City of Peoria, Arizona FY15 Comprehensive Annual Financial Report (CAFR) Fiscal Year Ended June 30, 2015 peoriaaz.gov Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2015 City of Peoria, Arizona City Council: Cathy Carlat, Mayor Jon Edwards, Vice Mayor Vicki Hunt Bridget Binsbacher Carlo Leone Michael Finn Bill Patena Administrative Staff: Carl Swenson, City Manager Jeff Tyne, Deputy City Manager Susan Daluddung, Deputy City Manager Prepared By: Finance & Budget Department Brent D. Mattingly, Chief Financial Officer, Finance Director Katie Gregory, Deputy Finance and Budget Director Sonia Andrews, Finance Manager Yiannis Kalaitzidis, Accounting Supervisor City of Peoria Core Values “The City of Peoria team members share a commitment to provide quality service for our community.” Professional Demonstrates professional skills and knowledge needed to perform the job; keeps informed of developments in the professional field and applies this knowledge to the job; encourages and supports the development of subordinate personnel. Ethical Maintains the highest standards of personal integrity, truthfulness, honesty, and fairness in carrying out public duties; avoids any improprieties; trustworthy, maintains confidentiality; never uses City position or power for personal gain. Open Communicates effectively orally and in writing; involves appropriate individuals and keeps others informed; acts as a team member; participates and supports committees/boards/commissions/task forces; approachable; receptive to new ideas; supports diversity and treats others with respect; actively listens. Responsive Consistently emphasizes and supports customer service; takes responsibility to respond to all customers in a prompt, efficient, friendly, and patient manner; represents the City in an exemplary manner with civic groups/organizations and the public. Innovative Demonstrates original thinking, ingenuity, and creativity by introducing new ideas or courses of action; supports innovative problem-solving by identifying and implementing better methods and procedures; takes responsible risks; demonstrates initiative and “follows through” on development and completion of assignments. Accountable Accepts responsibility; committed to providing quality service to our community; plans, organizes, controls and delegates appropriately; work produced is consistent and completed within required timeframes; implements or recommends appropriate solutions to problems; acknowledges mistakes; manages human and financial resources appropriately. Introductory Section CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2015 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-xii xiii xiv xv xvi II. FINANCIAL SECTION Independent Auditor’s Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 3 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities 17 18 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 Development Fee Fund 20 23 24 27 28 30 31 32 33 Proprietary Fund Financial Statements Statement of Net Position Statement of Revenues, Expenses, and Changes in Fund Net Position Statement of Cash Flows 34 36 38 Fiduciary Fund Financial Statements Statement of Net Position Statement of Changes in Net Position 42 43 Notes to the Financial Statements 45 i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2015 Page C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of the City’s Proportionate Share of the Net Pension Liability Cost-Sharing Pension Plan Schedule of Changes in Net Pension Liability (Asset) Schedule of Pension Contributions Notes to Pension Plan Schedules 77 78 80 81 Schedule of OPEB Plans’ Funding Progress Notes to Schedule of Agent OPEB Plans’ Funding Progress 82 83 D. SUPPLEMENTARY INFORMATION - COMBINING FUND FINANCIAL STATEMENTS AND BUDGETARY SCHEDULES Major Governmental Funds Other Than General Fund and Special Revenue Funds Budgetary Comparison Schedules – Major Debt Service Fund General Obligation Bonds Debt Service Fund 87 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 General Obligation Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Non-Bond Capital Projects Fund 90 92 94 95 96 97 98 99 100 101 102 Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Combining Statement of Cash Flows 104 105 106 Fiduciary Funds Combining Statement of Fiduciary Net Position – Agency Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds ii 108 109 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2015 Page Table III. STATISTICAL SECTION - Unaudited Net Position By Component Changes in Net Position Fund Balances, Governmental Funds Changes in Fund Balances, Governmental Funds City Transaction Privilege Taxes By Category Direct and Overlapping Sales Tax Rates Sales Tax Payers - By Category Secondary Assessed Value and Full Cash Value of Taxable Property Comparative Secondary Assessed Value Direct and Overlapping Property Tax Rates Direct and Overlapping Property Tax Levies Principal Property Tax Payers Property Tax Levies and Collections Utility Statistical Data Outstanding Debt By Type Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita Direct and Overlapping General Obligation Bonded Debt – Current Fiscal Year Direct and Overlapping Governmental Activities Debt – Current Fiscal Year Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years Legal Debt Margin Pledged Revenue Coverage - Municipal Development Authority Bonds Governmental Portion Pledged Revenue Coverage – Water & Wastewater Revenue Bonds Pledged Revenue Coverage - Special Assessment Bonds Special Assessment Collections Demographic and Economic Statistics Major Employers Within the City Authorized Full-time Equivalent City Government Employees By Function Operating Indicators By Function/Program Capital Asset Statistics By Function/Program I II III IV V VI VII VIII IX X XI XII XIII XIV XV 113 114 116 117 118 119 120 121 122 123 124 125 126 127 130 XVI 131 XVII 132 XVIII 133 XIX XX 134 135 XXI XXII XXIII XXIV XXV XXVI 136 137 138 139 140 141 XXVII XXVIII XXIX 142 143 144 IV. CONTINUING DISCLOSURES Continuing Disclosures Annual Report 146 iii iv November 24, 2015 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, 2015. This report was prepared by the Financial Services Division of the Finance and Budget Department. The CAFR represents management’s report of the City’s complete financial results 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 3-16 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 108,300 in 2000 to 154,065 in 2010. The current estimated population is 168,450. 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 Phoenix 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 34 neighborhood parks encompassing 305 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 City’s second community park, Pioneer Community Park was completed in fiscal year 2014 and includes v 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 five blended component units, the City of Peoria Municipal Development Authority, Inc., the Vistancia Community Facilities District and Vistancia West 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 2015, Peoria’s economy continued to see construction activity as home sales climbed. Peoria is part of the metro Phoenix West Valley which includes Glendale, Goodyear, Surprise and Buckeye. Over the past 10 years, the West Valley has focused on transportation infrastructure and economic development. Last year homes sales in the West Valley surpassed other metro Phoenix regions. The West Valley has the region’s newest freeway (Loop 303) and large communities, such as Vistancia, in Peoria are bringing higher-end homes, golf courses and shopping amenities to attract home buyers. Home sales are expected to continue growing in Peoria and the West Valley. The City issued 1,215 new residential building permits in fiscal year 2015 compare to 1,031 in fiscal year 2014. Median re-sale home prices in Peoria rose by 2.6% from $229,000 in June 2014 to $235,000 in June 2015. The City’s total property full cash value, which lags the market, increased by 25.0% from $11.2 billion in 2014-15 to $14.0 billion in 2015-16. 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. Unemployment rate in Peoria improved from 5.6% in June 2014 to 5.0% in June 2015. With the job market consistently improving and gains in the stock market continuing, consumer spending remained healthy in fiscal year 2015. The City’s sales and use tax collections in fiscal year 2015 totaled $74.6 million, a 4.8% increase from the $71.2 million in the prior year. On the commercial front, the City gained a few new businesses, most notably State Trailer RV & Outdoor Supplies, GEPACK and Aviage. State Trailer RV & Outdoor Supplies operates RV parts, accessories and service superstores. Aviage, a global tier-1 civil avionics solution provider and joint venture between General Electric Company and the Aviation Industry Corporation of China, opened its high-quality research, design and manufacturing complex in Peoria. Aviage is expected to create 30-40 high wage jobs in 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 With the economic slowdown in China and other global economic and financial developments, the Federal Reserve decided to hold the Fed Funds target rate at 0% to 0.25% at its September 2015 meeting. Inflation is expected to remain low in the near term. Despite some restrain in economic activity, economic forecasters predict the US economy will maintain growth at a slow and steady pace with GDP at 2.6% in 2016. Likewise, the overall economic outlook for the State of Arizona and City of Peoria is expected to mirror the nation’s slow and steady growth. Population growth projected for the City of Peoria is expected to be modest. The housing market in the State or Arizona and Peoria is looking considerably better than it has since the recession and is expected to continue improving. vi 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 competing priorities for available resources, 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  Leadership and image – to conduct city business with the highest standard of integrity and accountability and to build greater community relations Major Initiatives and Accomplishments in 2015 Major initiatives and accomplishments during fiscal 2015 are as follows: University Recruitment – The City has been working on bringing more science, technology, engineering and mathematics programs to the area through partnerships with specialty universities. In 2015, the City entered into an Economic Development Activities Agreement with Huntington University for the development of an accredited university campus in Peoria. Huntington University is expected to bring programs such as digital arts, graphic design, film production and web development to the area. Old Town Redevelopment – The City 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. In 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. During fiscal year 2015, the City entered into a lease purchase option with Lucidi Distilling Company, a craft distillery of ultra premium and small batch spirits to open a distillery, public vii tasting room and ultimately a restaurant in the former fire station property and adjacent parking lots. In 2015, the City also entered into an Old Town Commercial Revitalization Easement Agreement with Greenfield Townhomes, LLC and Wing Pointe Apartments LP to locate State Trailer RV & Outdoor Supplies, a large RV and trailer parts and accessory store in Old Town Peoria. Peoria Sports Complex Renovations and Improvements – The professional major league baseball teams, Seattle Mariners and San Diego Padres, conduct their spring training and minor league activities at the City-owned Peoria Sports Complex. 