Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2009 City of Peoria, Arizona City Council: Bob Barrett, Mayor Joan Evans, Vice Mayor Ron Aames Cathy Carlat Vicki Hunt Carlo Leone Dave Pearson Administrative Staff: Carl Swenson, City Manager Susan Thorpe, Deputy City Manager Susan Daluddung, Deputy City Manager Prepared By: Finance Department 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, 2009 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-xvi xvii xviii xix xx-xxiii 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 44 45 47 Notes to the Financial Statements i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2009 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, 2009 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. 130 133 134 135 140 142 143 STATISTICAL SECTION - Unaudited 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 iv City of Peoria 8401 West Monroe Street, Peoria, Arizona 85345 October 15, 2009 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, 2009. 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 3-18 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 159,263. 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 28 parks encompassing 314 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 will begin construction of another large community park in fiscal year 2010. 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 2009 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: Peoria’s commitment to sustainability and the environment put on its public face: § News and information to help residents “go green” is available in a new section of the city web site – www.peoriaaz.gov/sustainability. § A Building Community speakers series invites regional experts on sustainable development to share ideas on how Peoria might move forward in an environmentally and financially sustainable fashion. § Hundreds of people attended Peoria’s first “Green Your ride” auto show, where they could put their hands on hybrid and other fuel efficient vehicles offered by the City’s Bell Road auto dealers; climb on the City’s alt-fuel work vehicles; and learn about other sustainable practices. § Peoria earned a rebate of almost $55,000 from Arizona Public Service (APS) for the energy-efficient lighting, heating and air conditioning, and other systems built into the Development & Community Services Building, which opened in 2007. Budget & Management § Received the Certificate of Distinction from the International City/County Management Association (ICMA) for the Performance Management Program. th § Received the 16 consecutive Distinguished Budget Award from the Government Finance Officers Association for the fiscal year 2009 budget documents. Communications § Peoria’s government Channel 11 began streaming live at www.peoriaaz.gov/channel11, opening city government to an even wider audience. § Channel 11 launched two new shows: The REC Show, a roughly 20 minute program that highlights recreational, educational and cultural opportunities in Peoria; and Peoria Pulse, a five-minute community update. The new programs join Focus TV, an award winning 30 minute newsmagazine that debuted in November 2008. Community Development § Set the future direction in sustainability by drafting a new Energy Element of the General Plan which was adopted by Council. vi § § § § Developed a process to recognize locally historically significant structures in the City. The Central School, jail, Women’s Club and Presbyterian Church were all recognized under this program. Developed new levels of customer service, Fast Track and Expedited Review, to give customers additional options in the development process. Awarded the City’s first Community Housing Development Authority Grant to purchase, rehab and lease multi-family housing units. Developed a strategy through the Foreclosure Task Force to reduce the negative effects of the foreclosure crisis on City neighborhoods. The strategy combines aggressive code compliance efforts with increased down payment assistance for purchasers of foreclosed homes. Community Services § Received official designation of “Tree City USA” by the Arbor Day Foundation. § Dedicated and opened new Sunrise Mountain Branch Library in the northern part of the City. § Completed two miles of trails as part of the New River Trail between Grand and Olive Avenues. § Made significant right-of-way improvements to several areas throughout the City. § Completed overall renovations at Hayes Park. § Installed shade canopies over playground structures at Country Meadows Park, Terramar Park, and Hayes Park. § Organized Veterans Day Run and recognition event. City Clerk § Conducted open meeting law training for Department Directors, Boards & Commissions Staff Liaisons and Staff Assistants. § Conducted three elections, including serving as an early voting location. City Manager § Organized and led Fleet Solutions Group, a cross-functional team that analyzed the city’s fleet operations and identified approximately $1 million in ongoing budget savings, primarily through the elimination of low-uses vehicles and a review of the useful lives of existing vehicles. § The City collaborated with residents and neighboring communities to successfully back a State Route 74 alignment for a major electric power line through Peoria. The alternate route would have dissected some of the city’s most beautiful terrain and near existing neighborhoods. Engineering rd th § Constructed a new segment of Happy Valley road from 83 Avenue to 67 Avenue, including a new bridge over New River, as part of a $54 million project. th § Completed the $19.2 million widening of Thunderbird Road from SR 101L to 94 Avenue, including aesthetic enhancements to the bridge over New River. § Completed two major drainage projects in partnership with the Flood Control District of Maricopa rd County – the Rose Garden Lane Channel ($11.8 million) and the 83 Avenue & Pinnacle Peak Road Drainage ($16 million). These projects provide an increased level of flood protection for residents and businesses in these areas. § Installed traffic signals at seven additional intersections throughout the City to enhance traffic flow and safety. th st § Received $4.9 million in federal funds for the 84 Avenue streetscape ($2.4 million) and 91 Avenue & Olive Avenue intersection improvements ($2.5 million) projects. § Secured $3.98 million in transportation funding through the American Recovery and Reinvestment Act of 2009 (ARRA) to assist in construction of the Beardsley road Extension to the Loop 101 freeway rd ($2.85 million) and the resurfacing and re-striping of Beardsley Road from Lake Pleasant Road to 83 Avenue ($1.13 million). Finance § Issued $68.4 million in General Obligation bonds to fund various street, storm drainage, municipal facilities, and parks and trails projects. § Received another incremental bond rating upgrade for its General Obligation Bonds from Standard & Poor’s rating agency. vii § § § The Revenue Division successfully completed 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. Implemented electronic (e-billing) for the utility billing system allowing customers to sign up to receive their city utility bill by e-mail. The Meter Services Section completed the final phase of a nine year project to convert all of the City’s water meters to an automated meter reading system. Fire § The Emergency Management Division trained every City employee in Continuous Chest Compression (CCC) Cardio Pulmonary Resuscitation (CPR) and Automatic Defibrillator (AED) operations. New AED heart monitors were installed throughout city facilities. § Received a grant from the Federal Emergency Management Agency (FEMA) to purchase new SelfContained Breathing Apparatus (SCBAs) for improved safety of personnel. § Fire Community Services received grants for programs including car seat installations, smoke detectors replacement, CPR in schools and senior programs. These grants allowed them to: train 200 th th 5 & 6 grade students through the CPR in schools program; install 300 smoke detectors in senior communities; teach the proper installation of child car seats to over 400 participants; and donate 25 car seats to low income families. § Peoria paramedics received 4 recognition awards from John C. Lincoln Hospital – North Mountain for paramedic of the year and medals of valor. § Lead a multi-department effort to relocate and expand the City’s Emergency Operations Center to allow the City to enhance response to disasters or other emergency situations. Human Resources § Completed first on-line open benefits enrollment for all City staff. § Implementation of the Classification and Compensation study covering all AFSCME represented staff of the City. Information Technology § Completion of a $14 million Citywide radio system for Police and general government operations, with integration into the regional radio system to enhance regional disaster response. § Completion of the City of Peoria/Peoria Unified School District fiber optic sharing project, with connectivity to all major City facilities. § Redesign of the City’s public website to make it more citizen-centric, with implementation of a content management system for ease of updates. § Implementation of e-Citation for the Courts and Police motorcycle units for electronic traffic violation ticketing and processing. Police § Implemented the Nixel emergency notification system. This system allows residents to sign up to receive emergency or community alert information from the Police and Fire Departments. This system allows notification by e-mail, text message or through the Nixel web site. § Also implemented a new Community Emergency Notification System (CENS) to notify the community of emergency situations by phone (land lines only). § Participated on the team to review the Federal Emergency Management Agency (FEMA) Basic Public Information Officers’ Course and created two new courses. § Established a School Resource Officer Program and assigned officers to two local high schools. § Participated with Information Technology in the installation and implementation of a new radio sytem. § Upgraded the 9-1-1 phone system. Public Works th § Became the 54 agency in the country to be accredited by the American Public Works Association. § Led the initiative to reduce electrical consumption at the Municipal Office Complex. This led to a savings of 799,360 kilowatt hours from the same period a year earlier. viii § § § § § The Transit Division’s Trip Reduction Program (TRP) received the 2008 Clean Air Award of Outstanding TRP (Governmental Employer category). Fleet Division earned a Blue Seal of Excellence from the National Institute for Automotive Safety Excellence. Executed $2.6 million in pavement management projects. Conducted three Household Hazardous Waste Drop-Off Events. Over 1,500 residents utilized the service and 184,338 pounds of hazardous waste was diverted from the landfill. Peoria celebrated one year of residential curbside recycling by treating residents to “Recycling Night at the Ballpark”. Residents diverted nearly 25% of solid waste to recycling - 16,076 tons – which earned nearly $350,000 to help pay fro the service. Public Works Utilities § The Utilities Division received nine safety awards from AzWater (formerly Arizona Water & Pollution Control Association), the preeminent water association in the state. This was the largest number of awards to a single entity. § The Butler Water Reclamation Facility was named a Public Works Project of the Year by the American Public Works Association. The plant was the largest membrane bio-reactor in the United States when it opened. This treatment system minimizes impact to the surrounding area while treating effluent to the highest quality. § Began recharging Class A+ reclaimed water from the Butler Water Reclamation Facility at the New River Agua Fria Underground Storage Project operated by Salt River Project (SRP). § Enhanced the water conservation program through expansion of the rebate program and additional educational class for residents. § The water conservation program helped the community reduce its residential water use by 634 million gallons from the previous year – enough to fill nearly 1,000 Olympic swimming pools. § Significantly reduced the City’s reliance on groundwater pumping through recovery of recharged surface water. § Cleaned 123 miles of sewer line. § Inspected and performed maintenance of all 7,600 fire hydrants throughout the City. § Converted to radio cluster communications, improving Supervisory Control and Data Acquisition (SCADA) communications system wide. 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: § § § Community Building – Preserve and expand our quality of life: § Arts/Culture. § Parks and recreation opportunities. § Quality neighborhoods / revitalization of older neighborhoods / Old town / Arrowhead Entertainment District. § Community oriented services, including Fire and Police. § Expand civic and not-for-profit partnerships. Enhance Current Services: § Our City organization and culture. § Cost effective service delivery. § Peoria is the employer of choice. § Use technology to enhance and streamline services. § A business model for the future / strategic planning. § Seek out grants. Preserve our Natural Environment: § Land banking for parks and open space. ix § § § § Incorporate open space into our built environment. Total Planning: § Employment / Jobs / Corridor. § Mix of living environments. § Infrastructure. § University / Higher Education strategy. § Health Care strategy. § Prudent fiscal stewardship. § Broad internet access. § Cost-effective green development. Economic Development: § Seek economic opportunities state, national, Pacific Rim, international. § Partner with economic development groups like Greater Phoenix Economic Council (GPEC). § Assess new models for economic development. § Partner with State Land Department in seeking economic development opportunities. § Seek multi-modal transportation infrastructure. § Strengthen Sister Cities relationships. Add an Asian city. Leadership and Image: § Locally and regionally. § Within the State. § Community relations. § Become a major player. § Peoria as a destination. 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 2009 another successful year and continues to provide a foundation for success in the years to come. The City maintains a strong commitment to continue to refocus itself to the new economic reality and to be a leader in areas like sustainability and cost-effective service delivery to maintain and enhance the quality of life in Peoria. 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 five 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. In fiscal year 2009 the City has continued to experience a downturn in the overall economy. However, four major retail centers at Happy Valley Road and Lake Pleasant Road have reached a virtual completion, offering approximately 1.5 million square feet of new retail space for northern Peoria. The majority of the space has been occupied and current tenancy continues to reflect profitability. There is quite a bit of opportunity and business potential still available for this area. Numerous commercial and retail developments are in various stages of planning. The Peoria Regional Medical Center is anticipated to start construction in the next year, consisting of a 70,000 square foot hospital and an adjacent 350,000 square foot medical support facilities. Also, a 500,000 square foot commercial/office site north of Jomax Road on Lake Pleasant Road is moving forward and construction is projected in the next year. Two major commercial activity studies are currently underway; both are designed to enhance the overall concept of the Downtown and Peoria Sports Complex areas. Both of these areas will attract major new commercial and office developments enhancing the economic outlook for the City. x Presently, we have two new commercial developments moving forward in southern Peoria; one is a new rd retail building just north of Thunderbird Road and 83 Ave consisting of 40,000 square feet offering approximately 50 employment opportunities and the other is a 30,000 square foot manufacturing building th at Olive Rd and 75 Ave bringing an additional 40 new jobs to the City. Construction on both these commercial developments is planned to begin shortly. The overall trend has been that commercial development is dependent on, and follows, residential development activity. Since residential construction has declined significantly over the last year, commercial activity has slowed dramatically. When the residential market turns, the City of Peoria will become a major commercial market for new construction within the Maricopa County area. Economic Outlook The regional economy has remained subdued during fiscal year 2009 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 in decline with only moderate gains in the healthcare sectors. Employment growth in Arizona declined at a rate of 7.6%. In June 2009, the unemployment rate in the metropolitan Phoenix region was 8.3%, which remains below the state (8.9%) and national (9.5%) unemployment rates. Locally, Peoria has maintained a slow 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 much slower pace than in previous years as the state’s housing market continues to adjust home values down. 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 34% of General Fund revenues in fiscal year 2009. 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 45% of sales tax collection is derived through retail sales. In the past, 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 st the Peoria Sports Complex area, as well as the 91 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 taxes decreased 13.8% from the prior fiscal year. Fiscal year 2010 sales tax revenues are anticipated to decline an additional 3% from fiscal 2009 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 $8.8 million in revenue in fiscal year 2009, down from $10.3 million in fiscal year 2008. As with other sales tax revenues, a small decline is expected in fiscal year 2010 collections. 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 decrease of 7.5% in these revenues in fiscal year 2010, 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. xi Property Tax: The City’s property tax rate was $1.44 per $100 of assessed valuation for fiscal year 2009. Of this, $.19, or about 15% 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 $2.9 million in revenue for the General Fund in fiscal year 2009. 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. The property tax rate is unchanged for fiscal year 2010. With a 12% rise in assessed value, primary property tax revenue projections for fiscal year 2010 are $3.2 million. Based on current development patterns, as well as expected decreases in the assessed value of existing properties, primary property tax revenue will likely 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. 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 2009 was $688.9 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 xii 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 five former members currently receive payments under the plan. The plan for volunteer firemen is sufficiently funded with assets of $204,962 at June 30, 2009. For fiscal year 2009, investment income and other revenues were $5,653 while expenditures for retirement payments and administrative expenses were $30,600. 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, 2009, the City’s general obligation debt of $183,060,000 was below the combined legal limit of $518,593,900. 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, 2009. Percent of General Obligation Debt to Secondary Assessed Value: General Obligation Debt $ 183,060,000 Secondary Assessed Value $ 1,994,591,924 G.O. debt to secondary assessed 9.2% value Bonded Debt Per Capita: General Obligation Debt Less: Debt Service Reserves Net GO Debt Estimated Population G.O. debt per capita $ $ 183,060,000 44,978,714 138,081,286 159,263 867 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 xiii upgrade from Aa3 to Aa2 for its existing General Obligation debt from Moody’s Investors Service. In January 2009, all of the rating agencies reviewed their ratings for the City’s General Obligation Bonds and Utility Revenue Bonds. The previous ratings were confirmed except for an upgrade from Standard & Poor’s from AA to AA+ on the General Obligation rating and from AA- to AA for the Utility Revenue rating. 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. Moody’s Investors Service Standard & Poor’s General Obligation Bonds Current rating Aa2 AA+ Prior rating Aa2 AA Date of current rating 1/2009 1/2009 Water & Wastewater Bonds Current rating A2 AA Prior rating A2 AADate of current rating 1/2009 1/2009 Municipal Development Authority Bonds (Other than Transportation) Current rating Aa3 AA+ Prior rating A1 AA+ Date of current rating 2/2008 2/2006 Municipal Development Authority (Transportation) Bonds Current rating Aa3 AA Prior rating Not rated Not rated Date of current rating 2/2008 2/2008 Highway User Revenue Bonds Current rating A A Prior rating not rated not rated Date of current rating 6/1988 2/1988 Improvement District Bonds Current rating A1 A Prior rating Not rated ADate of current rating 3/2007 3/2007 Fitch Ratings AA AA 1/2009 AAAA1/2009 AAAA2/2006 A+ Not rated 2/2008 A+ A3/2000 AAA+ 3/2007 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 2.34% for the year ended June 30, 2009. The book value of the City’s unrestricted investment portfolio at June 30, 2009 was $204,523,892. For further information on the City’s investments please refer to Note 4 of the notes to the financial statements. xiv 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 2009 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, 2009 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 on risk management and insurance coverage, please refer to Note 1.Q 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, 2009, 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, 2009, 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, 2009 found no instances of material weakness in the xv internal control. However, there were significant deficiencies found in one of the major programs tested. 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 Officers 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, 2008. This is the 24th 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. 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 xviii Community Services Intergovernmental Affairs Police Finance Communications Planning and Sustainability Human Resources Fire City y Clerk Economic Development Services Management and Budget Information Technology Deputy City Manager Community Building Engineering Assistant to the City Manager City Attorney Strategic Support City Manager City of Peoria Organizational Chart Public Works/Utility Operations Deputy City Manager Operations Municipal Court Citizen Advisory Boards & Commissions Mayor and City Council Peoria Citizens City of Peoria Principal Officials of the City Fiscal Year 2009 Bob Barrett Mayor Joan Evans Vice-Mayor Ron Aames Councilmember Cathy Carlat Councilmember Vicki Hunt Councilmember Carlo Leone Councilmember Dave Pearson Councilmember Carl Swenson City Manager Susan Thorpe Deputy City Manager – Operations Susan Daluddung Deputy City Manager – Community Building George Anagnost Municipal Judge Stephen M. Kemp City Attorney J.P. de la Montaigne Community Services Director Andrew Granger Engineering Director Wynette Reed Human Resources Director Glen Van Nimwegen Planning & Sustainability Director Thomas Solberg Fire Chief Larry Ratcliff Chief of Police Mary Jo Kief City Clerk Brent D. Mattingly Chief Financial Officer, Finance Director Bill Mattingly Public Works /Utility Operations Director Grady Miller Communications & Public Affairs Director Jeff Tyne Budget Director John Imig Information Technology Director Vacant Economic Development Services Director xvii --6-- xix 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 E AV GRA ND .- Joan Evans Willow District U. S. 60 Carlo Leone Pine District Acacia District Pine District For more information visit www.peoriaaz.gov/council xx xx 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. Joan Evans Vice Mayor 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 th th Evans has devoted herself to education. After teaching 4 and 5 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 54 years, with the last 12 years being spent in Peoria. Now in her 41st 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. Vicki Hunt Councilmember 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 – 1998-Present; 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 xxi City Mayor and Council City of Peoria, Arizona 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 – 2004-Present; Member, Boards and Commissions subcommittee – 2003-Present; Council Liaison, Economic Development Advisory Board – 2004-Present; Chair – Ethic Committee. 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 27 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 20 year resident of Peoria where he and his wife have raised three children. Cathy Carlat Councilmember 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, 21 and Natalie, 14. 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. 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 xxii City Mayor and Council City of Peoria, Arizona 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). xxiii xxiv 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, 2009. 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-xvi 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 $62.5 million (4.5%) in fiscal year 2009, an increase of $65.0 million (7.3%) in governmental activities and a decrease of $2.5 million (.5%) in business-type activities. ♦ Total net assets of the City are $1,453.4 million, of which $244.2 million is unrestricted (down $18.2 million, 6.9%, from last year’s $262.4 million unreserved net assets). ♦ The governmental activities program revenues increased by approximately $2.6 million (3.2%) over the previous year. This was due to an increase in the value of donated capital assets. Charges for services decreased by $5.4 million (21.2%), grants/entitlements decreased by $1.9 million (5.2%), while donations of capital assets increased by $9.9 million (50.3%). ♦ The business-type activities program revenues decreased by approximately $12.5 million (14.8%) from the previous year. Charges for services decreased by $2.5 million (4.0%) and donations of capital assets decreased by $10.1 million (45.3%). ♦ At June 30, 2009, total fund balance of the governmental funds was $319.4 million, up $12.1 million (3.9%) from the previous year. Of this, $66.0 million (up 3.5%) was unreserved/undesignated (available for spending at the government’s discretion). ♦ General Fund inflows (on a budgetary basis) were less than budgeted inflows by $8.3 million for fiscal year 2009. Budgetary basis outflows of the General Fund were only 74.2% ($42.6 million in savings) of the final budgeted outflows. ♦ At June 30, 2009, unreserved/undesignated fund balance for the General Fund was $24.3 million, or 22.2% of General Fund expenditures for fiscal year 2009. ♦ During fiscal year 2009, the City issued $68.4 million in General Obligation (GO) Bonds and $8.6 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 59-62). 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 on the face of 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 47-86) 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, 2009, 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, 2009, 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 2009 2008 $ 400.3 $ 393.5 982.5 867.0 1,260.5 1,382.8 $ Business-type Activities 2009 2008 $ 83.6 $ 102.2 571.8 564.6 655.4 666.8 Total Primary Government 2009 2008 $ 483.9 $ 495.7 1,554.3 1,431.6 2,038.2 1,927.3 Percent Change (2.4)% 8.6 5.8 47.0 382.2 429.2 53.7 318.2 371.9 11.4 144.2 155.6 9.3 155.2 164.5 58.4 526.4 584.8 63.0 473.4 536.4 (7.3) 11.2 9.0 690.7 55.2 207.7 953.6 602.7 65.5 220.4 888.6 429.8 33.5 36.5 499.8 427.3 33.0 42.0 502.3 1,120.5 88.7 244.2 $ 1,453.4 1,030.0 98.5 262.4 $ 1,390.9 8.8 (10.0) (6.9) 4.5 $ $ $ The net assets of the City increased $62.5 million (4.5%) in fiscal year 2009. Net assets of governmental activities increased $65.0 million (7.3%), while the business-type activities decreased $2.5 million (.5%). Net Assets consists of three components. The largest portion of net assets ($1,120.5 million or 77.1%) 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 the capital assets themselves are not intended to be used to liquidate these liabilities. This category of Net Assets increased $90.5 million in fiscal year 2009 due to capital asset expenditures, including $53 million for streets-related infrastructure, $7 million for drainage infrastructure, $5 million related to the new branch library, $2 million for the court building expansion, $5 million for parks, trails and other culture and 6 recreation capital items, $4 million for water utility capital items, $6 million for wastewater utility capital items, and the rest for various other capital expenditures and reductions in related debt. The second portion of the City’s net assets ($88.7 million or 6.1%) represents resources that are subject to external restrictions on how they may be used. The decrease of $9.8 million is primarily due to an increase of $4.2 million in restricted for capital projects in the governmental activities and a decrease of $15.0 million in net assets restricted for development fees (due to a sharp decreases in development fee revenues, but continued capital projects from this fund) in the governmental activities. The third portion consists of Unrestricted Net Assets of $244.2 million (16.8%). These net assets may be used to meet the City’s ongoing obligations to citizens and creditors. This category decreased $18.2 million (6.9%) in fiscal year 2009. Unrestricted net assets is the balance of net assets remaining after calculating the other two categories discussed above. Unrestricted net assets of governmental activities decreased $12.7 million, while unrestricted net assets of business-type activities decreased $5.5 million. Much of the decrease in unrestricted net assets comes from the following funds: General Fund $9.6 million, Half-Cent Sales Tax Fund $1.4 million and Highway User Revenue Fund $.3 million due to lower revenues, especially sales taxes and development related revenues, in the economic downturn. Changes in Net Assets The following table compares the government-wide revenue and expenses for the current and previous fiscal year. Changes in Net Assets (in millions of dollars) Governmental Business-type Activities Activities 2008 2009 2008 2009 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 (deficit) before transfers Transfers Increase (decrease) in net assets $ 20.1 3.0 31.4 29.6 $ 25.5 2.9 33.4 19.7 $ 59.5 .2 12.2 $ 62.0 .1 22.3 Total Primary Government 2009 2008 $ 79.6 3.2 31.4 41.8 $ 87.5 3.0 33.4 42.0 Percent Change (9.0)% 6.7 (6.0) (.5) 31.8 59.0 4.0 11.0 20.4 5.0 3.6 7.9 226.8 26.3 68.5 3.8 12.7 19.5 5.6 6.0 13.3 237.2 2.0 73.9 3.3 87.7 31.8 59.0 4.0 11.0 20.4 5.0 3.6 9.9 300.7 26.3 68.5 3.8 12.7 19.5 5.6 6.0 16.6 324.9 20.9 (13.9) 5.3 (13.4) 4.6 (10.7) (40.0) (40.4) (7.5) 23.2 23.2 37.1 21.6 6.4 24.0 7.7 2.4 12.6 .6 17.1 21.8 34.5 19.9 6.5 22.9 7.8 2.9 11.2 .6 - - 23.2 23.2 37.1 21.6 6.4 24.0 7.7 2.4 12.6 .6 17.1 21.8 34.5 19.9 6.5 22.9 7.8 2.9 11.2 .6 35.7% 6.4 7.5 8.5 (1.5) 4.8 (1.3) (17.2) 12.5 - 158.8 68.0 (3.0) 65.0 145.2 92.0 (9.8) 82.2 32.2 31.0 10.6 5.3 .3 79.4 (5.5) 3.0 (2.5) 28.7 17.3 13.3 6.9 .4 66.6 21.1 9.8 30.9 32.2 31.0 10.6 5.3 .3 238.2 62.5 62.5 28.7 17.3 13.3 6.9 .4 211.8 113.1 113.1 12.2 79.2 (20.3) (23.2) (25.0) 12.5 (44.7) (44.7) $ $ 7 $ $ $ The general revenues of governmental activities decreased $13.0 million (8.4%) from the previous year. The primary drivers were property taxes, levied for debt service (or secondary property taxes), sales and use taxes, and state shared sales taxes. Secondary property tax revenues increased by $5.6 million (24.8%) in fiscal year 2009 due to increased secondary valuation of taxable property. Sales and use taxes decreased $9.5 million (13.9%) and state shared sales taxes decreased $1.7 million (13.4%) due to the downturn in the economy. Additionally interest income decreased $5.4 million (40.6%) due to lower interest rates. Program revenues of governmental activities increased $2.6 million (3.2%) mainly as a result of the following changes: Charges for services decreased by $5.4 million (21.2%), grants/entitlements decreased by $1.9 million (5.2%), while donations of capital assets increased by $9.9 million (50.3%). Charges for services were affected by decreased permit-related revenues of $5.7 million from fiscal year 2008, affecting public works, development services, police, and fire program revenues. The program revenues of business-type activities decreased $12.5 million (14.8%). Of that, capital contributions (impact fees and donations of capital assets) decreased by $10.1 million (45.3%) as a result of decreased permit and construction activity. For fiscal year 2009, total governmental revenues decreased $10.4 million (4.4%) and total business-type revenues decreased $13.8 million (15.7%). Expenses increased $13.6 million (9.4%) and $12.8 million (19.2%) for the governmental activities and business-type activities, respectively. General government expenses increased by $6.1 million (35.7%), police expenses increased by $2.6 million (7.5%), fire expenses increased by $1.7 million (8.5%), and interest expense on debt increased $1.4 million (12.5%). Water Utility expenses increased $3.5 million (12.2%) while Wastewater utility expenses increased by $13.7 million (79.2%), solid waste utility expenses decreased by $2.7 million (20.3%) and stadium expenses decreased by $1.6 million (23.2%). For further explanation of these changes, refer to the financial analysis of the City’s funds later in this document. 