Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2013 City of Peoria, Arizona City Council: Bob Barrett, Mayor Tony Rivero, Vice Mayor Cathy Carlat Ron Aames Carlo Leone Jon Edwards Bill Patena Administrative Staff: Carl Swenson, City Manager Jeff Tyne, Deputy City Manager Susan Daluddung, Deputy City Manager Prepared By: Finance Department Brent D. Mattingly, Chief Financial Officer, Finance Director Katie Gregory, Deputy Finance and Budget Director Christen Wilcox, Acting 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, 2013 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-xvi xvii xviii xix xx II. FINANCIAL SECTION Independent Auditor’s Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS (required supplementary information) 3 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities 19 20 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet to the Statement of Net Position - 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 Position Statement of Revenues, Expenses, and Changes in Fund Net Position Statement of Cash Flows 36 38 40 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Notes to the Financial Statements 44 45 47 i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2013 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 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 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 114 115 116 117 118 119 Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Combining Statement of Cash Flows Schedules of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 122 123 124 125 126 127 128 Fiduciary Funds Combining Statement of Fiduciary Net Position Combining Statement of Changes in Assets and Liabilities – All Agency Funds ii 130 131 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2013 Page D. OTHER SUPPLEMENTARY INFORMATION Combining Detailed Schedules – Self-Insurance Fund Combining Detailed Schedule of Net Position – Self-Insurance Fund Combining Detailed Schedule of Revenues, Expenses, and Changes in Fund Net Position – Self-Insurance Fund Federal Financial Data Schedule 134 135 136 Table III. STATISTICAL SECTION - Unaudited Net Position By Component I Changes in Net Position II Program Revenues III Fund Balances, Governmental Funds IV Changes in Fund Balances, Governmental Funds V Government-wide Revenues By Function VI Tax Revenues By Source, Governmental Funds VII Intergovernmental Revenues By Source, Governmental Funds VIII Development/Expansion Fees By Type IX City Transaction Privilege Taxes By Category X Direct and Overlapping Sales Tax Rates XI Sales Tax Payers - By Category XII Secondary Assessed Value and Full Cash Value of Taxable Property XIII Direct and Overlapping Property Tax Rates XIV Direct and Overlapping Property Tax Levies XV Principal Property Tax Payers XVI Property Tax Levies and Collections XVII Utility Statistical Data XVIII Outstanding Debt By Type XIX Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita XX Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XXI Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XXII Legal Debt Margin XXIII Pledged Revenue Coverage - Municipal Development Authority Bonds Governmental Portion XXIV Pledged Revenue Coverage – Revenue Bonds XXV Pledged Revenue Coverage - Special Assessment Bonds XXVI Special Assessment Collections XXVII Ratio of Annual Debt Service Expenditures for Governmental Debt To Total Governmental Expenditures and Revenues XXVIII Bond Authorizations – Issued and Unissued XXIX Demographic and Economic Statistics XXX Major Employers Within the City XXXI Authorized Full-time Equivalent City Government Employees By Function XXXII Building Permits and Home Sales XXXIII Schedule of Insurance in Force XXXIV Property Insurance Schedule XXXV Operating Indicators By Function/Program XXXVI Capital Asset Statistics By Function/Program XXXVII APPENDIX Glossary 141 142 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 183 iii iv xvii 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 2013 Bob Barrett Mayor Tony Rivero Vice-Mayor Ron Aames Councilmember Cathy Carlat Councilmember Jon Edwards Councilmember Carlo Leone Councilmember Bill Patena Councilmember Carl Swenson City Manager Jeff Tyne Deputy City Manager – Operations and Administrative Services Susan Daluddung Deputy City Manager – Development and Community Services 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 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 Bo Larsen Public Information Director John Schell Intergovernmental Affairs Director xix City of Peoria Council Districts Lake Pleasant Mayor Bob Barrett Vice Mayor Tony Rivero Acacia District Mesquite Carefree Hwy 67th Ave. Councilmember Ron Aames Palo Verde District Pinnacle Peak Rd. Willow Councilmember Bill Patena Ironwood District Ironwood Bell Rd. Councilmember Carlo Leone Pine District Peoria Ave. 115th Ave. Councilmember Jon Edwards Willow District xx Pine Palo Verde Acacia Northern Ave. 67th Ave. Councilmember Cathy Carlat Mesquite District 3033 N. Central Ave., Suite 300 Phoenix, Arizona 85012 Tel (602) 277-9449 Fax (602) 277-9297 INDEPENDENT AUDITOR’S REPORT Honorable Mayor and Members of the City Council City of Peoria, Arizona Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Peoria, Arizona (the City), as of and for the year ended June 30, 2013, and the related notes to the financial statements, 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, 2013, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Peoria, Arizona, as of June 30, 2013, 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, 2013, 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 www.heinfeldmeech.com Change in Accounting Principle As described in Note 1T., the City implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities for the year ended June 30, 2013, which represents changes in accounting principles. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, statistical section, and schedules listed in the table of contents as Supplementary Information and Other Supplementary Information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Supplementary Information and Other Supplementary Information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information and Other Supplementary Information is fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2013, on our consideration of City of Peoria, Arizona’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 in considering City of Peoria, Arizona’s internal control over financial reporting and compliance. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants October 31, 2013 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, 2013. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the financial plan (the approved annual budget), and (5) identify individual fund issues or concerns. This discussion and analysis (MD&A) has a different focus and purpose than the transmittal letter presented on pages v-xvi of this report. It 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 separate financial reports, including management’s discussion and analysis, for the Vistancia Community Facilities District, the Employee Benefit Trust and the Workers’ Compensation Trust, which are blended component units of the City. Financial Highlights  The City’s total net position increased $24.3 million (1.5%) in fiscal year 2013, an increase of $8.8 million (0.8%) in governmental activities and an increase of $15.5 million (2.8%) in business-type activities.  Total net position of the City is $1,634.9 million, of which $158.9 million is unrestricted (down $13.7 million, (7.9%), from last year’s $172.6 million unrestricted net position).  The governmental activities program revenues decreased by approximately $5.8 million (9.9%) from the previous year. This was primarily due to a decrease in donated capital assets with fewer large developments being completed in fiscal year 2013.  The business-type activities program revenues decreased by approximately $0.02 million (0.0%) from the previous year. Charges for services increased $1.1 million (1.7%), and Public Housing decreased by $0.1 million as the City turned it over to Maricopa County as of March 31, 2013.  At June 30, 2013, total fund balance of the governmental funds was $275.5 million, up $5.3 million (2.0%) from the previous year. Of this, $14.0 million (up 9.4%) was unassigned (available for spending at the government’s discretion).  General Fund inflows (on a budgetary basis) were higher than budgeted inflows by $5.0 million for fiscal year 2013. Budgetary basis outflows of the General Fund were 93.0% ($8.6 million in savings) of the final budgeted outflows.  At June 30, 2013, unassigned fund balance for the General Fund was $14.0 million, or 13.8% of General Fund expenditures for fiscal year 2013.  During fiscal year 2013, the City issued $35.5 million in Municipal Development Authority (MDA) Revenue Bonds. OVERVIEW OF THE FINANCIAL STATEMENTS As pictured in the following table, 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 position 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 position. The focus on net position is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net position may serve as a useful indicator of how the financial position of the City may be changing. Increases in net position may indicate an improved financial position; however, even decreases in net position 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 position changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net position 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 61-65). 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 Utility 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. 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 position. 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 122-124). 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 130-131) 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, 2013, with comparative information for the previous year. Net Position Net position may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Position of the City for June 30, 2013, compared to the prior year. Statement of Net Position As of June 30 Current and other assets Capital assets Total assets Total deferred outflows of resources Other liabilities Long-term liabilities outstanding Total liabilities Net position: Net investment in capital assets Restricted Unrestricted Total net position (in millions of dollars) Governmental Business-type Activities Activities 2012 2013 2012 2013 $ 328.7 $ 325.4 $ 95.8 $ 94.0 1,108.4 621.4 615.6 1,129.3 1,433.8 717.2 709.6 1,458.0 0.4 0.3 27.1 27.4 8.5 7.3 363.4 128.8 138.0 376.6 390.8 137.3 145.3 403.7 Total Primary Government 2013 2012 $ 424.5 $ 419.4 1,750.7 1,724.0 2,175.2 2,143.4 0.7 35.6 34.7 505.4 501.4 541.0 536.1 829.0 131.6 94.1 $ 1,054.7 1,322.8 153.2 158.9 $ 1,634.9 813.3 118.1 111.6 $ 1,043.0 $ 493.8 21.6 64.8 580.2 $ 478.4 24.9 61.0 564.3 1,292.7 143.0 172.6 $ 1,607.3 Percent Change 1.2% 1.5 1.5 100.0 2.6 0.8 0.9 2.4 7.1 (7.9) 1.7 The net position of the City increased $27.6 million (1.7%) in fiscal year 2013. Net position of governmental activities increased $11.6 million (1.1%), while the business-type activities increased $15.9 million (2.8%). Net position consists of three components. The largest portion of net position ($1,322.8 million or 80.9%) 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 position increased $31.1 million in fiscal year 2013 due to $54.7 million in capital asset expenditures, $15.4 million in donated assets, and a $4.1 million decrease in net capital related debt, offset by $43.5 million in depreciation expense, and asset disposals. 6 The second portion of the City’s net position ($153.2 million or 9.4%) represents resources that are subject to external restrictions on how they may be used. The increase of $10.1 million includes an increase of $4.2 million in restricted for development fees with increased development fee revenues; a decrease of $.5 million in reserved for grant purposes, a $2.2 million increase in restricted for transportation purposes due to decreased capital project activity and a $4.0 million increase in net position restricted for trust purposes. The third portion consists of Unrestricted Net Position of $158.9 million (9.7%). This category of net position may be used to meet the City’s ongoing obligations to citizens and creditors. This category decreased $13.7 million (7.9%) in fiscal year 2013. Unrestricted net position is the balance of net position remaining after calculating the other two categories discussed above. Unrestricted net position of governmental activities decreased $17.5 million, while unrestricted net position of business-type activities increased $3.8 million. Changes in Net Position The following table compares the government-wide revenue and expenses for the current and previous fiscal year. Changes in Net Position (in millions of dollars) Governmental Business-type Activities Activities 2012 2013 2012 2013 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 Special Item: Close out of Public Housing Increase (decrease) in net position $ 18.7 2.9 6.7 24.3 $ 17.3 2.2 9.9 29.0 $ 67.2 0.1 7.3 - $ 66.1 0.1 8.4 - Total Primary Government 2013 2012 $ 85.9 3.0 14.0 24.3 $ 83.4 2.3 18.3 29.0 Percent Change 3.1% 30.4 (23.5) (16.2) 19.5 66.0 4.1 12.7 14.4 5.2 0.6 0.1 0.6 4.4 180.2 22.2 60.7 4.1 12.1 13.2 4.9 1.0 0.1 0.0 3.5 180.2 0.2 74.8 0.3 74.9 19.5 66.0 4.1 12.7 14.4 5.2 0.8 0.1 0.6 4.4 255.0 22.2 60.7 4.1 12.1 13.2 4.9 1.3 0.1 0.0 3.5 255.1 19.1 22.4 35.4 21.4 8.4 30.0 7.0 2.2 12.7 0.6 20.9 23.5 35.9 22.3 5.4 31.8 7.4 1.7 12.6 0.6 - - 19.1 22.4 35.4 21.4 8.4 30.0 7.0 2.2 12.7 0.6 20.9 23.5 35.9 22.3 5.4 31.8 7.4 1.7 12.6 0.6 159.2 21.0 (9.4) 162.1 18.1 (3.3) 29.1 20.3 10.5 5.1 0.8 0.3 66.1 8.7 9.4 30.8 21.9 10.8 5.3 0.8 0.4 70.0 4.9 3.3 29.1 20.3 10.5 5.1 0.8 0.3 225.3 29.7 - 30.8 21.9 10.8 5.3 0.8 0.4 232.1 23.0 - (5.5) (7.3) (2.8) (3.8) (25.0) (2.9) 29.1 - 23.0 20.0 11.6 $ 14.8 $ 7 (2.1) 16.0 $ 8.2 $ (2.1) 27.6 $ (12.2) 8.7 0.0 3.1 9.1 6.1 (38.5) 0.0 100.0 25.7 (0.0) (8.6)% (4.7) (1.4) (4.0) 55.6 (5.7) (5.4) 29.4 0.8 0.0 For fiscal year 2013, total governmental activities revenues remained constant at $180.2 million, and total business-type activities revenues decreased $0.1 million (0.1%). Expenses decreased $3.0 million (1.7%) and $3.9 million (5.5%) for the governmental activities and business-type activities, respectively. While some functions had increased expenses with a slowly recovering economy, general government expenses decreased by $1.8 million (8.6%); culture & recreation expenses decreased by $1.1 million (4.7%); public works decrease $0.4 million (5.7%); and public safety decreased $1.5 million (2.5%). Development services expenses increased by $3.0 million (55.6%), human services increased by $0.5 (29.4) and highways and streets expenses decreased by $1.8 million (5.7%). The decrease in the business-type activities expenses are primarily in the Water Utility ($1.7 million, 5.5%), Wastewater Utility ($1.6 million, 7.3%) and the Solid Waste Utility ($0.3 million, 2.8%). 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 increased $5.7 million (4.7%) from the previous year. The primary drivers were decreases in property tax and capital contributions, offset by increased local and state sales taxes. Property tax revenues decreased by $2.7 million (12.3%) in fiscal year 2013 as assessed values continued to decline. Capital contributions decreased by $3.2 million (32.4%) in fiscal year 2013. Local sales and use taxes increased $5.2 million (8.6%) as retail and restaurant & bar sales taxes increased $2.6 million and $0.4 million respectively while state shared sales taxes increased $.6 million (4.8%). Program revenues of governmental activities decreased $5.8 million (9.9%) mainly as a result of the following change: Donations of capital assets decreased by $3.2 million (32.4%) with fewer large developments being completed in 2013. The program revenues of business-type activities remained steady primarily due to a $1.1 million (1.7%) increase in charges for services revenues as water and wastewater rates increased 4.5% in fiscal year 2012 and Public Housing decreased by $0.1 million (39.7%) as the City turned over Public Housing to Maricopa County effective March 31, 2013. 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 $52.7 million are 33.1% of the governmental activities expenses for fiscal year 2013, down from 36.0% in fiscal year 2012. In the business-type activities, program revenues of $74.6 million are 112.7% of the business-type expenses for fiscal year 2013. This compares to $74.6 million and 106.6% in fiscal year 2012. 8 Governmental activities account for 70.7% of the total revenues of the City and 70.6% of the total expenses in fiscal year 2013. These percentages were 70.6% and 69.8% respectively in fiscal year 2012. As seen in the following graph, one of the largest financing sources for the City in fiscal year 2013 is charges for services (33.7%), primarily because this is the major funding source of the business-type activities (90.1% of business-type revenues in fiscal year 2013). The major funding sources of the governmental activities are property, franchise and sales/use taxes (35.1% of total revenues, 49.7% of governmental revenues) and state shared revenues (12.7% of total revenues, 17.9% of governmental revenues). Government-Wide Revenue Sources Fiscal Year 2013 Other grants & entitlements 9.5% Investment earnings 0.3% Property taxes 7.6% Sales & use taxes 25.9% Federal grants 1.2% State shared revenues 12.7% Franchise taxes 1.6% Other 2.0% Charges for services 33.7% Contributed capital 5.5% Property taxes decreased 1.1% from fiscal year 2012 with a continued decline in assessed value. The tax rates did not change in fiscal year 2013 compared to the previous year. Total government-wide expenses (not including transfers out) of the City decreased $6.8 million (2.9%) in fiscal year 2013. Expenses of the governmental activities decreased $2.9 million (1.8%). This includes increases of $2.9 million (55.6%) for development services, and $0.5 million (29.4%) for human services offset by a decrease of $1.7 million (8.4%) for general government, $1.8 million (5.7%) for highways and streets, $1.0 million (4.5%) for culture and recreation, $0.5 million (1.4%) for police, $0.9 million (4.3%) for fire, and $0.4 million (5.7%) for public works. Highways and streets expenses decreased primarily due to a decrease of $2.8 million in depreciation expense. Culture and recreation expenses decreased primarily due to a decrease of $1.3 million in lower depreciation expense. General government expenses decreased with $1.6 million in lower depreciation expense. Expenses in business-type activities decreased $3.9 million (5.5%) primarily due to lower depreciation expense. As shown in the following Government-Wide Functional Expenses graph, business-type activities account for 29.4% of the functional expenses of the City for fiscal year 2013, while governmental activities account for 70.6% of the functional expenses. For the governmental activities, the largest users of resources are public safety (25.2% of total expense, 35.6% of governmental expenses), general government (8.4% of total expenses, 12.0% of governmental expenses), highways and streets (13.3% of total expenses, 18.8% of governmental expenses), and culture and recreation (10.0% of total expenses, 14.1% of governmental expenses). 9 Government-Wide Functional Expenses Fiscal Year 2013 General government 8.4% Business-type activities 29.4% Culture & recreation 10.0% Other 1.2% Public safety 25.2% Highways & streets 13.3% Development services 3.7% Public works 3.1% Interest 5.7% 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, Transportation Sales Tax Fund, Development Fee Fund and GO Bond Debt Service 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 $275.5, an increase of $5.3 million, or 2.0%, from the previous year. Of this, $188.9 million (up $19.4 million (11.4%) 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 increase in restricted fund balance is caused by increases in restricted for debt service of $123,453, in restricted for capital projects of $13.5 million, in restricted for development fees of $4.4 million due to increased development fee revenues, and in restricted for transportation purposes of $2.3 million due to decreased capital expenditures; a decrease of $0.3 million in unspendable. An additional $72.6 million of the governmental fund balance (down $15.4 million (17.5%) from the previous year) has been committed or assigned for specific purposes by council or administrative action. These commitments include various stabilization reserves ($36.6 million), debt service reserves ($1.0 million), capital projects ($18.5 million) and arts capital and various other purposes ($16.5). The remaining $14.0 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 increase of $1.2 million (9.4%) during fiscal year 2013 is due primarily to increased General Fund revenues. 10 Governmental Funds - Fund Balance 120 Millions 100 80 60 40 20 FY12 0 FY13 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 $6.5 million (7.4%) from the previous year. Urban revenue sharing increased $1.2 million (9.0%). Property taxes decreased by $.3 million (12.2%) as assessed values continue to decrease, and investment earnings decreased $.09 million (54.1%) due to continuing low interest rates. The City’s sales tax revenues in the General Fund increased $3.0 million (8.8%) and state shared sales tax revenues increased $.6 million (4.8%) due to a recovering retail sales and restaurant & bar sales. Auto-in-lieu revenue (licensing fees) increased .2 million (4.3%) with an increase in auto sales. Total General Fund expenditures increased $6.3 million (6.7%). Personnel costs increased $3.3 million while other costs (contractual services and commodities) increased $1.5 million as the economy begins to recover. Capital outlay increased by $.5 million (19.8%). The unassigned fund balance of the General Fund was 13.8% of expenditures at June 30, 2013, compared to 13.5% at June 30, 2012. 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 $1.4 million (9.3%) from the previous year due to increased sales tax revenues. Expenditures in this fund decreased $1.0 million (26.0%) due to increased debt service payments on development agreements in fiscal year 2012 that did not repeat in fiscal year 2013. Transfers out from the Half-Cent Fund increased $2.6 million with higher debt service transfers. Total fund balance of the Half-Cent Sales Tax Fund increased by $0.7 million (5.8%) in fiscal year 2013. 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 increased by $0.9 million (7.5%) due to increased highway user revenues ($0.7 million or 9.3%) and a small increase in sales taxes. Expenditures increased by $0.3 million (2.3%) in fiscal year 2013 primarily due to an increase in capital outlay expenditures. Fund balance increased $0.7 million (5.9%) in fiscal year 2013. 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 $0.8 million (9.2%) while expenditures decreased $1.1 million (20.9%). The increased revenues are due to increasing sales tax revenue while the decreased expenditures are primarily capital outlay. The fund balance increased $1.5 million (5.8%) in fiscal year 2013. All fund balance in this fund is restricted. 11 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 $1.7 million (23.9%) with a moderate increase in development activity in the City, while expenditures decreased $0.3 million (5.4%) in fiscal year 2013 due to increased principal payments on development agreements. Fund balance increased $4.4 million (20.4%) in fiscal year 2013, 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 $2.2 million (12.9%) due to decreased secondary property tax revenues and investment earnings. The secondary assessed value of the City decreased 10.9% in fiscal year 2013 while the secondary tax rate was unchanged. Expenditures decreased by $3.4 million (18.5%) 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 increased $0.04 million (0.1%) in fiscal year 2013. 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 Fund, Stadium Fund, Storm Drain Utility 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 position of the enterprise funds increased $14.6 million (2.6%) in fiscal year 2013. Net investment in capital assets increased $15.4 million (3.2%) with the addition of utility infrastructure and equipment in the Water and Wastewater Funds and renovation of the clubhouses and sports complex in the Stadium Fund. Restricted net position decreased $3.3 million (13.4%) primarily due to an increase in capital project activity in the Water Utility, Wastewater Utility, and Stadium Funds. The unrestricted net position increased $2.9 million (4.9%) primarily due to increased net income in the utility operating portions of the Utility Funds. The Water Utility Fund, Wastewater Utility Fund, Solid Waste Fund, and Stadium Fund experienced increases in total net position of $7.9 million (2.8%), $3.6 million (1.5%), $0.2 million (.8%), and $5.2 million (22.1%) respectively. The Storm Drain Utility Fund net position increased $37,175 (4.9%) and the Public Housing Fund total net position was reduced to $0 with the transfer of the program to Maricopa County. The Water Utility unrestricted net position increased $3.4 million (11.1%), the Wastewater Utility unrestricted net position increased $0.3 million (2.3%), and the unrestricted net position of the Solid Waste Fund decreased $.3 million (2.3%). Operating revenues of the enterprise funds increased $1.0 million (1.5%) in fiscal year 2013. Charges for services in the Water Utility Fund increased $.2 million (.6%) due to increased usage. The Wastewater Utility Fund charges for services increased $1.8 million (11.0%) and the Solid Waste Fund charges for services decreased by $0.9 million primarily due to an adjustment in the rates between the two utilities. Wastewater Utility service fees were increased by 8% and solid waste service fees were decreased by 13% with no net rate increase to the utility customer. Operating expenses of the enterprise funds decreased $1.2 million (1.9%) in fiscal year 2013. The Water Utility Fund operating expenses decreased $0.4 million (1.3%) and the Wastewater Utility Fund decreased $1.0 million (5.1%) primarily due to decreases in depreciation expense of $0.4 million (5.0%) and $1.1 million (10.5%) respectively. In the Solid Waste Fund, operating expenses increased $0.2 million (1.7%) due to an increase of $0.2 million (3.5%) in contractual services/commodities primarily in sanitation system supplies. Operating income for the Water Utility Fund increased by $0.6 million (10.8%) from fiscal year 2012 due to the increase in charges for services and a decrease in depreciation expense. Operating income for the Wastewater Utility Fund increased by $2.8 million (121.9%) in fiscal year 2013 with the increase in charges for services and the decrease in depreciation expense discussed above. The Solid Waste Utility Fund operating income decreased $1.1 million (91.9%) based on decreased charges for services as discussed above. The Stadium Fund and the Public Housing Fund had operating losses in fiscal years 2012 and 2013. The Stadium Fund’s operating loss is substantially covered by transfers from the Half12 Cent Sales Tax Fund for governmental use and support of this facility. The Public Housing Fund operating loss is lower in fiscal year 2013 than 2012 primarily due to decreased depreciation expense. The Storm Drainage Fund essentially broke even in fiscal years 2012 and 2013. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2013. Fiscal year 2013 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, 104-112, 114-119, and 125-128. 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 $473 million occurred during fiscal year 2013. 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 $112.6 million, on a budgetary basis, exceeded budgeted inflows of $107.6 million by $5.0 million (4.6%) while budgetary basis outflows (expenditures and other uses) of $116.0 million were 93.0% of final budgeted outflows. Revenues, on a budgetary basis, exceeded budgeted revenues in sales tax, property tax, state shared sales tax, urban revenue sharing, auto in-lieu tax, charges for other services, licenses and permits, rents, while falling short in franchise tax, investment earnings and fines and forfeitures. Reduced General Fund outflows resulted 13 primarily from unspent contingency. There were no expenditure overages for any of the functional categories, with the exception of capital outlay. During the fiscal year, the original General Fund expenditures and other uses budget of $134.7 million was amended by $10.1 million to the final expenditure and other uses budget of $124.6 million. Notable General Fund transfers were as follows:  Contingency appropriation of $0.3 million was transferred from General Fund to the Outside Sources Fund for amounts received from developers for CIP projects; Lake Pleasant Parkway and Annual Sidewalk Program.  Appropriation of $6.9 million was transferred from General Fund contingency to the Sports Complex Fund for Sports Complex Improvement Project.  The purchase of turf maintenance equipment resulted in a contingency appropriation of $0.4 million from the General Fund to the Sports Complex Fund.  Contingency appropriation of $2.4 million was transferred from the General Fund contingency to the Capital Project Funds for the carryover of capital improvement projects from FY2012. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2013, the City had $1.3 billion invested in various capital assets, net of accumulated depreciation and related debt, up 1.5% from the previous year. The capital assets of the City (net of depreciation, but not capital debt) are $1.8 billion. This is a net increase of $26.6 million from June 30, 2012. Net assets of business-type activities increased $5.8 million while governmental activities increased $20.8 million. Major additions to capital assets during the fiscal year included the following:  The City spent $7.3 million beginning a major renovation of the team clubhouses and the stadium at the Peoria Sports Complex. These improvements are pursuant to the new lease agreement with the San Diego Padres and the Seattle Mariners. The presence of these two teams has proven to be an important community asset, as well as an important economic driver. Recently constructed Spring Training complexes have raised the bar for these facilities, and the Padres and Mariners are desirous that the Peoria Sports Complex reflect this new standard. The total project costs is $34.3 million.  Current fire department support services facilities are inadequate to meet the department’s needs. In responses, an industrial building at the corner of 78th Avenue and Seldon Lane was acquired; that with minor renovations can meet the program needs for high bay engine servicing, parts storage, shower/lockers, pandemic supplies storage, equipment and turn-out laundry/repair, SCBA compressor room ,and office facilities. The City spent $1.1 million to acquire the industrial building.  Located at the southeast corner of 83rd and Olive Avenue, the City constructed a second community park, Pioneer Park. The park has 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 $16.9 million in fiscal year 2013 for a total cost of $19.7 million. Pioneer Park opened in September 2013.  Sections of roadway along 83rd Ave have been widened due to development. However, the section between Butler Ave and Mountain View Road continues to be one lane in each direction. It has been determined that the area between Butler Ave and Grand Ave needs to be widened to four-lane roadway, with bike lanes and a raised landscape median. In fiscal year 2013, the City spent $3.9 million on this street project. 14 The following table provides a breakdown of the capital assets of the City at June 30, 2013, and 2012. Additional information on the City’s capital assets may be found in Note 12 on pages 73-75. 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 2012 2013 2012 2013 $ 137.7 $ 133.3 $ 21.5 $ 23.7 .4 .6 .1 .1 13.1 12.3 5.3 2.8 7.1 7.1 4.7 3.7 58.6 60.6 362.8 370.2 48.6 48.4 237.6 241.2 11.3 11.6 274.8 281.2 339.2 336.7 16.6 17.0 139.2 49.5 34.3 161.7 $ 621.4 $ 615.6 $ 1,129.2 $ 1,108.4 Total Primary Government 2013 2012 $ 159.2 $ 157.0 .5 .7 18.4 15.1 11.8 10.8 58.6 60.6 362.8 370.2 48.6 48.4 237.6 241.2 11.3 11.6 274.8 281.2 355.8 353.7 211.2 173.5 $ 1,750.6 $ 1,724.0 Percent Change 1.4% (29.3) 21.8 9.0 (3.2) (2.0) 0.4 (1.5) (2.2) (2.3) 0.6 21.7 1.5 The City has adopted a ten year capital improvement plan budgeted at $524.5 million, including $154.1 million in fiscal year 2014. Anticipated funding for this plan for fiscal year 2014 is through a combination of impact fees (12.6%), general obligation bonds (19.2%), municipal development authority bonds (22.1%), operating revenues (23.3%), City (15.5%) and County (5.0%) transportation sales taxes and other outside funding sources (2.3%). The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $14.7 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 $463.7 million at June 30, 2013. Of this total, $345.4 million was in governmental activities and $118.3 million was in business-type activities. The City’s outstanding non-current debt increased $3.2 million in fiscal year 2013. In fiscal year 2013, the Municipal Development Authority issued $35.5 in excise tax bonds to finance improvements to the City’s sports complex facility. Of the total outstanding bonds of $424.4 million, $162.4 million is general obligation bonds backed by the full faith and credit of the City. An additional $3.5 million is special assessment bonds where the City is contingently liable in the event that the assessment revenues are insufficient to pay the debt payments. The outstanding debt also includes $53.7 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, 2013, is $66.6 million in the 6% category and $66.8 million in the 20% category. Additional information on the debt limitations and capacities may be found in Note 14 (page 75) and also in Table XXIII in the statistical section of this report (page 167). The following schedule shows the outstanding debt of the City (both current and long-term) as of June 30, 2013, and 2012. Further detail on the City’s outstanding debt may be found in Note 14 on pages 75-80. 15 Outstanding Debt (in millions) Governmental Activities 2012 2013 General obligation debt Municipal Development Authority debt Special assessment debt Water/Sewer Revenue bonds Community Facilities District bonds Contracts payable Compensated absences Total $ $ 162.4 85.2 3.5 53.7 57.2 6.9 368.9 $ $ Business-type Activities 2013 2012 171.0 52.5 4.7 56.2 62.9 7.0 354.3 $ $ 119.5 6.3 0.8 126.6 $ $ 128.3 6.9 0.8 136.0 Total Primary Government 2013 2012 $ $ 162.4 85.2 3.5 119.5 53.7 63.5 7.7 495.5 $ $ 171.0 52.5 4.7 128.3 56.2 69.8 7.8 490.3 Percent Change (5.0)% 62.3 (25.5) (6.9) (4.4) (9.0) (1.3) 1.1 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 2013 was 7.2%, which remains below both the state (8.0%) and national average (7.6%). The regional economy continues to recover at a slow pace with population growth in the 1% range and modest improvements in job creation over the 12-month period at 2.0%, slightly faster than the national rate of 1.6% Construction activity began to improve markedly over the previous year (though, much lower than after previous recessions) in the region as home values and re-sale activity rebounded. Most job gains in the state were in the construction, leisure and hospitality, business and financial services, education, and healthcare sectors. Peoria also experienced growth in new home starts with a 40% increase in single-family home permits compared to the previous fiscal year. Commercial activity improved during the year, but reflects increases over historically low levels during the previous two fiscal years. The adopted fiscal year 2014 budget is $468 million, a decrease of 1.1% from the fiscal year 2013 budget as the City anticipates slight property tax revenue decreases due to lag between the time properties are valued and the time they are billed. The operating budget totals $313.9 million, which is an increase of 3.7% from 2013. The capital projects portion of the budget, $154.1 million (a 9.6% decrease), is divided in the following manner: $0.5 million for drainage projects, $6.5 for operational facilities, $46.1 million for parks, trails and open space, $7.1 million for public safety projects, $54.3 million for streets and traffic control projects, $15.6 million for economic development projects, $6.7 million for wastewater projects, and $17.3 million for water projects. The General Fund operating budget (not including contingency) is $119.5 million, up 6.5% from the prior year budget. With the muted economic recovery, the citizens’ needs for City services were balanced with a slowly increasing revenue base. The budget continues to focus on preserving the City’s excellent quality of life, while preserving our future financial viability. The fiscal year 2014 budget no longer required staff cuts, but adhering to the commitment to avoid ongoing commitments, ten new positions were added in the budget. 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 $31.4 million in the General Fund and $5.2 million in the Half-Cent Sales Tax Fund at June 30, 2013. The City also maintains working capital policy reserve, rate stabilization, and debt stabilization reserves in the Utility Funds. At June 30, 2013, those reserves were $11.9 million in the Water Utility, $8.5 million in the Wastewater Utility, and $2.2 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 2014 budget does not anticipate the use of reserves to address recurring expenses. 16 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 POSITION JUNE 30, 2013 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 Restricted cash and cash equivalents Restricted investments Other assets Special assessments receivable Capital assets: Non-depreciable Depreciable (net) Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred loss on bond refunding LIABILITIES Accounts payable Accrued payroll Interest payable Due to other governments Other liabilities Customer deposits Unearned revenue-other 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 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 payable Plus: Unamortized bond premium Total liabilities NET POSITION Net investment in capital assets Restricted for: Debt service Capital projects Development fees Transportion purposes Grant purposes Facilities maintenance Trust purpose Unrestricted Total net position $ 46,528,320 3,745,828 183,903,685 10,470,509 248,263 (1,917,820) 4,287,261 171,060 403,255 47,182,046 28,362,497 1,800,000 3,520,000 Primary Government Business-type Activities $ 17,458,605 67,517,836 8,472,448 73,228 1,917,820 2,610 326,492 - Total $ 63,986,925 3,745,828 251,421,521 18,942,957 321,491 4,287,261 173,670 729,747 47,182,046 28,362,497 1,800,000 3,520,000 500,850,130 628,395,502 1,457,950,536 66,115,381 555,314,356 717,198,776 566,965,511 1,183,709,858 2,175,149,312 407,974 331,807 739,781 11,956,686 1,122,629 6,389,570 1,257,224 3,037,933 3,567 3,354,815 3,599,571 134,898 1,901,629 676,177 277,171 1,901,298 26,450 15,556,257 1,257,527 8,291,199 1,933,401 3,315,104 1,904,865 3,381,265 1,660,785 5,102,910 5,174,034 16,705,000 614,690 563,190 9,007,117 1,660,785 5,717,600 5,737,224 25,712,117 2,174,989 1,779,189 51,991,948 288,145,000 3,850,154 403,706,433 228,040 5,734,014 110,500,533 2,167,805 137,332,583 2,174,989 2,007,229 57,725,962 398,645,533 6,017,959 541,039,016 829,001,871 493,788,885 1,322,790,756 53,849,607 3,396,396 25,743,432 40,936,011 2,725,456 108,517 4,791,144 94,099,643 $ 1,054,652,077 21,475,445 100,000 64,833,670 $ 580,198,000 53,849,607 24,871,841 25,743,432 40,936,011 2,725,456 208,517 4,791,144 158,933,313 $ 1,634,850,077 The accompanying notes are an integral part of the financial statements 19 CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2013 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 19,175,790 22,434,968 35,396,834 21,360,706 8,374,619 29,967,207 6,989,988 2,196,801 12,739,029 574,557 159,210,499 $ 29,094,123 20,342,376 10,503,928 5,140,500 806,658 273,528 66,161,113 225,371,612 34,100,166 18,459,924 11,003,792 2,716,778 816,478 100,165 67,197,303 $ 85,942,426 2,712,644 7,055,179 1,135,692 1,664,610 2,398,630 456,791 3,278,257 43,320 18,745,123 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 162,996 416,918 491,838 356,547 495,153 8,435,926 128,745 1,952,637 12,440,760 67,915 67,915 $ 12,508,675 $ 4,106,779 3,216,703 7,323,482 $ 28,808,511 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 Expired development agreement debt Miscellaneous Special Item: Close out of Public Housing Transfers in (out) Total general revenues and transfers Change in net position Net position - beginning Cummulative effect of change in accounting principle (note 1) Net position - beginning - restated Net position - ending The accompanying notes are an integral part of the financial statements 20 2,020,935 467,546 622,335 18,374,213 21,485,029 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Activities $ $ $ $ (16,300,150) (12,941,936) (33,301,758) (18,717,214) (5,480,836) (2,700,277) (3,582,986) (200,844) (12,739,029) (574,557) (106,539,587) (106,539,587) 2,848,691 16,628,634 65,950,235 4,136,004 12,665,191 14,425,958 5,155,206 599,263 66,465 630,104 4,397,616 (9,394,454) 118,108,913 11,569,326 1,045,833,799 (2,751,048) 1,043,082,751 1,054,652,077 Business-type Activities $ $ $ 9,112,822 1,334,251 499,864 (2,423,722) 9,820 (105,448) 8,427,587 8,427,587 176,176 (2,101,809) 9,394,454 7,468,821 15,896,408 564,684,770 (383,178) 564,301,592 $ 580,198,000 Total $ $ (16,300,150) (12,941,936) (33,301,758) (18,717,214) (5,480,836) (2,700,277) (3,582,986) (200,844) (12,739,029) (574,557) (106,539,587) 9,112,822 1,334,251 499,864 (2,423,722) 9,820 (105,448) 8,427,587 (98,112,000) $ 2,848,691 16,628,634 65,950,235 4,136,004 12,665,191 14,425,958 5,155,206 775,439 66,465 630,104 4,397,616 (2,101,809) 125,577,734 27,465,734 1,610,518,569 (3,134,226) 1,607,384,343 $ 1,634,850,077 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2013 Major Funds Half-Cent Sales Tax Fund General Fund Highway User Revenue Fund Transportation Sales Tax Fund $ ASSETS & DEFERRED OUTFLOWS 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 $ 10,098,918 39,116,129 5,487,712 39,907 175,375 2,599,327 123,315 136,328 326,568 58,103,579 $ 2,430,727 9,660,852 1,499,009 11,112 13,601,700 $ Total assets & deferred outflows $ 58,103,579 $ 13,601,700 $ 14,449,270 $ 29,048,588 $ $ LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable $ 1,849,386 Accrued payroll 984,392 Due to other funds Due to other governments 1,256,919 Customer deposits 3,567 Other liabilities 1,918,272 Unearned revenue-other 1,147,133 Interfund payable (non-current) Total liabilities 7,159,669 Deferred Inflows of Resources: Unavailable revenue-property taxes 18,922 Unavailable revenue-special assessments Total deferred inflows of resources 18,922 Fund balances: Nonspendable: Supply inventories 136,328 Prepaid items 123,315 Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance 108,517 Committed to: Debt service Economic development 1,829,466 Arts capital Operating reserve 13,400,000 Emergency reserve 9,000,000 Budget stabilization reserve 9,000,000 Assigned to: Capital projects Municipal Complex reserve 3,330,705 Council Half-Cent Policy Other purposes Unassigned: 13,996,657 Total fund balance 50,924,988 Total liabilities, deferred inflows & fund balance $ 58,103,579 $ - 2,665,138 10,592,510 304,087 11,709 802,007 73,819 14,449,270 1,055,695 39,300 1,094,995 1,461,825 1,461,825 - 5,027 5,027 - - 73,819 - - - 13,275,429 - 1,000,000 5,200,000 $ 5,653,583 22,469,994 899,536 25,475 29,048,588 7,401,700 13,601,700 13,601,700 13,349,248 $ 14,449,270 The accompanying notes are an integral part of the financial statements 22 27,586,763 27,586,763 $ 29,048,588 GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds $ $ 5,743,892 22,828,923 30,080 28,602,895 $ 8,033,551 3,745,828 31,929,107 391,547 85,720 1,200,000 709,150 25,000 46,855,478 28,362,497 3,520,000 890,133 125,748,011 $ 40,431,138 3,745,828 159,670,619 10,435,309 222,784 1,375,375 4,287,261 148,315 210,147 47,182,046 28,362,497 3,520,000 890,133 300,481,452 $ 30,927,409 $ 28,602,895 $ 125,748,011 $ 300,481,452 $ $ $ 5,421,163 11,076 34,363 305 1,119,661 2,207,682 8,794,250 $ 10,417,107 1,034,768 1,375,375 1,257,224 3,567 3,037,933 3,354,815 890,133 21,370,922 5,805,329 23,073,104 1,853,418 18,781 176,777 30,927,409 720 720 101,123 101,123 30,825,566 30,825,566 $ 30,927,409 628,318 1,341,012 890,133 2,859,463 Total Governmental Funds - 14,287 3,520,000 3,534,287 139,359 3,520,000 3,659,359 - 25,000 210,147 148,315 23,024,041 65,254,257 2,725,456 - 53,849,607 65,254,257 25,743,432 40,862,192 2,725,456 108,517 3,804,379 - 1,000,000 1,829,466 3,804,379 13,400,000 9,000,000 14,200,000 18,491,040 95,301 113,419,474 125,748,011 18,491,040 3,330,705 7,401,700 95,301 13,996,657 275,451,171 300,481,452 25,743,432 25,743,432 $ 28,602,895 $ $ 23 24 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL ACTIVITIES JUNE 30, 2013 Fund balances - total governmental funds balance sheet $ 275,451,171 Amounts reported for governmental activities in the statement of net position 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 $ 1,381,949,305 (270,648,570) 1,111,300,735 Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Deferred loss on bond refunding 407,974 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 304,850,000 57,165,982 6,168,169 (368,184,151) Certain long-term debt is offset by an intangible asset (goodwill) for government-wide reporting 1,800,000 Advances for long-term special assessments is shown on the governmental governmental funds balance sheet, but is not on the statement of net position 3,520,000 Bond premiums are recognized at the time of issuance in the governmental funds, but recognized over the life of the bonds for goverrnment-wide reporting (3,850,154) Property tax revenue earned but not received within 60 days of year-end is a deferred inflow of resources for the governmental statements, but is recognized as revenue for the government-wide statements 139,359 Interest payable on long-term debt is not reported in the governmental funds. (6,389,570) 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. 40,456,713 Total net position of governmental activities - statement of net position The accompanying notes are an integral part of the financial statements 25 $ 1,054,652,077 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2013 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): Capital-related debt issued Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending General Fund Half-Cent Sales Tax Fund $ 36,450,780 2,392,199 4,136,004 $ 16,355,776 - 12,665,191 14,425,958 5,155,206 442 304,007 11,726,961 2,564,075 2,058,925 1,101,082 78,830 1,207,942 94,267,602 26,779 27,125 16,409,680 8,435,926 162,815 27,448 65,056 12,534,740 61,437 60,830 9,927,436 13,158,069 19,043,986 34,647,501 21,001,220 6,219,633 4,785,975 - 1,441,015 - 12,332,717 - 1,991,302 - 2,820,652 101,677,036 1,352,910 18,010 2,811,935 530,090 12,862,807 2,303,153 4,294,455 (7,409,434) 13,597,745 8,469,088 (1,543,141) 6,925,947 496,659 (13,353,028) (12,856,369) (483,487) Highway User Revenue Fund Transportation Sales Tax Fund $ $ 3,338,510 504,985 - (328,067) 1,066,230 1,066,230 9,805,169 - 5,632,981 (4,126,930) (4,126,930) 741,376 738,163 1,506,051 51,408,475 12,860,324 12,611,085 26,080,712 $ 50,924,988 $ 13,601,700 $ 13,349,248 $ 27,586,763 The accompanying notes are an integral part of the financial statements 26 GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds $ $ $ 14,781,897 - - Total Governmental Funds 2,183,404 - $ 65,950,235 19,862,485 4,136,004 45,322 14,827,219 8,916,126 72,792 8,988,918 2,929,258 5,915,156 599,721 198,552 225,124 1,217,271 4,519,558 17,788,044 12,665,191 14,425,958 5,155,206 8,435,926 2,929,700 6,219,163 21,405,623 2,564,075 2,257,477 1,101,082 537,732 1,217,271 5,880,511 174,743,639 2,800 - 495 127,442 37,521 4,267 13,205 - 492,487 497,170 690,144 321,613 2,348,380 2,018,281 128,745 2,213,374 15,094,866 19,668,598 35,375,166 21,327,100 8,568,013 16,355,505 4,914,720 2,213,374 8,585,000 6,294,094 14,881,894 3,777,253 640,004 4,600,187 6,405,000 6,221,935 33,318,799 54,655,928 20,120,163 12,534,039 39,612,698 195,784,242 4,388,731 (36,867,884) (21,040,603) 35,510,000 1,039,481 6,838,390 (8,160,725) 35,227,146 35,510,000 1,039,481 16,968,105 (27,205,066) 26,312,520 (1,640,738) 5,271,917 (54,675) 97,738 97,738 (21,242) (21,242) 43,063 4,367,489 30,782,503 21,375,943 115,060,212 $ 30,825,566 $ 25,743,432 $ 113,419,474 270,179,254 $ 27 275,451,171 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, 2013 Net change in fund balances - total governmental funds $ 5,271,917 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. 146,071 Certain revenues are advances in the governmental funds because they do not provide current financial resources, but are considered revenue on the statement of activities. (385,158) 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. (1,031,324) 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. (204,990) 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 ($39,612,698), plus other capital $0, is exceeded by depreciation ($27,952,231) in the current period. 11,660,467 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 position 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. 61,607 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 6,704,158 A development agreement (long-term debt) expired during the year. This had no effect on the governmental financial statements, but creates a special item on the statement of activities. 630,104 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. (35,510,000) Repayment of bonds/contracts principal is an expenditure in the governmental funds, but reduces long-term liabilities in the statement of net position. No effect on net position. 20,120,163 Bond premiums or discounts and gains or losses on bond refunding are sources or uses of current financial resources for governmental fund reporting but are deferred outflows or inflows of resources for government-wide reporting. (1,039,481) 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 (1,342,130) 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. 