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 partnership with the baseball teams contributes significantly to the economic impact of 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 – this phase consisted of $30 million for construction and renovation of clubhouses and team facility improvement. Phase I was completed in fiscal year 2014.  Phase II – this phase included stadium improvements such as a new ticket office and front entrance, expanded seating, souvenir shop and other amenities. These improvements were completed in 2015.  Phase III – phase III will consist of approximately $12 million for additional stadium improvements such as replacement of bleachers, creation of a kid’s zone and other improvements. 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. In 2014, the City completed design concepts for phase 1 improvements which added signage, branding and medians to give the area a consistent identity. Phase 2 developments include additional streetscapes and also the Avenue Shops which will be comprised 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 completed an economic analysis of Phase 2 and entered into a development agreement and amended ground lease in 2014 with Peoria Sports Park LLC (PSP LLC) to develop Phase 2. During 2015, PSP LLC worked on marketing and sales efforts to secure retail partners, establish debt and equity commitments and other financing arrangements. Vistancia West Community Facilities District (CFD)On August 27, 2014, the City Council approved the formation of the Vistancia West CFD. This new CFD encompasses the area of the new Trilogy West development, an active adult community. The new Trilogy West homes will share privately owned, joint recreational amenities, such as the Kiva Club, resort-type swimming pool facilities, fitness facilities, tennis and sports courts, café, spa, and meeting rooms with the Trilogy at Vistancia residents. Likewise, residents of the existing Trilogy at Vistancia community will share in new facilities and amenities that will be constructed in conjunction with the Trilogy West expansion. These include a new club, outdoor resort pool, tennis courts, fitness studio, meeting rooms, trails, and outdoor areas. Purchase of New River Utilities – The City is in the process of purchasing the New River Utilities Company, a private water provider serving approximately 2,900 customers within its 1.75 square mile service area located in Peoria. The purchase price of $10 million and another $4 million for system improvements and connections are expected to be financed with a loan from the Water Infrastructure Financing Authority. viii Mid-Decade Census Since the last census in 2010, Peoria has experienced significant growth in population. The census population figures are used by the State to calculate Peoria’s share of state-shared and urban revenue sharing distributions. An increase in the population could generate up to $1.5 million in additional revenues per year to the City for the next five years. Working with the US Census Bureau and other Arizona cities that have also experienced significant growth, the City Council voted in March 2015 to conduct a mid-decade census. The City expects to hire approximately 400 workers to conduct door-to-door counts from October through November. Final population figures are expected to be available at the beginning of 2016. Accreditations and Awards – In 2015, the City of Peoria received several outstanding awards as follows: The Sports Complex Improvements Project Team received the 2015 American Public Works Association (APWA) Project of the Year award. The APWA Public Works Project of the Year was established to promote excellence in management and administration of public works projects by recognizing the alliance between the managing agency, the consultant/architect/engineer and the contractor. The City also received the Honorable John R. Sticht Award for excellence in Disability Accessibility for the Peoria Sports Complex and Peoria Municipal Court. The Peoria Police Department received an advanced Gold Standard with excellence award for successfully completing its seventh Commission on Accreditation for Law Enforcement Agencies, Inc. (CALEA) re-accreditation assessment. Peoria and Chandler are currently the only Arizona agencies to achieve Gold Standard re-accreditation. Peoria’s Community Services Department received national accreditation through the Commission for Accreditation of Park and Recreation Agencies (CAPRA) and the National Recreation and Park Association (NRPA), indicating that Peoria has met rigorous standards related to the management and administration of lands, park and recreation facilities, resources, programs, safety and services. BOND RATING In April 2015, Fitch Ratings, a global credit rating agency affirmed the City’s AA+ rating for its General Obligation bonds. Fitch designated the rating outlook as stable, reflecting the city’s improving economic prospects, sound financial management practices, solid reserves and manageable debt levels. Fitch also affirmed the City’s AA rating for its Park West District Improvement bonds and A- rating for its Vistancia Community Facility District bonds. 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. ix 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 2014-15 was $788,435,848. 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 position and 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. x 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, 2015, 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, 2015, 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 xi Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Text38: City of Peoria Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2014 Executive Director/CEO xiii 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 xiv City of Peoria Principal Officials of the City Fiscal Year 2015 Cathy Carlat Mayor Jon Edwards Vicki Hunt Bill Patena Vice Mayor Councilmember Councilmember Carlo Leone Bridget Binsbacher Michael Finn Councilmember Councilmember Councilmember Carl Swenson City Manager Susan J. Daluddung Jeff Tyne Deputy City Manager Deputy City Manager George Anagnost Thomas Adkins 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 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 xv City of Peoria Council Districts Lake Pleasant Mayor Cathy Carlat Vice Mayor Jon Edwards Willow District Mesquite Carefree Hwy 67th Ave. Councilmember Vicki Hunt Acacia District Pinnacle Peak Rd. Willow Councilmember Bill Patena Ironwood District Ironwood Bell Rd. Councilmember Carlo Leone Pine District Peoria Ave. 115th Ave. Councilmember Michael Finn Palo Verde District Pine Palo Verde Acacia Northern Ave. 67th Ave. Councilmember Bridget Binsbacher Mesquite District 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, 2015, 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, 2015, 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, 2015, 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, Transportation Sales Tax, and Development Fee 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, 2015, 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 1H., the City implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, for the year ended June 30, 2015, 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 and net pension liability information, as listed in the table of contents, 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 are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Supplementary Information is the responsibility of management and was derived from and relates 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 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, 2015, 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, 2015 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, 2015. 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-xii of this report. It is designed to be read in conjunction with the transmittal letter as well as the financial statements beginning on page 17 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, as restated, increased $53 million in fiscal year 2015, an increase of $17 million in governmental activities and an increase of $36.0 million in business-type activities.  Total net position of the City is $1,642.3 million, of which $25.4 million is unrestricted with a deficit unrestricted balance in governmental activities as a result of the inclusion and presentation of net pension liabilities due to the implementation of new accounting guidance.  The governmental activities program revenues increased by approximately $18.5 million from the previous year. This was primarily due to an increase in donated capital assets with additional large developments’ infrastructure being completed in fiscal year 2015.  The business-type activities program revenues increased by approximately $19.4 million from the previous year. Capital Grants and Contributions increased by $20.5 million.  At June 30, 2015, total fund balance of the governmental funds was $215.9 million, down $21.3 million from the previous year. Of this, $21.6 million or 19.7% of General Fund expenditures for fiscal year 2015 was unassigned in the general fund and available for spending at the government’s discretion.  General Fund revenues (on a budgetary basis) were higher than budgeted inflows by $5.8 million for fiscal year 2015. Budgetary basis expenditures of the General Fund were 91.1% ($12.1 million in savings) of the final budgeted expenditures. 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. Other required supplementary information includes the schedules and notes related to the new pension requirements. The additional non-required information includes combining schedules and other supplementary schedules presented after the basic financial statements (Combining Statements 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, public safety, 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, and the stadium. 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. 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, 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 statements. 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. In fiscal year 2015, the City of Peoria implemented GASB statement no. 68 & 71. These statements added required supplementary schedules and notes that have been added to the fiscal year 2015 report. 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, 2015, 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, 2015, 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 Total deferred inflows of resources Net position: Net investment in capital assets Restricted Unrestricted Total net position (in millions of dollars) Governmental Business-type Activities Activities 2015 2014 2015 2014 (restated) (restated) (restated) (restated) $ 263.7 $ 289.9 $ 101.1 $ 101.7 1,129.8 670.9 645.7 1,151.4 1,419.7 772.0 747.4 1,415.1 23.9 0.3 1.9 0.3 19.8 26.2 7.5 9.3 415.0 117.4 128.0 407.0 441.2 124.9 137.3 426.8 16.3 2.6 - $ 885.7 139.2 (29.0) 995.9 $ 855.3 151.6 (28.1) 978.8 $ 568.2 23.8 54.4 646.4 $ 533.6 23.2 53.6 610.4 Total Primary Government 2015 2014 (restated) (restated) $ 364.8 $ 391.6 1,822.3 1,775.5 2,187.1 2,167.1 25.8 0.6 27.3 35.5 524.4 543.0 551.7 578.5 18.9 1,453.9 163.0 25.4 $ 1,642.3 1,388.9 174.8 25.5 $ 1,589.2 The net position of the City, as restated, increased $53 million in fiscal year 2015. Net position of governmental activities increased $17 million, while the business-type activities increased $36 million. Net position consists of three components. The largest portion of net position, $1,453.9 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 residents. 