Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2012 City of Peoria, Arizona City Council: Bob Barrett, Mayor Ron Aames, Vice Mayor Cathy Carlat Joan Evans Carlo Leone Dave Pearson Tony Rivero 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, 2012 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 district map v-xv xvii xviii xix xx 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 Transportation Sales Tax Fund 22 25 26 29 30 32 33 34 Proprietary Fund Financial Statements Statement of Net Assets Statement of Revenues, Expenses, and Changes in Fund Net Assets Statement of Cash Flows 36 38 40 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to the Financial Statements 44 45 47 i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2012 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 Development Fee 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 Municipal Development Authority (MDA) Bonds Debt Service Fund Community Facilities District (CFD) Bonds Debt Service Fund Special Assessment Debt Service Fund General Obligation (GO) Bond Capital Projects Fund Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Non-Bond Capital Projects Fund 94 95 100 102 104 105 106 107 108 109 110 111 112 113 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Public Housing Fund 116 117 118 119 120 121 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 124 125 126 127 128 129 130 Fiduciary Funds Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities – All Agency Funds ii 132 133 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2012 Page D. OTHER SUPPLEMENTARY INFORMATION Combining Detailed Schedules – Self-Insurance Fund Combining Detailed Schedule of Net Assets – Self-Insurance Fund Combining Detailed Schedule of Revenues, Expenses, and Changes in Fund Net Assets – Self-Insurance Fund Federal Financial Data Schedule Debt Service Schedules Schedule of Changes in Debt – Governmental Activities Schedule of Changes in Debt – Business-type Activities Schedule of Bonded 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. 136 137 138 141 142 143 146 148 149 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 iii 155 156 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2012 STATISTICAL SECTION (continued) Schedule of Insurance in Force Property Insurance Schedule Operating Indicators By Function/Program Capital Asset Statistics By Function/Program APPENDIX Glossary Table Page XXXIV XXXV XXXVI XXXVII 192 193 194 195 197 iv xvi Peoria Citizens Citizen Advisory Boards & Commissions Municipal Court City of Peoria Organizational Chart Mayor and City Council City Manager City Attorney Assistant to the City Manager Deputy City Manager Operations Public Works/Utility Operations Information Technology Deputy City Manager Community Building Fire Engineering Police Economic Development Services Human Resources Planning and Sustainability Management and Budget Community Services City Clerk Communications Finance Intergovernmental Affairs xviii City of Peoria Principal Officials of the City Fiscal Year 2012 Bob Barrett Mayor Ron Aames Vice-Mayor Cathy Carlat Councilmember Joan Evans Councilmember Carlo Leone Councilmember Dave Pearson Councilmember Tony Rivero 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 John Sefton Community Services Director Andrew Granger Engineering Director Julie Ayers Human Resources Director Scott Whyte Economic Development Services Director Bobby Ruiz Fire Chief Roy Minter Chief of Police Rhonda Geriminsky Interim City Clerk Brent D. Mattingly Chief Financial Officer, Finance Director Bill Mattingly Public Works /Utility Operations Director Chris Jacques Planning & Community Development Director John Imig Information Technology Director Jeff Tyne Management & Budget Director John Schell Intergovernmental Affairs Director xix City of Peoria Council Districts Bob Barrett Mayor Cathy Carlat Mesquite Joan Evans Willow Dave Pearson Ironwood Ron Aames Palo Verde Tony Rivero Acacia Carlo Leone Pine 1 3033 N. Central Ave., 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, 2012, 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, 2012, 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, 2012, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General, Half-cent Sales Tax, Highway User Revenue, 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 fund of the City of Peoria, Arizona, as of June 30, 2012, and the respective changes in financial position and, where applicable, cash flows, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. TUCSON • PHOENIX • FLAGSTAFF • ALBUQUERQUE www.heinfeldmeech.com In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2012, 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 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The 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 them. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants October 30, 2012 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, 2012. 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. The City also issues a separate financial report, including management’s discussion and analysis, for the Vistancia Community Facilities District, which is a blended component unit of the City. Financial Highlights  The City’s total net assets increased $23.0 million (1.5%) in fiscal year 2012, an increase of $14.8 million (1.4%) in governmental activities and an increase of $8.2 million (1.5%) in business-type activities.  Total net assets of the City are $1,610.5 million, of which $172.6 million is unrestricted (up $8.3 million, 5.1%, from last year’s $164.3 million unrestricted net assets).  The governmental activities program revenues decreased by approximately $7.1 million (10.8%) from the previous year. This was primarily due to a decrease in donated capital assets with fewer large developments being completed in fiscal year 2012.  The business-type activities program revenues increased by approximately $7.6 million (11.3%) from the previous year. Charges for services increased $4.7 million (7.6%) and development fees increased $0.9 million (43.0%) reflecting a small improvement in development activity.  At June 30, 2012, total fund balance of the governmental funds was $270.2 million, up $7.7 million (2.9%) from the previous year. Of this, $12.8 million (down 4.7%) was unassigned (available for spending at the government’s discretion).  General Fund inflows (on a budgetary basis) were higher than budgeted inflows by $4.1 million for fiscal year 2012. Budgetary basis outflows of the General Fund were 83.3% ($21.7 million in savings) of the final budgeted outflows.  At June 30, 2012, unassigned fund balance for the General Fund was $12.9 million, or 13.5% of General Fund expenditures for fiscal year 2012.  During fiscal year 2012, the City issued $28.4 million in General Obligation (GO) Bonds ($14.7 in new monies and $13.7 refunding bonds) and $23.3 million in Water and Wastewater Revenue Refunding Bonds. OVERVIEW OF THE FINANCIAL STATEMENTS As pictured below, the financial section of the Comprehensive Annual Financial Report (CAFR) for the City of Peoria, Arizona consists of this discussion and analysis, the basic financial statements, other required supplementary information and other non-required financial schedules. The basic financial statements include the government-wide financial statements, fund financial statements, including the budgetary statements for the general fund and major special revenue funds, and notes to the financial statements. The additional non-required information includes combining schedules and other supplementary schedules presented after the basic financial statements (Combining Statements, Supplemental Information and Statistical Sections of this report). 3 Required Components of the Annual Financial Report Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Governmentwide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail Government-wide Financial Statements The government-wide financial statements (see pages 19-21) are designed to provide a broad overview of the City’s finances in a manner similar to those used by private businesses. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are broken into two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided.  The governmental activities include the basic services of the City including general government (administration), culture and recreation, police, fire, development services, highways and streets, public works, and human services. These activities are generally supported by taxes and general revenues.  The business-type activities include the private sector type activities such as the water, wastewater solid waste, and storm drain 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 such as 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 22-34) 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 60-64). 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, Transportation Sales Tax Fund, Development Fee Fund, and GO Bond Debt Service 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 (pages 100-103). 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 with 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, Storm Drain 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. The Storm Drain Fund was reclassified in fiscal year 2012 from a governmental fund to an enterprise fund. This change was due to a change in the revenue source from primarily transfers from other governmental funds to a user fee to external customers. For better comparative analysis in this MD&A, the 2011 data has been restated, were applicable, to reflect the Storm Drain Fund as an enterprise fund. 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 5 is provided in combining statements (pages 124-126). The internal service funds of the City include the Motor Pool, Self-Insurance, Facilities Maintenance, and Information Technology Funds. 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 132-133) 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 47-89) 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. 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, 2012, 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, 2012, 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 2011 2012 2011 2012 $ 328.2 $ 317.4 $ 94.4 $ 86.0 1,106.4 615.6 622.6 1,108.4 1,423.8 710.0 708.6 1,436.6 Total Primary Government 2012 2011 $ 422.6 $ 403.4 1,724.0 1,729.0 2,146.6 2,132.4 27.4 363.4 390.8 26.0 366.8 392.8 7.3 138.0 145.3 6.1 146.0 152.1 34.7 501.4 536.1 32.1 512.8 544.9 816.1 118.1 111.6 $ 1,045.8 803.8 118.4 108.8 $ 1031.0 478.8 24.9 61.0 564.7 478.3 22.7 55.5 556.5 1,294.9 143.0 172.6 $ 1,610.5 1,282.1 141.1 164.3 $ 1,587.5 $ $ Percent Change 4.8% (0.3) 0.7 8.1 (2.2) (1.6) 1.0 1.4 5.1 1.5 The net assets of the City increased $23.0 million (1.5%) in fiscal year 2012. Net assets of governmental activities increased $14.8 million (1.4%), while the business-type activities increased $8.2 million (1.5%). Net Assets consists of three components. The largest portion of net assets ($1,294.9 million or 80.4%) 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 $12.9 million in fiscal year 2012 due to $31.1 million in capital asset expenditures, $18.7 million in donated assets, and a $17.8 million decrease in net capital related debt, offset by $54.7 million in depreciation expense, and asset disposals. 6 The second portion of the City’s net assets ($143.0 million or 8.9%) represents resources that are subject to external restrictions on how they may be used. The increase of $1.9 million includes an increase of $2.3 million in restricted for development fees with increased development fee revenues; a decrease of $2.1 million in reserved for debt service due to early payoff of the 2003 MDA bonds; and $2.3 million increase in net assets restricted for capital projects. The increase in the reserve for capital projects is primarily due to increased expansion fee revenues in the Water and Wastewater Funds. The third portion consists of Unrestricted Net Assets of $172.6 million (10.7%). These net assets may be used to meet the City’s ongoing obligations to citizens and creditors. This category increased $8.3 million (5.1%) in fiscal year 2012. Unrestricted net assets is the balance of net assets remaining after calculating the other two categories discussed above. Unrestricted net assets of governmental activities increased $2.8 million, while unrestricted net assets of business-type activities increased $5.5 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 2011 2012 2011 2012 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 Storm Drain utility Housing Total expenses Excess (deficit) before transfers Transfers Increase (decrease) in net assets $ 17.3 2.2 9.9 29.0 $ 16.9 5.0 17.2 26.4 $ 66.1 0.1 8.4 - $ 61.4 0.2 5.4 - Total Primary Government 2012 2011 $ 83.4 2.3 18.3 29.0 $ 78.3 5.2 22.6 26.4 22.2 60.7 4.1 12.1 13.2 4.9 1.0 0.1 0.0 3.5 180.2 26.0 58.1 4.0 11.6 13.4 4.5 1.4 0.1 0.8 5.1 190.5 0.3 74.9 0.3 67.3 22.2 60.7 4.1 12.1 13.2 4.9 1.3 0.1 0.0 3.5 255.1 26.0 58.1 4.0 11.6 13.4 4.5 1.7 0.1 0.8 5.1 257.8 20.9 23.5 35.9 22.3 5.4 31.8 7.4 1.7 12.6 0.6 27.4 21.1 35.5 21.2 6.1 25.6 7.7 2.0 12.6 0.6 - - 20.9 23.5 35.9 22.3 5.4 31.8 7.4 1.7 12.6 0.6 27.4 21.1 35.5 21.2 6.1 25.6 7.7 2.0 12.6 0.6 162.1 18.1 (3.3) 14.8 159.8 30.7 (11.1) 19.6 30.8 21.9 10.8 5.3 0.8 0.4 70.0 4.9 3.3 8.2 29.6 19.9 9.8 5.0 0.7 0.4 65.4 1.9 11.1 13.0 30.8 21.9 10.8 5.3 0.8 0.4 232.1 23.0 23.0 29.6 19.9 9.8 5.0 0.7 0.4 225.2 32.6 32.6 $ $ $ $ $ Percent Change 6.5% (55.8) (19.0) 9.8 (14.6) 4.5 2.5 4.3 (1.5) 8.9 (23.5) (100.0) (31.4) (1.0) (23.7)% 11.4 1.1 5.2 (11.5) 24.2 (3.9) (15.0) 4.1 10.1 10.2 6.0 14.3 3.1 (29.4) (29.4) For fiscal year 2012, total governmental activities revenues decreased $10.3 million (5.4%), and total business-type activities revenues increased $7.6 million (11.3%). Expenses increased $2.3 million (1.4%) and $4.6 million (7.0%) for the governmental activities and business-type activities, respectively. While some functions had increased expenses with a slowly recovering economy, general government 7 expenses decreased by $6.5 million (23.7%); development services expenses decreased by $.7 million (11.5%); public works decrease $.3 million (3.9%); and human services decreased $.3 million (15.0%) with the City turning the Section 8 Housing program over to the County. Culture & recreation expenses increased by $2.4 million (11.4%); police expenses increased $.4 million (1.1%; fire expenses increased by $1.1 million (5.2%); and highways and streets expenses increased by $6.2 million (24.2%). The increase in the business-type activities expenses are primarily in the Water Utility ($1.2 million, 4.4%), Wastewater Utility ($2.0 million, 10.1%) and the Solid Waste Utility ($1.0 million, 10.2%). 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 $3.2 million (2.6%) from the previous year. The primary drivers were decreases in property tax and reimbursement revenue, offset by increased local and state sales taxes. Property tax revenues decreased by $3.8 million (14.6%) in fiscal year 2012 as assessed values continued to decline. Miscellaneous revenues, including reimbursement revenue, decreased by $1.6 million (31.4%) in fiscal year 2012. Local sales and use taxes increased $2.6 million (4.5%) as retail and restaurant & bar sales taxes increased $2.2 million and $0.3 million respectively while state shared sales taxes increased $.5 million (4.3%). Program revenues of governmental activities decreased $7.1 million (10.8%) mainly as a result of the following changes: Federal grants decreased by $2.8 million (56.0%) with the substantial completion of the Energy grant in 2011, while donations of capital assets decreased by $7.3 million (42.4%) with fewer large developments being completed in 2012. The program revenues of business-type activities increased $7.6 million (11.3%) primarily due to a $4.7 million increase in charges for services revenues as water and wastewater rates increased 4.5% after three years of no changes. Development fee revenues also increased $0.9 million reflecting a slight improvement in development activity. 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 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 $58.4 million are 36.0% of the governmental activities expenses for fiscal year 2012, down from 41.0% in fiscal year 2011. In the business-type activities, program revenues of $74.6 million are 106.6% of the business-type expenses for fiscal year 2012. This compares to $67.0 million and 102.5% in fiscal year 2011. 8 Governmental activities account for 70.6% of the total revenues of the City and 69.8% of the total expenses in fiscal year 2012. These percentages were 73.9% and 71.0% respectively in fiscal year 2011. As seen in the following graph, one of the largest financing sources for the City in fiscal year 2012 is charges for services (32.7%), primarily because this is the major funding source of the business-type activities (88.2% of business-type revenues in fiscal year 2012). The major funding sources of the governmental activities are property, franchise and sales/use taxes (34.1% of total revenues, 48.3% of governmental revenues) and state shared revenues (11.8% of total revenues, 16.8% of governmental revenues). Government-Wide Revenue Sources Fiscal Year 2012 Other grants & entitlements 11.4% Investment earnings 0.5% Property taxes 8.7% Sales & use taxes 23.8% Federal grants 0.9% State shared revenues 11.8% Franchise taxes 1.6% Other 1.4% Charges for services 32.7% Contributed capital 7.2% Property taxes decreased 14.6% from fiscal year 2011 with a continued decline in assessed value. The tax rates did not change in fiscal year 2012 compared to the previous year. Total government-wide expenses (not including transfers out) of the City increased $6.9 million (3.0%) in fiscal year 2012. Expenses of the governmental activities increased $2.3 million (1.4%). This includes increases of $6.2 million (24.2%) for highways and streets, and $2.4 million (11.4%) for culture and recreation offset by a decrease of $6.5 million (23.7%) for general government. Highways and streets expenses increased primarily due to an increase of $4.8 million in depreciation expense. Culture and recreation expenses increased primarily due to an increase of $2.5 million additional depreciation expense. General government expenses decreased with $4.0 million in lower depreciation expense. Expenses in Business-type activities increased $4.6 million (7.0%) primarily due to increased depreciation expense. The various increases in depreciation expense were due to a thorough review of work-inprogress assets during 2012 and beginning depreciation on a number of assets. The decrease in general government depreciation expense is due to the completion of depreciation on a large information technology asset in fiscal year 2011. As shown in the following Government-Wide Functional Expenses graph, business-type activities account for 30.2% of the functional expenses of the City for fiscal year 2012, while governmental activities account for 69.8% of the functional expenses. For the governmental activities, the largest users of resources are public safety (25.1% of total expense, 35.9% of governmental expenses), general government (9.0% of total expenses, 12.9% of governmental expenses), highways and streets (13.7% of total expenses, 19.6% of governmental expenses), and culture and recreation (10.1% of total expenses, 14.4% of governmental expenses). 9 Government-Wide Functional Expenses Fiscal Year 2012 General government 9.0% Business-type activities 30.2% Culture & recreation 10.1% Other 1.0% Public safety 25.1% Highways & streets 13.7% Development services 2.3% Public works 3.2% Interest 5.4% FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental funds The focus of the governmental fund financial statements (pages 22-29) 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 100-103. Although the Half-Cent Sales Tax Fund, Highway User Revenue 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 or outstanding debt. The fund balance of the governmental funds is $270.2, an increase of $7.7 million, or 2.9%, from the previous year. Of this, $169.5 million (down $1.1 million (0.6%) from the previous year) is classified as Unspendable or Restricted because it is not appropriable for expenditure or is legally segregated for a specific future use. The decrease in restricted fund balance is caused by a decreases in restricted for debt service of $2.1 million, including $1.4 million in the MDA Debt Service Fund and $1.1 million in the GO Bond Debt Service Fund, due to the early payoff of bonds in 2012; a decrease of $0.9 million in restricted for capital projects due to decreased reimbursement revenue; a decrease of $0.8 million was recorded in restricted for transportation purposes due to increased capital expenditures; offset by a $2.4 million increase in restricted for development fees due to increased development fee revenues. An additional $87.9 million of the governmental fund balance (up $9.4 million (12.0%) from the previous year) has been committed or assigned for specific purposes by council or administrative action. These commitments include various stabilization reserves ($38.6 million), debt service reserves ($1.0 million), capital projects ($34.0 million) and arts capital and various other purposes ($14.3). The remaining $12.8 million of governmental fund balance is classified as Unassigned. 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 unassigned fund balance decrease of $0.6 million (4.5%) during fiscal year 2012 is primarily due to the net loss in the General Fund. 10 Governmental Funds - Fund Balance 120 Millions 100 80 60 40 20 FY11 0 FY12 The General Fund is the chief operating fund of the City and accounts for many of the major functions of the government, including public safety, parks and recreation, community development and general administrative services. The General Fund revenues increased $1.3 million (1.5%) from the previous year. Urban revenue sharing decreased $.2 million (1.3%). Urban revenue sharing is from the collection of state income tax two years prior, so distributions in fiscal year 2012 are still from the economic recession. Also, property taxes decreased by $.4 million (13.8%) as assessed values continue to decrease, and investment earnings decreased $.03 million (15.2%) due to continuing low interest rates. The City’s sales tax revenues in the General Fund increased $1.4 million (4.4%) and state shared sales tax revenues increased $.4 million (3.8%) due to a recovering retail sales and restaurant & bar sales. Auto-in-lieu revenue (licensing fees) increased .4 million (8.7) with an increase in auto sales. Total General Fund expenditures decreased $4.4 million (4.4%). Personnel costs decreased $1.3 million while other costs (contractual services and commodities) decreased $1.2 million with various cost saving measures. Capital outlay decreased by $1.6 million (40.1%) with fewer projects being funded by the General Fund. The unassigned fund balance of the General Fund was 13.5% of expenditures at June 30, 2012, compared to 13.6% at June 30, 2011. The Half-Cent Sales Tax Fund tracks the revenues from a $.05 sales tax committed for specific purposes by Council policy. Revenues in this fund increased $.6 million (4.3%) from the previous year due to increased sales tax revenues. Expenditures in this fund decreased $1.7 million (30.5%) due to increased debt service payments on development agreements in fiscal year 2011 that did not repeat in fiscal year 2012. Transfers out from the Half-Cent Fund increased $.7 million with higher debt service transfers. Total fund balance of the Half-Cent Sales Tax Fund increased by $.4 million (3.4%) in fiscal year 2012. 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 that are 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 $.2 million (2.1%) due to decreased highway user revenues ($.3 million or 3.8%) and a small increase in sales taxes. Expenditures increased by $.5 million (4.4%) in fiscal year 2012 primarily due to an increase in street repairs expenditures. Fund balance decreased $.2 million (1.5%) in fiscal year 2012. The Transportation Sales Tax Fund tracks the collection and expenditure of the .3% voter approved sales tax to address transportation issues. Revenues in this fund increased $.4 million (4.7%) while expenditures increased $1.9 million (56.2%). The increased revenues are due to increasing sales tax 11 revenue while the increased expenditures are primarily capital outlay. The fund balance decreased $.6 million (2.2%) in fiscal year 2012. All fund balance in this fund is restricted. Another major governmental fund of the City is the Development Fee Fund, which collects governmental impact fees for parks and recreational facilities, public safety, and streets and intersections. Revenues in the Development Fee Fund increased $2.5 million (52.6%) with a moderate increase in development activity in the City, while expenditures increased $.9 million (23.3%) in fiscal year 2012 due to increased capital outlay. Fund balance increased $2.4 million (12.6%) in fiscal year 2012, primarily due to increased revenues. All fund balance in this fund is restricted. The GO Bond Debt Service Fund accounts for the payment of general obligation bonds and the related interest. Revenues in this fund decreased $3.3 million (16.3%) due to decreased secondary property tax revenues and investment earnings. The secondary assessed value of the City decreased 20.7% in fiscal year 2012 while the secondary tax rate was unchanged. Expenditures decreased by $5.6 million (23.5%) due to decreased principal payments on general obligation bonds issued in fiscal year 2009. The Series 2009 bond debt service was structured with large payments in fiscal year 2010 and 2011 to lower the fund balance in this fund. Fund balance decreased $1.1 million (3.4%) in fiscal year 2012. All non-major governmental funds of the City are combined into one column on the governmental fund statements. Proprietary funds The proprietary fund financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each major enterprise fund is shown discretely. Although the Solid Waste, Stadium Fund, Storm Drain 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 $8.7 million (1.6%) in fiscal year 2012. Net assets invested in capital assets, net of related debt, increased $.5 million (.1%) with the addition of utility infrastructure in the Water Fund. Restricted net assets increased $2.2 million (9.6%), primarily due to increased balances for capital construction due to increased expansion fees in the Water and Wastewater Funds. The unrestricted net assets increased $6.0 million (11.1%) primarily due to increased net income in the utility operating portions of the Utility Funds. The Water Utility Fund, Wastewater Utility Fund, and Solid Water Utility Fund experienced increases in total net assets of $7.3 million (2.7%) $.6 million (0.2%) and $1.3 million (5.5%) respectively. The Storm Drain Utility Fund net assets increased $8,863 (1.2%) while the Stadium Fund decreased $0.4 million (1.6%), and the Public Housing Fund total net assets decreased $0.1 million (5.2%). The Water Utility unrestricted net assets increased $4.5 million (16.9%), the Wastewater Utility unrestricted net assets increased $0.4 million (2.7%), and the unrestricted net assets of the Solid Waste Fund increased $1.4 million (10.8%). Operating revenues of the enterprise funds increased $4.6 million (7.5%) in fiscal year 2012. Charges for services increased $3.9 million (13.1%) in the Water Utility Fund and $0.7 million (4.4%) in the Wastewater Utility Fund due to increased usage and rate increases of 4.6% in water and 4.5% in wastewater. Operating expenses of the enterprise funds increased $5.0 million (8.4%) in fiscal year 2012. The Water Utility Fund operating expenses increased $1.7 million (6.3%) primarily due to an increase in depreciation of $1.9 million (27.5%). In the Wastewater Utility Fund, operating expenses increased $2.0 million (11.9%) due to an increase in depreciation of $1.6 million (18.6%), an increase in contractual services/commodities of $0.3 million (5.3%), and an increase in salaries/wages of $0.1 million (5.0%). In the Solid Waste Fund, operating expenses increased $0.9 million (9.0%) due to an increase of $0.2 million (6.7%) in salaries/wages and $0.7 million (11.6%) in contractual services/commodities primarily in landfill services and internal charges for other City services. Operating expenses in the Stadium Fund increased $0.2 million (4.3%) due to a $0.2 million (7.8%) increase in contractual services/commodities of which a significant portion is one-time expenses from a catch-up on team splits of revenues. Operating income for the Water Utility Fund increased by $2.2 million (73.4%) from fiscal year 2011 due to the higher charges for service. Operating income for the Wastewater Utility decreased by $1.3 million 12 (133.6%) to an operating loss in fiscal year 2012 with the expense increases discussed above. The Solid Waste Utility Fund operating income decreased $.9 million (42.0%) based on increased expenses as discussed above. The Stadium Fund and the Public Housing Fund had operating losses in fiscal years 2011 and 2012. The Stadium Fund’s operating loss is substantially covered by transfers from the HalfCent Sales Tax Fund for governmental use and support of this facility. The Public Housing Fund operating loss is higher in fiscal year 2012 than 2011 due to decreasing federal subsidies and increased expenses. The Storm drainage fund essentially broke even in fiscal year 2012. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2012. Fiscal year 2012 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 30-34. These statements compare the original adopted budget, the budget as amended throughout the fiscal year, and the actual expenditures prepared on a budgetary basis. Budgetary schedules for the other governmental funds as well as the proprietary funds are also presented on pages 94-95, 104-113, 116-121, and 127-130. 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 $460 million occurred during fiscal year 2012. 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 $108.6 million, on a budgetary basis, exceeded budgeted inflows of $104.5 million by $4.1 million (3.9%) while budgetary basis outflows (expenditures and other uses) of $108.5 million were 83.3% of final budgeted outflows. Revenues, on a budgetary 13 basis, exceeded budgeted revenues in sales tax, franchise tax, state shared sales tax, charges for other services, licenses and permits, while falling short in investment earnings and miscellaneous revenues. Reduced General Fund outflows resulted primarily from delayed capital projects and unspent contingency. There were no expenditure overages for any of the functional categories although the fire department budget was increased $0.25 million from the General Fund contingency to cover higher overtime expenditures. During the fiscal year, the original General Fund expenditures and other uses budget of $134.0 million was amended by $3.8 million to the final expenditure and other uses budget of $130.2 million. Notable General Fund transfers were as follows:  Contingency appropriation of $0.3 million was transferred to General Fund from the Fleet Replacement Reserve Fund when the Police Department no longer required their supplemental for a REACT vehicle due to the State/County continuing their program when it had been anticipated that it would be turned over to the cities.  Excess appropriation of $0.1 million was transferred to General Fund contingency appropriation from the MDA Debt Service Fund associated with the GRIC Water Rights debt payoff being lower then estimated.  Appropriation of $0.3 million was transferred from General Fund contingency to the Motor Pool Fund for increased fuel costs.  Per council approval in April 2012, the 2003 MDA bonds were defeased in fiscal 2012. There was a transfer from General Fund contingency appropriation of $2.9 million to the MDA Debt Service Fund for expenditure authorization necessary to complete the defeasance.  Citywide health insurance cost savings resulted in $0.2 million transfer to General Fund contingency from the Self-Insurance Fund.  Contingency appropriation of $1.2 million was transferred from the General Fund contingency to the Self-Insurance Fund for increased costs associated with two large Worker’s Compensation claims. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2012, the City had $1.3 billion invested in various capital assets, net of accumulated depreciation and related debt, up 1.0% 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 decrease of $5.0 million from June 30, 2011. Net assets of business-type activities decreased $7.0 million while governmental activities increased $2.0 million. Major additions to capital assets during the fiscal year included the following:  The City spent an additional $1.3 million on major repair and rehabilitation of all sewer lines 15 inches and larger throughout the whole city. These trunk sewer lines collect the wastewater from multiple areas. Repair and rehabilitation of these sewer lines will correct deficiencies identified during the inspection process; thereby, ensuring continuous and reliable service.  The community center was built in 1987 in Old Town Peoria. It is a multi-use recreation center utilized by the citizens for Peoria. The 2006 Parks Recreation and Open Space Master Plan identified the citizens’ need for a larger multi-use recreation center as the number one facility requirement. An additional $5.5 million was spent to renovate the existing facility, while constructing an additional 10,000 square feet. These facilities will serve the residents of south Peoria and include a game room, an exercise room and a classroom. 14  Traffic projections indicate that Lake Pleasant Pkwy should be widened to four lanes between Westwing Pkwy (Dynamite Blvd) and Loop 303 to accommodate the increased traffic anticipated following connection of Loop 303 to Lake Pleasant Pkwy. Land was purchased for $1.9 million to accommodate the additional lanes.  Construction continued on the south half-street improvements of Beardsley Road between 99th Avenue and Lake Pleasant Road. The original half-street was field constructed by Maricopa County in the late 1980s to rural standards. Eventually the road was annexed into the City. The City spent $3.1 million to construct curbs, gutter and sidewalks.  