City of Peoria Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT for the Fiscal year ended june 30, 2010 WWW.PEORIAAZ.GOV Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2010 City of Peoria, Arizona City Council: Bob Barrett, Mayor Ron Aames, Vice Mayor Cathy Carlat Joan Evans 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, 2010 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting City of Peoria Organizational Chart Principal Officials of the City City Council pictures and biographies v-xv 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 Notes to the Financial Statements 47 Required Supplementary Information 86 i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2010 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 General Obligation (GO) Bond Capital Projects Fund Non-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 Special Assessment Debt Service Fund Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund 90 91 92 96 98 100 101 102 103 104 105 106 107 108 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Public Housing Fund 110 111 112 113 114 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 116 117 118 119 120 121 122 Fiduciary Funds Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities – All Agency Funds ii 124 125 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2010 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. 128 134 135 136 140 142 143 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, 2010 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, 2010. The report was prepared by the Financial Services Division of the Finance Department. This report represents management’s report to its governing body, constituents, legislative and oversight bodies, and investors and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies which have expressed interest in the City’s financial matters. Copies of this financial report will also be placed in the City libraries, as well as on the City’s website, for use by the general public. Managements Discussion and Analysis presented on pages 3-17 has a different focus and purpose than this transmittal letter and should be read in conjunction with this transmittal. THE FINANCIAL REPORTING ENTITY The City of Peoria, chartered in 1954, has a Council-Manager form of government with the City Council consisting of the Mayor and six Council Members. Pursuant to an amendment to the City Charter approved by the voters in 1997, the Mayor is elected at-large for a four-year term. Council members are elected, by district, for four-year terms. The City Council is vested with policy and legislative authority and is responsible for passing ordinances, adopting the budget, appointing committee, commission, and board members, and appointing the positions of City Manager, City Attorney, and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City encompasses approximately 179 square miles in the northwestern portion of Maricopa County, and is one of several major cities comprising the greater Phoenix metropolitan area. Between the 1990 census and the 2000 census the City’s population increased by over 100 percent, from approximately 50,600 to approximately 108,300. The estimated current population is approximately 160,254. 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 322 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, armadas, an urban lake, skate park 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 2011. 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 2010 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 section of the city web site – www.peoriaaz.gov/sustainability.  The City has won several awards for its sustainability efforts as well as recognizing budget savings and demonstrating good stewardship of resources. Budget & Management  Received the Certificate of Excellence from the International City/County Management Association (ICMA) for the Performance Management Program. This is the highest level of award. th  Received the 17 consecutive Distinguished Budget Award from the Government Finance Officers Association for the fiscal year 2010 budget documents.  Led a strategic approach in the budget preparation process where all departments were required to cost out and prioritize all service activities. Communications  Peoria’s government Channel 11 completed 10 business profile videos. These videos are part of a continuing effort to improve relationships with the city’s business partners and assist them in surviving in this tight economic climate.  Launched social media accounts on Twitter, Facebook and YouTube.  Redesigned the Focus resident newsletter.  Created email contact page on the City’s website to allow one-stop email contact to a variety of city departments, divisions and services. Resulted in over 2,000 emails from residents to various city recipients.  Added new technologies to website allowing interactive maps to locate Council Districts and all city parks and other facilities. Planning & Community Development  The City received a “Preserve America” designation from the U.S. National Advisory Council on Historic Preservation. vi     City Council adopted “General Plan 2010”, the Growing Smarter mandated 10-year update. The plan was ratified by voters on August 24, 2010. Completed the Peoria Sports Complex Urban Design Plan and the Old Town Revitalization Plan. The Neighborhood Pride program coordinated 658 volunteers completing various home and landscape improvement projects on 56 homes. Completed the engineering due diligence for the State Land at Lake Pleasant Parkway and Loop 303. This will open this area to become an economic development hub for Peoria. Community Services  Organized the first annual Earth Day celebration which included a river/trail clean-up, planting in Rio Vista Park and educational sessions for attendees. This event was honored as the Outstanding Community/Neighborhood Special Event by the Arizona Parks and Recreation Association.  Grand opening of WestWing neighborhood Park and the Skunk Creek Trail connection from the trail system to Rio Vista Park. Student artwork along the trail underneath Thunderbird Road Bridge was also dedicated.  Expanded Library Fest event to include arts, entertainment, antiques and local authors. The event held at Sunrise Mountain Library drew 3,000 attendees.  Friday Night Teen Dodge-ball was selected as the Outstanding Sports Program of the year by the Arizona Parks and Recreation Association.  Sixth consecutive Spring Training year with over 200,000 fans in attendance at the Peoria Sports Complex.  The Luke West Valley Recreation Committee won a prestigious Arizona Talent in Event Concepts (AzTEC) award for Outstanding Partnership of the Year. The West Valley Recreation Committee consists of west valley cities including Avondale, El Mirage, Glendale, Goodyear, Litchfield Park, Luke Air Force Base, Maricopa County Parks, Peoria, Surprise and Tolleson.  Constructed on-site nursery for turf and plant materials at Rio Vista Park. City Clerk  Developed and implemented a citywide electronic agenda management system for submitting and approving Council agenda items.  Completed a conversion of the electronic document management system used throughout the city.  Created searchable database for campaign finance documents on the City website.  Designed and implemented a comprehensive internal professional development program. Engineering  Completed Phase I of the $11 million Municipal Court expansion project and the $3.8 million Municipal Complex central plant upgrade project.  Completed the Pilot Wind Energy Project at Lake Pleasant funded with an Energy Efficiency and Conservation Block Grant, as well as local funds.  Completed several projects around local schools to increase the access and safety of students, parents and faculty to these sites.  Contracted for excavation material to construct Rose Garden Lane Basin at no cost to the City, saving $2.1 million in local funding. th  Received several awards for the construction of Happy Valley Road between 75 Avenue and Lake Pleasant Parkway, including the American Road and Transportation Builders of America 2010 Globe Award for Environmental Construction, the Arizona Chapter of the American Public Works Association Street Project of the Year 2010, and the Association of General Contractors Build Arizona 2010 award.  Constructed the $1.05 million Traffic Management Center. This center allows staff to actively manage traffic within the city, share traveler information with other jurisdictions and the public, and detect issues in the field related to the traffic signal system.  Completed the hybrid fiber to wireless project consisting of software, fiber and wireless equipment to allow an additional 31 traffic signals to be monitored and controlled from the Traffic Management Center. vii Finance  Issued $29.1 million in General Obligation bonds to fund various street, storm drainage, municipal facilities, and parks and trails projects.  Issued $15.7 million in Revenue Refunding bonds to generate $1.2 million in savings for the City’s utility operations.  Received another incremental bond rating upgrade for the City’s General Obligation Bonds from Moody’s (Aa2 to Aa1) and Fitch (AA to AA+) rating agencies as well as incremental rating upgrades for the City’s Revenue Bonds from Moody’s (A2 to Aa3) and Fitch (AA- to AA).  Implemented Accounts Payable ACH payments to vendors.  The Revenue Division developed and implemented new administrative procedure designed to detect and prevent identity theft. The new procedures comply with the requirements of the Federal Trade Commission’s “Ref Flags Rules”  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. Now all water meters in the City are read electronically. This significantly reduces the staff time necessary to read meters. Fire  The Fire Department completed a multi year project to become an Accredited Agency from the Commission on Fire Accreditation International (CFAI).  Began the implementation of a new Records Management Systems (RMS) to provide an integrated data system for fire operations, prevention, emergency medical services, support services, training and administration.  Fire Prevention conducted 150 community services events with over 69,700 attendees, spoke to over th th 13,000 students at 163 school events and trained 200 5 and 6 graders and hundred of adults in CPR.  Two new fire engines were purchased in fiscal year 2010 to be put into service in fiscal year 2011.  The training division implemented NEFSIS, a new teleconferencing system that allows crews to participate in meetings and training from each fire station, rather than having to go to a training site. Information Technology  Implementation of Microsoft Exchange 2007 e-mail server giving the City greater capabilities in electronic correspondence.  As of June 30, 2010, approximately 60 file servers have been converted from traditional hardwarebased systems to virtual machines, allowing approximately eight servers to share each single hardware platform. This allows much greater utilization of expensive hardware while conserving the environment through lower power consumption and reduced carbon emissions.  Began testing for the city-wide implementation of Microsoft Windows 7 operating system. Police  Implemented Geographical Policing by breaking the City into six areas, each commanded by a Lieutenant.  Implemented two neighborhood policing projects to address specific areas of the City.  The Property and Evidence unit destroyed 5,000 pounds of weapons and drugs and disposed of 20,000 impounded items.  The Youth and Support Services Section conducted a Youth Citizen’s Police Academy for 180 participants.  The Department was awarded 15 grants for a total of $681,503.  Nearly half of the Department’s employees participated in workshops and meetings to develop the functional and technical requirements for the upcoming estimated $3 million project to replace the Computer Aided Dispatch (CAD) and Records Management System (RMS) software programs. Public Works  Energy use was reduced by 12% at the City Hall Complex, resulting in over $100,000 in savings.  The City received energy rebates totaling $162,000 for the installation of energy efficient cooling systems and peak demand reduction. viii   The City received a grant for the conversion of site lighting associated with office buildings, parks, parking lots, and Park-and-Ride lots to Light Emitting Diode (LED) lighting. Installed a pilot solar voltaic system which provides over 30% of the electrical power for the Beardsley Water Reclamation Facility administrative building. Public Works Utilities  Won the Charles Nichols Award for Environmental Excellence from the Arizona Chapter of the American Public Works Association for Peoria’s role in implementing curbside recycling, supporting sustainable building, and fostering a solar-power project to offset a portion of the power used by the Beardsley Water Reclamation Facility administrative building.  Conducted four Household Hazardous Waste Drop-Off Events and collected over 115,000 pounds of hazardous waste that was diverted from the landfill.  Peoria purchased Arizona’s first hybrid solid waste vehicle. The Hydraulic Launch Automated Side Loader Solid Water Vehicle runs on biodiesel E-85 and achieves a 16% fuel savings over traditional solid waste vehicles.  Partnered with Arizona grocers to recycle plastic bags at over 12 city locations as well as local grocery stores.  The Butler Water Reclamation Facility was named Large Wastewater Plant of the Year by AZWater for outstanding work in the past year to optimize the process, labor, and costs of the facility. Optimizations resulted in $90,000 in energy savings.  Received nine safety awards from AZWater.  Completed the upgrade of the City’s Supervisory Control and Data Acquisition (SCADA) network. The upgrade enhanced radio communications for over 50 utility sites throughout the city, enhancing the capability to efficiently manage the City’s water and wastewater systems. 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 24-Month Business Plan adopted in February 2009:     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.  Incorporate open space into our built environment. Total Planning:  Employment / Jobs / Corridor.  Mix of living environments.  Infrastructure.  University / Higher Education strategy. ix    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. Significant progress has been made on these goals during fiscal year 2010. The City has strategically placed itself in a better position to take advantage of opportunities as the economy recovers and development increases. The Council will readdress the 24 month business plan in February 2011. LOCAL ECONOMIC CONDITION AND OUTLOOK Peoria continues to face many important growth issues, and its leadership is committed to implementing an economic development strategy that will best meet the needs of our community. This commitment has helped to make 2010 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 at the city’s own two-team stadium. The teams have four years remaining on a twenty-year joint use contract to share the facilities with an option of extending their contracts for an additional ten years. This agreement contributes significantly to the economic impact of the Spring Training Cactus League of Maricopa County and to the city. The area surrounding the Sports Complex is an entertainment district that is a primary focus of economic development. The city recently adopted a master plan for an urban redesign of the district that will allow for greater density and improve the use of certain underutilized parcels. A capital improvement budget has been allocated to this effort and will be applied in fiscal year 2011 to create an identity for the district as well as develop the first phase of street treatments to improve connectivity and create a sense of place. In fiscal year 2010 the City has continued to experience a downturn in the overall economy in terms of new development. However, space absorption has been on the rise. Peoria has a lower percentage of vacant space available than it did two years ago at the start of the downturn. In the coming year, new developments are expected to be dominated by economic development efforts in two areas: Health care and higher education. The city’s health care initiative has resulted in progressive efforts as hospital systems plan their next strategic move. Furthermore, the city’s aggressive pursuit of university expansions of private not-for-profit universities has netted a handful of strong candidates to enter the market over the next three years. Additionally, the city’s adoption of the Old Town Peoria Revitalization Plan in November 2009 has created the foundation for a series of redevelopment projects in Old Town. The most prominent is the transformation of Peoria Place into a residential university campus. The city entered into an exclusive negotiating agreement with Ottawa University to explore the possibility. Another project of importance is the Commercial Rehabilitation Program that the city is planning for the commercial developments in Old x Town. The purpose of the program is to enable the city to attract a university to Peoria Place as well as give a much needed facelift to the area to attract future commercial development. Other initiatives that the Economic Development Implementation Strategy focuses on include the creation of investment zones, a targeted marketing plan, improved business assistance programs, and a bioscience incubator. All of these incentives are already underway and the city expects to make a great deal of progress on their implementation in the coming year. Another item of note is the city’s aggressive pursuit of private investment to move development projects forward. An investment conference targeting bankers, REITS, investors, developers, and site consultants has been scheduled for November 2010. It is the first of its kind in Maricopa County and a premier opportunity for the city to showcase itself, its implementation plan, and its economic development initiatives to provide investment and development opportunities for those looking for viable projects to invest in. Economic Outlook The regional economy continued to lag behind other areas of the country during fiscal year 2010 with ongoing job losses and a large supply of vacant homes. Job growth has been in decline with only moderate job gains in the healthcare, professional and business services, leisure and hospitality services, and natural resources and mining sectors. Overall employment growth in Arizona declined at a rate of 0.3% for the year. In June 2010, the unemployment rate in the metropolitan Phoenix region was 8.8%, which remains below the state (9.6%) and national (9.5%) unemployment rates. Locally, Peoria’s commercial construction has continued at a slow pace with some in-fill activity taking place in previously developed neighborhoods. New housing construction in Peoria remains consistent with 2009 levels as the oversupply of vacant homes continues to be absorbed back into the real estate market. 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 35.7% of General Fund revenues in fiscal year 2010. 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 47.7% of sales tax collection was derived through retail sales in fiscal year 2010. 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, but auto sales have slowed significantly during the economic downturn. Retail store and restaurant activity near st the Peoria Sports Complex area, as well as the 91 Avenue and Northern area and the Jomax Road and Lake Pleasant Parkway 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 which is having an impact on sales tax revenues, especially in the sale of automobiles. Fiscal year 2010 sales taxes decreased 4.6% from the prior fiscal year. Fiscal year 2011 sales tax revenues are anticipated to increase less than 1%. The very modest increase reflects a slightly improving outlook for consumer spending and modest population growth. 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 $8.3 million in revenue in fiscal year 2010, down from $8.8 million in fiscal year 2009. As with other sales tax revenues, a very small increase is expected in fiscal year 2011 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 xi support the City’s day-to-day activities. The City projects an overall decrease of 9.2% in these revenues in fiscal year 2011, reflective of a sluggish statewide economy. As the State continues to deal with budget shortages, changes to the formulas used to allocate revenues to the cities are part of the budget balancing conversations. To date, the state legislature has not looked to these revenues to balance the state budget at the expense of the cities. Property Tax: The City’s property tax rate was $1.44 per $100 of assessed valuation for fiscal year 2010. Of this, $.19, or about 13% of the total, was levied as the City’s primary property tax. The primary tax can be used for any general government purpose, but is limited in size by State statute. The primary tax generated $3.5 million in revenue for the General Fund in fiscal year 2010. After a reduction in the total tax rate of $.11 in fiscal year 2007 ($.01 primary and $.10 secondary), a movement of five cents from the primary property tax rate to the secondary property tax rate for fiscal year 2008 and an additional five cent reduction to the primary rate in fiscal year 2009, the overall tax rate of $1.44 remains unchanged for fiscal year 2010 and fiscal year 2011. With a 5% reduction in assessed value for fiscal year 2010 and an expected additional 10% decline in assessed value for fiscal year 2011, primary property tax revenue projections for fiscal year 2011 are $2.9 million. Given the lag in assessor rolls and with statutory formulas, the primary valuation has likely stabilized, but is likely to grow slowly in the near future. Labor Force: Peoria has a well-educated and technically skilled 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 in introducing new businesses to the City. In addition, the City has created a new Economic Development Department that is a one-stop shop for all development, featuring aggressive business retention efforts, comprehensive engineering and site development, and building safety and inspection. FINANCIAL CONTROLS Internal Controls The management of the City of Peoria is responsible for establishing and maintaining a system of internal controls. 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 2010 was $723.2 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 xii revenue funds, debt service funds, capital project funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal year-end and are rebudgeted as needed in the next fiscal year. Financial Policies The City has an important responsibility to its citizens to carefully account for public funds, to manage its finances wisely, and to plan for the adequate funding of services desired by the public, including the provision and maintenance of public facilities. The City needs to ensure that it is capable of adequately funding and providing those government services desired by the community. Ultimately, the City’s reputation and success depends on the public’s awareness and acceptability of the management and delivery of these services. The City operates under a comprehensive set of financial policies adopted by Council. The Principals of Sound Financial Management establish guidelines for the City’s overall fiscal planning and management. These principles are intended to foster and support the continued financial strength and stability of the City of Peoria as reflected in its financial goals. The City’s financial goals are broad, fairly timeless statements of the financial position the City seeks to attain:  To deliver quality services in an affordable, efficient and cost-effective basis providing full value for each tax dollar.  To maintain an adequate financial base to sustain a sufficient level of municipal services, thereby preserving the quality of life in the City of Peoria.  To have the ability to withstand local and regional economic fluctuations, to adjust to changes in the service requirements of our community, and to respond to changes in Federal and State priorities and funding as they affect the City's residents.  To maintain a high bond credit rating to ensure the City’s access to the bond markets and to provide assurance to the City's taxpayers that the City government is well managed and financially sound. These policies establish minimum and recommended fund balance/net asset reserves, as well as establishing policies on the use of one-time revenues (to be used for on-time expenditures), fiscal planning and budgeting, expenditure control, capital improvement program, cash management, debt management, and economic development. Strategic Planning The City annually updates a five‐year long‐range forecast, incorporating both projected revenues and expenditures for the City’s major operating funds. The five‐year revenue forecast only includes revenues that are anticipated to be sustainable over the five‐year period. Expenditure projections include anticipated operating impacts of the adopted capital improvement program. Additionally, the City maintains a 10 year Capital Improvement Program which the City Manager submits annually for review by the City Council, pursuant to the timeline established in the budget preparation schedule. The program is updated annually and includes the cost of construction and operating expenditures. No capital improvement projects will be authorized or awarded until the funding sources have been established to finance the project. When current revenues or resources are available for Capital Improvement Projects, consideration will be given first to those capital assets with the shortest useful life, and for assets whose nature make them comparatively more difficult to finance with bonds or lease financing. xiii 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, 2010, are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that 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, 2010, 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, 2010 found no instances of material weakness in the internal control. However, there was a significant deficiency 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, 2009. This is the 25th 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. xiv 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 D. Mattingly Chief Financial Officer xv xvi xviii City of Peoria Principal Officials of the City Fiscal Year 2010 Ron Aames Vice-Mayor Bob Barrett Mayor Cathy Carlat Councilmember Joan Evans 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 Scott Whyte Economic Development Services 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 Glen Van Nimwegen Planning & Community Development Director John Imig Information Technology Director Jeff Tyne Management & Budget Director xix 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. Ron Aames Vice Mayor Palo Verde District Councilor Ron Aames joined the Peoria City Council on January 2, 2007 as the representative of the Palo Verde District. He was elected to a four year term in November 2006. His goal is to champion the needs and wishes of his fellow citizens in the Palo Verde District and Peoria. Ron and wife Jacqueline, who is a college professor and writer, moved to Arizona and Peoria in August 2002. They both love the variety and wonderful climate of the Valley of the Sun. They have a large extended family in the Northwest Valley. Educationally, Councilor Aames has a background in planning and city development, areas he anticipates will benefit him in his work as a councilmember. His degrees include a Ph.D., which focused on urban development, from the University of Wisconsin-Madison, and a Master’s from California State Polytechnic University-Pomona, which focused on transportation planning. In business, Councilor Aames has been a corporate executive for hi-tech, banking, and marketing companies. In the marketing area, he was a managing consultant for eight years for The Gallup Organization, where his clients included federal government agencies. Councilor Aames is currently an independent marking consultant. Joan Evans Councilmember Willow District Councilor Evans was elected to her first four-year term on the Peoria City Council in November 2004 and re-elected in 2008. Education, personal growth and continuous learning are accurate words to describe the experience of Councilor Joan Evans of the Willow District. With a bachelor’s degree from Arizona State University in Elementary Education and a master’s degree from Northern Arizona University in Educational Leadership, Councilor 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 55 years, with the last 13 years being spent in Peoria. Now in her 42nd 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. xxi City Mayor and Council City of Peoria, Arizona 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 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 xxii City Mayor and Council City of Peoria, Arizona member of the Council Subcommittee of Boards and Commissions, which screens residents who are seeking appointments. 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 HEINFELD, MEECH & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS 3033 N. Central Avenue, Suite 300 Phoenix, Arizona 85012 Tel (602) 277-9449 Fax (602) 277-9297 INDEPENDENT AUDITORS’ REPORT The Honorable Mayor and Members of the City Council City of Peoria, Arizona We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Peoria, Arizona (the City), as of and for the year ended June 30, 2010, which collectively comprise the City’s basic financial statements as listed in the table of contents. We also have audited the financial statements of each of the City’s non-major governmental, internal service, and fiduciary funds presented as supplementary information in the accompanying combining fund financial statements as of and for the year ended June 30, 2010, as listed in the table of contents. These financial statements are the responsibility of the City of Peoria’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Peoria, Arizona, as of June 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Half-cent Sales Tax, Highway User Revenue, Development Fee and Transportation Sales Tax Funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each non-major governmental, internal service, and fiduciary funds of the City of Peoria, Arizona, as of June 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. TUCSON • PHOENIX • FLAGSTAFF www.heinfeldmeech.com In accordance with Government Auditing Standards, we have also issued our report dated October 15, 2010, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3 through 17 and schedule of funding progress on page 86 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The accompanying supplementary information such as the introductory section, statistical section, and the schedules listed in the table of contents as Other Supplementary Information are presented for purposes of additional analysis and are not a required part of the financial statements. The Other Supplementary Information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. HEINFELD, MEECH & CO., P.C. Certified Public Accountants October 15, 2010 2 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, 2010. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the financial plan (the approved annual budget), and (5) identify individual fund issues or concerns. This discussion and analysis (MD&A) has a different focus and purpose than the transmittal letter presented on pages v-xv of this report and is designed to be read in conjunction with the transmittal letter as well as the financial statements beginning on page 19 and the accompanying notes to the financial statements. Financial Highlights ♦ The City’s total net assets increased $101.5 million (7.0%) in fiscal year 2010, an increase of $58.5 million (6.1%) in governmental activities and an increase of $43.0 million (8.6%) in business-type activities. ♦ Total net assets of the City are $1,554.9 million, of which $245.7 million is unrestricted (up $1.5 million, 0.6%, from last year’s $244.2 million unrestricted net assets). ♦ The governmental activities program revenues increased by approximately $2.4 million (2.9%) over the previous year. This was primarily due to an increase in the value of donated capital assets and a decrease in grants/entitlements. Charges for services decreased by $2.6 million (12.9%), grants/entitlements, including Federal grants, decreased by $12.8 million (37.2%), while donations of capital assets increased by $17.8 million (60.1%). ♦ The business-type activities program revenues increased by approximately $41.7 million (58.0%) from the previous year. Charges for services increased by $3.0 million (5.0%) and donations of capital assets increased by $38.7 million (317.2%). ♦ At June 30, 2010, total fund balance of the governmental funds was $286.2 million, down $33.2 million (10.4%) from the previous year. Of this, $61.8 million (down 6.4%) was unreserved/undesignated (available for spending at the government’s discretion). ♦ General Fund inflows (on a budgetary basis) were less than budgeted inflows by $5.3 million for fiscal year 2010. Budgetary basis outflows of the General Fund were only 78.6% ($32.9 million in savings) of the final budgeted outflows. ♦ At June 30, 2010, unreserved/undesignated fund balance for the General Fund was $19.8 million, or 18.7% of General Fund expenditures for fiscal year 2010. ♦ During fiscal year 2010, the City issued $29.2 million in General Obligation (GO) Bonds, $15.8 million in Water and Wastewater Revenue Refunding Bonds, and $20.4 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 3 supplementary schedules presented after the basic financial statements (Combining Statements, Supplemental Information and Statistical Sections of this report). Required Components of the Annual Financial Report Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Governmentwide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail Government-wide Financial Statements The government-wide financial statements (see pages 19-21) are designed to provide a broad overview of the City’s finances in a manner similar to those used by private businesses. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are broken into two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. • The governmental activities include the basic services of the City including general government (administration), culture and recreation, police, fire, development services, highways and streets, public works, and human services. These activities are generally supported by taxes and general revenues. • The business-type activities include the private sector type activities such as the water, wastewater and solid waste utilities, the stadium and public housing. These activities are primarily supported through user charges or fees. The statement of net assets presents information on all of the City’s assets and liabilities (excluding fiduciary funds), both current and long-term, with the difference between assets and liabilities reported as net assets. The focus on net assets is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of how the financial position of the City may be changing. Increases in net assets may indicate an improved financial position; however, even decreases in net assets may reflect a changing manner in which the City may have used previously accumulated funds (i.e. cash funding of capital projects). To assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of its infrastructure, should also be considered. The statement of activities presents information showing how the City’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the City, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenues for support. 4 Fund Financial Statements Also presented are fund financial statements for governmental funds, proprietary funds and fiduciary funds. The fund financial statements focus on major funds of the City. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or conditions. Funds are used to ensure and demonstrate compliance with finance-related legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the City. Governmental funds – Governmental funds are used to account for most of the City’s basic services. These are essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmental activities column on the government-wide financial statements, these fund financial statements (pages 22-35) focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs. Since the governmental fund financial statements focus on near-term spendable resources, while the governmental activities on the government-wide financial statements have a longer-term focus, it may be useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. To facilitate this comparison, reconciliations of the differences between the two are provided immediately following the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances and in Note 2 (pages 59-63). The City maintains several individual governmental funds organized according to their type (special revenue, debt service, and capital projects). Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Half-Cent Sales Tax Fund, Highway User Revenue Fund, Development Fee Fund, Transportation Sales Tax Fund, GO Bond Debt Service Fund, GO Bond Capital Projects Fund, and Non-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 9699). 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 116-118). 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 124-125) are prepared on the same basis as the government-wide and proprietary fund statements. Notes to the financial statements – The notes to the financial statements (pages 47-85) provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements and should be read with the financial statements. Required supplementary information other than MD&A – Governments have an option of including the budgetary comparison statements for the general fund and major special revenue funds as either part of the fund financial statements within the basic financial statements, or as required supplementary information after the footnotes. The City has chosen to present these budgetary statements as part of the basic financial statements. Additionally, governments are required to disclose certain information about employee pension funds. The City has disclosed this information on page 86. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position for the City as a whole as of and for the year ended June 30, 2010, 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, 2010, compared to the prior year. Statement of Net Assets As of June 30 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 (in millions of dollars) Governmental Business-type Activities Activities 2010 2009 2010 2009 $ 354.9 $ 400.3 $ 83.7 $ 83.6 1,088.2 982.5 628.7 571.8 1,443.1 1,382.8 712.4 655.4 Total Primary Government 2010 2009 $ 438.6 $ 483.9 1,716.9 1,554.3 2,155.5 2,038.2 Percent Change (9.4)% 10.5 5.8 40.4 390.6 431.0 47.0 382.2 429.2 7.8 161.8 169.6 11.4 144.2 155.6 48.2 552.4 600.6 58.4 526.4 584.8 (17.5) 4.9 2.7 782.2 37.6 192.3 $ 1,012.1 690.7 55.2 207.7 953.6 469.9 19.5 53.4 542.8 429.8 33.5 36.5 499.8 1,252.1 57.1 245.7 $ 1,554.9 1,120.5 88.7 244.2 $ 1,453.4 11.7 (35.6) 0.6 7.0 $ $ $ The net assets of the City increased $101.5 million (7.0%) in fiscal year 2010. Net assets of governmental activities increased $58.5 million (6.1%), while the business-type activities increased $43.0 million (8.6%). Net Assets consists of three components. The largest portion of net assets ($1,252.1 million or 80.5%) 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 $131.6 million in fiscal year 2010 due to $79 million in capital asset expenditures, $97 million in donated assets, the disposal of a $12 million dollar wastewater capital asset, with the balance due to changes in related debt. 6 The second portion of the City’s net assets ($57.1 million or 3.7%) represents resources that are subject to external restrictions on how they may be used. The decrease of $31.7 million is due to a decrease of $12.8 million in restricted for revenue bond retirement in the business-type activities as the restriction for this reserve was removed from the bond convents when the refunding bonds were issued in fiscal year 2010; $20.1 million decrease in net assets restricted for capital projects in the governmental and business-type activities as those funds were expended for capital assets; an increase of $.1 million in net assets restricted for grant purposes in the governmental activities; and an increase of $1.2 million in net assets restricted for development fees in the governmental activities. The third portion consists of Unrestricted Net Assets of $245.7 million (15.8%). These net assets may be used to meet the City’s ongoing obligations to citizens and creditors. This category increased $1.5 million (0.6%) in fiscal year 2010. 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 $15.4 million, while unrestricted net assets of business-type activities increased $16.9 million. 