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 $65 million in fiscal year 2015 due to capital asset related expenditures and donated assets. 6 The $163 million restricted portion of the City’s net position represents resources that are subject to external restrictions on how they may be used. The decrease of $11.8 million includes a decrease of $12.9 million in restricted for capital projects offset by a $3.2 million increase in net position restricted for trust purposes. The third portion consists of Unrestricted Net Position of $25.4 million. This category of net position may be used to meet the City’s ongoing obligations to residents and creditors. In fiscal year 2015, the City of Peoria implemented GASB statement no. 68 & 71. These new accounting regulations required recognition of unfunded pension liabilities and a prior period adjustment decreasing unrestricted fund balance. Unrestricted net position is the balance of net position remaining after calculating the other two categories discussed above. This category remained almost unchanged. 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 2014 2015 2014 2015 REVENUES: Program revenues: Fees, fines & charges for services $ 25.7 Operating grants and contributions 13.5 Capital grants and contributions 22.9 General revenues: Property taxes 19.8 Sales and use taxes 74.6 Franchise taxes 4.3 State shared sales tax 14.1 Urban revenue sharing 18.7 Auto-in-lieu taxes 5.9 Investment earnings 0.8 Gain on sale of capital assets Miscellaneous 3.2 Total revenues 203.5 EXPENSES: Program activities: Governmental activities: General government 21.2 Culture and recreation 26.0 Public safety 64.3 Development services 9.5 Highways and streets 33.7 Public works 7.3 Human services 1.2 Interest expense on debt 11.4 Business-type activities: Water utility Wastewater utility Solid Waste utility Stadium Storm Drain utility Total expenses 174.6 Excess (deficit) before transfers 28.9 Transfers (11.9) Change in net position before restatement 17.0 Restatement (112.3) Increase (decrease) in net position (95.3) Ending net position $ 995.9 $ 19.2 12.7 11.7 $ 68.4 29.8 $ 69.5 9.3 Total Primary Government 2015 2014 $ 94.1 13.5 52.7 $ 88.7 12.7 21.0 18.2 70.2 4.2 13.4 17.2 5.5 0.9 0.1 3.9 177.2 0.3 98.5 0.4 79.2 19.8 74.6 4.3 14.1 18.7 5.9 1.1 3.2 302.0 18.2 70.2 4.2 13.4 17.2 5.5 1.3 0.1 3.9 256.4 20.6 25.6 60.3 9.2 31.4 7.0 1.6 12.0 - - 21.2 26.0 64.3 9.5 33.7 7.3 1.2 11.4 20.6 25.6 60.3 9.2 31.4 7.0 1.6 12.0 34.6 21.7 10.9 6.4 0.8 74.4 24.1 11.9 36.0 (14.8) 21.2 646.4 30.8 21.1 10.8 5.2 0.8 68.7 10.5 28.2 38.7 6.3 45.0 625.2 167.7 9.5 (28.2) (18.7) 55.1 36.4 $ 1,091.1 $ 7 $ 34.6 21.7 10.9 6.4 0.8 249.0 53.0 53.0 (127.1) (74.1) $ 1,642.3 30.8 21.1 10.8 5.2 0.8 236.4 20.0 20.0 61.4 81.4 $ 1,716.3 For fiscal year 2015, total governmental activities revenues increased $26.3 million and total businesstype activities revenues increased $19.3 million. Expenses increased $6.9 million and $5.7 million for the governmental activities and business-type activities, respectively. General government expenses increased by $0.6 million; culture & recreation expenses increased by $0.4 million; public safety increased $4.1 million. Development services expenses increased by $0.3 million, human services decreased by $0.4 and highways and streets expenses increased by $2.3 million. The increase in the business-type activities expenses are primarily in the Water Utility, Wastewater Utility and the Stadium Fund. 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 $7.7 million from the previous year. The primary drivers were increases in property tax, sales taxes and state shared sales tax. Property tax revenues increased by $1.6 million in fiscal year 2015 as assessed values showed an increase. Local sales and use taxes increased $4.3 million as retail and restaurant & bar sales taxes increased $2.0 million and $0.8 million respectively while state shared sales taxes increased $0.7 million. Program revenues of governmental activities increased $18.5 million mainly as a result of the following change: Highways & Streets capital grants revenue increased by $14.8 million primarily due to additional donations of capital infrastructure from developers. The program revenues of business-type activities increased by $19.4 million primarily due to a $9.7 million increase in capital grants revenues in the Water Utility and a $6.2 million increase in Capital Grants in the Wastewater 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 $62.1 million are 35.6% of the governmental activities expenses for fiscal year 2015, up from 26.0% in fiscal year 2014. In the business-type activities, program revenues of $98.2 million are 131.9% of the business-type expenses for fiscal year 2015. This compares to $78.8 million and 114.7% in fiscal year 2014. Governmental activities account for 67.4% of the total revenues of the City and 70.1% of the total expenses in fiscal year 2015. These percentages were 69.2% and 70.9% respectively in fiscal year 2014. 8 As seen in the following graph, one of the largest financing sources for the City in fiscal year 2015 is charges for services (31.2%), primarily because this is the major funding source of the business-type activities (69.4% of business-type revenues in fiscal year 2015). The major funding sources of the governmental activities are property, franchise, sales/use taxes and state shared revenues. Government-Wide Revenue Sources Fiscal Year 2015 Other grants & entitlements 4.6% Investment earnings 0.4% Property taxes 6.6% Federal grants 0.8% Sales & use taxes 24.7% State shared revenues 12.8% Charges for services 31.2% Franchise taxes 1.4% Contributed capital 16.5% Other 1.0% Property taxes increased from fiscal year 2014 with an increase in assessed value. The tax rates did not change in fiscal year 2015 compared to the previous year. Total government-wide expenses (not including transfers out) of the City increased $12.5 million in fiscal year 2015. Expenses of the governmental activities increased $6.8 million. This primarily includes increases of $4.0 million for public safety and $2.3 million for highways and streets. Public Safety expenses increased due primarily to additional personnel costs of $1.5 million. Highways and streets expenses increased primarily due to an increase in maintenance performed on the City’s street system. Expenses in business-type activities increased $5.7 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 29.9% of the functional expenses of the City for fiscal year 2015, while governmental activities account for 70.1% of the functional expenses. For the governmental activities, the largest users of resources are public safety (25.8% of total expense, 36.8% of governmental expenses), general government (8.6% of total expenses, 12.2% of governmental expenses), highways and streets (13.5% of total expenses, 19.3% of governmental expenses), and culture and recreation (10.4% of total expenses, 14.9% of governmental expenses). 9 Government-Wide Functional Expenses Fiscal Year 2015 General government 8.6% Business-type activities 29.9% Culture & recreation 10.4% Other 0.5% Public safety 25.8% Highways & streets 13.5% Interest 4.6% Development services 3.8% Public works 2.9% 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 90-93. 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 quantitative 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 $215.9, a decrease of $21.3 million from the previous year. Of this, $127.6 million (down $18.2 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 primarily caused by a decrease in restricted for capital projects and restricted for debt service. An additional $73.3 million of the governmental fund balance (down $0.8 million from the previous year) has been committed or assigned for specific purposes by council or administrative action. These commitments include various stabilization reserves ($37.3 million), debt service reserves ($1.0 million), capital projects ($17.5 million) and arts capital and various other purposes ($17.5 million). The remaining $14.9 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 remained relatively stable compared to the prior year. 10 Governmental Funds - Fund Balance 70 60 Millions 50 40 30 20 10 FY14 0 FY15 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 $5.9 million from the previous year. Urban revenue sharing increased $1.5 million. Property taxes increased slightly in line with a slight increase in assessed values. The City’s sales tax revenues in the General Fund increased $1.9 million and state shared sales tax revenues increased $0.7 million due to recovering retail sales and restaurant & bar sales. Auto-in-lieu revenue (licensing fees) increased $0.4 million due to an increase in auto sales. Total General Fund expenditures increased $6.4 million. Personnel costs increased $2.5 million while other costs (contractual services and commodities) increased $1.9 million due to an increased need for contractual services and commodities. Capital outlay remained constant with fiscal year 2014. The unassigned fund balance of the General Fund was 19.7% of expenditures at June 30, 2015, compared to 16.8% at June 30, 2014. 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 $0.7 million from the previous year due to increased sales tax revenues. Expenditures in this fund remained constant with fiscal year 2014. Transfers out from the Half-Cent Fund decreased $2.2 million with lower debt service transfers. Total fund balance of the Half-Cent Sales Tax Fund increased by $0.5 million in fiscal year 2015. The Highway User Revenue Fund (HURF Fund) is required by state statute to 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 $1.1 million due to increased highway user revenues and an increase in sales taxes. Expenditures increased by $2.4 million in fiscal year 2015 primarily due to increased operating costs. Fund balance increased $0.6 million in fiscal year 2015. 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 $0.5 million while expenditures increased $7.8 million. The increased revenues are due to increasing sales tax revenue while the increased expenditures are primarily capital outlay. The fund balance decreased $1.9 million in fiscal year 2015. 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 increased $1.7 million, while expenditures increased $4.9 million in fiscal year 2015. Fund balance remained constant in fiscal year 2015. 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 increased $1.0 million due to increased secondary property tax revenues. The secondary assessed value of the City increased 7.0% in fiscal year 2015 while the secondary tax rate was unchanged. Expenditures remained constant with fiscal year 2014. Fund balance decreased $1.1 million in fiscal year 2015. 