Located at the southeast corner of 83rd and Olive Avenue, the City is constructed a second community park. The park will comprise approximately 80 acres of area to include six baseball/softball fields with associated concessions, restrooms, spectator areas and parking, four lighted soccer fields and support facilities, a five-acre lake, a skate park, a dog park, a splash park, picnic areas and gardens. The City spent an additional $1.7 million in fiscal year 2012. This project is estimated to cost $19.7 million. The following table provides a breakdown of the capital assets of the City at June 30, 2012, and 2011. Additional information on the City’s capital assets may be found in Note 12 on pages 72-73. Capital Assets at June 30 (Net of depreciation) Buildings and building improvements Furniture Equipment Vehicles Surface water system Street system Park system Water system Water rights Wastewater system Land Work in progress Total (in millions) Governmental Business-type Activities Activities 2011 2012 2011 2012 $ 133.3 $ 133.1 $ 23.7 $ 24.6 .6 .7 .1 .1 12.3 14.8 2.8 2.1 7.1 7.6 3.7 4.2 60.6 47.2 370.2 340.9 48.4 19.2 241.2 230.2 11.6 11.8 281.2 285.4 336.7 332.3 17.0 17.0 210.6 34.3 47.3 139.2 $ 615.6 $ 622.7 $ 1,108.4 $ 1,106.4 Total Primary Government 2012 2011 $ 157.0 $ 157.7 .7 .8 15.1 16.9 10.8 11.8 60.6 47.2 370.2 340.9 48.4 19.2 241.2 230.2 11.6 11.8 281.2 285.4 353.7 349.3 173.5 257.9 $ 1,724.0 $ 1,729.1 Percent Change (0.4)% (12.5) (10.7) (8.5) 28.4 8.6 152.1 4.8 (1.7) (1.5) 1.3 (32.7) (0.3) The City has adopted a ten year capital improvement plan budgeted at $463.0 million, including $170.4 million in fiscal year 2013. Anticipated funding for this plan for fiscal year 2013 is through a combination of impact fees (13.6%), general obligation bonds (25.2%), municipal development authority bonds (17.6%), operating revenues (15.4%), City (10.7%) and County (15.7%) transportation sales taxes and other outside funding sources (1.8%). The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $11.5 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, leases, contracts, compensated absences, and deferred bond premiums, net of deferred loss on bond refunding, was $460.5 million at June 30, 2012. Of this total, $332.5 million was in governmental activities and $128.0 million was in business-type activities. The City’s outstanding non-current debt decreased $16.3 million in fiscal year 2012. In fiscal year 2012, the City issued $14.7 million in General Obligation Bonds to fund various parks, trails and municipal operations projects and $13.7 million to refinance outstanding debt. The City also issued $23.3 million in Water and Sewer Revenue Refunding Bonds to prepay several outstanding loans with the Water Infrastructure Finance Authority. See Note 15 on pages 79-80 for additional information on the refunding debt. Of the total outstanding bonds of $412.6 million, $171.0 million is general obligation bonds backed by the full faith and credit of the City. An additional $4.7 million is special assessment bonds where the City is 15 contingently liable in the event that the assessment revenues are insufficient to pay the debt payments. The outstanding debt also includes $56.2 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, 2012, is $73.8 million in the 6% category and $87.0 million in the 20% category. Additional information on the debt limitations and capacities may be found in Note 14 (page 74) and also in Table XXIII in the statistical section of this report (page 181). The following schedule shows the outstanding debt of the City (both current and long-term) as of June 30, 2012, and 2011. Further detail on the City’s outstanding debt may be found in Note 14 on pages 74-79. Outstanding Debt (in millions) Governmental Activities 2011 2012 General obligation debt Municipal Development Authority debt Special assessment debt Water/Sewer Revenue bonds Community Facilities District bonds Contracts payable Compensated absences Total $ $ 171.0 52.5 4.7 56.2 62.9 7.0 354.3 $ $ Business-type Activities 2012 2011 167.6 58.4 6.2 58.6 67.4 6.1 364.3 $ $ 128.3 6.9 0.8 136.0 $ $ 0.4 137.8 7.1 0.6 145.9 Total Primary Government 2012 2011 $ $ 171.0 52.5 4.7 128.3 56.2 69.8 7.8 490.3 $ $ 167.6 58.8 6.2 137.8 58.6 74.5 6.7 510.2 Percent Change 2.0% (10.7) (24.2) (6.9) (4.1) (6.3) 16.4 (3.9) 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 2012 was 7.5%, which remains below both the state (8.2%) and national average (8.2%). The regional economy continues to recover at a slow pace with population growth in the 1% range and modest increases in construction activity. Overall employment growth was positive with a year-over-year increase of 2.4% for the state. Moderate growth in the education, healthcare, construction, retail, transportation and utilities, and leisure and hospitality services sectors helped create the job gains. Within Peoria, the local economy has experienced a slight increase in residential construction with activity continuing in the planned communities developed over the past few years. Commercial construction remains lower than historical levels. The adopted fiscal year 2013 budget is $473 million, an increase of 2.8% from the fiscal year 2012 budget as the City anticipates slight revenue increases due to a slowly recovering economy. The operating budget totals $302.6 million, which is an increase of 0.2% from 2012. The capital projects portion of the budget, $170.4 million (a 7.8% increase), is divided in the following manner: $1.4 million for drainage projects, $6.7 for operational facilities, $64.6 million for parks, trails and open space, $3.7 million for public safety projects, $62.3 million for streets and traffic control projects, $8.3 million for economic development projects, $9.1 million for wastewater projects, and $14.3 million for water projects. The General Fund operating budget (not including contingency) is $117.6 million, up 10.1% from the prior year budget. With the continued sluggish economy, the citizens’ needs for City services were balanced with a slowly increasing revenue base. For the first time in four years, budget cuts were not needed, but the approach was to allow modest one-time budget needs while avoiding ongoing commitments. The budget continues to focus on preserving the City’s excellent quality of life. The fiscal year 2013 budget no longer required staff cuts, but adhering to the commitment to avoid ongoing commitments, only one new employee was added in the budget. 16 The City has maintained 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 several 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 $33.2 million in the General Fund and $5.4 million in the Half-Cent Sales Tax Fund at June 30, 2012. The City also maintains working capital policy reserve, rate stabilization, and debt stabilization reserves in the Utility Funds. At June 30, 2012, those reserves were $11.9 million in the Water Utility, $8.1 million in the Wastewater Utility, and $2.1 million in the Solid Waste Utility. It should be noted that while these reserves are established to address immediate and dramatic fiscal difficulties, they are not intended to cover structural budget shortfalls. With this in mind, the fiscal year 2013 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, 2012 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 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 Other liabilities Customer deposits Unearned revenue Non-current liabilities: Due within one year: Current portion of claims payable 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 claims payable 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: Debt service Capital projects Development fees Transportion purposes Grant purposes Facilities maintenance Trust purpose Unrestricted Total net assets $ 43,103,448 13,685,827 179,500,482 12,993,502 136,247 (1,036,659) 5,642,987 124,202 1,133,415 2,751,048 27,155,382 36,087,909 2,340,000 4,551,574 Primary Government Business-type Activities $ 16,236,678 1,488,945 65,674,208 8,813,866 39,653 1,036,659 313,325 267,626 383,178 136,118 - Total $ 59,340,126 15,174,772 245,174,690 21,807,368 175,900 5,642,987 437,527 1,401,041 3,134,226 27,291,500 36,087,909 2,340,000 4,551,574 475,895,730 632,520,706 1,436,585,800 51,374,815 564,266,310 710,031,381 527,270,545 1,196,787,016 2,146,617,181 9,673,491 961,646 5,960,577 1,025,839 2,276,265 3,567 7,521,754 2,975,423 114,316 2,133,294 239,426 91,617 1,684,843 20,100 12,648,914 1,075,962 8,093,871 1,265,265 2,367,882 1,688,410 7,541,854 2,268,909 4,823,470 4,591,479 14,990,000 575,920 751,540 8,776,254 2,268,909 5,399,390 5,343,019 23,766,254 4,165,771 2,187,760 58,334,770 269,340,000 3,092,958 (466,255) 390,752,001 226,030 6,184,810 119,507,652 2,444,594 (379,208) 145,346,611 816,149,271 478,738,661 1,294,887,932 53,726,154 573,990 21,538,493 38,691,797 2,673,661 70,016 831,314 111,579,103 $ 1,045,833,799 24,296,095 516,261 100,000 61,033,753 $ 564,684,770 53,726,154 24,870,085 21,538,493 38,691,797 3,189,922 170,016 831,314 172,612,856 $ 1,610,518,569 The accompanying notes are an integral part of the financial statements 19 4,165,771 2,413,790 64,519,580 388,847,652 5,537,552 (845,463) 536,098,612 CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 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 Storm Drain Utility Housing programs Total business-type activities Total primary government $ $ Fees, Fines & Charges for Services 20,935,141 23,499,906 35,905,144 22,313,810 5,437,784 31,778,203 7,416,026 1,655,935 12,595,752 574,550 162,112,251 $ 30,777,765 21,923,061 10,859,872 5,284,940 802,246 400,405 70,048,289 232,160,540 33,896,048 16,624,110 11,873,744 2,711,665 804,487 138,086 66,048,140 $ 83,379,796 2,839,814 6,810,891 1,112,621 1,693,101 1,720,697 424,505 2,687,325 42,702 17,331,656 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 114,971 405,727 740,607 141,859 522,604 7,714,173 175,110 1,256,937 11,071,988 140,461 140,461 $ 11,212,449 General revenues: Taxes: Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes State shared sales taxes- unrestricted Urban revenue sharing- unrestricted Auto in-lieu taxes- unrestricted Investment earnings Gain on sale of capital assets Miscellaneous Special Item: Close out of Section 8 Housing 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 $ 184,101 1,567,346 396,297 512,886 27,403,368 30,063,998 5,102,532 3,245,348 70,434 8,418,314 $ 38,482,312 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Activities $ $ $ $ (17,796,255) (14,715,942) (33,655,619) (19,965,964) (3,194,483) 3,763,843 (4,553,591) (356,296) (12,595,752) (574,550) (103,644,609) (103,644,609) 3,187,679 19,030,940 60,719,648 4,084,163 12,087,651 13,231,006 4,944,181 959,479 50,192 3,965,187 (464,390) (3,335,912) 118,459,824 14,815,215 1,031,018,584 1,045,833,799 Business-type Activities $ $ $ 8,220,815 (2,053,603) 1,084,306 (2,573,275) 2,241 (121,858) 4,558,626 4,558,626 284,427 3,335,912 3,620,339 8,178,965 556,505,805 $ 564,684,770 Total $ $ (17,796,255) (14,715,942) (33,655,619) (19,965,964) (3,194,483) 3,763,843 (4,553,591) (356,296) (12,595,752) (574,550) (103,644,609) 8,220,815 (2,053,603) 1,084,306 (2,573,275) 2,241 (121,858) 4,558,626 (99,085,983) $ 3,187,679 19,030,940 60,719,648 4,084,163 12,087,651 13,231,006 4,944,181 1,243,906 50,192 3,965,187 (464,390) 122,080,163 22,994,180 1,587,524,389 $ 1,610,518,569 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2012 Major Funds Half-Cent Sales Tax Fund General Fund ASSETS Cash and cash equivalents Cash with fiscal agents Investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Prepaid items Supply inventories Restricted cash and cash equivalents Restricted investments Special assessments receivable Interfund receivable (non-current) Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Due to other governments Customer deposits Deferred revenue Other liabilities Interfund payable (non-current) Total liabilities Fund balances: Nonspendable: Supply inventories Prepaid items Long-term loans Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance Committed to: Debt service Economic development Arts Capital Operating reserve Emergency reserve Budget stabilization reserve Assigned to: Capital projects Municipal Complex reserve Other purposes Unassigned: Total fund balance Total liabilities and fund balance $ $ $ $ $ 9,633,966 39,744,077 4,359,161 25,196 133,089 3,712,430 109,202 891,969 490,224 162,550 59,261,864 $ 3,474,099 840,171 1,025,534 3,567 921,621 1,588,397 7,853,389 $ 891,969 109,202 162,550 $ $ $ 70,016 $ Highway User Revenue Fund Transportation Sales Tax Fund 2,233,858 9,327,651 1,322,650 6,814 12,890,973 $ 2,354,515 9,831,465 287,931 6,444 753,917 80,928 13,315,200 $ 30,649 30,649 $ 594,157 32,126 77,832 704,115 $ - $ 80,828 - $ $ $ - 390,254 14,200,000 9,500,000 9,500,000 1,000,000 5,400,000 3,705,809 12,878,675 51,408,475 59,261,864 6,460,324 12,860,324 12,890,973 $ $ $ 12,530,257 - $ The accompanying notes are an integral part of the financial statements 22 915,729 915,729 26,080,712 - 12,611,085 13,315,200 5,060,016 21,128,495 792,840 15,090 26,996,441 - $ 26,080,712 26,996,441 GO Bond Debt Service Fund $ $ $ $ $ 3,365,514 11,753,490 14,052,969 1,717,365 10,833 334,409 31,234,580 452,077 452,077 - Devlopment Fee Fund $ $ $ $ $ 30,782,503 - $ 196,310 117,000 21,209 10,353,093 10,687,612 - $ $ $ $ $ 21,375,943 - 30,782,503 31,234,580 6,192,051 25,855,397 16,107 32,063,555 Non-Major Governmental Funds - $ 21,375,943 32,063,555 $ Total Governmental Funds 8,667,361 1,932,337 36,191,247 4,513,555 41,628 842,231 15,000 26,665,158 36,087,909 4,551,574 10,190,543 129,698,543 $ $ 2,831,923 10,426 11,558 305 11,223,897 560,222 14,638,331 $ 15,000 - $ $ 37,507,281 13,685,827 156,131,301 12,993,502 122,112 133,089 5,642,987 124,202 972,897 27,155,382 36,087,909 4,551,574 10,353,093 305,461,156 8,042,867 882,723 128,558 1,025,839 3,567 12,597,595 2,247,660 10,353,093 35,281,902 972,797 124,202 162,550 22,943,651 51,741,087 2,673,661 - 53,726,154 51,741,087 21,375,943 38,610,969 2,673,661 70,016 3,664,814 - 1,000,000 390,254 3,664,814 14,200,000 9,500,000 14,900,000 34,012,861 93,811 (84,673) 115,060,212 129,698,543 $ 23 34,012,861 3,705,809 6,554,135 12,794,002 270,179,254 305,461,156 24 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL ACTIVITIES JUNE 30, 2012 Fund balances - total governmental funds balance sheet $ 270,179,254 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 $ 1,336,993,581 (246,724,974) 1,090,268,607 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 2,751,048 466,255 3,217,303 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 284,330,000 62,926,249 6,314,240 (353,570,489) Certain long-term debt is offset by an intangible asset (goodwill) for government-wide reporting 2,340,000 Deferred revenue for long-term special assessments is shown on the governmental funds balance sheet, but is not deferred on the statement of net assets 4,551,324 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 (3,092,958) 524,517 Interest payable on long-term debt is not reported in the governmental funds. (5,960,577) 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. 37,376,818 Net assets of governmental activities - statement of net assets The accompanying notes are an integral part of the financial statements 25 $ 1,045,833,799 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2012 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 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): Refunding bonds issued Capital-related debt issued Premium on bonds issued Payment to bond refunding escrow agent Special item: Close out of Section 8 Housing 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 $ 33,491,257 2,723,487 4,084,163 $ 14,958,919 - 12,087,651 13,231,006 4,944,181 2,248 235,288 10,766,323 2,106,545 2,521,407 486,932 171,757 904,010 87,756,255 47,925 15,006,844 7,714,173 129,502 45,611 11,661,264 106,395 9,088,210 11,954,032 17,922,219 33,036,203 20,553,781 4,807,169 4,700,792 - 2,094,035 - 12,519,415 - 589,358 - 2,353,584 95,327,780 1,662,019 41,491 3,797,545 56,483 12,575,898 4,837,963 5,427,321 (7,571,525) 11,209,299 (914,634) 3,660,889 7,861,456 (1,058,665) 6,802,791 (10,791,139) (10,791,139) 1,025,418 (301,087) 724,331 (4,249,495) (4,249,495) (190,303) (588,606) (768,734) 418,160 Highway User Revenue Fund Transportation Sales Tax Fund $ $ 3,287,657 484,321 - 8,981,815 - 52,177,209 12,442,164 12,801,388 26,669,318 $ 51,408,475 $ 12,860,324 $ 12,611,085 $ 26,080,712 The accompanying notes are an integral part of the financial statements 26 GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds $ $ $ 16,943,025 76,362 17,019,387 - Total Governmental Funds 2,248,487 - $ 60,719,648 22,399,320 4,084,163 7,141,870 114,040 7,255,910 2,224,074 14,123,750 322,062 235,615 297,056 2,069,613 3,684,208 25,204,865 12,087,651 13,231,006 4,944,181 7,714,173 2,226,322 14,359,038 18,359,757 2,106,545 2,757,022 486,932 859,146 2,069,613 4,588,218 172,992,735 10,884 24,620 1,877 - 411,871 449,348 680,818 120,175 521,234 1,643,782 183,921 1,586,315 14,470,822 18,396,187 33,717,021 20,673,956 5,328,403 14,754,432 4,884,713 1,586,315 11,335,000 6,916,161 18,251,161 2,803,044 2,023,125 4,863,550 9,765,965 6,140,611 17,065,440 38,569,480 25,566,028 13,098,263 26,336,595 178,812,735 (1,231,774) 2,392,360 (13,364,615) (5,820,000) 14,715,000 645,188 (464,390) 7,688,905 (1,706,575) 20,878,128 13,690,000 14,715,000 645,188 (13,690,000) (464,390) 16,740,587 (18,106,961) 13,529,424 - 13,690,000 (13,690,000) 164,808 164,808 - (1,066,966) 2,392,360 7,513,513 7,709,424 31,849,469 18,983,583 107,546,699 262,469,830 $ 30,782,503 $ 21,375,943 $ 115,060,212 $ 27 270,179,254 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, 2012 Net change in fund balances - total governmental funds $ 7,709,424 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. (730,802) 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. (180,701) Certain long-term obligations are offset by goodwill that is amortized over the life of the debt. Goodwill amortization is included in the statement of activities, but not the governmental fund statements (540,000) 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. (1,777,099) 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. 820,838 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 ($26,315,845), plus other capital $0, is exceeded by depreciation ($34,016,023) in the current period. (7,700,178) 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. 19,924 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 9,898,335 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. (14,715,000) Repayment of bonds/contracts principal is an expenditure in the governmental funds, but reduces long-term liabilities in the statement of net assets. No effect on net assets. 25,566,028 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. (963,515) The donation of governmental capital assets from Governmental Funds is not shown in the governmental fund statements but is a transfer out in the statement of activities (3,294,903) 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 29 702,864 $ 14,815,215 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto in-lieu taxes From federal government Other Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government: Mayor and council City manager Human resources Attorney City clerk Court Economic development Finance Non-departmental Culture and recreation Police Fire Development services Public works Debt service: Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 49,531,723 $ 49,531,723 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 49,531,723 $ - 31,749,663 2,599,577 4,107,825 31,749,663 2,599,577 4,107,825 33,394,670 2,558,349 4,219,522 1,645,007 (41,228) 111,697 11,656,003 13,003,737 5,195,515 246,835 22,040,103 1,807,600 2,522,624 450,101 270,700 948,500 7,891,864 104,490,647 154,022,370 11,656,003 13,003,737 5,195,515 246,835 22,040,103 1,807,600 2,522,624 450,101 270,700 948,500 7,891,864 104,490,647 154,022,370 12,037,001 13,003,200 5,202,751 2,248 443,266 23,632,656 2,106,545 2,521,407 486,472 223,418 904,010 7,891,443 108,626,958 158,158,681 380,998 (537) 7,236 2,248 196,431 1,592,553 298,945 (1,217) 36,371 (47,282) (44,490) (421) 4,136,311 4,136,311 604,452 3,623,833 2,320,292 2,961,367 918,943 1,821,218 1,138,582 10,301,111 2,174,092 18,305,745 33,444,387 19,547,095 5,360,489 4,713,255 595,628 3,611,322 2,386,764 3,004,247 894,308 1,818,739 1,143,989 10,265,924 3,124,237 18,242,788 33,482,527 20,553,601 5,339,146 4,875,485 582,793 3,514,013 2,275,946 2,960,727 827,431 1,780,776 109,777 8,900,123 2,499,819 17,710,450 32,856,574 20,442,023 4,699,569 4,629,710 (12,835) (97,309) (110,818) (43,520) (66,877) (37,963) (1,034,212) (1,365,801) (624,418) (532,338) (625,953) (111,578) (639,577) (245,775) 8,645,268 17,741,581 375,834 133,997,544 7,572,494 12,922,097 375,834 130,209,130 4,528,383 171,412 108,489,526 (3,044,111) (12,922,097) (204,422) (21,719,604) 20,024,826 $ 23,813,240 $ 49,669,155 The accompanying notes are an integral part of the financial statements 30 $ 25,855,915 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ 158,158,681 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 (49,531,723) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (7,891,443) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules (12,396,307) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (582,953) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 87,756,255 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 108,489,526 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 61,098 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 382,699 Capital outlay recognized as expenditures in proprietary fund for budgetary purposes, but assets reclassified to expenditure in governmental funds for financial reporting purposes Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (1,037,824) Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (12,396,307) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (171,412) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 95,327,780 31 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Capital-related debt issued 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, 2012 $ 11,847,247 $ 11,847,247 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 11,847,247 $ - 14,157,154 159,000 14,316,154 26,163,401 14,157,154 159,000 14,316,154 26,163,401 14,906,982 62,169 14,969,151 26,816,398 749,828 (96,831) 652,997 652,997 1,635,628 3,041,361 2,088,621 (952,740) 1,670,000 12,000 72,164 1,991,230 9,296,862 14,677,884 1,670,000 12,000 72,164 586,073 9,296,862 14,678,460 1,662,019 41,491 28,094 9,915,130 13,735,355 (7,981) 29,491 (44,070) (586,073) 618,268 (943,105) 11,485,517 $ 11,484,941 $ 13,081,043 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 $ 26,816,398 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (11,847,247) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 37,693 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 15,006,844 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,735,355 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (8,628) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (14,052) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (9,915,130) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 3,797,545 The accompanying notes are an integral part of the financial statements 32 $ 1,596,102 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Intergovernmental: Highway user revenue Charges for services Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Debt service: Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 21,871,502 $ 21,871,502 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 21,871,502 $ - 3,187,599 483,919 3,187,599 483,919 3,377,857 485,805 190,258 1,886 7,828,000 322,000 120,000 1,509,337 13,450,855 35,322,357 7,828,000 322,000 120,000 1,509,337 13,450,855 35,322,357 7,751,816 424,502 58,136 1,508,427 13,606,543 35,478,045 (76,184) 102,502 (61,864) (910) 155,688 155,688 9,075,063 9,291,150 8,759,253 (531,897) 4,831,703 1,095,110 604,441 15,606,317 4,891,875 887,122 604,441 15,674,588 3,922,901 669,160 13,351,314 (968,974) (887,122) 64,719 (2,323,274) 19,716,040 $ 19,647,769 $ 22,126,731 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 $ 35,478,045 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (21,871,502) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (1,508,427) 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 (141,852) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 11,661,264 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,351,314 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 15,418 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 173,326 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 (669,160) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 12,575,898 The accompanying notes are an integral part of the financial statements 33 $ 2,478,962 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Debt service: Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 29,798,289 $ 29,798,289 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 29,798,289 $ - 8,531,011 150,000 8,681,011 38,479,300 8,531,011 150,000 8,681,011 38,479,300 8,953,026 137,086 9,090,112 38,888,401 422,015 (12,914) 409,101 409,101 1,578,692 1,219,233 296,969 (922,264) 9,751,651 1,010,993 5,545,538 17,886,874 14,098,366 1,010,993 5,545,538 21,874,130 4,584,951 4,249,495 9,131,415 (9,513,415) (1,010,993) (1,296,043) (12,742,715) 20,592,426 $ 16,605,170 $ 29,756,986 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 $ 38,888,401 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 (29,798,289) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (1,902) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 9,088,210 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 9,131,415 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 545,401 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (4,249,495) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 5,427,321 The accompanying notes are an integral part of the financial statements 34 $ 13,151,816 35 CITY OF PEORIA, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2012 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 Restricted cash and cash equivalents Total current assets Non-current assets: Capital assets: Buildings and improvements Distribution and collection systems Water Rights Equipment Vehicles Furniture Less accumulated depreciation and amortization Land and improvements Construction in progress Capital assets, net Unamortized bonds costs Total non-current assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll Accrued interest payable Due to other funds Due to other governments Other current liabilities Current portion of claims payable Current portion of compensated absences Current portion of bonds, contracts & leases payable Total current liabilities Non-current liabilities: Deposits payable Unearned revenue Long-term portion of claims payable Compensated absences Long-term portion of bonds, contracts & leases 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 Sports Complex OM&R Grant purpose Trust purpose Unrestricted Total net assets $ 7,756,189 1,373,660 32,247,398 5,155,377 21,249 310,678 245,772 136,118 47,246,441 1,744,850 307,604,328 12,889,809 2,417,810 1,711,132 186,058 (70,350,832) 6,028,939 23,497,031 285,729,125 258,344 285,987,469 333,233,910 $ 3,428,002 70,777 14,313,892 2,105,351 6,745 19,924,767 $ 7,659,795 346,276,759 1,912,069 897,775 29,004 (67,545,023) 3,878,001 10,628,039 303,736,419 124,834 303,861,253 323,786,020 3,907,047 16,314,181 1,413,324 10,066 19,032 21,663,650 $ 10,799 28,430 9,085,534 (5,639,263) 3,485,500 3,485,500 25,149,150 538,397 2,237,667 19,486 1,234 2,796,784 25,781,679 646,237 406,159 (12,767,372) 6,703,349 229,106 20,999,158 20,999,158 23,795,942 1,548,723 42,895 750,159 239,220 63,214 244,790 4,019,235 6,908,236 845,840 23,031 1,383,135 8,469 104,310 5,508,559 7,873,344 277,493 29,520 11,385 141,420 459,818 277,306 16,446 206 7,543 73,700 375,201 1,670,650 107,010 42,087,997 1,875,501 (359,436) 45,381,722 52,289,958 28,380 83,340,408 569,093 (19,772) 83,918,109 91,791,453 64,840 264,057 328,897 788,715 20,100 22,110 42,210 417,411 238,364,172 214,462,965 3,221,443 20,999,158 11,586,674 30,993,106 $ 280,943,952 4,007,269 13,524,333 $ 231,994,567 7,189,888 1,512,264 100,000 767,109 23,378,531 $ 13,949,104 24,360,435 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 $ Storm Drain Utility Fund $ 134,369 561,070 93,760 359 789,558 Public Housing Fund $ - 472,674 44,508 26,568 2,647 2,822 549,219 Total $ 3,276,922 23,247 9,613 (2,029,209) 410,350 1,690,923 1,690,923 2,240,142 $ 5,596,167 23,369,181 14,135 160,518 29,140,001 38,474,045 653,881,087 12,889,809 5,027,793 12,100,600 224,675 (158,331,699) 17,020,639 34,354,176 615,641,125 383,178 616,024,303 708,994,722 148,102 30,262,769 22,771,962 30,745 (39,306,106) 4,240,357 18,147,829 18,147,829 47,287,830 1,006 11,700 26,957 14,234 4,531 18,765 2,975,423 114,316 2,133,294 4,531 239,426 91,617 575,920 9,527,794 15,662,321 1,630,624 78,923 28,605 2,268,909 479,500 4,486,561 3,690 3,690 30,647 14,193 14,193 32,958 1,684,843 20,100 226,030 125,692,462 2,444,594 (379,208) 129,688,821 145,351,142 4,165,771 217,490 4,383,261 8,869,822 1,690,923 478,738,661 18,147,829 516,261 2,207,184 $ 24,296,095 100,000 516,261 59,992,563 563,643,580 831,313 19,438,866 38,418,008 $ 1,041,190 564,684,770 789,558 11,827 2,424 - - $ 16,236,678 1,488,945 65,674,208 8,813,866 39,653 313,325 267,626 136,118 92,970,419 Governmental Activities Internal Service Funds 758,911 758,911 $ $ 37 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 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 Transfers in Transfers out Change in net assets Total net assets - beginning Total net assets - ending 33,895,988 60 33,896,048 $ 16,574,897 49,213 16,624,110 $ 11,868,092 11,868,092 $ 1,224,572 1,484,343 2,750 2,711,665 4,517,773 15,366,034 8,790,374 28,674,181 5,221,867 2,318,975 6,620,479 9,988,235 18,927,689 (2,303,579) 3,280,543 6,306,745 1,071,610 10,658,898 1,209,194 1,488,089 3,009,262 727,747 5,225,098 (2,513,433) 152,456 (1,961,753) (2,798) (1,812,095) 48,091 (2,912,077) (2,863,986) 72,391 5,651 78,042 8,843 (1,215) 7,628 3,409,772 (5,167,565) 1,287,236 (2,505,805) 8,397,435 592,171 (5,081,308) 7,318,070 3,245,348 2,658,976 (165,543) 571,216 70,434 10,668 (107,089) 1,261,249 2,406,145 (277,084) (376,744) 273,625,882 231,423,351 $ 280,943,952 $ 231,994,567 23,099,186 $ 24,360,435 23,755,275 $ 23,378,531 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 Storm Drain Utility Fund $ 804,488 804,488 Public Housing Fund $ 296,749 505,497 131,765 140,461 6,321 278,547 Total $ 315,194 85,211 400,405 (121,858) 802,246 2,242 2,548 98 98 35,280,276 212,687 35,492,963 7,537,118 11,327,866 17,812,117 5,389,752 42,066,853 (6,573,890) 284,427 (4,875,045) 2,853 (4,587,765) 100,333 (703) 99,630 4,790 (121,760) (3,093,332) (6,474,260) 4,073 8,863 (121,760) 11,713,217 5,672,033 (5,631,024) 8,660,894 23,006 2,872,611 (1,547,246) (5,125,889) 750,048 $ $ 11,902,129 32,123,211 20,663,177 64,688,517 1,494,433 2,548 64,368,037 1,616,108 140,461 58,344 66,182,950 Governmental Activities Internal Service Funds 758,911 2,328,944 $ 2,207,184 554,982,686 $ 563,643,580 43,543,897 $ 38,418,008 (481,929) $ 8,178,965 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 Business-type Activities - Major Enterprise Funds Wastewater Solid Waste Stadium Utility Fund Utility Fund Fund Water Utility 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 $ 33,578,604 (13,618,418) (4,440,752) (1,880,689) 13,638,745 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities $ 11,836,344 (1,874,109) (3,216,833) (4,132,697) 2,612,705 $ 2,691,911 (2,328,557) (1,462,547) (505,238) (1,604,431) 2,658,976 (165,543) 2,493,433 10,668 (107,089) (96,421) 2,406,145 (277,084) 2,129,061 (1,705,464) 3,225 1,904,299 (1,953,435) 916,117 (877,986) 5,651 70,434 (229,106) - 17,092,176 (21,222,988) (411,797) 6,187,824 (12,004,399) (2,263,593) (6,018) - (165,904) (12,180) (4,340,549) (9,117,486) (807,919) (407,190) (49,221,088) 39,430,182 187,105 (9,603,801) (21,855,213) 17,121,892 60,084 (4,673,237) (24,891,700) 20,198,927 88,338 (4,604,435) (3,411,363) 2,806,235 10,889 (594,239) (4,794,742) 14,060,709 $ 9,265,967 $ (3,627,583) 7,126,362 3,498,779 (2,896,070) 6,803,117 3,907,047 (476,799) 1,015,196 538,397 $ $ CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities Classified as: Cash and cash equivalents Restricted cash with fiscal agents Current restricted cash and cash equivalents Totals 16,346,248 (5,455,843) (2,282,636) (938,062) 7,669,707 592,171 (5,081,308) (4,489,137) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Disposal of capital assets Capital contributions Contribution from County for debt Proceeds from sale of bonds Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ 7,756,189 1,373,660 136,118 9,265,967 $ 3,428,002 70,777 3,498,779 $ $ $ The accompanying notes are an integral part of the financial statements 40 3,907,047 3,907,047 $ $ $ 538,397 538,397 Storm Drainage Fund Public Housing Fund $ $ 798,700 (283,284) (280,168) (255,985) (20,737) $ $ $ 65,833,469 (23,878,875) (11,682,936) (7,712,671) 22,558,987 $ 35,506,757 (11,327,607) (7,399,622) (14,532,437) 2,247,091 4,073 4,073 4,531 5,672,033 (5,631,024) 45,540 2,872,611 (1,547,246) 1,325,365 - - (3,212,719) 81,856 - - - (4,765,991) 8,876 2,890,850 23,280,000 (33,399,309) (2,687,570) - - (14,673,144) (3,130,863) 98 98 (100,241,577) 80,305,516 349,728 (19,586,333) (35,688,101) 30,230,450 126,899 (5,330,752) 267,627 249,555 517,182 (11,654,950) 29,516,691 $ 17,861,741 $ (4,889,159) 10,485,326 5,596,167 472,674 44,508 517,182 $ $ (862,213) 748,280 3,214 (110,719) $ 581,662 (318,664) 262,998 Total Governmental Activities Internal Service Funds (127,383) 261,752 134,369 134,369 134,369 $ $ $ $ 16,236,678 1,488,945 136,118 17,861,741 - $ 5,596,167 5,596,167 (continued) 41 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 Business-type Activities - Major Enterprise Funds Wastewater Solid Waste Stadium Utility Fund Utility Fund Fund Water Utility 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 Increase (decrease) in liabilities: Accounts payable Accrued payroll Due to other governments Other liabilities Deposits payable Claims payable Deferred revenue Compensated absences Total adjustments Net cash provided (used) by operating activities 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 5,221,867 $ 8,790,374 (2,303,579) $ 9,988,235 (546,860) (310,678) (35,435) 255,011 4,140 8,469 23,730 9,973,286 7,669,707 - $ $ $ 2,329,231 (5,156) 2,324,075 $ $ $ (13,654) - 266,497 7,005 11,385 45,320 1,403,511 $ $ The accompanying notes are an integral part of the financial statements 42 2,612,705 - (7,068) (7,068) (2,513,433) 727,747 (31,748) 33,442 $ 13,638,745 - 6,493,136 (15,283) 6,477,853 $ 1,071,610 (277,862) - 293,285 5,310 37,330 (21,896) 229,416 54,580 8,416,878 1,209,194 178,357 5,641 (202) 2,353 (6,100) 14,860 909,002 $ (1,604,431) - $ (898) (898) $ Storm Drainage Fund Public Housing Fund $ $ 2,242 $ 1,494,433 $ 85,211 (5,788) - (6,780) 309,811 (2,432) 719 (882,692) 309,811 (313,110) (1,274) 13,794 (1,047) (33,772) 185 1,006 15,390 (22,979) (1,757) 84 384,856 957,621 22,281 37,128 1,317 229,500 (6,100) 153,880 21,064,554 1,306 (6,129) 28,605 3,279,680 115,020 8,820,981 (20,737) - $ $ (283) (283) $ $ 262,998 - - 20,663,177 (6,573,890) - $ $ (121,858) Total Governmental Activities Internal Service Funds $ $ $ 22,558,987 - 8,822,367 (28,688) 8,793,679 5,389,752 $ $ $ 2,247,091 - 23,006 (11,242) 11,764 (concluded) 43 CITY OF PEORIA, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2012 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 26,087 108,930 78 135,095 2,125 2,125 NET ASSETS Held in trust for pension benefits $ 132,970 The accompanying notes are an integral part of the financial statements 44 Agency Funds $ 86,231 360,065 446,296 424 445,872 446,296 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 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 $ 621 621 $ 589 589 51 538 1,159 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 (24,341) $ 157,311 132,970 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 60 3 Budget Basis of Accounting 64 4 Deposits and Investments 64 5 Property Taxes 67 6 Due from Other Governments 68 7 Accounts Receivable and Allowance for Doubtful Accounts 69 8 Interfund Transactions, Receivable and Payable Balances 69 9 Segment Information for Enterprise Funds 70 10 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 70 11 Fund Balance/Net Assets Restrictions, Commitments & Assignments 70 12 Capital Assets 72 13 Community Facilities District Debt 74 14 Long-Term Debt 74 15 Advance Refundings 79 16 Pledged Revenues 80 17 Retirement and Pension Plans 81 18 Leases 86 19 Deferred Compensation Plan 87 20 Commitments and Contingencies 87 21 Other Matters 88 22 Subsequent Events 89 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 for state and local governments. 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, solid waste and storm drain 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, as amended by GASB Statement #61, 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, wholly or substantially, comprised of the government’s elected council and the City is financially accountable for these component units. Additionally, these component units provide services entirely to the City. 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 and City management has operational responsibility for 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. 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. 47 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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. Commitments or assignments 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 commitments and assignments of net assets in the various funds to demonstrate the government’s intended use of those net assets. The government-wide Statement of Activities demonstrates the degree to which the direct expenses of the various functions and segments of the City are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Interest on long-term debt and depreciation expense on assets shared by multiple functions are not allocated to the various functions. Program revenues include: 1) charges to customers or users who purchase, use or directly benefit from goods, services or privileges provided by a particular function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, investment income and other revenues not identifiable with 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 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 funds 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. Externally imposed restrictions as well as internally imposed commitments and assignments of fund balance, as defined by GASB Statement 54, are shown on the face of the governmental fund financial statements as well as discussed in Note 11. Generally, the order in which the City would apply resources when multiple categories of fund balance are available is as follows: restricted, committed, assigned and unassigned. 