City of Peoria, Arizona FY14 Comprehensive Annual Financial Report (CAFR) Fiscal Year Ended June 30, 2014 peoriaaz.gov Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2014 City of Peoria, Arizona City Council: Bob Barrett, Mayor Ron Aames, Vice Mayor Ben Toma Tony Rivero 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 Sonia Andrews, Finance Manager Christen Wilcox, Acting Accounting Supervisor City of Peoria Core Values P “The City of Peoria team members share a commitment to provide quality service for our community.” Professional E 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 O 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 R 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 I 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 A 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. Introductory Section CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014 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-xiii xiv xv xvi xvii 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, 2014 Page C. SUPPLEMENTARY INFORMATION - COMBINING FUND FINANCIAL STATEMENTS AND BUDGETARY SCHEDULES Major Governmental Funds Budgetary Comparison Schedules – Major Debt Service & Capital Projects Funds General Obligation Bonds Debt Service Fund General Obligation Bonds Capital Projects Fund Development Fee Fund 92 93 94 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 Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Non-Bond Capital Projects Fund 98 100 102 103 104 105 106 107 108 109 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund 112 113 114 115 116 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 118 119 120 121 122 123 124 Fiduciary Funds Combining Statement of Fiduciary Net Position Combining Statement of Changes in Assets and Liabilities – All Agency Funds ii 126 127 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014 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 130 131 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 Comparative Secondary Assessed Value 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 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 General Obligation Bonded Debt – Current Fiscal Year XXII Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XXIII Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XXIV Legal Debt Margin XXV Pledged Revenue Coverage - Municipal Development Authority Bonds Governmental Portion XXVI Pledged Revenue Coverage – Water & Wastewater Revenue Bonds XXVII Pledged Revenue Coverage - Special Assessment Bonds XXVIII Special Assessment Collections XXIX Ratio of Annual Debt Service Expenditures for Governmental Debt To Total Governmental Expenditures and Revenues XXX Bond Authorizations – Issued and Unissued XXXI Demographic and Economic Statistics XXXII Major Employers Within the City XXXIII Authorized Full-time Equivalent City Government Employees By FunctionXXXIV Building Permits and Home Sales XXXV Schedule of Insurance in Force XXXVI Operating Indicators By Function/Program XXXVII Capital Asset Statistics By Function/Program XXXVIII iii 135 136 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014 Page IV. CONTINUING DISCLOSURES Continuing Disclosures Annual Report 178 iv November 24, 2014 Honorable Mayor, City Council, City Manager and Citizens of Peoria, Arizona: We are pleased to submit to you the Comprehensive Annual Financial Report (CAFR) of the City of Peoria, Arizona (the City) for the fiscal year ended June 30, 2014. The report was prepared by the Financial Services Division of the Finance Department. This report represents management’s report to its governing body, constituents, legislative and oversight bodies, investors, and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies which have expressed interest in the City’s financial matters. Copies of this financial report will also be placed in the City’s libraries, as well as on the City’s website, for use by the general public. Management’s Discussion and Analysis presented on pages 3-17 has a different focus and purpose than the transmittal letter and should be read in conjunction with this transmittal. THE FINANCIAL REPORTING ENTITY The City of Peoria, chartered in 1954, has a Council-Manager form of government with the City Council consisting of the Mayor and six Council Members. Pursuant to an amendment to the City Charter approved by the voters in 1997, the Mayor is elected at-large for a four-year term. Council members are elected, by district, for four-year terms. The City Council is vested with policy and legislative authority and is responsible for passing ordinances; adopting the budget; appointing committee, commission, and board members; and appointing the positions of City Manager, City Attorney, and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City encompasses approximately 179 square miles in the northwestern portion of Maricopa County, and is one of several major cities comprising the greater Phoenix metropolitan area. Between the 2000 census and the 2010 census the City’s population increased by more than 42 percent, from approximately 108,300 to approximately 154,065. The estimated current population is 164,104. The City’s tremendous growth is attributable to the comparatively affordable housing, an excellent school district, and the expansion of the metropolitan freeway systems, allowing Peoria residents to commute effectively to other cities in the metropolitan area. Population growth trends are expected to continue, though at a slower pace. The City provides a full range of municipal services, including police and fire protection, solid waste services, water and sewer services, construction and maintenance of streets, recreational and cultural events, library services, public transportation, planning and zoning services, and general administrative services. Peoria offers a wide range of community facilities including two community centers, three swimming pools, two libraries, and 33 neighborhood parks encompassing 356 acres. The Peoria Sports Complex—operated by the City—is the nation’s first two-team baseball spring training facility and the spring training home of the San Diego Padres and Seattle Mariners. Lake Pleasant, in northern Peoria, is the second largest lake in Arizona. The City opened its first large community park, Rio Vista Community Park, in the southern part of the City in fiscal year 2004. This 52 acre facility has athletic fields, playgrounds, ramadas, an urban lake, skate park and other amenities for the citizens’ enjoyment. The v City’s second community park, Pioneer Community Park was completed in fiscal year 2014 and includes ball fields, multipurpose fields, a dog park, fishing lake and other amenities. The City also has a performing arts center with a 250-seat main auditorium, 80-seat black box theater, and classroom and administrative space in the downtown area. This report includes financial statements on both a government-wide and fund basis for the primary government as well as its component units. Component units are separate legal entities included in the reporting entity due to the significance of their financial or operational relationship with the City. Criteria used by the City for inclusion of activities in preparing its financial statements are in conformity with GASB Statement No.14, The Financial Reporting Entity, as amended by GASB Statement No.61. Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. Accordingly, the financial reporting entity consists of the City and four blended component units, the City of Peoria Municipal Development Authority, Inc., the Vistancia Community Facilities District, the City of Peoria Employee Benefits Trust and the City of Peoria Workers’ Compensation Trust as discussed further in Note 1.A of the notes to the financial statements. LOCAL ECONOMIC CONDITION AND OUTLOOK During fiscal year 2014, the local economy, much like the State of Arizona, continued its recovery at a slow and uneven pace with some pick up in construction activity and continued improvement in sales tax collections. However the nagging level of unemployment remained throughout the fiscal year. Peoria’s unemployment rate improved marginally from 6.8% in June 2013 to 6.1% in June 2014 compare to an unemployment rate of less than 3% prior to the recession. Despite the level of unemployment, consumer confidence and spending increased as home values climbed, consumer debt burden fell to a record low since the recession and gains in the stock market restored some of the wealth lost during the recession. The City’s sales and use tax collections in fiscal year 2014 totaled $71.2 million, a 7.9% increase from the $66.0 million collected in the prior year. Sales and use tax collections peaked at $68.9 million in 2006-07 prior to the recession and fell to a low of $56.3 million in 2009-10 during the recession. The local housing market rebounded from the abnormally low recessionary levels. At the start of the fiscal year, new home inventory was exceptionally low while distressed properties continued to be worked downed. With the dwindling inventory and moderate demand for new homes, builders kept busy during fiscal year 2014. The City issued 1,031 new residential building permits in fiscal year 2014 compare to 833 in fiscal year 2013. Median home sale price in Peoria rose by 13.2% from $197,000 in June 2013 to $223,000 in June 2014. The City’s total property full cash value, which lags the market, will increase by 11.0% from $10.1 billion in 2013-14 to $11.2 billion in 2014-15. Full cash value hit the highest point in 2008-09 at $18.3 billion and fell to a low of $10.1 billion in 2013-14 as a result of the housing downturn. On the commercial front, businesses are slowly increasing their investments. During fiscal year 2014, the City gained several new businesses, most notably Maxwell Technology, At Home Furnishings and GEPACK USA. Maxwell Technology completed its new electrode, cell and module manufacturing facility in November 2013 and estimates it will create 150 jobs over the next three years with an average salary of $48,000, and an overall capital investment of $26 million. At Home Furnishings, a home décor superstore opened its 105,000 square foot retail store in June 2014, bringing 20 new jobs to Peoria. GEPACK, a global manufacturer of high quality plastics and advanced composites announced the opening of a 12,000 square foot manufacturing facility in July 2014 and anticipates creating up to 20 manufacturing jobs in Peoria. Economic Outlook Forecasters predict the US economy will continue to grow at a slow and steady pace with GDP at +3.0% for the next four quarters. Likewise, the overall economic outlook for the State of Arizona and City of Peoria is expected to be more of the same slow and steady growth as we saw during fiscal year 2014. vi Employment conditions are expected to improve, however rises in wage rates are expected to remain weak. Population growth projected for Arizona and the City of Peoria are expected to be modest. The recession hit harder in Arizona and the recovery has been slower while Arizona’s job growth is expected to lag behind the rest of the nation. The long term outlook remains positive. Home sales are expected to taper off as mortgage rates have risen over the last year, home prices are higher and growth in demand has slowed. The housing market is expected to be a quiet market next year characterized by low demand and flat prices according to Mike Orr, director of the Center for Real Estate Theory and Practice at the Arizona State University W. P. Carey School of Business. Median home sale prices in the Phoenix Metro area have stabilized, demand and sales activity were low for the normally strong spring selling season and further significant increases in home sale prices are unlikely without growth in demand. Orr reasons that the low demand for home ownership is a result of various factors such as a lack of household formation because of unemployment, falling birth rates, lower net migration and greater home sharing as well as potential homeowners disqualified from owning for now and investors looking for better bargains in other areas of the country with more foreclosures. Meanwhile demand for rental homes is very high and the availability of those homes is dropping to an unusually low level which will spark construction activity for multifamily units. Consumer confidence rose to a post-recession high of 85.2 in June, suggesting that spending could increase in future months. Specifically auto sales have been robust and forecasters expect auto sales to remain healthy. As the Federal Reserve continues to keep interest rates low, consumers are expected to borrow and spend more with employment and income growth. However such growth will still be limited. According to Scott Hoyt, Senior Director at Moody’s Analytics, consumer debt obligations are rising and job gains will unleash pent up demand and spark more borrowing. The increase in debt burden is expected to be modest and will not be a material impediment to spending growth. MAJOR PROJECTS AND INITIATIVES The Council utilizes a goal setting and strategic planning process to assist in the identification, prioritization, and management of capital projects, initiatives, service efforts and emerging strategic issues. Given the limited resources available with the slow economic recovery, careful consideration is given to all projects and initiatives to ensure investments of public funds achieve Council objectives and provide a long term sustainable benefit to the community. Listed below are the Council goals for 2013-15 to further the City’s commitment to provide quality service, economic development and improved quality of life for the citizens of Peoria.  Community building – to preserve and expand our quality of life by strengthening neighborhoods, providing superior quality parks and recreational programs, expanding cultural and entertainment opportunities and other community oriented service efforts  Enhance current services – to improve cost effectiveness of service delivery, using technology to enhance and streamline service delivery, enhance organizational culture and become an employer of choice  Preserve our natural environment – to provide environmental stewardship, pursue cost effective green development and land banking for future parks  Total planning – to identify key corridors and cores throughout the city and create specific development plans for those areas, to provide diverse and sustainable residential housing options and to plan and develop city infrastructure to improve quality of life and coincide with economic development and revitalization efforts  Economic development – to implement strategies to attract targeted industries, help existing businesses grow, facilitate development opportunities in targeted investment zones and develop Peoria’s workforce vii  Leadership and image – to conduct city business with the highest standard of integrity and accountability and to build greater community relations Major Initiatives Accomplished in 2014 Major initiatives accomplished during fiscal 2014 were as follows: Peoria Sports Complex Renovations and Improvements – The professional major league baseball teams, Seattle Mariners and San Diego Padres, continue their Cactus League Spring Training and minor league activities in Peoria at the City-owned, twoteam stadium. In 2012-13, both teams signed a new twenty-year joint use contract to share the facilities with an option of extending their contracts for an additional ten years. This agreement contributes significantly to the economic impact of the Spring Training Cactus League of Maricopa County and the City. As part of the contract, the City pledged approximately $48 million for various improvements to the Sports Complex. The improvement projects consist of 3 distinct phases:  Phase I - approximately $30 million for construction and renovation of clubhouses and team facility improvements. Phase I improvements were completed in fiscal year 2014.  Phase II – at least $6 million for improvements to the stadium such as a new ticket office and front entrance, expanded seating, souvenir shop and other amenities. These improvements are expected to be completed in 2015.  Phase III – approximately $12 million for additional clubhouse and stadium improvements to be completed by 2027. Financing for Phases I and II were accomplished through Municipal Debt Authority bonds. P83 Entertainment DistrictThe Peoria Eighty Three (P83) Entertainment District surrounding the Sports Complex was one of the outcomes of the City’s Urban Redesign Master Plan and continues to be a primary focus of economic development. During 2014, the City completed design concepts for phase 1 improvements which will add signage, branding and medians to give the area a consistent identity. Phase 2 development includes additional streetscapes and also the Avenue Shops which will comprise of 17.5 acres of mixed use space outside the Sports Complex Stadium. Design concepts include a 140 room hotel, retail space to accommodate a variety of retailers, restaurants and two parking structures. The City entered into a new ground lease in March 2014 with Peoria Sports Park LLC to develop phase 2. During fiscal year 2014, the City completed an economic analysis of phase 2 and is working on a development agreement to secure a national/regional retail partner, establish debt and equity commitments and other financing arrangements. University Recruitment – The City continued its efforts in attracting higher learning institutions during fiscal year 2014. Trine University opened a branch campus in the fall of 2013 and the City is in negotiations with Huntington University and St. Scholastica College. Trine, St. Scholastica and Huntington are expected to bring more science, technology, engineering and mathematics programs such as nursing, digital arts, graphic design and engineering to the area. Details are being worked out and a proposal from Huntington University is expected in the fall of 2014. The idea is that over the next few years, all three colleges would come together to create a centralized campus. Business Recruitment – During fiscal year 2014, the City worked with Maxwell Technologies to become the first userdriven Foreign Trade Zone (FTZ) in the City of Peoria. The FTZ is a huge incentive for Maxwell Technologies with benefits that include a reduction of real and personal property taxes by 75%. Maxwell opened its new electrode, cell and module manufacturing facility in November 2013 following a development agreement entered into with the City. The company estimates it will viii create 150 jobs over the next three years with an average salary of $48,000, and an overall capital investment of $26 million. Old Town Redevelopment – During fiscal year 2014, the City entered into a cooperative agreement with Chicanos Por La Causa, a nonprofit statewide community development corporation to assess and evaluate potential redevelopment projects and opportunities for the Old Town area. The City had adopted the Old Town Peoria Revitalization Plan back in 2009 to help breathe life into the downtown area while recognizing its historical relevance. The area targeted for revitalization is bounded by 85th Avenue to the west, Peoria Avenue to the north, Grand Avenue to the east, and Monroe Street to the south. Vistancia Commercial Core In February 2014, the City approved an amendment to the development agreement with Vistancia Land Holdings Inc. (VLH) to continue its efforts in making Vistancia Commercial Core shovel ready for built-to-suit development opportunities. The Vistancia Commercial Core is an important part of the Loop 303 Investment Zone area identified in the City’s adopted Economic Development Implementation Strategy. It is a planned destination in the northern part of Peoria for targeted industries such as healthcare, higher education, corporate offices and headquarters, high technology companies, light manufacturing, bioscience, and other businesses. As part of the agreement with VLH, the city will allocate $6.7 million to build El Mirage road from its current terminus to Lone Mountain Parkway while VLH will construct access roads, an off‐site sewer line, as well as utility and other infrastructure extensions. VLH will also donate up to 50 acres of buildable land in the Vistancia Commercial Core for further targeted economic development initiatives. Development Services Enhancements – During 2014, the City implemented a Self-Certification Pilot Program and an Over-the-Counter Plan Review program to enhance current services. The Self-Certification Pilot Program allows eligible registered design professionals to self-certify building plans which will expedite issuance of certain building permit types. The Over-the-Counter Plan Review Program allows building and site permits to be issued in as little as 30 minutes. Additional service enhancements include electronic document review and on-line permitting that are targeted for implementation in fiscal year 2015. These additional enhancements are expected to reduce customer trips and cost of maintaining hard copies of plans. Youth Council Liaison Program The Peoria Youth Master Plan was adopted by Council in November 2012 to create a culture in which Peoria’s youth are safe, valued, and involved, and have the support to reach their highest potential now and in the future. Key goals of the plan include education and life preparation, community collaboration, civic engagement and out-of-school enrichment. A Youth Advisory Board was formed to act in the same, advisory role as boards and commissions relating to planning, zoning, library, parks and recreation, and other city topics that require a minimum age of 18 years. The Youth Advisory Board also advises the city on the development of public recreation as well as programs, events, ordinances, and proposals pertaining to youth within Peoria. During fiscal year 2014, Council appointed a youth liaison to an ex-officio seat with the City Council. The youth liaison will receive council meeting materials, have the opportunity to ask department leads questions regarding meeting issues and report back to the Youth Advisory Board. Sustainability – In 2012, the council adopted the City’s Sustainability Action Plan to ensure that Peoria uses good environmental practices, which enhances quality of life through energy efficiency, financial stewardship and best practices. During 2013-14, the Peoria Community Center achieved LEED Gold certification and the Seattle Mariners’ and San Diego Padres’ clubhouses were designed for LEED Silver certification. The city also formed a partnership with Habitat for Humanity. In addition, the city is pursuing sustainable best practices in design and construction of new roadways and providing community education and outreach. In September 2013, the city ix received the Arizona Forward Environmental Excellence Award and other awards for its sustainability efforts. Other Major Infrastructure Projects In addition to the Peoria Sports Complex improvements mentioned above, the City completed the following major infrastructure projects during fiscal year 2014:  Agua Fria Truck Road Reliever – this $10.5 million project added 1.8 miles of new roadway connecting 112th and Rose Garden and reduced truck traffic on Beardsley by approximately 50%.  Pioneer Community Park - a $26.5 million facility which includes ball fields, multipurpose fields, a dog park, fishing lake and other amenities was completed and opened to the public in September 2013.  Union Hills/Country Club well head water quality mitigation project – a $3.2 million project that included well rehabilitation, fiber optic and rehabilitation of a storage tank. Additional improvements are slated for fiscal year 2014-15. Infrastructure projects under construction include:  Skunk Creek Trail – a $1.8 million project that includes parking for horse trailers, equestrian amenities, handrail and water fountains  Camino a Lago Neighborhood Park – a 6.8 acres park with sports courts, ramadas, butterfly garden, lighted ball fields and parking lot.  91st Ave & drainage improvements – a $7.1 million project consisting of multi land road improvements, sidewalk, bike lanes street lights and raised landscape median.  Lake Pleasant Pkwy – a $30.9 million project with multi land road improvements, sidewalk, signal, water/sewer lines and raised landscape median. BOND RATING In April 2014, Fitch Ratings, a global credit rating agency affirmed the City’s AA+ rating for its General Obligation bonds and Municipal Debt Authority bonds. Fitch also affirmed the City’s AA rating for its water and wastewater revenue bonds. Fitch designated the ratings outlook as stable, reflecting the city’s improving economic prospects, sound financial management practices, solid reserves and manageable debt levels. FINANCIAL CONTROLS Internal Controls The management of the City of Peoria is responsible for establishing and maintaining a system of internal controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. x The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City’s financial statements. All internal control evaluations occur within the above framework. The City's internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary Controls The City of Peoria, like all cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the City's legal budget capacity. At a general election held in March 2003, the citizens of Peoria approved a permanent adjustment of the expenditure base from the original 1979-80 base of $3,247,857 to a new base of $18,247,857. The permanent adjustment eliminated the need for voter approval every four years. After adjustment for inflation and population growth, the City’s expenditure limitation for fiscal year 2013-14 was $781,620,317. The City may utilize the additional expenditure authority for any local budgetary purposes. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated operating budget approved by the Mayor and Council. Activities of the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal year-end and are rebudgeted as needed in the next fiscal year. Financial Policies The City has an important responsibility to its citizens to carefully account for public funds, to manage its finances wisely, and to plan for the adequate funding of services desired by the public, including the provision and maintenance of public facilities. The City needs to ensure that it is capable of adequately funding and providing those government services desired by the community. Ultimately, the City’s reputation and success depends on the public’s awareness and acceptability of the management and delivery of these services. The City operates under a comprehensive set of financial policies adopted by Council. The Principles of Sound Financial Management establishes guidelines for the City’s overall fiscal planning and management. These principles are intended to foster and support the continued financial strength and stability of the City of Peoria as reflected in its financial goals. The City’s financial goals are broad, fairly timeless statements of the financial position the City seeks to attain:  To deliver quality services in an affordable, efficient and cost-effective basis providing full value for each tax dollar.  To maintain an adequate financial base to sustain a sufficient level of municipal services, thereby preserving the quality of life in the City of Peoria.  To have the ability to withstand local and regional economic fluctuations, to adjust to changes in the service requirements of our community, and to respond to changes in Federal and State priorities and funding as they affect the City's residents.  To maintain a high bond credit rating to ensure the City’s access to the bond markets and to provide assurance to the City's taxpayers that the City government is well managed and financially sound. These policies establish minimum and recommended fund balance/net asset reserves, as well as establishing policies on the use of one-time revenues (to be used for one-time expenditures), fiscal planning and budgeting, expenditure control, capital improvement program, cash management, debt management, and economic development. xi Long Term Financial Planning The City annually updates a five‐year long‐range forecast, incorporating both projected revenues and expenditures for the City’s major operating funds. The five‐year revenue forecast only includes revenues that are anticipated to be sustainable over the five‐year period. Expenditure projections include anticipated operating impacts of the adopted capital improvement program. Additionally, the City maintains a 10-year Capital Improvement Program which the City Manager submits annually for review by the City Council. The program is updated annually and includes the cost of construction and operating expenditures. No capital improvement projects will be authorized or awarded until the funding sources have been established to finance the project. When current revenues or resources are available for Capital Improvement Projects, consideration will be given first to those capital assets with the shortest useful life, and for assets whose nature make them comparatively more difficult to finance with bonds or lease financing. OTHER INFORMATION Responsibility for the accuracy of the presented data and the completeness and fairness of the presentations in this CAFR, including all disclosures, rests with the management of the City. The City has established and maintains a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to allow the compilation of sufficient reliable information for the preparation of financial statements. We believe the data, as presented in this report, is accurate in all material respects and is presented in a manner that fairly sets forth the financial position and results of operations of the City on both a government-wide and fund basis. Furthermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activity and financial stability have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). Independent Audit The basic financial statements and related notes have been audited by an independent firm of certified public accountants, Heinfeld, Meech & Co., P.C., whose report is included herein. The audit satisfies Article VI, Section 7, of the City Charter, which requires an annual audit of all accounts of the City by an independent certified public accountant. As stated in the independent auditors’ report, the goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Peoria, Arizona, for the fiscal year ended June 30, 2014, are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the financial statements of the City of Peoria, Arizona, for the fiscal year ended June 30, 2014, are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. Additionally, the City is required to have an independent audit (“Single Audit”) of federal financial assistance received by the City directly from federal agencies, or passed through to the City by the State of Arizona or other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the government’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. The results of the City’s single audit for the fiscal year ended June 30, 2014, found no instances of material weakness or xii xiv City of Peoria Organizational Chart Peoria Citizens Citizens Advisory Boards and Commissions Mayor and City Council Municipal Court City Manager Intergovernmental Affairs Human Resources Deputy City Manager City Attorney Assistant to the City Manager Office of Communications Deputy City Manager Public WorksUtilities Finance / Budget Planning and Community Development Economic Development Services Police Fire Engineering City Clerk Community Services Information Technology xv City of Peoria Principal Officials of the City Fiscal Year 2014 Bob Barrett Mayor Ron Aames Vice Mayor Ben Toma Jon Edwards Bill Patena Tony Rivero Councilmember Carlo Leone Councilmember Councilmember Councilmember Councilmember Carl Swenson City Manager Susan J. Daluddung Jeff Tyne Deputy City Manager Deputy City Manager George Anagnost John Schell Municipal Judge Governmental Affairs Director Stephen M. Kemp Bobby Ruiz City Attorney Fire Chief John Sefton Roy Minter Community Services Director Police Chief Andrew Granger Rhonda Geriminsky Engineering Director City Clerk Julie Ayers Brent Mattingly Human Resources Director Finance and Budget Director xvi John Imig Information Technology Director Bo Larsen Director of Communications Bill Mattingly Public Works-Utility Operations Director Scott Whyte Economic Development Services Director Chris Jacques Planning and Community Development Director 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 Palo Verde Peoria Ave. 115th Ave. Councilmember Jon Edwards Willow District Pine Acacia Northern Ave. 67th Ave. Councilmember Cathy Carlat Mesquite District xviii Financial Section 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, 2014, 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, 2014, 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 entity’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 entity’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, 2014, 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 accordance 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, 2014, and the respective changes in financial position and, where applicable, cash flows, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. 