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 2010 2009 2010 2009 REVENUES: Program revenues: Fees, fines & charges for services $ Federal grants Capital contributions Other grants and entitlements General revenues: Property taxes Sales and use taxes Franchise taxes State shared sales tax Urban revenue sharing Auto-in-lieu taxes Investment earnings Gain on sale of capital assets Forgiveness of debt Miscellaneous 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 $ 17.5 4.0 47.4 17.6 $ 20.1 3.0 29.6 31.4 $ 62.5 .2 50.9 - $ 59.5 .2 12.2 - Total Primary Government 2010 2009 $ 80.0 4.2 98.3 17.6 $ Percent Change 79.6 3.2 41.8 31.4 0.5% 31.3 135.2 (43.9) (5.3) (4.6) (8.2) (14.2) (8.0) (73.7) 63.9 10.6 30.1 56.3 4.0 10.1 17.5 4.6 2.2 0.1 5.9 217.3 31.8 59.0 4.0 11.0 20.4 5.0 7.9 3.6 226.8 0.4 1.4 115.4 2.0 73.9 30.1 56.3 4.0 10.1 17.5 4.6 2.6 0.1 1.4 5.9 332.7 31.8 59.0 4.0 11.0 20.4 5.0 9.9 3.6 300.7 24.6 21.2 35.1 21.0 6.5 22.4 9.6 2.2 12.6 .6 23.2 23.2 37.1 21.6 6.4 24.0 7.7 2.4 12.6 .6 - - 24.6 21.2 35.1 21.0 6.5 22.4 9.6 2.2 12.6 .6 23.2 23.2 37.1 21.6 6.4 24.0 7.7 2.4 12.6 .6 6.0% (8.6) (5.4) (2.8) 1.6 (6.7) 24.7 (8.3) - 155.8 61.5 (3.0) 58.5 158.8 68.0 (3.0) 65.0 29.7 30.2 10.0 5.1 .4 75.4 40.0 3.0 43.0 32.2 31.0 10.6 5.3 .3 79.4 (5.5) 3.0 (2.5) 29.7 30.2 10.0 5.1 .4 231.2 101.5 101.5 32.2 31.0 10.6 5.3 .3 238.2 62.5 62.5 (7.8) (2.6) (5.7) (3.8) 33.3 (2.9) 62.4 62.4 $ $ 7 $ $ $ For fiscal year 2010, total governmental activities revenues decreased $9.5 million (4.2%), and total business-type activities revenues increased $41.5 million (56.2%). Expenses decreased $3.0 million (1.9%) and $4.0 million (5.0%) for the governmental activities and business-type activities, respectively. General government expenses increased by $1.4 million (6.0%), culture and recreation expenses decreased by $2.0 million (8.6%), police expenses decreased by $2.0 million (5.4%), highways and streets expenses decreased by $1.6 million (6.7%), while public works expenses increased by $1.9 million (24.7%). Water Utility expenses decreased $2.5 million (7.8%) while Wastewater utility expenses decreased by $.8 million (2.6%), and solid waste utility expenses decreased by $.6 million (5.7%). For further explanation of these expense changes, refer to the financial analysis of the City’s funds later in this document. The general revenues of governmental activities decreased $11.9 million (8.3%) from the previous year. The primary drivers were property taxes, levied for debt service (or secondary property taxes), sales and use taxes, urban revenue sharing, and investment earnings. Secondary property tax revenues decreased by $1.9 million (6.9%) in fiscal year 2010 as assessed values decreased. Sales and use taxes decreased $2.7 million (4.6%) as sales tax on construction dropped $2.5. Some other areas of sales tax appeared to stabilize after a $9.5 million decrease in total sales taxes from fiscal year 2008 to fiscal year 2009. Urban revenue sharing continued to decline with a $2.9 million (14.2%) decrease as this revenue source lags in responding to economic factors. Additionally governmental activities interest earnings decreased $5.7 million (72.1%) due to continuing low interest rates. Program revenues of governmental activities increased $2.4 million (2.9%) mainly as a result of the following changes: Charges for services decreased by $2.6 million (12.9%), grants/entitlements decreased by $12.8 million (37.2%), while donations of capital assets increased by $17.8 million (60.1%). Charges for services were affected by decreased AM/PM program revenue of $.9 million (30.8%) in culture and recreation, decreased fines and forfeitures of $.8 million (28.6%) in general government, and decreased seizure revenue of $.5 million (79.4%) in police. The program revenues of business-type activities increased $41.7 million (58.0%). Of that, capital contributions increased by $38.7 million (317.2%) primarily due to donations of water and wastewater capital assets. Business-like service charge revenues also increased by $3.0 million (5.0%) as water, wastewater and solid waste user fee revenues increased over fiscal year 2009 revenues. The revenue increases are due to increased customer base and usage as there were no rate changes in fiscal year 2010. 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 Governmental Activities Program Revenues & Expenses 70 60 (millions $) 50 40 30 20 10 0 Program revenues Expenses 8 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 $86.5 million are 55.5% of the governmental activities expenses for fiscal year 2010, up from 53.0% in fiscal year 2009. In the business-type activities, program revenues of $113.6 million are 150.7% of the business-type expenses for fiscal year 2010. This compares to $71.9 million and 90.6% in fiscal year 2009. Governmental activities account for 65.3% of the total revenues of the City and 67.4% of the total expenses in fiscal year 2010. These percentages were 75.4% and 66.7% respectively in fiscal year 2009. As seen in the following graph, one of the largest financing sources for the City in fiscal year 2010 is contributed capital (29.6%) which is mostly contributed infrastructure (non-spendable) of streets, intersections, water lines, and wastewater lines. Next is charges for services (24.0%), primarily because this is the major funding source of the business-type activities (54.2% of business-type revenues in fiscal year 2010). The major funding sources of the governmental activities are property, franchise and sales/use taxes (27.1% of total revenues, 41.6% of governmental revenues) and state shared revenues (9.7% of total revenues, 14.8% of governmental revenues). Government-Wide Revenue Sources Fiscal Year 2010 Other grants & entitlements 5.3% Investment earnings 0.8% Forgiveness of debt 0.4% Sales & use taxes 16.9% Federal grants 1.3% Charges for services 24.0% Other 1.8% Property taxes 9.0% Franchise taxes 1.2% Contributed capital 29.6% State shared revenues 9.7% Property taxes decreased 5.3% from fiscal year 2009. The city’s primary assessed valuation increased 12.4%, while the secondary assessed valuation decreased 5.0%. Since the secondary tax is 88.1% of the total tax levy, decrease in property taxes resulted from the decrease in the secondary assessed valuation. The tax rates did not change in fiscal year 2010 compared to the previous year. Total government-wide expenses (not including transfers out) of the City decreased $7.0 million (2.9%) in fiscal year 2010. Expenses of the governmental activities decreased $3.0 million (1.9%). This includes increases of $1.9 million (24.7%) for public works, and $1.4 million (6.0%) for general government. These increases were offset by decreases of $2.6 million (4.4%) for public safety (police and fire), $2.0 million (8.6%) for culture and recreation, and $1.6 million (6.7%) for highways and streets. General government expenses increased with an additional $2.5 million in depreciation in fiscal year 2010, while public works increased due to a $1.8 million claims settlement in the CFD Bonds Capital Projects Fund. Decreases in expenses of the remaining activities were due to cost-cutting measures, including voluntary severance packages to reduce the number of employees, green initiatives, water and energy-saving measures, and reductions in contractual services. Expenses in Business-type activities decreased $4.0 million (5.0%) due to the same cost-cutting measures that affected governmental activities. As shown in the following Government-Wide Functional Expenses graph, business-type activities account for 32.6% of the functional expenses of the City for fiscal year 2010, while governmental activities account for 67.4% of the functional expenses. For the governmental activities, the largest users of resources are public safety (24.3% of total expense, 36.0% of governmental expenses), general government (10.6% of 9 total expenses, 15.8% of governmental expenses), highways and streets (9.7% of total expenses, 14.4% of governmental expenses), and culture and recreation (9.2% of total expenses, 13.6% of governmental expenses). Government-Wide Functional Expenses Fiscal Year 2010 General government 10.6% Business-type activities 32.6% Culture & recreation 9.2% Highways & streets 9.7% Public safety 24.3% Interest 5.4% Public works 4.2% Development services 2.8% Other 1.2% 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 22-29) 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 $286.2, a decrease of $33.2 million, or 10.4%, from the previous year. Of this, $148.2 million (down $17.2 million (10.4%) 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 decrease in reserved fund balance is primarily caused by the GO Bond Debt Service Fund and the Non-Bond Capital Projects Fund offset by an increase in the GO Bond Capital Projects Fund. The GO Bond Debt Service Fund reserved fund balance decreased by $9.6 million as $7.2 million was used to pay off the series 1993 Refunding Bonds, the series 1998A bonds, and the series 1998B bonds. The Non-Bond Capital Projects Fund decreased by $9.4 million in fiscal 2010 as county shared sales taxes of $10.2 million received in fiscal year 2009 were spent in fiscal year 2010. The GO Bond Capital Projects Fund increased $11.9 million with the receipt of funds from the series 2010 GO bonds sale of $29.2 million, offset by capital expenditures of $19.3 million. An additional $76.2 million of the governmental fund balance (down $11.8 million (13.4%) from the previous year) has been designated or committed for specific purposes by council policy or administrative action. These designations include encumbrances ($12.6 million), economic stabilization reserves ($40.4 million), debt service reserves ($1.0 million), and current capital projects and equipment replacement reserves ($22.2 million). The designations are further described in Note 11 to the financial statements (pages 69-70). 10 The remaining $61.8 million of governmental fund balance is classified as “Unreserved, Undesignated”. This balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. By Council policy, these resources are used to fund one-time needs of the City including capital facilities and transportation improvements. The unreserved, undesignated fund balance decrease of 6.4% during fiscal year 2010 is primarily due to decreased general fund revenues, particularly urban revenue sharing (down 14.3%), charges for services (down 11.8%), fines and forfeitures (down 23.7%), and investment earnings (down 69.2%). Governmental Funds - Fund Balance 70 60 Millions 50 40 30 20 10 FY09 0 FY10 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 $8.8 million (9.2%) over the previous year. Urban revenue sharing decreased $2.9 million (14.3%) and Fines & Forfeitures decreased by $.8 million (23.7%). Charges for service decreased $1.3 million (11.8%) due to decreased development related fees. The City’s sales tax revenues in the General Fund decreased $1.5 million (4.6%) and state shared sales tax revenues decreased $.9 million (7.8%) due to the economic downturn. Total General Fund expenditures decreased $4.0 million (3.6%). Personnel costs decreased $4.1 million while other costs (contractual services and commodities) decreased $2.2 million with the cost saving measures. However, capital outlay increased by $2.4 million due to the replacement of the city complex heating & cooling system ($2.8 million). The unreserved/undesignated fund balance of the General Fund was 18.7% of expenditures at June 30, 2010, compared to 22.2% at June 30, 2009. 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 $1.1 million (7.6%) 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 $.6 million (22.2%) due to a $630,000 decrease in principal payments with the reduction of development agreements with Wal-Mart and DMB Circle. Total fund balance of the Half-Cent Sales Tax Fund decreased by $.8 million (5.8%) in fiscal year 2010. 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 $.7 million (5.8%) due to decreased investment earnings ($.2 million or 78.1%) and decreased highway user revenues ($.4 million or 5.3%). 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 $32,000 or 1.0%) as sales taxes in other funds. Expenditures increased by $.8 million (5.4%) in fiscal year 2010. Principal payments increased by $2.7 million to retire the 1996 HURF Revenue Bonds, while other costs (contractual and commodities) decreased. Fund balance decreased $1.7 million (12.5%) in fiscal year 2010. 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 increased $87,000 (1.3%) with slow development activity in the City, while expenditures decreased $9.8 million (53.8%) in fiscal year 2010 due to decreased capital outlay with the completion of the Sunrise Mountain Branch Library. Fund balance decreased $1.8 million (4.9%) in fiscal year 2010. 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 $.9 million (9.3%) while expenditures decreased $.4 million (12.0%). The decreased revenues are due to decreased sales tax revenue and investment earnings. The fund balance increased $1.7 million (7.8%) in fiscal year 2010. The GO Bond Debt Service Fund accounts for the payment of general obligation bonds and the related interest. Revenues in this fund decreased $1.2 million (4.6%) due to decreased secondary property taxes and investment earnings. The secondary assessed value of the City decreased 5.0% in fiscal year 2010 while the secondary tax rate was unchanged. Expenditures increased by $17.0 million (102.0%) due to the additional principal payments on general obligation bonds issued in fiscal year 2009. The series 2009 bonds debt service was structured with large payments in fiscal year 2010 and 2011 to lower the fund balance in this fund. Fund balance decreased $9.6 million (21.4%) in fiscal year 2010. 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 $2.2 million (281.0%) due to a st reimbursement from the State of Arizona Department of Transportation for the 91 Ave and Olive Intersection Widening project, while expenditures decreased by $8.1 million (28.6%) due to lower capital outlays. Fund balance increased $11.9 million (29.3%) with the sale of $29.2 million in new bonds. The Non Bond Capital Projects Fund accounts for reimbursements and financing from outside sources for the funding of capital projects. Revenues in the fund decreased $13.9 million (81.7%) due to decreased county shared sales tax reimbursements. Expenditures increased by $6.4 million (104.0%) due to increased capital outlay on various street projects including Cotton Crossing. Fund balance decreased $9.4 million (38.8%) in fiscal year 2010. 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 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 increased $42.8 million (8.6%) in fiscal year 2010. Net assets invested in capital assets, net of related debt increased $40.1 million (9.3%) with the addition of utility infrastructure. Restricted net assets decreased $14.1 million (42.0%), primarily due to the removal of the bond covenant that restricted funds for bond retirement. The unreserved net assets increased $16.7 million (48.1%), primarily due to a decrease in operating expenses brought about by cost cutting measures instituted in response to the changing economy. The Water Utility Fund experienced an increase in total net assets of $26.6 million (11.2%). The Wastewater Utility Fund increased total net assets by $14.4 million (6.7%), the Solid Waste Fund increased $1.9 million (10.1%), the Stadium Fund decreased $34,203 (0.1%) and the Public Housing Fund total net assets decreased $80,848 (3.3%). The 12 Water Utility unrestricted net assets increased $4.5 million (21.4%), and the Wastewater Utility unrestricted net assets increased $8.9 million (202.0%), while the restricted net assets of the Solid Waste Fund decreased $2.6 million.. Operating revenues of the enterprise funds increased $2.9 million (4.9%) in fiscal year 2010. Charges for service increased $0.5 million (1.7%) in the Water Utility Fund, $0.9 million (6.2%) in the Wastewater Utility Fund, and $.5 million in the Solid Waste Fund with increased usage and customer base. Operating expenses of the enterprise funds decreased $17.3 million (23.0%) in fiscal year 2010. The Water Utility had decreased operating expenses of $3.6 million (11.9%) as salaries and wages were down from fiscal year 2009 by $1.4 million (22.4%), while contractual services, materials and supplies were down by $2.9 million (15.9%). In the Wastewater Utility Fund, operating expenses decreased $12.8 million (45.6%) due to a one time claims settlement of $7.9 million for the termination of a wastewater treatment processing agreement in fiscal year 2009 and a decrease of $4.9 million (47.2%) in contractual services, materials and supplies due to cost savings programs. In the Solid Waste Fund, contractual services/commodities expenses decreased by $0.7 million (10.7%), while in the Stadium Fund, contractual services/commodities expenses decreased by $0.3 million (8.2%). Operating income for the Water Utility Fund increased by $4.3 million from a negative $.5 million in fiscal year 2009, with the increased revenues and decreased expenditures discussed above. Operating income for the Wastewater Utility increased by $14.5 million from a negative $12.8 million in fiscal year 2009 without the one-time fiscal year 2009 insurance claims and with the fiscal year 2010 decreases in contractual services, materials and supplies previously mentioned. The Solid Waste Utility Fund operating income increased $1.3 million (285.4%). The Stadium Fund and the Public Housing Fund had operating losses in fiscal year 2010 of $2.4 million and $82,020, 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 increased contractual services, materials and supplies. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2010. Fiscal year 2010 Enterprise Fund Operating Revenues and Expenses 35 30 Millions 25 Revenues 20 Expenses 15 10 5 0 BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. Budgetary comparison statements are required for the General Fund and all major special revenue funds and may be found on pages 30-35. These statements compare the original adopted budget, the budget as amended throughout the fiscal year, and the actual expenditures prepared on a budgetary basis. 13 Budgetary schedules for the other governmental funds as well as the proprietary funds are also presented on pages 90-92, 100-108, 110-114, and 119-122. 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 $535 million occurred during fiscal year 2010. 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 $111.1 million, on a budgetary basis, fell below budgeted inflows of $116.4 million by $5.3 million (4.5%) while budgetary basis outflows (expenditures and other uses) of $121.0 million were only 78.6% of final budgeted outflows. The shortfall of General Fund inflows under budgeted amounts is primarily due to lower than budgeted charges for services, fines and forfeitures, and transfers from other funds. 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 $161.4 million was amended by $7.5 million to the final expenditure and other uses budget of $153.9 million. Notable General Fund transfers were as follows:  Contingency appropriation of $6.4 million was transferred from the General Fund to the SelfInsurance Fund to provide expenditure authority for the City’s health insurance plan, which became self-funded as of January 1, 2010.  Contingency appropriation of $.9 million was transferred from the General Fund to the GO Bond Capital Projects Fund to advance the design phase of a truck route in the northwest portion of the City from fiscal 2011 to fiscal 2010. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2010, the City had $1.25 billion invested in various capital assets, net of accumulated depreciation and related debt, up 11.7% from the previous year. The capital assets of the City (net of depreciation, but not capital debt) are $1.7 billion. This is a net increase of $162.6 million from June 30, 2009. Of the increase, $105.7 million resulted from governmental activities and $56.9 million resulted from business-type activities. Major additions to capital assets during the fiscal year included the following:  The City spent an additional $2.7 million on the drainage facilities along Deer Valley Road from th st 85 Avenue to 91 Avenue. A series of channels and ditches along the north side of Deer Valley Road are recommended to collect sheet flow from the north and convey it into one of three culverts that would cross under Deer Valley Road. Since it has been determined that the system along the south side of Deer Valley Road is underutilized, these improvements will maximize the existing system by inserting culverts.  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 east- th 14 west 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 2010, the city spent an additional $12 million.  Construction of a three miles of 24-inch waterline on Beardsley Avenue from Lake Pleasant Road th st to 87 Avenue and on 91 Avenue from Union Hills Drive to Beardsley Avenue was continued in fiscal year 2010. The water service in this area is dependent on a centralized surface water treatment plant. This waterline will provide an interconnect between the Lake Pleasant Road transmission line and the future zone 2/3 transmission line. In fiscal year 2010, the city spent $4.3 million on this project.  The City spent $1.8 million in fiscal year 2010 to purchase land for improvements along Northern Avenue. This project will include an eight-lane, limited access “regionally significant” aertial roadway, bridge structures, median barriers, access ramp roadways, new traffic signals and landscaping. This new parkway along Northern Avenue will improve east-west mobility across the Valley. The connectivity with the three state routes of US60, Loop 101 and Loop 303 are vital to regional traffic connectivity. The City’s participation in this project is expected to cost $10.9 in total to be completed in FY2019.  The City spent an additional $6.0 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. The following table provides a breakdown of the capital assets of the City at June 30, 2010, and 2009. Additional information on the City’s capital assets may be found in Note 12 on pages 70-71. Capital Assets at June 30 (Net of depreciation) Buildings and building improvements Furniture Equipment Vehicles Storm drainage system Street system Park system Water system Water rights Wastewater system Land Work in progress Total (in millions) Governmental Business-type Activities Activities 2010 2009 2010 2009 $ 118.3 $ 114.5 $ 25.5 $ 26.4 .9 1.1 .1 .1 20.8 26.0 1.4 1.5 9.5 9.8 5.6 5.5 48.5 42.7 346.8 259.5 20.0 20.8 228.4 205.4 12.1 6.0 292.1 281.8 328.7 326.3 17.0 17.0 194.7 181.8 46.5 28.1 $ 1,088.2 $ 982.5 $ 628.7 $ 571.8 Total Primary Government 2010 2009 $ 143.8 $ 140.9 1.0 1.2 22.2 27.5 15.1 15.3 48.5 42.7 346.8 259.5 20.0 20.8 228.4 205.4 12.1 6.0 292.1 281.8 345.7 343.3 241.2 209.9 $ 1,716.9 $ 1,554.3 Percent Change 2.0% (16.7) (19.3) (1.3) 13.6 33.6 (3.9) 11.2 101.7 3.7 0.7 14.9 10.5 The City has adopted a ten year capital improvement plan budgeted at $522 million, including $139.3 million in fiscal year 2011. Anticipated funding for this plan is through a combination of impact fees (10.0%), general obligation bonds (36.7%), municipal development authority bonds (3.2%), operating revenues (22.2%), City (6.3%) and County (6.0%) transportation sales taxes and other outside funding sources (15.5%). The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $9.5 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 deferred bond premiums, net of deferred loss on bond refunding, was $504.1 million at June 30, 2010. Of this total, $351.2 million was in governmental activities and $152.9 million was in business-type activities. The City’s outstanding non-current debt increased $31.9 million in fiscal year 2010. Water Infrastructure Finance Authority Revenue Bonds were issued in the amount of $20.4 million for various water and wastewater projects, and Revenue Refunding Bonds were issued in the amount of 15 $15.8 million. In addition, General Obligation Bonds in the amount of $29.2 million were issued for drainage, street, park and recreation and other miscellaneous improvements. Of the total outstanding bonds of $456.8 million, $185.0 million is general obligation bonds backed by the full faith and credit of the City. An additional $8.0 million is special assessment bonds where the City is contingently liable in the event that the assessment revenues are insufficient to pay the debt payments. The outstanding debt also includes $60.9 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, 2010, is $108.2 million in the 6% category and $199.6 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, 2010, and 2009. Further detail on the City’s outstanding debt may be found in Note 14 on pages 72-77. Outstanding Debt (in millions) Governmental Activities 2010 2009 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 $ $ 185.0 55.9 8.0 60.9 71.6 6.4 387.8 $ $ Business-type Activities 2010 2009 183.1 61.0 3.0 10.4 63.1 56.8 5.9 383.3 $ $ 0.9 146.2 6.9 7.3 .7 162.0 $ $ 1.2 135.3 1.1 4.4 .6 142.6 Total Primary Government 2010 2009 $ $ 185.0 56.8 8.0 146.2 60.9 6.9 78.9 7.1 549.8 $ $ 183.1 62.2 3.0 10.4 135.3 63.1 1.1 61.2 6.5 525.9 Percent Change 1.0% (8.7) (100.0) (23.1) 8.1 (3.5) 527.3 28.9 9.2 4.4 The City currently maintains the following ratings on its general obligation debt: “AA+” from Standard & Poor’s, “Aa1” from Moody’s and “AA+“ from Fitch. For the water and sewer revenue bonds, the ratings are “AA” from Standard & Poor’s, “Aa3” from Moody’s and “AA” from Fitch. ECONOMIC FACTORS The unemployment rate in the metropolitan Phoenix region for June 2010 was 8.8%, which remains below both the state (9.6%) 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 0.3% for the state. Moderate job gains in the healthcare, professional and business services, leisure and hospitality services, and natural resources and mining have helped offset losses in other sectors. Within Peoria, the local economy has experienced decreases in commercial activity with some limited construction activity to infill the neighborhoods and planned communities that have developed over the past few years. Residential activity, although much lower than historical trends, has remained steady in fiscal year 2010 with the 2009 rates. The adopted fiscal year 2011 budget is $455 million, a decrease of 15% from the fiscal year 2010 budget as the City anticipates continuing declines in revenues due to the economic slowdown. The operating budget totals $315.7 million, which is a decrease of 5.9% from 2010. The capital projects portion of the budget, $139.3 million (a 30% decrease), is divided in the following manner: $5.2 million for drainage projects, $12.0 for operational facilities, $35.4 million for parks, trails and open space, $4.7 million for public safety projects, $62.1 million for streets and traffic control projects, $5.1 million for economic development projects, $7.9 million for wastewater projects, and $6.9 million for water projects. The General Fund budget is $106.5 million, down 7.4% from the previous general fund budget. With the 16 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 42.4 (full-time equivalent) staff positions in the fiscal year 2011 budget. In addition, the restructuring of some City departments continued. Following are the approved budgeted 2011 position increases (decreases) (including moves due to the departmental reorganization): City Manager’s Office 5.0 (reorganization for Mayor & Council), Community Services (13.5), Economic Development Services (1.5), Finance (3.0), Fire (3.0), Human resources (1.0), Information Technology (4.4), Mayor & Council (6.0), Municipal Court (1.0), Planning and Community Development (0.5), Police (3.0), and Public Works (10.5). 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 $34.6 million in the General Fund and $5.8 million in the Half-Cent Sales Tax Fund at June 30, 2010. The City also maintains a working capital policy reserve in the Utility Funds. At June 30, 2010, those reserves were $15.4 million in the Water Utility, $8.6 million in the Wastewater Utility, and $2.4 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 this in mind, the fiscal year 2011 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. 17 18 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS JUNE 30, 2010 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 Other liabilities Non-current liabilities: Due within one year: Current portion of compensated absences Current portion of contracts payable Current portion of bonds & notes payable Due in more than one year: Noncurrent portion of compensated absences Noncurrent portion of contracts payable Noncurrent portion of bonds & notes payable Plus: Deferred bond premium Less: Deferred loss on bond refunding Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital projects Development fees Grant purposes Unrestricted Total net assets $ 99,326,257 4,161,380 134,010,425 9,688,709 919,447 (1,602,554) 8,317,292 116,305 328,761 3,233,076 38,573,802 46,122,191 3,564,000 8,141,515 Primary Government Business-type Activities $ 30,045,623 40,051,809 7,688,254 177,453 1,602,554 78,401 280,387 570,026 2,538,505 480,319 227,994 - Total $ 129,371,880 4,161,380 174,062,234 17,376,963 1,096,900 8,317,292 194,706 609,148 3,803,102 41,112,307 480,319 46,122,191 3,791,994 8,141,515 523,395,351 564,785,732 1,443,081,689 63,556,462 565,088,002 712,385,789 586,951,813 1,129,873,734 2,155,467,478 14,158,064 2,566,990 6,176,720 2,048,767 2,805,000 3,317 9,512,119 198,695 2,896,084 2,386,790 298,403 2,053,911 205,551 1,500,000 1,265,404 15,450 60,727 16,544,854 2,865,393 8,230,631 2,254,318 4,305,000 1,268,721 9,527,569 198,695 2,956,811 4,239,710 8,096,143 27,039,694 479,980 370,293 8,119,132 4,719,690 8,466,436 35,158,826 2,148,030 63,488,655 282,795,965 3,648,056 (873,633) 430,948,376 170,910 6,966,869 145,704,314 552,191 (514,689) 169,635,236 782,205,232 469,854,140 1,252,059,372 462,761 35,047,460 2,138,865 192,278,995 $ 1,012,133,313 18,978,691 495,658 53,422,064 $ 542,750,553 19,441,452 35,047,460 2,634,523 245,701,059 $ 1,554,883,866 The accompanying notes are an integral part of the financial statements 19 2,318,940 70,455,524 428,500,279 4,200,247 (1,388,322) 600,583,612 CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2010 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 Program Revenues Operating Capital Grants and Grants and Contributions Contributions 24,518,718 21,167,750 35,140,959 20,977,164 6,539,886 22,414,044 9,642,355 2,188,730 12,571,503 574,550 155,735,659 $ 2,955,225 7,133,645 813,032 1,457,280 1,231,534 445,074 3,310,544 143,130 17,489,464 $ 166,203 467,480 1,096,444 72,073 846,225 7,852,103 803,478 1,792,030 13,096,036 29,715,038 30,212,381 9,985,889 5,186,732 368,007 75,468,047 $ 231,203,706 30,789,786 16,994,511 11,764,271 2,800,976 108,277 62,457,821 $ 79,947,285 177,710 177,710 $ 13,273,746 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 Forgiveness of debt Miscellaneous Transfers in (out) Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The accompanying notes are an integral part of the financial statements 20 $ 391,226 1,271,351 318,921 470,248 53,526,889 55,978,635 26,734,391 24,044,252 120,700 50,899,343 $ 106,877,978 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Activities Business-type Activities $ (21,006,064) (12,295,274) (32,912,562) (18,977,563) (4,462,127) 39,410,022 (5,528,333) (253,570) (12,571,503) (574,550) (69,171,524) $ (69,171,524) 27,809,139 10,826,382 1,899,082 (2,385,756) (82,020) 38,066,827 $ 38,066,827 $ $ $ $ $ 3,833,445 26,225,535 56,276,937 3,955,416 10,137,682 17,469,936 4,634,263 2,199,984 102,409 5,885,847 (3,029,412) 127,692,042 58,520,518 953,612,795 $ 1,012,133,313 - 444,698 1,379,738 3,029,412 4,853,848 42,920,675 499,829,878 $ 542,750,553 Total $ (21,006,064) (12,295,274) (32,912,562) (18,977,563) (4,462,127) 39,410,022 (5,528,333) (253,570) (12,571,503) (574,550) (69,171,524) 27,809,139 10,826,382 1,899,082 (2,385,756) (82,020) 38,066,827 (31,104,697) 3,833,445 26,225,535 56,276,937 3,955,416 10,137,682 17,469,936 4,634,263 2,644,682 102,409 1,379,738 5,885,847 132,545,890 101,441,193 1,453,442,673 $ 1,554,883,866 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2010 Major Funds Half-Cent Sales Tax Fund Highway User Revenue Fund Development Fee Fund $ 33,899,640 3,962,260 159,713 38,982 2,660,472 116,255 125,423 2,978,256 $ 69,276,844 5,282,960 7,163,848 1,208,801 42,832 $ 13,698,441 5,067,477 6,871,646 257,917 31,466 728,392 62,656 $ 13,019,554 $ 14,900,470 20,205,473 96,734 $ 1,871,949 2,224,445 2,048,754 3,317 794,934 1,853,349 8,796,748 $ 81,798 81,798 $ 781,653 81,780 63,946 927,379 $ 125,423 116,255 $ - $ 62,656 - $ General Fund ASSETS Cash and cash equivalents Cash with fiscal agents Investments Accounts receivable, net Interest receivable Due from other funds 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 funds 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 $ 25,335,843 $ $ $ $ $ $ 35,202,677 $ 155,217 155,217 34,326,641 - 40,486,810 - 6,836,298 428,704 720,819 19,751,608 60,480,096 $ 69,276,844 6,780,345 13,616,643 $ 13,698,441 11,600,815 12,092,175 $ 13,019,554 35,047,460 $ 35,202,677 The accompanying notes are an integral part of the financial statements 22 GO Bond Capital Projects Fund Non-Bond Capital Projects Fund Transportation Sales Tax Fund GO Bond Debt Service Fund $ 9,885,283 13,404,733 727,020 62,430 $ 24,079,466 $ 14,662,230 19,882,412 869,590 61,189 541,094 $ 36,016,515 192,698 4,000 21,956,707 31,939,882 $ 54,093,287 $ $ $ 664,373 664,373 $ 996,587 198,695 414,905 1,610,187 $ $ 35,352,142 - $ 48,303,804 - $ $ $ 163,082 163,082 1,023,232 22,893,152 23,916,384 $ 24,079,466 $ 35,352,142 $ 36,016,515 $ $ $ $ Non-Major Governmental Funds Total Governmental Funds 8,330,335 11,296,178 2,435,122 72,458 3,024,017 25,158,110 $ 2,595,907 4,161,380 3,297,750 226,913 123,626 1,359,317 50 13,638,839 14,182,309 8,141,515 47,727,606 $ 86,060,505 4,161,380 116,021,680 9,687,623 843,146 38,982 8,317,292 116,305 188,079 38,573,802 46,122,191 8,141,515 $ 318,272,500 6,110,099 3,681,742 525,083 10,316,924 $ 826,530 49,583 38,982 13 8,397,486 38,801 9,351,395 $ 10,986,915 2,355,808 38,982 2,048,767 3,317 13,538,535 198,695 2,896,084 $ 32,067,103 302,316 - $ 12,863,329 15,564,002 1,199,918 50 $ 48,215,471 64,170,122 34,326,641 1,199,918 188,079 116,305 $ $ 4,179,296 - 14,538,870 - 3,485,533 4,519,358 40,486,810 22,203,699 13,528,411 52,483,100 $ 54,093,287 14,841,186 25,158,110 744,021 38,376,211 47,727,606 19,751,608 42,018,333 286,205,397 $ 318,272,500 $ 23 $ 24 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL ACTIVITIES JUNE 30, 2010 Fund balances - total governmental funds balance sheet $ 286,205,397 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 $ 1,259,954,510 (198,235,388) 1,061,719,122 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 3,233,076 873,633 4,106,709 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 309,835,659 71,584,798 5,804,400 (387,224,857) Certain long-term debt is offset by an intangible asset (goodwill) for government-wide reporting 3,564,000 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 3,231,705 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 (3,648,056) 794,711 Interest payable on long-term debt is not reported in the governmental funds. (6,176,720) 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. 49,561,302 Net assets of governmental activities - statement of net assets The accompanying notes are an integral part of the financial statements 25 $ 1,012,133,313 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Major Funds REVENUES: Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto in-lieu taxes Highway user revenue Local transportation aid From federal government Other Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Special assessments Miscellaneous Total revenues EXPENDITURES: Current: General government Culture and recreation Police Fire Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Capital-related debt issued Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Development Fee Fund $ 30,966,260 3,501,762 3,955,416 $ 13,851,803 - $ $ 10,137,682 17,469,936 4,634,263 9,077 345,650 10,035,654 1,599,957 2,525,753 421,289 437,181 628,571 86,668,451 108,867 13,960,670 7,852,103 150,074 77,895 972 11,667,074 6,393,226 228,636 6,621,862 15,771,595 18,700,613 33,534,460 19,671,691 5,682,494 5,588,847 - 369,399 - 11,637,909 - 68,523 345,727 11,357 5,591 - 9,510 6,783,122 105,742,332 1,394,224 13,505 320,788 2,097,916 3,005,000 85,919 377,752 15,106,580 3,448,811 4,500,949 8,380,958 (19,073,881) 11,862,754 (3,439,506) (1,759,096) 13,582,296 (1,405,648) 12,176,648 (12,700,840) (12,700,840) 2,079,707 (374,166) 1,705,541 (50,721) (50,721) (6,897,233) (838,086) (1,733,965) (1,809,817) 3,139,823 446,207 - - 67,377,329 14,454,729 13,826,140 36,857,277 $ 60,480,096 $ 13,616,643 $ 12,092,175 $ 35,047,460 The accompanying notes are an integral part of the financial statements 26 Transportation Sales Tax Fund GO Bond Debt Service Fund $ $ 8,319,051 - 23,776,030 - GO Bond Capital Projects Fund $ - Non-Bond Capital Projects Fund $ - Non-Major Governmental Funds $ 2,827,289 - Total Governmental Funds $ 56,276,937 30,551,288 3,955,416 172,046 8,491,097 143,675 100,000 24,019,705 445,349 2,485,000 2,930,349 207,836 2,893,463 3,101,299 375,639 4,034,853 762,718 1,558,764 229,351 171,332 2,214,167 2,377,564 14,551,677 10,137,682 17,469,936 4,634,263 7,852,103 375,639 4,043,930 1,108,368 18,137,718 1,599,957 2,755,104 421,289 1,992,817 2,214,167 8,485,570 172,012,184 463,395 - 1,600 - 780,692 - 48,913 - 119,042 429,294 585,648 73,755 847,100 134,148 2,366,547 2,145,702 16,330,159 19,475,634 34,131,465 19,745,446 6,529,594 13,070,648 7,955,394 2,145,702 2,329,094 2,792,489 27,270,000 6,374,677 33,646,277 142,001 19,278,403 20,201,096 12,459,227 12,508,140 9,572,547 6,550,140 14,219,846 37,043,769 44,700,092 13,166,242 60,269,181 237,519,557 5,698,608 (9,626,572) (17,270,747) (9,406,841) (22,492,092) (65,507,373) 7,905,883 (1,977,397) 5,928,486 29,170,000 495,890 23,567,886 (20,963,066) 32,270,710 (3,966,914) (3,966,914) - 29,170,000 495,890 (487,380) 29,178,510 - 1,731,694 (9,626,572) 11,907,763 (9,406,841) (16,563,606) (33,236,663) 22,184,690 44,978,714 40,575,337 24,248,027 54,939,817 319,442,060 $ 23,916,384 $ 35,352,142 $ 52,483,100 38,376,211 $ 286,205,397 $ 27 14,841,186 $ 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, 2010 Net change in fund balances - total governmental funds $ (33,236,663) 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. (468,410) 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. (1,320,308) 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. (1,689,357) 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. 798,672 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 ($60,269,181), plus other capital ($167,208) exceeds depreciation ($25,185,630) in the current period. 35,250,759 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. Also gains/losses on sales of capital assets are not shown in the governmental funds, but are revenues or expenses on the statement of activities. (77,480) Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 47,438,448 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. (29,170,000) 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. 