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 49 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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. 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; 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 capital assets or construction of major capital projects not being financed by proprietary funds. One capital projects fund is presented as a major fund in the basic financial statements. The Development Fee Fund accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities as governed by state statutes. 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 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. 50 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 The enterprise funds of the City are as follows: The Water Utility, Wastewater Utility, Solid Waste Utility and Storm Drain 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 workers’ compensation and health insurance programs operate under a trust. 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 functions is also in this fund. Revenues are internal charges to user departments. Fiduciary Funds Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary Funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. The City maintains the following types of fiduciary funds: Pension Trust Funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post employment benefit plans, or other employee benefit plans. The City has one Pension Trust Fund to account for the activities of the volunteer firemen’s retirement plan. Agency Funds account for assets the City holds as an agent for individuals, private organizations, other governments or other funds in a temporary custodial capacity. The City currently maintains five agency funds. One fund accounts for the monies collected from developers in one area of the City and held in trust by the City until reimbursed by the City to a developer that made certain infrastructure improvements in that area. Three funds account for monies held on behalf of separate not-for-profit agencies for which the City operates as an administrator. These are Neighborhood Pride, PLAY 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Peoria, and Peoria Citizens Corp Council. The fifth fund accounts for monies held on behalf of Westside Fire Training IGA, a cnsortium 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 unassigned 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 and Highway User revenues collected and held by the state at year-end on behalf of the City are also recognized as revenue. 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 or State in July are recognized as revenue in the previous fiscal year. Other receipts become measurable and available when cash is received by the City and are recognized as revenue at that time. Interest and dividend income is recognized on the modified accrual basis. Changes in fair value of investments are recognized in investment income at the end of the year. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. For the governmental fund statements, grant revenue earned but not expected to be received within six months of year end is deferred. Proprietary funds and pension trust funds are accounted for on the flow of economic resources measurement focus. This measurement focus emphasizes the determination of net income. The accrual basis of accounting is used for proprietary fund types and pension trust funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 2011. • 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 or the use of contingency budgets must be approved by the City Council. • All unencumbered expenditure appropriations expire at the end of the fiscal year. • Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office staff. Budgetary carry forwards are approved by the City Council. • All funds of the City, except the agency funds, have legally adopted budgets. Formal integration of these budgets into the City’s financial systems is employed as a management control device during the year for all funds. The City prepares its annual budget on a modified cash basis, which differs from GAAP. GASB Statement #34 requires that budgetary comparison statements for the General Fund and major special revenue funds be presented in the annual financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis). The City has also shown this information as supplementary schedules for other governmental funds as well as enterprise funds and internal service funds. F. Expenditure Limitation On June 3,1980, the voters of Arizona approved an expenditure limitation for all local governments. The limitation restricts the annual growth of expenditures to a percentage determined by population and 53 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 2011-2012, including the permanent base adjustment, was $733,909,330. 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. Since they do not constitute expenditures or liabilities, encumbrances are not reported in either the fund financial statements or the government-wide financial statements. Further information about commitments outstanding at June 30 may be found in Note 20. H. Deposits and Investments The City generally reports investments at fair value in the balance sheet and recognizes the corresponding change in the fair value of investments in the year in which the change occurred. It is generally the City’s policy to hold investments to maturity. Investment Policy The City’s funds are invested through the City’s Finance Department in accordance with the City’s investment policy and Arizona Revised Statutes. The City's policy is to invest in certificates of deposit, money market mutual funds, repurchase agreements, corporate securities, direct U.S. Treasury debt, securities guaranteed by the U.S. Government or any of its agencies and the State of Arizona local government investment pool. In addition, the function of the Finance Department is to review and monitor the City’s investment policy and to monitor compliance with the investment policy and reporting provisions of the law through an annual audit. The investment balances are comprised of two components: 1) pooled deposits and investments and 2) dedicated investment funds. The dedicated investment funds represent restricted funds and relate to bond issuances of the Enterprise funds and the General Fund’s cash reserve requirements. In addition to these, the City has other funds that are held by trustees. These funds are related to the issuance of bonds and certain loan programs of the City. Investment Valuation Local Government Investment Pool - Investments are carried at fair value. The fair value of pooled investments is determined annually and is based on current market prices. The fair value of participants’ position in the pool approximates the value of the pool shares. The method used to determine the value of participants’ equity withdrawn is based on the book value of the participants’ percentage participation at the date of such withdrawal. Other Investments - Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market price are reported at estimated fair value. 54 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 (nonspendable) 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 (nonspendable) in governmental funds to indicate it does not constitute available expendable resources. No reservation of net assets is shown in the proprietary fund statements or the government-wide financial statements for prepaid items. J. Capital Assets All capital assets, whether owned by governmental activities or business-type activities, are recorded and depreciated in the government-wide financial statements. The City has chosen not to apply the modified approach to any networks or subsystems of infrastructure assets. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are defined as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. Capital assets are recorded at 55 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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, 2012, the City did not capitalize any net interest costs in the business-type activities of the government-wide financial statements (also in the Enterprise Funds on the proprietary fund statements). Total interest incurred, not including agent fees or other costs, of the business-type activities (and the Enterprise Funds on the proprietary fund statements) before capitalization was $4,649,203. 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 landscape Streetlights and traffic control devices Equipment Furniture and fixtures Vehicles Computers/software Useful life (Years) 50 20-40 5-40 40 20 40 10 7 7 3-15 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 2012 amortization was $257,796 and the net book value at June 30, 2012 was $11,600,828. 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 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). 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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, if any, which are funded by state shared gas tax revenues. The Half-Cent Sales Tax Fund and Development Fee Fund service debt obligations from development agreements. Each enterprise fund individually accounts for and services the applicable bonds and contracts payable that benefit that fund. P. Compensated Absences Annual leave, based on a graduated scale of years of employment, is credited to each employee as it accrues. The maximum annual leave accrual for permanent employees is 320 hours. Upon employment termination, payment is made to the employee for the unused leave. City employees are granted one sick leave day per month. The maximum an employee may accumulate varies according to union status; however, the City makes no payment on the unused portion upon employment termination except on the condition of retirement. Any sick time accrued 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 Financing Activities The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters; workers’ compensation; and health insurance. 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. The City uses third party administrators to monitor the workers’ compensation and health insurance claims programs. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. Risk management The City is self-insured for property and public liability up to $1,000,000 and for damage to City vehicles valued up to $100,000. Vehicles with a value in excess of $100,000 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. The operating funds of the City pay monthly premiums to the risk management fund based upon a budget model taking into consideration prior loss experience, staffing, and operating budget. Premium payments to insurance carriers are made directly from the risk management fund. There have been no settlements paid in excess of insurance in any of the past three years nor has insurance coverage been significantly reduced in recent years. Workers’ compensation On July 1, 2009, the City established a workers’ compensation trust fund for work-related injuries to employees. 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 $2,761,926 for fiscal year 2012. Commercial insurance is purchased to cover claims above the selfinsurance amounts. Operating funds with employees covered under the workers’ compensation insurance program pay monthly premiums to the workers’ compensation fund based upon staffing levels. Premium payments to insurance carriers, as well as third party administrator costs are made directly from the workers’ compensation trust fund. Employee wages while off work for workers’ compensation injuries (2/3rds of weekly wages) are also paid from this fund. There have been no settlements paid in excess of insurance in the last three years, nor has insurance coverage been significantly reduced in recent years. Health insurance On January 1, 2010, the City established a health insurance trust fund for health insurance coverage for City employees and dependants. The City is self-insured for employee health claims up to $100,000 per claim. Commercial insurance is purchased 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. Premiums are collected through contributions from employee paychecks and department budgets. COBRA participants contribute 100% of the premiums for their insurance coverage. Premiums for the 58 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 medical, vision, dental, and life insurance plans are determined prior to each renewal period by estimating the costs of claims and administration of the plan based on a number of factors including: the demographics of the group, previous claims history, plan design changes and any new mandated benefits. Premium payments to insurance carriers, as well as third party administrator costs are made directly from the health insurance trust fund. There have been no settlements in excess of insurance in the past three years, nor have insurance coverage been significantly reduced in recent years. Estimated liability – The total claims liability of $6,434,680 reported in the Self-Insurance Fund at June 30, 2012 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 $3,144,409 for liability/property claims, $2,577,748 for workers’ compensation claims and $712,523 for health insurance claims. For additional information on insurance amounts, see Table XXXIV on page 192. 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. Changes in the Self-Insurance Fund’s claims liability amount (claims only, exclusive of other insurance expenses) during the last two fiscal years are as follows: Fiscal Year 2011: Risk management Workers' comp Health insurance Beginning of Fiscal Year Liability $ 1,725,000 510,000 570,000 $ 2,805,000 Changes in Estimates $ 36,000 165,000 149,000 $ 350,000 Current Year Claims $ 622,379 376,325 10,644,010 $ 11,642,714 Claims Payments $ (622,379) (376,325) (10,644,010) $(11,642,714) Balance at Fiscal Year-end $ 1,761,000 675,000 719,000 $ 3,155,000 Beginning of Fiscal Year Liability $ 1,761,000 675,000 719,000 $ 3,155,000 Changes in Estimates $ 1,383,409 1,902,748 (6,477) $ 3,279,680 Current Year Claims $ 2,226,420 2,331,374 11,700,457 $ 16,258,251 Claims Payments $ (2,226,420) (2,331,374) (11,700,457) $(16,258,251) Balance at Fiscal Year-end $ 3,144,409 2,577,748 712,523 $ 6,434,680 Fiscal Year 2012: Risk management Workers' comp Health insurance Detailed financial statements of the three functions making up the self-insurance fund may be found on pages 136-137. 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. 59 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 S. New Accounting Standards During fiscal year 2012, the City implemented the following new accounting standards issued by the Governmental Accounting Standards Board: Statement No. 60 – Accounting and financial Reporting for Service Concession Arrangements Statement No. 64 – Derivative Instruments: Application of Hedge Accounting Termination Provisions Statement No. 66 – Technical Corrections - 2012 T. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of net assets/balance sheet and the reported amounts of revenues and expenses/expenditures during the reporting period. Specifically, the city has made certain estimates and assumptions relating to the collectibility of its receivables (including accounts receivable), 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 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 Interfund receivable (non-current) Capital assets Total assets $ 37,507,281 13,685,827 156,131,301 12,993,502 122,112 133,089 5,642,987 124,202 972,897 27,155,382 36,087,909 4,551,574 10,353,093 $ 305,461,156 Long-term Assets/ Liabilities (1) 2,751,048 2,340,000 1,090,268,607 1,095,359,655 60 Internal Service Funds (2) 5,596,167 23,369,181 14,135 (1,041,190) 160,518 18,147,829 46,246,640 Statement of Net Assets Eliminations (3) Totals (128,558) (10,353,093) (10,481,651) 43,103,448 13,685,827 179,500,482 12,993,502 136,247 (1,036,659) 5,642,987 124,202 1,133,415 2,751,048 2,340,000 27,155,382 36,087,909 4,551,574 1,108,416,436 1,436,585,800 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Total Governmental Funds Liabilities Accounts payable Accrued payroll Interest payable Due to other funds Due to other governments Claims/deposits payable Deferred revenue Other liabilities Interfund payable (non-current) Unamortized bond premium Compensated absences-current Current bonds/contracts payable Long-term liabilities (net of deferred loss) Total liabilities Fund Balance/Net Assets Total fund balance/net assets Total liabilities and fund balance/net assets (1) $ 8,042,867 882,723 128,558 1,025,839 3,567 12,597,595 2,247,660 10,353,093 - Long-term Assets/ Liabilities (1) Internal Service Funds (2) Statement of Net Assets Eliminations (3) Totals 5,960,577 (5,075,841) 3,092,958 4,343,970 19,581,479 1,630,624 78,923 2,268,909 28,605 479,500 - (128,558) (10,353,093) - 9,673,491 961,646 5,960,577 1,025,839 2,272,476 7,521,754 2,276,265 3,092,958 4,823,470 19,581,479 (10,481,651) 332,562,046 390,752,001 35,281,902 329,178,785 357,081,928 4,383,261 8,869,822 $ 270,179,254 738,277,727 37,376,818 $ 305,461,156 1,095,359,655 46,246,640 $ - 1,045,833,799 (10,481,651) 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 1,436,585,800 $ 1,336,993,581 (246,724,974) $ 1,090,268,607 $ 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 2,751,048 $ (3,092,958) $ (62,926,249) (284,330,000) (6,314,240) (353,570,489) (4,343,970) (19,581,479) (329,645,040 ) $ 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. $ 466,255 Certain long-term debt obligations that are booked for the government-wide statements are offset by goodwill. $ 2,340,000 $ $ 4,551,324 524,517 5,075,841 $ 37,376,818 Deferred revenue for the long-term special assessment receivables shown on the governmental fund statements is not deferred on the statement of net assets. Also, certain property tax revenues deferred under modified accrual for the governmental fund statements, is recognized as revenue in the year received under accrual accounting for the government-wide statements. Deferred special assessment revenue Deferred property tax revenue (2) (5,960,577) 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 61 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 (3) Certain interfund transactions between governmental activities are eliminated in the consolidation of those activities for the statement of net assets. Interfund receivables - current Interfund receivables – non-current Interfund payables – current Interfund payables – non-current $ $ 128,558 10,353,093 (128,558) (10,353,093) - 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 $ 60,719,648 Property taxes 22,399,320 Franchise taxes 4,084,163 Intergovernmental: State shared sales taxes 12,087,651 Urban revenue sharing 13,231,006 Auto-in-lieu taxes 4,944,181 Highway user revenue 7,714,173 From federal government 2,226,322 Other governmental 14,359,038 Charges for services 18,359,757 Licenses and permits 2,106,545 Fines and forfeitures 2,757,022 Rents 486,932 Investment earnings 859,146 Special assessments 2,069,613 Miscellaneous 4,588,218 Other sources: Gain on sale of capital assets Capital contributions Refunding bonds issued 13,690,000 Capital-related debt issued 14,715,000 Premium on bonds issued 645,188 Transfers in 16,740,587 Total revenues and other sources 216,138,836 Expenditures/Expenses Current: General government 14,470,822 Culture and recreation 18,396,187 Police 33,717,021 Fire 20,673,956 Development services 5,328,403 Highways and streets 14,754,432 Public works 4,884,713 Human services 1,586,315 Debt service: Principal payments 25,566,028 Interest and other charges 13,098,263 Capital outlay 26,336,595 Unallocated depreciation Total expenditures/ expenses 178,812,735 Other financing uses/changes in net assets Transfers out 18,106,961 Special item: close out of Section 8 Housing 464,390 Payment to bond refunding Escrow agent 13,690,000 Total expenditures/expenses & other financing uses 211,074,086 Net change for the year $ 7,709,424 Long-term Revenues/ Expenses(1) Capitalrelated Items(2) Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities (180,701) - - - - (1,777,099) - 20,627 100,333 - - 50,192 9,898,335 2,803,044 2,872,611 12,772,198 2,972,944 (1,957,800) 690,860 82,890 271,520 137,350 51,680 20,990 13,462 2,050 5,713,752 5,083,587 1,661,413 1,572,589 13,236 16,900,964 2,532,979 34,598 (820,838) - (26,336,595) 574,550 449,964 171,492 202,111 255,190 (70,085) 44,465 101,817 (15,128) 32,972 12,087,651 13,231,006 4,944,181 7,714,173 2,226,322 14,359,038 18,598,261 2,106,545 2,757,022 486,932 959,479 292,514 3,965,187 28,500 (48,626,437) 50,192 9,926,835 3,005,893 165,900 (49,003,091) 181,088,987 - (111,785) (264,869) - 20,935,141 23,499,906 35,905,144 22,313,810 5,437,784 31,778,203 7,416,026 1,655,935 (13,690,000) (14,715,000) (645,188) 29,216,088 (25,566,028) 318,327 - 7,751,073 722,834 (25,247,701) - 6,097,947 1,547,246 29,216,088 - - - - - - - (13,690,000) 2,270,080 702,864 (9,721,613) 9,887,513 13,849,020 (1,076,822) 62 60,719,648 22,218,619 4,084,163 238,504 (643,658) - 449,964 (2,047,764) - - 12,595,752 574,550 (376,654) 162,112,251 (48,626,437) 6,341,805 - 464,390 - - (49,003,091) - 168,918,446 14,815,215 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 (1) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Accrual of long-term compensated absences Interest expense on long-term debt is accrued for the statement of activities but is not accrued for the governmental fund statements. Amortization of bond premiums and deferred loss on refunding is also included in the statement of activities, but not the governmental fund statements. Accrued interest Amortization of loss on refunding Amortization of bond premium (2) $ (730,802) $ $ 276,693 (252,158) 796,303 820,838 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. $ (180,701) 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 $ (1,777,099) 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. $ (540,000) 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 Depreciation expense $ 26,336,595 (34,016,023) $ (7,700,178) 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: $ 20,627 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 $ 9,898,335 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 capital assets between Governmental and Proprietary Funds is not shown in the governmental fund statements but is a transfer in/out on the statement of activities. Transfers out Transfers in $ $ (3) (4) Internal service funds are used by management to charge the costs of certain activities, such as insurance, motor pool, information technology, and facilities maintenance, to the individual funds. The adjustments for internal service funds “close” those funds by charging the additional amounts to participating governmental activities to completely cover the internal service funds’ costs for the year. Revenue and other sources Expenditures and other uses Change in net assets Repayment of bond principal is reported as an expenditure in governmental funds and thus has the effect of reducing fund balance because current financial resources have been used. For the City as a whole however, the principal payments reduce the long-term liabilities in the statement of net assets and do not result in an expense in the statement of activities. Principal payments made 63 $ 50,192 (50,895) (703) (6,097,947) 2,803,044 (3,294,903) $ 2,972,944 (2,270,080) 702,864 $ 25,566,028 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 The issuance of additional debt is reported as an other financing source in the governmental funds, but is an increase in outstanding debt, not an other financing source, for government-wide reporting. Bonds issued Refunding Bonds issued are shown as an financing source and the payment to the bond escrow agent is shown as an other financing use in the governmental funds. For the government-wide statements, the refunded debt is removed and the new debt recorded. Refunding bonds issued Payment to bond escrow agent 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 $ (14,715,000) $ (13,690,000) 13,690,000) $ - $ $ 165,901 (484,228) (645,188) (963,515) Certain debt transactions cause transfers between funds. Transfers out Transfers in (5) $ 29,216,088 (29,216,088) $ - 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 376,654 (376,654) - $ 48,626,437 (48,626,437) $ - 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, 2012, the carrying amount of the City's deposits was $25,285,769 and the bank balance was $25,223,919. The entire bank balance was covered by federal depository insurance or collateralized 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 $61,850 represents deposits in transit, outstanding checks and other reconciling items. 64 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 B. Investments City charter, ordinance, and trust agreements authorize the City to invest in obligations of the U.S. Treasury or its agencies and instrumentalities. In addition, the City may invest in certificates of deposit, mutual fund money market, repurchase agreements, corporate securities and the State of Arizona local government investment pool. The State Treasurer’s Investment Pool is overseen according to Arizona State Statute by the State Board of Deposit. Governmental Accounting Standards Board Statement No. 40 – Deposit and Investment Risk Disclosures (Statement 40) requires the City to disclose its deposit and investment policies regarding certain types of investment risks. The City’s adopted investment policy is in compliance with Statement 40. Interest rate risk: In order to limit interest and market rate risk, State law and the City’s investment policy sets a maximum maturity on any investment of five years with a minimum of 35% invested for a period of one year or less and no more than 20% of the City’s portfolio be invested for a period greater than three years. At June 30, 2012, 61.3% of the City’s investments have a maturity of less than one year and 2.5% 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, 2012 was 332 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, 2012, the City’s investments include $88.3 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 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 - Callable Agency Step Up Note Aaa Federal National Mortgage Assoc - Agency Note Aaa Federal National Mortgage Assoc - Callable Agency Note Aaa S&P Rating AA+ AA+ AA+ AA+ AA+ AA+ % of Investments 4.9 7.1 4.8 1.3 5.5 3.6 AA+ AA+ AA+ 2.8 2.0 15.1 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, 2012, 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, 2012, the City’s investments include 50.6% invested in U.S. Agency Coupon securities, 3.3% in U.S. Treasury Notes, 24.6% in Commercial Paper, and 21.5% in money market funds, cash with fiscal agent, and the Arizona State Investment Pool. 65 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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, 2012, the City’s investments included the following: Investment Maturities in Years Less than 1 1-2 2-3 Over 3 Unrestricted Investments: U.S. Treasury notes and strips $ Agency coupon securities 42,618,206 Agency discount notes Commercial paper 67,872,524 State of Arizona local 529,937 government investment pool Mutual fund-money market 33,432,537 Total unrestricted investments 144,453,204 8,051,200 86,210,325 32,017,010 - Fair Value -$ 8,012,800 - 8,051,200 168,858,341 67,872,524 - - 529,937 94,261,525 32,017,010 8,012,800 33,432,537 278,744,539 Less: amount included in cash and cash equivalents Plus: amount included in restricted investments Unrestricted investments, net $ 33,908,327 807,473 245,643,685 Total investments per statement of net assets Plus: Investments in fiduciary funds $ 245,174,690 468,995 Net unrestricted investments $ 245,643,685 1,001,900 $ 1,001,900 $ 12,403,828 20,452,355 30,808,928 4,039,200 67,704,311 $ 3,265,365 27,543,564 807,473 36,087,909 Restricted Investments: Agency coupon securities Commercial paper Mutual fund-money market U.S. Treasury notes and strips Total Restricted Investments 7,998,478 20,452,355 30,808,928 4,039,200 63,298,961 2,000,400 2,000,400 Less: amount included in restricted cash with fiscal agents Less: amount included in restricted cash and cash equivalents Less: amount included in unrestricted investments Net restricted investments 1,403,050 1,403,050 Restricted cash, cash equivalents, and cash with fiscal agents at June 30, 2012, consisted of the following: Restricted investments included in restricted cash and cash equivalents 27,543,564 Less: amount included in unrestricted cash and cash equivalents 252,064 Total restricted cash and cash equivalents per statement of net assets $ 27,291,500 Cash with Fiscal Agents at June 30, 2012, consisted of the following: Cash with fiscal agents $ 11,909,407 Restricted investments included in cash with fiscal agents 3,265,365 Total cash with fiscal agents $ 15,174,772 66 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Unrestricted Cash and cash equivalents at June 30, 2012, 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 $ $ 33,908,327 25,285,769 252,064 6,284 59,452,445 112,318 59,340,126 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, 2012: 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 $ $ 1,381,258 (136,814) 1,244,444 538 1,243,906 The net decrease in the fair value of investments during fiscal year 2011-2012 was approximately $136,814. 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, 2012, was approximately $12,094. 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 2012 are $1,269,336,456 and $1,276,335,862 respectively. The Arizona tax year has been defined as a calendar year, not withstanding 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 67 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 collects all property taxes. Public auctions for sale of delinquent real estate taxes are held in February following the May 1 date upon which the second half taxes become delinquent. The purchaser is given a Certificate of Purchase issued by the County Treasurer. Five years from the date of sale, the holder of a Certificate of Purchase that has not been redeemed may demand a County Treasurer's Deed from the County Treasurer. Property taxes are recognized as revenue in the government-wide financial statements when an enforceable legal claim has arisen. Therefore, the City recognizes revenue and a receivable, less any allowance for doubtful accounts deemed appropriate, for the entire tax levy in the year it is levied. For the governmental fund financial statements, property tax revenues not collected within 60 days of year end are deferred. Unsecured taxes on personal property, which are assessed on a monthly basis using different procedures than those mentioned above, are recognized as revenue on a cash basis for both the governmental fund statements and the government-wide statements. 6. DUE FROM OTHER GOVERNMENTS The following amounts are due from other governments at June 30, 2012: Governmental activities: General Fund: Due from Maricopa County for: Property tax Due from State of Arizona for: State shared sales tax State revenue sharing Auto lieu tax Miscellaneous other Due from Peoria Unified School District Subtotal Highway User Revenue Fund: Due from State of Arizona (Highway user revenue) Due from Maricopa County – Property tax (SLIDS) Subtotal GO Bond Debt Service Fund: Due from Maricopa County (Property tax) Subtotal Non-major Governmental Fund: Due from US Department of Housing & Urban Development Due from US Department of Transportation Due from US Department of Interior Due from US Department of Energy Due from other Federal agencies Non-major Governmental Fund (continued): Due from Maricopa County: Home Grant Property tax Other Due from State of Arizona Various Grants Subtotal Total governmental activities 54,093 2,047,094 1,311,451 185,091 38,130 76,572 3,712,430 749,471 4,446 753,917 334,409 334,409 407,461 61,357 6,718 22,636 52,942 77,005 25,062 26,900 162,149 842,231 $ 68 5,642,987 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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, 2012. Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Other Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Storm Drainage Fund Stadium Fund Public Housing Fund Total enterprise funds Internal Service Funds Grand totals Receivables $ $ $ $ Allowance Net 4,390,527 1,322,650 287,931 792,840 1,924,856 4,537,975 13,256,779 31,366 207,491 24,420 263,277 4,359,161 1,322,650 287,931 792,840 1,717,365 4,513,555 12,993,502 7,932,304 2,692,258 1,839,110 120,374 19,486 33,672 12,637,204 25,893,983 2,776,927 586,907 425,786 26,614 7,104 3,823,338 4,086,615 5,155,377 2,105,351 1,413,324 93,760 19,486 26,568 8,813,866 21,807,368 8. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES Net interfund receivables and payables between governmental activities and business-type activities of $1,036,659 are included in the government-wide financial statements at June 30, 2012. These internal balances are between the proprietary funds (business-type activities) and the internal service funds (governmental activities). Other interfund payables and receivables, $16,089 at June 30, 2012, shown on the fund financial statements generally represent short-term cash loans at year end. Such balances are expected to be repaid in the next fiscal year. At June 30, 2012, there are two interfund loans that have long-term portions as follows: 1) The General Fund has an outstanding balance of $279,550 ($117,000 current and $162,550 long-term) from the Development Fee Fund for a cash loan for the completion the Sunrise Mountain Branch Library construction, and 2) The Development Fee Fund owes the MDA Debt Service Fund $10,190,543 (all longterm) to repay future debt service payments for bonds used to complete construction of Happy Valley Road. The net transfers of $3,335,912 from governmental activities to business-type 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 and the transfer of completed capital assets from the CFD to the Water Utility Fund. The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2012: Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Non-Major Governmental Funds Total governmental funds Transfers out Transfers in 1,058,665 10,791,139 301,087 4,249,495 1,706,575 18,106,961 7,861,456 1,025,418 164,808 7,688,905 16,740,587 $ 69 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Total enterprise funds Internal Service funds Grand totals 5,081,308 165,543 107,089 277,084 5,631,024 1,547,246 25,285,231 $ 592,171 2,658,976 10,668 2,406,145 4,073 5,672,033 2,872,611 25,285,231 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 2012 that were either nonroutine 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 149-151. 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, 2012, two funds, as shown in the basic financial statements, were in a deficit position. The MDA Capital Projects Fund, as shown on the Combining Statements for Non-major Governmental funds, has a deficit balance of $84,673 at June 30, 2012. This will be remedied with a bond sale closing in July 2012. The Facilities Maintenance Fund, as shown in the Combining Statements for the Internal Service Funds, has a deficit balance of $296,592 at June 30, 2012. The City intends to remedy this situation through service charges to the various operating departments in future fiscal years. For the year ended June 30, 2012, expenditures, including capital outlay and transfers, did not exceed budget at the fund level (i.e. the level of budgetary control) in any funds other than the MDA Debt Service Fund where higher interest payments due to early payoff of certain outstanding bonds caused expenditures to exceed the budget by $18,224. 