contractual services, materials and supplies Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Excess (deficit) revenues over expenses - budgetary basis $ 160,000 160,000 $ 160,000 160,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 71,718 145,841 4,055 221,614 $ 71,718 (14,159) 4,055 61,614 280,000 75,000 355,000 280,000 75,000 355,000 296,578 296,578 16,578 (75,000) (58,422) (195,000) (195,000) (74,964) 120,036 13,000 13,000 13,000 13,000 9,791 9,791 (182,000) (182,000) (65,173) (182,000) $ (182,000) $ (65,173) (3,209) (3,209) 116,827 $ 116,827 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets 74,964 (85,489) $ (75,698) This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 116 INTERNAL SERVICE FUNDS Motor Pool Fund The Motor Pool Fund is responsible for the maintenance and operation of the City’s fleet of vehicles and various other equipment. Self-Insurance Fund The Self-Insurance Fund is responsible for the administration of the self-insurance program. This fund provides the liability insurance coverage for claims over the selfinsurance limit; claims under the limit are charged directly to the Self-Insurance Fund. Facilities Maintenance Fund The Facilities Maintenance Fund is responsible for the maintenance and operations of the City's buildings and grounds. Information Technology Fund The Information Technology Fund is responsible for the maintenance and operations of the City's computer hardware and software systems. 117 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS June 30, 2008 SelfInsurance Fund Motor Pool Fund ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable, net Interest receivable Supplies inventory Total current assets Non-current assets: Capital assets: Buildings and improvements Equipment Vehicles Furniture Less accumulated depreciation Construction in progress Total capital assets, net Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll Due to other governments Claims payable Current portion of compensated absences Total current liabilities Non-current liabilities: Compensated absences Total long-term liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets $ 5,171,020 7,348,038 54 78,533 82,795 12,680,440 $ 2,087,954 19,708,958 (12,175,699) 366,114 9,987,327 22,667,767 3,809,467 5,413,268 3,798 48,959 9,275,492 Facilities Maintenance Fund $ 353,281 502,013 4,430 859,724 Information Technology Fund $ 3,272,157 4,649,748 28,014 7,949,919 $ 12,605,925 17,913,067 3,852 159,936 82,795 30,765,575 9,275,492 81,342 11,732 (92,433) 641 860,365 209,211 24,590 195 78,580 312,576 116,240 4,019 3,100,000 3,630 3,223,889 131,773 67,427 167,550 366,750 386,327 105,470 226,840 718,637 843,551 201,506 195 3,100,000 476,600 4,621,852 9,190 9,190 321,766 480 480 3,224,369 18,200 18,200 384,950 25,990 25,990 744,627 53,860 53,860 4,675,712 9,987,327 12,358,674 $ 22,346,001 6,051,123 6,051,123 641 474,774 475,415 17,582,115 7,205,292 $ 24,787,407 27,570,083 26,089,863 $ 53,659,946 $ $ 148,102 29,838,005 60,969 (15,829,821) 3,364,860 17,582,115 25,532,034 Total The accompanying notes are an integral part of the financial statements 118 148,102 32,007,301 19,708,958 72,701 (28,097,953) 3,730,974 27,570,083 58,335,658 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2008 SelfInsurance Fund Motor Pool Fund OPERATING REVENUES Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Interest and investment income Loss on sale of fixed assets Total non-operating revenues Income (loss) before transfers Transfers in Transfers out Change in net assets $ $ 6,876,897 5,328 6,882,225 $ 9,834,218 29,095 9,863,313 Total $ 26,844,128 217,609 27,061,737 175,280 70,185 1,993,966 2,239,431 753,796 2,977,111 3,518,023 5,827 6,500,961 381,264 4,572,818 4,815,561 1,780,783 11,169,162 (1,305,849) 8,840,071 12,589,444 1,993,966 4,089,655 27,513,136 (451,399) 591,296 (77,547) 513,749 233,139 367,816 367,816 1,121,612 33,423 33,423 414,687 210,662 210,662 (1,095,187) 1,203,197 (77,547) 1,125,650 674,251 (14,835) 1,106,777 (848,194) (433,507) 10,301,712 (1,074,261) 8,132,264 11,987,822 (2,158,755) 10,503,318 4,944,346 908,922 16,655,143 43,156,628 20,648,217 $ 2,812,914 180,313 2,993,227 Information Technology Fund 1,114,862 4,185,675 2,303,045 7,603,582 (280,610) 1,686,110 (221,465) 1,697,784 Total net assets - beginning Total net assets - ending 7,320,099 2,873 7,322,972 Facilities Maintenance Fund 22,346,001 $ 6,051,123 $ 475,415 The accompanying notes are an integral part of the financial statements 119 $ 24,787,407 $ 53,659,946 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2008 SelfInsurance Fund Motor Pool Fund Facilities Maintenance Fund Information Technology Fund Total Increase (decrease) in cash and cash equivalents CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Net cash provided (used) by operating activities $ CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Net acquisition and construction of fixed assets Net cash flows from capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities 7,322,918 (4,282,574) (1,119,741) 1,920,603 $ 2,989,429 31,010 (174,919) (1,993,966) 851,554 1,686,110 (221,465) 1,464,645 (14,835) (14,835) (3,126,129) (3,126,129) - 26,512,265 (24,282,256) 588,323 2,818,332 19,554,626 (18,384,984) 364,214 1,533,856 $ 2,370,575 1,438,892 3,809,467 $ $ $ Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ 3,077,451 2,093,569 5,171,020 Classified as: Current assets Totals $ $ 5,171,020 5,171,020 $ 6,882,225 (3,606,312) (2,933,260) 342,653 $ (848,194) (848,194) - 1,830,958 (1,246,231) 36,556 621,283 9,863,313 (4,584,923) (4,517,205) 761,185 $ 27,057,885 (12,442,799) (8,745,125) (1,993,966) 3,875,995 10,301,712 (1,074,261) 9,227,451 11,987,822 (2,158,755) 9,829,067 (9,460,365) (9,460,365) (12,586,494) (12,586,494) 16,771,571 (15,528,939) 213,298 1,455,930 64,669,420 (59,442,410) 1,202,391 6,429,401 $ 7,547,969 5,057,956 12,605,925 12,605,925 12,605,925 $ 115,742 237,539 353,281 $ 1,984,201 1,287,956 3,272,157 3,809,467 3,809,467 $ $ 353,281 353,281 $ $ 3,272,157 3,272,157 $ $ 753,796 $ 381,264 $ (1,305,849) $ 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 by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets: Accounts receivable Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Due to other governments Compensated absences Total adjustments (280,610) 2,303,045 Net cash provided (used) by operating activities $ Non-cash investing, capital and financing activities: Decrease in fair market value of investments Total non-cash investing, capital and financing activities $ $ - 5,827 (54) (12,749) (3,798) - - (84,345) 3,791 195 (8,670) 2,201,213 101,195 941 (580) 97,758 1,920,603 (4,843) (4,843) $ $ $ 851,554 (3,097) (3,097) $ $ $ 342,653 (127) (127) 4,089,655 - (88,289) 15,801 28,050 (38,611) The accompanying notes are an integral part of the financial statements 120 1,780,783 (3,852) (12,749) 230,638 26,083 29,530 2,067,034 $ $ $ 761,185 (1,564) (1,564) (451,399) 159,199 46,616 195 48,330 4,327,394 $ $ $ 3,875,995 (9,631) (9,631) CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL MOTOR POOL FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Other governmental Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues (expenses) $ $ 7,325,025 96,000 50,000 7,471,025 $ 7,361,813 2,873 7,364,686 $ 36,788 (96,000) (47,127) (106,339) 1,175,962 3,914,184 3,033,073 1,500,000 9,623,219 1,195,962 4,245,075 5,188,034 10,629,071 1,119,741 4,325,507 2,920,850 8,366,098 (76,221) 80,432 (2,267,184) (2,262,973) (2,152,194) (3,158,046) (1,001,412) 2,156,634 500,000 500,000 Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 7,325,025 96,000 50,000 7,471,025 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 500,000 500,000 588,323 588,323 (1,652,194) (2,658,046) (413,089) 1,268,700 (108,096) 1,268,700 (108,096) 1,219,700 (107,821) (491,590) $ (1,497,442) $ 698,790 88,323 88,323 2,244,957 (49,000) 275 $ 2,196,232 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. The loss on sale of fixed assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets 3,027 (41,768) 41,768 4,879 96,899 2,827,296 (2,303,045) (77,547) 447,485 $ 1,697,784 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 121 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Insurance claims and expenses Capital outlay Contingencies Total operating expenses $ 175,988 461,247 2,378,250 750,000 3,765,485 Operating loss NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues Income (loss) before transfers Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 2,814,360 2,814,360 $ 2,814,360 2,814,360 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 175,988 455,171 2,378,250 6,076 750,000 3,765,485 2,814,229 176,515 2,990,744 $ (131) 176,515 176,384 174,919 (29,695) 1,993,966 6,076 2,145,266 (1,069) (484,866) (384,284) (750,000) (1,620,219) (951,125) (951,125) 845,478 1,796,603 200,000 200,000 200,000 200,000 364,214 364,214 164,214 164,214 (751,125) (751,125) 1,209,692 1,960,817 (3,759) (3,759) (754,884) $ (754,884) (3,759) $ 1,205,933 $ 1,960,817 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets 7,400 (361) (101,195) 6,076 (11,076) $ 1,106,777 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 122 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL FACILITIES MAINTENANCE FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Contingencies Total operating expenses 6,958,717 6,958,717 $ 3,297,287 3,650,043 50,000 6,997,330 Operating income (loss) 6,958,717 6,958,717 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 3,297,287 3,668,422 50,000 7,015,709 6,876,897 5,328 6,882,225 $ 2,933,260 3,606,312 6,539,572 (81,820) 5,328 (76,492) (364,027) (62,110) (50,000) (476,137) (38,613) (56,992) 342,653 399,645 25,000 25,000 25,000 25,000 36,556 36,556 11,556 11,556 Income (loss) before transfers (13,613) (31,992) 379,209 411,201 Transfers (out) Deficit revenues over expenses - budgetary basis (847,444) (847,444) (847,444) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ (861,057) $ (879,436) $ (468,235) $ 411,201 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (3,133) (43,851) 88,289 (5,827) (750) $ (433,507) This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 123 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL INFORMATION TECHNOLOGY FUND FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ $ 9,929,615 9,929,615 4,630,802 6,327,601 4,934,098 1,100,000 16,992,501 4,630,802 6,357,943 4,075,905 1,100,000 16,164,650 (7,062,886) (6,235,035) 130,000 130,000 Income before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 9,929,615 9,929,615 $ 9,942,098 29,095 9,971,193 (615,980) 2,723,023 (1,052,080) 2,723,023 (1,052,080) 2,473,023 (1,052,080) (4,434,092) 5,405,757 213,298 213,298 (6,105,035) $ 804,963 12,483 29,095 41,578 (113,597) (1,711,934) (2,438,648) (1,100,000) (5,364,179) (829,278) 130,000 130,000 $ $ 4,517,205 4,646,009 1,637,257 10,800,471 (6,932,886) (5,261,943) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 83,298 83,298 5,489,055 (250,000) $ 5,239,055 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (2,636) (55,613) (107,880) 107,880 (230,638) 1,590,463 (1,780,783) 7,806,508 $ 8,132,264 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 124 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. 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. Terramar Infrastructure Fund Accounts for the monies collected from developers in one area of the City and held in trust by the City until reimbursed by the City to a developer that made certain infrastructure improvements in that area. Neighborhood Pride NFP Fund Accounts for monies held on behalf of Neighborhood Pride, a separate not-for-profit agency for which the City operates as the administrator. Neighborhood Pride was formed to accept charitable contributions for the purpose of revitalizing neighborhoods. The program provides support to individual property owners for improvement of their properties through material donations and volunteer assistance. PLAY Peoria Fund Accounts for monies held on behalf of PLAY Peoria, a separate not-for profit agency for which the City operates as the administrator. PLAY Peoria was formed for the purpose of accepting charitable donations and seeking grants that require a not-for-profit status, for the benefit of recreation programs and participants. Peoria Citizens Corp Council Fund Accounts for monies held on behalf of Peoria Citizens Corp Council (PCCC), a separate not-for profit agency for which the City operates as the administrator. PCCC is organized for charitable and educational purposes supporting community activities that engage and train individuals in emergency preparedness and response, crime prevention, and promotion of good public health and safety practices through education, training, guidance, and volunteer service. Westside Fire Training IGA Fund Accounts for monies on behalf of the Westside Fire Training, a consortium of west valley fire departments for which the City operates as the administrator. This consortium was formed through an intergovernmental agreement to fund joint training opportunities for the member fire departments. 125 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS JUNE 30, 2008 ASSETS Cash and cash equivalents Investments (pooled), at fair value Total assets LIABILITIES Accounts payable Other liabilities Total liabilities Terramar Infrastructure Fund Neighborhood Pride NFP Fund $ $ 159,013 225,957 384,970 384,970 384,970 28,581 40,613 69,194 69,194 69,194 PLAY Peoria NFP Fund $ 2,285 3,248 5,533 5,533 5,533 Peoria Citizens Corp Council NFP Fund $ 199 283 482 482 482 The accompanying notes are an integral part of the financial statements 126 Westside Fire Training IGA Fund $ 5,196 7,384 12,580 1,922 10,658 12,580 Total $ 195,274 277,485 472,759 1,922 470,837 472,759 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Balance June 30, 2007 Terramar Infrastructure Fund Assets: Cash and cash equivalents Investments Total Assets $ Liabilities: Other liabilities 69,053 315,917 384,970 384,970 Additions $ 315,917 225,957 541,874 Deductions $ - 225,957 315,917 541,874 - Balance June 30, 2008 $ 159,013 225,957 384,970 384,970 Neighborhood Pride NFP Fund Assets: Cash and cash equivalents Investments Interest receivable Total Assets 10,464 47,872 360 58,696 76,440 40,613 117,053 58,323 47,872 360 106,555 28,581 40,613 69,194 Liabilities: Accounts payable Other liabilities Total Liabilities 58,696 58,696 16,041 10,523 26,564 16,041 25 16,066 69,194 69,194 PLAY Peoria NFP Fund Assets: Cash and cash equivalents Investments Total Assets - 11,791 3,248 15,039 9,506 9,506 2,285 3,248 5,533 Liabilities: Accounts payable Other liabilities Total Liabilities - 1,132 11,556 12,688 1,132 6,023 7,155 5,533 5,533 Peoria Citizens Corp Council NFP Fund Assets: Cash and cash equivalents Investments Due from other governments Total Assets 3,000 3,000 3,484 283 3,767 3,285 3,000 6,285 199 283 482 Liabilities: Other liabilities Total Liabilities 3,000 3,000 482 482 3,000 3,000 482 482 Westside Fire Training IGA Fund Assets: Cash and cash equivalents Investments Interest receivable Total Assets 2,985 13,655 6 16,646 34,327 7,384 41,711 32,116 13,655 6 45,777 5,196 7,384 12,580 Liabilities: Accounts payable Other liabilities Total Liabilities 546 16,100 16,646 23,425 23,425 22,049 5,442 27,491 1,922 10,658 12,580 Assets: Cash and cash equivalents Investments Due from other governments Interest receivable Total Assets 82,502 377,444 3,000 366 463,312 441,959 277,485 719,444 329,187 377,444 3,000 366 709,997 195,274 277,485 472,759 Liabilities: Accounts payable Other liabilities Total Liabilities 546 462,766 463,312 40,598 22,561 63,159 39,222 14,490 53,712 1,922 470,837 472,759 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 127 OTHER SUPPLEMENTARY INFORMATION This section contains schedules which the City deems necessary to provide additional debt service capital asset and interfund transfer