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 quantitative 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 $20.6 million in fiscal year 2015. Net investment in capital assets increased $34.6 million with the addition of utility infrastructure in the Water, Wastewater, and Storm Funds and the completion of phase II for the renovation of the clubhouses and sports complex in the Stadium Fund. This increase was offset by a decrease of $14.7 million in unrestricted net position which is primarily due to the implementation of new pension accounting standards requiring the recognition of a liability for future pension obligations. In accordance with the City’s Principles of Sound Financial Management, the City continues to maintain appropriate levels of stabilization reserves. Operating revenues of the enterprise funds decreased $1.1 million in fiscal year 2015. Charges for services decreased $2.0 million in the Water Utility Fund primarily due to a decrease in outside water usage resulting from unseasonal weather patterns. Charges for services increased $0.5 million in the Wastewater Fund primarily due to a return to more normalized revenue levels from a FY14 drop and $0.2 million in Sanitation due to higher than usual roll-off revenues. In the Stadium Fund, revenues increased $0.5 million primarily due to increased spring training attendance. Operating expenses of the enterprise funds increased $6.3 million in fiscal year 2015. Contractual services/commodities increased $3.6 million in the Water Utility Fund and $.9 million in the Wastewater Fund primarily due to an increase in water and wastewater system repair and maintenance expenditures. The Stadium operating expenses increased $0.7 million primarily due to increased building and grounds maintenance and repair expenditures along with increased spring training payouts to the teams. Depreciation increased $0.9 million in total across all proprietary funds. The changes in operating revenues and expenses discussed above resulted in a decrease of $7.4 million in operating income across all proprietary funds in fiscal year 2015. However, all enterprise fund operations experienced a positive year with most funds covering operating expenditures through operating revenues while maintaining appropriate levels of cash reserves. 12 The following graph shows the operating revenues and expenditures for the enterprise funds for fiscal year 2015. Fiscal Year 2015 Enterprise Fund Operating Revenues and Expenses 35 30 Millions 25 Revenues 20 Expenses 15 10 5 0 BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. Budgetary comparison statements, required for the General Fund and all major special revenue funds, may be found on pages 28-33. 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 are also presented on page 87, and pages 94-102. Amendments to the adopted budget may occur throughout the year in a legally permissible manner (see Note 1.D 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 $470 million occurred during fiscal year 2015. Budget amendments between funds or departments or from budgeted contingencies into operational expense/expenditure accounts did occur. General Fund revenues of $119.8 million, on a budgetary basis, exceeded budgeted revenues of $114.0 million by $5.8 million while budgetary basis expenditures of $123.8 million were 91.1% of final budgeted amounts. 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 and rents, while falling short in investment earnings and fines and forfeitures. There were no expenditure overages for any of the functional categories with the exception of Public Works. During the fiscal year, the original General Fund expenditures and contingencies budget of $146.5 million was amended by $7.6 million to the final expenditure and contingencies budget of $138.9 million. Notable General Fund transfers were as follows: 13  Contingency appropriation of $3.6 million was transferred from General Fund to the GO Bond Funds and the Sports Complex Capital Reserve Fund to construct amenities and improvements at the Peoria Sports Complex.  In fiscal year 2015, the City of Peoria made the decision to conduct a mid-decennial special census. Contingency appropriation of $3.0 million was utilized to pay for associated costs. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2015, the City had $1.5 billion invested in various capital assets, net of accumulated depreciation and related debt, up 4.7% 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 $46.8 million from June 30, 2014. Net assets of business-type activities increased $25.2 million while governmental activities increased $21.6 million. Major additions to capital assets during the fiscal year included the following:  The completion of phase II that consisted of improvements to the stadium at the Peoria Sports Complex. These improvements are pursuant to the new lease agreement with the San Diego Padres and the Seattle Mariners. The presence of these two teams has proven to be an important community asset, as well as an important economic driver.  Located directly north of the Sunrise Mountain Library at 98th Ave & Lake Pleasant Parkway, the City constructed a neighborhood park on approximately six acres in the Camino a Lago area. Park improvements amounted to $2.2 million and included typical amenities.  The City of Peoria invested $4.4 million in a land acquisition located at Peoria Ave and Loop 101. The primary use of this land is to achieve the stated goals in the Council approved Economic Development Implementation Strategy. The following table provides a breakdown of the capital assets of the City at June 30, 2015, and 2014. Additional information on the City’s capital assets may be found in Note 6. Capital Assets at June 30 (Net of depreciation) Buildings and building improvements Equipment; Furniture 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 2015 2014 2015 2014 $ 128.4 $ 133.0 $ 60.5 $ 50.6 11.0 12.2 8.0 6.2 7.8 7.8 6.0 6.2 54.6 56.6 3.2 0.2 394.4 353.4 71.5 68.4 243.3 236.8 10.8 11.1 274.9 268.8 346.4 340.1 16.7 16.6 158.3 47.5 49.2 137.3 $ 1,151.4 $ 1,129.8 $ 670.9 $ 645.7 Total Primary Government 2015 2014 $ 188.9 $ 183.6 19.0 18.4 13.8 14.0 57.8 56.8 394.4 353.4 71.5 68.4 243.3 236.8 10.8 11.1 274.9 268.8 363.1 356.7 184.8 207.5 $ 1,822.3 $ 1,775.5 The City has adopted a ten year capital improvement plan budgeted at $645.8 million, including $169.3 million in fiscal year 2016. Anticipated funding for this plan for fiscal year 2016 is through a combination of impact fees, utility revenue bonds, general obligation bonds, municipal development authority bonds, operating revenues, City and County transportation sales taxes and other outside funding sources. The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $13.9 million. The capital improvement plan is updated annually as part of the City’s budget process. 14 Long-term Debt The City’s outstanding non-current long-term debt, including bonds and loans, compensated absences, and deferred bond premiums was $351.6 million at June 30, 2015. Of this total, $258.0 million was in governmental activities and $93.6 million was in business-type activities. The City’s outstanding noncurrent debt (excluding claims and net pension liability) decreased $27.9 million in fiscal year 2015. This decrease is directly related to servicing the debt. Of the total outstanding bonds and loans of $372.2 million, $142.9 million is general obligation bonds backed by the full faith and credit of the City. An additional $2.9 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 $48.4 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. Additional information on the debt limitations and capacities may be found in Table XX in the statistical section of this report. The following schedule shows the outstanding debt of the City (both current and long-term, excluding net pension liability and claims payable) as of June 30, 2015, and 2014. Further detail on the City’s outstanding debt may be found in Note 7. Information on the City’s net pension liability may be found in the Required Supplementary Section of the report and in Note 9. Outstanding Debt (in millions) Governmental Activities 2015 2014 General obligation debt $ Municipal Development Authority debt Special assessment debt Water/Sewer Revenue bonds and loans Community Facilities District bonds Compensated absences Total $ 142.9 76.7 2.9 48.4 7.2 278.1 $ $ Business-type Activities 2015 2014 152.8 81.0 3.2 51.1 6.9 295.0 $ $ 101.3 0.8 102.1 $ $ 110.5 0.8 111.3 Total Primary Government 2015 2014 $ $ 142.9 76.7 2.9 101.3 48.4 8.0 380.2 $ $ 152.8 81.0 3.2 110.5 51.1 7.7 406.3 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 2015 was 5.3% which remains below the state (6.3%) and constant with the national average (5.3%). The regional economy continues to recover at a slow pace with population growth in the 1.6% range and modest improvements in job creation over the 12-month period at 1.9%, slightly lower than the national rate of 2.1%. 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. Commercial activity increased over previous years, but consisted mainly of small pads like banks rather than big box retail. The adopted fiscal year 2016 budget is $511 million, an increase from the fiscal year 2015 budget as the City anticipates slight property tax revenue increases due to an increase in the City’s assessed valuation and improving tax revenues. The operating budget totals $341.7 million, which is an increase of 5.2% from 2015. The capital projects portion of the budget, $169.3 million, is divided in the following manner: $2.3 million for drainage projects, $9.2 million for operational facilities, $14.6 million for parks, trails and 15 open space, $9.5 million for public safety projects, $39.3 million for streets and traffic control projects, $48.4 million for economic development projects, $15.9 million for wastewater projects, and $30.1 million for water projects. The General Fund operating budget (not including contingency) is $131.9 million, up 7.1% from the prior year budget. With the modest economic recovery, resident 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 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. The City also maintains working capital policy reserve, rate stabilization, and debt stabilization reserves in the Utility Funds. 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 2016 budget does not anticipate the use of reserves to address recurring expenses. FINANCIAL CONTACT This financial report is designed to provide a general overview of the City of Peoria, Arizona’s finances and to demonstrate accountability for the use of public funds. Questions about any of the information provided in this report, or requests for additional financial information should be addressed to the City’s Finance Director at the following address: City of Peoria, 8401 W. Monroe Street, Peoria, Arizona 85345. 