11. FUND BALANCE/NET ASSETS RESTRICTIONS, COMMITMENTS AND ASSIGNMENTS Only restrictions imposed by external sources are shown as Restricted Net Assets on the government-wide financial statements. Additionally, restrictions for inventories, prepaid items, and long-term interfund loans are shown as nonspendable fund balance on the governmental fund financial statements. Restrictions imposed by external sources or State of Arizona enabling legislation are shown as restricted fund balance on the governmental fund financial statements. Commitments or assignments of fund balances imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are shown on the governmental fund financial statements, but not on the proprietary fund financial statements. The City does, however, commit or assign portions of net assets in other funds to demonstrate the government’s intended use of those net assets. Commitments are created by legislative action of the City Council, the City’s highest level of decision making authority, by resolution or ordinance and would require the same legislative action to reverse. Ordinances and resolutions both require public votes of the Council and, although the uses may differ, they are both considered to be of the highest level of decision making authority for the City. The authority to make assignments has been delegated by the City Council to the Chief Financial Officer. Much of the authority to commit fund balance is established in Principals of Sound Financial Management last adopted by Council by resolution in November 2010. As previously noted in Note 1.B, 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. The order in which the City would apply resources when multiple categories of unrestricted fund balance are available is as follows: committed, assigned and unassigned. The committed and assigned fund balances of the governmental 70 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 funds are shown on the fund financial statements. The following are the commitments or assignments of net assets included in unrestricted net assets on the proprietary fund financial statements at June 30, 2012: Water Utility Fund: Committed for working capital policy reserve Committed for rate stabilization Committed for debt stabilization Committed for system asset maintenance Committed for capital equipment replacement Wastewater Utility Fund: Committed for working capital policy reserve Committed for rate stabilization Committed for debt stabilization Committed for system asset maintenance Committed for capital equipment replacement Solid Waste Utility Fund: Committed for working capital policy reserve Committed for capital equipment replacement Stadium Fund: Committed for capital equipment replacement Total proprietary funds Internal Service Funds: Committed for capital equipment replacement Assigned for Workers’ Compensation self-insurance reserve Assigned for Health self-insurance reserve Assigned for risk management purpose $ 7,100,000 1,600,000 3,200,000 6,746,686 1,005,550 19,652,236 4,800,000 800,000 2,500,000 4,600,331 762,943 13,463,274 2,100,000 4,421,905 6,521,905 765,796 40,403,211 13,644,427 250,000 2,000,000 3,193,720 19,088,147 The City has set aside funds for various stabilization arrangements. The authority for the stabilization arrangements is in the Council adopted Principals of Sound Financial Management. The governmental fund stabilization arrangements are shown as committed fund balance on the governmental fund financial statements. The commitments for stabilization arrangements in the proprietary funds are shown above. The City has the following stabilization arrangements at June 30, 2012: Budget stabilization reserve – Is maintained in the General Fund (10% of the average general fund revenues for the preceding five years) and the Half-Cent Sales Tax Fund (35% of the average fund revenues for the preceding five years). These reserves may be used to provide funding to deal with fluctuations in fiscal cycles and operating requirements that exceed $500,000. Any use of these reserves must be formally approved by the City Council and include a repayment plan to restore the reserve within the three fiscal years following the year in which the event occurred. Emergency reserve – Maintained in the General Fund (10% of the average general fund revenues for the preceding five years) and is for unexpected, large-scale events where damage in excess of $250,000 is incurred and immediate remedial action must be taken to protect the health and safety of residents (e.g. floods, fires, storm damage). Usage of the emergency reserve must be approved by City Council, but the City Manager may utilize these funds when immediate action must be taken to protect the health and safety of residents. The City Manager must then provide a summary report to the City Council as soon as practical on the usage of these funds. The City shall strive to restore the Emergency Reserve to the 10% level within the next fiscal year following the fiscal year in which the event occurred. Operating Reserve - Maintained in the General Fund (15% of the average general fund revenues for the preceding five years) and is for unexpected events whose impact exceeds $500,000, such as failure of the State to remit shared revenues, unexpected mandates, unexpected loss of State 71 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Shared revenues, continuance of critical city services due to unanticipated events, or to offset unexpected loss of a significant funding source for the remainder of the fiscal year. Any use of these reserves must be formally approved by the City Council and include a repayment plan to restore the reserve within the two fiscal years following the year in which the event occurred. Enterprise Operating Fund Working Capital Reserve – Maintained in the Water Utility Fund (25% of the operating expenditures of the fund for the fiscal year), the Wastewater Utility Fund (25% of the operating expenditures of the fund for the fiscal year), and the Solid Waste Utility Fund (20% of the operating expenditures of the fund for the fiscal year). These reserves are to provide the City with a comfortable margin of safety to address emergencies and unexpected declines in revenue without borrowing. Rate Stabilization Reserve – In the Water operating fund revenues for the preceding moderate significant rate increases. In the restore the reserve to the 5% level within the funds were used. and Wastewater Utility Funds (5% of the average three fiscal years). These funds may be used to event these funds are used, the City shall strive to next three fiscal years following the year in which the Debt Stabilization Reserve – In the Water and Wastewater Utility Funds (50% of the maximum annual debt service payment of the fund in the next five fiscal years). The Debt Stabilization Reserve is intended to provide additional security to insure the City’s ability to meet debt service obligations. In the event the Debt Stabilization Reserve is used, the City shall strive to restore the fund to the defined level within the three fiscal years following the year in which the funds were used. Asset Maintenance Reserve - In the Water and Wastewater Utility Funds (2% of the gross enterprise infrastructure assets). The Asset Maintenance Reserve may be used to provide funding for the repair and maintenance of critical enterprise infrastructure. In the event the Asset Maintenance Reserve is used, the City shall strive to restore the fund to the defined level within the three fiscal years following the year in which the funds were used. In the event the Enterprise Funds do not have sufficient fund balance to fully fund the four reserves just discussed, the funding priority will be 1) Working Capital Reserve, 2) Rate Stabilization Reserve, 3) Debt Stabilization Reserve and 4) Asset Maintenance Reserve. Capital Equipment Replacement Reserves – The City maintains various capital equipment replacement reserves to fund future replacement of certain capital equipment, primarily vehicles and computers. The annual internal charges to the operating funds are determined as part of the annual budget process. 12. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2012, follows: Balances June 30, 2011 Governmental activities: Non-depreciable assets: Work in Progress – Parks $ 41,164,941 Work in Progress – Buildings 122,776 Work in Progress - Equipment 145,120 Work in Progress – Furniture 31,036 Work in Progress – Surface water 24,408,354 Work in Progress – Streets 134,945,131 Work in Progress – Technology 3,757,966 Work in Progress – Vehicles 836,488 Work in Progress – CFD 5,151,438 Land 332,336,041 Total non-depreciable assets 542,899,291 Additions/ Transfers in Disposals/ Transfers out 8,165,904 5,975,778 31,559 1,162,516 6,815,812 869,027 446,428 777,995 4,355,071 28,600,090 (32,456,685) (5,106,128) (58,939) (15,720,733) (36,761,312) (1,368,463) (836,488) (3,294,903) (95,603,651) 72 Balances June 30, 2012 16,874,160 992,426 117,740 31,036 9,850,137 104,999,631 3,258,530 446,428 2,634,530 336,691,112 475,895,730 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Balances June 30, 2011 Depreciable assets: Buildings & Improvements 165,886,734 Furniture 2,023,634 Equipment 42,614,064 Vehicles 21,842,971 Surface water system 64,600,585 Street system 491,109,281 Park system 28,009,198 Total depreciable assets at historical cost 816,086,467 Less accumulated depreciation for: Buildings & Improvements (32,774,442) Furniture (1,302,587) Equipment (27,813,396) Vehicles (14,194,735) Surface water system (17,419,346) Street system (150,259,168) Park system (8,846,380) Total accum. depreciation (252,610,054) assets, net 563,476,413 Governmental activities capital assets, net $ 1,106,375,704 Business-type activities: Non-depreciable assets: Work in Progress - Water $ Work in Progress - Wastewater Work in Progress – Stadium Land Total non-depreciable assets Depreciable assets: Buildings & improvements Furniture Equipment Vehicles Water Rights Water system Wastewater system Total depreciable assets at historical cost Less accumulated depreciation for: Buildings & improvements Furniture Equipment Vehicles Water Rights Water system Wastewater system Total accum. depreciation Total depreciable assets, net Business-type activities capital assets, net $ Additions/ Transfers in Disposals/ Transfers out Balances June 30, 2012 4,843,830 108,141 2,808,968 1,612,721 15,724,021 45,711,316 32,333,879 (677,557) - 170,730,564 2,131,775 45,423,032 22,778,135 80,324,606 536,820,597 60,343,077 103,142,876 (677,557) 918,551,786 (4,619,972) (283,753) (5,273,488) (2,097,341) (2,359,068) (16,335,042) (3,047,359) (34,016,023) 69,126,853 594,997 594,997 (82,560) (37,394,414) (1,586,340) (33,086,884) (15,697,079) (19,778,414) (166,594,210) (11,893,739) (286,031,080) 632,520,706 97,726,943 (95,686,211) 1,108,416,436 35,145,007 12,116,845 17,020,639 64,282,491 1,414,944 1,730,138 229,106 3,374,188 (13,062,920) (3,218,944) (16,281,864) 23,497,031 10,628,039 229,106 17,020,639 51,374,815 38,474,045 224,675 3,615,447 11,306,236 12,889,809 288,473,826 341,167,384 1,418,369 837,787 19,130,502 5,109,375 (6,023) (43,423) - 38,474,045 224,675 5,027,793 12,100,600 12,889,809 307,604,328 346,276,759 696,151,422 26,496,033 (49,446) 722,598,009 (13,861,521) (151,622) (1,512,597) (7,133,853) (1,031,185) (58,296,574) (55,796,249) (137,783,601) 558,367,821 (961,808) (24,317) (723,777) (1,271,773) (257,796) (8,056,076) (9,295,974) (20,591,521) 5,904,512 43,423 43,423 (6,023) (14,823,329) (175,939) (2,236,374) (8,362,203) (1,288,981) (66,352,650) (65,092,223) (158,331,699) 564,266,310 622,650,312 9,278,700 (16,287,887) 615,641,125 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 $ 34,016,023 73 5,713,752 5,083,588 1,610,518 1,572,589 13,235 16,880,214 2,532,979 34,598 574,550 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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, 2012, 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, 2012 was $73,845,152 and $87,042,172 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. 74 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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, 2012, 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. Delinquent assessments at June 30, 2012 totaled $338. 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, 2012. 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, $9,384,315 in 2010 and $495,000 in 2012; 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 $135,094,201 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, $9,497,031 in 2010, and $8,775,000 in 2012 were issued against the 2005 authorization leaving $115,129,322 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, 2012. 75 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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. General obligation bonds in the amount of $6,243,424 were issued in 2010 and $5,445,000 in 2012 against the 2008 authorization leaving $366,311,576 unissued as of June 30, 2012. 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, 2012, $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, 2012. 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, 2012. At June 30, 2012, there is no outstanding arbitrage liability. Bonds and loans payable at June 30, 2012 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 06/28/12 Series 2012A Various improvements 06/28/12 Series 2012B Refunding of Series 2003A Total General Obligation Bonds Municipal Development Authority Bonds 03/09/06 Series 2006 Revenue Bonds MDA Series 2006 – Community Theater 03/12/08 Series 2008 Revenue Bonds MDA Series 2008 - Transportation 06/08/11 Series 2011 Revenue Bonds MDA Series 2011 7/1/04-22 7/1/07-26 7/1/07-20 7/1/09-28 07/1/10-30 07/1/12-32 7/1/12-22 4.04 4.27 4.00 3.86 4.03 3.32 1.75 7/1/06-25 7/1/08-26 7/1/12-26 4.2 4.6 3.9 9.5 $27,570,000 $1,070,000 20 94,380,000 64,280,000 14 18,365,000 12,360,000 7.4 68,440,000 39,715,000 10.5 29,170,000 25,130,000 11.38 14,715,000 14,715,000 5.7 13,690,000 13,690,000 266,330,000 170,960,000 6,675,000 47,000,000 7,920,000 61,595,000 5,080,000 39,480,000 7,920,000 52,480,000 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 tth 7/1/07-22 4.25 15 4,950,000 04/01/07 ID# 0601 99 Ave & Northern ID-Street improvements Total Improvement District Bonds 15,575,000 285,000 545,000 3,830,000 4,660,000 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 10.9 10.5 8.7 12.7 13.2 20 21,250,000 23,550,000 22,760,000 15,450,000 19,775,000 21,005,000 67,560,000 56,230,000 284,330,000 (14,990,000) $269,340,000 76 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 CLASSIFIED IN BUSINESS-TYPE ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: 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 12/08/06 02/15/08 05/16/08 07/17/09 07/17/09 07/17/09 07/17/09 11/20/09 05/27/10 06/28/12 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 WWW Series 2012 Total Revenue Bonds 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 Beardsley upgrades & Northern Ave repairs Beardsley reclamation facility Pinnacle Peak Road improvements Refunding Series 1998A & Series 2000 Revenue Bonds Refunding Series1995,1997, WIFA Series 2000 PH 1&2 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 7/1/08-26 7/1/09-27 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 7/1/12-21 3.94 3.06 3.30 3.48 3.48 2.00 2.00 3.27 3.23 3.21 1.60 11.8 20 20 19 20 20 20 20 20 6.2 4.3 11,405,081 14,330,000 20,150,000 14,500,000 686,660 806,434 1,078,002 721,108 1,964,789 1,263,892 27,183,342 23,613,324 42,741,541 37,614,427 8,575,253 7,911,947 1,577,978 665,156 8,484,204 7,324,991 4,021,623 3,399,450 4,545,000 4,037,180 1,780,000 681,335 15,780,000 15,200,000 23,280,000 23,280,000 200,318,811 128,283,906 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities Total long-term portion of bonds payable Reconciliation to total bonded debt principal: Total long-term portion of bonds payable Add: Current portion of bonds payable Total bonded debt principal as of June 30, 2012 128,283,906 (8,776,254) 119,507,652 $388,847,652 $388,847,652 23,766,254 $412,613,906 Contracts Payable The contracts payable listed below are generally development agreements where, in return for developers constructing capital infrastructure that the City would otherwise be responsible for constructing, and then dedicating (donating) that infrastructure to the City, the City has agreed to repay the developer at some future time. Both the liability (Contracts payable) and the capital asset are reported in the governmental activities on the government-wide financial statements. No other financing source or use is reported in the governmental fund financial statements since these are not cash transactions. Other debt at June 30, 2012 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 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 12/14/04 Planned area retail project 02/11/05 Master-planned community 09/14/05 Residential development Planned area retail 10/12/06 project Offsite improvements-Bell Rd-IDs 8801 and 8802 – Westcor Offsite improvements-Bell Rd & Paradise Ln-IDs 8802 and 9303 – DMB Circle Road 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 nd Offsite improvements-92 Ave & Bell Rd – Phoenix Motor Co. Offsite improvements; Right of way land; Trail land; Open space land – Tierra del Rio Offsite improvements-Lake Pleasant Pkwy, Deer Valley to Williams – Casa Del Ray Offsite improvements & Right of way land-Peoria east of 83rd Ave - Wal-Mart 77 08/28/18 Prime 10.5 $ 13,137,805 $ 1,065,805 06/20/17 Prime 7.0 4,538,187 510,182 03/16/14 - - 4,316,327 3,940,961 10/22/26 - - 45,251,014 25,292,165 05/20/20 - - 1.800,000 1,123,899 04/30/14 - - 1,800,000 1,087,456 02/17/14 - - 1,382,257 160,259 08/31/14 - - 14,512,075 11,450,789 - - - 3,901,317 3,453,756 07/29/18 - - 1,800,000 1,471,287 02/11/15 - - 10,587,249 9,501,371 - - - 588,659 54,935 10/01/13 - - 6,926,205 2,707,110 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 (continued): 12/22/06 Residential development Right of way land – Peoria Place 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 - - - 748,209 748,209 - - - 104,873 104,873 - - - 253,192 253,192 62,926,249 (4,591,479) 58,334,770 - - - 661,005 626,568 10/22/26 - - 4,841,000 2,761,841 02/17/14 - - 2,376,931 186,531 08/31/14 - - 426,208 309,003 02/11/15 - - 3,427,985 3,052,407 6,936,350 (751,540) 6,184,810 $ 64,519,580 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, 2012 The following is a summary of changes in non-current liabilities reported in the government-wide financial statements for the year ended June 30, 2012: Governmental activities: Bonds payable: General obligation bonds MDA 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 Contracts payable Compensated absences Lease payable Deferred bond premium Deferred loss on refunding Business-type activities totals Additions Reductions $ 167,580,000 58,365,965 6,155,000 58,615,000 290,715,965 67,383,993 6,165,410 3,244,074 (718,413) $ 366,791,029 28,405,000 28,405,000 34,958 8,257,411 645,188 37,342,557 25,025,000 5,885,965 1,495,000 2,385,000 34,790,965 4,492,702 7,411,591 796,303 (252,158) 47,239,404 170,960,000 52,480,000 4,660,000 56,230,000 284,330,000 62,926,249 7,011,230 3,092,958 (466,255) 356,894,183 8,585,000 2,760,000 1,140,000 2,505,000 14,990,000 4,591,479 4,823,470 24,404,949 $ 23,280,000 23,280,000 952,640 2,072,456 26,305,096 449,034 32,751,632 33,200,666 180,024 798,760 18,619 104,529 (74,520) 34,228,078 128,283,906 128,283,906 6,936,350 801,950 2,444,595 (379,208) 138,087,593 8,776,254 8,776,254 751,540 575,920 10,047,644 449,034 137,755,538 138,204,572 7,116,374 648,070 18,619 476,668 (453,728) $ 146,010,575 78 Ending Balance Amounts Due Within One Year Beginning Balance CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 The following is a summary of bond debt service requirements, including interest requirements, to maturity for long-term debt at June 30, 2012: General Obligation Bonds 14,877,672 15,628,409 15,638,309 15,665,759 15,263,734 14,693,884 14,681,728 14,644,259 14,665,603 13,467,774 13,453,315 11,861,871 11,846,175 11,831,774 11,835,219 6,085,050 6,076,688 2,820,575 2,815,638 967,406 957,622 Fiscal Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Less Interest (58,818,464) $170,960,000 Municipal Development Authority Bonds 5,061,069 5,098,469 5,118,931 5,112,431 5,104,731 5,100,481 5,089,506 5,078,756 5,084,041 5,081,386 5,082,553 5,066,693 5,063,288 5,041,331 689,344 - Special Assessment Bonds 1,362,820 474,600 475,788 476,338 476,250 480,525 478,950 481,738 483,675 484,763 - (19,393,010) 52,480,000 (1,015,447) 4,660,000 Revenue Bonds 12,817,507 12,695,674 12,684,630 12,652,567 12,952,581 12,937,109 12,001,210 10,613,246 10,633,223 7,706,818 6,888,325 6,744,469 6,741,606 6,747,233 6,753,332 4,728,820 1,656,385 304,515 - Community Facilities District Bonds 5,490,974 5,484,633 5,476,311 5,475,713 5,468,074 5,462,674 5,455,359 5,445,671 5,443,926 5,432,718 5,425,388 5,427,431 5,419,936 5,437,175 5,430,802 - Total _ 39,610,042 39,381,785 39,393,969 39,382,808 39,265,370 38,674,673 37,706,753 36,263,670 36,310,468 32,173,459 30,849,581 29,100,464 29,071,005 29,057,513 24,708,697 10,813,870 7,733,073 3,125,090 2,815,638 967,406 957,622 (29,975,344) (25,546,785) (134,749,050) 128,283,906 56,230,000 412,613,906 The following table discloses the bond debt service requirements as of June 30, 2012, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal year 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033 Totals Principal 23,766,255 24,412,117 25,259,387 26,170,996 27,047,081 136,368,704 124,837,643 23,811,723 940,000 $ 412,613,906 Interest 15,843,787 14,969,668 14,134,582 13,211,812 12,218,289 44,760,319 17,949,617 1,643,354 17,622 134,749,050 Total 39,610,042 39,381,785 39,393,969 39,382,808 39,265,370 181,129,023 142,787,260 25,455,077 957,622 547,362,956 The City had no outstanding variable rate bonds at June 30, 2012. The City had $1,575,987 in variable rate outstanding contracts payable at June 30, 2012. 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, 2012. 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 During fiscal year 2012, the City issued $13,690,000 Series 2012B General Obligation Bonds for the purpose of refinancing the Series 2003A General Obligation Bonds through an advance refunding arrangement. Under the terms of the refunding bonds, sufficient assets to pay all principal and interest on the refunded bond issue have been placed in an irrevocable trust account at a commercial bank 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 issue refunded. The City had an economic gain 79 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 (the difference between the present values of the debt service payments on the old and new debt) of $1,547,950. Also during fiscal year 2012, the City issued $23,280,000 in Water and Wastewater Revenue Bonds for the purpose of an advanced refunding of various Water Infrastructure Financing Authority bonds. At June 30, 2012, the amounts shown below for the 1995, 1997 and 2000 Ph1 bonds had been placed with the Water Infrastructure Financing Authority (WIFA) to be used to payoff those bond issues on July 1, 2012. The 2000 Ph2 WIFA bonds are not callable until October 31, 2013. Sufficient assets to pay all principal and interest on the refunded 2000 Ph2 bond issue have been placed in an irrevocable trust account at a commercial bank 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 issue refunded. The City had an economic gain (the difference between the present values of the debt service payments on the old and new debt) of $2,040,784. The City did a cash defeasance of the remaining 2003 MDA bonds. Since the 2003 MDA bonds are not callable until January 1, 2013, those funds have been placed in irrevocable trusts. Current Years Refundings (amounts not yet callable) 1995 1997 2000 Ph1 2000 Ph2 2003 2003 16. Water Infrastructure Authority Bonds Water Infrastructure Authority Bonds Water Infrastructure Authority Bonds Water Infrastructure Authority Bonds General Obligation Bonds Municipal Development Authority Bonds $ 2,192,592 4,403,006 10,302,264 7,912,547 13,690,000 2,760,000 $ 41,260,409 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 $15,780,000 in Revenue Refunding Bonds issued in 2010, $23,280,000 in Revenue Refunding Bonds issued in 2012 and $161,258,811 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, 2012, $128,283,906 in bonds remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2012, the net revenues available for service of this debt were $24,717,860. The debt principal and interest paid on this debt in fiscal year 2012, not including $25,216,338 in bond defeasance, was $12,183,877 (49.3% 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 183). The City has pledged certain revenues for the repayment of $14,595,000 in Municipal Development Authority (MDA) Bonds issued in 2006 and 2011. 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, 2012, $13,000,000 in bonds remained outstanding to be repaid by these future revenues. The bonds were issued to construct various City operational facilities and to purchase water rights. For the fiscal year ended June 30, 2012, the pledged revenues available to service this debt were $98,320,667. The debt principal and interest paid on this debt in fiscal year 2012, not including $2,899,000 in bond defeasance, was $2,075,826 (2.1% 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 182). 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 80 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 purposes (secondary after the MDA Bonds discussed above). At June 30, 2012, $39,480,000 of the bonds remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2012, the net revenues available to service this debt were $105,333,051. The debt principal and interest paid on this debt in fiscal year 2012 was $3,878,763 (3.7% 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 182). 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, 2012 $4,660,000 in bonds are outstanding to be repaid by these revenues. For the fiscal year ended June 30, 2012, the net revenues available to service this debt were $2,262,112. The debt principal and interest paid on this debt in fiscal year 2012 was $1,811,720 (80.1% 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 184). 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 premium 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 paid as a flat dollar amount per month towards the retiree’s health care insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The Arizona State Retirement System (A.S.R.S.) is for the benefit of the employees of the state and certain other governmental jurisdictions. All full-time City employees, except sworn fire and police personnel, are included in the Arizona State Retirement System plan, which is a cost sharing, multiple-employer, defined benefit plan. Sworn police and fire personnel participate in the Public Safety Retirement System, which is an agent multiple-employer defined benefit plan. In addition, the Mayor and City Council members are covered by the State’s Elected Officials Plan, which is also a multiple-employer defined benefit cost sharing 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, health insurance premiums, 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 Effective July 2011, the State Legislature changed the traditional 50/50 percent split for employee and employer funding for A.S.R.S. to a split of 53% for employees and 47% for employers. Covered employees were required by state statute to contribute 11.39 percent (11.13 percent for retirement and 0.26 percent for long-term disability) of their salaries to the System and the City was required to 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 contribute 10.1 percent (9.24 percent for retirement, .63 percent for health insurance premium, and 0.23 percent for long-term disability). A lawsuit was filed and the court ruled that the Legislature had no authority to change the funding percentage for existing employees, the funding for employees hired before the change must return to the 50/50 split, and the employees must be refunded the excess contributions. The Legislature rescinded their previous action and retroactively restored the 50/50 percent split for all participants. The City returned to the 50/50 split in May 2012 and accrued a fiscal year 2012 liability to employees to refund the 3% excess contributions. After the return to the 50/50 split, covered employees were required by state statute to contribute 10.74 percent (10.5 percent for retirement and 0.24 percent for long-term disability) of their salaries to the System and the City was required to match it (9.87 percent for retirement, .63 percent for health insurance premium, and 0.24 percent for long-term disability). 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 from employer and employees for the current year and two preceding years, all of which were equal to the required contributions, were as follows: Fiscal Year Ended 2010 2011 2012 Retirement Fund Health Benefit Supplement Fund Long-Term Disability Fund 340,054 290,740 272,167 206,093 123,195 103,682 4,297,045 4,439,940 4,263,942 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 Board of Trustees 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, death and disability benefits, and health insurance premium benefits. Because the health insurance premium plan benefit of the EORP is not established as a formal trust, it is reported in accordance with GASB Statement 45 as an agent multiple-employer plan. Accordingly, the disclosures that follow reflect the EORP as if it were an agent multiple-employer plan. 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. 82 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 10.0 percent of their annual covered salary. The employer rate for fiscal year 2011-2012 was 32.99 percent. The health insurance premium portion of the contribution rate was actuarially set at 1.79 percent of covered payroll. The City’s contributions from employer and employees for the fiscal year 2012, 2011, and 2010 were $15,140, $11,010, and $10,597, respectively for the employees and $49,943, $46,649, and $39,841, respectively for the employer. These contributions matched the required contributions for those years. c. Actuarial Methods and Assumptions Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plan and the annual contributions are subject to continual revisions as actual results are compared to past expectations and new estimates are made. Projections of benefits are based on 1) the plan as understood by the City and the plan’s members and include the types of benefits in force at the valuation date, and 2) the pattern of sharing benefit costs between the City and the plan members to that point. Actuarial calculations reflect a long-term prospective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The required contribution was determined as part of the June 30, 2010, 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. Since the heath insurance premium benefits are fixed, no health care cost trend rate is used in the actuarial valuation. 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 26 years. Public Safety Personnel Retirement System: a. Plan Description The City contributes to the Public Safety Personnel Retirement System (PSPRS), a 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, death benefits, and insurance premium benefits, to plan members and beneficiaries. The PSPRS is jointly administered by the Fund Manager and 209 Local Boards and was established by Title 38, Chapter 5, Article 4 of the Arizona Revised Statutes. The PSPRS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by writing to Public Safety Personnel Retirement System 3010 East Camelback Rd., Ste 200, Phoenix, Arizona, 85016, by calling 602-255-5575, or on the internet at www.psprs.com. b. Funding Policy PSPRS police personnel are required to contribute 8.65 percent of their annual covered salary and fire personnel are required to contribute 8.65 percent while the City is required to contribute an actuarially determined rate. Police personnel contributed $1,116,699 and fire personnel $913,879 during fiscal year 2011-2012. The City rate for fiscal year 2012 was 17.15 percent for police 83 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 personnel and 14.24 percent for fire members. The health insurance premium portion of the contribution rate was actuarially set at .96 percent of covered payroll for police and 1.04 percent for fire for fiscal year 2012. 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 Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plan and the annual contributions are subject to continual revisions as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress presented as required supplementary information provides multi-year trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on 1) the plan as understood by the City and the plan’s members and include the types of benefits in force at the valuation date, and 2) the pattern of sharing benefit costs between the City and the plan members to that point. Actuarial calculations reflect a long-term prospective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The most recent actuarial valuation and related information follow. Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Cost of living adjustments Fire 6/30/2011 Entry age normal Level % of pay, closed for underfunded, open for overfunded 25 years for underfunded 20 years for overfunded 7 years smoothed market Police 6/30/2011 Entry age normal Level % of pay, closed for underfunded, open for overfunded 25 years for underfunded 20 years for overfunded 7 years smoothed market 8.25% 5.0% - 8.0% 5.0% None 8.25% 5.0% - 8.0% 5.0% None Since the heath insurance premium benefits are fixed, no health care cost trend rate is used in the actuarial valuation. Annual Pension/OPEB Cost - Agent Plans: The City’s pension/OPEB costs for the agent plans for the year ended June 30, 2012, follows: Annual pension/OPEB cost Contributions made PSPRS - Police Health Pension Insurance PSPRS - Fire Health Pension Insurance $2,090,120 $123,935 $1,394,608 $109,878 $47,233 $2,710 2,090,120 123,935 1,394,608 109,878 47,233 2,710 84 EORP Pension Health Insurance CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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. Fiscal Year Ended Annual Pension/ OPEB Cost Annual Costs Contributed Percentage of Net Pension/OPEB Obligation PSPRP - Police - Pension 2010 $1,931,288 2011 2,112,544 2012 2,090,120 100% 100 100 $ 0 0 0 PSPRP - Police – Health Insurance 2010 $ 114,717 2011 126,533 2012 123,935 100% 100 100 $ 0 0 0 PSPRP - Fire - Pension 2010 $1,441,309 2011 1,457,929 2012 1,394,608 100% 100 100 $ 0 0 0 PSPRP - Fire – Health Insurance 2010 $ 94,272 2011 99,083 2012 109,878 100% 100 100 $ 0 0 0 EORP – Pension 2010 2011 2012 36,973 43,878 47,233 100% 100 100 $ 0 0 0 EORP – Health Insurance 2010 $ 2,869 2011 2,772 2012 2,710 100% 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. Schedule of Funding Progress: The funded status of the plans as of the most recent valuation date, June 30, 2011, 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. 85 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Schedule of Funding Progress (Latest 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 2009 2010 2011 $35,948,135 $49,249,481 38,917,135 54,236,036 42,776,856 62,806,469 73.0%$13,301,346 71.8 15,318,901 68.1 20,029,613 $13,600,726 13,537,319 12,989,140 97.8% 113.2 154.2 $1,075,889 1,188,099 1,547,097 0.0% $1,075,889 0.0 1,188,099 0.0 1,574,097 $13,600,726 13,537,319 12,989,140 7.91% 8.78 12.12 $29,565,148 $34,863,651 32,543,378 37,236,602 36,477,794 44,039,032 84.8% $5,298,503 87.4 4,693,224 82.8 7,591,238 $10,476,786 10,423,082 10,271,122 50.6% 45.0 73.9 $10,476,786 10,423,082 10,271,122 9.08% 11.06 13.54 Police – Health Insurance Subsidy 2009 2010 2011 $0 0 0 Fire – Retirement 2009 2010 2011 Fire – Health Insurance Subsidy 2009 2010 2011 $0 0 0 $951,241 1,152,655 1,390,847 0.0% 0.0 0.0 $951,241 1,152,655 1,390,847 18. LEASES The City leases vehicles, equipment 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, 2012 were $78,794. The following is a schedule of the future minimum lease payments on the operating leases. Year Ending June 30, 2013 2014 2015 2016 2017 Total $ $ Amount 151,680 181,496 185,702 190,027 194,471 903,376 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 2012 were $231,906. 86 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 The following is a schedule of five years minimum future rental revenues on these leases: Year Ending June 30, Amount 2013 $ 244,549 2014 256,822 2015 259,569 2016 242,380 2017 219,525 19. DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. Additionally, the City offers its management employees an additional deferred compensation plan created in accordance with Internal Revenue Code Section 401a. The deferred compensation is not available to employees, under either plan, until termination, retirement, death or unforeseeable emergency. The City’s fiduciary responsibility is that of exercising “due care” in selecting a third-party administrator. Federal legislation requires that Section 457 and 401a plan assets be held in trust for employees. This means that employee assets held in Section 457 and 401a plans are not the property of the City and are not subject to claims of the City’s general creditors. 