information to enable the user of the financial statements to fully understand the financial position and results of operation of the City. Description of Schedules Page Federal Financial Data Schedule 130 Debt Service Schedules Schedule of Changes in Debt – Governmental Activities Schedule of Changes in Debt – Business-type Activities Schedule of Debt Service Requirements to Maturity 132 133 134 Fixed Assets Schedules Schedule of Fixed Assets by Function and Classification Schedule of Changes in Fixed Assets by Function – Governmental Activities 138 140 Schedule of Interfund Transfers 141 129 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Supplementary Information – Federal Financial Data Schedule The following is the schedule of Federal Financial Data as required by the United States Department of Housing and Urban Development under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H. Line # Account Description: Low Rent Public Housing #14.850a 121 122 124 125 126.2 120 150 ASSETS: Current Assets: Cash: Cash – unrestricted Total cash Accounts receivable: Accounts receivable – PHA projects Accounts receivable – HUD Other projects Accounts receivable – other government Accounts receivable – miscellaneous Allowance for doubtful accts – other Total receivables, net Total current assets 161 162 164 165 166 160 180 190 Non-current Assets: Fixed Assets: Land Buildings Furniture, equipment & machinery – admin. Leasehold improvements Accumulated depreciation Total fixed assets, net Total non-current assets Total Assets 111 100 312 332 341 342 310 350 300 508.1 511.1 512.1 513 600 LIABILITIES AND EQUITY: LIABILITIES: Current Liabilities: Accounts payable < 90 days Accounts payable – PHA projects Tenant security deposits Deferred revenues Total current liabilities Total non-current Liabilities Total Liabilities EQUITY: Invested in capital assets, net of related debt Restricted net assets Unrestricted net assets Total Equity/Net Assets Total Liabilities and Equity/Net Assets (continued) 130 $ Housing Choice Vouchers #14.871 Public Housing Capital Fund Program #14.872 389,827 389,827 320,581 320,581 10,621 10,621 71,818 17,218 89,036 478,863 10,124 45,251 55,375 375,956 25,337 25,337 35,958 410,350 3,276,922 24,961 121,175 (1,807,730) 2,025,678 2,025,678 $ 2,504,549 375,956 35,958 11,572 11,572 11,572 49,455 31 6,737 56,223 56,223 25,337 10,621 35,958 35,958 2,025,678 467,291 2,492,969 $ 2,504,541 319,733 319,733 375,956 35,958 $ CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Line # Account Description 703 705 REVENUE: Net tenant rental revenues Total tenant revenue 706 711 715 700 911 912 913 915 916 931 932 933 941 942 943 945 961 969 Low Rent Public Housing #14.850a $ 970 Excess operating revenues over expenses 973 974 900 Housing assistance payments Depreciation expense Total expenses 1001 1002 1010 Operating transfers in Operating transfers out Total other financing sources (uses) 1000 Excess (deficiency) of operating revenues over (under) expenses 1103 1120 1121 1117 1118 146,682 146,682 - - 145,841 9,791 4,055 306,369 654,375 8,218 74,952 737,545 267,420 267,420 89,701 2,500 20,926 43,770 24,436 6,097 3,661 29,508 29,028 35,553 8,319 3,079 296,578 1,000 125,656 126,656 267,420 267,420 9,791 610,889 - 85,489 382,067 602,671 729,327 267,420 - - - (75,698) 8,218 - $ 2,568,667 840 812 - $311,515 984 916 $316,444 $3,289 - HUD PHA grants Investment income – unrestricted Other revenue Total revenue EXPENSES: Administrative salaries Audit fees Outside management fees Employee benefit contributions – administrative Other operating – administrative Water Electricity Gas Ordinary maintenance and operations – labor Ordinary maint. & oper. – materials and other Ordinary maint. & oper. – contract costs Employee benefit contributions – ordinary maint. Insurance premiums Total operating expenses MEMO ACCOUNT INFORMATION: Beginning equity Unit months available Number of unit months leased Administrative fee equity Housing assistance payments equity (concluded) 131 Public Housing Capital Fund Program #14.872 Housing Choice Vouchers #14.871 $ $ CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Balances at June 30, 2007 Compensated absences Contracts payable Total General obligation bonds: Refunding bonds - series 1993 Series 1995 Series 1996 Series 1998A Refunding bonds - series 1998B Series 2003 Series 2007 Series 2007 Ref Total Municipal Development Authority: Refunding bonds - series 2003 Series 2006 Series 2008 Total Highway user revenue: Series 1996 Total $ 4,376,340 40,264,731 44,641,071 3,205,000 245,000 315,000 4,265,000 2,285,000 19,775,000 94,380,000 18,365,000 142,835,000 Balances at June 30, 2008 Issued Retired 5,192,625 13,264,148 18,456,773 4,663,315 10,989,448 15,652,763 4,905,650 42,539,431 47,445,081 650,000 245,000 315,000 270,000 470,000 1,000,000 13,465,000 225,000 16,640,000 2,555,000 3,995,000 1,815,000 18,775,000 80,915,000 18,140,000 126,195,000 2,637,877 220,000 2,857,877 12,735,653 6,060,000 47,000,000 65,795,653 - 15,373,530 6,280,000 21,653,530 Exhibit 1 47,000,000 47,000,000 3,570,000 3,570,000 - 275,000 275,000 3,295,000 3,295,000 Special assessment: Sunny Boy ID #9002 North Valley ID #8801 Bell Road ID #8802 83rd Ave ID #9601 Arrowhead Fountains ID #9603 75th Ave & Paradise Ln ID #9303 99 Ave & Northern Ave ID #0601 Total 205,000 2,270,000 2,655,000 835,000 1,285,000 1,092,064 4,950,000 13,292,064 - 295,000 340,000 150,000 230,000 249,637 1,264,637 205,000 1,975,000 2,315,000 685,000 1,055,000 842,427 4,950,000 12,027,427 Community Facilities District: Vistancia CFD Series 2002 Vistancia CFD Series 2005 Vistancia CFD Series 2006 Total 19,775,000 23,550,000 22,760,000 66,085,000 - 775,000 700,000 1,475,000 19,000,000 22,850,000 22,760,000 64,610,000 Total bonds payable Total governmental debt 247,435,594 47,000,000 22,512,514 271,923,080 $ 292,076,665 65,456,773 38,165,277 319,368,161 132 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT BUSINESS-TYPE ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Balance at June 30, 2007 Compensated absences Less current portion Long-term portion of compensated absences $ $ 570,390 520,370 50,020 Contracts payable $ 4,728,355 Long-term loans payable: Suntrust Total 1995 Wastewater Management Authority 1997 Water Infrastructure Finance Authority 1998A Water and Sewer Revenue 2000 Water and Sewer Revenue 2000 Water Infrastructure Finance Authority, Phase 1 2000 Water Infrastructure Finance Authority, Phase 2 2000 Water Infrastructure Finance Authority, Phase 3 2003 Municipal Development Authority Refunding 2006 Water Infrastructure Finance Authority, DW 2006 Water Infrastructure Finance Authority, CW Phase 1 2006 Water Infrastructure Finance Authority, CW Phase 2 Total bonds Total business-type bonds & contracts payable Less current portion of loans, bonds & contracts payable Long-term portion of loans, bonds & contracts payable 6,010,354 8,908,261 12,760,000 8,290,000 16,187,438 11,849,320 1,683,106 1,906,470 16,200,000 27,183,342 Issued 526,211 1,235,000 1,235,000 Balances at June 30, 2008 Retired 1,096,731 $ Exhibit 2 1,045,351 $ 891,401 $ $ 621,770 563,460 58,310 $ 4,363,165 - 1,235,000 1,235,000 110,978,291 42,741,541 42,741,541 587,969 697,397 820,000 675,000 888,599 594,411 77,491 327,123 4,667,990 5,422,385 8,210,864 11,940,000 7,615,000 15,298,839 11,254,909 1,605,615 1,579,347 16,200,000 27,183,342 42,741,541 149,051,842 115,706,646 44,502,752 5,559,391 154,650,007 6,261,280 $ 109,445,366 133 5,585,734 $ 149,064,273 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2008 Exhibit 3 General Obligation Fiscal Year General Facilites Purpose 6% Limitation (1) Principal Interest Total Other Purpose 20% Limitation (1) Interest Principal Total Total General Obligation Interest Principal Total 2009 6,565,000 3,085,302 9,650,302 5,010,000 1,961,583 6,971,583 11,575,000 5,046,885 16,621,885 2010 1,800,000 1,030,684 2,830,684 4,580,000 3,611,786 8,191,786 6,380,000 4,642,470 11,022,470 2011 1,240,000 709,179 1,949,179 5,440,000 3,662,759 9,102,759 6,680,000 4,371,938 11,051,938 2012 1,170,000 643,209 1,813,209 5,360,000 3,457,403 8,817,403 6,530,000 4,100,612 10,630,612 2013 1,070,000 584,009 1,654,009 5,380,000 3,256,219 8,636,219 6,450,000 3,840,228 10,290,228 2014 1,115,000 545,074 1,660,074 5,605,000 3,033,123 8,638,123 6,720,000 3,578,197 10,298,197 2015 350,000 151,802 501,802 6,650,000 3,152,238 9,802,238 7,000,000 3,304,040 10,304,040 2016 - - - 6,990,000 3,024,231 10,014,231 6,990,000 3,024,231 10,014,231 2017 - - - 6,870,000 2,746,216 9,616,216 6,870,000 2,746,216 9,616,216 2018 - - - 6,610,000 2,455,066 9,065,066 6,610,000 2,455,066 9,065,066 2019 - - - 6,920,000 2,156,363 9,076,363 6,920,000 2,156,363 9,076,363 2020 - - - 6,725,000 1,868,796 8,593,796 6,725,000 1,868,796 8,593,796 2021 - - - 7,040,000 1,577,900 8,617,900 7,040,000 1,577,900 8,617,900 2022 - - - 6,155,000 1,293,739 7,448,739 6,155,000 1,293,739 7,448,739 2023 - - - 6,425,000 1,014,338 7,439,338 6,425,000 1,014,338 7,439,338 2024 - - - 4,955,000 758,288 5,713,288 4,955,000 758,288 5,713,288 2025 - - - 5,165,000 543,500 5,708,500 5,165,000 543,500 5,708,500 2,026 - - - 5,385,000 332,500 5,717,500 5,385,000 332,500 5,717,500 2,027 - - - 5,620,000 112,400 5,732,400 5,620,000 112,400 5,732,400 2,028 - - - $ 13,310,000 $ 6,749,259 $ 20,059,259 $ 112,885,000 $ 40,018,448 $ 152,903,448 $ 126,195,000 $ 46,767,707 (1) Various purpose bonds limited to 20% of assessed valuation are those issued for public safety, streets, water, sewer, artificial light, open space, preserves, parks, playgrounds and recreational areas. Other general obligation bonds are limited to 6% of assessed valuation. The general obligation bonds are categorized as follows: Year of Issuance General Obligation Bond Original Issue Amount 1993R 1995 1996 1998A 1998B 2000 2003 2007 2007R Total $ 6% Limitation 20% Limitation 9,900,000 4,695,000 6,000,000 5,930,000 4,030,000 14,860,000 27,570,000 94,380,000 18,365,000 5,475,000 1,900,000 3,060,000 5,740,000 15,345,000 17,340,000 2,265,000 4,425,000 2,795,000 6,000,000 5,930,000 970,000 9,120,000 12,225,000 77,040,000 16,100,000 185,730,000 51,125,000 134,605,000 (continued) 134 $ 172,962,707 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2008 Fiscal Year Municipal Development Authority (2) Principal Interest Total Principal Highway User Revenue Interest Total Principal Exhibit 3 Special Assessment (3) Interest Total 2009 5,160,000 2,526,227 7,686,227 290,000 179,810 469,810 1,624,614 675,958 2,300,572 2010 5,410,000 2,700,219 8,110,219 305,000 163,295 468,295 1,855,493 577,351 2,432,844 2011 5,910,000 2,449,319 8,359,319 325,000 145,574 470,574 2,017,320 463,832 2,481,152 2012 3,575,000 2,257,469 5,832,469 340,000 126,702 466,702 1,695,000 339,995 2,034,995 2013 3,730,000 2,120,269 5,850,269 360,000 106,663 466,663 1,315,000 235,595 1,550,595 2014 3,870,000 1,963,944 5,833,944 385,000 85,244 470,244 325,000 149,600 474,600 2015 2,585,000 1,832,381 4,417,381 405,000 62,531 467,531 340,000 135,788 475,788 2016 2,695,000 1,714,306 4,409,306 430,000 38,525 468,525 355,000 121,338 476,338 2017 2,810,000 1,592,831 4,402,831 455,000 13,080 468,080 370,000 106,250 476,250 2018 2,935,000 1,467,681 4,402,681 - - - 390,000 90,525 480,525 2019 3,065,000 1,323,981 4,388,981 - - - 405,000 73,950 478,950 2020 3,205,000 1,173,931 4,378,931 - - - 425,000 56,738 481,738 2021 3,345,000 1,038,141 4,383,141 - - - 445,000 38,675 483,675 2022 3,490,000 892,486 4,382,486 - - - 465,000 19,763 484,763 2023 3,650,000 736,453 4,386,453 - - - - - - 2024 3,805,000 569,193 4,374,193 - - - - - - 2025 3,980,000 390,288 4,370,288 - - - - - - 2026 4,155,000 194,237 4,349,237 - - - - - - 2027 - - - - - - - - - 2028 - - - - - - - - - $ 67,375,000 $ 26,943,356 $ 94,318,356 $ 3,295,000 $ 921,424 $ 4,216,424 $ 12,027,427 (2) 2003 Municipal Development Authority Revenue Refunding Bonds are partially paid by the Enterprise Fund (business-type activity). (3) Includes Sunny Boy Water and Sewer Improvement District Bonds, North Beardsley Improvement District Bonds, North Valley Power Center Improvement District Bonds, Bell Road Improvement District Bonds, Arrowhead Fountains Improvement District Bonds, 83rd Avenue Improvement District Bonds, 75th Avenue and Paradise Lane Improvement District Bonds, NE corner of Northern & 99th Ave. (continued) 135 $ 3,085,358 $ 15,112,785 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2008 Fiscal Year Principal Water and Sewer Revenue Interest Total Community Facilities District (4) Principal Interest Total Principal Exhibit 3 Long-Term Loan Interest Total 2009 4,501,441 4,177,118 8,678,559 1,550,000 3,416,955 4,966,955 170,368 46,639 217,007 2010 8,165,518 5,404,239 13,569,757 2,170,000 3,329,455 5,499,455 177,094 39,913 217,007 2011 7,671,128 4,562,429 12,233,557 2,275,000 3,222,392 5,497,392 184,087 32,920 217,007 2012 7,938,955 4,287,644 12,226,599 2,385,000 3,108,336 5,493,336 191,355 25,652 217,007 2013 8,214,248 4,002,092 12,216,340 2,505,000 2,985,974 5,490,974 198,910 18,097 217,007 2014 8,502,259 3,705,301 12,207,560 2,630,000 2,854,633 5,484,633 206,763 10,244 217,007 2015 8,798,250 3,397,068 12,195,318 2,765,000 2,711,311 5,476,311 106,423 2,081 108,504 2016 9,112,495 3,077,075 12,189,570 2,920,000 2,555,713 5,475,713 - - - 2017 9,752,858 2,730,774 12,483,632 3,080,000 2,388,074 5,468,074 - - - 2018 10,114,954 2,356,858 12,471,812 3,255,000 2,207,674 5,462,674 - - - 2019 9,550,391 1,990,385 11,540,776 3,440,000 2,285,359 5,725,359 - - - 2020 8,496,176 1,660,124 10,156,300 3,635,000 1,810,671 5,445,671 - - - 2021 8,830,062 1,344,796 10,174,858 3,850,000 1,593,926 5,443,926 - - - 2022 6,165,947 1,083,509 7,249,456 4,070,000 1,362,718 5,432,718 - - - 2023 5,305,478 900,306 6,205,784 4,310,000 1,115,388 5,425,388 - - - 2024 5,327,272 734,949 6,062,221 4,565,000 862,431 5,427,431 - - - 2025 5,492,387 567,274 6,059,661 4,815,000 604,936 5,419,936 - - - 2026 5,662,621 394,399 6,057,020 5,080,000 357,175 5,437,175 - - - 2027 5,838,136 216,162 6,054,298 5,310,000 120,802 5,430,802 - - - 2028 4,031,919 62,842 4,094,761 - - - $147,472,495 46,655,344 194,127,839 64,610,000 $ 38,893,923 (4) Vistancia Community Facilities District bonds (continued) 136 $ 103,503,923 1,235,000 $ 175,546 $ 1,410,546 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2008 Fiscal Year DEBT SERVICE REQUIREMENTS GRAND TOTALS Principal Interest Total 2009 24,871,423 16,069,592 40,941,015 2010 24,463,105 16,856,942 41,320,047 2011 25,062,535 15,248,404 40,310,939 2012 22,655,310 14,246,410 36,901,720 2013 22,773,158 13,308,918 36,082,076 2014 22,639,022 12,347,163 34,986,185 2015 21,999,673 11,445,200 33,444,873 2016 22,502,495 10,531,188 33,033,683 2017 23,337,858 9,577,225 32,915,083 2018 23,304,954 8,577,804 31,882,758 2019 23,380,391 7,830,038 31,210,429 2020 22,486,176 6,570,260 29,056,436 2021 23,510,062 5,593,438 29,103,500 2022 20,345,947 4,652,215 24,998,162 2023 19,690,478 3,766,485 23,456,963 2024 18,652,272 2,924,861 21,577,133 2025 19,452,387 2,105,998 21,558,385 2026 20,282,621 1,278,311 21,560,932 2027 16,768,136 449,364 17,217,500 2028 4,031,919 62,842 4,094,761 422,209,922 163,442,658 585,652,580 (concluded) 137 CITY OF PEORIA, ARIZONA SCHEDULE OF CAPITAL ASSETS BY FUNCTION AND CLASSIFICATION JUNE 30, 2008 Governmental activities: Culture and Recreation Asset Type General Government Police Development Services Fire Highways and Streets Work in progress (WIP) $ 30,108,111 $ 5,975,689 $ 134,656 $ 500,770 $ - $ 63,287,549 Land $ 51,314,511 $ 26,851,994 $ 1,059,975 $ 1,048,451 $ - $ 207,762,291 Buildings and Improvements $ 33,380,371 $ 66,022,835 $ 19,700,112 $ 19,411,856 $ 119,479 $ - Furniture $ 198,822 $ 2,263,431 $ 198,509 $ 340,818 $ 131,806 $ 57,229 Equipment $ 2,354,398 $ 32,136,130 $ 6,726,232 $ 3,479,712 $ 142,781 $ 6,047,764 Vehicles $ 1,321,466 $ $ 4,905,927 $ 5,829,934 $ 386,965 $ 3,873,329 Storm Drain System $ 527,426 $ - $ - $ - $ - $ Street System $ 7,458,289 $ 20,819 $ - $ - $ - $ Park System $ 25,314,340 $ 260,431 $ - $ - $ - $ Sub-total $ 151,977,734 Less accumulated depreciation Total governmental activities capital assets, net (15,757,890) $ 136,219,844 1,573,110 $ 135,104,439 $ 32,725,411 (30,048,256) $ (10,656,552) $ 105,056,183 $ 22,068,859 Wastewater Utility Sanitation Utility 30,611,541 $ (7,577,923) $ 23,033,618 781,031 $ (491,416) $ 289,615 353,684,350 634,712,512 (124,937,513) $ 509,774,999 Business-type activities: Water Utility Work in progress (WIP) $ $ 30,015,462 14,287,029 3,878,001 - 6,703,349 410,350 25,278,729 1,642,283 7,659,795 10,799 25,781,679 3,276,922 38,371,478 126,603 29,004 8,013 9,613 173,233 Equipment 1,686,837 1,076,558 43,338 749,922 136,523 3,693,178 Vehicles 1,944,774 922,694 7,030,795 406,380 Buildings and Improvements Furniture Water System Wastewater System 244,287,111 - 292,830,380 - $ - $ - - Total 21,882,982 Land $ Housing Programs Stadium $ 51,898,444 - 10,304,643 - - - 244,287,111 - - - 292,830,380 Sub-total 285,857,619 336,411,894 7,092,945 33,641,330 3,833,408 666,837,196 Less accumulated depreciation (43,704,563) (43,401,627) (3,299,548) (9,992,086) (1,807,730) (102,205,554) Total business-type activities capital assets, net $ 242,153,056 $ 293,010,267 138 $ 3,793,397 $ 23,649,244 $ 2,025,678 $ 564,631,642 Exhibit 4 Public Works Human Services $ 15,147,703 $ $ 10,239,344 $ $ 454,256 $ $ 90,665 $ $ 115,154,478 $ 298,584,323 - $ 139,088,909 $ 5,592 $ 3,286,872 297,066 $ - $ 51,184,083 $ 1,224,436 $ $ 19,715,132 $ 56,878,478 $ - $ 57,405,904 $ 8,774 $ - $ 361,172,232 $ - $ - $ 25,574,771 $ 1,071,166,704 $ 84,340,722 $ (14,415,114) $ 69,925,608 - Total 307,757 599,965 913,314 (299,481) $ 613,833 (204,184,145) $ 866,982,559 139 CITY OF PEORIA, ARIZONA Exhibit 5 SCHEDULE OF CHANGES IN CAPITAL ASSETS BY FUNCTION GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Balances July 1, 2007 Additions and Transfers $ 139,117,519 $ 12,924,247 General Government 98,145,334 36,982,032 (22,927) 135,104,439 Police 31,827,556 1,179,246 (281,391) 32,725,411 Fire 29,711,960 1,108,418 (208,837) 30,611,541 (16,113) 781,031 Department Culture and Recreation Development Services Highways & Streets Public Works Human Services Sub-total governmental fixed assets 797,144 Deletions and Transfers $ - (64,032) Balances June 30, 2008 $ 151,977,734 578,764,099 56,009,400 (60,987) 634,712,512 74,839,993 9,871,430 (370,701) 84,340,722 (94,255) 913,314 $ (1,119,243) $ 1,071,166,704 1,007,569 $ 954,211,174 $ 118,074,773 Less accumulated depreciation Culture and Recreation (14,130,174) (1,673,304) 45,588 (15,757,890) General Government (27,439,591) (2,626,374) 17,709 (30,048,256) Police (9,049,071) (1,821,049) 213,568 (10,656,552) Fire (6,354,109) (1,432,395) 208,581 (7,577,923) (444,795) (62,734) 16,113 (491,416) (115,436,013) (9,561,444) 59,944 (124,937,513) (13,250,316) (1,406,956) 242,158 (14,415,114) (321,307) (72,323) 94,149 (299,481) Sub-total accumulated depreciation $ (186,425,376) $ (18,656,579) $ 897,810 $ (204,184,145) Total governmental activities capital assets, net $ 767,785,798 $ 99,418,194 $ (221,433) Development Services Highways & Streets Public Works Human Services 140 $ 866,982,559 Exhibit 6 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2008 Fund Out Governmental Funds: General Purpose Transfers In Transfers Out Half-Cent - public safety subsidies Half-Cent - economic development subsidy Half-Cent - office complex reserve Highway User - capital assets Non-major - Other Grants - Employee wellness subsidy Non-major - MDA Debt Service - debt payments Water Utility - capital assets Solid Waste Utility - capital assets Sports Complex - subsidies ISF - Motor Pool - equipment purchases ISF - Motor Pool - capital assets ISF - Self-Insurance - capital assets ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF - IT Fund - operating supplementals ISF - IT Fund - equipment reserve ISF - IT Fund - capital assets ISF- IT Fund - projects Fund Totals $ $ 4,908,990 597,522 1,000,000 8,250 60,753 619,616 96,594 5,000 630,863 791,929 8,719,517 10,000 173,152 1,703,880 691,598 135,909 213,593 37,556 1,458,500 4,424,188 Half-Cent Sales Tax General - public safety subsidies General - economic development subsidy General - office complex reserve Highway User - streets subsidy Non-major - Other Grants - Arts - capital assets Non-major - MDA Debt Service - debt payments Non-major - MDA Cap Proj - capital assets Stadium - debt service subsidy Stadium - operating subsidy ISF - IT Fund - radio project ISF - IT Fund - capital assets Fund Totals 827,382 220,506 1,047,888 4,908,990 597,522 1,000,000 1,000,000 3,111,345 437,491 1,750,000 214,000 254,183 13,273,531 Highway User General - capital assets Half-Cent - streets subsidy Transportation Sales Tax - subsidy Non-major - MDA Debt Service - debt payments ISF - Motor Pool - equipment purchases ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - operating supplementals ISF- IT Fund - projects ISF- IT Fund - capital assets ISF - IT Fund - equipment reserve Fund Totals 1,000,000 711,980 11,675 42,245 1,765,900 8,250 301,314 74,955 4,900 71,474 471 11,028 472,392 Development Fee Water Utility - capital assets ISF - Motor Pool - capital assets ISF- IT Fund - equipment reserve ISF- IT Fund - capital assets Fund Totals - 6,382 14,048 1,473 1,898 23,801 Transportation Sales Tax Streets - subsidy Transit - subsidy Water Utility - capital assets Fund Totals - 711,980 177,066 4,050 893,096 Special Assmt Debt Service Non-major - ID Bonds Capital Projects - capitalized interest GO Bond Capital Projects ISF - IT Fund - capital assets (continued) 141 217,574 - 7,387,546 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2008 Fund Out Other Governmental Public Transit Purpose Transfers In Transportation Sales Tax - subsidy ISF - Motor Pool - equipment purchases ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - projects sub-total Other Grants General - Employee Wellness subsidy Half-Cent - capital assets ISF - Motor Pool - capital assets ISF - IT Fund - capital assets sub-total Storm Drainage ISF - Motor Pool - equipment purchases ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - operating supplementals ISF- IT Fund - equipment reserve ISF- IT Fund - projects sub-total MDA Debt Service General - debt service Half-Cent - debt service Highway User - debt service Non-major - MDA Cap Projects - debt service Non-major - MDA Cap Projects - capital assets Water Utility - debt service Wastewater Utility - debt service Solid Waste Utility - debt service Stadium - debt service ISF - Motor Pool - debt service sub-total CFD Bonds-Debt Service CFD Capital Projects - debt transfers CFD Bonds-Capital Projects Other Govtl - CFD Debt Services - debt transfers Water Utility - capital assets Wastewater Utility - capital assets sub-total MDA Bonds-Capital Projects Half-Cent - capital assets MDA Debt Service - debt service MDA Debt Service - capital assets sub-total ID Bonds-Capital Projects Exhibit 6 ID Bonds - Debt Service -capitalized interest Fund Totals Total Governmental Funds (continued) 142 Transfers Out 177,066 431 5,044 182,541 18,000 5,012 23,012 10,000 10,000 827,382 366,114 16,141 1,209,637 2,525 1,892 4,417 410,000 1,400 18,600 1,879 431,879 173,152 3,111,345 301,314 586 174,037 129,489 14,824 280,078 95,918 4,280,743 5,180 5,180 192,955 - 192,955 82,702 7,176,459 7,452,116 5,180 5,180 220,506 586 221,092 - 217,574 4,675,836 9,560,490 16,426,715 36,035,044 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2008 Fund Out Enterprise Funds: Water Utility Wastewater Utility Purpose Exhibit 6 Transfers In General - capital assets Development Fee - capital assets Transportation Sales Tax - capital assets Non-major - MDA Debt Service - debt service Non-major - CFD Bonds Capital Projects - capital assets Wastewater Utility - capital assets ISF - Motor Pool - capital assets ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - operating supplementals ISF- IT Fund - projects ISF- IT Fund - computer equipment purchases ISF- IT Fund - capital assets Fund Totals Transfers Out 6,382 4,050 82,702 52,968 731 26,507 110,971 284,311 60,753 174,037 17,035,992 29,800 164,261 19,900 14,543 17,499,286 7,176,459 CFD Bonds Capital Projects - capital assets Non-major - MDA Debt Service - debt service Water Utility - capital assets ISF - Motor Pool - capital assets ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - projects ISF - IT Fund - capital assets Fund Totals 17,035,992 731 15,159 18,915 24,247,256 129,489 52,968 18,794 62,617 263,868 Solid Waste Utility General - capital assets Non-major - MDA Debt Service - debt service ISF - Motor Pool - capital assets ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - projects ISF- IT Fund - equipment reserve ISF - IT Fund - capital assets Fund Totals 15,588 1,139 10,088 9,251 36,066 619,616 14,824 4,685 10,023 20,421 12,419 681,988 Stadium General - operating subsidies Half-Cent - operating subsidy Half-Cent - debt service subsidy Non-major - MDA Debt Service - debt service ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - projects ISF- IT Fund - equipment reserves ISF - IT Fund - capital assets Fund Totals 1,703,880 1,750,000 437,491 100,731 6,936 3,999,038 280,078 6,891 4,880 50,418 342,267 Public Housing Other Govtl - Section 8 Housing - capital assets Total Enterprise Funds 28,566,671 (continued) 143 18,787,409 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2008 Fund Out Internal Service Funds Motor Pool Purpose Exhibit 6 Transfers In General Fund - equipment purchases General Fund - capital assets Highway User - equipment purchases Development Fees - capital assets Non-major - Transit - equipment purchases Non-major - Other Grants - capital assets Non-major - Storm Drainage - equipment purchases Non-major - MDA Debt Service - debt service Water Utility - capital assets Wastewater Utility - capital assets Solid Waste Utility - capital assets ISF - Facilities - return overage to operating funds ISF- IT Fund - return overage to operating funds ISF- IT Fund - projects ISF- IT Fund - equipment purchases Fund Totals 691,598 74,955 14,048 18,000 366,114 410,000 4,685 29,720 11,980 65,010 1,686,110 Transfers Out 96,594 95,918 731 731 15,588 11,903 221,465 Self-Insurance General - capital assets ISF- IT Fund - capital assets ISF- IT Fund - projects Fund Totals - 5,000 6,076 3,759 14,835 Facilities Maintenance General - return Facilities overage Highway User- return Facilities overage Non-major - Transit - return Facilities overage Non-major - Storm Drainage - return Facilities overage Water Utility - return Facilities overage Wastewater Utility - return Facilities overage Solid Waste - return Facilities overage Sports Complex - return Facilities overage ISF - Motor Pool - return Facilities overage ISF- IT Fund - projects ISF- IT Fund - computer equipment purchases ISF - IT Fund - capital assets Fund Totals - 630,863 11,675 431 2,525 26,507 15,159 1,139 100,731 29,720 29,444 848,194 Information Technology General - operating supplementals General - equipment reserve General - capital assets General - IT projects General - return overage to operating funds Half-Cent -radio project Half-Cent - capital assets Highway User - return overage to operating funds Highway User - operating supplementals Highway User - computer projects Highway User - capital assets Highway User - equipment reserve Development Fees - equipment reserve Development Fees - capital assets GO Bond Capital Projects - capital assets Nonmajor -Transit - computer projects Non-major - Transit - return overage to operating funds Non-major - Other Grants - capital assets Non-major -Storm Drainage - operating supplementals Non-major -Storm Drainage - equipment reserve Non-major -Storm Drainage - projects Non-major - Storm Drainage - return overage to operating funds Water Utility - return overage to operating funds Water Utility - computer projects (continued) 144 135,909 213,593 37,556 1,458,500 214,000 254,183 4,900 71,474 471 11,028 1,473 1,898 7,387,546 5,012 16,141 1,400 18,600 1,879 164,261 791,929 42,245 5,044 1,892 110,971 - CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2008 Fund Out Purpose Internal Service Funds (continued) Information Technology (cont) Water Utility - operating supplementals Water Utility - computer equipment purchases Water Utility - capital assets Wastewater Utility - return overage to operating funds Wastewater Utility - computer projects Wastewater Utility - capital assets Solid Waste Utility - return overage to operating funds Solid Waste Utility - computer projects Solid waste Utility - equipment reserve Solid Waste Utility - capital assets Stadium - return overage to operating funds Stadium - computer projects Stadium - equipment reserve Stadium - capital assets ISF - Motor Pool - return overage to operating funds ISF - Motor Pool - equipment purchases ISF - Motor Pool - capital assets ISF - Self-Insurance - capital assets ISF - Self-Insurance - projects ISF - Facilities - computer projects Fund Totals Exhibit 6 Transfers In Transfers Out 29,800 19,900 14,543 18,794 62,617 10,023 20,421 12,419 6,891 4,880 50,418 11,903 6,076 3,759 29,444 10,301,712 18,915 10,088 9,251 6,936 11,980 65,010 1,074,261 Total Internal Service Funds 11,987,822 2,158,755 Grand Totals 56,981,208 56,981,208 (concluded) 145 Statistical Section The Statistical Section presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplemental information says about the government’s overall financial health. Statistical information is different from financial statements in that the statistics usually cover more than one fiscal year and may present non-accounting information. The following tables present financial trends, information about the fiscal capacity of the government, and social and economic information, as necessary for complete disclosure and understanding of the City’s financial activity. The information presented in these tables is not required for fair presentation in conformity with accounting principles generally accepted in the United States of America and is therefore not covered by the auditor’s opinion. Contents Page Financial Trends 149 These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity 159 These schedules contain information to help the reader assess the City’s most significant local revenue sources - sales and use taxes, property taxes and utility user fees. Debt Capacity 171 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. Economic and Demographic Information 182 These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information 184 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. 