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 $84.1 million are 53.0% of the governmental expenses for fiscal year 2009. Of note, is the increase in highways and streets program revenues of $15.7 million. Of that increase $12.8 million is reimbursement to the City from the county transportation tax for specific transportation projects. This reimbursement occurs as City projects included on the County’s project plan are completed and reimbursement requests are submitted to the County. Governmental Activities Program Revenues & Expenses 60 (millions $) 50 40 30 20 10 Ge ne ra Cu l go ltu ve rn re m & re ent cr ea tio n De ve Po lo pm lic e Hi ent gh se wa rv Fire ys ice s & str e Pu et Hu blic s ma wo r n se ks rv Un D i ce e all oc bt i s . d nte ep r re est cia tio n 0 Program revenues 8 Expenses In the business-type activities, program revenues of $71.9 million are 90.6% of the business-type expense for fiscal year 2009. This compares to $84.4 million and 126.7% in fiscal year 2008. Governmental activities account for 75.4% of the total revenues of the City and 66.7% of the total expenses in fiscal year 2009. These percentages were 73.0% and 68.6% respectively in fiscal year 2008. As seen in the following graph, one of the largest financing sources for the City is charges for services (26.5%), primarily because this is the major funding source of the business-type activities (80.5% of business-type revenues). Capital contributions represent $41.8 million (13.9%) of the fiscal year 2009 revenues, of which approximately $39.8 million (95.2%) is non-spendable resources. The major funding sources of the governmental activities are taxes (31.5% of total revenues, 41.8% of governmental revenues) and state shared revenues (12.2% of total revenues, 16.1% of governmental revenues). Property taxes increased 20.9% from fiscal year 2008 to fiscal year 2009. The city’s primary assessed valuation increased 19.9%, while the secondary assessed valuation increased 21.5%. The increase in property taxes resulted from the increase in the assessed valuation. The primary property tax rate decreased $.05 in fiscal year 2009, while the secondary rate was unchanged. Government-Wide Revenue Sources Fiscal Year 2009 Other grants & entitlements 10.4% Investment earnings 3.3% Sales & use taxes 19.6% Federal grants 1.1% Charges for services 26.5% Property taxes 10.6% Franchise taxes 1.3% Other 1.2%Contributed capital 13.9% State shared revenues 12.1% Business-type activities account for 33.3% of the functional expenses of the City for fiscal year 2009, while governmental activities account for 66.7% of the functional expenses. For the governmental activities, the largest users of resources are public safety (24.6% of total expense, 37.0% of governmental expenses), highways and streets (10.1% of total expenses, 15.1% of governmental expenses), culture and recreation (9.7% of total expenses, 14.6% of governmental expenses), and general government (9.7% of total expenses, 14.6% of governmental expenses). Total government-wide expenses (not including transfers out) of the City increased $26.4 million (12.5%) in fiscal year 2009. Expenses of the governmental activities increased $13.6 million (9.4%). This includes increases of $6.1 million (35.7%) for general government, $4.3 millon (7.9%) for public safety (police and fire), $1.1 million (4.8%) for highways and streets, and $1.4 million (6.4%) for culture and recreation. Interest on debt increase $1.4 million (12.5%). Expenses in Business-type activities increased $12.8 million (19.2%). The increase is primarily caused by insurance claims and expenses of $7.9 million in the wastewater fund, associated with a settlement of a terminated wastewater treatment agreement, and an increase in depreciation in the wastewater utility of $3.6 million (92.1%), as a full year’s depreciation was incurred for the Butler wastewater treatment plant. Water Utility expenses increased $3.5 million (12.2%) due to a one-time payment to Central Arizona Project for recalculated construction costs on the reallocation of water from the CAP canal. 9 Government-Wide Functional Expenses Fiscal Year 2009 General government 9.7% Business-type activities 33.3% Culture & recreation 9.7% Highways & streets 10.1% Public safety 24.6% Interest 5.3% Public works 3.2% Development services Other 2.7% 1.4% 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. Although the Half-Cent Sales Tax Fund, Highway User Revenue Fund, Development Fee Fund and Transportation Sales Tax Fund do not meet the GASB 34 criteria of a major fund, the City has chosen to present them as major funds due to local significance. The fund balance of the governmental funds is $319.4, an increase of $12.1 million, or 3.9%, from the previous year. Of this, $165.4 million (up $21.5 million (14.9%) 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 reserved fund balance is primarily due to shared County transportation tax revenues received from Maricopa County. These revenues are to fund various transportation projects within the city that are deemed to be of regional significance by the Maricopa Association of Governments (MAG) regional transportation plan. An additional $88.0 million of the governmental fund balance (down $11.7 million (11.7%) from the previous year) has been designated or committed for specific purposes by council policy or administrative action. These designations include encumbrances ($39.0 million), economic stabilization reserves ($40.0 million), debt service reserves ($1.0 million), and current capital projects and equipment replacement reserves ($8.0 million). The designations are further described in Note 11 to the financial statements (pages 69-70). The remaining $66.0 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 increase of 3.5% during fiscal year 2009 is primarily due to a change in the City’s policy of designating 10 fund balance for future capital projects (see the decrease in designated fund balance above), offset by increasing reserved fund balances. 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 decreased $13.9 million (12.7%) over the previous year. Urban revenue sharing increased $.9 million (4.4%) and Fines & Forfeitures increased by $.9 million (37.6%) (due to increased traffic fines, primarily from red light cameras) while charges for service decreased $4.7 million due to decreased development related fees. The City’s sales tax revenues in the General Fund decreased $5.4 million (14.3%) and state shared sales tax revenues decreased $1.7 million (13.4%) due to the economic downturn. Total General Fund expenditures decreased $1.0 million (0.9%). Personnel costs increased $2.6 million while other costs (contractual, commodities and capital outlay) decreased. The increased personnel costs are due to the following: the City offered a retirement incentive program which resulted in a liability to the Arizona State Retirement System (ASRS). Additionally, there were vacation, sick and incentive payouts related to the retirement and separation incentives. The City granted a 2.5% increase in salaries and wages in fiscal year 2009, plus eligible employees received salary step increases and employer retirement contributions, health insurance and other personnel benefit costs continued to increase in fiscal year 2009. There were 10 additional employees approved in the General Fund for fiscal year 2009. The unreserved/undesignated fund balance of the General Fund was 22.2% of expenditures at June 30, 2009 compared to 30.6% at June 30, 2008. The Half-Cent Sales Tax Fund tracks the revenues from a $.05 sales tax designated for specific purposes by Council policy. Revenues in this fund decreased $3.0 million (16.7%) from the previous year due to decreased sales tax revenue and investment earnings with the economic downturn and low interest rates. Expenditures in this fund decreased $2.0 million (42.3%) due to a $2.1 million decrease in capital outlay expenditures with the completion of the Municipal Operations Center Expansion (MOC). Total fund balance of the Half-Cent Sales Tax Fund decreased by $1.4 million (8.6%) in fiscal year 2009. 90 80 70 60 50 40 30 20 10 0 FY08 FY09 Ge Ha ne lfCe ral F nt un Sa d les Ta x HU De Tr RF ve an l Fu op sp nd m or en ta tF GO tion ee Sa s Bo les Sp nd Ta ec De ial x As bt S er se vic st m e en GO tD Bo ebt nd Ca Ot pita l he rF un ds 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 $1.3 million (9.8%) due to decreased investment earnings ($.2 million or 37.6%) and decreased highway user revenues ($1.2 million or 12.7%). The sales tax revenue in this fund is the tax on utilities, which has not been impacted as 11 strongly by the economic slow down (increased $.1 million or 3.8%) as sales taxes in other funds. Expenditures increased by $1.0 million (7.5%) in fiscal year 2009. The increased expenditures are split between personnel costs (cost of living and step increases plus higher benefit costs) and contractual services (street maintenance). Fund balance decreased $.2 million (1.4%) in fiscal year 2009. 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 $13.8 million (67.8%) with slower development in the City, while expenditures decreased $1.0 million (5.4%) in fiscal year 2009 due to decreased principal payments on development agreements. Fund balance decreased $12.0 million (24.4%) in fiscal year 2009 due to the decreased revenues. All fund balance in this fund is restricted or designated (encumbrances). 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 decreased $1.6 million (14.8%) while expenditures increased $2.8 million (817.0%) with higher capital outlay expenditures as the capital program for these dedicated revenues is catching up to the revenues. The fund balance increased $.4 million (1.7%) in the fiscal year 2009. The GO Bond Debt Service Fund accounts for the payment of general obligation bonds and the related interest. Revenues in this fund increased $2.0 million (8.5%) due to increased secondary property taxes. The secondary assessed value of the City increased 21.5% in fiscal year 2009 while the secondary tax rate was unchanged. Expenditures decreased by $4.8 million (22.4%) due to the retirement of $16.6 million of GO Bonds in fiscal year 2008. Debt payments were no longer required on these bonds in fiscal year 2009. Fund balance increased $8.5 million (23.3%) in fiscal year 2009. The Special Assessment Debt Service Fund collects special assessments levied through improvement districts and pays the debt service on the improvement district bonds. Revenues in this fund increased $.4 million (20.2%) while expenditures increased $.3 million (17.2%) in fiscal year 2009 due to higher debt payments. The fund balance decreased $.1 million (11.7%). 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 $30,025 (4.1%) with slightly higher investment earnings due to a decrease in the federal arbitrage liability, while expenditures decreased by $.9 million (3.2%) due to lower capital outlays. Fund balance increased $36.6 million (928.0%) with the sale of $68.4 million in new bonds. 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 Solid Waste Utility Fund, Stadium Fund and Public Housing Fund do not meet the GASB 34 criteria of a major fund, the City has chosen to present them as major funds due to local significance. Total net assets of the enterprise funds decreased $3.2 million (.7%) in fiscal year 2009. Net assets invested in capital assets, net of related debt increased $2.4 million (0.6%) with the addition of utility infrastructure. Restricted net assets increased $.6 million (1.8%), mostly in bond reserve requirements, which are tied to capital assets. The unreserved net assets decreased $6.2 million (15.1%), primarily due to lower revenues and one-time expenses discussed below. The Water Utility Fund experienced an increase in total net assets of $4.6 million (2.0%), while the Wastewater Utility Fund decreased total net assets by $8.7 million (3.9%). The Solid Waste Fund increased $.9 million (4.9%), the Stadium Fund increased $.1 million (0.5%) and the Public Housing Fund decreased $54,898 (2.2%). The Water Utility 12 unrestricted net assets decreased $2.1 million (9.1%), and the Wastewater Utility unrestricted net assets decreased $5.6 million (56.2%). Operating revenues of the enterprise funds decreased $2.2 million (3.5%) in fiscal year 2009. With the economic slowdown and increased home vacancies due to foreclosures, the Water Utility had decreased charges for services of $1.5 million (4.9%). The economic downturn also impacted spring training attendance at the sports complex causing the Stadium Fund to have decreased charges for services and rents of $.2 million (15.1%) and $.2 million (9.9%), respectively. Operating expenses of the enterprise funds increased $11.0 million (17.2%) in fiscal year 2009. The Water Utility had increased operating expenses of $3.9 million due to a $3.8 million one-time payment to Central Arizona Project for recalculated construction costs on the reallocation of water from the CAP canal and a $.5 million increase in depreciation expense. In the Wastewater Utility Fund, operating expenses increased $11.3 million (67.3%) due to a claims settlement of $7.9 million for the termination of a wastewater treatment processing agreement, and an increase of $3.5 million for wastewater depreciation due to a full year’s depreciation of the new Butler wastewater treatment plant. In the Solid Waste Fund, contractual services/commodities expenses decreased by $2.7 million (29.8%) without the $2.8 million one-time purchases of recycling containers in 2008. In the Stadium Fund, contractual services/commodities expenses decreased by $1.7 million (35.6%), due to $1.4 million decreases in building, grounds, and facilities repairs and maintenance expenses. Operating income for the Water Utility Fund decreased $5.6 million (110.9%) compared to 2008, due to the decreased revenues and one-time expenditures discussed above. Operating income for the Wastewater Utility decreased $11.4 million (833.6%) as a result of the insurance claims and depreciation operating expense increases previously mentioned. The Solid Waste Utility Fund operating income increased $2.6 million (121.0%) due to the 2008 one-time recycling expenses. The Stadium Fund and Public Housing Fund had operating losses in fiscal year 2009 of $2.5 million (a $1.2 million decrease from the previous fiscal year) and $65,148, respectively. The Stadium Fund’s operating loss is 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 to depreciation costs associated with capital assets. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2009. Fiscal year 2009 Enterprise Fund Operating Revenues and Expenses 35 25 Revenues 20 Expenses 15 10 5 13 Ho us in g St ad iu m W as te So lid W as te wa te r 0 W at er Millions 30 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 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 $680 million occurred during fiscal year 2009. 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 $115.0 million, on a budgetary basis, fell below budgeted inflows of $123.3 million by $8.3 million (6.7%) while budgetary basis outflows (expenditures and other uses) of $122.4 million were only 74.2% of final budgeted outflows. The shortfall of General Fund inflows under budgeted amounts is primarily due to lower than budgeted sales and use taxes, state shared sales taxes, charges for service (especially development related fees), licenses and permits (again especially development related fees like building permits) and investment earnings (due to low interest rates), somewhat offset by higher than anticipated fines and forfeitures (especially red light fines) and miscellaneous revenue. 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 $167.5 million was amended by $2.5 million to the final expenditure and other uses budget of $165.0 million. Notable General Fund transfers are as follows: Ø As a result of the economic downturn being worse than anticipated, the City made budget reductions in January 2009. As a result of these reductions, the General Fund operating budgets were reduced by $3.1 million and those funds plus an additional $1.9 million from other funds were returned to the General Fund contingency account. Ø Contingency appropriation of $3.4 million was transferred from the General Fund to the MDA Debt Service Fund for debt service on the 2008 MDA bonds for transportation projects. Ø Contingency appropriation of $.8 million was transferred from the General Fund to the Non-Bond Capital Projects Fund to cover additional costs for the Happy Valley Road water and wastewater lines construction. Ø Contingency appropriation of $.6 million was transferred from the General Fund to the Development Fee Fund for the purchase of fire trucks for the Jomax Station. Ø Contingency appropriation of $.9 million was transferred from the General Fund to the Development Fee Fund for funding of two streets projects. 14 Ø Appropriation authority of $3.5 million was returned to the General Fund contingency from various parks and trails projects after the final reconciliation of project budget carryovers included in the original adopted budget. Ø General Fund contingency appropriation of $6.5 million was transferred to various funds for the final reconciliation of carryover budgets for various streets, drainage and public safety capital projects. Ø Transfer of $.5 million from General Fund Capital Projects contingency to GO Bond Fund for the st roadway widening improvements at 91 Avenue and Olive Avenue. Ø Appropriation transfer of $.3 million from General Fund to various other funds to cover the Retirement Incentive Program. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2009, the City had $1.1 billion invested in various capital assets, net of accumulated depreciation and related debt, up 8.8% from the previous year. The capital assets of the City (net of depreciation, but not capital debt) are $1.6 billion. This is a net increase of $122.8 million from June 30, 2008. Of the increase, $115.6 million resulted from governmental activities and $7.2 million resulted from business-type activities. Major additions to capital assets during the fiscal year included the following: ü The City spent an additional $5.6 million on the upgrade of the radio system utilized by city staff and the emergency services. This project will meet the City’s need for a new digital, trunked radio system that will serve the needs of all City departments and have the expansion capacity to meet the anticipated growth occurring over the next 20 to 40 years. The City currently has four independent radio systems. This project will implement one system that will promote interoperability between departments as well as our ability to communicate with other government agencies. ü The City continued the construction of Happy Valley Road from 75 Av to Lake Pleasant Parkway. Happy Valley Road is significant to the far north portion of the city. It is the first eastwest route north of Bell Road connecting I-17 to US 60 and beyond. The total cost of the project is $40.5 million. In fiscal year 2009, the city spent an additional $24.3 million. ü Construction of a northern branch library completed in fiscal year 2009. 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 2009, the city spent $5.3 million on the project. ü The City spent $11.9 million in fiscal year 2009 on widening Thunderbird Road from Loop 101 to th 94 Drive. The project consists of constructing additional thru lanes, a median and bike lanes. Improvements include right-of-way acquisition, paving, curb, gutter, sidewalk, driveways, medians, storm drains, street lights and traffic signal interconnect conduits. This project will provide additional capacity and enhance safety on Thunderbird Road. ü The City spent an additional $2.4 million on the renovation and expansion of the Municipal Court Building (total expected costs $10.8 million). This project both expands the facility by adding 17,000 square feet of building space and updating the building to accommodate changes in technology, security needs and key building systems to current code requirements. th The following table provides a breakdown of the capital assets of the City at June 30, 2009 and 2008. Additional information on the City’s capital assets may be found in Note 12 on pages 70-71. 15 Capital Assets at June 30 (Net of depreciation) Buildings and building improvements Furniture Equipment Vehicles Storm drainage system Street system Park system Water system Water rights Wastewater system Land Work in progress Total (in millions) Governmental Business-type Activities Activities 2009 2008 2009 2008 $ 114.5 $ 116.7 $ 26.4 $ 27.4 1.1 1.2 .1 .1 26.0 21.4 1.5 1.6 9.8 9.2 5.5 5.1 42.7 44.0 259.5 241.3 20.8 19.3 205.4 202.9 6.0 281.8 250.3 326.3 298.6 17.0 25.3 115.2 28.1 51.9 181.8 $ 982.5 $ 866.9 $ 571.8 $ 564.6 Total Primary Government 2009 2008 $ 140.9 $ 144.1 1.2 1.3 27.5 23.0 15.3 14.3 42.7 44.0 259.5 241.3 20.8 19.3 205.4 202.9 6.0 281.8 250.3 343.3 323.9 209.9 167.1 $ 1,554.3 $ 1,431.5 Percent Change (2.2)% (7.7) 19.6 7.0 (3.0) 7.5 7.8 1.2 12.6 6.0 25.6 8.6 The City has adopted a ten year capital improvement plan budgeted at $612.5 million, including $199.4 million in fiscal year 2010. Anticipated funding for this plan is through a combination of impact fees (10.8%), utility revenue bonds (10.1%), general obligation bonds (29.9%), municipal development authority bonds (14.9%), operating revenues (19.2%), City (7.1%) and County (4.4%) transportation sales taxes and other outside funding sources (3.6%). The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $54.3 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 $467.0 million at June 30, 2009. Of this total, $333.1 million was in governmental activities and $133.9 million was in business-type activities. The City’s outstanding non-current debt increased $32.2 million in fiscal year 2009. Water Infrastructure Finance Authority Revenue Bonds were issued in the amount of $8.6 million for the final phase of construction of the Butler Water Reclamation Facility. In addition, General Obligation Bonds in the amount of $68.4 million were issued for drainage, street, and public safety improvements. Of the total outstanding bonds of $457.1 million, $183.1 million is general obligation bonds backed by the full faith and credit of the City. An additional $10.4 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 $63.1 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, 2009 is $112.9 million in the 6% category and $222.6 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, 2009 and 2008. Further detail on the City’s outstanding debt may be found in Note 14 on pages 72-78. 16 Outstanding Debt (in millions) Governmental Activities 2009 2008 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 $ $ 183.1 61.0 3.0 10.4 63.1 56.8 5.9 383.3 $ $ Business-type Activities 2009 2008 126.2 65.8 3.3 12.0 64.6 42.5 4.9 319.3 $ $ 1.2 135.3 1.1 4.4 .6 142.6 $ $ 1.6 147.5 1.2 4.3 .6 155.2 Total Primary Government 2009 2008 $ $ 183.1 62.2 3.0 10.4 135.3 63.1 1.1 61.2 6.5 525.9 $ $ 126.2 67.4 3.3 12.0 147.5 64.6 1.2 46.8 5.5 474.5 Percent Change 45.1% (7.7) (9.1) (13.3) (8.3) (2.3) (8.3) 30.8 18.2 10.8 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, “A2” from Moody’s and “AA-” from Fitch. ECONOMIC FACTORS The unemployment rate in the metropolitan Phoenix region for June 2009 was 8.3%, which remains below both the state (8.9%) and national average (9.5%). The regional economy remains subdued with declines in construction activity and population growth. Overall employment growth was negative with a year-over-year job loss rate of 7.6% for the state. The most significant employment losses were within the government and educational sectors, the professional and business sectors and the construction industry. Some moderate gains were realized in the healthcare sector which has helped to offset job losses within the other major industries. Within Peoria, the local economy has experienced decreases in both residential and commercial activity with some limited construction activity to infill the neighborhoods and planned communities that have developed over the past few years. The adopted fiscal year 2010 budget is $535 million, a decrease of 21% from 2009 as the City anticipates continuing declines in revenues due to the economic slowdown. The operating budget totals $207.4 million, which is a decrease of 11% from 2009. The capital projects portion of the budget, $199.4 million, is divided in the following manner: $22.4 million for drainage projects, $12.8 for operational facilities, $29.3 million for parks, trails and open space, $11.1 million for public safety projects, $81.7 million for streets projects, $3.4 million for traffic control projects, $16.6 million for wastewater projects, and $22.1 million for water projects. With the downturn in the economy, the citizens’ needs for City services were balanced with a diminished revenue base. To make ends meet, tough choices and numerous sacrifices were made. The budget focuses on preserving the City’s excellent quality of life. Overall, there was a reduction of 61.67 (full-time equivalent) staff positions in the fiscal year 2010 budget. In addition, many City departments were restructured. Following are the approved budget 2010 position decreases (including moves due to the departmental reorganization): City Manager’s Office (1.0), Community Services (18.22), Management & Budget (1.0), Engineering (14.25), Finance (4.25), Fire (3.0), Information Technology (3.0), Office of Communications (1.0), Planning and Sustainability (3.5), Public Works (14.25). Only two departments had 2010 budgeted position increases, as follows: Economic Development Services (1.3), and Police (3.5). 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 $34.2 million in the General Fund and $5.8 million in the Half-Cent Sales Tax Fund at June 30, 2009. The City also maintains a working capital policy reserve in the Utility Funds. At June 30, 2009, those reserves were $16.0 million in the Water Utility, $3.1 million in the Wastewater Utility, and $2.1 million in the Solid Waste Utility. It should be noted that while these reserves are established to address immediate and dramatic fiscal difficulties, they are not intended to cover structural budget shortfalls. With 17 this in mind, the fiscal year 2010 budget does not anticipate the use of reserves to address recurring expenses. 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. 