44,700,092 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. (699,823) The donation of governmental capital assets from Proprietary Funds is not shown in the governmental fund statements but is a transfer in in the statement of activities (425,156) 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. Change in net assets of governmental activities- statement of activities The accompanying notes are an integral part of the financial statements 29 (2,580,256) $ 58,520,518 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto in-lieu taxes From federal government Other Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government: Mayor and council City manager Human resources Attorney City clerk Court Economic development Finance Non-departmental Culture and recreation Police Fire Development services Public works Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2010 $ 54,558,210 $ 54,558,210 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 54,558,210 $ - 31,440,961 3,401,924 4,288,035 31,440,961 3,401,924 4,288,035 31,058,800 3,391,304 3,988,791 (382,161) (10,620) (299,244) 10,620,496 17,847,367 4,828,800 234,180 22,217,318 1,916,751 3,658,198 419,515 735,000 588,500 14,228,844 116,425,889 170,984,099 10,620,496 17,847,367 4,828,800 234,180 22,217,318 1,916,751 3,658,198 419,515 735,000 588,500 14,228,844 116,425,889 170,984,099 10,165,978 17,835,714 4,676,040 5,739 376,768 21,141,730 1,599,957 2,525,753 440,187 549,278 628,571 12,765,630 111,150,240 165,708,450 (454,518) (11,653) (152,760) 5,739 142,588 (1,075,588) (316,794) (1,132,445) 20,672 (185,722) 40,071 (1,463,214) (5,275,649) (5,275,649) 1,192,065 3,330,120 2,478,616 3,003,500 1,148,103 2,292,519 2,095,638 10,612,267 2,192,361 19,914,645 35,984,511 20,227,471 5,997,781 5,094,597 19,305,155 25,038,742 1,489,353 161,397,444 1,142,065 3,560,656 2,478,616 3,024,136 1,148,103 2,292,519 1,323,258 10,513,267 2,683,270 19,946,637 35,432,165 20,196,877 6,354,765 5,830,920 19,336,364 17,154,677 1,489,353 153,907,648 1,151,088 3,515,874 2,347,545 3,011,194 1,051,529 1,755,033 933,312 10,688,765 1,923,083 19,214,352 34,458,212 20,212,107 5,838,602 5,742,346 7,890,027 1,286,566 121,019,635 9,023 (44,782) (131,071) (12,942) (96,574) (537,486) (389,946) 175,498 (760,187) (732,285) (973,953) 15,230 (516,163) (88,574) (11,446,337) (17,154,677) (202,787) (32,888,013) 9,586,655 $ 17,076,451 $ 44,688,815 The accompanying notes are an integral part of the financial statements 30 $ 27,612,364 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 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 $ 165,708,450 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 (54,558,210) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (12,765,630) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules (11,078,841) The City budgets certain revenues on the cash basis, rather than on the modified (637,318) accrual basis Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 86,668,451 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 121,019,635 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 142,470 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (2,938,694) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (115,672) Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (11,078,841) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (1,286,566) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 105,742,332 31 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government- non-departmental Debt service: Principal payments Interest and other charges Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2010 $ 13,318,439 $ 13,318,439 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 13,318,439 $ - 14,054,745 229,000 14,283,745 27,602,184 14,054,745 229,000 14,283,745 27,602,184 13,886,949 153,798 14,040,747 27,359,186 (167,796) (75,202) (242,998) (242,998) 344,600 351,501 313,843 (37,658) 2,360,140 7,442 4,113,289 2,193,861 13,596,173 22,615,505 2,360,140 7,442 4,077,935 2,191,961 13,596,173 22,585,152 1,321,517 13,489 700,574 12,384,287 14,733,710 (1,038,623) 6,047 (3,377,361) (2,191,961) (1,211,886) (7,851,442) 4,986,679 $ 5,017,032 $ 12,625,476 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 $ 27,359,186 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 (13,318,439) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (80,077) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 13,960,670 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 14,733,710 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 65,046 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (316,553) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (12,384,287) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,097,916 The accompanying notes are an integral part of the financial statements 32 $ 7,608,444 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2010 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Intergovernmental: Highway user revenue Charges for services Investment earnings Miscellaneous 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, 2010 $ 12,614,604 $ 12,614,604 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,614,604 $ - 3,232,164 450,214 3,232,164 450,214 3,144,002 461,125 (88,162) 10,911 8,348,575 375,000 275,000 2,529,920 15,210,873 27,825,477 8,348,575 375,000 275,000 2,529,920 15,210,873 27,825,477 7,877,297 439,638 113,917 972 2,526,899 14,563,850 27,178,454 (471,278) 64,638 (161,083) 972 (3,021) (647,023) (647,023) 9,395,038 9,488,352 8,748,788 (739,564) 3,005,000 163,695 4,569,872 977,671 781,528 18,892,804 3,005,000 163,695 4,445,278 603,696 781,528 18,487,549 3,005,000 85,919 3,165,871 768,281 15,773,859 (77,776) (1,279,407) (603,696) (13,247) (2,713,690) 8,932,673 $ 9,337,928 $ 11,404,595 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 $ 27,178,454 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (12,614,604) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (2,526,899) 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 (74,877) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 11,667,074 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 15,773,859 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis (14,632) The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 410,634 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 (768,281) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 15,106,580 The accompanying notes are an integral part of the financial statements 33 $ 2,066,667 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 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, 2010 $ 28,073,840 $ 28,073,840 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 28,073,840 $ - 9,313,139 543,000 9,856,139 37,929,979 9,313,139 543,000 9,856,139 37,929,979 6,393,226 355,061 6,748,287 34,822,127 (2,919,913) (187,939) (3,107,852) (3,107,852) 111,983 297,347 20,912 407 90,799 22,457 567,566 12,203 407 30,029 21,642 289,363 11,357 1,752 5,591 (815) (278,203) (846) 1,345 (24,438) 2,544,337 18,976,739 1,787,558 23,830,082 4,074,830 14,666,484 4,759,842 24,133,818 3,448,811 6,140,652 9,919,168 (626,019) (8,525,832) (4,759,842) (14,214,650) 14,099,897 $ 13,796,161 $ 24,902,959 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 $ 34,822,127 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 (28,073,840) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (126,425) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 6,621,862 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 9,919,168 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (1,487,489) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (50,721) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 8,380,958 The accompanying notes are an integral part of the financial statements 34 $ 11,106,798 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2010 $ 16,663,309 $ 16,663,309 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 16,663,309 $ - 8,473,001 300,000 8,773,001 25,436,310 8,473,001 300,000 8,773,001 25,436,310 8,338,077 218,189 8,556,266 25,219,575 (134,924) (81,811) (216,735) (216,735) 372,294 8,201,598 2,252,897 5,020,688 15,847,477 351,601 8,548,876 2,686,821 5,020,688 16,607,986 463,395 2,812,485 3,966,914 7,242,794 111,794 (5,736,391) (2,686,821) (1,053,774) (9,365,192) 9,588,833 $ 8,828,324 $ 17,976,781 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 $ 25,219,575 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 (16,663,309) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (65,169) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 8,491,097 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,242,794 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (483,391) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (3,966,914) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,792,489 The accompanying notes are an integral part of the financial statements 35 $ 9,148,457 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2010 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 Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Cash equivalents 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 Unearned revenue Compensated absences Long-term portion of bonds, contracts & loans payable Plus: Deferred bond premium 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 Grant purpose Unrestricted Total net assets $ 14,835,030 217,720 20,039,699 4,521,892 95,593 78,344 232,332 40,020,610 592,864 1,642,283 280,490,121 12,889,809 1,123,741 1,818,013 186,058 (54,986,238) 6,028,186 37,057,711 286,249,684 268,600 175,010 287,286,158 327,306,768 1,314,728 119,428 554,459 204,605 55,540 226,860 3,210,237 5,685,857 1,253,465 77,360 57,003,423 486,162 (466,257) 58,354,153 64,040,010 $ 7,171,527 55,127 9,743,358 1,849,479 34,678 18,854,169 $ 6,556,636 8,903,552 1,300,524 42,834 43,342 16,846,888 1,945,641 7,659,795 339,802,861 888,673 873,230 29,004 (49,190,034) 3,878,001 9,478,865 313,420,395 300,098 52,984 315,719,118 334,573,287 10,799 28,430 9,093,778 (4,267,716) 4,865,291 4,865,291 21,712,179 740,412 66,011 1,492,027 1,500,000 85,910 5,121,426 9,005,786 25,650 95,233,020 33,879 (28,638) 95,263,911 104,269,697 $ 1,011,626 159,877 1,365,200 13,462 4,348 2,554,513 25,781,679 568,811 483,585 (11,289,895) 6,703,349 22,247,529 1,328 22,248,857 24,803,370 196,136 69,020 107,870 5,310 378,336 117,045 43,944 7,425 946 5,187 59,340 152,452 386,339 45,040 268,836 313,876 692,212 15,450 22,860 165,904 32,150 (19,794) 216,570 602,909 227,368,795 214,114,490 4,591,145 21,918,145 10,549,879 25,348,084 $ 263,266,758 2,903,591 13,285,509 $ 230,303,590 4,298,861 12,129,961 $ 21,019,967 1,226,360 1,055,956 $ 24,200,461 Some amounts reported for business-type activities in the statement of net assets are different because certain internal service fund assets and liabilities are included with business-type activities. Net Assets of business-type activities The accompanying notes are an integral part of the financial statements 36 Public Housing Fund $ 470,804 47,595 2,897 57 4,713 526,066 Total $ - 2,538,505 3,276,922 23,247 9,613 (1,858,567) 410,350 1,861,565 1,861,565 2,387,631 $ 30,045,623 480,319 40,051,809 7,688,254 177,453 78,401 280,387 78,802,246 Governmental Activities Internal Service Funds $ 13,265,752 17,988,745 1,086 76,301 140,682 31,472,566 - 38,371,478 620,292,982 12,889,809 2,632,902 12,268,606 224,675 (121,592,450) 17,019,886 46,536,576 628,644,464 570,026 227,994 631,980,989 710,783,235 148,102 26,392,540 22,567,034 30,745 (25,709,972) 3,033,512 26,461,961 26,461,961 57,934,527 18,469 18,469 2,386,790 298,403 2,053,911 205,551 60,727 1,500,000 479,980 8,489,425 15,474,787 3,171,149 211,182 2,805,000 367,440 6,554,771 11,939 11,939 30,408 1,265,404 15,450 170,910 152,671,183 552,191 (514,689) 154,160,449 169,635,236 215,900 215,900 6,770,671 1,861,565 469,854,140 26,461,961 495,658 2,357,223 $ 18,978,691 495,658 51,819,510 541,147,999 24,701,895 $ 51,163,856 $ 1,602,554 542,750,553 37 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund OPERATING REVENUES Charges for services Rents From federal government Miscellaneous Total operating revenues OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Investment income Interest expense Gain(loss) on sale of capital assets Total non-operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Forgiveness of debt Transfers in Transfers out Change in net assets Total net assets - beginning Total net assets - ending $ 30,444,381 338,476 30,782,857 $ 16,273,004 717,733 16,990,737 $ 11,727,243 250 11,727,493 $ 1,228,211 1,571,860 480 2,800,551 4,822,885 15,600,134 6,581,970 27,004,989 3,777,868 2,123,763 5,521,126 7,652,874 15,297,763 1,692,974 3,235,375 5,738,386 1,007,360 9,981,121 1,746,372 250,436 (2,716,621) 6,929 (2,459,256) 63,658 (2,975,422) (11,943,946) (14,855,710) 1,318,612 (13,162,736) 1,841,345 (2,377,325) 27,159,547 747,400 535,242 (3,184,713) 26,576,088 24,044,252 632,338 3,461,077 (519,801) 14,455,130 120,700 27,268 (57,939) 1,931,374 2,641,582 (298,460) (34,203) 1,537,164 2,889,862 750,908 5,177,934 (2,377,383) 118,537 (60,342) 36,778 94,973 10,895 (11,262) 425 58 236,690,670 215,848,460 19,088,593 24,234,664 $ 263,266,758 $ 230,303,590 $ 21,019,967 $ 24,200,461 Some amounts reported for business-type activities on the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities. Change in net assets of business-type activities The accompanying notes are an integral part of the financial statements 38 Public Housing Fund $ 88,553 177,710 19,724 285,987 282,161 85,846 368,007 (82,020) $ Total Governmental Activities Internal Service Funds $ 59,672,839 1,660,413 177,710 1,076,663 62,587,625 $ 29,846,133 648,153 30,494,286 11,719,187 30,031,669 16,078,958 57,829,814 4,757,811 8,177,892 10,554,901 9,259,213 8,975,819 36,967,825 (6,473,539) 1,172 1,172 444,698 (5,763,647) (11,899,814) (17,218,763) 207,167 34,161 241,328 (80,848) (12,460,952) (6,232,211) (80,848) 51,324,499 1,379,738 6,665,169 (4,060,913) 42,847,541 3,046,343 (8,255,419) (11,441,287) 2,438,071 498,300,458 62,605,143 2,357,223 $ 541,147,999 $ 51,163,856 73,134 $ 42,920,675 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Payments to internal service funds Net cash provided (used) by operating activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Net acquisition and construction of capital assets Capital contributions Proceeds from sale of bonds Proceeds (reduction) from contracts payable Forgiveness of debt 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 $ 30,090,199 (14,880,799) (4,845,692) (1,477,220) 8,886,488 $ 16,924,100 (5,660,026) (2,118,817) (3,000,000) (717,669) 5,427,588 $ 11,736,093 (2,747,608) (3,246,250) (2,962,928) 2,779,307 535,242 (3,184,713) (2,649,471) 3,461,077 (519,801) 2,941,276 27,268 (57,939) (30,671) 2,641,582 (298,460) 2,343,122 (19,662,609) 1,156,508 25,270,984 7,456,882 747,400 (20,303,960) (3,118,781) (14,159,947) 604,513 10,917,821 2,992,188 632,338 (6,032,722) (2,957,673) (1,372,577) 120,700 (1,066,225) (81,156) (3,386) (135,943) (18,336) (8,453,576) (8,003,482) (2,399,258) (157,665) (27,894,273) 30,918,971 339,910 3,364,608 (13,570,843) 15,174,172 135,475 1,738,804 (12,381,270) 12,722,154 149,036 489,920 (1,893,606) 1,658,696 15,684 (219,226) 2,104,186 7,068,109 9,172,295 839,298 5,717,338 6,556,636 320,837 850,666 1,171,503 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 1,148,049 14,497,565 $ 15,645,614 Classified as: Cash and cash equivalents Restricted cash with fiscal agents Non-current restricted cash and cash equivalents Totals $ 14,835,030 217,720 592,864 $ 15,645,614 $ $ $ 7,171,527 55,127 1,945,641 9,172,295 $ $ $ The accompanying notes are an integral part of the financial statements 40 6,556,636 6,556,636 $ $ $ $ 2,821,660 (2,488,602) (1,518,415) (460,037) (1,645,394) 1,011,626 159,877 1,171,503 Public Housing Fund $ $ $ $ 326,354 (286,820) 39,534 Total Governmental Activities Internal Service Funds $ 61,898,406 (26,063,855) (11,729,174) (3,000,000) (5,617,854) 15,487,523 $ 30,493,200 (7,039,047) (8,156,128) (7,954,213) 7,343,812 - 6,665,169 (4,060,913) 2,604,256 3,046,343 (8,255,419) (5,209,076) - (35,198,519) 1,881,721 36,188,805 10,449,070 1,379,738 (27,538,850) (6,175,946) (3,930,100) - - (19,013,981) (3,930,100) 1,172 1,172 (55,739,992) 60,473,993 641,277 5,375,278 (25,053,864) 27,320,024 268,054 2,534,214 40,706 477,693 518,399 4,453,076 28,611,371 $ 33,064,447 738,850 12,526,902 $ 13,265,752 470,804 47,595 518,399 $ 30,045,623 480,319 2,538,505 $ 33,064,447 $ 13,265,752 $ 13,265,752 (continued) 41 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 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 3,777,868 $ 6,581,970 1,692,974 7,652,874 (749,136) 418 2,874 (123,496) (66,637) 126,996 (49,153) (411,660) (31,517) (39,768) (186,253) 56,478 8,710 5,108,620 (892,465) 14,746 (41,947) (3,000,000) (9,800) 3,734,614 Net cash provided (used) by operating activities $ 8,886,488 Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers Decrease in fair market value of investments Total non-cash investing, capital and financing activities $ 26,003,039 (81,748) $ 25,921,291 $ $ 5,427,588 $ 23,439,739 (56,844) $ 23,382,895 1,746,372 $ 1,007,360 750,908 8,600 22,790 - 5,659 - 5,060 (6,845) (4,030) 1,032,935 $ $ $ The accompanying notes are an integral part of the financial statements 42 (2,377,383) 2,779,307 (29,984) (29,984) (59,443) 8,809 659 7 15,450 9,940 731,989 $ (1,645,394) $ (4,215) (4,215) $ Public Housing Fund $ (82,020) 85,846 Total $ 4,757,811 Governmental Activities Internal Service Funds $ 16,078,958 8,975,819 12,131 27,221 299 (562) - (789,383) 27,221 127,713 25,102 (172,649) (1,086) 842,291 (30,555) - 2,965 (7,361) 1,015 121,554 (1,355,543) (14,807) (46,470) (228,193) 57,493 (3,000,000) 15,450 4,820 10,729,712 2,704,118 (27,476) 1,305,000 49,240 13,817,351 $ 39,534 $ 15,487,523 $ $ - $ 49,442,778 (172,791) $ 49,269,987 $ $ (6,473,539) $ 7,343,812 (57,977) (57,977) (concluded) 43 CITY OF PEORIA, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2010 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 76,801 104,144 523 181,468 - NET ASSETS Held in trust for pension benefits and other purposes $ 181,468 The accompanying notes are an integral part of the financial statements 44 Agency Funds $ 185,151 251,068 436,219 170 436,049 436,219 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Firemen's Pension Fund ADDITIONS Contributions: State insurance premium tax rebate Total contributions Investment earnings: Interest and investment income Total investment earnings Less investment expenses: Investment management fees Net investment earnings Total additions $ 674 674 $ 1,406 1,406 74 1,332 2,006 DEDUCTIONS Retirement payments Total deductions 25,500 25,500 Change in net assets Net assets - beginning of the year Net assets - end of the year (23,494) $ 204,962 181,468 The accompanying notes are an integral part of the financial statements 45 Notes to the Financial Statements The Notes to the Basic Financial Statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying financial statements. Note Page 1 Summary of Significant Accounting Policies 47 2 Reconciliation of Governmental Fund Financial Statements to Government-wide Statements 59 3 Budget Basis of Accounting 63 4 Deposits and Investments 63 5 Property Taxes 66 6 Due from Other Governments 67 7 Accounts Receivable and Allowance for Doubtful Accounts 67 8 Interfund Transactions, Receivable and Payable Balances 68 9 Segment Information for Enterprise Funds 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 77 16 Pledged Revenues 78 17 Retirement and Pension Plans 78 18 Operating Leases 82 19 Deferred Compensation Plan 82 20 Commitments and Contingencies 83 21 Other Matters 84 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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, 2010 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 longterm 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 and 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 also included as general revenues. The general revenues support the net costs of the functions and segments not covered by program revenues. Also part of the basic financial statements are fund financial statements for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The focus of the fund financial statements is on major funds. Although GASB Statement #34 sets forth minimum criteria for the determination of major funds (a percentage of assets, liabilities, revenues, or expenditures/expenses of the fund category and of the governmental and enterprise funds combined), it also gives governments the option of displaying other funds as major funds. The City has opted to add some funds as major funds because of outstanding debt or community focus. Other non-major funds, as well as the internal service funds, are combined in a single column on the fund financial statements and are detailed in combining statements included as supplementary information after the basic financial statements. The internal service funds, which provide services to the other funds of the government, are presented in a single combined column in the proprietary fund financial statements. Because the principal users of the internal service funds are the City’s governmental activities, the assets and liabilities of the internal service funds are consolidated into the governmental activities column of the government-wide Statement of Net Assets. The costs of the internal service fund services are spread to the appropriate function or segment on the government-wide Statement of Activities and the revenues and expenses within the internal service funds are eliminated from the government-wide financial statements to avoid any doubling up effect of these revenues and expenses. The governmental fund financial statements are prepared on a current financial resources measurement focus and modified accrual basis of accounting. This is the traditional basis of accounting for governmental funds and also is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to 1) demonstrate legal and covenant compliance, 2) demonstrate the sources and uses of liquid resources, and 3) demonstrate how the City’s actual revenues and expenditures conform to the annual budget. Since the governmental fund financial statements are presented on a different basis than the governmental activities column of the government-wide financial statements, a reconciliation is provided immediately following each fund statement. These reconciliations briefly explain the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements. Additional reconciliations are also provided in Note 2. The proprietary fund and fiduciary fund financial statements, 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 businesstype 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, 2010 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 finance-related 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. One debt service fund is presented as a major fund in the basic financial statements. The 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. Capital Projects Funds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary funds. The capital projects funds presented as major funds in the basic financial statements are as follows: The GO Bond Capital Projects Fund accounts for the bond proceeds from general obligation bonds and the expenditure of those monies and the Non-Bond Capital Projects Fund accounts for the proceeds from developers and other sources dedicated to capital construction projects. 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, 2010 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. Also, beginning in fiscal year 2010, the City became self-insured for workers compensation claims and health insurance claims. The City carries excess insurance coverage and uses third party administrators to monitor the workers compensation and health claims programs. The costs of all these programs 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 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 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. 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. 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 2010. • 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. 53 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 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 2005-2006. The City of Peoria’s state calculated expenditure limitation for fiscal year 2009-2010, including the permanent base adjustment, was $723,170,421. 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 54 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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. 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 55 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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. 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, 2010, 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 $5,705,616. 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) 50 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 2057. These rights, costing $12,889,809, are being amortized over the 50 year life of the agreement on a straight-line basis starting in fiscal year 2008. Fiscal year 2010 amortization was $651,480 (including a correction of the useful life) and the net book value at June 30, 2010 was $12,116,421. Also see Note 14 for debt service on this purchase. 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 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 as reimbursement transactions and the revenue and expenditures/expenses reduced in the allocating fund. Transfers between funds are included in the results of both governmental and proprietary funds (as other sources/uses in governmental funds and as non-operating revenues/expenses in proprietary funds). Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds” for the current portion and “interfund receivables and payables” for the non-current portion (if applicable). Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. These transactions include transfers between funds and interdepartmental service charges. In the government-wide financial statements, only the net interfund activity and balances between governmental activities and business-type activities are shown (reported as “internal balances”). Also see Note 8. 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. 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 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. Additionally, beginning in fiscal year 2010, the City became self-insured for workers’ compensation and health insurance claims. The City uses third party administrators to monitor these claims programs. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. The claims liability of $2,805,000 reported in the Self-Insurance Fund at June 30, 2010 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 claims liability consists of $1,725,000 for liability/property claims, $510,000 for workers compensation claims and $570,000 for health insurance claims. The City is self-insured for property and public liability up to $1,000,000 and for damage to City vehicles valued up to $50,000. Vehicles with a value in excess of $50,000 have a $25,000 deductible. Excess coverage insurance policies purchased through commercial insurance carriers cover individual claims in excess of these amounts up to $40,000,000. For workers compensation insurance, the City is self-insured up to $750,000 per claim on public safety employees and $600,000 for all other employees up to an aggregate stop loss of $2,584,729 for fiscal year 2010. The City is self-insured for employee health claims up to $100,000 per claim, $2,000,000 lifetime maximum. Commercial insurance is in place for claims in excess of those limits as well as aggregate insurance for claims in excess of 125% of the City’s total actuarially projected claims. 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, 2010, 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 SelfInsurance Fund’s claims liability amount in fiscal years 2009 and 2010 were: Beginning of Years Ended, Fiscal Year Changes in June 30 Liability Estimates 2009 $3,100,000 $ (1,600,000) 2010 1,500,000 1,305,000 Current Year Claims $587,490 9,295,313 58 Claim Payments $ (587,490) $ (9,295,313) Balance at Fiscal Year-end $1,500,000 2,805,000 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of net assets/balance sheet and the reported amounts of revenues and expenses/expenditures during the reporting period. Specifically, the city has made certain estimates and assumptions relating to the collectibility of its receivables (including accounts receivable), valuation of capital assets and depreciation expense, and the ultimate outcome of claims payable. Actual results could differ from those estimates. 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 funds 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 funds Due to other governments Claims/deposits payable Deferred revenue Arbitrage liability Other liabilities Unamortized bond premium Compensated absences-current Current bonds/contracts payable $ 86,060,505 4,161,380 116,021,680 9,687,623 843,146 38,982 8,317,292 116,305 188,079 38,573,802 46,122,191 8,141,515 $ 318,272,500 $ 10,986,915 2,355,808 38,982 2,048,767 3,317 13,538,535 198,695 2,896,084 - Long-term Assets/ Liabilities (1) 3,233,076 3,564,000 1,061,719,122 1,068,516,198 6,176,720 (4,026,416) 3,648,056 3,872,270 35,135,837 59 Internal Service Funds (2) Statement of Net Assets Eliminations (3) Totals 13,265,752 17,988,745 1,086 76,301 (1,602,554) 140,682 26,461,961 56,331,973 (38,982) (38,982) 3,171,149 211,182 2,805,000 367,440 - (38,982) - 99,326,257 4,161,380 134,010,425 9,688,709 919,447 (1,602,554) 8,317,292 116,305 328,761 3,233,076 3,564,000 38,573,802 46,122,191 8,141,515 1,088,181,083 1,443,081,689 14,158,064 2,566,990 6,176,720 2,048,767 2,808,317 9,512,119 198,695 2,896,084 3,648,056 4,239,710 35,135,837 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Total Governmental Funds 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) Long-term Assets/ Liabilities (1) Internal Service Funds (2) 32,067,103 347,343,117 392,149,584 215,900 6,770,671 $ 286,205,799 676,366,614 49,561,302 $ 318,272,500 1,068,516,198 56,331,973 $ Statement of Net Assets Eliminations (3) Totals (38,982) 347,559,017 430,948,376 - 1,012,133,313 (38,982) When capital assets (land, buildings, equipment, etc.) that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in governmental funds, and thus a reduction in fund balance. However, the statement of net assets includes those capital assets among the assets of the City as a whole. Costs of capital assets Accumulated depreciation Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expense when paid. Interest payable 1,443,081,689 $ 1,259,954,510 (198,235,388) $ 1,061,719,122 $ 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 $ 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 (3,648,056) $ (71,584,798) (309,835,659) (5,804,400) (387,224,857) (3,872,270) (35,135,837) (348,216,750 ) 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. $ 873,633 Certain long-term debt obligations that are booked for the government-wide statements are offset by goodwill. $ 3,564,000 $ $ 3,231,705 794,711 4,026,416 $ 49,561,302 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 (3) 3,233,076 $ $ (2) (6,176,720) 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 Certain interfund transactions between governmental activities are eliminated in the consolidation of those activities for the statement of net assets. Interfund receivables Interfund payables $ $ 60 38,982 (38,982) - CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 $ 56,276,937 Property taxes 30,551,288 Franchise taxes 3,955,416 Intergovernmental: State shared sales taxes 10,137,682 Urban revenue sharing 17,469,936 Auto-in-lieu taxes 4,634,263 Highway user revenue 7,852,103 Local transportation aid 375,639 From federal government 4,043,930 Other governmental 1,108,368 Charges for services 18,137,718 Licenses and permits 1,599,957 Fines and forfeitures 2,755,104 Rents 421,289 Investment earnings 1,992,817 Special assessments 2,214,167 Miscellaneous 8,485,570 Other sources: Gain on sale of capital assets Capital contributions Capital-related debt issued 29,170,000 Premium on bonds issued 495,890 Transfers in 23,567,886 Total revenues and other sources 225,245,960 Expenditures/Expenses Current: General government 16,330,159 Culture and recreation 19,475,634 Police 34,131,465 Fire 19,745,446 Development services 6,529,594 Highways and streets 13,070,648 Public works 7,955,394 Human services 2,145,702 Debt service: Principal payments 44,700,092 Interest and other charges 13,166,242 Capital outlay 60,269,181 Unallocated depreciation Total expenditures/ expenses 237,519,557 Other financing uses/changes in net assets Transfers out 20,963,066 Total expenditures/expenses & other financing uses 258,482,623 Net change for the year $ (33,236,663) (1) Long-term Revenues/ Expenses(1) Capitalrelated Items(2) (492,308) - - (1,689,357) - (301) Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities - - 207,167 - - - 56,276,937 30,058,980 3,955,416 2,306,769 (2,599,422) 10,137,682 17,469,936 4,634,263 7,852,103 375,639 4,043,930 1,108,368 20,444,487 1,599,957 2,755,104 421,289 2,199,984 524,810 5,885,847 102,409 47,438,448 3,448,812 3,046,342 (29,170,000) (495,890) 30,837,757 (59,776,626) 102,409 47,438,448 1,124,171 (2,181,665) 50,989,368 3,253,509 1,171,867 (60,069,279) 218,409,760 942,630 (37,300) 54,160 158,810 39,040 33,220 114,410 (8,560) 7,668,687 2,210,170 1,636,629 1,631,824 36,734 9,799,577 1,580,977 58,862 - (60,914) (231,739) - 24,518,718 21,167,750 35,140,959 20,977,164 6,539,886 22,414,044 9,642,355 2,188,730 (798,672) - (60,269,181) 574,550 497,738 (35,071,171) (2,421,653) (44,496,159) 3,873,968 8,255,418 (31,197,203) 82,186,571 5,833,765 (2,580,256) 497,738 (2,679,403) (361,844) (249,015) (681,295) (558,916) (65,482) (489,401) (8,426) (7,274) - (44,700,092) 203,933 - - 12,571,503 574,550 (292,653) 155,735,659 30,837,757 (59,776,626) 4,153,583 (13,658,402) 14,830,269 (60,069,279) - 159,889,242 58,520,518 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 $ (468,410 ) $ 559,143 (155,220) 394,749 798,672 $ 61 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 (2) 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. $ (492,308) 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 $ (1,689,357) 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. $ (828,000) 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 $ 60,269,181 167,208 (25,185,630) $ 35,250,759 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: $ 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 $ 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) (301) 47,438,448 102,409 (179,588) (77,179) (3,873,968) 3,448,812 (425,156) 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 $ 3,253,509 (5,833,765) (2,580,256) 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 $ 44,700,092 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 $ (29,170,000) 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 62 $ $ 142,001 (345,934) (495,890) CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 (5) $ (699,823) $ 292,653 (292,653) - 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. 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 $ 59,776,626 (59,776,626) $ - 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, 2010, the carrying amount of the City's deposits was $47,215,652 and the bank balance was $46,811,752. The entire bank balance was covered by federal depository insurance or by collateral held by the City’s agent in the City’s name or in the Municipal Development Authority, Inc.'s trust name. The difference between the City’s carrying amount and the bank balance of $403,900 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 63 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 than three years. At June 30, 2010, 84.8% 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, 2010 was 204 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, 2010, the City’s investments include $18.0 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 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 Home Loan Bank - Agency Note Aaa Federal Home Loan Bank - Callable Agency Note Aaa Federal Home Loan Bank - Callable Agency Step Up 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 S&P Rating AAA AAA AAA AAA AAA AAA AAA AAA AAA % of Investments 5.5 2.9 21.7 3.2 2.9 9.5 6.0 2.0 4.7 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, 2010, 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, 2010, the City’s investments include 56.4% invested in U.S. Agency Coupon securities, 2.0% in U.S. Agency Discount Notes, 15.3% in U.S. Treasury Notes, 5.2% in Commercial Paper, and 21.1% 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, 2010, the City’s investments included the following: Investment Maturities in Years Less than 1 1-2 2-3 Over 3 Unrestricted Investments: City of Peoria bonds $ 297,321 U.S. Treasury notes and strips 45,271,126 Agency coupon securities 115,559,5111 Commercial paper 18,000,000 5,031,500 15,747,670 17,776,489 64 Fair Value -$ - 297,321 50,302,626 149,083,670 18,000,000 217,683,617 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Unrestricted Investments (cont): Investment Maturities in Years Less than 1 1-2 2-3 Over 3 State of Arizona local government investment pool Mutual fund-money market Total unrestricted investments 1,870,624 34,846,909 120,302,226 - Fair Value - - 1,870,624 111,319,395 22,779,489 - 34,846,909 254,401,150 Less: amount included in cash and cash equivalents Plus: amount included in restricted investments Unrestricted investments, net $ 81,381,499 1,397,795 174,417,446 Total investments per statement of net assets Plus: Investments in fiduciary funds $ 174,062,234 355,212 Net unrestricted investments $ 174,417,446 -$ -$ 47,510,687 6,998,406 33,887,327 3,021,600 91,418,020 $ 3,860,707 432,724 38,573,802 1,397,795 1,030,801 46,122,191 Restricted Investments: Agency coupon securities Agency discount notes Mutual fund-money market U.S. Treasury notes and strips Total Restricted Investments 36,196,287 6,998,406 33,887,327 77,082,020 11,314,400 3,021,600 14,336,000 - Less: amount included in cash with fiscal agents Less: amount included in restricted cash with fiscal agents Less: amount included in restricted cash and cash equivalents Less amount included in unrestricted investments Less: amount included in unrestricted cash and cash equivalents Net restricted investments Restricted cash, cash equivalents, and cash with fiscal agents at June 30, 2010, consisted of the following: Restricted investments included in restricted cash and cash equivalents $ 38,573,802 Water/wastewater infrastructure loans not yet drawn 2,538,505 Restricted investments included in cash with fiscal agents 432,724 Restricted cash with fiscal agents 47,595 Total cash and cash equivalents per statement of net assets $ 41,592,626 Cash with Fiscal Agents at June 30, 2010, consisted of the following: Restricted investments included in cash with fiscal agents Cash with fiscal agents Total cash with fiscal agents Unrestricted Cash and cash equivalents at June 30, 2010, consisted of the following: Investments included in cash and cash equivalents Carrying amount of city deposits Amounts due from restricted cash 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 65 $ $ $ $ 3,860,707 300,673 4,161,380 81,381,499 47,215,652 1,030,801 5,880 129,633,832 261,952 129,371,880 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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, 2010: Net interest and dividends Net decrease in the fair value of investments Total net investment income Less: net investment income of Fiduciary funds Total net investment income per statement of activities $ $ 3,426,987 (780,973) 2,646,014 1,332 2,644,682 The net decrease in the fair value of investments during fiscal year 2009-2010 was approximately $780,973. 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, 2010, was approximately $413,757. 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 2010 are $1,685,427,804 and $1,895,163,851 respectively. The Arizona tax year has been defined as a calendar year, notwithstanding the fact that tax procedures begin prior to January 1 of the tax year and continue through May of the succeeding calendar year. The definition of the tax year is a function of the fact that the tax lien for the year attaches to the real property as of January 1 of the year in question. The City Council adopts the annual tax levy each year on or before the third Monday in August. The basis of this levy is the full cash value as determined by the Maricopa County Assessor. For locally assessed property, the value is determined as of January 1 of the preceding year, known as the valuation year. For utilities and other centrally valued properties, the full cash value is determined as of January 1 of the tax year. The City has an enforceable claim on the property when the property tax is levied. Levies are due and payable in two installments, on October 1 and March 1, and become delinquent on November 1 and May 1, respectively. Delinquent amounts bear interest at the rate of 16 percent. A lien is placed on the property at the time the tax bill is sold. Maricopa County, at no charge to the taxing entities, bills and collects all property taxes. Public auctions for sale of delinquent real estate taxes are held in February following the May 1 date upon which the second half taxes become delinquent. The purchaser is given a Certificate of Purchase issued by the County Treasurer. Five years from the date of sale, the holder of a Certificate of Purchase that has not been redeemed may demand a County Treasurer's Deed from the County Treasurer. Property taxes are recognized as revenue in the government-wide financial statements when an enforceable legal claim has arisen. Therefore, the City recognizes revenue and a receivable, less any allowance for doubtful accounts deemed appropriate, for the entire tax levy in the year it is levied. For the 66 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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, 2010: 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 GO Bond Capital Projects: Due from State of Arizona Subtotal Non-Bond Capital Projects: Due from State of Arizona – Department of Transportation Subtotal Non-major Governmental Fund: Due from US Department of Housing & Urban Development Due from US Department of Transportation Due from US Department of Interior Due from US Department of Energy Due from other Federal agencies Due from Maricopa County: Home Grant Property tax Other Due from State of Arizona Various Grants Subtotal Total governmental activities $ 8,269 82,105 866,869 1,120,489 436,608 75,871 70,261 2,660,472 723,659 4,733 728,392 541,094 541,094 4,000 4,000 3,024,017 3,024,017 157,804 49,671 690,463 113,015 121,494 9,161 40,942 43,691 133,076 1,359,317 $ 8,317,292 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, 2010. 67 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Non-Bond Capital Projects 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 Internal Service Funds Grand totals Receivables $ $ $ $ Allowance Net 4,003,895 1,208,801 261,924 727,020 1,177,554 2,435,122 280,150 10,094,466 41,635 4,007 307,964 53,237 406,843 3,962,260 1,208,801 257,917 727,020 869,590 2,435,122 226,913 9,687,623 7,071,774 2,279,939 1,603,215 13,462 2,897 10,971,287 1,086 21,066,839 2,549,882 430,460 302,691 3,283,033 3,689,876 4,521,892 1,849,479 1,300,524 13,462 2,897 7,688,254 1,086 17,376,963 8. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES Net interfund receivables and payables between governmental activities and business-type activities of $1,602,554 are included in the government-wide financial statements at June 30, 2010. 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. At June 30, 2010, there is a cash loan of $38,982 from the General Fund to the Public Transit Fund. The net transfers of $3,029,412 from business-type activities to governmental activities on the governmentwide 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, 2010: Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Development Fee Fund Transportation Sales Tax Fund GO Bond Capital Projects Fund Non-Major Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Total enterprise funds Internal Service funds Grand totals Transfers out Transfers in 1,405,648 12,700,840 374,166 50,721 3,966,914 487,380 1,977,397 20,963,066 13,582,296 2,079,707 7,905,883 23,567,886 3,184,713 519,801 57,939 298,460 4,060,913 8,255,419 33,279,398 535,242 3,461,077 27,268 2,641,582 6,665,169 3,046,343 33,279,398 $ $ 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 2010 that were either non68 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 143-145. 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, 2010, the following funds were in a deficit position: Non-major Funds: Public Transit Fund $ 15,046 The City intends to remedy this situation in the next fiscal year. For the year ended June 30, 2010, 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 government-wide 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, 2010: General Fund: Designated for economic stabilization reserve Designated for encumbrances Designated for economic development Designated for municipal office complex reserve $ 34,600,000 1,198,227 387,027 4,301,556 40,486,810 $ 5,800,000 36,298 1,000,000 6,836,298 Highway User Revenue Fund: Designated for encumbrances $ 428,704 Development Fee Fund: Designated for encumbrances $ 720,819 Transportation Sales Tax Fund: Designated for encumbrances $ 1,023,232 GO Bond Capital Projects Fund: Designated for encumbrances $ 4,179,296 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, 2010 Non-Bond Capital Projects Fund: Designated for capital projects Designated for encumbrances Non-major Funds: Housing Fund: Designated for encumbrances Other Grants Fund: Designated for encumbrances Designated for arts capital sub-total MDA Bonds Capital Projects Fund: Designated for encumbrances $ 13,970,294 568,576 14,538,870 $ 197,788 741,109 3,580,461 4,321,570 3,485,533 Non-major funds total Total governmental funds $ Water Utility Fund: Designated for working capital policy reserve Designated for system replacement reserve Designated for capital equipment replacement $ Wastewater Utility Fund: Designated for working capital policy reserve Designated for system replacement reserve Designated for capital equipment replacement 8,004,891 76,218,920 15,400,000 6,431,390 844,959 22,676,349 8,600,000 7,182,628 668,830 16,451,458 Solid Waste Utility Fund: Designated for working capital policy reserve Designated for capital equipment replacement 2,400,000 3,499,709 5,899,709 Stadium Fund: Designated for capital equipment replacement Total proprietary funds $ 660,680 32,074,178 $ 14,500,804 2,000,000 2,500,000 19,000,804 Internal Service Funds: Designated for capital equipment replacement Designated for Workers’ Compensation Self-Insurance Reserve Designated for Health Self-Insurance Reserve 12. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2010, follows: 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 Balances June 30, 2009 Additions/ Transfers in Disposals/ Transfers out 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 3,860,459 10,543,167 217,797 7,917,786 33,098,147 469,593 1,599 1,407,376 2,386,185 59,902,109 (337,513) (7,227,042) (28,000) (7,100,582) (29,476,970) (425,156) (8,246) (44,603,509) 70 Balances June 30, 2010 32,791,906 16,715,390 266,549 31,036 22,776,147 116,036,236 2,976,113 1,599 3,143,809 328,656,566 523,395,351 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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, 2009 Additions/ Transfers in Disposals/ Transfers out 140,352,516 1,989,677 60,794,125 22,279,367 57,405,904 388,471,469 27,879,432 7,258,701 33,957 2,328,827 2,314,739 7,115,582 96,746,663 92,941 (133,658) (24,178,251) (2,020,899) - 147,477,559 2,023,634 38,944,701 22,573,207 64,521,486 485,218,132 27,972,373 699,172,490 115,891,410 (26,332,808) 788,731,092 (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 (3,450,160) (156,452) (7,468,172) (2,501,221) (1,278,234) (9,484,192) (847,199) (25,185,630) 90,705,780 24,855 24,166,766 1,824,618 26,016,239 (316,569) (29,228,644) (1,086,979) (18,129,461) (13,115,964) (15,978,321) (138,450,597) (7,955,394) (223,945,360) 564,785,732 982,493,272 150,607,889 (44,920,078) 1,088,181,083 12,640,501 10,757,636 2,500 23,400,637 (2,245,258) (2,673,205) (17,369) (4,935,832) 37,057,711 9,478,865 17,019,886 63,556,462 95,461 1,474,269 6,794,366 28,472,306 29,463,310 (1,346,650) (1,045,331) (20,939,206) 38,371,478 224,675 2,632,902 12,268,606 12,889,809 280,490,121 339,802,861 66,299,711 (23,331,187) 686,680,452 (959,244) (31,900) (277,681) (1,306,736) (651,480) (5,452,066) (7,243,513) (15,922,620) 50,377,091 1,337,694 978,975 8,991,486 11,308,155 (12,023,032) (12,902,064) (124,061) (1,252,685) (6,671,749) (773,389) (52,117,052) (47,751,450) (121,592,450) 565,088,002 73,777,728 (16,958,864) 628,644,464 Business-type activities: Non-depreciable assets: Work in Progress - Water $ 26,662,468 Work in Progress - Wastewater 1,394,434 Work in Progress – Stadium 17,369 Land 17,017,386 Total non-depreciable assets 45,091,657 Depreciable assets: Buildings & improvements 38,371,478 Furniture 224,675 Equipment 3,884,091 Vehicles 11,839,669 Water Rights 6,095,443 Water system 252,017,815 Wastewater system 331,278,757 Total depreciable assets at historical cost 643,711,928 Less accumulated depreciation for: Buildings & improvements (11,942,820) Furniture (92,161) Equipment (2,312,698) Vehicles (6,343,988) Water Rights (121,909) Water system (46,664,986) Wastewater system (49,499,423) Total accum. depreciation (116,977,985) Total depreciable assets, net 526,733,943 Business-type activities capital assets, net $ 571,825,600 Balances June 30, 2010 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 $ 25,185,630 71 7,835,895 2,201,617 1,569,374 1,631,824 36,734 9,799,577 1,477,197 58,862 574,550 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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, 2010, 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, 2010 was $108,144,831 and $199,637,770 for the 6 percent and 20 percent debt limits, respectively. Also see Table XXIII in the Statistical Section. B. Revenue bonds Water and Sewer Revenue Bonds: Water and Wastewater Revenue Bonds are issued, pursuant to voter authorization, for the construction, acquisition, and equipping of water and wastewater facilities and related systems and infrastructure. The bonds are backed by the revenues of the water and wastewater utilities. Also see Table XXV in the Statistical Section of this report. C. Municipal Development Authority bonds Municipal Development Authority (MDA) Bonds are issued by a non-profit corporation created by the City for the purpose of financing certain capital construction projects. The MDA issues its own bonds, which are repaid through a lease purchase agreement with the City equal to the debt service requirements. The City utilizes the City’s excise tax and other unrestricted revenues to pay the lease payments. Also see Table XXIV in the Statistical Section of this report. 72 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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, 2010, 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. There were no delinquent special assessment receivables at June 30, 2010. 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, 2010. 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, $60,380,132 in utility revenue bonds has been issued against the 1996 authorization, leaving $15,169,868 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 $9,384,315 in 2010; and water infrastructure debt of $13,965,546 in 2008, $8,575,248 in 2009, and $13,775,827 in 2010 have been issued against the 2000 authorization, leaving $135,589,201 unissued. In May 2005, the voters authorized $196,000,000 in general obligation bonds as follows: $52,000,000 for public safety and municipal operations, $109,000,000 for streets, bridges and traffic control projects, and $35,000,000 for parks, recreation and library projects. Also in May 2005 the voters authorized $160,000,000 in revenue 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, $38,511,231 in 2009, and $9,497,031 in 2010 were issued against the 2005 authorization leaving $123,904,322 unissued. Water infrastructure debt of $24,631,066 in 2007, $28,775,995 in 2008, $10,372,993 in 2009 and $4,045,230 in 2010 in general obligation bonds for drainage projects were issued against the 2005 water, wastewater and storm drainage authorization leaving $92,174,716 unissued at June 30, 2010. 73 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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. In June 2010, general obligation bonds in the amount of $5,238,190 were issued for transportation and drainage projects, and $1,005,234 for public safety and municipal operations projects against the 2008 authorization leaving $371,756,576 unissued as of June 30, 2010. 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. As of June 30, 2010, $23,605,000 remains available of this authorization. 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, 2010. 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, 2010. The City has an arbitrage liability of $198,695 at June 30, 2010. Bonds and loans payable at June 30, 2010 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 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 06/24/10 Series 2010 Various improvements Total General Obligation Bonds 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 7/1/04-22 7/1/07-26 7/1/07-20 7/1/09-28 7/1/10-30 4.04 4.27 4.00 3.86 4.03 7/1/04-13 7/1/06-25 7/1/08-26 2.7 4.2 4.6 9.5 $27,570,000 $16,785,000 20 94,380,000 70,235,000 14 18,365,000 15,310,000 7.4 68,440,000 53,460,000 10.5 29,170,000 29,170,000 237,925,000 184,960,000 5.1 10.9 10.5 22,255,141 6,675,000 47,000,000 75,930,141 Special Assessment Bonds with governmental commitment (collateralized by the special assessments levied on the property benefiting from the improvements) 06/30/91 ID# 8801 North Valley Power Center ID-Water & street improvements 1/1/94-13 7.30 13.4 5,015,000 12/30/92 ID# 8802 Bell Road ID-Street improvements 1/1/95-13 7.20 13.3 5,610,000 09/17/97 ID# 9601 83rd Ave ID-Water, wastewater & street improvements 1/1/99-12 5.30 8.7 2,285,000 08/13/97 ID# 9603 Arrowhead Fountains ID-Water, wastewater & street 1/1/99-12 5.20 8.7 3,800,000 improvements 08/28/01 ID# 9303 75th Ave & Paradise Ln ID-Street & bridge improvements 1/1/03-11 6.00 5.7 2,270,000 04/01/07 ID# 0601 99tth Ave & Northern ID-Street improvements 7/1/07-22 4.25 15 4,950,000 Total Improvement District Bonds 23,930,000 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 Total Community Facilities District Bonds Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 12.7 13.2 20 6,948,338 5,590,000 43,405,000 55,943,338 1,105,000 1,510,000 260,000 455,000 297,321 4,415,000 8,042,321 21,250,000 23,550,000 22,760,000 17,325,000 21,375,000 22,190,000 67,560,000 60,890,000 309,835,659 (27,039,694) $282,795,965 74 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 07/07/00 WIFA Series 2000 (ph 1) 07/26/01 WIFA Series 2000 (ph 2) 07/26/02 12/07/06 02/15/08 07/14/08 07/17/09 07/17/09 07/17/09 07/17/09 11/20/09 05/27/10 WIFA Series 2000 (ph 3) WIFA Series 2006 CW 1 WIFA Series 2006 CW 2 WIFA Series 2006 CW 3 WIFA Series CW0182009 WIFA Series DW0382009 WIFA Series CW0412009 WIFA Series CW0172009 WIFA Series DW1272009 WWW Series 2010 Total Revenue Bonds Loans Payable 02/28/08 Gila River Indian Comm. 5.1 $ 2,759,859 $ Wastewater treatment facilities Beardsley wastewater treatment plant & assoc. 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 Northern Ave Repairs Various improvements Beardlsey upgrades & Northern Ave repairs Beardlsey reclamation facility Pinnacle Peak Road improvements Refunding Series 1998A & Series 2000 Revenue Bonds 7/1/96-15 7/1/98-17 7/1/02-20 7/1/02-21 3.15 2.95 3.94 3.94 11.5 11.5 11.8 11.7 7/1/03-22 7/1/07-26 1/1/08-27 7/1/10-28 7/1/10-29 7/1/10-29 7/1/10-29 7/1/10-29 7/1/10-29 7/1/11-20 3.94 3.06 3.06 1.98 3.48 3.48 3.48 3.48 3.23 3.21 11.8 20 20 19 20 20 20 20 20 6.2 Water rights 2/28/08-22 8.25 11,405,081 14,330,000 20,150,000 14,500,000 861,662 4,190,267 6,753,789 13,415,229 9,994,904 1,964,789 1,441,353 27,183,342 26,029,064 42,741,541 41,087,615 8,575,248 8,575,248 1,577,978 727,612 8,484,204 8,484,204 4,021,623 4,021,623 4,545,000 4,545,000 1,780,000 1,032,600 15,780,000 15,780,000 177,038,806 146,078,508 15 $ 7,456,882 $ 6,883,276 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, 2010 153,823,446 (8,119,132) 145,704,314 $428,500,279 $428,500,279 35,158,826 $463,659,105 Contracts Payable Other debt at June 30, 2010 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: 05/22/90 Planned area retail project 02/20/92 Planned area retail project 06/01/94 Planned area retail project 03/16/99 Master-planned community 10/22/01 Master-planned community 07/01/03 Planned area retail project 11/18/03 Planned area retail project 02/17/04 Residential development 03/16/04 Residential development 10/19/04 Residential development 10/24/04 Capital lease 12/14/04 Planned area retail project 2/11/05 Master-planned community 07/19/05 Planned area retail project 09/14/05 Residential development 10/12/06 Planned area retail project Offsite improvements-Bell Rd-IDs 8801 and 8802 – Westcor 08/28/18 Prime 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 2,947,454 507,702 06/20/17 Prime 7.0 4,538,187 881,126 03/16/14 - - 4,316,327 3,940,961 10/22/26 - - 45,251,014 25,084,598 05/20/20 - - 1.800,000 1,294,181 04/30/14 - - 1,800,000 1,343,777 02/17/14 - - 1,382,257 234,405 08/31/14 - - 14,512,075 12,339,654 07/15/11 - - 3,901,317 47,550 3,618,504 396 07/29/18 - - 1,800,000 1,637,423 2/11/15 - - 10,587,249 10,223,099 1/1/10 - - 600,000 472,118 09/14/10 - - 588,659 79,875 10/01/13 - - 6,926,205 6,321,205 Street & infrastructure improvements-West Wing Pkwy; Park land; Trail improvements; Open space land – West Wing 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 Offsite improvements-91st Ave & Bell Rd – DIB Investment Group Offsite improvements-91st Ave & Bell Rd- BCC Development (Acura) Neighborhood park land & improvements; Right of way land on 67th 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 Offsite improvements-92nd Ave & Bell Rd – Phoenix Motor Co. Offsite improvements; Right of way land; Trail land; Open space land – Tierra del Rio Offsite improvements – 91st Ave & Bell Rd – BCC Development (Infiniti) Offsite improvements-Lake Pleasant Pkwy, Deer Valley to Williams – Casa Del Ray Offsite improvements & Right of way land-Peoria east of 83rd Ave - Walmart 75 10.5 $ 13,137,805 $ 2,531,760 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Agreement Date Type Nature of Improvements 04/19/07 Residential Street & infrastructure improvements; Right of way land – development Colina del Sur 03/05/09 Planned area retail 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 Expiration Interest Interest Date Rate Cap Original Amount Principal Balance Outstanding - - - 72,613 72,613 - - - 253,192 253,192 71,584,798 (8,096,143) 63,488,655 - - - 661,005 626,568 10/22/26 - - 4,841,000 2,761,841 02/17/14 - - 2,376,931 359,471 08/31/14 - - 426,208 340,255 02/11/15 - - 3,427,985 3,249,027 7,337,162 (370,293) 6,966,869 $ 70,455,524 CLASSIFIED IN BUSINESS-TYPE ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: 12/14/00 Master-planned Water and wastewater treatment plant facilities and lift stations community Quintero 10/22/01 Master-planned Water rights-4,200 acre feet of assured water supply - Vistancia community 02/17/04 Residential Wastewater infrastructure improvements –Sonoran Mtn Ranch development 03/16/04 Residential Water rights-947 acre feet water allocation – Camino A Lago development 02/11/05 Master-planned Offsite improvements; Right of way land; Trail land; Open space 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, 2010 The following is a summary of changes in non-current liabilities reported in the government-wide financial statements for the year ended June 30, 2010: Governmental activities: Bonds payable: General obligation bonds MDA Bonds Highway user revenue bonds Special assessment bonds CFD bonds Total bonds payable Contracts payable Compensated absences Deferred bond premium Deferred loss on refunding Governmental activities totals Business-type activities: Bonds payable: MDA bonds Revenue bonds Total bonds payable Loans payable Contracts payable Compensated absences Deferred bond premium Deferred loss on refunding Business-type activities totals Additions Reductions $ 183,060,000 60,985,393 3,005,000 10,402,812 63,060,000 320,513,205 56,858,711 5,870,090 3,546,915 (1,028,853) $ 385,760,068 29,170,000 29,170,000 19,578,633 5,791,491 495,890 55,036,014 27,270,000 5,042,055 3,005,000 2,360,491 2,170,000 39,847,546 4,852,546 5,273,841 394,749 (155,220) 50,213,462 184,960,000 55,943,338 8,042,321 60,890,000 309,835,659 71,584,798 6,387,740 3,648,056 (873,633) 390,582,620 17,380,000 5,497,373 1,887,321 2,275,000 27,039,694 8,096,143 4,239,710 $ 36,188,805 36,188,805 7,456,882 2,992,187 549,380 469,051 (477,960) 47,178,345 367,945 25,456,599 25,824,544 1,638,238 76,067 544,560 32,882 (17,508) 28,098,783 861,662 146,078,508 146,940,170 6,883,276 7,337,162 650,890 552,191 (514,689) 161,849,000 412,628 7,132,898 7,545,526 573,606 370,293 479,980 1,229,607 135,346,302 136,575,909 1,064,632 4,421,042 646,070 116,022 (54,237) $ 142,769,438 Ending Balance Amounts Due Within One Year Beginning Balance 39,375,547 8,969,405 The following is a summary of bond and note debt service requirements, including interest requirements, to maturity for long-term debt at June 30, 2010: Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 General Obligation Bonds $ 23,832,640 17,866,790 14,766,680 14,759,671 14,764,311 14,784,971 14,383,831 13,812,581 Municipal Development Authority Bonds 8,359,319 5,832,469 5,850,269 5,833,944 4,417,381 4,409,306 4,402,831 4,402,681 Special Assessment Bonds 2,319,623 1,811,720 1,362,820 474,600 475,788 476,338 476,250 480,525 Revenue Bonds 11,494,364 12,373,866 12,951,223 11,941,683 12,925,129 12,910,678 13,225,922 13,208,182 76 Community Facilities District Bonds 5,497,392 5,493,336 5,490,974 5,484,633 5,476,311 5,475,713 5,468,074 5,462,674 Long Term Loans 1,141,476 1,094,154 1,046,832 999,509 952,186 904,865 857,541 810,219 Total _ 52,644,814 44,472,335 41,468,798 39,494,040 39,011,106 38,961,871 38,814,449 38,176,862 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 General Obligation Bonds 13,801,465 13,766,873 13,787,965 12,604,316 12,588,978 10,859,884 10,846,538 10,835,086 10,847,006 5,101,850 5,096,262 1,844,812 1,840,500 Fiscal Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Less Interest (67,833,010) $184,960,000 Municipal Development Authority Bonds 4,388,981 4,378,931 4,383,141 4,382,486 4,386,453 4,374,193 4,370,288 4,349,237 - Special Assessment Bonds 478,950 481,738 483,675 484,763 - (21,716,910) 56,805,000 (1,764,469) 8,042,321 Revenue Bonds 12,271,536 10,881,045 10,902,118 7,978,012 6,933,765 6,789,605 6,786,426 6,783,145 6,779,759 4,819,532 1,791,270 1,136,434 - Community Facilities District Bonds 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 - (38,805,186) (31,877,513) 146,078,508 60,890,000 Long Term Loans 762,897 715,574 668,251 620,929 - Total _ 37,159,188 35,669,832 35,669,076 31,503,224 29,334,584 27,451,113 27,423,188 27,404,643 23,057,567 9,921,382 6,887,532 2,981,246 1,840,500 (3,691,157) (165,688,245) 6,883,276 463,659,105 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, 2010, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal year 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 Totals Principal $ 35,158,825 27,304,729 25,321,356 25,356,094 24,839,224 133,884,337 124,372,734 65,621,806 1,800,000 $ 463,659,105 Interest 17,485,989 17,167,606 16,147,442 14,137,946 14,171,882 54,897,865 27,008,451 4,630,564 40,500 165,688,245 Total 52,644,814 44,472,335 41,468,798 39,494,040 39,011,106 188,782,202 151,381,185 70,252,370 1,840,500 629,347,350 The City had no outstanding variable rate bonds at June 30, 2010. The City had $3,920,588 in variable rate outstanding contracts payable at June 30, 2010. 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, 2010. 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) 1998A 2000 Water/Sewer Revenue Bonds Water/Sewer Revenue Bonds $ 10,195,000 $ 6,165,000 $ 16,360,000 77 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 $15,780,000 in Revenue Refunding Bonds issued in 2010 and $161,258,806 in Water Infrastructure Financing Authority Bonds issued in 1995-2010. 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, 2010, $146,940,170 in bonds remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2010, the net revenues available for service of this debt were $21,636,498. The debt principal and interest paid on this debt in fiscal year 2010 was $12,087,669 (55.9% 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, 2010, $12,538,338 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, 2010, the net revenues available to service this debt were $95,507,133. The debt principal and interest paid on this debt in fiscal year 2010 was $3,852,695 (4.0% 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, 2010, $43,405,000 of the bonds remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2010, the net revenues available to service this debt were $100,145,535. The debt principal and interest paid on this debt in fiscal year 2010 was $3,840,188 (3.8% of available pledged revenues). For further information on longterm debt, refer to Note 14. For additional information on pledged revenues for revenue bonds, refer to Table XXIV (page 176). The City has pledged certain revenues for the repayment of Special Assessment Bonds. The bonds were issued to purchase or construct infrastructure within the various special assessment districts. Pledged revenues for these bonds include the fund balance of the Special Assessment Debt Service Fund, plus the collections of assessments against property owners in the districts. At June 30, 2010 $8,042,321 in bonds are outstanding to be repaid by these revenues. For the fiscal year ended June 30, 2010, the net revenues available to service this debt were $3,402,864. The debt principal and interest paid on this debt in fiscal year 2010 was $2,919,697 (85.8% of available pledged revenues). For further information on long-term debt, refer to Note 14. For additional information on pledged revenues for Special Assessment bonds, refer to Table XXVI (page 178). 17. RETIREMENT AND PENSION PLANS All full-time employees of the City are covered by one of three pension plans. Benefits are established by state statute and the plans generally provide retirement, long-term disability, and health insurance benefits, including death and survivor benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the 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. 78 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 pension 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 9.40 percent (9.00 percent for retirement and 0.4 percent for long-term disability) of their salaries to the System during fiscal year 2009-2010 and the City was required to match it (8.34 percent for retirement, .66 percent for health insurance premium, and 0.4 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 2008 2009 2010 Retirement Fund $ Health Benefit Supplement Fund 4,153,934 4,410,683 4,297,045 $ 541,968 531,674 340,054 Long-Term Disability Fund $ 258,104 275,934 206,093 Elected Officials Retirement Plan: a. Plan Description The City’s Mayor and Council members participate in the Elected Officials Retirement System (EORP), a cost sharing, multiple-employer defined benefit pension plan and insurance premium plan. The Fund Manager of the Public Safety Personnel Retirement System (PSPRS) is the administrator for the EORP which was established by Title 38, Chapter 5, Article 3 of the Arizona Revised Statutes to provide pension benefits for state and county elected officials, judges and certain elected city officials. EORP provides retirement benefits as well as death and disability benefits as well as insurance premium benefits. Because the health insurance premium plan benefit of the EORP is not established as a formal trust, it is reported in accordance with GASB Statement 45 as an agent multiple-employer plan. 79 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Accordingly, the disclosures that follow reflect the EORP as if it were an agent multiple-employer plan. According to GASB Statement 43, the health insurance subsidy paid by the Plan represents other post employment benefits. The Plan does not administer a separate healthcare plan as defined under IRC 401h or an equivalent arrangement. In addition, the Plan is not statutorily authorized to maintain a separate account for the health insurance subsidy assets and benefit payments. Therefore, in accordance with GASB Statement 43, the healthcare subsidy is reported by the Plan as an agency fund. All assets of the plan are available to pay both pension and health insurance subsidy. The pension benefits and health insurance subsidy are funded through employer contributions based on an annual actuarial valuation. Contributions are separately accounted for by employer but are not segregated by contribution type. 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 2009-2010 was 26.25 percent. The health insurance premium portion of the contribution rate was actuarially set at 1.89 percent of covered payroll. The City’s employees contributed $10,597, $10,314, and $10,093, for the fiscal years ended June 30, 2010, 2009, and 2008, respectively. c. Actuarial Methods and Assumptions The required contribution was determined as part of the June 30, 2009, 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, and (c) payroll growth of 5.0 percent per year. The actuarial value of EORP assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a seven-year period. EORP’s assets in excess of actuarial accrued liabilities are amortized as level percents of payroll over an open period of 20 years, while unfunded actuarial liabilities are amortized as level percents of payroll over a closed period of 27 years. Public Safety Personnel Retirement System: a. Plan Description The City contributes to the Public Safety Personnel Retirement System (PSPRS), an cost sharing, multiple-employer defined benefit pension plan and insurance premium plan, which acts as a common investment and administrative agent for the various fire and police agencies within the state. Sworn police and fire personnel are eligible to participate in the plan. The plan provides retirement and disability benefits, and death benefits, as well as insurance premium benefits, to plan members and beneficiaries. The PSPRS is jointly administered by the Fund Manager and 209 Local Boards and was established by Title 38, Chapter 5, Article 4 of the Arizona Revised Statutes. The PSPRS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by writing to Public Safety Personnel Retirement System 3010 East Camelback Rd., Ste 200, Phoenix, Arizona, 85016, by calling 602-2555575, 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 80 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 actuarially determined rate. Police personnel contributed $1,028,123 and fire personnel $798,923 during fiscal year 2009-2010. The City rate for fiscal year 2010 was 15.16 percent for police personnel and 14.66 percent for fire members. The health insurance premium portion of the contribution rate was actuarially set at .85 percent of covered payroll for police and .90 percent for fire for fiscal year 2010. 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). c. Actuarial Methods and Assumptions The required contribution was determined as part of the June 30, 2009, actuarial valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 8.50 percent investment rate of return, (b) projected salary increases of 5.5 percent to 8.5 percent per year, depending on age, attributable to seniority/merit, and (c) payroll growth of 5.5 percent per year. 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 seven-year period. PSPRS’s assets in excess of actuarial accrued liabilities are amortized as level percents of payroll over an open period of 20 years, while unfunded actuarial liabilities are amortized as level percents of payroll over a closed period of 27 years. Annual Pension/OPEB Cost - Agent Plans: The City’s pension/OPEB costs for the agent plans for the year ended June 30, 2010, follows: Annual pension/OPEB cost Contributions made PSPRS - Police Health Pension Insurance PSPRS - Fire Health Pension Insurance EORP $1,931,288 $114,717 $1,441,309 $94,272 $36,973 $2,869 1,931,288 114,717 1,441,309 94,272 36,973 2,869 Pension Health Insurance Three Year Trend Information for Agent Plans: Annual pension cost information for the current and two preceding years follows for each of the agent plans. Percentage of Fiscal Year Annual Pension/ Annual Costs Net Pension/OPEB Ended OPEB Cost Contributed Obligation PSPRP - Police - Pension 2008 $1,301,725 2009 2,136,029 2010 1,931,288 100% 100 100 $ 0 0 0 PSPRP - Police – Health Insurance 2008 $ 98,196 2009 143,303 2010 114,717 100% 100 100 $ 0 0 0 PSPRP - Fire - Pension 2008 $ 897,222 2009 1,529,542 2010 1,441,309 100% 100 100 $ 0 0 0 PSPRP - Fire – Health Insurance 2008 $ 72,975 2009 101,969 2010 94,272 100% 100 100 $ 0 0 0 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 EORP – Pension 2008 2009 2010 $ 27,537 36,427 36,973 100% 100 100 $ 0 0 0 EORP – Health Insurance 2008 $ 1,510 2009 4,397 2010 2,869 100% 100 100 $ 0 0 0 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, 2010 were $84,274. The following is a schedule of the future minimum lease payments on the operating leases. Year Ending June 30, 2011 2012 2013 2014 2015 Total $ $ Amount 82,077 59,166 47,098 13,560 13,560 215,461 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 2010 were $341,591. The following is a schedule of minimum future rental revenues on these leases: Year Ending June 30, Amount 2011 $ 268,409 2012 273,180 2013 289,922 2014 306,735 2015 284,327 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 82 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 of the City and are not subject to claims of the City’s general creditors. Also, the City exercises no administrative control nor makes investment decisions. 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 $1,000,000 of any occurrence and then has additional coverage up to $40.0 million. Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The following table presents the City’s commitments as of June 30, 2010: Remaining Construction Commitment Fund/Description General Fund: Municipal facilities construction/remodeling Streets/Traffic infrastructure Parks and recreation facilities Water Wells and reservoirs Half-Cent Sales Tax Fund: Municipal facilities construction/remodeling Highway User Revenue Fund: Streets/Traffic infrastructure $ 809,656 520 215,442 38,729 1,064,347 36,298 291,007 Development Fee Fund: Parks and recreation facilities Municipal facilities construction/remodeling Streets/Traffic infrastructure Transportation Sales Tax Fund: Streets/Traffic infrastructure 230,747 271,217 218,856 720,820 1,023,232 GO Bond Capital Projects Fund: Parks and recreation facilities Drainage infrastructure Streets/Traffic infrastructure Municipal facilities construction/remodeling Non-Bond Capital Projects Fund: Streets/Traffic infrastructure 302,154 49,261 2,884,838 943,043 4,179,296 568,576 Non-Major Governmental Funds: Other Grants – water wells and reservoirs Other Grants – wastewater facilities MDA Bonds Capital Projects - Streets/Traffic infrastructure 83 377,979 125,850 3,611,837 4,115,666 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Water Utility Fund: Water facilities Water lines Wells and reservoirs 172,301 333,475 453,599 959,375 Wastewater Utility Fund: Wastewater facilities and infrastructure Total construction commitments 498,403 $ 13,457,020 At June 30, 2010, there is a claims liability of $1,500,000 in the Wastewater Utility for the future payments due on a settlement involving the City discontinuing use of a regional wastewater reclamation facility. The final payment of this settlement is due in fiscal year 2011. 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 forty-five 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. 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 th a Volkswagen automotive dealership and service center, on the northwest corner of 84 Avenue and Bell Road. The City agreed to reimburse the dealer an amount not to exceed $500,000. Payments were to be made quarterly and would equal fifty percent of one percent of sales tax revenues from the project. Reimbursements would cease when the reimbursement amount was paid in full, or on November 30, 2010, whichever was sooner. However, since no development has occurred on the property, this agreement will terminate on November 30, 2010, with no future liabilities. 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, 2010, 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 $9,400,000. 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, 2010, no building activities have 84 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2010 commenced and the credits could not be reliably estimated. The agreement is in force for 25 years from the signing of the agreement. 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, rightof-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, 2010, those potential credits could not be reliably estimated. The City approved a development agreement with WalMart Stores, Inc. on October 12, 2006, for a rd commercial development located on Peoria east of 83 Avenue. Included in the agreement are certain infrastructure improvements, right-of-way and land dedications. As of June 30, 2010, the total reimbursement is capped at $7,270,000. Of that $224,355 is related to future infrastructure dedications and has not yet been recorded as a liability. A repayment, currently estimated at $2,885,139, 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 rd mixed-use development located at the Southeast corner of 83 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. Developer satisfied the timely completion of the required public infrastructure on March 31, 2010. In addition, an amendment to the development agreement was approved by Council on July 6, 2010 which advanced the date for reimbursement to August 2, 2010 in return for a 10% reduction in total reimbursement costs. The city paid a total of $5,719,781 on August 2, 2010. The project may be eligible for future impact fee credits related to the dedication of the ROW for Cotton Crossing. 85 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Required Supplementary Information (unaudited): The funded status of the plans as of the most recent valuation date, June 30, 2009, and the prior two years follow. 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 (Lastest Available Actuarial Information) Projected Unit Credit Actuarial Valuation Actuarial Accrued Date Value of Liability June 30, Plan Assets (AAL) Percent Unfunded Funded AAL Annual Covered Payroll Unfunded AAL as a % of Covered Payroll Police – Retirement 2007 2008 2009 $28,125,150 $41,246,496 31,757,979 44,194,554 35,948,135 49,249,481 68.2%$13,121,346 71.9 12,436,575 73.0 13,301,346 $11,417,698 13,106,869 13,600,726 114.9% 94.9 97.8 $1,170,734 1,032,969 1,075,889 0.0% $1,170,734 0.0 1,032,969 0.0 1,075,889 $11,417,698 13,106,869 13,600,726 10.25% 7.88 7.91 $22,779,501 $29,484,683 25,584,820 31,148,375 29,565,148 34,863,651 77.3% $6,705,182 82.1 5,563,555 84.8 5,298,503 $8,627,756 9,456,091 10,476,786 77.7% 58.8 50.6 Police – Health Insurance Subsidy 2007 2008 2009 $0 0 0 Fire – Retirement 2007 2008 2009 Fire – Health Insurance Subsidy 2007 2008 2009 $0 0 0 $831,346 845,345 951,241 0.0% 0.0 0.0 86 831,074 845,345 951,241 $8,627,756 9,456,091 10,476,786 9.63% 8.94 9.08 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 General Obligation (GO) Bond Capital Projects Fund Non-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 Special Assessment Debt Service Fund Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund 100 101 102 103 104 105 106 107 108 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Public Housing Fund 110 111 112 113 114 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 116 117 118 Schedule of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 96 98 119 120 121 122 Fiduciary Funds Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities - All Agency Funds 87 124 125 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. 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. 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. 89 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Property taxes Investment earnings Miscellaneous Total inflows Amounts available for appropriation $ 23,719,548 500,000 24,219,548 63,569,044 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2010 39,349,496 29,783,878 $ 29,783,878 $ 29,373,610 - (348,915) (299,651) 100,000 (548,566) (548,566) 1,600 27,270,000 6,375,268 33,646,868 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 $ 63,020,478 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 (39,349,496) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 348,723 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 24,019,705 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 33,646,868 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (591) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 33,646,277 90 $ 1,600 27,270,000 6,515,166 33,785,166 $ 39,349,496 23,370,633 200,349 100,000 23,670,982 63,020,478 - 27,270,000 6,515,166 33,785,166 $ 39,349,496 23,719,548 500,000 24,219,548 63,569,044 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (139,898) (138,298) $ (410,268) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 44,465,968 $ 44,465,968 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 44,465,968 $ - RESOURCES (INFLOWS): Capital-related debt issued Premium on bonds issued Investment earnings Miscellaneous Total inflows Amounts available for appropriation 33,073,938 400,000 33,473,938 77,939,906 33,073,938 400,000 33,473,938 77,939,906 29,170,000 495,890 874,488 2,485,000 33,025,378 77,491,346 (3,903,938) 495,890 474,488 2,485,000 (448,560) (448,560) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Interest and fiscal charges Capital outlay Contingencies Total charges to appropriations 761,546 57,264,375 58,025,921 472,653 52,691,423 5,927,504 59,091,580 1,142,223 124,001 22,832,346 24,098,570 669,570 124,001 (29,859,077) (5,927,504) (34,993,010) Budgetary fund balance, June 30, 2010 $ 19,913,985 $ 18,848,326 $ 53,392,776 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 $ 77,491,346 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 (44,465,968) Capital-related debt issued is a budgetary resource, but is not a revenue for financial reporting purposes (29,170,000) Bond Premiums are a budgetary resource, but are not a revenue for financial reporting purposes (495,890) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (429,139) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,930,349 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 24,098,570 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (3,410,094) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (487,380) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 20,201,096 91 $ 34,544,450 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 14,267,281 $ 14,267,281 Actual Amounts (budgetary basis) $ 14,267,281 Variance with Final Budget Over (Under) $ - RESOURCES (INFLOWS): Intergovernmental revenue: From federal government County shared sales tax Other governmental revenue Investment earnings Proceeds Miscellaneous Total inflows Amounts available for appropriation 4,000,000 8,000,000 200,000 6,972,072 19,172,072 33,439,353 4,000,000 4,000,000 18,267,281 3,024,017 249,584 (3,024,017) (1,258,326) (1,008,742) 13,258,539 (975,983) 249,584 (3,024,017) (1,258,326) (5,008,742) (5,008,742) CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services: Highways and streets Capital outlay Contingencies Total charges to appropriations 209,394 13,472,636 10,134,114 23,816,144 48,913 18,860,480 4,341,462 23,250,855 48,913 6,415,449 6,464,362 (12,445,031) (4,341,462) (16,786,493) Budgetary fund balance, June 30, 2010 $ 9,623,209 $ (4,983,574) $ 6,794,177 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 $ 13,258,539 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 (14,267,281) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 4,110,041 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 3,101,299 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 6,464,362 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 6,043,778 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 12,508,140 92 $ 11,777,751 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. 