7,027,922 Change in net position of governmental activities- statement of activities The accompanying notes are an integral part of the financial statements 29 $ 11,569,326 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ 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, 2013 $ 47,457,106 $ 47,457,106 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 47,457,106 $ - 33,773,042 2,317,569 4,206,352 33,773,042 2,317,569 4,206,352 36,075,747 2,342,812 4,120,373 2,302,705 25,243 (85,979) 12,446,215 15,344,410 4,793,869 248,667 23,098,605 1,839,088 2,352,061 365,400 232,000 701,440 5,900,537 107,619,255 155,076,361 12,446,215 15,344,410 4,793,869 248,667 23,098,605 1,839,088 2,352,061 365,400 232,000 701,440 5,900,537 107,619,255 155,076,361 12,534,939 15,737,409 5,090,274 442 258,687 23,603,776 2,564,075 2,058,925 1,102,069 64,119 1,207,942 5,899,770 112,661,359 160,118,465 88,724 392,999 296,405 442 10,020 505,171 724,987 (293,136) 736,669 (167,881) 506,502 (767) 5,042,104 5,042,104 652,117 3,859,336 2,448,513 3,115,442 949,360 1,953,037 1,255,884 9,968,360 2,680,574 19,672,918 35,211,761 21,233,589 5,343,350 5,086,175 652,117 3,859,336 2,448,513 3,235,442 949,360 1,953,037 1,258,894 9,611,146 2,893,031 19,928,163 35,111,261 21,233,589 6,783,320 5,106,150 605,405 3,787,296 2,431,744 3,218,558 780,536 1,869,818 1,177,958 9,259,854 1,489,478 19,161,408 34,857,071 21,130,710 6,255,982 4,813,484 (46,712) (72,040) (16,769) (16,884) (168,824) (83,219) (80,936) (351,292) (1,403,553) (766,755) (254,190) (102,879) (527,338) (292,666) 3,720,814 17,159,120 373,713 134,684,063 4,625,248 4,601,803 373,713 124,624,123 4,786,777 372,896 115,998,975 161,529 (4,601,803) (817) (8,625,148) 20,392,298 $ 30,452,238 $ 44,119,490 The accompanying notes are an integral part of the financial statements 30 $ 13,667,252 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2013 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 $ 160,118,465 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 (47,457,106) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (5,899,770) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules (12,112,496) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (381,491) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 94,267,602 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 115,998,975 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 144,221 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (728,503) 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 (1,252,265) Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (12,112,496) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (372,896) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 101,677,036 31 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government- non-departmental Debt service: Principal payments Interest and other charges Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 14,399,133 $ 14,399,133 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 14,399,133 $ - 15,082,827 79,000 15,161,827 29,560,960 15,082,827 79,000 15,161,827 29,560,960 16,179,417 22,481 27,125 496,659 16,725,682 31,124,815 1,096,590 (56,519) 27,125 496,659 1,563,855 1,563,855 1,364,265 2,043,731 1,441,015 (602,716) 1,330,000 26,000 3,000,000 9,995,940 15,716,205 1,330,000 26,000 112,560 1,594,315 9,995,940 15,102,546 1,352,910 18,010 143,209 10,770,783 13,725,927 22,910 (7,990) 30,649 (1,594,315) 774,843 (1,376,619) 13,844,755 $ 14,458,414 $ 17,398,888 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 31,124,815 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (14,399,133) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (496,659) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 180,657 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 16,409,680 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,725,927 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (30,649) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (112,560) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (10,770,783) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,811,935 The accompanying notes are an integral part of the financial statements 32 $ 2,940,474 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Intergovernmental: Highway user revenue Charges for services Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 12,174,696 $ 12,174,696 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,174,696 $ - 3,288,499 516,729 3,288,499 516,729 3,322,354 500,171 33,855 (16,558) 7,854,000 450,500 118,771 1,516,729 13,745,228 25,919,924 7,854,000 450,500 118,771 1,516,729 13,745,228 25,919,924 8,387,623 521,678 22,183 65,056 1,569,745 14,388,810 26,563,506 533,623 71,178 (96,588) 65,056 53,016 643,582 643,582 9,481,864 4,605,215 1,268,627 632,062 15,987,768 9,416,864 4,720,114 1,250,375 632,062 16,019,415 8,877,710 3,818,245 503,515 13,199,470 (539,154) (901,869) (1,250,375) (128,547) (2,819,945) 9,932,156 $ 9,900,509 $ 13,364,036 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 $ 26,563,506 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (12,174,696) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (1,569,745) 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 10,675 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 12,534,740 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,199,470 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis (6,795) The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 468,647 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 (503,515) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 12,862,807 The accompanying notes are an integral part of the financial statements 33 $ 3,463,527 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Miscellaneous Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Highways and streets Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 26,581,990 $ 26,581,990 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 26,581,990 $ - 9,087,148 119,000 9,206,148 35,788,138 9,087,148 119,000 9,206,148 35,788,138 9,698,473 51,052 60,830 9,810,355 36,392,345 611,325 (67,948) 60,830 604,207 604,207 1,255,904 17,027,087 1,619,053 5,415,552 25,317,596 930,756 17,590,681 1,307,527 5,415,552 25,244,516 556,643 3,191,716 4,126,930 7,875,289 (374,113) (14,398,965) (1,307,527) (1,288,622) (17,369,227) 10,470,542 $ 10,543,622 $ 28,517,056 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 36,392,345 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 (26,581,990) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 117,081 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 9,927,436 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,875,289 Differences - budget to GAAP: The city budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 546,096 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (4,126,930) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,294,455 The accompanying notes are an integral part of the financial statements 34 $ 17,973,434 35 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2013 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 Investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Capital assets: Buildings and improvements Distribution and collection systems Water Rights Equipment Vehicles Furniture Less accumulated depreciation and amortization Land and improvements Construction in progress Capital assets, net Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred loss on bond refunding Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable Accrued payroll Accrued interest payable Due to other governments Customer Deposits Other current liabilities Current portion of claims payable Current portion of compensated absences Current portion of bonds & contracts payable Unearned revenue-other Total current liabilities Non-current liabilities: Long-term portion of claims payable Long-term portion of compensated absences Long-term portion of bonds & contracts payable Plus: Deferred bond premium Total non-current liabilities Total liabilities NET POSITION Net investment in capital assets Restricted: Capital projects Sports Complex OM&R Trust purpose Unrestricted Total net position $ 9,040,935 35,789,121 4,948,947 39,979 248,655 50,067,637 1,744,850 311,274,825 12,889,809 5,301,047 1,722,934 186,058 (78,663,359) 6,031,539 26,550,656 287,038,359 337,105,996 $ 3,469,612 13,933,665 2,182,225 12,090 19,597,592 7,659,795 348,408,169 2,185,969 1,246,720 29,004 (76,480,736) 3,878,001 15,413,169 302,340,091 321,937,683 $ 4,057,988 16,128,352 1,247,379 18,472 2,610 77,837 21,532,638 $ 10,799 28,430 10,300,730 (6,279,421) 4,060,538 25,593,176 278,701 1,097,741 4,250 2,031 1,382,723 25,781,679 916,344 503,728 (13,477,872) 6,703,349 7,538,667 27,965,895 29,348,618 314,357 314,357 17,450 17,450 - - 1,394,146 50,597 618,112 207,746 1,901,298 127,795 268,390 4,345,727 8,913,811 999,706 28,013 1,283,517 146,873 109,800 5,224,580 7,792,489 545,530 33,546 149,430 728,506 651,004 19,526 215 2,503 71,990 26,450 771,688 108,610 37,920,044 1,662,197 39,690,851 48,604,662 30,850 78,050,446 505,608 78,586,904 86,379,393 49,610 264,057 313,667 1,042,173 35,270 35,270 806,958 243,424,748 218,576,907 3,796,481 27,965,895 10,964,351 34,426,592 $ 288,815,691 3,166,309 13,832,524 $ 235,575,740 7,127,160 13,627,362 $ 24,551,003 217,625 100,000 258,140 $ 28,541,660 Some amounts reported for business-type activities in the statement of net position are different because certain internal service fund assets and liabilities are included with business-type activities. Net position of business-type activities The accompanying notes are an integral part of the financial statements 36 Storm Drain Utility Fund $ 143,153 568,957 89,647 656 802,413 Public Housing Fund $ 24,856 (2) 24,854 827,267 Total $ 468,216 - $ 468,216 468,216 Governmental Activities Internal Service Funds 17,458,605 67,517,836 8,472,448 73,228 2,610 326,492 93,851,219 35,197,123 659,707,850 12,889,809 8,431,790 13,774,112 215,062 (174,901,390) 16,612,889 49,502,492 621,429,737 715,280,956 - 331,807 331,807 $ 6,097,182 24,233,066 35,200 25,479 22,745 193,108 30,606,780 148,102 33,301,962 23,786,609 30,745 (42,292,588) 2,970,067 17,944,897 48,551,677 - 9,185 3,216 15,080 27,481 468,216 468,216 3,599,571 134,898 1,901,629 676,177 1,901,298 277,171 614,690 9,570,307 26,450 18,702,191 1,539,579 87,861 1,660,785 507,950 3,796,175 3,700 3,700 31,181 468,216 228,040 116,234,547 2,167,805 118,630,392 137,332,583 2,174,989 205,980 2,380,969 6,177,144 24,854 - 493,788,885 17,944,897 771,232 796,086 - $ 21,475,445 100,000 62,915,850 578,280,180 4,791,144 19,638,492 $ 42,374,533 $ 1,917,820 580,198,000 $ 37 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2013 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 Special Items Transfers in Transfers out Change in net position Total net position - beginning Cumulative effect of changes in accounting principle (note 1) Total net position - beginning, restated Total net position - ending 34,061,533 33,483 34,095,016 $ 18,423,204 36,720 18,459,924 4,740,579 15,213,706 8,352,791 28,307,076 5,787,940 2,391,747 6,628,958 8,935,712 17,956,417 503,507 96,628 (1,073,334) 5,150 (971,556) 4,816,384 5,448,909 1,714,544 (3,849,754) 8,130,083 280,943,952 (258,344) 280,685,608 $ 288,815,691 $ 10,934,962 776 10,935,738 $ 1,283,732 1,434,296 (1,250) 2,716,778 3,294,605 6,524,869 1,017,792 10,837,266 98,472 1,573,767 2,991,318 710,500 5,275,585 (2,558,807) 29,193 (2,507,798) (2,478,605) 44,626 68,054 112,680 3,157 (81) 3,076 (1,975,098) 3,216,703 3,083,246 (618,844) 3,706,007 211,152 3,258 (23,842) 190,568 231,994,567 (124,834) 231,869,733 $ 235,575,740 $ (2,555,731) 7,718,860 5,163,129 24,360,435 23,378,531 24,360,435 24,551,003 23,378,531 28,541,660 $ 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 position of business-type activities The accompanying notes are an integral part of the financial statements 38 Storm Drain Utility Fund $ 816,478 816,478 Public Housing Fund $ 290,845 515,811 2 806,658 9,820 Total $ 211,239 62,289 273,528 (105,448) 2,499 2,499 $ 95,131 67,915 5,034 168,080 Governmental Activities Internal Service Funds 65,519,909 1,529,427 67,915 74,763 67,192,014 $ 12,291,543 32,085,901 19,079,086 63,456,530 3,735,484 73 73 37,326,644 230,759 37,557,403 7,984,645 12,596,334 11,298,944 4,028,636 35,908,559 1,648,844 176,176 (3,581,213) 73,204 (3,331,833) 61,531 42,513 104,044 403,651 8,665,612 (2,101,809) 12,544,764 (4,492,440) 15,019,778 1,752,888 19,000 2,312,937 (128,300) 3,956,525 12,319 24,856 37,175 (105,375) (2,101,809) (2,207,184) 758,911 2,207,184 563,643,580 38,418,008 758,911 796,086 2,207,184 - (383,178) 563,260,402 578,280,180 38,418,008 42,374,533 $ $ 876,630 $ 15,896,408 39 $ CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2013 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 $ 34,532,094 (13,618,073) (4,707,677) (1,409,308) 14,797,036 $ 18,383,050 (5,884,957) (2,378,805) (451,731) 9,667,557 $ 11,101,683 (2,525,716) (3,297,799) (3,803,916) 1,474,252 1,714,544 (3,849,754) (2,135,210) 3,083,246 (618,844) 2,464,402 3,258 (23,842) (20,584) (6,323,015) 6,189 2,108,860 (3,841,461) (1,373,606) (5,419,445) 1,096,764 (5,573,941) (2,668,579) (1,592,830) 68,054 - (7,677,237) (81) (9,423,033) (12,565,201) (1,524,776) (7,677,318) (5,399,800) 1,858,077 77,898 (3,463,825) (2,101,400) 2,481,627 23,848 404,075 (2,432,000) 2,617,829 36,220 222,049 (167,200) 1,307,126 2,360 1,142,286 (225,032) 9,265,967 9,040,935 (29,167) 3,498,779 3,469,612 150,941 3,907,047 4,057,988 (259,696) 538,397 278,701 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund loans payable Special Item Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Disposal of capital assets Capital contributions Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ $ The accompanying notes are an integral part of the financial statements 40 $ 2,738,364 (2,270,382) (1,559,237) (352,269) (1,443,524) 7,718,860 7,718,860 $ Storm Drain Utility Fund $ 820,591 (368,618) (286,663) (150,841) 14,469 Public Housing Fund $ $ 67,756,237 (24,419,534) (12,230,181) (6,168,065) 24,938,457 $ 37,522,203 (12,742,714) (7,987,372) (13,897,850) 2,894,267 24,856 24,856 (4,531) (2,101,809) (2,106,340) 12,544,764 (4,492,440) (4,531) (2,101,809) 5,945,984 2,312,937 (128,300) 2,184,637 (24,856) - 1,628,634 - (21,037,383) 1,702,877 3,205,624 (9,415,402) (4,042,266) (3,943,256) 179,065 - (24,856) 1,628,634 (29,586,550) (3,764,191) (10,187,800) 8,344,172 142,601 (1,701,027) (30,330,251) 29,466,366 50,187 (813,698) (403,136) 17,861,741 17,458,605 501,015 5,596,167 6,097,182 (87,400) 79,513 2,202 (5,685) $ 180,455 248,212 428,667 Total Governmental Activities Internal Service Funds 8,784 134,369 143,153 73 73 $ (48,966) 517,182 468,216 $ $ (continued) 41 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2013 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 Prepaid items Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Due to other governments Other liabilities Deposits payable Claims payable Unearned revenue - other 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 and property owners Decrease in fair market value of investments Total non-cash investing, capital and financing activities 5,787,940 $ 8,352,791 503,507 $ 8,935,712 206,430 310,678 (2,883) 153,866 4,982 138,404 7,960 9,164,050 9,667,557 - $ $ $ 2,119,939 (17,566) 2,102,373 $ $ $ 15,236 - 268,037 4,026 (11,385) (7,220) 1,375,780 $ $ The accompanying notes are an integral part of the financial statements 42 1,474,252 - (26,585) (26,585) (2,558,807) 710,500 165,945 (2,610) (58,805) $ 14,797,036 - 3,340,049 (57,490) 3,282,559 $ 1,017,792 (76,874) - (154,577) 7,702 (31,474) 64,581 230,648 25,200 9,009,096 98,472 373,698 3,080 9 (5,040) 6,350 11,450 1,115,283 $ (1,443,524) - $ (898) (898) $ Storm Drain Utility Fund $ $ $ $ 9,820 Public Housing Fund $ (105,448) 2 62,289 4,113 - 26,568 2,647 2,822 (2,642) 792 (1,006) 3,390 4,649 (14,234) 468,216 (14,193) 534,115 14,469 (31) (31) $ $ $ 428,667 - - Total $ 3,735,484 Governmental Activities Internal Service Funds $ 19,079,086 4,028,636 341,418 310,715 (58,866) (35,200) (22,745) (32,590) 624,148 20,582 436,751 185,554 216,455 6,350 40,780 21,202,973 $ $ $ 24,938,457 - 5,459,988 (102,570) 5,357,418 1,648,844 (91,045) 8,938 (28,605) (2,598,906) 16,940 1,245,423 $ $ $ 2,894,267 19,000 (36,691) (17,691) (concluded) 43 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2013 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 21,929 87,156 109 109,194 - NET POSITION Held in trust for pension benefits $ 109,194 The accompanying notes are an integral part of the financial statements 44 Agency Funds $ 88,933 353,460 442,393 1,200 441,193 442,393 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2013 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 $ 612 612 $ 294 294 32 262 874 DEDUCTIONS Retirement payments Total deductions 24,650 24,650 Change in net position Net position - beginning of the year Net position - end of the year (23,776) $ 132,970 109,194 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 61 3 Budget Basis of Accounting 65 4 Deposits and Investments 65 5 Property Taxes 68 6 Due from Other Governments 69 7 Accounts Receivable and Allowance for Doubtful Accounts 70 8 Interfund Transactions, Receivable and Payable Balances 70 9 Segment Information for Enterprise Funds 71 10 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 71 11 Fund Balance/Net Position Restrictions, Commitments & Assignments 71 12 Capital Assets 73 13 Community Facilities District Debt 75 14 Long-Term Debt 75 15 Advance Refundings 80 16 Pledged Revenues 81 17 Retirement and Pension Plans 81 18 Leases 87 19 Deferred Compensation Plan 87 20 Commitments and Contingencies 87 21 Other Matters 89 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 four 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. All of the oustanding debt of the Authority will be repaid by revenues of the City. 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, 2013 City of Peoria Employee Benefit Trust The City of Peoria Employee Benefit Trust (the Trust) was formed by petition to the City Council on January 1, 2010. The Trust’s purpose is to fund health, welfare and related benefit programs by the City in accordance with the provisions of Arizona law. Plan premiums are paid by Participants and the City. The City Council Sub Committee on Boards and Commissions nominate individuals to serve as Trustees overseeing the management and administration of the Trust. For financial reporting purposes, the transactions of the Trust are included as part of the Self-Insurance Fund, an internal service fund in the City’s financial statements. Stand-alone financial statements are prepared for the Trust. The accounting records of the Trust are maintained by the City and the financial statements are available from the City of Peoria Finance Department at 8401 West Monroe Street, Peoria, AZ 85345. City of Peoria Workers’ Compensation Trust The City of Peoria Workers’ Compensation Trust (the Trust) was formed by petition to the City Council in 2009. The Trust’s purposes is to fund workers’ compensation benefit programs by the City in accordance with the provisions of Arizona law. Plan premiums are paid by the City. The City Council Sub Committee on Boards and Commissions nominate individuals to serve as Trustees overseeing the management and administration of the Trust. For financial reporting purposes, the transactions of the Trust are included as part of the Self-Insurance Fund, an internal service fund in the City’s financial statements. Stand-alone financial statements are prepared for the Trust. The accounting records of the Trust are maintained by the City and the financial statements are available from the City of Peoria Finance Department at 8401 West Monroe Street, Peoria, AZ 85345. B. Basic Financial Statements The basic financial statements include both government-wide and fund financial statements. The government-wide financial statements (statement of net position 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 Position reports all financial and capital resources of the government (excluding fiduciary funds). It is displayed in a format of assets plus deferred outflows of 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 resources less liabilities less deferred inflows of resources equals net position, with the assets and liabilities shown in order of their relative liquidity. Net position is required to be displayed in three components: 1) net investment in capital assets, 2) restricted and 3) unrestricted. Net investment in capital assets 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 position balances 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 position 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 position balances are available. Commitments or assignments of net position 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 position in the various funds to demonstrate the government’s intended use of those net position balances. 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 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 Position. 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 49 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 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; 50 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 position, 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. 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. As of March 31, 2013, the City turned over operations of the Public Housing Fund to Maricopa County. 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. 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 position and changes in net position 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 four 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. Two funds account for monies held on behalf of separate not-for-profit agencies for which the City operates as an administrator. These are PLAY Peoria and Peoria Citizens Corp Council. The fourth fund accounts for monies held on behalf of Westside Fire Training IGA, a consortium of area fire departments that pool monies for training activities, for which the City acts as the administrator. D. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All funds are reported in the government-wide financial statements on the flow of economic resources measurement focus and accrual basis of accounting. Governmental fund types are presented, in the fund financial statements, using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets, and 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 advances or deferred inflows of resources. 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 inflows of resources 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 a deferred inflow of resources. 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. 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 2013. • 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. 53 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 • 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 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 2012-2013, including the permanent base adjustment, was $759,367,985. 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. 54 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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. 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 55 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 position 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 position is shown in the proprietary fund statements or the government-wide financial statements for prepaid items. J. Capital Assets All capital assets, whether owned by governmental activities or business-type activities, are recorded and depreciated in the government-wide financial statements. The City has chosen not to apply the modified approach to any networks or subsystems of infrastructure assets. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are defined as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. 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, 2013, 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 $3,579,904. 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 Useful life (Years) 50 20-40 5-40 40 20 40 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Streetlights and traffic control devices Equipment Furniture and fixtures Vehicles Computers/software 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 2013 amortization was $257,796 and the net book value at June 30, 2013 was $11,343,032. 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). 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 position, because they are maintained in separate bank accounts and their use is limited by applicable debt covenants. 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 position. 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. In the fund financial statements, governmental fund types recognize bond premiums and discounts 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 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 $5,000 deductible. Excess coverage insurance policies purchased through commercial insurance carriers cover individual claims in excess of these amounts up to $40,000,000. 58 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 $850,000 per claim on public safety employees and $750,000 for all other employees up to an aggregate stop loss of $3,423,282 for fiscal year 2013. 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 $200,000 per claimant. 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 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 $3,835,774 reported in the Self-Insurance Fund at June 30, 2013 is based on the requirements of Governmental Accounting Standards Board Statement #10 which requires that liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. The claims liability consists of $1,898,573 for liability/property claims, $1,378,432 for workers’ compensation claims and $558,769 for health insurance claims. For additional information on insurance amounts, see Table XXXIV in the Statistical Section of this report. 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 SelfInsurance Fund’s claims liability amount (claims only, exclusive of other insurance expenses) during the last two fiscal years are as follows: 59 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Fiscal Year 2012: Risk management Workers' comp Health insurance 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 Beginning of Fiscal Year Liability $ 3,144,409 2,577,748 712,523 $ 6,434,680 Changes in Estimates $(1,245,836) (1,199,316) (153,754) $(2,598,906) Current Year Claims $ 2,158,084 575,858 10,579,379 $ 13,313,321 Claims Payments $ (2,158,084) (575,858) (10,579,379) $(13,313,321) Balance at Fiscal Year-end $ 1,898,573 1,378,432 558,769 $ 3,835,774 Fiscal Year 2013: Risk management Workers' comp Health insurance Detailed financial statements of the three functions making up the self-insurance fund may be found on pages 134-135. R. Cash Equivalents The City considers short-term investments (including restricted assets) in the State of Arizona investment pool, mutual fund-money market, U.S. Treasury bills and notes with maturities of three months or less at acquisition date to be cash equivalents. S. New AccountingStandards During fiscal year 2013, the City implemented the following new accounting standards issued by the Governmental Accounting Standards Board: Statement No. 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position Statement No. 65 – Items Previously Reported as Assets and Liabilities T. Change in Accounting Principle The implementation of GASB Statements #63 and 65 are a change in accounting principle, which cause certain prior period net position/fund balances to be restated. Under previous accounting principles, bond issuance costs which were expensed in the year incurred in the governmental funds, were deferred and amortized over the life of the bonds in the government-wide and proprietary fund statements. GASB Statement No. 65 requires that bond issuance costs no longer be deferred, causing an adjustment to beginning net position to reflect the removal of unamortized bond issuance costs. The following re-statements of net position are included in the fund and government-wide financial statements: Government-wide Statement of Activities: Governmental Activities Business-type Activities Total 60 $ $ 2,751,048 383,178 3,134,226 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Proprietary Fund Statement of Revenues, Expenses and Changes in Fund Net Position: Water Utility Fund $ 258,344 Wastewater Utility Fund 124,834 Total $ 383,178 U. 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 position/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 Position: Total Governmental Funds Assets Cash and cash equivalents Cash with fiscal agent Investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Prepaid items Supply inventories Other assets Restricted cash/cash equivalents Restricted investments Special assessment receivables Interfund receivable (non-current) Capital assets Total assets Deferred outflows of resources Deferred loss on bond refunding Total Assets & Deferred Outflows Long-term Assets/ Liabilities (1) Internal Service Funds (2) Statement of Net Position Eliminations (3) Totals $ 40,431,138 3,745,828 159,670,619 10,435,309 222,784 1,375,375 4,287,261 148,315 210,147 47,182,046 28,362,497 3,520,000 890,133 $ 300,481,452 1,800,000 1,111,300,735 1,113,100,735 6,097,182 24,233,066 35,200 25,479 (1,917,820) 22,745 193,108 17,944,897 46,633,857 (1,375,375) (890,133) (2,265,508) 46,528,320 3,745,828 183,903,685 10,470,509 248,263 (1,917,820) 4,287,261 171,060 403,255 1,800,000 47,182,046 28,362,497 3,520,000 1,129,245,632 1,457,950,536 $ $ 300,481,452 407,974 1,113,508,709 46,633,857 (2,265,508) 407,974 1,458,358,510 61 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Total Governmental Funds Liabilities Accounts payable $ 10,417,107 Accrued payroll 1,034,768 Interest payable Due to other funds 1,375,375 Due to other governments 1,257,224 Claims/deposits payable 3,567 Other liabilities 3,037,933 Unearned revenue-other 3,354,815 Interfund payable (non-current) 890,133 Unamortized bond premium Compensated absences-current Current bonds/contracts payable Long-term liabilities Total liabilities $ 21,370,922 Deferred inflows of resources Unavailable revenue-property taxes 139,359 Unavailable revenue-special assessments 3,520,000 Total Deferred Inflows $ 3,659,359 Fund Balance/Net Position Total fund balance/net position $ 275,451,171 Total liabilities, deferred inflows & fund balance/net position $ 300,481,452 (1) Long-term Assets/ Liabilities (1) 6,389,570 3,850,154 4,594,960 21,879,034 341,710,157 378,423,875 (139,359) (3,520,000) (3,659,359) Internal Service Funds (2) 1,539,579 87,861 1,660,785 507,950 2,380,969 6,177,144 Statement of Net Position Eliminations (3) Totals (1,375,375) (890,133) (2,265,508) 11,956,686 1,122,629 6,389,570 1,257,224 1,664,352 3,037,933 3,354,815 3,850,154 5,102,910 21,879,034 344,091,126 403,706,433 - - - 738,744,193 40,456,713 - 1,054,652,077 1,113,508,709 46,633,857 (2,265,508) 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 position includes those capital assets among the assets of the City as a whole. Costs of capital assets Accumulated depreciation 1,458,358,510 $ 1,381,949,305 (270,648,570) $ 1,111,300,735 Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expense when paid. Interest payable $ (6,389,570) Bond premiums are recognized at the time of issuance in the governmental funds, but are amortized over the life of the bonds on the statement of net position. $ (3,850,154) $ (57,165,982) (304,850,000) (6,168,169) (368,184,151) (4,594,960) (21,879,034) (341,710,157 ) 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 position. Contracts payable Bonds payable Compensated absences Subtotal Less: current compensated absences current portion of bonds/contracts $ Loss on refunding bonds is expensed at the time of issuance in the governmental funds, but is amortized over the life of the bonds on the statement of net position. $ 407,974 Certain long-term debt obligations that are booked for the government-wide statements are offset by goodwill. $ 1,800,000 $ $ 3,520,000 139,359 3,659,359 $ 40,456,713 Advanced revenue for the long-term special assessment receivables shown on the governmental fund statements is not included on the statement of net position. 