18 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS JUNE 30, 2009 Governmental Activities 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 Restricted cash and cash equivalents Restricted cash with fiscal agents Restricted investments Other assets Special assessments receivable Capital assets: Non-depreciable Depreciable (net) Total assets LIABILITIES Accounts payable Accrued payroll Interest payable Due to other governments Claims payable Customer deposits Unearned revenue Arbitrage liability Unamortized bond premium Other liabilities Non-current liabilities: Due within one year: Current portion of compensated absences Current portion of contracts payable Current portion of loans payable Current portion of bonds payable Due in more than one year: Noncurrent portion of claims payable Noncurrent portion of compensated absences Noncurrent portion of contracts payable Noncurrent portion of loans payable Noncurrent portion of bonds payable Less: Deferred loss on bond refunding Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital projects Development fees Revenue bond retirement Grant purposes Unrestricted Total net assets $ $ 98,816,215 4,796,102 159,315,867 9,615,438 1,746,555 (1,529,420) 6,207,284 1,015,552 317,110 3,437,009 37,711,880 64,574,546 4,392,000 9,886,921 Primary Government Business-type Activities $ 28,202,435 44,785,810 6,898,871 374,032 1,529,420 27,221 206,114 305,489 446,025 408,936 384,332 Total $ 127,018,650 4,796,102 204,101,677 16,514,309 2,120,587 6,234,505 1,221,666 622,599 3,883,034 37,711,880 408,936 64,574,546 4,776,332 9,886,921 508,096,751 474,396,521 1,382,796,331 45,091,657 526,733,943 655,394,285 553,188,408 1,001,130,464 2,038,190,616 13,961,659 2,458,490 6,735,863 3,288,148 1,500,000 3,317 10,055,338 484,828 3,546,915 4,935,825 3,742,333 313,210 2,490,574 252,021 3,000,000 1,207,911 116,022 288,920 17,703,992 2,771,700 9,226,437 3,540,169 4,500,000 1,211,228 10,055,338 484,828 3,662,937 5,224,745 4,298,750 4,978,956 39,847,547 517,780 147,226 177,095 7,866,778 4,816,530 5,126,182 177,095 47,714,325 1,571,340 51,879,755 280,665,658 (1,028,853) 429,183,536 1,500,000 128,290 4,273,816 887,537 128,709,131 (54,237) 155,564,407 690,708,494 429,764,018 1,120,472,512 19,337,844 33,864,793 1,993,823 207,707,841 953,612,795 20,236,850 12,830,980 490,660 36,507,370 $ 499,829,878 39,574,694 33,864,793 12,830,980 2,484,483 244,215,211 $ 1,453,442,673 The accompanying notes are an integral part of the financial statements 19 1,500,000 1,699,630 56,153,571 887,537 409,374,789 (1,083,090) 584,747,943 CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2009 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 23,226,263 23,185,665 37,084,671 21,618,004 6,354,769 24,046,432 7,688,062 2,382,604 12,610,988 574,550 158,772,008 $ 32,164,325 31,039,534 10,624,589 5,235,258 331,785 79,395,491 238,167,499 30,104,254 15,331,781 11,166,354 2,866,609 108,010 59,577,008 $ 79,707,970 3,635,662 8,035,499 1,326,404 1,748,715 1,568,529 348,351 3,336,840 130,962 20,130,962 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 130,765 498,152 1,247,553 5,000 627,035 8,302,395 4,345 1,759,504 12,574,749 158,627 158,627 $ 12,733,376 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 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 $ 326,373 983,005 270,944 394,285 49,391,689 51,366,296 7,760,070 4,315,902 110,359 12,186,331 $ 63,552,627 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Activities $ $ $ $ Business-type Activities - Total (19,133,463) (13,669,009) (34,239,770) (19,470,004) (4,159,205) 33,996,003 (4,346,877) (492,138) (12,610,988) (574,550) (74,700,001) $ (74,700,001) 5,699,999 (11,391,851) 652,124 (2,368,649) (65,148) (7,473,525) $ (7,473,525) $ 3,629,629 28,162,003 59,004,816 4,019,182 10,991,095 20,395,663 5,018,384 7,896,100 115,412 3,528,043 (3,066,497) 139,693,830 64,993,829 888,618,966 953,612,795 $ $ 1,970,474 3,066,497 5,036,971 (2,436,554) 502,266,432 $ 499,829,878 $ (19,133,463) (13,669,009) (34,239,770) (19,470,004) (4,159,205) 33,996,003 (4,346,877) (492,138) (12,610,988) (574,550) (74,700,001) 5,699,999 (11,391,851) 652,124 (2,368,649) (65,148) (7,473,525) (82,173,526) 3,629,629 28,162,003 59,004,816 4,019,182 10,991,095 20,395,663 5,018,384 9,866,574 115,412 3,528,043 144,730,801 62,557,275 1,390,885,398 $ 1,453,442,673 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2009 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 Customer deposits 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 Special revenue funds Total fund balance Total liabilities and fund balance $ $ $ $ $ $ Highway User Revenue Fund Development Fee Fund 5,050,280 8,165,861 263,627 67,488 754,570 82,277 14,384,103 $ 390,638 96,412 6,967 63,946 557,963 $ 82,277 - $ 23,684,885 38,094,274 4,461,570 271,810 3,105,437 150,478 124,706 9,573,814 79,466,974 $ 5,021,097 8,118,675 1,243,947 87,763 4,783 $ 14,476,265 $ 2,451,237 2,081,975 3,284,259 3,317 1,273,747 2,995,110 12,089,645 $ 21,536 21,536 $ 124,706 150,478 $ 4,783 $ $ $ $ $ $ 14,626,711 23,650,113 223,159 38,499,983 1,392,811 249,895 1,642,706 33,864,793 - 42,758,436 - 7,088,293 209,966 2,992,484 24,343,709 67,377,329 79,466,974 7,361,653 14,454,729 $ 14,476,265 13,533,897 13,826,140 14,384,103 36,857,277 38,499,983 $ The accompanying notes are an integral part of the financial statements 22 $ Transportation Sales Tax Fund $ $ $ $ $ GO Bond Debt Service Fund 8,397,890 13,578,654 746,046 108,573 22,831,163 $ 646,473 646,473 $ - $ $ $ 1,862,300 $ 20,322,390 22,184,690 22,831,163 Special Assessment Debt Service Fund 17,012,616 27,507,912 958,385 142,534 340,914 45,962,361 $ 591 958,385 24,671 983,647 $ 44,978,714 - $ $ $ - $ 44,978,714 45,962,361 GO Bond Capital Projects Fund 398,574 644,460 5,875 9,886,921 10,935,830 $ 9,871,061 9,871,061 $ 1,064,769 - $ $ $ - $ 1,064,769 10,935,830 $ 23 Non-Major Governmental Funds Total Governmental Funds 360,375 18,000 17,600,656 27,892,049 45,871,080 $ 12,097,260 4,796,102 19,301,013 1,941,863 341,790 2,006,363 10,537,410 36,682,497 87,704,298 $ 86,289,313 4,796,102 139,060,962 9,615,438 1,609,367 6,207,284 173,261 206,983 37,711,880 64,574,546 9,886,921 $ 360,132,057 4,833,369 460,157 2,217 5,295,743 $ 3,757,973 41,445 3,889 4,153,259 1,624,657 9,581,223 $ 13,494,628 2,219,832 3,288,148 3,317 16,263,419 484,828 4,935,825 $ 40,689,997 24,751,843 18,000 $ 13,400,453 45,727,751 1,235,982 - $ 59,443,936 70,479,594 33,864,793 1,235,982 206,983 173,261 15,805,494 - 13,623,183 3,685,631 42,758,436 29,428,677 15,838,674 40,575,337 45,871,080 450,075 78,123,075 87,704,298 24,343,709 41,668,015 319,442,060 $ 360,132,057 $ $ $ 24 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL ACTIVITIES JUNE 30, 2009 Fund balances - total governmental funds balance sheet $ 319,442,060 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 $ 1,142,011,324 (190,991,571) 951,019,753 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 3,437,009 1,028,853 4,465,862 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 320,513,205 56,858,711 5,335,990 (382,707,906) Certain long-term debt is offset by an intangible asset (goodwill) for government-wide reporting 4,392,000 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 4,921,062 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 (3,546,915) 1,287,019 Interest payable on long-term debt is not reported in the governmental funds. (6,735,863) 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. 61,075,723 Net assets of governmental activities - statement of net assets The accompanying notes are an integral part of the financial statements 25 $ 953,612,795 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2009 Major Funds REVENUES: Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes County 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 $ 32,464,266 2,898,724 4,019,182 $ 14,643,516 - $ $ 10,991,095 20,395,663 5,018,384 259,443 11,381,397 1,802,759 3,309,210 366,976 1,420,768 1,146,493 95,474,360 463,291 15,106,807 12,379,050 5,356,850 1,178,214 6,535,064 17,020,771 20,980,812 35,261,322 20,482,503 5,847,773 5,692,376 - 436,079 - 13,642,031 - 19,289 784,806 16,751 3,415 752,915 - 34,192 4,415,263 109,735,012 2,024,534 9,953 219,331 2,689,897 290,000 180,160 221,998 14,334,189 4,079,953 12,491,799 18,148,928 (14,260,652) 12,416,910 (1,955,139) (11,613,864) 6,575,900 (2,944,135) 3,631,765 (13,773,560) (13,773,560) 2,118,394 (354,248) 1,764,146 760,500 (1,115,724) (355,224) (10,628,887) (1,356,650) (190,993) (11,969,088) 78,006,216 15,811,379 14,017,133 48,826,365 $ 67,377,329 $ 14,454,729 $ 13,826,140 $ 36,857,277 3,107,554 560,183 8,287,891 39,413 28,858 355,151 - The accompanying notes are an integral part of the financial statements 26 - Transportation Sales Tax Fund GO Bond Debt Service Fund Special Assessment Debt Service Fund $ $ $ 8,789,480 567,195 9,356,675 24,421,586 - - $ Non-Major Governmental Funds - $ Total Governmental Funds 2,991,522 - $ 59,004,816 30,872,015 4,019,182 25,169,793 31,447 2,200,782 2,232,229 769,110 769,110 12,837,089 640,826 2,970,534 1,317,298 1,702,004 423,837 1,640,726 6,342,247 30,866,083 10,991,095 12,837,089 20,395,663 5,018,384 8,287,891 640,826 2,970,534 1,576,741 18,479,664 1,802,759 3,733,047 395,834 7,174,109 2,200,782 7,488,740 197,889,171 336,995 - 139,680 - 866 - 480,816 - 182,262 538,234 1,180,035 30,427 641,426 256,938 495,257 2,343,847 17,798,947 22,303,852 36,458,108 20,516,345 6,489,199 15,469,695 6,187,633 2,343,847 2,835,486 3,172,481 11,575,000 4,940,779 16,655,459 1,624,615 679,184 2,304,665 221,675 27,601,687 28,304,178 6,360,260 5,885,831 29,729,578 47,644,095 25,988,554 11,917,582 77,515,142 242,988,904 6,184,194 8,514,334 (72,436) (27,535,068) (16,778,012) (45,099,733) (68,251) (68,251) 68,440,000 808,192 43,465 (5,128,351) 64,163,306 9,357,020 (1,720,604) 7,636,416 68,440,000 808,192 18,855,279 (30,928,896) 57,174,575 (140,687) 36,628,238 (9,141,596) 12,074,842 3,947,099 87,264,671 307,367,218 78,123,075 $ 319,442,060 (5,824,023) (5,824,023) 748,207 GO Bond Capital Projects Fund - 360,171 8,514,334 21,824,519 36,464,380 $ 22,184,690 $ 44,978,714 1,205,456 $ 1,064,769 $ 27 40,575,337 $ 28 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, 2009 Net change in fund balances - total governmental funds $ 12,074,842 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. (960,800) 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. 113,475 Special assessment principal payments received are revenues on the govermental operating statement, but are reductions in the outstanding special assessment debt for government-wide reporting. (1,605,303) 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. (642,921) 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 ($77,617,337) exceeded depreciation ($22,604,569) in the current period. 55,012,768 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 capital 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. 2,106 Gains/losses on sales of capital assets are not shown in the governmental funds, but are revenues or expenses, on the statement of activities. 26,926 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 29,600,596 Certain development agreement transactions are reported as operating expenditures in the governmental funds, but are reclassified to donated assets on the government-wide statements. 111,747 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. (68,440,000) 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. 25,988,554 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. (858,677) Interfund transactions between governmental activities are eliminated in the statement of activities unless the transfers are between governmental and business-type activities. 8,395,000 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. 6,175,516 Change in net assets of governmental activities- statement of activities The accompanying notes are an integral part of the financial statements 29 $ 64,993,829 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 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 Debt service: Principal payments Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2009 $ 66,030,207 $ 66,030,207 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 66,030,207 $ - 38,112,233 2,822,460 4,253,038 38,112,233 2,822,460 4,253,038 32,615,235 2,967,361 4,000,994 (5,496,998) 144,901 (252,044) 13,247,000 19,830,408 5,652,220 286,845 24,502,116 2,490,071 2,088,472 384,250 2,532,200 59,500 7,102,603 123,363,416 189,393,623 13,247,000 19,830,408 5,652,220 286,845 24,502,116 2,490,071 2,088,472 384,250 2,532,200 59,500 7,102,603 123,363,416 189,393,623 11,143,095 20,628,382 4,797,784 (4,931) 245,508 23,860,733 1,802,759 3,309,210 363,762 1,591,603 1,146,493 6,573,036 115,041,024 181,071,231 (2,103,905) 797,974 (854,436) (4,931) (41,337) (641,383) (687,312) 1,220,738 (20,488) (940,597) 1,086,993 (529,567) (8,322,392) (8,322,392) 1,223,500 3,962,403 2,960,278 3,071,732 1,336,421 2,360,510 1,265,001 12,653,776 1,588,309 23,097,805 37,118,685 21,745,093 6,495,146 6,786,758 1,226,812 3,873,732 2,737,618 3,175,122 1,257,518 2,534,525 1,325,848 11,541,558 3,339,787 21,725,266 35,740,285 20,430,872 5,234,292 5,505,353 1,179,602 3,781,673 2,486,637 3,077,592 1,171,289 2,444,260 675,559 11,639,191 2,689,726 20,684,060 34,766,248 20,155,990 5,765,670 5,612,454 (47,210) (92,059) (250,981) (97,530) (86,229) (90,265) (650,289) 97,633 (650,061) (1,041,206) (974,037) (274,882) 531,378 107,101 25,378,968 15,688,566 765,764 167,498,715 24,970,273 19,659,853 765,764 165,044,478 5,545,390 765,497 122,440,838 (19,424,883) (19,659,853) (267) (42,603,640) 21,894,908 $ 24,349,145 $ 58,630,393 The accompanying notes are an integral part of the financial statements 30 $ 34,281,248 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2009 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 $ 181,071,231 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 (66,030,207) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (6,573,036) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules (13,177,886) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 184,258 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 95,474,360 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 122,440,838 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 151,610 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,360,999 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (275,052) Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (13,177,886) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (765,497) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 109,735,012 31 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Transfers from other funds 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, 2009 $ 13,061,649 $ 13,061,649 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 13,061,649 $ - 17,206,203 332,500 17,538,703 30,600,352 17,206,203 332,500 17,538,703 30,600,352 14,696,810 491,429 15,188,239 28,249,888 (2,509,393) 158,929 (2,350,464) (2,350,464) 447,630 491,180 454,259 (36,921) 2,455,608 17,724 5,165,095 2,000,000 13,855,318 23,941,375 2,455,608 17,724 5,212,140 2,016,625 13,855,318 24,048,595 2,024,428 10,057 886,348 13,323,940 16,699,032 (431,180) (7,667) (4,325,792) (2,016,625) (531,378) (7,349,563) 6,658,977 $ 6,551,757 $ 11,550,856 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 $ 28,249,888 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 (13,061,649) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (81,432) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 15,106,807 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 16,699,032 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (235,575) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (449,620) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (13,323,940) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,689,897 The accompanying notes are an integral part of the financial statements 32 $ 4,999,099 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Intergovernmental: Highway user revenue Charges for services Rents 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, 2009 $ 14,411,456 $ 14,411,456 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 14,411,456 $ - 3,040,755 580,175 3,040,755 580,175 3,091,173 555,183 50,418 (24,992) 9,270,000 375,000 240,845 2,557,175 16,063,950 30,475,406 9,270,000 375,000 240,845 2,557,175 16,063,950 30,475,406 8,322,713 332,230 28,858 366,125 2,543,505 15,239,787 29,651,243 (947,287) (42,770) 28,858 125,280 (13,670) (824,163) (824,163) 10,562,016 10,036,860 10,972,697 935,837 290,000 180,210 6,600,540 1,000,000 934,885 19,567,651 290,000 180,210 5,768,125 1,131,000 934,885 18,341,080 290,000 180,160 4,056,034 920,754 16,419,645 10,907,755 $ 12,134,326 $ 13,231,598 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 $ 29,651,243 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 (14,411,456) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (2,543,505) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB 34's allocation rules. (295,000) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (22,232) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 12,379,050 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 16,419,645 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 13,811 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (883,513) Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (295,000) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (920,754) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 14,334,189 The accompanying notes are an integral part of the financial statements 33 (50) (1,712,091) (1,131,000) (14,131) (1,921,435) $ 1,097,272 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 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, 2009 $ 39,879,121 $ 39,879,121 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 39,879,121 $ - 10,930,974 663,500 11,594,474 51,473,595 10,930,974 663,500 11,594,474 51,473,595 5,765,008 955,055 6,720,063 46,599,184 (5,165,966) 291,555 (4,874,411) (4,874,411) 367,880 27,321 105,884 845,802 45,618 4,944 79,648 14,574 693,077 16,751 5,574 752,723 (91,310) (152,725) (28,867) 630 673,075 5,833,930 31,453,053 3,000,000 40,682,184 6,135,924 28,595,310 7,999,584 43,812,714 4,079,953 12,647,791 18,210,443 (2,055,971) (15,947,519) (7,999,584) (25,602,271) 10,791,411 $ 7,660,881 $ 28,388,741 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 $ 46,599,184 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 (39,879,121) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (184,999) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 6,535,064 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 18,210,443 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,054,209 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (1,115,724) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 18,148,928 The accompanying notes are an integral part of the financial statements 34 $ 20,727,860 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings 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, 2009 $ 18,377,715 $ 18,377,715 $ 18,377,715 10,380,262 10,380,262 28,757,977 10,380,262 10,380,262 28,757,977 8,822,786 544,937 9,367,723 27,745,438 71,953 211,556 303,243 1,760,000 1,809,171 20,027,488 1,000,000 1,386,000 26,054,612 1,760,000 1,809,171 15,344,755 5,705,523 1,386,000 26,217,005 1,760,000 1,659,171 2,511,649 1,157,500 7,391,563 2,703,365 $ 2,540,972 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 20,353,875 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 $ 27,745,438 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 (18,377,715) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (11,048) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 9,356,675 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,391,563 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 598,786 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (241,197) Certain debt service expenditures were budgeted in the Transportation Sales Tax Fund, but were paid from another fund. (3,419,171) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (1,157,500) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 3,172,481 The accompanying notes are an integral part of the financial statements 35 $ - (1,557,476) 544,937 (1,012,539) (1,012,539) 91,687 (150,000) (12,833,106) (5,705,523) (228,500) (18,825,442) $ 17,812,903 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2009 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: Capital assets: Buildings and improvements Distribution and collection systems Water Rights Equipment Vehicles Furniture Less accumulated depreciation and amortization 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 & loans payable Total current liabilities Non-current liabilities: Deposits payable Claims payable Deferred bond premium Compensated absences Long-term portion of bonds, contracts & loans 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 $ 14,297,697 199,868 23,064,397 3,772,756 185,067 78,762 235,206 41,833,753 1,642,283 252,017,815 6,095,443 1,863,781 1,856,327 186,058 (49,310,791) 6,025,686 26,662,468 247,039,070 154,094 295,016 247,488,180 289,321,933 $ 7,017,502 50,607 11,346,687 1,782,842 106,495 126,996 20,431,129 $ 7,659,795 331,278,757 1,082,629 903,774 29,004 (50,845,197) 3,878,001 1,394,434 295,381,197 290,160 89,316 295,760,673 316,191,802 5,717,338 9,244,436 1,309,124 73,333 66,132 16,410,363 $ 10,799 43,338 8,589,040 (4,179,881) 4,463,296 4,463,296 20,873,659 703,898 146,768 1,130,290 19,121 9,137 2,009,214 25,781,679 749,921 490,528 (10,748,220) 6,703,349 17,369 22,994,626 1,771 22,996,397 25,005,611 1,726,388 150,945 949,357 244,373 241,793 238,010 3,523,476 7,074,342 1,632,877 51,265 1,509,580 41,947 3,000,000 100,040 4,351,930 10,687,639 191,076 75,865 20,814 122,630 179,750 590,135 1,196,987 58,375 57,500 44,266,278 (22,219) 45,556,921 52,631,263 1,500,000 14,781 21,320 88,125,229 (5,627) 89,655,703 100,343,342 34,310 1,160,621 1,194,931 1,785,066 199,249,316 202,904,039 3,122,925 22,540,327 10,708,997 5,852,342 20,880,015 $ 236,690,670 1,566,421 6,978,638 4,399,362 $ 215,848,460 6,910,324 9,055,344 19,088,593 1,051,108 643,229 24,234,664 $ 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 36 176,488 35,135 10,823 287 5,180 57,100 135,943 420,956 42,866 15,160 318,356 (26,391) 349,991 770,947 $ Public Housing Fund $ 466,000 11,693 15,028 27,221 356 4,151 524,449 Total $ 3,276,922 144,422 9,613 (1,893,896) 410,350 1,947,411 1,947,411 2,471,860 $ 28,202,435 408,936 44,785,810 6,898,871 374,032 27,221 206,114 305,489 81,208,908 Governmental Activities Internal Service Funds $ 12,526,902 20,254,905 137,188 842,291 110,127 33,871,413 38,371,478 583,296,572 6,095,443 3,884,091 11,839,669 224,675 (116,977,985) 17,017,386 28,074,271 571,825,600 446,025 384,332 572,655,957 653,864,865 148,102 40,386,355 22,273,193 30,745 (33,784,398) 2,419,522 31,473,519 31,473,519 65,344,932 15,504 7,361 22,865 3,742,333 313,210 2,490,574 252,021 288,920 3,000,000 517,780 8,191,099 18,795,937 467,031 238,658 1,500,000 413,080 2,618,769 10,924 10,924 33,789 1,207,911 1,500,000 116,022 128,290 133,870,484 (54,237) 136,768,470 155,564,407 121,020 121,020 2,739,789 1,947,411 429,764,018 31,473,519 490,660 2,438,071 $ 20,236,850 12,830,980 490,660 34,977,950 498,300,458 31,131,624 62,605,143 $ 1,529,420 499,829,878 $ 37 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2009 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 $ 29,933,405 158,828 30,092,233 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) Investment income Interest expense Gain on sale of capital assets Total non-operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets Total net assets - beginning Total net assets - ending $ 15,327,269 3,199 15,330,468 $ 11,163,703 2,651 11,166,354 3,402,406 6,422,496 888,346 10,713,248 453,106 $ 1,310,340 1,555,509 760 2,866,609 6,218,758 18,541,841 5,885,108 30,645,707 (553,474) 2,204,155 10,457,127 7,930,000 7,498,822 28,090,104 (12,759,636) 1,450,908 3,147,049 756,134 5,354,091 (2,487,482) 981,749 (1,925,762) 12,021 (931,992) 552,381 (3,043,285) 1,313 (2,489,591) 386,254 (43,309) 342,945 (1,485,466) (15,249,227) 796,051 (2,457,802) 7,760,070 628,593 (2,322,602) 4,580,595 4,315,902 2,885,249 (681,539) (8,729,615) 110,359 (17,984) 888,426 2,848,601 (281,720) 109,079 47,739 (18,059) 29,680 232,110,075 224,578,075 18,200,167 24,125,585 $ 236,690,670 $ 215,848,460 $ 19,088,593 $ 24,234,664 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 Total Governmental Activities Internal Service Funds $ 57,734,717 1,659,667 158,627 169,290 59,722,301 $ 26,982,879 168,009 27,150,888 Public Housing Fund $ 104,158 158,627 3,852 266,637 245,619 86,166 331,785 (65,148) $ 13,276,227 38,814,132 7,930,000 15,114,576 75,134,935 (15,412,634) 9,506,713 11,865,247 160,246 6,424,208 27,956,414 (805,526) 2,351 2,351 1,970,474 (5,030,415) 13,334 (3,046,607) 721,991 21,612 743,603 (62,797) (18,459,241) (61,923) 7,899 (54,898) 12,186,331 6,370,342 (3,303,845) (3,206,413) 9,165,218 (158,098) 8,945,197 2,492,969 501,506,871 53,659,946 2,438,071 $ 498,300,458 $ 62,605,143 769,859 $ (2,436,554) 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2009 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 $ 31,831,880 (16,673,361) (6,245,808) (2,016,031) 6,896,680 $ 15,973,963 (9,460,770) (2,202,141) (4,930,000) (707,428) (1,326,376) $ 11,626,907 (2,871,626) (3,367,832) (3,762,678) 1,624,771 628,593 (2,322,602) (1,694,009) 2,885,249 (681,539) 2,203,710 (17,984) (17,984) 2,848,601 (281,720) 2,566,881 (4,273,103) 1,394,079 80,762 (19,640,602) (1,978,087) (5,963,252) 447,047 8,575,248 178,926 (1,483,174) (2,452,384) (1,558,245) 110,359 (170,368) (46,639) (101,516) (129,216) (24,966) (24,416,951) (697,589) (1,664,893) (255,698) 39,031,064 (39,051,141) 1,086,727 1,066,650 19,204,113 (20,165,827) 492,480 (469,234) 15,640,107 (16,307,077) 406,212 (260,758) 1,903,110 (2,328,516) 45,598 (379,808) Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (18,147,630) 32,645,195 $ 14,497,565 (289,489) 7,357,598 7,068,109 (318,864) 6,036,202 5,717,338 Classified as: Cash and cash equivalents Restricted cash with fiscal agents Totals $ 14,297,697 199,868 $ 14,497,565 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 $ $ $ 7,017,502 50,607 7,068,109 $ $ $ The accompanying notes are an integral part of the financial statements 40 5,717,338 5,717,338 $ $ $ $ 2,834,760 (2,623,371) (1,444,682) (491,569) (1,724,862) 206,513 644,153 850,666 703,898 146,768 850,666 Public Housing Fund $ $ $ $ 312,776 (227,199) (62) 85,515 Total Governmental Activities Internal Service Funds $ 62,580,286 (31,856,327) (13,260,463) (4,930,000) (6,977,768) 5,555,728 $ 27,154,740 (13,111,585) (9,465,921) (1,760,246) 2,816,988 7,899 7,899 6,370,342 (3,303,845) 3,066,497 9,165,218 (158,098) 9,007,120 (7,899) - (11,904,015) 1,951,485 8,575,248 259,688 (21,423,360) (4,502,076) (10,306,032) - (7,899) (27,043,030) (10,306,032) 2,351 2,351 75,778,394 (77,852,561) 2,033,368 (40,799) 34,255,985 (36,597,823) 744,739 (1,597,099) 87,866 389,827 477,693 (18,461,604) 47,072,975 $ 28,611,371 (79,023) 12,605,925 $ 12,526,902 466,000 11,693 477,693 $ 28,202,435 408,936 $ 28,611,371 $ 12,526,902 $ 12,526,902 (continued) 41 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2009 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 Claims payable Deferred revenue Compensated absences Total adjustments (553,474) $ (12,759,636) 5,885,108 $ 7,498,822 453,106 $ 888,346 756,134 1,671,059 (4,281) (59,065) - 643,495 20,195 (20,195) 426,637 33,916 (41,977) - (16,249) - (28,673) (6,800) (6,245) (49,287) 71,588 (3,000) (20,250) 7,450,154 (892,883) (14,516) (318,188) 3,000,000 16,530 11,433,260 (169,831) 9,794 24,780 1,171,665 32,073 2,986 17 19 (15,600) 3,240 762,620 Net cash provided (used) by operating activities $ 6,896,680 $ (1,326,376) $ 1,624,771 $ Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers Increase in fair market value of investments Total non-cash investing, capital and financing activities $ 6,365,991 158,082 6,524,073 $ 3,868,855 78,423 3,947,278 $ 60,309 60,309 $ $ (2,487,482) $ $ The accompanying notes are an integral part of the financial statements 42 $ (1,724,862) 7,042 7,042 Public Housing Fund $ (65,148) Total $ (15,412,634) 86,166 $ 15,114,576 (805,526) 6,424,208 2,190 44,597 (356) (4,151) - 2,727,132 78,513 15,558 (105,193) (20,195) 3,852 (842,291) (27,332) - 15,504 7,361 (648) 150,663 (1,043,810) (8,536) 1,133 (367,456) 70,940 3,000,000 (18,600) 24,300 20,968,362 (376,520) 37,152 (195) (1,600,000) 3,640 3,622,514 $ 85,515 $ - $ Governmental Activities Internal Service Funds $ 5,555,728 $ 2,816,988 $ 10,234,846 303,856 $ 10,538,702 $ 111,444 111,444 $ (concluded) 43 CITY OF PEORIA, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2009 Firemen's Pension Fund ASSETS Cash and cash equivalents Investments (pooled), at fair value Interest receivable Total assets $ LIABILITIES Accounts payable Other liabilities Total liabilities 77,913 125,979 1,070 204,962 - NET ASSETS Held in trust for pension benefits and other purposes $ 204,962 The accompanying notes are an integral part of the financial statements 44 Agency Funds $ 183,209 296,236 479,445 3,874 475,571 479,445 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2009 Firemen's Pension Fund ADDITIONS Investment earnings: Interest and investment income Total investment earnings Less investment expenses: Investment management fees Net investment earnings Total additions $ 91 5,653 5,653 DEDUCTIONS Retirement payments Total deductions 30,600 30,600 Change in net assets Net assets - beginning of the year Net assets - end of the year 5,744 5,744 (24,947) $ 229,909 204,962 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 68 8 Interfund Transactions, Receivable and Payable Balances 68 9 Segment Information for Enterprise Funds 69 10 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 69 11 Fund Balance/Net Assets Reservations and Designations 69 12 Capital Assets 70 13 Community Facilities District Debt 72 14 Long-Term Debt 72 15 Advance Refundings 78 16 Pledged Revenues 78 17 Retirement and Pension Plans 78 18 Operating Leases 83 19 Deferred Compensation Plan 83 20 Commitments and Contingencies 83 21 Other Matters 85 22 Subsequent Events 86 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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, 2009 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. Quasi-external transactions, like the sale of utility services from the Enterprise Funds to the other funds, are not eliminated for the financial statements. Elimination of these charges would distort the direct costs and program revenue reported for the various functions. 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 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 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 governmentwide 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, except for the Agency Funds which have no measurement focus, 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 government-wide 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, 2009 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, 2009 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 behalf of 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 yearend 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, 2009 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 2009. • 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, 2009 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 2008-2009, including the permanent base adjustment, was $688,862,608. 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 a restriction or designation of 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, 2009 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 open-end 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, 2009 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, 2009, the City did not capitalize any net interest costs in the business-type activities of the government-wide financial statements (also in the Enterprise Funds on the proprietary fund statements). Total interest incurred, not including agent fees or other costs, of the business-type activities (and the Enterprise Funds on the proprietary fund statements) before capitalization was $4,956,296. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives: Assets Water Rights 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) 100 40 40 40 40 25 10 7 7 7 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. Water Rights The City entered into a lease agreement with Gila River Indian Community (GRIC) for the rights to 7,000 acre-feet of water each year through 2107. These rights, costing $6,095,443, are being amortized over the 100 year life of the agreement on a straight-line basis starting in fiscal year 2008. Fiscal year 2009 amortization was $121,909 (2 years amortization under GASB Statement 51 implemented in fiscal year 2009) and the net book value at June 30, 2009 was $5,973,534. L. 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). 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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. M. 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. N. 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. O. 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. P. 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. 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. 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. 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 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 of the outstanding vacation, compensatory time and benefits, as well as an estimate of the retirement sick-time payout for eligible employees, are recorded as a liability. Compensated absences are liquidated when mature by the various operating funds accruing the liability. Q. 