1 TUCSON • PHOENIX • FLAGSTAFF www.heinfeldmeech.com Change in Accounting Principle As described in Note 1S., the City implemented a change with respect to liabilities associated with developer impact fee credits and sales tax reimbursements, for the year ended June 30, 2014, which represents a change in accounting principle. Our opinion is not modified with respect to this matter. 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, continuing disclosures 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, statistical and continuing disclosure 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 November 24, 2014, 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 November 24, 2014 2 Management’s Discussion & Analysis 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, 2014. 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-xiii 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 $20.1 million (1.2%) in fiscal year 2014, a decrease of $18.6 million (-1.7%) in governmental activities and an increase of $38.7 (6.6%) million in business-type activities.  Total net position of the City is $1,716.3 million, of which $152.6 million is unrestricted (down $6.3 million (-4.0%) from last year’s $158.9 million unrestricted net position).  The governmental activities program revenues decreased by approximately $9.1 million (-17.2%) from the previous year. This was primarily due to a decrease in donated capital assets with fewer large developments being completed in fiscal year 2014.  The business-type activities program revenues increased by approximately $4.2 million (5.7%) from the previous year. Charges for services increased by $2.3 million (3.4%).  At June 30, 2014, total fund balance of the governmental funds was $237.2 million, down $38.2 million (-13.9%) from the previous year. Of this, $17.3 million (up 23.7%) was unassigned (available for spending at the government’s discretion).  General Fund inflows (on a budgetary basis) were higher than budgeted inflows by $7.3 million for fiscal year 2014. Budgetary basis outflows of the General Fund were 80.0% ($28.9 million in savings) of the final budgeted outflows.  At June 30, 2014, unassigned fund balance for the General Fund was $17.3 million, or 16.8% of General Fund expenditures for fiscal year 2014. 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 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 and deferred inflows/outflows of resources, with the difference 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 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. 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, GO Bond Debt Service Fund, GO Bond Capital Projects Fund, and Development Fee 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. Proprietary funds – Proprietary funds are used to account for services primarily supported by user fees. The proprietary fund financial statements are prepared with the same long-term focus as the governmentwide 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). 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 is provided in combining statement. The internal service funds of the City include the Motor Pool, Self-Insurance, Facilities Maintenance, and Information Technology Funds. 5 Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of others. Fiduciary funds are not included in the government-wide financial statements because the resources of those funds are not available to support programs of the City. The fiduciary fund statements 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 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, 2014, 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, 2014, 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 2014 2013 2014 2013 (restated) (restated) $ 289.9 $ 326.6 $ 101.7 $ 95.8 1,129.3 645.7 621.4 1,129.8 1,455.9 747.4 717.2 1,419.7 0.3 0.4 0.3 0.3 26.2 27.1 9.3 8.5 319.4 113.2 122.5 302.7 346.5 122.5 131.0 328.9 Total Primary Government 2014 2013 (restated) $ 391.6 $ 422.4 1,775.5 1,750.7 2,167.1 2,173.1 0.6 0.7 35.5 35.6 415.9 441.9 451.4 477.5 855.3 151.6 84.2 $ 1,091.1 1,388.9 174.8 152.6 $ 1,716.3 886.2 129.5 94.1 $ 1,109.8 $ 533.6 23.2 68.4 625.2 $ 500.1 21.6 64.8 586.5 1,386.3 151.1 158.9 $ 1,696,3 The net position of the City increased $20.1 million in fiscal year 2014. Net position of governmental activities decreased $18.6 million, while the business-type activities increased $38.7 million. Net position consists of three components. The largest portion of net position, $1,388.9 million 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 $2.6 million in fiscal year 2014 due to $62.6 million in capital asset expenditures, $9.6 million in donated assets, and a $26.8 million decrease in net capital related debt, offset by $48.0 million in depreciation expense, and asset disposals. The second portion of the City’s net position, $174.8 million represents resources that are subject to external restrictions on how they may be used. The increase of $23.7 million includes an increase of $16.6 million in restricted for capital projects and a $4.0 million increase in restricted for transportation 6 purposes due to increased capital project activity and a $1.4 million increase in net position restricted for trust purposes. The third portion consists of Unrestricted Net Position of $152.6 million. This category of net position may be used to meet the City’s ongoing obligations to citizens and creditors. This category decreased $6.3 million in fiscal year 2014. 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 $9.9 million, while unrestricted net position of business-type activities increased $3.6 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 2013 2014 2013 2014 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 Restatement Increase (decrease) in net position $ 19.2 2.7 5.3 16.4 $ 18.7 2.9 6.7 24.3 $ 69.5 0.0 9.3 - $ 67.2 0.1 7.3 - Total Primary Government 2014 2013 $ 88.7 2.7 14.6 16.4 $ 85.9 3.0 14.0 24.3 18.2 70.2 4.2 13.4 17.2 5.5 0.9 0.1 3.9 177.2 19.5 66.0 4.1 12.7 14.4 5.2 0.6 0.1 0.6 4.4 180.2 0.4 79.2 0.2 74.8 18.2 70.2 4.2 13.4 17.2 5.5 1.3 0.1 3.9 256.4 19.5 66.0 4.1 12.7 14.4 5.2 0.8 0.1 0.6 4.4 255.0 20.0 25.6 36.4 23.9 9.2 31.4 7.0 1.6 12.0 0.6 19.1 22.4 35.4 21.4 8.4 30.0 7.0 2.2 12.7 0.6 - - 20.0 25.6 36.4 23.9 9.2 31.4 7.0 1.6 12.0 0.6 19.1 22.4 35.4 21.4 8.4 30.0 7.0 2.2 12.7 0.6 167.7 9.5 (28.2) 55.1 36.4 159.2 21.0 (9.4) 11.6 30.8 21.1 10.8 5.2 0.8 68.7 10.5 28.2 6.3 45.0 29.1 20.3 10.5 5.1 0.8 0.3 66.1 8.7 9.4 (2.1) 16.0 30.8 21.1 10.8 5.2 0.8 236.4 20.0 61.4 81.4 29.1 20.3 10.5 5.1 0.8 0.3 225.3 29.7 (2.1) 27.6 $ $ $ $ $ For fiscal year 2014, total governmental activities revenues decreased $3.0 million, and total businesstype activities revenues increased $4.4 million. Expenses increased $8.5 million and $2.6 million for the governmental activities and business-type activities, respectively. General government expenses increased by $0.8 million; culture & recreation expenses increased by $3.2 million; public safety increased $3.5 million. Development services expenses increased by $0.8 million, human services decreased by $0.6 and highways and streets expenses increased by $1.4 million. The increase in the business-type activities expenses are primarily in the Water Utility ($1.7 million), Wastewater Utility ($0.7 7 million,) and the Solid Waste Utility ($0.3 million). 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 $6.1 million from the previous year. The primary drivers were decreases in property tax, capital contributions and other grants, offset by increased local and state sales taxes. Property tax revenues decreased by $1.3 million in fiscal year 2014 as assessed values continued to decline. Capital contributions decreased by $1.5 million in fiscal year 2014. Other grants decreased by $7.9 million, due to decreased highways & streets revenue. Local sales and use taxes increased $4.3 million as retail and restaurant & bar sales taxes increased $2.8 million and $0.3 million respectively while state shared sales taxes increased $0.8 million. Program revenues of governmental activities decreased $9.1 million mainly as a result of the following change: Development/Impact Fees decreased by $8.2 million due to a change in reporting reimbursements made to developers. The program revenues of business-type activities increased by $4.2 million primarily due to a $1.7 million increase in charges for services revenues in the Water Utility and a $1.5 million increase in Capital Grants in the Water Utility. 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 (millions $) 60 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 $43.6 million are 26.0% of the governmental activities expenses for fiscal year 2014, down from 33.1% in fiscal year 2013. In the business-type activities, program revenues of $78.8 million are 114.7% of the business-type expenses for fiscal year 2014. This compares to $74.6 million and 112.7% in fiscal year 2013. Governmental activities account for 69.2% of the total revenues of the City and 70.9% of the total expenses in fiscal year 2014. These percentages were 70.7% and 70.6% respectively in fiscal year 2013. As seen in the following graph, one of the largest financing sources for the City in fiscal year 2014 is charges for services (33.7%), primarily because this is the major funding source of the business-type activities (87.8% of business-type revenues in fiscal year 2014). The major funding sources of the governmental activities are property, franchise and sales/use taxes (36.2% of total revenues, 52.3% of 8 governmental revenues) and state shared revenues (14.0% of total revenues, 20.3% of governmental revenues). Government-Wide Revenue Sources Fiscal Year 2014 Other grants & entitlements 1.0% Federal grants 1.1% Investment earnings 0.5% Property taxes 7.2% Sales & use taxes 27.3% State shared revenues 14.0% Franchise taxes 1.6% Charges for services 34.6% Other 7.0% Contributed capital 5.7% Property taxes decreased 5.0% from fiscal year 2013 with a continued decline in assessed value. The tax rates did not change in fiscal year 2014 compared to the previous year. Total government-wide expenses (not including transfers out) of the City increased $11.0 million in fiscal year 2014. Expenses of the governmental activities increased $8.4 million. This includes increases of $3.1 million for culture and recreation, $2.5 million for fire, $1 million in each of general government and police, and $2.8 million for highways and streets offset by a decrease of $0.6 million for human services, $0.5 million for development services, and $0.7 million for interest expense. Highways and streets expenses increased primarily due to an increase of $2.8 million in maintenace performed on the City’s street system. Culture and recreation expenses increased primarily due to the opening of a new regional city park, Pioneer Park. General government expenses increased with $1.3 million in costs to install energy efficiency lighting within the City. Expenses in business-type activities increased $2.6 million primarily due to increased costs of contractual services, materials and supplies. As shown in the following Government-Wide Functional Expenses graph, business-type activities account for 29.0% of the functional expenses of the City for fiscal year 2014, while governmental activities account for 71.0% of the functional expenses. For the governmental activities, the largest users of resources are public safety (25.5% of total expense, 35.9% of governmental expenses), general government (8.5% of total expenses, 12.0% of governmental expenses), highways and streets (13.3% of total expenses, 18.7% of governmental expenses), and culture and recreation (10.8% of total expenses, 15.2% of governmental expenses). 9 Government-Wide Functional Expenses Fiscal Year 2014 General government 8.5% Business-type activities 29.0% Culture & recreation 10.8% Other 0.9% Public safety 25.5% Highways & streets 13.3% Interest 5.1% Development services 3.9% Public works 3.0% 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 is to provide information on near-term 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 97-100. Although the 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 $237.2, a decrease of $38.3 million from the previous year. Of this, $145.8 million (down $43.1 million from the previous year) is classified as Unspendable or Restricted because it is not appropriable for expenditure or is legally segregated for a specific future use. The decrease in restricted fund balance is caused by a decrease in restricted for capital projects of $46.8 million and a decrease in restricted for debt service of $3.5, offset by an increase of $3.2 million in restricted for development fees due to increased development fee revenues, and $4.1 in restricted for transportation purposes due to increased capital expenditures. An additional $74.1 million of the governmental fund balance (up $1.5 million from the previous year) has been committed or assigned for specific purposes by council or administrative action. These commitments include various stabilization reserves ($36.8 million), debt service reserves ($1.0 million), capital projects ($18.4 million) and arts capital and various other purposes ($17.9). The remaining $17.3 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 $3.3 million during fiscal year 2014 is due primarily to increased General Fund revenues. 10 Governmental Funds - Fund Balance Millions 100 90 80 70 60 50 40 30 20 10 0 FY13 FY14 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 $6.1 million from the previous year. Urban revenue sharing increased $2.7 million. Property taxes decreased by $0.2 million as assessed values continue to decrease. The City’s sales tax revenues in the General Fund increased $3.0 million and state shared sales tax revenues increased $0.8 million due to a recovering retail sales and restaurant & bar sales. Auto-in-lieu revenue (licensing fees) increased $0.3 million with an increase in auto sales. Total General Fund expenditures increased $1.3 million. Personnel costs increased $1.5 million while other costs (contractual services and commodities) increased $2.0 million as the economy begins to recover. Capital outlay decreased by $2.6 million. The unassigned fund balance of the General Fund was 16.8% of expenditures at June 30, 2014, compared to 13.8% at June 30, 2013. 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 from the previous year due to increased sales tax revenues. Expenditures in this fund increased $1.5 million due to a project in fiscal year 2014 to replace energy efficiency in the lighting within the City. Transfers out from the Half-Cent Fund increased $2.7 million with higher debt service transfers. Total fund balance of the Half-Cent Sales Tax Fund decreased by $2.5 million in fiscal year 2014. 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 $0.4 million due to increased highway user revenues and a small increase in sales taxes. Expenditures decreased by $0.9 million in fiscal year 2014 primarily due to decreased operating costs. Fund balance increased $1.9 million in fiscal year 2014. 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 $0.9 million while expenditures decreased $1.1 million. The increased revenues are due to increasing sales tax revenue while the decreased expenditures are primarily capital outlay. The fund balance increased $2.2 million in fiscal year 2014. All fund balance in this fund is restricted. Another major governmental fund of the City is the Development Fee Fund, which collects governmental impact fees for parks and recreational facilities, public safety, and streets and intersections. Revenues in 11 the Development Fee Fund decreased $4.4 million, while expenditures decreased $3.1 million in fiscal year 2014. Fund balance increased $3.2 million in fiscal year 2014, primarily due to decreased principal payments on development agreements. 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 $1.3 million due to decreased secondary property tax revenues. The secondary assessed value of the City decreased 7.0% in fiscal year 2014 while the secondary tax rate was unchanged. Expenditures increased by $0.8 million due to increased principal payments on general obligation bonds. Fund balance decreased $3.9 million in fiscal year 2014. The GO Bond Capital Project Fund accounts for the use of proceeds from general obligation bonds for capital projects. Revenues in this fund increased $0.2 million due to a settlement agreement with a construction company. Expenditures increased by $1.4 million due to increased capital outlay. Fund balance decreased $18.9 million in fiscal year 2014. 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, and Storm Drain Utility 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 $44.6 million in fiscal year 2014. Net investment in capital assets increased $39.8 million 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 increased $1.6 million primarily due to an increase in capital project activity in the Water Utility, Wastewater Utility, and Stadium Funds. Beginning unrestricted net position was restated due to a change in accounting principle. Previously, contracts payable related to development agreements were included on the financial statements as a long-term liability. It was determined that these liabilities are contingent liabilities and should not have been recorded. The unrestricted net position of the enterprise funds increased 3.2 million primarily due to increased net income in all of the enterprise funds. The Water Utility Fund, Wastewater Utility Fund, Solid Waste Fund, Stadium Fund, and Storm Drain Utility Fund experienced increases in total net position of $14.0 million , $5.5 million, $0.7 million, $24.2 million and $0.2 million respectively. The Water Utility Fund unrestricted net position increased $1.8 million, the Wastewater Utility Fund unrestricted net position increased $2.1 million, the Solid Waste Fund unrestricted net position decreased $1.0 million, and the Stadium Fund unrestricted net position increased $0.3 million. Operating revenues of the enterprise funds increased $2.2 million in fiscal year 2014. Charges for services increased $1.4 million in the Water Utility Fund and $0.3 million in the Solid Waste Fund primarily due to increased usage. In the Stadium Fund, rent revenue increased by $0.3 million. Operating expenses of the enterprise funds increased $2.3 million in fiscal year 2014. The Water Utility Fund operating expenses increased $1.6 million primarily due to increases in depreciation expense of $0.4 million and contractual services/commodities of $1.1 million which consists primarily of increases in various Central Arizona Project related water charges and internal service charges. The Wastewater Utility Fund operating expenses increased $0.8 million due to increases in contractual services/commodities of $0.6 million primarily in professonal service fees and internal service charges. In the Solid Waste Fund, operating expenses increased $0.1 million due to an increase in contractual services/commodities primarily in landfill services. Operating income for the Water Utility Fund increased by $0.1 million from fiscal year 2013 due to the increases in contractual services/commodities and depreciation expenses being offset by increases in charges for services revenue. Operating income for the Wastewater Utility Fund decreased by $0.8 million in fiscal year 2014 with the increase in contractual services/commodities expenses as discussed above. The Solid Waste Utility Fund operating income increased $0.2 million due to increased charges 12 for services. The $0.5 million decrease in the Stadium Fund operating loss in fiscal year 2014 is primarily due to an increase in rent revenues. The Stadium Fund’s operating loss is substantially covered by transfers from the Half-Cent Sales Tax Fund for governmental use and support of this facility. The Storm Drainage Utility Fund essentially broke even in fiscal years 2013 and 2014. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2014. Fiscal year 2014 Enterprise Fund Operating Revenues and Expenses 40 35 Millions 30 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 92-93, 102-110, 112-116, and 121-124. Amendments to the adopted budget may occur throughout the year in a legally permissible manner (see Note 1.E 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 $468 million occurred during fiscal year 2014. 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 $125.2 million, on a budgetary basis, exceeded budgeted inflows of $118.1 million by $7.1 million while budgetary basis outflows (expenditures and other uses) of $115.5 million were 80.1% of final budgeted outflows. Revenues, on a budgetary basis, exceeded budgeted revenues in sales tax, property tax, franchise tax, state shared sales tax, urban revenue sharing, auto in-lieu tax, charges for other services, licenses and permits, rents, while falling short in investment earnings and fines and forfeitures. Reduced General Fund outflows resulted primarily 13 from the functional categories of Police, Culture and recreation and Finance. There were no expenditure overages for any of the functional categories, with the exception of Court. During the fiscal year, the original General Fund expenditures and other uses budget of $141.3 million was amended by $3.1 million to the final expenditure and other uses budget of $144.4 million. Notable General Fund transfers were as follows:  Budget appropriation of $1.73 million was transferred to the General Fund from operating and capital funds for FY2014.  Contingency appropriation of $1.85 million was transferred from General Fund to the Sports Complex Reserve Fund as part of a contractual payment from the City’s new Sports Complex concessionaire.  Reduction of Lake Pleasant Parkway and Truck Route Reliever capital improvement projects of $5.4 million from capital funds to General Fund contingency appropriation.  Additions to Camino A Lago Park, Skunk Creek Trailhead and the Sports Complex capital improvements projects of $1.8 million was transferred to capital funds from General Fund contingency appropriation. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2014, the City had $1.4 billion invested in various capital assets, net of accumulated depreciation and related debt, up 3.8% 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 $25.8 million from June 30, 2013. Net assets of business-type activities increased $24.8 million while governmental activities increased $0.5 million. Major additions to capital assets during the fiscal year included the following:  The City spent $23.6 million completing a major renovation of the team clubhouses located at the Peoria Sports Complex. An additional $1.8 million was spent to begin phase two, to renovate the main stadium. 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 Spots Complex reflect this new standard. The total project costs for the clubhouses were $30 million. The projected costs for phase two are $7.2 million.  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 the 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 $2 million in fiscal year 2014. Pioneer Park completed project costs are $21.7 million. Pioneer Park opened in September 2013.  Traffic projections indicate that Lake Pleasant Parkway should be widened to four lanes between Westwing Parkway (Dynamite Blvd) and the Loop 303 to accommodate the anticipated increased traffic anticipated following the connection of Loop 303 to Lake Pleasant Parkway. This project will add two lanes in both directions to the two existing lanes, bike lanes, median improvements, street lighting, sidewalk installation along Lake Pleasant Parkway from Happy Valley Road to Westwing Parkway and aesthetic enhancements to existing walls in the area. Project costs as of June 2014 are $9.8 million. This project is expected to be completed in FY2015.  The City of Peoria, MCDOT, City of Surprise, and the Arizona Rock Products Association identified an alternative truck route to reduce truck traffic on Beardsley Road between 111th Avenue and 99th 14 Avenue. Additionally, the route will alleviate the noise and other environmental impacts on residents in the area. This project was approved by the voters as part of the 2008 bond election. Project costs as of June 2014 are $4.5 million. This project is expected to be completed in FY2015. The following table provides a breakdown of the capital assets of the City at June 30, 2014, and 2013. Additional information on the City’s capital assets may be found in Note 12. 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 2013 2014 2013 2014 $ 133.0 $ 137.7 $ 50.6 $ 21.5 .5 .4 .1 11.7 13.1 6.2 5.3 7.8 7.1 6.2 4.7 56.6 58.6 353.4 362.8 68.4 48.6 236.9 237.6 11.1 11.3 268.8 274.8 340.1 339.2 16.6 16.6 161.7 50.2 49.5 158.3 $ 646.6 $ 621.4 $ 1,129.8 $ 1,129.2 Total Primary Government 2014 2013 $ 183.5 $ 159.2 .5 .5 17.9 18.4 13.9 11.8 56.8 58.6 353.4 362.8 68.4 48.6 236.9 237.6 11.1 11.3 268.8 274.8 356.7 355.8 208.5 211.2 $ 1,776.4 $ 1,750.6 The City has adopted a ten year capital improvement plan budgeted at $598.6 million, including $145.2 million in fiscal year 2015. Anticipated funding for this plan for fiscal year 2015 is through a combination of impact fees (20.4%), general obligation bonds (8.0%), municipal development authority bonds (25.6%), operating revenues (23.2%), City (17.6%) and County (1.5%) transportation sales taxes and other outside funding sources (3.7%). The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $10.5 million. The capital improvement plan is updated annually as part of the City’s budget process. Long-term Debt The City’s outstanding non-current long-term debt, including bonds, compensated absences, and deferred bond premiums, net of deferred loss on bond refunding, was $379.5 million at June 30, 2014. Of this total, $276.1 million was in governmental activities and $103.4 million was in business-type activities. The City’s outstanding non-current debt decreased $84.9 million in fiscal year 2014. This decrease in outstanding non-current debt is due to the change in accounting principle implemented in fiscal year 2014. All contracts payable related to development agreements were removed from the financial statements. Contracts payable of $57,165,982 was removed from governmental activities and $6,297,204 was removed from business-type activities. Of the total outstanding bonds, net of unamortized bond premium, of $398.6 million, $152.8 million is general obligation bonds backed by the full faith and credit of the City. An additional $3.2 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 $51.1 million in Community Facilities District bonds where the City has no obligation for payment. All other outstanding debt is secured by pledges of specific revenue sources of the City. The State constitution imposes certain debt limitations on the City of six percent (6%) and twenty percent (20%) of the assessed valuation of the City. The City’s available debt margin at June 30, 2014, is $63.1 million in the 6% category and $59.0 million in the 20% category. Additional information on the debt limitations and capacities may be found in Note 14 and also in Table XXV in the statistical section of this report. The following schedule shows the outstanding debt of the City (both current and long-term) as of June 30, 2014, and 2013. Further detail on the City’s outstanding debt may be found in Note 14. 15 Outstanding Debt (in millions) Governmental Activities 2014 2013 (restated) General obligation debt $ 152.8 $ 162.4 Municipal Development Authority debt 81.0 85.2 Special assessment debt 3.2 3.5 Water/Sewer Revenue bonds Community Facilities District bonds 51.1 53.7 6.9 Compensated absences 6.9 Total $ 295.0 $ 311.7. Business-type Activities 2014 2013 (restated) $ $ 110.5 119.5 0.8 0.8 $ 111.3 $ 120.3 Total Primary Government 2014 2013 (restated) $ 152.8 $ 162.4 81.0 85.2 3.2 3.5 110.5 119.5 51.1 53.7 7.7 7.7 $ 406.3 $ 432.0 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 2014 was 6.0% which remains below both the state (7.5%) and national average (6.3%). 