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. 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. 94 95 CITY OF PEORIA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2010 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 Prepaid items Restricted cash and cash equivalents Restricted investments Special assessments receivable Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Due to other governments Deferred revenue Other liabilities Total liabilities Fund balances: Reserved for: Debt service Capital projects Grant Purposes Prepaid items 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 $ $ $ $ $ $ 4,485 414 49,671 54,570 2,646 27,488 38,982 500 69,616 - $ $ $ $ $ 156,620 300,673 51,986 11,618 50 520,947 16,615 847 17,462 305,647 50 $ $ $ $ $ 1,966,684 2,656,097 30,000 11,778 1,257,086 5,921,645 380,948 15,681 13 210,064 606,706 894,271 - - 197,788 4,321,570 (15,046) (15,046) 54,570 503,485 520,947 99,098 5,314,939 5,921,645 $ $ The accompanying notes are an integral part of the financial statements 96 Storm Drainage Fund $ $ $ $ $ 249,577 339,223 88,138 1,082 678,020 11,637 6,414 18,051 - $ 659,969 659,969 678,020 Debt Service Funds Municipal Development CFD Authority Bonds Bonds Special Assessment Bonds $ $ $ $ $ $ 3,860,707 327 3,861,034 - 3,861,034 - $ $ $ $ $ - $ 3,861,034 3,861,034 2,673 3,625 52,304 4,824 40,942 6,449,219 2,010,600 8,564,187 220,353 298,805 2,311 8,141,515 $ 8,662,984 45,060 45,060 $ 8,519,127 - $ Capital Projects Funds 8,519,127 8,564,187 CFD Bonds MDA Bonds $ 94,494 4,689,272 10,960,251 15,744,017 $ 8,141,515 38,301 $ 8,179,816 $ 180,015 $ $ 180,015 $ $ $ 15,564,002 - $ 483,168 - $ 483,168 $ 8,662,984 $ - - - $ 15,564,002 15,744,017 97 Total Non-Major Governmental Funds $ 8,723 2,500,021 1,211,458 3,720,202 234,669 234,669 - $ $ $ $ $ 2,595,907 4,161,380 3,297,750 226,913 123,626 1,359,317 50 13,638,839 14,182,309 8,141,515 47,727,606 826,530 49,583 38,982 13 8,397,486 38,801 9,351,395 12,863,329 15,564,002 1,199,918 50 3,485,533 - 3,485,533 4,519,358 3,485,533 3,720,202 744,021 38,376,211 47,727,606 $ CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Special Revenue Funds Section 8 Other Housing Grants Fund Fund Public Transit Fund REVENUES: Taxes: Property taxes Intergovernmental: Local transportation aid From federal government Other Charges for service Fines and forfeitures Investment earnings Special assessments 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 $ Fund balances - beginning $ $ - $ - 886,823 97,324 420 161,164 1,145,731 2,995,504 449,516 729,574 229,351 36,654 76,649 4,517,248 783,384 3,934 787,318 1,222,344 923,358 108,880 429,294 585,648 73,755 847,100 66,433 - 500,114 - 1,222,344 923,358 234,246 2,345,356 500,114 222,373 2,171,892 287,204 133,390 (102,855) 30,535 Net change in fund balances - 375,639 152,526 215,878 45,806 19,798 809,647 (412,697) OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses Fund balances - ending - Storm Drainage Fund - 150,201 (1,365,190) (1,214,989) 7,341 7,341 (382,162) 222,373 956,903 294,545 367,116 281,112 4,358,036 365,424 (15,046) $ 503,485 $ 5,314,939 The accompanying notes are an integral part of the financial statements 98 $ 659,969 Debt Service Funds Municipal Development Authority Bonds $ - CFD Bonds $ $ - CFD Bonds $ - Total Non-Major Governmental Funds MDA Bonds $ - $ 2,827,289 609 609 24,589 2,119,953 4,971,831 5,028 2,214,167 2,219,195 81,766 81,766 18,332 18,332 375,639 4,034,853 762,718 1,558,764 229,351 171,332 2,214,167 2,377,564 14,551,677 610 - 9,534 - 18 - 1,800,000 - 134,148 - 119,042 429,294 585,648 73,755 847,100 134,148 2,366,547 2,145,702 5,042,055 2,657,029 7,699,694 2,170,000 3,329,455 5,508,989 2,360,492 563,656 2,924,166 1,407,376 3,207,376 12,578,224 12,712,372 9,572,547 6,550,140 14,219,846 37,043,769 (12,694,040) (22,492,092) (7,699,085) (537,158) (704,971) (3,125,610) 6,989,965 6,989,965 225,986 225,986 399,000 (275,630) 123,370 (233,722) (233,722) (311,172) (581,601) (3,359,332) (12,694,040) (16,563,606) 1,064,769 18,923,334 16,179,573 54,939,817 483,168 $ 15,564,002 (709,120) 4,570,154 $ 2,827,289 Capital Projects Funds Special Assessment Bonds 3,861,034 8,830,299 $ 8,519,127 $ 99 - $ 3,485,533 7,905,883 (1,977,397) 5,928,486 $ 38,376,211 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 279,422 $ 279,422 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 279,422 $ - RESOURCES (INFLOWS): Intergovernmental: Local transportation aid From federal government Other Charges for services Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation 678,570 189,000 187,306 50,800 3,600 313,890 1,423,166 1,702,588 678,570 189,000 187,306 50,800 3,600 313,890 1,423,166 1,702,588 375,639 151,816 215,878 44,382 2,152 19,798 133,390 943,055 1,222,477 (302,931) (37,184) 28,572 (6,418) (1,448) 19,798 (180,500) (480,111) (480,111) CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Transfers out Total charges to appropriations 1,437,142 199,500 1,636,642 1,420,860 199,500 1,620,360 1,216,064 102,855 1,318,919 (204,796) (96,645) (301,441) Budgetary fund balance, June 30, 2010 $ 65,946 $ 82,228 $ (96,442) 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 $ 1,222,477 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 (279,422) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (18) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (133,390) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 809,647 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,318,919 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 6,145 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 135 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (102,855) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,222,344 100 $ (178,670) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SECTION 8 HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 238,204 $ 238,204 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 238,204 $ - RESOURCES (INFLOWS): Intergovernmental: From federal government Other Investment earnings Miscellaneous Total inflows Amounts available for appropriation 1,473,414 500 1,473,914 1,712,118 1,473,414 500 1,473,914 1,712,118 878,428 145,135 420 161,164 1,185,147 1,423,351 (594,986) 145,135 (80) 161,164 (288,767) (288,767) CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Total charges to appropriations 1,666,508 1,666,508 1,666,508 1,666,508 1,112,273 1,112,273 (554,235) (554,235) Budgetary fund balance, June 30, 2010 $ 45,610 $ 45,610 $ 311,078 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 $ 1,423,351 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 (238,204) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (39,416) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 1,145,731 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,112,273 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (188,915) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 923,358 101 $ 265,468 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 4,384,570 $ 4,384,570 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 4,384,570 $ - 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 1,693,275 11,899,424 872,575 320,000 96,700 12,500 10,000 14,904,474 19,289,044 1,693,275 11,899,424 872,575 320,000 96,700 12,500 10,000 14,904,474 19,289,044 3,231,308 1,038,693 700,400 229,351 40,522 76,649 10,000 5,326,923 9,711,493 1,538,033 (10,860,731) (172,175) (90,649) (56,178) 64,149 (9,577,551) (9,577,551) CHARGES TO APPROPRIATIONS (OUTFLOWS): General government: Mayor and council Attorney City Manager Court Non-departmental Culture and recreation Police Fire Development services Public works Capital outlay Contingencies Transfers out Total charges to appropriations 51,807 65,000 41,854 17,000 712,186 531,674 62,990 1,493,916 1,708,617 9,759,568 243,678 14,688,290 4,000 97,875 65,000 65,015 17,000 587,620 1,064,608 181,776 1,518,916 3,766,500 3,829,707 2,828,977 243,678 14,270,672 2,531 556,966 31,832 13,909 1,536 430,206 520,742 71,089 848,063 62,990 1,393,492 3,933,356 (1,469) 459,091 (33,168) (51,106) (15,464) (157,414) (543,866) (110,687) (670,853) (3,703,510) (2,436,215) (2,828,977) (243,678) (10,337,316) Budgetary fund balance, June 30, 2010 $ 4,600,754 $ 5,018,372 $ 5,778,137 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 $ 9,711,493 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 (4,384,570) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (799,675) 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 $ 4,517,248 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 3,933,356 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 1,912 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (224,722) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (1,365,190) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 2,345,356 102 $ 759,765 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE STORM DRAINAGE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Intergovernmental: Charges for services Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Total charges to appropriations Budgetary fund balance, June 30, 2010 $ 282,897 $ 282,897 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 282,897 $ - 786,500 9,400 7,341 803,241 1,086,138 786,500 9,400 7,341 803,241 1,086,138 779,041 3,356 7,341 789,738 1,072,635 (7,459) (6,044) (13,503) (13,503) 607,239 607,239 505,457 505,457 493,614 493,614 (11,843) (11,843) 478,899 $ 580,681 $ 579,021 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 1,072,635 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 (282,897) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 4,921 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (7,341) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 787,318 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 493,614 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 81 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 6,419 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 500,114 103 $ (1,660) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Investment earnings Transfers from other funds Total inflows Amounts available for appropriation $ 7,993,473 7,993,473 11,826,660 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2010 3,833,187 4,129,677 $ 4,123,777 $ 3,121,907 - 609 (1,003,508) (1,002,899) (1,002,899) 610 5,042,055 2,659,189 7,701,854 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 $ 10,823,761 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (3,833,187) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (6,989,965) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 609 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,701,854 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 $ 7,699,694 104 $ 610 5,042,055 2,660,828 7,702,883 $ 3,833,187 609 6,989,965 6,990,574 10,823,761 - 5,042,055 2,654,928 7,696,983 $ 3,833,187 7,993,473 7,993,473 11,826,660 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (1,639) (1,029) $ (1,001,870) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Property Taxes Investment earnings Miscellaneous Total inflows Amounts available for appropriation $ 2,830,851 52,000 2,616,605 5,499,456 14,225,032 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2010 8,725,576 (3,531,327) $ (3,531,327) $ 8,212,143 - 6,804 (14,052) (496,652) (503,900) (503,900) 9,534 2,170,000 3,329,455 5,508,989 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 $ 13,721,132 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 (8,725,576) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (23,725) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 4,971,831 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 5,508,989 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 5,508,989 105 $ 9,534 2,170,000 3,329,456 12,256,903 17,756,359 $ 8,725,576 2,837,655 37,948 2,119,953 4,995,556 13,721,132 - 2,170,000 3,329,456 12,256,903 17,756,359 $ 8,725,576 2,830,851 52,000 2,616,605 5,499,456 14,225,032 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (1) (12,256,903) 9,533 $ (513,433) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ RESOURCES (INFLOWS): Special assessments Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2010 1,247,171 $ 2,435,844 33,850 398,150 2,867,844 4,115,015 1,677,571 $ 1,089,312 $ 684,993 - (205,818) (25,258) 850 (230,226) (230,226) 18 2,360,492 563,656 275,630 3,199,796 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 $ 3,884,789 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 (1,247,171) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (399,000) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (19,423) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,219,195 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 3,199,796 Differences - budget to GAAP: Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (275,630) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,924,166 106 $ 18 2,435,492 590,211 3,025,703 $ 1,247,171 2,230,026 8,592 399,000 2,637,618 3,884,789 - 1,855,492 581,952 2,437,444 $ 1,247,171 2,435,844 33,850 398,150 2,867,844 4,115,015 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (75,000) (26,555) 275,630 174,093 $ (404,319) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 18,771,766 $ 18,771,766 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 18,771,766 $ - RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 150,000 150,000 18,921,766 150,000 150,000 18,921,766 94,257 94,257 18,866,023 (55,743) (55,743) (55,743) CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Capital outlay Total charges to appropriations 1,800,000 16,983,371 18,783,371 1,800,000 16,983,371 18,783,371 1,800,000 1,235,097 3,035,097 (15,748,274) (15,748,274) Budgetary fund balance, June 30, 2010 $ 138,395 $ 138,395 $ 15,830,926 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 $ 18,866,023 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 (18,771,766) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (12,491) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 81,766 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 3,035,097 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 180,015 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (7,736) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 3,207,376 107 $ 15,692,531 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2009 $ 31,894,657 $ 31,894,657 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 31,894,657 $ - RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 200,000 200,000 32,094,657 200,000 200,000 32,094,657 93,308 93,308 31,987,965 (106,692) (106,692) (106,692) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and Streets Capital outlay Contingencies Total charges to appropriations 21,691,089 21,691,089 132,148 21,641,000 21,773,148 134,148 14,118,982 14,253,130 2,000 (7,522,018) (7,520,018) Budgetary fund balance, June 30, 2010 $ 10,403,568 $ 10,321,509 $ 17,734,835 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 $ 31,987,965 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (31,894,657) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (74,976) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 18,332 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 14,253,130 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (1,540,758) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 12,712,372 108 $ 7,413,326 ENTERPRISE FUNDS Schedule of Operations – Budget and Actual 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. 109 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Proceeds from bonds or contracts payable Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 33,135,110 358,000 33,493,110 $ 33,135,110 358,000 33,493,110 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 28,639,238 338,476 28,977,714 $ (4,495,872) (19,524) (4,515,396) 5,622,088 17,187,930 21,353,455 8,816,215 52,979,688 5,391,931 17,514,795 22,079,658 5,255,766 50,242,150 4,845,692 16,155,849 12,617,135 33,618,676 (546,239) (1,358,946) (9,462,523) (5,255,766) (16,623,474) (19,486,578) (16,749,040) (4,640,962) 12,108,078 1,136,900 10,158,388 (2,293,314) (4,504,775) 4,497,199 1,136,900 10,158,388 (2,293,314) (4,264,595) 4,737,379 339,910 10,264,204 (3,102,841) (3,424,403) 4,076,870 (14,989,379) (12,011,661) (564,092) 1,630,000 165,705 (2,624,526) 1,630,000 165,705 (2,624,526) 1,156,508 165,705 (2,624,994) (15,818,200) $ (12,840,482) $ (1,866,873) (796,990) 105,816 (809,527) 840,192 (660,509) 11,447,569 (473,492) (468) $ 10,973,609 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. 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, netted with debt forgiveness which is an other source for GAAP purposes, but not for budget purposes. 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 1,856,649 (140,980) (9,516,804) 140,980 22,807 1,029,287 12,397,481 26,003,039 3,424,403 (6,581,970) (8,678) 6,929 (190,182) $ 26,576,088 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. 110 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WASTEWATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2010 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 in Transfers out Excess (deficit) revenues over expenses - budgetary basis $ 18,674,575 18,674,575 $ 18,674,575 18,674,575 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 18,007,184 717,733 18,724,917 $ (667,391) 717,733 50,342 2,154,546 8,760,902 4,000,000 15,768,651 76,186 30,760,285 2,250,542 8,888,873 4,000,000 17,008,917 1,306,630 33,454,962 2,118,817 8,091,838 3,000,000 9,714,940 22,925,595 (131,725) (797,035) (1,000,000) (7,293,977) (1,306,630) (10,529,367) (12,085,710) (14,780,387) (4,200,678) 10,579,709 370,000 9,937,559 (2,882,200) (4,264,417) 3,160,942 370,000 9,937,559 (3,036,268) (4,365,677) 2,905,614 135,475 10,917,821 (2,950,205) (4,507,901) 3,595,190 (8,924,768) (11,874,773) (605,488) 600,000 2,530,180 (138,084) 600,000 2,530,180 (138,084) 460,210 2,530,779 (138,400) (5,932,672) $ (8,882,677) $ 2,247,101 (234,525) 980,262 86,063 (142,224) 689,576 11,269,285 (139,790) 599 (316) $ 11,129,778 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, netted with debt forgiveness which is an other source for GAAP purposes, but not for budget 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 (5,180) (10,285,483) (1,800,817) 1,800,817 (4,946) 3,824,969 9,677,419 23,584,042 4,507,901 (7,652,874) (42,770) (11,943,946) 548,897 $ 14,455,130 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. 111 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SOLID WASTE UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2010 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 $ 3,331,450 7,066,775 1,749,589 1,739,119 13,886,933 Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 12,600,340 1,800 12,602,140 $ 12,600,340 1,800 12,602,140 (370,629) 375,000 (39,913) (177,095) 157,992 375,000 (39,913) (1,091,259) (756,172) (1,126,801) (1,126,801) 200,000 27,268 (15,808) 200,000 27,268 (15,808) (915,341) $ 3,331,450 7,066,775 1,749,589 824,955 12,972,769 (1,284,793) $ (915,341) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 12,448,681 250 12,448,931 $ 3,246,250 6,423,374 1,474,269 11,143,893 (85,200) (643,401) (275,320) (824,955) (1,828,876) 1,305,038 1,675,667 149,036 (81,156) (1,066,225) (998,345) (225,964) (41,243) 25,034 (242,173) 306,693 1,433,494 120,700 27,268 (15,797) $ (151,659) (1,550) (153,209) 438,864 (79,300) 11 $ 1,354,205 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. 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 (39,099) (712,838) 712,838 10,875 (7,036) 1,474,269 1,066,225 (1,007,360) 36,778 (42,142) $ 1,931,374 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 STADIUM FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Rents Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 1,528,483 1,446,420 2,974,903 $ 1,528,483 1,446,420 2,974,903 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,302,047 1,571,860 480 2,874,387 $ (226,436) 125,440 480 (100,516) 1,448,291 3,049,511 70,132 695,000 5,262,934 1,534,197 3,083,924 70,132 660,587 5,348,840 1,518,415 3,016,816 14,211 4,549,442 (15,782) (67,108) (55,921) (660,587) (799,398) (2,288,031) (2,373,937) (1,675,055) 698,882 29,000 (18,348) (135,943) (125,291) 29,000 (18,348) (135,943) (125,291) 15,684 (18,336) (135,943) (138,595) (2,413,322) (2,499,228) (1,813,650) 2,641,907 (298,669) 2,641,907 (298,669) 2,641,582 (298,460) (70,084) $ (155,990) $ 529,472 (13,316) 12 (13,304) 685,578 (325) 209 $ (685,462) 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. Bond issuance costs are expensed in the year of issuance for budgetary purposes, but are amortized to interest expense over the life of the bonds for GAAP purposes. The loss on sale of capital assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (10,448) (68,177) 68,177 (18,749) 62,175 14,211 135,943 (750,908) 3,676 425 $ (34,203) 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 PUBLIC HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final OPERATING REVENUES: Rent From federal government Miscellaneous Total operating revenues $ OPERATING EXPENSES: Contractual services, materials and supplies Total operating expenses $ 327,871 327,871 Operating income (loss) 2,000 2,000 Income (loss) before transfers (45,871) $ (45,871) 280,000 280,000 $ - (47,871) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Excess (deficit) revenues over expenses - budgetary basis 280,000 280,000 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 128,920 177,710 19,724 326,354 $ (151,080) 177,710 19,724 46,354 286,820 286,820 286,820 286,820 280,000 39,534 (240,466) 2,000 2,000 1,172 1,172 (828) (828) 282,000 40,706 (241,294) 282,000 $ 40,706 $ (241,294) 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. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets (40,367) 4,659 (85,846) $ (80,848) 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 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. 115 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2010 SelfInsurance Fund Motor Pool Fund ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable, net Interest receivable Supplies inventory Total current assets Non-current assets: Capital assets: Buildings and improvements Equipment Vehicles Furniture Less accumulated depreciation Construction in progress Total capital assets, net Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll 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 $ 4,516,233 6,124,143 32,538 140,682 10,813,596 $ 1,015,581 22,567,034 (13,843,920) 1,599 9,740,294 20,553,890 5,686,978 7,711,708 27,864 13,426,550 Facilities Maintenance Fund $ 676,175 916,913 2,972 1,596,060 13,426,550 1,596,060 169,716 18,479 38,900 227,095 1,943,836 3,261 2,805,000 4,400 4,756,497 26,850 26,850 253,945 9,740,294 10,559,651 $ 20,299,945 $ Information Technology Fund $ 2,386,366 3,235,981 1,086 12,927 5,636,360 Total $ 13,265,752 17,988,745 1,086 76,301 140,682 31,472,566 148,102 25,376,959 30,745 (11,866,052) 3,031,913 16,721,667 22,358,027 148,102 26,392,540 22,567,034 30,745 (25,709,972) 3,033,512 26,461,961 57,934,527 130,959 60,775 126,370 318,104 926,638 128,667 197,770 1,253,075 3,171,149 211,182 2,805,000 367,440 6,554,771 1,890 1,890 4,758,387 106,420 106,420 424,524 80,740 80,740 1,333,815 215,900 215,900 6,770,671 8,668,163 8,668,163 1,171,536 1,171,536 16,721,667 4,302,545 $ 21,024,212 26,461,961 24,701,895 $ 51,163,856 $ The accompanying notes are an integral part of the financial statements 116 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2010 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) 6,245,278 3,216 6,248,494 $ 8,977,646 623,181 9,600,827 Facilities Maintenance Fund $ 5,746,400 2,705 5,749,105 Information Technology Fund $ 8,876,809 19,051 8,895,860 Total $ 29,846,133 648,153 30,494,286 799,970 3,380,375 2,617,069 6,797,414 (548,920) 143,575 475,945 9,259,213 9,878,733 (277,906) 2,548,426 2,792,052 5,340,478 408,627 4,685,921 3,906,529 6,358,750 14,951,200 (6,055,340) 8,177,892 10,554,901 9,259,213 8,975,819 36,967,825 (6,473,539) 84,871 34,161 119,032 (429,888) 79,695 79,695 (198,211) 9,424 9,424 418,051 33,177 33,177 (6,022,163) 207,167 34,161 241,328 (6,232,211) Transfers in Transfers out Change in net assets 793,335 (4,174,472) (3,811,025) (198,211) (26,376) 391,675 2,253,008 (4,054,571) (7,823,726) 3,046,343 (8,255,419) (11,441,287) Total net assets - beginning 24,110,970 779,861 28,847,938 62,605,143 NON-OPERATING REVENUES (EXPENSES) Interest and investment income Gain on sale of capital assets Total non-operating revenues Income (loss) before transfers Total net assets - ending $ 8,866,374 20,299,945 $ 8,668,163 $ 1,171,536 The accompanying notes are an integral part of the financial statements 117 $ 21,024,212 $ 51,163,856 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2010 SelfInsurance Fund Motor Pool Fund Facilities Maintenance Fund Information Technology Fund Total Increase (decrease) in cash and cash equivalents CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Net cash provided (used) by operating activities $ 6,248,494 (2,601,433) (798,658) 2,848,403 $ 9,600,827 1,442,162 (142,321) (7,954,213) 2,946,455 $ 5,749,105 (2,744,327) (2,564,701) 440,077 $ 8,894,774 (3,135,449) (4,650,448) 1,108,877 $ 30,493,200 (7,039,047) (8,156,128) (7,954,213) 7,343,812 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 793,335 (4,174,472) (3,381,137) - (26,376) (26,376) 2,253,008 (4,054,571) (1,801,563) 3,046,343 (8,255,419) (5,209,076) 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 (2,089,832) (2,089,832) - - (1,840,268) (1,840,268) (3,930,100) (3,930,100) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities (8,521,227) 10,520,273 115,864 2,114,910 (10,730,434) 9,417,484 96,080 (1,216,870) (4,515,522) 6,289,868 46,274 1,820,620 (25,053,864) 27,320,024 268,054 2,534,214 $ 1,729,585 3,957,393 5,686,978 $ $ 5,686,978 5,686,978 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ (507,656) 5,023,889 4,516,233 Classified as: Current assets Totals $ $ 4,516,233 4,516,233 (1,286,681) 1,092,399 9,836 (184,446) $ 229,255 446,920 676,175 $ (712,334) 3,098,700 2,386,366 738,850 12,526,902 $ 13,265,752 $ $ 676,175 676,175 $ $ 2,386,366 2,386,366 $ 13,265,752 $ 13,265,752 $ 408,627 $ (6,055,340) 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 Claims payable Compensated absences Total adjustments (548,920) $ 2,617,069 842,291 (30,555) (32,794) (10,888) 12,200 3,397,323 Net cash provided (used) by operating activities $ Non-cash investing, capital and financing activities: Decrease in fair market value of investments Total non-cash investing, capital and financing activities $ $ 2,848,403 (28,197) (28,197) (277,906) - - - - 1,918,107 (276) 1,305,000 1,530 3,224,361 $ $ $ 2,946,455 (17,131) (17,131) $ $ 440,077 (905) (905) The accompanying notes are an integral part of the financial statements 118 6,358,750 (1,086) 842,291 (30,555) 771,080 5,003 30,470 7,164,217 $ $ $ 1,108,877 (11,744) (11,744) (6,473,539) 8,975,819 (1,086) - 47,725 (21,315) 5,040 31,450 $ $ 2,704,118 (27,476) 1,305,000 49,240 13,817,351 $ $ $ 7,343,812 (57,977) (57,977) CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL MOTOR POOL FUND FOR THE YEAR ENDED JUNE 30, 2010 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) Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 8,119,871 8,119,871 $ $ 6,270,092 3,216 6,273,308 $ (1,849,779) 3,216 (1,846,563) 961,653 4,067,681 2,163,824 443,750 7,636,908 935,418 4,067,681 2,364,280 443,750 7,811,129 798,658 2,621,240 1,722,472 5,142,370 482,963 308,742 1,130,938 322,900 322,900 322,900 322,900 115,864 115,864 805,863 631,642 1,246,802 615,160 181,130 (4,102,213) (129,645) 72 310,775 (4,102,285) $ 8,119,871 8,119,871 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,985,647) 310,775 (4,102,285) $ (3,159,868) $ (2,674,281) (136,760) (1,446,441) (641,808) (443,750) (2,668,759) 822,196 (207,036) (207,036) $ 485,587 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 (30,993) (24,814) 24,814 (1,312) (778,942) 1,717,465 (2,617,069) 34,161 539,946 $ (3,811,025) 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. 119 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2010 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 Operating loss NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ $ 8,978,439 623,181 9,601,620 $ 6,683,260 623,181 7,306,441 142,409 2,082,590 7,739,063 1,011,480 10,975,542 142,321 (1,441,369) 7,954,213 6,655,165 (88) (3,523,959) 215,150 (1,011,480) (4,320,377) (2,266,787) (8,680,363) 2,946,455 11,626,818 157,000 157,000 (2,266,787) $ 2,295,179 2,295,179 127,409 399,446 2,035,111 2,000,000 4,561,966 - Income (loss) before transfers Excess (deficit) revenues over expenses - budgetary basis 2,295,179 2,295,179 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,266,787) 96,080 96,080 (8,523,363) $ (8,523,363) (60,920) (60,920) 3,042,535 $ 3,042,535 11,565,898 $ 11,565,898 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 insurance claims 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 (16,385) (793) 793 (1,254) (1,305,000) $ (198,211) 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. 120 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL FACILITIES MAINTENANCE FUND FOR THE YEAR ENDED JUNE 30, 2010 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 $ 3,084,467 3,296,925 6,381,392 Operating income (loss) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues Income (loss) before transfers Deficit revenues over expenses - budgetary basis 6,036,920 6,036,920 $ 6,036,920 6,036,920 $ 5,770,378 2,705 5,773,083 2,635,549 3,192,713 36,000 5,864,262 2,564,701 2,744,327 23,978 5,333,006 (344,472) 172,658 440,077 17,000 17,000 17,000 17,000 9,836 9,836 (327,472) 189,658 449,913 (327,472) $ 189,658 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 449,913 $ (266,542) 2,705 (263,837) (70,848) (448,386) (12,022) (531,256) 267,419 (7,164) (7,164) 260,255 $ 260,255 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. 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 (412) (23,978) 16,275 (47,725) 23,978 (26,376) $ 391,675 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 INFORMATION TECHNOLOGY FUND FOR THE YEAR ENDED JUNE 30, 2010 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ $ 8,943,648 8,943,648 4,528,327 4,687,220 1,750,053 500,000 11,465,600 4,603,755 4,669,185 1,784,053 500,000 11,556,993 (2,521,952) (2,613,345) 164,000 164,000 Income before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 8,943,648 8,943,648 (2,449,345) 1,352,839 (4,000,000) 1,352,839 (4,000,000) (5,005,113) $ $ (5,096,506) 8,917,323 19,051 8,936,374 $ 46,693 (1,572,650) (810,749) 8,720,287 (2,336,706) 2,329,432 46,274 46,274 (117,726) (117,726) 262,361 2,211,706 1,299,820 (4,000,000) $ (26,325) 19,051 (7,274) 4,650,448 3,096,535 973,304 216,087 164,000 164,000 (2,357,952) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,437,819) (53,019) $ 2,158,687 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 (12,011) (35,473) (41,600) 41,600 (771,080) 892,790 (6,358,750) 898,617 $ (7,823,726) 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 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. 123 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS JUNE 30, 2010 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 $ $ 163,398 221,572 384,970 384,970 384,970 6,500 8,813 15,313 15,313 15,313 PLAY Peoria NFP Fund $ 3,351 4,543 7,894 105 7,789 7,894 Peoria Citizens Corp Council NFP Fund $ 2,337 3,170 5,507 5,507 5,507 The accompanying notes are an integral part of the financial statements 124 Westside Fire Training IGA Fund $ 9,565 12,970 22,535 65 22,470 22,535 Total $ 185,151 251,068 436,219 170 436,049 436,219 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Balance June 30, 2009 Terramar Infrastructure Fund Assets: Cash and cash equivalents Investments Total Assets $ Liabilities: Other liabilities 147,108 237,862 384,970 Additions $ Deductions 237,862 221,572 459,434 $ 221,572 237,862 459,434 - Balance June 30, 2010 $ 163,398 221,572 384,970 384,970 - Neighborhood Pride NFP Fund Assets: Cash and cash equivalents Investments Total Assets 21,819 35,280 57,099 60,836 8,813 69,649 76,155 35,280 111,435 6,500 8,813 15,313 Liabilities: Accounts payable Other liabilities Total Liabilities 3,777 53,322 57,099 56,399 25,939 82,338 60,176 63,948 124,124 15,313 15,313 PLAY Peoria NFP Fund Assets: Cash and cash equivalents Investments Total Assets 3,840 6,209 10,049 30,628 9,151 39,779 31,117 10,817 41,934 3,351 4,543 7,894 Liabilities: Accounts payable Other liabilities Total Liabilities 97 9,952 10,049 5,535 19,862 25,397 5,527 22,025 27,552 105 7,789 7,894 Peoria Citizens Corp Council NFP Fund Assets: Cash and cash equivalents Investments Total Assets 2,084 3,370 5,454 3,422 3,170 6,592 3,169 3,370 6,539 2,337 3,170 5,507 Liabilities: Accounts payable Other liabilities Total Liabilities 5,454 5,454 - - 5,507 5,507 Westside Fire Training IGA Fund Assets: Cash and cash equivalents Investments Total Assets 8,358 13,515 21,873 33,265 12,970 46,235 32,058 13,515 45,573 9,565 12,970 22,535 Liabilities: Accounts payable Other liabilities Total Liabilities 21,873 21,873 19,153 19,400 38,553 19,088 18,803 37,891 65 22,470 22,535 Assets: Cash and cash equivalents Investments Total Assets 183,209 296,236 479,445 366,013 255,676 621,689 364,071 300,844 664,915 185,151 251,068 436,219 Liabilities: Accounts payable Other liabilities Total Liabilities 3,874 475,571 479,445 81,087 65,254 146,341 84,791 104,776 189,567 170 436,049 436,219 53 53 384,970 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 125 126 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 128 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 134 135 136 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 143 127 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 # 111 114 100 121 122-020 122-030 122 126 126.1 126.2 120 142 143 ASSETS: Current Assets: Cash-unrestricted Cash-tenant security deposits Total Cash 507,307 11,939 519,246 - Accounts receivable - HUD other projects - Capital fund Accounts receivable - HUD other projects - Other Accounts Receivable - HUD Other Projects 2,083 2,170 4,253 2,083 2,170 4,253 Accounts receivable - tenants Allowance for doubtful accounts - tenants Allowance for doubtful accounts - other Total Receivables, Net of Allowance for Doubtful Accounts 726 4,979 726 4,979 Prepaid expenses and other assets Inventories 57 4,713 57 4,713 528,995 528,995 161 162 164 166 160 Non-current Assets: Land Buildings Furniture, equipment and machinery - administration Accumulated depreciation Total Capital Assets, Net of Accumulated Depreciation 180 190 410,350 3,276,922 32,860 (1,858,567) 1,861,565 410,350 3,276,922 32,860 (1,858,567) 1,861,565 Total Non-current Assets 1,861,565 1,861,565 Total Assets 2,390,560 2,390,560 13,284 13,284 4,022 245 799 11,939 4,022 245 799 11,939 847 847 847 847 31,136 31,136 2,202 2,202 2,202 2,202 33,338 33,338 1,861,565 495,657 2,357,222 1,861,565 495,657 2,357,222 2,390,560 2,390,560 LIABILITIES AND EQUITY: LIABILITIES: Current Liabilities: Bank Overdraft Accounts payable <= 90 days 321 322 331-030 332 341 Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accounts payable - HUD PHA Programs - Other Accounts payable - HUD PHA Projects Tenant security deposits 342-020 342 Deferred revenue - Capital fund Deferred Revenue 310 Total Current Liabilities 354 350 Non-current Liabilities: Accrued compensated absences - non-current Total Non-current Liabilities 300 Total Liabilities 600 TOTAL PROJECTS - Total Current Assets 508.1 511.1 512.1 513 507,307 11,939 519,246 Accounts receivable - PHA projects 150 311 312 Public Housing 14.850A & 14.872 BALANCE SHEET 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) 128 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 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 # 111 114 100 121 122-020 122-030 122 126 126.1 126.2 120 142 143 BALANCE SHEET ASSETS: Current Assets: Cash-unrestricted Cash-tenant security deposits Total Cash Accounts receivable - PHA projects Accounts receivable - HUD other projects - Capital fund Accounts receivable - HUD other projects - Other Accounts Receivable - HUD Other Projects Accounts receivable - tenants Allowance for doubtful accounts - tenants Allowance for doubtful accounts - other Total Receivables, Net of Allowance for Doubtful Accounts Prepaid expenses and other assets Inventories 150 Total Current Assets 161 162 164 166 160 Non-current Assets: Land Buildings Furniture, equipment and machinery - administration Accumulated depreciation Total Capital Assets, Net of Accumulated Depreciation 180 Total Non-current Assets 190 Total Assets 311 312 Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accounts payable - HUD PHA Programs - Other Accounts payable - HUD PHA Projects Tenant security deposits 342-020 342 Deferred revenue - Capital fund Deferred Revenue 310 Total Current Liabilities 354 350 Non-current Liabilities: Accrued compensated absences - non-current Total Non-current Liabilities 300 Total Liabilities 600 - - - 463,756 463,756 36,450 - - - 36,450 799 799 - 133,410 133,410 21,938 21,938 156,147 156,147 15,109 52,358 - 133,410 21,938 15,109 207,706 50 - 516,164 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) 129 TOTAL PROGRAMS 463,756 463,756 - LIABILITIES AND EQUITY: LIABILITIES: Current Liabilities: Bank Overdraft Accounts payable <= 90 days 321 322 331-030 332 341 508.1 511.1 512.1 513 Housing Choice Vouchers 14.871 Community Development Capital Fund Community Block Stimulus Development Stimulus Grant Block Grant Grant 14.885 14.218 14.253 - - - - - 133,410 - 21,938 - 50 671,512 - 516,164 - 133,410 21,938 671,512 6,946 - 78,868 50,787 21,888 50 100,756 57,783 4,110 162 - - 1,585 2,170 - - 5,695 162 2,170 - - - - - - 11,218 - 1,461 1,461 - 12,679 - 49,363 454,122 503,485 - 516,164 - 133,410 133,410 133,410 21,938 - 166,566 1,461 1,461 21,938 168,027 - 49,363 454,122 503,485 21,938 671,512 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Public Public Housing Capital 14.872 INCOME STATEMENT 70300 70400 70500 REVENUE: Net tenant rental revenue Tenant revenue - other Total Tenant Revenue 70600-010 70600-020 70600 70800 Housing assistance payments Ongoing administrative fees earned HUD PHA operating grants Other government grants 71100-020 71100 Administrative fee Investment income - unrestricted 71400 71500 7000 91100 91200 91300 91310 91500 91600 91700 91800 91900 91000 Fraud recovery Other revenue Total Revenue EXPENSES: Administrative salaries Auditing fees Management fee Bookkeeping fee Employee benefit contributions - administrative Office expenses Legal expense Travel Other Total Operating - Administrative Housing Operating 14.850A TOTAL PROJECTS 88,553 6,297 94,850 - 88,553 6,297 94,850 177,710 - 78,783 - 256,493 - 1,172 - 1,172 13,426 - 13,426 287,158 78,783 365,941 36,348 1,712 33,406 5,602 6,104 59,547 275 142,994 1,419 1,419 36,348 1,712 33,406 5,602 6,104 60,966 275 144,413 93100 93200 93300 93600 93000 Water Electricity Gas Sewer Total Utilities 13,423 5,403 4,359 4,718 27,903 - 13,423 5,403 4,359 4,718 27,903 94100 94200 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials and other 32,418 26,088 7,658 32,418 33,746 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 5,085 23,260 28,345 375 16,020 47,417 290 64,102 5,085 375 16,020 47,417 290 23,260 92,447 94500 Employee benefit contribution - ordinary maintenance 10,593 - 10,593 94000 Total Maintenance 97,444 71,760 169,204 95200 95000 Protective services - other contract costs Total Protective Services 1,264 1,264 - 1,264 1,264 96130 96140 96100 Workmen's Compensation All other insurance Total Insurance Premiums 903 609 1,512 - 903 609 1,512 96200 96300 96400 96600 96000 Other general expenses Payments in lieu of taxes Bad debt - tenant rents Bad debt - other Total Other General Expenses 6,065 4,979 11,044 5,604 5,604 5,604 6,065 4,979 16,648 282,161 78,783 360,944 94300-010 94300-020 94300-050 94300-060 94300-070 94300-080 94300-110 94300-120 94300 96900 Total Operating Expenses 97000 Excess Revenue Over Operating Expenses 97300-050 97300 97400 All other Housing Assistance Payments Depreciation expense 90000 Total Expenses 1000 Excess (Deficiency) of Revenue Over (Under) Expenses (continued) 130 4,997 - 4,997 - - - 85,846 - 85,846 368,007 78,783 446,790 (80,849) - (80,849) CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Housing Choice Vouchers 14.871 INCOME STATEMENT 70300 70400 70500 REVENUE: Net tenant rental revenue Tenant revenue - other Total Tenant Revenue 70600-010 70600-020 70600 70800 Housing assistance payments Ongoing administrative fees earned HUD PHA operating grants Other government grants 71100-020 71100 Administrative fee Investment income - unrestricted 71400 71500 7000 91100 91200 91300 91310 91500 91600 91700 91800 91900 91000 606,768 50,475 - Fraud recovery Other revenue Total Revenue 117,833 - 735,589 110,636 TOTAL PROGRAMS 606,768 50,475 117,833 846,225 420 420 - - - 420 420 10,668 247,820 - - - 10,668 247,820 916,151 