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. Advanced special assessment revenue Deferred property tax revenue (2) Internal service funds are used by management to charge the costs of certain activities, such as insurance, motor pool, information technology, and facilities maintenance, to the individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position, but are not included on the governmental fund balance sheet. ISF Net Position 62 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 (3) Certain interfund transactions between governmental activities are eliminated in the consolidation of those activities for the statement of net position. Interfund receivables - current Interfund receivables – non-current Interfund payables – current Interfund payables – non-current $ $ 1,375,375 890,133 (1,375,375) (890,133) - 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 $ 65,950,235 Property taxes 19,862,485 Franchise taxes 4,136,004 Intergovernmental: State shared sales taxes 12,665,191 Urban revenue sharing 14,425,958 Auto-in-lieu taxes 5,155,206 Highway user revenue 8,435,926 From federal government 2,929,700 Other governmental 6,219,163 Charges for services 21,405,623 Licenses and permits 2,564,075 Fines and forfeitures 2,257,477 Rents 1,101,082 Investment earnings 537,732 Special assessments 1,217,271 Miscellaneous 5,880,511 Other sources: Gain on sale of capital assets Capital contributions Capital-related debt issued 35,510,000 Premium on bonds issued 1,039,481 Expired development agreement Transfers in 16,968,105 Total revenues and other sources 228,261,225 Expenditures/Expenses Current: General government 15,094,866 Culture and recreation 19,668,598 Police 35,375,166 Fire 21,327,100 Development services 8,568,013 Highways and streets 16,355,505 Public works 4,914,720 Human services 2,213,374 Debt service: Principal payments 20,120,163 Interest and other charges 12,534,039 Capital outlay 39,612,698 Unallocated depreciation Total expenditures/ expenses 195,784,242 Other financing uses/changes in net position Transfers out 27,205,066 Total expenditures/expenses & other financing uses 222,989,308 Net change for the year $ 5,271,917 (1) Long-term Revenues/ Expenses(1) Capitalrelated Items(2) Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities (385,158) - - - - (1,031,324) - 19,093 61,531 - - 66,465 6,704,158 3,777,254 2,312,937 (1,416,482) 10,566,970 2,374,468 514,910 31,910 (16,980) (230,910) (22,890) 39,130 81,060 (2,300) 4,156,703 3,817,353 1,572,468 1,548,144 6,084 14,117,536 2,143,565 39,771 (429,165) (610,188) (1,533,820) (1,283,628) (176,588) (544,964) (149,357) (54,044) 204,990 - (39,612,698) 574,557 598,290 (11,636,517) - 598,290 (2,015,402) 5,119,384 (6,517,133) 17,084,103 (4,781,754) 128,300 (4,653,454) 7,027,922 65,950,235 19,477,327 4,136,004 867,759 (1,501,988) 12,665,191 14,425,958 5,155,206 8,435,926 2,929,700 6,219,163 22,273,382 2,564,075 2,257,477 1,101,082 599,263 185,947 4,397,616 (58,415,316) 66,465 6,704,158 630,104 1,192,461 630,104 (59,049,545) 181,366,740 - (161,524) (472,705) - 19,175,790 22,434,968 35,396,834 21,360,706 8,374,619 29,967,207 6,989,988 2,196,801 (35,510,000) (1,039,481) 630,104 36,549,481 (20,120,163) (20,120,163) - 12,739,029 574,557 (634,229) 159,210,499 36,549,481 (58,415,316) 10,586,915 16,429,318 (15,799,214) (59,049,545) - 169,797,414 11,569,326 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 63 - $ 146,071 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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) $ (428,993) (58,282) 282,285 (204,990) 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. $ (385,158) 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 Advances 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 $ (1,031,324) 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 position decrease by the amount of depreciation expense charged for the year. Capital outlay Depreciation expense $ $ 39,612,698 (27,952,231) $ 11,660,467 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 position 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: $ 19,093 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 $ 6,704,158 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 position 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 position and do not result in an expense in the statement of activities. Principal payments made 64 $ 66,465 (23,951) 42,514 (5,119,384) 3,777,254 (1,342,130) $ 2,374,468 4,653,454 7,027,922 $ 20,120,163 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 Certain bond transactions, like 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 amortized (expensed) over the life of the bonds. Bond premium Loss on bond refunding $ (35,510,000) $ $ A Development Agreement (long term not carried in the governmental funds) expired without meeting the revenue requirements necessary to cause the City to pay out the entire amount of the agreement. This transaction has no effect on the governmental statements, but creates a special item on the statement of activities $ (1,039,481) (1,039,481) 630,104 Certain debt transactions cause transfers between funds. Transfers out Transfers in (5) $ 36,549,481 (36,549,481) $ - 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 634,229 (634,229) - $ 58,415,316 (58,415,316) $ - 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 position on a budgetary basis, to revenues and expenditures/expenses or change in net position 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 Position, and on the fund financial statements, as “Cash and cash equivalents” and “Investments”. At June 30, 2013, the carrying amount of the City's deposits was $37,961,857 and the bank balance was $37,510,164. 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 $451,693 represents deposits in transit, outstanding checks and other reconciling items. 65 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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, 2013, 72.5% of the City’s investments have a maturity of less than one year and 4.5% 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, 2013 was 356 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, 2013, the City’s investments include $86.9 million in Commercial Paper and no Banker’s Acceptance securities. State law and the City’s investment policy also restricts investments in certificates of deposit (CD) to fully collateralized or insured from eligible Arizona depositories limited on a statewide basis by their capital structure on a quarterly basis. Such CDs are further collateralized to 110% with pledged securities held by an independent custodian approved by the City. City policy requires that securities underlying repurchase agreements must have a market value of at least 102 percent of the cost of the repurchase agreement. The market values of securities underlying repurchase agreements were at or above the required level during the fiscal year. Moody’s Investment Type Rating Federal Farm Credit Bank - Agency Note Aaa Federal Farm Credit Bank – Callable Agency Note Aaa Federal Home Loan Bank - Agency Note Aaa Federal Home Loan Bank - Callable Agency Note Aaa Federal Home Loan Mortgage Corp - Agency Note Aaa Federal Home Loan Mortgage Corp - Callable Agency 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+ AA+ AA+ % of Investments 2.8 4.2 7.9 0.9 2.8 8.7 8.9 5.8 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, 2013, 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, 2013, the City’s investments include 46.1% invested in U.S. Agency Coupon securities, 7.9% in U.S. Treasury Notes, 24.3% in Commercial Paper, and 21.7% in money market funds, cash with fiscal agent, and the Arizona State Investment Pool. Custodial credit risk: To control custodial credit risk, State law and the City’s investment policy requires all securities and collateral to be held by an independent third party custodian in the City’s name. The custodian provides the City with monthly market values along with original safekeeping receipts. 66 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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, 2013, 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 $ 26,183,530 -$ Agency coupon securities 55,286,942 48,958,628 29,944,500 16,096,624 Agency discount notes 1,999,153 Commercial paper 71,431,327 State of Arizona local 297,072 government investment pool Mutual fund-money market 25,342,820 Total unrestricted investments 180,540,844 48,958,628 29,944,500 16,096,624 Less: amount included in cash and cash equivalents Plus: amount included in restricted investments Unrestricted investments, net $ Fair Value 26,183,530 150,286,694 1,999,153 71,431,327 297,072 25,342,820 275,540,596 25,292,606 1,614,147 251,862,137 Total investments per statement of net position Plus: Investments in fiduciary funds $ 251,421,521 440,616 Net unrestricted investments $ 251,862,137 -$ -$ 12,469,555 15,484,974 51,767,885 2,019,000 81,741,414 $ 3,745,828 48,018,941 1,614,147 28,362,498 Restricted Investments: Agency coupon securities Commercial paper Mutual fund-money market U.S. Treasury notes and strips Total Restricted Investments 9,081,192 15,484,974 51,767,885 2,019,000 78,353,051 1,392,463 1,392,463 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 1,995,900 1,995,900 Restricted cash, cash equivalents, and cash with fiscal agents at June 30, 2013, consisted of the following: Restricted investments included in restricted cash and cash equivalents 48,018,941 Less: amount included in unrestricted cash and cash equivalents 836,895 Total restricted cash and cash equivalents per statement of net position $ 47,182,046 Cash with Fiscal Agents at June 30, 2013, consisted of the following: Cash with fiscal agents $ Restricted investments included in cash with fiscal agents 3,745,828 Total cash with fiscal agents $ 3,745,828 67 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Unrestricted Cash and cash equivalents at June 30, 2013, 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 position $ $ 25,292,605 37,961,857 836,895 6,430 64,097,787 110,862 63,986,925 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 is comprised of the following for the year ended June 30, 2013: 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 $ $ 1,169,148 (393,447) 775,701 262 775,439 The net decrease in the fair value of investments during fiscal year 2012-2013 was approximately $393,447. This amount takes into account all changes in fair value (including purchases and sales) that occurred during the year. The unrealized loss on investments held at June 30, 2013, was approximately $381,353. 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 2013 are $1,133,938,910 and $1,137,434,740 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 68 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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, 2013: Governmental activities: General Fund: Due from Maricopa County for: Property tax Due from State of Arizona for: State shared sales tax 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 Funds: Due from US Department of Housing & Urban Development Due from US Department of Transportation Due from US Department of Interior Due from other Federal agencies Due from Maricopa County: Home Grant Property tax Other Due from State of Arizona Various Grants Subtotal Total Governmental Activities 30,122 2,177,346 250,023 24,849 116,987 2,599,327 797,774 4,233 802,007 176,777 176,777 230,121 62,091 38,972 121,554 47,501 28,805 55,464 124,642 709,150 $ 69 4,287,261 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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, 2013. Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Other Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Public Housing Fund Total enterprise funds Internal Service Funds Grand totals Receivables $ $ $ $ Allowance Net 5,515,834 1,499,009 310,804 899,536 2,038,298 420,057 10,683,538 28,122 6,717 184,880 28,510 248,229 5,487,712 1,499,009 304,087 899,536 1,853,418 391,547 10,435,309 7,762,103 2,804,668 1,687,422 4,250 118,367 12,376,810 35,200 23,095,548 2,813,156 622,443 440,043 28,720 3,904,362 4,152,591 4,948,947 2,182,225 1,247,379 4,250 89,647 8,472,448 35,200 18,942,957 8. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES Net interfund receivables and payables between governmental activities and business-type activities of $1,917,820 are included in the government-wide financial statements at June 30, 2013. These internal balances are between the proprietary funds (business-type activities) and the internal service funds (governmental activities). Other interfund payables and receivables, $34,363 at June 30, 2013, 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, 2013, there are two interfund loans that are considered to be long-term loans: 1) The General Fund has an outstanding balance of $141,012 (all current) due from the Development Fee Fund for a cash loan for the completion of the Sunrise Mountain Branch Library construction, and 2) The Development Fee Fund owes the MDA Debt Service Fund $2,090,133 ($1,200,000 current and $890,133 long-term) to repay future debt service payments for bonds used to complete construction of Happy Valley Road. The net transfers of $9,394,454 from governmental activities to business-type activities on the governmentwide statement of activities are primarily operational subsidies from the Half-Cent Sales Tax Fund to the Stadium Fund and the transfer of completed capital assets from the MDA to the Stadium Fund and the General Fund to the Water Utility Fund. The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2013: Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds Total governmental funds Transfers out Transfers in 1,543,141 13,353,028 4,126,930 21,242 8,160,725 27,205,066 8,469,088 496,659 1,066,230 97,738 6,838,390 16,968,105 $ 70 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 3,849,754 618,844 23,842 4,492,440 128,300 31,825,806 $ 1,714,544 3,083,246 3,258 7,718,860 24,856 12,544,764 2,312,937 31,825,806 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 2013 that were either nonroutine in nature or inconsistent with the activities of the fund making the transfer. 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, 2013, one fund, as shown in the basic financial statements, was in a deficit position. The Facilities Maintenance Fund, as shown in the Combining Statements for the Internal Service Funds, has a deficit balance of $144,158 at June 30, 2013. 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, 2013, 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 Facilities Maintenance Fund where higher capital outlay caused expenditures to exceed the budget by $9,226. 11. FUND BALANCE/NET POSITION RESTRICTIONS, COMMITMENTS AND ASSIGNMENTS Only restrictions imposed by external sources are shown as Restricted Net Position on the governmentwide 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 position in other funds to demonstrate the government’s intended use of those net position balances. 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 position 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 funds are shown on the fund financial statements. The following are the commitments or assignments of net position included in unrestricted net position on the proprietary fund financial statements at June 30, 2013: 71 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 $ 7,100,000 1,600,000 3,200,000 6,939,861 1,035,990 19,875,851 4,500,000 900,000 3,100,000 4,725,000 600,202 13,825,202 2,200,000 3,152,956 5,352,956 Stadium Fund: Committed for capital equipment replacement Total proprietary funds 146,244 39,225,253 Internal Service Funds: Committed for capital equipment replacement Assigned for Workers’ Compensation self-insurance reserve Assigned for risk management purpose Total internal service funds 12,337,917 650,000 6,256,183 19,244,100 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, 2013: Budget stabilization reserve – 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 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. 72 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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, 2013, follows: Balances June 30, 2012 Governmental activities: Non-depreciable assets: Work in Progress – Parks $ 16,874,160 Work in Progress – Buildings 992,426 Work in Progress - Equipment 117,740 Work in Progress – Furniture 31,036 Work in Progress – Surface water 9,850,137 Work in Progress – Streets 104,999,631 Work in Progress – Technology 3,258,530 Work in Progress – Vehicles 446,428 Work in Progress – CFD 2,634,530 Land 336,691,112 Total non-depreciable assets 475,895,730 Additions/ Transfers in Disposals/ Transfers out 19,934,496 131,343 6,276 13,446,354 723,861 384,175 2,455,422 2,470,013 39,551,940 (10,509,062) (311,545) (38,214) (18,262) (1,926,964) (451,363) (1,342,130) (14,597,540) 73 Balances June 30, 2013 26,299,594 812,224 117,740 31,036 9,818,199 118,427,723 2,055,427 379,240 3,747,822 339,161,125 500,850,130 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Balances June 30, 2012 Depreciable assets: Buildings & Improvements 170,730,564 Furniture 2,131,775 Equipment 45,423,032 Vehicles 22,778,135 Surface water system 80,324,605 Street system 536,820,597 Park system 60,343,077 Total depreciable assets at historical cost 918,551,785 Less accumulated depreciation for: Buildings & Improvements (37,394,414) Furniture (1,586,340) Equipment (33,086,884) Vehicles (15,697,079) Surface water system (19,778,414) Street system (166,594,210) Park system (11,893,739) Total accum. depreciation (286,031,080) assets, net 632,520,705 Governmental activities capital assets, net $ 1,108,416,435 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 Surface water system Water Rights Water system Wastewater system Total depreciable assets at historical cost Less accumulated depreciation for: Buildings & improvements Furniture Equipment Surface water system 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, 2013 8,718,054 4,526,519 2,133,702 38,214 6,550,813 1,936,628 (1,119,055) - 179,448,618 2,131,775 49,949,551 23,792,782 80,362,819 543,371,410 62,279,705 23,903,930 (1,119,055) 941,336,660 (4,306,635) (158,417) (3,773,366) (1,996,205) (1,979,144) (13,989,888) (1,748,576) (27,952,231) (4,048,301) 1,042,153 1,042,153 (76,902) (41,701,049) (1,744,757) (36,860,250) (16,651,131) (21,757,558) (180,584,098) (13,642,315) (312,941,158) 628,395,502 35,503,639 (14,674,442) 1,129,245,632 23,497,031 10,628,039 229,106 17,020,639 51,374,815 3,053,625 4,785,130 7,309,561 2,600 15,150,916 (410,350) (410,350) 26,550,656 15,413,169 7,538,667 16,612,889 66,115,381 38,474,045 224,675 5,027,793 12,100,600 12,889,809 307,604,328 346,276,759 3,428,348 2,091,346 24,856 3,670,497 2,131,410 (3,276,922) (9,613) (24,351) (417,834) - 35,197,123 215,062 8,431,790 13,774,112 24,856 12,889,809 311,274,825 348,408,169 722,598,009 11,346,457 (3,728,720) 730,215,746 (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 (941,328) (15,865) (874,992) (2) (1,175,374) (257,796) (7,329,441) (8,484,288) (19,079,086) (7,732,629) 2,061,629 9,612 20,256 417,832 66 2,509,395 (1,219,325) (13,703,028) (182,192) (3,091,110) (2) (9,119,745) (1,546,777) (73,682,025) (73,576,511) (174,901,390) 555,314,356 615,641,125 7,418,287 (1,629,675) 621,429,737 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 $ 74 4,156,703 3,817,353 1,609,945 1,490,878 6,084 14,117,536 2,143,565 35,610 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Unallocated 574,557 Total depreciation expense $ 27,952,231 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, 2013, 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, 2013 was $66,581,084 and $66,776,948 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 75 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 service requirements. The City utilizes the City’s excise tax and other unrestricted revenues to pay the lease payments. Also see Table XXIV in the Statistical Section of this report. D. Special assessment bonds with Governmental Commitment Special Assessment Bonds are used to construct projects within special assessment districts created by the City after property owners within these districts agree to be assessed for the costs of debt service on these bonds. Payments made by the assessed property owners within the districts are pledged to pay the debt service on the bonds. In the event of default by a property owner, the lien created by the assessment is sold at public action, and the proceeds are used to offset the defaulted assessment. If there is no purchase at the public auction, the City is required to buy the property, and pay off the assessment, with funds appropriated from the General Fund. As trustee for improvement districts, the City is responsible for collection of assessments levied against the owners of property within the improvement districts and for disbursement of these amounts for retirement of the respective bonds issued to finance the improvements. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. At June 30, 2013, special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, are adequate to meet the scheduled maturities of the bonds payable and related interest. There were no delinquent assessments at June 30, 2013. 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, 2013. 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 76 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 bonds for drainage projects were issued against the 2005 water, wastewater and storm drainage authorization leaving $92,174,716 unissued at June 30, 2013. 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, 2013. 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, 2013, $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, 2013. 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, 2013. At June 30, 2013, there is no outstanding arbitrage liability. Bonds and loans payable at June 30, 2013 are comprised of the following: Delivery Date Description Maturity Dates Purpose Net Interest Rate Ave. Life (Yrs) Original Principal Balance Principal Balance Outstanding CLASSIFIED IN GOVERNMENTAL ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: General Obligation Bonds 03/01/07 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 7/1/07-26 7/1/07-20 7/1/09-28 07/1/10-30 07/1/12-32 7/1/12-22 4.27 4.00 3.86 4.03 3.32 1.75 20 14 7.4 10.5 11.38 5.7 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 07/18/12 Series 2012 Revenue Bonds MDA Series 2012 Total General Obligation Bonds 7/1/06-25 7/1/08-26 7/1/12-26 7/1/13-32 4.2 4.6 3.9 3.3 10.9 10.5 8.7 11.6 94,380,000 61,090,000 18,365,000 10,780,000 68,440,000 37,945,000 29,170,000 24,155,000 14,715,000 14,715,000 13,690,000 13,690,000 238,760,000 162,375,000 6,675,000 47,000,000 7,920,000 35,510,000 97,105,000 4,805,000 37,385,000 7,530,000 35,510,000 85.230,000 Special Assessment Bonds with governmental commitment (collateralized by the special assessments levied on the property benefiting from the improvements) 04/01/07 ID# 0601 99tth Ave & Northern ID-Street improvements Total Improvement District Bonds 7/1/07-22 4.25 15 4,660,000 4,660,000 3,520,000 3,520,000 12.7 13.2 20 21,250,000 23,550,000 22,760,000 14,450,000 18,900,000 20,375,000 67,560,000 53,725,000 Community Facility District Bonds (collateralized by ad valorem property taxes levied on the property benefiting from the improvements) 12/17/02 04/27/05 12/28/06 Series 2002 Series 2005 Series 2006 Vistancia Community Facilities District infrastructure Vistancia Community Facilities District infrastructure Vistancia Community Facilities District Infrastructure Total Community Facilities District Bonds 77 7/15/05-22 7/15/07-24 7/15/09-26 6.69 5.47 4.26 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 304,850,000 (16,705,000) $288,145,000 CLASSIFIED IN BUSINESS-TYPE ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: Revenue Bonds 07/26/02 WIFA Series 2000 (ph 3) 12/08/06 WIFA Series 2006 CW 1 02/15/08 WIFA Series 2006 CW 2 05/16/08 WIFA Series 2006 CW 3 07/17/09 WIFA Series CW0182009 07/17/09 WIFA Series DW0382009 07/17/09 WIFA Series CW0412009 07/17/09 WIFA Series CW0172009 11/20/09 WIFA Series DW1272009 05/27/10 WWW Series 2010 06/28/12 WWW Series 2012 Total Revenue Bonds 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 7/1/03-22 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 1,964,789 1,169,884 27,183,342 22,349,661 42,741,541 35,791,511 8,575,253 7,562,886 1,577,978 635,215 8,484,204 6,961,702 4,021,623 3,227,316 4,545,000 3,861,721 1,780,000 652,756 15,780,000 14,015,000 23,280,000 23,280,000 200,318,811 119,507,652 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, 2013 119,507,652 (9,007,117) 110,500,535 $398,645,535 $398,645,535 25,712,117 $424,357,652 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, 2013 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: 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 & 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 78 06/20/17 Prime 7.0 4,538,187 309,094 03/16/14 - - 4,316,327 3,940,961 10/22/26 - - 45,251,014 23,348,852 05/20/20 - - 1.800,000 1,022,194 04/30/14 - - 1,800,000 929,815 02/17/14 - - 1,382,257 102,014 08/31/14 - - 14,512,075 11,094,044 - - - 3,901,317 3,026,791 07/29/18 - - 1,800,000 1,379,531 02/11/15 - - 10,587,249 8,614,259 - - - 588,659 54,935 10/01/13 - - 6,926,205 2,342,091 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 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 - - - 253,192 253,192 57,165,982 (5,174,034) 51,991,948 - - - 661,005 626,568 10/22/26 - - 4,841,000 2,348,454 02/17/14 - - 2,376,931 173,070 08/31/14 - - 426,208 292,851 02/11/15 - - 3,427,985 2,856,261 6,297,204 (563,190) 5,734,014 $ 57,722,962 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, 2013 The following is a summary of changes in non-current liabilities reported in the government-wide financial statements for the year ended June 30, 2013: 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: Revenue bonds Contracts payable Compensated absences Deferred bond premium Deferred loss on refunding Business-type activities totals Additions Reductions $ 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 35,510,000 35,510,000 8,394,712 1,039,481 44,944,193 8,585,000 2,760,000 1,140,000 2,505,000 14,990,000 5,760,267 8,523,843 282,285 (58,382) 29,498,013 162,375,000 85,230,000 3,520,000 53,725,000 304,850,000 57,165,982 6,882,099 3,850,154 (407,873) 372,340,362 9,555,000 4,195,000 325,000 2,630,000 16,705,000 5,174,034 5,102,910 26,981,944 128,283,906 6,936,350 801,950 2,444,595 (379,208) $ 138,087,593 863,196 863,196 8,776,254 639,146 822,416 276,791 (47,401) 10,467,206 119,507,652 6,297,204 842,730 2,176,804 (331,807) 128,483,583 9,007,117 563,190 614,690 10,184,997 79 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, 2013 The following is a summary of bond debt service requirements, including interest requirements, to maturity for long-term debt at June 30, 2013: General Obligation Bonds 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 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Less Interest (52,525,792) $162,375,000 Municipal Development Authority Bonds 7,633,645 7,595,408 7,583,308 7,576,707 7,571,358 7,549,657 7,561,183 7,557,017 7,547,712 7,546,978 7,517,769 7,532,213 7,508,634 3,157,307 2,464,791 2,463,106 2,455,581 2,459,128 2,455,300 2,457,263 Special Assessment Bonds 474,600 475,788 476,338 476,250 480,525 478,950 481,738 483,675 484,761 - (30,964,065) 85,230,000 (792,625) 3,520,000 Revenue Bonds 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 5,484,633 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 _ 41,916,961 41,870,446 41,853,685 41,737,346 41,145,550 40,166,904 38,746,097 38,783,444 34,639,783 33,314,006 31,551,540 31,539,930 31,524,816 27,176,660 13,278,661 10,196,179 5,580,671 5,274,766 3,422,706 3,414,885 (25,934,091) (22,560,811) (132,777,384) 119,507,652 53,725,000 424,357,652 The following table discloses the bond debt service requirements as of June 30, 2013, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal year 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 Totals Principal 25,712,117 26,539,387 27,490,996 28,422,081 28,947,787 141,976,908 119,278,968 25,989,408 $ 424,357,652 Interest 16,204,844 15,331,059 14,362,689 13,315,265 12,197,763 43,673,326 15,792,639 1,899,799 132,777,384 Total 41,916,961 41,870,446 41,853,685 41,737,346 41,145,550 185,650,234 135,071,607 27,889,207 557,135,036 The City had no outstanding variable rate bonds at June 30, 2013. The City had $309,094 in variable rate outstanding contracts payable at June 30, 2013. 