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 $1,500,000 reported in the Self-Insurance Fund at June 30, 2009 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, 2009, 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 2008 and 2009 were: Beginning of Years Ended, Fiscal Year June 30 Liability 2008 $3,100,000 2009 3,100,000 Changes in Estimates $ (1,600,000) Current Year Claims $727,954 587,490 Claim Payments $ (727,954) $ (587,490) Balance at Fiscal Year-end $3,100,000 1,500,000 R. 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. S. New Accounting Standards During fiscal year 2009, the City implemented the following new accounting standard issued by the Governmental Accounting Standards Board: Statement No. 51 – “Accounting and Financial Reporting for Intangible Assets”. T. 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), 58 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 valuation of capital assets and depreciation expense, and the ultimate outcome of claims payable. Actual results could differ from those estimates. 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) $ 86,289,313 4,796,102 139,060,962 9,615,438 1,609,367 6,207,284 173,261 206,983 37,711,880 64,574,546 9,886,921 $ 360,132,057 $ 13,494,628 2,219,832 3,288,148 3,317 16,263,419 484,828 4,935,825 - Long-term Assets/ Liabilities (1) 3,437,009 4,392,000 951,019,753 958,848,762 6,735,863 (6,208,081) 3,546,915 3,885,670 44,826,503 Internal Service Funds (2) Statement of Net Assets Totals 12,526,902 20,254,905 137,188 (1,529,420) 842,291 110,127 31,473,519 63,815,512 98,816,215 4,796,102 159,315,867 9,615,438 1,746,555 (1,529,420) 6,207,284 1,015,552 317,110 3,437,009 4,392,000 37,711,880 64,574,546 9,886,921 982,493,272 1,382,796,331 467,031 238,658 1,500,000 413,080 - 13,961,659 2,458,490 6,735,863 3,288,148 1,503,317 10,055,338 484,828 4,935,825 3,546,915 4,298,750 44,826,503 40,689,997 332,966,880 385,753,750 121,020 2,739,789 333,087,900 429,183,536 $ 319,442,060 573,095,012 61,075,723 953,612,795 $ 360,132,057 958,848,762 63,815,512 1,382,796,331 $ 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 $ 1,142,011,324 (190,991,571) $ 951,019,753 Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expense when paid. Interest payable $ 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. Deferred bond issuance costs $ 59 6,735,863 3,437,009 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 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 $ 3,546,915 $ 56,858,711 320,513,205 5,335,990 382,707,906 3,885,670 44,826,503 333,995,733 $ 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. $ (1,028,853) Certain long-term debt obligations that are booked for the government-wide statements are offset by goodwill. $ 4,392,000 $ $ (4,921,062) (1,287,019) (6,208,081) $ 61,075,723 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) 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 $ 59,004,816 Property taxes 30,872,015 Franchise taxes 4,019,182 Intergovernmental: State shared sales taxes 10,991,095 County shared sales taxes 12,837,089 Urban revenue sharing 20,395,663 Auto-in-lieu taxes 5,018,384 Highway user revenue 8,287,891 Local transportation aid 640,826 From federal government 2,970,534 Other governmental 1,576,741 Charges for services 18,479,664 Licenses and permits 1,802,759 Fines and forfeitures 3,733,047 Rents 395,834 Investment earnings 7,174,109 Special assessments 2,200,782 Miscellaneous 7,488,740 Other sources: Gain on sale of capital assets Capital contributions Capital-related debt issued 68,440,000 Premium on bonds issued 808,192 Transfers in 18,855,279 Total revenues and other sources 285,992,642 Long-term Revenues/ Expenses(1) Capitalrelated Items(2) 821,475 - - - - 2,106 721,991 - - 115,412 29,600,596 4,191,700 612,120 33,909,814 1,334,111 (1,605,303) (783,828) Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities 60 (68,440,000) (808,192) 69,469,867 221,675 98,142 - 59,004,816 31,791,632 4,019,182 3,148,597 100 2,850 (3,962,803) 10,991,095 12,837,089 20,395,663 5,018,384 8,287,891 640,826 2,970,534 1,576,741 21,628,261 1,802,859 3,735,897 395,834 7,896,100 595,479 3,528,043 (91,642,744) 115,412 29,600,596 1,486,222 (92,355,858) 228,318,556 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Total Governmental Funds Expenditures/Expenses Current: General government 17,798,947 Culture and recreation 22,303,852 Police 36,458,108 Fire 20,516,345 Development services 6,489,199 Highways and streets 15,469,695 Public works 6,187,633 Human services 2,343,847 Debt service: Principal payments 25,988,554 Interest and other charges 11,917,582 Capital outlay 77,515,142 Unallocated depreciation Total expenditures/ expenses 242,988,904 Other financing uses/changes in net assets Transfers out 30,928,896 Total expenditures/expenses & other financing uses 273,917,800 Net change for the year $ 12,074,842 (1) Long-term Revenues/ Expenses(1) Capitalrelated Items(2) 738,900 41,640 475,880 393,070 (10,510) 22,250 7,100 470 5,189,671 2,327,641 1,680,280 1,735,046 52,813 9,384,911 1,465,388 68,813 642,921 - (77,515,142) 574,550 2,311,721 (55,036,029) 2,311,721 (3,095,549) 4,191,700 (50,844,329) 84,754,143 Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities (600,811) (719,746) (1,536,221) (998,555) (176,733) (825,608) 46,795 (30,526) (4,841,405) (4,841,405) 6,175,516 (25,988,554) 50,485 (25,938,069) 23,226,263 23,185,665 37,084,671 21,618,004 6,354,769 24,046,432 7,688,062 2,382,604 - 12,610,988 574,550 (713,114) 158,772,008 69,469,867 (100,037,744) 4,552,719 43,531,798 (100,750,858) (43,310,123) 8,395,000 163,324,727 64,993,829 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 (2) 99,556 (767,722) 6,624 (27,902) (4,816) (18,854) - $ 960,800 $ $ 854,581 155,220 (366,880) 642,921 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. $ 821,475 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. $ 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 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: 61 (1,605,303) 708,000 $ (77,515,142) (102,195) 22,604,569 $ (55,012,768) $ 2,106 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 $ Certain development agreement transactions are reported as charges for service and operating expenditures in the governmental funds, but are reclassified to capital assets and donated assets on the government-wide statements. Expenditures $ (111,747) $ 115,412 (88,486) 26,926 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) (4,191,700) 4,191,700 - 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 $ (25,988,554) 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 $ (68,440,000) 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 $ $ $ (5) 29,600,596 1,334,111 4,841,405 6,175,516 221,537 (272,022) (808,192) (858,677) 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 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 $ $ 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 62 54,663 (54,663) - 767,777 (767,777) - $ 100,037,744 (91,642,744) $ 8,395,000 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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, 2009, the carrying amount of the City's deposits was $70,092,697 and the bank balance was $74,687,460. Of the bank balance, $20,735,751 was swept into the bank’s money market fund, which is backed by government-only securities. An additional $44,459,032 of that balance was already committed in the Fedwire system for 7/1/09 debt service payments and was not collateralized. The remaining bank balance of $9,492,677 was covered by federal depository insurance or by collateral held by the City’s agent in the City’s name, in the Municipal Development Authority, Inc.'s trust name, or in the name of the Peoria Housing Authority. The difference between the City’s carrying amount and the bank balance of $4,594,763 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. 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, 2009, 67.1% of the City’s investments have a maturity of less than one year and none 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, 2009 was 255 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, 2009, the City’s investments include $11.0 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 63 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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. Moody’s Investment Type Rating Federal Farm Credit Bank - Agency Note Aaa Federal Farm Credit Bank - Callable Agency Note Aaa Federal Farm Credit Bank - Discount Note Aaa Federal Home Loan Bank - Agency Note Aaa Federal Home Loan Bank - Callable Agency Note Aaa Federal Home Loan Bank - Step-up Agency Note Aaa Federal Home Loan Bank - Discount Note Aaa Federal Home Loan Mortgage Corp - Agency Note Aaa Federal Home Loan Mortgage Corp - Callable Agency Note Aaa Federal Home Loan Mortgage Corp - Discount Note Aaa Federal National Mortgage Assoc-Agency Note Aaa Federal National Mortgage Assoc-Callable Agency Note Aaa Federal National Mortgage Assoc-Discount Note Aaa S&P Rating AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA % of Investments 11.9 2.2 2.7 13.4 2.2 1.4 .8 12.1 3.3 1.9 7.6 9.0 2.7 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, 2009, 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, 2009, the City’s investments include 61.6% invested in U.S. Agency Coupon securities, 8.1% in U.S. Agency Discount Notes, 1.4% in U.S. Agency Step-up securities, 9.6% in U.S. Treasury Notes, 3.0% in Commercial Paper, and 16.3% 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. At June 30, 2009, 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 $ 280,492 297,321 U.S. Treasury notes and strips 25,366,291 10,206,250 Agency coupon securities 86,021,662 79,553,689 Agency discount notes 15,907,417 Commercial Paper 5,998,833 - 5,093,750 - -$ - 577,813 35,572,541 170,669,101 15,907,417 5,998,833 228,725,705 State of Arizona local government investment pool Mutual fund-money market Total unrestricted investments 5,093,750 - 1,034,834 30,167,980 259,928,519 1,034,834 30,167,980 164,777,509 90,057,260 64 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Investment Maturities in Years 1-2 Less than 1 2-3 Over 3 Unrestricted Investments (cont): Less: amount included in cash and cash equivalents Plus: amount included in restricted investments Unrestricted investments, net 56,497,373 Total investments per statement of net assets Plus: Investments in Fiduciary Funds $ 1,092,746 204,523,892 $ 204,101,677 422,215 Net unrestricted investments Restricted Investments: Agency coupon securities Agency Discount Notes Commercial paper Mutual fund-money market Total Restricted Investments Fair Value 55,569,122 13,946,915 4,998,872 28,334,001 102,848,910 6,175,313 6,175,313 Less: amount included in cash with fiscal agents Less: amount included in restricted cash and cash equivalents Less: amount included in restricted cash with fiscal agents Less: amount included in unrestricted investments Less: amount included in unrestricted cash and cash equivalents Net restricted investments - $ 204,523,892 -$ -$ 61,744,435 13,946,915 4,998,872 28,334,001 109,024,223 4,571,986 37,711,880 397,243 1,092,746 $ 675,822 64,574,546 Restricted cash, cash equivalents, and cash with fiscal agents at June 30, 2009 consisted of the following: Restricted investments included in restricted cash and cash equivalents $ 37,711,880 Restricted investments included in cash with fiscal agents 397,243 Restricted Cash with Fiscal Agents 11,693 Total cash and cash equivalents per statement of net assets $ 38,120,816 Cash with Fiscal Agents: Restricted investments included in cash with fiscal agents Cash with Fiscal Agents Total cash with fiscal agents 65 $ 4,571,986 224,116 4,796,102 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Unrestricted Cash and cash equivalents at June 30, 2009 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 $ $ 56,497,373 70,092,697 675,822 13,880 127,279,772 261,122 127,018,650 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. Investment income comprises the following for the year ended June 30, 2009: Net interest and dividends Net increase 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 $ $ 8,443,460 1,428,767 9,872,227 5,653 9,866,574 The net increase in the fair value of investments during fiscal year 2008-2009 was approximately $1,428,767. This amount takes into account all changes in fair value (including purchases and sales) that occurred during the year. The unrealized gain on investments held at June 30, 2009 was approximately $1,194,730. 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 2009 are $1,499,682,407 and $1,994,591,924 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 66 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 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, 2009: Governmental activities: General Fund: Due from Federal for: COBRA Subsidy – ARRA 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 Public Housing Fund: Due from US Department of Housing & Urban Development Subtotal Total proprietary activities 67 $ 4,931 43,443 895,166 1,486,265 478,385 94,322 102,925 3,105,437 748,853 5,717 754,570 340,914 340,914 151,188 48,961 890,062 169,732 $ 12,155 58,552 559,047 116,264 2,006,363 6,207,284 $ 27,221 27,221 27,221 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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, 2009. Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Other Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Public Housing Fund Total enterprise funds Grand totals Receivables $ $ $ $ Allowance Net 4,606,273 1,243,947 279,127 746,046 1,340,413 2,001,426 10,217,232 144,703 15,500 382,028 59,563 601,794 4,461,570 1,243,947 263,627 746,046 958,385 1,941,863 9,615,438 5,662,790 2,158,326 1,580,321 19,121 15,028 9,435,586 19,652,818 1,890,034 375,484 271,197 2,536,715 3,138,509 3,772,756 1,782,842 1,309,124 19,121 15,028 6,898,871 16,514,309 8. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES Net interfund receivables and payables between governmental activities and business-type activities of $1,529,420 are included in the government-wide financial statements at June 30, 2009. 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 $3,066,497 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, 2009: 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 Public Housing Fund Total enterprise funds Internal Service funds Grand totals $ $ 68 Transfers out Transfers in 2,944,135 13,773,560 354,248 1,115,724 5,824,023 68,251 5,128,351 1,720,604 30,928,896 6,575,900 2,118,394 760,500 43,465 9,357,020 18,855,279 2,322,602 681,539 17,984 281,720 3,303,845 158,098 34,390,839 628,593 2,885,249 2,848,601 7,899 6,370,342 9,165,218 34,390,839 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 2009 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 143-146. 9. SEGMENT INFORMATION FOR ENTERPRISE FUNDS 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, 2009, no funds were in a deficit position. For the year ended June 30, 2009, 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, 2009: General Fund: Designated for economic stabilization reserve Designated for encumbrances Designated for economic development Designated for municipal office complex reserve $ 34,200,000 3,413,508 447,964 4,696,964 42,758,436 $ 5,800,000 288,293 1,000,000 7,088,293 Highway User Revenue Fund: Designated for encumbrances $ 209,966 Development Fee Fund: Designated for encumbrances $ 2,992,484 Transportation Sales Tax Fund: Designated for encumbrances $ 1,862,300 GO Bond Capital Projects Fund: Designated for encumbrances $ 15,805,494 Half-Cent Sales Tax Fund: Designated for economic stabilization reserve Designated for encumbrances Designated for debt service retirement 69 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Non-major Funds: Housing Fund: Designated for encumbrances Other Grants Fund: Designated for encumbrances Designated for arts capital sub-total Storm Drain Fund: Designated for encumbrances MDA Bonds Capital Projects Fund: Designated for encumbrances Non-Bond Capital Projects Fund: Designated for encumbrances Non-major funds total Total governmental funds $ 22,027 735,774 2,911,661 3,647,435 16,169 13,592,725 $ 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 Designated for capital equipment replacement 30,458 17,308,814 88,025,787 16,000,000 2,452,286 2,044,739 20,497,025 3,077,322 1,322,041 4,399,363 Solid Waste Utility Fund: Designated for working capital policy reserve Designated for capital equipment replacement 2,100,000 5,889,421 7,989,421 Stadium Fund: Designated for capital equipment replacement Total proprietary funds $ 577,231 33,463,042 Internal Service Funds: Designated for capital equipment replacement $ 17,134,785 12. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2009 follows: Balances June 30, 2008 Governmental activities: Non-depreciable assets: Work in Progress – Parks $ Work in Progress – Buildings Work in Progress - Equipment Work in Progress – Furniture 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 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 Additions/ Transfers in 4,417,121 10,472,850 76,752 31,036 6,811,240 49,618,625 1,361,624 308,318 27,694,304 100,791,870 70 Disposals/ Transfers out (2,031,353) (383,041) (769,917) (2,883,495) (366,114) (6,433,920) Balances June 30, 2009 29,268,960 13,399,265 76,752 31,036 21,958,943 112,415,059 2,506,520 2,161,589 326,278,627 508,096,751 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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, 2008 Additions/ Transfers in Disposals/ Transfers out 139,088,909 3,286,872 51,184,083 19,715,132 57,405,904 361,172,232 25,574,771 1,263,607 19,744 9,794,182 3,207,180 27,299,237 2,304,661 (1,316,939) (184,140) (642,945) - 140,352,516 1,989,677 60,794,125 22,279,367 57,405,904 388,471,469 27,879,432 657,427,903 43,888,611 (2,144,024) 699,172,490 (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 (3,450,653) (206,850) (5,263,201) (2,453,126) (1,263,129) (9,125,841) (841,769) (22,604,569) 21,284,042 1,316,939 184,140 511,666 2,012,745 (131,279) (25,803,339) (930,527) (34,828,055) (12,439,361) (14,700,087) (128,966,405) (7,108,195) (224,775,969) 474,396,521 866,982,559 122,075,912 (6,565,199) 982,493,272 5,834,184 4,487,654 17,369 268,342 10,607,549 (1,054,698) (33,108,682) (8,529,685) (42,693,065) 26,662,468 1,394,434 17,369 17,017,386 45,091,657 67,165 262,239 1,642,394 6,095,443 7,730,704 38,448,377 (15,723) (71,326) (107,368) - 38,371,478 224,675 3,884,091 11,839,669 6,095,443 252,017,815 331,278,757 54,246,322 (194,417) 643,711,928 (969,785) (24,894) (317,522) (1,238,779) (121,909) (5,260,119) (7,025,230) (14,958,238) 39,288,084 15,723 71,326 98,758 185,807 (8,610) (11,942,820) (92,161) (2,312,698) (6,343,988) (121,909) (46,664,986) (49,499,423) (116,977,985) 526,733,943 Business-type activities: Non-depreciable assets: Work in Progress - Water $ 21,882,982 Work in Progress - Wastewater 30,015,462 Work in Progress – Stadium Land 25,278,729 Total non-depreciable assets 77,177,173 Depreciable assets: Buildings & improvements 38,371,478 Furniture 173,233 Equipment 3,693,178 Vehicles 10,304,643 Water Rights Water system 244,287,111 Wastewater system 292,830,380 Total depreciable assets at historical cost 589,660,023 Less accumulated depreciation for: Buildings & improvements (10,973,035) Furniture (82,990) Equipment (2,066,502) Vehicles (5,203,967) Water Rights Water system (41,404,867) Wastewater system (42,474,193) Total accum. depreciation (102,205,554) Total depreciable assets, net 487,454,469 Business-type activities capital assets, net $ 564,631,642 49,895,633 Balances June 30, 2009 (42,701,675) 571,825,600 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 $ Total depreciation expense $ 22,604,569 71 5,236,477 2,368,022 1,591,793 1,735,046 52,813 9,511,667 1,465,388 68,813 574,550 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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. 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, 2009, 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, 2009 was $112,390,515 and $222,603,385 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 pursuant to wastewater revenues of this report. Sewer Revenue Bonds: Water and Wastewater Revenue Bonds are issued, voter authorization, for the construction, acquisition, and equipping of water and facilities and related systems and infrastructure. The bonds are backed by the the water and wastewater utilities. Also see Table XXV in the Statistical Section of 72 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 with Governmental Commitment 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 contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. At June 30, 2009, 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, 2009 totaled $15,860. 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, 2009. 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, $59,472,631 in 2007, $19,555,776 in 2009 and water infrastructure debt of $13,965,546 in 2008 and $8,575,248 in 2009 have been issued against the 2000 authorization, leaving $158,749,243 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 73 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 2005 the voters authorized $160,000,000 in revenue or general obligation bonds for water treatment, water system, wastewater and storm drainage projects. General obligation bonds in the amount of $24,087,416 in 2007 and $38,511,231 in 2009 were issued against the 2005 authorization leaving $133,401,353 unissued. Water infrastructure debt of $24,631,066 in 2007 and $28,775,995 in 2008, and $10,372,993 in general obligation bonds for drainage projects were issued in 2009 against the 2005 water, wastewater and storm drainage authorization leaving $96,219,946 unissued at June 30, 2009. In November 2008, the voters authorized $378,000,000 in bonds as follows: $276,700,000 in general obligation or utility revenue bonds for transportation and drainage projects, $60,300,000 for public safety and municipal operations projects, and $41,000,000 for parks, recreation and trails projects. As of June 30, 2009, no bonds have been issued against the 2008 authorizations. 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, 2009. 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, 2009. 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, 2009. The City has an arbitrage liability of $484,828 at June 30, 2009. Bonds and loans payable at June 30, 2009 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 02/19/09 Series 2009 Various improvements 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 7/1/09-28 5.84 4.82 4.64 4.04 4.27 4.00 3.86 10.5 $ 9,900,000 $ 1,865,000 12.2 5,930,000 3,710,000 9.8 4,030,000 1,590,000 9.5 27,570,000 17,745,000 20 94,380,000 73,005,000 14 18,365,000 16,705,000 7.4 68,440,000 68,440,000 228,615,000 183,060,000 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 – Community Theater 03/12/08 Series 2008 Revenue Bonds MDA Series 2008 - Transportation 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 9,915,393 5,830,000 45,240,000 60,985,393 Highway User Revenue Bonds 07/10/96 Series C (1996) 7/1/97-16 5.81 14.1 4,600,000 3,005,000 Street, bridge, traffic signal improvements 74 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Net Ave. Original Principal Delivery Maturity Interest Life Principal Balance Date Description Purpose Dates Rate (Yrs) Balance Outstanding Special Assessment Bonds with governmental commitment (collateralized by the special assessments levied on the property benefiting from the improvements) 7.30 13.4 5,015,000 1,650,000 06/30/91 ID# 8801 North Valley Power Center ID-Water & street improvements 1/1/94-13 12/30/92 ID# 8802 Bell Road ID-Street improvements 1/1/95-13 7.20 13.3 5,610,000 1,940,000 11/21/91 ID# 9002 Sunny Boy Water & Sewer ID-acquire private water company 1/1/93-11 6.35 12.4 2,575,000 205,000 09/17/97 ID# 9601 83rd Ave ID-Water, wastewater & street improvements 1/1/99-12 5.30 8.7 2,285,000 530,000 08/13/97 ID# 9603 Arrowhead Fountains ID-Water, wastewater & street 1/1/99-12 5.20 8.7 3,800,000 810,000 improvements 08/28/01 ID# 9303 75th Ave & Paradise Ln ID-Street & bridge improvements 1/1/03-11 6.00 5.7 2,270,000 577,812 tth 04/01/07 ID# 0601 99 Ave & Northern ID-Street improvements 7/1/07-22 4.25 15 4,950,000 4,690,000 Total Improvement District Bonds 26,505,000 10,402,812 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 12.7 13.2 20 Total Community Facilities District Bonds 21,250,000 23,550,000 22,760,000 18,175,000 22,125,000 22,760,000 67,560,000 63,060,000 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 320,513,205 (39,847,547) $280,665,658 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) 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 Water system improvements Butler Water Treatment Plant Butler Water Treatment Plant Butler Water Treatment Plant 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 7/1/03-22 7/1/07-26 1/1/08-27 7/1/10-28 3.94 3.06 3.06 1.98 11.8 20 20 19 Recycle containers 1/15/08-14 3.91 7 07/26/02 12/07/06 02/15/08 07/14/08 WIFA Series 2000 (ph 3) WIFA Series 2006 CW 1 WIFA Series 2006 CW 2 WIFA Series 2006 CW 3 Total Revenue Bonds Loans Payable 02/29/08 Suntrust Leasing 5.1 $ 2,759,859 $ 1,229,607 11,405,081 14,330,000 16,730,000 16,590,000 20,150,000 14,500,000 4,815,884 7,492,909 11,085,000 6,915,000 14,375,229 10,637,078 1,964,789 1,525,071 27,183,342 27,183,342 42,741,541 42,741,541 8,575,248 8,575,248 174,170,001 135,346,302 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, 2009 1,064,632 137,640,541 (8,043,873) 129,596,668 $410,262,326 $410,262,326 47,891,420 $458,153,746 Contracts Payable Other debt at June 30, 2009 consists of the following: Agreement Date Type Expiration Interest Interest Date Rate 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 – Westcor 08/28/18 Prime 10.5 Offsite improvements-Bell Rd-ID 8802 – Bell 77 Offsite improvements-Bell Rd & Paradise Ln-IDs 8802 and 9303 – DMB Circle Road 01/20/11 Prime 9.0 2,947,454 663,466 06/20/17 Prime 7.0 4,538,187 1,015,371 Master-planned 03/16/99 community Street & infrastructure improvements-West Wing Pkwy; Park land; Trail improvements; Open space land – West Wing 03/16/14 - - 4,316,327 3,940,961 75 $ 13,137,805 $ 3,203,216 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Agreement Date Type Nature of Improvements Fire station building, equipment & land; Street & infrastructure improvements-parts of El Mirage Road, Ridgeline Rd, Vistancia Blvd, Jomax Rd, Ln Mtn Rd, Westland Rd; Park land & improvements - Vistancia st Offsite improvements-91 Ave & Bell Rd – DIB Investment Group st Offsite improvements-91 Ave & Bell Rd- BCC Development (Acura) Neighborhood park land & improvements; Right of way land on th 67 Ave – Sonoran Mtn Ranch Street & infrastructure improvements; Right of way land; Park land; Library land – Camino A Lago Street & infrastructure improvements; Right of way land; Trail land; Fire station land – Rock Springs Pay Printers & Copiers Expiration Interest Interest Date Rate Cap Master-planned 10/22/01 community Planned area retail 07/01/03 project Planned area retail 11/18/03 project Residential 02/17/04 development Residential 03/16/04 development Residential 10/19/04 development 10/24/04 Capital lease Planned area retail Offsite improvements-92nd Ave & Bell Rd – Phoenix Motor Co. 12/14/04 project 01/21/05 Capital lease Modular building at Beardsley Treatment Plant Master-planned Offsite improvements; Right of way land; Trail land; Open space 2/11/05 community land – Tierra del Rio Planned area retail Offsite improvements – 91st Ave & Bell Rd – BCC Development 07/19/05 project (Infiniti) Residential Offsite improvements-Lake Pleasant Pkwy, Deer Valley to 09/14/05 development Williams – Casa Del Ray Planned area retail Offsite improvements & Right of way land-Peoria east of 83rd Ave - Walmart 10/12/06 project Residential 12/22/06 development Right of way land – Griffith Commerce Residential Street & infrastructure improvements; Right of way land – Colina 04/19/07 development del Sur Planned area retail Street & infrastructure improvements; Right of way land – 11/24/07 project Mountainside Crossing Planned area retail 03/05/09 project Right of way land; Intersection improvements – Empire Center Total contracts payable recorded in governmental activities Less estimated current portion Long-term portion of contracts payable in governmental activities Original Amount Principal Balance Outstanding 10/22/26 - - 29,203,276 11,655,161 05/20/20 - - 1.800,000 1,387,442 04/30/14 - - 1,800,000 1,437,167 02/17/14 - - 1,382,257 443,003 08/31/14 - - 14,512,075 12,872,380 07/15/11 - - 3,901,317 47,550 3,641,155 9,906 07/29/18 01/21/10 4.00 - 1,800,000 259,728 1,708,130 33,041 2/11/15 - - 7,056,354 6,743,603 1/1/10 - - 600,000 515,311 09/14/10 - - 588,659 79,875 10/01/13 - - 6,926,205 6,420,372 12/22/11 - - 748,209 748,209 - - - 72,613 72,613 - - - 441,543 15,137 - - - 253,192 253,192 56,858,711 (4,978,956) 51,879,755 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 Quintero - - - 661,005 626,568 Master-planned 10/22/01 community Water rights-4,200 acre feet of assured water supply - Vistancia 10/22/26 - - 4,841,000 2,761,842 Residential 02/17/04 development Wastewater infrastructure improvements –Sonoran Mtn Ranch 02/17/14 - - 2,376,931 405,753 Residential 03/16/04 development Water rights-947 acre feet water allocation – Camino A Lago 08/31/14 - - 426,208 351,140 02/11/15 - - 308,801 275,739 4,421,042 (147,226) 4,273,816 $ 56,153,571 Master-planned Offsite improvements; Right of way land; Trail land; Open space 02/11/05 community land – Tierra del Rio 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, 2009 The following is a summary of changes in long-term liabilities reported in the government-wide financial statements for the year ended June 30, 2009: Beginning Balance Additions Reductions Governmental activities: Bonds payable: General obligation bonds $ 126,195,000 MDA Bonds 65,795,653 Highway user revenue bonds 3,295,000 Special assessment bonds 12,027,427 CFD bonds 64,610,000 Total bonds payable 271,923,080 Contracts payable 42,539,431 Compensated absences 4,905,650 Governmental activities totals $ 319,368,161 68,440,000 68,440,000 20,901,705 7,115,408 96,457,113 11,575,000 4,810,260 290,000 1,624,615 1,550,000 19,849,875 6,582,425 6,150,968 32,583,268 76 Ending Balance 183,060,000 60,985,393 3,005,000 10,402,812 63,060,000 320,513,205 56,858,711 5,870,090 383,242,006 Amounts Due Within One Year 27,270,000 5,042,055 3,005,000 2,360,492 2,170,000 39,847,547 4,978,956 4,298,750 49,125,253 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Business-type activities: Bonds payable: MDA bonds Revenue bonds Total bonds payable Loans payable Contracts payable Compensated absences Business-type activities totals Beginning Balance Additions Reductions 1,579,347 147,472,495 149,051,842 1,235,000 4,363,165 621,770 $ 155,271,777 8,575,248 8,575,248 259,688 773,977 9,608,913 349,740 20,701,441 21,051,181 170,368 201,811 749,677 22,173,037 $ Ending Balance 1,229,607 135,346,302 136,575,909 1,064,632 4,421,042 646,070 142,707,653 Due Within One Year 367,945 7,498,833 7,866,778 177,095 147,226 517,780 8,708,879 The following is a summary of bond debt service requirements, including interest requirements, to maturity for long-term debt at June 30, 2009: General Obligation Bonds $33,643,669 23,260,962 12,786,828 12,826,943 12,824,558 12,834,574 12,846,584 12,442,919 11,880,044 11,863,278 11,830,361 11,840,965 10,660,204 10,645,803 8,925,853 8,923,913 8,934,961 8,957,256 3,230,600 3,241,325 Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Less Interest (61,341,600) $183,060,000 Municipal Development Authority Bonds 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 4,386,453 4,374,193 4,370,288 4,349,237 - Highway User Revenue Bonds 3,090,917 - (24,417,129) 62,215,000 (85,917) 3,005,000 Revenue Bonds 12,231,870 11,766,491 11,759,571 11,749,348 11,740,604 11,731,395 11,722,677 12,016,770 12,004,978 11,073,969 9,689,517 9,708,098 6,782,715 5,739,060 5,595,511 5,592,962 5,590,330 5,587,612 3,628,076 613,898 Community Facilities District Bonds 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 5,455,359 5,445,671 5,443,926 5,432,718 5,425,388 5,427,431 5,419,936 5,437,175 5,430,802 - Long Term Loans 217,007 217,007 217,007 217,007 217,007 108,504 - Total 65,589,343 51,559,048 37,900,931 37,297,361 36,575,346 35,043,953 34,930,618 34,806,844 34,230,902 33,260,537 31,826,218 31,859,805 27,742,886 26,196,704 24,322,988 24,307,099 24,311,703 19,975,670 6,858,676 3,855,223 (2,138,438) (40,979,150) 10,402,812 135,346,302 (35,206,968) 63,060,000 (128,907) 1,064,632 (164,298,109) 458,153,746 Special Assessment Bonds 2,798,206 2,457,877 1,811,720 1,162,820 474,600 475,788 476,338 476,250 480,525 478,950 481,738 483,675 484,763 - 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, 2009, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal year 2010 2011 2012 2013 2014 2015-2019 2020-2024 2025-2029 Totals Principal $ 47,761,419 35,079,031 22,514,898 23,025,762 23,049,571 118,814,952 114,194,108 73,714,005 $ 458,153,746 Interest 17,827,924 16,480,017 15,386,033 14,271,599 13,525,775 53,457,902 27,754,493 5,594,366 164,298,109 Total 65,589,343 51,559,048 37,900,931 37,297,361 36,575,346 172,272,854 141,948,601 79,308,371 622,451,855 The City had no outstanding variable rate bonds at June 30, 2009. The City had $4,882,053 in variable rate outstanding contracts payable at June 30, 2009. 