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 2.3%, slightly faster than the national rate of 1.5% 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 leisure and hospitality, business and financial services, education, and healthcare sectors. Peoria also experienced growth in new home starts with a 25.0% 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 2015 budget is $470 million, a slight increase from the fiscal year 2014 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 $324.8 million, which is an increase of 3.5% from 2014. The capital projects portion of the budget, $145.2 million (a 5.8% decrease), is divided in the following manner: $0.9 million for drainage projects, $6.0 for operational facilities, $17.8 million for parks, trails and open space, $10.8 million for public safety projects, $35.9 million for streets and traffic control projects, $44.3 million for economic development projects, $8.0 million for wastewater projects, and $21.5 million for water projects. The General Fund operating budget (not including contingency) is $123.2 million, up 3.1% 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 2015 budget no longer required staff cuts, but adhering to the commitment to avoid ongoing commitments, seven 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 $31.5 million in the General Fund and $5.2 million in the Half-Cent Sales Tax Fund at June 30, 2014. The City also maintains working capital policy reserve, rate stabilization, and debt stabilization reserves in the Utility Funds. At June 30, 2014, those reserves were $12.3 million in the Water Utility, $8.8 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 2015 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 Basic Financial Statements CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2014 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 p 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 bonds payable Due in more than one year: Noncurrent portion of claims payable Noncurrent portion of compensated absences Noncurrent portion of bonds payable 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 $ 53,613,894 3,681,859 179,737,909 8,891,034 99,040 (2,241,926) 4,587,905 230,822 429,506 22,102,392 15,248,986 900,000 2,603,127 Primary Government Business-type Activities $ 20,694,824 69,540,816 8,679,861 35,482 2,241,926 91,000 389,058 - Total $ 74,308,718 3,681,859 249,278,725 17,570,895 134,522 4,587,905 321,822 818,564 22,102,392 15,248,986 900,000 2,603,127 498,433,470 631,321,478 1,419,639,496 65,819,496 579,910,785 747,403,248 564,252,966 1,211,232,263 2,167,042,744 349,692 284,406 634,098 11,159,551 1,272,054 6,078,842 1,208,783 3,302,122 , 3,567 3,159,970 3,188,124 155,006 1,786,943 219,028 87,769 , , 2,018,373 1,848,389 14,347,675 1,427,060 7,865,785 1,427,811 3,389,891 , , 2,021,940 5,008,359 2,477,231 5,177,550 17,305,000 619,410 9,210,037 2,477,231 5,796,960 26,515,037 1,585,358 1,728,590 274,407,869 328,866,487 213,930 103,181,509 122,528,518 1,585,358 1,942,520 377,589,378 451,395,005 855,286,264 533,623,141 1,388,909,405 50,307,079 18,452,158 28,897,666 44,934,361 2,790,691 54,193 6,188,544 84,211,745 $ 1,091,122,701 23,053,024 100,000 68,382,971 $ 625,159,136 50,307,079 41,505,182 28,897,666 44,934,361 2,790,691 154,193 6,188,544 152,594,716 $ 1,716,281,837 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, 2014 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 Total business-type activities Total primary government $ $ Fees, Fines & Charges for Services 20,038,112 25,559,518 36,344,807 23,868,374 9,193,743 31,411,752 7,015,316 1,629,118 12,009,243 574,550 167,644,533 $ 30,836,235 21,083,666 10,806,101 5,176,689 823,780 68,726,471 236,371,004 35,800,393 18,455,600 11,309,198 3,103,333 831,439 69,499,963 $ 88,721,884 2,303,848 7,299,943 995,068 1,772,238 2,677,468 621,056 3,506,520 45,780 19,221,921 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 138,563 422,945 628,923 453,757 1,013,410 8,691,989 41,028 1,302,920 12,693,535 $ 12,693,535 $ 5,611,597 3,510,961 203,078 9,325,636 $ 21,029,083 General revenues: Taxes: Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes State shared sales taxes- unrestricted Urban revenue sharing- unrestricted Auto in-lieu taxes- unrestricted Investment earnings Gain on sale of capital assets Miscellaneous Transfers in (out) Total general revenues and transfers Change in net position Net position - beginning Cumulative 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 2,515,028 525,073 591,566 8,071,780 11,703,447 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Activities $ $ $ $ Business-type Activities (17,595,701) (15,321,602) (34,195,743) (21,050,813) (5,502,865) (14,026,927) (3,467,768) (280,418) (12,009,243) (574,550) (124,025,630) $ (124,025,630) 10,575,755 882,895 503,097 (2,073,356) 210,737 10,099,128 $ 10,099,128 10,575,755 882,895 503,097 (2,073,356) 210,737 10,099,128 $ (113,926,502) $ $ 2,744,900 15,479,771 70,213,953 4,194,371 13,431,637 17,172,500 5,495,225 878,164 111,342 3,920,109 (28,205,646) 105,436,326 (18,589,304) 1,054,652,077 55,059,928 1,109,712,005 1,091,122,701 - Total 359,158 28,205,646 28,564,804 38,663,932 580,198,000 6,297,204 586,495,204 $ 625,159,136 $ (17,595,701) (15,321,602) (34,195,743) (21,050,813) (5,502,865) (14,026,927) (3,467,768) (280,418) (12,009,243) (574,550) (124,025,630) 2,744,900 15,479,771 70,213,953 4,194,371 13,431,637 17,172,500 5,495,225 1,237,322 111,342 3,920,109 134,001,130 20,074,628 1,634,850,077 61,357,132 1,696,207,209 $ 1,716,281,837 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2014 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 Total assets $ 13,758,042 45,083,344 4,791,063 23,139 2,673,176 108,002 154,850 326,735 66,918,351 $ 2,197,029 7,388,011 1,535,489 4,694 11,125,223 $ Total assets & deferred outflows $ 66,918,351 $ 11,125,223 $ 15,985,292 $ 30,925,321 $ $ LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable $ 2,675,205 Accrued payroll 1,115,339 Due to other funds Due to other governments 1,208,783 Customer deposits 3,567 Other liabilities 2,438,667 Unearned revenue-other 1,472,954 Total liabilities 8 914 515 8,914,515 Deferred Inflows of Resources: Unavailable revenue-property taxes 9,051 Unavailable revenue-special assessments Total deferred inflows of resources 9,051 Fund balances: Nonspendable: Supply inventories 154,850 Prepaid items 108,002 Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance 54,193 Committed to: Debt service Economic development 5,496,922 Arts capital Operating reserve 13,514,000 Emergency reserve 9,009,000 Budget stabilization reserve 9,009,000 Assigned to: Capital projects Municipal Complex reserve 3,340,512 Other purposes Unassigned: 17,308,306 Total fund balance 57,994,785 Total liabilities, deferred inflows & fund balance $ 66,918,351 $ - 3,369,335 11,330,155 378,420 5,940 822,335 79,107 15,985,292 650,929 44,290 695 219 695,219 1,049,528 87,798 1 137 326 1,137,326 - 41,589 41,589 - - 79,107 - - - 15,169,377 - 1,000,000 5,242,000 $ 6,874,794 23,118,058 920,313 12,156 30,925,321 4,883,223 11,125,223 11,125,223 15,248,484 $ 15,985,292 The accompanying notes are an integral part of the financial statements 22 - 29,787,995 29,787,995 $ 30,925,321 GO Bond Debt Service Fund $ GO Bond Capital Projects Fund Development Fee Fund Non-Major Governmental Funds Total Governmental Funds 6,111,342 20,550,778 93,941 8,749 188,206 26,953,016 $ 116 52,534 788,737 2,497,638 3,339,025 $ 7,461,895 25,092,320 13,357 32,567,572 $ 7,983,858 3,681,859 27,477,736 1,168,701 21,652 1,819,656 904,188 16,403,396 9,753,598 2,603,127 71,817,771 $ 47,756,295 3,681,859 160,040,402 8,887,927 89,803 1,819,656 4,587,905 160,536 233,957 17,518,868 12,251,236 2,603,127 259,631,571 $ 26,953,016 $ 3,339,025 $ 32,567,572 $ 71,817,771 $ 259,631,571 $ $ 1,057,263 461,624 1 518 887 1,518,887 $ $ 1,823,377 14,681 314,033 1,687,016 3 839 107 3,839,107 $ 9,106,552 1,174,310 1,819,656 1,208,783 3,567 3,302,122 3,159,970 19 774 960 19,774,960 - 1,850,250 1,819,656 3 669 906 3,669,906 - - - - 52,534 - 26,953,016 - 1,767,604 - 26,953,016 $ 26,953,016 - $ 1,820,138 3,339,025 12,922 2,603,127 2,616,049 - 28,897,666 28,897,666 $ 32,567,572 63,562 2,603,127 2,666,689 $ 23 233,957 160,536 23,354,063 16,632,020 2,790,691 - 50,307,079 18,399,624 28,897,666 44,957,372 2,790,691 54,193 4,058,556 - 1,000,000 5,496,922 4,058,556 13,514,000 9,009,000 14,251,000 18,415,187 112,098 65,362,615 71,817,771 18,415,187 3,340,512 4,995,321 17,308,306 237,189,922 259,631,571 $ 24 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL ACTIVITIES JUNE 30, 2014 Fund balances - total governmental funds balance sheet $ 237,189,922 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 $ 1,406,372,622 (295,117,985) 1,111,254,637 Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Deferred loss on bond refunding 349,692 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 Compensated absences 288,145,000 6,188,290 Certain long-term debt is offset by an intangible asset (goodwill) for government-wide reporting (294,333,290) 900,000 Advances for long-term special assessments is shown on the governmental governmental funds balance sheet, but is not on the statement of net position 2,603,127 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 (3,567,869) 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 63,562 Interest payable on long-term debt is not reported in the governmental funds. (6,078,842) 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. 42,741,762 Total net position of governmental activities - statement of net position The accompanying notes are an integral part of the financial statements 25 $ 1,091,122,701 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2014 Major Funds Half-Cent Sales Tax Fund General Fund 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 $ 39,454,451 2,174,962 4,194,371 $ 17,776,962 - Highway User Revenue Fund Transportation Sales Tax Fund $ $ 3,356,033 543,246 - 10,649,695 - 13,431,637 17,172,500 5,495,225 257,065 12,207,472 2,800,894 1,933,142 731,901 83,771 436,071 100,373,462 49,707 27,391 17,854,060 8,691,989 328,007 51,013 98 12,970,386 131,450 80,000 10,861,145 12,207,156 20,955,595 35,086,801 22,455,728 6,984,941 5,069,896 - 3,241,986 - 11,494,957 - 1,030,186 - 201,560 102,961,677 1,023,188 8,287 4,273,461 500,764 11,995,721 2,212,668 3,242,854 (2,588,215) 13,580,599 974,665 7,618,291 11,039,167 (1,137,515) 9,901,652 (16,057,076) (16,057,076) 1,000,000 (75,429) 924,571 (5,417,059) (5,417,059) 7,313,437 (2,476,477) 1,899,236 2,201,232 Fund balances - beginning 50,924,988 13,601,700 13,349,248 27,586,763 Restatement (note 1) Fund balances (deficit) - beginning - restated (243,640) 50,681,348 13,601,700 13,349,248 27,586,763 11,125,223 $ 15,248,484 $ 29,787,995 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): Loan proceeds Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - ending $ 57,994,785 $ The accompanying notes are an integral part of the financial statements 26 GO Bond Debt Service Fund $ 13,429,627 - GO Bond Capital Projects Fund Development Fee Fund Non-Major Governmental Funds $ $ $ 89,959 13,519,586 - - 2,152,633 - Total Governmental Funds $ 71,237,141 18,300,468 4,194,371 10,934 257,058 267,992 4,477,101 141,338 4,618,439 2,717,331 2,367,175 671,777 195,147 199,575 1,137,018 4,259,725 13,700,381 13,431,637 17,172,500 5,495,225 8,691,989 2,717,331 2,624,240 17,684,357 2,800,894 2,128,289 731,901 757,747 1,137,018 5,060,343 174,165,451 4,095,067 - 181,062 38,598 236,293 117,396 - 417,470 626,068 714,252 445,201 2,327,023 360,984 41,028 1,604,288 15,866,612 21,762,725 35,839,651 23,137,222 9,311,964 17,098,590 5,110,924 1,604,288 9,555,000 6,077,659 15,632,659 2,500 14,444,860 18,542,427 890,856 1,464,205 7,150,000 6,455,528 3,687,053 23,828,895 17,728,188 12,543,974 21,937,761 181,941,899 (2,113,073) (18,274,435) 3,154,234 (10,128,514) (7,776,448) 112,000 8,120,774 (25,325,151) (17,092,377) 112,000 20,159,941 (48,650,688) (28,378,747) - - (638,458) (638,458) - (2,113,073) (18,912,893) 3,154,234 (27,220,891) (36,155,195) 30,825,566 20,733,031 25,743,432 92,686,443 275,451,171 (1,759,477) 29,066,089 20,733,031 25,743,432 (102,937) 92,583,506 (2,106,054) 273,345,117 $ 26,953,016 $ 1,820,138 $ 28,897,666 $ 65,362,615 27 $ 237,189,922 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, 2014 Net change in fund balances - total governmental funds $ (36,155,195) 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. (20,120) 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. (75,797) 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 (900,000) 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. (916,873) 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. 534,731 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 ($21,937,761), plus other capital $0, is exceeded by depreciation ($28,510,136) in the current period. (6,572,375) 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. 141,376 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 5,250,155 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. 16,705,000 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 (2,749,603) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 6,169,397 Change in net position of governmental activities- statement of activities The accompanying notes are an integral part of the financial statements 29 $ (18,589,304) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto in-lieu taxes Other Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government: Mayor and council City manager Human resources Attorney City clerk Court Economic development Finance Non-departmental Culture and recreation Police Fire Development services Public works Capital outlay Contingencies Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2014 $ 49,901,946 $ 49,901,946 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 49,901,946 $ - 35,799,364 2,166,429 4,127,136 35,799,364 2,166,429 4,127,136 39,362,157 2,437,408 4,182,052 3,562,793 270,979 54,916 13,136,907 16,994,859 5,215,662 285,667 23,512,060 2,215,734 2,124,729 639,773 137,652 685,000 11,080,843 118,121,815 168,023,761 13,136,907 16,994,859 5,215,662 285,667 23,512,060 2,215,734 2,124,729 639,773 146,586 685,000 11,080,843 118,130,749 168,032,695 13,369,551 17,172,500 5,509,827 469,025 26,420,793 2,800,894 1,933,142 743,340 100,539 436,071 10,517,719 125,455,018 175,356,964 232,644 177,641 294,165 183,358 2,908,733 585,160 (191,587) 103,567 (46,047) (248,929) (563,124) 7,324,269 7,324,269 676,888 4,112,354 2,679,726 3,155,905 819,344 1,906,941 1,439,059 9,790,335 1,720,819 21,711,985 36,805,169 23,000,939 8,209,879 5,296,323 1,761,920 17,500,000 718,189 141,305,775 686,874 4,167,474 2,637,843 3,255,905 819,344 1,906,941 1,582,082 10,011,335 2,250,979 21,772,023 36,745,319 23,000,939 8,645,276 5,418,896 2,362,171 18,384,776 718,189 144,366,366 600,775 3,838,977 2,316,520 3,066,127 744,288 1,910,068 915,902 8,954,037 2,421,425 20,088,394 34,721,210 22,221,748 6,912,161 4,829,375 1,253,285 715,748 115,510,040 (86,099) (328,497) (321,323) (189,778) (75,056) 3,127 (666,180) (1,057,298) 170,446 (1,683,629) (2,024,109) (779,191) (1,733,115) (589,521) (1,108,886) (18,384,776) (2,441) (28,856,326) 26,717,986 $ 23,666,329 $ 59,846,924 The accompanying notes are an integral part of the financial statements 30 $ 36,180,595 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2014 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 $ 175,356,964 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (49,901,946) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (10,517,719) Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules (12,743,673) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (1,820,164) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 100,373,462 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 115,510,040 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 130,947 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 780,111 Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules (12,743,673) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (715,748) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 102,961,677 31 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ RESOURCES (INFLOWS): Taxes: Sales and use taxes Investment earnings Miscellaneous 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, 2014 $ 12,712,986 $ 12,712,986 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 12,712,986 $ - 15,853,416 39,000 15,892,416 28,605,402 15,853,416 39,000 15,892,416 28,605,402 17,740,482 56,125 27,391 17,823,998 30,536,984 2,308,796 3,323,928 3,241,986 (81,942) 1,310,000 26,000 1,170,000 3,000,000 15,961,477 23,776,273 1,310,000 26,000 3,054,868 15,961,477 23,676,273 1,023,188 8,287 15,957,076 20,230,537 (286,812) (17,713) (3,054,868) (4,401) (3,445,736) 4,829,129 $ 4,929,129 $ 10,306,447 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 $ 30,536,984 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 (12,712,986) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 30,062 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 17,854,060 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 20,230,537 Differences - budget to GAAP: Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (15,957,076) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,273,461 The accompanying notes are an integral part of the financial statements 32 1,887,066 17,125 27,391 1,931,582 1,931,582 $ 5,377,318 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 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, 2014 $ 11,911,821 $ 11,911,821 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 11,911,821 $ - 3,286,725 548,978 3,286,725 548,978 3,362,779 465,254 76,054 (83,724) 8,011,080 426,000 75,100 1,548,978 13,896,861 25,808,682 8,011,080 426,000 75,100 1,548,978 13,896,861 25,808,682 8,671,502 583,517 56,782 98 1,541,755 14,681,687 26,593,508 660,422 157,517 (18,318) 98 (7,223) 784,826 784,826 9,741,292 3,664,176 1,000,000 624,407 15,029,875 9,737,816 4,023,368 791,345 624,407 15,176,936 9,739,948 2,955,837 617,184 13,312,969 2,132 (1,067,531) (791,345) (7,223) (1,863,967) 10,778,807 $ 10,631,746 $ 13,280,539 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 $ 26,593,508 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (11,911,821) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (1,541,755) 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 125,454 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 12,970,386 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,312,969 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 4,990 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (410,054) 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 (617,184) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 11,995,721 The accompanying notes are an integral part of the financial statements 33 $ 2,648,793 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 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, 2014 $ 28,371,138 $ 28,371,138 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 28,371,138 $ - 9,552,852 125,000 9,677,852 38,048,990 9,552,852 125,000 9,677,852 38,048,990 10,628,918 144,769 80,000 10,853,687 39,224,825 1,076,066 19,769 80,000 1,175,835 1,175,835 471,541 23,432,478 1,000,000 5,424,294 30,328,313 435,458 18,154,324 2,651,497 5,424,294 26,665,573 257,501 3,485,448 5,417,059 9,160,008 (177,957) (14,668,876) (2,651,497) (7,235) (17,505,565) 7,720,677 $ 11,383,417 $ 30,064,817 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 $ 39,224,825 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (28,371,138) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 7,458 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 10,861,145 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 9,160,008 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (500,095) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (5,417,059) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 3,242,854 The accompanying notes are an integral part of the financial statements 34 $ 18,681,400 35 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2014 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: Restricted assets: Cash equivalents Investments Net restricted 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 Debt service Sports Complex OM&R Grant purpose Trust purpose Unrestricted Total net position $ 10,974,011 36,858,854 4,944,065 20,425 91,000 245,007 53,133,362 1,744,850 318,065,019 12,889,809 7,333,928 1,782,263 186,058 (87,405,013) 6,031,539 30,469,751 291,098,204 344,231,566 $ 4,576,097 15,390,100 1,984,631 6,041 21,956,869 $ 4,333,308 14,571,735 1,180,673 8,344 144,051 20,238,111 7,659,795 350,897,553 2,185,969 1,293,603 29,004 (85,498,050) 3,878,001 16,690,662 297,136,537 319,093,406 $ - 644,400 2,158,524 495,094 349 3,298,367 - 10,799 28,430 11,246,609 (5,697,538) 5,588,300 25,826,411 55,779,184 916,344 503,728 (14,268,856) 6,703,349 1,958,239 51,591,988 54,890,355 269,279 269,279 15,127 15,127 - - 1,819,781 60,889 575,492 215,889 2,018,373 78,263 283,120 4,178,424 9,230,231 807,315 28,791 1,211,451 7,003 108,740 5,031,613 7,194,913 334,961 40,209 142,890 518,060 223,093 21,183 3,139 2,503 68,110 1,848,389 2,166,417 100,810 30,907,296 1,448,892 32,456,998 41,687,229 27,550 70,383,199 442,122 70,852,871 78,047,784 50,400 50,400 568,460 31,010 31,010 2,197,427 254,832,871 221,294,730 5,588,300 51,591,988 11,800,419 36,180,326 $ 302,813,616 3,751,241 16,014,778 $ 241,060,749 7,064,311 12,605,340 $ 25,257,951 437,053 100,000 563,887 $ 52,692,928 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 $ 167,008 561,603 75,398 323 804,332 Total $ - 20,694,824 69,540,816 8,679,861 35,482 91,000 389,058 99,431,041 $ 5,857,599 19,697,507 3,107 9,237 70,286 195,549 25,833,285 - 227,934 (637) 87,955 315,252 1,119,584 65,194,628 669,190,506 12,889,809 10,464,671 14,826,203 215,062 (192,870,094) 16,612,889 49,206,607 645,730,281 745,161,322 - $ Governmental Activities Internal Service Funds 4,583,524 2,997,750 7,581,274 148,102 34,700,693 24,738,456 30,745 (44,597,728) 3,480,043 18,500,311 51,914,870 284,406 284,406 - 2,974 3,934 16,550 23,458 3,188,124 155,006 1,786,943 219,028 2,018,373 87,769 619,410 9,210,037 1,848,389 19,133,079 2,052,999 97,744 2,477,231 509,860 5,137,834 4,160 4,160 27,618 213,930 101,290,495 1,891,014 103,395,439 122,528,518 1,585,358 207,990 1,793,348 6,931,182 315,252 533,623,141 18,500,311 776,714 1,091,966 23,053,024 100,000 66,141,045 622,917,210 6,188,544 20,294,833 $ 44,983,688 $ 2,241,926 625,159,136 37 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2014 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Stadium Fund Utility Fund Utility Fund Fund OPERATING REVENUES Charges for services Rents Other governmental From federal government Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Investment income Interest expense Gain(loss) on sale of capital assets Total non-operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net position Total net position - beginning Cumulative effect of changes in accounting principle (note 1) Total net position - beginning, restated Total net position - ending 35,448,171 - $ 18,420,134 - $ 11,213,152 - $ 1,323,412 1,757,010 345,998 35,794,169 35,466 18,455,600 1,000 11,214,152 22,911 3,103,333 4,876,579 16,315,969 8,761,560 29,954,108 5,840,061 2,491,788 7,258,400 9,017,314 18,767,502 (311,902) 3,405,321 6,605,531 937,951 10,948,803 265,349 1,554,702 2,862,482 790,984 5,208,168 (2,104,835) 204,635 (982,357) 6,224 (771,498) 60,892 (2,361,556) (2,300,664) 86,573 95,046 181,619 5,068,563 8,361,200 1,411,627 (3,904,455) 10,936,935 (2,612,566) 3,510,961 2,837,689 (1,223,233) 2,512,851 446,968 (4,077) 442,891 4,510 4,510 (2,100,325) 26,254,160 (2,567) 24,151,268 288,815,691 235,575,740 24,551,003 28,541,660 3,060,989 291,876,680 $ 302,813,615 2,972,158 238,547,898 $ 241,060,749 264,057 24,815,060 25,257,951 28,541,660 52,692,928 $ $ 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 $ 831,439 - Total $ 831,439 67,236,308 1,757,010 405,375 69,398,693 318,611 508,837 635 828,083 3,356 12,647,001 33,551,219 19,508,444 65,706,664 3,692,029 2,548 2,548 5,904 203,078 87,955 (1,057) 295,880 $ Governmental Activities Internal Service Funds $ 39,525,879 365,028 39,890,907 7,928,962 12,460,372 16,133,160 4,040,721 40,563,215 (672,308) 359,158 (3,343,913) 101,270 (2,883,485) 120,417 111,342 231,759 808,544 12,075,239 30,591,431 (5,135,389) 38,339,825 (440,549) 15,000 3,080,772 (46,068) 2,609,155 796,086 578,280,180 42,374,533 796,086 1,091,966 6,297,204 584,577,384 622,917,209 42,374,533 44,983,688 $ $ 324,106 $ 38,663,931 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2014 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund 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 $ Stadium Fund 35,916,126 (13,574,541) (4,859,357) (2,444,534) 15,037,694 $ 18,653,194 (5,600,211) (2,495,370) (1,990,450) 8,567,163 $ 11,280,858 (3,355,530) (3,404,408) (3,524,174) 996,746 $ 4,434,428 (2,650,520) (1,561,185) (636,949) (414,226) 1,411,627 (3,904,455) (2,492,828) 2,837,689 (1,223,233) 1,614,456 (4,077) (4,077) 26,254,160 (2,567) 26,251,593 (7,502,346) 6,224 3,042,141 (4,119,061) (1,193,204) (1,571,811) 1,269,012 (4,888,056) (2,494,785) (2,467,934) 97,267 - (24,417,077) - (9,766,246) (7,685,640) (2,370,667) (24,417,077) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities (5,707,600) 4,637,867 224,189 (845,544) (2,382,600) 926,165 66,941 (1,389,494) (2,257,200) 3,813,817 96,701 1,653,318 (334,400) (726,383) 6,192 (1,054,591) Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 1,933,076 9,040,935 10,974,011 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 $ 1,106,485 3,469,612 $ 4,576,097 275,320 4,057,988 $ 4,333,308 The accompanying notes are an integral part of the financial statements 40 $ 365,699 278,701 644,400 Storm Drainage Fund Public Housing Fund $ $ $ 845,688 (313,670) (315,963) (201,378) 14,677 (468,216) (468,216) Total $ Governmental Activities Internal Service Funds 71,130,294 (25,962,688) (12,636,283) (8,797,485) 23,733,838 $ 39,923,000 (11,996,933) (7,915,159) (15,906,345) 4,104,563 87,955 (1,057) 86,898 - 30,591,431 (5,135,389) 25,456,042 3,080,772 (46,068) 3,034,704 (87,955) - - (36,047,123) 103,491 4,311,153 (9,007,117) (3,687,989) (4,638,216) 168,422 - (87,955) - (44,327,585) (4,469,794) (87,400) 94,754 2,881 10,235 - (10,769,200) 8,746,220 396,904 (1,626,076) (3,047,600) 4,585,409 136,659 1,674,468 3,236,219 17,458,605 20,694,824 4,343,941 6,097,182 10,441,123 23,855 143,153 167,008 $ (468,216) 468,216 - $ (continued) 41 $ CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2014 Business-type Activities - Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund Stadium 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 5,840,061 8,761,560 4,882 (91,000) 3,648 425,635 10,292 8,143 (49,532) 117,075 6,930 9,197,633 $ (311,902) $ 9,017,314 265,349 $ (2,104,835) 937,951 790,984 197,594 - 66,706 2,610 (66,214) (490,844) - (192,391) 778 (139,870) (4,360) 8,879,065 (210,569) 6,663 (5,750) 731,397 (427,911) 1,657 2,924 1,821,939 (8,140) 1,690,609 Net cash provided (used) by operating activities $ 15,037,694 - $ 8,567,163 - $ 996,746 - $ Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers and property owners Increase in fair market value of investments Total non-cash investing, capital and financing activities $ 5,319,059 43,352 5,362,411 $ 2,241,949 13,192 $ 2,255,141 $ 20,690 20,690 $ $ $ The accompanying notes are an integral part of the financial statements 42 $ (414,226) - 1,756 1,756 Storm Drainage Fund Public Housing Fund $ $ 3,356 635 - 14,249 - - (6,211) 718 1,930 11,321 $ 14,677 $ $ 203,078 203,078 $ $ (468,216) - - 3,692,029 $ 19,508,444 (672,308) 4,040,721 (207,413) (88,390) (62,566) (468,216) (468,216) $ $ - Total Governmental Activities Internal Service Funds 32,093 (47,541) (2,441) (411,447) 20,108 (457,149) (189,402) 117,075 1,821,939 (9,390) 20,041,809 513,421 9,883 226,815 3,920 4,776,871 $ 23,733,838 - $ 4,104,563 $ 7,764,086 78,990 7,843,076 $ 15,000 29,907 44,907 $ $ (concluded) 43 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2014 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 20,592 69,245 43 89,880 - NET POSITION Held in trust for pension benefits $ 89,880 The accompanying notes are an integral part of the financial statements 44 Agency Funds $ 102,485 344,628 447,113 447,113 447,113 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2014 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 $ 623 623 $ 463 463 463 1,086 DEDUCTIONS Retirement payments Total deductions 20,400 20,400 Change in net position Net position - beginning of the year Net position - end of the year (19,314) $ 109,194 89,880 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 64 4 Deposits and Investments 65 5 Property Taxes 67 6 Due from Other Governments 68 7 Accounts Receivable and Allowance for Doubtful Accounts 69 8 Interfund Transactions, Receivable and Payable Balances 69 9 Segment Information for Enterprise Funds 70 10 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 70 11 Fund Balance/Net Position Restrictions, Commitments & Assignments 70 12 Capital Assets 72 13 Community Facilities District Debt 74 14 Long-Term Debt 74 15 Advance Refundings 78 16 Pledged Revenues 78 17 Retirement and Pension Plans 79 18 Leases 84 19 Deferred Compensation Plan 85 20 Commitments and Contingencies 85 21 Other Matters 86 22 Subsequent Events 87 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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, and a baseball stadium complex. 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 on the City’s website www.peoriaaz.gov. 47 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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 on the City’s website www.peoriaaz.gov. 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 on the City’s website www.peoriaaz.gov. 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, 2014 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, 2014 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, 2014 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, 2014 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 unearned revenues. 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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 2014. • 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, 2014 • 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 2013-2014, including the permanent base adjustment, was $781,620,317. 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, 2014 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% of 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, 2014 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, 2014, 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 $3,343,913. 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, 2014 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 2014 amortization was $257,796 and the net book value at June 30, 2014 was $11,085,236. 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, 2014 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 bond obligiations 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, 2014 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 $3,437,607 for fiscal year 2014. 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 $4,062,589 reported in the Self-Insurance Fund at June 30, 2014 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 $1,646,754 for liability/property claims, $1,849,744 for workers’ compensation claims and $566,091 for health insurance claims. 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. Nonincremental 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, 2014 Fiscal Year 2013: Risk management Workers' comp Health insurance 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 Beginning of Fiscal Year Liability $ 1,898,573 1,378,432 558,769 $ 3,835,774 Changes in Estimates $(251,819) 471,312 7,322 $226,815 Current Year Claims $ 1,588,528 771,647 12,945,651 $ 15,305,826 Claims Payments $ (1,588,528) (771,647) (12,945,651) $(15,305,826) Balance at Fiscal Year-end $ 1,646,754 1,849,744 566,091 $ 4,062,589 Fiscal Year 2014: Risk management Workers' comp Health insurance Detailed financial statements of the three functions making up the self-insurance fund may be found on pages 130-131. 