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, 2013. Long-term compensated absences of governmental activities are expected to be liquidated by the operating funds (primarily the General Fund, Highway User Revenue Fund and Transit Fund) as they come due. 15. ADVANCE REFUNDINGS In prior years, the City refinanced various bond issues through advance refunding arrangements. Under the terms of the refunding bond issues, sufficient assets to pay all principal and interest on the refunded bond issues have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities which, together with interest earned thereon, will provide amounts sufficient for future payment of principal and interest of the issues refunded. 80 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Prior Years Refundings (amounts callable on October 31, 2013) 2000 Ph2 16. Water Infrastructure Authority Bonds $7,912,547 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, 2013, $119,507,652 in bonds remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2013, the net revenues available for service of this debt were $26,911,394. The debt principal and interest paid on this debt in fiscal year 2013 was $12,356,158 (45.9% of available net pledged revenues). For further information on long-term debt, refer to Note 14. For additional information on pledged revenues for revenue bonds, refer to Table XXV of the Statistical Section. The City has pledged certain revenues for the repayment of $50,105,000 in Municipal Development Authority (MDA) Bonds issued in 2006, 2011 and 2012. 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, 2013, $47,845,000 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, 2013, the pledged revenues available to service this debt were $105,886,977. The debt principal and interest paid on this debt in fiscal year 2013 was $1,162,481 (1.1% 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 of the Statistical Section. The City has pledged certain revenues for the repayment of $47,000,000 in Municipal Development Authority Bonds issued in 2008. The bonds were issued to construct transportation infrastructure. The bonds have a senior lien on the .03% transportation sales tax and a secondary lien on the excise taxes and state shared revenues not specifically reserved by law or other regulation to be expended for other purposes (secondary after the MDA Bonds discussed above). At June 30, 2013, $37,385,000 of the bonds remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2013, the net revenues available to service this debt were $114,651,932. The debt principal and interest paid on this debt in fiscal year 2013 was $3,898,588 (3.4% 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 XXV of the Statistical Section. 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, 2013 $3,520,000 in bonds are outstanding to be repaid by these revenues. For the fiscal year ended June 30, 2013, the net revenues available to service this debt were $1,484,283. The debt principal and interest paid on this debt in fiscal year 2013 was $1,362,820 (91.8% of available pledged revenues). For further information on long-term debt, refer to Note 14. For additional information on pledged revenues for Special Assessment bonds, refer to Table XXVI of the Statistical Section. 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 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 Covered employees were required by state statute to contribute 11.14 percent (10.9 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 (10.25 percent for retirement, .65 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 was also required to contribute an alternate contribution rate of 8.64 percent of salaries for those employees that are currently receiving retirement benefits from the System. These retirement members are not required to contribute to the System. These amounts have been included in the employer retirement fund contributions in the following table. The City’s contributions for the current year and two preceding years, all of which were equal to the required contributions, were as follows: Fiscal Year Ended 2011 2012 2013 Retirement Fund Health Benefit Supplement Fund Long-Term Disability Fund 290,740 272,167 320,008 123,195 103,682 117,811 4,439,940 4,263,942 5,048,667 82 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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. 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 11.50 percent of their annual covered salary. The employer rate for fiscal year 2012-2013 was 36.44 percent. The health insurance premium portion of the contribution rate was actuarially set at 1.80 percent of covered payroll. The City’s contributions from employer and employees for the fiscal year 2013, 2012, and 2011 were $17,410, $15,140, and $11,010, respectively for the employees and $55,166, $49,943, and $46,649, 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, 2011, actuarial valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 8.25 percent investment rate of return, (b) projected salary increases of 4.5 percent, and (c) payroll growth of 4.5 83 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 25 years. Public Safety Personnel Retirement System: a. Plan Description The City contributes to the Public Safety Personnel Retirement System (PSPRS), an agent multipleemployer defined benefit pension plan and insurance premium plan, which acts as a common investment and administrative agent for the various fire and police agencies within the state. Sworn police and fire personnel are eligible to participate in the plan. The plan provides retirement and disability benefits, 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 9.55 percent of their annual covered salary and fire personnel are required to contribute 9.55 percent while the City is required to contribute an actuarially determined rate. Police personnel contributed $1,266,014 and fire personnel $1,015,995 during fiscal year 2012-2013. The City rate for fiscal year 2013 was 20.85 percent for police personnel and 16.15 percent for fire members. The City was also required to contribute 14.57 percent for those police and fire personnel that were currently drawing retirement benefits from a PSPRS retirement system and were not required to make employee contributions. The health insurance premium portion of the contribution rate was actuarially set at 1.02 percent of covered payroll for police and 1.01 percent for fire for fiscal year 2013. 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. 84 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 6/30/2012 Entry age normal Level % of pay, closed for underfunded, open for overfunded 24 years for underfunded 20 years for overfunded 7 years smoothed market Police 6/30/2012 Entry age normal Level % of pay, closed for underfunded, open for overfunded 24 years for underfunded 20 years for overfunded 7 years smoothed market 8.00% 5.0% - 9.0% 5.0% None 8.00% 5.0% -9.0% 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, 2013, follows: Annual pension/OPEB cost Contributions made PSPRS - Police Health Pension Insurance PSPRS - Fire Health Pension Insurance EORP $2,622,025 $134,785 $1,632,474 $107,353 $52,441 $2,725 2,622,025 134,785 1,632,474 107,353 52,441 2,725 Pension Health Insurance Three Year Trend Information for Agent Plans: Annual pension cost information for the current and two preceding years follows for each of the agent plans. Fiscal Year Ended Annual Pension/ OPEB Cost Annual Costs Contributed Percentage of Net Pension/OPEB Obligation PSPRP - Police - Pension 2011 $2,112,544 2012 2,090,120 2013 2,622,025 100% 100 100 $ 0 0 0 PSPRP - Police – Health Insurance 2011 $ 126,533 2012 123,935 2013 134,785 100% 100 100 $ 0 0 0 PSPRP - Fire - Pension 2011 $1,457,929 2012 1,394,608 2013 1,632,474 100% 100 100 $ 0 0 0 PSPRP - Fire – Health Insurance 2011 $ 99,083 2012 109,878 2013 107,353 100% 100 100 $ 0 0 0 85 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 EORP – Pension 2011 2012 2013 $ 43,878 47,233 52,441 100% 100 100 $ 0 0 0 EORP – Health Insurance 2011 $ 2,772 2012 2,710 2013 2,725 100% 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 four 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, 2012, and the prior two years follow. The EORP, by statute, is a cost-sharing plan. However, because of its statutory construction, in accordance with GASB Statement No. 43, paragraphs 5 and 41, the EORP is reported for such purposes as an agent multiple-employer plan. The Fund Manager obtains an actuarial valuation for the EORP on its statutory basis as a cost-sharing plan and therefore, actuarial information for the City, as a participating government, is not available. Schedule of Funding Progress (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 2010 2011 2012 $38,917,135 $54,236,036 42,776,856 62,806,469 47,252,572 72,134,658 71.8%$15,318,901 68.1 20,029,613 65.5 24,882,086 $13,537,319 12,989,140 12,995,169 113.2% 154.2 191.5 $1,188,099 1,547,097 1,637,968 0.0% $1,188,099 0.0 1,547,097 0.0 1,637,968 $13,537,319 12,989,140 12,995,169 8.78% 12.12 12.60 $32,543,378 $37,236,602 36,477,794 44,039,032 41,223,476 49,863,454 87.4% $4,693,224 82.8 7,591,238 82.7 8,639,978 $10,423,082 10,271,122 10,470,454 45.0% 73.9 82.5 Police – Health Insurance Subsidy 2010 2011 2012 $0 0 0 Fire – Retirement 2010 2011 2012 86 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Fire – Health Insurance Subsidy 2010 2011 2012 $0 0 0 $1,152,655 1,390,847 1,377,734 0.0% $1,152,655 0.0 1,390,847 0.0 1,377,734 $10,423,082 10,271,122 10,470,454 11.06% 13.54 13.16 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 Position. Lease costs for the fiscal year ended June 30, 2013 were $158,989. The following is a schedule of the future minimum lease payments on the operating leases. Year Ending June 30, 2014 2015 2016 2017 2018 Total $ $ Amount 192,356 196,312 196,518 200,842 205,286 991,314 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 2013 were $901,183. The following is a schedule of five years minimum future rental revenues on these leases: Year Ending June 30, Amount 2014 $ 311,335 2015 314,739 2016 320,187 2017 348,889 2018 355,427 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. 87 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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, 2013: Remaining Commitment Fund/Description General Fund: Old Town Commercial Rehab Public Safety Equipment Systems Upgrades Parks and Recreation Facilities $ Highway User Revenue Fund: Streets/Traffic Infrastructure Sidewalk Improvements ADA Ramp Improvements 219,968 130,583 82,719 7,877 441,147 51,504 25,135 1,205 77,844 Development Fee Fund: Parks and Recreation Facilities Municipal Facilities Streets/Traffic Infrastructure 106,759 46,175 3,713 156,647 Transportation Sales Tax Fund: Streets/Traffic Infrastructure 4,459,993 Non-Major Governmental Funds: GO Bond Cap Proj – Streets/Traffic Infrastructure GO Bond Cap Proj – Parks and Recreation Facilitities GO Bond Cap Proj – Asset Management System Upgrade GO Bond Cap Proj – Police CAD Replacement GO Bond Cap Proj – Drainage Infrastructure GO Bond Cap Proj – Municipal Facilities Non-Bond Cap Proj –Parks and Recreation Facilities Non-Bond Cap Proj –Drainage Infrastructure Non-Bond Cap Proj –Streets/Traffic Infrastructure CFD Cap Proj – Recharge Wells MDA Bonds Capital Proj – Parks and Recreation Facilities Water Utility Fund: Water Lines Wells and Reservoirs Water Facilities Systems Upgrades Operational Purposes 6,807,067 300,674 136,819 136,488 98,095 48,410 2,496,195 555,828 505,567 222,361 24,895,534 36,203,038 1,076,199 354,942 119,663 82,720 80,944 1,714,468 Wastewater Utility Fund: Wastewater Lines Systems Upgrades Operational Purposes 1,075,589 82,723 52,413 1,210,725 Total commitments $ 44,263,862 88 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 21. OTHER MATTERS Park West Development 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, 2013. Vistancia 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, 2013, there are currently estimated potential impact fee reimbursements of the following that are not yet recorded as liabilities: One neighborhood park site currently estimated at $450,000; two community park sites currently estimated at $4,500,000; one library site currently estimated at $750,000; and street and intersection improvements and associated ROW land dedications currently estimated at $11,500,000. Saddleback Heights 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, 2013, no building activities have commenced and the credits could not be reliably estimated. The agreement is in force for 25 years from the signing of the agreement. The developer is currently seeking an amendment to the development plan and agreement. As of June 30, 2013, these potential credits/reimbursements could not be reliably estimated. Lake Pleasant Heights 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. Subsequently, these entities no longer have ownership interests in the land, and new developers are looking to amend or restate a development agreement. The development is a master-planned community east of Vistancia North and south of State Route 74. As the developer(s) 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, 2013, the potential credits could not be reliably estimated. 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 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 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 114 115 116 117 118 119 100 102 Internal Service Funds Combining Statements Combining Statement of Net Position 122 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 123 Combining Statement of Cash Flows 124 Schedule of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 125 126 127 128 Fiduciary Funds Combining Statement of Fiduciary Net Position Combining Statement of Changes in Assets and Liabilities - All Agency Funds 91 130 131 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, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Property taxes Investment earnings Transfers in Total inflows Amounts available for appropriation $ 14,251,508 112,000 14,363,508 44,624,967 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services Debt service: Principal payments Interest and other charges Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2013 30,261,459 29,059,765 $ 29,069,667 $ - 201,084 (74,626) 126,458 126,458 2,800 8,585,000 6,293,374 (186,828) 14,881,174 (184,028) 29,870,251 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 $ 44,751,425 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 (30,261,459) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 337,253 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 14,827,219 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 14,881,174 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 720 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 14,881,894 94 $ 2,800 8,585,000 6,480,202 490,098 15,555,300 $ 30,261,459 14,452,592 37,374 14,489,966 44,751,425 - 8,585,000 6,480,202 500,000 15,565,202 $ 30,261,459 14,251,508 112,000 14,363,508 44,624,967 - Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 310,486 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Impact/expansion fees Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government-non departmental Culture and recreation Police Fire Highways and streets Debt service: Principal payments Capital outlay Contingencies Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 32,114,798 $ 32,114,798 4,940,100 231,670 5,171,770 37,286,568 4,940,100 230,487 5,170,587 37,285,385 261,162 42,343 7,327 186,024 284,457 39,591 12,196 176,229 2,370,457 11,271,537 1,587,710 15,726,560 3,075,855 11,355,120 848,010 15,791,458 21,560,008 $ 21,493,927 $ 32,114,798 $ 8,916,126 58,819 8,974,945 41,089,743 (212,752) (4,912) (43,766) (164,524) 3,777,253 346,858 4,210,630 $ 36,879,113 - 3,976,026 (171,668) 3,804,358 3,804,358 71,705 34,679 (31,570) 11,705 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 41,089,743 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 (32,114,798) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 13,973 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 8,988,918 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 4,210,630 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 410,799 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (21,242) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,600,187 95 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 701,398 (11,008,262) (848,010) (11,580,828) $ 15,385,186 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. 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. 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. 97 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, 2013 Special Revenue Funds Public Other Transit Grants Fund Fund ASSETS & DEFERRED OUTFLOWS Cash and cash equivalents Cash with fiscal agents Investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Prepaid items Restricted cash and cash equivalents Restricted investments Special assessments receivable Interfund receivable (non-current) Total assets Total assets & deferred outflows Debt Service Funds Municipal Development CFD Authority Bonds Bonds Special Assessment Bonds $ 179,906 715,033 39,926 752 62,091 997,708 $ 1,069,629 4,251,209 61,650 4,776 618,254 6,005,518 $ 1,628,228 3,745,828 6,471,340 652 1,200,000 890,133 13,936,181 $ 116,281 9,505 28,805 4,444,414 4,381,954 8,980,959 $ $ 997,708 $ 6,005,518 $ 13,936,181 $ 8,980,959 $ 3,641,824 $ 243,237 6,068 34,363 305 87,782 371,755 $ - $ 276 276 $ LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable $ 827 Accrued payroll 5,008 Due to other funds Due to other governments Other liabilities 500 Unearned revenue-other Total liabilities $ 6,335 Deferred inflows of resources: Unavailable revenue-property taxes Unavailable revenue-special assessments Total deferred inflows of resources Fund balances: Unspendable: Prepaid items $ Restricted for: Debt service Capital projects Grant Purposes 991,373 Committed for: Arts Capital Assigned to: Capital projects Other purposes Total fund balance 991,373 Total liabilities, deferred inflows & fund balance $ 997,708 $ - $ $ $ $ $ - $ - $ 14,287 14,287 $ $ - $ - $ - $ 1,734,083 13,936,181 - 3,804,379 $ $ 95,301 5,633,763 6,005,518 - 8,966,396 - - $ 13,936,181 13,936,181 $ The accompanying notes are an integral part of the financial statements 100 - $ $ - 360 360 3,520,000 3,520,000 121,464 - 8,966,396 8,980,959 24,478 97,289 57 3,520,000 3,641,824 121,464 $ 3,641,824 $ - Capital Projects Funds GO Bonds CFD Bonds MDA Bonds Non-Bond Total Non-Major Governmental Funds $ 30,546 15,409 25,000 5,780,760 16,169,607 22,021,322 $ 22,524 2,748,658 7,810,936 10,582,118 $ 33,881,646 33,881,646 $ 5,131,310 20,394,236 143,144 32,045 25,700,735 $ $ 22,021,322 $ 10,582,118 $ 33,881,646 $ 25,700,735 $ 125,748,011 $ 1,040,927 247,364 1,288,291 $ 64,684 95,859 160,543 $ 2,695,727 457,664 3,153,391 $ 1,375,125 318,274 2,119,900 3,813,299 $ $ $ $ $ $ 8,033,551 3,745,828 31,929,107 391,547 85,720 1,200,000 709,150 25,000 46,855,478 28,362,497 3,520,000 890,133 125,748,011 5,421,163 11,076 34,363 305 1,119,661 2,207,682 8,794,250 $ - $ - $ - $ - $ 14,287 3,520,000 3,534,287 $ 25,000 $ - $ - $ - $ 25,000 20,708,031 - 10,421,575 - - $ $ 20,733,031 22,021,322 - 30,728,255 - - $ $ 10,421,575 10,582,118 - 3,396,396 - - $ $ 30,728,255 33,881,646 - 23,024,041 65,254,257 2,725,456 - $ 18,491,040 21,887,436 25,700,735 $ - 101 3,804,379 18,491,040 95,301 113,419,474 $ 125,748,011 $ - CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2013 Special Revenue Funds Public Other Transit Grants Fund 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 OTHER FINANCING SOURCES (USES): Capital-related debt issued Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending - $ - $ - 142,571 610,091 43,316 1,826 62,815 860,619 2,786,687 705,073 556,405 198,552 20,050 133,249 4,400,016 2,514 2,514 1,013,401 172,494 492,983 690,144 321,613 495,153 128,745 1,199,973 - 1,013,401 218,200 3,719,305 $ 2,183,404 2,760,000 2,880,325 5,640,325 200,000 (131,850) 68,150 12,349 (415,578) (403,229) 6,626,041 (715,508) 5,910,533 (84,632) 277,482 272,722 136,596 5,356,281 13,663,459 8,829,800 5,633,763 $ 13,936,181 The accompanying notes are an integral part of the financial statements 102 1,140,000 223,179 1,363,179 136,596 (144,924) - $ 8,966,396 984 1,217,271 1,218,255 2,505,000 2,985,974 5,490,974 (5,637,811) $ $ - 680,711 991,373 Special Assessment Bonds 19,831 3,424,335 5,627,570 (152,782) 1,076,005 $ Debt Service Funds Municipal Development CFD Authority Bonds Bonds (184,004) (184,004) (328,928) 450,392 $ 121,464 Capital Projects Funds GO Bonds $ 70,582 338,203 408,785 1,211,310 - CFD Bonds $ 31,148 31,148 $ Non-Bond - $ - - $ 2,183,404 3 4,599,992 78,186 560,956 5,239,134 2,929,258 5,915,156 599,721 198,552 225,124 1,217,271 4,519,558 17,788,044 4,187 - 319,993 1,853,227 806,971 - 3 - 15,800 15,936,518 17,163,628 2,455,422 2,455,422 116,657 120,844 14,708,659 17,688,850 492,487 497,170 690,144 321,613 2,348,380 2,018,281 128,745 2,213,374 6,405,000 6,221,935 33,318,799 54,655,928 (16,754,843) (2,424,274) (120,841) (12,449,716) (36,867,884) 35,510,000 1,039,481 (5,615,712) 30,933,769 (222,146) (222,146) 35,510,000 1,039,481 6,838,390 (8,160,725) 35,227,146 (12,671,862) (1,640,738) (875,927) (875,927) - MDA Bonds Total Non-Major Governmental Funds - (17,630,770) (2,424,274) 30,812,928 38,363,801 12,845,849 (84,673) 34,559,298 115,060,212 $ 20,733,031 $ 10,421,575 $ 30,728,255 $ 21,887,436 $ 113,419,474 103 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ 435,599 $ 435,599 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 435,599 $ - RESOURCES (INFLOWS): Intergovernmental: From federal government Other Charges for services Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation 125,646 27,000 2,500 15,000 516,964 687,110 1,122,709 125,646 27,000 2,500 15,000 516,964 687,110 1,122,709 141,837 610,091 107,592 1,369 62,815 200,000 1,123,704 1,559,303 16,191 610,091 80,592 (1,131) 47,815 (316,964) 436,594 436,594 CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Capital outlay Transfers out Total charges to appropriations 995,894 125,646 1,121,540 989,690 131,850 125,646 1,247,186 1,045,835 131,850 1,177,685 56,145 (125,646) (69,501) Budgetary fund balance, June 30, 2013 $ 1,169 $ (124,477) $ 381,618 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 $ 1,559,303 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 (435,599) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (63,085) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (200,000) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 860,619 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary $ comparison schedule 1,177,685 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 300 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (32,734) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (131,850) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 1,013,401 104 $ 506,095 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Intergovernmental: From federal government Other Charges for services Fines and forfeitures Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): General government: Mayor and council Attorney City Manager Court Non-departmental Culture and recreation Police Fire Development services Public works Human Services Capital outlay Contingencies Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 6,111,457 $ 6,111,457 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 6,111,457 $ - 2,761,833 4,780,231 1,423,437 220,000 16,800 12,000 10,000 9,224,301 15,335,758 2,761,833 4,780,231 1,423,437 220,000 16,688 12,000 10,000 9,224,189 15,335,646 2,866,919 635,373 499,490 198,552 18,144 133,249 9,999 4,361,726 10,473,183 105,086 (4,144,858) (923,947) (21,448) 1,456 121,249 (1) (4,862,463) (4,862,463) 300 45,587 328,432 9,833 468,119 856,782 57,443 1,198,204 153,853 1,752,026 486,958 3,635,308 328,841 9,321,686 300 89,975 73,890 328,432 9,833 502,528 1,219,698 1,042,987 1,198,204 198,297 1,752,026 620,049 1,939,856 328,841 9,304,916 73,475 73,869 11,987 4,286 398,573 651,445 321,613 470,696 135,422 1,199,973 369,786 296,495 4,007,620 (300) (16,500) (21) (316,445) (5,547) (103,955) (568,253) (721,374) (727,508) (62,875) (552,053) (250,263) (1,939,856) (32,346) (5,297,296) 6,014,072 $ 6,030,730 $ 6,465,563 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 10,473,183 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 (6,111,457) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 48,289 