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, 2009. 77 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 Water/Sewer Revenue Bonds (partially defeased) $ 5,475,000 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 $33,320,000 in Revenue Bonds issued in 1998 and 2000 and $140,850,001 in Water Infrastructure Financing Authority Bonds issued in 1995-2009. 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, 2009, $136,575,909 in bonds remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2009, the net revenues available for service of this debt were $15,046,440. The debt principal and interest paid on this debt in fiscal year 2009 was $9,617,423 (63.9% 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, 2009, $15,745,393 in bonds remained 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, 2009, the net revenues available to service this debt were $105,935,592. The debt principal and interest paid on this debt in fiscal year 2009 was $3,849,983 (3.6% 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, 2009, $45,240,000 of the bonds remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2009, the net revenues available to service this debt were $111,442,284. The debt principal and interest paid on this debt in fiscal year 2009 was $3,419,171 (3.1% of available 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 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 78 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 percentage, based on years of service, of the retiree’s 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 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 602-240-2000. b. Funding Policy Covered employees were required by state statute to contribute 9.45 percent (8.95 percent for retirement and 0.5 percent for long-term disability) of their salaries to the System during fiscal year 2008-2009 and the City was required to match it (7.99 percent for retirement, .96 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 2007 2008 2009 Retirement Fund $ Health Benefit Supplement Fund 3,384,935 4,153,934 4,410,683 $ 470,799 541,968 531,674 Long-Term Disability Fund $ 223,976 258,104 275,934 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 79 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 2008-2009 was 28.0 percent. The health insurance premium portion of the contribution rate was actuarially set at 3.06 percent of covered payroll. The City’s employees contributed $10,314, $10,093, and $9,479, for the fiscal years ended June 30, 2009, 2008, and 2007 respectively. Public Safety Personnel Retirement System: a. Plan Description The City contributes to the Public Safety Personnel Retirement System (PSPRS), an agent multipleemployer 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 602255-5575, or on the internet at www.psprs.com. b. Funding Policy PSPRS police personnel are required to contribute 7.65 percent of their annual covered salary and fire personnel are required to contribute 7.65 percent while the City is required to contribute an actuarially determined rate. Police personnel contributed $1,046,855 and fire personnel $797,066 during fiscal year 2008-2009. The City rate for fiscal year 2009 was 16.86 percent for police personnel and 15.84 percent for fire members. The health insurance premium portion of the contribution rate was actuarially set at 1.06 percent of covered payroll for police and .99 percent for fire for fiscal year 2009. 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, 2008 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 5.0 percent per year compounded annually, attributable to inflation, and (c) additional projected salary increases ranging from .5 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 80 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 period of 20 years, while unfunded actuarial liabilities are amortized as level percents of payroll over a closed period of 28 years. Annual Pension/OPEB Cost - Agent Plans: The City’s pension/OPEB costs for the agent plans for the year ended June 30, 2009 follows: PSPRS - Police Health Pension Insurance PSPRS - Fire Health Pension Insurance EORP Annual pension/OPEB cost $2,219,580 $138,933 $1,505,080 $93,615 $36,427 $4,397 Contributions made 2,137,432 141,900 1,530,364 101,147 36,427 4,397 Pension Health Insurance 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 2007 2008 2009 Percentage of Annual Costs Contributed Annual Pension/ OPEB Cost $1,358,007 1,303,677 2,219,580 Net Pension/OPEB Obligation 100% 100 100 $ 0 0 0 100% 100 $ 0 0 100% 100 100 $ 0 0 0 PSPRP - Police – Health Insurance 2008 2009 $ 102,234 138,933 PSPRP - Fire - Pension 2007 2008 2009 $ 645,244 907,893 1,505,080 PSPRP - Fire – Health Insurance 2008 2009 $ 73,758 93,615 100% 100 $ 0 0 $ 25,118 27,537 36,427 100% 100 100 $ 0 0 0 100% 100 $ 0 0 EORP – Pension 2007 2008 2009 EORP – Health Insurance 2008 2009 $ 1,510 4,397 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Required Supplementary Information (unaudited): The funded status of the plans as of the most recent valuation date, June 30, 2008 follow. For prior valuations, which were 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. Schedule of Funding Progress (Latest Available Information) – Includes pension and health insurance Police – Retirement (includes Health Insurance Subsidy for years 2006 & 2007) Entry Age Unfunded Actuarial AAL as Valuation Actuarial Accrued Annual a % of Date Value of Liability Percent Unfunded Covered Covered June 30, Plan Assets (AAL) Funded AAL Payroll Payroll 2006 2007 2008 $26,520,019 $32,127,887 28,125,150 41,246,496 31,757,979 44,194,554 Police – Health Insurance Subsidy Entry Age Actuarial Valuation Actuarial Accrued Date Value of Liability June 30, Plan Assets (AAL) 2008 $0 $1,032,969 82.5% $5,607,868 68.2 13,121,346 71.9 12,436,575 Percent Unfunded Funded AAL 0.0% $1,032,969 $10,276,601 11,417,698 13,106,869 Annual Covered Payroll $13,106,869 54.6% 114.9 94.9 Unfunded AAL as a % of Covered Payroll 7.88% Fire – Retirement (includes Health Insurance Subsidy for years 2006 & 2007) Entry Age Unfunded Actuarial Unfunded AAL as Valuation Actuarial Accrued AAL or Annual a % of Date Value of Liability Percent (Funded Covered Covered June 30, Plan Assets (AAL) Funded Excess) Payroll Payroll 2006 2007 2008 $21,755,244 $22,910,255 22,779,501 29,484,683 25,584,820 31,148,375 Fire – Health Insurance Subsidy Entry Age Actuarial Valuation Actuarial Accrued Date Value of Liability June 30, Plan Assets (AAL) 2008 $0 $845,345 95.0% 77.3 82.1 1,155,011 6,705,182 5,563,555 Unfunded AAL or Percent (Funded Funded Excess) 0.0% 82 845,345 $7,134,565 8,627,756 9,456,091 Annual Covered Payroll $9,456,091 16.2% 77.7 58.8 Unfunded AAL as a % of Covered Payroll 8.94% CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 five individuals receiving monthly benefits of $425 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, 2009 were $108,715. The following is a schedule of the future minimum lease payments on the operating leases. Year Ending June 30, 2010 2011 2012 2013 2014 Total $ $ Amount 104,415 98,000 70,506 58,438 24,900 356,259 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 2009 were $172,384. The following is a schedule of minimum future rental revenues on these leases: Year Ending June 30, Amount 2010 $ 241,822 2011 268,409 2012 273,180 2013 289,922 2014 306,735 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. 83 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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, 2009: Remaining Construction Commitment Fund/Description General Fund: Municipal facilities construction/remodeling Streets/Traffic infrastructure Parks and recreation facilities $ 3,138,510 65,953 132,591 3,337,054 Half-Cent Sales Tax Fund: Municipal facilities construction/remodeling 288,293 Highway User Revenue Fund: Streets/Traffic infrastructure 156,387 Development Fee Fund: Parks and recreation facilities Municipal facilities construction/remodeling Streets/Traffic infrastructure Transportation Sales Tax Fund: Streets/Traffic infrastructure 110,612 2,255,720 626,152 2,992,484 1,800,392 GO Bond Capital Projects Fund: Parks and recreation facilities Drainage infrastructure Streets/Traffic infrastructure Municipal facilities construction/remodeling Non-Major Governmental Funds: Other Grants – Public Safety equipment MDA Bonds Capital Projects - Streets/Traffic infrastructure Non-Bond Capital Projects – Streets/Traffic infrastructure Water Utility Fund: Water facilities Water lines Wells and reservoirs 113,688 8,198,305 1,168,555 6,324,946 15,805,494 5,686 13,592,725 30,458 13,628,869 74,121 5,090,830 1,194,639 6,359,590 Wastewater Utility Fund: Wastewater facilities and infrastructure Total construction commitments 4,758,194 $ 49,126,757 At June 30, 2009, there is a claims liability of $4,500,000 in the Wastewater Utility for the future payments due on a settlement involving the City discontinuing use of a regional wastewater reclamation facility. Payments of $3,000,000 (classified as a current liability) and $1,500,000 (classified as a long-term liability) are due in fiscal years 2010 and 2011 respectively. 84 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 Park 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. The developer is in default of the terms of the Agreement related to the improvement district. Developer has requested an amendment to the agreement and provided the City with proposed changes. City is in discussions with the developer regarding possible amendment. Because of the default, the $9,000,000 has not yet been recorded as a liability. 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, 2009, there are currently estimated potential impact fee reimbursements of the following that are not yet recorded as liabilities: Two neighborhood park sites currently estimated at $1,500,000; two community park sites currently estimated at $4,500,000; one library site currently estimated at $750,000; and street and intersection improvements and associated ROW land dedications currently estimated at $45,670,000. Developer is in the process of amending their PCD (Planned Community Development) and once finalized, future required dedications may be adjusted. 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, 2009, 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, 2009, 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. 85 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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, 2009, 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, 2009, the total reimbursement is capped at $7,270,000. Of that $228,934 is related to future infrastructure dedications and has not yet been recorded as a liability. 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 22, 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 cash reimbursement for roadway and intersection improvements. Construction on Cotton Crossing has begun. 22. SUBSEQUENT EVENTS On July 1, 2009, the City called $9,190,000 in bonds as follows: $1,140,000 in Series 1993 General Obligation Bonds, $$3,415,000 in Series A 1998 General Obligation Bonds, $1,355,000 in Series B 1998 General Obligation Bonds, $2,700,000 in Series 1996 Streets and Highway User Revenue Bonds, $175,000 in North Valley Power Center #8801 Improvement District Bonds, $100,000 in 83rd Avenue #9601 Improvement District Bonds, $100,000 in Arrowhead Fountain Center #9603 Improvement District Bonds, and $205,000 in Sunny Boy Water & Sewer #9002 Improvement District Bonds. There was a 1% call premium on the North Valley Power Center Improvement District Bonds. All other bonds were callable without premium. On July 17, 2009, the City closed on four loans with the Water Infrastructure Financing Authority (WIFA) totaling $18,828,805 for various water and wastewater infrastructure projects. Approximately $10,004,662 of these loans are funded by American Recovery & Reinvestment Act (ARRA) monies through subsidized interest rates or principal forgiveness. On July 1, 2009 the City established a workers’ compensation fund for work-related injuries to employees. Previously, the City participated in the State Compensation Fund for workers’ compensation claims. The workers compensation self-insurance program is accounted for in an internal service fund. The City created the City of Peoria Workers’ Compensation Trust to oversee the program. The City is self-insured up to $750,000 for public safety employees and $600,000 for all other employees up to an aggregate loss of $2,577,017. The fund purchases $1,000,000 in excess coverage insurance through a commercial insurance carrier cover individual claims, or cumulative claims, over these amounts. For fiscal year 2010, the program is funded by a one time transfer from the Risk Management Fund. In future years, it will be funded by service charges to the operating departments. Claims are administered and medical claims are paid by a third party administrator from the accounts of the fund. Salaries of employees off work for workers’ compensation claims are paid by the employee’s regular department. 86 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 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 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 88 MAJOR GOVERNMENTAL FUNDS OTHER THAN GENERAL FUND & SPECIAL REVENUE FUNDS Budgetary Comparison 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, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ RESOURCES (INFLOWS): Property taxes Investment earnings Transfers in Total inflows Amounts available for appropriation $ 24,871,967 675,000 25,546,967 36,722,867 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2009 11,175,900 14,091,016 $ 14,091,016 $ 19,777,980 - (389,774) 100,285 (289,489) (289,489) 139,680 11,575,000 4,940,718 16,655,398 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 $ 36,433,378 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 (11,175,900) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (87,685) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 25,169,793 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 16,655,398 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 61 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 16,655,459 90 $ 139,680 13,366,328 9,265,523 22,631,851 $ 11,175,900 24,482,193 775,285 25,257,478 36,433,378 - 13,366,328 9,265,523 22,631,851 $ 11,175,900 24,871,967 675,000 25,546,967 36,722,867 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (1,791,328) (4,324,805) (5,976,453) $ 5,686,964 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 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 Total charges to appropriations Budgetary fund balance, June 30, 2009 1,090,854 $ 1,830,999 495,525 2,326,524 3,417,378 1,624,615 679,959 2,304,574 $ 1,112,804 $ 1,090,854 $ 1,090,854 1,830,999 495,525 2,326,524 3,417,378 2,185,865 32,693 2,218,558 3,309,412 790 866 1,624,615 679,959 2,305,364 1,624,615 679,184 2,304,665 1,112,014 $ 1,004,747 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 $ 3,309,412 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 (1,090,854) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 13,671 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,232,229 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 2,304,665 Differences - budget to GAAP: Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,304,665 91 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ - 354,866 (462,832) (107,966) (107,966) 76 (775) (699) $ (107,267) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 20,513,691 $ 20,513,691 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 20,513,691 $ - RESOURCES (INFLOWS): Capital-related debt issued Premium on bonds issued Investment earnings Total inflows Amounts available for appropriation 99,997,498 200,000 100,197,498 120,711,189 99,997,498 200,000 100,197,498 120,711,189 68,440,000 808,192 697,142 69,945,334 90,459,025 (31,557,498) 808,192 497,142 (30,252,164) (30,252,164) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Interest and fiscal charges Capital outlay Contingencies Total charges to appropriations 912,756 115,524,483 116,437,239 1,268,807 102,962,964 3,878,497 108,110,268 570,122 179,675 39,996,679 40,746,476 (698,685) 179,675 (62,966,285) (3,878,497) (67,363,792) Budgetary fund balance, June 30, 2009 $ 4,273,950 $ 12,600,921 $ 49,712,549 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 $ 90,459,025 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 (20,513,691) Capital-related debt issued is a budgetary resource, but is not a revenue for financial reporting purposes (68,440,000) Bond Premiums are a budgetary resource, but are not a revenue for financial reporting purposes (808,192) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 71,968 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 769,110 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 40,746,476 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (7,313,947) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (5,128,351) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 28,304,178 92 $ 37,111,628 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 95 CITY OF PEORIA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2009 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: Special revenue funds Total fund balance Total liabilities and fund balance $ $ $ $ $ 128,733 208,149 3,061 2,566 48,961 391,470 $ 2,511 21,343 500 24,354 $ 367,116 $ $ $ - $ 367,116 391,470 $ 160,303 224,116 99,797 12,155 496,371 $ 201,591 3,889 9,779 215,259 $ 259,085 $ $ $ Storm Drainage Fund 1,180,403 1,908,609 827 15,646 1,886,695 4,992,180 $ 605,670 13,769 14,705 634,144 $ 609,781 $ $ $ 111,840 180,836 83,795 504 376,975 5,218 6,333 11,551 - 22,027 3,647,435 16,169 281,112 496,371 100,820 4,358,036 4,992,180 349,255 365,424 376,975 $ The accompanying notes are an integral part of the financial statements 96 $ Debt Service Funds Municipal Development CFD Authority Bonds Bonds $ $ $ $ $ 4,571,986 328 4,572,314 $ 2,160 2,160 $ 4,570,154 - $ $ $ - $ 4,570,154 4,572,314 CFD Bonds 3,648 5,898 128,831 18,183 58,552 4,555,487 4,188,531 8,959,130 $ 128,831 128,831 $ 8,830,299 - $ $ $ - $ 8,830,299 8,959,130 Capital Projects Funds Improvement MDA District Bonds Bonds 156,764 253,472 106,986 3,516,400 14,889,712 18,923,334 - 18,923,334 - $ 18,923,334 18,923,334 $ 83,699 2,465,195 17,604,254 $ 20,153,148 $ $ 2,874,501 1,099,074 $ 3,973,575 $ $ $ 2,586,848 - $ $ Non-Bond - $ - $ - $ $ $ Total Non-Major Governmental Funds 10,355,569 16,744,049 1,625,552 114,206 28,839,376 $ 66,322 3,999,944 525,083 4,591,349 $ 24,217,569 - $ $ $ 12,097,260 4,796,102 19,301,013 1,941,863 341,790 2,006,363 10,537,410 36,682,497 87,704,298 3,757,973 41,445 3,889 4,153,259 1,624,657 9,581,223 13,400,453 45,727,751 1,235,982 13,592,725 - - 30,458 - 13,623,183 3,685,631 16,179,573 $ 20,153,148 - 24,248,027 28,839,376 450,075 78,123,075 87,704,298 97 $ $ $ CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2009 Special Revenue Funds Section 8 Other Housing Grants Fund Fund Public Transit Fund REVENUES: Taxes: Property taxes Intergovernmental: County shared sales taxes 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): Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ - $ - $ Storm Drainage Fund - $ - 640,826 53,545 272,766 50,514 13,643 1,031,294 792,337 80,448 1,391 30 874,206 2,124,652 964,084 921,596 423,837 84,451 53,745 4,572,365 729,894 2,592 732,486 1,438,919 904,928 177,888 538,234 1,180,035 30,427 641,426 14,504 4,997 - 490,260 - 1,438,919 904,928 206,730 2,794,241 490,260 (407,625) (30,722) 1,778,124 242,226 180,500 (425) 180,075 (7,899) (7,899) (227,550) (38,621) 1,289,384 240,013 594,666 319,733 3,068,652 125,411 367,116 $ 281,112 28,152 (516,892) (488,740) $ 4,358,036 The accompanying notes are an integral part of the financial statements 98 (2,213) (2,213) $ 365,424 Debt Service Funds Municipal Development CFD Authority Bonds Bonds $ $ - $ 2,991,522 4,036 4,036 82,170 2,736,299 5,809,991 734 - 3,640 - 4,810,260 2,468,876 7,279,870 1,550,000 3,416,955 4,970,595 CFD Bonds $ 224,192 224,192 - $ - $ - $ 2,991,522 - 12,837,089 599,549 3,552,173 16,988,811 12,837,089 640,826 2,970,534 1,317,298 1,702,004 423,837 1,640,726 6,342,247 30,866,083 217,960 - - 24,474 - 182,262 538,234 1,180,035 30,427 641,426 256,938 495,257 2,343,847 308,318 308,318 23,107,631 23,325,591 - 6,106,899 6,131,373 6,360,260 5,885,831 29,729,578 47,644,095 (22,696,889) - 10,857,438 (16,778,012) - 839,396 (84,126) 8,358,313 8,358,313 225,240 225,240 491,552 (423,745) 67,807 1,082,479 1,064,636 (16,319) 3,487,675 7,765,663 8,830,299 $ $ Non-Bond Total Non-Major Governmental Funds 628,702 628,702 (7,275,834) 4,570,154 Capital Projects Funds Improvement MDA District Bonds Bonds - 73,263 73,263 (769,430) (769,430) 9,357,020 (1,720,604) 7,636,416 (22,696,889) 73,263 10,088,008 (9,141,596) 18,939,653 38,876,462 (73,263) 14,160,019 87,264,671 $ 18,923,334 $ 16,179,573 99 $ - $ 24,248,027 $ 78,123,075 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 388,773 $ 388,773 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 388,773 $ - RESOURCES (INFLOWS): Intergovernmental: Local transportation aid From federal government Other Charges for services Investment earnings Transfers from other funds Total inflows Amounts available for appropriation 686,800 61,000 6,701 409,000 1,163,501 1,552,274 686,800 61,000 6,701 409,000 1,163,501 1,552,274 640,826 42,772 272,766 51,208 15,399 180,500 1,203,471 1,592,244 (45,974) 42,772 272,766 (9,792) 8,698 (228,500) 39,970 39,970 CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Transfers out Total charges to appropriations 1,551,849 425 1,552,274 1,735,454 425 1,735,879 1,437,758 425 1,438,183 (297,696) (297,696) Budgetary fund balance, June 30, 2009 $ - $ (183,605) $ 154,061 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 $ 1,592,244 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 (388,773) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 8,323 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (180,500) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 1,031,294 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,438,183 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 1,427 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (266) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (425) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,438,919 100 $ 337,666 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SECTION 8 HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 287,515 $ 287,515 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 287,515 $ - RESOURCES (INFLOWS): Intergovernmental: From federal government Other Investment earnings Miscellaneous Total inflows Amounts available for appropriation 1,697,570 300 1,697,870 1,985,385 1,697,570 300 1,697,870 1,985,385 865,909 (19,349) 1,391 30 847,981 1,135,496 (831,661) (19,349) 1,091 30 (849,889) (849,889) CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Capital outlay Total charges to appropriations 1,681,766 1,681,766 1,422,075 84,631 1,506,706 775,360 7,899 783,259 (646,715) (76,732) (723,447) Budgetary fund balance, June 30, 2009 $ 303,619 $ 478,679 $ 352,237 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 $ 1,135,496 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 (287,515) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 26,225 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 874,206 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 783,259 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 129,568 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 904,928 101 $ (126,442) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 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 Highways and streets Public works Capital outlay Contingencies Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2009 $ 4,515,533 $ 4,515,533 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 4,515,533 $ - 1,438,475 5,636,390 2,000,000 20,000 68,750 42,500 10,000 9,216,115 13,731,648 1,438,475 5,636,390 2,000,000 20,000 68,750 42,500 10,000 9,216,115 13,731,648 1,631,254 569,877 920,770 423,837 83,376 53,745 10,000 3,692,859 8,208,392 192,779 (5,066,513) (1,079,230) 403,837 14,626 11,245 (5,523,256) (5,523,256) 1,800 92,625 65,000 15,000 559,075 546,675 28,500 1,301,215 2,609,890 2,709,954 1,950,995 159 9,880,888 2,880 93,204 65,731 91,856 15,000 576,624 1,651,703 43,179 1,345,615 16,853 5,000 1,409,052 510,275 159 5,827,131 2,741 (499,942) 65,731 48,110 7,954 517,198 1,172,800 31,412 643,183 14,504 3,616 775,678 159 2,783,144 (139) (593,146) (43,746) (7,046) (59,426) (478,903) (11,767) (702,432) (2,349) (1,384) (633,374) (510,275) (3,043,987) 3,850,760 $ 7,904,517 $ 5,425,248 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 $ 8,208,392 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 (4,515,533) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 889,506 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 $ 4,572,365 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 2,783,144 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis (2,917) The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 513,406 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (499,233) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (159) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 2,794,241 102 $ (2,479,269) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE STORM DRAINAGE FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 74,649 $ 74,649 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 74,649 $ - RESOURCES (INFLOWS): Intergovernmental: Charges for services Investment earnings Total inflows Amounts available for appropriation 744,410 1,600 746,010 820,659 744,410 1,600 746,010 820,659 762,620 2,088 764,708 839,357 18,210 488 18,698 18,698 CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Capital outlay Transfers out Total charges to appropriations 620,264 213 620,477 574,854 2,000 213 577,067 496,634 2,000 213 498,847 (78,220) (78,220) Budgetary fund balance, June 30, 2009 $ 200,182 $ 243,592 $ 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 $ 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 The City budgets certain revenues on the cash basis, rather than on the modified accrual basis Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 103 340,510 839,357 (74,649) (32,222) 732,486 498,847 694 (7,068) (213) 490,260 $ 96,918 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ RESOURCES (INFLOWS): Investment earnings Transfers from other funds Total inflows Amounts available for appropriation $ 3,930,717 3,930,717 6,268,434 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2009 2,337,717 3,050,260 803,723 3,853,983 $ 2,414,451 $ 2,337,717 $ 2,337,717 3,930,717 3,930,717 6,268,434 4,036 3,932,987 3,937,023 6,274,740 734 734 4,810,260 2,468,876 7,279,870 4,810,260 2,466,716 7,277,710 (1,011,436) $ (1,002,970) 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 $ 6,274,740 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 (2,337,717) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (3,932,987) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 4,036 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,277,710 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 2,160 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 7,279,870 104 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ - 4,036 2,270 6,306 6,306 (2,160) (2,160) $ 8,466 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ RESOURCES (INFLOWS): Property Taxes Investment earnings Miscellaneous Total inflows Amounts available for appropriation $ 3,144,037 500,000 1,326,919 4,970,956 12,691,493 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2009 7,720,537 1,550,000 3,416,956 4,966,956 $ 7,724,537 $ 7,720,537 $ 7,720,537 $ - 3,144,037 500,000 1,326,919 4,970,956 12,691,493 2,968,119 73,965 2,736,299 5,778,383 13,498,920 3,640 3,640 - 1,550,000 3,416,956 4,970,596 1,550,000 3,416,955 4,970,595 - 7,720,897 $ 8,528,325 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 $ 13,498,920 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 (7,720,537) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 31,608 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 5,809,991 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 4,970,595 Differences - budget to GAAP: Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 4,970,595 105 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (175,918) (426,035) 1,409,380 807,427 807,427 (1) (1) $ 807,428 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 21,630,856 $ 21,630,856 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 21,630,856 $ - RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 500,000 500,000 22,130,856 495,000 495,000 22,125,856 145,461 145,461 21,776,317 (349,539) (349,539) (349,539) CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Capital outlay Contingencies Total charges to appropriations 19,124,997 19,124,997 19,118,155 6,842 19,124,997 936 651,633 652,569 936 (18,466,522) (6,842) (18,472,428) Budgetary fund balance, June 30, 2009 $ 3,005,859 $ 3,000,859 $ 21,123,748 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 $ 21,776,317 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 78,731 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 224,192 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 652,569 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (417,614) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes 73,363 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 308,318 