147 Statistical Section Financial presentations included in the Statistical Section provide data on the financial, physical and economic characteristics of the City. These tables cover multiple fiscal years and provide users with a broader and more complete understanding of the City and its financial affairs. Table Page Financial Trends I Net Assets By Component II Changes in Net Assets III Program Revenues IV Fund Balances, Governmental Funds V Changes in Fund Balances, Governmental Funds VI Government-Wide Revenues By Function VII Tax Revenues By Source, Governmental Funds VIII Intergovernmental Revenues By Source, Governmental Funds IX Development/Expansion Fees By Type 149 150 151 152 154 155 156 157 158 Revenue Capacity X City Transaction Privilege Taxes By Category XI Direct and Overlapping Sales Tax Rates XII Sales Tax Payers - By Category XIII Secondary Assessed Value and Full Cash Value of Taxable Property XIV Direct and Overlapping Property Tax Rates XV Direct and Overlapping Property Tax Levies XVI Principal Property Tax Payers XVII Property Tax Levies and Collections XVIII Utility Statistical Data 159 160 161 162 163 164 165 166 167 Debt Capacity XIX Outstanding Debt By Type XX Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita XXI Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XXII Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XXIII Legal Debt Margin XXIV Pledged Revenue Coverage - Municipal Development Authority Bonds – Governmental Portion XXV Pledged Revenue Coverage – Revenue Bonds XXVI Pledged Revenue Coverage - Special Assessment Bonds XXVII Special Assessment Collections XXVIII Ratio of Annual Debt Service Expenditures for Governmental Debt to Total Governmental Expenditures and Revenues XXIX Bond Authorizations – Issued and Unissued 171 172 173 174 175 176 177 179 179 180 181 Economic and Demographic Information XXX Demographic and Economic Statistics XXXI Major Employers Within the City 182 181 Operating Information XXXII Authorized Full-time Equivalent City Government Employees By Function XXXIII Building Permits and Home Sales XXXIV Schedule of Insurance in Force XXXV Property Insurance Schedule XXXVI Operating Indicators By Function/Program XXXVII Capital Asset Statistics By Function/Program 184 185 186 187 188 189 148 Table I CITY OF PEORIA, ARIZONA NET ASSETS BY COMPONENT LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year 2001 2002 Governmental Activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ 195,963,096 29,693,525 75,707,921 $ 301,364,542 $ Business-type Activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 115,133,709 53,395,184 60,155,500 $ 228,684,393 $ Primary Government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 311,096,805 83,088,709 135,863,421 $ 530,048,935 $ $ $ $ 2003 2004 230,785,628 44,743,192 75,812,410 351,341,230 $ 275,314,371 23,123,757 191,628,459 $ 490,066,587 $ 396,789,364 22,011,167 108,663,727 $ 527,464,258 158,071,050 54,505,333 60,944,374 273,520,757 $ 186,811,252 63,628,468 57,594,489 $ 308,034,209 $ 216,306,907 73,597,149 58,112,123 $ 348,016,179 388,856,678 99,248,525 136,756,784 624,861,987 $ 462,125,623 86,752,225 249,222,948 $ 798,100,796 $ 613,096,271 95,608,316 166,775,850 $ 875,480,437 Note: The City implemented GASB 34 for the fiscal year ended June 30, 2001. Prior financial statements have not been restated to provide this information. Source: Statement of Net Assets City financial records and reports 149 2005 $ $ $ $ $ $ 412,711,011 35,660,531 118,007,870 566,379,412 273,024,663 83,015,115 55,874,702 411,914,480 685,735,674 118,675,646 173,882,572 978,293,892 2006 $ $ $ $ $ 523,429,904 41,483,246 131,307,050 696,220,200 311,724,201 79,329,431 53,032,272 444,085,904 835,154,105 120,812,677 184,339,322 $ 1,140,306,104 2007 $ $ $ $ $ 591,763,494 40,822,727 173,833,813 806,420,034 369,615,117 32,749,544 68,959,683 471,324,344 961,378,611 73,572,271 242,793,496 $ 1,277,744,378 2008 $ $ $ $ 602,715,532 65,528,725 220,374,709 888,618,966 427,331,359 32,967,702 41,967,371 502,266,432 $ 1,030,046,891 98,496,427 262,342,080 $ 1,390,885,398 CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) Table II Fiscal Year 2001 Expenses Governmental Activities General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Interest on long-term debt Unallocated Deprecation Total governmental activities expenses Business-type Activities Water Utility Wastewater Utility Solid Waste Utility Stadium Housing Total business-type activities expenses Total primary government expenses Program Revenues Governmental Activities Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense)/Revenue Governmental Activities Business-type Activities Total primary government net expense $ $ $ $ $ $ $ $ $ $ $ $ 10,658,604 9,962,666 13,334,357 8,500,589 3,534,282 13,830,180 2,518,683 1,582,952 5,635,399 1,541,927 71,099,639 14,222,685 9,237,170 6,564,782 5,378,906 281,411 35,684,954 106,784,593 10,644,978 8,513,857 20,456,182 39,615,017 2002 $ $ 12,518,899 11,926,736 15,018,206 9,155,641 3,447,617 14,507,609 3,630,838 1,597,081 5,542,309 604,962 77,949,898 $ 2003 $ $ 18,106,642 10,880,229 6,896,802 5,673,177 345,064 $ 41,901,914 $ 119,851,812 $ $ $ $ $ 10,374,005 9,707,432 33,856,277 53,937,714 38,657,721 113,892 14,815,684 53,587,297 93,202,314 $ 41,520,765 125,136 19,692,785 $ 61,338,686 $ 115,276,400 (31,484,622) 17,902,343 (13,582,279) $ (24,012,184) 19,436,772 $ (4,575,412) $ $ $ $ $ $ $ 14,008,647 12,488,931 18,400,046 10,361,499 4,178,383 16,423,295 4,647,879 2,551,175 6,186,918 587,006 89,833,779 18,886,650 12,274,198 7,787,634 3,916,869 347,606 43,212,957 133,046,736 12,278,699 10,818,544 19,620,729 42,717,972 2004 $ $ 16,794,131 13,580,663 19,519,868 11,025,133 4,280,766 16,554,235 4,460,277 1,665,219 6,884,380 582,180 95,346,852 $ 2005 $ $ 21,344,055 11,049,354 7,798,343 4,341,127 357,785 $ 44,890,664 $ 140,237,516 $ $ $ $ $ 14,305,895 10,450,539 27,215,210 51,971,644 $ 44,627,823 120,070 27,526,484 72,274,377 114,992,349 47,136,002 129,308 34,853,722 $ 82,119,032 $ 134,090,676 $ $ (47,115,807) 29,061,420 (18,054,387) $ $ Continued 150 $ $ $ (43,375,208) 37,228,368 (6,146,840) $ $ 18,810,419 15,135,836 21,844,025 12,731,478 4,557,154 21,839,566 5,187,303 1,869,601 6,017,664 576,719 108,569,765 23,815,912 12,469,667 8,462,126 4,623,886 344,030 49,715,621 158,285,386 21,078,973 10,836,600 37,599,732 69,515,305 47,962,423 136,736 48,121,049 96,220,208 165,735,513 (39,054,460) 46,504,587 7,450,127 2006 $ $ $ $ $ $ $ $ $ $ $ $ 21,608,973 16,304,875 25,725,922 14,184,353 4,882,448 18,713,722 5,791,128 2,054,042 7,223,963 575,334 117,064,760 25,859,997 12,782,965 8,688,437 5,442,993 369,052 53,143,444 170,208,204 22,666,481 12,117,734 103,368,209 138,152,424 53,196,965 137,532 14,097,716 67,432,213 205,584,637 21,087,664 14,288,769 35,376,433 2007 $ $ $ $ $ $ $ $ $ $ $ $ 24,469,279 17,947,721 28,548,401 17,401,924 5,605,618 23,031,544 6,288,446 2,316,358 8,065,449 575,334 134,250,074 27,058,901 14,523,268 9,458,194 5,448,667 371,540 56,860,570 191,110,644 2008 $ $ $ $ $ 23,226,773 13,954,308 59,793,946 96,975,027 $ 61,918,282 135,174 18,219,423 80,272,879 177,247,906 $ (37,275,047) 23,412,309 (13,862,738) $ $ $ $ $ 17,077,115 21,834,144 34,513,465 19,914,716 6,542,413 22,909,823 7,782,967 2,887,625 11,168,041 574,942 145,205,251 28,677,086 17,324,471 13,250,526 6,921,044 382,067 66,555,194 211,760,445 25,523,896 14,382,484 41,598,499 81,504,879 61,936,451 145,841 22,321,213 84,403,505 165,908,384 (63,700,372) 17,848,311 (45,852,061) CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) Table II Fiscal Year 2001 General Revenues and Other Changes in Net Assets Governmental Activities Taxes Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes State shared sales taxes - unrestricted Urban revenue sharing - unrestricted Auto in-lieu taxes - unrestricted Investment Earnings Gain on sale of capital assets Elimination of development agreement debt Miscellaneous Transfers in (out) Total governmental activities Business-type Activities Investment Earnings Gain on sale of capital assets Elimination of Municipal Sports Authority Bonds Transfers in (out) Total business-type activities Total primary government Change in Net Assets Governmental Activities Prior Period Adjustment Business-type Activities Total primary government $ $ $ $ $ $ $ 2,011,880 6,878,678 33,621,787 2,022,335 6,971,235 8,891,990 3,054,248 7,677,637 59,397 171,852 (1,463,203) 69,897,836 7,108,181 163,574 1,463,203 8,734,958 78,632,794 38,413,214 26,637,301 65,050,515 2002 $ $ $ $ $ $ $ 2,261,947 8,156,576 33,711,972 2,327,874 8,350,576 11,321,449 3,575,255 5,395,083 36,313 414,835 (1,563,008) 73,988,872 5,357,578 104,006 18,375,000 1,563,008 25,399,592 99,388,464 49,976,688 44,836,364 94,813,052 2003 $ $ $ $ $ $ $ 2,697,682 8,681,164 35,932,415 2,291,179 8,474,910 11,386,513 4,268,379 2,950,753 91,970 135,068 1,034,025 (2,755,444) 75,188,614 2,379,114 317,474 2,755,444 5,452,032 80,640,646 28,072,807 110,652,550 34,513,452 173,238,809 2004 $ $ $ $ $ $ $ 2,724,739 9,940,516 40,579,522 2,495,803 9,116,684 9,786,943 4,390,706 1,698,168 160,917 839,099 443,892 (1,404,110) 80,772,879 1,349,492 1,404,110 2,753,602 83,526,481 37,397,671 39,981,970 77,379,641 Note: The City implemented GASB 34 for the fiscal year ended June 30, 2001. Prior financial statements have not been restated to provide this information. Source: Statement of Activities City financial records and reports (concluded) 151 2005 $ $ $ $ $ $ $ 2,926,017 11,240,627 45,535,559 2,498,995 10,038,874 10,076,455 4,639,457 2,930,923 148,518 2,480,978 (14,546,789) 77,969,614 2,846,925 14,546,789 17,393,714 95,363,328 38,915,154 63,898,301 102,813,455 2006 $ $ $ $ $ $ $ 3,274,982 12,930,561 61,156,870 3,004,895 11,681,284 11,707,782 5,251,577 6,723,061 81,122 17,279 5,584,218 (12,660,507) 108,753,124 5,222,148 12,660,507 17,882,655 126,635,779 129,840,788 32,171,424 162,012,212 2007 $ $ $ $ $ $ $ 3,722,092 14,392,472 68,873,970 3,983,701 13,130,116 15,996,992 5,725,299 12,100,831 60,785 23,941 7,439,193 2,025,489 147,474,881 5,851,620 (2,025,489) 3,826,131 151,301,012 110,199,834 27,238,440 137,438,274 2008 $ $ $ $ $ $ $ 3,728,615 22,569,309 68,466,910 3,848,746 12,695,890 19,539,768 5,546,558 13,328,215 40,953 2,358,431 3,555,171 (9,779,262) 145,899,304 3,314,515 9,779,262 13,093,777 158,993,081 82,198,932 30,942,088 113,141,020 Table III CITY OF PEORIA, ARIZONA PROGRAM REVENUES LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year 2001 Program Revenues Governmental Activities Charges for services General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Water Utility Wastewater Utility Solid Waste Utility Stadium Housing Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Note: $ $ $ $ $ 2002 1,147,361 3,156,382 179,253 244,605 3,915,408 603,174 930,258 468,537 8,513,857 20,456,182 39,615,017 $ 19,706,869 9,605,153 6,799,753 2,406,658 139,288 113,892 14,815,684 53,587,297 93,202,314 $ 2003 1,261,983 3,579,918 173,678 216,299 3,380,947 247,162 1,454,693 59,325 9,707,432 33,856,277 53,937,714 $ 22,230,008 9,606,324 7,036,110 2,494,194 154,129 125,136 19,692,785 $ 61,338,686 $ 115,276,400 $ $ 2004 1,468,973 4,156,225 231,147 839,434 3,816,666 142,242 1,578,903 45,109 10,818,544 19,620,729 42,717,972 $ 24,364,355 10,623,544 7,277,520 2,225,211 137,193 120,070 27,526,484 $ 72,274,377 $ 114,992,349 $ $ 1,576,952 4,278,605 603,702 730,868 4,121,816 176,195 2,709,759 107,998 10,450,539 27,215,210 51,971,644 $ 25,175,285 10,971,239 7,728,124 3,133,022 128,332 129,308 34,853,722 $ 82,119,032 $ 134,090,676 $ $ The City implemented GASB 34 for the fiscal year ended June 30, 2001. Prior financial statements have not been restated to provide this information. Source: Statement of Activities City financial records and reports 152 2005 2006 2007 3,122,641 5,117,914 1,123,337 1,557,835 5,840,631 205,291 3,987,875 123,449 10,836,600 37,599,732 69,515,305 $ 3,346,730 5,793,176 828,053 1,844,083 5,660,591 104,654 4,950,541 138,653 12,117,734 103,368,209 $ 138,152,424 $ 24,932,796 11,608,902 8,330,792 2,961,792 128,141 136,736 48,121,049 $ 96,220,208 $ 165,735,513 $ $ $ 28,240,253 12,227,879 9,715,409 2,859,794 153,630 137,532 14,097,716 $ 67,432,213 $ 205,584,637 $ 2,747,370 6,927,760 1,283,559 1,737,666 4,614,166 433,400 5,318,686 164,166 13,954,308 59,793,946 96,975,027 33,511,407 14,907,360 10,395,273 2,953,365 150,877 135,174 18,219,423 $ 80,272,879 $ 177,247,906 2008 $ $ $ $ $ 2,293,928 8,111,802 790,269 1,717,319 3,526,784 345,417 8,607,833 130,544 14,382,484 41,598,499 81,504,879 31,866,685 15,423,188 11,216,061 3,279,780 150,737 145,841 22,321,213 84,403,505 165,908,384 CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 2000 1999 General Fund Reserved Unreserved Total General Fund $ $ General Fund as % of current year revenues (1) Reserved Unreserved Total General Fund General Fund as % of current year expenditures (2) Reserved Unreserved Total General Fund All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Total All Other Governmental Funds 11,069,242 38,464,822 49,534,064 $ $ 10,649,066 54,391,303 65,040,369 2001 $ $ 231,842 53,437,142 53,668,984 Fiscal Year 2003 2002 $ $ 366,670 43,946,135 44,312,805 Table IV $ $ 730,494 41,955,367 42,685,861 $ $ 2004 3,061,807 43,989,346 47,051,153 2005 $ 150,764 52,553,522 $ 52,704,286 2006 $ 948,135 65,224,766 $ 66,172,901 2007 $ 216,652 74,842,586 $ 75,059,238 2008 $ 264,489 77,741,727 $ 78,006,216 17.8% 62.0% 79.8% 15.1% 77.1% 92.2% 0.4% 92.6% 93.0% 0.6% 70.7% 71.3% 1.1% 64.4% 65.5% 4.4% 62.6% 67.0% 0.2% 64.2% 64.4% 1.0% 67.6% 68.6% 0.2% 70.9% 71.1% 0.2% 71.1% 71.3% 25.1% 87.3% 112.5% 21.8% 111.1% 132.9% 0.5% 112.4% 112.9% 0.6% 75.2% 75.8% 1.2% 70.8% 72.0% 4.7% 67.3% 72.0% 0.2% 68.2% 68.4% 1.1% 76.4% 77.5% 0.2% 72.0% 72.2% 0.2% 70.2% 70.4% $ 14,236,043 $ 4,333,086 6,280,936 24,850,065 $ 14,551,664 $ 4,933,778 13,581,014 33,066,456 $ 36,599,179 $ 21,657,090 (3,157,315) 55,098,954 $ 40,007,493 $ $ 19,750,001 13,613,176 73,370,670 20,546,432 9,533,035 $ 121,555,278 (1) Revenues are operating revenues. Does not include Other Financing Sources. (2) Expenditures are operating expenditures. Does not include Other Financing Uses. Note: Prior to fiscal year 2001, the General Fund included the Half-Cent Sales Tax Fund and Development Fee Funds. The entire fund balance of the Development Fee Fund and portions of the Half Cent Sales Tax Fund were classified as "Reserved." With the implementation of GASB Statement #34, these other funds became special revenue funds, separate from the General Fund. Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 153 91,475,811 $ 60,276,977 $ 82,831,364 $ 84,931,450 $ 154,966,318 $ 143,600,643 $ 21,662,579 8,300,215 90,239,771 25,365,373 (4,566,517) $ 103,630,220 41,501,121 (21,988,077) $ 104,444,494 49,251,757 18,917,375 $ 223,135,450 62,170,663 23,589,696 $ 229,361,002 Table V CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2000 1999 Revenues Taxes Intergovernmental Charges for services Licenses and Permits Fines and Forfeitures Rents Investment Earnings Special assessments Miscellaneous Total Revenues Expenditures General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Other Capital Outlay Debt Service Interest Principal Total Expenditures Excess of Revenues over (under) Expenditures $ $ $ 33,085,735 24,357,944 12,537,838 3,406,197 838,607 146,021 3,518,012 2,026,300 957,553 80,874,207 13,333,772 8,818,465 15,751,383 4,042,788 4,548,800 16,814 14,333,847 $ 5,093,165 6,846,203 72,785,237 $ $ $ $ 38,420,066 27,039,716 13,972,714 4,416,214 796,459 160,742 4,074,836 1,559,116 1,589,749 92,029,612 14,915,711 9,449,959 17,441,886 4,348,716 5,959,910 8,225 16,673,212 $ 4,908,180 7,359,490 81,065,289 8,088,970 $ $ Other Financing Sources (Uses) Proceeds from borrowing Proceeds from refunding Proceeds from sale of general fixed assets Payments to bond refunding escrow agent Premium on bonds issued Transfers In Transfers Out Total Other Financing Sources (Uses) $ 5,930,000 4,030,000 1,697,720 (4,030,000) 3,720,651 (8,699,061) 2,649,310 Net Change in Fund Balance $ 10,738,280 Debt Service as a percentage of noncapital expenditures $ 20.4% 2001 $ $ $ 44,534,680 32,083,433 12,384,749 2,847,785 1,159,057 30,217 6,797,894 2,028,389 1,167,055 103,033,259 10,201,573 9,080,373 12,599,894 8,197,640 3,412,057 6,704,977 1,780,346 1,474,413 4,518 22,993,500 2002 $ $ $ 2003 46,097,098 35,187,028 13,497,278 2,771,677 1,080,542 58,606 4,765,132 2,225,642 3,610,289 109,293,292 $ 49,675,987 37,076,594 14,719,159 3,022,495 1,093,438 70,952 2,669,885 3,142,875 1,089,570 $ 112,560,955 $ 13,465,303 10,964,291 14,727,025 9,012,316 3,420,333 7,752,287 2,571,543 1,537,183 8,025 20,817,224 $ $ 6,918,514 10,612,697 $ 111,779,079 $ 5,737,720 9,663,293 91,850,304 $ 5,352,468 9,578,372 99,206,370 10,964,323 $ 11,182,955 $ 10,086,922 $ $ $ 3,159,195 28,513,754 (32,844,334) (1,171,385) $ $ 5,506,348 (8,466,414) (2,960,066) $ $ 14,885,028 1,328,591 4,566,726 (8,023,647) 12,756,698 $ 23,721,021 $ 8,222,889 $ 8,915,537 19.1% 2004 22.4% 19.0% 13,094,326 11,339,011 17,462,775 9,633,471 4,095,448 8,740,707 3,217,245 2,452,063 3,707 24,209,115 781,876 $ 2005 55,774,213 34,841,183 18,430,649 3,597,522 1,086,327 89,829 1,467,703 2,598,445 3,293,560 121,179,431 15,386,608 12,395,888 18,663,675 10,440,007 4,253,710 8,825,795 3,107,787 1,590,605 16,823 52,502,380 $ $ (22,041,409) $ $ $ $ $ $ (26,950,215) 17.7% Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports Notes: When the City implemented GASB 34 in FY01, certain functions were realligned on the financial statements. Prior financial statements have not been restated. Prior to FY2001, Fire and Police were combined into Public Safety. The combined expenditures are shown on this schedule as Police. Prior to FY2001, Human Services was combined into Community Services. Prior to FY2001, Public Works was combined into Development Services. 