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (9,999) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 4,400,016 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 4,007,620 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 350 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 126,913 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (119,083) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (296,495) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 3,719,305 105 $ 434,833 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contingencies Debt service: Principal payments Interest and other charges Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 15,622,700 $ 15,622,700 10,000 7,031,959 7,041,959 22,664,659 10,000 7,031,959 7,041,959 22,664,659 500,000 500,000 3,969,954 3,097,396 7,567,350 6,425,449 3,221,061 10,146,510 15,097,309 $ 12,518,149 $ 15,622,700 $ 1,862 6,626,041 6,627,903 22,250,603 (500,000) 2,760,000 2,880,325 715,508 6,355,833 $ 15,894,770 - (8,138) (405,918) (414,056) (414,056) - Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 22,250,603 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 (15,622,700) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 652 Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (6,626,041) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 2,514 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 6,355,833 Differences - budget to GAAP: Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (715,508) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 5,640,325 106 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (3,665,449) (340,736) 715,508 (3,790,677) $ 3,376,621 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Property Taxes Investment earnings Miscellaneous 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, 2013 $ 8,720,506 $ 8,720,506 2,193,084 23,900 3,281,047 5,498,031 14,218,537 2,193,084 23,900 3,281,047 5,498,031 14,218,537 5,056 5,056 2,505,000 2,987,975 5,498,031 2,505,000 2,987,975 5,498,031 8,720,506 $ 8,720,506 $ 8,720,506 $ 2,150,438 20,711 3,424,335 5,595,484 14,315,990 (5,056) 2,505,000 2,985,974 5,490,974 $ 8,825,016 - (42,646) (3,189) 143,288 97,453 97,453 - 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 $ 14,315,990 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 (8,720,506) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 32,086 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 5,627,570 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 5,490,974 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 5,490,974 107 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (2,001) (7,057) $ 104,510 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Special assessments Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Debt service: Principal payments Interest and other charges Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 459,694 $ 459,694 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 459,694 $ - 1,354,718 950 1,355,668 1,815,362 1,354,718 950 1,355,668 1,815,362 1,217,521 1,082 1,218,603 1,678,297 (137,197) 132 (137,065) (137,065) 1,140,000 214,718 1,354,718 1,140,000 224,620 1,364,620 1,140,000 222,819 1,362,819 (1,801) (1,801) 460,644 $ 450,742 $ 315,478 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 $ 1,678,297 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 (459,694) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (348) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,218,255 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,362,819 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 360 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,363,179 108 $ (135,264) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ 23,530,140 $ 23,530,140 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 23,530,140 $ - RESOURCES (INFLOWS): Capital-related debt issued Investment earnings Miscellaneous Total inflows Amounts available for appropriation 19,924,555 45,000 19,969,555 43,499,695 19,924,555 45,000 19,969,555 43,499,695 62,499 338,203 400,702 23,930,842 (19,924,555) 17,499 338,203 (19,568,853) (19,568,853) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Interest and fiscal charges Capital outlay Transfers out Total charges to appropriations 1,623,221 146,260 40,317,811 42,087,292 1,664,008 146,260 45,794,320 47,604,588 1,751,989 25,800 16,265,166 753,333 18,796,288 87,981 (120,460) (29,529,154) 753,333 (28,808,300) Budgetary fund balance, June 30, 2013 $ 1,412,403 $ (4,104,893) $ 5,134,554 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 $ 23,930,842 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 (23,530,140) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 8,083 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 408,785 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 18,796,288 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (854,471) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (24,856) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (753,333) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 17,163,628 109 $ 9,239,447 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ 12,905,376 $ 12,905,376 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,905,376 $ - RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 38,500 38,500 12,943,876 38,500 38,500 12,943,876 11,055 11,055 12,916,431 (27,445) (27,445) (27,445) CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Contingencies Total charges to appropriations 12,816,516 75,000 12,891,516 12,891,516 12,891,516 2,356,037 2,356,037 (10,535,479) (10,535,479) Budgetary fund balance, June 30, 2013 $ 52,360 $ 52,360 $ 10,560,394 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 12,916,431 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (12,905,376) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 20,093 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 31,148 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 2,356,037 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 99,385 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 2,455,422 110 $ 10,508,034 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ (10,700) $ (10,700) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ (10,700) $ - RESOURCES (INFLOWS): Investment earnings Capital related debt issued Premium on bonds issued Total inflows Amounts available for appropriation 35,135,700 35,135,700 35,125,000 35,135,700 35,135,700 35,125,000 3 35,510,000 1,039,481 36,549,484 36,538,784 3 374,300 1,039,481 1,413,784 1,413,784 CHARGES TO APPROPRIATIONS (OUTFLOWS): Culture and recreation Capital outlay Interest and other charges Transfers to other funds Total charges to appropriations 435,000 29,474,009 346,900 30,255,909 109,200 36,240,606 346,900 36,696,706 4,187 3,403,640 116,657 3,524,484 (105,013) (32,836,966) (230,243) (33,172,222) Budgetary fund balance, June 30, 2013 $ 4,869,091 $ (1,571,706) $ 33,014,300 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 36,538,784 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 10,700 Capital-related debt issued is a budgetary resource, but is not a revenue for financial reporting purposes (35,510,000) Premiums on bonds are a budgetary resource, but are not a revenue for financial reporting purposes (1,039,481) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 3 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 3,524,484 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 2,212,072 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (5,615,712) Total expenditures as reported in the combining statement of revenues, expenditures, and $ changes in fund balances - non-major governmental funds 120,844 111 $ 34,586,006 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2012 $ 36,264,119 $ 36,264,119 Actual Amounts (budgetary basis) $ 36,264,119 Variance with Final Budget Over (Under) $ - RESOURCES (INFLOWS): Intergovernmental revenue: Other governmental revenue Investment earnings Miscellaneous Total inflows Amounts available for appropriation 120,666 3,468,369 3,589,035 39,853,154 120,491 3,468,369 3,588,860 39,852,979 4,142,971 64,307 1,196,244 5,403,522 41,667,641 4,142,971 (56,184) (2,272,125) 1,814,662 1,814,662 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services: General government - non-departmental Development services Highways and streets Capital outlay Contingencies Total charges to appropriations 1,952,028 26,949,376 1,696,412 30,597,816 2,749,353 25,638,876 1,607,136 29,995,365 82,541 647,085 806,971 15,330,482 16,867,079 82,541 647,085 (1,942,382) (10,308,394) (1,607,136) (13,128,286) Budgetary fund balance, June 30, 2013 $ 9,255,338 $ 9,857,614 $ 24,800,562 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 41,667,641 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 (36,264,119) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (164,388) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 5,239,134 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 16,867,079 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,043,917 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (222,146) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 17,688,850 112 $ 14,942,948 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 Fund 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. 113 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 34,303,172 41,000 34,344,172 $ 34,303,172 41,000 34,344,172 $ 4,971,439 16,586,970 14,126,370 3,323,772 39,008,551 4,971,439 16,244,484 12,776,918 4,690,502 38,683,343 4,724,809 14,736,887 5,349,759 24,811,455 (246,630) (1,507,597) (7,427,159) (4,690,502) (13,871,888) (4,664,379) (4,339,171) 9,782,019 14,121,190 223,000 (1,378,744) (3,601,340) (4,757,084) 222,833 (1,386,460) (4,066,295) (5,229,922) 77,898 (1,373,607) (3,841,460) (5,137,169) (9,421,463) (9,569,093) 4,644,850 14,213,943 920,000 (3,627,185) 920,000 (3,627,185) 2,108,860 38,254 (3,507,760) 1,188,860 38,254 119,425 (12,128,648) $ (12,276,278) $ 34,559,991 33,483 34,593,474 3,284,204 $ 256,819 (7,517) 249,302 (144,935) 12,853 224,835 92,753 $ 15,560,482 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Donations of capital assets are an other financing source for GAAP purposes, but are not a revenue for budget purposes. Debt principal payments are an expense for budgetary purposes, but are a reduction of long-term obligations and therefore not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Loss on refunding and bond premiums are expensed in the year of issuance for budgetary purposes but are amortized to interest expense over the life of the bonds for GAAP purposes. The gain on sale of capital assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net position per the statement of revenues, expenses and changes in fund net position $ (418,348) (61,380) 61,380 (15,770) (71,410) 5,015,017 3,340,049 3,841,460 (8,352,791) 168,226 5,150 1,334,296 8,130,083 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 114 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WASTEWATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2013 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 Depreciation and amortization Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Excess (deficit) revenues over expenses - budgetary basis $ 19,348,140 55,000 19,403,140 $ 19,348,140 55,000 19,403,140 2,505,163 8,405,636 10,401,054 2,505,163 8,302,404 9,004,286 1,634,355 22,946,208 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 19,638,862 36,720 19,675,582 $ 290,722 (18,280) 272,442 3,134,355 22,946,208 2,387,274 6,928,609 6,034,324 15,350,207 (117,889) (1,373,795) (2,969,962) (3,134,355) (7,596,001) (3,543,068) (3,543,068) 4,325,375 7,868,443 55,250 (2,593,702) (5,383,448) (7,921,900) 55,179 (2,595,656) (5,435,702) (7,976,179) 23,848 (2,541,607) (5,573,641) (8,091,400) (11,464,968) (11,519,247) (3,766,025) 330,000 2,699,123 (335,132) 330,000 2,699,123 (335,132) 1,096,764 2,672,707 (285,568) (8,770,977) $ (8,825,256) $ (282,122) (31,331) 54,049 (137,939) (115,221) 7,753,222 766,764 (26,416) 49,564 $ 8,543,134 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Donations of capital assets are an other financing source for GAAP purposes, but are not a revenue for budget purposes. Debt principal payments are an expense for budgetary purposes, but are a reduction of long-term obligations, and therefore not an expense, for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. 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 position per the statement of revenues, expenses and changes in fund net position 82,219 (1,292,532) 1,292,532 (4,473) (201,121) 5,342,182 2,119,939 5,573,641 (8,935,712) (65,809) 77,263 $ 3,706,007 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 115 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SOLID WASTE UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2013 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 Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 12,246,910 12,246,910 $ 12,246,910 12,246,910 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,168,659 776 12,169,435 $ 3,352,141 7,617,978 1,725,000 2,500,000 15,195,119 3,352,141 7,650,049 1,725,000 2,467,929 15,195,119 (2,948,209) (2,948,209) 93,000 (5,310) 87,690 93,000 (5,310) 87,690 (2,860,519) (2,860,519) (106,201) 2,754,318 290,000 (295,674) 290,000 (295,674) 293,258 (290,000) 3,258 5,674 (2,866,193) $ (2,866,193) 3,309,184 7,385,999 1,616,673 12,311,856 (78,251) 776 (77,475) (42,957) (264,050) (108,327) (2,467,929) (2,883,263) (142,421) 2,805,788 36,220 36,220 $ (102,943) (56,780) 5,310 (51,470) $ 2,763,250 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules. The expenses associated with the interdepartmental service charges are expenses on a budgetary basis but are eliminated along with the revenues above under GASB34's allocation rules. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. The gain on sale of capital assets is not a budgeted revenue/expense, but is a revenue/expense for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net position per the statement of revenues, expenses and changes in fund net position (157,539) (1,067,752) 1,067,752 14,579 (206,622) 1,616,673 (1,017,792) 68,054 (23,842) $ 190,568 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 STADIUM FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Rents Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 1,354,239 1,317,000 2,671,239 $ 1,354,239 1,317,000 2,671,239 $ 1,323,166 1,434,296 (1,250) 2,756,212 1,590,739 2,939,735 1,300,000 500,000 6,330,474 1,590,739 3,114,017 1,881,311 459,997 7,046,064 1,564,277 2,648,159 1,879,940 6,092,376 (3,659,235) (4,374,825) (3,336,164) 9,575 (4,339) (55,437) (50,201) 9,572 (10,005) (167,942) (168,375) 2,360 (81) 2,279 (3,709,436) (4,543,200) (3,333,885) 2,027,329 (107,205) 2,027,329 (107,205) 1,921,563 - (1,789,312) $ (2,623,076) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ (1,412,322) $ (31,073) 117,296 (1,250) 84,973 (26,462) (465,858) (1,371) (459,997) (953,688) 1,038,661 (7,212) 9,924 167,942 170,654 1,209,315 (105,766) 107,205 $ (1,210,754) 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. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Change in net position per the statement of revenues, expenses and changes in fund net position (8,089) (30,548) 30,548 (9,490) (373,707) (710,500) $ 5,163,129 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 STORM DRAIN UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2013 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) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Excess (deficit) revenues over expenses - budgetary basis 816,600 816,600 $ 816,600 816,600 $ 820,591 820,591 $ 3,991 3,991 316,321 567,358 50,000 933,679 316,321 566,022 51,336 933,679 287,669 518,453 806,122 (28,652) (47,569) (51,336) (127,557) (117,079) (117,079) 14,469 131,548 4,000 4,000 4,000 4,000 (113,079) $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (113,079) 2,202 2,202 (113,079) $ (113,079) (1,798) (1,798) 16,671 $ 16,671 129,750 $ 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 position per the statement of revenues, expenses and changes in fund net position (3,816) (3,176) 2,642 $ 37,175 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. 118 129,750 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL PUBLIC HOUSING FUND FOR THE YEAR ENDED JUNE 30, 2013 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) Budgeted Amounts Original Final OPERATING REVENUES: Rent From federal government Miscellaneous Total operating revenues 327,871 327,871 327,871 327,871 107,506 67,915 5,034 180,455 107,506 (259,956) 5,034 (147,416) OPERATING EXPENSES: Contractual services, materials and supplies Total operating expenses 327,871 327,871 327,871 327,871 (248,212) (248,212) (576,083) (576,083) 428,667 428,667 Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Special Items Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ - - 100 100 100 100 73 73 100 100 428,740 - - 100 $ 100 (27) (27) 428,640 (2,101,809) $ (1,673,069) (2,101,809) $ (1,673,169) Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Change in net position per the statement of revenues, expenses and changes in fund net position (12,375) (459,451) (62,289) $ (2,207,184) 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. 119 120 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. 121 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2013 SelfInsurance Fund Motor Pool Fund ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Capital assets: Buildings and improvements Equipment Vehicles Furniture Less accumulated depreciation Construction in progress Total capital assets, net Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll 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 POSITION Net investment in capital assets Restricted - trust purpose Unrestricted Total net position $ 2,018,937 8,024,204 9,203 4,000 193,108 10,249,452 1,173,585 23,786,609 (17,619,647) 379,241 7,719,788 17,969,240 $ 3,334,927 13,254,563 35,200 13,190 16,637,880 Facilities Maintenance Fund $ 42,109 167,364 74 209,547 Information Technology Fund $ 701,209 2,786,935 3,012 18,745 3,509,901 $ 6,097,182 24,233,066 35,200 25,479 22,745 193,108 30,606,780 16,637,880 17,741 (3,488) 14,253 223,800 179,725 14,479 54,850 249,054 1,096,320 1,719 1,660,785 5,660 2,764,484 60,748 29,020 175,990 265,758 202,786 42,643 271,450 516,879 1,539,579 87,861 1,660,785 507,950 3,796,175 31,300 31,300 280,354 2,174,989 1,080 2,176,069 4,940,553 102,200 102,200 367,958 71,400 71,400 588,279 2,174,989 205,980 2,380,969 6,177,144 7,719,788 9,969,098 $ 17,688,886 4,791,144 6,906,183 $ 11,697,327 10,210,856 2,921,622 $ 13,132,478 17,944,897 4,791,144 19,638,492 $ 42,374,533 $ 14,253 (158,411) (144,158) The accompanying notes are an integral part of the financial statements 122 148,102 32,110,636 30,745 (24,669,453) 2,590,826 10,210,856 13,720,757 Total 148,102 33,301,962 23,786,609 30,745 (42,292,588) 2,970,067 17,944,897 48,551,677 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2013 SelfInsurance Fund Motor Pool Fund OPERATING REVENUES Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) 6,154,114 1,353 6,155,467 $ 17,752,762 195,043 17,947,805 Facilities Maintenance Fund $ 5,895,231 1,040 5,896,271 Information Technology Fund $ 7,524,537 33,323 7,557,860 Total $ 37,326,644 230,759 37,557,403 857,818 4,188,618 2,051,021 7,097,457 (941,990) 179,861 1,028,977 11,298,944 12,507,782 5,440,023 2,823,449 2,907,160 2,534 5,733,143 163,128 4,123,517 4,471,579 1,975,081 10,570,177 (3,012,317) 7,984,645 12,596,334 11,298,944 4,028,636 35,908,559 1,648,844 NON-OPERATING REVENUES (EXPENSES) Interest and investment income Gain (Loss) on sale of capital assets Total non-operating revenues Income (loss) before transfers 22,178 42,513 64,691 (877,299) 31,916 31,916 5,471,939 162 162 163,290 7,275 7,275 (3,005,042) 61,531 42,513 104,044 1,752,888 Capital contributions Transfers in Transfers out Change in net position 19,000 440,736 (26,299) (443,862) (49,645) 5,422,294 29,000 (39,856) 152,434 1,843,201 (12,500) (1,174,341) 19,000 2,312,937 (128,300) 3,956,525 6,275,033 (296,592) 14,306,819 Total net position - beginning Total net position - ending 18,132,748 $ 17,688,886 $ 11,697,327 $ (144,158) The accompanying notes are an integral part of the financial statements 123 $ 13,132,478 38,418,008 $ 42,374,533 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2013 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 $ 6,155,467 (4,265,025) (874,443) 1,015,999 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 440,736 (26,299) 414,437 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 (2,232,480) 179,065 (2,053,415) 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 $ (10,043,142) 10,609,176 18,625 584,659 17,912,605 (955,960) (174,150) (13,897,850) 2,884,645 $ 5,896,271 (2,928,412) (2,810,744) 157,115 $ 7,557,860 (4,593,317) (4,128,035) (1,163,492) $ 37,522,203 (12,742,714) (7,987,372) (13,897,850) 2,894,267 (49,645) (49,645) 29,000 (39,856) (10,856) 1,843,201 (12,500) 1,830,701 2,312,937 (128,300) 2,184,637 - - (1,710,776) (1,710,776) (3,943,256) 179,065 (3,764,191) (3,488,145) 4,352,549 5,921 870,325 (30,330,251) 29,466,366 50,187 (813,698) (16,589,490) 14,411,791 25,319 (2,152,380) (209,474) 92,850 322 (116,302) $ 29,957 12,152 42,109 $ 163,128 $ (38,320) 2,057,257 2,018,937 $ 682,620 2,652,307 3,334,927 $ (941,990) $ 5,440,023 $ (173,242) 874,451 701,209 501,015 5,596,167 $ 6,097,182 $ (3,012,317) $ 1,648,844 Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets: Accounts receivable Prepaid items Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Other liabilities Claims payable Compensated absences Total adjustments 2,051,021 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 $ $ - 2,534 (4,000) (32,590) (35,200) - - (39,817) 3,565 (2,980) (17,210) 1,957,989 73,017 1,039 (238) (2,598,906) 4,910 (2,555,378) 1,015,999 19,000 (13,300) 5,700 $ $ $ 2,884,645 (18,931) (18,931) (21,252) 2,107 (10,122) 20,720 (6,013) $ $ $ 157,115 (124) (124) The accompanying notes are an integral part of the financial statements 124 1,975,081 (18,745) - (35,200) (22,745) (32,590) (102,993) 2,227 (15,265) 8,520 1,848,825 (91,045) 8,938 (28,605) (2,598,906) 16,940 1,245,423 $ (1,163,492) $ (4,336) (4,336) $ 4,028,636 $ 2,894,267 $ $ 19,000 (36,691) (17,691) CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL MOTOR POOL FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues (expenses) $ $ 6,612,485 6,612,485 942,042 4,146,580 2,473,383 1,100,000 8,662,005 942,042 4,146,580 2,546,917 1,070,094 8,705,633 (2,049,520) (2,093,148) 32,251 32,251 Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 6,612,485 6,612,485 (2,060,897) 193,046 (36,714) 193,046 (36,714) (1,860,937) $ $ (1,904,565) 6,180,980 1,353 6,182,333 $ 874,443 4,288,399 1,950,708 7,113,550 (431,505) 1,353 (430,152) (67,599) 141,819 (596,209) (1,070,094) (1,592,083) (931,217) 32,251 32,251 (2,017,269) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 1,161,931 18,625 18,625 (13,626) (13,626) (912,592) 1,148,305 53,484 $ (859,108) (139,562) 36,714 $ 1,045,457 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 position per the statement of revenues, expenses and changes in fund net position 3,553 (26,866) 26,866 16,625 76,407 1,947,216 19,000 (2,051,021) 42,513 360,953 $ (443,862) 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. 125 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2013 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 $ 17,677,427 17,677,427 17,717,562 195,043 17,912,605 $ 40,135 195,043 235,178 163,337 1,262,671 16,442,792 3,500,000 21,368,800 174,151 943,157 13,904,383 15,021,691 10,814 (319,514) (2,538,409) (3,500,000) (6,347,109) (3,691,373) (3,691,373) 2,890,914 6,582,287 68,000 68,000 (3,623,373) $ $ 163,337 1,262,671 16,442,792 3,500,000 21,368,800 68,000 68,000 Income (loss) before transfers Excess (deficit) revenues over expenses - budgetary basis 17,677,427 17,677,427 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (3,623,373) 25,319 25,319 (3,623,373) $ (3,623,373) (42,681) (42,681) 2,916,233 $ 2,916,233 6,539,606 $ 6,539,606 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. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Change in net position per the statement of revenues, expenses and changes in fund net position 41,797 (5,710) 2,592,636 (73,017) (49,645) $ 5,422,294 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. 126 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL FACILITIES MAINTENANCE FUND FOR THE YEAR ENDED JUNE 30, 2013 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ 5,895,231 5,895,231 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 5,895,231 5,895,231 $ 5,935,087 1,040 5,936,127 $ 39,856 1,040 40,896 2,853,037 2,835,349 29,000 5,717,386 2,853,037 2,887,749 29,000 5,769,786 2,810,744 2,928,412 39,856 5,779,012 177,845 125,445 157,115 2,000 2,000 1,978 1,978 322 322 179,845 127,423 157,437 30,014 29,000 - 29,000 - 29,000 - - 208,845 $ 156,423 $ 186,437 (42,293) 40,663 10,856 9,226 31,670 (1,656) (1,656) $ 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 position per the statement of revenues, expenses and changes in fund net position (160) (12,705) 21,252 39,856 (2,534) $ 152,434 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 30,014 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL INFORMATION TECHNOLOGY FUND FOR THE YEAR ENDED JUNE 30, 2013 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 $ $ 7,570,289 7,570,289 $ 7,553,170 33,323 7,586,493 $ (17,119) 33,323 16,204 4,177,160 4,436,416 1,822,460 500,000 10,936,036 4,177,160 4,437,384 1,822,460 500,000 10,937,004 4,128,035 4,232,037 1,328,966 9,689,038 (49,125) (205,347) (493,494) (500,000) (1,247,966) (3,365,747) (3,366,715) (2,102,545) 1,264,170 7,750 7,750 Income before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 7,570,289 7,570,289 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 7,750 7,750 5,921 5,921 (3,357,997) (3,358,965) (2,096,624) 1,058,977 - 1,058,977 - 1,058,977 - (2,299,020) $ (2,299,988) $ (1,037,647) (1,829) (1,829) 1,262,341 $ 1,262,341 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 position per the statement of revenues, expenses and changes in fund net position 1,354 4,518 (28,633) 28,633 121,738 939,053 (1,975,081) 771,724 $ (1,174,341) 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 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. 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. 