106 $ 18,122,889 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 40,183,266 $ 40,183,266 $ 40,183,266 RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 300,500 300,500 40,483,766 300,500 300,500 40,483,766 850,552 850,552 41,033,818 CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and Streets Capital outlay Contingencies Total charges to appropriations 110,123 36,904,992 37,015,115 334,132 43,617,210 1,065,188 45,016,530 217,960 22,483,645 22,701,605 Budgetary fund balance, June 30, 2009 $ 3,468,651 $ (4,532,764) $ 18,332,213 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 $ 41,033,818 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 (40,183,266) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (221,850) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 628,702 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 22,701,605 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 623,986 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 23,325,591 107 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ - 550,052 550,052 550,052 (116,172) (21,133,565) (1,065,188) (22,314,925) $ 22,864,977 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE IMPROVEMENT DISTRICT BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 1,399,859 $ 1,399,859 RESOURCES (INFLOWS): Investment earnings Special assessments Total inflows Amounts available for appropriation 25,000 4,000,000 4,025,000 5,424,859 25,000 4,000,000 4,025,000 5,424,859 CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Total charges to appropriations 5,445,316 5,445,316 4,215,294 4,215,294 Budgetary fund balance, June 30, 2009 $ (20,457) $ 1,209,565 $ 1,399,859 $ 1,399,859 $ 1,399,859 - (25,000) (4,000,000) (4,025,000) (4,025,000) - 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 $ 1,399,859 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 (1,399,859) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 73,263 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (73,263) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ - 108 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (4,215,294) (4,215,294) $ 190,294 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2009 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2008 $ 154,378 $ 154,378 Actual Amounts (budgetary basis) $ 154,378 Variance with Final Budget Over (Under) $ - RESOURCES (INFLOWS): Intergovernmental revenue: Other governmental revenue Investment earnings Proceeds Miscellaneous Total inflows Amounts available for appropriation 18,855,130 502,000 10,210,000 15,007,973 44,575,103 44,729,481 18,855,130 502,000 10,210,000 15,007,973 44,575,103 44,729,481 12,837,089 604,157 2,872,720 16,313,966 16,468,344 (6,018,041) 102,157 (10,210,000) (12,135,253) (28,261,137) (28,261,137) CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services: Highways and streets Capital outlay Contingencies Total charges to appropriations 3,880 36,541,845 6,000,000 42,545,725 33,880 34,720,068 8,767,143 43,521,091 24,474 8,014,127 8,038,601 (9,406) (26,705,941) (8,767,143) (35,482,490) Budgetary fund balance, June 30, 2009 $ 2,183,756 $ 1,208,390 $ 8,429,743 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 $ 16,468,344 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 (154,378) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 674,845 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 16,988,811 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 8,038,601 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (1,318,719) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (588,509) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 6,131,373 109 $ 7,221,353 110 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, 2009 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 Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 35,198,318 613,000 35,811,318 $ 35,198,318 613,000 35,811,318 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 33,574,439 158,828 33,733,267 $ 6,673,866 17,709,947 31,949,629 11,253,079 67,586,521 6,849,660 17,171,630 26,185,272 12,528,084 62,734,646 (31,775,203) (26,923,328) (764,180) 1,246,000 (2,496,420) (4,072,656) (5,323,076) 1,246,000 (2,496,420) (4,072,656) (5,323,076) 1,086,727 (1,978,086) (3,440,602) (4,331,961) (37,098,279) (32,246,404) (5,096,141) 27,150,263 3,475,000 (186,994) 3,475,000 (186,994) 1,394,079 (186,727) (2,080,921) 267 (33,810,273) $ (28,958,398) 6,245,808 19,125,267 9,126,372 34,497,447 (1,623,879) (454,172) (2,078,051) $ (3,888,789) (603,852) 1,953,637 (17,058,900) (12,528,084) (28,237,199) 26,159,148 (159,273) 518,334 632,054 991,115 $ 25,069,609 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 capital 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 (1,844,625) (1,901,387) 1,901,387 27,050 225,123 7,660,860 6,365,991 3,440,602 (5,885,108) (25,248) 12,021 (1,507,282) $ 4,580,595 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, 2009 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 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 out Excess (deficit) revenues over expenses - budgetary basis $ 16,432,249 150 16,432,399 $ 16,432,249 150 16,432,399 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 16,124,013 3,199 16,127,212 $ (308,236) 3,049 (305,187) 2,057,188 11,089,554 22,113,168 1,880,000 37,139,910 2,059,928 10,147,029 4,000,000 15,118,486 12,058,088 43,383,531 2,202,141 11,293,110 3,430,000 5,355,605 22,280,856 142,213 1,146,081 (570,000) (9,762,881) (12,058,088) (21,102,675) (20,707,511) (26,951,132) (6,153,644) 20,797,488 617,275 13,977,628 (2,727,283) (1,652,312) 10,215,308 617,275 13,977,628 (2,747,483) (1,672,312) 10,175,108 492,480 8,575,248 (2,472,579) (1,483,174) 5,111,975 (124,795) (5,402,380) 274,904 189,138 (5,063,133) (10,492,203) (16,776,024) (1,041,669) 15,734,355 1,685,000 (132,524) 1,685,000 (132,524) 447,047 (132,326) (8,939,727) $ (15,223,548) $ (726,948) (1,237,953) 198 $ 14,496,600 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. 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, loss on refunding and bond premiums 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 capital 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 (583,594) (8,575,248) (153,249) 153,249 (2,014) (3,864,928) 4,847,464 3,868,855 1,483,174 (7,498,822) (14,903) 1,313 2,336,036 $ (8,729,615) 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, 2009 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 Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 12,917,172 12,917,172 $ 12,917,172 12,917,172 3,338,132 8,031,428 2,877,668 3,500,000 17,747,228 3,066,535 7,474,008 2,661,113 3,683,555 16,885,211 (4,830,056) (3,968,039) 312,000 (46,640) (188,069) 77,291 312,000 (46,640) (188,069) 77,291 (4,752,765) (3,890,748) 330,000 (16,007) 330,000 (16,007) (4,438,772) $ (3,576,755) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,705,428 2,651 12,708,079 $ 3,367,832 7,715,474 1,560,245 12,643,551 301,297 241,466 (1,100,868) (3,683,555) (4,241,660) 64,528 4,032,567 406,212 (46,639) (170,368) 189,205 94,212 1 17,701 111,914 253,733 4,144,481 110,359 (15,984) $ 348,108 (211,744) 2,651 (209,093) (219,641) 23 $ 3,924,863 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. 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. 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 (480,511) (1,081,172) 1,081,172 (34,574) 215,136 1,560,245 170,368 (888,346) (2,000) $ 888,426 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, 2009 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 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 $ 1,651,214 1,643,000 3,294,214 $ 1,651,214 1,643,000 3,294,214 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,420,905 1,555,509 760 2,977,174 $ (230,309) (87,491) 760 (317,040) 1,447,838 3,647,435 199,677 5,294,950 1,447,838 3,573,935 229,677 5,251,450 1,444,682 3,199,067 128,603 4,772,352 (3,156) (374,868) (101,074) (479,098) (2,000,736) (1,957,236) (1,795,178) 162,058 33,000 (24,977) (129,217) (121,194) 33,000 (24,977) (129,217) (121,194) 45,598 (24,966) (129,217) (108,585) 12,598 11 12,609 (2,121,930) (2,078,430) (1,903,763) 174,667 2,849,150 (282,150) 2,849,150 (282,150) 2,848,601 (281,720) 445,070 $ 488,570 $ 663,118 (549) 430 $ (174,548) 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. Change in net assets per the statement of revenues, expenses and changes in fund net assets 2,790 (6,226) (28,878) 101,516 129,217 (756,134) 3,676 $ 109,079 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, 2009 Budgeted Amounts Original Final OPERATING REVENUES: Rent From federal government Miscellaneous Total operating revenues $ OPERATING EXPENSES: Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) $ $ 150,297 158,627 3,852 312,776 $ 150,297 (121,373) 3,852 32,776 378,000 100,000 478,000 227,261 7,899 235,160 (150,739) 7,899 (100,000) (242,840) (198,000) (198,000) 77,616 275,616 3,000 3,000 (195,000) $ 280,000 280,000 378,000 100,000 478,000 3,000 3,000 Income (loss) before transfers Excess (deficit) revenues over expenses - budgetary basis 280,000 280,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (195,000) 2,351 2,351 (195,000) $ (195,000) (649) (649) 79,967 $ 79,967 274,967 $ 274,967 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 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 (46,139) (18,358) 7,899 (86,166) 7,899 $ (54,898) 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, 2009 SelfInsurance Fund Motor Pool Fund ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Prepaid items 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 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 $ 5,023,889 8,123,189 63,531 842,291 110,127 14,163,027 $ 2,013,471 22,273,193 (14,053,294) 10,233,370 24,396,397 3,957,393 6,398,758 44,249 10,400,400 Facilities Maintenance Fund $ 446,920 722,631 3,384 1,172,935 Information Technology Fund $ 3,098,700 5,010,327 26,024 8,135,051 $ 12,526,902 20,254,905 137,188 842,291 110,127 33,871,413 10,400,400 81,342 (81,342) 1,172,935 202,510 29,367 42,560 274,437 25,729 3,537 1,500,000 4,010 1,533,276 83,234 82,090 166,150 331,474 155,558 123,664 200,360 479,582 467,031 238,658 1,500,000 413,080 2,618,769 10,990 10,990 285,427 750 750 1,534,026 61,600 61,600 393,074 47,680 47,680 527,262 121,020 121,020 2,739,789 10,233,370 13,877,600 $ 24,110,970 8,866,374 8,866,374 779,861 779,861 21,240,149 7,607,789 $ 28,847,938 31,473,519 31,131,624 $ 62,605,143 $ $ 148,102 38,291,542 30,745 (19,649,762) 2,419,522 21,240,149 29,375,200 Total The accompanying notes are an integral part of the financial statements 118 148,102 40,386,355 22,273,193 30,745 (33,784,398) 2,419,522 31,473,519 65,344,932 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2009 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 Gain on sale of capital assets Total non-operating revenues Income (loss) before transfers Transfers in Transfers out Change in net assets $ $ 6,674,134 5,135 6,679,269 $ 10,043,578 7,552 10,051,130 Total $ 26,982,879 168,009 27,150,888 147,500 59,771 160,246 367,517 2,582,918 3,105,977 3,271,844 641 6,378,462 300,807 4,988,183 4,532,313 3,850,165 13,370,661 (3,319,531) 9,506,713 11,865,247 160,246 6,424,208 27,956,414 (805,526) 334,816 21,612 356,428 (13,292) 232,599 232,599 2,815,517 17,860 17,860 318,667 136,716 136,716 (3,182,815) 721,991 21,612 743,603 (61,923) (266) 2,815,251 (14,221) 304,446 7,272,346 (29,000) 4,060,531 9,165,218 (158,098) 8,945,197 6,051,123 475,415 22,346,001 $ 2,799,204 151,231 2,950,435 Information Technology Fund 1,265,053 4,001,319 2,573,402 7,839,774 (369,720) 1,892,872 (114,611) 1,764,969 Total net assets - beginning Total net assets - ending 7,465,963 4,091 7,470,054 Facilities Maintenance Fund 24,110,970 $ 8,866,374 $ 779,861 The accompanying notes are an integral part of the financial statements 119 24,787,407 $ 28,847,938 53,659,946 $ 62,605,143 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2009 SelfInsurance Fund Motor Pool Fund Facilities Maintenance Fund Information Technology Fund Total 6,679,269 (3,320,383) (3,049,314) 309,572 $ 10,051,130 (4,763,082) (4,974,779) 313,269 $ 27,154,740 (13,111,585) (9,465,921) (1,760,246) 2,816,988 (14,221) (14,221) 7,272,346 (29,000) 7,243,346 9,165,218 (158,098) 9,007,120 - (7,508,199) (7,508,199) (10,306,032) (10,306,032) 8,477,491 (8,838,070) 138,706 (221,873) 34,255,985 (36,597,823) 744,739 (1,597,099) (79,023) 12,605,925 $ 12,526,902 $ 12,526,902 $ 12,526,902 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 $ 7,470,108 (4,877,838) (1,294,496) 1,297,774 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 1,892,872 (114,611) 1,778,261 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Net acquisition and construction of capital assets Net cash flows used by capital and related financing activities (2,797,833) (2,797,833) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Classified as: Current assets Totals $ $ $ $ 5,023,889 5,023,889 $ (266) (266) - 13,736,996 (14,512,147) 349,818 (425,333) (147,131) 5,171,020 5,023,889 2,954,233 (150,282) (147,332) (1,760,246) 896,373 10,830,428 (11,815,918) 237,309 (748,181) $ 147,926 3,809,467 3,957,393 $ $ $ 1,211,070 (1,431,688) 18,906 (201,712) $ 93,639 353,281 446,920 $ (173,457) 3,272,157 3,098,700 3,957,393 3,957,393 $ $ 446,920 446,920 $ $ 3,098,700 3,098,700 2,582,918 $ 300,807 $ (3,319,531) 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 Prepaid items Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Due to other governments Claims payable Compensated absences Total adjustments (369,720) 2,573,402 - 54 (842,291) (27,332) 641 3,798 - (6,701) 4,777 (195) (34,220) 1,667,494 3,850,165 - (90,511) (482) (1,600,000) 650 (1,686,545) $ 6,424,208 - (48,539) 14,663 42,000 8,765 (805,526) 3,852 (842,291) (27,332) (230,769) 18,194 (4,790) 3,632,800 (376,520) 37,152 (195) (1,600,000) 3,640 3,622,514 Net cash provided (used) by operating activities $ 1,297,774 $ 896,373 $ 309,572 $ 313,269 $ 2,816,988 Non-cash investing, capital and financing activities: Increase in fair market value of investments Total non-cash investing, capital and financing activities $ $ 52,075 52,075 $ $ 35,671 35,671 $ $ 2,800 2,800 $ $ 20,898 20,898 $ $ 111,444 111,444 The accompanying notes are an integral part of the financial statements 120 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL MOTOR POOL FUND FOR THE YEAR ENDED JUNE 30, 2009 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): Interest and investment income Total nonoperating revenues (expenses) $ $ 8,291,291 50,000 8,341,291 1,202,455 4,559,744 5,183,903 3,000,000 13,946,102 1,362,455 4,084,984 5,499,903 3,026,000 13,973,342 (5,604,811) (5,632,051) 256,000 256,000 Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 8,291,291 50,000 8,341,291 (5,376,051) 56,000 (97,258) 56,000 (97,258) (5,390,069) $ $ (5,417,309) 7,499,605 4,091 7,503,696 $ 1,294,496 4,900,058 1,142,717 7,337,271 256,000 256,000 (5,348,811) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (791,686) (45,909) (837,595) (67,959) 815,074 (4,357,186) (3,026,000) (6,636,071) 166,425 5,798,476 349,818 349,818 93,818 93,818 516,243 5,892,294 56,000 (97,111) $ 475,132 147 $ 5,892,441 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 capital 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 (15,056) (33,588) 33,588 29,443 876,519 1,131,349 (2,573,402) 21,612 1,819,372 $ 1,764,969 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, 2009 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 Contingencies Total operating expenses $ 156,996 475,769 2,277,411 1,000,000 3,910,176 Operating loss Income (loss) before transfers $ 2,799,327 2,799,327 $ 156,996 459,569 1,805,511 1,000,000 3,422,076 (1,110,849) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 2,799,327 2,799,327 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 2,799,204 155,029 2,954,233 $ 147,332 150,282 1,760,246 2,057,860 (123) 155,029 154,906 (9,664) (309,287) (45,265) (1,000,000) (1,364,216) (622,749) 896,373 1,519,122 150,000 150,000 150,000 150,000 237,309 237,309 87,309 87,309 (960,849) (472,749) 1,133,682 1,606,431 (266) (266) (961,115) $ (473,015) (266) $ 1,133,416 $ 1,606,431 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 insurance claims on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Change in net assets per the statement of revenues, expenses and changes in fund net assets (8,508) (168) 1,600,000 90,511 $ 2,815,251 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, 2009 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 Total operating expenses 6,475,817 6,475,817 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 6,475,817 6,475,817 $ 6,677,093 5,135 6,682,228 $ 201,276 5,135 206,411 3,210,946 3,261,290 6,472,236 2,767,626 3,302,546 2,959 6,073,131 3,049,314 3,320,383 2,959 6,372,656 3,581 402,686 309,572 (93,114) 8,800 8,800 8,800 8,800 18,906 18,906 10,106 10,106 Income (loss) before transfers 12,381 411,486 328,478 (83,008) Transfers (out) Deficit revenues over expenses - budgetary basis (11,262) (11,262) (11,262) - Operating income (loss) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ 1,119 $ 400,224 $ 317,216 281,688 17,837 299,525 $ (83,008) 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 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. 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 (1,046) (2,959) (56,663) 48,539 2,959 (641) (2,959) $ 304,446 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, 2009 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 Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ $ 10,132,055 10,132,055 4,797,956 5,601,212 3,236,666 13,635,834 4,917,556 4,906,308 3,058,438 12,882,302 (3,503,779) (2,750,247) 85,000 85,000 Income before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 10,132,055 10,132,055 $ 10,132,053 7,552 10,139,605 2,061,595 138,706 138,706 (2,665,247) (549,946) 783,580 (29,000) 783,580 (29,000) 783,580 (29,000) (1,910,667) (2) 7,552 7,550 57,223 (527,795) (1,583,473) (2,054,045) (688,652) 85,000 85,000 $ $ 4,974,779 4,378,513 1,474,965 10,828,257 (3,418,779) (2,664,199) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 204,634 53,706 53,706 2,115,301 $ 2,115,301 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 (1,990) (13,404) (88,475) 88,475 230,769 1,001,921 (3,850,165) 6,488,766 $ 4,060,531 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, 2009 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 $ $ 147,108 237,862 384,970 384,970 384,970 21,819 35,280 57,099 3,777 53,322 57,099 PLAY Peoria NFP Fund $ 3,840 6,209 10,049 97 9,952 10,049 Peoria Citizens Corp Council NFP Fund $ 2,084 3,370 5,454 5,454 5,454 The accompanying notes are an integral part of the financial statements 126 Westside Fire Training IGA Fund $ 8,358 13,515 21,873 21,873 21,873 Total $ 183,209 296,236 479,445 3,874 475,571 479,445 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2009 Balance June 30, 2008 Terramar Infrastructure Fund Assets: Cash and cash equivalents Investments Total Assets $ Liabilities: Other liabilities 159,013 225,957 384,970 384,970 Additions $ 225,957 237,862 463,819 Deductions $ - 237,862 225,957 463,819 - Balance June 30, 2009 $ 147,108 237,862 384,970 384,970 Neighborhood Pride NFP Fund Assets: Cash and cash equivalents Investments Total Assets 28,581 40,613 69,194 69,535 35,280 104,815 76,297 40,613 116,910 21,819 35,280 57,099 Liabilities: Accounts payable Other liabilities Total Liabilities 69,194 69,194 42,082 42,082 38,305 15,872 54,177 3,777 53,322 57,099 PLAY Peoria NFP Fund Assets: Cash and cash equivalents Investments Total Assets 2,285 3,248 5,533 15,057 6,209 21,266 13,502 3,248 16,750 3,840 6,209 10,049 Liabilities: Accounts payable Other liabilities Total Liabilities 5,533 5,533 3,525 15,303 18,828 3,428 10,884 14,312 97 9,952 10,049 Peoria Citizens Corp Council NFP Fund Assets: Cash and cash equivalents Investments Total Assets 199 283 482 7,834 3,370 11,204 5,949 283 6,232 2,084 3,370 5,454 Liabilities: Accounts payable Other liabilities Total Liabilities 482 482 2,439 5,092 7,531 2,439 120 2,559 5,454 5,454 Westside Fire Training IGA Fund Assets: Cash and cash equivalents Investments Total Assets 5,196 7,384 12,580 20,542 13,515 34,057 17,380 7,384 24,764 8,358 13,515 21,873 Liabilities: Accounts payable Other liabilities Total Liabilities 1,922 10,658 12,580 1,943 11,215 13,158 3,865 3,865 21,873 21,873 Assets: Cash and cash equivalents Investments Total Assets 195,274 277,485 472,759 338,925 296,236 635,161 350,990 277,485 628,475 183,209 296,236 479,445 Liabilities: Accounts payable Other liabilities Total Liabilities 1,922 470,837 472,759 49,989 31,610 81,599 48,037 26,876 74,913 3,874 475,571 479,445 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 127 128 OTHER SUPPLEMENTARY INFORMATION This section contains schedules which the City deems necessary to provide additional debt service capital asset and interfund transfer information and the Federal Financial Data Schedule for Housing 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 133 134 135 Capital Assets Schedules Schedule of Capital Assets by Function and Classification Schedule of Changes in Capital Assets by Function – Governmental Activities 140 142 Schedule of Interfund Transfers 143 129 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2009 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 # 111 114 100 121 BALANCE SHEET ASSETS: Current Assets: Cash-unrestricted Cash-tenant security deposits Total Cash TOTAL PROJECTS Public Housing 14.850A & 14.872 TOTAL PROGRAMS Housing Choice Vouchers 14.871 476,549 10,924 487,473 386,073 386,073 Accounts receivable - PHA projects 98,350 122-010 122-020 122 Accounts receivable - HUD other projects - Operating subsidy Accounts receivable - HUD other projects - Capital fund Accounts Receivable - HUD Other Projects 21,270 5,951 27,221 - 125-010 125 Account receivable - miscellaneous - Not For Profit Account Receivable - Miscellaneous 11,915 11,915 - Accounts receivable - tenants Allowance for doubtful accounts - tenants Allowance for doubtful accounts - other Total Receivables, Net of Allowance for Doubtful Accounts 3,113 42,249 98,350 356 4,151 - 1,447 534,229 485,870 126 126.1 126.2 120 142 143 144 Prepaid expenses and other assets Inventories Inter program - due from 150 Total Current Assets 161 162 164 165 166 160 Non-current Assets: Land Buildings Furniture, equipment and machinery - administration Leasehold improvements Accumulated depreciation Total Capital Assets, Net of Accumulated Depreciation 180 190 312 321 322 331 341 342-020 342 345 347 410,350 3,276,922 32,860 121,175 (1,893,896) 1,947,411 - Total Non-current Assets 1,947,411 - Total Assets 2,481,640 485,870 9,828 3,386 2,693 154 10,924 4,215 307 3,889 - Deferred revenue - Capital fund Deferred Revenue 9,779 9,779 - Other current liabilities Inter program - due to 7,361 1,447 190,201 - 42,186 201,998 1,383 1,383 2,761 2,761 43,569 204,759 LIABILITIES AND EQUITY: LIABILITIES: Current Liabilities: Accounts payable <= 90 days Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accounts payable - HUD PHA Programs Tenant security deposits 310 Total Current Liabilities 354 350 Non-current Liabilities: Accrued compensated absences - non-current Total Non-current Liabilities 300 Total Liabilities 508.1 511.1 512.1 513 600 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 1,947,411 490,660 2,438,071 (14,773) 295,884 281,111 2,481,640 485,870 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Public Housing Operating 14.850A INCOME STATEMENT 70300 70400 70500 REVENUE: Net tenant rental revenue Tenant revenue - other Total Tenant Revenue 70600-010 70600-020 70600 70610 Housing assistance payments Ongoing administrative fees earned HUD PHA operating grants Capital grants 71100-020 71100 Administrative fee Investment income - unrestricted 71500 7000 91100 91200 91300 91310 91500 91600 91700 91000 104,158 3,851 108,009 158,627 - Other revenue Total Revenue 128,712 7,899 TOTAL PROJECTS Public Housing TOTAL PROGRAMS Housing Choice Vouchers 14.871 104,158 3,851 108,009 - 287,339 7,899 592,914 48,502 641,416 - 2,351 - 2,351 1,391 1,391 - - - 80,479 268,987 EXPENSES: Administrative salaries Auditing fees Management fee Bookkeeping fee Employee benefit contributions - administrative Office expenses Legal expense Total Operating - Administrative Public Housing Capital 14.872 136,611 405,598 723,286 66,546 1,000 6,047 19,902 7,717 24,166 125,378 46,708 2,500 (24,341) 4,433 8,740 44,199 63 82,302 5,093 5,093 46,708 2,500 (24,341) 4,433 8,740 49,292 63 87,395 93100 93200 93300 93600 93000 Water Electricity Gas Sewer Total Utilities 13,180 5,891 3,856 7,616 30,543 - 13,180 5,891 3,856 7,616 30,543 105 1,065 154 22 1,346 94100 94200 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials and other 30,518 51,260 6,913 27,717 37,431 78,977 7,595 1,145 Ordinary maintenance and operations - garbage & trash removal contracts Ordinary maintenance and operations - heating & cooling contracts Ordinary maintenance and operations - landscape & grounds contracts Ordinary maintenance and operations - unit turnaround contracts Ordinary maintenance and operations - electrical contracts Ordinary maintenance and operations - plumbing contracts Ordinary maintenance and operations - routine maintenance contracts Ordinary maintenance and operations - misc contracts Total Ordinary Maintenance and Operations Contracts 5,068 33,554 38,622 11,017 4,883 57,487 4,481 845 2,969 3,389 85,071 5,068 11,017 4,883 57,487 4,481 845 2,969 36,943 123,693 419 1,123 1,542 94300-010 94300-020 94300-050 94300-060 94300-070 94300-080 94300-110 94300-120 94300 94500 Employee benefit contribution - ordinary maintenance 94000 Total Maintenance 95200 95000 Protective services - other contract costs Total Protective Services 96140 96100 All other insurance Total Insurance Premiums 96200 96300 96400 96000 Other general expenses Payments in lieu of taxes Bad debt - tenant rents Total Other General Expenses 96900 Total Operating Expenses 97000 Excess Revenue Over Operating Expenses 97300-050 97300 97400 90000 1,881 120,400 All other Housing Assistance Payments Depreciation expense Total Expenses 240,101 12,163 639 639 - 639 639 448 448 23 23 - 23 23 23 23 9,879 7,361 4,351 11,712 3,918 3,918 3,918 7,361 4,351 15,630 1,695 11,574 245,619 128,712 374,331 150,932 23,368 7,899 31,267 572,354 - - - 610,975 610,975 86,166 - 86,166 331,785 (continued) 131 119,701 128,712 460,497 761,907 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Public Housing Operating 14.850A INCOME STATEMENT (continued) Public Housing Capital 14.872 TOTAL PROJECTS Public Housing TOTAL PROGRAMS Housing Choice Vouchers 14.871 EXPENSES (continued): 10010 10020 10100 1000 11030 11170-001 11170-010 11170-040 11170-050 11170-060 11170-080 11170-110 11170-002 11170-003 11180-001 11180-010 11180-030 11180-080 11180-100 11180-002 11180-003 11180 11190-210 11190 11210 11270 Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess (Deficiency) of Revenue Over (Under) Expenses OTHER INFORMATION: Beginning equity 7,899 7,899 (7,899) (7,899) 7,899 (7,899) - - (54,899) - (54,899) (38,621) 2,492,969 - 2,492,969 319,733 Administrative Fee Equity - Beginning Balance Administrative Fee Revenue Investment Income Other Revenue Total Admin Fee Revenues Total Operating Expenses Total Expenses Net Administrative Fee Administrative Fee Equity - Ending Balance - - - 316,445 48,502 1,391 80,478 130,371 150,932 150,932 (20,561) 295,884 Housing Assistance Payments Equity - Beginning Balance Housing Assistance Payment Revenues Total HAP Revenues Housing Assistance Payments Total Housing Assistance Payments Expenses Net Housing Assistance Payments Housing Assistance Payments Equity - Ending Balance Housing Assistance Payments Equity - - - 3,288 592,914 592,914 610,975 610,975 (18,061) (14,773) (14,773) Total ACC HCV Units Unit Months Available Unit Months Leased 840 796 - 840 796 487,536 - 487,536 Excess Cash (concluded) 132 984 984 846 - CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Balances at June 30, 2008 Compensated absences Contracts payable Total General obligation bonds: Refunding bonds - series 1993 Series 1998A Refunding bonds - series 1998B Series 2003 Series 2007 Series 2007 Ref Series 2009A Total Municipal Development Authority: Refunding bonds - series 2003 Series 2006 Series 2008 Total $ Exhibit 1 Balances at June 30, 2009 Issued Retired 4,905,650 42,539,431 47,445,081 7,115,408 20,901,705 28,017,113 6,150,968 6,582,425 12,733,393 5,870,090 56,858,711 62,728,801 2,555,000 3,995,000 1,815,000 18,775,000 80,915,000 18,140,000 126,195,000 68,440,000 68,440,000 690,000 285,000 225,000 1,030,000 7,910,000 1,435,000 11,575,000 1,865,000 3,710,000 1,590,000 17,745,000 73,005,000 16,705,000 68,440,000 183,060,000 12,735,653 6,060,000 47,000,000 65,795,653 - 2,820,260 230,000 1,760,000 4,810,260 9,915,393 5,830,000 45,240,000 60,985,393 3,295,000 3,295,000 - 290,000 290,000 3,005,000 3,005,000 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 1,975,000 2,315,000 685,000 1,055,000 842,427 4,950,000 12,027,427 - 325,000 375,000 155,000 245,000 264,615 260,000 1,624,615 205,000 1,650,000 1,940,000 530,000 810,000 577,812 4,690,000 10,402,812 Community Facilities District: Vistancia CFD Series 2002 Vistancia CFD Series 2005 Vistancia CFD Series 2006 Total 19,000,000 22,850,000 22,760,000 64,610,000 - 825,000 725,000 1,550,000 18,175,000 22,125,000 22,760,000 63,060,000 Highway user revenue: Series 1996 Total Total bonds payable Total governmental debt 271,923,080 68,440,000 19,849,875 320,513,205 $ 319,368,161 96,457,113 32,583,268 383,242,006 133 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT BUSINESS-TYPE ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Balance at June 30, 2008 Compensated absences Less current portion Long-term portion of compensated absences $ $ 621,770 563,460 58,310 Contracts payable $ 4,363,165 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 2006 Water Infrastructure Finance Authority, CW Phase 3 Total bonds Total business-type bonds & contracts payable Less current portion of loans, bonds & contracts payable Long-term portion of loans, bonds & contracts payable 1,235,000 1,235,000 Issued Retired (1) 773,977 $ 259,688 - Exhibit 2 749,677 $ 201,811 Balances at June 30, 2009 $ $ 646,070 517,780 128,290 $ 4,421,042 170,368 170,368 1,064,632 1,064,632 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 8,575,248 8,575,248 606,501 717,955 855,000 700,000 923,610 617,831 80,544 349,740 16,200,000 21,051,181 4,815,884 7,492,909 11,085,000 6,915,000 14,375,229 10,637,078 1,525,071 1,229,607 27,183,342 42,741,541 8,575,248 136,575,909 154,650,007 8,834,936 21,423,360 142,061,583 5,585,734 $ 149,064,273 8,191,099 $ (1) Includes 2006 Water Infrastructure Finance Authority DW debt of $16,200,000 that was canceled in fiscal year 2009. 