154 $ $ 164,548 6,193,157 (11,266,511) (4,908,806) 20.0% $ 6,299,626 9,737,936 143,220,840 49,213,258 24,613,603 (22,255,141) 15,978,782 (21,772,434) $ 45,778,068 46,559,944 $ 62,170,531 36,747,293 30,768,591 5,041,680 1,823,626 174,837 2,652,530 2,252,142 2,560,291 144,191,521 18,144,444 13,935,373 20,915,014 12,206,093 4,575,963 13,930,314 3,993,427 1,768,107 3,849 33,148,181 7,046,576 15,304,972 144,972,313 2006 $ $ $ 2007 80,238,340 41,899,532 34,863,016 4,807,840 2,112,799 228,492 6,050,060 2,262,770 5,562,231 178,025,080 19,767,909 15,300,068 24,715,113 13,422,870 4,986,442 10,333,402 4,640,211 1,991,939 539 34,944,336 $ $ $ 2008 90,780,140 64,283,444 39,290,401 3,878,132 2,203,756 249,069 10,942,001 1,971,991 6,992,363 220,591,297 $ 98,358,262 52,612,549 37,609,937 3,020,436 2,666,731 358,215 12,125,018 1,803,344 7,882,947 $ 216,437,439 22,833,440 17,013,511 28,163,474 16,522,036 5,526,599 14,679,124 5,010,116 2,291,469 45,912 76,919,805 $ 14,544,047 21,769,313 33,340,756 19,120,991 6,669,979 14,632,287 6,408,150 2,817,716 74,142,416 10,340,704 31,143,531 $ 234,929,890 $ 6,747,072 16,881,632 153,731,533 $ 8,099,492 16,178,431 213,283,409 (780,792) $ 24,293,547 $ 7,307,888 $ $ 6,722,550 20,559 10,116,361 (26,870,128) (10,010,658) $ $ 23,809,728 75,552 11,766,397 (15,827,303) 19,824,374 $ 19,043,582 $ 14,282,889 20.0% 19.9% $ (18,492,451) $ 122,090,000 18,365,000 (18,365,000) 1,502,204 17,798,434 (21,121,233) 120,269,405 $ 47,000,000 273,310 16,426,715 (36,035,044) $ 27,664,981 $ 127,577,293 $ 17.8% 9,172,530 25.8% Table VI CITY OF PEORIA, ARIZONA GOVERNMENT-WIDE REVENUES BY FUNCTION LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year 2001 Governmental Activities: General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Unallocated General Revenues Total Governmental Activities 4,197,681 7,491,034 1,357,792 542,501 4,814,347 18,522,808 930,258 1,758,596 71,361,039 $ 110,976,056 $ Business-type Activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Housing Unallocated General Revenues Total Business-type Activities $ 24,529,708 16,351,098 7,670,435 4,782,876 253,180 7,271,755 $ 60,859,052 $ Total Primary Government $ 171,835,108 Notes: $ 2002 2003 2004 2005 2006 6,195,112 7,036,365 1,023,801 588,650 4,034,695 31,816,700 1,558,305 1,684,086 75,551,880 129,489,594 $ 3,475,738 7,017,008 1,147,435 1,375,502 4,735,581 19,439,898 3,063,471 2,463,339 77,944,058 $ 120,662,030 $ 3,842,493 8,427,932 1,697,650 1,553,178 4,756,969 24,079,992 5,887,194 1,726,236 82,176,989 $ 134,148,633 $ 5,155,229 11,784,749 2,579,817 3,075,988 6,545,647 34,210,694 4,161,349 2,001,832 92,516,403 $ 162,031,708 $ $ 36,926,991 24,833,732 8,031,180 2,225,211 257,263 2,696,588 74,970,965 $ 45,639,906 24,595,006 8,493,458 3,133,022 257,640 1,349,492 $ 83,468,524 $ $ 49,238,279 34,300,518 9,454,742 2,961,792 264,877 2,846,925 99,067,133 $ $ 32,751,517 17,500,110 7,633,584 3,174,210 279,265 23,836,584 85,175,270 $ 214,664,864 $ 195,632,995 $ 217,617,157 $ 261,098,841 $ $ The City implemented GASB 34 for the fiscal year ended June 30, 2001. Prior statements have not been restated to comply with the new requirements. Unallocated General Revenues do not include transfers between governmental activities and business-type activities. Source: Statement of Activities. City financial records and reports 155 2007 $ 3,872,997 12,673,351 3,468,250 3,202,518 4,148,578 42,357,347 8,929,561 2,852,277 155,678,566 237,183,445 $ 44,900,179 21,116,119 11,017,165 2,953,365 286,051 5,851,620 86,124,499 $ 44,368,035 24,784,247 11,674,865 3,279,780 296,578 3,314,515 87,718,020 $ 328,548,918 $ 324,901,465 5,471,741 14,003,877 3,128,006 3,729,960 6,459,264 98,404,102 4,950,541 2,004,933 121,413,631 259,566,055 $ $ $ 36,888,294 16,668,034 10,732,529 2,859,794 283,562 5,222,148 72,654,361 $ 332,220,416 $ 2008 $ 5,099,910 12,243,385 5,271,968 4,098,537 5,437,544 57,310,910 5,418,686 2,094,087 145,449,392 242,424,419 CITY OF PEORIA, ARIZONA Table VII TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year Transaction Taxes (1) Franchise Taxes Property Taxes Primary Taxes Secondary Taxes Special District* Taxes In Lieu Taxes Total Property Taxes Total Taxes (1) $ 1999 24,999,105 1,446,562 $ 1,196,827 4,947,844 205,678 289,719 6,640,068 $ 33,085,735 $ 2000 29,172,894 1,720,818 $ 2001 33,621,787 2,022,335 2002 33,711,972 2,327,874 $ 1,638,719 7,713,406 512,196 192,931 10,057,252 $ 46,097,098 $ 1,357,963 5,709,744 183,425 275,222 7,526,354 $ 1,580,367 6,689,726 384,380 236,085 8,890,558 $ 38,420,066 $ 44,534,680 $ 2003 35,932,415 2,291,179 $ 2004 40,579,522 2,495,803 2005 $ 45,535,559 2,498,995 2006 $ 61,156,870 3,004,895 2007 $ 68,873,970 3,983,701 2008 $ 68,466,910 3,848,746 2,285,792 10,688,571 868,197 293,417 $ 14,135,977 2,612,397 12,393,713 796,821 273,644 $ 16,076,575 2,896,360 13,211,927 1,571,936 242,246 $ 17,922,469 2,975,900 19,176,935 3,633,664 256,107 $ 26,042,606 $ 62,170,531 $ 80,238,340 $ 90,780,140 $ 98,358,262 $ 1,838,829 8,603,538 834,891 175,135 11,452,393 $ 2,077,178 9,749,392 619,973 252,345 12,698,888 $ 49,675,987 $ 55,774,213 See Detail in Table X Notes: Includes all governmental fund types. * Special Districts include Street Light Improvement Districts (SLIDs), Maintenance Improvement Districts (MIDs) and Community Facilities Districts (CFDs). SLIDs and MIDs levy primary property taxes. CFDs may levy both primary and secondary property taxes. Source: City financial records 156 CITY OF PEORIA, ARIZONA Table VIII INTERGOVERNMENTAL REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year State Shared Sales Tax Urban Revenue Sharing HURF Revenues Auto in-Lieu Local Transportation Aid Other Federal Total Intergovernmental Revenue Notes: Source: $ $ 1999 5,958,570 7,513,864 5,091,160 2,516,193 528,376 976,880 1,772,901 24,357,944 2000 $ 6,549,653 8,297,259 5,334,646 2,771,158 551,269 1,291,896 2,243,835 $ 27,039,716 $ $ 2001 6,971,235 8,891,990 5,606,104 3,054,248 598,664 4,709,819 2,251,373 32,083,433 2002 $ 8,350,576 11,321,449 6,719,940 3,575,255 615,115 2,903,838 1,700,855 $ 35,187,028 Includes all governmental fund types Includes all governmental revenues, including revenues from federal government City financial records 157 $ $ 2003 8,474,910 11,386,513 7,020,920 4,268,379 639,879 1,733,992 3,552,001 37,076,594 2004 9,116,684 9,786,943 7,501,918 4,390,706 650,734 1,053,460 2,340,738 $ 34,841,183 $ 2005 $ 10,038,874 10,076,455 7,878,977 4,639,457 650,056 778,059 2,685,415 $ 36,747,293 2006 $ 11,681,284 11,707,782 8,475,784 5,251,577 657,162 1,303,622 2,822,321 $ 41,899,532 2007 $ 13,130,116 15,996,992 9,870,460 5,725,299 658,598 15,800,183 3,101,796 $ 64,283,444 2008 $ 12,695,890 19,539,768 9,488,625 5,546,558 666,237 1,770,683 2,904,788 $ 52,612,549 CITY OF PEORIA, ARIZONA DEVELOPMENT/EXPANSION FEES BY TYPE LAST TEN FISCAL YEARS Table IX Fiscal Year 2000 1999 Governmental Activities: Streets Parks/Recreation Library Public Safety General Government Total Governmental Activities $ $ 721,216 330,070 452,779 1,504,065 Business-type Activities: Water Expansion Water Resource Wastewater Expansion Solid Waste Expansion Total Business-type Activities Total Primary Government $ $ 215,358 1,110,776 436,814 531,464 112,669 2,407,081 $ 1,994,610 4,920,157 915,034 7,829,801 $ 2,395,778 16,882 6,101,944 1,450,380 9,964,984 $ 9,333,866 $ 12,372,065 2001 $ $ 1,846,867 2,117,536 460,258 909,116 926,097 6,259,874 $ 2,431,800 185,934 3,421,540 870,682 6,909,956 $ 13,169,830 2002 $ $ 1,911,146 2,346,030 476,734 929,164 941,436 6,604,510 $ 2003 $ 2,064,748 2,089,955 457,898 1,124,351 1,012,151 6,749,103 4,458,106 475,237 3,899,520 597,474 9,430,337 $ 7,013,267 887,389 4,786,965 753,660 13,441,281 $ 16,034,847 $ 20,190,384 Source: City financial records 158 $ 2004 $ $ 2006 2007 2008 $ 8,460,281 5,113,046 969,582 3,275,831 2,105,106 19,923,846 $ 11,093,775 4,020,306 691,434 5,649,715 2,167,340 $ 23,622,570 $ 8,950,451 3,647,109 501,209 3,515,573 1,413,319 $ 18,027,661 4,973,097 1,133,833 2,719,879 621,892 $ 9,448,701 3,297,819 659,750 1,863,749 458,804 $ 6,280,122 $ 33,071,271 $ 24,307,783 $ 7,029,058 5,045,791 1,028,504 2,730,568 2,020,208 17,854,129 7,025,548 1,287,101 3,658,370 765,334 $ 12,736,353 $ 7,671,535 1,801,486 4,391,622 1,123,950 14,988,593 $ 6,972,529 1,550,288 4,364,858 1,009,520 13,897,195 $ 21,684,327 $ 32,842,722 $ 33,821,041 $ 2,740,580 2,778,480 586,200 1,461,477 1,381,237 8,947,974 2005 $ Table X CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS 2000 1999 2001 Fiscal Year 2003 2002 2004 2005 2006 2007 2008 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 12,345,170 5,554,362 2,244,361 1,473,358 405,098 2,070,678 63,571 454,945 387,562 $ 14,738,906 5,870,856 2,618,602 1,714,012 484,518 2,283,606 149,361 788,801 524,232 $ 15,148,939 6,433,978 3,099,174 1,703,292 623,951 2,789,325 308,340 2,754,177 760,612 $ 17,456,584 5,066,482 3,065,400 2,156,154 626,479 3,223,465 340,467 897,835 880,106 $ 18,284,743 5,372,308 3,315,297 2,255,621 719,721 3,944,702 373,416 602,119 1,064,488 $ 19,946,715 6,147,387 3,756,875 2,445,199 815,105 4,432,723 443,680 599,172 1,992,666 $ 21,861,810 7,871,565 4,297,474 2,576,655 920,471 5,052,224 549,702 570,265 1,835,393 $ 26,832,950 14,022,558 5,469,550 4,949,457 1,079,620 5,986,135 655,728 485,720 1,675,151 $ 30,963,887 13,910,951 6,554,938 6,005,833 1,245,892 6,782,852 814,307 783,997 1,811,313 $ 30,721,220 11,271,722 7,190,660 6,584,854 1,492,871 7,032,488 838,550 985,505 2,349,040 Total $ 24,999,105 $ 29,172,894 $ 33,621,788 $ 33,712,972 $ 35,932,415 $ 40,579,522 $ 45,535,559 $ 61,156,869 $ 68,873,970 $ 68,466,910 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other Total Note: 16.2% 31.6% 16.4% 11.7% 27.0% 20.1% -12.3% 51.0% -43.3% 19.4% 5.7% 16.7% 16.3% 19.6% 10.3% 135.0% 73.4% 35.3% 2.8% 9.6% 18.4% -0.6% 28.8% 22.1% 106.4% 249.2% 45.1% 15.2% -21.3% -1.1% 26.6% 0.4% 15.6% 10.4% -67.4% 15.7% 4.7% 6.0% 8.2% 4.6% 14.9% 22.4% 9.7% -32.9% 20.9% 9.1% 14.4% 13.3% 8.4% 13.3% 12.4% 18.8% -0.5% 87.2% 9.6% 28.0% 14.4% 5.4% 12.9% 14.0% 23.9% -4.8% -7.9% 22.7% 78.1% 27.3% 92.1% 17.3% 18.5% 19.3% -14.8% -8.7% 15.4% -0.8% 19.8% 21.3% 15.4% 13.3% 24.2% 61.4% 8.1% -0.8% -19.0% 9.7% 9.6% 19.8% 3.7% 3.0% 25.7% 29.7% 18.0% 16.7% 15.3% 0.3% 6.6% 12.9% 12.2% 34.3% 12.6% -0.6% Includes all governmental fund types Source: City financial records and reports 159 Table XI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Year Taxes Are Payable 2002 2003 2004 1999 2000 2001 City Direct Rates: Retail Sales Contracting Rental Hotel/Transient Lodging Utilities Telecom/Cable TV Restaurant/Bar Amusement Others 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% County Rate Hotel/Transient Lodging All Others 1.77% 0.70% 1.77% 0.70% 1.77% 0.70% 1.77% 0.70% State Rate Hotel/Transient Lodging All Others 5.50% 5.00% 5.50% 5.00% 5.50% 5.00% 5.50% 5.60% Source: Model City Tax Code, ADOR 91-5312 160 2005 2006 2007 2008 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% 1.50% 1.50% 1.50% 5.00% 3.00% 1.50% 2.50% 2.50% 1.50% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.77% 0.70% 1.77% 0.70% 1.77% 0.70% 1.77% 0.70% 1.77% 0.70% 1.77% 0.70% 5.50% 5.60% 5.50% 5.60% 5.50% 5.60% 5.50% 5.60% 5.50% 5.60% 5.50% 5.60% Table XII CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND THREE YEARS AGO 2005 2008 Category # of Payers Percentage of Total Payers Percentage of Total City Sales Tax Revenue # of Payers Percentage of Total Payers 3,003 4,383 308 4,098 14 120 697 56 552 22.70% 33.13% 2.33% 30.97% 0.11% 0.91% 5.27% 0.42% 4.17% $ 30,721,220 11,271,722 7,032,488 7,190,660 6,584,854 1,492,871 985,505 838,550 2,349,040 44.9% 16.5% 10.3% 10.5% 9.6% 2.2% 1.4% 1.2% 3.4% 2,365 3,216 235 2,867 9 126 857 45 402 23.4% 31.8% 2.3% 28.3% 0.1% 1.2% 8.5% 0.4% 4.0% $ 21,861,810 7,871,565 5,052,224 4,297,474 2,576,655 920,471 570,265 549,702 1,835,393 48.0% 17.3% 11.1% 9.4% 5.7% 2.0% 1.3% 1.2% 4.0% 13,231 100.00% $ 68,466,910 100.00% 10,122 100.00% $ 45,535,559 100.00% Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others Total Percentage of Total City Sales Tax Revenue Sales Tax Paid Note: Information is unavailable prior to FY05 due to change in tax software. Source: City Sales Tax system City financial records 161 Sales Tax Paid CITY OF PEORIA, ARIZONA SECONDARY ASSESSED VALUE AND FULL CASH VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Residential (Owner occupied) Residential (Renter occupied) Commercial, Industrial, Mines & Utilities Agriculture & Vacant Railroad Historic & Environmental Public Property Improvements $ Net Assessed Value % Growth $ Net Assessed Value Per Capita Population $ 384,697,103 7.0% 4,049 95,000 $ $ 35,426 11.4% $ 442,330,817 15.0% 4,082 108,364 $ $ 36,088 11.3% $ 521,704,006 17.9% 4,520 115,432 2002 371,374,428 35,543,344 $ $ 607,836,669 16.5% 4,956 122,655 39,009 170,508,040 50,351,826 955,802 28,555 - 5,405,768,822 20.1% $ 44,073 11.6% 2005 $ 497,294,057 51,436,849 2006 $ 582,512,691 64,003,067 218,209,727 58,949,534 1,712,708 30,780 - 242,554,778 73,674,495 1,724,400 - 190,086,111 51,802,238 951,301 190,782 - 2007 626,591,494 75,761,506 2008 $ 1,041,693,334 116,115,688 293,807,014 117,630,028 1,830,109 - 334,323,557 148,077,787 1,918,660 58,450 - $ 750,429,221 13.2% $ 827,633,655 10.3% $ 964,469,431 16.5% $ 1,115,620,151 15.7% $ 1,642,187,476 47.2% $ $ $ $ $ $ 5,226 126,815 1.30 5,868,802,159 8.6% $ 11.2% 46,278 11.3% 5,651 132,805 6,039 137,045 1.30 6,743,773,145 14.9% $ 50,780 7,262 132,805 1.30 7,525,637,782 11.6% $ 11.1% 54,914 1.30 $ 65,788 11.0% Property Classifications Railroads, Private Car, and Airline Commercial Agriculture and Mines (b) Utilities Flight Property and Industrial Residential Vacant Land Fiscal Year 1999 25% 25% 21% 25.0% 10% 16% 2000 21% 25.0% 10% 16% 2001 21% 25.0% 10% 16% 2002 21% 25.0% 10% 16% 2003 21% 25.0% 10% 16% 2004 20% 25.0% 10% 16% 2005 21% 25.0% 10% 16% 2006 21% 25.0% 10% 16% 2007 22% 24.5% 10% 16% 2008 20% 23.0% 10% 16% (a) Several additional classes of property exist, but seldom amount to a significant portion of an entity's total valuation. (b) Beginning with tax year 2000, mining and utility properties are included in the same class property as the commercial and industrial properties. (c) This percentage is determined annually to be equal to the ratio of (i) the total assessed valuation of all mining, utility, commercial, industrial and military reuse zone properties, agricultural personal property and certain leasehold personal property to (ii) the total full cash (market) value of such properties. (d) Beginning in 1995, an annually adjusted exemption exists for commercial, industrial and agricultural property. Any portion of the full cash value in excess of that exemption is assessed at 25% or 16% as applicable. Source: Arizona Department of Revenue - Property Tax Division abstract of the assessment roll City financial records 11.0% 7,264 153,592 1.20 8,736,985,007 16.1% Note: In 1968, a statewide re-appraisal program was completed in which property's value was assessed by usage classification on varying percentages of actual cash value. These percentages for the last ten years are as follows: 162 $ $ 662,785,441 9.0% 1.30 4,502,876,658 15.1% $ Fiscal Year 2003 2004 $ 403,937,371 $ 464,911,130 37,003,847 42,487,659 151,050,647 48,748,154 1,094,881 25,215 - 1.30 3,910,651,859 16.2% $ 2001 316,200,286 32,258,579 128,361,247 43,750,084 1,073,870 58,510 1,430 1.30 3,365,492,995 6.6% $ 2000 267,224,220 26,956,291 106,059,247 40,917,076 1,008,673 163,835 1,475 1.30 Full Cash Value % Growth Net Assessed Value as a Percentage of Full Cash Value $ 95,383,002 37,217,844 1,063,094 86,391 1,970 Total Direct Secondary Tax Rate Full Cash Value Per Capita 1999 229,616,621 21,328,181 Table XIII 9,999,273,539 14.4% $ 65,103 11.2% 10,379 158,227 1.25 15,118,988,316 51.2% $ 95,553 10.9% CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 1999 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 0.32 1.30 2000 $ 0.32 1.30 2001 $ 0.32 1.30 Fiscal Year 2003 2004 2002 $ 0.29 1.30 Table XIV $ 0.29 1.30 $ 0.29 1.30 2005 $ 0.29 1.30 2006 $ 0.29 1.30 2007 $ 0.28 1.20 $ 0.24 1.25 4.82 5.16 4.75 4.95 4.87 4.63 4.32 4.40 4.41 4.28 4.56 4.04 4.46 3.90 4.13 3.80 4.29 3.31 3.82 2.72 2.66 0.78 2.68 0.74 2.64 0.70 2.64 0.65 2.66 0.62 2.59 0.51 2.59 0.51 2.59 0.51 2.06 0.68 1.92 0.59 7.80 7.24 7.75 6.99 7.83 6.63 7.25 6.35 7.36 6.20 7.44 5.85 7.34 5.71 4.42 6.56 6.63 5.19 (1) The school district tax levies are for the Peoria Unified School District, which serves the majority of the City of Peoria. Other areas of the City are served by the Deer Valley Unified School District, whose most recent rates are as follows: Deer Valley Primary $ 3.63 Secondary 1.68 (2) These tax rates include the rates for Maricopa County, Education Equalization, Maricopa Community College District, West Maricopa Education Center, Maricopa County Flood Control District, Fire District Assistance, County Free Library, Central Arizona Water Conservation District, and Special Health Care. The various rates for the most recent year are as follows: Primary Secondary Maricopa County $ 1.10 $ Education Equalization Community College District 0.82 0.15 West Maricopa Education Center 0.05 County Flood Control District 0.15 Fire District Assistance 0.01 County Free Library 0.04 Central AZ Water Conservation 0.10 Special Health Care 0.09 $ 1.92 $ 0.59 Note: 2008 All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication (continued) 163 5.98 4.56 Table XV CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 1999 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 2000 1,200,924 5,010,680 $ 2001 1,367,471 5,761,359 $ 2002 1,585,084 6,729,710 $ 1,675,077 7,901,877 $ Tax Levies Fiscal Year 2003 2004 1,836,000 8,616,211 2,077,622 9,755,580 $ 2005 $ 2006 2,295,435 10,759,238 $ 2,640,883 12,538,103 $ 2008 3,012,725 13,387,442 $ 3,002,150 20,527,343 26,059,009 27,839,438 31,023,072 33,823,043 35,993,776 36,136,167 36,367,657 38,874,484 39,965,149 40,456,138 45,718,267 42,454,023 48,345,544 44,291,944 50,475,795 49,294,120 58,945,121 48,531,032 61,400,326 56,465,081 426,667,921 120,255,268 469,465,347 129,292,449 512,232,252 137,665,480 563,545,711 141,844,666 611,337,637 144,920,909 726,446,055 145,100,016 726,446,055 145,100,016 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 453,927,854 153,105,386 501,855,890 168,876,851 549,811,112 180,531,357 601,588,445 188,621,027 653,138,786 193,993,258 774,241,944 197,309,619 777,087,034 200,151,198 (1) The school district tax levies are for the Peoria Unified School District, which serves the majority of the City of Peoria. Other areas of the City are served by the Deer Valley Unified School District, whose most recent tax levies are as follows: Deer Valley Primary $ 89,300,110 Secondary 54,180,166 (2) These tax rates include the rates for Maricopa County, Education Equalization, Maricopa Community College District, West Maricopa Education Center, Maricopa County Flood Control District, Fire District Assistance, County Free Library, Central Arizona Water Conservation District, and Special Health Care. The various rates for the most recent year are as follows: Primary Secondary Maricopa County $ 430,023,735 $ Education Equalization Community College District 321,018,986 74,981,944 West Maricopa Education Center 8,825,841 County Flood Control District 70,422,870 Fire District Assistance 2,631,597 County Free Library 19,368,018 Central AZ Water Conservation 49,730,785 Special Health Care 46,310,880 $ 751,042,721 $ 272,271,935 Note: 2007 All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 164 451,841,923 229,728,799 758,698,013 302,890,898 815,445,197 349,264,359 Table XVI CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO 2008 Taxable Secondary Assessed Value Taxpayer Arizona Public Service Qwest Corporation Vistancia LLC Sprint Spectrum LP Inland Western Glendale LLC Larry Miller Real Estate-Peoria LLC Safeway, Inc Courtland Homes Inc Ddra Ahwatukee Foothills LLC Southwest Gas Corporation Developers Diversified Realty Corp Dayton Hudson Corp Schonfeld, Robert AZ Medical Clinic Diamante Crossroads Plaza Sun Health Corporation Freedom Plaza Limited Partner $ Total $ 18,043,880 10,224,146 10,192,385 8,040,561 5,716,817 5,679,524 4,844,798 4,842,960 4,799,328 4,596,191 - Rank 1 2 3 4 5 6 7 8 9 10 76,980,590 1999 Percentage of Total City Taxable Secondary Assessed Value Taxable Secondary Assessed Value 1.10% 0.62% 0.62% 0.49% 0.35% 0.35% 0.30% 0.29% 0.29% 0.28% $ 4.69% $ 11,741,786 7,019,034 2,078,967 5,134,154 3,311,278 2,074,829 1,993,218 1,865,006 1,822,448 1,642,860 Rank 1 2 3.05% 1.82% 5 3 4 6 7 8 9 10 0.54% 1.33% 0.86% 0.54% 0.52% 0.48% 0.47% 0.43% 38,683,580 Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For Fiscal year 2008, the assessed value of Salt River Project property within the City of Peoria is $17,188,403. Source - Maricopa County Treasurer's Office 165 Percentage of Total City Taxable Secondary Assessed Value 10.06% CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Current Levy Current Tax Collections Percent of Levy Collected Delinquent Tax Collections Total Tax Collections Total Collection as Percent of Current Levy Fiscal Year 2004 1999 2000 2001 2002 2003 $ 6,211,604 $ 7,128,830 $ 8,314,794 $ 9,576,954 $ 10,452,211 6,120,026 7,045,289 8,120,403 9,234,358 10,209,517 98.5% 98.8% 97.7% 96.4% Table XVII 2005 2006 2007 2008 $ 11,833,202 $ 13,054,673 $ 15,178,986 $ 16,400,167 $ 23,529,493 11,624,426 12,817,287 14,827,945 15,926,805 22,822,879 97.7% 98.2% 98.2% 97.7% 97.1% 97.0% 24,645 22,418 149,690 117,765 325,376 251,331 143,034 91,070 52,195 356,825 $ 6,144,671 $ 7,067,707 $ 8,270,093 $ 9,352,123 $ 10,534,893 $ 11,875,757 $ 12,960,321 $ 14,919,015 $ 15,979,000 $ 23,179,704 98.9% 99.1% 99.5% 97.7% 100.8% 100.4% Notes: Prior to Fiscal Year 2001, secondary Tax Collections were not broken out between Current and Delinquent collections. All secondary taxes collected were reported as current collections. Collections include secured levies. Delinquent tax collections are shown in the year collected. Source: Maricopa County Treasurer City financial records and reports 166 99.3% 98.3% 97.4% 98.5% Table XVIII CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 1999 Water Average bill $ 26.81 $ % Increase 10.42% Wastewater Average bill 17.14 % Increase -2.61% Residential Solid Waste Average bill 12.30 % Increase no change Water # % Increase Wastewater # % Increase Residential Solid Waste # % Increase 2000 33.59 $ 25.29% Utility Rate Increases & Average Bill Last Ten Fiscal Years 2001 2002 2003 34.58 $ 2.95% 37.77 $ 9.22% 2004 2005 2006 2007 39.61 $ 4.87% 39.06 $ -1.39% 35.53 $ -9.04% 34.59 $ -2.65% 34.85 $ 0.75% 35.59 2.12% 17.49 2.04% 18.10 3.49% 17.32 -4.31% 18.73 8.14% 18.53 -1.07% 19.47 5.07% 18.74 -3.75% 21.52 14.83% 21.24 -1.30% 12.49 1.54% 12.49 no change 12.49 no change 12.49 no change 12.49 no change 13.32 6.65% 14.58 9.46% 14.91 2.26% 14.85 -0.40% Utility Service Connections Last Ten Fiscal Years 2001 2002 2003 2004 2005 2006 2007 2008 1999 2000 31,020 5.87% 31,810 2.55% 34,900 9.71% 36,221 3.79% 37,664 3.98% 38,818 3.06% 42,673 9.93% 44,221 3.63% 45,630 3.19% 46,146 1.13% 30,274 11.75% 34,190 12.94% 37,321 9.16% 38,130 2.17% 39,806 4.40% 40,984 2.96% 43,824 6.93% 45,933 4.81% 47,831 4.13% 48,759 1.94% 29,517 11.84% 32,615 10.50% 35,320 8.29% 36,978 4.69% 38,546 4.24% 39,747 3.12% 42,467 6.84% 44,198 4.08% 46,309 4.78% 47,146 1.81% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2008 Meter Size 5/8"-3/4" 1" 1 1/2" 2" 3" 4" 6" Source: 2008 All Customers $ 13.75 16.35 18.97 26.18 67.37 95.19 148.81 City customer service and billing records (continued) 167 Table XVIII CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA Volume Consumption (gallons) First 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 25,000 25,001 - 50,000 (a) 50,001+ Volume Charges for Water Services Usage Per Month As of June 30, 2008 Residential Multiplex (per 1,000 gallons) (per 1,000 gallons) Base Charge Base Charge $ 1.45 $ 1.45 2.61 2.10 3.14 2.55 3.74 3.06 3.74 3.06 Commercial (per 1,000 gallons) Base Charge $ 1.45 2.10 2.55 3.06 3.11 (a) Residential and Multiplex customers are charged this rate for all usage above 25,000 gallons Water Meter Permit Charges As of June 30, 2008 Meter Size 3/4" 1 1/2" 2" 3" 4" 6" Hydrant meter Commercial accounts Charges for Wastewater Services As of June 30, 2008 Monthly All Customers Base (a) Volume (b) $ 3.02 2.28 Charge 264 418 528-907 1,522 - 2,312 2,096 - 2,985 3,565 - 4,799 1,196 By meter size $ Charges for Storm Water As of June 30, 2008 Monthly All Customers Base charge $ 1.00 (a) Base service charge is based on each bill rendered. (b) For residential & multiplex users, volume is measured as the rate per 1,000 gallons of a three month winter average (December - February). For commercial users, the volume charge is based on actual monthly water usage. Source: City customer service and billing records (continued) 168 Table XVIII CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST EIGHT FISCAL YEARS 06/30/2001 06/30/2002 06/30/2003 06/30/2004 06/30/2005 06/30/2006 06/30/2007 06/30/2008 6,629,039 15,829 189,944 16.78 28.17 23 16.1 06/30/2000 6,657,323 15,801 189,608 19.32 30.25 24 16.1 6,640,038 15,712 180,544 18.19 28.82 25 22.2 6,828,944 14,904 178,850 20.43 30.00 28 37.3 6,890,083 15,056 180,679 20.10 32.00 27 40.0 7,889,653 16,213 194,552 23.21 32.00 27 40.0 8,220,760 16,320 195,840 24.46 34.40 29 40.0 8,626,688 14,751 177,016 23.63 33.39 31 41.8 Miscellaneous data on water utility Annual consumption (000's gal) Average gallons/household/month Average gallons/household/year Average daily demand (MGD) Peak demand (MGD) Number of wells in system Available storage capacity (million gallon) Miscellaneous data on wastewater utility Treatment plant capacity: Beardsley treatment plant (million gallon/day) Jomax treatment plant (million gallon/day) Tolleson regional plant (million gallon/day) Butler treatment plant (million gallon/day) Annual wastewater treated: Beardsley treatment plant (billion gallon) Jomax treatment plant (billion gallon) Tolleson regional plant (billion gallon) Butler treatment plant (million gallon/day) Average daily flow: Beardsley treatment plant (million gallon/day) Jomax treatment plant (million gallon/day) Tolleson regional plant (million gallon/day) Butler treatment plant (million gallon/day) Peak flow: Beardsley treatment plant (million gallon/day) Jomax treatment plant (million gallon/day) Tolleson regional plant (million gallon/day) Butler treatment plant (million gallon/day) Miscellaneous data on solid waste service Residential tonnage processed Commercial tonnage processed Recycling tonnage processed 2.0 9.4 - 2.0 9.4 - 4.0 9.4 - 4.0 9.4 - 4.0 0.75 9.4 - 4.0 0.75 9.4 - 4.0 0.75 9.4 - 4.0 2.25 9.4 10.0 0.4 2.580 - 0.485 2.200 - 0.531 2.180 - 0.606 2.620 - 0.674 0.0065 2.731 - 0.763 0.057 2.731 - 0.851 0.091 2.727 - 0.8698 0.119 2.600 0.036 1.16 7.07 - 1.45 6.54 - 1.46 7.12 - 1.67 7.19 - 1.85 0.02 7.48 - 2.09 0.16 7.88 - 2.33 0.25 7.47 - 2.40 0.33 7.12 2.57 1.27 7.60 - 1.58 7.60 - 1.87 8.11 - 3.20 11.80 - 2.30 0.278 10.88 - 2.50 0.278 10.88 - 3.00 0.33 8.92 - 3.50 0.26 10.99 7.50 52,188 19,958 357 72,503 55,081 22,917 498 78,496 60,516 19,642 600 80,758 Source: City records Note: Information not available for years prior to Fiscal year 2001 Butler treatment plant operational mid-June 2008 (continued) 169 64,358 19,157 1,133 84,648 65,950 18,436 1,523 85,909 69,191 22,943 1,690 93,824 71,396 25,260 1,927 98,583 61,290 20,519 11,549 93,358 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND FIVE YEARS AGO Table XVIII 2003 2008 Entity Desert Harbor City of Peoria Padre's Pump Station Trilogy at Vistancia Sun Garden Park II H/O Assn. Polynesian Village Ventana Lakes N. of Beardsley Lake Centennial High School Ventana Lakes S. of Beardsley Lake Casa Del Sol East Southern portion Casa Del Sol East Northern portion Freedom Plaza LTD Partnership Desert Harbor sprinklers Greenway Water Treatment Plant Arizona American Water Co. Sun Garden Mobilie Home Park MHC Operating Ltd. Partnership Note: Type of User Homeowner's Association Sports Complex Commercial Landscape Homeowner's Association Homeowner's Association Homeowner's Association Public School Homeowner's Association Multi-Family Residential Multi-Family Residential Health Care Facility Homeowner's Association Water Treatment Plant Water Utility Homeowner's Association Homeowner's Association Avg Monthly Water Usage Ranking 7,351 1 5,983 2 3,161 3 2,237 4 1,444 5 1,330 6 1,323 7 1,213 8 1,207 9 1,120 10 - Water usage information unavailable prior to FY03 Source: City customer service and billing records (concluded) 170 % of Average Monthly Water Usage 1.07% 0.87% 0.46% 0.33% 0.21% 0.19% 0.19% 0.18% 0.18% 0.16% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Avg Monthly Water Usage Ranking 7,236 1 3,438 3 1,675 6 1,624 7 2,108 5 1,245 8 4,114 2 2,413 4 1,565 9 1,330 10 % of Average Monthly Water Usage 1.31% 0.62% 0.30% 0.29% 0.00% 0.38% 0.22% 0.74% 0.44% 0.28% 0.24% CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2000 1999 Governmental Activities General Obligation Bonds Municipal Development Authority Bonds Highway User Revenue Bonds Special Assessment Bonds Community Facilities District Bonds $ Business-type Activities Water and Sewer Revenue Bonds WIFA Bonds Municipal Development Authority Bonds Municipal Sports Complex Bonds Long-Term Loan Payable 38,123,080 31,390,209 5,710,000 19,267,000 - $ 50,598,318 29,721,834 5,470,000 18,095,000 - 2001 $ 47,669,600 27,900,997 5,205,000 15,814,000 - Fiscal Year 2003 2002 $ 44,484,200 25,773,797 4,925,000 17,333,692 - Table XIX $ 2004 2005 2006 2007 2008 68,629,389 23,640,141 4,625,000 15,444,341 21,250,000 $ 64,980,000 22,255,141 4,305,000 12,938,689 21,250,000 $ 55,380,000 20,199,999 4,075,000 11,431,553 44,800,000 $ 51,205,000 24,628,578 3,830,000 9,822,570 44,075,000 $ 142,835,000 21,653,530 3,570,000 13,292,064 66,085,000 $ 126,195,000 65,795,653 3,295,000 12,027,427 64,610,000 25,035,000 23,925,889 4,374,791 22,375,000 - 24,370,000 22,914,426 4,223,166 21,480,000 - 40,255,000 42,022,210 4,064,004 20,525,000 - 33,470,000 55,448,302 3,871,204 1,135,000 - 30,740,000 55,084,081 2,759,859 - 27,350,000 52,606,867 2,759,859 - 25,395,000 50,042,301 2,505,001 - 23,275,000 47,387,253 2,226,422 - 21,050,000 88,021,820 1,906,470 - 19,555,000 127,917,495 1,579,347 1,235,000 $ 176,872,744 $ 203,455,811 $ 186,441,195 $ 222,172,811 $ 208,445,556 $ 213,828,854 $ 206,449,823 $ 358,413,884 $ 422,209,922 $ $ $ $ $ $ $ $ $ Total Primary Government $ 170,200,969 Total debt per capita $ 1,791.59 1,632.21 1,762.56 1,520.05 Source: City financial records. See Exibits 1 & 2 and footnote 14. 