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. Change in Accounting Principle In fiscal year 2014, the City implemented a change in accounting principle which eliminated liabilities associated with developer impact fee credits and sales tax reimbursements. These liabilities were determined to be contingent liabilities, which according to GAAP should only be recorded if the liability is probable. These liabilities, which are reasonably possible, should be mentioned in the footnotes not recognized on the financial statements. In prior fiscal years, the City recorded a receivable due to property taxes to be received in future periods. However in fiscal year 2014, it was determined that these receivables were overstated in the General Fund, the General Obligation Debt Service Bond and the Vistancia CFD Bonds Debt Service Funds. The change in accounting principle and prior period adjustment impacted beginning net position as follows: Governmental Business-type Total Primary Activities Activities Government Net position-beginning Cumulative effect of change in accounting principle Prior Period Adjustment Net position-beginningrestated $1,054,652,077 $580,198,000 $1,634,850,077 57,165,982 6,297,204 61,357,321 (2,106,054) $1,109,712,005 $586,495,204 $1,696,207,209 60 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 T. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of net 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 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 $ 47,756,295 3,681,859 160,040,402 8,887,927 89,803 1,819,656 4,587,905 160,536 233,957 17,518,868 12,251,236 2,603,127 $ 259,631,571 900,000 1,111,254,637 1,112,154,637 5,857,599 19,697,507 3,107 9,237 (2,241,926) 70,286 195,549 4,583,524 2,997,750 18,500,311 49,672,944 (1,819,656) (1,819,656) 53,613,894 3,681,859 179,737,909 8,891,034 99,040 (2,241,926) 4,587,905 230,822 429,506 900,000 22,102,392 15,248,986 2,603,127 1,129,754,948 1,419,639,496 $ $ 259,631,571 349,692 1,112,504,329 49,672,944 (1,819,656) 349,692 1,419,989,188 Total Governmental Funds Liabilities Accounts payable $ 9,106,552 Accrued payroll 1,174,310 Interest payable Due to other funds 1,819,656 Due to other governments 1,208,783 Claims/deposits payable 3,567 Other liabilities 3,302,122 Unearned revenue-other 3,159,970 Unamortized bond premium Compensated absences-current Current bonds payable Long-term liabilities Total liabilities $ 19,744,960 Deferred inflows of resources Unavailable revenue-property taxes 63,562 Unavailable revenue-special assessments 2,603,127 Long-term Assets/ Liabilities (1) 6,078,842 3,567,869 4,667,690 17,305,000 272,360,600 303,980,001 (63,562) (2,603,127) 61 Internal Service Funds (2) 2,052,999 97,744 2,477,231 509,860 1,793,348 6,931,182 - Statement of Net Position Eliminations (3) Totals (1,819,656) (1,819,656) - 11,159,551 1,272,054 6,078,842 1,208,783 2,480,798 3,302,122 3,159,970 3,567,869 5,177,550 17,305,000 274,153,948 328,866,487 - CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Total Deferred Inflows $ 2,666,689 Fund Balance/Net Position Total fund balance/net position $ 237,189,922 Total liabilities, deferred inflows & fund balance/net position $ 259,631,571 (1) (2,666,689) - - - 811,191,017 42,741,762 - 1,091,122,701 1,112,504,329 49,672,944 (1,819,656) 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 1,419,989,188 $ 1,406,372,622 (295,117,985) $ 1,111,254,637 Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expense when paid. Interest payable $ (6,078,842) 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. $ (3,567,869) $ (288,145,000) (6,188,290) (294,333,290) (4,667,690) (17,305,000) (272,360,600 ) 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. Bonds payable Compensated absences Subtotal Less: current compensated absences current portion of bonds payable $ 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. $ 349,692 Certain long-term debt obligations that are booked for the government-wide statements are offset by goodwill. $ 900,000 $ $ 2,603,127 63,562 2,666,689 $ 42,741,762 $ 1,819,656 (1,819,656) - 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) (3) 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 Certain interfund transactions between governmental activities are eliminated in the consolidation of those activities for the statement of net position. Interfund receivables - current Interfund payables – current $ 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 $ Property taxes Franchise taxes Intergovernmental: State shared sales taxes Urban revenue sharing Auto-in-lieu taxes Highway user revenue From federal government 71,237,141 18,300,468 4,194,371 13,431,637 17,172,500 5,495,225 8,691,989 2,717,331 Long-term Revenues/ Expenses(1) (75,797) - 62 Capitalrelated Items(2) Internal Long-term Eliminations Statement Service Debt and of Funds(3) Transactions(4) Adjustments(5) Activities - - - - - - (1,023,188) - 70,213,953 18,224,671 4,194,371 13,431,637 17,172,500 5,495,225 8,691,989 2,717,331 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Other governmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Special assessments Miscellaneous Other sources: Gain on sale of capital assets Capital contributions Proceeds from HUD Loan Transfers in Total revenues and other sources Expenditures/Expenses 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 Unallocated depreciation Total expenditures/ expenses Other financing uses/changes in net position Transfers out Total expenditures/expenses & other financing uses Net change for the year $ (1) 2,624,240 17,684,357 2,800,894 2,128,289 731,901 757,747 1,137,018 5,060,343 112,000 20,159,941 (916,873) - 30,034 120,417 - - 657,602 (1,170,268) 2,624,240 18,341,959 2,800,894 2,128,289 731,901 878,164 220,145 3,920,109 111,342 5,250,155 - 3,080,772 - (21,967,415) 111,342 5,250,155 112,000 1,273,298 194,437,392 (992,670) 5,391,531 3,201,189 - (23,503,269) 178,534,173 15,866,612 21,762,725 35,839,651 23,137,222 9,311,964 17,098,590 5,110,924 1,604,288 869,530 50,060 14,140 12,590 (8,760) 23,020 (36,360) (4,100) 3,596,283 4,601,283 1,612,147 1,496,263 4,303 14,570,136 2,015,575 39,596 (294,313) (341,884) (1,121,131) (777,701) (113,764) (279,994) (74,823) (10,666) - (512,666) - 20,038,112 25,559,518 36,344,807 23,868,374 9,193,743 31,411,752 7,015,316 1,629,118 17,728,188 12,543,974 21,937,761 - (534,731) - (21,937,761) 574,550 (16,705,000) - (1,023,188) - 12,009,243 574,550 181,941,899 385,389 6,572,375 (16,705,000) (1,535,854) 167,644,533 48,650,688 - 2,749,603 (21,967,415) 29,478,944 (26,617,528) - 197,123,477 (18,589,304) 233,706,846 (36,155,195) 385,389 (1,378,059) 9,321,978 (3,930,447) (3,014,276) 46,068 (2,986,208) 6,169,397 (16,705,000) 16,705,000 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Accrual of long-term compensated absences Interest expense on long-term debt is accrued for the statement of activities but is not accrued for the governmental fund statements. Amortization of bond premiums and deferred loss on refunding is also included in the statement of activities, but not the governmental fund statements. Accrued interest Amortization of loss on refunding Amortization of bond premium (2) $ (20,120) $ $ 310,728 (58,282) 282,285 534,731 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. $ (75,797) 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 $ (916,873) 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. $ (900,000) 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 63 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 resources expended, whereas net position decrease by the amount of depreciation expense charged for the year. Capital outlay Depreciation expense $ 21,937,761 (28,510,136) $ 6,572,375 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: $ 30,034 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 $ 5,250,155 $ 111,342 111,342 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) (5) 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 $ (2,749,603) (2,749,603) $ 3,201,189 2,968,208 6,169,397 $ 16,705,000 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 512,668 (512,668) - $ 21,967,415 (21,967,415) $ - 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. 64 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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, 2014, the carrying amount of the City's deposits was $38,031,985 and the bank balance was $39,033,414. 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 $1,001,429 represents deposits in transit, outstanding checks and other reconciling items. B. Investments City charter, ordinance, and trust agreements authorize the City to invest in obligations of the U.S. Treasury or its agencies and instrumentalities. In addition, the City may invest in certificates of deposit, mutual fund money market, repurchase agreements, corporate securities and the State of Arizona local government investment pool. The State Treasurer’s Investment Pool is overseen according to Arizona State Statute by the State Board of Deposit. Governmental Accounting Standards Board Statement No. 40 – Deposit and Investment Risk Disclosures (Statement 40) requires the City to disclose its deposit and investment policies regarding certain types of investment risks. The City’s adopted investment policy is in compliance with Statement 40. Interest rate risk: In order to limit interest and market rate risk, State law and the City’s investment policy sets a maximum maturity on any investment of five years with a minimum of 35% invested for a period of one year or less and no more than 20% of the City’s portfolio be invested for a period greater than three years. At June 30, 2014, 67.1% of the City’s investments have a maturity of less than one year and 5.8% 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, 2014 was 346 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, 2014, the City’s investments include $77.7 million in Commercial Paper and no Banker’s Acceptance securities. State law and the City’s investment policy also restricts investments in certificates of deposit (CD) to fully collateralized or insured from eligible Arizona depositories limited on a statewide basis by their capital structure on a quarterly basis. Such CDs are further collateralized to 110% with pledged securities held by an independent custodian approved by the City. City policy requires that securities underlying repurchase agreements must have a market value of at least 102 percent of the cost of the repurchase agreement. The market values of securities underlying repurchase agreements were at or above the required level during the fiscal year. Investment Type Federal Farm Credit Bank - Agency Note Federal Home Loan Bank - Agency Note Federal Home Loan Bank – Discount Note Federal Home Loan Mortgage Corp - Agency Note Federal Home Loan Mortgage Corp – Discount Note Federal National Mortgage Assoc - Agency Note 65 Moody’s Rating Aaa Aaa Aaa Aaa Aaa Aaa S&P Rating AA+ AA+ AA+ AA+ AA+ AA+ % of Investments 3.1 13.4 2.4 8.6 3.1 16.2 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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, 2014, 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, 2014, the City’s investments include 41.3% invested in U.S. Agency Coupon securities, 5.5% in U.S. Agency Discount Notes, 8.7% in U.S. Treasury Notes, 23.8% in Commercial Paper, and 20.7% 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. 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, 2014, the City’s investments included the following: Investment Maturities in Years Less than 1 1-2 2-3 Over 3 . Unrestricted Investments: U.S. Treasury notes and strips $ Agency coupon securities 50,112,965 Agency discount notes 17,994,839 Commercial paper 69,968,865 State of Arizona local 4,121,782 government investment pool Mutual fund-money market 30,452,427 Total unrestricted investments 172,650,878 Fair Value 28,535,700 -$ 34,629,987 23,398,911 18,934,760 - - 28,535,700 127,076,623 17,994,839 69,968,865 - 4,121,782 63,165,687 23,398,911 18,934,760 30,452,427 278,150,236 Less: amount included in cash and cash equivalents Plus: amount included in restricted investments Unrestricted investments, net $ 28,839,602 381,963 249,692,597 Total investments per statement of net position Plus: Investments in fiduciary funds $ 249,278,724 413,873 Net unrestricted investments $ 249,692,597 Investment Maturities in Years Less than 1 1-2 2-3 Over 3 Fair Value Restricted Investments: Agency coupon securities Commercial paper Mutual fund-money market Total Restricted Investments $ 5,886,842 7,744,007 33,337,791 44,968,640 - 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 66 2,000,100 2,000,100 -$ -$ 7,886,942 7,744,007 33,337,791 48,968,740 $ 3,681,859 29,655,932 381,963 15,248,986 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Restricted cash, cash equivalents, and cash with fiscal agents at June 30, 2014, consisted of the following: Restricted investments included in restricted cash and cash equivalents 29,655,932 Less: amount included in unrestricted cash and cash equivalents 7,553,539 Total restricted cash and cash equivalents per statement of net position $ 22,102,393 Cash with Fiscal Agents at June 30, 2014, consisted of the following: Cash with fiscal agents $ Restricted investments included in cash with fiscal agents 3,681,859 Total cash with fiscal agents $ 3,681,859 Unrestricted cash and cash equivalents at June 30, 2014, 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 $ $ 28,839,601 38,031,985 7,553,539 6,672 74,431,797 123,077 74,308,720 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, 2014: Net interest and dividends Net increase in the fair value of investments Total net investment income Less: net investment income of Fiduciary funds Total net investment income per statement of activities $ $ 929,546 308,239 1,237,785 463 1,237,322 The net increase in the fair value of investments during fiscal year 2013-2014 was approximately $308,239. 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, 2014, was approximately $73,114. 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 2014 are $1,051,739,698 and $1,057,413,204 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 67 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 third Monday in August. The basis of this levy is the full cash value as determined by the Maricopa County Assessor. For locally assessed property, the value is determined as of January 1 of the preceding year, known as the valuation year. For utilities and other centrally valued properties, the full cash value is determined as of January 1 of the tax year. The City has an enforceable claim on the property when the property tax is levied. Levies are due and payable in two installments, on October 1 and March 1, and become delinquent on November 1 and May 1, respectively. Delinquent amounts bear interest at the rate of 16 percent. A lien is placed on the property at the time the tax bill is sold. Maricopa County, at no charge to the taxing entities, bills and collects all property taxes. Public auctions for sale of delinquent real estate taxes are held in February following the May 1 date upon which the second half taxes become delinquent. The purchaser is given a Certificate of Purchase issued by the County Treasurer. Five years from the date of sale, the holder of a Certificate of Purchase that has not been redeemed may demand a County Treasurer's Deed from the County Treasurer. Property taxes are recognized as revenue in the government-wide financial statements when an enforceable legal claim has arisen. Therefore, the City recognizes revenue and a receivable, less any allowance for doubtful accounts deemed appropriate, for the entire tax levy in the year it is levied. For the governmental fund financial statements, property tax revenues not collected within 60 days of year end are deferred. Unsecured taxes on personal property, which are assessed on a monthly basis using 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, 2014: 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 $ 2,239,432 235,421 35,062 131,553 2,673,176 818,261 4,074 822,335 188,206 188,206 316,314 30,705 28,590 1,610 205,416 22,313 73,076 226,164 904,188 $ 68 31,708 4,587,905 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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, 2014. Fund Governmental activities: 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 Internal Service Funds Business-type activities: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Total enterprise funds Grand totals Receivables $ Allowance Net 4,819,291 1,535,489 385,557 920,313 225,288 1,196,781 9,082,719 3,107 28,228 7,137 131,347 28,080 194,792 - 4,791,063 1,535,489 378,420 920,313 93,941 1,168,701 8,887,927 3,107 $ 7,897,994 2,663,037 1,631,833 495,094 110,235 12,798,193 2,953,929 678,406 451,160 34,837 4,118,332 4,944,065 1,984,631 1,180,673 495,094 75,398 8,679,861 $ 21,884,019 4,313,124 17,570,895 $ $ 8. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES Net interfund receivables and payables between governmental activities and business-type activities of $2,241,926 are included in the government-wide financial statements at June 30, 2014. These internal balances are between the proprietary funds (business-type activities) and the internal service funds (governmental activities). At June 30, 2014, there was an interfund loan that is considered to be a long-term loan: The Development Fee Fund owes the MDA Debt Service Fund $1,819,656 to repay future debt service payments for bonds used to complete construction of Happy Valley Road. The net transfers of $28,205,646 from governmental activities to business-type activities on the government-wide 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, 2014: 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 Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Transfers out Transfers in 1,137,515 16,057,076 75,429 5,417,059 25,963,609 48,650,688 11,039,168 1,000,000 8,120,774 20,159,942 3,904,455 1,223,233 4,077 2,567 1,057 1,411,627 2,837,689 26,254,160 87,955 $ 69 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Total enterprise funds Internal Service funds Grand totals 5,135,389 46,068 53,832,145 $ 30,591,431 3,080,772 53,832,145 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 2014 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, 2014, no funds, as shown in the basic financial statements, were in a deficit position. For the year ended June 30, 2014, expenditures, including capital outlay and transfers, did not exceed budget at the fund level (i.e. the level of budgetary control) in any funds. 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, 2014: 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 $ 7,400,000 1,700,000 3,200,000 7,194,589 992,002 20,486,591 4,800,000 900,000 70 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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 3,136,000 7,578,328 647,330 17,061,658 2,200,000 2,656,838 4,856,838 Stadium Fund: Committed for capital equipment replacement Total proprietary funds 355,815 42,760,902 Internal Service Funds: Committed for capital equipment replacement Assigned for risk management purpose Total internal service funds 12,357,816 7,161,289 19,519,105 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, 2014: 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. 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 and Wastewater Utility Funds (5% of the average operating fund revenues for the preceding three fiscal years). These funds may be used to moderate significant rate increases. In the event these funds are used, the City shall strive to 71 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 restore the reserve to the 5% level within the next three fiscal years following the year in which the funds were used. 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, 2014, follows: Balances June 30, 2013 Governmental activities: Non-depreciable assets: Work in Progress – Parks $ 26,299,594 Work in Progress – Buildings 812,224 Work in Progress - Equipment 117,740 Work in Progress – Furniture 31,036 Work in Progress – Surface water 9,818,199 Work in Progress – Streets 118,427,723 Work in Progress – Technology 2,055,427 Work in Progress – Vehicles 379,240 Work in Progress – CFD 3,747,822 Land 339,161,125 Total non-depreciable assets 500,850,130 Additions/ Transfers in Disposals/ Transfers out 819,182 16,600 17,250,659 920,847 44,764 736,381 927,411 20,715,842 (19,927,268) (76,393) (379,241) (2,749,602) (23,132,504) 72 Balances June 30, 2014 7,191,508 812,224 134,340 31,036 9,818,199 135,678,382 2,899,881 44,763 1,734,601 340,088,536 498,433,470 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Balances June 30, 2013 Depreciable assets: Buildings & Improvements 179,448,618 Furniture 2,131,775 Equipment 49,949,551 Vehicles 23,792,782 Surface water system 80,362,819 Street system 543,371,410 Park system 62,279,705 Total depreciable assets at historical cost 941,336,660 Less accumulated depreciation for: Buildings & Improvements (41,701,049) Furniture (1,744,757) Equipment (36,860,250) Vehicles (16,651,131) Surface water system (21,757,558) Street system (180,584,098) Park system (13,642,315) Total accum. depreciation (312,941,158) assets, net 628,395,502 Governmental activities capital assets, net $ 1,129,245,632 Business-type activities: Non-depreciable assets: Work in Progress - Water $ 26,550,656 Work in Progress - Wastewater 15,413,169 Work in Progress – Storm Drainage Work in Progress – Stadium 7,538,667 Land 16,612,889 Total non-depreciable assets 66,115,381 Depreciable assets: Buildings & improvements 35,197,123 Furniture 215,062 Equipment 8,431,790 Vehicles 13,774,112 Surface water system 24,856 Water Rights 12,889,809 Water system 311,274,825 Wastewater system 348,408,169 Total depreciable assets at historical cost 730,215,746 Less accumulated depreciation for: Buildings & improvements (13,703,028) Furniture (182,192) Equipment (3,091,110) Surface water system (2) Vehicles (9,119,745) Water Rights (1,546,777) Water system (73,682,025) Wastewater system (73,576,511) Total accum. depreciation (174,901,390) Total depreciable assets, net 555,314,356 Business-type activities capital assets, net $ 621,429,737 Additions/ Transfers in Disposals/ Transfers out Balances June 30, 2014 202,887 1,698,116 2,744,509 4,938,263 21,909,418 (1,792,661) - 179,448,618 2,334,662 51,647,667 24,744,630 80,362,819 548,309,673 84,189,123 31,493,193 (1,792,661) 971,037,191 (4,773,726) (107,425) (3,073,677) (2,075,290) (1,985,747) (14,331,984) (2,162,287) (28,510,136) 2,983,057 1,735,581 (1,735,581) (46,474,775) (1,852,182) (39,933,927) (16,990,840) (23,743,305) (194,916,082) (15,804,602) (339,715,713) 631,321,478 23,698,901 (23,189,584) 1,129,745,948 3,919,096 1,277,492 87,955 5,284,543 (5,580,428) (5,580,428) 30,469,752 16,690,661 87,955 1,958,239 16,612,889 65,819,496 29,997,705 2,032,882 2,594,050 203,078 6,790,195 2,489,385 (1,541,961) - 65,194,628 215,062 10,464,672 14,826,201 227,934 12,889,809 318,065,020 350,897,554 44,107,095 (1,541,961) 772,780,880 (932,978) (13,965) (1,187,856) (649) (1,066,574) (257,796) (7,509,507) (8,539,121) (19,508,446) (24,598,649) 1,539,740 1,539,740 (2,221) (14,636,006) (196,157) (4,278,966) (651) (8,646,579) (1,804,573) (81,191,532) (82,115,632) (192,870,096) 579,910,784 29,883,192 (5,582,649) 645,730,280 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 $ 73 3,596,283 4,601,283 1,612,147 1,496,263 4,303 14,570,136 2,015,575 39,596 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Unallocated 574,550 Total depreciation expense $ 28,510,136 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, 2014, 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, 2014 was $63,094,792 and $59,012,641 for the 6 percent and 20 percent debt limits respectively. 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. C. Municipal Development Authority bonds Municipal Development Authority (MDA) Bonds are issued by a non-profit corporation created by the City for the purpose of financing certain capital construction projects. The MDA issues its own bonds, which are repaid through a lease purchase agreement with the City equal to the debt service requirements. The City utilizes the City’s excise tax and other unrestricted revenues to pay the lease payments. 74 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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 auction, 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, 2014, 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, 2014. 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, 2014. In September 1996, the voters authorized $75,550,000 in either general obligation bonds or utility revenue bonds. To date, the City has not issued general obligation bonds against this authorization; however, $60,380,132 in utility revenue bonds has been issued against the 1996 authorization, leaving $15,169,868 unissued against the authorization. In September 2000, the voters authorized $282,000,000 in bonds as follows: $164,000,000 in general obligation, utility revenue bonds or Water Infrastructure Finance Authority of Arizona Revolving Fund Loan for the acquisition and construction of water and wastewater facilities; $22,300,000 in general obligation or utility revenue bonds for storm drainage projects; $47,150,000 in general obligation or highway user revenue bonds for street, bridges and traffic control projects; and $48,550,000 in general obligation bonds for parks, open space, public safety and public service projects. General obligation bonds in the amount of $21,681,456 in 2003, $59,472,631 in 2007, $19,555,776 in 2009, $9,384,315 in 2010 and $495,000 in 2012; and water infrastructure debt of $13,965,546 in 2008, $8,575,248 in 2009, and $13,775,827 in 2010 have been issued against the 2000 authorization, leaving $135,094,201 unissued. In May 2005, the voters authorized $196,000,000 in general obligation bonds as follows: $52,000,000 for public safety and municipal operations, $109,000,000 for streets, bridges and traffic control projects, and $35,000,000 for parks, recreation and library projects. Also in May 2005 the voters authorized $160,000,000 in revenue or general obligation bonds for water treatment, water system, wastewater, and storm drainage projects. General obligation bonds in the amount of $24,087,416 in 2007, $38,511,231 in 2009, $9,497,031 in 2010, and $8,775,000 in 2012 were issued against the 2005 authorization leaving $115,129,322 unissued. Water infrastructure debt of $24,631,066 in 2007, $28,775,995 in 2008, $10,372,993 in 2009 and $4,045,230 in 2010 in general obligation bonds for drainage projects were issued against the 2005 water, wastewater and storm drainage authorization leaving $92,174,716 unissued at June 30, 2014. 75 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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, 2014. 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, 2014, $23,605,000 remains available of this authorization. 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, 2014. 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, 2014. At June 30, 2014, there is no outstanding arbitrage liability. Bonds payable at June 30, 2014 are comprised of the following: Delivery Date Description Purpose Maturity Dates Net Ave. Interest Life Rate (Yrs) CLASSIFIED IN GOVERNMENTAL ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: Original Principal Balance Principal Balance Outstanding General Obligation Bonds 03/01/07 Series 2007A Various improvements 03/01/07 Series 2007B Refunding 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 20.0 14.0 7.4 10.5 11.38 5.7 94,380,000 18,365,000 68,440,000 29,170,000 14,715,000 13,690,000 238,760,000 57,760,000 9,150,000 36,125,000 23,155,000 14,155,000 12,475,000 152,820,000 Municipal Development Authority Bonds 03/09/06 Series 2006 Community Theater 03/12/08 Series 2008 Transportation 06/08/11 Series 2011 Water Rights 07/18/12 Series 2012 Sports Complex 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 6,675,000 47,000,000 7,920,000 35,510,000 97,105,000 4,520,000 35,200,000 7,105,000 34,210,000 81,035,000 Special Assessment Bonds with governmental commitment (collateralized by the special assessments levied on the property benefiting from the improvements) 04/01/07 tth Series 2006 99 Ave & Northern ID# 0601 Total Improvement District Bonds 7/1/07-22 4.25 15.0 4,950,000 4,950,000 3,195,000 3,195,000 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 Vistancia CFD Infrastructure Series 2005 Vistancia CFD Infrastructure Series 2006 Vistancia CFD Infrastructure Total Community Facilities District Bonds 7/15/05-22 7/15/07-24 7/15/09-26 76 6.69 5.47 4.26 12.7 13.2 20.0 21,250,000 23,550,000 22,760,000 67,560,000 13,375,000 18,000,000 19,720,000 51,095,000 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Total bonds payable recorded in governmental activities Add unamortized bond premium Less current portion Long-term portion of bonds payable recorded in governmental activities Delivery Date Description Purpose 288,145,000 3,567,869 (17,305,000) $274,407,869 Maturity Dates Net Interest Rate Ave. Life (Yrs) Original Principal Balance Principal Balance Outstanding CLASSIFIED IN BUSINESS-TYPE ACTIVITIES ON THE GOVERNMENT-WIDE FINANCIAL STATEMENTS: Revenue Bonds 07/26/02 WIFA Series 2000 12/08/06 WIFA Series 2006 02/15/08 WIFA Series 2006 05/16/08 WIFA Series 2006 07/17/09 WIFA Series 2009 07/17/09 WIFA Series 2009 07/17/09 WIFA Series 2009 07/17/09 WIFA Series 2009 11/20/09 WIFA Series 2009 05/27/10 WWW Series 2010 06/28/12 WWW Series 2012 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 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 Total Revenue Bonds Total bonds payable recorded in business-type activities Add unamortized bond premium 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, 2014 1,964,789 27,183,342 42,741,541 8,575,248 1,577,978 8,484,204 4,021,623 4,545,000 1,780,000 15,780,000 23,280,000 1,072,172 21,047,280 33,908,512 7,201,677 604,231 6,591,147 3,051,741 3,680,521 623,251 12,805,000 19,915,000 139,933,725 110,500,532 110,500,532 1,891,014 (9,210,037) 103,181,509 $377,589,378 $377,589,378 26,515,038 $404,104,416 The following is a summary of changes in non-current liabilities reported in the government-wide financial statements for the year ended June 30, 2014: Beginning Balance (as restated) Governmental activities: Bonds payable: General obligation bonds $ 162,375,000 MDA Bonds 85,230,000 Special assessment bonds 3,520,000 CFD bonds 53,725,000 Total bonds payable 304,850,000 Compensated absences 6,882,099 Deferred bond premium 3,850,154 Governmental activities totals $ 315,582,253 Business-type activities: Bonds payable: Revenue bonds 119,507,652 Compensated absences 842,730 Deferred bond premium 2,167,804 Business-type activities totals $ 122,518,186 Ending Balance Amounts Due Within One Year Additions Reductions 6,466,049 6,466,049 9,555,000 4,195,000 325,000 2,630,000 16,705,000 6,442,008 282,285 23,429,293 152,820,000 81,035,000 3,195,000 51,095,000 288,145,000 6,906,140 3,567,869 298,619,009 9,895,000 4,305,000 340,000 2,765,000 17,305,000 5,177,550 22,482,550 725,568 725,568 9,007,120 734,958 276,790 10,018,868 110,500,532 833,340 1,891,014 113,224,886 9,210,037 619,410 9,829,447 The following table discloses the bond debt service requirements as of June 30, 2014, segregating principal and interest, for the next five years and in five-year increments thereafter. 77 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Governmental Activities Fiscal year 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2033 Totals Principal 17,305,000 18,010,000 18,315,000 18,505,000 19,285,000 102,950,000 77,475,000 16,300,000 $ 288,145,000 Interest 11,880,816 11,191,118 10,469,765 9,703,441 8,880,694 31,498,789 9,613,870 1,088,513 94,327,006 Total 29,185,816 29,201,118 28,784,765 28,208,441 28,165,694 134,448,789 87,088,870 17,388,513 382,472,006 Business-Type Activities Fiscal year 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2033 Totals Principal 9,210,037 9,456,159 10,081,747 10,416,947 9,831,905 35,947,642 24,835,039 721,059 $ 110,500,535 Interest 3,450,304 3,171,755 2,845,809 2,494,759 2,143,516 6,504,022 1,646,435 5,601 22,262,201 Total 12,660,341 12,627,914 12,927,556 12,911,706 11,975,421 42,451,664 26,481,474 726,660 132,762,736 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. The City did not have any advanced refundings during the fiscal year ending June 30, 2014. 