129 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS JUNE 30, 2013 Terramar Infrastructure Fund ASSETS Cash and cash equivalents Investments (pooled), at fair value Total assets LIABILITIES Accounts payable Other liabilities Total liabilities $ 77,390 307,580 384,970 384,970 384,970 PLAY Peoria NFP Fund $ 4,624 18,380 23,004 1,200 21,804 23,004 Peoria Citizens Corp Council NFP Fund $ 414 1,645 2,059 Westside Fire Training IGA Fund $ 2,059 2,059 The accompanying notes are an integral part of the financial statements 130 6,505 25,855 32,360 32,360 32,360 Total $ 88,933 353,460 442,393 1,200 441,193 442,393 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2013 Balance June 30, 2012 Terramar Infrastructure Fund Assets: Cash and cash equivalents Investments Total Assets $ Liabilities: Other liabilities 74,382 310,588 384,970 384,970 Additions $ 925,751 922,742 1,848,493 Deductions $ - 922,743 925,750 1,848,493 - Balance June 30, 2013 $ 77,390 307,580 384,970 384,970 PLAY Peoria NFP Fund Assets: Cash and cash equivalents Investments Total Assets 6,101 25,476 31,577 80,920 55,140 136,060 82,397 62,236 144,633 4,624 18,380 23,004 Liabilities: Accounts payable Other liabilities Total Liabilities 397 31,180 31,577 5,926 5,926 5,123 9,376 14,499 1,200 21,804 23,004 Peoria Citizens Corp Council NFP Fund Assets: Cash and cash equivalents Investments Total Assets 398 1,661 2,059 4,952 4,936 9,888 4,936 4,952 9,888 414 1,645 2,059 Liabilities: Accounts payable Other liabilities Total Liabilities 2,059 2,059 - - 2,059 2,059 Westside Fire Training IGA Fund Assets: Cash and cash equivalents Investments Total Assets 5,350 22,340 27,690 81,288 77,563 158,851 80,133 74,048 154,181 6,505 25,855 32,360 Liabilities: Accounts payable Other liabilities Total Liabilities 27 27,663 27,690 2,543 4,697 7,240 2,570 2,570 32,360 32,360 Assets: Cash and cash equivalents Investments Total Assets 86,231 360,065 446,296 1,092,911 1,060,381 2,153,292 1,090,209 1,066,986 2,157,195 88,933 353,460 442,393 Liabilities: Accounts payable Other liabilities Total Liabilities 424 445,872 446,296 8,469 4,697 13,166 7,693 7,693 1,200 441,193 442,393 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 131 132 OTHER SUPPLEMENTARY INFORMATION This section contains schedules which the City deems necessary to provide detailed schedules of the self-insurance programs 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 Position Combining Detailed Schedule of Revenues, Expenses, and Changes in Fund Net Position Federal Financial Data Schedule 134 135 136 133 CITY OF PEORIA, ARIZONA COMBINING DETAILED SCHEDULE OF NET POSITION SELF-INSURANCE FUND JUNE 30, 2013 ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable, net Interest receivable Total current assets Total assets Risk Management Fund Employee Trust Workers' Health Compensation Insurance Fund Fund $ $ 1,809,669 7,192,475 7,505 9,009,649 9,009,649 532,490 2,116,363 2,130 2,650,983 2,650,983 $ 992,768 3,945,725 35,200 3,555 4,977,248 4,977,248 Total $ 3,334,927 13,254,563 35,200 13,190 16,637,880 16,637,880 LIABILITIES Current liabilities: Accounts payable Accrued payroll 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 196,434 1,719 843,885 5,660 1,047,698 27,228 258,131 285,359 872,658 558,769 1,431,427 1,096,320 1,719 1,660,785 5,660 2,764,484 1,080 1,054,688 1,055,768 2,103,466 1,120,301 1,120,301 1,405,660 1,431,427 1,080 2,174,989 2,176,069 4,940,553 NET POSITION Restricted - trust purpose Unrestricted Total net position 6,906,183 6,906,183 1,245,323 1,245,323 3,545,821 3,545,821 4,791,144 6,906,183 $ 11,697,327 $ 134 $ $ CITY OF PEORIA, ARIZONA COMBINING DETAILED SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2013 OPERATING REVENUES Charges for services Miscellaneous Total operating revenues Risk Management Fund Employee Trust Workers' Health Compensation Insurance Fund Fund $ $ 2,467,922 122,510 2,590,432 1,100,005 23,974 1,123,979 $ 14,184,835 48,559 14,233,394 Total $ 17,752,762 195,043 17,947,805 OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Total operating expenses Operating income 135,902 48,237 912,248 1,096,387 1,494,045 43,959 334,204 (481,707) (103,544) 1,227,523 646,536 10,868,403 11,514,939 2,718,455 179,861 1,028,977 11,298,944 12,507,782 5,440,023 NON-OPERATING REVENUES (EXPENSES) Interest and investment income Total non-operating revenues Income before transfers 18,063 18,063 1,512,108 5,205 5,205 1,232,728 8,648 8,648 2,727,103 31,916 31,916 5,471,939 Transfers out Change in net position (49,645) 1,462,463 1,232,728 2,727,103 (49,645) 5,422,294 Total net position - beginning 5,443,720 12,595 818,718 Total net position - ending $ 6,906,183 135 $ 1,245,323 $ 3,545,821 6,275,033 $ 11,697,327 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2013 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 # 111 114 100 122-020 122-030 122 Public Housing 14.850A & 14.872 BALANCE SHEET ASSETS: Current Assets: Cash-unrestricted Cash-tenant security deposits Total Cash 468,216 468,216 TOTAL PROJECTS 468,216 468,216 Accounts receivable - HUD other projects - Capital fund Accounts receivable - HUD other projects - Other Accounts Receivable - HUD Other Projects - - 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 - - 142 143 143.1 Prepaid expenses and other assets Inventories Allowance for obsolete inventories - - 150 Total Current Assets 161 162 164 166 160 Non-current Assets: Land Buildings Furniture, equipment and machinery - administration Accumulated depreciation Total Capital Assets, Net of Accumulated Depreciation - - 180 Total Non-current Assets - - 190 Total Assets 311 312 468,216 468,216 LIABILITIES AND EQUITY: LIABILITIES: Current Liabilities: Bank Overdraft Accounts payable <= 90 days - 321 322 332 333 341 345 310 Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accounts payable - HUD PHA Projects Accounts payable - other government Tenant security deposits Other current liabilities Total Current Liabilities 354 350 Non-current Liabilities: Accrued compensated absences - non-current Total Non-current Liabilities 300 Total Liabilities 508.1 511.1 512.1 513 600 468,216 468,216 468,216 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 468,216 (continued) 136 468,216 468,216 468,216 468,216 468,216 468,216 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Public Housing Capital 14.872 INCOME STATEMENT 70300 70400 70500 REVENUE: Net tenant rental revenue Tenant revenue - other Total Tenant Revenue Public Housing Operating 14.850A - 95,131 5,035 100,166 95,131 5,035 100,166 66,222 67,915 134,137 70600-010 70600-020 70600 Housing assistance payments Ongoing administrative fees earned HUD PHA operating grants 71100-020 71100 Administrative fee Investment income - unrestricted - - Fraud recovery Other revenue - - 71400 71500 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 TOTAL PROJECTS 73 73 - 66,222 168,154 234,376 3,503 3,503 20,911 1,177 27,373 3,851 8,949 23,765 86,026 24,414 1,177 27,373 3,851 8,949 23,765 89,529 - 9,504 4,976 3,055 2,371 19,906 9,504 4,976 3,055 2,371 19,906 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 1,500 15,524 28,677 25,913 30,177 41,437 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 1,750 34,937 599 6,409 43,695 4,380 3,822 170 4,115 2,665 15,152 4,380 5,572 34,937 170 4,115 599 9,074 58,847 94300-010 94300-020 94300-050 94300-060 94300-070 94300-080 94300-090 94300-100 94300-110 94300-120 94300 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 10080 All other Housing Assistance Payments Depreciation expense Total Expenses - 9,812 9,812 60,719 79,554 140,273 - 829 829 829 829 - 1,051 12,649 13,700 1,051 12,649 13,700 2,000 2,000 3,931 7,295 11,226 2,000 3,931 7,295 13,226 66,222 211,241 277,463 - (43,087) (43,087) - - - - 62,289 62,289 66,222 273,530 339,752 (2,101,807) (2,101,807) 10100 Total Other Financing Sources (Uses) Special Items - (2,101,807) (2,101,807) 1000 Excess (Deficiency) of Revenue Over (Under) Expenses - (2,207,183) (2,207,183) (continued) 137 CITY OF PEORIA, ARIZONA SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Public Public Housing Capital 14.872 INCOME STATEMENT (continued) 11030 OTHER INFORMATION: Beginning equity - Housing Operating 14.850A 2,207,184 TOTAL PROJECTS 2,207,184 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 - 813 797 813 797 Excess Cash - 23,121 23,121 11270 138 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 141 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 151 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 163 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 174 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 176 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. 139 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 Position 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 141 142 144 145 146 147 148 149 150 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 151 152 153 154 155 156 157 158 159 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 163 164 165 166 167 168 169 170 171 172 173 Economic and Demographic Information XXX Demographic and Economic Statistics XXXI Major Employers Within the City 174 175 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 176 177 178 179 180 181 140 Table I CITY OF PEORIA, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net assets $ 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 $ 816,149,271 118,105,425 111,579,103 $ 1,045,833,799 $ Business-type Activities Net investment in capital assets Restricted Unrestricted Total business-type activities net assets $ 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 Net investment in capital assets Restricted Unrestricted Total primary government net assets $ 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 $ 1,294,887,932 143,017,781 172,612,856 $ 1,610,518,569 Source: Statement of Net Position City financial records and reports 141 2012 $ 478,738,661 24,912,356 61,033,753 564,684,770 2013 829,001,871 131,550,563 94,099,643 $ 1,054,652,077 $ 493,788,885 21,575,445 64,833,670 580,198,000 $ 1,322,790,756 153,126,008 158,933,313 $ 1,634,850,077 Table II CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2004 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 $ $ 16,794,131 13,580,663 19,519,868 11,025,133 4,280,766 16,554,235 4,460,277 1,665,219 6,884,380 582,180 95,346,852 $ 2005 2006 2007 2008 2009 2010 2011 2012 2013 $ 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 $ 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 $ 19,175,790 22,434,968 35,396,834 21,360,706 8,374,619 29,967,207 6,989,988 2,196,801 12,739,029 574,557 $ 159,210,499 $ $ $ $ $ $ $ $ 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 30,777,765 21,923,061 10,859,872 5,284,940 802,246 400,405 $ 70,048,289 $ 232,160,540 29,094,123 20,342,376 10,503,928 5,140,500 806,658 273,528 $ 66,161,113 $ 225,371,612 $ $ $ $ $ $ $ $ $ $ $ 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 $ 17,331,656 11,071,988 30,063,998 58,467,642 $ 18,745,123 12,440,760 21,485,029 52,670,912 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 $ 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 67,197,303 67,915 7,323,482 $ 74,588,700 $ 127,259,612 Net (Expense)/Revenue Governmental Activities Business-type Activities Total primary government net expense $ (43,375,208) 37,228,368 $ (6,146,840) $ (39,054,460) 46,504,587 $ 7,450,127 $ $ (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) $ (103,644,609) 4,558,626 $ (99,085,983) $ (106,539,587) 8,427,587 $ (98,112,000) $ 21,087,664 14,288,769 35,376,433 Continued 142 $ Table II CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2004 General Revenues and Other Changes in Net Position 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 Special Item: Close out of Public Housing Transfers in (out) Total business-type activities Total primary government Change in Net Position Governmental Activities Business-type Activities Total primary government Source: $ $ $ $ $ $ $ 2005 $ 2006 2007 2008 2009 2010 2011 2012 2013 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 2,926,017 11,240,627 45,535,559 2,498,995 10,038,874 10,076,455 4,639,457 2,930,923 148,518 2,480,978 (14,546,789) $ 77,969,614 $ 3,274,982 12,930,561 61,156,870 3,004,895 11,681,284 11,707,782 5,251,577 6,723,061 81,122 17,279 5,584,218 (12,660,507) $ 108,753,124 $ 3,722,092 14,392,472 68,873,970 3,983,701 13,130,116 15,996,992 5,725,299 12,100,831 60,785 23,941 7,439,193 2,025,489 $ 147,474,881 $ 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 2,848,691 16,628,634 65,950,235 4,136,004 12,665,191 14,425,958 5,155,206 599,263 66,465 630,104 4,397,616 (9,394,454) $ 118,108,913 1,349,492 1,404,110 2,753,602 83,526,481 $ $ 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 $ 37,397,671 39,981,970 77,379,641 $ $ 129,840,788 32,171,424 $ 162,012,212 $ 110,199,834 27,238,440 $ 137,438,274 $ $ $ $ $ $ $ $ 2,846,925 14,546,789 17,393,714 95,363,328 38,915,154 63,898,301 $ 102,813,455 Statement of Activities City financial records and reports (concluded) 143 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 $ 176,176 (2,101,809) 9,394,454 $ 7,468,821 $ 125,577,734 $ 11,569,326 15,896,408 27,465,734 Table III CITY OF PEORIA, ARIZONA PROGRAM REVENUES LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2004 Program Revenues Governmental Activities Charges for services General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Housing Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues $ $ $ $ $ 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 2006 $ 2007 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 $ 2008 2,747,370 6,927,760 1,283,559 1,737,666 4,614,166 433,400 5,318,686 164,166 13,954,308 59,793,946 96,975,027 33,511,407 14,907,360 10,395,273 2,953,365 150,877 135,174 18,219,423 $ 80,272,879 $ 177,247,906 Source: Statement of Activities City financial records and reports 144 $ $ $ $ $ 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 2013 $ $ $ 2,712,644 7,055,179 1,135,692 1,664,610 2,398,630 456,791 3,278,257 43,320 12,440,760 21,485,029 52,670,912 34,100,166 18,459,924 11,003,792 2,716,778 816,478 100,165 67,915 7,323,482 $ 74,588,700 $ 127,259,612 CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 2005 2004 General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund $ $ 3,061,807 43,989,346 47,051,153 $ $ 150,764 52,553,522 52,704,286 2006 $ $ 948,135 65,224,766 66,172,901 Fiscal Year 2008 2007 $ $ Table IV 216,652 74,842,586 75,059,238 $ 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 2013 $ 1,163,721 70,016 33,590,254 3,705,809 12,878,675 $ 51,408,475 $ $ 259,643 108,517 33,229,466 3,330,705 13,996,657 50,924,988 General Fund as % of current year revenues (1) Reserved Unreserved Unspendable Restricted Committed Assigned Unassigned Total General Fund 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% 0.6% 0.0% 39.7% 4.5% 15.5% 60.4% 1.3% 0.1% 38.3% 4.2% 14.7% 58.6% 0.3% 0.1% 35.4% 3.6% 14.9% 54.3% General Fund as % of current year expenditures (2) Reserved Unreserved Unspendable Restricted Committed Assigned Unassigned Total General Fund 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% 0.5% 0.0% 34.4% 3.9% 13.5% 52.3% 1.2% 0.1% 35.2% 3.9% 13.5% 53.9% 0.3% 0.1% 32.7% 3.3% 13.8% 50.1% All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Unspendable Restricted Committed Assigned Unassigned Total All Other Governmental Funds * $ 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 Balance Sheet - Governmental Funds City financial records and reports 145 - $ - 95,828 168,127,814 10,064,814 40,566,996 (84,673) $ 218,770,779 $ - 98,819 188,434,944 10,004,379 25,988,041 $ 224,526,183 CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Table V Fiscal Year 2004 Revenues Taxes Intergovernmental Charges for services Licenses and Permits Fines and Forfeitures Rents Investment Earnings Special assessments Miscellaneous Total Revenues Expenditures General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Other Capital Outlay Debt Service Interest Principal Total Expenditures Excess of Revenues over (under) Expenditures Other Financing Sources (Uses) Proceeds from borrowing Proceeds from refunding 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) Net Change in Fund Balance Debt Service as a percentage of noncapital expenditures Source: $ $ $ 2005 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 $ 62,170,531 36,747,293 30,768,591 5,041,680 1,823,626 174,837 2,652,530 2,252,142 2,560,291 $ 144,191,521 $ 15,386,608 12,395,888 18,663,675 10,440,007 4,253,710 8,825,795 3,107,787 1,590,605 16,823 52,502,380 $ $ 18,144,444 13,935,373 20,915,014 12,206,093 4,575,963 13,930,314 3,993,427 1,768,107 3,849 33,148,181 $ 6,299,626 9,737,936 143,220,840 7,046,576 15,304,972 $ 144,972,313 $ (22,041,409) $ $ $ $ 164,548 6,193,157 (11,266,511) (4,908,806) $ (26,950,215) 17.68% $ 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% 2007 $ 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 $ 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 $ $ 8,099,492 16,178,431 213,283,409 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% $ 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 $ $ $ 122,090,000 18,365,000 (18,365,000) 1,502,204 17,798,434 (21,121,233) 120,269,405 $ 127,577,293 17.80% Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 146 2009 $ 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 $ 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 $ $ 11,917,582 25,988,554 242,988,904 (18,492,451) $ $ $ 47,000,000 273,310 16,426,715 (36,035,044) 27,664,981 $ 9,172,530 25.80% 2010 $ 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 $ $ 13,166,242 44,700,092 237,519,557 (45,099,733) $ $ $ 68,440,000 808,192 18,855,279 (30,928,896) 57,174,575 $ 12,074,842 22.91% 2011 $ 2012 2013 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 89,948,724 49,831,144 21,405,623 2,564,075 2,257,477 1,101,082 537,732 1,217,271 5,880,511 $ 174,743,639 15,094,866 19,668,598 35,375,166 21,327,100 8,568,013 16,355,505 4,914,720 2,213,374 39,612,698 $ 12,658,032 34,309,287 192,780,638 13,098,263 25,566,028 $ 178,812,735 12,534,039 20,120,163 $ 195,784,242 (65,507,373) $ (17,236,370) $ $ (21,040,603) $ 14,715,000 13,690,000 (13,690,000) 645,188 (464,390) 16,740,587 (18,106,961) $ 13,529,424 $ $ 7,920,000 16,960 28,388,910 (42,075,019) (5,749,149) $ $ 29,170,000 495,890 23,567,886 (20,963,066) 32,270,710 $ (33,236,663) $ (22,985,519) $ $ 32.65% 28.71% (5,820,000) 7,709,424 25.36% 35,510,000 1,039,481 16,968,105 (27,205,066) $ 26,312,520 5,271,917 20.91% CITY OF PEORIA, ARIZONA GOVERNMENT-WIDE REVENUES BY FUNCTION LAST TEN FISCAL YEARS (accrual basis of accounting) Table VI Fiscal Year 2004 Governmental Activities: General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Unallocated General Revenues Total Governmental Activities Business-type Activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Housing Unallocated General Revenues Total Business-type Activities Total Primary Government Note: $ $ $ 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 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 2006 $ $ $ 5,471,741 14,003,877 3,128,006 3,729,960 6,459,264 98,404,102 4,950,541 2,004,933 121,413,631 259,566,055 2007 $ $ $ 2008 5,099,910 12,243,385 5,271,968 4,098,537 5,437,544 57,310,910 5,418,686 2,094,087 145,449,392 242,424,419 $ 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 147 $ 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 $ 2013 $ 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 2,875,640 9,493,032 2,095,076 2,643,492 2,893,783 27,266,930 3,407,002 1,995,957 127,503,367 $ 180,174,279 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 38,206,945 21,676,627 11,003,792 2,716,778 816,478 168,080 176,176 74,764,876 $ 332,644,899 $ 258,006,016 $ $ 255,154,720 $ $ $ 254,939,155 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 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 619,973 868,197 796,821 1,571,936 3,633,664 In Lieu Taxes 252,345 293,417 273,644 242,246 256,107 Transaction Taxes (1) Franchise Taxes Property Taxes Primary Taxes Secondary Taxes $ $ 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 2013 $ 65,950,235 4,136,004 3,188,468 23,564,788 2,866,098 20,037,286 2,521,692 16,735,182 2,214,665 14,568,676 3,729,995 3,554,681 2,978,348 2,895,288 2,826,052 345,155 243,351 242,926 247,158 253,093 $ 2010 56,276,937 3,955,416 $ Total Property Taxes $ 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 $ 19,862,485 Total Taxes $ 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 $ 89,948,723 (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 148 Table VIII CITY OF PEORIA, ARIZONA INTERGOVERNMENTAL REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2004 State Shared Sales Tax $ 9,116,684 County Shared Sales Tax Urban Revenue Sharing 9,786,943 Auto in-Lieu 4,390,706 HURF Revenues 7,501,918 Local Transportation Aid 650,734 Federal 2,340,738 Other 1,053,460 Total Intergovernmental Revenue $ 34,841,183 Notes: Source: $ $ 2005 10,038,874 10,076,455 4,639,457 7,878,977 650,056 2,685,415 778,059 36,747,293 2006 $ 11,681,284 11,707,782 5,251,577 8,475,784 657,162 2,822,321 1,303,622 $ 41,899,532 $ $ 2007 13,130,116 15,996,992 5,725,299 9,870,460 658,598 3,101,796 15,800,183 64,283,444 $ $ Includes all governmental fund types Includes all governmental revenues, including revenues from federal government City financial records 149 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 $ $ 2013 12,665,191 14,425,958 5,155,206 8,435,926 2,929,700 6,219,163 49,831,144 CITY OF PEORIA, ARIZONA DEVELOPMENT/EXPANSION FEES BY TYPE LAST TEN FISCAL YEARS 2005 2004 Governmental Activities: Streets Parks/Recreation Library Public Safety General Government Total Governmental Activities $ $ 2,740,580 2,778,480 586,200 1,461,477 1,381,237 8,947,974 Business-type Activities: Water Expansion Water Resource Wastewater Expansion Solid Waste Expansion Total Business-type Activities Total Primary Government $ 2006 $ 7,029,058 5,045,791 1,028,504 2,730,568 2,020,208 17,854,129 $ $ 7,025,548 1,287,101 3,658,370 765,334 12,736,353 $ 7,671,535 1,801,486 4,391,622 1,123,950 14,988,593 $ 6,972,529 1,550,288 4,364,858 1,009,520 13,897,195 $ 21,684,327 $ 32,842,722 $ 33,821,041 Table IX Fiscal Year 2008 2007 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 150 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 2013 $ $ 5,824,877 1,844,398 176,537 1,070,881 (567) 8,916,126 $ 1,661,806 447,053 1,096,764 3,205,623 $ 12,121,749 CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS 2004 2005 2006 2007 Fiscal Year 2008 2009 Table X 2010 2011 2012 2013 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 34,115,601 4,716,985 7,918,121 7,343,965 1,258,991 8,168,064 992,752 474,842 960,914 Total $ 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 $ 65,950,235 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other 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% 8.4% 42.7% 6.8% 1.5% -3.5% 5.0% 10.8% -16.2% 29.8% Total 12.9% 12.2% 34.3% 12.6% -0.6% -13.8% -4.6% 3.2% 4.5% 8.6% Note: Includes all governmental fund types Source: City financial records and reports 151 Table XI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Year Taxes Are Payable 2007 2008 2009 2004 2005 2006 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% 1.80% 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% 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 152 2010 2011 2012 2013 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% 6.50% 6.60% 6.50% 6.60% 6.50% 6.60% 5.50% 5.60% Table XII CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND EIGHT YEARS AGO 2013 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 2,370 3,948 348 6,447 16 135 1,342 59 84 16.07% 26.77% 2.36% 43.71% 0.11% 0.92% 9.10% 0.40% 0.57% $ 34,115,601 4,716,985 8,168,064 7,918,121 7,343,965 1,258,991 474,842 992,752 960,914 51.7% 7.2% 12.4% 12.0% 11.1% 1.9% 0.7% 1.5% 1.5% 2,365 3,216 235 2,867 9 126 857 45 402 23.4% 31.8% 2.3% 28.3% 0.1% 1.2% 8.5% 0.4% 4.0% $ 21,861,810 7,871,565 5,052,224 4,297,474 2,576,655 920,471 570,265 549,702 1,835,393 48.0% 17.3% 11.1% 9.4% 5.7% 2.0% 1.3% 1.2% 4.0% 14,749 100.00% $ 65,950,235 100.00% 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 153 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 $ Total Direct Secondary Tax Rate Net Assessed Value as a Percentage of Full Cash Value 2005 $ 497,294,057 51,436,849 2006 $ 582,512,691 64,003,067 190,086,111 51,802,238 951,301 190,782 - 218,209,727 58,949,534 1,712,708 30,780 - 242,554,778 73,674,495 1,724,400 - 750,429,221 13.2% 5,651 132,805 6,743,773,145 14.9% $ 50,780 11.1% $ 2007 626,591,494 75,761,506 Fiscal Year 2008 2009 $ 1,041,693,334 $ 1,219,595,280 116,115,688 146,413,989 293,807,014 117,630,028 1,830,109 - 334,323,557 148,077,787 1,918,660 58,450 - 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 - $ 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 2013 620,970,965 119,387,647 341,042,160 54,523,204 1,399,678 103,122 7,964 $ 1,115,620,151 15.7% $ 1,642,187,476 47.2% $ 1,994,591,924 21.5% $ 1,895,163,851 -5.0% $ 1,609,972,512 -15.0% $ 1,276,335,862 -20.7% $ 1,137,434,740 -10.9% $ $ $ $ $ $ $ $ $ 6,039 137,045 1.30 7,525,637,782 11.6% $ 54,914 11.0% 6,646 145,125 1.30 1.20 8,736,985,007 16.1% $ 60,203 11.0% 7,264 153,592 9,999,273,539 14.4% $ 65,103 10,557 155,560 1.25 15,118,988,316 51.2% $ 11.2% 97,191 10.9% 12,524 159,263 12,301 154,065 1.25 18,279,838,277 20.9% $ 114,778 1.25 17,162,776,025 -6.1% $ 111,400 10.9% Property Classifications (a) Commercial and Industrial (b) 25.0% 25.0% 24.5% 24.0% 23.0% 22.0% 21.0% 21.0% 20.0% 20.0% 2011 818,535,888 147,284,152 $ 964,469,431 16.5% 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: Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $ $ 827,633,655 10.3% 1.30 Full Cash Value % Growth Full Cash Value Per Capita 2004 464,911,130 42,487,659 Table XIII Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Agriculture and Vacant Land 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% (a) Several additional classes of property exist, but seldom amount to a significant portion of an entity's total valuation. (b) 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 154 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% 7,087 160,504 1.25 10,635,350,631 -10.3% $ 66,262 10.7% Table XIV CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 2004 Total Direct City Primary Secondary Total School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary Total $ 0.29 1.30 1.59 2005 $ 0.29 1.30 1.59 2006 $ 0.29 1.30 1.59 Fiscal Year 2007 $ 0.28 1.20 1.48 2008 $ 0.24 1.25 1.49 2009 $ 0.19 1.25 1.44 2010 $ 0.19 1.25 1.44 2011 $ 0.19 1.25 1.44 2012 $ 0.19 1.25 1.44 2013 $ 0.19 1.25 1.44 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 4.01 3.02 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 2.87 0.78 - - - - - 7.44 5.85 13.29 7.34 5.71 13.05 4.42 6.56 10.98 6.63 5.19 11.82 5.98 4.56 10.54 5.74 3.74 9.48 5.23 4.30 9.53 5.63 3.98 9.61 (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 $ 3.91 Secondary 2.85 (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 0.47 Community College District 1.16 0.22 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 0.17 $ 2.87 $ 0.78 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 155 - - 6.58 3.47 10.05 7.07 5.05 12.12 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 2005 2004 Total Direct City Primary Secondary Total School District (1) Primary Secondary County (2) Primary Secondary State Primary Secondary Total Primary Secondary Total $ 2,077,622 9,755,580 11,833,202 $ Tax Levies Fiscal Year 2007 2006 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 58,370,644 44,104,877 726,446,055 145,100,016 726,446,055 145,100,016 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 811,397,481 312,172,569 1,016,398,826 312,960,824 1,030,448,332 295,233,122 1,031,164,830 264,170,408 982,926,843 249,995,761 777,087,034 200,151,198 977,238,232 451,841,923 229,728,799 681,570,722 - 758,698,013 302,890,898 1,061,588,911 815,445,197 349,264,359 1,164,709,556 2,849,397 24,932,399 27,781,796 885,318,337 384,200,264 1,269,518,601 (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 81,894,797 59,824,187 (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 $ 425,111,491 $ Education Equalization 161,622,544 Community College District 396,192,808 76,200,590 West Maricopa Education Center 6,142,163 County Flood Control District 54,584,578 Fire District Assistance 3,782,401 County Free Library 16,925,024 Central AZ Water Conservation 34,465,535 Special Health Care 57,895,470 $ 982,926,843 $ 249,995,761 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 156 $ 3,202,665 23,689,548 26,892,213 1,082,860,554 395,553,654 1,478,414,208 $ 2,901,540 20,124,656 23,026,196 1,097,305,986 358,845,657 1,456,151,643 $ 2013 50,475,795 49,294,120 - $ 2012 48,345,544 44,291,944 774,241,944 197,309,619 971,551,563 3,002,150 20,527,343 23,529,493 2011 45,718,267 42,454,023 - $ 2010 $ 2,640,883 12,538,103 15,178,986 - 3,012,725 13,387,442 16,400,167 2009 2,295,435 10,759,238 13,054,673 - $ 2008 Table XV 2,411,739 15,954,198 18,365,937 1,094,377,847 307,760,376 1,402,138,223 $ 2,154,484 14,217,934 16,372,418 1,043,451,971 308,318,572 1,351,770,543 CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XVI 2004 2013 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 Lifehouse Capital Montecito LLC Cox Communications Developers Diversified Realty Corp Larry Miller Real Estate - Peoria LLC Albertsons Inc Safeway Inc North Valley Shopping Center LLC Camden Operations TR Arizona Inc Lou Grubb Chevrolet Peoria Sunset LLC Harkins Phoenix Cinamas LLC Total Taxable Secondary Assessed Value $ 23,195,396 8,752,872 6,681,435 5,418,735 4,939,537 4,385,299 4,259,111 4,120,034 4,007,925 3,635,992 3,302,683 3,304,493 3,137,280 2,801,791 2,872,495 2,711,073 $ 87,526,151 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Percentage of Total City Taxable Secondary Assessed Value 2.04% 0.77% 0.59% 0.48% 0.43% 0.39% 0.37% 0.36% 0.35% 0.32% 0.29% 0.29% 0.28% 0.25% 0.25% 0.24% 7.70% Taxable Secondary Assessed Value $ 12,726,121 $ Rank 1 Percentage of Total City Taxable Secondary Assessed Value 1.92% 11,157,954 2 1.68% 2,898,316 3,692,066 5,762,882 11 8 4 0.44% 0.56% 0.87% 3,840,780 7 0.58% 5,862,831 5,454,703 5,012,676 3,540,311 3,287,011 2,740,568 2,550,384 2,459,818 2,391,973 2,515,185 75,893,579 3 5 6 9 10 12 13 15 16 14 0.88% 0.82% 0.76% 0.53% 0.50% 0.41% 0.38% 0.37% 0.36% 0.38% 11.45% Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For Fiscal year 2013, the assessed value of Salt River Project property within the City of Peoria is $16,929,178. Source - Maricopa County Treasurer's Office 157 CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Tax Levy $ Collected within the Fiscal Year of the Levy: Amount Collected Percentage of Levy Collections in Subsequent Years (1) Total Collections to Date: Amount Collected Percentage of Levy 11,833,202 2006 2007 $ 13,054,673 $ 15,178,986 $ 16,400,167 11,624,426 98.24% $ 207,277 11,831,703 99.99% Fiscal Year 2008 2005 2004 12,817,287 98.18% $ 235,057 13,052,344 99.98% 14,827,945 97.69% $ 344,238 15,172,183 99.96% $ 23,529,493 15,926,805 97.11% $ 469,736 16,396,541 99.98% 22,822,879 97.00% $ 700,987 23,523,866 99.98% 2009 2010 2011 2012 2013 $ 27,781,796 $ 26,892,213 $ 23,026,196 $ 18,365,937 $ 16,372,418 26,269,411 94.56% $ 1,504,838 27,774,249 99.97% (1) Amount is the difference between collections to date (from County reports) and the amount collected in the year of the levy. Source: Maricopa County Treasurer City financial records and reports 158 Table XVII 25,792,963 95.91% $ 1,069,800 26,862,763 99.89% 22,021,842 95.64% $ 989,465 23,011,307 99.94% 17,780,536 96.81% $ 559,360 18,339,896 99.86% 16,071,438 98.16% $ - 16,071,438 98.16% CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 2004 Water Average bill $ 39.06 $ % Increase -1.39% Wastewater Average bill 18.53 % Increase -1.07% Residential Solid Waste Average bill 12.49 % Increase no change 2004 Water # % Increase Wastewater # % Increase Residential Solid Waste # % Increase 2005 2006 35.53 $ -9.04% 34.59 $ -2.65% Average Utility Bill Amounts Last Ten Fiscal Years 2007 2008 2009 34.85 $ 0.75% 35.59 $ 2.12% 2010 36.73 $ 3.20% 2011 35.46 $ -3.46% 34.36 $ -3.10% 2012 38.00 $ 10.59% 2013 37.41 -1.55% 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% 24.16 12.42% 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% 13.38 -13.12% 2005 2006 Utility Service Connections Last Ten Fiscal Years 2007 2008 2009 2010 2011 2012 2013 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% 49,416 1.87% 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% 52,674 2.23% 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% 50,727 2.47% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2013 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, 2013 Monthly Base Fee (a) Meter Size 5/8"-3/4" $ 7.42 1" 7.42 1 1/2" 12.23 2" 17.49 3" 31.55 4" 47.34 6" 91.18 8" 143.82 All Customers $ 15.54 18.39 29.09 40.85 72.26 107.55 205.53 323.16 City customer service and billing records (continued) 159 Monthly Volume Charge (b) All Customers 2.18 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, 2013 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, 2013 Monthly fee $ 13.10 Single container & recycling 10.50 Additional container Water Meter Permit Charges As of June 30, 2013 Meter Size Charge 317 3/4" $ 1 1/2" 493 2" 629 - 1,033 3" 1,751 - 2,662 4" 2,231 - 3,172 6" 3,781 - 5,086 Hydrant meter 1,280 Commercial accounts By meter size Charges for Storm Water As of June 30, 2013 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) 160 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 2005 2004 2006 Table XVIII 2007 2008 2009 2010 2011 2012 2013 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 6,828,944 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 42.0 8,405,929 13,656 163,869 22.34 32.59 33 42.0 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 4.00 2.25 N/A 10.00 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 0.925 0.182 N/A 2.529 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 3.22 0.52 N/A 7.04 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 3.22 0.74 N/A 8.32 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) 161 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 47,717 20,561 15,184 83,462 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND NINE YEARS AGO 2013 Entity City of Peoria Padre's Pump Station Desert Harbor Ventana Lakes N. of Beardsley Lake Trilogy at Vistancia Christ's Church of the Valley Sun Garden Park II H/O Assn. Freedom Plaza LTD Partnership Sun Garden Mobile Home Park Centennial High School Forum at Desert Harbor Desert Harbor Landscaping Polynesian Village Type of User Sports Complex Homeowner's Association Homeowner's Association Commercial Landscape Church Homeowner's Association Health Care Facility Homeowner's Association Public School Health Care Facility Homeowner's Association Homeowner's Association % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 6,772 1 0.96% 5,656 2 0.80% 3,287 4 0.47% 2,415 3 0.34% 2,055 5 0.29% 1,845 6 0.26% 1,665 7 0.24% 1,552 8 0.22% 1,488 9 0.21% 1,478 10 0.21% 1,272 11 0.18% 1,224 12 0.17% Source: City customer service and billing records (concluded) 162 Table XVIII 2004 % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 3,097 2 0.56% 6,458 1 1.17% 1,279 9 0.23% 1,920 3 0.35% 1,711 4 0.31% 1,692 6 0.31% 1,429 7 0.26% 1,354 8 0.24% 1,223 10 0.22% 1,693 5 0.31% Table XIX CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Fiscal Year 2004 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 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 $ 424,357,652 $ $ 2,333.55 $ 2,714.13 $ 2,876.71 $ 3,009.50 $ 2,764.59 $ 2,631.80 $ 2,643.91 $ 1,569.56 $ 1,560.28 5.1% 4.8% 1,422.57 4.2% 6.7% Source: City financial records. See Exhibits 1 & 2 and footnote 14. 163 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 $ 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 $ 2013 $ Total debt per capita $ 2012 $ 206,449,823 213,828,854 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 - $ $ 2010 25,395,000 50,042,301 2,505,001 - 208,445,556 142,835,000 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 $ $ 2008 55,380,000 20,199,999 4,075,000 11,431,553 44,800,000 Total Primary Government Total Debt as a % of Personal Income 2007 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% 162,375,000 85,230,000 3,520,000 53,725,000 37,295,000 82,212,652 - 7.2% 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 2004 Bonded Debt (1) Less: Debt Service Reserves (2) Net Bonded Debt 2005 2006 2007 2008 2009 2010 2011 2012 2013 $ 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 $ 162,375,000 $ 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 30,825,566 $ 131,549,434 Percentage of Net Bonded Debt to Full Cash Value 0.7% 0.5% 0.3% 1.1% 0.6% 0.8% 0.9% 0.9% 1.2% 1.2% Net Bonded Debt Per Capita $347 $276 $186 $704 $577 $867 $971 $875 $894 $820 Net Bonded Debt as a % of Personal Income 1.12% 0.85% 0.54% 2.01% 1.66% 2.53% 2.82% 2.43% 2.48% 2.23% (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. 164 Table XXI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2013 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 56,283,023,907 34,400,455,716 34,400,455,716 30,665,493,359 34,400,455,716 34,400,455,716 34,400,455,716 34,465,534,205 12,284,325,659 Debt Outstanding $ 1,460,442,551 2,100,573,053 55,821,853 Percentage Applicable to City of Peoria Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria (1) 766,085,000 35,000,000 2.02% 3.31% 3.31% 3.71% 3.31% 3.31% 3.31% 3.31% 9.26% $ 185,730,000 210,025,000 1,295,000 87.78% 11.98% 22.00% 163,033,794 25,160,995 284,900 188,479,689 217,078,103 365,458,162 100.00% 365,458,162 Total overlapping 25,357,414 3,241,000 28,598,414 394,056,576 $ 0.22 0.18 0.05 0.01 0.17 0.10 0.05 3.02 2.85 0.89 Direct: City of Peoria (3) $ 1,137,434,740 $ Total direct and overlapping 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. (3) - Includes general obligation bonds, special assessment bonds, municipal development authority bonds, community facilities district bonds, deferred amounts on refundings, unamortized bond premiums and contracts payable 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 165 $ 582,536,265 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit 2004 Overlapping: State of Arizona Maricopa County Community College District County Flood Control District County Free Library Fire District Assistance Education Equalization West MEC Vocational District 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 Total overlapping $ 550,505 71,257 621,762 140,717,106 2005 $ 11,690,706 11,690,706 160,387,744 2006 $ 11,594,345 11,594,345 163,028,901 Fiscal Year 2008 2007 $ 10,710,280 10,710,280 297,071,313 $ 18,505,348 18,505,348 331,783,787 Table XXII 2009 $ 17,301,999 17,301,999 393,645,062 2010 $ 21,354,408 21,354,408 405,549,288 2011 $ 23,908,932 23,908,932 384,534,551 2012 $ 22,084,125 22,084,125 371,967,077 2013 $ 25,357,414 3,241,000 28,598,414 394,056,576 142,493,656 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 4,524 203,179,142 163,033,794 25,160,995 284,900 188,479,689 146,687,338 150,095,061 228,792,839 240,206,823 258,196,431 249,102,302 213,773,136 245,270,794 225,263,267 217,078,103 140,095,344 148,697,038 151,434,556 286,361,033 313,278,439 376,343,063 384,194,880 360,625,619 349,882,952 365,458,162 $ 286,782,682 $ 298,792,099 $ 380,227,395 Direct: City of Peoria Total direct and overlapping debt $ 526,567,856 (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 166 $ 571,474,870 $ 625,445,365 $ 597,968,016 $ 605,896,413 $ 575,146,219 $ 582,536,265 CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS 2005 2004 Table XXIII Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 Secondary Assessed Value $ 750,429,221 $ 827,633,655 $ 964,469,431 $ 1,115,620,151 $ 1,642,187,476 $ 1,994,591,924 $ 1,895,163,851 $ 1,609,972,512 $ 1,276,335,862 $ 1,137,434,740 6% Limitation Debt limit $ $ 49,658,019 $ 57,868,166 $ $ $ $ $ $ $ 16,400,000 13,350,000 33,258,019 $ 44,518,166 Total net debt applicable to limit Legal 6% Debt Margin 45,025,753 25,500,000 $ 19,525,753 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 56.6% $ 150,085,844 33.0% $ 39,480,000 $ 110,605,844 Total net debt applicable to the limit as a percentage of debt limit Note: $ $ $ 192,893,886 38,980,000 37,855,000 126,546,731 $ 155,038,886 26.3% 23.5% 28,470,000 $ 23.1% 165,526,731 19.6% 66,937,209 38,467,209 13,310,000 $ 42.5% $ 223,124,030 108,759,030 85,221,249 $ 328,437,495 $ 51.3% 215,552,495 34.4% See footnote 14 for discussion of 6% and 20% limitations. Source: Maricopa County Assessor Exhibit 3 to the Financial Statements 167 112,930,515 $ 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 $ 255,267,172 $ 87,042,172 65.9% 66,581,084 2.4% $ 168,225,000 $ 68,246,084 1,665,000 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 $ 98,531,249 227,486,948 160,710,000 $ 66,776,948 70.6% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS 2004 2005 2006 Fiscal Year 2008 2007 Table XXIV 2009 2010 2011 2012 2013 MDA Debt other than Transportation Pledged Revenues (1) Debt Service Requirements Principal (2) & (6) Interest (2) & (6) Total Annual Requirements (2) Estimated Coverage $ 77,041,031 $ 89,807,396 $ 108,336,399 $ 117,980,567 $ 122,039,417 $ 105,935,592 $ 95,507,133 $ 96,318,307 $ 98,320,667 $ 105,886,977 1,385,000 748,795 2,133,795 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 2,075,826 665,000 1,065,571 1,730,571 36.11 26.15 30.58 26.74 29.12 24.97 22.50 21.54 47.36 61.19 117,848,611 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 9,088,210 105,333,051 104,156,406 9,927,436 114,083,842 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 2,095,000 1,803,588 3,898,588 Estimated Coverage - 32.48 25.98 26.04 27.16 29.26 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 168 Table XXV CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - REVENUE BONDS LAST TEN FISCAL YEARS 2004 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 $ 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 $ 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 $ Fiscal Year 2008 2007 $ 44,982,822 27,318,074 17,664,748 $ 12,887,675 30,552,423 $ 4,672,124 2,961,997 7,634,121 $ 2009 2010 2011 2012 2013 $ 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 $ 52,680,761 28,974,990 $ 23,705,771 $ 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 3,205,623 $ 26,911,394 $ 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 8,776,254 3,579,904 $ 12,356,158 Ratio of Total Net Revenue/ Total Bond Expense 3.11 3.54 4.00 4.21 2.83 1.63 1.85 1.69 2.03 2.18 Ratio of Net Available/ Total Bond Expense (5) 1.81 1.70 2.31 3.04 2.06 1.43 1.71 1.52 1.80 1.92 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 169 Note 6 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS Table XXVI Fiscal Year 2004 Pledged Revenues (1) Debt Service Requirements Principal Interest (2) Total Annual Requirements Estimated Coverage $ 4,756,382 $ 2,505,652 972,553 3,478,205 2005 $ 3,547,789 $ 1,507,136 828,532 2,335,668 1.37 1.52 2006 $ 3,516,277 $ 1,608,983 747,720 2,356,703 1.49 2007 $ 3,216,095 $ 1,480,506 638,657 2,119,163 2008 $ 3,167,933 $ 1,264,637 697,840 1,962,477 1.52 1.61 2009 2010 $ 3,365,342 $ 1,624,615 675,958 2,300,573 2011 $ 3,402,865 $ 2,360,492 559,205 2,919,697 1.46 $ 2,645,451 $ 1,887,322 432,302 2,319,624 1.17 (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 170 2012 1.14 2013 $ 2,262,112 $ 1,495,000 316,720 1,811,720 1.25 $ 1,484,283 $ 1,140,000 222,820 1,362,820 1.09 CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) $ 2004 2,088,695 $ 2,069,962 504,165 2,574,127 Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) $ 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 $ 2007 1,965,107 $ 1,961,724 7,818 1,969,542 99.8% $ 9,243,866 $ Fiscal Year 2008 2009 1,749,724 $ 2,196,027 $ 1,749,246 44,061 1,793,307 99.8% $ 12,782,394 Table XXVII 100.0% $ 11,476,365 2,193,992 2,041 $ 2,196,033 171 2010 2,211,609 $ 2,211,599 38,301 2,249,900 99.9% $ 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 $ $ 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 $ 2013 1,213,646 $ 1,213,646 1,213,646 100.0% $ 4,551,324 100.0% $ 3,520,000 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 2004 $ 9,737,936 6,299,626 $ 16,037,562 $ 2005 15,304,972 7,046,576 22,351,548 2006 $ 16,881,632 6,747,072 $ 23,628,704 Total Governmental Expenditures $ 143,220,840 $ 144,972,313 $ 153,731,533 $ $ 2007 16,178,431 8,099,492 24,277,923 $ $ 213,283,409 $ $ Fiscal Year 2008 2009 31,143,531 $ 25,988,554 10,340,704 11,917,582 41,484,235 $ 37,906,136 $ 234,929,890 $ 242,988,904 Table XXVIII 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 $ 2013 20,120,163 12,534,039 32,654,202 $ 178,812,735 $ 195,784,242 $ $ Ratio of Debt Service to Governmental Expenditures 11.20% 15.42% 15.37% 11.38% 17.66% 15.60% 24.36% 24.36% 21.62% 16.68% Ratio of Debt Service to non-capital expenditures 17.68% 19.99% 19.89% 17.80% 25.80% 22.91% 32.65% 28.71% 25.84% 19.27% Total Governmental Revenues Ratio of Debt Service to Governmental Revenues Source: $ 121,179,431 13.23% $ 144,191,521 15.50% $ 178,025,080 $ 220,591,297 13.27% $ 216,437,439 11.01% 19.17% Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 172 $ 197,889,171 19.16% $ 172,012,184 33.64% $ 175,544,268 26.76% $ 172,992,735 22.35% $ 174,743,639 18.69% Table XXIX CITY OF PEORIA, ARIZONA BOND AUTHORIZATIONS - ISSUED AND UNISSUED AS OF JUNE 30, 2013 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 22,013,271 146,905,799 - 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 21,042,597 148,695,962 - 69,069,506 13,957,403 207,304,038 276,700,000 5,873,129 - 270,826,871 60,300,000 41,000,000 378,000,000 2,273,356 3,541,939 11,688,424 - 58,026,644 37,458,061 366,311,576 1,231,260,000 471,182,100 - 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 173 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 2004 2005 * 2006 2007 2008 Table XXX 2009 2010 * 2011 2012 2013 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 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% 5,651,449 160,504 2.4% 6.8% 5,911,844 Maricopa County Population % growth Unemployment Rate Per Capita Income 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% 38,071 4,438,459 2.5% 7.3% N/A 3,922,600 -11.6% 7.1% N/A State of Arizona Population % growth Unemployment Rate Per Capita Income 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% 35,979 6,553,800 -11.1% 8.0% N/A United States of America Unemployment Rate 5.6% 5.3% 4.6% 4.6% 5.5% 9.5% 9.5% 9.2% 8.2% 7.6% Phoenix MSA Per Capita Income 30,892 32,414 34,215 35,010 34,675 34,282 34,452 36,047 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 174 36,833 N/A CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND NINE YEARS AGO Table XXXI 2004 2013 Employer Peoria Unified School District City of Peoria Younger Brothers Freedom Plaza Properties Immanuel Care Campus Antigua Northern Pipeline OakCraft Varsity Facility Services Arizona Retirement Center 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) Total # of Employees 3,008 1,132 588 527 340 297 284 255 203 174 170 163 - Rank 1 2 3 4 5 6 7 8 9 10 11 12 7,141 Percentage of Total City Employment 4.2% 1.6% 0.8% 0.7% 0.5% 0.4% 0.4% 0.4% 0.3% 0.2% 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% # of Employees 4,250 1,532 612 354 243 230 218 208 240 297 469 280 340 10.0% 8,933 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 175 Rank 1 2 Percentage of Total City Employment 6.6% 2.4% 3 5 9 11 12 0.9% 0.5% 0.4% 0.4% 0.3% 13 10 7 4 8 6 0.3% 0.4% 0.5% 0.7% 0.4% 0.5% 13.8% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2004 2005 Full-time Equivalent Employees as of June 30, 2013 2006 2007 2008 2009 2010 Table XXXII 2011 * 2012 2013 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 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 15.00 8.00 17.50 26.00 7.00 20.90 26.00 7.00 73.75 112.41 288.00 161.50 12.50 33.25 38.80 57.95 7.50 55.50 37.70 36.80 39.00 16.00 Total FTE 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 1,098.06 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) 176 Table XXXIII CITY OF PEORIA, ARIZONA BUILDING PERMITS AND HOME SALES LAST TEN YEARS Building Permits 2005 2004 Commercial Number of Permits Value $ Residential Number of Dwelling Units Value Other Number of Permits Value Total Value $ 190 47,808,957 $ 177 73,892,753 2006 $ Fiscal Year 2008 2007 181 64,990,575 $ 244 121,602,510 $ 2009 153 38,162,527 60 $ 18,722,347 2010 $ 2011 82 35,940,280 $ 2012 27 4,416,256 $ 2013 60 14,130,283 25 $ 14,151,136 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 79,951,361 833 113,425,646 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 17,128,209 929 99,323,042 309,833,199 $ 469,121,647 227,086,013 $ 84,475,521 $ 131,807,441 63,759,929 $ 111,209,853 $ 226,899,824 2011 2012 $ 412,303,639 $ 368,827,021 $ $ Source: City Community Development Department Single Family Housing Sales 2003 2004 2005 Calendar Year 2007 2006 2008 2009 2010 New # of Units Average Sale Amount Avr price % increase $ 1,583 215,825 6.65% $ 1,395 270,000 25.10% $ 1,875 323,190 19.70% $ 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% $ 598 296,506 21.63% # of Units Average Sale Amount Avr price % increase $ 3,515 151,000 -1.54% $ 4,575 175,000 15.89% $ 5,055 250,000 42.86% $ 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% $ 3,933 180,420 28.87% Resale New Housing Starts 2003 City of Peoria Maricopa County Notes: 1,974 2004 2,420 47,808 58,882 3,560 2006 1,654 Calendar Year 2007 2,046 2008 1,098 56,139 40,294 35,465 20,605 2005 Information for bottom two tables is for calendar years Source: Arizona State University College of Business - AZ Real Estate Center 177 2009 2010 2011 2012 514 691 699 15,825 15,676 15,353 642 10,029 Table XXXIV CITY OF PEORIA, ARIZONA SCHEDULE OF INSURANCE IN FORCE JULY 1, 2012 THROUGH JUNE 30, 2013 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 ZLP10T05497 $2 Million per occurrence SIR above $ 301,544 Excess liability -Umbrella 7/1 Travelers Indemnity Company ZUP10T05504 $20 Million per occurrence SIR above $ 170,538 Automobile & Equipment 7/1 Travelers Indemnity Company 8109157P24A $25,000/$100,000 (1) Excess liability - 1st level 7/1 RSUI Indemnity Company NHA060300 $20 Million per occurrence N/A Self-insured N/A $500,000 per incident $500,000 annual 7/1 Travelers Indemnity Company KTKCMB297T228812 $599,691,110 Property (Real & Personal) City buildings and contents 3. Boiler & Machinery 7/1 Phoenix Insurance Company BME27733A918 $50,000,000 4. Workers' Compensation Excess Liability N/A Self-insured Safety National Casualty Corp N/A AGC4046269 N/A 5. Broker Service Fee 6. Cyber Liability 7/1 Axis Surplus Insurance Co. 7. Identity Theft 7/1 8. Crime Coverages 7/1 (1) Annual Premium N/A Excess buildings and contents (see Note) Note: Deductible Amount N/A N/A SIR above N/A SIR above 117,875 71,000 N/A 311,951 1,000 24,092 N/A N/A 141,751 39,500 ECN000168721201 $2,000,000 Travelers Indemnity Company 105639670 $10,000 N/A 4,171 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 178 SIR above 9,113 Table XXXV CITY OF PEORIA, ARIZONA PROPERTY INSURANCE SCHEDULE JUNE 30, 2013 Property Building and contents - combined blanket limit excluding earthquake and flooding $ 580,935,424 Valuable papers: City Hall 5,000,000 Contractors equipment ($50,000 deductible) 3,755,686 Electronic data processing ($50,000 deductible) 10,000,000 $ Sources - Risk Management records 179 599,691,110 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 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: $ 2004 2005 2006 2007 52,674 11.0% 65,998 33.8% 62,328 25.4% 63,544 25.4% 65,928 4,998 * 69,206 5,492 * 75,145 5,160 * 101,951 5.32 142,319 5.73 11,014 4.30 11,618 4.30 4,224 309.8 5,104 469.1 $ * * * 6,654 9,807 277 $ Fiscal Year 2008 2009 2010 2011 2012 2013 71,051 60.6% 76,323 81.2% 82,578 29.2% 86,803 29.2% 85,592 23.7% 87,432 23.7% 77,602 4,923 * 119,620 6,692 * 131,372 6,237 * 102,385 4.80 103,921 5.20 62,341(A) 5.98 60,219 5.47 56,683 5.65 56,764 5.87 57,184 6.01 54,159 4.52 (C) 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 18,719 5.14 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 (B) 136,200 6,106 65,347 $ 2,371 111.2 2,038 6,202 163 $ 1,787 226.9 3,122 6,143 187 4746 5,056 5,920 5,787 5,679 5,917 5,697 5,856 5,608 5,899 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 ** ** 830 32,101 ** ** 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 8,405,929 163,869 3.23 3.41 3.55 3.67 3.60 3.90 3.70 3.50 3.61 3.64 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 47,717 20,561 15,184 222,927 * * 225,316 * * 200,153 * * 220,357 195 54 230,434 234 83 211,243 246 66 200,029 208 74 188,244 336 108 190,643 350 134 196,881 290 143 840 819 840 828 840 831 840 827 840 812 840 796 840 745 840 787 840 813 840 797 * Information is not available for these fiscal years. ** City discontinued participation in Section 8 housing programs as of 6/30/11. (A) 134,045 5,396 73,800 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. (B) Changed from lane miles to center line miles in FY11 to be consistent with other highway measurements (C) Decrease in Police Average Response time reflects calculation change. New Calculation=Dispatch to Arrival. Previous calculation=Call for Service to Arrival. Source: Various City Departments 180 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 2004 2005 2006 2007 Fiscal Year 2008 2009 2010 2011 2012 2013 176.3 177.9 177.9 177.9 177.9 177.9 179.0 179.1 179.1 179.1 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 10 31 3 1 1 32 338 96 43 26 10 34 3 1 1 33 367 96 44 27 10 34 3 1 1 2 80 2 86 2 90 2 101 2 103 2 92 2 86 2 86 2 86 2 86 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 7/1 8 2 471 487 518 537 538 551 554 584 590 622 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 15,006 714 9 9 9 11 11 11 9 7 7 7 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 42.0 49,516 42.0 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 52,674 16.25 39,747 42,467 44,198 46,309 47,146 48,006 43,382 48,752 49,506 50,727 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 181 182 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. 183 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 184 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 185 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. 186 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 187 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. 188 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 189 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. 190 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 191 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, 192 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 193 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 194 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 195 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 196 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 197 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. 198 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 199 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 200 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 201 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 202