EXPENSES: Administrative salaries Auditing fees Management fee Bookkeeping fee Employee benefit contributions - administrative Office expenses Legal expense Travel Other Total Operating - Administrative Community Development Capital Fund Community Block Stimulus Development Stimulus Grant Block Grant Grant 14.885 14.218 14.253 117,833 735,589 110,636 1,880,209 45,841 788 20,812 9,000 31,728 108,169 - 18,473 1,609 25,534 45,616 12,320 592 12,912 76,634 788 20,812 9,000 31,728 1,609 26,126 166,697 93100 93200 93300 93600 93000 Water Electricity Gas Sewer Total Utilities 112 1,604 221 31 1,968 - - 4,279 22,486 26,765 4,391 24,090 221 31 28,733 94100 94200 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials and other 9,799 833 9,584 58,141 1,580 - 67,940 11,997 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 2,591 2,591 42,708 36,455 27,539 106,702 35,045 1,152 15,537 579,205 630,939 70,959 70,959 77,753 36,455 1,152 15,537 27,539 652,755 811,191 94500 Employee benefit contribution - ordinary maintenance 2,810 94000 Total Maintenance 95200 95000 Protective services - other contract costs Total Protective Services 1,026 1,026 - - - 1,026 1,026 96130 96140 96100 Workmen's Compensation All other insurance Total Insurance Premiums 790 281 1,071 - - - 790 281 1,071 96200 96300 96400 96600 96000 Other general expenses Payments in lieu of taxes Bad debt - tenant rents Bad debt - other Total Other General Expenses 11,492 718 12,210 1,547 1,547 188 188 - 13,227 718 13,945 117,833 736,464 94300-010 94300-020 94300-050 94300-060 94300-070 94300-080 94300-110 94300-120 94300 16,033 116,286 690,660 70,959 893,938 96900 Total Operating Expenses 140,477 97000 Excess Revenue Over Operating Expenses 775,674 - - 774,799 553,300 553,300 - - - 553,300 553,300 - - - 97300-050 97300 97400 All other Housing Assistance Payments Depreciation expense 90000 Total Expenses 1000 Excess (Deficiency) of Revenue Over (Under) Expenses 693,777 775,674 (continued) 131 117,833 - (875) 736,464 (875) 110,636 2,810 110,636 - 1,105,410 1,658,710 774,799 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Public Public Housing Capital 14.872 INCOME STATEMENT (continued) 11030 OTHER INFORMATION: Beginning equity 2,438,071 Housing Operating 14.850A - TOTAL PROJECTS 2,438,071 11170-001 11170-010 11170-040 11170-050 11170-060 11170-080 11170-110 11170-002 11170-003 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 - - - 11180-001 11180-010 11180-030 11180-080 11180-090 11180-100 11180-002 11180-003 11180 Housing Assistance Payments Equity - Beginning Balance Housing Assistance Payment Revenues Total HAP Revenues Housing Assistance Payments Other Expenses Total Housing Assistance Payments Expenses Net Housing Assistance Payments Housing Assistance Payments Equity - Ending Balance Housing Assistance Payments Equity - - - 11190-210 11190 11210 Total ACC HCV Units Unit Months Available Unit Months Leased 840 745 - 840 745 469,576 - 469,576 11270 Excess Cash (concluded) 132 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Housing Choice Vouchers 14.871 INCOME STATEMENT (continued) 11030 OTHER INFORMATION: Beginning equity Community Development Capital Fund Community Block Stimulus Development Stimulus Grant Block Grant Grant 14.885 14.218 14.253 TOTAL PROGRAMS 281,111 - 875 - 281,986 11170-001 11170-010 11170-040 11170-050 11170-060 11170-080 11170-110 11170-002 11170-003 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 281,111 50,475 420 273,261 324,156 140,477 140,477 183,679 464,790 - - - 281,111 50,475 420 273,261 324,156 140,477 140,477 183,679 464,790 11180-001 11180-010 11180-030 11180-080 11180-090 11180-100 11180-002 11180-003 11180 Housing Assistance Payments Equity - Beginning Balance Housing Assistance Payment Revenues Total HAP Revenues Housing Assistance Payments Other Expenses Total Housing Assistance Payments Expenses Net Housing Assistance Payments Housing Assistance Payments Equity - Ending Balance Housing Assistance Payments Equity 606,768 606,768 553,300 14,773 568,073 38,695 38,695 38,695 - - - 606,768 606,768 553,300 - - - 568,073 38,695 38,695 38,695 11190-210 11190 11210 Total ACC HCV Units Unit Months Available Unit Months Leased 984 984 793 - - - 984 984 793 Excess Cash - - - - - 11270 (concluded) 133 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Balances at June 30, 2009 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 Series 2010 Total Municipal Development Authority: Refunding bonds - series 2003 Series 2006 Series 2008 Total $ Exhibit 1 Balances at June 30, 2010 Issued Retired 5,870,090 56,858,711 62,728,801 5,791,491 19,578,633 25,370,124 5,273,841 4,852,546 10,126,387 6,387,740 71,584,798 77,972,538 1,865,000 3,710,000 1,590,000 17,745,000 73,005,000 16,705,000 68,440,000 29,170,000 29,170,000 1,865,000 3,710,000 1,590,000 960,000 2,770,000 1,395,000 14,980,000 27,270,000 16,785,000 70,235,000 15,310,000 53,460,000 29,170,000 184,960,000 6,948,338 5,590,000 43,405,000 55,943,338 183,060,000 9,915,393 5,830,000 45,240,000 60,985,393 - 2,967,055 240,000 1,835,000 5,042,055 3,005,000 3,005,000 - 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 1,650,000 1,940,000 530,000 810,000 577,812 4,690,000 10,402,812 - 205,000 545,000 430,000 270,000 355,000 280,491 275,000 2,360,491 1,105,000 1,510,000 260,000 455,000 297,321 4,415,000 8,042,321 Community Facilities District: Vistancia CFD Series 2002 Vistancia CFD Series 2005 Vistancia CFD Series 2006 Total 18,175,000 22,125,000 22,760,000 63,060,000 - 850,000 750,000 570,000 2,170,000 17,325,000 21,375,000 22,190,000 60,890,000 Highway user revenue: Series 1996 Total Total bonds payable Total governmental debt - 320,513,205 29,170,000 39,847,546 309,835,659 $ 383,242,006 54,540,124 49,973,933 387,808,197 134 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT BUSINESS-TYPE ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Balance at June 30, 2009 Compensated absences Less current portion Long-term portion of compensated absences Contracts payable Long-term loans payable: Suntrust Gila River Indian Water Rights 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 2009 Water Infrastructure Finance Authority, Northern Ave 2009 Water Infrastructure Finance Authority, DW Various 2009 Water Infrastructure Finance Authority, CW Various 2009 Water Infrastructure Finance Authority, CW Beardsley 2009 Water Infrastructure Finance Authority, Pinn. Peak 2010 Water and Wastewater Revenue Refunding Bonds Total bonds Total business-type bonds & contracts payable Less current portion of bonds, contracts & loans payable Long-term portion of bonds, contracts & loans payable $ Issued Exhibit 2 Retired 549,380 $ 646,070 517,780 128,290 $ 4,421,042 $ 2,992,187 $ 76,067 1,064,632 1,064,632 $ 7,456,882 7,456,882 $ 1,064,632 573,606 1,638,238 6,883,276 6,883,276 625,617 739,120 11,085,000 6,915,000 960,000 642,174 83,718 367,945 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 - 544,560 Balances at June 30, 2010 $ $ 650,890 479,980 170,910 $ 7,337,162 136,575,909 1,577,978 8,484,204 4,021,623 4,545,000 1,780,000 15,780,000 36,188,805 1,154,278 1,653,926 850,366 747,400 25,824,544 4,190,267 6,753,789 13,415,229 9,994,904 1,441,353 861,662 26,029,064 41,087,615 8,575,248 727,612 8,484,204 4,021,623 4,545,000 1,032,600 15,780,000 146,940,170 142,061,583 46,637,874 27,538,849 161,160,608 8,191,098 $ 133,870,485 135 8,489,425 $ 152,671,183 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2010 General Obligation General Facilites Purpose 6% Limitation (1) Principal Interest Total Principal Fiscal Year Other Purpose 20% Limitation (1) Interest Total Principal Exhibit 3 Total General Obligation Interest Total 2011 995,000 797,376 1,792,376 16,385,000 5,655,264 22,040,264 17,380,000 6,452,640 23,832,640 2012 2,035,000 878,947 2,913,947 9,300,000 5,652,843 14,952,843 11,335,000 6,531,790 17,866,790 2013 1,070,000 584,009 1,654,009 7,515,000 5,597,671 13,112,671 8,585,000 6,181,680 14,766,680 2014 1,115,000 545,074 1,660,074 7,780,000 5,319,597 13,099,597 8,895,000 5,864,671 14,759,671 2015 350,000 151,802 501,802 8,880,000 5,382,509 14,262,509 9,230,000 5,534,311 14,764,311 2016 - - - 9,595,000 5,189,971 14,784,971 9,595,000 5,189,971 14,784,971 2017 - - - 9,545,000 4,838,831 14,383,831 9,545,000 4,838,831 14,383,831 2018 - - - 9,350,000 4,462,581 13,812,581 9,350,000 4,462,581 13,812,581 2019 - - - 9,735,000 4,066,465 13,801,465 9,735,000 4,066,465 13,801,465 2020 - - - 10,100,000 3,666,873 13,766,873 10,100,000 3,666,873 13,766,873 2021 - - - 10,540,000 3,247,965 13,787,965 10,540,000 3,247,965 13,787,965 2022 - - - 9,775,000 2,829,316 12,604,316 9,775,000 2,829,316 12,604,316 2023 - - - 10,180,000 2,408,978 12,588,978 10,180,000 2,408,978 12,588,978 2024 - - - 8,855,000 2,004,884 10,859,884 8,855,000 2,004,884 10,859,884 2025 - - - 9,225,000 1,621,538 10,846,538 9,225,000 1,621,538 10,846,538 2026 - - - 9,615,000 1,220,086 10,835,086 9,615,000 1,220,086 10,835,086 2027 - - - 10,045,000 802,006 10,847,006 10,045,000 802,006 10,847,006 2028 - - - 4,620,000 481,850 5,101,850 4,620,000 481,850 5,101,850 2029 - - - 4,830,000 266,262 5,096,262 4,830,000 266,262 5,096,262 2030 1,725,000 119,812 1,844,812 1,725,000 119,812 1,844,812 2031 1,800,000 40,500 1,840,500 1,800,000 40,500 1,840,500 179,395,000 $ 64,875,802 $ 244,270,802 $ 184,960,000 $ 67,833,010 $ 252,793,010 $ 5,565,000 $ 2,957,208 $ 8,522,208 $ (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 2003 2007 2007R 2009 2010 Total General Obligation Bond Original Issue Amount 6% Limitation 20% Limitation 27,570,000 94,380,000 18,365,000 68,440,000 29,170,000 15,345,000 17,340,000 2,265,000 1,005,000 12,225,000 77,040,000 16,100,000 68,440,000 28,165,000 $ 237,925,000 35,955,000 201,970,000 (continued) 136 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2010 Fiscal Year Municipal Development Authority (2) Principal Interest Total Principal Special Assessment (3) Interest Exhibit 3 Water and Sewer Revenue Principal Interest Total Total 2011 5,910,000 2,449,319 8,359,319 1,887,321 432,302 2,319,623 7,132,898 4,361,466 11,494,364 2012 3,575,000 2,257,469 5,832,469 1,495,000 316,720 1,811,720 7,941,123 4,432,743 12,373,866 2013 3,730,000 2,120,269 5,850,269 1,140,000 222,820 1,362,820 8,787,749 4,163,474 12,951,223 2014 3,870,000 1,963,944 5,833,944 325,000 149,600 474,600 9,062,488 2,879,195 11,941,683 2015 2,585,000 1,832,381 4,417,381 340,000 135,788 475,788 9,345,618 3,579,511 12,925,129 2016 2,695,000 1,714,306 4,409,306 355,000 121,338 476,338 9,657,427 3,253,251 12,910,678 2017 2,810,000 1,592,831 4,402,831 370,000 106,250 476,250 10,315,798 2,910,124 13,225,922 2018 2,935,000 1,467,681 4,402,681 390,000 90,525 480,525 10,651,362 2,556,820 13,208,182 2019 3,065,000 1,323,981 4,388,981 405,000 73,950 478,950 10,070,745 2,200,791 12,271,536 2020 3,205,000 1,173,931 4,378,931 425,000 56,738 481,738 9,010,973 1,870,072 10,881,045 2021 3,345,000 1,038,141 4,383,141 445,000 38,675 483,675 9,349,816 1,552,302 10,902,118 2022 3,490,000 892,486 4,382,486 465,000 19,763 484,763 6,696,195 1,281,817 7,978,012 2023 3,650,000 736,453 4,386,453 - - - 5,851,775 1,081,990 6,933,765 2024 3,805,000 569,193 4,374,193 - - - 5,890,196 899,409 6,789,605 2025 3,980,000 390,288 4,370,288 - - - 6,072,539 713,887 6,786,426 2026 4,155,000 194,237 4,349,237 - - - 6,260,626 522,519 6,783,145 2027 - - - - - - 6,454,641 325,118 6,779,759 2028 - - - - - - 4,667,597 151,935 4,819,532 2029 - - - - - - 1,737,143 54,127 1,791,270 2030 - - - - 1,121,799 14,635 1,136,434 2031 - - - - $ 56,805,000 $ 21,716,910 $ 78,521,910 $ 8,042,321 $ 1,764,469 $ 9,806,790 $146,078,508 $ 38,805,186 $184,883,694 (2) 2003 Municipal Development Authority Revenue Refunding Bonds are partially paid by the Enterprise Fund (business-type activity). (3) Includes 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 (Parkwest) Improvement District Bonds. (continued) 137 CITY OF PEORIA, ARIZONA SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2010 Fiscal Year Community Facilities District (4) Principal Interest Total Principal Long-Term Loan Interest Exhibit 3 DEBT SERVICE REQUIREMENTS GRAND TOTALS Interest Total Total Principal 2011 2,275,000 3,222,392 5,497,392 573,606 567,870 1,141,476 35,158,825 17,485,989 52,644,814 2012 2,385,000 3,108,336 5,493,336 573,606 520,548 1,094,154 27,304,729 17,167,606 44,472,335 2013 2,505,000 2,985,974 5,490,974 573,607 473,225 1,046,832 25,321,356 16,147,442 41,468,798 2014 2,630,000 2,854,633 5,484,633 573,606 425,903 999,509 25,356,094 14,137,946 39,494,040 2015 2,765,000 2,711,311 5,476,311 573,606 378,580 952,186 24,839,224 14,171,882 39,011,106 2016 2,920,000 2,555,713 5,475,713 573,607 331,258 904,865 25,796,034 13,165,837 38,961,871 2017 3,080,000 2,388,074 5,468,074 573,606 283,935 857,541 26,694,404 12,120,045 38,814,449 2018 3,255,000 2,207,674 5,462,674 573,606 236,613 810,219 27,154,968 11,021,894 38,176,862 2019 3,440,000 2,015,359 5,455,359 573,607 189,290 762,897 27,289,352 9,869,836 37,159,188 2020 3,635,000 1,810,671 5,445,671 573,606 141,968 715,574 26,949,579 8,720,253 35,669,832 2021 3,850,000 1,593,926 5,443,926 573,606 94,645 668,251 28,103,422 7,565,654 35,669,076 2022 4,070,000 1,362,718 5,432,718 573,607 47,322 620,929 25,069,802 6,433,422 31,503,224 2023 4,310,000 1,115,388 5,425,388 - - - 23,991,775 5,342,809 29,334,584 2024 4,565,000 862,431 5,427,431 - - - 23,115,196 4,335,917 27,451,113 2025 4,815,000 604,936 5,419,936 - - - 24,092,539 3,330,649 27,423,188 2026 5,080,000 357,175 5,437,175 - - - 25,110,626 2,294,017 27,404,643 2027 5,310,000 120,802 5,430,802 - - - 21,809,641 1,247,926 23,057,567 2028 - - - - - - 9,287,597 633,785 9,921,382 2029 - - - - - - 6,567,143 320,389 6,887,532 2030 - - - - - - 2,846,799 134,447 2,981,246 2031 - - - - - - 1,800,000 40,500 1,840,500 $ 165,688,245 $ 629,347,350 $60,890,000 31,877,513 92,767,513 6,883,276 $ 3,691,157 (4) Vistancia Community Facilities District bonds (concluded) 138 $ 10,574,433 463,659,105 139 CITY OF PEORIA, ARIZONA SCHEDULE OF CAPITAL ASSETS BY FUNCTION AND CLASSIFICATION JUNE 30, 2010 Governmental activities: Culture and Recreation Asset Type General Government Police Development Services Fire Highways and Streets Work in progress (WIP) $ 37,288,641 $ 18,463,211 $ 64,453 $ 135,602 $ - $ 116,009,485 Land $ 51,311,964 $ 26,913,171 $ 1,059,975 $ 1,048,451 $ - $ 237,599,647 Buildings and Improvements $ 37,783,632 $ 67,048,930 $ 21,198,774 $ 21,006,146 $ 119,479 $ - Furniture $ 84,054 $ 1,558,721 $ $ 207,324 $ 65,914 $ 57,229 Equipment $ 2,770,510 $ 28,483,050 $ 3,488,476 $ 1,554,900 $ 109,445 $ 2,264,476 Vehicles $ 1,276,269 $ $ 5,808,517 $ 8,349,192 $ 290,868 $ 3,405,400 Storm Drain System $ Street System $ Park System Sub-total $ - $ - $ - $ - $ 7,458,289 $ 20,819 $ - $ - $ - $ $ 27,711,942 $ 260,431 $ - $ - $ - $ $ 165,685,301 Less accumulated depreciation Total governmental activities capital assets, net - 1,487,300 - $ 144,235,633 (19,232,401) $ 146,452,900 $ 31,620,195 (29,772,518) $ (9,207,157) $ 114,463,115 $ 22,413,038 Wastewater Utility Sanitation Utility 32,301,615 $ (8,450,520) $ 23,851,095 585,706 $ (387,954) $ 197,752 477,739,024 837,075,261 (139,764,301) $ 697,310,960 Business-type activities: Water Utility Work in progress (WIP) $ Land 37,057,711 6,028,186 Water Rights 12,889,809 Buildings and Improvements $ 9,478,865 $ 3,878,001 - 7,659,795 186,058 29,004 - Equipment 1,123,741 888,673 28,430 Vehicles 1,818,013 873,230 9,093,778 Water System 280,490,121 Wastewater System - 339,802,861 $ - Total $ 410,350 - 10,799 - 6,703,349 - 1,642,283 Furniture $ - - Housing Programs Stadium 17,019,886 - 25,781,679 46,536,576 12,889,809 3,276,922 38,371,478 9,613 224,675 568,811 23,247 2,632,902 483,585 - 12,268,606 - - - - 280,490,121 - - - 339,802,861 Sub-total 341,235,922 362,610,429 9,133,007 33,537,424 3,720,132 750,236,914 Less accumulated depreciation (54,986,238) (49,190,033) (4,267,716) (11,289,896) (1,858,567) (121,592,450) Total business-type activities capital assets, net $ 286,249,684 $ 313,420,396 140 $ 4,865,291 $ 22,247,528 $ 1,861,565 $ 628,644,464 Exhibit 4 Public Works Human Services $ 22,777,393 $ $ 10,415,601 $ $ 320,598 $ $ 50,392 $ - Total $ 194,738,785 $ 328,656,566 - $ 147,477,559 $ - $ 2,023,634 273,844 $ - $ 38,944,701 $ 1,543,628 $ $ 22,573,207 $ 64,521,486 $ - $ 64,521,486 307,757 412,033 $ - $ - $ 485,218,132 $ - $ - $ 27,972,373 $ 1,312,126,443 $ 99,902,942 $ (16,896,773) $ 83,006,169 719,790 (233,736) $ 486,054 (223,945,360) $ 1,088,181,083 141 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN CAPITAL ASSETS BY FUNCTION GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Department Culture and Recreation Additions and Transfers Balances July 1, 2009 $ $ (5,457,082) 145,971,180 12,407,196 (14,142,743) 144,235,633 Police 34,224,018 4,670,858 (7,274,681) 31,620,195 Fire 33,179,635 1,482,759 (2,360,779) 32,301,615 (79,268) 585,706 Development Services 664,974 Highways & Streets Public Works Human Services Sub-total governmental fixed assets $ Balances June 30, 2010 9,456,721 General Government 161,685,662 Deletions and Transfers Exhibit 5 - $ 165,685,301 738,614,973 132,259,255 (33,798,967) 837,075,261 92,021,077 15,516,730 (7,634,865) 99,902,942 (187,932) 719,790 $ (70,936,317) $ 1,312,126,443 907,722 $ 1,207,269,241 $ 175,793,519 Less accumulated depreciation Culture and Recreation (17,852,630) (2,201,617) 821,846 (19,232,401) General Government (35,078,957) (8,410,445) 13,716,884 (29,772,518) Police (11,792,368) (1,569,374) 4,154,585 (9,207,157) (9,179,475) (1,631,824) 2,360,779 (8,450,520) (428,171) (36,734) 76,951 (387,954) (134,241,437) (9,799,577) 4,276,713 (139,764,301) (15,840,229) (1,477,197) 420,653 (16,896,773) (362,702) (58,862) 187,828 (233,736) Sub-total accumulated depreciation $ (224,775,969) $ (25,185,630) $ 26,016,239 $ (223,945,360) Total governmental activities capital assets, net $ $ 150,607,889 $ (44,920,078) $ 1,088,181,083 Fire Development Services Highways & Streets Public Works Human Services 982,493,272 142 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2010 Fund Out Governmental Funds: General Exhibit 6 Purpose Transfers In Transfers Out Half-Cent - public safety subsidies Half-Cent - economic development subsidy Highway User - fund ASRS liability Special Assmt Debt Service - city contribution to ID#8802 Non-major - Other Grants - employee wellness subsidy Non-major - Other Grants - Homeland Security Grant Non-major - MDA Debt Service - debt payments Non-major - CFD Debt Service - close completed IDs Water utility - fund ASRS liability Water Utility - capital assets Wastewater utility - fund ASRS liability Solid Waste Utility - fund ASRS liability ISF - Motor Pool - fund ASRS liability ISF - Motor Pool - excess equipment reserve cash ISF - Motor Pool - equipment purchases ISF - Motor Pool - capital assets ISF - Facilities - fund ASRS liability ISF - Facilities - capital assets ISF- IT Fund - supplemental operational support ISF - IT Fund - return excess cash to operating funds ISF - IT Fund - fund ASRS liability ISF - IT Fund - capital assets ISF- IT Fund - projects ISF- IT Fund - computer equipment purchases Fund Totals $ $ 4,771,880 259,188 53,077 275,630 272,434 171,890 42,143 72,259 4,000,000 2,398 23,978 3,583,640 53,779 13,582,296 Half-Cent Sales Tax General - public safety subsidies General - economic development subsidy 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 General - fund ASRS liability Half-Cent - streets subsidy Transportation Sales Tax - streets subsidy Non-major - MDA Debt Service - debt payments ISF- IT Fund - return overage to operating funds Fund Totals Development Fee ISF- IT Fund - capital assets Fund Totals - 50,721 50,721 Transportation Sales Tax Streets - subsidy Transit - subsidy Non-major - MDA Debt Service - debt payments Fund Totals - 1,000,000 125,000 2,841,914 3,966,914 GO Bond Capital Projects ISF - IT Fund - capital assets - 487,380 487,380 Other Governmental Public Transit Transportation Sales Tax - transit subsidy ISF - Motor Pool - equipment purchases ISF- IT Fund - return overage to operating funds sub-total (continued) 143 - 399,000 10,000 140,201 184,517 104,429 57,300 19,978 1,000 15,243 445,430 28,550 1,405,648 1,000,000 1,000,000 79,707 2,079,707 125,000 8,390 133,390 4,771,880 259,188 1,000,000 2,902,529 465,850 2,160,000 824,840 316,553 12,700,840 53,077 321,089 374,166 102,855 102,855 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2010 Fund Out Other Governmental (cont) Other Grants Purpose Exhibit 6 Transfers In General - employee wellness subsidy General - correct Homeland Security grant expenditures Water Utility - capital assets Wastewater Utility - capital assets ISF - Motor Pool - capital assets ISF - IT Fund - capital assets sub-total Storm Drainage ISF- IT Fund - return overage to operating funds 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 10,000 140,201 150,201 Transfers Out 47,449 643,014 591,436 83,291 1,365,190 7,341 7,341 - 184,517 2,902,529 321,089 2,841,914 185,459 137,988 15,796 298,460 102,213 6,989,965 - Non-major - CFD Capital Projects - debt transfers 225,986 - Special Assmt Debt Service General - close completed IDs General - city contribution to ID 399,000 399,000 CFD Bonds-Capital Projects Non-major - CFD Debt Services - debt transfers Water Utility - capital assets sub-total Enterprise Funds: Water Utility Wastewater Utility - 275,630 275,630 225,986 7,736 233,722 Non-major Fund Totals 7,905,883 1,977,397 Total Governmental Funds 23,567,886 20,963,066 104,429 47,449 7,736 209,923 165,705 535,242 272,434 185,459 287,284 2,439,536 3,184,713 643,014 287,284 2,439,536 91,243 3,461,077 171,890 137,988 209,923 519,801 General - capital assets General - fund ASRS liability Non-major - Other Grants - capital assets Non-major - MDA Debt Service - debt service Non-major - CFD Bonds Capital Projects - capital assets Wastewater Utility - capital assets Wastewater Utility - debt service ISF - Facilities - return overage to operating funds Fund Totals General - fund ASRS liability Non-major - MDA Debt Service - debt service Non-major - Other Grants - capital assets Water Utility - capital assets Water Utility - debt service ISF- IT Fund - return overage to operating funds Fund Totals (continued) 144 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2010 Fund Out Enterprise (cont) Solid Waste Utility Stadium Internal Service Funds Motor Pool Purpose Exhibit 6 Transfers In Transfers Out General - fund ASRS liability Non-major - MDA Debt Service - debt service ISF- IT Fund - return overage to operating funds Fund Totals 27,268 27,268 42,143 15,796 57,939 Half-Cent - operating subsidy Half-Cent - debt service subsidy Non-major - MDA Debt Service - debt service ISF- IT Fund - return overage to operating funds Fund Totals 2,160,000 465,850 15,732 2,641,582 298,460 298,460 Total Enterprise Funds 6,665,169 4,060,913 57,300 19,978 102,855 591,436 20,975 791 793,335 72,259 4,000,000 102,213 4,174,472 General Fund - equipment purchases General Fund - capital assets General Fund - fund ASRS liability General fund - excess equipment reserve cash Non-major - Transit - equipment purchases Non-major - Other Grants - capital assets Non-major - MDA Debt Service - debt service ISF- IT Fund - return overage to operating funds ISF- IT Fund - capital assets Fund Totals Facilities Maintenance General - fund ASRS liability General - capital assets Fund Totals - Information Technology General - computer equipment purchases General - Supplemental operational support General - capital assets General - IT projects General - return overage to operating funds General - fund ASRS liability Half-Cent -radio project Half-Cent - capital assets Highway User - return overage to operating funds Development Fees - capital assets GO Bond Capital Projects - capital assets Non-major - Transit - return overage to operating funds Non-major - Other Grants - capital assets Non-major -Storm Drainage - return overage to operating funds Water Utility - return overage to operating funds Wastewater Utility - return overage to operating funds Solid Waste Utility - return overage to operating funds Stadium - return overage to operating funds ISF - Motor Pool - return overage to operating funds ISF - Motor Pool - capital assets Fund Totals 28,550 1,000 15,243 445,430 824,840 316,553 50,721 487,380 83,291 2,253,008 3,583,640 53,779 79,707 8,390 7,341 165,705 91,243 27,268 15,732 20,975 791 4,054,571 Total Internal Service Funds 3,046,343 8,255,419 33,279,398 33,279,398 Grand Totals (concluded) 145 2,398 23,978 26,376 146 Statistical Section The Statistical Section presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplemental information says about the government’s overall financial health. Statistical information is different from financial statements in that the statistics usually cover more than one fiscal year and may present non-accounting information. The following tables present financial trends, information about the fiscal capacity of the government, and social and economic information, as necessary for complete disclosure and understanding of the City’s financial activity. The information presented in these tables is not required for fair presentation in conformity with accounting principles generally accepted in the United States of America and is therefore not covered by the auditor’s opinion. Contents Page Financial Trends 149 These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity 159 These schedules contain information to help the reader assess the City’s most significant local revenue sources - sales and use taxes, property taxes and utility user fees. Debt Capacity 171 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Economic and Demographic Information 182 These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information 184 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. 147 Statistical Section Financial presentations included in the Statistical Section provide data on the financial, physical and economic characteristics of the City. These tables cover multiple fiscal years and provide users with a broader and more complete understanding of the City and its financial affairs. Table Page Financial Trends I Net Assets By Component II Changes in Net Assets III Program Revenues IV Fund Balances, Governmental Funds V Changes in Fund Balances, Governmental Funds VI Government-Wide Revenues By Function VII Tax Revenues By Source, Governmental Funds VIII Intergovernmental Revenues By Source, Governmental Funds IX Development/Expansion Fees By Type 149 150 152 153 154 155 156 157 158 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 CITY OF PEORIA, ARIZONA NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Table I Fiscal Year 2001 2002 Governmental Activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ 195,963,096 29,693,525 75,707,921 $ 301,364,542 $ Business-type Activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 115,133,709 53,395,184 60,155,500 $ 228,684,393 $ Primary Government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 311,096,805 83,088,709 135,863,421 $ 530,048,935 $ Source: $ $ $ 2003 2004 2005 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 $ 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 $ $ 2010 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 $ 1,453,442,673 782,205,232 37,649,086 192,278,995 $ 1,012,133,313 $ 469,854,140 19,474,349 53,422,064 542,750,553 $ 1,252,059,372 57,123,435 245,701,059 $ 1,554,883,866 CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) Table II Fiscal Year 2001 Expenses Governmental Activities General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Interest on long-term debt Unallocated Deprecation Total governmental activities expenses Business-type Activities Water Utility Wastewater Utility Solid Waste Utility Stadium Housing Total business-type activities expenses Total primary government expenses Program Revenues Governmental Activities Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense)/Revenue Governmental Activities Business-type Activities Total primary government net expense $ $ $ $ $ $ $ $ $ $ $ $ 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 $ $ $ $ $ (31,484,622) 17,902,343 (13,582,279) $ $ $ (24,012,184) 19,436,772 (4,575,412) $ $ $ 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 2005 $ $ $ $ $ 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 $ 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 $ $ $ 21,078,973 10,836,600 37,599,732 69,515,305 $ 2007 $ 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 $ $ $ 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) $ 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 2009 $ $ $ $ $ 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 2010 $ $ $ $ $ 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) $ $ $ $ $ 24,518,718 21,167,750 35,140,959 20,977,164 6,539,886 22,414,044 9,642,355 2,188,730 12,571,503 574,550 155,735,659 29,715,038 30,212,381 9,985,889 5,186,732 368,007 75,468,047 231,203,706 17,489,464 13,096,036 55,978,635 86,564,135 62,457,821 177,710 50,899,343 113,534,874 200,099,009 (69,171,524) 38,066,827 (31,104,697) CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) Table II Fiscal Year 2001 General Revenues and Other Changes in Net Assets Governmental Activities Taxes Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes State shared sales taxes - unrestricted Urban revenue sharing - unrestricted Auto in-lieu taxes - unrestricted Investment Earnings Gain on sale of capital assets Elimination of development agreement debt Miscellaneous Transfers in (out) Total governmental activities Business-type Activities Investment Earnings Gain on sale of capital assets Forgiveness of debt 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 Source: $ $ $ $ $ $ $ 2,011,880 6,878,678 33,621,787 2,022,335 6,971,235 8,891,990 3,054,248 7,677,637 59,397 171,852 (1,463,203) 69,897,836 7,108,181 163,574 1,463,203 8,734,958 78,632,794 38,413,214 26,637,301 65,050,515 2002 $ $ $ $ $ $ $ 2,261,947 8,156,576 33,711,972 2,327,874 8,350,576 11,321,449 3,575,255 5,395,083 36,313 414,835 (1,563,008) 73,988,872 5,357,578 104,006 18,375,000 1,563,008 25,399,592 99,388,464 49,976,688 44,836,364 94,813,052 2003 $ $ $ $ $ $ $ 2,697,682 8,681,164 35,932,415 2,291,179 8,474,910 11,386,513 4,268,379 2,950,753 91,970 135,068 1,034,025 (2,755,444) 75,188,614 2,379,114 317,474 2,755,444 5,452,032 80,640,646 28,072,807 110,652,550 34,513,452 173,238,809 2004 $ $ $ $ $ $ $ 2,724,739 9,940,516 40,579,522 2,495,803 9,116,684 9,786,943 4,390,706 1,698,168 160,917 839,099 443,892 (1,404,110) 80,772,879 1,349,492 1,404,110 2,753,602 83,526,481 37,397,671 39,981,970 77,379,641 Statement of Activities City financial records and reports (concluded) 151 2005 $ $ $ $ $ $ $ 2,926,017 11,240,627 45,535,559 2,498,995 10,038,874 10,076,455 4,639,457 2,930,923 148,518 2,480,978 (14,546,789) 77,969,614 2006 2007 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 $ $ $ $ $ $ 2008 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 38,915,154 63,898,301 102,813,455 $ 129,840,788 32,171,424 $ 162,012,212 $ 110,199,834 27,238,440 $ 137,438,274 $ $ $ $ $ 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 2009 $ $ $ $ $ $ $ 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 2010 $ $ $ $ $ $ $ 3,833,445 26,225,535 56,276,937 3,955,416 10,137,682 17,469,936 4,634,263 2,199,984 102,409 5,885,847 (3,029,412) 127,692,042 444,698 1,379,738 3,029,412 4,853,848 132,545,890 58,520,518 42,920,675 101,441,193 CITY OF PEORIA, ARIZONA PROGRAM REVENUES LAST TEN FISCAL YEARS (accrual basis of accounting) Table III Fiscal Year 2001 Program Revenues Governmental Activities Charges for services General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Water Utility Wastewater Utility Solid Waste Utility Stadium Housing Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues $ $ $ $ $ 2002 1,147,361 3,156,382 179,253 244,605 3,915,408 603,174 930,258 468,537 8,513,857 20,456,182 39,615,017 $ 19,706,869 9,605,153 6,799,753 2,406,658 139,288 113,892 14,815,684 53,587,297 93,202,314 $ 2003 1,261,983 3,579,918 173,678 216,299 3,380,947 247,162 1,454,693 59,325 9,707,432 33,856,277 53,937,714 $ 22,230,008 9,606,324 7,036,110 2,494,194 154,129 125,136 19,692,785 $ 61,338,686 $ 115,276,400 $ $ 2004 1,468,973 4,156,225 231,147 839,434 3,816,666 142,242 1,578,903 45,109 10,818,544 19,620,729 42,717,972 $ 24,364,355 10,623,544 7,277,520 2,225,211 137,193 120,070 27,526,484 $ 72,274,377 $ 114,992,349 $ $ $ $ $ 2005 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 $ 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 $ $ $ $ 2010 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 $ $ $ $ 2,955,225 7,133,645 813,032 1,457,280 1,231,534 445,074 3,310,544 143,130 13,096,036 55,978,635 86,564,135 30,789,786 16,994,511 11,764,271 2,800,976 108,277 177,710 50,899,343 113,534,874 200,099,009 CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Table IV Fiscal Year 2001 General Fund Reserved Unreserved Total General Fund $ $ 231,842 53,437,142 53,668,984 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 2002 $ $ 366,670 43,946,135 44,312,805 2003 $ $ 730,494 41,955,367 42,685,861 2004 2005 $ 3,061,807 43,989,346 $ 47,051,153 $ 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 $ $ 264,489 77,741,727 78,006,216 2009 $ $ 275,184 67,102,145 67,377,329 2010 $ $ 241,678 60,238,418 60,480,096 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% 0.3% 69.5% 69.8% 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% 0.2% 57.0% 57.2% $ 36,599,179 $ 21,657,090 (3,157,315) 55,098,954 $ 40,007,493 $ 91,475,811 $ 60,276,977 $ 19,750,001 13,613,176 73,370,670 20,546,432 9,533,035 $ 121,555,278 21,662,579 8,300,215 $ 90,239,771 (1) Revenues are operating revenues. Does not include Other Financing Sources. (2) Expenditures are operating expenditures. Does not include Other Financing Uses. Source: $ 2006 Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 153 $ 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 $ 147,974,858 $ 55,546,744 22,203,699 225,725,301 CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Table V Fiscal Year 2001 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 $ $ $ 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 $ $ 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 $ $ $ 11,182,955 $ 10,086,922 $ $ $ $ $ 3,159,195 28,513,754 (32,844,334) (1,171,385) $ 8,915,537 $ Net Change in Fund Balance $ 8,222,889 22.4% 2004 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 5,352,468 9,578,372 99,206,370 5,506,348 (8,466,414) (2,960,066) Source: $ 2003 5,737,720 9,663,293 91,850,304 Other Financing Sources (Uses) Proceeds from borrowing Proceeds from refunding Payments to bond refunding escrow agent Premium on bonds issued Transfers In Transfers Out Total Other Financing Sources (Uses) Debt Service as a percentage of noncapital expenditures 2002 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 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 $ 62,170,531 36,747,293 30,768,591 5,041,680 1,823,626 174,837 2,652,530 2,252,142 2,560,291 $ 144,191,521 $ $ $ 18,144,444 13,935,373 20,915,014 12,206,093 4,575,963 13,930,314 3,993,427 1,768,107 3,849 33,148,181 $ 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% Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 154 2006 $ 2007 80,238,340 41,899,532 34,863,016 4,807,840 2,112,799 228,492 6,050,060 2,262,770 5,562,231 178,025,080 $ 19,767,909 15,300,068 24,715,113 13,422,870 4,986,442 10,333,402 4,640,211 1,991,939 539 34,944,336 $ $ 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 $ $ $ $ $ (780,792) $ 24,293,547 $ 7,307,888 $ $ 6,722,550 20,559 10,116,361 (26,870,128) (10,010,658) $ $ 23,809,728 75,552 11,766,397 (15,827,303) 19,824,374 $ 19,043,582 $ 14,282,889 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 $ 2010 $ 8,099,492 16,178,431 213,283,409 19.9% 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 6,747,072 16,881,632 153,731,533 20.0% 2008 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 $ 90,783,641 45,621,921 18,137,718 1,599,957 2,755,104 421,289 1,992,817 2,214,167 8,485,570 172,012,184 16,330,159 19,475,634 34,131,465 19,745,446 6,529,594 13,070,648 7,955,394 2,145,702 60,269,181 10,340,704 31,143,531 $ 234,929,890 11,917,582 25,988,554 $ 242,988,904 $ 13,166,242 44,700,092 237,519,557 $ (18,492,451) $ (45,099,733) $ (65,507,373) $ 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 $ $ 122,090,000 18,365,000 (18,365,000) 1,502,204 17,798,434 (21,121,233) 120,269,405 $ 29,170,000 495,890 23,567,886 (20,963,066) 32,270,710 $ 127,577,293 $ $ $ (33,236,663) 17.8% 9,172,530 25.8% 12,074,842 22.9% 32.6% CITY OF PEORIA, ARIZONA GOVERNMENT-WIDE REVENUES BY FUNCTION LAST TEN FISCAL YEARS (accrual basis of accounting) 2001 2002 2003 Table VI Fiscal Year 2005 2004 2006 Governmental Activities: General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Unallocated General Revenues Total Governmental Activities 4,197,681 7,491,034 1,357,792 542,501 4,814,347 18,522,808 930,258 1,758,596 71,361,039 $ 110,976,056 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 $ 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 $ $ 49,238,279 34,300,518 9,454,742 2,961,792 264,877 2,846,925 99,067,133 $ Total Primary Government $ 171,835,108 $ 214,664,864 $ 195,632,995 $ 217,617,157 $ 261,098,841 Note: $ $ $ $ $ 45,639,906 24,595,006 8,493,458 3,133,022 257,640 1,349,492 83,468,524 Unallocated General Revenues do not include transfers between governmental activities and business-type activities. Source: Statement of Activities. City financial records and reports 155 $ $ $ 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 2007 $ $ 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 $ $ 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 $ 332,220,416 $ 328,548,918 2008 $ 2009 $ 2010 $ 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 3,512,654 8,872,476 2,228,397 1,999,601 2,077,759 61,824,066 4,114,022 1,935,160 130,721,454 $ 217,285,589 57,524,177 41,038,763 11,884,971 2,800,976 285,987 1,824,436 $ 115,359,310 $ 332,644,899 $ 3,872,997 12,673,351 3,468,250 3,202,518 4,148,578 42,357,347 8,929,561 2,852,277 155,678,566 237,183,445 $ 44,368,035 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 $ 324,901,465 $ 300,724,774 $ Table VII CITY OF PEORIA, ARIZONA TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 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 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 Special District* Taxes 384,380 512,196 834,891 619,973 868,197 796,821 In Lieu Taxes 236,085 192,931 175,135 252,345 293,417 273,644 Total Property Taxes $ 8,890,558 $ 10,057,252 $ 11,452,393 $ 12,698,888 $ 14,135,977 $ 16,076,575 $ 17,922,469 $ 26,042,606 Total Taxes $ 44,534,680 $ 46,097,098 $ 49,675,987 $ 55,774,213 $ 62,170,531 $ 80,238,340 $ 90,780,140 $ 98,358,262 Transaction Taxes (1) Franchise Taxes Property Taxes Primary Taxes Secondary Taxes (1) $ 2006 61,156,870 3,004,895 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 $ 2007 68,873,970 3,983,701 2009 59,004,816 4,019,182 2010 $ 56,276,937 3,955,416 2,975,900 19,176,935 2,691,525 24,105,340 3,188,468 23,564,788 1,571,936 3,633,664 3,729,995 3,554,681 242,246 256,107 345,155 243,351 $ 30,872,015 $ 30,551,288 $ 93,896,013 $ 90,783,641 $ 2008 68,466,910 3,848,746 $ 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: 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 2010 $ 10,137,682 17,469,936 4,634,263 7,852,103 375,639 4,043,930 1,108,368 $ 45,621,921 CITY OF PEORIA, ARIZONA DEVELOPMENT/EXPANSION FEES BY TYPE LAST TEN FISCAL YEARS 2001 Governmental Activities: Streets Parks/Recreation Library Public Safety General Government Total Governmental Activities $ $ 1,846,867 2,117,536 460,258 909,116 926,097 6,259,874 Business-type Activities: Water Expansion Water Resource Wastewater Expansion Solid Waste Expansion Total Business-type Activities $ Total Primary Government 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 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 Fiscal Year 2005 2004 $ $ 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 $ Table IX 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 $ 2007 2008 2009 2010 $ 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 $ 3,941,479 1,162,332 109,019 789,170 391,226 $ 6,393,226 1,073,071 321,008 447,047 110,359 $ 1,951,485 898,045 258,463 460,210 120,700 $ 1,737,418 $ 7,341,090 $ 8,130,644 $ 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 $ 4,973,097 1,133,833 2,719,879 621,892 $ 9,448,701 $ 3,297,819 659,750 1,863,749 458,804 6,280,122 $ 33,071,271 $ 24,307,783 CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS 2001 2002 2003 Fiscal Year 2005 2004 Table X 2006 2007 2008 2009 2010 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 26,857,263 4,550,512 6,927,724 6,906,904 1,405,352 7,114,625 814,694 374,659 1,325,204 Total $ 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 $ 56,276,937 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other Total Note: 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% 0.6% -35.1% -2.5% 1.0% -2.2% 1.3% 12.1% -37.5% -15.2% 15.3% 0.3% 6.6% 12.9% 12.2% 34.3% 12.6% -0.6% -13.8% -4.6% Includes all governmental fund types Source: City financial records and reports 159 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Table XI Year Taxes Are Payable 2004 2005 2006 2001 2002 2003 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% 5.60% 5.50% 5.60% 5.50% 5.60% Source: Model City Tax Code, ADOR 91-5312 160 2007 2008 2009 2010 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% 1.80% 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% 6.50% 6.60% CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND FIVE YEARS AGO Table XII 2010 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 3,245 3,951 330 5,023 12 144 1,282 61 77 22.97% 27.97% 2.34% 35.56% 0.08% 1.02% 9.08% 0.43% 0.55% $ 26,857,263 4,550,512 6,927,724 6,906,904 1,405,352 7,114,625 814,694 374,659 1,325,204 47.7% 8.1% 12.3% 12.3% 2.5% 12.6% 1.4% 0.7% 2.4% 2,365 3,216 235 2,867 9 126 857 45 402 23.4% 31.8% 2.3% 28.3% 0.1% 1.2% 8.5% 0.4% 4.0% $ 21,861,810 7,871,565 5,052,224 4,297,474 2,576,655 920,471 570,265 549,702 1,835,393 48.0% 17.3% 11.1% 9.4% 5.7% 2.0% 1.3% 1.2% 4.0% 14,125 100.00% $ 56,276,937 100.00% 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 $ 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 Fiscal Year 2005 2006 497,294,057 $ 582,512,691 51,436,849 64,003,067 $ 750,429,221 13.2% 5,651 132,805 218,209,727 58,949,534 1,712,708 30,780 $ 827,633,655 10.3% $ 6,039 137,045 1.30 5,868,802,159 8.6% $ 2004 464,911,130 42,487,659 190,086,111 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 Full Cash Value % Growth Net Assessed Value as a Percentage of Full Cash Value $ 128,361,247 43,750,084 1,073,870 58,510 1,430 Total Direct Secondary Tax Rate Full Cash Value Per Capita 2001 316,200,286 32,258,579 $ 11.3% 50,780 242,554,778 73,674,495 1,724,400 - 7,525,637,782 11.6% $ 11.1% 54,914 11.0% 2007 626,591,494 75,761,506 2008 $ 1,041,693,334 116,115,688 2009 $ 1,219,595,280 146,413,989 2010 $ 1,048,710,389 155,720,660 293,807,014 117,630,028 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 - 495,336,050 193,685,182 1,647,040 64,530 - $ 964,469,431 16.5% $ 1,115,620,151 15.7% $ 1,642,187,476 47.2% $ 1,994,591,924 21.5% $ 1,895,163,851 -5.0% $ $ $ $ $ 1.30 6,743,773,145 14.9% $ Table XIII 6,646 145,125 7,264 153,592 1.30 1.20 8,736,985,007 16.1% $ 60,203 10,557 155,560 9,999,273,539 14.4% $ 65,103 11.0% 1.25 (a) (b) (c) Commercial and Industrial (c) 25.0% 25.0% 25.0% 25.0% 25.0% 24.5% 24.0% 23.0% 22.0% 21.0% Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 17,162,776,025 -6.1% $ $ $ 11.2% Agriculture and Vacant Land 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% Several additional classes of property exist, but seldom amount to a significant portion of an entity's total valuation. 