16. PLEDGED REVENUES The City has pledged certain future revenues to repay specific bonded debt as follows: The City has pledged future water utility and wastewater utility revenues, net of specific operating expenses, to repay $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, 2014, $110,500,535 in bonds remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2014, the pledged revenues, net of operating expenses available for service of this debt were $27,883,713. The debt principal and interest paid on this debt in fiscal year 2014 was $12,350,530 (44.3% of available net pledged revenues). 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, 2014, $45,835,000 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 78 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 rights. For the fiscal year ended June 30, 2014, the pledged revenues, net of operating expenses available to service this debt were $114,035,421. The debt principal and interest paid on this debt in fiscal year 2014 was $3,718,383 (3.3% of available net pledged revenues). 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, 2014, $35,200,000 of the bonds remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2014, the pledged revenues, net of operating expenses available to service this debt were $121,178,183. The debt principal and interest paid on this debt in fiscal year 2014 was $3,915,263 (3.2% of available net pledged revenues). 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, 2014 $3,195,000 in bonds are outstanding to be repaid by these revenues. For the fiscal year ended June 30, 2014, the net revenues available to service this debt were $1,259,303. The debt principal and interest paid on this debt in fiscal year 2014 was $474,600 (37.7% of available net pledged revenues). 17. RETIREMENT AND PENSION PLANS All full-time employees of the City are covered by one of three pension plans. Benefits are established by state statute and the plans generally provide retirement, long-term disability, and health insurance premium benefits, including death and survivor benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the retiree’s average compensation. Long-term disability benefits vary by circumstances, but generally pay a percentage of the employee’s monthly compensation. Health insurance premium benefits are paid as a flat dollar amount per month towards the retiree’s health care insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The Arizona State Retirement System (A.S.R.S.) is for the benefit of the employees of the state and certain other governmental jurisdictions. All full-time City employees, except sworn fire and police personnel, are included in the Arizona State Retirement System plan, which is a cost sharing, multiple-employer, defined benefit plan. Sworn police and fire personnel participate in the Public Safety Retirement System, which is an agent multiple-employer defined benefit plan. In addition, the Mayor and City Council members are covered by the State’s Elected Officials Plan, which is also a multiple-employer defined benefit cost sharing plan. Arizona State Retirement System: a. Plan Description All of the City’s full-time employees, other than those covered by one of the other retirement plans, participate in the Arizona State Retirement System (System), a cost sharing multiple-employer defined benefit pension plan; health insurance premium plan; and long-term disability plan. The System was established by the State of Arizona to provide benefits for employees of the state and employees of participating political subdivisions and school districts. The System is administered in accordance with Title 38, Chapter 5, Article 2 of the Arizona Revised Statutes. The System provides for retirement, disability, health insurance premiums, and death and survivor benefits. The System issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to the Arizona State Retirement System, 3300 N. Central Ave., Suite 1300, Phoenix, Arizona, 85012 or by calling 1-800-621-3778 or 602-240-2000. 79 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 b. Funding Policy Covered employees were required by state statute to contribute 11.54 percent (11.3 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 (10.70 percent for retirement, 0.60 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 9.20 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 2012 2013 2014 Retirement Fund Health Benefit Supplement Fund Long-Term Disability Fund 272,167 320,008 271,849 103,682 117,811 108,739 4,263,942 5,048,667 4,847,966 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. 80 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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 13.0 percent of their annual covered salary. The employer rate for fiscal year 2013-2014 was 39.62 percent. The health insurance premium portion of the contribution rate was actuarially set at 1.56 percent of covered payroll. The City’s contributions from employer and employees for the fiscal year 2014, 2013, and 2012 were $19,278, $17,410, and $15,140, respectively for the employees and $47,048, $55,166, and $49,943, 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, 2012, actuarial valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 8.00 percent investment rate of return, (b) projected salary increases of 4.75 percent, and (c) payroll growth of 4.5 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 23 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 10.35 percent of their annual covered salary and fire personnel are required to contribute 10.35 percent while the City is required to contribute an actuarially determined rate. Police personnel contributed $1,349,474 and fire personnel $1,131,864 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 during fiscal year 2013-2014. The City rate for fiscal year 2014 was 23.29 percent for police personnel and 17.71 percent for fire members. The City was also required to contribute 17.07 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 0.98 percent of covered payroll for police and 0.96 percent for fire for fiscal year 2014. 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 provides multi-year trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on 1) the plan as understood by the City and the plan’s members and include the types of benefits in force at the valuation date, and 2) the pattern of sharing benefit costs between the City and the plan members to that point. Actuarial calculations reflect a long-term prospective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The most recent actuarial valuation and related information follow. Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Cost of living adjustments Fire 6/30/2013 Entry age normal Level % of pay, closed for underfunded, open for overfunded 23 years for underfunded 20 years for overfunded 7 years smoothed market Police 6/30/2013 Entry age normal Level % of pay, closed for underfunded, open for overfunded 23 years for underfunded 20 years for overfunded 7 years smoothed market 7.85% 4.5 - 8.5% 4.5% None 7.85% 4.5 - 8.5% 4.5% 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, 2014, follows: Annual pension/OPEB cost Contributions made PSPRS - Police Health Pension Insurance PSPRS - Fire Health Pension Insurance EORP $2,908,870 $127,776 $1,831,762 $104,985 $45,196 $1,852 2,908,870 127,776 1,831,762 104,985 45,196 1,852 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. 82 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Fiscal Year Ended Annual Pension/ OPEB Cost Annual Costs Contributed Percentage of Net Pension/OPEB Obligation PSPRP - Police - Pension 2012 $2,090,120 2013 2,622,025 2014 2,908,870 100% 100 100 $ 0 0 0 PSPRP - Police – Health Insurance 2012 $ 123,935 2013 134,785 2014 127,776 100% 100 100 $ 0 0 0 PSPRP - Fire - Pension 2012 $1,394,608 2013 1,632,474 2014 1,831,762 100% 100 100 $ 0 0 0 PSPRP - Fire – Health Insurance 2012 $ 109,878 2013 107,353 2014 104,985 100% 100 100 $ 0 0 0 EORP – Pension 2012 2013 2014 47,233 52,441 45,196 100% 100 100 $ 0 0 0 EORP – Health Insurance 2012 $ 2,710 2013 2,725 2014 1,852 100% 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, 2013, 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. 83 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 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 2011 2012 2013 42,776,856 47,252,572 50,542,535 62,806,469 72,134,658 78,259,854 68.1 65.5 64.6 20,029,613 24,882,086 27,717,319 12,989,140 12,995,169 13,250,689 154.2% 191.5 209.2 Police – Health Insurance Subsidy 2011 2012 2013 0 0 0 1,547,097 1,637,968 1,698,633 0.0 0.0 0.0 1,547,097 1,637,968 1,698,633 12,989,140 12,995,169 13,250,689 12.12% 12.60 12.82 36,477,794 41,223,476 44,476,474 44,039,032 49,863,454 53,020,164 82.8 82.7 83.9 7,591,238 8,639,978 8,543,690 10,271,122 10,470,454 10,431,141 73.9% 82.5 81.9 0.0 0.0 0.0 1,390,847 1,377,734 1,282,533 10,271,122 10,470,454 10,431,141 13.54% 13.16 12.30 Fire – Retirement 2011 2012 2013 Fire – Health Insurance Subsidy 2011 2012 2013 0 0 0 1,390,847 1,377,734 1,282,533 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, 2014 were $208,164. The following is a schedule of the future minimum lease payments on the operating leases. Year Ending June 30, 2015 2016 2017 2018 2019 Total $ $ Amount 191,787 195,743 195,949 200,273 204,718 988,470 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 2014 were $385,700. 84 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 The following is a schedule of five years minimum future rental revenues on these leases: Year Ending June 30, Amount 2015 $ 321,856 2016 326,534 2017 354,436 2018 360,141 2019 295,604 19. DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. Additionally, the City offers its management employees an additional deferred compensation plan created in accordance with Internal Revenue Code Section 401a. The deferred compensation is not available to employees, under either plan, until termination, retirement, death or unforeseeable emergency. The City’s fiduciary responsibility is that of exercising “due care” in selecting a third-party administrator. Federal legislation requires that Section 457 and 401a plan assets be held in trust for employees. This means that employee assets held in Section 457 and 401a plans are not the property of the City and are not subject to claims of the City’s general creditors. Also, the City exercises no administrative control nor makes investment decisions. Therefore, the deferred compensation assets are not included in the City’s Basic Financial Statements. 20. COMMITMENTS AND CONTINGENCIES The City is involved in litigation arising in the ordinary course of its operations. The City believes that it’s ultimate liability, if any, in connection with these matters will not have a material adverse effect on the City's financial position, changes in financial position, or liquidity. The City is self-insured for the first $1,000,000 of any occurrence and then has additional coverage up to $40.0 million. Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The following table presents the City’s commitments and encumbrances as of June 30, 2014: Remaining Commitment Fund/Description General Fund: P83 Entertainment Discrict Improvements Systems Upgrades Parks and Recreation Facilities Highway User Revenue Fund: Streets/Traffic Infrastructure Sidewalk Improvements $ 205,102 1,348 53,170 259,620 47,572 24,068 71,640 Development Fee Fund: Parks and Recreation Facilities Municipal Facilities Streets/Traffic Infrastructure 1,410,850 22,270 2,226,008 3,659,128 Transportation Sales Tax Fund: Streets/Traffic Infrastructure 2,843,693 85 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Non-Major Governmental Funds: GO Bond Cap Proj – Streets/Traffic Infrastructure GO Bond Cap Proj – Parks and Recreation Facilitities GO Bond Cap Proj – Municipal Facilities Non-Bond Cap Proj –Parks and Recreation Facilities Non-Bond Cap Proj –Streets/Traffic Infrastructure MDA Bonds Capital Proj – Parks and Recreation Facilities Water Utility Fund: Water Lines Wells and Reservoirs Water Facilities Operational Purposes 1,529,871 817,803 116,963 985,680 562,096 1,585,495 5,597,908 535,888 1,579,063 131,590 57,562 2,304,103 Wastewater Utility Fund: Wastewater Lines Systems Upgrades Wastewater Facilities Operational Purposes 239,893 92,621 26,536 34,388 393,438 Stadium Fund: Parks and Recreational Facilities 67,337 Total commitments $ 15,196,867 Contracts Payable The City has development agreements where, in return for developers constructing public infrastructure, the City agreeds to reimburse the developer for the cost of such infrastucture at some future time contingent on the collection of impact fees and sales tax revenues. Obligations under these development agreements at June 30, 2014 total $55,406,650 for governmental funds and $6,297,204 for enterprise funds. 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 he default, the $9,000,000 has not been recorded as a liability as of June 30, 2014. 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 86 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 the developer has met City requirements associated with each agreed-upon item. As of June 30, 2014, 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 may have credits owed to the developer from impact fees. As of June 30, 2014, no building activities have commenced and potential 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. 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, 2014, the potential credits could not be reliably estimated. 22. SUBSEQUENT EVENTS On August 27, 2014, Council approved the formation of Vistancia West Community Facilities District (CFD) and authorized the execution and delivery of a District Development, Financing Participation and Intergovernmental Agreement. The Agreement is structured with a maximum of $9 million in general obligation bonds with a targeted tax rate of $2.10 per $100 of assessed value. Projects anticipated to be constructed under the CFD include the Westland Water Campus, Offsite Sewer and Lone Mountain Waterline projects. As with other CFDs, the Vistancia West CFD is a separate legal entity and debt issued under the CFD are not obligations of the City. Debt service payments are secured by the property tax revenues generated from the District and a Standby Contribution Agreement and Letter of Credit executed by the development joint venture. 87 88 Combining Statements & Budgetary Schedules Combining Fund Financial Statements and Budgetary Schedules This section contains the combining financial statements for non-major governmental funds, internal service funds and fiduciary funds as well as the budget schedules other than those for the general fund and major special revenue funds (which may be found immediately following the governmental fund financial statements). Page Major Governmental Funds Other than General Fund & Special Revenue Funds Budgetary Comparison Schedules General Obligation Bonds Debt Service Fund General Obligation Bonds Capital Projects Fund Development Fee Fund 92 93 94 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 Community Facilities District (CFD) Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Non-Bond Capital Projects Fund 102 103 104 105 106 107 108 109 Enterprise Funds Schedule of Operations – Budget and Actual Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund 112 113 114 115 116 98 100 Internal Service Funds Combining Statements Combining Statement of Net Position 118 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 119 Combining Statement of Cash Flows 120 Schedule of Operations – Budget and Actual Motor Pool Fund Self-Insurance Fund Facilities Maintenance Fund Information Technology Fund 121 122 123 124 Fiduciary Funds Combining Statement of Fiduciary Net Position Combining Statement of Changes in Assets and Liabilities - All Agency Funds 89 126 127 90 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 (GO) 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. 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. 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. 91 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 30,315,391 $ 30,315,391 $ 30,315,391 RESOURCES (INFLOWS): Property taxes Investment earnings Total inflows Amounts available for appropriation 13,249,479 68,280 13,317,759 43,633,150 13,249,479 61,480 13,310,959 43,626,350 15,076,552 99,991 15,176,543 45,491,934 CHARGES TO APPROPRIATIONS (OUTFLOWS): Debt service: Principal payments Interest and other charges Total charges to appropriations 9,555,000 6,079,408 15,634,408 9,555,000 6,079,408 15,634,408 9,555,000 6,078,379 15,633,379 Budgetary fund balance, June 30, 2014 $ 27,998,742 $ 27,991,942 $ 29,858,555 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 $ 45,491,934 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 (30,315,391) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (1,656,957) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 13,519,586 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 15,633,379 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 $ 15,632,659 92 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ - 1,827,073 38,511 1,865,584 1,865,584 (1,029) (1,029) $ 1,866,613 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 23,365,222 $ 23,365,222 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 23,365,222 $ - RESOURCES (INFLOWS): Capital-related debt issued Investment earnings Miscellaneous Total inflows Amounts available for appropriation 7,318,614 74,200 7,392,814 30,758,036 7,318,614 74,200 7,392,814 30,758,036 26,227 257,058 283,285 23,648,507 (7,318,614) (47,973) 257,058 (7,109,529) (7,109,529) CHARGES TO APPROPRIATIONS (OUTFLOWS): Highways and streets Interest and fiscal charges Capital outlay Contingencies Transfers out Total charges to appropriations 715,881 28,941,314 29,657,195 749,733 29,332,997 850,000 30,932,730 7,816,390 30,034 11,100,852 1 18,947,277 7,066,657 30,034 (18,232,145) (850,000) 1 (11,985,453) Budgetary fund balance, June 30, 2014 $ 1,100,841 $ (174,694) $ 4,701,230 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 $ 23,648,507 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 (23,365,222) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (15,293) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 267,992 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 18,947,277 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 233,608 Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (638,457) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (1) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 18,542,427 93 $ 4,875,924 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ RESOURCES (INFLOWS): Impact/expansion fees Investment earnings Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Culture and recreation Police Fire Highways and streets Debt service: Principal payments Capital outlay Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2014 $ 34,871,908 $ 34,871,908 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 34,871,908 $ - 6,883,040 72,232 6,955,272 41,827,180 6,883,040 71,798 6,954,838 41,826,746 4,477,101 158,061 4,635,162 39,507,070 (2,405,939) 86,263 (2,319,676) (2,319,676) 18,214 56,270 2,327 73,777 151,519 59,580 5,637 93,637 167,813 3,379 5,442 24,168 16,294 (56,201) (195) (69,469) 3,809,501 19,286,554 3,350,000 26,596,643 3,809,501 15,340,632 3,420,155 22,880,661 41,471 242,273 (3,809,501) (15,299,161) (3,420,155) (22,638,388) 15,230,537 $ 18,946,085 $ 39,264,797 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 $ 39,507,070 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 (34,871,908) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (16,723) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,618,439 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 242,273 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis 1,221,932 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,464,205 94 $ 20,318,712 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. 95 Capital Projects Funds A capital project fund is established to account for the acquisition and construction of major capital facilities other than those financed by Special Revenue Fund and Enterprise Fund resources. A capital project fund enhances reporting to ensure that requirements regarding the use of the revenue were fully satisfied. Community Facilities District (CFD) Bonds Capital Projects Fund This fund accounts for the expenditure of Vistancia Community Facilities District bond proceeds for the construction of capital assets for the District. Once the capital assets are completed, they are turned over to the City for operation and maintenance. Municipal Development Authority (MDA) Bonds Capital Projects Fund This fund accounts for the construction or purchase of capital assets to be funded through the use of Municipal Development Authority Bonds. 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. 96 97 CITY OF PEORIA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 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 Total assets Total assets & deferred outflows Debt Service Funds Municipal Development CFD Authority Bonds Bonds Special Assessment Bonds $ 285,886 961,356 51,340 409 30,705 1,329,696 $ 1,074,062 4,241,976 15,063 2,383 851,170 6,184,654 $ 1,918,728 3,681,859 6,452,159 1,819,656 13,872,402 $ 13,344 8,550 22,313 4,310,820 4,371,443 8,726,470 $ $ 1,329,696 $ 6,184,654 $ 13,872,402 $ 8,726,470 $ 3,387,831 $ 239,635 8,710 297,554 545,899 $ - $ 16,591 16,591 $ - $ 12,922 12,922 $ LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable $ 635 Accrued payroll 5,971 Other liabilities 500 Unearned revenue-other Total liabilities $ 7,106 Deferred inflows of resources: Unavailable revenue-property taxes Unavailable revenue-special assessments Total deferred inflows of resources Fund balances: Restricted for: Debt service Capital projects Grant Purposes 1,322,590 Committed for: Arts Capital Assigned to: Capital projects Other purposes Total fund balance 1,322,590 Total liabilities, deferred inflows & fund balance $ 1,329,696 $ $ - $ $ 1,468,101 13,872,402 - 4,058,556 $ 112,098 5,638,755 6,184,654 $ 8,696,957 - - $ 13,872,402 13,872,402 The accompanying notes are an integral part of the financial statements 98 - $ 8,696,957 8,726,470 $ 179,834 604,734 136 2,603,127 3,387,831 2,603,127 2,603,127 784,704 784,704 $ 3,387,831 Capital Project Funds CFD Bonds MDA Bonds Total Non-Major Governmental Funds Non-Bond $ 1,164 4,308,013 5,382,155 9,691,332 $ 7,784,563 7,784,563 $ 4,525,348 15,217,511 1,088,954 9,010 20,840,823 $ 7,983,858 3,681,859 27,477,736 1,168,701 21,652 1,819,656 904,188 16,403,396 9,753,598 2,603,127 71,817,771 $ 9,691,332 $ 7,784,563 $ 20,840,823 $ 71,817,771 $ 635 - $ 1,424,436 1,424,436 $ 141,445 313,533 1,389,462 1,844,440 $ 1,823,377 14,681 314,033 1,687,016 3,839,107 $ $ 635 - $ $ 9,690,697 - $ $ 6,360,127 - 9,690,697 9,691,332 - $ $ $ 581,196 - 6,360,127 7,784,563 - $ 23,354,063 16,632,020 2,790,691 - $ 12,922 2,603,127 2,616,049 4,058,556 18,415,187 18,996,383 20,840,823 99 $ 18,415,187 112,098 65,362,615 71,817,771 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2014 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 Transfers in Transfers out Total other financing sources and uses Net change in fund balances - $ Debt Service Funds Municipal Development CFD Authority Bonds Bonds - $ - 55,474 637,281 45,780 4,027 72,336 814,898 2,661,857 679,667 625,997 195,147 19,108 128,211 4,309,987 21,492 21,492 994,123 414,555 532,221 714,252 445,201 1,027,262 41,028 610,165 - 994,123 169,455 3,954,139 $ 355,848 (7,624,553) 550,000 (39,558) 510,442 112,000 10,000 (472,856) (350,856) 7,560,774 7,560,774 $ 26,002 3,142,411 5,321,046 - 2,630,000 2,854,633 5,487,548 325,000 149,850 474,850 (166,502) 663,240 - - 331,217 4,992 Fund balances - beginning 991,373 5,633,763 13,936,181 8,966,396 121,464 Restatement (note 1) Fund balances - beginning - restated 991,373 5,633,763 13,936,181 (102,937) 8,863,459 121,464 Fund balances - ending $ 1,322,590 $ 5,638,755 (63,779) 1,072 1,137,018 1,138,090 2,915 - 4,195,000 3,451,045 7,646,045 (179,225) 2,152,633 Special Assessment Bonds $ 13,872,402 The accompanying notes are an integral part of the financial statements 100 (166,502) $ 8,696,957 663,240 $ 784,704 Capital Project Funds CFD Bonds $ - MDA Bonds $ Non-Bond - $ - Total Non-Major Governmental Funds $ 2,152,633 12,752 12,752 5,626 5,626 1,050,227 109,496 916,767 2,076,490 2,717,331 2,367,175 671,777 195,147 199,575 1,137,018 4,259,725 13,700,381 - 82,097 - 11,750 1,299,761 360,984 - 417,470 626,068 714,252 445,201 2,327,023 360,984 41,028 1,604,288 736,380 736,380 82,097 2,781,218 4,453,713 7,150,000 6,455,528 3,687,053 23,828,895 (723,628) (76,471) (2,377,223) (10,128,514) (7,250) (7,250) (24,291,657) (24,291,657) (513,830) (513,830) 112,000 8,120,774 (25,325,151) (17,092,377) (730,878) (24,368,128) (2,891,053) (27,220,891) 10,421,575 30,728,255 21,887,436 92,686,443 10,421,575 30,728,255 21,887,436 (102,937) 92,583,506 6,360,127 $ 18,996,383 $ 9,690,697 $ $ 65,362,615 101 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 504,968 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 504,968 $ 504,968 $ - RESOURCES (INFLOWS): Intergovernmental: From federal government Other Charges for services Investment earnings Miscellaneous Transfers from other funds Total inflows Amounts available for appropriation 100,220 33,000 3,000 20,000 550,000 706,220 1,211,188 100,220 33,000 3,000 20,000 550,000 706,220 1,211,188 86,860 637,281 34,366 4,370 72,336 550,000 1,385,213 1,890,181 (13,360) 637,281 1,366 1,370 52,336 678,993 678,993 CHARGES TO APPROPRIATIONS (OUTFLOWS): Human services Capital outlay Contingencies Transfers out Total charges to appropriations 1,034,996 69,220 100,000 1,057 1,205,273 1,084,996 69,220 50,000 1,057 1,205,273 993,352 38,501 1,057 1,032,910 (91,644) (30,719) (50,000) (172,363) Budgetary fund balance, June 30, 2014 $ 5,915 $ 5,915 $ 857,271 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 $ 1,890,181 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 (504,968) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (20,315) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (550,000) Total revenues as reported on the combining statement of revenue, expenditures, and changes $ in fund balances - non-major governmental funds 814,898 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 1,032,910 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 963 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (192) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (38,501) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 994,123 102 $ 851,356 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 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, 2014 $ 6,050,452 $ 6,050,452 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 6,050,452 $ - 2,898,617 3,992,242 1,226,776 160,000 13,000 6,329 10,000 8,306,964 14,357,416 2,898,617 3,992,242 1,226,776 160,000 13,000 6,329 10,000 8,306,964 14,357,416 2,872,099 557,776 672,784 195,147 21,501 128,211 10,000 4,457,518 10,507,970 (26,518) (3,434,466) (553,992) 35,147 8,501 121,882 (3,849,446) (3,849,446) 17,591 67,705 494,283 12,838 546,447 641,295 4,900 1,340,989 1,413,957 335,000 3,100,000 296,231 8,271,236 1,500 77,748 83,205 528,381 12,838 568,602 1,289,495 813,152 1,659,000 41,029 1,250,560 870,055 721,657 296,231 8,213,453 1,274 67,286 80,007 216,884 11,431 542,284 714,324 445,201 1,021,400 41,028 610,165 378,153 297,345 4,426,782 (226) (10,462) (3,198) (311,497) (1,407) (26,318) (575,171) (367,951) (637,600) (1) (640,395) (491,902) (721,657) 1,114 (3,786,671) 6,086,180 $ 6,143,963 $ 6,081,188 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 $ 10,507,970 Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a a current year revenue for financial reporting purposes (6,050,452) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (25,531) Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes (10,000) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 4,421,987 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 4,426,782 Differences - budget to GAAP: The City budgets for claims and compensated absences on the cash basis, rather than on the modified accrual basis 2,642 The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (3,602) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (174,338) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (297,345) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 3,954,139 103 $ (62,775) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ RESOURCES (INFLOWS): Investment earnings Transfers from other funds Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Debt service: Principal payments Interest and other charges Transfers to other funds Total charges to appropriations Budgetary fund balance, June 30, 2014 $ 15,062,732 $ 15,062,732 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 15,062,732 $ - 7,500 7,569,676 7,577,176 22,639,908 5,800 7,569,676 7,575,476 22,638,208 22,144 7,560,774 7,582,918 22,645,650 16,344 (8,902) 7,442 7,442 4,190,000 3,448,644 7,638,644 4,195,000 3,452,046 7,647,046 4,195,000 3,451,045 7,646,045 (1,001) (1,001) 15,001,264 $ 14,991,162 $ 14,999,605 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 22,645,650 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 (15,062,732) 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 (7,560,774) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 21,492 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 7,646,045 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 7,646,045 104 $ 8,443 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 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, 2014 $ 8,828,779 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 8,828,779 $ 8,828,779 $ - 2,160,009 23,900 3,307,325 5,491,234 14,320,013 2,160,009 22,800 3,307,325 5,490,134 14,318,913 2,131,994 26,957 3,142,411 5,301,362 14,130,141 (28,015) 4,157 (164,914) (188,772) (188,772) 4,600 4,600 2,915 (1,685) 2,630,000 2,854,634 5,489,234 2,630,000 2,854,634 5,489,234 2,630,000 2,854,633 5,487,548 8,830,779 $ 8,829,679 $ 8,642,593 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 $ 14,130,141 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 (8,828,779) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 19,684 Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 5,321,046 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 5,487,548 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 5,487,548 105 (1) (1,686) $ (187,086) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ RESOURCES (INFLOWS): Special assessments Charges for services Investment earnings Bond Premium Transfers from other funds 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, 2014 $ 495,223 $ 495,223 $ 495,223 475,600 250 475,850 971,073 475,600 250 475,850 971,073 1,137,018 993 1,138,011 1,633,234 325,000 150,600 475,600 325,000 150,600 475,600 325,000 150,210 475,210 495,473 $ 495,473 $ 1,158,024 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 $ 1,633,234 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 (495,223) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis 79 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,138,090 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 475,210 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 $ 474,850 106 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ - 661,418 743 662,161 662,161 (390) (390) $ 662,551 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 10,557,606 $ 10,557,606 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 10,557,606 $ - RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 38,500 38,500 10,596,106 38,500 38,500 10,596,106 34,112 34,112 10,591,718 (4,388) (4,388) (4,388) CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Contingencies Interest and other charges Transfers to other funds Total charges to appropriations 10,595,826 10,595,826 10,436,093 10,436,093 903,538 903,538 (9,532,555) (9,532,555) Budgetary fund balance, June 30, 2014 $ 280 $ 160,013 $ 9,688,180 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 $ 10,591,718 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 (10,557,606) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis (21,360) Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 12,752 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 903,538 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (159,908) Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 736,380 107 $ 9,528,167 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 33,996,511 $ 33,996,511 $ 33,996,511 RESOURCES (INFLOWS): Investment earnings Total inflows Amounts available for appropriation 2,000 2,000 33,998,511 2,000 2,000 33,998,511 5,626 5,626 34,002,137 CHARGES TO APPROPRIATIONS (OUTFLOWS): Culture and recreation Capital outlay Total charges to appropriations 33,996,103 33,996,103 146,202 31,171,373 31,317,575 82,097 25,105,284 25,187,381 Budgetary fund balance, June 30, 2014 $ 2,408 $ 2,680,936 $ 8,814,756 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule $ 34,002,137 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 (33,996,511) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis Capital-related debt issued is a budgetary resource, but is not a revenue for financial reporting purposes Premiums on bonds are a budgetary resource, but are not a revenue for financial reporting purposes Transfers from other funds are a budgetary resource but are not revenues for financial reporting purposes Total revenues as reported on the combining statement of revenue, expenditures, and changes in fund balances - non-major governmental funds $ 5,626 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 25,187,381 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis (813,627) Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (24,291,657) Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds $ 82,097 108 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ - 3,626 3,626 3,626 (64,105) (6,066,089) (6,130,194) $ 6,133,820 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final Budgetary fund balance, July 1, 2013 $ 24,584,176 $ 24,584,176 Actual Amounts (budgetary basis) $ 24,584,176 Variance with Final Budget Over (Under) $ - RESOURCES (INFLOWS): Intergovernmental revenue: Other governmental revenue Investment earnings Miscellaneous Total inflows Amounts available for appropriation 37,935 1,527,425 1,565,360 26,149,536 37,935 1,527,425 1,565,360 26,149,536 1,050,227 109,496 916,767 2,076,490 26,660,666 1,050,227 71,561 (610,658) 511,130 511,130 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contractual services: Culture & Recreation Development services Highways and streets Capital outlay Contingencies Transfers out Total charges to appropriations 3,157,909 8,276,692 1,000,000 12,434,601 3,106,108 9,819,575 2,460,630 15,386,313 1,299,761 133,507 3,534,275 4,967,543 1,299,761 (2,972,601) (6,285,300) (2,460,630) (10,418,770) Budgetary fund balance, June 30, 2014 $ 13,714,935 $ 10,763,223 $ 21,693,123 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 $ 26,660,666 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 (24,584,176) The City budgets certain revenues on the cash basis, rather than on the modified accrual basis Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 2,076,490 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 4,967,543 Differences - budget to GAAP: The City budgets for certain other expenditures on the cash basis, rather than on the modified accrual basis Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes (513,830) Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 4,453,713 109 $ 10,929,900 110 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). 