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 and encumbrances as of June 30, 2012: Remaining Commitment Fund/Description General Fund: Municipal Facilities Construction/Remodeling ADA Ramp Improvements Streets/Traffic Infrastructure Parks and Recreation Facilities Various Operating Purposes Highway User Revenue Fund: Sidewalk Improvements ADA Ramp Improvements Streets/Traffic Infrastructure $ 1,953,780 61,484 14,478 141,089 42,201 2,213,032 113,709 17,486 675 131,870 Development Fee Fund: Parks and Recreation Drainage Infrastructure 100,602 81,343 181,945 87 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Remaining Commitment Fund/Description Transportation Sales Tax Fund: Streets/Traffic Infrastructure 1,373,468 Non-Major Governmental Funds: GO Bond Cap Proj – Parks and Recreation Facilities 6,271,438 GO Bond Cap Proj – Asset Management System Upgrade 172,936 GO Bond Cap Proj – Drainage Infrastructure 1,110,599 GO Bond Cap Proj – Streets/Traffic Infrastructure 1,009,681 GO Bond Cap Proj – Municipal Facilities Construction/Remodeling 117,126 GO Bond Cap Proj – Police CAD Replacement 687,668 Non-Bond Cap Proj – Streets/Traffic Infrastructure 1,992,346 Non-Bond Cap Proj – Parks and Recreation Facilities 11,563,171 Non-Bond Cap Proj – Drainage Infrastructure 2,813,441 Non-Bond Cap Proj – MOC Entrance/Exit Gate Modifications 116,941 CFD Cap Proj – Recharge Wells 79,151 MDA Bonds Capital Proj – Parks and Recreation Facilities 3,050,371 28,984,869 Water Utility Fund: Water Facilities 51,464 Water Lines 561,083 Wells and Reservoirs 66,101 Operational purposes 4,077 682,725 Wastewater Utility Fund: Wastewater Facilities and Infrastructure 765,203 Operational purposes 16,066 781,269 Total commitments $ 34,349,178 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, but the Agreement has not been terminated. Because of the default, the $9,000,000 has not been recorded as a liability as of June 30, 2012. 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, 2012, 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 88 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 $11,500,000. 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, 2012, no building activities have commenced and the credits could not be reliably estimated. The agreement is in force for 25 years from the signing of the agreement. 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, 2012, those potential credits could not be reliably estimated. 22. SUSEQUENT EVENTS On July 18, 2012, the City sold $35,510,000 Municipal Development Authority Revenue Bonds - Series 2012 for the purpose of financing a portion of the costs of renovations and improvements to the Peoria Sports Complex. 89 90 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 Development Fee Fund 94 95 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 Municipal Development Authority (MDA) Bonds Debt Service Fund Community Facilities District (CFD) Bonds Debt Service Fund Special Assessment Debt Service Fund General Obligation (GO) Bond Capital Projects Fund Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Non-Bond Capital Projects Fund 104 105 106 107 108 109 110 111 112 113 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Public Housing Fund 116 117 118 119 120 121 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 124 125 126 Schedule of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 100 102 127 128 129 130 Fiduciary Funds Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities - All Agency Funds 91 132 133 92 MAJOR GOVERNMENTAL FUNDS OTHER THAN GENERAL FUND & SPECIAL REVENUE FUNDS Budgetary Comparison Schedules Debt Service Funds Debt service funds are used to account for and report financial resources, that are restricted, committed, or assigned to expenditure for principal and interest payments on debt. This includes financial resources that are being accumulated for principal and interest maturing in future years. 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 Capital projects funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets other than those financed by proprietary funds. Development Fee Fund This fund accounts for the collection of governmental development/impact fees, including streets, parks and open space, library, public safety, and general government, and the expenditure of those funds for capital construction or new equipment needed because of new development. 93 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 31,236,830 $ 31,236,830 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 31,236,830 $ - RESOURCES (INFLOWS): Property taxes Investment earnings Total inflows Amounts available for appropriation 15,990,834 173,000 16,163,834 47,400,664 15,990,834 173,000 16,163,834 47,400,664 16,051,790 98,485 16,150,275 47,387,105 60,956 (74,515) (13,559) (13,559) CHARGES TO APPROPRIATIONS (OUTFLOWS): Debt service: Principal payments Interest and other charges Total charges to appropriations 11,820,375 7,341,260 19,161,635 7,341,260 11,820,375 19,161,635 11,335,000 6,916,161 18,251,161 3,993,740 (4,904,214) (910,474) Budgetary fund balance, June 30, 2012 $ 28,239,029 $ 28,239,029 $ 29,135,944 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 47,387,105 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 (31,236,830) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 869,112 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 17,019,387 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 18,251,161 Differences - budget to GAAP: Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 18,251,161 94 $ 896,915 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 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 Highways and streets Debt service: Principal payments Capital outlay Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 18,738,037 $ 18,738,037 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 18,738,037 $ - 4,718,567 147,105 4,865,672 23,603,709 4,718,567 146,970 4,865,537 23,603,574 7,141,870 145,271 7,287,141 26,025,178 2,423,303 (1,699) 2,421,604 2,421,604 5,500 207,514 203,775 1,900 100,214 184,015 3,794 31,025 1,877 1,894 (69,189) (182,138) 1,834,164 9,362,102 1,881,620 13,494,675 2,334,164 5,258,455 1,459,690 9,338,438 2,803,044 2,145,559 4,985,299 468,880 (3,112,896) (1,459,690) (4,353,139) 10,109,034 $ 14,265,136 $ 21,039,879 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 $ 26,025,178 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 (18,738,037) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (31,231) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 7,255,910 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 4,985,299 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (121,749) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,863,550 95 $ 6,774,743 96 NON-MAJOR GOVERNMENTAL FUNDS OTHER GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for and report the proceeds of specific revenues sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. 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. Debt Service Funds Debt service funds are used to account for and report financial resources, that are restricted, committed, or assigned to expenditure for principal and interest payments on debt. This includes financial resources that are being accumulated for principal and interest maturing in future years. 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. 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. 97 Debt Service Funds (continued) Special Assessment Bonds Debt Service Fund This fund accounts for the collection of special assessment district revenues and the payment of the special assessment bonds. Capital Projects Funds A capital project fund is established to account for the acquisition and construction of major capital facilities other than those financed by Special Revenue Fund and Enterprise Fund resources. A capital project fund enhances reporting to ensure that requirements regarding the use of the revenue were fully satisfied. General Obligation (GO) Bond Capital Projects Fund This fund accounts for the receipt of proceeds from General Obligation bonds and the expenditure of those funds to purchase or construct capital assets for the City. 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. 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. 98 99 CITY OF PEORIA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2012 Special Revenue Funds Section 8 Housing 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 Interfund receivable (non-current) 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: Unspendable: Prepaid items Restricted for: Debt service Capital projects Grant Purposes Committed for: Arts Capital Assigned to: Capital projects Other purposes Unassigned: Total fund balance Total liabilities and fund balance $ 183,346 765,574 104,202 295 61,357 1,114,774 $ $ $ 31,704 4,708 2,357 38,769 $ - $ $ $ $ $ 1,076,005 - $ $ 1,076,005 1,114,774 - $ $ 101,716 101,716 $ 90,158 11,558 101,716 $ - $ $ $ Debt Service Funds Municipal Development CFD Authority Bonds Bonds Other Grants Fund 952,554 3,977,465 4,735 2,870 654,096 5,591,720 $ 115,451 5,718 305 113,092 873 235,439 $ - - 1,597,656 - 3,664,814 101,716 - $ $ 93,811 5,356,281 5,591,720 - $ 319,189 1,820,927 1,332,800 10,190,543 13,663,459 $ $ 72,771 10,385 25,062 4,322,309 4,399,273 8,829,800 $ $ - $ - $ - $ - 13,663,459 - 8,829,800 - - $ $ The accompanying notes are an integral part of the financial statements 100 13,663,459 13,663,459 - - $ $ 8,829,800 8,829,800 - Capital Projects Funds s Special Assessment Bonds $ GO Bonds 65,418 111,410 273,159 155 4,551,574 $ 5,001,716 $ $ CFD Bonds $ $ 7,326 15,000 18,527,719 21,915,972 40,466,017 $ MDA Bonds 2,431 3,131,912 9,772,664 12,907,007 $ $ $ $ 4,551,324 $ 4,551,324 $ 2,094,955 $ $ 7,261 2,102,216 $ 30,271 30,887 61,158 $ $ 15,000 $ - 450,392 - 38,348,801 - 450,392 $ 5,001,716 $ - $ $ - 683,218 683,218 $ 25,991 741,900 767,891 $ - 12,845,849 - 38,363,801 40,466,017 $ $ $ - $ $ $ - 12,845,849 12,907,007 Non-Bond $ $ - 101 7,146,854 29,842,249 4,331,847 18,166 41,339,116 $ 443,393 5,817,581 518,844 6,779,818 $ - 8,667,361 1,932,337 36,191,247 4,513,555 41,628 842,231 15,000 26,665,158 36,087,909 4,551,574 10,190,543 $ 129,698,543 $ 2,831,923 10,426 11,558 305 11,223,897 560,222 14,638,331 $ 15,000 546,437 - (84,673) (84,673) 683,218 Total Non-Major Governmental Funds 22,943,651 51,741,087 2,673,661 - $ $ 34,012,861 34,559,298 41,339,116 - 3,664,814 34,012,861 93,811 (84,673) 115,060,212 $ 129,698,543 $ - CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2012 Special Revenue Funds Section 8 Housing Fund Public Transit Fund REVENUES: Taxes: Property taxes Intergovernmental: 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 $ Net change in fund balances Fund balances - beginning $ - $ - $ - $ 2,248,487 21,357 552,752 42,705 2,253 32,502 651,569 356,269 356,269 1,846,448 682,385 279,357 235,615 20,945 106,543 3,171,293 4,863 4,863 21,909 3,455,336 5,725,732 903,486 356,269 405,333 449,089 680,818 120,175 521,234 166,921 326,560 1,517 - 3,291 - 903,486 356,269 88,229 2,758,359 5,885,965 2,532,735 8,420,217 2,385,000 3,108,336 5,496,627 (251,917) OTHER FINANCING SOURCES (USES): Capital-related debt issued Premium on bonds issued Special item: Close out of Section 8 Housing Transfers in Transfers out Total other financing sources and uses Fund balances - ending - Debt Service Funds Municipal Development CFD Authority Bonds Bonds Other Grants Fund - 412,934 (8,415,354) 671,103 671,103 (464,390) (464,390) 20,841 (679,982) (659,141) 6,996,961 6,996,961 419,186 (464,390) (246,207) (1,418,393) 656,819 464,390 1,076,005 $ - 5,602,488 $ 5,356,281 The accompanying notes are an integral part of the financial statements 102 229,105 229,105 15,081,852 $ 13,663,459 8,600,695 $ 8,829,800 Capital Projects Funds Special Assessment Bonds $ - $ - CFD Bonds $ - 1,364 2,069,613 2,070,977 82,511 82,511 28,856 28,856 1,730 - 489,502 - 1,495,000 318,299 1,815,029 MDA Bonds $ Non-Bond - $ $ 2,248,487 12 2,224,074 14,123,750 322,062 235,615 297,056 2,069,613 3,684,208 25,204,865 17,000 - 259 - 1,154,280 - 411,871 449,348 680,818 120,175 521,234 1,643,782 183,921 1,586,315 181,241 14,164,238 14,834,981 777,995 794,995 259 2,034,978 3,189,258 9,765,965 6,140,611 17,065,440 38,569,480 255,948 (14,752,470) (766,139) (247) 9,923,525 (13,364,615) (131,383) (131,383) 14,715,000 645,188 (772,659) 14,587,529 (164,941) - 12,888,613 134,343 89,827 13,112,783 124,565 $ GO Bonds Total Non-Major Governmental Funds 12 - - (122,551) (122,551) (766,139) 325,827 38,528,742 13,611,988 450,392 $ 38,363,801 $ 12,845,849 $ - 14,715,000 645,188 (464,390) 7,688,905 (1,706,575) 20,878,128 (122,798) 9,923,525 7,513,513 38,125 24,635,773 107,546,699 $ 34,559,298 $ 115,060,212 (84,673) 103 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 246,898 $ 246,898 RESOURCES (INFLOWS): Intergovernmental: Other Charges for services Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation 2,600 18,493 671,103 692,196 939,094 2,600 18,493 671,103 692,196 939,094 CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Total charges to appropriations 932,686 932,686 1,387,378 1,387,378 Budgetary fund balance, June 30, 2012 $ 6,408 $ (448,284) $ $ 246,898 $ - 552,752 (40,350) 2,284 32,502 671,103 1,218,291 1,465,189 552,752 (40,350) (316) 14,009 526,095 526,095 885,010 885,010 (502,368) (502,368) 580,179 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 $ 1,465,189 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 (246,898) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 104,381 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (671,103) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 651,569 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 885,010 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis (9,073) The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 27,549 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 903,486 104 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,028,463 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SECTION 8 HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 197,788 $ 197,788 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 197,788 $ - RESOURCES (INFLOWS): Intergovernmental: From federal government Other Total inflows Amounts available for appropriation 1,320,013 1,320,013 1,517,801 1,320,013 1,320,013 1,517,801 305,126 31,989 337,115 534,903 (1,014,887) 31,989 (982,898) (982,898) CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Transfers out Total charges to appropriations 1,584,299 1,584,299 1,584,299 1,584,299 303,041 464,390 767,431 (1,281,258) 464,390 (816,868) Budgetary fund balance, June 30, 2012 $ (66,498) $ (66,498) $ (232,528) 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 $ 534,903 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 (197,788) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 19,154 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 356,269 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 767,431 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 53,228 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (464,390) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 356,269 105 $ (166,030) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 6,411,487 $ 6,411,487 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 6,411,487 $ - 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 1,679,214 10,938,790 1,216,415 220,000 48,500 12,200 10,000 14,125,119 20,536,606 1,679,214 10,938,790 1,216,415 220,000 48,443 12,200 10,000 14,125,062 20,536,549 1,883,092 854,006 283,748 235,615 26,261 106,543 10,000 3,399,265 9,810,752 203,878 (10,084,784) (932,667) 15,615 (22,182) 94,343 (10,725,797) (10,725,797) CHARGES TO APPROPRIATIONS (OUTFLOWS): General government: Mayor and council Attorney City Manager Court Non-departmental Culture and recreation Police Fire Development services Public works Human Services Capital outlay Contingencies Transfers out Total charges to appropriations 94,524 35,027 503,252 10,000 473,136 946,914 133,279 1,217,981 241,000 1,180,596 810,755 8,329,001 293,029 14,268,494 94,524 39,617 472,639 10,272 477,034 1,260,209 204,484 1,214,189 280,272 1,180,596 1,042,999 7,208,384 293,029 13,778,248 1,680 71,874 39,617 293,856 6,667 412,600 732,539 120,175 591,511 213,890 326,560 505,077 298,338 3,614,384 1,680 (22,650) (178,783) (3,605) (64,434) (527,670) (84,309) (622,678) (66,382) (854,036) (537,922) (7,208,384) 5,309 (10,163,864) Budgetary fund balance, June 30, 2012 $ 6,268,112 $ 6,758,301 $ 6,196,368 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 $ 9,810,752 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 (6,411,487) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (217,972) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (10,000) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 3,171,293 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 3,614,384 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 210 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (176,296) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (381,601) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (298,338) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 2,758,359 106 $ (561,933) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Investment earnings Transfers from other funds Total inflows Amounts available for appropriation $ 5,634,463 5,634,463 7,378,608 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2012 1,744,145 1,699,990 $ - 3,430,470 2,248,148 5,678,618 $ 1,744,145 5,634,463 5,634,463 7,378,608 - 5,885,965 2,534,613 8,420,578 $ (1,041,970) $ 1,744,145 $ - 4,863 5,717,058 5,721,921 7,466,066 4,863 82,595 87,458 87,458 1,517 1,517 5,885,965 2,551,320 8,438,802 16,707 18,224 (972,736) Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 7,466,066 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 (1,744,145) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (5,717,058) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 4,863 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 8,438,802 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (18,585) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 8,420,217 107 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 69,234 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Property Taxes Investment earnings Miscellaneous Transfers in Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 8,552,831 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 8,552,831 $ 8,552,831 $ - 2,148,025 32,500 3,685,411 250,000 6,115,936 14,668,767 2,148,025 32,500 3,685,411 250,000 6,115,936 14,668,767 2,181,517 27,191 3,455,336 5,664,044 14,216,875 33,492 (5,309) (230,075) (250,000) (451,892) (451,892) 9,900 9,900 3,291 (6,609) 2,385,000 3,113,337 5,508,237 2,385,000 3,113,337 5,508,237 2,385,000 3,108,336 5,496,627 (5,001) (11,610) 9,160,530 $ 9,160,530 $ 8,720,248 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 14,216,875 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 (8,552,831) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 61,688 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 5,725,732 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 5,496,627 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 5,496,627 108 $ (440,282) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Special assessments Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Total charges to appropriations Budgetary fund balance, June 30, 2012 542,619 $ 1,814,820 4,750 1,819,570 2,362,189 546,569 $ 546,546 $ 798,713 - 254,543 (2,967) 251,576 251,576 1,730 1,495,000 318,299 1,815,029 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 2,613,742 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 (542,619) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (146) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,070,977 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,815,029 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,815,029 109 $ 1,730 1,495,000 320,620 1,815,620 $ 542,619 2,069,363 1,760 2,071,123 2,613,742 - 1,495,000 320,620 1,815,620 $ 542,619 1,814,820 4,727 1,819,547 2,362,166 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,321) (591) $ 252,167 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 35,675,898 $ 35,675,898 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 35,675,898 $ - RESOURCES (INFLOWS): Capital-related debt issued Premium on bonds issued Investment earnings Total inflows Amounts available for appropriation 16,523,825 178,000 16,701,825 52,377,723 16,523,825 178,000 16,701,825 52,377,723 14,715,000 645,188 227,985 15,588,173 51,264,071 (1,808,825) 645,188 49,985 (1,113,652) (1,113,652) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Interest and fiscal charges Capital outlay Contingencies Total charges to appropriations 1,945,092 163,602 48,952,473 1,924,380 52,985,547 1,526,046 163,602 51,051,335 1,762,305 54,503,288 589,918 166,241 13,646,480 14,402,639 (936,128) 2,639 (37,404,855) (1,762,305) (40,100,649) Budgetary fund balance, June 30, 2012 $ (607,824) $ (2,125,565) $ 36,861,432 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 $ 51,264,071 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 (35,675,898) Capital-related debt issued is a budgetary resource, but is not a revenue for financial reporting purposes (14,715,000) Bond Premiums are a budgetary resource, but are not a revenue for financial reporting purposes (645,188) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (145,474) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 82,511 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 14,402,639 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,040,193 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (607,851) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 14,834,981 110 $ 38,986,997 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 13,574,467 $ 13,574,467 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 13,574,467 $ - RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 68,500 68,500 13,642,967 68,500 68,500 13,642,967 58,037 58,037 13,632,504 (10,463) (10,463) (10,463) CHARGES TO APPROPRIATIONS (OUTFLOWS): Public works Capital outlay Transfers to other funds Total charges to appropriations 13,560,630 250,000 13,810,630 17,000 13,563,630 250,000 13,830,630 17,000 716,837 733,837 (12,846,793) (250,000) (13,096,793) Budgetary fund balance, June 30, 2012 $ (167,663) $ (187,663) $ 12,898,667 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 $ 13,632,504 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 (13,574,467) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (29,181) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 28,856 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 733,837 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 61,158 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 794,995 111 $ 13,086,330 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ - $ - RESOURCES (INFLOWS): Investment earnings Capital related debt issued Total inflows Amounts available for appropriation 16,780,125 16,780,125 16,780,125 16,780,125 16,780,125 16,780,125 CHARGES TO APPROPRIATIONS (OUTFLOWS): Culture and recreation Capital outlay Transfers to other funds Total charges to appropriations 449,095 16,382,029 16,831,124 331,540 16,389,452 16,720,992 Budgetary fund balance, June 30, 2012 $ (50,999) $ 59,133 $ - $ 12 $ - 12 12 12 (16,780,125) (16,780,113) (16,780,113) 259 310 569 (331,281) (16,389,142) (16,720,423) - 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 $ Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 112 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (557) 12 12 569 (310) 259 $ (59,690) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2011 $ 26,786,231 $ 26,786,231 Actual Amounts (budgetary basis) $ 26,786,231 Variance with Final Budget Over (Under) $ - RESOURCES (INFLOWS): Intergovernmental revenue: From federal government Other governmental revenue Investment earnings Miscellaneous Total inflows Amounts available for appropriation 997,000 81,823 11,794,488 12,873,311 39,659,542 997,000 81,823 11,794,488 12,873,311 39,659,542 9,647,953 153,583 906,114 10,707,650 37,493,881 (997,000) 9,647,953 71,760 (10,888,374) (2,165,661) (2,165,661) CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services: Highways and streets Capital outlay Contingencies Total charges to appropriations 798,038 31,593,609 1,416,842 33,808,489 2,651,692 28,206,525 1,496,952 32,355,169 977,787 1,730,542 2,708,329 (1,673,905) (26,475,983) (1,496,952) (29,646,840) Budgetary fund balance, June 30, 2012 $ 5,851,053 $ 7,304,373 $ 34,785,552 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 $ 37,493,881 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 (26,786,231) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 2,405,133 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 13,112,783 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 2,708,329 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 480,929 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 3,189,258 113 $ 27,481,179 114 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. Storm Drain Utility This fund collects and expends storm water user fees included on utility bill sent out by the City. The fee is to provide funding for the Storm Water Management Plan to comply with the National Pollution Discharge Elimination System (NPDES). 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. 115 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ 32,641,807 170,000 32,811,807 $ 32,641,807 170,000 32,811,807 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 33,649,782 60 33,649,842 $ 1,007,975 (169,940) 838,035 4,796,834 16,411,441 12,680,332 3,642,922 37,531,529 4,774,787 16,482,334 12,760,924 3,420,447 37,438,492 4,440,751 15,412,523 1,706,633 21,559,907 (334,036) (1,069,811) (11,054,291) (3,420,447) (15,878,585) (4,719,722) (4,626,685) 12,089,935 16,716,620 244,000 (1,829,896) (3,254,498) (4,840,394) 244,000 (1,537,612) (3,407,706) (4,701,318) 187,105 17,092,176 (1,922,381) (19,960,120) (4,603,220) (56,895) 17,092,176 (384,769) (16,552,414) 98,098 (9,560,116) (9,328,003) 7,486,715 16,814,718 1,080,670 112,213 (3,896,367) 1,080,670 112,213 (3,896,367) 1,904,299 112,213 (4,618,000) (12,263,600) $ (12,031,487) $ 4,885,227 823,629 (721,633) $ 16,916,714 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 282,795 (71,238) (17,092,176) 71,238 (77,022) 69,785 1,627,358 6,493,136 19,960,120 (8,790,374) (54,631) (2,798) 16,650 $ 7,318,070 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 116 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WASTEWATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ 19,181,801 50,000 19,231,801 $ 19,181,801 50,000 19,231,801 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 17,915,746 49,213 17,964,959 $ (1,266,055) (787) (1,266,842) 2,366,421 8,482,351 9,874,560 1,103,748 21,827,080 2,369,045 8,362,854 10,040,688 1,082,957 21,855,544 2,282,636 7,245,912 2,676,668 12,205,216 (86,409) (1,116,942) (7,364,020) (1,082,957) (9,650,328) (2,595,279) (2,623,743) 5,759,743 8,383,486 113,700 (2,780,888) (5,191,687) (7,858,875) 113,680 (2,782,842) (5,230,480) (7,899,642) 60,084 6,187,824 (2,810,464) (8,250,477) (4,813,033) (53,596) 6,187,824 (27,622) (3,019,997) 3,086,609 (10,454,154) (10,523,385) 443,316 2,594,567 (63,285) 443,316 2,594,567 (63,285) (7,479,556) $ (7,548,787) 946,710 11,470,095 916,117 2,619,287 (91,490) $ 4,390,624 472,801 24,720 (28,205) $ 11,939,411 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. 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 265,869 (6,187,824) (1,618,711) 1,618,711 (36,339) (193,649) 1,938,401 2,329,231 8,250,477 (9,988,235) (162,975) (34,364) $ 571,216 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. 117 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SOLID WASTE UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ 3,254,594 7,373,422 956,067 2,060,000 13,644,083 Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income 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 12,982,418 12,982,418 $ 12,982,418 12,982,418 (661,749) 12,000 (5,310) 6,690 12,000 (5,310) 6,690 (654,975) (655,059) 121,500 85,668 (82,282) 121,500 85,668 (82,282) (530,089) $ 3,227,874 7,400,226 956,067 2,060,000 13,644,167 (661,665) $ (530,173) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 12,799,964 12,799,964 $ (182,454) (182,454) 3,216,833 6,970,426 968,908 11,156,167 (11,041) (429,800) 12,841 (2,060,000) (2,488,000) 1,643,797 2,305,546 88,338 (6,018) 82,320 76,338 (708) 75,630 1,726,117 2,381,176 70,434 85,668 (85,511) $ 1,796,708 (51,066) (3,229) $ 2,326,881 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 15,801 (963,620) 963,620 (63,710) (299,939) 968,908 6,018 (1,071,610) 5,651 (96,578) $ 1,261,249 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. 118 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL STADIUM FUND FOR THE YEAR ENDED JUNE 30, 2012 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 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 $ 1,276,239 1,424,000 2,700,239 $ 1,276,239 1,424,000 2,700,239 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,250,707 1,484,343 2,750 2,737,800 $ (25,532) 60,343 2,750 37,561 1,459,806 2,893,358 1,450,000 5,803,164 1,448,538 2,893,358 1,450,000 5,791,896 1,462,548 2,867,483 4,330,031 14,010 (25,875) (1,450,000) (1,461,865) (3,102,925) (3,091,657) (1,592,231) 1,499,426 9,975 (6,438) (53,399) (49,862) 9,975 (12,104) (165,904) (168,033) 10,889 (12,181) (165,904) (167,196) (3,152,787) (3,259,690) (1,759,427) 2,056,232 (109,240) 2,056,232 (109,240) 2,177,039 (170,243) (1,205,795) $ (1,312,698) $ 247,369 914 (77) 837 1,500,263 120,807 (61,003) $ (1,560,067) 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. Debt principal payments are an expense for budgetary purposes, but are a reduction of long-term obligations and therefore not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Bond issuance costs are expensed in the year of issuance for budgetary purposes, but are amortized to interest expense over the life of the bonds for GAAP purposes. Change in net assets per the statement of revenues, expenses and changes in fund net assets 5,508 (33,689) 33,689 (25,541) (171,854) 165,904 (727,747) 7,352 $ (376,744) 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 STORM DRAIN UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Contingencies Total operating expenses Operating income (loss) 801,000 801,000 798,700 798,700 $ (2,300) (2,300) 280,168 539,269 819,437 (12,875) 64,621 (154,870) (103,124) (119,536) (121,561) (20,737) 100,824 4,000 4,000 (115,536) (111,463) 3,214 3,214 (117,561) 4,073 $ $ 293,043 474,648 154,870 922,561 4,000 4,000 Income (loss) before contributions and transfers 801,000 801,000 294,709 470,957 154,870 920,536 NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Transfers in Excess (deficit) revenues over expenses - budgetary basis $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (17,523) 4,073 $ (113,488) (786) (786) 100,038 4,073 $ (13,450) $ Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Change in net assets per the statement of revenues, expenses and changes in fund net assets 5,122 (16,581) 33,772 $ 8,863 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. 120 100,038 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL PUBLIC HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final OPERATING REVENUES: Rent From federal government Miscellaneous Total operating revenues - OPERATING EXPENSES: Contractual services, materials and supplies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Excess (deficit) revenues over expenses - budgetary basis - 327,871 327,871 318,664 318,664 (327,871) (327,871) (46,813) 2,900 2,900 (324,971) $ 125,069 140,461 6,321 271,851 327,871 327,871 2,900 2,900 (324,971) (324,971) 125,069 140,461 6,321 271,851 (9,207) (9,207) 281,058 98 98 (324,971) $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,802) (2,802) (46,715) $ (46,715) 278,256 $ 278,256 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. The gain/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 (85,211) $ (121,760) 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. 121 122 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 programs, including liability and property damage, workers’ compensation insurance, and employee health insurance. This fund provides the excess insurance coverage for claims over the self-insurance limits; claims under the limits are charged directly to the SelfInsurance Fund. Detailed Combining Schedules of the three self-insurance programs are provided in the Supplemental Information tab of this document. 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. 123 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2012 SelfInsurance Fund Motor Pool Fund ASSETS Current assets: Cash and cash equivalents Investments 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 Other current liabilities Current portion of claims payable Current portion of compensated absences Total current liabilities Non-current liabilities: Long-term portion of claims payable Compensated absences Total long-term liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted - trust purpose Unrestricted Total net assets $ 2,057,257 8,590,238 5,650 160,518 10,813,663 $ 1,048,271 22,771,962 (16,610,780) 446,428 7,655,881 18,469,544 2,652,307 11,076,864 6,593 13,735,764 Facilities Maintenance Fund $ 13,735,764 12,152 50,740 234 63,126 17,741 (954) 16,787 79,913 Information Technology Fund $ 874,451 3,651,339 1,658 4,527,448 148,102 29,196,757 30,745 (22,694,372) 3,793,929 10,475,161 15,002,609 Total $ 5,596,167 23,369,181 14,135 160,518 29,140,001 148,102 30,262,769 22,771,962 30,745 (39,306,106) 4,240,357 18,147,829 47,287,830 219,542 10,914 2,980 61,780 295,216 1,023,303 680 238 2,268,909 1,370 3,294,500 82,000 26,913 10,122 162,220 281,255 305,779 40,416 15,265 254,130 615,590 1,630,624 78,923 28,605 2,268,909 479,500 4,486,561 41,580 41,580 336,796 4,165,771 460 4,166,231 7,460,731 95,250 95,250 376,505 80,200 80,200 695,790 4,165,771 217,490 4,383,261 8,869,822 7,655,881 10,476,867 $ 18,132,748 831,313 5,443,720 6,275,033 16,787 (313,379) (296,592) 10,475,161 3,831,658 $ 14,306,819 18,147,829 831,313 19,438,866 $ 38,418,008 $ $ The accompanying notes are an integral part of the financial statements 124 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2012 SelfInsurance Fund Motor Pool Fund OPERATING REVENUES Charges for services From federal government Miscellaneous Total operating revenues $ 6,028,297 12,616 6,040,913 $ 16,734,890 188,008 16,922,898 Facilities Maintenance Fund $ 5,280,629 - Information Technology Fund $ 5,280,629 7,236,460 12,063 7,248,523 Total $ 35,280,276 212,687 35,492,963 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) 876,504 4,189,777 2,177,738 7,244,019 (1,203,106) 126,093 860,562 17,812,117 18,798,772 (1,875,874) 2,633,381 2,847,371 954 5,481,706 (201,077) 3,901,140 3,430,156 3,211,060 10,542,356 (3,293,833) 7,537,118 11,327,866 17,812,117 5,389,752 42,066,853 (6,573,890) NON-OPERATING REVENUES (EXPENSES) Interest and investment income Gain (Loss) on sale of capital assets Total non-operating revenues Income (loss) before transfers 40,225 (703) 39,522 (1,163,584) 46,934 46,934 (1,828,940) 1,247 1,247 (199,830) 11,927 11,927 (3,281,906) 100,333 (703) 99,630 (6,474,260) 23,006 326,881 (107,576) (921,273) (69,170) (1,898,110) (1,351,500) (1,551,330) 2,545,730 (19,000) (755,176) 23,006 2,872,611 (1,547,246) (5,125,889) 8,173,143 1,254,738 Capital contributions Transfers in Transfers out Change in net assets Total net assets - beginning Total net assets - ending 19,054,021 $ 18,132,748 $ 6,275,033 $ (296,592) The accompanying notes are an integral part of the financial statements 125 15,061,995 $ 14,306,819 43,543,897 $ 38,418,008 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2012 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 $ 6,040,913 (4,066,603) (846,626) 1,127,684 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 326,881 (107,576) 219,305 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Disposal of capital assets Net cash flows used by capital and related financing activities (1,222,226) 81,856 (1,140,370) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ 16,927,277 (740,073) (132,357) (14,532,437) 1,522,410 $ (69,170) (69,170) - 5,280,629 (2,945,353) (2,576,346) (241,070) $ 7,257,938 (3,575,578) (3,844,293) (161,933) $ 35,506,757 (11,327,607) (7,399,622) (14,532,437) 2,247,091 (1,351,500) (1,351,500) 2,545,730 (19,000) 2,526,730 2,872,611 (1,547,246) 1,325,365 (17,741) (17,741) (1,972,752) (1,972,752) (3,212,719) 81,856 (3,130,863) (13,120,625) 11,084,231 50,443 (1,985,951) (16,906,863) 13,535,995 58,881 (3,311,987) (74,975) 1,077,698 3,047 1,005,770 (5,585,638) 4,532,526 14,528 (1,038,584) (35,688,101) 30,230,450 126,899 (5,330,752) $ (1,779,332) 3,836,589 2,057,257 $ (1,858,747) 4,511,054 2,652,307 $ (604,541) 616,693 12,152 $ (646,539) 1,520,990 874,451 $ (4,889,159) 10,485,326 5,596,167 $ (1,203,106) $ (1,875,874) $ (201,077) $ (3,293,833) $ (6,573,890) Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets: Accounts receivable Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Other liabilities Claims payable Compensated absences Total adjustments 2,177,738 - (1,047) 4,379 - 124,221 3,928 2,980 22,970 2,330,790 Net cash provided (used) by operating activities $ 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 $ $ 1,127,684 23,006 (4,371) 18,635 954 - 120,489 (512) 238 3,279,680 (5,990) 3,398,284 $ $ $ 1,522,410 (5,108) (5,108) 5,389,752 9,415 - (97,982) (557) 10,122 47,470 (39,993) 13,794 (1,047) (145,422) (8,988) 15,265 50,570 3,131,900 1,306 (6,129) 28,605 3,279,680 115,020 8,820,981 $ (241,070) $ (161,933) $ $ (602) (602) $ (1,161) (1,161) $ $ The accompanying notes are an integral part of the financial statements 126 3,211,060 $ $ 2,247,091 23,006 (11,242) 11,764 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL MOTOR POOL FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ 892,098 3,728,224 1,391,998 750,000 6,762,320 Operating income (loss) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues (expenses) Income (loss) before transfers Capital Contributions Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 6,308,203 6,308,203 $ 6,308,203 6,308,203 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 746,417 4,224,820 1,187,998 750,000 6,909,235 6,050,463 12,616 6,063,079 $ 846,626 4,088,769 924,253 5,859,648 (257,740) 12,616 (245,124) 100,209 (136,051) (263,745) (750,000) (1,049,587) (454,117) (601,032) 203,431 804,463 35,000 35,000 35,000 35,000 50,443 50,443 15,443 15,443 (419,117) (566,032) 253,874 819,906 220,224 (37,412) 220,224 (37,412) 16,224 (58,303) (204,000) (20,891) (236,305) $ (383,220) $ 211,795 $ 595,015 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Donations of capital assets are an other financing source for GAAP purposes, but are not a revenue for budget purposes. 