16 Basic Financial Statements CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2015 Governmental Activities ASSETS Pooled cash and investments Accounts receivable, net Interest receivable Internal balances Due from other governments Prepaid items Supply inventories Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Special assessments receivable Capital assets: Non-depreciable Depreciable (net) Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Deferred loss on bond refunding Total deferred outflows of resources LIABILITIES Accounts payable Accrued payroll Interest payable Due to other governments Customer deposits Other liabilities Unearned revenue-other Non-current liabilities: Due within one year: Current portion of claims payable Current portion of compensated absences Current portion of bonds & loans payable Due in more than one year: Noncurrent portion of claims payable Noncurrent portion of compensated absences Noncurrent portion of bonds & loans payable Net pension liability Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Total deferred inflow of resources NET POSITION Net investment in capital assets Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Facilities maintenance Trust purpose Unrestricted Total net position $ $ 201,201,597 8,309,389 134,647 (2,883,511) 6,984,997 65,200 446,916 8,241,193 14,314,415 24,561,684 2,326,112 Primary Government Business-type Activities $ 83,791,894 8,674,507 48,557 2,883,511 90,415 334,313 5,299,212 - $ 284,993,491 16,983,896 183,204 6,984,997 155,615 781,229 8,241,193 19,613,627 24,561,684 2,326,112 483,687,321 667,668,491 1,415,058,451 64,150,067 606,740,778 772,013,254 547,837,388 1,274,409,269 2,187,071,705 23,640,361 291,410 23,931,771 1,703,459 237,005 1,940,464 25,343,820 528,415 25,872,235 6,154,761 1,379,443 5,743,336 1,386,994 3,567 1,979,367 3,233,723 3,285,592 173,634 1,663,375 189,547 2,032,293 2,504 210,061 9,440,353 1,553,077 7,406,711 1,576,541 2,035,860 1,981,871 3,443,784 3,290,217 5,400,100 18,010,000 612,460 9,456,158 3,290,217 6,012,560 27,466,158 641,829 1,814,260 256,150,584 121,657,840 426,846,021 182,340 93,448,562 13,696,960 124,953,486 641,829 1,996,600 349,599,146 135,354,800 551,799,507 16,286,821 16,286,821 2,594,978 2,594,978 18,881,799 18,881,799 885,716,419 568,223,130 1,453,939,549 23,730,354 100,000 54,351,770 $ 646,405,254 47,641,567 30,421,871 28,858,752 43,783,885 2,727,599 167,084 9,373,545 25,348,782 $ 1,642,262,634 47,641,567 6,691,517 28,858,752 43,783,885 2,727,599 67,084 9,373,545 (29,002,988) 995,857,380 The accompanying notes are an integral part of the financial statements 17 Total CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2015 Net (Expense) Revenue and Changes in Net Position Program Revenues Fees, Fines & Charges for Services Expenses Functions/Programs Governmental activities: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Interest on long-term debt $ Total governmental activities Business-type activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Total business-type activities Total primary government 21,210,452 25,982,440 64,261,923 9,544,919 33,658,672 7,259,675 1,177,275 11,373,755 $ 174,469,111 25,696,523 34,566,373 21,737,995 10,939,896 6,372,954 813,636 33,598,235 18,969,596 11,450,636 3,556,442 842,812 248,899,965 Capital Grants and Contributions $ $ 23,419 2,393,193 344,458 1,185,984 9,538,734 13,485,788 $ 94,114,244 $ $ $ (112,377,937) (18,846,539) (15,228,383) (59,731,894) (5,460,638) 2,801,681 (3,411,918) (1,126,491) (11,373,755) (112,377,937) 14,393,093 6,992,107 510,740 (1,179,184) 3,030,831 - 52,669,583 - Total - - 29,760,720 $ (18,846,539) (15,228,383) (59,731,894) (5,460,638) 2,801,681 (3,411,918) (1,126,491) (11,373,755) Business-type Activities (112,377,937) 15,361,231 9,760,506 1,637,328 3,001,655 $ 13,485,788 9,000 22,899,863 - Governmental Activities 22,908,863 - 68,417,721 74,430,854 $ 2,340,494 8,360,864 4,176,571 2,898,297 4,021,756 3,847,757 50,784 - Operating Grants and Contributions 14,393,093 6,992,107 510,740 (1,179,184) 3,030,831 23,747,587 23,747,587 23,747,587 (88,630,350) General revenues: Taxes: Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes Intergovernmental: State shared sales taxes- unrestricted Urban revenue sharing- unrestricted Auto in-lieu taxes- unrestricted Investment earnings Miscellaneous Transfers in (out) 14,139,128 18,650,521 5,886,971 843,648 3,216,595 (11,931,172) 348,717 11,931,172 14,139,128 18,650,521 5,886,971 1,192,365 3,216,595 - Total general revenues and transfers 129,454,727 12,279,889 141,734,616 17,076,790 36,027,476 53,104,266 1,091,122,701 625,159,136 1,716,281,837 2,889,150 16,891,026 74,556,024 4,312,836 Change in net position Net position - beginning Cumulative effect of change in accounting principle Net position - beginning - restated Net position - ending $ The accompanying notes are an integral part of the financial statements 18 - (112,342,111) (14,781,358) 978,780,590 610,377,778 995,857,380 $ 646,405,254 2,889,150 16,891,026 74,556,024 4,312,836 (127,123,469) 1,589,158,368 $ 1,642,262,634 19 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2015 Major Funds General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund ASSETS & DEFERRED OUTFLOWS Assets: Pooled cash and investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Supply inventories Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Special assessments receivable Total assets $ 56,081,330 5,125,988 40,287 5,934,752 2,874,314 163,703 304,559 70,524,933 $ 10,170,198 1,609,107 6,099 11,785,404 $ 15,078,200 427,178 8,670 895,505 70,579 16,480,132 $ 27,327,259 973,013 16,423 28,316,695 Total assets & deferred outflows $ 70,524,933 $ 11,785,404 $ 16,480,132 $ 28,316,695 $ $ $ $ 419,313 419,313 LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Due to other governments Customer deposits Other liabilities Unearned revenue-other Total liabilities Deferred Inflows of Resources: Unavailable revenue-property taxes Unavailable revenue-special assessments Total deferred inflows of resources Fund balances: Nonspendable: Supply inventories Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance Committed to: Debt service Economic development Arts capital Operating reserve Emergency reserve Budget stabilization reserve Assigned to: Capital projects Municipal Complex reserve Other purposes Unassigned: Total fund balance Total liabilities, deferred inflows & fund balance 2,380,245 1,206,251 1,386,994 3,567 1,906,780 1,858,353 8,742,190 186,261 186,261 - 477,931 45,119 523,050 - 82,718 82,718 - 163,703 - 70,579 - 67,084 - 15,803,785 - 5,036,493 13,661,000 9,107,000 9,107,000 1,000,000 5,434,000 3,056,458 21,584,005 61,782,743 $ 70,524,933 5,165,143 11,599,143 $ 11,785,404 15,874,364 $ 16,480,132 The accompanying notes are an integral part of the financial statements 20 27,897,382 - $ 27,897,382 28,316,695 (continued) CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2015 Major Funds GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds Total Governmental Funds ASSETS & DEFERRED OUTFLOWS Assets: Pooled cash and investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Supply inventories Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Special assessments receivable Total assets $ 12,540,196 65,100 10,738 190,408 13,052,629 25,859,071 $ 29,774,823 16,993 29,791,816 $ 27,763,291 98,220 19,273 929,914 3,024,770 408,835 1,261,786 19,071,412 2,326,112 54,903,613 $ 178,735,297 8,298,606 118,483 6,864,666 6,984,997 234,282 713,394 14,314,415 19,071,412 2,326,112 237,661,664 Total assets & deferred outflows $ 25,859,071 $ 29,791,816 $ 54,903,613 $ 237,661,664 $ $ $ 1,144,271 19,224 5,934,752 72,587 1,375,370 8,546,204 LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Due to other governments Customer deposits Other liabilities Unearned revenue-other Total liabilities Deferred Inflows of Resources: Unavailable revenue-property taxes Unavailable revenue-special assessments Total deferred inflows of resources Fund balances: Nonspendable: Supply inventories Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance Committed to: Debt service Economic development Arts capital Operating reserve Emergency reserve Budget stabilization reserve Assigned to: Capital projects Municipal Complex reserve Other purposes Unassigned: Total fund balance Total liabilities, deferred inflows & fund balance - 3,150 929,914 933,064 - - - - 25,859,071 - - 28,858,752 - 25,859,071 $ 25,859,071 2,326,112 2,326,112 28,858,752 $ 29,791,816 $ 4,611,171 1,270,594 6,864,666 1,386,994 3,567 1,979,367 3,233,723 19,350,082 82,718 2,326,112 2,408,830 234,282 19,456,384 6,691,517 2,727,599 - 45,315,455 6,691,517 28,858,752 43,701,167 2,727,599 67,084 4,138,297 - 1,000,000 5,036,493 4,138,297 13,661,000 9,107,000 14,541,000 17,546,784 109,383 (6,638,667) 44,031,297 54,903,613 The accompanying notes are an integral part of the financial statements 21 $ 17,546,784 3,056,458 5,274,526 14,945,338 215,902,752 $ 237,661,664 22 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL ACTIVITIES JUNE 30, 2015 Fund balances - total governmental funds balance sheet $ 215,902,752 Amounts reported for governmental activities in the statement of net position are different because: 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 $ 1,452,491,087 (319,807,572) 1,132,683,515 Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Deferred loss on bond refunding 291,410 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 (270,875,000) (6,510,540) (277,385,540) Unavailable revenue for long-term special assessments is shown on the governmental funds balance sheet, but was recognized as revenue for the government-wide statements 2,326,112 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 (3,285,584) 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 82,718 Interest payable on long-term debt is not reported in the governmental funds. (5,743,336) 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 are reported with the governmental activities. 35,050,391 Long-term liabilities, such as net pension liabilities are not due and payable in the current period and, therefore, are not reported as a liability in the funds. (112,044,331) Deferred outflows and inflows of resources related to pensions are applicable to future reporting periods and, therefore, are not reported in the funds. Deferred outflows related to pensions Deferred inflows related to pensions 22,444,751 (14,465,478) Total net position of governmental activities - statement of net position The accompanying notes are an integral part of the financial statements 23 7,979,273 $ 995,857,380 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Major Funds REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Special assessments Miscellaneous Total revenues EXPENDITURES: Current: General government Culture and recreation Public safety 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): Bond proceeds Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund $ 47,980,124 39,120,003 12,530,545 3,132,178 1,699,818 889,053 139,171 759,199 106,250,091 $ 18,529,653 43,966 18,573,619 $ 3,992,046 9,562,309 173,442 71,504 243,891 14,043,192 $ 13,760,256 21,614,003 59,714,728 8,876,406 5,260,083 - 2,828,322 - 14,216,410 - 1,917,936 - 181,313 109,406,789 1,443,331 4,271,653 180,721 14,397,131 9,150,120 11,068,056 11,224,109 110,780 11,334,889 (3,156,698) 14,301,966 (353,939) 8,682,112 (1,737,456) 6,944,656 (13,828,046) (13,828,046) 1,000,000 (20,181) 979,819 (2,157,446) (2,157,446) (1,890,613) 3,787,958 473,920 625,880 57,994,785 11,125,223 15,248,484 $ 61,782,743 $ 11,599,143 $ 15,874,364 The accompanying notes are an integral part of the financial statements 24 266,833 29,787,995 $ 27,897,382 (continued) CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Major Funds GO Bond Debt Service Fund REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Special assessments Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Non-Major Governmental Funds Total Governmental Funds $ $ $ 9,895,000 5,746,609 15,641,609 Excess (deficiency) of revenues over (under) expenditures (1,093,945) OTHER FINANCING SOURCES (USES): Bond proceeds Transfers in Transfers out Total other financing sources and uses (1,093,945) Net change in fund balances 26,953,016 Fund balances - beginning Fund balances - ending 14,469,957 77,707 14,547,664 Development Fee Fund $ 25,859,071 6,169,160 120,536 6,289,696 496,923 526,654 1,125,460 838,548 2,067,576 1,759 1,147,341 17,085,501 22,181,064 60,840,413 9,714,954 19,400,893 5,261,842 1,147,341 5,089,007 6,328,610 7,410,000 6,186,655 10,447,482 30,248,398 17,305,000 11,933,264 26,491,974 191,362,246 (38,914) (17,491,955) (7,566,652) - 35,000 6,675,380 (12,369,881) (5,659,501) 35,000 16,357,492 (30,113,010) (13,720,518) (38,914) (23,151,456) (21,287,170) 67,182,753 237,189,922 28,858,752 $ 44,031,297 The accompanying notes are an integral part of the financial statements 25 98,629,880 55,289,472 19,355,378 3,132,178 1,856,640 889,053 725,208 381,761 3,536,024 183,795,594 40,407 225 1,198,971 - 28,897,666 $ 2,433,991 6,607,160 482,231 156,822 161,544 381,761 2,532,934 12,756,443 $ 215,902,752 26 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, 2015 Net change in fund balances - total governmental funds $ (21,287,170) Amounts reported for governmental activities in the statement of activities are different because 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. (322,250) 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. 