111 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Contingencies Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Debt principal payments Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers (out) Excess (deficit) revenues over expenses - budgetary basis $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 34,938,143 34,938,143 $ 34,938,143 34,938,143 $ 5,076,137 16,155,502 18,235,872 3,400,000 42,867,511 5,076,137 16,292,869 19,468,087 1,548,269 42,385,362 4,859,357 15,758,170 7,193,173 27,810,700 (216,780) (534,699) (12,274,914) (1,548,269) (14,574,662) (7,929,368) (7,447,219) 8,206,269 15,653,488 161,000 (1,188,183) (4,331,021) (5,358,204) 161,000 (1,194,333) (4,438,454) (5,471,787) 224,189 (1,193,203) (4,412,795) (5,381,809) (13,287,572) (12,919,006) 2,824,460 1,780,000 (3,581,403) 1,780,000 (3,581,403) 3,042,141 (3,609,357) (15,088,975) $ (14,720,409) $ 35,670,971 345,998 36,016,969 2,257,244 $ 732,828 345,998 1,078,826 63,189 1,130 25,659 89,978 15,743,466 1,262,141 (27,954) $ 16,977,653 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 $ (141,511) (100,843) 100,843 (17,222) (254,274) 6,831,425 5,319,059 4,412,795 (8,761,560) 168,226 6,224 1,116,529 10,936,935 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 112 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WASTEWATER UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2014 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 $ 19,817,259 20,000 19,837,259 $ 19,817,259 20,000 19,837,259 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 19,604,987 35,466 19,640,453 $ (212,272) 15,466 (196,806) 2,589,722 8,429,168 6,621,634 1,800,000 19,440,524 2,589,722 8,545,168 6,654,319 1,591,147 19,380,356 2,495,370 8,058,976 3,134,573 13,688,919 (94,352) (486,192) (3,519,746) (1,591,147) (5,691,437) 396,735 456,903 5,951,534 5,494,631 45,000 (2,433,441) (5,349,576) (7,738,017) 45,000 (2,496,241) (5,349,576) (7,800,817) 66,941 (2,494,785) (4,911,131) (7,338,975) 21,941 1,456 438,445 461,842 (7,341,282) (7,343,914) (1,387,441) 5,956,473 800,000 2,557,472 (151,608) 800,000 2,557,472 (151,608) 1,269,012 2,583,805 (151,608) 469,012 26,333 - (4,135,418) $ (4,138,050) $ 2,313,768 $ 6,451,818 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 (203,643) (987,259) 987,259 3,582 404,327 2,615,629 2,241,949 4,911,131 (9,017,314) 61,163 (817,741) $ 2,512,851 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 113 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SOLID WASTE UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2014 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 Total nonoperating revenues (expenses) $ $ 12,064,943 12,064,943 $ 12,238,402 1,000 12,239,402 $ 173,459 1,000 174,459 3,491,012 7,456,077 2,573,655 2,500,000 16,020,744 3,491,012 7,557,077 2,681,370 2,326,000 16,055,459 3,404,408 7,838,248 2,576,635 13,819,291 (86,604) 281,171 (104,735) (2,326,000) (2,236,168) (3,955,801) (3,990,516) (1,579,889) 2,410,627 71,000 71,000 Income (loss) before contributions and transfers Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 12,064,943 12,064,943 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 71,000 71,000 96,701 96,701 (3,884,801) (3,919,516) (1,483,188) (4,077) (4,077) (4,077) (3,888,878) $ (3,923,593) $ (1,487,265) 25,701 25,701 2,436,328 $ 2,436,328 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. Change in net position per the statement of revenues, expenses and changes in fund net position (76,834) (958,544) 958,544 (913) 274,173 2,576,635 (937,951) 95,046 $ 442,891 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 114 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL STADIUM FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Rents Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) $ $ 1,311,842 1,598,500 2,910,342 $ 1,399,754 1,757,010 22,911 3,179,675 $ 87,912 158,510 22,911 269,333 1,668,897 2,930,008 4,598,905 1,668,897 3,077,926 2,167,035 6,913,858 1,561,185 3,363,811 300,890 5,225,886 (107,712) 285,885 (1,866,145) (1,687,972) (1,688,563) (4,003,516) (2,046,211) 1,957,305 6,300 6,300 Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 1,311,842 1,598,500 2,910,342 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 6,300 6,300 6,192 6,192 (1,682,263) (3,997,216) (2,040,019) 2,010,000 (152,567) 2,010,000 (152,567) 172,916 (152,567) 175,170 $ (2,139,783) $ (2,019,670) (108) (108) 1,957,197 (1,837,084) $ (120,113) 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. 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 (1,682) (76,342) 76,342 6,483 424,987 300,890 (790,984) 26,231,244 $ 24,151,268 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 STORM DRAIN UTILITY FUND FOR THE YEAR ENDED JUNE 30, 2014 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 $ 326,045 530,447 200,000 1,056,492 Operating income (loss) 821,600 821,600 (234,892) 2,600 2,600 Income (loss) before contributions and transfers $ 845,688 845,688 (232,292) (1,057) (1,057) $ (233,349) $ (10,082) (15,399) (200,000) (225,481) 14,677 249,569 2,881 2,881 281 281 17,558 249,850 (1,057) $ 16,501 $ Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes. Certain transfers in/(out)out are not budgeted items, but are other financing sources(uses) for GAAP purposes. Donations of capital assets are an other financing source for GAAP purposes, but are not a revenue for budget purposes. Change in net position per the statement of revenues, expenses and changes in fund net position (14,582) (2,648) 6,211 (635) 87,955 203,078 $ 295,880 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 24,088 24,088 315,963 515,048 831,011 2,600 2,600 (232,292) (233,349) $ 326,045 530,447 200,000 1,056,492 (234,892) NONOPERATING REVENUES (EXPENSES): Investment income Total nonoperating revenues (expenses) Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 821,600 821,600 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 249,850 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. 117 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2014 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: Restricted assets: Cash equivalents Investments Total restricted assets Capital assets: Buildings and improvements Equipment Vehicles Furniture Less accumulated depreciation Construction in progress Total capital assets, net Total assets $ $ - $ 2,549,470 8,573,174 805 3,612 11,127,061 $ 4,583,524 2,997,750 7,581,274 1,475,608 24,738,456 (18,064,041) 44,763 8,194,786 18,519,050 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 2,320,671 7,803,783 4,261 195,549 10,324,264 Facilities Maintenance Fund 90,685 304,947 115 395,747 Information Technology Fund $ - 896,773 3,015,603 2,302 1,249 70,286 3,986,213 Total $ - 5,857,599 19,697,507 3,107 9,237 70,286 195,549 25,833,285 4,583,524 2,997,750 7,581,274 18,708,335 17,741 (6,023) 11,718 407,465 188,395 11,314 47,590 247,299 1,283,411 1,952 2,477,231 8,710 3,771,304 64,352 32,796 168,410 265,558 516,841 51,682 285,150 853,673 2,052,999 97,744 2,477,231 509,860 5,137,834 31,240 31,240 278,539 1,585,358 1,840 1,587,198 5,358,502 100,090 100,090 365,648 74,820 74,820 928,493 1,585,358 207,990 1,793,348 6,931,182 8,194,788 10,045,723 18,240,511 6,188,544 7,161,289 13,349,833 11,718 30,099 41,817 10,293,805 3,057,722 13,351,527 18,500,311 6,188,544 20,294,833 44,983,688 $ $ 148,102 33,207,344 30,745 (26,527,664) 3,435,280 10,293,807 14,280,020 $ The accompanying notes are an integral part of the financial statements 118 148,102 34,700,693 24,738,456 30,745 (44,597,728) 3,480,043 18,500,311 51,914,870 $ CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2014 SelfInsurance Fund Motor Pool Fund OPERATING REVENUES Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Interest and investment income Gain (Loss) on sale of capital assets Total non-operating revenues Income (loss) before transfers Capital contributions Transfers in Transfers out Change in net position Total net position - beginning Total net position - ending 6,679,315 57 6,679,372 $ $ 5,892,452 5,892,452 Information Technology Fund $ 8,250,027 52,805 8,302,832 Total $ 39,525,879 365,028 39,890,907 902,660 3,976,419 2,179,976 7,059,055 (379,683) 198,829 1,057,637 16,133,160 17,389,626 1,626,625 2,765,635 2,932,000 2,534 5,700,169 192,283 4,061,838 4,494,316 1,858,211 10,414,365 (2,111,533) 7,928,962 12,460,372 16,133,160 4,040,721 40,563,215 (672,308) 43,892 111,342 155,234 (224,449) 62,285 62,285 1,688,910 940 940 193,223 13,300 13,300 (2,098,233) 120,417 111,342 231,759 (440,549) 15,000 763,490 (2,416) 551,625 (36,404) 1,652,506 (7,248) 185,975 2,317,282 219,049 15,000 3,080,772 (46,068) 2,609,155 (144,158) 13,132,478 17,688,886 $ 18,704,085 312,166 19,016,251 Facilities Maintenance Fund 18,240,511 11,697,327 $ 13,349,833 $ 41,817 $ The accompanying notes are an integral part of the financial statements 119 13,351,527 42,374,533 $ 44,983,688 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2014 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 $ 6,679,372 (3,966,190) (913,145) 1,800,037 $ 19,050,646 (870,546) (194,786) (15,906,345) 2,078,969 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 763,490 (2,416) 761,074 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 (2,697,054) 168,422 (2,528,632) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities (1,208,400) 1,428,821 48,834 269,255 (1,326,200) 3,009,839 71,863 1,755,502 301,734 2,018,937 2,320,671 $ 3,798,067 3,334,927 7,132,994 $ 1,626,625 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ 5,892,452 (2,928,395) (2,771,549) 192,508 $ 8,300,530 (4,231,802) (4,035,679) 33,049 $ 39,923,000 (11,996,933) (7,915,159) (15,906,345) 4,104,563 (36,404) (36,404) (7,248) (7,248) 2,317,282 2,317,282 3,080,772 (46,068) 3,034,704 - - (1,941,162) (1,941,162) (4,638,216) 168,422 (4,469,794) (45,600) (91,983) 899 (136,684) (467,400) 238,732 15,063 (213,605) (3,047,600) 4,585,409 136,659 1,674,468 $ 48,576 42,109 90,685 $ 195,564 701,209 896,773 $ 192,283 $ 4,343,941 6,097,182 $ 10,441,123 Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets: Accounts receivable Prepaid items Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Claims payable Compensated absences Total adjustments (379,683) 2,179,976 - 2,534 4,000 (2,441) 34,395 - - 8,670 (3,165) (7,320) 2,179,720 187,091 233 226,815 3,810 452,344 3,605 3,776 (9,690) 225 (2,111,533) 1,858,211 513,421 9,883 226,815 3,920 4,776,871 $ 4,104,563 1,800,037 $ 2,078,969 $ 192,508 $ 33,049 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 $ 15,000 10,245 25,245 $ 16,187 16,187 $ 34 34 $ 3,441 3,441 $ The accompanying notes are an integral part of the financial statements 120 $ 32,093 (47,541) (2,441) 314,055 9,039 17,120 2,144,582 $ $ (672,308) 4,040,721 (2,302) (51,541) - Net cash provided (used) by operating activities $ $ $ $ 15,000 29,907 44,907 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL MOTOR POOL FUND FOR THE YEAR ENDED JUNE 30, 2014 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) $ $ 6,957,028 6,957,028 967,500 4,272,141 2,117,096 1,000,000 8,356,737 967,500 4,272,141 2,404,469 1,000,000 8,644,110 (1,399,709) (1,687,082) 37,000 37,000 Income (loss) before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 6,957,028 6,957,028 $ 6,708,863 57 6,708,920 1,399,536 48,834 48,834 (1,650,082) (238,712) 153,461 (2,416) 153,461 (2,416) 153,461 (2,416) (1,499,037) (248,165) 57 (248,108) (54,355) (288,882) (304,407) (1,000,000) (1,647,644) (287,546) 37,000 37,000 $ $ 913,145 3,983,259 2,100,062 6,996,466 (1,362,709) (1,211,664) Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ (87,667) 11,834 11,834 1,411,370 $ 1,411,370 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 (4,942) (29,548) 29,548 10,485 (10,229) 2,087,583 15,000 (2,179,976) 111,342 610,029 $ 551,625 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 121 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SELF-INSURANCE FUND FOR THE YEAR ENDED JUNE 30, 2014 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 $ 18,680,868 18,680,868 $ $ 18,738,480 312,166 19,050,646 $ 57,612 312,166 369,778 153,260 1,546,721 16,924,696 3,500,000 22,124,677 153,260 1,546,721 17,357,916 3,200,000 22,257,897 194,786 1,198,871 15,578,020 16,971,677 41,526 (347,850) (1,779,896) (3,200,000) (5,286,220) (3,443,809) (3,577,029) 2,078,969 5,655,998 71,863 71,863 10,363 10,363 2,150,832 5,666,361 61,500 61,500 Income (loss) before transfers Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 18,680,868 18,680,868 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 61,500 61,500 (3,382,309) (3,515,529) (36,404) (36,404) (3,418,713) $ (3,551,933) (36,404) $ 2,114,428 $ 5,666,361 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets insurance claims on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Change in net position per the statement of revenues, expenses and changes in fund net position (43,973) (4,043) (226,815) (187,091) $ 1,652,506 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 122 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL FACILITIES MAINTENANCE FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Total operating expenses $ 2,963,706 2,906,181 5,869,887 Operating income (loss) 5,892,130 5,892,130 $ 100 100 22,343 (50,657) (7,248) (7,248) 15,095 $ (57,905) 5,892,452 5,892,452 $ 2,771,549 2,928,396 5,699,945 (50,757) 100 100 Income (loss) before transfers $ 2,963,706 2,979,181 5,942,887 22,243 NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 5,892,130 5,892,130 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 322 322 (192,157) (50,785) (242,942) 192,507 243,264 899 899 799 799 193,406 244,063 (7,248) $ 186,158 $ 244,063 Explanation of differences between budgetary revenues and expenditures and GAAP revenues and expenditures The City budgets certain revenues on the cash basis, rather than on the accrual basis. The City budgets compensated absences on the cash basis, rather than the accrual basis. The City budgets certain other expenditures on the cash basis, rather than the accrual basis. Depreciation and amortization are not budgeted expenses, but are expenses for GAAP purposes Change in net position per the statement of revenues, expenses and changes in fund net position 41 5,914 (3,604) (2,534) $ 185,975 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 123 CITY OF PEORIA, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL INFORMATION TECHNOLOGY FUND FOR THE YEAR ENDED JUNE 30, 2014 Budgeted Amounts Original Final OPERATING REVENUES: Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES: Salaries, wages and benefits Contractual services, materials and supplies Capital outlay Total operating expenses Operating loss NONOPERATING REVENUES (EXPENSES): Interest and investment income Total nonoperating revenues $ $ 8,252,110 8,252,110 $ 8,247,725 52,805 8,300,530 $ (4,385) 52,805 48,420 4,421,750 4,706,378 1,465,419 10,593,547 4,421,750 4,855,404 1,579,474 10,856,628 4,035,679 4,169,872 1,210,819 9,416,370 (386,071) (685,532) (368,655) (1,440,258) (2,341,437) (2,604,518) (1,115,840) 1,488,678 3,000 3,000 Income before transfers Transfers in Transfers (out) Excess (deficit) revenues over expenses - budgetary basis 8,252,110 8,252,110 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 3,000 3,000 15,063 15,063 (2,338,437) (2,601,518) (1,100,777) 1,684,245 (202,240) 1,684,245 (202,240) 1,684,245 (202,240) (856,432) $ (1,119,513) $ 381,228 12,063 12,063 1,500,741 $ 1,500,741 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. 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 539 (26,159) (262,514) 1,148,889 (1,858,211) 835,277 $ 219,049 This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 124 FIDUCIARY FUNDS Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others and therefore are not available to support City programs. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. Agency Funds Account for assets the City holds as an agent for individuals, private organizations, other governments or other funds in a temporary custodial capacity. Terramar Infrastructure Fund Accounts for the monies collected from developers in one area of the City and held in trust by the City until reimbursed by the City to a developer that made certain infrastructure improvements in that area. 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. 125 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS JUNE 30, 2014 Terramar Infrastructure Fund ASSETS Cash and cash equivalents Investments (pooled), at fair value Total assets LIABILITIES Accounts payable Other liabilities Total liabilities $ 88,241 296,729 384,970 384,970 384,970 PLAY Peoria NFP Fund $ 5,450 18,327 23,777 23,777 23,777 Peoria Citizens Corp Council NFP Fund $ 472 1,588 2,060 Westside Fire Training IGA Fund $ 2,060 2,060 The accompanying notes are an integral part of the financial statements 126 8,322 27,984 36,306 36,306 36,306 Total $ 102,485 344,628 447,113 447,113 447,113 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2014 Balance June 30, 2013 Terramar Infrastructure Fund Assets: Cash and cash equivalents Investments Total Assets $ Liabilities: Other liabilities 77,390 307,580 384,970 Additions $ Deductions 307,581 296,730 604,311 $ 296,730 307,581 604,311 Balance June 30, 2014 $ 88,241 296,729 384,970 384,970 - - 384,970 PLAY Peoria NFP Fund Assets: Cash and cash equivalents Investments Total Assets 4,624 18,380 23,004 78,032 18,327 96,359 77,206 18,380 95,586 5,450 18,327 23,777 Liabilities: Accounts payable Other liabilities Total Liabilities 1,200 21,804 23,004 3,298 1,973 5,271 4,498 4,498 23,777 23,777 Peoria Citizens Corp Council NFP Fund Assets: Cash and cash equivalents Investments Total Assets 414 1,645 2,059 1,646 1,588 3,234 1,588 1,645 3,233 472 1,588 2,060 Liabilities: Accounts payable Other liabilities Total Liabilities 2,059 2,059 - - 2,060 2,060 Westside Fire Training IGA Fund Assets: Cash and cash equivalents Investments Total Assets 6,505 25,855 32,360 36,175 27,984 64,159 34,358 25,855 60,213 8,322 27,984 36,306 Liabilities: Accounts payable Other liabilities Total Liabilities 32,360 32,360 6,374 3,946 10,320 6,374 6,374 36,306 36,306 Assets: Cash and cash equivalents Investments Total Assets 88,933 353,460 442,393 423,434 344,629 768,063 409,882 353,461 763,343 102,485 344,628 447,113 Liabilities: Accounts payable Other liabilities Total Liabilities 1,200 441,193 442,393 9,672 5,920 15,592 10,872 10,872 447,113 447,113 1 1 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 127 128 Supplemental Information OTHER SUPPLEMENTARY INFORMATION This section contains schedules which the City deems necessary to provide detailed schedules of the self-insurance programs 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 129 130 131 CITY OF PEORIA, ARIZONA COMBINING DETAILED SCHEDULE OF NET POSITION SELF-INSURANCE FUND JUNE 30, 2014 ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable, net Interest receivable Total current assets Non-current assets: Restricted assets: Cash equivalents Investments Total non-current assets Total assets Risk Management Fund Employee Trust Workers' Health Compensation Insurance Fund Fund $ $ 2,030,009 6,826,368 3,612 8,859,989 84,371 283,718 805 368,894 $ 435,090 1,463,088 1,898,178 Total $ 2,549,470 8,573,174 805 3,612 11,127,061 8,859,989 1,653,346 999,250 2,652,596 3,021,490 2,930,178 1,998,500 4,928,678 6,826,856 4,583,524 2,997,750 7,581,274 18,708,335 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 39,444 1,952 885,182 8,710 935,288 42,983 1,025,958 1,068,941 1,200,984 566,091 1,767,075 1,283,411 1,952 2,477,231 8,710 3,771,304 1,840 761,572 763,412 1,698,700 823,786 823,786 1,892,727 1,767,075 1,840 1,585,358 1,587,198 5,358,502 NET POSITION Restricted - trust purpose Unrestricted Total net position 7,161,289 7,161,289 1,128,763 1,128,763 5,059,781 5,059,781 6,188,544 7,161,289 $ 13,349,833 $ 130 $ $ 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, 2014 OPERATING REVENUES Charges for services Miscellaneous Total operating revenues Risk Management Fund Employee Trust Workers' Health Compensation Insurance Fund Fund $ $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Total operating expenses Operating income 2,583,129 187,937 2,771,066 1,297,719 6,022 1,303,741 $ 14,823,237 118,207 14,941,444 Total $ 18,704,085 312,166 19,016,251 154,007 54,439 2,307,905 2,516,351 254,715 44,822 217,601 1,165,134 1,427,557 (123,816) 785,597 12,660,121 13,445,718 1,495,726 198,829 1,057,637 16,133,160 17,389,626 1,626,625 NON-OPERATING REVENUES (EXPENSES) Interest and investment income Total non-operating revenues Income before transfers 36,795 36,795 291,510 7,256 7,256 (116,560) 18,234 18,234 1,513,960 62,285 62,285 1,688,910 Transfers out Change in net position (36,404) 255,106 (116,560) 1,513,960 (36,404) 1,652,506 Total net position - beginning Total net position - ending 6,906,183 $ 7,161,289 131 1,245,323 $ 1,128,763 3,545,821 $ 5,059,781 11,697,327 $ 13,349,833 132 Statistical Section 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 135 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 145 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 157 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 169 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 171 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. 133 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 Position 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 135 136 138 139 140 141 142 143 144 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 Comparative Secondary Assessed Value XV Direct and Overlapping Property Tax Rates XVI Direct and Overlapping Property Tax Levies XVII Principal Property Tax Payers XVIII Property Tax Levies and Collections XIX Utility Statistical Data 145 146 147 148 149 150 151 152 153 154 Debt Capacity XX Outstanding Debt By Type XXI Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita XXII Direct and Overlapping General Obligation Bonded Debt – Current Fiscal Year XXIII Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XXIV Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XXV Legal Debt Margin XXVI Pledged Revenue Coverage - Municipal Development Authority Bonds – Governmental Portion XXVII Pledged Revenue Coverage – Revenue Bonds XXVIII Pledged Revenue Coverage - Special Assessment Bonds XXIX Special Assessment Collections XXX Ratio of Annual Debt Service Expenditures for Governmental Debt to Total Governmental Expenditures and Revenues XXXI Bond Authorizations – Issued and Unissued 157 158 159 160 161 162 163 164 165 166 167 168 Economic and Demographic Information XXXII Demographic and Economic Statistics XXXIII Major Employers Within the City 169 170 Operating Information XXXIV Authorized Full-time Equivalent City Government Employees By Function XXXV Building Permits and Home Sales XXXVI Schedule of Insurance in Force XXXVII Operating Indicators By Function/Program XXXVIII Capital Asset Statistics By Function/Program 171 172 173 174 175 134 Table I CITY OF PEORIA, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net assets $ 412,711,011 35,660,531 118,007,870 $ 566,379,412 Business-type Activities Net investment in capital assets Restricted Unrestricted Total business-type activities net assets $ 273,024,663 83,015,115 55,874,702 $ 411,914,480 Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net assets $ 685,735,674 118,675,646 173,882,572 $ 978,293,892 Source: 2006 $ $ $ $ $ $ 523,429,904 41,483,246 131,307,050 696,220,200 311,724,201 79,329,431 53,032,272 444,085,904 835,154,105 120,812,677 184,339,322 1,140,306,104 2007 $ $ $ $ $ $ 591,763,494 40,822,727 173,833,813 806,420,034 369,615,117 32,749,544 68,959,683 471,324,344 961,378,611 73,572,271 242,793,496 1,277,744,378 2008 $ $ $ $ $ $ 602,715,532 65,528,725 220,374,709 888,618,966 427,331,359 32,967,702 41,967,371 502,266,432 1,030,046,891 98,496,427 262,342,080 1,390,885,398 Statement of Net Position City financial records and reports 135 2009 $ $ $ $ $ $ 690,708,494 54,945,644 207,958,657 953,612,795 429,764,018 33,558,490 36,507,370 499,829,878 1,120,472,512 88,504,134 244,466,027 1,453,442,673 2010 $ $ $ $ $ $ 782,205,232 37,649,086 192,278,995 1,012,133,313 469,854,140 19,474,349 53,422,064 542,750,553 1,252,059,372 57,123,435 245,701,059 1,554,883,866 2011 $ $ $ $ $ $ 803,835,704 118,382,244 109,550,684 1,031,768,632 478,230,446 22,733,731 54,791,580 555,755,757 1,282,066,150 141,115,975 164,342,264 1,587,524,389 2012 $ $ $ $ $ $ 816,149,271 118,105,425 111,579,103 1,045,833,799 478,738,661 24,912,356 61,033,753 564,684,770 1,294,887,932 143,017,781 172,612,856 1,610,518,569 2013 $ $ $ $ $ $ 829,001,871 131,550,563 149,159,571 1,109,712,005 493,788,885 21,575,445 71,130,874 586,495,204 1,322,790,756 153,126,008 220,290,445 1,696,207,209 2014 $ $ $ $ $ $ 855,286,264 151,624,692 84,211,745 1,091,122,701 533,623,141 23,153,024 68,382,971 625,159,136 1,388,909,405 174,777,716 152,594,716 1,716,281,837 Table II CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 Expenses Governmental Activities General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Interest on long-term debt Unallocated Depreciation Total governmental activities expenses Business-type Activities Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Housing Total business-type activities expenses Total primary government expenses Program Revenues Governmental Activities Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense)/Revenue Governmental Activities Business-type Activities Total primary government net expense 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 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 $ 20,038,112 25,559,518 36,344,807 23,868,374 9,193,743 31,411,752 7,015,316 1,629,118 12,009,243 574,550 $ 167,644,533 $ $ $ $ $ $ $ $ $ 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 30,836,235 21,083,666 10,806,101 5,176,689 823,780 $ 68,726,471 $ 236,371,004 $ $ $ $ $ $ $ $ $ $ $ 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 $ 18,745,123 12,440,760 21,485,029 52,670,912 $ 19,221,921 12,693,535 11,703,447 43,618,903 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 69,499,963 9,325,636 $ 78,825,599 $ 122,444,502 $ $ $ $ $ $ $ $ (103,644,609) 4,558,626 $ (99,085,983) $ (106,539,587) 8,427,587 $ (98,112,000) $ (124,025,630) 10,099,128 $ (113,926,502) $ $ $ $ (63,700,372) 17,848,311 (45,852,061) Continued 136 $ (74,700,001) (7,473,525) (82,173,526) $ (69,171,524) 38,066,827 (31,104,697) $ $ 17,331,656 11,071,988 30,063,998 58,467,642 61,918,282 135,174 18,219,423 $ 80,272,879 $ 177,247,906 (37,275,047) 23,412,309 (13,862,738) $ $ 17,722,889 13,709,669 34,932,888 66,365,446 53,196,965 137,532 14,097,716 $ 67,432,213 $ 205,584,637 21,087,664 14,288,769 35,376,433 $ $ 17,489,464 13,096,036 55,978,635 86,564,135 47,962,423 136,736 48,121,049 $ 96,220,208 $ 165,735,513 (39,054,460) 46,504,587 7,450,127 $ $ 20,130,962 12,574,749 51,366,296 84,072,007 $ (94,364,808) 1,579,184 (92,785,624) $ Table II CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2005 