134 133,870,484 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2009 General Obligation General Facilites Purpose 6% Limitation (1) Principal Interest Total Principal Fiscal Year 2010 2,185,000 979,822 Other Purpose 20% Limitation (1) Interest 3,164,822 25,085,000 5,393,847 Total Principal Exhibit 3 Total General Obligation Interest 30,478,847 27,270,000 Total 6,373,669 33,643,669 2011 995,000 655,166 1,650,166 16,385,000 5,225,796 21,610,796 17,380,000 5,880,962 23,260,962 2012 1,030,000 620,244 1,650,244 6,265,000 4,871,584 11,136,584 7,295,000 5,491,828 12,786,828 2013 1,070,000 584,009 1,654,009 6,540,000 4,632,934 11,172,934 7,610,000 5,216,943 12,826,943 2014 1,115,000 545,074 1,660,074 6,780,000 4,384,484 11,164,484 7,895,000 4,929,558 12,824,558 2015 350,000 151,802 501,802 7,855,000 4,477,772 12,332,772 8,205,000 4,629,574 12,834,574 2016 - - - 8,530,000 4,316,584 12,846,584 8,530,000 4,316,584 12,846,584 2017 - - - 8,445,000 3,997,919 12,442,919 8,445,000 3,997,919 12,442,919 2018 - - - 8,225,000 3,655,044 11,880,044 8,225,000 3,655,044 11,880,044 2019 - - - 8,570,000 3,293,278 11,863,278 8,570,000 3,293,278 11,863,278 2020 - - - 8,900,000 2,930,361 11,830,361 8,900,000 2,930,361 11,830,361 2021 - - - 9,290,000 2,550,965 11,840,965 9,290,000 2,550,965 11,840,965 2022 - - - 8,485,000 2,175,204 10,660,204 8,485,000 2,175,204 10,660,204 2023 - - - 8,845,000 1,800,803 10,645,803 8,845,000 1,800,803 10,645,803 2024 - - - 7,480,000 1,445,853 8,925,853 7,480,000 1,445,853 8,925,853 2025 - - - 7,800,000 1,123,913 8,923,913 7,800,000 1,123,913 8,923,913 2026 - - - 8,140,000 794,961 8,934,961 8,140,000 794,961 8,934,961 2027 - - - 8,505,000 452,256 8,957,256 8,505,000 452,256 8,957,256 2028 - - - 3,020,000 210,600 3,230,600 3,020,000 210,600 3,230,600 2029 - - - 3,170,000 71,325 3,241,325 3,170,000 71,325 3,241,325 176,315,000 $ 57,805,483 183,060,000 $ 61,341,600 $ 6,745,000 $ 3,536,117 $ 10,281,117 $ $ 234,120,483 $ $ 244,401,600 (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 1993R 1995 1996 1998A 1998B 2000 2003 2007 2007R 2009 Total General Obligation Bond Original Issue Amount 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 68,440,000 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 68,440,000 $ 254,170,000 51,125,000 203,045,000 (continued) 135 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2009 Fiscal Year 2010 Municipal Development Authority (2) Principal Interest Total 5,410,000 2,700,219 Principal 8,110,219 Highway User Revenue Interest 3,005,000 85,917 Total Principal 3,090,917 Exhibit 3 Special Assessment (3) Interest 2,230,492 565,714 Total 2,796,206 2011 5,910,000 2,449,319 8,359,319 - - - 2,017,320 440,557 2,457,877 2012 3,575,000 2,257,469 5,832,469 - - - 1,495,000 316,720 1,811,720 2013 3,730,000 2,120,269 5,850,269 - - - 1,140,000 22,820 1,162,820 2014 3,870,000 1,963,944 5,833,944 - - - 325,000 149,600 474,600 2015 2,585,000 1,832,381 4,417,381 - - - 340,000 135,788 475,788 2016 2,695,000 1,714,306 4,409,306 - - - 355,000 121,338 476,338 2017 2,810,000 1,592,831 4,402,831 - - - 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 - - - - - - - - - 2028 - - - - - - - - - $ 62,215,000 $ 24,417,129 $ 86,632,129 $ 3,005,000 $ 85,917 $ 3,090,917 $ 10,402,812 $ 2,138,438 (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) 136 $ 12,541,250 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2009 Fiscal Year 2010 Water and Sewer Revenue Principal Interest Total 7,498,833 4,733,037 12,231,870 Community Facilities District (4) Principal Interest Total 2,170,000 3,329,455 Principal 5,499,455 Exhibit 3 Long-Term Loan Interest 177,094 Total 39,913 217,007 2011 7,312,624 4,453,867 11,766,491 2,275,000 3,222,392 5,497,392 184,087 32,920 217,007 2012 7,573,543 4,186,028 11,759,571 2,385,000 3,108,336 5,493,336 191,355 25,652 217,007 2013 7,841,852 3,907,496 11,749,348 2,505,000 2,985,974 5,490,974 198,910 18,097 217,007 2014 8,122,808 3,617,796 11,740,604 2,630,000 2,854,633 5,484,633 206,763 10,244 217,007 2015 8,411,674 3,319,721 11,731,395 2,765,000 2,711,311 5,476,311 106,423 2,081 108,504 2016 8,718,726 3,003,951 11,722,677 2,920,000 2,555,713 5,475,713 - - - 2017 9,351,834 2,664,936 12,016,770 3,080,000 2,388,074 5,468,074 - - - 2018 9,706,615 2,298,363 12,004,978 3,255,000 2,207,674 5,462,674 - - - 2019 9,134,680 1,939,289 11,073,969 3,440,000 2,015,359 5,455,359 - - - 2020 8,073,040 1,616,477 9,689,517 3,635,000 1,810,671 5,445,671 - - - 2021 8,399,453 1,308,645 9,708,098 3,850,000 1,593,926 5,443,926 - - - 2022 5,727,821 1,054,894 6,782,715 4,070,000 1,362,718 5,432,718 - - - 2023 4,859,795 879,265 5,739,060 4,310,000 1,115,388 5,425,388 - - - 2024 4,873,999 721,512 5,595,511 4,565,000 862,431 5,427,431 - - - 2025 5,031,496 561,466 5,592,962 4,815,000 604,936 5,419,936 - - - 2026 5,194,091 396,239 5,590,330 5,080,000 357,175 5,437,175 - - - 2027 5,361,950 225,662 5,587,612 5,310,000 120,802 5,430,802 - - - 2028 3,548,069 80,007 3,628,076 - - - - - - 2028 603,399 10,499 613,898 - - - - - - $135,346,302 40,979,150 176,325,452 63,060,000 $ 35,206,968 (4) Vistancia Community Facilities District bonds (continued) 137 $ 98,266,968 1,064,632 $ 128,907 $ 1,193,539 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2009 Fiscal Year DEBT SERVICE REQUIREMENTS GRAND TOTALS Interest Total Principal 2010 47,761,419 17,827,924 65,589,343 2011 35,079,031 16,480,017 51,559,048 2012 22,514,898 15,386,033 37,900,931 2013 23,025,762 14,271,599 37,297,361 2014 23,049,571 13,525,775 36,575,346 2015 22,413,097 12,630,856 35,043,953 2016 23,218,726 11,711,892 34,930,618 2017 24,056,834 10,750,010 34,806,844 2018 24,511,615 9,719,287 34,230,902 2019 24,614,680 8,645,857 33,260,537 2020 24,238,040 7,588,178 31,826,218 2021 25,329,453 6,530,352 31,859,805 2022 22,237,821 5,505,065 27,742,886 2023 21,664,795 4,531,909 26,196,704 2024 20,723,999 3,598,989 24,322,988 2025 21,626,496 2,680,603 24,307,099 2026 22,569,091 1,742,612 24,311,703 2027 19,176,950 798,720 19,975,670 2028 6,568,069 290,607 6,858,676 2028 3,773,399 81,824 3,855,223 458,153,746 164,298,109 622,451,855 (concluded) 138 Exhibit 3 139 CITY OF PEORIA, ARIZONA SCHEDULE OF CAPITAL ASSETS BY FUNCTION AND CLASSIFICATION JUNE 30, 2009 Governmental activities: Culture and Recreation Asset Type General Government Police Fire Development Services Highways and Streets Work in progress (WIP) $ 37,575,379 $ 7,865,530 $ 1,003,492 $ 1,025,225 $ - $ 112,388,308 Land $ 51,320,210 $ 26,913,171 $ 1,059,975 $ 1,048,451 $ - $ 235,213,462 Buildings and Improvements $ 33,553,914 $ 67,017,272 $ 19,700,112 $ 19,507,483 $ 119,479 $ - Furniture $ 50,097 $ 1,558,721 $ $ 207,324 $ 65,914 $ 57,229 Equipment $ 2,709,453 $ 40,809,075 $ 6,973,422 $ 3,858,351 $ 142,781 $ 5,876,394 Vehicles $ 1,399,319 $ $ 5,487,017 $ 7,532,801 $ 336,800 $ 4,087,219 Storm Drain System $ Street System $ Park System Sub-total - 1,526,161 - $ - $ - $ - $ - $ 7,458,289 $ 20,819 $ - $ - $ - $ $ 27,619,001 $ 260,431 $ - $ - $ - $ $ 161,685,662 Less accumulated depreciation (17,852,630) Total governmental activities capital assets, net $ 143,833,032 $ 145,971,180 $ 34,224,018 (35,078,957) $ (11,792,368) $ 110,892,223 $ 22,431,650 Wastewater Utility Sanitation Utility 33,179,635 $ (9,179,475) $ 24,000,160 664,974 $ (428,171) $ 236,803 380,992,361 738,614,973 (134,241,437) $ 604,373,536 Business-type activities: Water Utility Work in progress (WIP) $ 26,662,468 $ 1,394,434 $ $ 6,025,686 Water Rights 6,095,443 Buildings and Improvements 1,642,283 7,659,795 186,058 29,004 Equipment 1,863,781 1,082,629 43,338 749,921 Vehicles 1,856,327 903,774 8,589,040 490,528 Water System Wastewater System 252,017,815 - - 17,369 Land Furniture 3,878,001 - - $ - 28,074,271 17,017,386 - 25,781,679 - - Total 410,350 - 10,799 331,278,757 $ 6,703,349 - - Housing Programs Stadium 6,095,443 3,276,922 38,371,478 9,613 224,675 144,422 3,884,091 - 11,839,669 - - - 252,017,815 - - - 331,278,757 Sub-total 296,349,861 346,226,394 8,643,177 33,742,846 3,841,307 688,803,585 Less accumulated depreciation (49,310,791) (50,845,197) (4,179,881) (10,748,220) (1,893,896) (116,977,985) Total business-type activities capital assets, net $ 247,039,070 $ 295,381,197 140 $ 4,463,296 $ 22,994,626 $ 1,947,411 $ 571,825,600 Exhibit 4 Public Works Human Services $ 21,960,190 $ $ 10,415,601 $ $ 454,256 $ $ 50,392 $ - Total $ 181,818,124 $ 326,278,627 - $ 140,352,516 $ - $ 1,989,677 424,649 $ - $ 60,794,125 $ 1,310,085 $ $ 22,279,367 $ 57,405,904 $ - $ 57,405,904 307,757 599,965 $ - $ - $ 388,471,469 $ - $ - $ 27,879,432 $ 1,207,269,241 $ 92,021,077 $ (15,840,229) $ 76,180,848 907,722 (362,702) $ 545,020 (224,775,969) $ 982,493,272 141 CITY OF PEORIA, ARIZONA Exhibit 5 SCHEDULE OF CHANGES IN CAPITAL ASSETS BY FUNCTION GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Balances July 1, 2008 Additions and Transfers $ 151,977,734 $ 10,510,329 135,104,439 11,647,067 (780,326) 145,971,180 Police 32,725,411 2,009,996 (511,389) 34,224,018 Fire 30,611,541 2,775,651 (207,557) 33,179,635 (116,057) 664,974 Department Culture and Recreation General Government Development Services Highways & Streets Public Works Human Services Sub-total governmental fixed assets 781,031 Deletions and Transfers $ - (802,401) Balances June 30, 2009 $ 161,685,662 634,712,512 104,110,314 (207,853) 738,614,973 84,340,722 7,720,628 (40,273) 92,021,077 (5,592) 907,722 $ (2,671,448) $ 1,207,269,241 913,314 $ 1,071,166,704 $ 138,773,985 Less accumulated depreciation Culture and Recreation (15,757,890) (2,368,022) 273,282 (17,852,630) General Government (30,048,256) (5,811,027) 780,326 (35,078,957) Police (10,656,552) (1,591,793) 455,977 (11,792,368) (7,577,923) (1,735,046) 133,494 (9,179,475) (491,416) (52,813) 116,058 (428,171) (124,937,513) (9,511,667) 207,743 (134,241,437) (14,415,114) (1,465,388) 40,273 (15,840,229) (299,481) (68,813) 5,592 (362,702) Sub-total accumulated depreciation $ (204,184,145) $ (22,604,569) $ 2,012,745 $ (224,775,969) Total governmental activities capital assets, net $ 866,982,559 $ 116,169,416 $ Fire Development Services Highways & Streets Public Works Human Services 142 (658,703) $ 982,493,272 Exhibit 6 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2009 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 Development Fee - contribution to branch library construction Special Assmt Debt Service - close completed IDs GO Bond Capital Projects - capital assets Non-major - Storm Drainage - capital assets Non-major - Other Grants - employee wellness subsidy Non-major - Other Grants - GOHS Traffic - correct grant Non-major - MDA Debt Service - debt payments Non-major - CFD Capital Projects - reclass expenditures Non-major - ID Capital Projects - reclass expenditures Water utility - unspent meters budget Wastewater utility - unspent meters budget Solid Waste Utility - capital assets ISF - Facilities - capital assets ISF - IT Fund - capital assets ISF- IT Fund - projects ISF- IT Fund - computer equipment purchases Fund Totals $ $ 4,771,880 728,810 1,000,000 68,251 2,000 2,000 2,959 6,575,900 Half-Cent Sales Tax General - public safety subsidies General - economic development subsidy General - office complex reserve Highway User - streets subsidy Non-major - MDA Debt Service - debt payments Stadium - debt service subsidy Stadium - operating subsidy ISF - IT Fund - radio project ISF - IT Fund - capital assets Fund Totals Highway User Half-Cent - streets subsidy Transportation Sales Tax - streets subsidy Non-major - MDA Debt Service - debt payments Non-major - Non-Bond Capital Projects - close streets CIP fund ISF - Motor Pool - equipment purchases ISF- IT Fund - projects ISF- IT Fund - capital assets Fund Totals Development Fee General - contribution to branch library construction ISF - Motor Pool - capital assets ISF- IT Fund - capital assets Fund Totals Transportation Sales Tax Streets - subsidy Transit - subsidy Non-major - MDA Debt Service - debt payments Water Utility - capital assets ISF - Motor Pool - capital assets Fund Totals - 977,000 180,500 4,425,326 3,595 237,602 5,824,023 Special Assmt Debt Service General - close completed IDs - 68,251 GO Bond Capital Projects General - capital assets ISF - IT Fund - capital assets (continued) 143 - 760,500 43,465 10,000 652 173,674 219,684 33,736 624,998 280,611 282,011 437,704 77,100 2,944,135 4,771,880 728,810 1,000,000 1,000,000 2,760,649 438,601 2,410,000 214,000 449,620 13,773,560 1,000,000 977,000 141,394 2,118,394 302,223 27,000 3,719 21,306 354,248 760,500 760,500 1,110,068 5,656 1,115,724 43,465 43,465 5,128,351 5,128,351 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2009 Fund Out Other Governmental Public Transit Purpose Exhibit 6 Transfers In Transportation Sales Tax - transit subsidy ISF- IT Fund - projects sub-total Section 8 Housing Public housing - capital assets Other Grants General - employee wellness subsidy General - correct GOHS grant ISF - Motor Pool - capital assets ISF - IT Fund - projects ISF - IT Fund - capital assets sub-total Storm Drainage General - capital assets ISF- IT Fund - projects sub-total MDA Debt Service General - debt service Half-Cent - debt service Highway User - debt service Transportation Sales Tax - debt service 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 Non-major - CFD Capital Projects - debt transfers 180,500 180,500 10,000 652 17,500 28,152 - CFD Bonds-Capital Projects General - reclass expenditures Non-major - CFD Debt Services - debt transfers Wastewater Utility - capital assets sub-total Transfers Out 425 425 7,899 489,202 159 27,531 516,892 2,000 213 2,213 173,674 2,760,649 302,223 4,425,326 174,562 129,880 14,868 280,923 96,208 8,358,313 - 225,240 - 219,684 271,868 491,552 ID Bonds-Capital Projects General - reclass expenditures Non-major - Non-Bond Capital Projects - reclass expenditures 33,736 39,527 73,263 Non-Bond Capital Projects Highway User - close streets capital project fund Non-major - ID Bonds Capital Projects - reclass expenditures Wastewater Utility - capital assets - 225,240 198,505 423,745 141,394 39,527 588,509 769,430 Non-major Fund Totals 9,357,020 1,720,604 Total Governmental Funds 18,855,279 30,928,896 (continued) 144 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2009 Fund Out Enterprise Funds: Water Utility Purpose Transfers In General - unspent meters budget Transportation Sales Tax - capital assets Non-major - MDA Debt Service - debt service Wastewater Utility - capital assets Wastewater Utility - debt service ISF- IT Fund - projects ISF- IT Fund - computer equipment purchases ISF- IT Fund - capital assets Fund Totals Wastewater Utility General - unspent meters budget CFD Bonds Capital Projects - capital assets Non-major - MDA Debt Service - debt service Non-major - Non-Bond Capital Projects - capital assets Water Utility - capital assets Water Utility - debt service ISF- IT Fund - projects ISF - IT Fund - capital assets Fund Totals Solid Waste Utility General - capital assets Non-major - MDA Debt Service - debt service ISF- IT Fund - projects Fund Totals Stadium Half-Cent - operating subsidy Half-Cent - debt service subsidy Non-major - MDA Debt Service - debt service ISF- IT Fund - projects Fund Totals Public Housing Other Govtl - Section 8 Housing - capital assets Internal Service Funds Motor Pool Exhibit 6 Transfers Out 624,998 3,595 628,593 174,562 700,375 1,117,249 9,565 2,600 318,251 2,322,602 280,611 198,505 588,509 700,375 1,117,249 2,885,249 271,868 129,880 2,445 277,346 681,539 2,410,000 438,601 2,848,601 7,899 2,000 14,868 1,116 17,984 280,923 797 281,720 - Total Enterprise Funds 6,370,342 3,303,845 Highway User - equipment purchases Development Fees - capital assets Transportation Sales Tax - capital assets Non-major - Other Grants - capital assets Non-major - MDA Debt Service - debt service ISF- IT Fund - projects ISF- IT Fund - equipment purchases Fund Totals 27,000 1,110,068 237,602 489,202 29,000 1,892,872 17,500 96,208 903 114,611 Self-Insurance ISF- IT Fund - projects - 266 Facilities Maintenance General - capital assets ISF- IT Fund - projects ISF- IT Fund - computer equipment purchases Fund Totals - 2,959 2,762 8,500 14,221 Information Technology General - computer equipment purchases General - capital assets General - IT projects Half-Cent -radio project Half-Cent - capital assets Highway User - computer projects Highway User - capital assets Development Fees - capital assets (continued) 145 77,100 282,011 437,704 214,000 449,620 3,719 21,306 5,656 - CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2009 Fund Out Purpose Internal Service Funds (continued) Information Technology (cont) Non-major -Transit - projects Non-major - Other Grants - projects Non-major - Other Grants - capital assets Non-major -Storm Drainage - projects Non-major - GO Bond Capital Projects - capital assets Water Utility - computer projects Water Utility - computer equipment purchases Water Utility - capital assets Wastewater Utility - computer projects Wastewater Utility - capital assets Solid Waste Utility - computer projects Stadium - computer projects ISF - Motor Pool - computer projects ISF - Motor Pool - equipment purchases ISF - Self-Insurance - projects ISF - Facilities - computer projects ISF - Facilities - computer equipment purchases Fund Totals Total Internal Service Funds Grand Totals (concluded) 146 Exhibit 6 Transfers In Transfers Out 425 159 27,531 213 5,128,351 9,565 2,600 318,251 2,445 277,346 1,116 797 903 266 2,762 8,500 7,272,346 29,000 29,000 9,165,218 158,098 34,390,839 34,390,839 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. 159 Revenue Capacity 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. 171 Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. 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. 184 Operating Information 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 149 150 152 153 154 155 156 157 158 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 171 172 173 174 175 176 177 178 179 180 181 Economic and Demographic Information XXX Demographic and Economic Statistics XXXI Major Employers Within the City 182 183 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 NINE FISCAL YEARS (accrual basis of accounting) 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 $ $ $ $ Fiscal Year 2005 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 $ $ $ 2006 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 $ 2007 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 $ $ $ $ $ 2008 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 $ $ 2009 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 $ $ 690,708,494 54,945,644 207,958,657 953,612,795 429,764,018 33,558,490 36,507,370 499,829,878 $ 1,120,472,512 88,504,134 244,466,027 $ 1,453,442,673 Table II CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST NINE FISCAL YEARS (accrual basis of accounting) 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 $ $ $ $ $ $ $ $ $ $ $ $ 2002 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 $ 2003 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 $ 18,106,642 10,880,229 6,896,802 5,673,177 345,064 $ 41,901,914 $ 119,851,812 $ 10,644,978 8,513,857 20,456,182 39,615,017 $ 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 $ $ (24,012,184) 19,436,772 $ (4,575,412) $ (31,484,622) 17,902,343 (13,582,279) $ $ $ $ $ $ $ $ $ Fiscal Year 2005 2004 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 $ 44,627,823 120,070 27,526,484 72,274,377 114,992,349 $ (47,115,807) 29,061,420 (18,054,387) $ $ $ $ $ $ $ $ 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 $ 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 $ 47,136,002 129,308 34,853,722 82,119,032 134,090,676 $ (43,375,208) 37,228,368 (6,146,840) $ Continued 150 $ $ $ $ $ $ $ 2006 2007 2008 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 $ 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 $ 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 $ 23,815,912 12,469,667 8,462,126 4,623,886 344,030 49,715,621 158,285,386 $ 25,859,997 12,782,965 8,688,437 5,442,993 369,052 $ 53,143,444 $ 170,208,204 $ 27,058,901 14,523,268 9,458,194 5,448,667 371,540 $ 56,860,570 $ 191,110,644 $ 21,078,973 10,836,600 37,599,732 69,515,305 $ 22,666,481 12,117,734 103,368,209 $ 138,152,424 $ 23,226,773 13,954,308 59,793,946 96,975,027 $ 47,962,423 136,736 48,121,049 96,220,208 165,735,513 $ 53,196,965 137,532 14,097,716 $ 67,432,213 $ 205,584,637 $ 61,918,282 135,174 18,219,423 $ 80,272,879 $ 177,247,906 $ (39,054,460) 46,504,587 7,450,127 $ $ $ $ 21,087,664 14,288,769 35,376,433 $ $ (37,275,047) 23,412,309 (13,862,738) $ $ $ $ $ $ $ 2009 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) $ $ $ $ $ $ $ $ 23,226,263 23,185,665 37,084,671 21,618,004 6,354,769 24,046,432 7,688,062 2,382,604 12,610,988 574,550 158,772,008 32,164,325 31,039,534 10,624,589 5,235,258 331,785 79,395,491 238,167,499 20,130,962 12,574,749 51,366,296 84,072,007 59,577,008 158,627 12,186,331 71,921,966 155,993,973 (74,700,001) (7,473,525) (82,173,526) Table II CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST NINE FISCAL YEARS (accrual basis of accounting) 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 $ $ $ $ $ $ $ 2002 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 $ $ $ $ $ 2003 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 $ $ $ $ $ Fiscal Year 2005 2004 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 $ $ $ $ $ 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 $ $ $ $ 2006 2007 2008 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 $ 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 $ 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 $ 2,846,925 14,546,789 17,393,714 95,363,328 $ 5,222,148 12,660,507 $ 17,882,655 $ 126,635,779 $ 5,851,620 (2,025,489) $ 3,826,131 $ 151,301,012 $ $ 129,840,788 32,171,424 $ 162,012,212 $ 110,199,834 27,238,440 $ 137,438,274 $ 38,915,154 63,898,301 102,813,455 $ $ $ $ 2009 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 $ $ $ $ $ 3,629,629 28,162,003 59,004,816 4,019,182 10,991,095 20,395,663 5,018,384 7,896,100 115,412 3,528,043 (3,066,497) 139,693,830 1,970,474 3,066,497 5,036,971 144,730,801 64,993,829 (2,436,554) 62,557,275 CITY OF PEORIA, ARIZONA PROGRAM REVENUES LAST NINE FISCAL YEARS (accrual basis of accounting) 2002 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 $ 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 $ 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 $ 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 $ Note: 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 $ $ $ $ $ Table III Fiscal Year 2005 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 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 2008 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 $ $ $ $ $ 2009 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 $ $ $ $ 3,635,662 8,035,499 1,326,404 1,748,715 1,568,529 348,351 3,336,840 130,962 12,574,749 51,366,296 84,072,007 30,104,254 15,331,781 11,166,354 2,866,609 108,010 158,627 12,186,331 71,921,966 155,993,973 Table IV CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2000 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 10,649,066 54,391,303 65,040,369 2001 $ $ 231,842 53,437,142 53,668,984 2002 $ $ 366,670 43,946,135 44,312,805 2003 $ $ 2004 730,494 41,955,367 42,685,861 $ $ 3,061,807 43,989,346 47,051,153 2005 $ $ 2006 150,764 52,553,522 52,704,286 $ 948,135 65,224,766 $ 66,172,901 2007 $ 216,652 74,842,586 $ 75,059,238 2008 $ $ 2009 264,489 77,741,727 78,006,216 $ $ 275,184 67,102,145 67,377,329 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% 0.3% 70.3% 70.6% 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% 0.3% 61.1% 61.4% $ 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 $ 91,475,811 $ 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 $ 60,276,977 $ 21,662,579 8,300,215 90,239,771 $ 82,831,364 $ 84,931,450 $ 154,966,318 $ 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 $ 143,600,643 $ 62,170,663 23,589,696 229,361,002 $ 165,129,365 $ 57,506,689 29,428,677 252,064,731 Table V CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 2000 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 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) Net Change in Fund Balance Debt Service as a percentage of noncapital expenditures $ $ $ 2001 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 $ $ $ 2002 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 $ $ 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% 22.4% Fiscal Year 2004 2003 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 $ 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 $ 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 $ 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 $ $ 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 $ 6,299,626 9,737,936 143,220,840 7,046,576 15,304,972 $ 144,972,313 $ (22,041,409) $ 49,213,258 24,613,603 (22,255,141) 15,978,782 (21,772,434) $ 45,778,068 $ $ $ 164,548 6,193,157 (11,266,511) (4,908,806) $ $ (26,950,215) 781,876 46,559,944 20.0% 17.7% $ 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 2009 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 $ 93,896,013 62,718,223 18,479,664 1,802,759 3,733,047 395,834 7,174,109 2,200,782 7,488,740 $ 197,889,171 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 $ 17,798,947 22,303,852 36,458,108 20,516,345 6,489,199 15,469,695 6,187,633 2,343,847 77,515,142 10,340,704 31,143,531 $ 234,929,890 11,917,582 25,988,554 $ 242,988,904 $ (18,492,451) $ (45,099,733) $ 47,000,000 273,310 16,426,715 (36,035,044) $ 27,664,981 $ 68,440,000 808,192 18,855,279 (30,928,896) $ 57,174,575 $ $ 12,074,842 $ 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 $ 122,090,000 18,365,000 (18,365,000) 1,502,204 17,798,434 (21,121,233) 120,269,405 $ 19,043,582 $ 14,282,889 $ 127,577,293 20.0% 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 2006 19.9% 17.8% 9,172,530 25.8% 22.9% CITY OF PEORIA, ARIZONA GOVERNMENT-WIDE REVENUES BY FUNCTION LAST NINE FISCAL YEARS (accrual basis of accounting) 2001 Governmental Activities: General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Unallocated General Revenues Total Governmental Activities 2002 2003 Table VI Fiscal Year 2005 2004 2006 2007 2008 2009 $ 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 $ 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 $ 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 $ 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 $ 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 4,092,800 9,516,656 2,844,901 2,148,000 2,195,564 58,042,435 3,341,185 1,890,466 142,760,327 $ 226,832,334 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 $ 32,751,517 17,500,110 7,633,584 3,174,210 279,265 23,836,584 $ 85,175,270 $ 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 $ 36,888,294 16,668,034 10,732,529 2,859,794 283,562 5,222,148 $ 72,654,361 $ 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 37,864,324 19,647,683 11,276,713 2,866,609 266,637 1,970,474 $ 73,892,440 Total Primary Government $ 171,835,108 $ 214,664,864 $ 195,632,995 $ 217,617,157 $ 261,098,841 $ 332,220,416 $ 328,548,918 $ 324,901,465 $ 300,724,774 Notes: 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 $ Table VII CITY OF PEORIA, ARIZONA 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 2000 $ 29,172,894 1,720,818 2001 $ 33,621,787 2,022,335 2002 33,711,972 2,327,874 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 2009 $ 59,004,816 4,019,182 1,357,963 5,709,744 1,580,367 6,689,726 1,638,719 7,713,406 1,838,829 8,603,538 2,077,178 9,749,392 2,285,792 10,688,571 2,612,397 12,393,713 2,896,360 13,211,927 2,975,900 19,176,935 2,691,525 24,105,340 3,729,995 Special District* Taxes 183,425 384,380 512,196 834,891 619,973 868,197 796,821 1,571,936 3,633,664 In Lieu Taxes 275,222 236,085 192,931 175,135 252,345 293,417 273,644 242,246 256,107 345,155 Total Property Taxes $ 7,526,354 $ 8,890,558 $ 10,057,252 $ 11,452,393 $ 12,698,888 $ 14,135,977 $ 16,076,575 $ 17,922,469 $ 26,042,606 $ 30,872,015 Total Taxes $ 38,420,066 $ 44,534,680 $ 46,097,098 $ 49,675,987 $ 55,774,213 $ 62,170,531 $ 80,238,340 $ 90,780,140 $ 98,358,262 $ 93,896,013 (1) 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 County Shared Sales Tax Urban Revenue Sharing Auto in-Lieu HURF Revenues Local Transportation Aid Federal Other Total Intergovernmental Revenue Notes: Source: 2000 $ 6,549,653 8,297,259 2,771,158 5,334,646 551,269 2,243,835 1,291,896 $ 27,039,716 $ $ 2001 6,971,235 8,891,990 3,054,248 5,606,104 598,664 2,251,373 4,709,819 32,083,433 2002 $ 8,350,576 11,321,449 3,575,255 6,719,940 615,115 1,700,855 2,903,838 $ 35,187,028 $ $ 2003 8,474,910 11,386,513 4,268,379 7,020,920 639,879 3,552,001 1,733,992 37,076,594 2004 $ 9,116,684 9,786,943 4,390,706 7,501,918 650,734 2,340,738 1,053,460 $ 34,841,183 Includes all governmental fund types Includes all governmental revenues, including revenues from federal government City financial records 157 $ $ 2005 10,038,874 10,076,455 4,639,457 7,878,977 650,056 2,685,415 778,059 36,747,293 2006 $ 11,681,284 11,707,782 5,251,577 8,475,784 657,162 2,822,321 1,303,622 $ 41,899,532 $ $ 2007 13,130,116 15,996,992 5,725,299 9,870,460 658,598 3,101,796 15,800,183 64,283,444 $ $ 2008 12,695,890 19,539,768 5,546,558 9,488,625 666,237 2,904,788 1,770,683 52,612,549 2009 $ 10,991,095 12,837,089 20,395,663 5,018,384 8,287,891 640,826 2,970,534 1,576,741 $ 62,718,223 CITY OF PEORIA, ARIZONA DEVELOPMENT/EXPANSION FEES BY TYPE LAST TEN FISCAL YEARS 2000 Governmental Activities: Streets Parks/Recreation Library Public Safety General Government Total Governmental Activities $ $ 215,358 1,110,776 436,814 531,464 112,669 2,407,081 Business-type Activities: Water Expansion Water Resource Wastewater Expansion Solid Waste Expansion Total Business-type Activities $ 2,395,778 16,882 6,101,944 1,450,380 9,964,984 Total Primary Government $ 12,372,065 2001 $ $ 1,846,867 2,117,536 460,258 909,116 926,097 6,259,874 $ 2002 $ $ 1,911,146 2,346,030 476,734 929,164 941,436 6,604,510 2,431,800 185,934 3,421,540 870,682 6,909,956 $ 13,169,830 Fiscal Year 2004 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 $ 16,034,847 $ $ 2,740,580 2,778,480 586,200 1,461,477 1,381,237 8,947,974 $ 7,013,267 887,389 4,786,965 753,660 13,441,281 $ 20,190,384 2005 2006 $ 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 Source: City financial records 158 $ Table IX $ 2007 $ 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 2008 $ 2009 $ 8,950,451 3,647,109 501,209 3,515,573 1,413,319 18,027,661 $ 3,425,308 883,944 99,061 654,919 326,373 $ 5,389,605 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 1,073,071 321,008 447,047 110,359 $ 1,951,485 $ 33,071,271 $ 24,307,783 $ 7,341,090 CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS 2000 2001 2002 2003 Fiscal Year 2004 2005 Table X 2006 2007 2008 2009 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 26,694,348 7,014,131 7,107,109 6,836,000 1,437,589 7,026,265 727,023 599,537 1,562,814 Total $ 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 $ 59,004,816 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other Total Note: 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% -13.1% -37.8% -1.2% 3.8% -3.7% -0.1% -13.3% -39.2% -33.5% 16.7% 15.3% 0.3% 6.6% 12.9% 12.2% 34.3% 12.6% -0.6% -13.8% 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 2003 2004 2005 2000 2001 2002 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% 5.60% 5.50% 5.60% Source: Model City Tax Code, ADOR 91-5312 160 2006 2007 2008 2009 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% 1.80% 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% CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND FOUR YEARS AGO Table XII 2009 Category # of Payers Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others Total Percentage of Total Payers 2005 Sales Tax Paid Percentage of Total City Sales Tax Revenue # of Payers Percentage of Total Payers Sales Tax Paid Percentage of Total City Sales Tax Revenue 3,343 4,280 338 4,977 15 131 1,175 62 82 23.21% 29.72% 2.35% 34.56% 0.10% 0.91% 8.16% 0.43% 0.57% $ 26,694,348 7,014,131 7,026,265 7,107,109 6,836,000 1,437,589 599,537 727,023 1,562,814 45.2% 11.9% 11.9% 12.0% 11.6% 2.4% 1.0% 1.2% 2.6% 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% 14,403 100.00% $ 59,004,816 100.00% 10,122 100.00% $ 45,535,559 100.00% Note: Information is unavailable prior to FY05 due to