19,156 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. (277,015) 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. 559,509 Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays ($26,354,877), plus other capital $0, is exceeded by depreciation ($28,411,399) in the current period. (2,056,522) 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. 125,602 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 20,029,654 The issuance of long-term debt provides current financial resources in the governmental funds, but creates a long-term liability in the statement of activities. Repayment of bonds principal is an expenditure in the governmental funds, but reduces long-term liabilities in the statement of net position. No effect on net position. 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 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. Governmental funds report pension contributions as expenditures. However, in the Statement of Activities, pension service costs, interest on the pension liability, current year benefit changes, member contributions, expected earnings on plan investments, administrative expenses and recognition of deferred outflows and inflows from the pensions is reported as pension expense. Change in net position of governmental activities- statement of activities The accompanying notes are an integral part of the financial statements 27 (35,000) 17,305,000 (257,066) 6,270,458 (2,097,566) $ 17,076,790 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government: Mayor and council City manager Human resources Attorney City clerk Court Economic development Finance Non-departmental Culture and recreation Public safety: Police Fire Development services Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 44,574,293 37,518,728 25,841,648 2,574,540 1,960,274 618,463 257,100 670,000 114,015,046 $ 44,574,293 37,518,728 25,841,648 2,574,540 1,960,274 618,463 257,100 670,000 114,015,046 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 47,980,124 39,120,003 26,084,379 3,132,178 1,699,818 889,053 139,171 759,199 119,803,925 $ 3,405,831 1,601,275 242,731 557,638 (260,456) 270,590 (117,929) 89,199 5,788,879 705,276 4,073,220 2,514,788 3,264,380 971,151 1,870,388 1,573,802 9,853,216 2,293,385 22,198,209 705,276 4,138,920 2,561,997 3,399,380 971,151 1,870,388 1,718,733 9,890,776 5,190,988 22,744,414 638,168 3,973,013 2,341,752 3,250,155 857,377 1,745,085 1,346,055 9,440,594 3,767,050 21,960,996 (67,108) (165,907) (220,245) (149,225) (113,774) (125,303) (372,678) (450,182) (1,423,938) (783,418) 38,278,848 23,957,261 9,079,414 5,581,077 1,986,052 128,200,467 38,070,998 24,010,635 11,891,102 5,622,827 3,096,743 135,884,328 36,130,515 23,602,224 8,876,406 5,646,108 181,313 123,756,811 (1,940,483) (408,411) (3,014,696) 23,281 (2,915,430) (12,127,517) (14,185,421) (21,869,282) (3,952,886) 17,916,396 (18,250,000) 8,080,843 (1,100,190) (11,269,347) (3,018,435) 8,080,843 (1,100,190) 3,962,218 8,682,112 (941,268) 7,740,844 3,018,435 601,269 158,922 3,778,626 (25,454,768) (17,907,064) 3,787,958 21,695,022 47,944,999 47,944,999 57,994,785 10,049,786 22,490,231 $ 30,037,935 $ 61,782,743 The accompanying notes are an integral part of the financial statements 28 $ 31,744,808 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2015 Explanation of differences between budgetary basis and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "Total revenues" from the budgetary comparison statement Differences - budget to GAAP: Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison statement Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 29 $ 119,803,925 (13,553,834) $ 106,250,091 $ 123,756,811 (796,188) (13,553,834) $ 109,406,789 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Total revenues $ EXPENDITURES: Current: General government Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 16,969,450 70,000 17,039,450 $ 16,969,450 70,000 17,039,450 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 18,529,653 43,966 18,573,619 $ 1,560,203 (26,034) 1,534,169 1,988,949 2,797,825 2,828,322 785,000 20,000 378,650 3,172,599 785,000 20,000 1,820,269 5,423,094 1,544,208 4,372,530 13,866,851 11,616,356 14,201,089 2,584,733 3,500,000 (13,092,159) (9,592,159) 2,400,000 (13,092,159) (10,692,159) (13,727,169) (13,727,169) (2,400,000) (635,010) (3,035,010) 4,274,692 924,197 473,920 10,066,879 10,066,879 11,125,223 14,341,571 $ 10,991,076 Explanation of differences between budgetary basis and GAAP revenues and expenditures Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison statement Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 11,599,143 $ 4,372,530 (100,877) $ 4,271,653 The accompanying notes are an integral part of the financial statements 30 30,497 (785,000) (20,000) (276,061) (1,050,564) (450,277) 1,058,344 $ 608,067 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Taxes Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending 4,103,136 8,556,214 392,000 100,400 13,151,750 $ $ 3,992,046 9,562,309 468,442 71,504 243,891 14,338,192 $ 10,150,895 5,976,944 16,127,839 (2,125,585) (2,976,089) (366,925) 1,500,000 1,548,978 (556,173) 2,492,805 818,329 1,548,978 (556,173) 1,811,134 1,000,000 (7,195) 992,805 367,220 (1,164,955) 625,880 1,790,835 15,248,484 1,190,252 14,425,452 14,524,396 180,721 14,705,117 (111,090) 1,006,095 76,442 (28,896) 243,891 1,186,442 10,023,048 5,254,287 15,277,335 14,058,232 $ 4,103,136 8,556,214 392,000 100,400 13,151,750 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 14,058,232 $ 12,893,277 Explanation of differences between budgetary basis and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "Total revenues" from the budgetary comparison schedule Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB 34's allocation rules. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison statement Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 15,874,364 $ 14,338,192 (295,000) $ 14,043,192 $ 14,705,117 (12,986) (295,000) $ 14,397,131 The accompanying notes are an integral part of the financial statements 31 4,373,501 (5,796,223) (1,422,722) 2,609,164 (818,329) (548,978) 548,978 (818,329) $ 2,981,087 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Total revenues $ EXPENDITURES: Current: Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 10,223,387 125,000 10,348,387 $ 10,223,387 125,000 10,348,387 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 11,224,109 110,780 11,334,889 $ 416,075 25,330,423 25,746,498 343,269 28,882,776 29,226,045 (15,398,111) (18,877,658) 1,000,000 (1,275,000) (275,000) 99,494 (1,275,000) (1,175,506) (2,157,446) (2,157,446) (15,673,111) (20,053,164) (1,890,613) 18,162,551 22,405,999 22,405,999 29,787,995 7,381,996 6,732,888 $ 2,352,835 1,917,936 9,150,120 11,068,056 1,000,722 (14,220) 986,502 266,833 $ 27,897,382 The accompanying notes are an integral part of the financial statements 32 1,574,667 (19,732,656) (18,157,989) 19,144,491 (99,494) (882,446) (981,940) $ 25,544,547 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Charges for services Investment earnings Total revenues $ EXPENDITURES: Current: Culture and recreation Public safety Development services Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 13,017,244 184,100 13,201,344 $ 13,017,244 184,100 13,201,344 502,500 77,625 5,674,739 17,134,298 23,389,162 534,499 63,996 6,175,604 31,325 15,391,801 22,197,225 (10,187,818) (8,995,881) 3,800,000 3,800,000 2,997,985 2,997,985 (6,387,818) (5,997,896) 28,226,176 28,226,176 21,838,358 $ 22,228,280 $ 6,169,160 120,536 6,289,696 $ 40,407 225 1,198,971 5,089,007 6,328,610 8,956,967 - (2,997,985) (2,997,985) (38,914) 5,958,982 28,897,666 $ 28,858,752 (6,848,084) (63,564) (6,911,648) (494,092) (63,771) (4,976,633) (31,325) (10,302,794) (15,868,615) (38,914) The accompanying notes are an integral part of the financial statements 33 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 671,490 $ 6,630,472 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2015 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund ASSETS Current assets: Pooled cash and investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Pooled cash and investments Cash with fiscal agents Investments Net restricted assets Capital assets: Buildings and improvements Distribution and collection systems Water rights Equipment & furniture Vehicles Less accumulated depreciation and amortization Land and improvements Construction in progress Capital assets, net Other assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Deferred loss on bond refunding Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable Accrued payroll Interest payable Due to other governments Customer Deposits Other liabilities Current portion of claims payable Current portion of compensated absences Current portion of bonds & loans 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 & loans payable Net pension liability Total non-current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted: Capital projects Facilities maintenance Trust purpose Unrestricted Total net position $ 42,137,074 4,430,634 26,753 90,415 184,893 46,869,769 $ 20,676,004 1,940,756 9,291 22,626,051 4,215,223 4,215,223 1,083,989 1,083,989 1,744,850 332,837,367 12,889,809 9,774,480 1,920,168 (96,404,592) 6,077,325 30,605,950 299,445,357 350,530,349 7,659,795 365,700,822 2,393,982 1,106,630 (94,330,482) 3,878,001 15,696,571 302,105,319 325,815,359 $ 19,425,747 1,171,095 10,936 149,420 20,757,198 10,799 28,430 11,064,578 (5,868,187) 5,235,620 25,992,818 675,669 224,201 899,870 342,529 12,804 355,333 466,862 466,862 1,129,609 63,180 526,480 185,291 2,032,293 282,560 4,277,328 8,496,741 1,598,980 34,193 1,136,895 107,440 5,178,830 8,056,338 262,802 48,161 135,160 446,123 85,940 27,865,557 5,432,832 33,384,329 41,881,070 22,690 65,583,005 2,754,161 68,359,856 76,416,194 39,960 3,753,885 3,793,845 4,239,968 1,029,285 1,029,285 521,794 521,794 711,197 711,197 267,526,670 231,356,291 5,235,620 13,222,923 27,770,271 $ 308,519,864 3,518,136 14,358,277 $ 249,232,704 6,970,453 9,302,442 $ 21,508,515 (continued) The accompanying notes are an integral part of the financial statements 34 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2015 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund ASSETS Current assets: Pooled cash and investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Pooled cash and investments Cash with fiscal agents Investments Net restricted assets Capital assets: Buildings and improvements Distribution and collection systems Water rights Equipment & furniture Vehicles Less accumulated depreciation and amortization Land and improvements Construction in progress Capital assets, net Other assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Deferred loss on bond refunding Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable Accrued payroll Interest payable Due to other governments Customer Deposits Other liabilities Current portion of claims payable Current portion of compensated absences Current portion of bonds & loans 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 & loans payable Net pension liability Total non-current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted: Capital projects Facilities maintenance Trust purpose Unrestricted Total net position $ 763,986 1,057,579 1,151 1,822,716 $ - 789,083 74,443 426 863,952 - 67,217,249 916,344 503,728 (15,653,735) 6,703,349 3,229,589 (846) 1,188,871 4,417,614 5,281,566 59,686,935 61,509,651 Total Governmental Activities Internal Service Funds $ 83,791,894 8,674,507 48,557 90,415 334,313 92,939,686 $ 22,466,300 10,783 16,164 65,200 212,634 22,771,081 5,299,212 5,299,212 7,527,799 5,490,272 13,018,071 76,632,693 701,767,778 12,889,809 13,113,236 14,595,104 (212,257,842) 16,658,675 47,491,392 670,890,845 769,129,743 148,102 35,703,624 25,475,993 (46,893,898) 4,238,476 18,672,297 54,461,449 178,008 178,008 40,391 40,391 1,703,459 237,005 1,940,464 1,195,610 1,195,610 248,938 24,202 4,256 2,504 72,640 210,061 562,601 45,263 3,898 14,660 63,821 3,285,592 173,634 1,663,375 189,547 2,032,293 2,504 612,460 9,456,158 210,061 17,625,624 1,543,590 108,849 3,290,217 532,290 5,474,946 30,100 1,431,309 1,461,409 2,024,010 3,650 324,773 328,423 392,244 182,340 93,448,562 13,696,960 107,327,862 124,953,486 641,829 171,530 9,613,509 10,426,868 15,901,814 271,171 271,171 61,531 61,531 2,594,978 2,594,978 1,821,343 1,821,343 59,686,935 4,417,614 568,223,130 18,672,297 450,568 4,868,182 23,730,354 100,000 51,468,259 643,521,743 9,373,545 9,888,060 $ 37,933,902 18,842 100,000 (413,299) $ 59,392,478 Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time. $ 2,883,511 $ 646,405,254 The accompanying notes are an integral part of the financial statements 35 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund OPERATING REVENUES Charges for services Rents 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 33,399,813 179,829 33,579,642 18,895,883 35,648 18,931,531 $ 11,395,008 405 11,395,413 4,888,144 19,870,060 9,105,517 33,863,721 (284,079) 2,390,262 8,177,595 9,043,637 19,611,494 (679,963) 3,550,965 6,825,644 120 848,259 11,224,988 170,425 192,773 (885,586) 18,593 (674,220) 66,314 (2,213,057) 38,065 (2,108,678) 78,801 55,223 134,024 (958,299) 15,361,231 998,325 (3,832,055) 11,569,202 (2,788,641) 10,017,576 4,663,837 (748,607) 11,144,165 304,449 (2,803) 301,646 302,813,615 Cumulative effect of changes in accounting principle Total net position - beginning, restated Total net position - ending $ (5,862,953) 296,950,662 $ 308,519,864 241,060,749 (2,972,210) 238,088,539 $ 249,232,704 25,257,951 $ (4,051,082) 21,206,869 21,508,515 (continued) The accompanying notes are an integral part of the financial statements 36 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund OPERATING REVENUES Charges for services Rents 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) 1,431,213 2,124,639 590 3,556,442 $ 1,465,218 3,602,598 1,384,879 6,452,695 (2,896,253) 842,812 842,812 Total $ 65,964,729 2,124,639 216,472 68,305,840 8,260,159 12,717,225 15,857,812 3,721,811 40,557,007 966,463 2,872 2,872 348,717 (3,098,643) 111,881 (2,638,045) 118,440 149,515 267,955 (6,306,001) 30,017,790 16,259,998 (4,585,895) 35,385,892 1,234,418 9,000 2,088,145 (6,730) 3,324,833 24,786 3,001,655 1,100,915 (654) 4,126,702 Total net position - beginning 52,692,928 1,091,966 622,917,209 Cumulative effect of changes in accounting principle Total net position - beginning, restated Total net position - ending (1,544,627) 51,148,301 59,392,478 (350,486) 741,480 4,868,182 (14,781,358) 608,135,851 643,521,743 $ Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds. Change in net position of business-type activities 641,585 $ 36,027,477 The accompanying notes are an integral part of the financial statements 37 41,082,673 440,797 41,523,470 12,585,843 38,999,634 120 20,388,199 71,973,796 (3,667,956) (2,888,296) 1,637,328 9,496,921 (1,776) 8,244,177 $ $ 291,254 523,737 5,907 820,898 21,914 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 7,957 7,957 Governmental Activities Internal Service Funds 44,983,688 (10,374,619) 34,609,069 $ 37,933,902 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 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 $ 34,106,993 (18,126,492) (4,977,789) (2,481,902) 8,520,810 $ 18,975,406 (6,388,859) (2,429,804) (1,004,074) 9,152,669 $ 11,404,991 (2,595,894) (3,614,045) (120) (4,307,278) 887,654 998,325 (3,832,055) (2,833,730) 4,663,837 (748,607) 3,915,230 (2,803) (2,803) (5,502,651) 18,593 3,411,212 (2,942,835) (2,338,412) (5,002,197) 38,065 1,007,354 (4,652,977) (2,727,412) (495,579) 55,223 - (7,354,093) (11,337,167) (440,356) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Disposal of capital assets Capital contributions Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 186,445 186,445 (1,480,568) 47,832,865 $ 46,352,297 63,064 63,064 76,209 76,209 1,793,796 19,966,197 $ 21,759,993 520,704 18,905,043 $ 19,425,747 (continued) The accompanying notes are an integral part of the financial statements 38 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Total Governmental Activities Internal Service Funds 843,767 (277,902) (298,263) (203,546) 64,056 $ 66,686,786 (30,378,247) (12,798,635) (120) (8,583,335) 14,926,449 $ 41,515,794 (13,238,633) (8,398,461) (15,988,355) 3,890,345 9,496,921 (1,776) 9,495,145 1,100,915 (654) 1,100,261 16,259,998 (4,585,895) 11,674,103 2,088,145 (6,730) 2,081,415 (9,479,826) 1,637,328 - (1,106,614) - (21,586,867) 111,881 6,055,894 (7,595,812) (5,065,824) (3,915,114) 179,832 - (7,842,498) (1,106,614) (28,080,728) (3,735,282) Business-type Activities Major Enterprise Funds Stadium Storm Drainage Fund Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Payments to internal service funds Net cash provided (used) by operating activities $ 1,355,629 (2,989,100) (1,478,734) (586,535) (3,698,740) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Disposal of capital assets Capital contributions Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ 7,155 7,155 (2,038,938) 2,802,924 $ 763,986 2,769 2,769 $ 60,472 728,611 789,083 335,642 335,642 (1,144,534) 90,235,640 $ 89,091,106 (745,716) 111,513 (634,203) 1,602,275 28,391,824 $ 29,994,099 (continued) The accompanying notes are an integral part of the financial statements 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Add: Pension expense Subtract: Employer pension contributions (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 (284,079) $ 9,105,517 323,052 (399,558) (679,963) $ 9,043,637 163,770 (202,554) 848,259 223,217 (276,079) 513,431 585 60,114 43,875 - 9,578 (5,369) (690,172) 2,291 (30,598) (78,263) 13,920 - 791,665 5,402 (7,003) - (72,159) 7,952 - (15,430) 8,804,889 (6,160) 9,832,632 (18,170) 717,229 Net cash provided (used) by operating activities $ 8,520,810 $ 9,152,669 $ 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 $ 11,950,019 14,994 $ 11,965,013 $ 9,010,222 4,573 9,014,795 $ $ The accompanying notes are an integral part of the financial statements 40 170,425 887,654 6,126 $ 6,126 (continued) CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Business-type Activities Major Enterprise Funds Stadium Storm Drainage Fund Fund Total Governmental Activities Internal Service Funds Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ (2,896,253) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Add: Pension expense Subtract: Employer pension contributions (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 $ 1,384,879 85,110 (105,265) 21,914 5,907 19,312 (23,885) (562,485) - 955 - 25,845 3,019 1,117 1 (1,638,328) 3,620 (802,487) 42,289 (36) (2,400) 42,142 $ (3,667,956) $ 20,388,199 814,461 (1,007,341) 3,721,811 571,646 (707,023) 5,354 585 54,745 (7,676) 5,086 (17,085) 97,468 18,628 (29,481) (85,265) 13,920 (1,638,328) (38,540) 18,594,405 (509,409) 11,105 (130,543) (14,030) 2,923,882 Net cash provided (used) by operating activities $ (3,698,740) $ 64,056 $ 14,926,449 $ 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 $ $ 3,001,655 43 3,001,698 $ 23,961,896 26,044 $ 23,987,940 $ $ 308 308 $ The accompanying notes are an integral part of the financial statements 41 966,463 3,890,345 9,000 9,591 $ 18,591 (concluded) CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2015 Firemen's Pension Fund ASSETS Pooled cash and investments Interest receivable Total assets $ LIABILITIES Accounts payable Other liabilities Total liabilities 70,306 46 70,352 Agency Funds $ - NET POSITION Held in trust for pension benefits $ 70,352 The accompanying notes are an integral part of the financial statements 42 446,363 9 446,372 2,495 443,877 446,372 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 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 $ 537 537 335 335 335 872 DEDUCTIONS Retirement payments Total deductions 20,400 20,400 Change in net position (19,528) Net position - beginning of the year Net position - end of the year $ 89,880 70,352 The accompanying notes are an integral part of the financial statements 43 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 45 2 Deposits and Investments 54 3 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 56 4 Accounts Receivable and Allowance for Doubtful Accounts 56 5 Due from Other Governments 56 6 Capital Assets 57 7 Long-term Debt 58 8 Risk Financing Activities 62 9 Pensions and Other Postemployment Benefits 63 10 Deferred Compensation Plan 73 11 Contingencies and Commitments 73 12 Interfund Transactions, Receivable and Payable Balances 73 13 Stabilization Arrangements 74 14 Segment Information for Enterprise Funds 75 15 Subsequent Events 75 44 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements of the City of Peoria, Arizona (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) applicable to governmental units adopted by the Governmental Accounting Standards Board (GASB). A summary of the City’s more significant policies follows. A. Financial Reporting Entity 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. 