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes, levied for general purpose $ 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: 2007 Fiscal Year 2010 2008 2011 2012 2012 2013 2014 $ 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 2,744,900 15,479,771 70,213,953 4,194,371 13,431,637 17,172,500 5,495,225 878,164 111,342 3,920,109 (28,205,646) $ 105,436,326 2,846,925 14,546,789 17,393,714 95,363,328 $ 5,222,148 12,660,507 $ 17,882,655 $ 126,635,779 $ 5,851,620 (2,025,489) $ 3,826,131 $ 151,301,012 $ 3,314,515 9,779,262 $ 13,093,777 $ 158,993,081 $ 1,970,474 3,066,497 $ 5,036,971 $ 144,730,801 $ 444,698 1,379,738 3,029,412 $ 4,853,848 $ 132,545,890 $ 306,672 11,119,348 $ 11,426,020 $ 125,426,147 $ 284,427 3,335,912 $ 3,620,339 $ 122,080,163 $ 176,176 (2,101,809) 9,394,454 $ 7,468,821 $ 125,577,734 $ 99,057,278 31,682,483 $ 130,739,761 $ $ $ $ $ $ $ $ $ (18,589,304) 38,663,932 $ 20,074,628 $ $ $ $ 2,926,017 11,240,627 45,535,559 2,498,995 10,038,874 10,076,455 4,639,457 2,930,923 148,518 2,480,978 (14,546,789) 77,969,614 2006 71,478,077 41,294,964 $ 112,773,041 83,774,509 21,674,442 $ 105,448,951 $ 71,199,303 5,620,252 76,819,555 Statement of Activities City financial records and reports (concluded) 137 70,522,306 43,103,798 $ 113,626,104 $ 33,327,234 6,433,032 39,760,266 $ 10,355,518 15,984,646 26,340,164 $ 11,920,237 12,047,926 23,968,163 $ 11,569,326 15,896,408 27,465,734 $ 359,158 28,205,646 $ 28,564,804 $ 134,001,130 Table III CITY OF PEORIA, ARIZONA PROGRAM REVENUES LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 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 $ $ $ $ $ 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 $ 2,747,370 6,927,760 1,283,559 1,737,666 4,614,166 433,400 5,318,686 164,166 13,954,308 59,793,946 96,975,027 33,511,407 14,907,360 10,395,273 2,953,365 150,877 135,174 18,219,423 $ 80,272,879 $ 177,247,906 2008 $ $ 2009 2,293,928 8,111,802 790,269 1,717,319 3,526,784 345,417 8,607,833 130,544 14,382,484 41,598,499 81,504,879 $ 31,866,685 15,423,188 11,216,061 3,279,780 150,737 145,841 22,321,213 $ 84,403,505 $ 165,908,384 Source: Statement of Activities City financial records and reports 138 $ $ $ $ $ 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 2014 $ $ $ 2,303,848 7,299,943 995,068 1,772,238 2,677,468 621,056 3,506,520 45,780 12,693,535 11,703,447 43,618,903 35,800,393 18,455,600 11,309,198 3,103,333 831,439 9,325,636 $ 78,825,599 $ 122,444,502 CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 2006 2005 General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund $ $ General Fund as % of current year revenues (1) Reserved Unreserved Unspendable Restricted Committed Assigned Unassigned Total General Fund Revenues 150,764 52,553,522 52,704,286 $ $ 948,135 65,224,766 66,172,901 2007 $ $ 216,652 74,842,586 75,059,238 Fiscal Year 2009 2008 $ $ 264,489 77,741,727 78,006,216 $ 275,184 67,102,145 $ 67,377,329 Table IV 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 2014 $ 259,643 108,517 33,229,466 3,330,705 13,996,657 $ 50,924,988 $ $ 262,852 54,193 37,028,922 3,340,512 17,308,306 57,994,785 0.2% 64.2% 64.4% 81,842,282 1.0% 67.6% 68.6% 96,472,378 0.2% 70.9% 71.1% 105,613,476 0.2% 71.1% 71.3% 109,388,443 0.3% 70.3% 70.6% 95,474,360 0.3% 69.5% 69.8% 86,668,451 0.0% 0.0% 60.4% 86,457,113 1.3% 0.1% 38.3% 4.2% 14.7% 58.6% 87,756,255 0.3% 0.1% 35.4% 3.6% 14.9% 54.3% 93,753,322 0.3% 0.1% 36.9% 3.3% 17.2% 57.8% 100,373,462 General Fund as % of current year expenditures (2) Reserved 0.2% Unreserved 68.2% Unspendable Restricted Committed Assigned Unassigned Total General Fund 68.4% Expenditures 77,086,642 1.1% 76.4% 77.5% 85,344,491 0.2% 72.0% 72.2% 103,999,097 0.2% 70.2% 70.4% 110,804,124 0.3% 61.1% 61.4% 109,735,012 0.2% 57.0% 57.2% 105,742,332 0.0% 0.0% 52.3% 99,741,106 1.2% 0.1% 35.2% 3.9% 13.5% 53.9% 95,327,780 0.3% 0.1% 32.7% 3.3% 13.8% 50.1% 101,677,037 0.3% 0.1% 36.0% 3.2% 16.8% 56.3% 102,961,677 All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Nonspendable Restricted Committed Assigned Unassigned Total All Other Governmental Funds * $ 82,831,364 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 $ 95,828 168,127,814 10,064,814 40,566,996 (84,673) $ 218,770,779 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 139 - $ - 98,819 188,434,944 10,004,379 25,988,041 $ 224,526,183 $ - 131,641 145,352,432 10,300,556 23,410,508 $ 179,195,137 CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Table V Fiscal Year 2005 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: $ 2006 2007 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 $ 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 $ 18,144,444 13,935,373 20,915,014 12,206,093 4,575,963 13,930,314 3,993,427 1,768,107 3,849 33,148,181 $ $ 7,046,576 15,304,972 144,972,313 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% $ 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% 2008 $ 2009 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% $ 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% Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 140 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 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 $ 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 $ $ $ 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 $ 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 $ $ $ $ (65,507,373) $ (17,236,370) $ (5,820,000) $ $ 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) 28.71% 2014 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 12,658,032 34,309,287 192,780,638 32.65% 2013 13,098,263 25,566,028 178,812,735 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 93,731,980 50,132,922 17,684,357 2,800,894 2,128,289 731,901 757,747 1,137,018 5,060,343 $ 174,165,451 15,866,612 21,762,725 35,839,651 23,137,222 9,311,964 17,098,590 5,110,924 1,604,288 17,728,188 12,534,039 20,120,163 $ 195,784,242 12,543,974 21,937,761 $ 181,941,899 $ (21,040,603) $ $ 35,510,000 1,039,481 16,968,105 (27,205,066) $ 26,312,520 $ $ 14,715,000 13,690,000 (13,690,000) 645,188 (464,390) 16,740,587 (18,106,961) 13,529,424 $ 7,709,424 $ $ (36,155,195) 25.36% 5,271,917 20.91% (7,776,448) 112,000 20,159,941 (48,650,688) $ (28,378,747) 21.00% CITY OF PEORIA, ARIZONA GOVERNMENT-WIDE REVENUES BY FUNCTION LAST TEN FISCAL YEARS (accrual basis of accounting) 2005 Governmental Activities: General Government Culture & Recreation Police Fire Development Services Highways & Streets Public Works Human Services Unallocated General Revenues Total Governmental Activities $ 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 $ $ $ $ $ Total Primary Government $ 261,098,841 49,238,279 34,300,518 9,454,742 2,961,792 264,877 2,846,925 99,067,133 $ 2007 5,155,229 11,784,749 2,579,817 3,075,988 6,545,647 34,210,694 4,161,349 2,001,832 92,516,403 $ 162,031,708 Business-type Activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Housing Unallocated General Revenues Total Business-type Activities Note: 2006 $ 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 $ Fiscal Year 2009 2008 $ $ 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 $ 57,524,177 41,038,763 11,884,971 2,800,976 285,987 1,824,436 115,359,310 $ 324,901,465 $ 300,724,774 $ 332,644,899 $ 3,872,997 12,673,351 3,468,250 3,202,518 4,148,578 42,357,347 8,929,561 2,852,277 155,678,566 237,183,445 Unallocated General Revenues do not include transfers between governmental activities and business-type activities. Source: Statement of Activities. City financial records and reports 141 $ 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 $ Table VI $ 2011 $ 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 $ 3,483,196 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 2012 $ 2013 $ 2014 $ 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 2,442,411 10,237,916 2,149,064 2,817,561 3,690,878 17,384,825 3,547,548 1,348,700 133,641,972 $ 177,260,875 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 41,411,990 21,966,561 11,309,198 3,103,333 1,034,517 359,158 79,184,757 $ 258,006,016 $ 255,154,720 $ $ 254,939,155 $ $ $ 256,445,632 Table VII CITY OF PEORIA, ARIZONA TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 45,535,559 2,498,995 2006 $ 61,156,870 3,004,895 2,285,792 10,688,571 2,612,397 12,393,713 2,896,360 13,211,927 2,975,900 19,176,935 2,691,525 24,105,340 3,188,468 23,564,788 Special District* Taxes 868,197 796,821 1,571,936 3,633,664 3,729,995 In Lieu Taxes 293,417 273,644 242,246 256,107 345,155 Transaction Taxes (1) Franchise Taxes Property Taxes Primary Taxes Secondary Taxes $ $ 2007 68,873,970 3,983,701 $ 2008 68,466,910 3,848,746 $ 2009 59,004,816 4,019,182 $ 2010 56,276,937 3,955,416 2012 60,719,648 4,084,163 2013 $ 65,950,235 4,136,004 2014 $ 71,237,141 4,194,371 2,866,098 20,037,286 2,521,692 16,735,182 2,214,665 14,568,676 1,993,395 13,222,843 3,554,681 2,978,348 2,895,288 2,826,052 2,838,553 243,351 242,926 247,158 253,093 245,677 $ 2011 58,082,217 4,037,897 $ Total Property Taxes $ 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 $ 18,300,468 Total Taxes $ 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 $ 93,731,980 (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 142 Table VIII CITY OF PEORIA, ARIZONA INTERGOVERNMENTAL REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 State Shared Sales Tax $ 10,038,874 County Shared Sales Tax Urban Revenue Sharing 10,076,455 Auto in-Lieu 4,639,457 HURF Revenues 7,878,977 Local Transportation Aid 650,056 Federal 2,685,415 Other 778,059 Total Intergovernmental Revenue $ 36,747,293 Notes: Source: $ $ 2006 11,681,284 11,707,782 5,251,577 8,475,784 657,162 2,822,321 1,303,622 41,899,532 2007 $ 13,130,116 15,996,992 5,725,299 9,870,460 658,598 3,101,796 15,800,183 $ 64,283,444 $ $ 2008 12,695,890 19,539,768 5,546,558 9,488,625 666,237 2,904,788 1,770,683 52,612,549 $ $ Includes all governmental fund types Includes all governmental revenues, including revenues from federal government City financial records 143 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 $ $ 2014 13,431,637 17,172,500 5,495,225 8,691,989 2,717,331 2,624,240 50,132,922 CITY OF PEORIA, ARIZONA DEVELOPMENT/EXPANSION FEES BY TYPE LAST TEN FISCAL YEARS 2006 2005 Governmental Activities: Streets Parks/Recreation Library Public Safety General Government Total Governmental Activities $ $ 7,029,058 5,045,791 1,028,504 2,730,568 2,020,208 17,854,129 Business-type Activities: Water Expansion Water Resource Wastewater Expansion Solid Waste Expansion Total Business-type Activities Total Primary Government $ 2007 $ 8,460,281 5,113,046 969,582 3,275,831 2,105,106 19,923,846 $ $ 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 $ 4,973,097 1,133,833 2,719,879 621,892 9,448,701 $ 32,842,722 $ 33,821,041 $ 33,071,271 Fiscal Year 2009 2008 2010 2011 2012 $ 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 $ 4,521,099 1,425,820 141,526 869,324 184,101 $ 7,141,870 898,045 258,463 460,210 120,700 $ 1,737,418 1,111,092 225,007 563,836 121,188 $ 2,021,123 $ 8,130,644 $ 6,644,318 $ 11,093,775 4,020,306 691,434 5,649,715 2,167,340 23,622,570 $ 8,950,451 3,647,109 501,209 3,515,573 1,413,319 $ 18,027,661 $ 3,297,819 659,750 1,863,749 458,804 $ 6,280,122 $ 1,073,071 321,008 447,047 110,359 1,951,485 $ 24,307,783 $ 7,341,090 Source: City financial records 144 Table IX 2013 $ $ 5,824,877 1,844,398 176,537 1,070,881 (567) 8,916,126 1,531,494 372,805 916,117 70,434 $ 2,890,850 $ $ 10,032,720 2014 $ $ 859,868 2,324,198 190,830 1,101,638 567 4,477,101 1,661,806 447,053 1,096,764 3,205,623 $ 2,483,440 558,701 1,269,012 4,311,153 $ 12,121,749 $ 8,788,254 CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS Table X Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 36,878,825 6,301,005 7,214,392 7,388,831 1,262,651 8,505,082 960,332 624,795 2,101,228 Total $ 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 $ 71,237,141 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other 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% 8.1% 33.6% -8.9% 0.6% 0.3% 4.1% -3.3% 31.6% 118.7% Total 12.2% 34.3% 12.6% -0.6% -13.8% -4.6% 3.2% 4.5% 8.6% 8.0% Note: Includes all governmental fund types Source: City financial records and reports 145 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Table XI Year Taxes Are Payable 2008 2009 2010 2005 2006 2007 City Direct Rates (1): Retail Sales (excluding groceries) Groceries Contracting Rentals Hotel/Transient Lodging Utilities Telecommunications Restaurant/Bar Amusement All Others 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% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 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% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% County Rates: Retail Sales (excluding groceries) Groceries Rental Occupancy Hotel/Transient Lodging Mining - Nonmetal All Others 0.70% 0.70% 3.00% 1.77% 0.44% 0.70% 0.70% 0.70% 3.00% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% State Rates (2): Retail Sales (excluding groceries) Groceries Hotel/Transient Lodging Mining - Nonmetal Mining - Severance All Others 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 2011 2012 2013 2014 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% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 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% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 5.60% 5.50% 3.13% 2.50% 5.60% 6.60% 6.50% 3.13% 2.50% 6.60% 6.60% 6.50% 3.13% 2.50% 6.60% 6.60% 6.50% 3.13% 2.50% 6.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% Notes: (1) Pursuant to City Charter, increases in the City transaction privilege (sales) tax rates are subject to voter approval. The City collects is own sales taxes. The City has earmarked 0.8% of its sales tax for payment of Excise Tax and State Shared Revenue Obligations. (2) The State transaction privilege (sales) tax is levied against the same categories of business activity as the City's sale tax with the exception of groceries and prescription drugs, which the State exempts from tax. The State collects and distributes a portion of its sales tax revenues to all cities and towns based on the city or town's population relative to the aggregate population of all cities and towns as shown by the latest census. Source: ADOR Transaction Privilege And Other Tax Rate Tables 146 Table XII CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND NINE YEARS AGO 2014 Category Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others Total # of Payers Percentage of Total Payers 2005 Sales Tax Paid Percentage of Total City Sales Tax Revenue # of Payers Percentage of Total Payers Sales Tax Paid Percentage of Total City Sales Tax Revenue 3,292 3,910 355 6,550 15 182 1,353 62 84 20.83% 24.74% 2.25% 41.45% 0.09% 1.15% 8.56% 0.39% 0.53% $ 36,878,825 6,301,005 8,505,082 7,214,392 7,388,831 1,262,651 624,795 960,332 2,101,228 51.8% 8.8% 11.9% 10.1% 10.4% 1.8% 0.9% 1.3% 2.9% 2,365 3,216 235 2,867 9 126 857 45 402 23.4% 31.8% 2.3% 28.3% 0.1% 1.2% 8.5% 0.4% 4.0% $ 21,861,810 7,871,565 5,052,224 4,297,474 2,576,655 920,471 570,265 549,702 1,835,393 48.0% 17.3% 11.1% 9.4% 5.7% 2.0% 1.3% 1.2% 4.0% 15,803 100.00% $ 71,237,141 100.00% 10,122 100.00% $ 45,535,559 100.00% Source: City Sales Tax system City financial records 147 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, Mining & Utilities Agriculture & Vacant Railroad Historic & Environmental Public Property Improvements 2005 $ 497,294,057 51,436,849 2006 $ 582,512,691 64,003,067 218,209,727 58,949,534 1,712,708 30,780 - 242,554,778 73,674,495 1,724,400 - $ 2007 626,591,494 75,761,506 2008 $ 1,041,693,334 116,115,688 Fiscal Year 2009 $ 1,219,595,280 146,413,989 2010 $ 1,048,710,389 155,720,660 293,807,014 117,630,028 1,830,109 - 334,323,557 148,077,787 1,918,660 58,450 - 419,192,584 207,476,727 1,837,324 76,020 - 495,336,050 193,685,182 1,647,040 64,530 - $ 2011 818,535,888 147,284,152 Table XIII $ 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 2014 546,593,560 161,107,937 304,844,019 43,659,181 1,118,206 83,177 7,124 Net Assessed Value % Growth $ 827,633,655 10.3% $ 964,469,431 16.5% $ 1,115,620,151 15.7% $ 1,642,187,476 47.2% $ 1,994,591,924 21.5% $ 1,895,163,851 -5.0% $ 1,609,972,512 -15.0% $ 1,276,335,862 -20.7% $ 1,137,434,740 -10.9% $ 1,057,413,204 -7.0% Net Assessed Value Per Capita Population $ $ $ $ $ $ $ $ $ $ Total Direct Secondary Tax Rate Full Cash Value % Growth Full Cash Value Per Capita Net Assessed Value as a Percentage of Full Cash Value 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 11.2% 10,557 155,560 1.25 15,118,988,316 51.2% $ 97,191 10.9% 12,524 159,263 1.25 18,279,838,277 20.9% $ 114,778 10.9% 12,301 154,065 1.25 17,162,776,025 -6.1% $ 111,400 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% Note: All property, both real and personal, is assigned a classification to determine its assessed valuation for tax purposes. Each classification is defined by property use and has an assessment ratio that is multiplied by the taxable value of the property to obtain the assessed valuation. The assessment ratios for the major classes of property are as follows: Property Tax Assessment Ratios (a) Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Commercial, Industrial, Mining & Utilities (b) 25.0% 25.0% 24.5% 24.0% 23.0% 22.0% 21.0% 20.0% 20.0% 19.5% Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Agriculture and Vacant Land (c) 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% Railroad 21% 21% 22% 21% 20% 18% 17% 15% 15% 15% (a) Several additional classes of property exist, but seldom amount to a significant portion of an entity's total valuation. (b) The assessment ratio for commercial, industrial, mining & utility properties will be reduced to 19% in fiscal year 2015, 18.5% in fiscal year 2016 and 18% for fiscal year 2017 and thereafter. (c) The assessment ratio for agriculture and vacant properties will be reduced to 15% in fiscal year 2017 and thereafter. Source: Arizona Department of Revenue - Property Tax Division abstract of the assessment roll City financial records 148 7,087 160,504 1.25 10,635,350,631 -10.3% $ 66,262 10.7% 6,444 164,104 1.25 10,057,364,678 -5.4% $ 61,287 10.5% CITY OF PEORIA, ARIZONA COMPARATIVE SECONDARY ASSESSED VALUE LAST TEN FISCAL YEARS Table XIV Fiscal Year 2005 2007 2008 2009 2010 2011 2012 2013 2014 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 $ 1,057,413,204 1,135,684,510 1,297,757,445 1,467,901,555 2,064,548,189 2,484,660,275 2,393,720,410 2,030,314,508 1,581,371,147 1,460,442,551 1,350,310,615 Maricopa County 30,066,986,670 33,168,406,054 36,294,693,601 49,534,573,831 58,303,635,287 57,984,051,727 49,662,543,618 38,760,296,498 34,400,455,712 32,229,006,810 State of Arizona 44,480,893,202 48,931,946,145 54,394,764,521 71,852,630,420 86,183,351,753 86,525,272,506 75,664,423,588 61,764,402,437 56,283,023,907 52,598,341,678 City of Peoria Peoria Unified School District No. 11 $ 827,633,655 2006 $ Source: Arizona Department of Revenue - Property Tax Division abstract of the assessment roll City financial records 149 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 2005 Total Direct City Primary Secondary Total $ 0.29 1.30 1.59 2006 $ 0.29 1.30 1.59 2007 $ 0.28 1.20 1.48 Fiscal Year 2009 2010 2008 $ 0.24 1.25 1.49 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 Table XV 2011 $ 0.19 1.25 1.44 2012 $ 0.19 1.25 1.44 2013 $ 0.19 1.25 1.44 2014 $ 0.19 1.25 1.44 Peoria Unified School District No. 11 (1) Primary Secondary 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 4.18 3.35 Maricopa County (2) Primary Secondary 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 3.08 0.79 State of Arizona Primary Secondary - - - - - - - - - - 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 6.58 3.47 10.05 7.07 5.05 12.12 7.45 5.39 12.84 Total Primary Secondary Total (1) Peoria Unified School District 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: Primary Secondary Deer Valley Unified School District $ 3.91 $ 2.85 (2) The Maricopa County rates includes the rates for the County, State Education Equalization Assistance and other county districts and special districts as follows: Maricopa County State Education Equalization Asistance Maricopa County Community College District Maricopa County Flood Control District Maricopa County Fire District Assistance Maricopa County Library District Maricopa County Special Health Care District West Maricopa Education Center Central Arizona Water Conservation District Fiscal Year 2014 Tax Rate Primary $ 1.28 0.51 1.29 $ 3.08 Secondary $ 0.24 0.14 0.01 0.04 0.19 0.06 0.10 $ 0.79 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 150 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS Table XVI Tax Levies Fiscal Year 2006 2005 Total Direct City Primary Secondary Total Peoria Unified School District No. 11 (1) Primary Secondary Maricopa County (2) Primary Secondary State of Arizona Primary Secondary Total Primary Secondary Total $ 2,295,435 10,759,238 13,054,673 $ 2007 2,640,883 12,538,103 15,178,986 $ 2008 3,012,725 13,387,442 16,400,167 $ 2009 3,002,150 20,527,343 23,529,493 $ 2010 2,849,397 24,932,399 27,781,796 $ 2011 3,202,665 23,689,548 26,892,213 $ 2012 2,901,540 20,124,656 23,026,196 $ 2013 2,411,739 15,954,198 18,365,937 $ 2014 2,154,484 14,217,934 16,372,418 $ 1,998,305 13,217,665 15,215,970 48,345,544 44,291,944 50,475,795 49,294,120 58,945,121 48,531,032 61,400,326 56,465,081 71,071,459 47,095,296 63,259,063 58,903,282 63,956,114 43,487,879 60,801,278 27,635,770 58,370,644 44,104,877 56,069,720 45,266,377 726,446,055 145,100,016 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 811,397,481 312,172,569 1,016,398,826 312,960,824 1,030,448,332 295,233,122 1,031,164,830 264,170,408 982,926,843 249,995,761 986,315,014 251,345,124 777,087,034 200,151,198 977,238,232 - - 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 1,164,709,556 885,318,337 384,200,264 1,269,518,601 1,082,860,554 395,553,654 1,478,414,208 (1) The Peoria Unified School District serves the majority of the City of Peoria. Other ares of the City are served by Deer Valley Unified School District, whose most recent tax levies are as follows: Deer Valley Unified School District Primary $ 81,894,797 $ Secondary 59,824,187 (2) The tax levies for Maricopa County include those for the County, State Education Equalization, and other county and special districts whose most recent tax levies are as follows: Maricopa County State Education Equalization Asistance Maricopa County Community College District Maricopa County Flood Control District Maricopa County Fire District Assistance Maricopa County Library District Maricopa County Special Health Care District West Maricopa Education Center Central Arizona Water Conservation District Fiscal Year 2014 Tax Levy Primary $ 409,775,397 163,916,558 412,623,059 $ 986,315,014 Secondary 78,752,950 39,842,985 3,913,249 14,116,305 62,499,144 7,084,268 45,136,223 $ 251,345,124 $ Note: All rates rounded to two decimal places from the four shown by the County SourceMaricopa County Assessor - Tax Rates and Levies publication 151 1,097,305,986 358,845,657 1,456,151,643 1,094,377,847 307,760,376 1,402,138,223 1,043,451,971 308,318,572 1,351,770,543 1,044,383,039 309,829,166 1,354,212,205 CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XVII 2014 Taxpayer Arizona Public Service Sprint Nextel Wireless LP Vestar Arizona XLVIII LLC Parke West LLC DDRA Arrowhead Crossing LLC Miller Family Real Estate LLC Southwest Gas Corporation Vestar LPTC LLC Excel Lake Pleasant LLC Target Corporation Plaza III Limited Partnership BCC Development Inc Peoria Center Apartments South LLC Inland Western Glendale LLC Qwest Corporation PDG America Properties LLC ERGS III Arrowhead Owner LLC Wal Mart Stores Inc North Valley Plaza LLC Harkins Phoenix Cinemas LLC Safeway Sprint Spectrum LP Developers Diversified Realty Corp. Larry Miller Real Estate - Dealerships Cox Communications Albertsons Kimco Barclay Peoria Crossings Peoria Ni Industrial One LLC Camden Operating Tr Arizona Inc Salt River Project Total Type of Business Gas & Electric Utility Telecommunications Property Development Shopping Center Shopping Center Shopping Center Gas Utility Property Development Shopping Center Shopping Center Nursing Home/Apartments Property Development Multi-family Housing Shopping Center Telecommunications Shopping Center Shopping Center Shopping Center Shopping Center Movie Theater Grocery Store Telecommunications Shopping Center Auto/Light Truck Dealership Cable & Telecommunications Grocery Store Shopping Center Manufacturing Multi-family Housing Gas & Electric Utility Taxable Secondary Assessed Value Rank $ 23,928,175 1 7,828,821 2 4,986,864 3 4,984,045 4 4,493,481 5 4,397,673 6 3,992,858 7 3,832,994 8 3,737,680 9 3,688,771 10 3,326,800 11 3,283,364 12 3,248,950 13 3,246,667 14 3,129,224 15 2,773,064 16 2,670,610 17 2,668,893 18 $ 90,218,934 2005 Percentage of Total City Taxable Secondary Assessed Value 2.26% 0.74% 0.47% 0.47% 0.42% 0.42% 0.38% 0.36% 0.35% 0.35% 0.31% 0.31% 0.31% 0.31% 0.30% 0.26% 0.25% 0.25% 7.93% Percentage of Total City Taxable Taxable Secondary Secondary Assessed Assessed Value Rank Value $ 13,934,529 2 1.68% 0.00% 0.00% 0.00% 0.00% 0.00% 4,086,766 8 0.49% 0.00% 0.00% 3,764,438 9 0.45% 2,898,316 16 0.35% 0.00% 0.00% 0.00% 11,024,328 3 1.33% 3,530,239 12 0.43% 0.00% 0.00% 3,087,842 14 0.37% 2,952,946 15 0.36% 3,213,113 13 0.39% 6,161,851 4 0.74% 6,114,746 5 0.74% 4,830,525 7 0.58% 5,957,645 6 0.72% 3,764,329 10 0.45% 3,615,061 11 0.44% 2,871,768 17 0.35% 2,550,384 18 0.31% 18,453,923 1 2.23% $ 45,279,404 6.83% Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For Fiscal year 2014, the assessed value of Salt River Project property within the City of Peoria is $16,542,717. Source - Maricopa County Treasurer's Office 152 Table XVIII CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Year Ended June 30, Taxes Levied for the Fiscal Year (1) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 13,054,673 15,178,986 16,400,167 23,529,493 27,781,796 26,892,213 23,026,196 18,365,937 16,372,418 15,215,970 Notes: (1) (2) Source: Collected with the (2) Fiscal Year of the Levy Percentage Amount of Levy $ 12,731,497 14,715,154 15,784,673 22,741,557 26,280,210 25,561,505 21,884,397 17,628,300 15,962,490 14,882,168 97.52% 96.94% 96.25% 96.65% 94.60% 95.05% 95.04% 95.98% 97.50% 97.81% Collections in Subsequent (2) Years $ 259,426 346,422 405,985 718,100 944,567 783,339 565,191 431,758 279,198 - Levy figures obtained from Maricopa County Tax Levy Books-February Publication. Collection amount obtained from Maricopa County Treasurer's Secured Levy Report Maricopa County Treasurer's Office Maricopa County Assessor's Office City financial records and reports 153 Total Collections To Date Percentage Amount of Levy $ 12,990,923 15,061,576 16,190,659 23,459,657 27,224,776 26,344,844 22,449,588 18,060,057 16,241,689 14,882,168 99.51% 99.23% 98.72% 99.70% 98.00% 97.96% 97.50% 98.33% 99.20% 97.81% CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS 2005 Water Average bill $ % Increase Wastewater Average bill % Increase Residential Solid Waste Average bill % Increase 35.53 $ -9.04% 2007 34.59 $ -2.65% 34.85 $ 0.75% Average Utility Bill Amounts Last Ten Fiscal Years 2008 2009 2010 35.59 $ 2.12% 36.73 $ 3.20% 2011 35.46 $ -3.46% 34.36 $ -3.10% 2012 38.00 $ 10.59% 2013 2014 37.41 $ -1.55% 37.31 -0.27% 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% 23.36 -3.31% 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% 13.38 0.00% 2005 Water # % Increase Wastewater # % Increase Residential Solid Waste # % Increase 2006 Table XIX 2006 2007 Utility Service Connections Last Ten Fiscal Years 2008 2009 2010 2011 2012 2013 2014 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% 50,399 1.99% 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% 53,548 1.66% 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% 51,609 1.74% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2014 Meter Size 5/8"-3/4" 1" 1 1/2" 2" 3" 4" 6" 8" All Customers $ 15.54 18.39 29.09 40.85 72.26 107.55 205.53 323.16 Charges for Wastewater Services As of June 30, 2014 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 Monthly Volume Charge (b) All Customers 2.18 (a) Base service charge is based on each bill rendered. (b) For residential & multi-plex users, volume is measured as the rate per 1,000 gallons of a three-month winter average (December - February). For commercial customers, the volume charge is based on actual monthly usage. Source: City customer service and billing records (continued) 154 Table XIX 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, 2014 Residential Multiplex (per 1,000 gallons) (per 1,000 gallons) $ 1.00 $ 2.59 3.66 4.00 - Commercial (per 1,000 gallons) $ - 1.00 2.59 3.66 Water Meter Permit Charges As of June 30, 2014 Charge Meter Size 317 $ 3/4" 493 1 1/2" 629 - 1,033 2" 1,751 - 2,662 3" 2,231 - 3,172 4" 3,781 - 5,086 6" 1,280 Hydrant meter By meter size Commercial accounts Charges for Residential Solid Waste As of June 30, 2014 Monthly fee 13.10 Single container & recycling $ 10.50 Additional container 1.00 2.59 3.66 Charges for Storm Water As of June 30, 2014 Monthly All Customers Base charge $ 1.00 (a) Base service charge is based on each bill rendered. (b) For residential & multi-plex users, volume is measured as the rate per 1,000 gallons of a three-month winter average (December - February). For commercial customers, the volume charge is based on actual monthly usage. Source: City customer service and billing records (continued) 155 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND TEN YEARS AGO Table XIX 2014 Entity City of Peoria Padre's Pump Station Desert Harbor Lake Ventana Lakes N. of Beardsley Lake Trilogy at Vistancia Liberty High School Westwing Mountain HOA Sun Garden Park II HOA Pleasant Valley HOA Christ's Church of the Valley Centennial High School Desert Vista Pool/Clubhouse Freedom Plaza LTD Partnership Polynesian Village Sun Garden Mobile Home Park Equity Lifestyle Properties - Casa del Sol East Equity Lifestyle Properties - Casa del Sol West Parkridge Park Type of User Sports Complex Homeowner's Association Homeowner's Association Commercial Landscape Public School Homeowner's Association Homeowner's Association Homeowner's Association Church Public School Homeowner's Association Healthcare Facility Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association City Park % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 6,758 1 0.94% 6,642 2 0.92% 3,541 3 0.49% 3,436 4 0.48% 2,326 5 0.32% 1,961 6 0.27% 1,922 7 0.27% 1,704 8 0.24% 1,629 9 0.23% 1,488 10 0.21% Source: City customer service and billing records (concluded) 156 2005 % of Average Avg Monthly Monthly Water Water Usage Ranking Usage 5,050 3 0.88% 5,394 2 0.94% 0.00% 2,739 4 5,991 1,579 1,578 1,450 1,390 1,387 1,191 1 5 6 7 8 9 10 0.48% 0.00% 0.00% 0.00% 1.04% 0.28% 0.27% 0.25% 0.24% 0.24% 0.21% Table XX CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2006 2005 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 $ 358,413,884 $ 422,209,922 $ 458,153,746 $ 463,659,105 $ 428,920,537 $ 412,613,906 $ $ 2,333.55 $ 2,714.13 $ 2,876.71 $ 3,009.50 $ 2,764.59 $ 2,631.80 $ 1,560.28 4.8% 1,422.57 4.1% $ 19,555,000 127,917,495 1,579,347 1,235,000 6.2% 7.1% Source: City financial records. See Exhibits 1 & 2 and footnote 14. 