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 (10,218) (22,166) 22,166 (29,878) (123,174) 924,253 23,006 (2,177,738) (703) 261,384 $ (921,273) 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. 127 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ 16,743,215 16,743,215 16,739,269 188,008 16,927,277 $ (3,946) 188,008 184,062 147,191 1,555,623 16,931,850 1,484,694 20,119,358 132,356 749,291 14,523,219 15,404,866 (14,835) (806,332) (2,408,631) (1,484,694) (4,714,492) (2,219,707) (3,376,143) 1,522,411 4,898,554 76,690 76,690 (2,142,707) $ $ 155,755 1,555,623 15,201,544 2,050,000 18,962,922 77,000 77,000 Income (loss) before transfers Excess (deficit) revenues over expenses - budgetary basis 16,743,215 16,743,215 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,142,707) 58,881 58,881 (3,299,453) $ (3,299,453) (17,809) (17,809) 1,581,292 $ 1,581,292 4,880,745 $ 4,880,745 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets insurance claims on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not 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 (16,326) 6,263 (3,279,680) (120,489) (69,170) $ (1,898,110) 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. 128 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL FACILITIES MAINTENANCE FUND FOR THE YEAR ENDED JUNE 30, 2012 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Depreciation and amortization Total operating expenses $ 2,693,723 2,759,146 18,000 5,470,869 Operating income (loss) 5,280,629 5,280,629 $ 5,280,629 5,280,629 5,000 5,000 (255,764) (1,351,500) (1,351,500) (1,351,500) (1,540,445) (64,866) 3,047 3,047 (188,945) $ - (83,009) 148,134 (259) 64,866 (258,811) (185,240) (1,536,740) $ 2,576,346 2,945,353 17,741 5,539,440 (193,945) 5,000 5,000 Income (loss) before transfers $ 2,659,355 2,797,219 18,000 5,474,574 (190,240) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 5,280,629 5,280,629 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ (1,607,264) (1,953) (1,953) (66,819) $ (66,819) Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. 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 (1,800) (57,035) 97,982 17,741 (954) $ (1,551,330) 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. 129 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL INFORMATION TECHNOLOGY FUND FOR THE YEAR ENDED JUNE 30, 2012 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 $ $ 7,265,093 7,265,093 3,966,271 3,922,555 526,144 481,838 8,896,808 3,939,033 3,922,555 526,144 481,838 8,869,570 (1,631,715) (1,604,477) 22,500 22,500 Income before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 7,265,093 7,265,093 $ 7,274,508 12,063 7,286,571 1,130,476 14,528 14,528 (1,581,977) (459,473) 2,035,046 (1,169,000) 2,035,046 (1,169,000) 2,035,046 (1,169,000) (715,931) 9,415 12,063 21,478 (94,740) (333,950) (198,470) (481,838) (1,108,998) (474,001) 22,500 22,500 $ $ 3,844,293 3,588,605 327,674 7,760,572 (1,609,215) (743,169) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 406,573 (7,972) (7,972) 1,122,504 $ 1,122,504 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 (12,016) (56,847) (28,633) 28,633 145,422 312,068 (3,211,060) 1,660,684 $ (755,176) 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. 130 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 NFP 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 NFP 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. 131 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS JUNE 30, 2012 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 $ $ 74,382 310,588 384,970 384,970 384,970 - - PLAY Peoria NFP Fund $ 6,101 25,476 31,577 397 31,180 31,577 Peoria Citizens Corp Council NFP Fund $ 398 1,661 2,059 2,059 2,059 The accompanying notes are an integral part of the financial statements 132 Westside Fire Training IGA Fund $ 5,350 22,340 27,690 27 27,663 27,690 Total $ 86,231 360,065 446,296 424 445,872 446,296 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2012 Balance June 30, 2011 Terramar Infrastructure Fund Assets: Cash and cash equivalents Investments Total Assets $ Liabilities: Other liabilities 142,147 242,823 384,970 Additions $ 242,823 310,588 553,411 Deductions $ 310,588 242,823 553,411 Balance June 30, 2012 $ 74,382 310,588 384,970 384,970 - - 384,970 Neighborhood Pride NFP Fund Assets: Cash and cash equivalents Investments Total Assets 5,938 10,144 16,082 35,341 35,341 41,279 10,144 51,423 - Liabilities: Accounts payable Other liabilities Total Liabilities 153 15,929 16,082 27,121 25,350 52,471 27,274 41,279 68,553 - PLAY Peoria NFP Fund Assets: Cash and cash equivalents Investments Total Assets 3,631 6,202 9,833 39,330 25,476 64,806 36,860 6,202 43,062 6,101 25,476 31,577 Liabilities: Accounts payable Other liabilities Total Liabilities 9,833 9,833 3,512 29,272 32,784 3,115 7,925 11,040 397 31,180 31,577 Peoria Citizens Corp Council NFP Fund Assets: Cash and cash equivalents Investments Total Assets 2,041 3,486 5,527 7,048 1,661 8,709 8,691 3,486 12,177 398 1,661 2,059 Liabilities: Accounts payable Other liabilities Total Liabilities 5,527 5,527 3,562 3,562 7,030 7,030 2,059 2,059 Westside Fire Training IGA Fund Assets: Cash and cash equivalents Investments Total Assets 10,523 17,976 28,499 23,157 22,340 45,497 28,330 17,976 46,306 5,350 22,340 27,690 Liabilities: Accounts payable Other liabilities Total Liabilities 69 28,430 28,499 5,949 3,181 9,130 5,991 3,948 9,939 27 27,663 27,690 Assets: Cash and cash equivalents Investments Total Assets 164,280 280,631 444,911 347,699 360,065 707,764 425,748 280,631 706,379 86,231 360,065 446,296 Liabilities: Accounts payable Other liabilities Total Liabilities 222 444,689 444,911 36,582 61,365 97,947 36,380 60,182 96,562 424 445,872 446,296 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 133 134 Supplemental Information Slip Sheet OTHER SUPPLEMENTARY INFORMATION This section contains schedules which the City deems necessary to provide detailed schedules of the self-insurance programs, as well as 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 Combining Detailed Schedules – Self-Insurance Fund Combining Detailed Schedule of Net Assets Combining Detailed Schedule of Revenues, Expenses, and Changes in Fund Net Assets 136 137 Federal Financial Data Schedule 138 Debt Service Schedules Schedule of Changes in Debt – Governmental Activities Schedule of Changes in Debt – Business-type Activities Schedule of Bonded Debt Service Requirements to Maturity 141 142 143 Capital Assets Schedules Schedule of Capital Assets by Function and Classification Schedule of Changes in Capital Assets by Function – Governmental Activities 146 148 Schedule of Interfund Transfers 149 135 CITY OF PEORIA, ARIZONA COMBINING DETAILED SCHEDULE OF NET ASSETS SELF-INSURANCE FUND JUNE 30, 2012 ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Total current assets Total assets Risk Management Fund Employee Trust Workers' Health Compensation Insurance Fund Fund $ $ 1,680,570 7,019,297 4,884 8,704,751 8,704,751 505,033 2,108,807 472 2,614,312 2,614,312 $ 466,704 1,948,760 1,237 2,416,701 2,416,701 Total $ 2,652,307 11,076,864 6,593 13,735,764 13,735,764 LIABILITIES Current liabilities: Accounts payable Accrued payroll Other current liabilities Current portion of claims payable Current portion of compensated absences Total current liabilities Non-current liabilities: Compensated absences Long-term portion of claims payable Total long-term liabilities Total liabilities 113,874 680 238 741,558 1,370 857,720 23,969 814,828 838,797 885,460 712,523 1,597,983 1,023,303 680 238 2,268,909 1,370 3,294,500 460 2,402,851 2,403,311 3,261,031 1,762,920 1,762,920 2,601,717 1,597,983 460 4,165,771 4,166,231 7,460,731 NET ASSETS Restricted - trust purpose Unrestricted Total net assets 5,443,720 5,443,720 12,595 12,595 818,718 818,718 831,313 5,443,720 6,275,033 $ 136 $ $ $ CITY OF PEORIA, ARIZONA COMBINING DETAILED SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2012 OPERATING REVENUES Charges for services Miscellaneous Total operating revenues Risk Management Fund Employee Trust Workers' Health Compensation Insurance Fund Fund $ $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Interest and investment income Total non-operating revenues Income (loss) before transfers 2,617,820 173,900 2,791,720 13,167,572 6,775 13,174,347 $ 16,734,890 188,008 16,922,898 172,606 2,483,566 2,656,172 (1,699,341) 646,425 12,082,395 12,728,820 445,527 126,093 860,562 17,812,117 18,798,772 (1,875,874) 34,699 34,699 (587,361) 3,508 3,508 (1,695,833) 8,727 8,727 454,254 46,934 46,934 (1,828,940) 1,750,000 54,167 454,254 1,750,000 (1,819,170) (1,898,110) 364,464 8,173,143 (1,819,170) (2,406,531) Total net assets - beginning 7,850,251 $ $ 126,093 41,531 3,246,156 3,413,780 (622,060) Transfers in Transfers out Change in net assets Total net assets - ending 949,498 7,333 956,831 Total 5,443,720 137 (41,572) $ 12,595 $ 818,718 $ 6,275,033 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 Public Housing 14.850A & 14.872 BALANCE SHEET ASSETS: Current Assets: Cash-unrestricted Cash-tenant security deposits Total Cash TOTAL PROJECTS Community Development Block Grant 14.218 498,458 14,193 512,651 498,458 14,193 512,651 Accounts receivable - HUD other projects - Capital fund Accounts receivable - HUD other projects - Other Accounts Receivable - HUD Other Projects 24,711 24,711 24,711 24,711 193,618 193,618 193,618 193,618 125 126 126.1 126.2 120 Accounts receivable - miscellaneous Accounts receivable - tenants Allowance for doubtful accounts - tenants Allowance for doubtful accounts - other Total Receivables, Net of Allowance for Doubtful Accounts 8,962 (7,104) 26,569 8,962 (7,104) 26,569 193,618 193,618 142 143 143.1 Prepaid expenses and other assets Inventories Allowance for obsolete inventories 2,646 3,136 (314) 2,646 3,136 (314) 122-020 122-030 122 150 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 180 190 311 312 321 322 332 333 341 193,618 193,618 410,350 3,276,922 32,860 (2,029,209) 1,690,923 - - Total Non-current Assets 1,690,923 1,690,923 - - Total Assets 2,235,611 2,235,611 LIABILITIES AND EQUITY: LIABILITIES: Current Liabilities: Bank Overdraft Accounts payable <= 90 days Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accounts payable - HUD PHA Projects Accounts payable - other government Tenant security deposits Total Current Liabilities 354 350 Non-current Liabilities: Accrued compensated absences - non-current Total Non-current Liabilities 300 Total Liabilities 600 544,688 - - 410,350 3,276,922 32,860 (2,029,209) 1,690,923 310 508.1 511.1 512.1 513 544,688 - TOTAL PROGRAMS 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) 138 - - 8,133 14,193 8,133 14,193 22,326 22,326 6,102 6,102 6,102 6,102 28,428 28,428 1,690,923 516,260 2,207,183 1,690,923 516,260 2,207,183 2,235,611 2,235,611 193,618 193,618 121,148 72,470 121,148 72,470 193,618 193,618 193,618 193,618 193,618 193,618 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Public Housing Capital 14.872 INCOME STATEMENT 70300 70400 70500 REVENUE: Net tenant rental revenue Tenant revenue - other Total Tenant Revenue - TOTAL PROJECTS 131,766 6,212 137,978 131,766 6,212 137,978 280,187 419,912 Community Development Block Grant 14.218 - - Housing assistance payments Ongoing administrative fees earned HUD PHA operating grants 71100-020 71100 Administrative fee Investment income - unrestricted - 98 98 - - Fraud recovery Other revenue - 109 109 - - 139,725 418,372 558,097 521,234 521,234 7,438 7,438 67,482 1,671 39,888 5,603 14,290 26,413 155,347 74,920 1,671 39,888 5,603 14,290 26,413 162,785 74,726 1,339 13,900 89,965 74,726 1,339 13,900 89,965 - 10,601 4,712 3,214 2,999 21,526 10,601 4,712 3,214 2,999 21,526 2,903 7,097 10,000 2,903 7,097 10,000 5,430 8,166 44,598 146,234 50,028 154,400 - - 13,475 6,181 37,684 1,808 53,968 950 114,066 4,877 10,093 447 5,407 21,276 42,100 4,877 13,475 16,274 37,684 2,255 5,407 53,968 22,226 156,166 7000 91100 91200 91300 91310 91500 91600 91800 91900 91000 Total Revenue EXPENSES: Administrative salaries Auditing fees Management fee Bookkeeping fee Employee benefit contributions - administrative Office expenses Travel Other Total Operating - Administrative 93100 93200 93300 93600 93000 Water Electricity Gas Sewer Total Utilities 94100 94200 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials and other 94300-010 94300-020 94300-050 94300-060 94300-070 94300-080 94300-090 94300-100 94300-110 94300-120 94300 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 - extermination contracts Ordinary maintenance and operations - janitorial contracts Ordinary maintenance and operations - routine maintenance contracts Ordinary maintenance and operations - misc contracts Total Ordinary Maintenance and Operations Contracts 94500 Employee benefit contribution - ordinary maintenance 94000 Total Maintenance 95200 95000 Protective services - other contract costs Total Protective Services 96130 96140 96100 Workmen's Compensation All other insurance Total Insurance Premiums 96200 96210 96300 96400 96600 96000 Other general expenses Compensated absences Payments in lieu of taxes Bad debt - tenant rents Bad debt - other Total Other General Expenses 96900 Total Operating Expenses 97000 Excess Revenue Over Operating Expenses 97300-050 97300 97400 90000 10010 10020 - Depreciation expense 19,994 380,588 - 1,117 1,117 1,117 1,117 - - - 2,290 477 2,767 2,290 477 2,767 - - 4,625 4,625 14,235 7,004 21,239 4,625 14,235 7,004 25,864 - - 139,725 454,922 594,647 - (36,550) (36,550) - - - - - - - 139,725 Operating transfer in Operating transfer out - 10100 Total Other Financing Sources (Uses) - 1000 Excess (Deficiency) of Revenue Over (Under) Expenses (continued) 139 85,211 85,211 540,133 679,858 (121,761) (121,761) - 104,914 3,265 29,429 283,661 421,269 19,994 - Total Expenses 104,914 3,265 29,429 283,661 421,269 521,234 252,926 127,662 All other Housing Assistance Payments - 521,234 TOTAL PROGRAMS 70600-010 70600-020 70600 71400 71500 139,725 Public Housing Operating 14.850A 421,269 521,234 521,234 421,269 521,234 521,234 - - - - - - CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Public Public Housing Capital 14.872 INCOME STATEMENT (continued) 11030 OTHER INFORMATION: Beginning equity - Housing Operating 14.850A 2,328,944 TOTAL PROJECTS 2,328,944 Community Development Block Grant 14.218 TOTAL PROGRAMS - - 11170-001 11170-010 11170-040 11170-045 11170-050 11170-060 11170-080 11170-100 11170-110 11170-002 11170-003 Administrative Fee Equity - Beginning Balance Administrative Fee Revenue Investment Income Fraud Recovery Revenue Other Revenue Total Admin Fee Revenues Total Operating Expenses Other Expenses Total Expenses Net Administrative Fee Administrative Fee Equity - Ending Balance - - - - - 11180-001 11180-010 11180-015 11180-020 11180-030 11180-080 11180-100 11180-002 11180-003 11180 Housing Assistance Payments Equity - Beginning Balance Housing Assistance Payment Revenues Fraud Recovery Revenue Other Revenue Total HAP Revenues Housing Assistance Payments Total Housing Assistance Payments Expenses Net Housing Assistance Payments Housing Assistance Payments Equity - Ending Balance Housing Assistance Payments Equity - - - - - 11190-210 11190 11210 Total ACC HCV Units Unit Months Available Unit Months Leased - 840 813 840 813 - - Excess Cash - 478,984 478,984 - - 11270 (concluded) 140 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Balances at June 30, 2011 Compensated absences Contracts payable Total General obligation bonds: Series 2003 Series 2007 Series 2007 Ref Series 2009A Series 2010 Series 2012A Series 2012B Total Municipal Development Authority: Refunding bonds - series 2003 Series 2006 Series 2008 Series 2011 Total Special assessment: North Valley ID #8801 Bell Road ID #8802 83rd Ave ID #9601 Arrowhead Fountains ID #9603 99 Ave & Northern Ave ID #0601 Total Community Facilities District: Vistancia CFD Series 2002 Vistancia CFD Series 2005 Vistancia CFD Series 2006 Total Total bonds payable Total governmental debt $ Issued Retired Exhibit 1 Balances at June 30, 2012 6,165,410 67,383,993 73,549,403 8,257,411 34,958 8,292,369 7,411,591 4,492,702 11,904,293 7,011,230 62,926,249 69,937,479 15,790,000 67,325,000 13,860,000 41,435,000 29,170,000 167,580,000 14,715,000 13,690,000 28,405,000 14,720,000 3,045,000 1,500,000 1,720,000 4,040,000 25,025,000 1,070,000 64,280,000 12,360,000 39,715,000 25,130,000 14,715,000 13,690,000 170,960,000 3,620,965 5,340,000 41,485,000 7,920,000 58,365,965 - 3,620,965 260,000 2,005,000 5,885,965 5,080,000 39,480,000 7,920,000 52,480,000 710,000 1,045,000 85,000 185,000 4,130,000 6,155,000 - 425,000 500,000 85,000 185,000 300,000 1,495,000 285,000 545,000 3,830,000 4,660,000 16,400,000 20,600,000 21,615,000 58,615,000 - 950,000 825,000 610,000 2,385,000 15,450,000 19,775,000 21,005,000 56,230,000 290,715,965 28,405,000 34,790,965 284,330,000 $ 364,265,368 36,697,369 46,695,258 354,267,479 141 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN DEBT BUSINESS-TYPE ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Balance at June 30, 2011 Exhibit 2 Issued Retired 952,640 798,760 Balances at June 30, 2012 Compensated absences Less current portion Long-term portion of compensated absences $ $ 648,070 519,850 128,220 $ Leases payable $ 18,619 $ - $ 18,619 $ Contracts payable $ 7,116,374 $ - $ 180,024 $ $ 801,950 575,920 226,030 6,936,350 1995 Wastewater Management Authority 1997 Water Infrastructure Finance Authority 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, 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 2012 Water and Wastewater Revenue Refunding Bonds Total bonds 3,544,930 5,992,880 12,417,405 9,327,429 1,354,337 449,034 24,839,419 39,379,176 8,249,270 694,092 7,681,157 3,568,277 4,207,080 720,086 15,780,000 138,204,572 23,280,000 23,280,000 2,858,270 5,186,446 11,339,403 8,606,321 90,445 449,034 1,226,095 1,764,749 337,323 28,936 356,166 168,827 169,900 38,751 580,000 33,200,666 686,660 806,434 1,078,002 721,108 1,263,892 23,613,324 37,614,427 7,911,947 665,156 7,324,991 3,399,450 4,037,180 681,335 15,200,000 23,280,000 128,283,906 Total business-type leases, contracts, loans and bonds payable Less current portion of leases, contracts, loans, and bonds payable 145,339,565 23,280,000 33,399,309 135,220,256 Long-term portion of bonds, contracts, loans & leases payable 8,543,134 $ 136,796,431 142 9,527,794 $ 125,692,462 CITY OF PEORIA, ARIZONA SCHEDULE OF BONDED DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2012 Fiscal Year General Obligation General Facilites Purpose 6% Limitation (1) Principal Interest Total Principal Other Purpose 20% Limitation (1) Interest Total Exhibit 3 Total General Obligation Principal Interest Total 2013 1,070,000 63,491 1,133,491 7,515,000 6,229,181 13,744,181 8,585,000 6,292,672 14,877,672 2014 1,315,000 21,150 1,336,150 8,240,000 6,052,259 14,292,259 9,555,000 6,073,409 15,628,409 2015 350,000 3,500 353,500 9,545,000 5,739,809 15,284,809 9,895,000 5,743,309 15,638,309 2016 - - - 10,265,000 5,400,759 15,665,759 10,265,000 5,400,759 15,665,759 2017 - - - 10,210,000 5,053,734 15,263,734 10,210,000 5,053,734 15,263,734 2018 - - - 10,010,000 4,683,884 14,693,884 10,010,000 4,683,884 14,693,884 2019 - - - 10,385,000 4,296,728 14,681,728 10,385,000 4,296,728 14,681,728 2020 - - - 10,735,000 3,909,259 14,644,259 10,735,000 3,909,259 14,644,259 2021 - - - 11,160,000 3,505,603 14,665,603 11,160,000 3,505,603 14,665,603 2022 - - - 10,370,000 3,097,774 13,467,774 10,370,000 3,097,774 13,467,774 2023 - - - 10,770,000 2,683,315 13,453,315 10,770,000 2,683,315 13,453,315 2024 - - - 9,590,000 2,271,871 11,861,871 9,590,000 2,271,871 11,861,871 2025 - - - 9,980,000 1,866,175 11,846,175 9,980,000 1,866,175 11,846,175 2026 - - - 10,390,000 1,441,774 11,831,774 10,390,000 1,441,774 11,831,774 2027 - - - 10,835,000 1,000,219 11,835,219 10,835,000 1,000,219 11,835,219 2028 - - - 5,430,000 655,050 6,085,050 5,430,000 655,050 6,085,050 2029 - - - 5,665,000 411,688 6,076,688 5,665,000 411,688 6,076,688 2030 2,585,000 235,575 2,820,575 2,585,000 235,575 2,820,575 2031 2,690,000 125,638 2,815,638 2,690,000 125,638 2,815,638 2032 915,000 52,406 967,406 915,000 52,406 967,406 2033 940,000 17,622 957,622 940,000 17,622 957,622 $ 168,225,000 $ 58,730,323 $ 226,955,323 $ 170,960,000 $ 58,818,464 $ 229,778,464 $ 2,735,000 $ 88,141 $ 2,823,141 (1) Various purpose bonds limited to 20% of assessed valuation are those issued for public safety, streets, water, sewer, artificial light, open space, preserves, parks, playgrounds and recreational areas. Other general obligation bonds are limited to 6% of assessed valuation. The general obligation bonds are categorized as follows: Year of Issuance General Obligation Bond Original Issue Amount 6% Limitation 20% Limitation 27,570,000 94,380,000 18,365,000 68,440,000 29,170,000 14,715,000 13,690,000 15,345,000 17,340,000 2,265,000 1,005,000 200,000 1,465,000 12,225,000 77,040,000 16,100,000 68,440,000 28,165,000 14,515,000 12,225,000 266,330,000 37,620,000 228,710,000 2003 2007 2007R 2009 2010 2012A 2012B Total $ (continued) 143 CITY OF PEORIA, ARIZONA SCHEDULE OF BONDED DEBT SERVICE REQUIREMENTS TO MATURITY AS OF JUNE 30, 2012 Fiscal Year Municipal Development Authority (2) Principal Interest Total Principal Special Assessment (3) Interest Water and Sewer Revenue Principal Interest Total Total 2013 2,760,000 2,301,069 5,061,069 1,140,000 222,820 1,362,820 8,776,255 4,041,252 12,817,507 2014 2,895,000 2,203,469 5,098,469 325,000 149,600 474,600 9,007,117 3,688,557 12,695,674 2015 3,025,000 2,093,931 5,118,931 340,000 135,788 475,788 9,234,387 3,450,243 12,684,630 2016 3,150,000 1,962,431 5,112,431 355,000 121,338 476,338 9,480,996 3,171,571 12,652,567 2017 3,280,000 1,824,731 5,104,731 370,000 106,250 476,250 10,107,081 2,845,500 12,952,581 2018 3,420,000 1,680,481 5,100,481 390,000 90,525 480,525 10,442,787 2,494,322 12,937,109 2019 3,570,000 1,519,506 5,089,506 405,000 73,950 478,950 9,858,262 2,142,948 12,001,210 2020 3,725,000 1,353,756 5,078,756 425,000 56,738 481,738 8,793,660 1,819,586 10,613,246 2021 3,885,000 1,199,041 5,084,041 445,000 38,675 483,675 9,124,137 1,509,086 10,633,223 2022 4,050,000 1,031,386 5,081,386 465,000 19,763 484,763 6,459,858 1,246,960 7,706,818 2023 4,230,000 852,553 5,082,553 - - - 5,835,991 1,052,334 6,888,325 2024 4,405,000 661,693 5,066,693 - - - 5,873,903 870,566 6,744,469 2025 4,605,000 458,288 5,063,288 - - - 6,055,721 685,885 6,741,606 2026 4,805,000 236,331 5,041,331 - - - 6,251,991 495,242 6,747,233 2027 675,000 14,344 689,344 - - - 6,455,037 298,295 6,753,332 2028 - - - - - - 4,602,316 126,504 4,728,820 2029 - - - - - - 1,624,441 31,944 1,656,385 2030 - - - - 299,966 4,549 304,515 2031 - - - - - - - 2032 - - - - - - - 2033 - - - - - - - $ 52,480,000 $ 19,393,010 $ 71,873,010 $ 4,660,000 $ 1,015,447 $ 5,675,447 $ 128,283,906 $ 29,975,344 $ 158,259,250 (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, NE corner of Northern & 99th Ave (Parkwest) Improvement District Bonds 144 Exhibit 3 Fiscal Year DEBT SERVICE REQUIREMENTS GRAND TOTALS Principal Interest Total Community Facilities District (4) Principal Interest Total 2013 2,505,000 2,985,974 5,490,974 23,766,255 15,843,787 39,610,042 2014 2,630,000 2,854,633 5,484,633 24,412,117 14,969,668 39,381,785 2015 2,765,000 2,711,311 5,476,311 25,259,387 14,134,582 39,393,969 2016 2,920,000 2,555,713 5,475,713 26,170,996 13,211,812 39,382,808 2017 3,080,000 2,388,074 5,468,074 27,047,081 12,218,289 39,265,370 2018 3,255,000 2,207,674 5,462,674 27,517,787 11,156,886 38,674,673 2019 3,440,000 2,015,359 5,455,359 27,658,262 10,048,491 37,706,753 2020 3,635,000 1,810,671 5,445,671 27,313,660 8,950,010 36,263,670 2021 3,850,000 1,593,926 5,443,926 28,464,137 7,846,331 36,310,468 2022 4,070,000 1,362,718 5,432,718 25,414,858 6,758,601 32,173,459 2023 4,310,000 1,115,388 5,425,388 25,145,991 5,703,590 30,849,581 2024 4,565,000 862,431 5,427,431 24,433,903 4,666,561 29,100,464 2025 4,815,000 604,936 5,419,936 25,455,721 3,615,284 29,071,005 2026 5,080,000 357,175 5,437,175 26,526,991 2,530,522 29,057,513 2027 5,310,000 120,802 5,430,802 23,275,037 1,433,660 24,708,697 2028 - - - 10,032,316 781,554 10,813,870 2029 - - - 7,289,441 443,632 7,733,073 2030 - - - 2,884,966 240,124 3,125,090 2031 - - - 2,690,000 125,638 2,815,638 2032 - - - 915,000 52,406 967,406 2033 - - - 940,000 17,622 957,622 $ 412,613,906 $ 134,749,050 $ 547,362,956 $ 56,230,000 $ 25,546,785 $ 81,776,785 (4) Vistancia Community Facilities District bonds (concluded) 145 CITY OF PEORIA, ARIZONA SCHEDULE OF CAPITAL ASSETS BY FUNCTION AND CLASSIFICATION JUNE 30, 2012 Governmental activities: Culture and Recreation Asset Type General Government Police Development Services Fire Highways and Streets Work in progress (WIP) $ 17,129,035 $ 5,206,432 $ 1,586,295 $ 470,848 $ - $ 104,960,624 Land $ 56,213,077 $ 26,944,291 $ 1,059,975 $ 1,048,451 $ - $ 240,225,410 Buildings and Improvements $ 46,152,465 $ 80,908,537 $ 21,233,492 $ 21,040,863 $ 119,479 $ 955,131 Furniture $ 84,053 $ 1,666,863 $ $ 207,324 $ 65,914 $ 57,229 Equipment $ 3,684,707 $ 31,986,801 $ 4,060,495 $ 2,585,920 $ 109,445 $ 2,721,820 Vehicles $ 1,199,374 $ $ 6,006,088 $ 8,724,698 $ 276,218 $ 3,531,496 Surface Water System $ Street System $ Park System Sub-total $ - $ - $ - $ - $ 7,458,289 $ 20,819 $ - $ - $ - $ $ 60,082,646 $ 260,431 $ - $ - $ - $ $ 192,003,646 Less accumulated depreciation Total governmental activities capital assets, net - 1,434,295 - (26,812,781) $ 165,190,865 $ 148,428,469 $ 33,946,345 (46,238,086) $ (11,986,399) $ 102,190,383 $ 21,959,946 Wastewater Utility Sanitation Utility 34,078,104 $ (10,923,562) $ 23,154,542 571,056 $ (410,359) $ 160,697 529,341,488 881,793,198 (168,602,763) $ 713,190,435 Business-type activities: Water Utility Work in progress (WIP) $ Land Water Rights Buildings and Improvements 23,497,031 $ 10,628,039 6,028,939 3,878,001 12,889,809 $ - 7,659,795 186,058 29,004 Equipment 2,417,810 1,912,069 28,430 Vehicles 1,711,132 897,775 9,085,534 Water System Wastewater System 307,604,328 - - Total $ 410,350 34,354,176 17,020,639 - 25,781,679 - 346,276,759 $ - 10,799 - 229,106 6,703,349 - 1,744,850 Furniture $ - - Housing Programs Stadium 12,889,809 3,276,922 38,474,045 9,613 224,675 646,237 23,247 5,027,793 406,159 - 12,100,600 - - - - 307,604,328 - - - 346,276,759 Sub-total 356,079,957 371,281,442 9,124,763 33,766,530 3,720,132 773,972,824 Less accumulated depreciation (70,350,832) (67,545,023) (5,639,263) (12,767,372) (2,029,209) (158,331,699) Total business-type activities capital assets, net $ 285,729,125 $ 303,736,419 146 $ 3,485,500 $ 20,999,158 $ 1,690,923 $ 615,641,125 Exhibit 4 Public Works Human Services $ 9,851,384 $ $ 10,892,151 $ $ 320,598 $ $ 50,392 $ - Total $ 139,204,618 $ 336,691,112 - $ 170,730,565 $ - $ 2,131,775 273,844 $ - $ 45,423,032 $ 1,363,782 $ $ 22,778,135 $ 80,324,606 $ - $ 80,324,606 307,757 242,184 $ - $ - $ 536,820,596 $ - $ - $ 60,343,077 $ 1,394,447,516 $ 103,076,757 $ (20,899,850) $ 82,176,907 549,941 (157,280) $ 392,661 (286,031,080) $ 1,108,416,436 147 CITY OF PEORIA, ARIZONA SCHEDULE OF CHANGES IN CAPITAL ASSETS BY FUNCTION GOVERNMENTAL ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Department Culture and Recreation Additions and Transfers Balances July 1, 2011 $ 14,077,261 149,529,072 2,248,432 (3,349,035) 148,428,469 Police 32,784,046 1,327,030 (164,731) 33,946,345 Fire 33,732,095 670,236 (324,227) 34,078,104 (14,650) 571,056 Development Services 585,706 $ - (82,535) Balances June 30, 2012 178,008,920 General Government $ Deletions and Transfers Exhibit 5 $ 192,003,646 Highways & Streets 861,847,743 19,945,455 - 881,793,198 Public Works 101,948,235 1,165,804 (37,282) 103,076,757 Human Services Sub-total governmental fixed assets 549,941 $ 1,358,985,758 $ 39,434,218 $ (3,972,460) 549,941 $ 1,394,447,516 Less accumulated depreciation Culture and Recreation (21,810,477) (5,083,588) 81,284 (26,812,781) General Government (39,994,874) (6,288,302) 45,090 (46,238,086) Police (10,468,345) (1,610,518) 92,464 (11,986,399) (9,675,200) (1,572,589) 324,227 (10,923,562) (411,774) (13,235) 14,650 (410,359) (151,722,549) (16,880,214) - (168,602,763) (18,404,153) (2,532,979) 37,282 (20,899,850) (122,682) (34,598) (252,610,054) (34,016,023) Fire Development Services Highways & Streets Public Works Human Services Sub-total accumulated depreciation Total governmental activities capital assets, net $ 1,106,375,704 148 $ 5,418,195 594,997 $ (3,377,463) (157,280) (286,031,080) $ 1,108,416,436 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2012 Fund Out Governmental Funds: General Exhibit 6 Purpose Transfers In Transfers Out Half-Cent - public safety subsidies Half-Cent - capital assets Highway User - capital assets Non-major - Other Grants - employee wellness subsidy Non-major - Other Grants - grant expenditures Non-major - Other Grants - subsidize court apppointed attorneys Non-major - CFD Debt Service - close completed IDs Water utility - fund Meter Services - meter purchases Water Utility - capital assets Wastewater Utility - capital assets Solid Waste Utility - capital assets Sports Complex - capital assets ISF - Motor Pool - capital assets ISF - Facilities - return overage to operating funds ISF - Facilities - capital assets ISF - IT Fund - capital assets Fund Totals $ $ 5,271,880 1,500 3,000 43 50,000 131,383 1,241,144 13,700 9,300 1,500 1,117,506 1,500 19,000 7,861,456 Half-Cent Sales Tax General - public safety subsidies General - capital assets 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 - capital assets Transportation Sales Tax - streets subsidy Non-major - MDA Debt Service - debt payments ISF - Facilities - return overage to operating funds Fund Totals Transportation Sales Tax Highway User - Streets subsidy Non-major - Transit - subsidy Non-major - MDA Debt Service - debt payments Fund Totals GO Bond Debt Service Non-major - GO Bond Capital Projects - transfer bond premium 164,808 - Transportation Sales Tax - transit subsidy ISF - Facilities - return overage to operating funds sub-total 666,775 4,328 671,103 - Non-major Governmental Public Transit Other Grants General - employee wellness subsidy General - correct Homeland Security grant expenditures General - subsidize court appointed attornys Non-major - MDA Debt Service - debt payments ISF - Motor Pool - capital assets ISF - IT Fund - capital assets sub-total (continued) 149 - 10,000 10,841 467,275 144,692 18,977 406,880 1,058,665 1,000,000 25,418 1,025,418 - 10,000 10,841 20,841 5,271,880 1,500 2,483,747 291,314 1,860,000 868,646 14,052 10,791,139 3,000 298,087 301,087 1,000,000 666,775 2,582,720 4,249,495 43 50,000 248,338 222,510 159,091 679,982 CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2012 Fund Out MDA Debt Service Purpose Half-Cent - debt service Highway User - debt service Transportation Sales Tax - debt service Non-major - Other Grants - debt service Non-major - MDA Capital Projects - 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 Exhibit 6 Transfers In 2,483,747 298,087 2,582,720 248,338 38,138 831,184 128,105 14,665 277,084 94,893 6,996,961 Transfers Out - Non-major Governmental (cont) Special Assmt Debt Service General - close completed IDs - 131,383 GO Bond Capital Projects Non-major - GO Bond Debt Service - transfer bond premium ISF - IT Fund - capital assets sub-total - 164,808 607,851 772,659 - 38,138 84,413 122,551 MDA Bonds-Capital Projects Water Utility - capital assets Non-major - MDA Debt Service - debt service Sports Complex - capital assets sub-total Enterprise Funds: Water Utility Wastewater Utility Enterprise (cont) Solid Waste Utility Storm Drainage Non-major Fund Totals 7,688,905 1,706,575 Total Governmental Funds 16,740,587 18,106,961 General - capital assets General - fund Meter Services - meter purchases Non-major - MDA Debt Service - debt service Wastewater Utility - capital assets Wastewater Utility - debt service ISF - Motor Pool - capital assets ISF - Facilities - return overage to operating funds ISF- IT Fund - software purchases ISF- IT Fund - capital assets Fund Totals 467,275 12,683 112,213 592,171 13,700 1,241,144 831,184 39,691 2,585,441 12,920 357,228 5,081,308 General - capital assets Non-major - MDA Debt Service - debt service Water Utility - capital assets Water Utility - debt service ISF - Facilities - return overage to operating funds ISF- IT Fund - software purchase ISF - IT Fund - capital assets Fund Totals 39,691 2,585,441 33,844 2,658,976 9,300 128,105 3,480 24,658 165,543 General - capital assets Non-major - MDA Debt Service - debt service ISF - Facilities - return overage to operating funds ISF- IT Fund - computer equipment purchases Fund Totals 10,668 10,668 1,500 14,665 90,924 107,089 ISF - Facilities - return overage to operating funds sub-total 4,073 4,073 (continued) 150 - CITY OF PEORIA, ARIZONA SCHEDULE OF INTERFUND TRANSFERS FOR THE YEAR ENDED JUNE 30, 2012 Fund Out Stadium Purpose General - capital assets Half-Cent - operating subsidy Half-Cent - debt service subsidy Non-major - MDA Bond Debt Service - debt service Non-major - MDA Bond Capital Projects - capital assets ISF - Facilities - return overage to operating funds Fund Totals Total Enterprise Funds Internal Service Funds: Motor Pool General Fund - capital assets Non-major - Other Grants - capital assets Non-major - MDA Debt Service - debt service Water Utility - capital assets ISF - Facilities - return overage to operating funds ISF- Self-Insurance - capital assets Fund Totals Exhibit 6 Transfers In 144,692 1,860,000 291,314 84,413 25,726 2,406,145 Transfers Out 277,084 277,084 5,672,033 5,631,024 18,977 222,510 16,224 69,170 326,881 94,893 12,683 107,576 Self-Insurance ISF- Motor Pool - capital assets Fund Totals - 69,170 69,170 Facilities Maintenance General - return Facilities overage General - capital assets Highway User - return Facilities overage Non major - Transit - return Facilities overage Water Utility - return Facilities overage Wastewater Utility - return Facilities overage Storm Drainage Utility - return Facilities overage Solid Waste - return Facilities overage Sports Complex - return Facilities overage ISF - Motor Pool - return Facilities overage Fund Totals - 1,117,506 1,500 25,418 4,328 112,213 33,844 4,073 10,668 25,726 16,224 1,351,500 Information Technology General - capital assets General - capital assets Half-Cent -radio project Half-Cent - capital assets Non-major - GO Bond Capital Projects - capital assets Non-major - Other Grants - capital assets Water Utility - software purchases Water Utility - capital assets Wastewater Utility - software purchases Wastewater Utility - capital assets Solid waste Utility - purchase new equipment Fund Totals 406,880 868,646 14,052 607,851 159,091 12,920 357,228 3,480 24,658 90,924 2,545,730 19,000 19,000 Total Internal Service Funds 2,872,611 1,547,246 25,285,231 25,285,231 Grand Totals (concluded) 151 152 Statistical Section Slip Sheet 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 155 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 165 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 177 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 188 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 190 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. 