171 1,751.94 1,569.56 1,560.28 1,422.57 2,333.55 2,668.38 CITY OF PEORIA, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO FULL CASH VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Table XX Fiscal Year 1999 Bonded Debt (1) Less: Debt Service Reserves Net Bonded Debt 2000 2001 2002 2003 2004 2005 2006 2007 2008 $ 38,123,080 $ 50,598,318 $ 47,669,600 $ 44,484,200 $ 68,629,389 $ 64,980,000 $ 55,380,000 $ 51,205,000 $ 142,835,000 $ 126,195,000 $ 6,340,080 31,783,000 $ 8,076,539 42,521,779 $ 9,749,163 37,920,437 $ 12,167,776 32,316,424 $ 15,323,333 53,306,056 $ 18,843,020 46,136,980 $ 17,598,666 37,781,334 $ 24,205,524 26,999,476 34,727,031 $ 108,107,969 $ 36,464,380 89,730,620 Percentage of Net Bonded Debt to Full Cash Value 0.9% 1.1% 0.8% 0.6% 0.9% 0.7% 0.5% 0.3% 1.1% 0.6% Net Bonded Debt Per Capita $335 $392 $329 $263 $420 $347 $276 $186 $704 $567 Net Bonded Debt as a % of Personal Income 1.27% 1.38% 1.15% 0.91% 1.43% 1.12% 0.85% 0.57% 2.17% 1.71% (1) Represents face value of general obligation debt outstanding Note: Personal income and population information may be found on Table XXIX Full cash value information may be found on Table XIII Sources - City debt service schedules. See Exibits 1 & 2, also footnote 14. 172 Table XXI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2008 Secondary Assessed Valuation Governmental Unit Overlapping: State of Arizona Maricopa County Community College District County Flood Control District County Free Library Fire District Assistance County Special Health Care Central AZ Water Conservation West MEC Vocational District Sub-total - City-wide overlapping Total City-wide debt levies (1) $ Unified School Districts: Peoria No. 11 Deer Valley No. 97 71,852,630,420 49,534,573,831 49,534,573,831 45,937,944,910 49,534,573,831 49,730,785,225 49,534,573,831 49,730,785,225 17,648,505,706 General Obligation Debt Outstanding 557,390,000 - 2.29% 3.32% 3.32% 3.57% 3.32% 3.32% 3.32% 2.23% 0.58% 2,073,765,401 3,224,835,278 261,755,000 210,500,000 85.66% 7.35% 224,219,333 15,471,750 239,691,083 2.72 1.68 91,288,926 64,610,000 100.00% 64,610,000 2.10 Vistancia Community Facilities District $ Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria Percentage Applicable to City of Peoria $ Total overlapping 18,505,348 18,505,348 144,700,348 $ 0.15 0.15 0.04 0.01 0.09 0.10 0.05 322,806,431 Direct: City of Peoria $ 1,642,187,476 $ 126,195,000 Total direct and overlapping general obligation bonded debt 126,195,000 $ (1) - Total City-wide debt levies are County debt plus City debt. Note: Secondary property taxes are restricted for debt service. For information on total tax rates, see Table XIV. Sources: 100.00% - Exhibit 1 to the Financial Statements - Maricopa County Treasurer - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 173 449,001,431 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit 1999 Overlapping: State of Arizona Maricopa County Community College District County Flood Control District County Free Library Fire District Assistance Education Equalization Central AZ Water Conservation Sub-total - City-wide overlapping Total City-wide levies (1) Unified School Districts: Peoria No. 11 Deer Valley No. 97 Vistancia Community Facilities District Total overlapping $ 2000 2,432,725 6,024,200 8,456,925 46,580,005 84,040,922 630,713 84,671,635 - $ 2001 2,367,867 6,707,930 9,075,797 59,674,115 114,077,401 1,664,226 115,741,627 - $ Fiscal Year 2003 2002 1,969,797 7,982,014 9,951,811 57,621,411 114,711,003 2,186,348 116,897,351 $ 1,542,433 8,102,375 9,644,808 54,129,008 118,240,368 3,586,515 121,826,883 - - $ 1,542,433 8,102,375 9,644,808 78,364,808 $ Table XXII 2004 550,505 71,257 621,762 65,601,762 2005 $ 11,690,706 11,690,706 67,070,706 2006 $ 11,594,345 11,594,345 62,799,345 2007 $ 10,710,280 10,710,280 153,545,280 2008 $ 18,505,348 18,505,348 144,700,348 138,618,928 3,918,198 142,537,126 142,493,656 3,571,920 146,065,576 134,340,540 4,063,815 138,404,355 196,625,176 20,573,318 217,198,494 205,291,709 24,204,834 229,496,543 224,219,333 15,471,750 239,691,083 21,250,000 21,250,000 44,800,000 44,075,000 66,085,000 64,610,000 93,128,560 124,817,424 126,849,162 131,471,691 173,431,934 167,937,338 194,895,061 272,867,839 306,291,823 322,806,431 38,123,080 50,598,318 47,669,600 44,484,200 68,720,000 64,980,000 55,380,000 51,205,000 142,835,000 126,195,000 $ 131,251,640 $ 175,415,742 $ 174,518,762 $ 175,955,891 $ 242,151,934 $ 232,917,338 $ 250,275,061 $ 324,072,839 $ 449,126,823 $ 449,001,431 Direct: City of Peoria Total direct and overlapping general obligation bonded debt (1) - Total City-wide debt levies are County debt plus City debt. Sources: - Exhibit 1 to the Financial Statements - Maricopa County Treasurer 174 CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS Fiscal Year 2004 1999 2000 2001 2002 2003 Secondary Assessed Value $ 384,697,103 $ 442,330,817 $ 521,704,006 $ 607,836,669 $ 662,785,441 6% Limitation Debt limit $ 23,081,826 $ 26,539,849 $ 31,000,582 $ 36,470,200 14,633,080 18,968,426 17,084,708 7,571,423 63.4% 2005 2006 2007 2008 $ 750,429,221 $ 827,633,655 $ 964,469,431 $ 1,115,620,151 $ 1,642,187,476 $ 39,767,126 $ 45,025,753 $ 49,658,019 $ 57,868,166 $ $ 15,004,200 27,999,389 25,500,000 16,400,000 13,350,000 $ 13,915,874 $ 21,466,000 $ 11,767,737 $ 19,525,753 $ 33,258,019 $ 44,518,166 71.5% 55.1% 41.1% 70.4% 56.6% 33.0% 23.1% $ 76,939,421 $ 88,466,163 $ 103,335,273 $ 121,567,334 $ 132,557,088 $ 150,085,844 $ 165,526,731 $ 192,893,886 23,490,000 31,629,892 30,584,892 29,480,000 40,630,000 39,480,000 38,980,000 37,855,000 $ 53,449,421 $ 56,836,271 $ 72,750,381 $ 92,087,334 $ 91,927,088 $ 110,605,844 $ 126,546,731 $ 155,038,886 30.5% 35.8% 29.6% 24.2% 30.7% 26.3% 23.5% 19.6% Total net debt applicable to limit Legal 6% Debt Margin $ 8,448,746 Total net debt applicable to the limit as a percentage of debt limit 20% Limitation Debt limit Total net debt applicable to limit Legal 20% Debt Margin Total net debt applicable to the limit as a percentage of debt limit Note: Table XXIII $ See footnote 14 for discussion of 6% and 20% limitations. Source: Maricopa County Assessor Exhibit 3 to the Financial Statements 175 66,937,209 28,470,000 $ 38,467,209 13,310,000 $ 42.5% $ 223,124,030 108,759,030 51.3% 85,221,249 13.5% $ 114,365,000 $ 98,531,249 328,437,495 112,885,000 $ 215,552,495 34.4% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS Table XXIV Fiscal Year 2000 1999 2001 2002 2003 2004 2005 2006 2007 2008 89,807,396 $ 108,336,399 $ 117,980,567 $ 122,039,417 MDA Debt other than Transportation Pledged Revenues (1) Debt Service Requirements Principal (2) Interest (2) Total Annual Requirements (2) Estimated Coverage $ 51,582,476 $ 58,578,166 $ 67,198,257 $ 69,544,724 $ 71,409,403 $ 77,041,031 $ 1,589,387 1,708,735 3,298,122 1,668,375 1,619,574 3,287,949 1,820,838 1,520,345 3,341,183 2,127,200 1,408,653 3,535,853 2,453,938 1,864,812 4,318,750 1,385,000 611,534 1,996,534 2,055,142 1,017,518 3,072,660 2,246,421 930,530 3,176,951 2,975,048 1,040,265 4,015,313 2,857,877 945,176 3,803,053 15.64 17.82 20.11 19.67 16.53 38.59 29.23 34.10 29.38 32.09 Transportation MDA Debt (3) Net Pledged Revenues from above (4) Additional Pledged Revenues (5) Total 118,236,364 10,978,453 129,214,817 Debt Service Requirements Principal Interest Total Annual Requirements - Estimated Coverage Note: NA (1) Pledged revenues on the Municipal Development Authority (MDA) Bonds are the "Excise Taxes" and "State Shared Revenues." Excise Taxes are defined to include the transaction privilege and use taxes, business license and permit and franchise fees, user fees and charges and fines and forfeitures which the City imposes. However, the transaction privilege tax increase of 0.3% approved by voters in September 2005 is not part of pledged revenue for this debt. State Shared Revenues are defined as any excise tax, transaction privilege and use taxes and income taxes imposed by the State of Arizona and allocated or apportioned to the City, except the City's share of any such taxes which by State law, rule or regulation must be expended for other purposes. (2) Debt service requirements reflect the governmental portion of outstanding MDA issues. Sunnyboy Water and Wastewater and Sports Complex allocations of MDA issues are excluded. Those portions are serviced by the Water Utility, Waterwater Utility and Sports Complex funds. (3) The Transportation MDA Bonds of 2008 are backed by a primary lien on the .03% transaction priviledge tax approved by voters in 2005 and a secondary pledge of the "Excise Taxes" discussed in #1 above. (4) Pledged revenues on the non-transportation MDA Bonds, less the debt requirements for the non-transportation MDA Bonds. (5) Revenues of the Transportation Sales Tax Fund, primarily consisting of the 0.3% transaction priviledge tax discussed above. Source: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Debt service schedules, City financial records 176 Table XXV CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - REVENUE BONDS LAST TEN FISCAL YEARS 1999 2000 Gross Revenue (1) Operating and Maintenance Expenses (2) Net Revenue Available for Debt Service $ 25,000,981 16,473,188 $ 8,527,793 Development Fee Revenue Total Net Revenue 6,914,767 $ 15,442,560 Debt Service Requirements Principal (3) Interest (4) Total Debt Service Requirements $ 2,573,718 1,447,300 4,021,018 $ 2001 $ 30,648,093 15,355,373 15,292,720 $ 8,515,604 23,808,324 $ 2,366,910 2,504,469 4,871,379 $ Fiscal Year 2003 2002 $ 35,656,995 15,245,886 20,411,109 $ 6,039,274 26,450,383 $ 1,975,976 3,147,993 5,123,969 $ $ 36,573,208 20,628,253 15,944,955 $ 8,832,863 24,777,818 $ 3,797,131 3,310,090 7,107,221 $ $ 37,049,975 22,922,451 14,127,524 $ 12,687,621 26,815,145 $ 7,215,071 3,516,929 10,732,000 $ 2004 2005 $ 2006 2007 2008 $ 44,982,822 27,318,074 $ 17,664,748 $ 53,290,996 30,532,640 $ 22,758,356 $ 49,812,486 34,287,751 $ 15,524,735 $ 39,176,675 22,617,415 16,559,260 $ 39,037,367 26,151,794 12,885,573 $ 11,971,020 28,530,280 $ 13,864,643 26,750,216 12,887,675 $ 30,552,423 8,826,809 $ 31,585,165 5,821,318 $ 21,346,053 $ 5,867,214 3,422,812 9,290,026 $ 4,680,263 3,246,056 7,926,319 4,950,702 3,054,982 $ 8,005,684 5,175,515 2,718,837 $ 7,894,352 4,547,129 3,376,974 $ 7,924,103 Ratio of Total Net Revenue/ Total Bond Expense 3.84 4.89 5.16 3.49 2.50 3.07 3.37 3.82 4.00 2.69 Ratio of Net Available/ Total Bond Expense (5) 2.12 3.14 3.98 2.24 1.32 1.78 1.63 2.21 2.88 1.96 (1) Includes total operating revenues and investment income of the Water Utility and Wastewater Utility Enterprise Funds. (2) Includes total operating expenses of the Water Utility and Wastewater Utility Enterprise Funds less depreciation and amortization. (3) Includes principal for Water and Sewer Revenue bonds, Water Infrastructure Finance Authority bonds, and the utility portion of the Municipal Development Authority bonds. (4) Bond interest payments only. Does not include amortization of loss on refunding, capitalized interest, agent fees or amortization of bond issuance costs that are included in interest expense on the statement of revenues, expenses, and changes in net assets. (5) Excludes Development Fee Revenue. Source: Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds Repayment schedules for debt serviced by the Water and Sewer Utility Enterprise Funds 177 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS 1999 Pledged Revenues (1) Debt Service Requirements Principal Interest (2) Total Annual Requirements Estimated Coverage $ 5,093,990 $ 640,000 1,015,885 1,655,885 2000 $ 5,822,427 $ 520,000 955,340 1,475,340 3.08 3.95 2001 $ 4,310,686 $ 740,000 911,040 1,651,040 2.61 Fiscal Year 2003 2002 $ 4,974,602 $ 1,243,308 1,052,893 2,296,201 $ 5,876,529 $ 1,889,351 1,091,160 2,980,511 2.17 1.97 Table XXVI 2004 2005 2006 $ 4,756,382 $ 3,547,789 $ 3,516,277 $ 2,505,652 972,553 3,478,205 1,507,136 828,532 $ 2,335,668 1,608,983 747,720 $ 2,356,703 1.37 1.52 1.49 (1) - Pledged revenues equals Special Assessment Debt Service Fund current year fund balance plus current year principal & interest payments. (2) - Bond interest payments only. Does not include agent fees included in interest expense on the Statement of Revenues, Expenditures and Changes in Fund Balance. Source: City financial records Governmental Fund Financial Statements 178 2007 $ 3,216,095 $ 1,480,506 638,657 2,119,163 1.52 2008 $ 3,167,933 $ 1,264,637 697,840 1,962,477 1.61 Table XXVII CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) $ 1999 2,192,539 2000 $ 2,106,995 2001 $ 1,954,952 $ 2,184,783 731,042 2,915,825 2,098,476 79,724 $ 2,178,200 1,932,607 88,160 $ 2,020,767 99.6% $ 17,174,620 99.6% $ 16,140,436 98.9% $ 14,675,529 $ 2002 2,069,030 $ 2,061,842 156,055 2,217,897 $ Fiscal Year 2003 2004 2,301,354 $ 2,088,695 $ 2,291,817 877,315 3,169,132 99.7% $ 16,256,194 2,069,962 504,165 2,574,127 $ 99.6% $ 14,086,246 179 2005 2,065,519 $ 2,057,821 186,624 2,244,445 99.1% $ 12,345,284 (1) Does not include penalties or admin fees which are included in special assessment revenues on the Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds. (2) Principal only. Assessments Receivable on Balance Sheet-Governmental Funds also includes delinquent interest and penalties. Source: City financial records and reports $ $ 2006 1,987,461 2007 $ 1,965,107 $ 1,983,885 275,392 2,259,277 1,961,724 7,818 $ 1,969,542 99.6% $ 10,845,765 99.8% $ 9,243,866 99.8% $ 12,782,394 $ 2008 1,749,724 $ 1,749,246 44,061 1,793,307 100.0% $ 11,476,365 CITY OF PEORIA, ARIZONA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GOVERNMENTAL DEBT TO TOTAL GOVERNMENTAL EXPENDITURES AND REVENUES LAST TEN FISCAL YEARS Principal Payments Interest and Other Charges Total $ $ 1999 6,846,203 5,093,165 11,939,368 Total Governmental Expenditures $ 72,785,237 Ratio of Debt Service to Governmental Expenditures Total Governmental Revenues Ratio of Debt Service to Governmental Revenues Source: 16.40% $ 80,874,207 14.76% 2000 $ 7,359,490 4,908,180 $ 12,267,670 $ 81,065,289 $ 2001 9,663,293 5,737,720 15,401,013 $ 91,850,304 $ 15.13% $ 92,029,612 13.33% $ 2002 9,578,372 5,352,468 14,930,840 $ 99,206,370 $ 111,779,079 $ 143,220,840 $ 144,972,313 $ 153,731,533 $ 213,283,409 $ 234,929,890 15.05% 15.68% 11.20% 15.42% 15.37% 11.38% 17.66% 109,293,292 $ 112,560,955 $ 121,179,431 $ 144,191,521 $ 178,025,080 $ 220,591,297 $ 216,437,439 13.66% 15.57% 13.23% 15.50% 13.27% 11.01% 19.17% $ 16.77% $ 103,033,259 Fiscal Year 2003 2004 10,612,697 $ 9,737,936 6,918,514 6,299,626 17,531,211 $ 16,037,562 Table XXVIII $ 14.95% Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 180 $ $ 2005 $ 15,304,972 7,046,576 $ 22,351,548 2006 $ 16,881,632 6,747,072 $ 23,628,704 2007 $ 16,178,431 8,099,492 $ 24,277,923 2008 $ 31,143,531 10,340,704 $ 41,484,235 Table XXIX CITY OF PEORIA, ARIZONA BOND AUTHORIZATIONS - ISSUED AND UNISSUED AS OF JUNE 30, 2008 Authorization/Purpose 1990 Authorization Police, Fire & Public Service Streets & Traffic Control Subtotal Authorization $ 4,145,000 17,935,000 22,080,000 Prior Issues $ 4,025,500 17,461,940 21,487,440 Current Year Issues $ - Remaining Authorization $ 119,500 473,060 592,560 1994 Authorization Police, Fire & Public Service Storm Sewer, Flood Protection & Bridges Streets & Traffic Control Water System Wastewater System Solid Waste Park & Library Subtotal 5,975,000 1,506,590 - 4,468,410 15,375,000 23,700,000 14,820,000 4,100,000 1,000,000 10,180,000 75,150,000 15,364,256 23,485,561 13,404,454 238,181 9,150,301 63,149,343 - 10,744 214,439 1,415,546 3,861,819 1,000,000 1,029,699 12,000,657 1996 Authorization Water System Wastewater System Subtotal 56,500,000 19,050,000 75,550,000 56,124,930 2,167,224 58,292,154 - 375,070 16,882,776 17,257,846 1996 WIFA Authorization Water/Wastewater 42,480,000 14,330,000 - 28,150,000 18,550,000 16,020,393 - 2,529,607 22,300,000 17,214,740 - 5,085,260 47,150,000 99,000,000 65,000,000 30,000,000 282,000,000 22,490,912 9,188,599 16,239,443 81,154,087 13,965,546 13,965,546 24,659,088 99,000,000 41,845,855 13,760,557 186,880,367 52,000,000 10,450,649 - 41,549,351 160,000,000 40,831,066 28,775,995 90,392,939 109,000,000 35,000,000 356,000,000 7,085,141 6,551,626 64,918,482 28,775,995 101,914,859 28,448,374 262,305,523 2000 Authorization Police, Fire & Public Service Storm Sewer & Flood Protection Streets, Bridges & Traffic Control Water System Wastewater System