157 183,060,000 60,985,393 3,005,000 10,402,812 63,060,000 $ 18,000,000 117,346,302 1,229,607 1,064,632 7.6% 184,960,000 55,943,338 8,042,321 60,890,000 $ 15,780,000 130,298,508 861,662 6,883,276 8.5% 167,580,000 58,365,965 6,155,000 58,615,000 $ 2013 $ 206,449,823 21,050,000 88,021,820 1,906,470 - 126,195,000 65,795,653 3,295,000 12,027,427 64,610,000 2012 23,275,000 47,387,253 2,226,422 - Total Debt Per Capita $ 2011 25,395,000 50,042,301 2,505,001 213,828,854 142,835,000 21,653,530 3,570,000 13,292,064 66,085,000 2010 $ 51,205,000 24,628,578 3,830,000 9,822,570 44,075,000 $ $ Fiscal Year 2009 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 - 7.8% 170,960,000 52,480,000 4,660,000 56,230,000 $ 162,375,000 85,230,000 3,520,000 53,725,000 $ 152,820,000 81,035,000 3,195,000 51,095,000 37,295,000 82,212,652 - 32,720,000 77,780,535 - $ 424,357,652 $ 398,645,535 $ 2,643.91 38,480,000 89,803,906 - 7.4% 2014 7.1% $ 2,429.22 6.4% CITY OF PEORIA, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO FULL CASH VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Fiscal Year 2009 2005 2006 2007 2008 $ 55,380,000 $ 51,205,000 $ 142,835,000 $ 126,195,000 17,598,666 $ 37,781,334 24,205,524 $ 26,999,476 34,727,031 $ 108,107,969 Percentage of Net Bonded Debt to Full Cash Value 0.5% 0.3% Percentage of Net Bonded Debt to Secondary Assessed Value 4.6% Net Bonded Debt Per Capita Net Bonded Debt as a % of Personal Income Bonded Debt (1) Less: Debt Service Reserves (2) Net Bonded Debt 2010 2011 2012 2013 2014 $ 183,060,000 $ 184,960,000 $ 167,580,000 $ 170,960,000 $ 162,375,000 $ 152,820,000 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 28,924,537 $ 123,895,463 1.1% 0.6% 0.8% 0.9% 0.9% 1.2% 1.2% 1.2% 2.8% 9.7% 5.5% 6.9% 7.9% 8.4% 11.0% 11.6% 11.7% $276 $186 $704 $577 $867 $971 $875 $894 $820 $755 0.85% 0.53% 1.88% 1.50% 2.30% 2.74% 2.47% 2.53% 2.20% 1.99% (1) Represents face value of general obligation debt outstanding (2) Fund balance of GO Bond Debt Service Fund per the fund financial statements Note: Table XXI Personal income and population information may be found on Table XXXII Full cash value information may be found on Table XIII Sources - City debt service schedules. See Exhibits 1 & 2, also footnote 14. 158 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2014 Secondary Assessed Valuation Governmental Unit Overlapping: State of Arizona $ 52,598,341,678 Maricopa County 32,229,006,810 Maricopa County Community College Distr 32,229,006,810 Maricopa County Flood Control District 28,622,833,869 Maricopa County Library District 32,229,006,810 Maricopa County Fire District Assistance 32,229,006,810 Maricopa County Special Health Care Distr 32,229,006,810 Central AZ Water Conservation 32,240,159,338 West MEC Vocational District 11,569,641,364 Sub-total - City-wide overlapping Total City-wide debt levies (3) Unified School Districts: Peoria No. 11 Deer Valley No. 97 Nadaburg No. 81 General Obligation Bonds Outstanding (2) $ 921,493,428 133,844,194 1,866,966 Percentage Applicable to City of Peoria (1) Table XXII Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 712,735,000 35,000,000 2.01% 3.28% 3.28% 3.69% 3.28% 3.28% 3.28% 3.28% 9.14% $ 238,910,000 215,400,000 1,295,000 87.15% 12.66% 0.18% 208,200,535 27,264,686 2,286 235,467,507 262,050,732 152,820,000 100.00% 152,820,000 Total overlapping 23,384,382 3,198,843 26,583,225 179,403,225 $ 0.24 0.14 0.04 0.01 0.19 0.10 0.06 3.35 2.85 0.66 Direct: City of Peoria $ 1,057,413,204 $ $ Total direct and overlapping debt 414,870,732 Notes: Overlapping governments are those that coincide, at least in part, with the geographical boundaries of the city. This table estimates the portion of outstanding debt of those overlapping governments that is borne by the residents and businesses in the city. This process recognizes that, when considering the city's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) Percentage applicable to the City is computed on the ratio of secondary assessed valuation. (2) Includes total stated principal amount of general obligation bonds outstanding. Does not include certificates of participation, revenue obligations or loan obligations outstanding for the jurisdictions listed. (3) Total City-wide debt levies are County debt plus City debt. Sources: - City of Peoria financial records - Maricopa County Treasurer - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 159 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2014 Governmental Unit Overlapping: State of Arizona $ Maricopa County Maricoopa County Community College District Maricopa County Flood Control District Maricopa County Library District Maricopa County Fire District Assistance Maricopa County Special Health Care District 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 Secondary Assessed Valuation 52,598,341,678 32,229,006,810 32,229,006,810 28,622,833,869 32,229,006,810 32,229,006,810 32,229,006,810 32,240,159,338 11,569,641,364 Debt Outstanding (2) $ 921,493,428 133,844,194 1,866,966 Percentage Applicable to City of Peoria (1) Table XXIII Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 712,735,000 35,000,000 2.01% 3.28% 3.28% 3.69% 3.28% 3.28% 3.28% 3.28% 9.14% $ 238,910,000 215,400,000 1,295,000 87.15% 12.66% 0.18% 208,200,535 27,264,686 2,286 235,467,507 262,050,732 291,363,178 100.00% 291,363,178 Total overlapping 23,384,382 3,198,843 26,583,225 317,946,403 $ 0.24 0.14 0.04 0.01 0.19 0.10 0.06 3.35 2.85 0.66 Direct: City of Peoria (3) 1,057,413,204 $ Total direct and overlapping debt $ 553,413,910 Notes: Overlapping governments are those that coincide, at least in part, with the geographical boundaries of the city. This table estimates the portion of outstanding debt of those overlapping governments that is borne by the residents and businesses in the city. This process recognizes that, when considering the city's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) Percentage applicable to the City is computed on the ratio of secondary assessed valuation. (2) Includes total stated principal amount of general obligation bonds outstanding. Does not include certificates of participation, revenue obligations or loan obligations outstanding for the jurisdictions listed. (3) Total City-wide debt levies are County debt plus City debt. Sources: - City of Peoria financial records - Maricopa County Treasurer - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 160 $ 1.25 Table XXIV CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit 2005 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 $ 11,690,706 11,690,706 160,387,744 2006 $ 11,594,345 11,594,345 163,028,901 2007 $ 10,710,280 10,710,280 297,071,313 Fiscal Year 2009 2008 $ 18,505,348 18,505,348 331,783,787 $ 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 3,198,843 28,556,257 394,014,419 2014 $ 23,384,382 3,198,843 26,583,225 317,946,402 134,340,540 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 25,160,995 284,900 188,479,689 208,200,535 27,264,686 2,286 235,467,507 Total overlapping 150,095,061 228,792,839 240,206,823 258,196,431 249,102,302 213,773,136 245,270,794 225,263,267 217,035,946 262,050,732 Direct (2): City of Peoria 148,697,038 151,434,556 286,361,033 313,278,439 376,343,063 384,194,880 360,625,619 349,882,952 365,458,162 291,363,177 $ 298,792,099 $ 380,227,395 526,567,856 $ 571,474,870 Total direct and overlapping debt $ $ 625,445,365 (1) - Total City-wide debt levies are County debt plus City debt. (2) - Due to a recommended change in accounting principle, the contracts payable category is no longer being used to calculate direct governmental activities debt. Sources: City Financial Records - Maricopa County Treasurer for debt of other entities 161 $ 597,968,016 $ 605,896,413 $ 575,146,219 $ 582,494,108 $ 553,413,909 Table XXV CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS 2005 2006 2007 2008 Fiscal Year 2009 2010 2011 2012 2013 2014 $ 1,609,972,512 $ 1,276,335,862 $ 1,137,434,740 $ 1,057,413,204 $ $ $ Secondary Assessed Value $ 827,633,655 $ 964,469,431 $ 1,115,620,151 $ 1,642,187,476 $ 1,994,591,924 $ 1,895,163,851 6% Limitation Debt limit $ 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 $ 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 $ 33.0% 23.1% 165,526,731 $ 192,893,886 38,980,000 37,855,000 126,546,731 $ 155,038,886 23.5% 19.6% Total net debt applicable to the limit as a percentage of debt limit Note: 66,937,209 28,470,000 $ 38,467,209 13,310,000 $ 42.5% $ 223,124,030 108,759,030 51.3% 85,221,249 $ 328,437,495 $ 215,552,495 112,930,515 $ 398,918,385 $ 34.4% 222,603,385 44.2% See footnote 14 for discussion of 6% and 20% limitations. Source: Maricopa County Assessor Exhibit 3 to the Financial Statements 162 $ 4 108,144,831 $ 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 $ 227,486,948 $ 66,776,948 70.6% 63,094,792 0.6% $ 160,710,000 $ 63,444,792 350,000 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 $ 98,531,249 211,482,641 152,470,000 $ 59,012,641 72.1% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS 2005 2006 2007 Fiscal Year 2009 2010 2008 Table XXVI 2011 2012 2013 2014 Senior Lien MDA Debt (excludes 2008 Transportation MDA Debt) Pledged Revenues Sales and use taxes (1) State-shared sales tax Urban revenue sharing Franchise taxes License and permits Fines and forefeitures User fees and charges Miscellaneous Total Pledged Revenues Senior Lien Debt Service Requirements Principal (2) Interest (2) Total Senior Lien Debt Service Requirements Estimated Coverage (6) $ 45,535,559 10,038,874 10,076,455 2,498,995 5,041,680 1,794,776 12,450,732 2,370,325 $ 89,807,396 $ 57,255,493 11,681,284 11,707,782 3,004,895 4,807,840 2,078,281 14,025,003 3,775,821 $ 108,336,399 $ 59,153,094 13,130,116 15,996,992 3,983,701 3,878,132 2,135,525 14,208,071 5,494,936 $ 117,980,567 $ 58,145,253 12,695,890 19,539,768 3,848,746 3,020,436 2,404,459 16,137,447 6,247,418 $ 122,039,417 $ 50,215,336 10,991,095 20,395,663 4,019,182 1,802,759 3,309,210 11,420,810 3,781,537 $ 105,935,592 $ 47,957,886 10,137,682 17,469,936 3,955,416 1,599,957 2,525,753 10,185,728 1,674,775 $ 95,507,133 $ 49,541,810 11,649,489 13,408,996 4,037,897 1,672,072 2,813,535 10,502,078 2,692,430 $ 96,318,307 $ 51,737,833 12,087,651 13,231,006 4,084,163 2,106,545 2,521,407 10,895,825 1,656,235 $ 98,320,665 $ 56,145,066 12,665,191 14,425,958 4,136,004 2,564,075 2,058,925 11,889,776 2,534,262 $ 106,419,257 $ 60,587,446 13,431,637 17,172,500 4,194,371 2,800,894 1,933,142 12,535,479 1,379,952 $ 114,035,421 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 3,990,000 482,594 4,472,594 1,569,999 505,827 2,075,826 665,000 1,065,571 1,730,571 2,010,000 1,708,383 3,718,383 26.15 30.58 26.74 29.12 24.97 22.50 21.54 47.36 61.49 30.67 117,848,611 10,978,453 128,827,064 101,692,725 9,356,675 111,049,400 91,261,747 8,491,097 99,752,844 91,845,713 8,682,846 100,528,559 96,244,839 9,088,210 105,333,049 104,688,686 9,927,436 114,616,122 110,317,038 10,861,145 121,178,183 2008 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 2,185,000 1,730,263 3,915,263 Estimated Coverage - 32.48 25.98 26.04 27.16 29.40 30.95 Note (1) Excludes the 0.3% Transportation Sales Tax approved by voters in September 2005 for the 2008 Transportation MDA Debt. (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 taxes and state shared revenues. (3) The 2008 Transportation MDA Bonds are backed by a senior lien on the .03% transaction priviledge tax approved by voters in 2005 and a subordinated lien of the Excise Taxes and State Shared revenues. (4) Pledged revenues on the non-transportation MDA Bonds, less the debt requirements for the non-transportation MDA Bonds. (5) Revenues of the Transportation Sales Tax Fund, primarily consisting of the 0.3% transaction priviledge tax discussed above. Source: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Debt service schedules, City financial records 163 Table XXVII CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - WATER AND WASTEWATER REVENUE BONDS LAST TEN FISCAL YEARS 2005 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 $ 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 $ 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 $ 2008 Fiscal Year 2009 2010 2011 2012 2013 2014 $ 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 $ 54,515,296 30,942,736 $ 23,572,560 $ 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 4,311,153 $ 27,883,713 $ 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 9,007,117 3,343,413 $ 12,350,530 Ratio of Total Net Revenue/ Total Bond Expense 3.54 4.00 4.21 2.83 1.63 1.85 1.69 2.03 2.18 2.26 Ratio of Net Available/ Total Bond Expense (5) 1.70 2.31 3.04 2.06 1.43 1.71 1.52 1.80 1.92 1.91 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 164 Note 6 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS 2005 Pledged Revenues (1) Debt Service Requirements Principal Interest (2) Total Annual Requirements Estimated Coverage $ 3,547,789 $ 1,507,136 828,532 2,335,668 2006 $ 3,516,277 $ 1,608,983 747,720 2,356,703 1.52 1.49 2007 $ 3,216,095 $ 1,480,506 638,657 2,119,163 1.52 Fiscal Year 2009 2008 $ 3,167,933 $ 1,264,637 697,840 1,962,477 1.61 $ 3,365,342 $ 1,624,615 675,958 2,300,573 1.46 2010 Table XXVIII 2011 $ 3,402,865 $ 2,360,492 559,205 2,919,697 2012 $ 2,645,451 $ 1,887,322 432,302 2,319,624 1.17 $ 2,262,112 $ 1,495,000 316,720 1,811,720 1.14 (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 165 2013 1.25 2014 $ 1,484,283 $ 1,140,000 222,820 1,362,820 1.09 $ 1,259,303 $ 325,000 149,600 474,600 2.65 CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) $ 2005 2,065,519 $ 2,057,821 186,624 2,244,445 Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) $ 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 $ 2008 1,749,724 Fiscal Year 2009 $ 2,196,027 $ 1,749,246 44,061 1,793,307 2,193,992 2,041 $ 2,196,033 99.8% $ 12,782,394 $ 100.0% 99.9% 11,476,365 $ 9,871,061 $ 2010 2,211,609 $ 2,211,599 38,301 2,249,900 166 $ 2011 2,171,435 $ 2,171,435 2,171,435 100.0% $ 8,141,515 (1) Does not include penalties or administrative 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. (3) These Special Assessments relate to Improvement District 0601 which includes three lots. The tax rolls of Maricopa County Assessor's Office indicate that the current full cash value of the Assessed Property is approximately $25,957,000 for Lot No. 1, $17,577,500 for Lot No. 2 and $669,500 for Lot No. 3. There are no overlapping Assessment Districts and all lots are current in their assessment payments. Source: City financial records and reports Table XXIX $ 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 $ 2014 (3) 455,116 $ 455,116 675,958 1,131,074 100.0% $ 3,520,000 100.0% $ 2,603,127 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 $ 2005 15,304,972 7,046,576 22,351,548 2006 $ 16,881,632 6,747,072 $ 23,628,704 Total Governmental Expenditures $ 144,972,313 $ 153,731,533 $ $ 2007 16,178,431 8,099,492 24,277,923 $ 213,283,409 $ $ 2008 31,143,531 10,340,704 41,484,235 $ 234,929,890 $ Fiscal Year 2009 $ 25,988,554 11,917,582 $ 37,906,136 $ $ $ 237,519,557 242,988,904 $ 2010 44,700,092 13,166,242 57,866,334 $ 2011 34,309,287 12,658,032 46,967,319 $ 192,780,638 $ Table XXX $ 2012 25,566,028 13,098,263 38,664,291 $ 178,812,735 $ $ 2013 20,120,163 12,534,039 32,654,202 $ 195,784,242 $ $ 2014 20,842,447 12,543,974 33,386,421 $ 185,056,158 $ Ratio of Debt Service to Governmental Expenditures 15.42% 15.37% 11.38% 17.66% 15.60% 24.36% 24.36% 21.62% 16.68% 18.04% Ratio of Debt Service to non-capital expenditures 20.31% 30.76% 17.45% 26.35% 20.75% 27.77% 28.22% 25.36% 20.91% 20.47% Total Governmental Revenues Ratio of Debt Service to Governmental Revenues Source: $ 144,191,521 15.50% $ 178,025,080 13.27% $ 220,591,297 $ 216,437,439 11.01% 19.17% Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 167 $ 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% $ 177,566,482 18.80% CITY OF PEORIA, ARIZONA BOND AUTHORIZATIONS - ISSUED AND UNISSUED AS OF JUNE 30, 2014 Authorization/Purpose Authorization Prior Issues Current Year Issues Remaining Authorization Authorization/Purpose Table XXXI Authorization Issued Remaining 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: 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 41,757,232 10,264,204 35,241,016 22,013,271 - 5,392,768 88,735,796 29,758,984 7,986,729 282,000,000 146,905,799 - 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 1,016,000,000 307,290,185 - 708,709,815 NOTE: Remaining unused bond authorizations prior to 2000 are usually not exercised. Source: City financial records 168 Total authorizations by type: Police, Fire & Public Service Streets & traffic control Parks, open space, library Water system Waterwater system Storm Sewer, Flood Protection & Bridges Water, Wastewater & Drainage Transportation & Drainage $ 130,850,000 $ 38,191,336 $ 156,150,000 106,000,000 99,000,000 65,000,000 81,687,726 46,597,807 10,264,204 35,241,016 74,462,274 59,402,193 88,735,796 29,758,984 22,300,000 160,000,000 276,700,000 21,609,683 67,825,284 5,873,129 690,317 92,174,716 270,826,871 $ 1,016,000,000 $ 307,290,185 $ 92,658,664 708,709,815 Table XXXII CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 2005 * 2006 2007 2008 2009 2010 * 2011 2012 2013 2014 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 137,045 3.2% 2.9% 4,465,885 145,125 5.9% 2.6% 5,058,622 153,592 5.8% 2.1% 5,762,618 155,560 1.3% 3.6% 5,964,948 159,263 2.4% 6.7% 5,998,322 154,065 -3.3% 7.0% 5,462,529 155,148 0.7% 8.7% 5,489,757 156,780 1.1% 7.1% 5,547,504 160,504 2.4% 6.8% 5,966,094 164,104 2.2% 6.0% 6,236,937 Maricopa County Population % growth Unemployment Rate Per Capita Income 3,681,300 4.1% 4.1% 33,294 3,792,675 3.0% 3.7% 35,595 3,879,150 2.3% 3.0% 38,520 3,987,492 2.8% 5.1% 39,530 4,105,623 3.0% 9.4% 38,811 4,217,427 2.7% 9.7% 36,530 4,328,379 2.6% 9.0% 36,643 4,438,459 2.5% 7.6% 38,411 3,922,600 -11.6% 7.1% 39,300 3,944,859 0.6% 6.4% N/A State of Arizona Population % growth Unemployment Rate Per Capita Income 6,077,740 4.0% 4.9% 30,225 6,305,210 3.7% 4.4% 32,419 6,432,007 2.0% 3.6% 34,817 6,629,455 3.1% 5.9% 35,863 6,812,137 2.8% 10.2% 35,772 6,999,810 2.8% 10.6% 33,972 7,186,070 2.7% 10.0% 33,967 7,370,993 2.6% 8.7% 35,446 6,553,800 -11.1% 8.5% 36,243 6,581,054 0.4% 7.5% 36,823 United States of America Unemployment Rate 5.2% 4.8% 4.7% 5.7% 9.7% 9.6% 9.3% 8.4% 7.8% 6.3% Phoenix MSA Per Capita Income 32,587 34,857 37,519 38,345 37,663 35,456 35,384 37,171 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 using non-seasonally adjusted figures. Per Capita Income data - U.S. Dept of Commerce, Bureau of Economic Analysis 169 38,006 N/A CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND TEN YEARS AGO Table XXXIII 2014 Employer Peoria Unified School District City of Peoria Younger Brothers Freedom Plaza Properties Immanuel Care Campus Antigua Arizona Retirement Center OakCraft Good Shepherd Care Center Albertson's (2 Locations) Fry's Food Stores (4 Locations) Arizona Training and Evaluation Northern Pipeline Forum At Desert Harbor Target (3 Locations) Total # of Employees 3,047 1,093 528 523 456 289 236 200 130 - 2005 Rank 1 2 3 4 5 6 7 8 9 6,502 Percentage of Total City Employment 4.3% 1.5% 0.7% 0.7% 0.6% 0.4% 0.3% 0.3% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% # of Employees 4,250 1,532 612 354 243 218 240 297 469 280 230 208 340 9.1% 8,495 Note: Beginning in fiscal year 2012, Peoria Economic Development Department no longer tracked employment for retail locations. Sources: City of Peoria Economic Development Department Arizona Unemployment Statistics Program Special Employment Report www.azstats.gov Greater Phoenix Economic Council Records 170 Rank 1 2 Percentage of Total City Employment 6.6% 2.4% 3 5 9 0.9% 0.5% 0.4% 12 10 7 4 8 11 13 6 0.3% 0.4% 0.5% 0.7% 0.4% 0.4% 0.3% 0.5% 13.1% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Table XXXIV Full-time Equivalent Employees as of June 30, 2014 2005 General Government Mayor & Council City Manager Office of Communications Human Resources Attorney City Clerk Court Economic Development Finance & Budget Culture & Recreation Police Fire Community Development Engineering Highways & Streets Public Works Human Services Water Utility Wastewater Utility Solid Waste Utility Information Technology Stadium Total FTE 2006 2007 2008 2009 2010 2011 * 2012 2013 2014 5.00 8.50 7.50 13.00 20.20 8.00 11.00 3.00 84.00 111.36 226.00 131.00 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 86.00 109.36 250.00 134.00 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 89.00 124.39 264.00 157.00 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 97.00 131.74 286.00 173.00 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 96.00 142.04 287.00 170.00 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 89.75 125.47 271.00 167.00 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 86.75 115.97 287.00 164.00 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 80.75 113.57 289.00 162.00 12.50 33.25 38.80 57.95 7.50 56.50 29.50 45.00 39.00 15.50 16.00 8.00 17.50 26.00 7.00 20.90 26.00 80.75 111.97 288.00 167.50 12.50 33.25 38.80 57.95 7.50 55.50 29.50 45.00 39.00 16.50 16.00 8.00 17.50 26.00 7.00 20.90 28.00 80.00 115.97 289.00 168.50 13.50 33.25 38.80 57.95 7.50 55.50 29.50 45.50 40.00 16.50 1,083.08 1,135.88 1,239.99 1,341.04 1,332.59 1,264.02 1,218.62 1,181.47 1,185.87 1,114.87 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) 171 CITY OF PEORIA, ARIZONA BUILDING PERMITS AND HOME SALES LAST TEN YEARS Table XXXV Building Permits 2005 Commercial Number of Permits 177 Value $ 73,892,753 Residential Number of Dwelling Units 2,927 Value 373,716,048 Other (A) Number of Permits 2,000 Value 21,512,846 Total Value $ 469,121,647 2006 $ $ 2007 181 64,990,575 $ 244 121,602,510 2008 $ Fiscal Year 2009 153 38,162,527 60 $ 18,722,347 2010 $ 2011 82 35,940,280 $ 2012 27 4,416,256 $ 60 14,130,283 2013 2014 31 $ 22,536,140 43 $ 11,137,771 835 118,188,477 1,031 146,826,079 2,421 320,780,556 1,338 213,028,399 963 154,975,128 383 47,217,878 398 42,714,995 404 50,318,368 610 79,951,361 2,209 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 1,241 3,526,505 1,459 4,254,688 227,086,013 $ 84,475,521 $ 131,807,441 63,759,929 $ 111,209,853 $ 144,251,122 $ 162,218,538 2011 2012 2013 412,303,639 $ 368,827,021 $ $ Source: City of Peoria - Economic Development Department Notes: (A) Beginning in FY13, revised criteria was used for "Other" permits. Figures include the following categories: Addition-Alteration and Patio, Miscellaneous Residential, Miscellaneous Commercial, and Swimming Pool-Spa-Hot Tub. Figures exclude permits obtained for improvements, non-structural permits, demolition permits, sign permits, mechanical/plumbing/electrical permits. Single Family Housing Sales 2004 2005 2006 2007 Calendar Year 2008 2009 2010 New # of Units Average Sale Amount Avr price % increase $ 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% $ 817 346,353 16.81% # of Units Average Sale Amount Avr price % increase $ 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% $ 3,502 225,683 25.09% Resale New Housing Starts City of Peoria Maricopa County 2004 2,381 47,100 2005 3,038 2006 1,572 41,707 27,607 Calendar Year 2007 2008 1,148 794 19,345 Source: Arizona State University College of Business - AZ Real Estate Center 172 8,320 2009 2010 2011 2012 330 441 430 6,502 5,637 6,444 2013 642 10,029 877 10,835 Table XXXVI CITY OF PEORIA, ARIZONA SCHEDULE OF INSURANCE IN FORCE JULY 1, 2013 THROUGH JUNE 30, 2014 Type of Insurance 1. 2. Primary Public Liability & Automobile General & Auto liability Insurance Carrier Deductible Amount Policy Number Limits N/A $1,000,000 per incident (SIR) $1,000,000 annual (SIR) N/A Annual Premium N/A Self-insured Excess Liability - Primary 7/1 OneBeacon (Atlantic Specialty) 791000664000 $3,000,000 Aggregate $4,000,000 SIR Aggregate SIR above $ 92,719 Excess Liability - Law Enforcement 7/1 OneBeacon (Atlantic Specialty) 791000664000 $2,000,000 SIR above $ 106,708 Automobile & Equipment 7/1 OneBeacon (Atlantic Specialty) 791000664000 $1,000,000 (1) SIR above $ 88,253 Excess Liability - Umbrella 7/1 OneBeacon (Atlantic Specialty) 791000664000 $13,000,000 SIR above $ 234,389 Excess Liability 7/1 Endurance American Specialty ELD10004037700 $25,000,000 per occurrence SIR above $ 90,943 N/A Self-insured N/A $500,000 per incident (SIR) $500,000 annual (SIR) N/A 7/1 Travelers Indemnity Company KTKCMB297T228813 $250,000,000 SIR above N/A Self-insured N/A $750,000 General (SIR) $850,000 Public Safety (SIR) N/A AGC4048475 $1,000,000 SIR above $ 180,435 ECN000168721301 $2,000,000 $10,000 $ 7,744 105639670 $10,000 None $ 4,103 BVT052017500 $1,000,000 $10,000 $ 4,900 Property (Real & Personal) City buildings and Contents Excess buildings, Boiler, Machinery, and Contents 3. Annual Renewal Date Workers' Compensation Excess Liability Safety National Casualty Corp. N/A N/A $ 354,698 N/A 4. Cyber Liability 7/1 Axis Surplus Insurance Co. 5. Identity Fraud Expense Reimbursement 7/1 Travelers Casualty & Surety Co. 6. Crime Coverages 7/1 Great American Insurance Co. 7. Boat Coverage 7/1 Travelers Property Casualty Co. ZOH15N1430013ND $170,000/$1,000,000 $2,500 $ 4,838 8. Fiduciary Liability 9/12 Travelers Casualty & Surety Co. 105993111 $1,000,000 None $ 4,826 (1) 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 173 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 Inspected 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: $ CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year 2007 2008 2009 2010 Table XXXVII 2005 2006 65,998 33.8% 62,328 25.4% 63,544 25.4% 71,051 60.6% 76,323 81.2% 69,206 5,492 * 75,145 5,160 * 77,602 4,923 * 119,620 6,692 * 131,372 6,237 * 142,319 5.73 102,385 4.80 103,921 5.20 62,341(A) 5.98 60,219 5.47 56,683 5.65 56,764 5.87 57,184 6.01 54,159 4.52 (C) 52,193 4.39 (C) 11,618 4.30 12,445 4.30 12,788 4.40 13,649 4.40 13,361 4.43 14,874 5.02 15,403 5.19 17,717 5.08 18,719 5.14 19,312 5.30 5,104 469.1 4,811 412.3 $ 6,654 9,807 277 3,692 368.8 $ 5,035 8,697 218 $ 7,999 8,496 275 2,943 225.5 8,365 7,604 381 $ 1,486 84.5 82,578 29.2% 132,391 5,903 46,578 $ 2,441 7,526 423 1,497 131.8 2,832 5,935 422 2011 2012 2013 2014 86,803 29.2% 85,592 23.7% 87,432 23.7% 89,604 24.9% 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 6,202 163 134,045 5,396 73,800 $ 3625(D) 169.0 3,122 6,143 187 3993(D) 188.3 2,227 5,660 205 5,920 5,787 5,679 5,917 5,697 5,856 5,608 5,899 5,464 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 ** ** 836 33,308 ** ** 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 8,662,507 165,821 3.41 3.55 3.67 3.60 3.90 3.70 3.50 3.61 3.64 3.69 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 47,987 21,176 15,155 225,316 * * 200,153 * * 220,357 195 54 230,434 234 83 211,243 246 66 200,029 208 74 188,244 336 108 190,643 350 134 196,881 290 143 192,513 322 146 840 828 840 831 840 827 840 812 840 796 840 745 840 787 840 813 840 797 NA*** NA*** ** City discontinued participation in Section 8 housing programs as of 6/30/11. *** As of FY14, all public housing units have been transferred to Maricopa County for administration. Source: $ 5,056 * Information is not available for these fiscal years. (A) 122,318 5,533 74,950 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. (D) Beginning FY13, this number includes all permits issued including tenant improvements, C of O permits, and spec suite permits. Various City Departments 174 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 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) Crack Seal Application (linear feet) Surface Treatments (lane miles) Public Works Street Lights Vehicles in Fleet Utilities Number of Pump Stations Number of Lift Stations Number of Well Number of Reservoirs 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 Table XXXVIII 2005 2006 2007 2008 Fiscal Year 2009 2010 2011 2012 2013 2014 177.9 177.9 177.9 177.9 177.9 179.0 179.1 179.1 179.1 179.1 24 240 26 264 26 264 26 264 28 314 28 322 28 322 32 285 33 294 33 294 2 86 2 90 2 101 2 103 2 92 2 86 2 86 2 86 2 86 2 88 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 7/1 8 2 622 * * 487 * * 518 * * 537 * * 538 * * 551 * * 554 * * 584 * * 590 * * 1452 (A) 1,165,460 88 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 14,786 738 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 25 15 38 30 9 9 11 11 11 9 7 7 7 6 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 50,399 42.0 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 53,548 16.25 42,467 44,198 46,309 47,146 48,006 43,382 48,752 49,506 50,727 51,609 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 N/A** Notes: * Information not tracked during this fiscal year. **As of FY2014, all public housing units have been transferred to Maricopa County for administration (A) Measurement changed from centerlane miles to lane miles in FY14. Source: Various City Departments 175 176 Continuing Disclosures Continuing Disclosure Section SEC Rule 15c2-12, as amended, requires the City to provide Continuing Disclosure Annual Reports that include audited financial statements and other financial information for the benefit of owners and holders of bond obligations issued by the City. The Continuing Disclosure Annual Report shall contain or incorporate by reference certain information as set forth in the Continuing Disclosure Agreements and Undertakings executed by the City with the issuance of its municipal bond obligations. Information in this section is provided solely pursuant to the requirements of SEC Rule 15c2-12 and Continuing Disclosure Agreements and Undertakings and include financial information that is not required for fair presentation in conformity with accounting principles generally accepted in the United States of America and is therefore unaudited and not covered by the auditor’s opinion. Annual continuing disclosure information is filed with the Municipal Securities Rulemaking Board (MSRB) for public access via their Electronic Municipal Market Access (EMMA) system at www.emma.msrb.org. 177 Continuing Disclosures Annual Report For the Year Ended June 30, 2014 Audited Financial Statements The City’s Comprehensive Annual Financial Report for fiscal year ended June 30, 2014 is included as part of this submittal. Other Financial Information Information concerning the outstanding debt by type of bond ocan be found in the Notes to the Financial Statements on page 74, Note 14 Long Term Debt. Other financial information required per the City’s Continuing Disclosure Agreements and Undertakings for each type of bond obligation is incorporated by reference as follows: Statistical Section Page General Obligation Bonds (CUSIP 712838) Secondary Assessed Value by Property Classification Table XIII 148 Comparison of Secondary Assessed Value to Full Cash Value Table XIII 148 Comparative Secondary Assessed Value Table XIV 149 Direct and Overlapping Assessed Value Direct and Overlapping Tax Rates Table XXII Table XV 159 150 Real and Personal Property Tax Collections Table XVIII 153 Net Direct and Overlapping General Obligation Bonds Direct General Obligation Debt Ratios Table XXII Table XXI 159 158 Legal Debt Limitation and Unused Borrowing Capacity Table XXV 162 Statement of Net Revenues and Debt Service Coverage Table XXVII 164 Number of Utility Service Connections Table XIXa 154 List of Top 10 Water Account Users Table XIXc 156 Municipal Development Authority Bonds (CUSIP 71284R and 71285A) Excise Tax and State Shared Revenues and Debt Service Coverage Table XXVI 163 Priviledge and Use Tax Rates by Category Table XI 146 Schedule of Annual Debt Service Requirements Table XXVI 163 Legal Debt Limitation and Unused Borrowing Capacity Table XXV 162 Secondary Assessed Value by Property Classification Table XIII 148 Real and Personal Property Tax Collections Table XVIII 153 Status of Payment of Assessment and Full Cash Value of Properties Table XXIX 166 Water and Wastewater Revenue Bonds (CUSIP 712851) Improvement District Bonds (CUSIP 712844) 178