153 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 155 156 158 159 160 161 162 163 164 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 165 166 167 168 169 170 171 172 173 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 177 178 179 180 181 182 183 184 185 186 187 Economic and Demographic Information XXX Demographic and Economic Statistics XXXI Major Employers Within the City 188 189 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 190 191 192 193 194 195 154 Table I CITY OF PEORIA, ARIZONA NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 2003 2004 2005 2006 Fiscal Year 2007 2008 2009 2010 2011 Governmental Activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ 275,314,371 23,123,757 191,628,459 $ 490,066,587 $ 396,789,364 22,011,167 108,663,727 $ 527,464,258 $ 412,711,011 35,660,531 118,007,870 $ 566,379,412 $ 523,429,904 41,483,246 131,307,050 $ 696,220,200 $ 591,763,494 40,822,727 173,833,813 $ 806,420,034 $ 602,715,532 65,528,725 220,374,709 $ 888,618,966 $ 690,708,494 54,945,644 207,958,657 $ 953,612,795 $ 782,205,232 37,649,086 192,278,995 $ 1,012,133,313 $ 803,835,704 118,382,244 109,550,684 $ 1,031,768,632 $ Business-type Activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 186,811,252 63,628,468 57,594,489 $ 308,034,209 $ 216,306,907 73,597,149 58,112,123 $ 348,016,179 $ 273,024,663 83,015,115 55,874,702 $ 411,914,480 $ 311,724,201 79,329,431 53,032,272 $ 444,085,904 $ 369,615,117 32,749,544 68,959,683 $ 471,324,344 $ 427,331,359 32,967,702 41,967,371 $ 502,266,432 $ 429,764,018 33,558,490 36,507,370 $ 499,829,878 $ 469,854,140 19,474,349 53,422,064 $ 542,750,553 $ 478,230,446 22,733,731 54,791,580 $ 555,755,757 $ Primary Government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 462,125,623 86,752,225 249,222,948 $ 798,100,796 $ 613,096,271 95,608,316 166,775,850 $ 875,480,437 $ 685,735,674 118,675,646 173,882,572 $ 978,293,892 $ 835,154,105 120,812,677 184,339,322 $ 1,140,306,104 $ 961,378,611 73,572,271 242,793,496 $ 1,277,744,378 $ 1,030,046,891 98,496,427 262,342,080 $ 1,390,885,398 $ 1,120,472,512 88,504,134 244,466,027 $ 1,453,442,673 $ 1,252,059,372 57,123,435 245,701,059 $ 1,554,883,866 $ 1,282,066,150 141,115,975 164,342,264 $ 1,587,524,389 $ 1,294,887,932 194,199,878 121,430,759 $ 1,610,518,569 Source: Statement of Net Assets City financial records and reports 155 2012 816,149,271 169,287,522 60,397,006 $ 1,045,833,799 $ 478,738,661 24,912,356 61,033,753 564,684,770 CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) 2003 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 Storm Drain Utility 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 $ 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 $ $ 2005 Table II Fiscal Year 2007 2006 2008 2009 2010 2011 2012 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 $ 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 $ 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 $ 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 $ 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 $ 27,523,428 21,066,722 35,536,887 21,243,965 6,135,184 25,598,067 8,441,912 1,992,977 12,616,562 574,550 $ 160,730,254 $ 21,344,055 11,049,354 7,798,343 4,341,127 357,785 $ 44,890,664 $ 140,237,516 $ 23,815,912 12,469,667 8,462,126 4,623,886 344,030 $ 49,715,621 $ 158,285,386 $ 25,859,997 12,782,965 8,688,437 5,442,993 369,052 $ 53,143,444 $ 170,208,204 $ 27,058,901 14,523,268 9,458,194 5,448,667 371,540 $ 56,860,570 $ 191,110,644 $ 28,677,086 17,324,471 13,250,526 6,921,044 382,067 $ 66,555,194 $ 211,760,445 $ 32,164,325 31,039,534 10,624,589 5,235,258 331,785 $ 79,395,491 $ 238,167,499 $ 29,715,038 30,212,381 9,985,889 5,186,732 368,007 $ 75,468,047 $ 231,203,706 $ 29,582,708 19,891,729 9,773,553 5,019,605 367,644 $ 64,635,239 $ 225,365,493 $ 12,278,699 10,818,544 19,620,729 42,717,972 $ 14,305,895 10,450,539 27,215,210 51,971,644 $ 21,078,973 10,836,600 37,599,732 69,515,305 $ 22,666,481 12,117,734 103,368,209 $ 138,152,424 $ 23,226,773 13,954,308 59,793,946 96,975,027 $ 25,523,896 14,382,484 41,598,499 81,504,879 $ 20,130,962 12,574,749 51,366,296 84,072,007 $ 17,489,464 13,096,036 55,978,635 86,564,135 $ 17,722,889 13,709,669 34,932,888 66,365,446 $ 44,627,823 120,070 27,526,484 $ 72,274,377 $ 114,992,349 $ 47,136,002 129,308 34,853,722 $ 82,119,032 $ 134,090,676 $ 47,962,423 136,736 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 $ 61,936,451 145,841 22,321,213 $ 84,403,505 $ 165,908,384 $ 59,577,008 158,627 12,186,331 $ 71,921,966 $ 155,993,973 $ 62,457,821 177,710 50,899,343 $ 113,534,874 $ 200,099,009 $ 60,595,686 209,878 5,408,859 $ 66,214,423 $ 132,579,869 $ 66,048,140 140,461 8,418,314 $ 74,606,915 $ 133,074,557 $ $ $ $ $ $ $ $ $ $ (103,644,609) 4,558,626 $ (99,085,983) $ $ $ $ $ (47,115,807) 29,061,420 (18,054,387) $ $ $ (43,375,208) 37,228,368 (6,146,840) $ $ (39,054,460) 46,504,587 7,450,127 $ 21,087,664 14,288,769 35,376,433 Continued 156 $ $ (37,275,047) 23,412,309 (13,862,738) $ $ (63,700,372) 17,848,311 (45,852,061) $ $ (74,700,001) (7,473,525) (82,173,526) $ $ (69,171,524) 38,066,827 (31,104,697) $ $ (94,364,808) 1,579,184 (92,785,624) 20,935,141 23,499,906 35,905,144 22,313,810 5,437,784 31,778,203 7,416,026 1,655,935 12,595,752 574,550 $ 162,112,251 30,777,765 21,923,061 10,859,872 5,284,940 802,246 400,405 $ 70,048,289 $ 232,160,540 $ 17,331,656 11,071,988 30,063,998 58,467,642 CITY OF PEORIA, ARIZONA CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) 2003 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 Special Item: Close out of Section 8 Housing 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 Business-type Activities Total primary government Source: $ $ $ $ $ $ 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 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 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 Table II Fiscal Year 2007 2006 2008 2009 2010 2011 2012 $ 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 $ 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 $ 3,629,629 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 $ 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 $ 3,628,286 22,406,879 58,082,217 4,037,897 11,649,489 13,408,996 4,548,154 1,354,607 76,640 801,394 5,124,916 (11,119,348) $ 114,000,127 $ 3,187,679 19,030,940 60,719,648 4,084,163 12,087,651 13,231,006 4,944,181 959,479 50,192 3,965,187 (464,390) (3,335,912) $ 118,459,824 $ $ $ 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 $ 3,314,515 9,779,262 $ 13,093,777 $ 158,993,081 1,970,474 3,066,497 $ 5,036,971 $ 144,730,801 $ 444,698 1,379,738 3,029,412 $ 4,853,848 $ 132,545,890 306,672 11,119,348 $ 11,426,020 $ 125,426,147 284,427 3,335,912 $ 3,620,339 $ 122,080,163 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 $ $ $ $ $ $ $ $ Statement of Activities City financial records and reports (concluded) 157 82,198,932 30,942,088 $ 113,141,020 $ 64,993,829 (2,436,554) 62,557,275 58,520,518 42,920,675 $ 101,441,193 $ 19,635,319 13,005,204 32,640,523 $ 14,815,215 8,178,965 22,994,180 Table III CITY OF PEORIA, ARIZONA PROGRAM REVENUES LAST TEN FISCAL YEARS (accrual basis of accounting) 2003 Program Revenues Governmental Activities Charges for services General Government $ Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues $ 1,468,973 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 Business-type Activities Charges for services Water Utility $ 24,364,355 Wastewater Utility 10,623,544 Solid Waste Utility 7,277,520 Stadium 2,225,211 Storm Drain Utility Housing 137,193 Operating grants and contributions 120,070 Capital grants and contributions 27,526,484 Total business-type activities program revenues $ 72,274,377 Total primary government program revenues $ 114,992,349 2004 $ $ $ $ $ 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 2005 $ $ $ 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 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 Fiscal Year 2007 2006 $ 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 $ $ $ 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 Source: Statement of Activities City financial records and reports 158 $ 2,747,370 6,927,760 1,283,559 1,737,666 4,614,166 433,400 5,318,686 164,166 13,954,308 59,793,946 96,975,027 33,511,407 14,907,360 10,395,273 2,953,365 150,877 135,174 18,219,423 $ 80,272,879 $ 177,247,906 2008 $ $ $ $ $ 2,293,928 8,111,802 790,269 1,717,319 3,526,784 345,417 8,607,833 130,544 14,382,484 41,598,499 81,504,879 31,866,685 15,423,188 11,216,061 3,279,780 150,737 145,841 22,321,213 84,403,505 165,908,384 2009 $ $ $ $ $ 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 2010 $ $ $ $ $ 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 2011 $ $ $ $ $ 3,111,713 6,642,642 1,050,490 1,580,191 1,323,358 516,778 3,350,178 147,539 13,709,669 34,932,888 66,365,446 30,004,279 15,933,154 11,904,142 2,629,765 124,346 209,878 5,408,859 66,214,423 132,579,869 2012 $ $ $ 2,839,814 6,810,891 1,112,621 1,693,101 1,720,697 424,505 2,687,325 42,702 11,071,988 30,063,998 58,467,642 33,896,048 16,624,110 11,873,744 2,711,665 804,487 138,086 140,461 8,418,314 $ 74,606,915 $ 133,074,557 CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 2004 2003 General Fund Reserved Unreserved Unspendable Restricted Committed Assigned Unassigned Total General Fund $ $ 730,494 41,955,367 42,685,861 $ $ 3,061,807 43,989,346 47,051,153 2005 $ $ 150,764 52,553,522 52,704,286 Fiscal Year 2007 2006 $ $ Table IV 948,135 65,224,766 66,172,901 $ $ 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 2011 * $ $ 2012 537,000 30,671 34,288,769 3,891,174 13,429,595 52,177,209 $ $ 1,163,721 70,016 33,590,254 3,705,809 12,878,675 51,408,475 General Fund as % of current year revenues (1) Reserved Unreserved Unspendable Restricted Committed Assigned Unassigned Total General Fund 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% 0.0% 0.0% 0.6% 0.0% 39.7% 4.5% 15.5% 60.4% 0.0% 0.0% 1.3% 0.1% 38.3% 4.2% 14.7% 58.6% General Fund as % of current year expenditures (2) Reserved Unreserved Unspendable Restricted Committed Assigned Unassigned Total General Fund 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% 0.0% 0.0% 0.5% 0.0% 34.4% 3.9% 13.5% 52.3% 0.0% 0.0% 1.2% 0.1% 35.2% 3.9% 13.5% 53.9% All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Unspendable Restricted Committed Assigned Unassigned Total All Other Governmental Funds * $ 91,475,811 20,546,432 9,533,035 $ 121,555,278 $ 60,276,977 $ 82,831,364 $ 21,662,579 8,300,215 90,239,771 25,365,373 (4,566,517) $ 103,630,220 $ 84,931,450 41,501,121 (21,988,077) $ 104,444,494 $ 154,966,318 $ 143,600,643 $ 165,129,365 $ 147,974,858 $ 49,251,757 18,917,375 $ 223,135,450 62,170,663 23,589,696 $ 229,361,002 57,506,689 29,428,677 $ 252,064,731 55,546,744 22,203,699 $ 225,725,301 108,919 169,837,817 11,040,682 30,055,251 $ 211,042,669 The City implemented GASB Statement 54 - Fund Balance Reporting and Governmental Fund Type Definitions in 2011. Previous years have not been restated to the new required format. (1) Revenues are operating revenues. Does not include Other Financing Sources. (2) Expenditures are operating expenditures. Does not include Other Financing Uses. Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 159 - $ - 95,828 168,127,814 10,064,814 40,566,996 (84,673) $ 218,770,779 CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 2003 Revenues Taxes Intergovernmental Charges for services Licenses and Permits Fines and Forfeitures Rents Investment Earnings Special assessments Miscellaneous Total Revenues $ 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 $ $ $ Expenditures General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Other Capital Outlay Debt Service Interest Principal Total Expenditures 6,918,514 10,612,697 $ 111,779,079 Excess of Revenues over (under) Expenditures $ 13,094,326 11,339,011 17,462,775 9,633,471 4,095,448 8,740,707 3,217,245 2,452,063 3,707 24,209,115 781,876 $ $ 62,170,531 36,747,293 30,768,591 5,041,680 1,823,626 174,837 2,652,530 2,252,142 2,560,291 $ 144,191,521 $ 15,386,608 12,395,888 18,663,675 10,440,007 4,253,710 8,825,795 3,107,787 1,590,605 16,823 52,502,380 $ $ $ 7,046,576 15,304,972 $ 144,972,313 $ (22,041,409) $ $ $ $ 164,548 6,193,157 (11,266,511) (4,908,806) Net Change in Fund Balance $ $ (26,950,215) Debt Service as a percentage of noncapital expenditures Source: 20.02% 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 49,213,258 24,613,603 (22,255,141) 15,978,782 (21,772,434) $ 45,778,068 46,559,944 2006 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 Other Financing Sources (Uses) Proceeds from borrowing Proceeds from refunding Payments to bond refunding escrow agent Premium on bonds issued Special Item: Close out Section 8 Housing Transfers In Transfers Out Total Other Financing Sources (Uses) $ 2005 17.68% $ Fiscal Year 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 $ $ 6,747,072 16,881,632 153,731,533 (780,792) $ $ $ 23,809,728 75,552 11,766,397 (15,827,303) 19,824,374 $ 19,043,582 19.99% $ $ 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 $ $ 24,293,547 $ 7,307,888 $ $ 6,722,550 20,559 10,116,361 (26,870,128) (10,010,658) $ 14,282,889 19.89% Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 160 2008 90,780,140 64,283,444 39,290,401 3,878,132 2,203,756 249,069 10,942,001 1,971,991 6,992,363 220,591,297 8,099,492 16,178,431 213,283,409 Table V $ 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 $ 14,544,047 21,769,313 33,340,756 19,120,991 6,669,979 14,632,287 6,408,150 2,817,716 74,142,416 $ $ 10,340,704 31,143,531 234,929,890 $ $ $ $ 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 $ $ (18,492,451) $ $ $ $ 47,000,000 273,310 16,426,715 (36,035,044) 27,664,981 $ 127,577,293 $ 9,172,530 25.80% 2010 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 11,917,582 25,988,554 242,988,904 122,090,000 18,365,000 (18,365,000) 1,502,204 17,798,434 (21,121,233) 120,269,405 17.80% 2009 $ 2011 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 $ $ 2012 88,244,772 43,917,343 16,356,566 1,672,072 3,068,861 403,321 1,238,174 2,201,463 18,441,696 175,544,268 $ 87,203,131 54,562,371 18,359,757 2,106,545 2,757,022 486,932 859,146 2,069,613 4,588,218 $ 172,992,735 15,818,173 18,784,735 33,926,463 19,463,905 6,051,667 13,891,078 6,748,102 1,952,861 29,176,335 $ 14,470,822 18,396,187 33,717,021 20,673,956 5,328,403 14,754,432 4,884,713 1,586,315 26,336,595 13,098,263 25,566,028 $ 178,812,735 $ 13,166,242 44,700,092 237,519,557 $ 12,658,032 34,309,287 192,780,638 (45,099,733) $ (65,507,373) $ (17,236,370) $ (5,820,000) $ $ 29,170,000 495,890 23,567,886 (20,963,066) 32,270,710 $ $ 68,440,000 808,192 18,855,279 (30,928,896) 57,174,575 $ 7,920,000 16,960 28,388,910 (42,075,019) (5,749,149) $ 14,715,000 13,690,000 (13,690,000) 645,188 (464,390) 16,740,587 (18,106,961) $ 13,529,424 $ 12,074,842 $ (33,236,663) $ (22,985,519) $ 22.91% 32.65% 28.71% 7,709,424 25.36% CITY OF PEORIA, ARIZONA GOVERNMENT-WIDE REVENUES BY FUNCTION LAST TEN FISCAL YEARS (accrual basis of accounting) 2003 Governmental Activities: General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Unallocated General Revenues Total Governmental Activities 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 Business-type Activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Housing Unallocated General Revenues Total Business-type Activities $ 36,926,991 24,833,732 8,031,180 2,225,211 257,263 2,696,588 $ 74,970,965 Total Primary Government $ 195,632,995 Note: $ 2004 $ $ $ 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 $ 45,639,906 24,595,006 8,493,458 3,133,022 257,640 1,349,492 83,468,524 $ 217,617,157 Fiscal Year 2006 2005 $ $ $ 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 $ 49,238,279 34,300,518 9,454,742 2,961,792 264,877 2,846,925 99,067,133 $ 261,098,841 $ $ $ 2007 5,471,741 14,003,877 3,128,006 3,729,960 6,459,264 98,404,102 4,950,541 2,004,933 121,413,631 259,566,055 $ $ $ 36,888,294 16,668,034 10,732,529 2,859,794 283,562 5,222,148 72,654,361 $ 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 Unallocated General Revenues do not include transfers between governmental activities and business-type activities. Source: Statement of Activities. City financial records and reports 161 $ 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 Table VI 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 $ 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 $ 2011 $ 2012 $ 3,483,196 8,255,882 1,920,702 2,093,976 2,188,283 41,466,907 5,443,608 1,512,892 125,119,475 191,484,921 $ 3,138,886 8,783,964 2,249,525 2,347,846 2,243,301 35,542,046 2,862,435 1,299,639 121,795,736 $ 180,263,378 57,524,177 41,038,763 11,884,971 2,800,976 285,987 1,824,436 $ 115,359,310 $ 33,948,181 17,276,923 12,025,330 2,629,765 334,224 306,672 66,521,095 38,998,580 19,869,458 11,944,178 2,711,665 804,487 278,547 284,427 74,891,342 $ 332,644,899 $ 258,006,016 $ $ 255,154,720 Table VII CITY OF PEORIA, ARIZONA TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2004 40,579,522 2,495,803 2005 $ 45,535,559 2,498,995 1,838,829 8,603,538 2,077,178 9,749,392 2,285,792 10,688,571 2,612,397 12,393,713 2,896,360 13,211,927 2,975,900 19,176,935 2,691,525 24,105,340 Special District* Taxes 834,891 619,973 868,197 796,821 1,571,936 3,633,664 In Lieu Taxes 175,135 252,345 293,417 273,644 242,246 256,107 Transaction Taxes (1) Franchise Taxes Property Taxes Primary Taxes Secondary Taxes $ 2003 35,932,415 2,291,179 $ $ 2006 61,156,870 3,004,895 $ 2007 68,873,970 3,983,701 $ 2008 68,466,910 3,848,746 $ 2009 59,004,816 4,019,182 2011 58,082,217 4,037,897 2012 $ 60,719,648 4,084,163 3,188,468 23,564,788 2,866,098 20,037,286 2,521,692 16,735,182 3,729,995 3,554,681 2,978,348 2,895,288 345,155 243,351 242,926 247,158 $ 2010 56,276,937 3,955,416 $ Total Property Taxes $ 11,452,393 $ 12,698,888 $ 14,135,977 $ 16,076,575 $ 17,922,469 $ 26,042,606 $ 30,872,015 $ 30,551,288 $ 26,124,658 $ 22,399,320 Total Taxes $ 49,675,987 $ 55,774,213 $ 62,170,531 $ 80,238,340 $ 90,780,140 $ 98,358,262 $ 93,896,013 $ 90,783,641 $ 88,244,772 $ 87,203,131 (1) See Detail in Table X Notes: Includes all governmental fund types. * Special Districts include Street Light Improvement Districts (SLIDs), Maintenance Improvement Districts (MIDs) and Community Facilities Districts (CFDs). SLIDs and MIDs levy primary property taxes. CFDs may levy both primary and secondary property taxes. Source: City financial records 162 Table VIII CITY OF PEORIA, ARIZONA 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: $ $ 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 $ $ 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 $ $ Includes all governmental fund types Includes all governmental revenues, including revenues from federal government City financial records 163 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 2011 $ 11,649,489 13,408,996 4,548,154 8,018,271 5,036,285 1,256,148 $ 43,917,343 $ $ 2012 12,087,651 13,231,006 4,944,181 7,714,173 2,226,322 14,359,038 54,562,371 CITY OF PEORIA, ARIZONA DEVELOPMENT/EXPANSION FEES BY TYPE LAST TEN FISCAL YEARS 2004 2003 Governmental Activities: Streets Parks/Recreation Library Public Safety General Government Total Governmental Activities $ $ 2,064,748 2,089,955 457,898 1,124,351 1,012,151 6,749,103 Business-type Activities: Water Expansion Water Resource Wastewater Expansion Solid Waste Expansion Total Business-type Activities Total Primary Government $ $ 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 Fiscal Year 2006 2005 $ $ 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 2007 Table IX 2008 2009 2010 2011 $ 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 $ 2,754,212 1,040,832 108,307 480,085 239,759 $ 4,623,195 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 Source: City financial records 164 $ 2012 $ $ 4,521,099 1,425,820 141,526 869,324 184,101 7,141,870 1,111,092 225,007 563,836 121,188 $ 2,021,123 $ 1,531,494 372,805 916,117 70,434 2,890,850 $ 6,644,318 $ 10,032,720 CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS Fiscal Year 2007 Table X 2003 2004 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 29,247,900 3,611,614 6,980,633 6,917,391 1,294,565 7,469,189 856,274 426,017 1,278,634 $ 31,483,859 3,305,409 7,414,803 7,232,286 1,304,092 7,776,190 896,320 566,453 740,236 Total $ 35,932,415 $ 40,579,522 $ 45,535,559 $ 61,156,869 $ 68,873,970 $ 68,466,910 $ 59,004,816 $ 56,276,937 $ 58,082,217 $ 60,719,648 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% 8.9% -20.6% 0.8% 0.2% -7.9% 5.0% 5.1% 13.7% -3.5% 7.6% -8.5% 6.2% 4.6% 0.7% 4.1% 4.7% 33.0% -42.1% 6.6% 12.9% 12.2% 34.3% 12.6% -0.6% -13.8% -17.8% 3.2% 4.5% % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other Total Note: 2005 2006 Includes all governmental fund types Source: City financial records and reports 165 2008 2009 2010 2011 2012 Table XI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Year Taxes Are Payable 2006 2007 2008 2003 2004 2005 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% 1.80% 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% 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% 5.60% 5.50% 5.60% 5.50% 5.60% 5.50% 5.60% Source: Model City Tax Code, ADOR 91-5312 166 2009 2010 2011 2012 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% 6.60% 5.50% 6.60% 5.50% 6.60% Table XII CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND SEVEN YEARS AGO 2012 Category Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others Total # of Payers 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 3,141 3,828 360 6,083 14 130 1,991 60 88 20.01% 24.39% 2.29% 38.76% 0.09% 0.83% 12.69% 0.38% 0.56% $ 31,483,859 3,305,409 7,776,190 7,414,803 7,232,286 1,304,092 566,453 896,320 740,236 51.9% 5.4% 12.8% 12.2% 11.9% 2.1% 0.9% 1.5% 1.2% 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% 15,695 100.00% $ 60,719,648 100.00% 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 167 Table XIII 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 $ 662,785,441 9.0% 5,226 126,815 $ $ 46,278 11.3% $ 750,429,221 13.2% 5,651 132,805 $ $ 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 Full Cash Value % Growth Net Assessed Value as a Percentage of Full Cash Value $ 170,508,040 50,351,826 955,802 28,555 - Total Direct Secondary Tax Rate Full Cash Value Per Capita 2003 403,937,371 37,003,847 50,780 2006 $ 582,512,691 64,003,067 218,209,727 58,949,534 1,712,708 30,780 - 242,554,778 73,674,495 1,724,400 - 827,633,655 10.3% 6,039 137,045 7,525,637,782 11.6% $ 11.1% 54,914 11.0% Fiscal Year 2007 2008 626,591,494 $ 1,041,693,334 75,761,506 116,115,688 $ 293,807,014 117,630,028 1,830,109 - 2009 $ 1,219,595,280 146,413,989 2010 $ 1,048,710,389 155,720,660 419,192,584 207,476,727 1,837,324 76,020 - 495,336,050 193,685,182 1,647,040 64,530 - 334,323,557 148,077,787 1,918,660 58,450 - (a) (b) (c) Commercial and Industrial (c) 25.0% 25.0% 25.0% 24.5% 24.0% 23.0% 22.0% 21.0% 21.0% 20.0% Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% $ 495,318,990 147,216,152 1,563,689 53,641 - 2012 687,456,278 122,978,913 378,992,788 85,330,391 1,429,130 140,493 7,869 $ 1,642,187,476 47.2% $ 1,994,591,924 21.5% $ 1,895,163,851 -5.0% $ 1,609,972,512 -15.0% $ 1,276,335,862 -20.7% $ $ $ $ $ $ $ 6,646 145,125 7,264 153,592 1.30 1.20 8,736,985,007 16.1% $ 60,203 9,999,273,539 14.4% $ 11.0% 65,103 11.2% 10,557 155,560 12,524 159,263 1.25 15,118,988,316 51.2% $ 97,191 12,301 154,065 1.25 18,279,838,277 20.9% $ 114,778 10.9% 1.25 17,162,776,025 -6.1% $ 111,400 10.9% Property Classifications (a) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2011 818,535,888 147,284,152 $ 1,115,620,151 15.7% 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) 20% 21% 21% 22% 21% 20% 18% 17% 17% 15% $ $ 964,469,431 16.5% 1.30 6,743,773,145 14.9% $ 2005 497,294,057 51,436,849 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 168 11.0% 10,377 155,148 1.25 14,588,623,722 -15.0% $ 94,030 11.0% 8,141 156,780 1.25 11,862,384,776 -18.7% $ 75,663 10.8% CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 2003 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 0.29 1.30 2004 $ 0.29 1.30 Fiscal Year 2006 2007 2005 $ 0.29 1.30 $ 0.29 1.30 $ 0.28 1.20 Table XIV 2008 $ 0.24 1.25 2009 $ 0.19 1.25 2010 $ 0.19 1.25 2011 $ 0.19 1.25 2012 $ 0.19 1.25 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 3.24 2.09 3.71 1.68 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 2.20 0.64 2.68 0.54 7.36 6.20 7.44 5.85 - - 7.34 5.71 4.42 6.56 6.63 5.19 5.98 4.56 5.74 3.74 5.23 4.30 (1) The school district tax levies are for the Peoria Unified School District, which serves the majority of the City of Peoria. Other areas of the City are served by the Deer Valley Unified School District, whose most recent rates are as follows: Deer Valley Primary $ 3.86 Secondary 2.39 (2) These tax rates include the rates for Maricopa County, Education Equalization, Maricopa Community College District, West Maricopa Education Center, Maricopa County Flood Control District, Fire District Assistance, County Free Library, Central Arizona Water Conservation District, and Special Health Care. The various rates for the most recent year are as follows: Primary Secondary Maricopa County $ 1.24 $ Education Equalization 0.43 Community College District 1.01 0.20 West Maricopa Education Center 0.05 County Flood Control District 0.18 Fire District Assistance 0.01 County Free Library 0.05 Central AZ Water Conservation 0.10 Special Health Care 0.15 $ 2.68 $ 0.74 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 169 5.63 3.98 6.58 3.47 Table XV CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 2004 2003 Total Direct City Primary Secondary School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary $ 1,836,000 8,616,211 $ Tax Levies Fiscal Year 2006 2005 2,077,622 9,755,580 $ 2,295,435 10,759,238 $ 2,640,883 12,538,103 $ 2007 2008 3,012,725 13,387,442 $ 3,002,150 20,527,343 2,849,397 24,932,399 $ 2011 3,202,665 23,689,548 $ 2012 2,901,540 20,124,656 $ 2,411,739 15,954,198 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 63,956,114 43,487,879 60,801,278 27,635,770 611,337,637 144,920,909 726,446,055 145,100,016 726,446,055 145,100,016 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 811,397,481 312,172,569 1,016,398,826 312,960,824 1,030,448,332 295,233,122 1,031,164,830 264,170,408 653,138,786 193,993,258 774,241,944 197,309,619 777,087,034 200,151,198 451,841,923 229,728,799 758,698,013 302,890,898 815,445,197 349,264,359 87,896,692 54,602,359 (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 $ 477,571,468 $ Education Equalization 163,937,848 Community College District 389,655,514 75,935,239 West Maricopa Education Center 6,834,877 County Flood Control District 62,401,172 Fire District Assistance 3,251,752 County Free Library 19,070,066 Central AZ Water Conservation 38,781,832 Special Health Care 57,895,470 $ 1,031,164,830 $ 264,170,408 Note: $ 2010 39,965,149 40,456,138 (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: Primary Secondary 2009 All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 170 885,318,337 384,200,264 1,082,860,554 395,553,654 1,097,305,986 358,845,657 1,094,377,847 307,760,376 CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XVI 2003 2012 Taxpayer Arizona Public Service Vestar Arizona XLVIII LLC Parke West LLC Qwest Corporation DDRA Arrowhead Crossing LLC Plaza III Limited Partnership Target Corporation Sprint Nextel Wireless LP BCC Development Inc Inland Western Glendale LLC Lake Pleasant Pavilion LLC Southwest Gas Corporation RES-AZ HP 160 LLC Wal-Mart Stores Inc PDG America Properties LLC Cox Communications Developers Diversified Realty Corp Larry Miller Real Estate - Peoria LLC Albertsons Inc Freedom Plaza Limited Partner North Valley Shopping Center LLC Pivotal Realty AZ LLC Lou Grubb Chevrolet Peoria Sunset LLC Harkins Phoenix Cinamas LLC Polar Ice Peoria Entertainment Inc Lowes Home Improvement Warehouse Total Taxable Secondary Assessed Value $ 23,195,396 9,215,722 6,681,435 5,418,735 4,939,537 4,385,299 4,259,111 4,106,418 4,007,925 3,636,006 3,305,504 3,304,493 3,137,280 2,955,940 2,878,480 $ 85,427,281 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Percentage of Total City Taxable Secondary Assessed Value 1.82% 0.72% 0.52% 0.42% 0.39% 0.34% 0.33% 0.32% 0.31% 0.28% 0.26% 0.26% 0.25% 0.23% 0.23% 6.69% Taxable Secondary Assessed Value $ 13,106,165 8,596,738 3,778,690 3,765,874 3,649,428 5,459,036 5,384,272 3,464,260 3,410,897 2,876,272 2,813,788 2,668,314 2,454,418 2,437,551 2,331,739 2,326,337 2,270,878 $ 70,794,657 Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For Fiscal year 2012, the assessed value of Salt River Project property within the City of Peoria is $16,627,408. Source - Maricopa County Treasurer's Office 171 Rank 1 Percentage of Total City Taxable Secondary Assessed Value 1.98% 2 1.30% 5 6 0.57% 0.57% 7 0.55% 3 4 8 9 10 11 12 13 14 15 16 17 0.82% 0.81% 0.52% 0.51% 0.43% 0.42% 0.40% 0.37% 0.37% 0.35% 0.35% 0.34% 10.68% CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Current Levy $ Current Tax Collections Percent of Levy Collected 2005 2006 10,452,211 $ 11,833,202 $ 13,054,673 $ 15,178,986 10,209,517 11,624,426 12,817,287 14,827,945 97.7% Delinquent Tax Collections Total Tax Collections Total Collection as Percent of Current Levy * $ Fiscal Year 2007 2004 2003 98.2% 98.2% 97.7% Table XVII 2008 2009 2010 2011 2012 $ 16,400,167 $ 23,529,493 $ 27,781,796 $ 26,892,213 $ 23,026,196 $ 18,365,937 15,926,805 22,822,879 26,269,411 25,792,963 22,021,842 17,780,536 97.1% 97.0% 94.6% 95.9% 95.6% 96.8% 325,376 251,331 143,034 91,070 52,195 55,670 71,715 235,378 466,091 519,216 10,534,893 $ 11,875,757 $ 12,960,321 $ 14,919,015 $ 15,979,000 $ 22,878,549 $ 26,341,126 $ 26,028,341 $ 22,487,933 $ 18,299,752 100.8% 100.4% 99.3% 98.3% 97.4% 97.2% 94.8% 96.8% 97.7% 99.6% Notes: Collections include secured levies. * Since tax collections are done by the County, and detail of the tax year for delinquent tax collections are not provided to the City, all delinquent taxes are shown in the year collecte Source: Maricopa County Treasurer City financial records and reports 172 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 2003 2004 Water Average bill $ 39.61 $ 39.06 $ % Increase 4.87% -1.39% Wastewater Average bill 18.73 18.53 % Increase 8.14% -1.07% Residential Solid Waste Average bill 12.49 12.49 % Increase no change no change 2003 Water # % Increase Wastewater # % Increase Residential Solid Waste # % Increase 2004 Average Utility Bill Amounts Last Ten Fiscal Years 2006 2007 2008 2005 35.53 $ -9.04% 34.59 $ -2.65% 34.85 $ 0.75% 2009 35.59 $ 2.12% 2010 36.73 $ 3.20% 2011 35.46 $ -3.46% 34.36 $ -3.10% 2012 38.00 10.59% 19.47 5.07% 18.74 -3.75% 21.52 14.83% 21.24 -1.30% 21.36 0.56% 21.45 0.42% 20.45 -4.66% 21.49 5.09% 13.32 6.65% 14.58 9.46% 14.91 2.26% 14.85 -0.40% 15.18 2.22% 15.36 1.19% 15.35 -0.07% 15.40 0.33% Utility Service Connections Last Ten Fiscal Years 2006 2007 2008 2005 2009 2010 2011 2012 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 1.50% 47,793 0.39% 48,509 1.50% 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% 50,715 0.66% 51,527 1.60% 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% 48,752 0.76% 49,506 1.55% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2012 Meter Size 5/8"-3/4" 1" 1 1/2" 2" 3" 4" 6" 8" Source: Table XVIII Charges for Wastewater Services As of June 30, 2012 All Customers $ 15.54 18.39 28.79 40.16 70.53 104.65 199.39 313.10 City customer service and billing records (continued) 173 Monthly Base Fee (a) Meter Size 5/8"-3/4" $ 5.54 1" 5.54 1 1/2" 7.64 2" 9.94 3" 16.09 4" 22.99 6" 42.16 8" 65.17 Monthly Volume Charge (b) All Customers 2.17 Table XVIII CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA Volume Consumption (gallons) 0 - 4,000 4,001 - 10,000 10,001 - 20,000 10,001 - 25,000 0 - 10,000 10,001 - 50,000 50,001+ Volume Charges for Water Services Usage Per Month As of June 30, 2012 Residential Multiplex (per 1,000 gallons) (per 1,000 gallons) $ 1.00 $ 2.59 3.66 4.00 1.00 2.59 3.66 Commercial (per 1,000 gallons) $ 1.00 2.59 3.66 Charges for Residential Solid Waste As of June 30, 2012 Monthly fee $ 15.06 Single container & recycling 12.06 Additional container Water Meter Permit Charges As of June 30, 2012 Meter Size Charge 285 3/4" $ 1 1/2" 463 2" 586 - 983 3" 1,666 - 2,545 4" 2,305 - 3,306 6" 3,397 - 5,310 Hydrant meter 1,280 Commercial accounts By meter size Charges for Storm Water As of June 30, 2012 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) 174 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 2003 2005 2004 2006 Table XVIII 2007 2008 2009 2010 2011 2012 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 6,640,038 15,712 180,544 18.19 28.82 25 22.2 6,828,944 14,904 178,850 20.43 30.00 28 37.3 6,890,083 15,056 180,679 20.10 32.00 27 40.0 7,889,653 16,213 194,552 23.21 32.00 27 40.0 8,220,760 16,320 195,840 24.46 34.40 29 40.0 8,626,688 14,751 177,016 23.63 33.39 31 41.8 8,674,450 14,606 175,270 23.93 34.84 31 42.0 8,212,711 13,720 164,636 23.69 35.40 32 42.0 8,003,947 13,267 159,203 23.64 32.45 32 42.0 8,448,795 13,839 166,070 24.13 32.45 32.00 40.0 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 4.00 2.25 N/A 10.00 4.00 2.25 N/A 10.00 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 0.966 0.156 N/A 2.381 0.918 0.162 N/A 2.527 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 2.65 0.43 N/A 6.52 2.52 0.44 N/A 6.92 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 3.20 0.63 N/A 8.35 3.04 0.66 N/A 11.34 60,516 19,642 600 80,758 64,358 19,157 1,133 84,648 65,950 18,436 1,523 85,909 69,191 22,943 1,690 93,824 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) 175 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 47,989 20,340 16,277 84,606 46,299 19,700 15,715 81,714 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND NINE YEARS AGO 2012 Entity City of Peoria Padre's Pump Station Desert Harbor Trilogy at Vistancia Ventana Lakes N. of Beardsley Lake Casa Del Sol East Sun Garden Park II H/O Assn. Centennial High School Sun Garden Mobilie Home Park Desert Harbor sprinklers Freedom Plaza LTD Partnership Polynesian Village Greenway Water Treatment Plant Arizona American Water Co. MHC Operating Ltd. Partnership Type of User Sports Complex Homeowner's Association Commercial Landscape Homeowner's Association Multi-Family Residential Homeowner's Association Public School Homeowner's Association Homeowner's Association Health Care Facility Homeowner's Association Water Treatment Plant Water Utility Homeowner's Association % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 7,623 1 1.08% 7,144 2 1.01% 2,682 3 0.38% 2,401 4 0.34% 2,174 5 0.31% 1,966 6 0.28% 1,550 7 0.22% 1,464 8 0.21% 1,272 9 0.18% 1,237 10 0.18% - Source: City customer service and billing records (concluded) 176 Table XVIII 2003 % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 3,438 3 0.62% 7,236 1 1.31% 1,675 6 0.30% 1,565 9 0.28% 1,245 8 0.22% 2,108 5 0.38% 1,624 7 0.29% 4,114 2 0.74% 2,413 4 0.44% 1,330 10 0.24% Table XIX CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Fiscal Year 2003 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 Long-Term Loan Payable 2004 68,629,389 23,640,141 4,625,000 15,444,341 21,250,000 $ 30,740,000 55,084,081 2,759,859 - 2005 64,980,000 22,255,141 4,305,000 12,938,689 21,250,000 $ 27,350,000 52,606,867 2,759,859 - 2006 $ 358,413,884 $ 422,209,922 $ 458,153,746 $ 463,659,105 $ 428,920,537 $ 412,613,906 $ $ 2,333.55 $ 2,714.13 $ 2,876.71 $ 3,009.50 $ 2,764.59 $ 2,631.80 213,828,854 Total debt per capita $ $ 1,569.56 $ 1,560.28 Total Debt as a % of Personal Income 6.0% 5.1% 4.8% 1,422.57 4.2% Source: City financial records. See Exhibits 1 & 2 and footnote 14. 