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. 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 1.25 18,279,838,277 20.9% Property Classifications (a) Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1.25 11,826 160,254 15,118,988,316 51.2% 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: Railroads, Private Car, and Airline Flight Property (b) 21% 20% 20% 21% 21% 22% 21% 20% 18% 17% 12,524 159,263 97,191 10.9% 114,778 10.9% 107,097 11.0% CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 2001 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 0.32 1.30 2002 $ 0.29 1.30 2003 $ 0.29 1.30 Fiscal Year 2005 2006 2004 $ 0.29 1.30 Table XIV $ 0.29 1.30 $ 0.29 1.30 2007 $ 0.28 1.20 2008 $ 0.24 1.25 2009 $ 0.19 1.25 2010 $ 0.19 1.25 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 2.99 2.46 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 2.05 0.59 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 5.98 4.56 (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 $ 2.86 Secondary 1.63 (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 $ 0.99 $ Education Equalization 0.33 Community College District 0.73 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 $ 2.05 $ 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 5.74 3.74 5.23 4.30 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 2001 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 2002 1,585,084 6,729,710 $ 2003 1,675,077 7,901,877 $ Tax Levies Fiscal Year 2005 2006 2004 1,836,000 8,616,211 $ Table XV 2,077,622 9,755,580 $ 2007 2,295,435 10,759,238 $ 2,640,883 12,538,103 $ 3,012,725 13,387,442 $ 2009 3,002,150 20,527,343 $ 2010 2,849,397 24,932,399 $ 3,202,665 23,689,548 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 63,259,063 58,903,282 512,232,252 137,665,480 563,545,711 141,844,666 611,337,637 144,920,909 726,446,055 145,100,016 726,446,055 145,100,016 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 811,397,481 312,172,569 1,016,398,826 312,960,824 549,811,112 180,531,357 601,588,445 188,621,027 653,138,786 193,993,258 774,241,944 197,309,619 777,087,034 200,151,198 451,841,923 229,728,799 (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 $ 89,797,809 Secondary 57,723,039 (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 $ 492,230,736 $ Education Equalization 164,225,937 Community College District 359,942,153 92,685,846 West Maricopa Education Center 10,353,487 County Flood Control District 74,996,804 Fire District Assistance 3,324,489 County Free Library 20,468,370 Central AZ Water Conservation 58,113,465 Special Health Care 53,018,363 $1,016,398,826 $ 312,960,824 Note: 2008 All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 164 758,698,013 302,890,898 815,445,197 349,264,359 885,318,337 384,200,264 1,082,860,554 395,553,654 CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XVI 2010 Taxpayer Arizona Public Service Vestar Arizona XLVIII LLC Parke West LLC Arizona State Land Department Sprint Nextel Wireless LP Ddra Arrowhead Crossing LLC Plaza Iii Limited Partnership Bcc Development Inc Lake Pleasant Pavilion LLC Qwest Corporation Target Corporation Inland Western Glendale LLC Happy Valley 160 LLC Wal-Mart Stores, Inc. Peoria NI Industrial One LLC Southwest Gas Corporation Developers Diversified Realty Corp Sprint Spectrum LP Midcor Associates Larry Miller Real Estate - Peoria LLC Freedom Plaza Limited Partner Dayton Hudson Corp Diamante Crossroads Plaza Marriot International LLC Total Taxable Secondary Assessed Value $ 20,681,227 11,508,473 10,376,085 8,520,286 8,205,460 7,458,783 7,009,682 6,229,965 6,049,153 5,918,160 5,468,902 5,047,369 4,952,614 4,326,105 4,266,673 3,850,714 $ 119,869,651 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 2001 Percentage of Total City Taxable Secondary Assessed Value 1.09% 0.61% 0.55% 0.45% 0.43% 0.39% 0.37% 0.33% 0.32% 0.31% 0.29% 0.27% 0.26% 0.23% 0.23% 0.20% 6.33% Taxable Secondary Assessed Value $ 10,310,536 - $ 6,924,857 1,275,000 1,363,106 4,880,010 4,299,974 2,950,464 2,919,535 2,445,570 1,847,758 1,812,985 1,664,160 32,383,419 Rank 1 2 1.57% 18 0.29% 17 3 4 5 6 7 8 9 10 0.31% 1.10% Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For Fiscal year 2010, the assessed value of Salt River Project property within the City of Peoria is $16,600,287. Source - Maricopa County Treasurer's Office 165 Percentage of Total City Taxable Secondary Assessed Value 2.33% 0.67% 0.55% 0.42% 0.41% 0.38% 8.42% 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 2001 2002 $ 8,314,794 $ 9,576,954 8,120,403 9,234,358 97.7% $ 117,765 $ 8,270,093 $ 9,352,123 2007 2008 2009 2010 $ 11,833,202 $ 13,054,673 $ 15,178,986 $ 16,400,167 $ 23,529,493 $ 27,781,796 $ 26,892,213 10,209,517 11,624,426 12,817,287 14,827,945 15,926,805 22,822,879 26,269,411 25,792,963 97.7% $ Fiscal Year 2005 2006 2004 10,452,211 96.4% 149,690 99.5% 2003 Table XVII 98.2% 98.2% 97.7% 97.1% 97.0% 94.6% 95.9% 325,376 251,331 143,034 91,070 52,195 55,670 71,715 235,378 10,534,893 $ 11,875,757 $ 12,960,321 $ 14,919,015 $ 15,979,000 $ 22,878,549 $ 26,341,126 $ 26,028,341 97.7% Notes: Collections include secured levies. Delinquent tax collections are shown in the year collected. Source: Maricopa County Treasurer City financial records and reports 100.8% 100.4% 99.3% 166 98.3% 97.4% 97.2% 94.8% 96.8% Table XVIII CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS Average Utility Bill Amounts Last Ten Fiscal Years 2004 2005 2001 2002 2003 Water Average bill $ 34.58 $ 37.77 $ 39.61 $ 39.06 $ % Increase 2.95% 9.22% 4.87% -1.39% Wastewater Average bill 18.10 17.32 18.73 18.53 % Increase 3.49% -4.31% 8.14% -1.07% Residential Solid Waste Average bill 12.49 12.49 12.49 12.49 % Increase no change no change no change no change 2001 Water # % Increase Wastewater # % Increase Residential Solid Waste # % Increase 35.53 $ -9.04% 34.59 $ -2.65% 2007 34.85 $ 0.75% 2008 35.59 $ 2.12% 2009 36.73 $ 5.39% 2010 35.46 -0.37% 19.47 5.07% 18.74 -3.75% 21.52 14.83% 21.24 -1.30% 21.36 -0.74% 21.45 0.99% 13.32 6.65% 14.58 9.46% 14.91 2.26% 14.85 -0.40% 15.18 1.81% 15.36 3.43% 2005 2006 2007 2008 2009 2010 Utility Service Connections Last Ten Fiscal Years 2002 2003 2004 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% 47,606 1.07% 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% 50,383 0.92% 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% 48,382 0.78% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2010 Source: 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, 2010 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 Charges for Residential Solid Waste As of June 30, 2010 Monthly fee Single container & recycling $ 15.06 Additional container 12.06 (a) Residential and Multiplex customers are charged this rate for all usage above 25,000 gallons Water Meter Permit Charges As of June 30, 2010 Meter Size 3/4" 1 1/2" 2" 3" 4" 6" Hydrant meter Commercial accounts Charges for Wastewater Services As of June 30, 2010 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, 2010 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 2004 Table XVIII 2005 2006 2007 2008 2009 2010 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 8,212,711 13,720 164,636 23.69 35.4 32 42.0 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 (billion gallon) 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 06/30/2000 6,657,323 15,801 189,608 19.32 30.25 24 16.1 6,640,038 15,712 180,544 18.19 28.82 25 22.2 6,828,944 14,904 178,850 20.43 30.00 28 37.3 6,890,083 15,056 180,679 20.10 32.00 27 40.0 7,889,653 16,213 194,552 23.21 32.00 27 40.0 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 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 1.018 0.144 N/A 2.546 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 2.78 0.39 N/A 6.97 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 3.50 0.67 N/A 8.50 52,188 19,958 357 72,503 55,081 22,917 498 78,496 60,516 19,642 600 80,758 64,358 19,157 1,133 84,648 Source: City records Notes: The Butler treatment plant became operational in mid-June 2008 The City stopped using the Tolleson Regional Treatment Plant after opening the City's Butler Plant (continued) 169 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 47,540 21,981 15,516 85,037 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND SEVEN YEARS AGO 2010 Entity Desert Harbor City of Peoria Padre's Pump Station Trilogy at Vistancia Sun Garden Park II H/O Assn. Ventana Lakes N. of Beardsley Lake Freedom Plaza LTD Partnership Casa Del Sol East Centennial High School Polynesian Village 5 Star Quality Care - Desert Harbor Desert Harbor sprinklers Greenway Water Treatment Plant Arizona American Water Co. Sun Garden Mobilie Home Park MHC Operating Ltd. Partnership Type of User Homeowner's Association Sports Complex Commercial Landscape Homeowner's Association Homeowner's Association Health Care Facility Multi-Family Residential Public School Homeowner's Association Health Care Facility Homeowner's Association Water Treatment Plant Water Utility Homeowner's Association Homeowner's Association % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 7,118 1 1.04% 5,912 2 0.86% 2,699 3 0.39% 2,014 4 0.29% 1,610 5 0.24% 1,443 6 0.21% 1,337 7 0.20% 1,320 8 0.19% 1,312 9 0.19% 1,307 10 0.19% 0.00% 0.00% 0.00% 0.00% 0.00% Source: City customer service and billing records Data unavailable prior to fiscal year 2003 (concluded) 170 Table XVIII 2003 % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 7,236 1 1.31% 3,438 3 0.62% 1,675 6 0.30% 2,108 5 0.38% 1,624 7 0.29% 1,245 8 0.22% 4,114 2 0.74% 2,413 4 0.44% 1,565 9 0.28% 1,330 10 0.24% CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2001 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 2002 47,669,600 27,900,997 5,205,000 15,814,000 - $ 2003 44,484,200 25,773,797 4,925,000 17,333,692 - $ Table XIX Fiscal Year 2006 2004 2005 2007 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 $ 2008 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 $ 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 - Total Primary Government $ 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 $ 463,659,105 Total debt per capita $ $ $ $ $ $ $ 2,333.55 $ 2,714.13 $ 2,876.71 $ 2,893.28 Total Debt as a % of Personal Income 6.1% 5.3% 1,751.94 6.0% 1,569.56 5.1% Source: City financial records. See Exhibits 1 & 2 and footnote 14. 171 1,560.28 4.8% 1,422.57 4.2% 6.7% 7.8% 18,000,000 117,346,302 1,229,607 1,064,632 184,960,000 55,943,338 8,042,321 60,890,000 33,470,000 55,448,302 3,871,204 1,135,000 - 1,520.05 19,555,000 127,917,495 1,579,347 1,235,000 2010 40,255,000 42,022,210 4,064,004 20,525,000 - 1,762.56 21,050,000 88,021,820 1,906,470 - 2009 8.3% 15,780,000 130,298,508 861,662 6,883,276 8.4% 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 Bonded Debt (1) Less: Debt Service Reserves Net Bonded Debt 2002 2003 2004 2005 2006 2007 2008 2009 2010 $ 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 $ 184,960,000 $ 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 35,352,142 $ 149,607,858 Percentage of Net Bonded Debt to Full Cash Value 0.8% 0.6% 0.9% 0.7% 0.5% 0.3% 1.1% 0.6% 0.8% 0.9% Net Bonded Debt Per Capita $329 $263 $420 $347 $276 $186 $704 $577 $867 $934 Net Bonded Debt as a % of Personal Income 1.15% 0.91% 1.43% 1.12% 0.85% 0.54% 2.01% 1.66% 2.50% 2.72% (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, 2010 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 86,525,272,506 57,984,051,718 57,984,051,718 54,862,329,172 57,984,051,718 58,113,465,815 57,984,051,718 58,113,465,815 20,706,973,204 General Obligation Debt Outstanding Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 653,040,000 - 2.19% 3.27% 3.27% 3.45% 3.27% 3.27% 3.27% 3.27% 0.58% 2,393,720,410 3,546,357,712 209,950,000 207,125,000 79.17% 12.65% 166,217,415 26,201,313 192,418,728 2.46 1.63 134,171,551 60,890,000 100.00% 60,890,000 2.10 Vistancia Community Facilities District $ Percentage Applicable to City of Peoria Table XXI $ Total overlapping 21,354,408 21,354,408 206,314,408 $ 0.16 0.14 0.04 0.01 0.09 0.10 0.05 274,663,136 Direct: City of Peoria $ 1,895,163,851 $ 184,960,000 Total direct and overlapping general obligation bonded debt 184,960,000 $ (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 173 459,623,136 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit Fiscal Year 2001 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 Table XXII $ 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 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 2007 $ 196,625,176 20,573,318 217,198,494 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 2009 $ 224,219,333 15,471,750 239,691,083 17,301,999 17,301,999 200,361,999 210,241,616 21,558,687 231,800,303 2010 $ 21,354,408 21,354,408 206,314,408 166,217,415 26,201,313 192,418,728 21,250,000 21,250,000 44,800,000 44,075,000 66,085,000 64,610,000 63,060,000 60,890,000 126,849,162 131,471,691 173,431,934 167,937,338 194,895,061 272,867,839 306,291,823 322,806,431 312,162,302 274,663,136 47,669,600 44,484,200 68,720,000 64,980,000 55,380,000 51,205,000 142,835,000 126,195,000 183,060,000 184,960,000 $ 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 $ 459,623,136 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 Table XXIII Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Secondary Assessed Value $ 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 $ 1,895,163,851 6% Limitation Debt limit $ $ 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 31,000,582 17,084,708 $ 13,915,874 Total net debt applicable to the limit as a percentage of debt limit 20% Limitation Debt limit 55.1% $ 103,335,273 Total net debt applicable to limit Legal 20% Debt Margin 41.1% $ 30,584,892 $ 72,750,381 Total net debt applicable to the limit as a percentage of debt limit Note: $ $ 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 29.6% 24.2% 30.7% 26.3% 23.5% See footnote 14 for discussion of 6% and 20% limitations. Source: Maricopa County Assessor Exhibit 3 to the Financial Statements 175 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 $ 398,918,385 $ 222,603,385 44.2% 108,144,831 4.9% $ 176,315,000 $ 113,709,831 5,565,000 5.6% 112,885,000 $ 119,675,515 6,745,000 13.5% 114,365,000 $ 98,531,249 379,032,770 179,395,000 $ 199,637,770 47.3% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS Table XXIV Fiscal Year 2001 2002 2003 2004 2005 69,544,724 $ 71,409,403 $ 77,041,031 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 20.11 19.67 16.53 38.59 2006 2007 2008 2009 2010 108,336,399 $ 117,980,567 $ 122,039,417 $ 105,935,592 $ 95,507,133 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 3,207,055 645,640 3,852,695 29.23 34.10 29.38 32.09 27.52 24.79 MDA Debt other than Transportation Pledged Revenues (1) Debt Service Requirements Principal (2) Interest (2) Total Annual Requirements (2) Estimated Coverage $ 67,198,257 $ $ 89,807,396 $ Transportation MDA Debt (3) Net Pledged Revenues from above (4) Additional Pledged Revenues (5) Total 91,654,438 8,491,097 100,145,535 Debt Service Requirements Principal Interest Total Annual Requirements 1,835,000 2,005,188 3,840,188 Estimated Coverage Note: 26.08 (1) Pledged revenues on the Municipal Development Authority (MDA) Bonds are the "Excise Taxes" and "State Shared Revenues." Excise Taxes are defined to include the transaction privilege and use taxes, business license and permit and franchise fees, user fees and charges and fines and forfeitures which the City imposes. However, the transaction privilege tax increase of 0.3% approved by voters in September 2005 is not part of pledged revenue for this debt. State Shared Revenues are defined as any excise tax, transaction privilege and use taxes and income taxes imposed by the State of Arizona and allocated or apportioned to the City, except the City's share of any such taxes which by State law, rule or regulation must be expended for other purposes. (2) Debt service requirements reflect the governmental portion of outstanding MDA issues. Sunnyboy Water and Wastewater and Sports Complex allocations of MDA issues are excluded. Those portions are serviced by the Water Utility, Waterwater Utility and Sports Complex funds. (3) The Transportation MDA Bonds of 2008 are backed by a primary lien on the .03% transaction priviledge tax approved by voters in 2005 and a secondary pledge of the "Excise Taxes" discussed in #1 above. (4) Pledged revenues on the non-transportation MDA Bonds, less the debt requirements for the non-transportation MDA Bonds. (5) Revenues of the Transportation Sales Tax Fund, primarily consisting of the 0.3% transaction priviledge tax discussed above. Source: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Debt service schedules, City financial records 176 Table XXV CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - REVENUE BONDS LAST TEN FISCAL YEARS 2001 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 $ 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 $ 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 $ Fiscal Year 2005 2004 $ 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 $ 2006 $ 2007 2008 2009 2010 $ 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 $ 48,087,688 28,067,908 $ 20,019,780 $ 39,037,367 26,151,794 12,885,573 $ 44,982,822 27,318,074 17,664,748 $ 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 1,616,718 $ 21,636,498 $ 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 7,730,834 4,356,835 $ 12,087,669 Ratio of Total Net Revenue/ Total Bond Expense 5.16 3.49 2.50 3.07 3.37 3.82 4.00 2.69 1.56 1.79 Ratio of Net Available/ Total Bond Expense (5) 3.98 2.24 1.32 1.78 1.63 2.21 2.88 1.96 1.37 1.66 (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 Table XXVI Fiscal Year 2001 Pledged Revenues (1) $ 4,310,686 Debt Service Requirements Principal Interest (2) Total Annual Requirements 740,000 911,040 $ 1,651,040 Estimated Coverage 2002 2003 2004 2005 2006 2007 $ 4,974,602 $ 5,876,529 $ 4,756,382 $ 3,547,789 $ 3,516,277 $ 3,216,095 $ 1,243,308 1,052,893 2,296,201 1,889,351 1,091,160 $ 2,980,511 2,505,652 972,553 $ 3,478,205 1,507,136 828,532 $ 2,335,668 1,608,983 747,720 $ 2,356,703 1,480,506 638,657 $ 2,119,163 2.17 1.97 1.37 1.52 1.49 1.52 2.61 2008 2009 $ 3,167,933 $ 1,264,637 697,840 1,962,477 1.61 (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 2010 $ 3,365,342 $ 1,624,615 675,958 2,300,573 1.46 $ 3,402,864 $ 2,360,492 559,205 2,919,697 1.17 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) $ 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 $ 2004 2,088,695 $ 2,069,962 504,165 2,574,127 99.6% $ 14,086,246 $ Fiscal Year 2005 2,065,519 $ 2006 1,987,461 $ 2,057,821 186,624 2,244,445 1,983,885 275,392 2,259,277 99.1% $ 12,345,284 179 $ 99.6% $ 10,845,765 (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 Table XXVII 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 $ 2010 2,211,609 $ 2,249,900 38,301 2,288,201 99.9% $ 9,871,061 101.7% $ 8,141,515 Table XXVIII 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 $ $ 2001 9,663,293 5,737,720 15,401,013 Total Governmental Expenditures $ 91,850,304 Ratio of Debt Service to Governmental Expenditures Total Governmental Revenues Ratio of Debt Service to Governmental Revenues Source: $ 2002 9,578,372 5,352,468 14,930,840 $ 99,206,370 $ 16.77% $ 103,033,259 14.95% 15.05% $ 109,293,292 13.66% 2003 10,612,697 6,918,514 17,531,211 2004 $ 9,737,936 6,299,626 $ 16,037,562 Fiscal Year 2005 2006 $ 15,304,972 $ 16,881,632 7,046,576 6,747,072 $ 23,628,704 $ 22,351,548 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 2010 $ 44,700,092 13,166,242 $ 57,866,334 $ 111,779,079 $ 143,220,840 $ 144,972,313 $ 213,283,409 $ 234,929,890 $ 242,988,904 $ 237,519,557 $ $ 15.68% $ 112,560,955 11.20% $ 121,179,431 15.57% 13.23% Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 180 15.42% $ 144,191,521 15.50% $ 153,731,533 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% 24.36% $ 172,012,184 33.64% CITY OF PEORIA, ARIZONA BOND AUTHORIZATIONS - ISSUED AND UNISSUED AS OF JUNE 30, 2010 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 2,087,978 2,087,978 375,070 14,794,798 15,169,868 1996 WIFA Authorization Water/Wastewater 42,480,000 14,330,000 4,545,000 23,605,000 18,550,000 16,020,393 - 2,529,607 22,300,000 17,504,196 4,105,487 690,317 47,150,000 99,000,000 65,000,000 30,000,000 282,000,000 41,757,232 31,729,393 16,239,443 123,250,657 10,264,204 3,511,623 5,278,828 23,160,142 5,392,768 88,735,796 29,758,984 8,481,729 135,589,201 52,000,000 16,349,033 3,548,554 32,102,413 160,000,000 63,780,054 4,045,230 92,174,716 109,000,000 35,000,000 356,000,000 39,068,253 7,181,361 126,378,701 862,241 5,086,236 13,542,261 69,069,506 22,732,403 216,079,038 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: 276,700,000 - 5,238,190 271,461,810 60,300,000 41,000,000 378,000,000 - 1,005,234 6,243,424 59,294,766 41,000,000 371,756,576 49,578,805 774,792,900 1,231,260,000 406,888,295 Source: City financial records 181 Authorization/Purpose Total authorizations by type: Police, Fire & Public Service Streets & traffic control Parks, open space, library Water system Waterwater system Solid waste Storm Sewer, Flood Protection & Bridges Water, Wastewater & Drainage Table XXIX Authorization $ 140,670,000 436,785,000 116,180,000 170,320,000 88,150,000 Issued $ Remaining 4,553,788 6,100,431 10,365,064 10,264,204 6,632,978 $ 136,116,212 430,684,569 105,814,936 160,055,796 81,517,022 1,000,000 - 1,000,000 75,675,000 202,480,000 7,617,110 4,045,230 68,057,890 198,434,770 $1,231,260,000 $ 49,578,805 $ 1,181,681,195 CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 2001 2002 2003 2004 Table XXX 2005 * 2006 2007 2008 2009 2010 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 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% 5,522,445 160,254 0.6% 6.3% 5,493,828 Maricopa County Population % growth Unemployment Rate Per Capita Income 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% 37,168 4,105,623 3.0% 8.1% N/A 4,217,427 2.7% 8.8% N/A State of Arizona Population % growth Unemployment Rate Per Capita Income 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% 33,244 6,999,810 2.8% 9.6% N/A United States of America Unemployment Rate 4.8% 6.0% 6.4% 5.6% 5.3% 4.6% 4.6% 5.5% 9.5% 9.5% Phoenix MSA Per Capita Income 28,683 28,844 29,318 30,892 32,414 34,215 35,010 34,675 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 34,282 N/A CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND SEVEN YEARS AGO Table XXXI 2010 Employer Peoria Unified School District City of Peoria Plaza Del Rio Campus/Freedom Plaza & Care Center Fry's Food Stores (4 Locations) Wal-Mart (2 locations) Target (3 Locations) Immanuel Care Campus Good Shepherd Care Center Antigua Lowes (2 Locations) Larry Miller Dodge/Hyundai Home Depot (2 Locations) Albertson's (2 Locations) Arizona Training and Evaluation Total # of Employees 3,864 1,174 650 600 535 435 360 250 240 239 230 227 175 - 2003 Rank 1 2 3 4 5 6 7 8 9 10 8,979 Percentage of Total City Employment 11.5% 3.5% 1.9% 1.8% 1.6% 1.3% 1.1% 0.7% 0.7% 0.7% 0.7% 0.7% 0.5% 0.0% # of Employees 4,100 889 1,129 415 280 300 378 230 210 297 310 26.7% 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 4 9 7 5 10 9 8 6 Percentage of Total City Employment 15.6% 3.4% 4.3% 1.6% 1.1% 1.1% 1.4% 0.9% 0.8% 0.0% 0.0% 0.0% 1.1% 1.2% 32.5% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Table XXXII Full-time Equivalent Employees as of June 30, 2010 2004 2005 2006 2007 2001 2002 2003 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 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 6.00 10.00 8.50 19.00 26.00 9.00 22.00 13.30 7.00 82.75 125.47 271.00 167.00 51.00 39.75 41.00 63.75 11.75 60.75 29.25 45.00 46.00 19.00 Total FTE 868.14 943.49 889.13 917.11 999.08 1,049.88 1,150.99 1,244.04 1,236.59 1,174.27 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 2008 2009 2010 CITY OF PEORIA, ARIZONA BUILDING PERMITS AND HOME SALES LAST TEN YEARS Table XXXIII Building Permits Fiscal Year 2001 Commercial Number of Permits 74 Value $ 35,619,783 Residential Number of Dwelling Units 1,740 Value 243,314,533 Other Number of Permits 2,254 Value 19,001,442 Total Value $ 297,935,758 2002 $ $ 151 39,366,098 2003 $ 2004 180 69,627,621 $ 190 47,808,957 2005 $ 177 73,892,753 2006 $ 2007 181 64,990,575 244 $ 121,602,510 2008 $ 2009 2010 153 38,162,527 60 $ 18,722,347 82 $ 35,940,280 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 47,217,878 398 42,714,995 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 1,017 53,152,166 269,282,831 $ 282,518,313 309,833,199 $ 469,121,647 412,303,639 $ 368,827,021 $ 227,086,013 $ 84,475,521 $ 131,807,441 2006 2007 2008 2009 $ $ Source: City Community Development Department Single Family Housing Sales 2000 2001 Calendar Year 2003 2002 2004 2005 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% 435 253,350 -10.44% Resale $ 2,930 270,000 8.00% $ 2,415 257,830 -4.51% $ 3,635 210,000 -18.55% $ 5,000 166,750 -20.60% New Housing Starts City of Peoria Maricopa County Notes: 2000 3,227 2001 2,332 2002 2,183 Calendar Year 2003 1,974 2004 2,420 2005 3,560 2006 1,654 2007 2,046 2008 1,098 43,909 43,732 43,826 47,808 58,882 56,139 40,294 35,465 20,605 Information for calendar years Source: Arizona State University College of Business - AZ Real Estate Center 185 2009 514 15,825 CITY OF PEORIA, ARIZONA SCHEDULE OF INSURANCE IN FORCE JULY 1, 2009 THROUGH JUNE 30, 2010 Type of Insurance 1. 2. Primary Public Liability & Automobile General & auto liability Annual Renewal Date Insurance Carrier Limits N/A $1,000,000 per incident $1,000,000 annual Deductible Amount Annual Premium Self-insured Excess liability -Primary 7/1 St. Paul Fire & Marine GP06301403 5 Million per occurrence SIR above Public Entity E & O 7/1 St. Paul Fire & Marine GP06301403 5 Million per occurrence SIR above Excess liability - 1st level 7/1 RSUI Indemnity Company NHA049262 20 Million per occurrence SIR above Excess liability - 2nd level 7/1 RSUI Indemnity Company NHA049262 20 Million per occurrence SIR above Excess liability - 1st level -Special Events 12/1 Admiral Insurance E000001256301 1,000,000 N/A 5,418 Excess liability - 2nd level -Special Events 12/1 Great American Assurance GLP0000566241705 1,000,000 N/A 13,880 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 297T228809 267,000,000 Storage Tank 3rd Party liability 1/6 Great American Insurance BTA557496106 1,000,000 5,000 2,576 7733A918BME1 25,000,000 1,000 15,476 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 Self-insured 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. 8. Identity Theft 7/1 9. Multi-media Liability 7/1 (1) Policy Number N/A 3. Note: Table XXXIV N/A SIR above 5,000 632,259 Included with above 70,000 Included with above 278,298 400 38,000 ECN000032940901 1,000,000 Travelers Casualty and Surety 104968078 10,000 Axis Speciality MCN642851 1 Million per occurrence 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 7,220 N/A 4,883 5,000 2,057 Table XXXV CITY OF PEORIA, ARIZONA PROPERTY INSURANCE SCHEDULE JUNE 30, 2010 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 CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Table XXXVI Fiscal Year 2001 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: $ 2002 2003 2004 2005 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 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 56,683 5.7 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 14,874 5.0 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 $ 3,692 368.8 7,999 8,496 90 71,051 60.6% 2010 61813 * $ 63,544 25.4% 2009 51,617 11.0% 3,741 269.3 62,328 25.4% 2008 48,142 23.3% $ 65,998 33.8% 2007 48,142 23.3% 4,068 297.9 52,674 11.0% 2006 $ 2,943 225.5 8,365 7,604 381 76,323 81.2% 82,578 81.2% 131,372 6,237 $ 1,486 84.5 2,441 7,526 423 132,391 5,903 $ 1,497 131.8 * * * * * * * * * * * * 2,832 5,935 422 * * * 4746 5,056 5,920 5,787 5,679 5,917 5,697 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 3,959 31,568 984 793 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 8,212,711 164,636 3.0 2.7 2.7 3.2 3.4 3.6 3.7 3.6 3.9 3.7 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 47,540 21,981 15,516 194,462 * * 230,662 * * 169,932 * * 222,927 * * 225,316 * * 200,153 * * 220,357 195 54 230,434 234 83 211,243 246 66 200,029 208 74 840 840 840 840 840 822 840 819 840 828 840 831 840 827 840 812 840 796 840 745 * 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 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 2010 156.0 162.4 162.6 176.2 177.9 177.9 177.9 177.9 177.9 177.9 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 28 322 90 41 25 12 31 3 1 1 2 52 2 59 2 61 2 80 2 86 2 90 2 101 2 103 2 92 2 86 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 7/1 9 2 396 414 444 471 487 518 537 538 551 554 10,008 * 10,552 * 11,186 * 11,829 543 12,000 599 12,000 621 12,737 661 13,618 720 13,726 683 13,901 670 9 9 9 9 9 9 11 11 11 9 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 47,606 42.0 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 50,383 16.3 35,320 36,978 38,546 39,747 42,467 44,198 46,309 47,146 48,006 43,382 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 70 * Information is not available for these fiscal years. Source: Various City Departments 189 190 Appendix Glossary Certain specialized terms or acronyms may be used in this publication. The following is a list of some of those acronyms: ABP AICPA CARF FAF FASB FASAC GAAP GAAS GAGAS GAO GASB GFOA GASAC IGAS NCGA OMB OPEB Q&A SAS SEC SGAC SGAS TB Accounting Principles Board American Institute of Certified Public Accountants Comprehensive Annual Financial Report Financial Accounting Foundation Financial Accounting Standards Board Financial Accounting Standards Advisory Board Generally accepted accounting principles Generally accepted auditing standards Generally accepted governmental auditing standards Government Accountability Office Governmental Accounting Standards Board Government Finance Officers Association Governmental Accounting Standards Advisory Council Interpretation of Governmental Accounting Standards National Council on Governmental Accounting Office of Management and Budget (federal) Other postemployment benefits Comprehensive Implementation Guide Statement of Auditing Standards Securities and Exchange Commission Statement of Governmental Accounting Concepts Statement of Governmental Accounting Standards Technical Bulletin Accounting Standards Executive Committee (AcSEC) – AICPA committee authorized to issue Practice Bulletins. Accrual basis of accounting – Method of accounting that recognizes the financial effect of transactions, events, and interfund activities when they occur, regardless of the related cash flows. Accountability – Term used by the GASB to describe a government’s duty to justify the raising and spending of public funds. The GASB has indentified accountability as the “paramount objective” of financial reporting “from which all other objectives must flow.” [SGAC 1] Accounting Principles Board (APB) – Authoritative private-sector standards setting body that preceded the FASB. The APB issued guidance in the form of Opinions. Accrual – A liability resulting from an expense for which no invoice or other 191 Appendix official document is available yet. Also called an accrued expense. employer must contribute in a given year. [SGAS 27 and SGAS 45] Activity – Specific and distinguishable service performed by one or more organizational components of a government to accomplish a function for which the government is responsible (e.g., police is an activity within the public safety function). Appropriation – An authorization made by the City Council which permits the City to incur obligations and to make expenditures of resources. Adopted budget – Formal action by the City Council that sets the spending limits for the fiscal year. Arbitrage –The reinvestment of the proceeds of tax-exempt securities in materially higher yielding taxable securities. The City is subject to Federal regulations regarding arbitrage. Advanced refunding – Refunding transaction where the proceeds of the refunding bonds are placed in escrow pending the call date or maturity of the debt to be refunded. Assessed valuation – Valuation set upon real estate or other property by a government as a basis for levying property taxes. In Arizona, property values are established by the county Assessor. Agency funds – One of four types of fiduciary funds. Agency funds are used to report resources held by the reporting government in a purely custodial capacity (assets equal liabilities). Agency funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. [SGAS 34] Audit Guides – Series of AICPA publications that enjoy potential “level 2” status on the hierarchy of authoritative sources of GAAP. Audit Scope - In the context of a financial statement audit, the coverage provided by the independent auditor’s opinion. For example, required supplemental information normally is not included within the scope of a financial statement audit (i.e., the independent auditor does not offer an opinion on its fair presentation). Analytical review – Term used by auditors to describe the process of attempting to determine the reasonableness of financial data by comparing their behavior with other financial or nonfinancial data. Auditor’s report on internal control and compliance over financial reporting – Report issued in conjunction with a financial audit preformed in accordance with GAGAS. The independent auditor reports on internal control weaknesses and instance of noncompliance in connection Annual required contribution (ARC) – Term used in connection with defined benefit pension and other postemployment benefit plans to describe the amount an 192 Appendix with the financial audit, but does not offer an opinion on internal controls or compliance. resources or free-up resources for other purposes. Availability criterion – Requirement under the modified accrual basis of accounting that revenues be recognized only when they are collected or collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. [NCGA Statement 1] Balanced budget – A budget that contains ongoing revenues equal to the ongoing expenditures of the City. In addition, the balanced budget will not include one-time (non-recurring) sources to fund continuing (recurring) uses, postpone expenditures, or use external borrowing for operational requirements. Availability period – Designated period immediately following the close of the fiscal year by the end of which cash must be collected for related revenue to be recognized in accordance with the availability criterion of modified accrual accounting. Blending – Presentation of the data of a component unit as though it were one or more fund(s) of the primary government. [SGAS 14] Bond – A long-term debt or promise to pay. It is a promise to repay a specified amount (principal amount or face value), at a specified date in the future (maturity date), along with periodic interest at a specific rate. Bonds are primarily use to finance capital projects. Basic financial statements – Minimum combination of financial statements and note disclosures required for fair presentation in conformity with GAAP. Basis difference – Differences that arise when the basis of budgeting differs from the basis of accounting prescribed by GAAP for a given fund type [NCGA Interpretation 10] Budget amendment – A change of budget appropriation between expenditure accounts. Budget amendments do not change the legal spending limit adopted by City Council. Basis of accounting – Timing of recognition for financial reporting purposes (i.e., when the effects of transactions or events should be recognized in financial statements). [SGAS 11] Budgetary control – The control or management of governmental unit or enterprise in accordance with an approved budget for the purpose of keeping expenditures within the limitations of authorized appropriations and available revenues. Basis of budgeting – Method used to determine when revenues and expenditures are recognized for budgetary purposes. Budgetary integration – Use of recording the operating budget in the general ledger Base budget – Maintaining current service levels. Changes in demand or activity levels may create the need for additional 193 Appendix Capital outlay – Expenditures which result in the acquisition of or addition to capital assets. to facilitate control over revenues and expenditures during the fiscal year. Budgetary reporting – As used by accountants, requirement to present budget-to-actual comparisons in connection with general purpose external financial reporting. Budgetary reporting is required to demonstrate compliance at a legal level of control for all governmental funds with appropriated budgets. Capital projects fund – Fund type used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by proprietary funds or trust funds. [NCGA Statement 1] Capitalization threshold – Dollar value at which a government elects to capitalize tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. Business-type activities – One of two classes of activities reported in the government-wide financial statements. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. These activities are usually reported in enterprise funds. [SGAS 34] Cash basis of accounting – Basis of accounting that recognized transactions or events when related cash amounts are received or disbursed. Capital and related financing activities – Term used in connection with cash flows reporting. Capital and related financing activities include (a) acquiring and disposing of capital assets used in providing services or producing goods, (b) borrowing money for acquiring, constructing, or improving capital assets and repaying the amounts borrowed, including interest, and (c) paying for capital assets obtained from vendors or credit. [SGAS 9] Cash equivalent – Short-term, highly liquid investments that are both (a) readily convertible to know amounts of cash and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities (maturity as of the date the investment was purchased by the reporting government) of three months or less meet this definition. [SGAS 9] Capital assets – Land, improvements to land, easements, buildings, building improvements, vehicles machinery, equipment, works of art, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. [SGAS 34] Certificate of Achievement for Excellence in Financial Reporting Program – Program sponsored by the Government Finance Officers Association to encourage state and local governments to prepare high-quality comprehensive annual financial reports. 