Parks & Open Space Subtotal 2005 Authorization Public Safety & Municipal Operations Water Treatment, Water System, Wastewater & Drainage Streets, Bridges & Traffic Control Parks, Recreation & Library Subtotal Grand Total 507,186,953 Source: City financial records 181 Authorization/Purpose Total authorizations by type: Police, Fire & Public Service Streets & traffic control Parks, open space, library Water system Waterwater system Solid waste Storm Sewer, Flood Protection & Bridges Water, Wastewater & Drainage Remaining Authorization Authorization Issued $ 80,670,000 197,785,000 75,180,000 170,320,000 88,150,000 1,000,000 $ 32,003,132 70,523,554 31,941,370 69,529,384 25,559,550 - 37,675,000 202,480,000 32,578,996 83,937,061 5,096,004 118,542,939 $ 853,260,000 $ 346,073,047 $ 507,186,953 $ 48,666,868 127,261,446 43,238,630 100,790,616 62,590,450 1,000,000 CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 1999 2000 * 2001 2002 2003 Table XXX 2004 2005 * 2006 2007 2008 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 95,000 108,364 115,432 122,655 126,815 132,805 137,045 145,125 153,592 5.6% 14.1% 6.5% 6.3% 3.4% 4.7% 3.2% 5.9% 12.1% 2.2% 2.3% 3.0% 3.8% 4.0% 3.2% 2.9% 2.2% 2.3% 2,506,575 3,073,095 3,310,936 3,537,861 3,717,962 4,102,612 4,442,177 4,704,082 4,978,531 158,227 9.0% 2.7% 5,255,150 Maricopa County Population % growth Unemployment Rate Per Capita Income 2,913,475 3,072,149 3,192,125 3,296,250 3,406,170 3,537,630 3,681,300 3,792,675 3,879,150 3.8% 5.4% 3.9% 3.3% 3.3% 3.9% 4.1% 3.0% 5.4% 3.0% 3.3% 3.9% 5.1% 5.2% 3.9% 4.1% 3.8% 3.2% 26,930 28,984 29,250 29,423 29,912 31,523 33,178 35,046 N/A 3,992,887 5.3% 3.7% N/A State of Arizona Population % growth Unemployment Rate Per Capita Income 4,924,350 5,131,501 5,319,785 5,470,720 5,642,725 5,845,250 6,077,740 6,305,210 6,432,007 3.4% 4.2% 3.7% 2.8% 3.1% 3.6% 4.0% 3.7% 5.8% 4.5% 4.0% 4.7% 6.0% 5.7% 5.0% 4.7% 4.4% 3.8% 24,057 25,656 26,197 26,472 26,975 28,564 30,019 31,936 33,029 6,622,885 5.0% 4.4% N/A United States of America Unemployment Rate Phoenix MSA Per Capita Income 4.2% 26,385 4.0% 28,359 4.8% 28,683 6.0% 28,844 6.4% 29,318 5.6% 30,892 5.3% 32,414 4.6% 34,215 4.6% 35,010 * - Census years. Mid decade census conducted for population only. ** - In thousands of dollars. Peoria personal income calculated by multiplying Phoenix Metropolitan Statistical Area (MSA) per capita income times Peoria population. Notes : Population estimates in non-census years are estimates from the sources listed below. Most recent per capita income information is two years old. Most recent two years of Peoria persona income calculated using most recent available per capital information. Per capita income information not available for the City of Peoria. Source: City population for most current year based on City staff estimates. Other population and unemployment data - Arizona Department of Security. www.workforce.az.gov Per Capita Income data - U.S. Dept of Commerce, Bureau of Economic Analysis 182 5.5% N/A CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND FIVE YEARS AGO Table XXXI 2008 Employer Peoria Unified School District City of Peoria Wal-Mart (2 locations) Plaza Del Rio Campus/Freedom Plaza & Care Center Fry's Food Stores (4 Locations) Target (3 Locations) Antigua Larry Miller Dodge/Hyundai Northern Pipeline Immanuel Care Campus Safeway (4 Locations) Good Shepherd Care Center Lowes (2 Locations) Forum At Desert Harbor Home Depot (2 Locations) Kohl's (2 Locations) Albertson's (2 Locations) Arizona Training and Evaluation Total # of Employees 4,500 1,960 748 700 543 523 287 270 260 260 264 250 250 218 216 205 195 - 2003 Rank 1 2 3 4 5 6 7 8 9 9 10 11 11 12 13 14 15 11,649 Percentage of Total City Employment 12.9% 5.6% 2.1% 2.0% 1.6% 1.5% 0.8% 0.8% 0.7% 0.7% 0.8% 0.7% 0.7% 0.6% 0.6% 0.6% 0.6% 0.0% # of Employees 4,100 832 280 1,129 415 300 210 378 230 297 310 33.3% 8,791 Note: This schedule should be current year and nine year prior, but earliest information available is fiscal year 2003. Source: City of Peoria Economic Development Department 183 Rank 1 3 9 2 4 7 11 5 10 8 6 Percentage of Total City Employment 15.6% 3.2% 1.1% 4.3% 1.6% 1.1% 0.8% 0.0% 0.0% 1.4% 0.0% 0.9% 0.0% 0.0% 0.0% 0.0% 1.1% 1.2% 33.5% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Full-time Equivalent Employees as of June 30, 2002 2003 2004 2005 Table XXXII 1999 2000 General Government Mayor & Council City Manager Communications & PA Human Resources Attorney City Clerk Court Economic Development Budget Finance Culture & Recreation Police Fire Community Development Engineering Highways & Streets Public Works Human Services Water Utility Wastewater Utility Solid Waste Utility Information Technology Stadium 3.00 8.04 8.50 16.12 6.49 9.55 5.00 56.37 141.69 146.00 98.00 51.92 21.00 30.29 47.00 9.25 44.52 16.00 30.00 18.00 19.47 3.50 8.04 10.00 16.44 5.63 10.05 5.00 58.37 156.31 158.00 98.00 51.92 21.00 32.29 48.00 9.25 44.52 16.00 31.00 19.00 19.47 3.50 8.04 11.00 16.50 5.63 10.05 5.00 65.37 170.59 165.00 102.50 51.92 26.00 32.29 47.50 9.25 47.52 16.00 35.00 20.00 19.48 4.00 10.04 12.00 18.80 7.00 11.05 5.50 69.87 186.02 182.00 107.00 52.92 30.00 33.29 53.50 8.50 54.52 16.00 35.00 27.00 19.48 4.00 7.50 6.00 12.00 18.71 7.00 10.00 3.00 5.00 71.00 99.90 200.00 112.00 46.50 31.50 35.00 52.50 9.00 56.52 16.00 39.00 33.00 14.00 4.00 7.50 6.00 12.00 19.31 7.00 10.00 3.00 5.00 71.00 103.78 208.00 117.00 46.50 33.00 36.00 56.50 8.00 60.02 17.50 40.00 33.00 13.00 5.00 8.50 7.50 13.00 20.20 8.00 11.00 3.00 7.00 77.00 111.36 226.00 131.00 49.50 38.00 39.00 59.50 8.00 67.02 17.50 40.00 38.00 14.00 5.00 10.50 11.00 13.00 22.70 8.00 13.00 4.00 7.00 79.00 109.36 250.00 134.00 50.80 43.00 40.00 61.50 8.50 70.02 16.50 40.00 39.00 14.00 6.00 12.00 12.50 14.00 23.80 8.00 16.00 4.00 7.00 82.00 124.39 264.00 157.00 51.80 47.00 44.00 69.00 14.50 72.00 19.00 44.00 43.00 16.00 6.00 13.00 13.50 17.00 26.00 9.00 22.00 5.00 9.00 88.00 131.74 286.00 173.00 53.80 49.00 44.00 70.50 14.50 75.00 25.00 47.00 47.00 19.00 Total FTE 786.21 821.79 868.14 943.49 889.13 917.11 999.08 1,049.88 1,150.99 1,244.04 Note: 2001 Beginning with fiscal year 2003, the City no longer counts part-time seasonal staff in the FTE calculation. Source: City budget office 184 2006 2007 2008 CITY OF PEORIA, ARIZONA BUILDING PERMITS AND HOME SALES LAST TEN YEARS Table XXXIII Building Permits Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 101 $ 46,615,999 74 $ 35,619,783 151 $ 39,366,098 180 $ 69,627,621 190 $ 47,808,957 177 $ 73,892,753 181 $ 64,990,575 244 $ 121,602,510 153 $ 38,162,527 3,654 420,114,645 1,740 243,314,533 1,620 215,434,384 1,525 199,491,258 1,831 241,885,416 2,927 373,716,048 2,421 320,780,556 1,338 213,028,399 963 154,975,128 2,512 59,939,189 2,254 19,001,442 1,970 14,482,349 1,399 13,399,434 2,203 20,138,826 2,000 21,512,846 2,209 26,532,508 2,110 34,196,112 1,825 33,948,358 $ 526,669,833 $ 297,935,758 $ 269,282,831 $ 282,518,313 $ 309,833,199 $ 469,121,647 $ 412,303,639 $ 368,827,021 $ 227,086,013 2005 2006 2007 1999 Commercial Number of Permits 76 Value $ 32,467,463 Residential Number of Dwelling Units 2,867 Value 307,835,122 Other Number of Permits 3,251 Value 90,972,372 Total Value $ 431,274,957 Source: City Community Development Department Single Family Housing Sales 1999 2000 2001 Calendar Year 2003 2002 2004 New # of Units Average Sale Amount Avr price % increase $ 2,747 143,839 12.63% $ 2,822 158,987 10.53% $ 2,279 183,975 15.72% $ 1,810 202,365 10.00% $ 1,583 215,825 6.65% $ 1,395 270,000 25.10% $ 1,875 323,190 19.70% # of Units Average Sale Amount Avr price % increase $ 2,194 128,078 7.89% $ 2,275 136,615 6.67% $ 2,850 145,844 6.76% $ 2,945 153,360 5.15% $ 3,515 151,000 -1.54% $ 4,575 175,000 15.89% $ 5,055 250,000 42.86% 2,235 395,650 22.42% 1,360 350,000 -11.54% Resale $ 2,930 270,000 8.00% $ 2,415 257,830 -4.51% New Housing Starts City of Peoria Maricopa County Note: 1999 2,496 2000 3,227 2001 2,332 2002 2,183 Calendar Year 2003 1,974 2004 2,420 2005 3,560 2006 1,654 2007 2,046 36,997 43,908 43,732 43,826 47,808 58,882 56,139 40,294 35,465 Information is not available for years prior to 1998. Information for calendar year. Source: Arizona State University College of Business - AZ Real Estate Center. Data is for calendar years. 185 CITY OF PEORIA, ARIZONA SCHEDULE OF INSURANCE IN FORCE JULY 1, 2007 THROUGH JUNE 30, 2008 Type of Insurance 1. 2. Primary Public Liability & Automobile General & auto liability Annual Renewal Date Insurance Carrier Limits N/A $500,000 per incident $500,000 annual Deductible Amount Annual Premium Self-insured Excess liability -Primary 7/1 St. Paul Companies GP06301403 5 Million per occurrence SIR above Public Entity E & O 7/1 St. Paul Companies GP06301403 5 Million per occurrence SIR above Included with above Excess liability - 1st level 7/1 RSUI Indemnity Company NHA040320 20 Million per occurrence SIR above 77,500 Excess liability - 2nd level 7/1 RSUI Indemnity Company NHA040320 20 Million per occurrence SIR above 12,000 Excess liability - 2nd level -Special Events 4/1 Great American Insurance GLP0000566241702 1,000,000 N/A 2,895 N/A Self-insured N/A $500,000 per incident $500,000 annual N/A N/A Automobile & Equipment N/A Self-insured N/A $25,000/$50,000 (1) N/A N/A Excess buildings and contents (see Note) 7/1 Travelers Casualty and Surety 297T228807 267,028,566 Storage Tank 3rd Party liability 1/6 Great American Insurance BTA557496104 1,000,000 5,000 2,405 7733A918BM21 25,000,000 1,000 12,000 N/A N/A N/A N/A 83BSBDQ8939 100,000 Property (Real & Personal) City buildings and contents Boiler & Machinery 7/1 Travelers Casualty and Surety 4. Workers' Compensation N/A State Compensation 5. Public Employee Bond Blanket employee dishonesty bond 9/22 Hartford Fire Insurance Co. 6. Broker Service Fee 7. Cyber Liability 7/1 Mesirow Insurance Services 8. Identity Theft 7/1 9. Multi-media Liability 7/1 (1) Policy Number N/A 3. Note: Table XXXIV N/A SIR above 5,000 822,618 194,292 400 60,000 N/A 1,000,000 Travelers Casualty and Surety 104968078 10,000 National Casualty Company LS039414 1 Million per occurrence For breakdown of property insurance policy, see Table XXXIV Vehicles with a value less than $50,000 are self-insured by the City. Vehicles with a value in excess of $50,000 are self-insured up to $25,000. Source: City Risk Management and financial records 186 SIR above 2,378 N/A 4,686 5,000 2,381 Table XXXV CITY OF PEORIA, ARIZONA PROPERTY INSURANCE SCHEDULE JUNE 30, 2008 Property Building and contents - combined blanket limit excluding earthquake and flooding $ 250,028,566 Valuable papers: City Hall 5,000,000 Contractors equipment ($5,000 deductible) 2,000,000 Electronic data processing ($5,000 deductible) 10,000,000 $ Sources - Risk Management records 187 267,028,566 CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2000 1999 Governmental Activities: General Government Registered Voters Voter Participation (last election) Culture & Recreation Recreation Participants New Recreation Accounts Public Safety Police Calls for Service Avg Response Time (minutes) Fire Number of Incidents Avg Response Time (minutes) Development Services Building Permits Issued Value of Building Permits $M Highways & Streets Asphalt Used (in tons) Centerline Miles Swept Lane Miles Assessed Public Works Number of Vehicle Work Orders Human Services Number of Dial-a-Ride users Number of Annual Trips Section 8 Unit Months Available Section 8 Unit Months Leased Business-type Activities Water Utility Annual Consumption (000's gal) Average Gallons/Household/Year Wastewater Utility Wastewater Treated (billion gal) Solid Waste Utility Residential Tonnage Processed Comercial Tonnage Processed Recycle Tonnage Processed Stadium Spring Training Attendance Sporting Rentals Days Non-Sporting Rentals Days Public Housing Unit Months Available Number of Unit Months Leased Notes: $ 2001 2002 2003 43,283 21.1% 43,283 21.1% 48,142 23.3% 48,142 23.3% * * * * 61,813 * 67,182 * 35,146 * 38,988 * 43,009 * 50,099 * 6,636 4.5 8,276 4.2 9,312 4.5 9,977 4.2 6,194 431.3 $ 6,267 526.7 $ 4,068 297.9 $ 3,741 269.3 Fiscal Year 2004 51,617 11.0% 2005 52,674 11.0% 65,725 4,149 $ Table XXXVI 2006 65,998 33.8% 2007 62,328 25.4% 2008 63,544 25.4% 71,051 60.6% 65,928 4,998 69,206 5,492 75,145 5,160 77,602 4,923 119,620 6,692 56,430 5.5 101,951 5.3 142,319 5.7 102,385 4.8 103,921 5.2 **62,341 6.0 10,268 4.2 11,014 4.3 11,618 4.3 12,445 4.3 12,788 4.4 13,649 4.4 3,104 282.5 $ 4,224 309.8 $ 5,104 469.1 $ 4,811 412.3 $ 3,692 368.8 $ 2,943 225.5 * * * * * * * * * * * * * * * * * * 6654 9807 277 5035 8697 218 7999 8496 90 8365 7604 381 * * * * * 4,746 5,056 5,920 5,787 5,679 4,875 39,564 * * 4,925 35,028 * * 5,276 37,296 756 746 5,236 36,792 864 864 5,478 32,256 984 897 5,814 29,382 984 819 6,010 34,428 984 858 5,147 42,232 984 773 5,310 47,244 984 788 5,750 45,451 984 916 5,351,436 172,516 5,465,333 171,812 6,629,039 189,944 6,657,323 189,608 6,640,038 180,544 6,828,944 178,850 6,890,083 180,679 7,889,653 194,552 8,220,760 195,840 8,626,688 177,016 2.8 2.9 3.0 2.7 2.7 3.2 3.4 3.6 3.7 3.6 42,461 23,046 260 44,081 25,016 410 52,188 19,958 357 55,081 22,917 498 60,516 19,642 600 64,358 19,157 1,133 65,950 18,436 1,523 69,191 22,943 1,690 71,396 25,260 1,927 61,290 20,519 11,549 215,413 * * 190,945 * * 194,462 * * 230,662 * * 169,932 * * 222,927 * * 225,316 * * 200,153 * * 220,357 195 54 230,434 234 83 * * * * 840 840 840 840 840 822 840 819 840 828 840 831 840 827 840 812 * Information is not available for these fiscal years. ** The drop in calls for service reflect a change in what is considered a “call for service”. Past practice was to include officer initiated calls, that has changed and we currently only count those calls that come into the 911 center. Source: Various City Departments 188 CITY OF PEORIA, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Table XXXVII Fiscal Year 1999 Governmental Activities: General Government Annexed Area (square miles) Culture & Recreation # of Parks/Playgrounds Total Park Acreage Ramadas Basketball Hoops Tennis Courts Volleyball Courts Multi-Purpose Fields Swimming Pools Urban Lakes Skate Parks Public Safety Police Stations Marked Patrol Vehicles (units) Fire Stations (full-time / part-time) Number of Fire Engines Number of Ladder Trucks Highways & Streets Streets (miles maintained) Public Works Street Lights Vehicles in Fleet Human Services Dial-a-Ride Buses Business-type Activities Water Utility Number of Water Accounts Storage Capacity (million gal) Wastewater Utility Number of Wastewater Accounts Treatment Capacity (billion gal) Solid Waste Utility Number of Solid Waste Accounts Stadium Number of Practice Fields Number of Clubhouses Total Complex Acreage Public Housing Number of Public Housing Units Notes: 2000 2001 2002 2003 2004 2005 2006 2007 2008 139.0 144.0 156.0 162.4 162.6 176.2 177.9 177.9 177.9 177.9 20 173 46 38 17 5 * 1 0 0 20 180 46 38 17 5 * 2 0 0 21 195 50 42 19 5 * 2 0 0 22 205 59 42 21 8 * 2 0 0 23 223 60 42 21 8 * 2 0 0 24 233 74 71 22 10 12 3 1 1 24 240 78 74 24 10 37 3 1 1 26 264 87 82 25 12 30 3 1 1 26 264 87 82 25 12 31 3 1 1 26 264 87 82 25 12 31 3 1 1 2 45 2 46 2 52 2 59 2 61 2 80 2 86 2 90 2 101 2 103 4/0 * * 4/0 * * 5/0 * * 5/0 * * 5/0 * * 5/2 8 1 5/2 7 1 6/1 8 1 7/1 9 1 7/1 9 1 365 374 396 414 444 471 487 518 537 538 10,170 * 11,315 * 10,008 * 10,552 * 11,186 * 11,829 543 12,000 599 12,000 621 12,737 661 13,618 720 9 9 9 9 9 9 9 9 11 11 31,020 4.1 31,810 16.1 34,900 16.1 36,221 16.1 37,664 22.2 38,818 37.3 42,673 40.0 44,221 40.0 45,630 40.0 46,146 41.8 30,274 11.4 34,190 11.4 37,321 11.4 38,130 11.4 39,806 13.4 40,984 13.4 43,824 14.2 45,933 14.2 47,831 14.2 48,759 25.7 29,517 32,615 35,320 36,978 38,546 39,747 42,467 44,198 46,309 47,146 13 3 145 13 3 145 13 3 145 13 3 145 13 3 145 13 3 145 13 3 145 13 3 145 13 3 145 13 3 145 * * 70 70 70 70 70 70 70 70 * Information is not available for these fiscal years. Source: Various City Departments 189