177 6.7% $ 19,555,000 127,917,495 1,579,347 1,235,000 7.8% 183,060,000 60,985,393 3,005,000 10,402,812 63,060,000 $ 18,000,000 117,346,302 1,229,607 1,064,632 8.4% 184,960,000 55,943,338 8,042,321 60,890,000 $ 2012 $ 206,449,823 $ 21,050,000 88,021,820 1,906,470 - 126,195,000 65,795,653 3,295,000 12,027,427 64,610,000 2011 23,275,000 47,387,253 2,226,422 - 208,445,556 $ 2010 25,395,000 50,042,301 2,505,001 - $ 142,835,000 21,653,530 3,570,000 13,292,064 66,085,000 2009 $ 51,205,000 24,628,578 3,830,000 9,822,570 44,075,000 $ 222,172,811 $ 2008 55,380,000 20,199,999 4,075,000 11,431,553 44,800,000 Total Primary Government 1,751.94 2007 15,780,000 130,298,508 861,662 6,883,276 8.7% 167,580,000 58,365,965 6,155,000 58,615,000 $ 15,780,000 121,975,538 449,034 - 7.7% 170,960,000 52,480,000 4,660,000 56,230,000 38,480,000 89,803,906 - 7.3% CITY OF PEORIA, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO FULL CASH VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Table XX Fiscal Year 2003 Bonded Debt (1) Less: Debt Service Reserves (2) Net Bonded Debt 2004 2005 2006 2007 2008 2009 2010 2011 2012 $ 68,629,389 $ 64,980,000 $ 55,380,000 $ 51,205,000 $ 142,835,000 $ 126,195,000 $ 183,060,000 $ 184,960,000 $ 167,580,000 $ 170,960,000 $ 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 31,849,469 $ 135,730,531 30,782,503 $ 140,177,497 Percentage of Net Bonded Debt to Full Cash Value 0.9% 0.7% 0.5% 0.3% 1.1% 0.6% 0.8% 0.9% 0.9% 1.2% Net Bonded Debt Per Capita $420 $347 $276 $186 $704 $577 $867 $971 $875 $894 Net Bonded Debt as a % of Personal Income 1.43% 1.12% 0.85% 0.54% 2.01% 1.66% 2.53% 2.82% 2.43% 2.48% (1) Represents face value of general obligation debt outstanding (2) Fund balance of GO Bond Debt Service Fund per the fund financial statements 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. 178 Table XXI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2012 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 Nadaburg No. 81 Vistancia Community Facilities District 61,764,402,437 38,760,296,714 38,760,296,714 35,056,838,356 38,760,296,714 38,760,296,714 38,760,296,714 38,781,832,368 13,669,753,823 General Obligation Debt Outstanding $ Percentage Applicable to City of Peoria Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria (1) 671,250,000 - 2.07% 3.29% 3.29% 3.64% 3.29% 3.29% 3.29% 3.29% 9.33% $ 1,644,626,413 2,287,639,525 72,550,941 202,610,000 214,365,000 1,560,000 87.72% 11.87% 0.29% 177,729,492 25,445,126 4,524 203,179,142 1.68 2.39 0.86 102,606,002 56,230,000 100.00% 56,230,000 2.10 Total overlapping 22,084,125 22,084,125 193,044,125 $ 0.20 0.18 0.05 0.01 0.15 0.10 0.05 281,493,267 Direct: City of Peoria $ 1,276,335,862 $ 170,960,000 100.00% Total direct and overlapping general obligation bonded debt (1) - Percentage applicable to the City is determined from parcel tax codes assigned by Maricopa County for property taxation. (2) - 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: - Exhibit 1 to the Financial Statements - Maricopa County Treasurer - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 179 170,960,000 $ 452,453,267 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit Fiscal Year 2003 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 Nadaburg No. 81 $ 1,542,433 8,102,375 9,644,808 78,364,808 2004 $ 550,505 71,257 621,762 65,601,762 2005 $ 11,690,706 11,690,706 67,070,706 2006 $ 11,594,345 11,594,345 62,799,345 2007 $ 10,710,280 10,710,280 153,545,280 2008 $ 18,505,348 18,505,348 144,700,348 2009 $ 17,301,999 17,301,999 200,361,999 2010 $ 21,354,408 21,354,408 206,314,408 2011 $ 23,908,932 23,908,932 191,488,932 2012 $ 22,084,125 22,084,125 193,044,125 138,618,928 3,918,198 142,537,126 142,493,656 3,571,920 146,065,576 134,340,540 4,063,815 138,404,355 196,625,176 20,573,318 217,198,494 205,291,709 24,204,834 229,496,543 224,219,333 15,471,750 239,691,083 210,241,616 21,558,687 231,800,303 166,217,415 26,201,313 192,418,728 196,735,864 24,618,198 7,800 221,361,862 177,729,492 25,445,126 4,524 203,179,142 21,250,000 21,250,000 44,800,000 44,075,000 66,085,000 64,610,000 63,060,000 60,890,000 58,615,000 56,230,000 173,431,934 167,937,338 194,895,061 272,867,839 306,291,823 322,806,431 312,162,302 274,663,136 303,885,794 281,493,267 Vistancia Community Facilities District Total overlapping Table XXII Direct: City of Peoria Total direct and overlapping general obligation bonded debt 68,720,000 64,980,000 55,380,000 51,205,000 $ 242,151,934 $ 232,917,338 $ 250,275,061 $ 324,072,839 (1) - Total City-wide debt levies are County debt plus City debt. Sources: - Exhibit 1 to the Financial Statements for City debt - Maricopa County Treasurer for debt of other entities 180 142,835,000 $ 449,126,823 126,195,000 $ 449,001,431 183,060,000 $ 495,222,302 184,960,000 $ 459,623,136 167,580,000 $ 471,465,794 170,960,000 $ 452,453,267 CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS Fiscal Year 2006 2003 2004 2005 Secondary Assessed Value $ 662,785,441 $ 750,429,221 $ 827,633,655 6% Limitation Debt limit $ 39,767,126 $ 45,025,753 Total net debt applicable to limit Legal 6% Debt Margin 27,999,389 $ 11,767,737 Total net debt applicable to the limit as a percentage of debt limit 20% Limitation Debt limit Total net debt applicable to limit Legal 20% Debt Margin 2007 2008 2009 2010 2011 2012 $ 964,469,431 $ 1,115,620,151 $ 1,642,187,476 $ 1,994,591,924 $ 1,895,163,851 $ 1,609,972,512 $ 1,276,335,862 $ 49,658,019 $ 57,868,166 $ $ $ $ $ $ 25,500,000 16,400,000 13,350,000 19,525,753 $ 33,258,019 $ 44,518,166 70.4% 56.6% 33.0% $ 150,085,844 $ 165,526,731 $ 192,893,886 40,630,000 39,480,000 38,980,000 37,855,000 $ 91,927,088 $ 110,605,844 $ 126,546,731 $ 155,038,886 30.7% 26.3% 23.5% 66,937,209 28,470,000 $ 38,467,209 23.1% $ 132,557,088 Total net debt applicable to the limit as a percentage of debt limit Note: $ Table XXIII 13,310,000 $ 42.5% $ 223,124,030 108,759,030 19.6% 51.3% See footnote 14 for discussion of 6% and 20% limitations. Source: Maricopa County Assessor Exhibit 3 to the Financial Statements 181 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 $ 379,032,770 $ 199,637,770 47.3% 92,028,351 $ 321,994,502 $ 158,984,502 50.6% 73,845,152 3.6% $ 163,010,000 $ 76,580,152 2,735,000 4.7% 179,395,000 $ 96,598,351 4,570,000 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 $ 98,531,249 255,267,172 168,225,000 $ 87,042,172 65.9% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS Table XXIV Fiscal Year 2003 2004 $ 71,409,403 $ 77,041,031 4,558,797 2,015,695 6,574,492 1,385,000 748,795 2,133,795 10.86 36.11 2005 2006 2007 2008 2009 2010 2011 2012 108,336,399 $ 117,980,567 $ 122,039,417 $ 105,935,592 $ 95,507,133 $ 96,318,307 $ 98,320,667 2,310,000 1,124,432 3,434,432 2,524,999 1,017,160 3,542,159 3,295,000 1,117,252 4,412,252 3,185,000 1,005,806 4,190,806 3,400,000 842,867 4,242,867 3,575,000 670,386 4,245,386 3,990,001 482,594 4,472,595 1,569,999 505,827 2,075,826 26.15 30.58 26.74 29.12 24.97 22.50 21.54 47.36 117,848,611 10,978,453 128,827,064 101,692,725 9,356,675 111,049,400 91,261,747 8,491,097 99,752,844 91,845,712 8,682,846 100,528,558 96,244,841 9,088,210 105,333,051 MDA Debt other than Transportation Pledged Revenues (1) Debt Service Requirements Principal (2) & (6) Interest (2) & (6) Total Annual Requirements (2) Estimated Coverage $ 89,807,396 $ Transportation MDA Debt (3) Net Pledged Revenues from above (4) Additional Pledged Revenues (5) Total Debt Service Requirements Principal Interest Total Annual Requirements - 1,760,000 1,659,171 3,419,171 1,835,000 2,005,188 3,840,188 1,920,000 1,940,963 3,860,963 2,005,000 1,873,763 3,878,763 Estimated Coverage - 32.48 25.98 26.04 27.16 Note: (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, rents, 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 all outstanding MDA issues other than the 2008 MDA Transportation issue discussed below. Although the debt service on some MDA bonds, including the 2011 MDA Bonds, are funded by Enterprise Funds, the pledged revenue for all MDA debt is excise tax. (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. (6) In fiscal year 2012 the City defeased the 2003 MDA Bonds, including $2,760,000 principal and $139,000 interest. These amounts have removed from the debt service requirements above so as not to distort the comparative information. Source: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Debt service schedules, City financial records 182 Table XXV CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - REVENUE BONDS LAST TEN FISCAL YEARS 2003 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 $ 2004 $ 37,049,975 22,922,451 14,127,524 $ 12,687,621 26,815,145 $ 5,110,212 3,366,046 8,476,258 $ 2005 $ 39,176,675 22,617,415 16,559,260 $ 11,971,019 28,530,279 $ 5,867,214 3,301,391 9,168,605 $ Fiscal Year 2007 2006 $ 39,037,367 26,151,794 12,885,573 $ 13,864,643 26,750,216 $ 4,425,405 3,139,142 7,564,547 $ 2008 2009 2010 2011 2012 $ 44,982,822 27,318,074 17,664,748 $ 53,290,996 30,532,640 $ 22,758,356 $ 49,812,486 34,287,751 $ 15,524,735 $ 46,956,831 33,751,517 $ 13,205,314 $ 48,087,688 28,067,908 $ 20,019,780 $ 46,141,098 28,610,625 $ 17,530,473 $ 50,720,705 28,823,261 $ 21,897,444 $ 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 1,899,935 $ 19,430,408 2,820,416 $ 24,717,860 $ 4,672,124 2,961,997 7,634,121 4,855,563 2,641,850 $ 7,497,413 4,220,006 3,316,344 $ 7,536,350 4,372,224 4,852,315 $ 9,224,539 7,362,889 4,332,089 $ 11,694,978 7,025,129 4,501,266 $ 11,526,395 7,941,123 4,242,754 $ 12,183,877 Ratio of Total Net Revenue/ Total Bond Expense 3.16 3.11 3.54 4.00 4.21 2.83 1.63 1.85 1.69 2.03 Ratio of Net Available/ Total Bond Expense (5) 1.67 1.81 1.70 2.31 3.04 2.06 1.43 1.71 1.52 1.80 Note 2 (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 amortization. For FY09 also excludes a one-time insurance claim ($7,930,000) and a one-time charges from Central Arizona Project for back billed water capital recovery charges ($3,670,364). (3) Includes principal for Water and Sewer Revenue bonds and Water Infrastructure Finance Authority bonds. Although some MDA bonds are financed by the Utility Funds, the pledged revenue is excise tax therefore the debt is included in the MDA Bond debt coverage calculations on Table 24. (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. (6) In FY2012 $24,810,509 in principal and $405,829 in interest were defeased. These additional debt payments have been removed from the FY12 debt service requirements so as not to distort the ratios. 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 183 Note 6 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS Table XXVI Fiscal Year 2003 Pledged Revenues (1) Debt Service Requirements Principal Interest (2) Total Annual Requirements Estimated Coverage $ 5,876,529 $ 1,889,351 1,091,160 2,980,511 2004 $ 4,756,382 $ 2,505,652 972,553 3,478,205 1.97 1.37 2005 $ 3,547,789 $ 1,507,136 828,532 2,335,668 1.52 2006 $ 3,516,277 $ 1,608,983 747,720 2,356,703 2007 $ 3,216,095 $ 1,480,506 638,657 2,119,163 1.49 1.52 2008 2009 $ 3,167,933 $ 1,264,637 697,840 1,962,477 2010 $ 3,365,342 $ 1,624,615 675,958 2,300,573 1.61 $ 3,402,865 $ 2,360,492 559,205 2,919,697 1.46 (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 184 2011 1.17 2012 $ 2,645,451 $ 1,887,322 432,302 2,319,624 1.14 $ 2,262,112 $ 1,495,000 316,720 1,811,720 1.25 CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) $ 2003 2,301,354 $ 2,291,817 877,315 3,169,132 Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) $ 2004 2,088,695 $ 2,069,962 504,165 2,574,127 99.6% $ 14,086,246 $ 2005 2,065,519 $ 2,057,821 186,624 2,244,445 99.1% $ 12,345,284 $ 2006 1,987,461 $ 1,983,885 275,392 2,259,277 99.6% $ 10,845,765 $ Fiscal Year 2007 1,965,107 $ 2008 1,749,724 2009 $ 2,196,027 $ 1,961,724 7,818 1,969,542 1,749,246 44,061 1,793,307 2,193,992 2,041 $ 2,196,033 99.8% $ 9,243,866 Table XXVII $ 99.8% $ 12,782,394 $ 100.0% 99.9% 11,476,365 $ 9,871,061 (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 administrative charges, interest and penalties. Source: City financial records and reports 185 $ 2010 2,211,609 $ 2,211,599 38,301 2,249,900 $ 2011 2,171,435 $ 2,171,435 2,171,435 100.0% $ 8,141,515 $ 2012 1,849,026 $ 1,848,788 205,901 2,054,689 100.0% $ 6,328,423 100.0% $ 4,551,324 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 $ 2003 10,612,697 6,918,514 17,531,211 2004 $ 9,737,936 6,299,626 $ 16,037,562 Total Governmental Expenditures $ 111,779,079 $ 143,220,840 $ 2005 15,304,972 7,046,576 22,351,548 2006 $ 16,881,632 6,747,072 $ 23,628,704 $ 144,972,313 $ 153,731,533 $ $ Fiscal Year 2007 2008 16,178,431 $ 31,143,531 8,099,492 10,340,704 24,277,923 $ 41,484,235 $ $ $ 213,283,409 $ 234,929,890 Table XXVIII $ 2009 25,988,554 11,917,582 37,906,136 $ 242,988,904 $ $ $ 2010 44,700,092 13,166,242 57,866,334 $ 237,519,557 $ 2011 34,309,287 12,658,032 46,967,319 $ 192,780,638 $ $ 2012 25,566,028 13,098,263 38,664,291 $ 178,812,735 $ Ratio of Debt Service to Governmental Expenditures 15.68% 11.20% 15.42% 15.37% 11.38% 17.66% 15.60% 24.36% 24.36% 21.62% Ratio of Debt Service to non-capital expenditures 20.02% 17.68% 19.99% 19.89% 17.80% 25.80% 22.91% 32.65% 28.71% 25.36% Total Governmental Revenues Ratio of Debt Service to Governmental Revenues Source: $ 112,560,955 15.57% $ 121,179,431 13.23% $ 144,191,521 $ 178,025,080 15.50% $ 220,591,297 13.27% 11.01% Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 186 $ 216,437,439 19.17% $ 197,889,171 19.16% $ 172,012,184 33.64% $ 175,544,268 26.76% $ 172,992,735 22.35% Table XXIX CITY OF PEORIA, ARIZONA BOND AUTHORIZATIONS - ISSUED AND UNISSUED AS OF JUNE 30, 2012 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 4,255,202 60,380,132 - 375,070 14,794,798 15,169,868 1996 WIFA Authorization Water/Wastewater 42,480,000 18,875,000 - 23,605,000 18,550,000 16,020,393 - 2,529,607 22,300,000 21,609,683 - 690,317 47,150,000 99,000,000 65,000,000 30,000,000 282,000,000 41,757,232 10,264,204 35,241,016 21,518,271 146,410,799 495,000 495,000 5,392,768 88,735,796 29,758,984 7,986,729 135,094,201 52,000,000 19,897,587 - 32,102,413 160,000,000 67,825,284 - 92,174,716 109,000,000 35,000,000 356,000,000 39,930,494 12,267,597 139,920,962 8,775,000 8,775,000 69,069,506 13,957,403 207,304,038 276,700,000 5,238,190 634,939 270,826,871 60,300,000 41,000,000 378,000,000 1,005,234 6,243,424 1,268,122 3,541,939 5,445,000 58,026,644 37,458,061 366,311,576 1,231,260,000 456,467,100 14,715,000 760,077,900 2000 Authorization Police, Fire & Public Service Storm Sewer & Flood Protection Streets, Bridges & Traffic Control Water System Wastewater System Parks & Open Space Subtotal 2005 Authorization Public Safety & Municipal Operations Water Treatment, Water System, Wastewater & Drainage Streets, Bridges & Traffic Control Parks, Recreation & Library Subtotal 2008 Authorization Transportation & Drainage Public Safety & Municipal Operations Parks, Recreation & Trails Subtotal Grand Totals: Source: City financial records 187 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 Authorization $ Issued Remaining 140,670,000 436,785,000 116,180,000 170,320,000 88,150,000 $ 43,723,426 128,508,356 55,748,108 79,793,588 40,767,776 $ 1,000,000 - 1,000,000 75,675,000 202,480,000 40,485,562 82,155,284 35,189,438 120,324,716 $ 1,231,260,000 $ 471,182,100 $ 96,946,574 308,276,644 60,431,892 90,526,412 47,382,224 760,077,900 CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 2003 2004 2005 * 2006 Table XXX 2007 2008 2009 2010 * 2011 2012 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 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% 5,459,854 154,065 -3.3% 6.3% 5,307,847 155,148 0.7% 6.4% 5,592,620 156,780 1.1% 6.8% 5,651,449 Maricopa County Population % growth Unemployment Rate Per Capita Income 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% 35,319 4,217,427 2.7% 8.8% 37,352 4,328,379 2.6% 8.8% N/A 4,438,459 2.5% 7.3% N/A State of Arizona Population % growth Unemployment Rate Per Capita Income 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% 34,999 7,186,070 2.7% 9.3% 35,062 7,370,993 2.6% 8.2% N/A United States of America Unemployment Rate 6.4% 5.6% 5.3% 4.6% 4.6% 5.5% 9.5% 9.5% 9.2% 8.2% Phoenix MSA Per Capita Income 29,318 30,892 32,414 34,215 35,010 34,675 34,282 34,452 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 based on building permit activity. 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 188 36,047 N/A Table XXXI CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND NINE YEARS AGO 2012 Employer Peoria Unified School District City of Peoria Plaza Del Rio Campus/Freedom Plaza & Care Center Younger Brothers Immanuel Care Campus Antigua Northern Pipeline Forum At Desert Harbor Good Shepherd Care Center Albertson's (2 Locations) Fry's Food Stores (4 Locations) Arizona Training and Evaluation Target (3 Locations) Wal-Mart (2 locations) Total # of Employees 3,500 1,132 635 580 348 271 267 182 181 175 - 2003 Rank 1 2 3 4 5 6 7 8 9 10 7,271 Percentage of Total City Employment 5.0% 1.6% 0.9% 0.8% 0.5% 0.4% 0.4% 0.3% 0.3% 0.2% 0.0% 0.0% 0.0% 0.0% # of Employees 4,100 889 1,129 378 210 230 297 415 310 300 280 10.3% 7,958 Note: Beginning in fiscal year 2012, Peoria Economic Development Department no longer tracks employment for retail locations. Sources: City of Peoria Economic Development Department Arizona Unemployment Statistics Program Special Employment Report www.azstats.gov 189 Rank 1 3 2 0 5 9 10 8 4 6 7 9 Percentage of Total City Employment 15.6% 3.4% 4.3% 0.0% 1.4% 0.8% 0.0% 0.0% 0.9% 1.1% 1.6% 1.2% 1.1% 1.1% 30.3% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2003 2004 2005 Full-time Equivalent Employees as of June 30, 2012 2006 2007 2008 2009 Table XXXII 2010 2011 * 2012 General Government Mayor & Council City Manager Office of Communications 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 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 15.00 8.00 18.00 26.00 9.00 21.00 27.80 7.00 79.75 115.97 287.00 164.00 15.50 39.75 44.00 56.75 10.00 57.75 29.25 43.25 41.60 15.50 15.00 7.00 17.00 26.00 8.00 20.90 26.00 7.00 73.75 113.57 289.00 162.00 12.50 33.25 38.80 57.95 7.50 56.50 29.50 45.00 39.00 15.50 Total FTE 889.13 917.11 999.08 1,049.88 1,150.99 1,244.04 1,236.59 1,174.27 1,131.87 1,100.72 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. * Interdepartmental reorganization is reflected in FY2011 numbers. This will explain some of the significant changes in departments such as Mayor and Council, City Manager, Economic Development and Community Development. Source: City budget office (Schedule 6 in Annual Program Budget) 190 CITY OF PEORIA, ARIZONA BUILDING PERMITS AND HOME SALES LAST TEN YEARS Table XXXIII Building Permits Fiscal Year 2004 2003 Commercial Number of Permits 180 Value $ 69,627,621 Residential Number of Dwelling Units 1,525 Value 199,491,258 Other Number of Permits 1,399 Value 13,399,434 Total Value $ 282,518,313 $ $ 2005 190 47,808,957 $ 177 73,892,753 2006 $ 2007 181 64,990,575 $ 244 121,602,510 2008 $ 2009 153 38,162,527 60 $ 18,722,347 2010 $ 2011 82 35,940,280 $ 2012 27 4,416,256 $ 60 14,130,283 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 42,714,995 404 50,318,368 610 79,951,361 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 53,152,166 970 9,025,305 1,701 17,128,209 309,833,199 $ 469,121,647 227,086,013 $ 84,475,521 $ 131,807,441 63,759,929 $ 111,209,853 2008 2009 $ 412,303,639 $ 368,827,021 $ $ Source: City Community Development Department Single Family Housing Sales 2002 2003 2004 Calendar Year 2006 2007 2005 2010 2011 New # of Units Average Sale Amount Avr price % increase $ 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 $ 2,945 153,360 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% 355 236,505 -6.65% 390 243,780 3.08% 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% $ 5,305 159,000 -4.65% $ 5,355 140,000 -11.95% New Housing Starts City of Peoria Maricopa County Notes: 2002 2,183 2003 43,826 1,974 2004 2,420 47,808 58,882 Calendar Year 2006 2007 1,654 2,046 2005 3,560 56,139 40,294 Information for bottom two tables is for calendar years Source: Arizona State University College of Business - AZ Real Estate Center 191 35,465 2008 1,098 20,605 2009 2010 2011 514 691 699 15,825 15,676 15,353 Table XXXIV CITY OF PEORIA, ARIZONA SCHEDULE OF INSURANCE IN FORCE JULY 1, 2011 THROUGH JUNE 30, 2012 Type of Insurance 1. 2. Primary Public Liability & Automobile General & auto liability Annual Renewal Date Insurance Carrier Policy Number Limits N/A $1,000,000 per incident $1,000,000 annual Self-insured Excess liability -Primary 7/1 Travelers Indemnity Company GE06300060 $5 Million per occurrence SIR above Public Entity E & O 7/1 Travelers Indemnity Company GP06302355 $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 EO00001256303 $1,000,000 N/A N/A Self-insured N/A $500,000 per incident $500,000 annual N/A N/A Automobile & Equipment 7/1 Travelers Indemnity Company 8109157P24A $25,000/$100,000 (1) N/A 108,086 Excess buildings and contents (see Note) 7/1 Travelers Indemnity Company 297T228811 $267,000,000 Storage Tank 3rd Party liability 1/6 Great American Insurance BTA557496107 $1,000,000 5,000 2,732 1,000 24,092 N/A N/A 135,192 Property (Real & Personal) City buildings and contents Boiler & Machinery 7/1 Phoenix Insurance Company 7733A918PHX11 $25,000,000 4. Workers' Compensation Excess Liability N/A Self-insured Safety National Casualty Corp N/A AGC4044177 N/A 5. Public Employee Bond Blanket employee dishonesty bond 9/22 Hartford Fire Insurance Co. 83BSBDQ8939 $100,000 6. Broker Service Fee 7. Cyber Liability 7/1 Axis Surplus Insurance Co. 8. Identity Theft 7/1 9. Crime Coverages 7/1 (1) Annual Premium N/A 3. Note: Deductible Amount N/A SIR above 5,000 $ 454,848 Included with above 71,000 Included with above 5,934 295,453 400 55,000 ECN000032941101 $1,000,000 Travelers Indemnity Company 105639670 $10,000 N/A 4,463 Travelers Indemnity Company 0705R496 $1 Million 10,000 5,527 For breakdown of property insurance policy, see Table XXXV Vehicles with a value less than $100,000 are self-insured by the City. Vehicles with a value in excess of $100,000 have a $5,000 deductible. Source: City Risk Management and financial records 192 SIR above 7,125 Table XXXV CITY OF PEORIA, ARIZONA PROPERTY INSURANCE SCHEDULE JUNE 30, 2012 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 193 267,000,000 Table XXXVI CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Governmental Activities: General Government Registered Voters Voter Participation (last election) Culture & Recreation Recreation Participants New Recreation Accounts Special Event Participants 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 (millions $) Highways & Streets Asphalt Used (in tons) Centerline Miles Swept 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: $ 2003 2004 2005 2006 51,617 11.0% 52,674 11.0% 65,998 33.8% 62,328 25.4% 65,725 4,149 * 65,928 4,998 * 69,206 5,492 * 56,430 5.53 101,951 5.32 10,268 4.20 11,014 4.30 3,104 282.5 $ 4,224 309.8 $ Fiscal Year 2007 2008 2009 2010 2011 2012 63,544 25.4% 71,051 60.6% 76,323 81.2% 82,578 29.2% 86,803 29.2% 85,765 29.2% 75,145 5,160 * 77,602 4,923 * 119,620 6,692 * 131,372 6,237 * 142,319 5.73 102,385 4.80 103,921 5.20 **62,341 5.98 60,219 5.47 56,683 5.65 56,764 5.87 57,184 6.01 11,618 4.30 12,445 4.30 12,788 4.40 13,649 4.40 13,361 4.43 14,874 5.02 15,403 5.19 17,717 5.08 5,104 469.1 6,654 9,807 277 $ 4,811 412.3 5,035 8,697 218 $ 3,692 368.8 7,999 8,496 275 $ 2,943 225.5 8,365 7,604 381 $ 1,486 84.5 2,441 7,526 423 132,391 5,903 46,578 $ 1,497 131.8 2,832 5,935 422 134,661 5,968 60,715 $ 1,401 63.8 2,677 6,159 85 136,200 6,106 65,347 $ 2,371 111.2 * * * * * * * 4746 5,056 5,920 5,787 5,679 5,917 5,697 5,856 5,608 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 43,263 984 846 899 31,568 984 793 747 27,440 984 911 759 31,082 **** **** 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 8,003,947 159,203 8,448,795 166,070 2.71 3.23 3.41 3.55 3.67 3.60 3.90 3.70 3.50 3.61 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 47,989 20,340 16,277 46,299 19,700 15,715 169,932 * * 222,927 * * 225,316 * * 200,153 * * 220,357 195 54 230,434 234 83 211,243 246 66 200,029 208 74 188,244 336 108 190,643 350 134 840 822 840 819 840 828 840 831 840 827 840 812 840 796 840 745 840 787 840 813 * 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. *** Changed from lane miles to center line miles in FY11 to be consistant with other highway measurements ****City discontinued participation in Section 8 housing programs as of 6/30/11. Source: Various City Departments 194 2,038 6,202 163 CITY OF PEORIA, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 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: Table XXXVII 2003 2004 2005 2006 Fiscal Year 2007 2008 2009 2010 2011 2012 170.9 176.3 177.9 177.9 177.9 177.9 177.9 179.0 179.1 179.1 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 28 322 90 41 25 12 31 3 1 1 32 338 96 45 26 12 34 3 1 1 2 61 2 80 2 86 2 90 2 101 2 103 2 92 2 86 2 86 2 86 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 7/1 7 2 7/1 7 2 444 471 487 518 537 538 551 554 584 590 11,186 * 11,829 543 12,000 599 12,000 621 12,737 661 13,618 720 13,726 683 13,901 670 14,093 673 14,333 687 9 9 9 9 11 11 11 9 7 7 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 47,793 42.0 48,509 40.0 39,806 13.40 40,984 13.40 43,824 14.15 45,933 14.15 47,831 14.15 48,759 25.70 49,923 16.25 50,383 16.25 50,715 16.25 51,527 16.25 38,546 39,747 42,467 44,198 46,309 47,146 48,006 43,382 48,752 49,506 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 195 196 Appendix Slip Sheet Appendix Glossary Certain specialized terms or acronyms may be used in this publication. The following is a list of some of those acronyms: APB AICPA CAFR 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 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 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. Accounting Principles Board (APB) – Authoritative private-sector standards setting body that preceded the FASB. The APB issued guidance in the form of Opinions. 197 Appendix Accrual – A liability resulting from an expense for which no invoice or other official document is available yet. Also called an accrued expense. benefit plans to describe the amount an employer must contribute in a given year. [SGAS 27 and SGAS 45] Appropriation – An authorization made by the City Council which permits the City to incur obligations and to make expenditures of resources. 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). 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. Adopted budget – Formal action by the City Council that sets the spending limits for the fiscal year. 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. 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. Audit Guides – Series of AICPA publications that enjoy potential “level 2” status on the hierarchy of authoritative sources of GAAP. 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 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 198 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 unit 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. Base budget – Maintaining current service levels. Changes in demand or activity levels may create the need for additional Budgetary integration – Use of recording the operating budget in the general ledger 199 Appendix to facilitate control over revenues and expenditures during the fiscal year. Capital outlay – Expenditures which result in the acquisition of or addition to capital assets. 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. 200 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] 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. Comparative data – Information from prior fiscal periods provided to enhance the analysis of financial data of the current fiscal period. 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 of internal control – Structure of internal control that provides for (a) a favorable control environment, (b) the continuing assessment 201 Appendix 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. Published Internal Control: An Integrated Framework. 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. 202 Appendix Deferred revenue – Resource inflows that do not yet meet the criteria for revenue 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. 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. Discrete presentation – Method of reporting financial data of a component unit separately from financial data of the primary government. [SGAS 14] Exchange transactions – Transactions in which each party receives and gives up essentially equal values. [SGAS 33] Exchange-like transactions – Transactions in which there is an identifiable exchange between the reporting government and another party, but the 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] Economic resources measurement focus - Measurement focus where the aim of a set of financial statements is to report 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. Expenditure-driven grants – Governmentmandated or voluntary nonexchange 203 Appendix 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 separate organization in the reporting entity of another government. [SGAS 14] Financial section – One of the three required 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 Financial Accounting Foundation (FAF) – Nonprofit organization responsible for overseeing the operations of both the GASB and FASB. 204 Appendix information, combining statements, and supplementary information, as needed. 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 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] Government Accountability Office (GAO) – Investigative arm of the U.S. Congress charged with improving the performance and accountability of the federal government. The GAO issues the publication Governmental Auditing Standards, commonly known as the “Yellow 205 Appendix Book” which sets generally accepted governmental audit standards (GAGAS). 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 GASAC 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] Governmental entity – For accounting and financial reporting purposes, an entity subject to the hierarchy of GAAP applicable to state and local governmental units. Implementation guides – Guidance on the proper implementation of authoritative accounting and financial reporting standards issued by the staff of the GASB. Implementation guides are level 4 GAAP. Governmental financial reporting model – Minimum combination of financial statements, note disclosures, and required Imposed nonexchange revenues – Revenues that result from assessments imposed on nongovernmental entities, 206 Appendix 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] “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. 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] 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] 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] 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 activity comprises interfund transfers and interfund reimbursements. Independent auditor’s report – Official written communication of the results of an audit. In a financial audit, the independent auditor’s report typically will offer (or disclaim) an opinion on whether a set of financial statements is fairly presented in conformity with GAAP. Interfund loans – Amounts provided between funds or blended component units 207 Appendix with a requirement for repayment. [SGAS 34] 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 required 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 or 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 procedures as well as the resolution of potential problems identified by controls. 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] 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 Internal service funds – Proprietary fund type that may be used to report any activity that provides goods or services to other 208 Appendix participants do not retain an ongoing financial interest or responsibility. [SGAS 14] Major program – Term used in the context 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 tested. 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 basic 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 material misstatement of the financial statements or material non-compliance with major federal award programs. Major fund – Governmental fund or enterprise fund reported as a separate column in the basic fund financial statements and subject to a separate opinion in the independent auditor’s report. Materiality – In the context of financial reporting, the notion that an omission or 209 Appendix 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. 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). 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) revenues 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 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. 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 established and disclosed by the government. [SGAS 34] Net general obligation debt – General obligation debt reduced by the amount of any accumulated resources restricted to repay the principal of such debt. [SGAS 44] Net pension/OPEB obligation – The cumulative difference between annual pension/OPEB costs and the employer’s contributions to the plan. No-commitment special assessment debt – Special assessment debt that is secured solely by liens on assessed Money market investment – Short-term, highly liquid debt instrument, including 210 Appendix 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. 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 financing sources category is limited to items so classified by GAAP. Office of Management and Budget (OMB – Agency of the federal government with regulatory oversight of Single Audits. Other financing use – Decrease in current financial resources that is reported separately from expenditures to avoid distorting expenditure trends. The use of the Operating activities – Term used in conjunction with cash flows reporting. Operating activities generally result from providing services and producing and 211 Appendix 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 measures 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. 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] 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 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] Performance measurement – Commonly used term for service efforts and accomplishments reporting. 212 Appendix 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] private organizations, or other governments. [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] Program revenue – In the context of the government-wide statement of activities, revenues that derive directly from the program itself or 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] Program – Group activities, operations or organizational units directed to attaining specific purposes or objectives. 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] Private-purpose trust funds – Fiduciary trust fund type used to report all trust arrangements, other than those properly reported in pension trust funds or investment trust funds, under which principal and income benefit individuals, Purpose restriction – In the context of government-mandated and voluntary nonexchange transactions, legal limitations that specify the purpose or purposes for which resources are required to be used (as 213 Appendix 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 time (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 types of public-entity risk pools. 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 securities are reinvested in a taxable money market instrument with a higher yield. Schedule of funding progress – In the context of defined benefit pension plans and other postemployment benefit plans, trend data on the relationship between the 214 Appendix actuarial value of plan assets and the related actuarial accrued liability. 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 required 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 basic 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 basic financial statements that is not included within the scope of the audit of those statements. When the presentation of certain supplementary information is mandated by the GASB it is referred to as required supplementary information. Special assessment – Compulsory levy made against certain properties to defray all or part of the cost of a specific capital improvement or service deemed to benefit primarily those properties. 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 Special items – Significant transactions or other events within the control of 215 Appendix be used to pay liabilities of the current period. [NCGA Statement 1] 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 auditor that financial statements are fairly presented in all material respects. 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 months, weighted to reflect the dollar size of individual investments within an investment type. [SGAS 40] Yellow book – Term commonly used to describe the Government Accountability 216