194 Appendix Character classification – Classification of expenditures according to the periods they are presumed to benefit. The four character groupings are (a) current operating expenditures, presumed to benefit the current fiscal period; (b) debt service expenditures, presumed to benefit prior fiscal periods as well as current and future periods; (c) capital outlay expenditures, presumed to benefit the current and future fiscal periods; and (d) intergovernmental expenditures, when one government transfers resources to another. [NCGA Statement 1] Community Facilities District (CFD) – A separate legal entity established by a local government agency which allows for financing of public improvements and services. Comparability – Principle according to which differences between financial reports should be substantive differences in the underlying transactions of the governmental structure rather than the selection of different alternatives in accounting procedures or practices. [SGAC 1] Comparative data – Information from prior fiscal periods provided to enhance the analysis of financial data of the current fiscal period. Classified presentation – Separate reporting of the current and noncurrent portions of assets and liabilities to permit the calculation of working capital. A classified presentation is required for the proprietary statement of net assets. Component unit – Legally separate organization for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the nature and significance of their relationship with a primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. [SGAS 14] Collateral – In the context of deposits with financial institutions, security pledged by the financial institution to a government entity for its deposit. [SGAS 3] Combining financial statements – Financial statements that report separate columns for individual funds or component units. Comprehensive Annual Financial Report (CAFR) – Financial report that contains, at a minimum, three sections: 1) introductory, 2) financial, and 3) statistical, and whose financial section provides information on each individual fund and component unit. Commercial paper – Unsecured short-term promissory note issued by corporations, with maturities ranging from 2 to 270 days. Committee on Accounting Procedure (CAP) – Authoritative private-sector standards setting body that preceded the Accounting Principles Board and the FASB. The CAP issued guidance in the form of Accounting Research Bulletins. Comprehensive framework if internal control – Structure of internal control that provides for (a) a favorable control environment, (b) the continuing assessment 195 Appendix Published Internal Control: An Integrated Framework. of risk, (c) the design, implementation, and maintenance of effective control-related policies and procedures, (d) the effective communication of information, and (e) ongoing monitoring of the effectiveness of control-related policies and procedures as well as the resolution of potential problems identified by controls. Current financial resources measurement focus – Measurement focus where the aim of a set of financial statements is to report the near-term (current) inflows, outflows, and balance of expendable financial resources. The current financial resources measurement focus is unique to accounting and financial reporting for state and local governments and is used solely for reporting the financial position and results of operations of governmental funds. Conduit debt – Certain limited-obligation revenue bonds, certificates of participation, or similar debt instruments issued by a local governmental entity for the express purpose of providing capital financing for a specific third party that is not part of the issuer’s financial reporting entity. Although conduit debt obligations bear the name of the governmental issuer, the issuer has no obligation for such debt beyond the resources provided by a lease or loan with the third party on whose behalf they are issued. [IGAS 2] Current refunding – Refunding transactions in which the proceeds of the refunding debt are applied immediately to redeem the debt to be refunded. Custodial credit risk – Risk that a government will not be able a to recover deposits if the depository financial institution fails, or (b) to recover the value of an investment or collateral securities that are in the possession of an outside party if the counterparty to the investment or deposit transaction fails. [Q&A] Connection fees – Fees charged to join or to extend an existing utility system. Often referred to as tap fees or system development fees. Consistency – Notion that once an accounting principle or reporting method is adopted, it will be used for all similar transactions and events. [SGAC 1] Debt service fund – Governmental fund type used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. [NCGA Statement 1] Contingency – A budgetary reserve set aside for emergency or unanticipated expenditures and/or revenue shortfalls. The City Council must approve all uses of contingency funds. Defeasance – In financial reporting, the netting of outstanding liabilities and related assets on the statement of position. Defeased debt is no longer reported as a liability on the statement of position. COSO – Committee of Sponsoring Organizations of the Treadway Commission on Fraudulent Financial Reporting. Deferred revenue – Resource inflows that do not yet meet the criteria for revenue 196 Appendix inflows, outflows, and balances affecting or reflecting an entity’s net assets. The economic resources measurement focus is used for proprietary and trust funds, as well as for government-wide financial reporting. It is also used by business enterprises and nonprofit organizations in the private sector. recognition. Unearned amounts are always reported as deferred revenue. In governmental funds, earned amounts also are reported as deferred revenue until they are available to liquidate liabilities of the current period. Designated unreserved fund balance – Management’s intended use of available expendable financial resources in governmental funds reflecting actual plans approved by the government’s senior management. Designations reflect a government’s self-imposed limitations on the use of otherwise available expendable financial resources in governmental funds. Effectiveness – Term used by auditors to describe the degree to which an entity, program, or procedure is successful in achieving its goals and objectives. Efficiency – Term used by auditors to describe the degree to which an entity, program, or procedure is successful at achieving its goals and objectives with the least use of scarce resources. Department – A major administrative division of the City which indicates overall management responsibility for an operation or group of related operations within a functional area. Eligibility requirements – Term used in connection with government-mandated and voluntary nonexchange transactions to describe conditions established by the provider of resources. [SGAS 33] Depreciation – An accounting transaction which spreads the purchase cost of an asset across its useful life. Encumbrance – Commitments related to unperformed contracts for goods or services. For financial reporting purposes, encumbrance accounting is restricted to governmental funds. Development fees – Fees charged to developers to cover, in whole or in part, the anticipated costs of improvements that will be necessary as a result of the development. Also called expansion fees. Enterprise fund – Proprietary fund type used to report an activity for which a fee is charged to external users for goods or services. [SGAS 34] Division – A functional unit of a department. Exchange transactions – Transactions in which each party receives and gives up essentially equal values. [SGAS 33] Discrete presentation – Method of reporting financial data of a component unit separately from financial data of the primary government. [SGAS 14] Exchange-like transactions – Transactions in which there is an identifiable exchange between the reporting government and another party, but the Economic resources measurement focus - Measurement focus where the aim of a set of financial statements is to report 197 Appendix separate organization in the reporting entity of another government. [SGAS 14] values exchanged may not be quite equal or the direct benefits of the exchange may not be exclusively for the parties to the exchange. [SGAS 33] Financial Accounting Foundation (FAF) – Nonprofit organization responsible for overseeing the operations of both the GASB and FASB. Expenditure-driven grants – Governmentmandated or voluntary nonexchange transactions in which expenditure is the prime factor for determining eligibility. Also known as reimbursement grants. Financial Accounting Standards Advisory Council (FASAC) – Advisory group that assists the FASB. The FASAC includes representatives of all of the FASB’s major constituents. Expenditures – Under the current financial resources measurement focus, decreases in net financial resources not properly classified as other financing uses. Financial Accounting Standards Board (FASB) - Authoritative accounting and financial reporting standard-setting body for business enterprises and nonprofit organizations. The FASB is the direct successor to the Committee on Accounting Procedure and the Accounting Principles Board. Fair value – In the context of investment valuation, the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.[SGAS 31] Financial audits – Audits designed to provide independent assurance of the presentation of financial information. Fiduciary funds – Funds used to report assets held in a trustee or agency capacity for others and which therefore cannot be used to support the government’s own programs. The fiduciary fund category includes pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds, and agency funds. [SGAS 34] Financial reporting entity – Primary government, organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. [SGAS 14] Final amended budget – Original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes applicable to the fiscal year, whenever signed into law or otherwise legally authorized. [SGAS 34] Financial resources – Resources that are or will become available for spending. Includes cash and resources ordinarily expected to be converted to cash (e.g., receivables, investments). Financial accountability – Relationship warranting the inclusion of a legally 198 Appendix Financial section – One of the three basic sections of a comprehensive annual financial report. The financial section contains the auditor’s report, management’s discussion and analysis, the basic financial statements (including notes to the financial statements), required supplementary information, combining statements, and supplementary information, as needed. equities or balances, and changes therein, that are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. [NCGA Statement 1] Fund balance – The difference between assets and liabilities reported in a governmental fund. Fiscal accountability – Responsibility of governments to justify that their actions in the current period have complied with public decisions concerning the raising and spending of public monies in the short term. [SGAS 34] Fund classifications – One of three categories – governmental, proprietary, and fiduciary – used to classify fund types. GAAP hierarchy – Identification and ranking of the source of generally accepted accounting principles (GAAP). Fiscal dependence – Situation requiring the inclusion of a legally separate entity as a component unit within the financial reporting entity because the governing board of the primary government may arbitrarily override the financial decisions of the legally separate entity regarding a) its budget, (b) the levying of taxes or the setting of rates or charges, or (c) the issuance of bonded debt. General Fund – One of the five governmental fund types. The general fund typically serve as the chief operating fund of a government. The general fund is used to account for all financial resources except those required to be accounted for in another fund. [NCGA Statement 1] Generally accepted accounting principles (GAAP) – Conventions, rules, and procedures that serve as the norm for the fair presentation of financial statements. Formula grants – Government-mandated or voluntary nonexchange transactions involving the provision of resources based upon established criteria other than the incurrence of qualifying expenditures. Also referred to as “shared revenues”. Generally accepted auditing standards (GAAS) – Rules and procedures that govern the conduct of a financial audit. Function – Group of related activities aimed at accomplishing a major service or regulatory program for which a government is responsible (e.g., public safety). Generally accepted governmental auditing standards (GAGAS) – Standards for the conduct and reporting of both financial and performance audits in the public sector as promulgated by the GAO. Fund – Fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual Government Accountability Office (GAO) – Investigative arm of the U.S. Congress 199 Appendix subject to the hierarchy of GAAP applicable to state and local governmental units. charged with improving the performance and accountability of the federal government. The GAO issues the publication Governmental Auditing Standards, commonly known as the “Yellow Book” which sets generally accepted governmental audit standards (GAGAS). Governmental financial reporting model – Minimum combination of financial statements, note disclosures, and required supplementary information prescribed for state and local governments by the GASB. Government Finance officers Association (GFOA) – Association of public finance professionals founded in 1906 as the Municipal Finance Officers Association. The GFOA has played a major role in the development and promotion of GAAP for state and local governments. Also sponsors the Certificate of Achievement for Excellence in Financial Reporting program. Governmental funds – Funds generally used to account for tax-supported activities. There are five types of governmental funds: the general fund, special revenue funds, debt service funds, capital project funds, and permanent funds. Government-mandated nonexchange transactions – Situation where a higher level government requires performance of a lower level government and provides it full or partial funding to do so. [SGAS 33] Governmental Accounting Standards Advisory Council (GASAC) – Advisory body established to assist the GASB. The membership of the GASA represents all major groups with an interest in accounting and financial reporting for state and local governments. Government-wide financial statements – Financial statements that incorporate all of a government’s governmental and businesstype activities, as well as its nonfiduciary component units. There are two basic government-wide financial statements; the statement of net assets and the statement of activities. [SGAS 34] Governmental Accounting Standards Board (GASB) – Ultimate authoritative accounting and financial reporting standardsetting body for state and local governments. The GASB was established in June 1984 to replace the NCGA. Impact fees – Fees charged to developers to cover, in whole or in part, the anticipated cost of improvements that will be necessary as a result of the development. Governmental Activities – Activities generally finance through taxes, intergovernmental revenues, and other nonexchange revenues. These activities are usually reported in governmental funds and internal service funds. [SGAS 34] Impairment – Significant, unexpected decline in the service utility of a capital asset. [SGAS 42] Implementation guides – Guidance on the proper implementation of authoritative accounting and financial reporting standards Governmental entity – For accounting and financial reporting purposes, an entity 200 Appendix auditor’s report typically will offer (or disclaim) an opinion on whether a set of financial statements is fairly presented in conformity with GAAP. issued by the staff of the GASB. Implementation guides are level 4 GAAAP. Imposed nonexchange revenues – Revenues that result from assessments imposed on nongovernmental entities, including individuals, other than assessments on exchange transactions. Examples of imposed nonexchange transactions are property taxes and fines. [SGAS 33] Indirect expenses – Expenses that cannot be specifically associated with a given service, program, or department and thus, cannot be clearly associated with a particular functional category. [SGAS 34] Infrastructure – Long-lived capital assets that normally are statutory in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples include roads, bridges, tunnels, drainage systems, water and wastewater systems, dams, and lighting systems. [SGAS 34] “In-relation-to” opinion – Indication in the independent auditor’s report that the auditor does not render an opinion on the fair presentation per se of certain information contained in the financial report, but does assert that the information in question is fairly presented in relation to the audited financial statements. In-substance defeasance of debt – Situation that occurs when debt is considered defeased for accounting and financial reporting purposes, even though a legal defeasance has not occurred. When debt is defeased, it is no longer reported on the face of the statement of position; only the new debt, if any, is reported as a liability. [SGAS 7] Incurred but not reported (IBNR) claims – In connection with risk financing, claims for insured events that have occurred but the claim has not yet been reported to the insuring entity as of the date of the financial statements. IBNR claims include (a) known loss events that are expected to be presented later as claims, (b) unknown loss events that are expected to become claims, and (c) expected future development on claims already reported. [SGAS 10] Interest rate risk – Risk that changes in the interest rates will adversely affect the fair value of an investment. [SGAS40] Independent auditor – Auditors who are independent, both in fact and appearance, of the entities they audit. Both GAAS and GAGAS set specific criteria that must be met for an auditor to be considered independent. Interfund activity – Activity between funds of the primary government, including blended component units. Interfund activities are divided into two broad categories; reciprocal and nonreciprocal. Reciprocal interfund activity comprises interfund loans and interfund services provided and used. Nonreciprocal interfund Independent auditor’s report – Official written communication of the results of an audit. In a financial audit, the independent 201 Appendix activity comprises interfund transfers and interfund reimbursements. procedures as well as the resolution of potential problems identified by controls. Interfund loans – Amounts provided between funds and blended component units with a requirement for repayment. [SGAS 34] Internal service funds – Proprietary fund type that may be used to report any activity that provides goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a costreimbursement basis. [SGAS 34] Interfund reimbursements – Repayments by one fund or blended component unit of a primary government to another for expenditures or expenses incurred on its behalf. [SGAS 34] Introductory section – First of the three essential components of any comprehensive annual financial report. The introductory section typically provides general information on a government’s structure and personnel as well as information useful in assessing the government’s economic condition. The key element of the introductory section is the letter of transmittal. Interfund services provided and used – Sales and purchases of goods and services between funds and blended component units of the primary government for a price approximating their external exchange value. [SGAS 34] Interfund transfers – Flows of assets (such as cash or goods) between funds and blended component units of the primary government without equivalent flows of assets in return and without a requirement for repayment. [SGAS 34] Invested in capital assets, net of related debt – One of the three components of net assets that must be reported in both government-wide and proprietary fund financial statements. Related debt, for this purpose, includes the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of capital assets of the government. Internal control framework – Integrated set of policies and procedures designed to assist management to achieve its goals and objectives. To be truly comprehensive, a government’s internal control framework must (a) provide a favorable control environment, (b) provide for the continuing assessment of risk, (c) provide for the design, implementation, and maintenance of effective control-related policies and procedures, (d) provide for the effective communication of information, and (e) provide for the ongoing monitoring of the effectiveness of control-related policies and Joint venture – Legal entity or other organization that results from a contractual arrangement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control, in which the participants retain (a) an ongoing financial interest or (b) and ongoing financial responsibility. [SGAS 14] 202 Appendix Major fund – Governmental fund or enterprise fund reported as a separate column in the basic fund financial statements and subject to a spate opinion in the independent auditor’s report. Jointly governed organization – Regional government or other multi-governmental arrangement that is governed by representatives from each of the governments that create the organization, but that is not a joint venture because the participants do not retain an ongoing financial interest or responsibility. [SGAS 14] Major program – Term used in the contest of Single Audits. As part of the Single Audit, the independent auditor must gain an understanding of internal control over compliance for each major federal award program and then test it. In addition, the independent auditor must render an opinion on whether the government complied with laws, regulations, and provisions of contracts or grant agreements that could have a direct and material effect on each major federal awards program. Legal debt margin – Excess of amount of the legally authorized debt over the amount of debt outstanding. Legal defeasance – Situation that occurs when debt is legally satisfied based on certain provisions in the debt instrument even though the debt is not actually paid. When debt is defeased, it is no longer reported as a liability on the face of the statement of position; only the new debt, if any, is reported as a liability. [SGAS 7] Management letter – In the context of the independent audit of the financial statements, a formal communication by the auditor to management that focuses on internal control weaknesses discovered in the course of the audit of the financial statements. Legal level of budgetary control – Level at which a government’s management may not reallocate resources without special approval from the legislative body. Management’s discussion and analysis – Component of required supplementary information used to introduce the basis financial statements and provide analytical overview of the government’s financial activities. [SGAS 34] Level (1-4) guidance – In the context of the hierarchy of GAAP for state and local governments, a reference to the relative authority of a given source of GAAP guidance. Level of effort requirement – Requirement that a grant recipient not use grant resources to reduce its own participation in a given program or activity. Matching requirement – Requirement that a grant recipient contribute resources to a program that equal or exceed a predetermined percentage of amounts provided by the grantor. Lien date – For property (ad valorem) taxes, the date when an enforceable legal claim to taxable property arises. Material weakness – Reportable condition (internal control weakness) of such magnitude that it could potentially result in a 203 Appendix material misstatement of the financial statements. established and disclosed by the government. [SGAS 34] Materiality – In the context of financial reporting, the notion that an omission or misstatement of accounting information is of such significance as to make it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. Money market investment – Short-term, highly liquid debt instrument, including commercial paper, banker’s acceptances, and U.S. Treasury and agency obligations. [SGAS 31] National Advisory Council on State and Local Budgeting (NACSLB) – Working group created by eight public-sector organizations to establish a comprehensive framework for public-sector budgeting that could be used by state and local governments as an ideal against which to measure and improve the quality of their own budget practices. Measurement focus - Types of balances (and related changes) reported in a given set of financial statements (i.e., economic resources, current financial resources, assets and liabilities resulting from cash transactions). National Committee on Governmental Accounting – Committee of the Municipal Finance Officers Association that served as the authoritative accounting and financial reporting standards-setting body for local governments from 1946 until the establishment of the National Council on Governmental Accounting in the 1970s. Modified accrual basis of accounting – Basis of accounting used in conjunction with the current financial resources measurement focus that modifies the accrual basis of accounting in two important ways 1) revenue are not recognized until they are measurable and available, and 2) expenditures are recognized in the period in which governments in general normally liquidate the related liability rather than when that liability is first incurred (if earlier). National Council on Governmental Accounting (NCGA) – Immediate predecessor of the GASB as the authoritative accounting and financial reporting standards-setting body for state and local governments. Modified approach – Election not to depreciate infrastructure assets that are part of a network or subsystem of a network that meets two requirements. First, the government manages the eligible infrastructure assets using an asset management system that has certain specified characteristics; second, the government documents that the eligible infrastructure assets are being preserved approximately at (or above) a condition level Net general obligation debt – General obligation debt reduced by the amount of any accumulated resources restricted to repaying the principal of such debt. [SGAS 44] Net pension/OPEB obligation – The cumulative difference between annual 204 Appendix Office of Management and Budget (OMB – Agency of the federal government with regulatory oversight of Single Audits. pension/OPEB costs and the other employer’s contributions to the plan. No-commitment special assessment debt – Special assessment debt that is secured solely by liens on assessed properties and resources provided from bond proceeds and is not backed by either the full faith and credit of the government or by any other type of general governmental commitment. Operating activities – Term used in conjunction with cash reporting. Operating activities generally result from providing services and producing and delivering goods, and include all transactions and other events that are not defined as capital and related financing, noncapital financing, or investing activities. [SGAS 9] Noncapital financing activities – Term used in connection with cash flows reporting. Noncapital financing activities include borrowing money for purposes other than to acquire, construct, or improve capital assets and repaying those amounts borrowed, including interest. [SGAS 9] Operating revenues and expenses – Cost of goods sold and services provided to customers and the revenues thus generated. Operational accountability – Government’s responsibility to report the extent to which they have met their operating objectives efficiently and effectively, using all resources available for that purpose, and whether they can continue to meet their objectives for the foreseeable future. Nonexchange transaction – Transactions in which a government (including the federal government, as a provider) either gives or receives value (benefit) to/from another party without directly receiving/giving equal value in exchange. [SGAS 33] Original budget – First complete appropriated budget. The original budget may be adjusted by reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes before the beginning of the fiscal year. The original budget should also include actual appropriation amounts automatically carried over from prior years by law. [SGAS 34] Nonoperating revenue and expenses – In the context of the proprietary fund operating statement, revenue and expenses not qualifying as operating items (e.g., taxes, grants that are not equivalent to contracts for services, and most interest revenue and expense). Nonreciprocal Interfund activity – Counterpart of nonexchange transactions within the primary government. Includes both Interfund transfers and Interfund reimbursements. [SGAS 34] Other financing source – Increase in current financial resources that is reported separately from revenues to avoid distorting revenue trends. The use of the other 205 Appendix Overlapping governments – In the context of the statistical section, all local governments located wholly or in part within the geographic boundaries of the reporting government. [SGAS 44] financing sources category is limited to items so classified by GAAP. Other financing use – Decrease in current financial resources that is reported separately from expenditures to avoid distorting expenditure trends. The use of the other financing uses category is limited to items so classified by GAAP. Overlapping rate - In the context of the statistical section, an amount or percentage applied to a unit of a specific revenue base by governments that overlap geographically, at least in part, with the government preparing the statistical section information. [SGAS 44] Other postemployment benefits (OPEB) – Postemployment benefits other than pension benefits. Includes postemployment healthcare benefits, regardless of the type of plan that provides them, and all postemployment benefits provided separately from a pension plan, excluding benefits defined as termination offers and benefits. [SGAS 43] Own-source revenue – In the context of the statistical section, revenues that are generated by a government itself (e.g., tax revenues, water and wastewater charges, investment income) rather than provided from some outside source (e.g., intergovernmental aid and shared revenues). [SGAS 44] Outcome measures – In the context of service efforts and accomplishments reporting, indicators that measure accomplishments or results that occur (at least partially) because of service provided. [SGAC 2] Pass-through grants – Grants and other financial assistance received by a governmental entity to transfer to, or spend on behalf of, a secondary recipient. [SGAS 24] Output measures – Term used in connection with service efforts and accomplishments reporting. Indicators that measure the quantity of services provided. Output measures include both measure of the quantity of service provided and measures of the quantity of services provided that meets a certain quality requirement. [SGAC 2] Payment in lieu of taxes - Payment that a property owner not subject to taxation makes to a government to compensate it for services that the property owner receives that are normally financed through property taxes. Pension (and OPEB) trust funds – Fiduciary fund type used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit plans, defined contribution plans, other postemployment benefit plans, or other employee benefit plans. [SGAS 34] Overlapping debt – In the context of the statistical section, the outstanding long-term debt instruments of governments that overlap geographically, at least in part, with the government preparing the statistical section information. [SGAS 44] 206 Appendix Performance measurement – Commonly used term for service efforts and accomplishments reporting. reported in pension trust funds or investment trust funds, under which principal and income benefit individuals, private organizations, or other governments. [SGAS 34] Permanent funds – Governmental fund type used to report resources that are legally restricted to the extent that only the earnings, and not the principal, may be used for purposes that support the reporting government’s programs. [SGAS 34] Program – Group activities, operations or organizational units directed to attaining specific purposes or objectives. Program revenue – In the context of the government-wide statement of activities, revenue that derive directly from the program itself o from parties outside the reporting government’s taxpayers or citizenry, as a whole; they reduce the net cost of the function to be financed from the government’s general revenues. [SGAS 34] Perspective differences – Difference between the basis for budgeting and GAAP that result when the structure used for budgeting differs from the fund structure used for GAAP financial reporting. [NCGA Interpretation 10] Postemployment – Period following termination of employment, including the time between termination and retirement. [SGAS 43] Proprietary funds – Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. There are two types of proprietary funds: enterprise funds and internal service funds. Postemployment healthcare benefits – Medical, dental, vision, and other healthrelated benefits provided to terminated employees, retired employees, dependents, and beneficiaries. [SGAS 43] Public employee retirement system – State or local governmental entity entrusted with administering one or more pension plans; it also may administer other postemployment benefit plans and deferred compensation plans. [SGAS 25] Primary government – Term used in connection with defining the financial reporting entity. A state government or general purpose local government. Also, a special-purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. The primary government is the focus of the financial reporting entity. [SGAS 14] Public-entity risk pool – Cooperative group of governmental entities joining together to finance an exposure, liability or risk. A pool may be a stand-alone entity or part of a larger governmental entity that acts as the pool’s sponsor. [SGAS 10] Purpose restriction – In the context of government-mandated and voluntary nonexchange transactions, legal limitations Private-purpose trust funds – Fiduciary trust fund type used to report all trust arrangements, other than those properly 207 Appendix securities are reinvested in a taxable money market instrument with a higher yield. that specify the purpose or purposes for which resources are required to be used (as distinguished from eligibility requirements). [SGAS 33] Reciprocal Interfund activity – Interfund counterpart to exchange and exchange-like transactions. Includes both Interfund loans and Interfund services provided and used. [SGAS 34] Qualified opinion – In the context of financial audits, a modification of the independent auditor’s report on the fair presentation of the financial statements indicating that there exists one or more specific exceptions to the auditor’s general assertion that the financial statements are fairly presented. Refunding – Issuance of new debt whose proceeds are used to repay previously issued debt. The proceeds may be used immediately for this purpose (a current refunding), or they may be placed with an escrow agent and invested until they are used to pay principal and interest on the old debt at a future tome (an advance refunding). [SGAS 23] Questioned costs – In the context of Single Audits, a determination by the independent auditor that an expenditure under a federal grant does not meet all of the grantor’s requirements and therefore may be subject to refund to the grantor. Reverse repurchase agreement – Agreement in which a broker-dealer or financial institution (buyer-lender) transfers cash to a governmental entity (sellerborrower); the entity transfers securities to the broker-dealer or financial institution and promises to repay the cash plus interest in exchange for the same securities or for different securities. [SGAS 3] Realized gains and losses – Differences between the carrying value of an asset and its price at the time of sale if the asset had been reported at other than fair value. Reappropriation – Inclusion of a balance from the prior year’s budget as part of the budget of the subsequent fiscal year. Risk-sharing pool One of four different type of public-entity risk pool. An arrangement by which governments pool risks and funds and share in the cost of losses. [SGAS 10] Reasonable assurance – Principle that the goal of the independent audit of the financial statements is to ensure that those statements are free from material misstatement (based on the assumption that it is not cost beneficial to ensure that financial statements are free of immaterial misstatements). Schedule of employer contributions – In the context of defined benefit pension plans and other postemployment benefit plans, trend data on employers’ annual required contribution to a plan and actual contributions. Rebatable arbitrage – Requirement to remit to the federal government interest revenue in excess of interest costs when the proceeds from the sale of tax-exempt 208 Appendix Schedule of funding progress – In the context of defined benefit pension plans and other postemployment benefit plans, trend data on the relationship between the actuarial value of plan assets and the related actuarial accrued liability. improvement or service deemed to benefit primarily those properties. Special items – Significant transactions or other events within the control of management that are either unusual in nature or infrequent in occurrence. [SGAS 34] Segment – Identifiable activity (or grouping of activities) reported as or within an enterprise fund or another stand-alone entity that has one or more bonds or other debt instruments outstanding, with a revenue stream pledged in support of that debt. In addition, the activity’s revenues, expenses, gains and losses, assets, and liabilities are required to be accounted for separately. Special revenue fund – Governmental fund type used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditure for specific purposes. (NCGA Statement 1] Statistical section – Third of three essential components of any comprehensive annual financial report, it 1) provides information on financial trends, 2) provides information on revenue capacity, 3) provides information on debt capacity, 4) provides demographic and economic information, and 5) provides operating information. Service efforts and accomplishment reporting – Term used by the GASB to describe the presentation of performance measures in connection with general purpose external financial reporting. Single Audit – Audit designed to meet the needs of all federal grantor agencies and performed in accordance with the Single Audit Act of 1984 (as amended) and Office of Management and Budget (OMB) Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations. Summary of significant accounting policies (SAAP) – First of the notes to the financial statements. The basis content should include a discussion of 1) any selection of an accounting treatment when GAAP permit more than one approach, 2) accounting practices unique to state and local governments, and 3) unusual or innovative application of GAAP. Single Audit Act of 1984 – Federal legislation that provides for state and local government recipients of federal financial awards to have one audit preformed to meet the needs of all federal grantor agencies. The Single Audit Act was amended in 1996. Supplementary information – Financial information presented together with basis financial statements that is not included within the scope of the audit of those statements. When the presentation of certain supplementary information is Special assessment – Compulsory levy made against certain properties to defray all or part of the cost of a specific capital 209 Appendix months, weighted to reflect the dollar size of individual investments within an investment type. [SGAS 40] mandated by the GASB it is referred to as required supplementary information. Susceptible to accrual – In the context of the modified accrual basis of accounting, revenues that are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. [NCGA Statement 1] Yellow book – Term commonly used to describe the Government Accountability Office’s publication Governmental Auditing Standards, the source of GAGAS. System development fees - Fees charged to join or to extend an existing utility system. Also referred to as tap fees or connection fees. Unqualified opinion – Opinion rendered without reservation by the independent audit that financial statements are fairly presented. Unrealized gains or losses – Difference between the carrying value of an asset and its fair value prior to sale. Unrealized revenues – In the context of budgeting, the difference between estimated revenues and actual revenues. Unrestricted net assets – That portion of net assets that is neither restricted nor invested in capital assets (net of related debt). Voluntary nonexchange transaction – Transaction that result from legislative or contractual agreements, other than exchanges, entered into willingly by the parties to the agreement. [SGAS 33] Weighted average maturity (WAM) – In the context of investment disclosure, a measurement that expresses investment time horizons – the time when investments become due and payable – in years or 210 F Y 2 0 1 0 City of Peoria | 8401 West Monroe Street | Peoria, Arizona 85345 | www.peoriaaz.gov