change in tax software. Source: City Sales Tax system City financial records 161 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 $ 442,330,817 15.0% 4,082 108,364 $ $ 36,088 11.3% $ 521,704,006 17.9% 4,520 115,432 $ $ 39,009 11.6% $ 607,836,669 16.5% 4,956 122,655 $ $ 44,073 11.2% $ 662,785,441 9.0% 5,226 126,815 $ $ 46,278 750,429,221 13.2% 5,651 132,805 $ $ 11.3% 50,780 11.1% 827,633,655 10.3% 6,039 137,045 7,525,637,782 11.6% $ 54,914 $ 242,554,778 73,674,495 1,724,400 - 2007 626,591,494 75,761,506 2008 $ 1,041,693,334 116,115,688 2009 $ 1,219,595,280 146,413,989 293,807,014 117,630,028 1,830,109 - 334,323,557 148,077,787 1,918,660 58,450 - 419,192,584 207,476,727 1,837,324 76,020 - $ 964,469,431 16.5% $ 1,115,620,151 15.7% $ 1,642,187,476 47.2% $ 1,994,591,924 21.5% $ $ $ $ 7,262 132,805 1.30 6,743,773,145 14.9% $ 2006 $ 582,512,691 64,003,067 218,209,727 58,949,534 1,712,708 30,780 - 1.30 5,868,802,159 8.6% $ Fiscal Year 2004 2005 464,911,130 $ 497,294,057 42,487,659 51,436,849 190,086,111 51,802,238 951,301 190,782 - 1.30 5,405,768,822 20.1% $ 2003 403,937,371 37,003,847 170,508,040 50,351,826 955,802 28,555 - 1.30 4,502,876,658 15.1% $ 2002 371,374,428 35,543,344 151,050,647 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 Full Cash Value % Growth Net Assessed Value as a Percentage of Full Cash Value $ 106,059,247 40,917,076 1,008,673 163,835 1,475 Total Direct Secondary Tax Rate Full Cash Value Per Capita 2000 267,224,220 26,956,291 Table XIII 7,264 153,592 1.30 1.20 8,736,985,007 16.1% $ 11.0% 65,788 9,999,273,539 14.4% $ 11.0% 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: Property Classifications Railroads, Private Car, and Commercial and Agriculture and Airline Flight Mines (b) Utilities Residential Fiscal Year Property Industrial Vacant Land 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% 2009 18% 22.0% 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 162 65,103 11.2% 10,379 158,227 1.25 15,118,988,316 51.2% $ 95,553 10.9% 12,524 159,263 1.25 18,279,838,277 20.9% $ 114,778 10.9% CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 2000 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 0.32 1.30 2001 $ 0.32 1.30 2002 $ 0.29 1.30 Fiscal Year 2004 2005 2003 $ 0.29 1.30 Table XIV $ 0.29 1.30 $ 0.29 1.30 2006 $ 0.29 1.30 2007 $ 0.28 1.20 2008 $ 0.24 1.25 2009 $ 0.19 1.25 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 3.77 1.90 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 1.78 0.59 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 $ 3.33 Secondary 1.59 (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 $ 1.00 $ Education Equalization Community College District 0.78 0.16 West Maricopa Education Center 0.05 County Flood Control District 0.14 Fire District Assistance 0.01 County Free Library 0.04 Central AZ Water Conservation 0.10 Special Health Care 0.09 $ 1.78 $ 0.59 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 163 5.98 4.56 5.74 3.74 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS Table XV Tax Levies Fiscal Year 2001 2000 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 1,367,471 5,761,359 $ 2002 1,585,084 6,729,710 $ 2003 1,675,077 7,901,877 $ 2004 1,836,000 8,616,211 $ 2005 2,077,622 9,755,580 $ 2006 2,295,435 10,759,238 $ 2,640,883 12,538,103 $ 2008 3,012,725 13,387,442 $ 2009 3,002,150 20,527,343 $ 2,849,397 24,932,399 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 71,071,459 47,095,296 469,465,347 129,292,449 512,232,252 137,665,480 563,545,711 141,844,666 611,337,637 144,920,909 726,446,055 145,100,016 726,446,055 145,100,016 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 811,397,481 312,172,569 501,855,890 168,876,851 549,811,112 180,531,357 601,588,445 188,621,027 653,138,786 193,993,258 774,241,944 197,309,619 777,087,034 200,151,198 451,841,923 229,728,799 (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 $ 95,094,998 Secondary 59,160,510 (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 $ 463,492,311 $ Education Equalization Community College District 347,905,170 95,293,956 West Maricopa Education Center 10,278,868 County Flood Control District 74,674,333 Fire District Assistance 3,105,495 County Free Library 20,581,183 Central AZ Water Conservation 58,315,605 Special Health Care 49,923,129 $ 811,397,481 $ 312,172,569 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 164 758,698,013 302,890,898 815,445,197 349,264,359 885,318,337 384,200,264 CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XVI 2009 Taxpayer Arizona Public Service Arizona State Land Department Vistancia LLC Vestar Arizona XLVIII LLC Parke West LLC Sprint Nextel Wireless LP Qwest Corporation Ddra Arrowhead Crossing LLC Plaza Iii Limited Partnership Bcc Development Inc Lake Pleasant Pavilion LLC Target Corporation Happy Valley 160 LLC Inland Western Glendale LLC Southwest Gas Corporation Developers Diversified Realty Corp Midcor Associates Freedom Plaza Limited Partner Schonfeld, Robert Diamante Crossroads Plaza Dayton Hudson Corp Sun Health Corporation Total Taxable Secondary Assessed Value $ 20,300,229 $ 19,562,225 13,745,350 12,245,102 10,462,263 8,918,055 8,086,064 7,828,875 6,881,353 6,130,813 5,732,708 5,675,099 5,298,185 5,151,706 4,959,398 $ 140,977,425 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2000 Percentage of Total City Taxable Secondary Assessed Value 1.02% 0.98% 0.69% 0.61% 0.52% 0.45% 0.41% 0.39% 0.35% 0.31% 0.29% 0.28% 0.27% 0.26% 0.25% 7.07% Taxable Secondary Assessed Value $ 11,301,826 $ 7,724,387 2,694,439 1,842,599 2,128,307 4,964,621 3,272,545 2,893,389 2,144,720 1,891,082 1,867,038 1,795,397 33,218,524 Rank 1 2 6 11 1.75% 0.61% 0.42% 8 3 4 5 7 9 10 12 0.48% 1.12% 0.74% 0.65% 0.48% 0.43% 0.42% 0.41% 8.63% Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For Fiscal year 2009, the assessed value of Salt River Project property within the City of Peoria is $21,455,967. Source - Maricopa County Treasurer's Office 165 Percentage of Total City Taxable Secondary Assessed Value 2.56% 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 2005 2000 2001 2002 2003 2004 $ 7,128,830 $ 8,314,794 $ 9,576,954 $ 10,452,211 $ 11,833,202 7,045,289 8,120,403 9,234,358 10,209,517 11,624,426 98.8% 97.7% 96.4% 97.7% Table XVII 2006 2007 2008 2009 $ 13,054,673 $ 15,178,986 $ 16,400,167 $ 23,529,493 $ 27,781,796 12,817,287 14,827,945 15,926,805 22,822,879 26,269,411 98.2% 98.2% 97.7% 97.1% 97.0% 94.6% 22,418 149,690 117,765 325,376 251,331 143,034 91,070 52,195 55,670 71,715 $ 7,067,707 $ 8,270,093 $ 9,352,123 $ 10,534,893 $ 11,875,757 $ 12,960,321 $ 14,919,015 $ 15,979,000 $ 22,878,549 $ 26,341,126 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% 97.2% 94.8% Table XVIII CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS Water Average bill $ % Increase Wastewater Average bill % Increase Residential Solid Waste Average bill % Increase Water # % Increase Wastewater # % Increase Residential Solid Waste # % Increase 2000 2001 33.59 $ 25.29% 34.58 $ 2.95% Utility Rate Increases & Average Bill Last Ten Fiscal Years 2002 2003 2004 2005 37.77 $ 9.22% 39.61 $ 4.87% 39.06 $ -1.39% 2007 2008 34.59 $ -2.65% 34.85 $ 0.75% 35.59 $ 2.12% 2009 36.73 3.20% 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% 21.36 0.56% 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% 15.18 2.22% 2004 2005 2006 2007 2008 2009 Utility Service Connections Last Ten Fiscal Years 2002 2003 2000 2001 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% 46,902 1.64% 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% 49,923 2.39% 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% 48,006 1.82% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2009 Source: 35.53 $ -9.04% 2006 Meter Size All Customers 5/8"-3/4" $ 14.16 1" 16.84 1 1/2" 19.54 2" 26.97 3" 69.39 4" 98.04 6" 153.27 8" 212.70 City customer service and billing records (continued) 167 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, 2009 Residential Multiplex (per 1,000 gallons) (per 1,000 gallons) Base Charge Base Charge $ 1.49 $ 1.49 2.69 2.17 3.24 2.63 3.85 3.15 3.85 3.15 Table XVIII Commercial (per 1,000 gallons) Base Charge $ 1.49 2.17 2.63 3.15 3.20 (a) Residential and Multiplex customers are charged this rate for all usage above 25,000 gallons Water Meter Permit Charges As of June 30, 2009 Meter Size 3/4" 1 1/2" 2" 3" 4" 6" Hydrant meter Commercial accounts Charges for Wastewater Services As of June 30, 2009 Monthly All Customers Base (a) Volume (b) $ 3.11 2.35 Charge 283 448 567-970 1,629 - 2,474 2,243 - 3,205 3,814 - 5,135 1,280 By meter size $ Charges for Storm Water As of June 30, 2009 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 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 2001 2002 2003 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 2004 Table XVIII 2005 2006 2007 2008 2009 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 active 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 6,629,039 15,829 189,944 16.78 28.17 23 16.1 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 8,674,450 14,606 175,270 23.93 34.84 31 42.0 2.00 0.00 9.40 0.00 2.00 0.00 9.40 0.00 4.00 0.00 9.40 0.00 4.00 0.00 9.40 0.00 4.00 0.75 9.40 0.00 4.00 0.75 9.40 0.00 4.00 0.75 9.40 0.00 4.00 2.25 9.40 10.00 4.00 2.25 N/A 10.00 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 - 0.870 0.119 2.600 0.036 1.007 0.134 0.009 2.732 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 2.75 0.37 N/A 7.48 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 3.30 0.53 N/A 10.16 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 The City stopped using the Tolleson Regional Treatment Plant after opening the City's Butler Plant (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 48,970 22,856 16,084 87,910 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND SIX YEARS AGO Table XVIII 2009 Entity Desert Harbor City of Peoria Padre's Pump Station Trilogy at Vistancia Sun Garden Park II H/O Assn. Freedom Plaza LTD Partnership Centennial High School Ventana Lakes N. of Beardsley Lake Casa Del Sol East 5 Star Quality Care - Desert Harbor Polynesian Village 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 Health Care Facility Public School Homeowner's Association Multi-Family Residential Health Care Facility Homeowner's Association Homeowner's Association Water Treatment Plant Water Utility Homeowner's Association Homeowner's Association Avg Monthly Water Usage Ranking 7,162 1 5,959 2 3,070 3 2,168 4 1,884 5 1,529 6 1,398 7 1,362 8 1,343 9 1,303 10 - Water usage information unavailable prior to FY03 Source: City customer service and billing records (concluded) 170 2003 % of Average Monthly Water Usage 0.99% 0.82% 0.42% 0.30% 0.26% 0.21% 0.19% 0.19% 0.19% 0.18% 0.00% 0.00% 0.00% 0.00% 0.00% Avg Monthly Water Usage Ranking 7,236 1 3,438 3 1,675 6 2,108 5 1,624 7 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% 0.38% 0.29% 0.22% 0.74% 0.44% 0.28% 0.24% Table XIX CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2001 2000 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 50,598,318 29,721,834 5,470,000 18,095,000 - $ 2002 47,669,600 27,900,997 5,205,000 15,814,000 - $ Fiscal Year 2004 2003 44,484,200 25,773,797 4,925,000 17,333,692 - $ 2005 2006 2007 2008 2009 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 $ 183,060,000 60,985,393 3,005,000 10,402,812 63,060,000 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 18,000,000 117,346,302 1,229,607 Total Primary Government $ 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 $ 458,153,746 Total debt per capita $ $ $ $ $ $ $ $ $ $ Total Debt as a % of Personal Income 1,632.21 5.8% 1,762.56 6.1% 1,520.05 1,751.94 5.3% 6.0% Source: City financial records. See Exhibits 1 & 2 and footnote 14. 171 1,569.56 5.1% 1,560.28 4.8% 1,422.57 4.2% 2,333.55 6.7% 2,714.13 7.8% 1,064,632 2,876.71 8.3% 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 2001 2000 Bonded Debt (1) Less: Debt Service Reserves Net Bonded Debt 2002 2003 2004 2005 2006 2007 2008 2009 $ 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 $ 183,060,000 $ 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 44,978,714 $ 138,081,286 Percentage of Net Bonded Debt to Full Cash Value 1.1% 0.8% 0.6% 0.9% 0.7% 0.5% 0.3% 1.1% 0.6% 0.8% Net Bonded Debt Per Capita $392 $329 $263 $420 $347 $276 $186 $704 $577 $867 Net Bonded Debt as a % of Personal Income 1.38% 1.15% 0.91% 1.43% 1.12% 0.85% 0.54% 2.01% 1.66% 2.50% (1) Represents face value of general obligation debt outstanding Note: Personal income and population information may be found on Table XXX Full cash value information may be found on Table XIII Sources - City debt service schedules. See Exhibits 1 & 2, also footnote 14. 172 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2009 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 86,183,351,753 58,303,635,287 58,303,635,287 54,626,432,391 58,303,635,287 58,315,604,917 58,303,635,287 58,315,604,917 20,557,736,111 General Obligation Debt Outstanding Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 507,390,000 - 2.31% 3.41% 3.41% 3.41% 3.41% 3.41% 3.41% 3.41% 0.58% 2,483,449,966 3,713,048,948 261,755,000 187,630,000 80.32% 11.49% 210,241,616 21,558,687 231,800,303 1.90 1.59 144,250,779 63,060,000 100.00% 63,060,000 2.10 Vistancia Community Facilities District $ Percentage Applicable to City of Peoria Table XXI $ Total overlapping 17,301,999 17,301,999 200,361,999 $ 0.16 0.14 0.04 0.01 0.09 0.10 0.05 312,162,302 Direct: City of Peoria $ 1,994,591,924 $ 183,060,000 Total direct and overlapping general obligation bonded debt 183,060,000 $ (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 173 495,222,302 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit 2000 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 $ 2001 2,367,867 6,707,930 9,075,797 59,674,115 114,077,401 1,664,226 115,741,627 - $ 2002 1,969,797 7,982,014 9,951,811 57,621,411 114,711,003 2,186,348 116,897,351 - $ 2003 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 78,364,808 138,618,928 3,918,198 142,537,126 Table XXII Fiscal Year 2004 $ 550,505 71,257 621,762 65,601,762 142,493,656 3,571,920 146,065,576 2005 $ 11,690,706 11,690,706 67,070,706 134,340,540 4,063,815 138,404,355 2006 $ 11,594,345 11,594,345 62,799,345 196,625,176 20,573,318 217,198,494 2007 $ 10,710,280 10,710,280 153,545,280 205,291,709 24,204,834 229,496,543 2008 $ 18,505,348 18,505,348 144,700,348 224,219,333 15,471,750 239,691,083 2009 $ 17,301,999 17,301,999 200,361,999 210,241,616 21,558,687 231,800,303 21,250,000 21,250,000 44,800,000 44,075,000 66,085,000 64,610,000 63,060,000 124,817,424 126,849,162 131,471,691 173,431,934 167,937,338 194,895,061 272,867,839 306,291,823 322,806,431 312,162,302 50,598,318 47,669,600 44,484,200 68,720,000 64,980,000 55,380,000 51,205,000 142,835,000 126,195,000 183,060,000 $ 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 $ 495,222,302 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 2000 2001 2002 Table XXIII Fiscal Year 2004 2003 2005 2006 2007 2008 2009 Secondary Assessed Value $ 442,330,817 $ 521,704,006 $ 607,836,669 $ 662,785,441 $ 750,429,221 $ 827,633,655 $ 964,469,431 $ 1,115,620,151 $ 1,642,187,476 $ 1,994,591,924 6% Limitation Debt limit $ 26,539,849 $ 31,000,582 $ 36,470,200 $ 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 21,466,000 $ 11,767,737 $ 19,525,753 $ 33,258,019 $ 44,518,166 Total net debt applicable to limit Legal 6% Debt Margin 18,968,426 $ Total net debt applicable to the limit as a percentage of debt limit 20% Limitation Debt limit $ 13,915,874 88,466,163 $ 56,836,271 $ 55.1% $ 103,335,273 31,629,892 Total net debt applicable to the limit as a percentage of debt limit Note: $ 71.5% Total net debt applicable to limit Legal 20% Debt Margin 7,571,423 17,084,708 41.1% $ 30,584,892 $ 35.8% 72,750,381 29.6% $ 70.4% 56.6% 33.0% $ 132,557,088 $ 150,085,844 $ 165,526,731 $ 192,893,886 29,480,000 40,630,000 39,480,000 38,980,000 37,855,000 92,087,334 $ 91,927,088 $ 110,605,844 $ 126,546,731 $ 155,038,886 24.2% 30.7% See footnote 14 for discussion of 6% and 20% limitations. Source: Maricopa County Assessor Exhibit 3 to the Financial Statements 175 26.3% 23.5% 28,470,000 $ 23.1% 121,567,334 19.6% 66,937,209 38,467,209 13,310,000 $ 42.5% $ 223,124,030 108,759,030 51.3% 85,221,249 $ 328,437,495 $ 215,552,495 34.4% 112,930,515 5.6% $ 112,885,000 $ 119,675,515 6,745,000 13.5% 114,365,000 $ 98,531,249 398,918,385 176,315,000 $ 222,603,385 44.2% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS 2000 2001 2002 Fiscal Year 2004 2003 Table XXIV 2005 2006 2007 2008 2009 89,807,396 $ 108,336,399 $ 117,980,567 $ 122,039,417 $ 105,935,592 MDA Debt other than Transportation Pledged Revenues (1) Debt Service Requirements Principal (2) Interest (2) Total Annual Requirements (2) Estimated Coverage $ 58,578,166 $ 67,198,257 $ 69,544,724 $ 71,409,403 $ 77,041,031 $ 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 3,050,260 799,723 3,849,983 17.82 20.11 19.67 16.53 38.59 29.23 34.10 29.38 32.09 27.52 Transportation MDA Debt (3) Net Pledged Revenues from above (4) Additional Pledged Revenues (5) Total 102,085,609 9,356,675 111,442,284 Debt Service Requirements Principal Interest Total Annual Requirements 1,760,000 1,659,171 3,419,171 Estimated Coverage Note: 32.59 (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 CITY OF PEORIA, ARIZONA Table XXV PLEDGED REVENUE COVERAGE - REVENUE BONDS LAST TEN FISCAL YEARS 2000 Gross Revenue (1) Operating and Maintenance Expenses (2) Net Revenue Available for Debt Service Development Fee Revenue Total Net Revenue Debt Service Requirements Principal (3) Interest (4) Total Debt Service Requirements $ 2001 $ 30,648,093 15,355,373 15,292,720 $ 8,514,604 23,807,324 $ 2,366,910 2,504,469 4,871,379 $ 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 $ Fiscal Year 2004 2003 $ 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 $ $ 39,176,675 22,617,415 16,559,260 $ 11,971,019 28,530,279 $ 5,867,214 3,422,812 9,290,026 2005 2006 2007 2008 2009 $ 39,037,367 26,151,794 12,885,573 $ 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 $ 46,956,831 33,751,517 $ 13,205,314 $ 13,864,643 26,750,216 12,887,675 $ 30,552,423 8,826,809 $ 31,585,165 5,821,318 $ 21,346,053 1,841,126 $ 15,046,440 $ 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 4,721,964 4,895,459 $ 9,617,423 $ Ratio of Total Net Revenue/ Total Bond Expense 4.89 5.16 3.49 2.50 3.07 3.37 3.82 4.00 2.69 1.56 Ratio of Net Available/ Total Bond Expense (5) 3.14 3.98 2.24 1.32 1.78 1.63 2.21 2.88 1.96 1.37 (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. For FY09 also excludes a one-time insurance claim ($7,930,000) and a one-time charge from Central Arizona Project for back billed water capital recovery charges ($3,670,364). (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 2000 Pledged Revenues (1) Debt Service Requirements Principal Interest (2) Total Annual Requirements Estimated Coverage $ 5,822,427 $ 520,000 955,340 1,475,340 3.95 2001 $ 4,310,686 $ 740,000 911,040 1,651,040 2.61 2002 Fiscal Year 2004 2005 2003 $ 4,974,602 $ 1,243,308 1,052,893 2,296,201 2.17 $ 5,876,529 $ 1,889,351 1,091,160 2,980,511 $ 4,756,382 $ 2,505,652 972,553 3,478,205 1.97 1.37 $ 3,547,789 $ 1,507,136 828,532 2,335,668 Table XXVI 2006 $ 3,516,277 $ 1,608,983 747,720 2,356,703 1.52 2007 $ 3,216,095 $ 1,480,506 638,657 2,119,163 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 1.52 2008 2009 $ 3,167,933 $ 1,264,637 697,840 1,962,477 1.61 $ 3,365,342 $ 1,624,615 675,958 2,300,573 1.46 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) $ 2000 2,106,995 $ 2,098,476 79,724 2,178,200 99.6% $ 16,140,436 $ 2001 1,954,952 $ 1,932,607 88,160 2,020,767 98.9% $ 14,675,529 $ 2002 2,069,030 $ 2,061,842 156,055 2,217,897 99.7% $ 16,256,194 $ 2003 2,301,354 $ 2,291,817 877,315 3,169,132 $ Fiscal Year 2004 2,088,695 $ 2005 2,065,519 $ 2,069,962 504,165 2,574,127 2,057,821 186,624 2,244,445 99.6% $ 14,086,246 Table XXVII $ 99.1% $ 12,345,284 179 2006 1,987,461 $ 1,983,885 275,392 2,259,277 99.6% $ (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 $ 10,845,765 99.8% $ 9,243,866 $ 2007 1,965,107 2008 $ 1,749,724 $ 1,961,724 7,818 1,969,542 1,749,246 44,061 $ 1,793,307 99.8% $ 12,782,394 $ 2009 2,196,027 $ 2,193,992 2,041 2,196,033 100.0% $ 11,476,365 99.9% $ 9,871,061 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 2000 $ 7,359,490 4,908,180 $ 12,267,670 Total Governmental Expenditures $ 81,065,289 Ratio of Debt Service to Governmental Expenditures Total Governmental Revenues Ratio of Debt Service to Governmental Revenues Source: $ 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 $ 16.77% $ 103,033,259 14.95% $ $ $ 111,779,079 15.05% $ 109,293,292 2003 10,612,697 6,918,514 17,531,211 15.68% $ 112,560,955 13.66% 15.57% Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 180 Table XXVIII Fiscal Year 2004 2005 $ 9,737,936 $ 15,304,972 6,299,626 7,046,576 $ 16,037,562 $ 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 2009 $ 25,988,554 11,917,582 $ 37,906,136 $ 143,220,840 $ 153,731,533 $ 213,283,409 $ 234,929,890 $ 242,988,904 11.20% $ 121,179,431 13.23% $ 144,972,313 15.42% $ 144,191,521 15.50% 15.37% $ 178,025,080 13.27% 11.38% $ 220,591,297 11.01% 17.66% $ 216,437,439 19.17% 15.60% $ 197,889,171 19.16% CITY OF PEORIA, ARIZONA BOND AUTHORIZATIONS - ISSUED AND UNISSUED AS OF JUNE 30, 2009 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 17,214,740 289,456 4,795,804 47,150,000 99,000,000 65,000,000 30,000,000 282,000,000 22,490,912 23,154,145 16,239,443 95,119,633 19,266,320 8,575,248 28,131,024 5,392,768 99,000,000 33,270,607 13,760,557 158,749,343 52,000,000 10,450,649 5,898,384 35,650,967 160,000,000 53,407,061 10,372,993 96,219,946 109,000,000 35,000,000 356,000,000 7,085,141 6,551,626 77,494,477 31,983,112 629,735 48,884,224 69,931,747 27,818,639 229,621,299 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 2008 Authorization Transportation & Drainage Public Safety & Municipal Operations Parks, Recreation & Trails Subtotal Grand Totals: Source: City Financial Records 276,700,000 - - 276,700,000 60,300,000 41,000,000 378,000,000 - - 60,300,000 41,000,000 378,000,000 1,231,260,000 329,873,047 77,015,248 824,371,705 181 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 Table XXIX Authorization $ Issued 140,670,000 436,785,000 116,180,000 170,320,000 88,150,000 1,000,000 $ 37,901,516 121,772,986 32,571,105 69,529,384 34,134,798 - 75,675,000 202,480,000 32,868,452 78,110,054 $ 1,231,260,000 $ 406,888,295 Remaining Authorization $ 102,768,484 315,012,014 83,608,895 100,790,616 54,015,202 1,000,000 42,806,548 124,369,946 $ 824,371,705 Table XXX CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 2000 * 2001 2002 2003 2004 2005 * 2006 2007 2008 2009 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 108,364 14.1% 2.3% 3,073,095 115,432 6.5% 3.0% 3,310,936 122,655 6.3% 3.8% 3,537,861 126,815 3.4% 4.0% 3,717,962 132,805 4.7% 3.2% 4,102,612 137,045 3.2% 2.9% 4,442,177 145,125 5.9% 2.2% 4,965,452 153,592 5.8% 2.3% 5,377,256 155,560 1.3% 2.4% 5,394,043 159,263 2.4% 5.8% 5,522,445 Maricopa County Population % growth Unemployment Rate Per Capita Income 3,072,149 5.4% 3.3% 28,984 3,192,125 3.9% 3.9% 29,250 3,296,250 3.3% 5.1% 29,423 3,406,170 3.3% 5.2% 29,912 3,537,630 3.9% 3.9% 31,523 3,681,300 4.1% 4.1% 33,178 3,792,675 3.0% 3.8% 35,046 3,879,150 2.3% 3.2% 36,135 3,987,492 2.8% 4.2% N/A 4,105,623 3.0% 8.1% N/A State of Arizona Population % growth Unemployment Rate Per Capita Income 5,131,501 4.2% 4.0% 25,656 5,319,785 3.7% 4.7% 26,197 5,470,720 2.8% 6.0% 26,472 5,642,725 3.1% 5.7% 26,975 5,845,250 3.6% 5.0% 28,564 6,077,740 4.0% 4.7% 30,019 6,305,210 3.7% 4.4% 31,936 6,432,007 2.0% 3.8% 33,029 6,629,455 3.1% 5.0% 32,953 6,812,137 2.8% 8.9% N/A United States of America Unemployment Rate 4.0% 4.8% 6.0% 6.4% 5.6% 5.3% 4.6% 4.6% 5.5% 9.5% Phoenix MSA Per Capita Income 28,359 28,683 28,844 29,318 30,892 32,414 34,215 35,010 N/A = Data not available at this time. * - 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 one-two years old. Most recent year 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 Commerce (www.workforce.az.gov) and U.S. Bureau of Labor Statistics. Unemployment statistics for June of the fiscal year. Per Capita Income data - U.S. Dept of Commerce, Bureau of Economic Analysis 182 34,675 N/A CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND SIX YEARS AGO Table XXXI 2009 Employer Peoria Unified School District City of Peoria Plaza Del Rio Campus/Freedom Plaza & Care Center Wal-Mart (2 locations) Fry's Food Stores (4 Locations) Target (3 Locations) Immanuel Care Campus Safeway (4 Locations) Larry Miller Dodge/Hyundai Good Shepherd Care Center Antigua Albertson's (2 Locations) Arizona Training and Evaluation Total # of Employees 3,776 1,236 700 635 533 492 350 301 263 250 227 210 - 2003 Rank 1 2 3 4 5 6 7 8 9 10 10,033 Percentage of Total City Employment 10.4% 3.4% 1.9% 1.7% 1.5% 1.4% 1.0% 0.8% 0.7% 0.7% 0.6% 0.6% 0.0% # of Employees 4,100 889 1,129 280 415 300 378 230 210 297 310 27.6% 8,538 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 2 9 4 7 5 10 11 8 6 Percentage of Total City Employment 15.6% 3.4% 4.3% 1.1% 1.6% 1.1% 1.4% 0.0% 0.0% 0.9% 0.8% 1.1% 1.2% 32.5% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2000 2001 2002 Full-time Equivalent Employees as of June 30, 2003 2004 2005 2006 Table XXXII 2007 2008 2009 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 3.50 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 6.00 13.00 9.50 17.00 26.00 9.00 22.00 5.00 8.00 88.00 142.04 287.00 170.00 49.80 45.25 43.00 69.50 14.50 72.75 28.25 45.00 47.00 19.00 Total FTE 821.79 868.14 943.49 889.13 917.11 999.08 1,049.88 1,150.99 1,244.04 1,236.59 Note: Beginning with fiscal year 2003, the City no longer counts part-time seasonal staff in the FTE calculation. Counts do include part-time non-seasonal benefitted employees. Source: City budget office 184 CITY OF PEORIA, ARIZONA BUILDING PERMITS AND HOME SALES LAST TEN YEARS Table XXXIII Building Permits Fiscal Year 2000 Commercial Number of Permits 101 Value $ 46,615,999 Residential Number of Dwelling Units 3,654 Value 420,114,645 Other Number of Permits 2,512 Value 59,939,189 Total Value $ 526,669,833 2001 2002 2003 2004 2005 2006 2007 2008 2009 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 60 $ 18,722,347 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 1,338 213,028,399 963 154,975,128 383 47,217,878 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 1,043 18,535,296 $ 297,935,758 $ 269,282,831 $ 282,518,313 $ 309,833,199 $ 469,121,647 $ 412,303,639 $ 368,827,021 $ 227,086,013 $ 84,475,521 2005 2006 2007 2008 Source: City Community Development Department Single Family Housing Sales 2001 2000 Calendar Year 2003 2004 2002 New # of Units Average Sale Amount Avr price % increase $ 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 $ 2,275 136,615 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% 925 282,885 -19.18% Resale $ 2,930 270,000 8.00% $ 2,415 257,830 -4.51% $ 3,635 210,000 -18.55% New Housing Starts City of Peoria Maricopa County Note: 2000 3,227 2001 2,332 2002 2,183 43,908 43,732 43,826 Calendar Year 2003 2004 1,974 2,420 47,808 58,882 Information for calendar year. Source: Arizona State University College of Business - AZ Real Estate Center. Data is for calendar years. 185 2005 3,560 2006 1,654 2007 2,046 2008 1,098 56,139 40,294 35,465 20,605 CITY OF PEORIA, ARIZONA SCHEDULE OF INSURANCE IN FORCE JULY 1, 2008 THROUGH JUNE 30, 2009 Type of Insurance 1. 2. Primary Public Liability & Automobile General & auto liability Annual Renewal Date Insurance Carrier Table XXXIV Policy Number Limits N/A $500,000 per incident $500,000 annual 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 70,000 Excess liability - 2nd level 7/1 RSUI Indemnity Company NHA040320 20 Million per occurrence SIR above 12,000 Excess liability - 2nd level -Special Events 7/1 Great American Insurance GLP0000566241704 1,000,000 N/A 14,782 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 297T228808 267,000,000 Storage Tank 3rd Party liability 1/6 Great American Insurance BTA557496104 1,000,000 5,000 2,510 7733A918BM21 25,000,000 1,000 17,306 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 Axis Surplus Insurance Co. ECN636953 1,000,000 8. Identity Theft 7/1 Travelers Casualty and Surety 104968078 10,000 9. Multi-media Liability 7/1 Axis Speciality MCN636980 1 Million per occurrence (1) Annual Premium N/A 3. Note: Deductible Amount N/A SIR above 5,000 759,761 252,555 400 38,000 For breakdown of property insurance policy, see Table XXXV 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 5,586 N/A 4,700 5,000 2,350 CITY OF PEORIA, ARIZONA Table XXXV PROPERTY INSURANCE SCHEDULE JUNE 30, 2009 Property Building and contents - combined blanket limit excluding earthquake and flooding $ 250,000,000 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 187 267,000,000 Table XXXVI CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year 2000 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 Commercial 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 2004 2005 51,617 11.0% * * 61813 * 67,182 * 65,725 4149 65,928 4,998 69,206 5,492 75,145 5,160 77,602 4,923 119,620 6,692 131,372 6,237 38,988 * 43,009 * 50,099 * 56,430 6 101,951 5.3 142,319 5.7 102,385 4.8 103,921 5.2 **62,341 6.0 **60,219 5.5 8,276 4.2 9,312 4.5 9,977 4.2 10,268 4.2 11,014 4.3 11,618 4.3 12,445 4.3 12,788 4.4 13,649 4.4 13,361 4.4 $ 3,741 269.3 $ 3,104 282.5 $ 4,224 309.8 $ 5,104 469.1 6,654 9,807 277 $ 4,811 412.3 5,035 8,697 218 63,544 25.4% 2009 48,142 23.3% 4,068 297.9 62,328 25.4% 2008 48,142 23.3% $ 65,998 33.8% 2007 43,283 21.1% 6,267 526.7 52,674 11.0% 2006 $ 3,692 368.8 7,999 8,496 90 71,051 60.6% $ 2,943 225.5 8,365 7,604 381 76,323 81.2% $ 1,486 84.5 * * * * * * * * * * * * * * * 2,441 7,526 423 * * * * 4746 5,056 5,920 5,787 5,679 5,917 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 6,174 43,263 984 846 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 8,674,450 175,270 2.9 3.0 2.7 2.7 3.2 3.4 3.6 3.7 3.6 3.9 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 48,970 22,856 16,084 190,945 * * 194,462 * * 230,662 * * 169,932 * * 222,927 * * 225,316 * * 200,153 * * 220,357 195 54 230,434 234 83 211,243 246 66 * * 840 840 840 840 840 822 840 819 840 828 840 831 840 827 840 812 840 796 * 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”. Prior to FY08, calls for service included officer initiated calls. Beginning in FY08, only calls coming into the 911 center are counted as calls for service. Source: Various City Departments 188 CITY OF PEORIA, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Table XXXVII Fiscal Year 2001 2000 Governmental Activities: General Government Annexed Area (square miles) Culture & Recreation # of Neighborhood Parks 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: 2002 2003 2004 2005 2006 2007 2008 2009 144.0 156.0 162.4 162.6 176.2 177.9 177.9 177.9 177.9 177.9 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 28 314 87 82 24 12 31 3 1 1 2 46 2 52 2 59 2 61 2 80 2 86 2 90 2 101 2 103 2 92 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 7/1 9 2 374 396 414 444 471 487 518 537 538 551 11,315 * 10,008 * 10,552 * 11,186 * 11,829 543 12,000 599 12,000 621 12,737 661 13,618 720 13,726 683 9 9 9 9 9 9 9 11 11 11 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 46,902 42.0 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 49,923 16.3 32,615 35,320 36,978 38,546 39,747 42,467 44,198 46,309 47,146 48,006 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 70 * Information is not available for these fiscal years. Source: Various City Departments 189 190