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 its blended component units for which the City is financially accountable. The blended component units are, in substance, part of the primary government’s operations, even though they are legally separate entities. These component units are governed by boards, wholly or substantially, comprised of the government’s elected council. Individual Component Units - Blended City of Peoria Municipal Development Authority, Inc. City of Peoria Municipal Development Authority, Inc. (Authority), an Arizona not-for-profit corporation, was organized for the purpose of financing the construction of municipal facilities within the City through the issuance of bonds. Concurrent with these bond issues, the City entered into contracts with the Authority whereby the City will pay, to the Authority, amounts sufficient to retire the Authority's bonds and related interest. The outstanding Municipal Development Authority, Inc. bonds are reported as a debt service fund in the City’s financial statements. All of the outstanding 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 (Vistancia) was formed by petition to the City Council in 2002. Vistancia’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, Vistancia can levy taxes and issue bonds independently of the City. Property owned in the designated areas is assessed for Vistancia’s property taxes, and thus for the costs of operating the district. The City Council serves as the Board of Directors of Vistancia and City management has operational responsibility for Vistancia. The City has no liability for the district’s debt. For reporting purposes, the transactions of Vistancia 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 Vistancia are available on the City’s website www.peoriaaz.gov. Vistancia West Community Facilities District The Vistancia West Community Facilities District (Vistancia West) was formed by petition to the City Council in 2014. Vistancia West’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, Vistancia West can levy taxes and issue bonds independently of the City. Property owned in the designated areas is assessed for Vistancia West’s property taxes, and thus for the costs of operating the district. The 45 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 City Council serves as the Board of Directors of Vistancia West and City management has operational responsibility for Vistancia West. The City has no liability for the district’s debt. For reporting purposes, the transactions of Vistancia West are included as governmental type funds as if they were part of the City’s operations. Stand-alone financial statements have not been prepared for the Vistancia West Community Facilities District during the current fiscal year. 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. Basis of Presentation – Government-wide and Fund Financial Statements The government-wide financial statements (i.e. the statement of net position and the statement of activities) report financial information on all of the non-fiduciary activities of the primary government and its component units. Governmental activities which are normally 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. The statement of activities demonstrates the degree to which the direct expenses for a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operation or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. 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. 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Separate financial statements are provided for governmental funds (general fund, special revenue funds, debt service funds and capital projects funds), proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund and is used to account for and report all financial resources not accounted for and reported in another fund. The Half-Cent Sales Tax Fund, a special revenue fund, accounts for the revenues generated from a sales tax increase designated for specific uses per Council policy. The Highway User Revenue Fund, a special revenue fund, is required by state statute to track receipts of specific state shared revenues and the expenditure of those funds. The Transportation Sales Tax Fund, a special revenue fund, accounts for the revenues generated from a sales tax increase designated by public vote for use in funding transportation needs throughout the City. The Development Fee Fund, a special revenue fund, accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities as governed by state statutes. 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. The City reports the following major proprietary funds: 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. Additionally, the City reports the following fund types: The Internal Service Funds account for (1) Motor, (2) Facilities Maintenance, (3) Self-Insurance which includes workers’ compensation and health insurance programs, and (4) Information Technology which includes a computer replacement program. The Firemen’s Pension Fund, a trust fund, is used to account for assets held in a trustee capacity for the volunteer firemen’s retirement plan. Trust funds can be expended for the trusts’ intended purposes. The Agency Funds are purely custodial (assets equal liabilities) and do not involve measurement of operations. 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. One fund, PLAY Peoria, accounts for monies held on behalf of separate not-for-profit agencies for which the City operates as an administrator. 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. For the most part, the effect of the interfund activity has been removed from these statements. Quasiexternal transactions, like the sale of utility services from the Enterprise Funds to the other funds, are not eliminated for the financial statements as elimination of these charges would distort the direct costs and program revenue reported for the various functions. 47 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges for customer services including: water, sewer, solid waste, storm drain, vehicle purchase/maintenance, computer replacement and risk management charges. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for specified expenditures, generally, the City would first apply restricted resources when an expense is incurred. C. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and trust financial statements. Agency funds do not have a measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are earned and available to pay liabilities of the current period (generally these revenues are earned by June 30 and are 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, except expenditures related to debt service, compensated absences and claims and judgments, which are recorded only when payment is due. Entitlements, other taxes and shared revenues are all considered to be susceptible to accrual and revenue recognition in the current fiscal period. 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. Changes in fair value of investments are recognized in investment income at the end of the year. All other revenue items are considered to be measurable and available only when the City receives cash. Because different measurement focuses and bases of accounting are used in the government-wide statement of net position and in governmental fund balance sheets, amounts reported as restricted fund balances in governmental funds may be different from amounts reported as restricted net position in the statement of net position. D. Budgets and Budgetary Accounting The City prepares its annual budget on a basis consistent with generally accepted accounting principles with such exceptions as eliminating compensated absences. 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. 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 • Prior to June 30, the City Council legally enacts the budget, through the passage of a resolution. The resolution sets the limit for expenditures for the year, within the voter mandated state expenditure limitation. Additional expenditures may be authorized if directly necessitated by a natural or man-made disaster as prescribed in the state constitution. • The maximum legal expenditure permitted for the year is the total budget as adopted. The expenditure appropriations in the adopted budget are maintained in the City’s financial system by department within individual funds. Departmental appropriations may be amended during the year, within administrative guidelines and adopted Council policies. • The initial budget for the fiscal year may be amended during the year in a legally permissible manner. • The City Manager is generally authorized to transfer budgeted amounts within any specific department’s expenditure appropriation. Any budget revisions requiring a transfer between departments must be approved by the City Council. Additionally, budget revisions involving personnel or capital asset expenditures/expenses or the use of contingency budgets must be approved by the City Council. • All unencumbered expenditure appropriations expire at the end of the fiscal year. • Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office staff. Budgetary carry forwards are approved by the City Council. • All funds of the City, except the agency funds, have legally adopted budgets. Formal integration of these budgets into the City’s financial systems is employed as a management control device during the year for all funds. E. Assets, Liabilities, Deferred Outflows of Resources, and Net Position/Fund Balance I. Deposits and Investments 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. Investments The City’s funds are invested in accordance with the City’s investment policy and Arizona Revised Statutes. The City's policy is to invest in obligations of the U.S. Government or any of its agencies and instrumentalities, certificates of deposit, bankers’ acceptances, commercial paper, money market funds, repurchase agreements, corporate securities, the State of Arizona local government investment pool and State of Arizona debt including counties, incorporated cities, towns or duly organized school districts. Funds held by trustees related to the issuance of bonds and certain loan programs are invested in accordance with contractual agreements and trust documents. 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. The fair value of participants’ position in the Local Government Investment Pool approximates the value of the pool shares. Other non-pooled investments are also generally carried at fair value. 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. Except for certain specific investments, generally those held in trust for a specific purpose, the City maintains pooled cash and investments, and allocates interest income based on a fund’s proportionate cash balance. Investment income related to certain special revenue funds is allocated to the General Fund. Non-pooled investment income is recorded in the fund that held the specific investments. 49 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 II. 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. III. Inventory Inventories are valued at cost and the City uses the first-in, first-out (FIFO) flow assumption in determining cost and consist of expendable supplies. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased. IV. 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. V. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life of greater than one year. Capital assets are recorded at the cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the 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. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives: Useful life (Years) 50 20-40 5-40 40 40 20 10 7 3-15 3 Assets Water Rights Buildings and improvements Water and sewer systems Storm drainage systems Park facilities and landscape Street system Streetlights and traffic control devices Equipment, furniture and fixtures Vehicles Computers/software 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. VI. Compensated Absences The liability for compensated absences reported in the government-wide and proprietary statements consists of unpaid, accumulated leave balances. 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 while Police and Fire department employees accrue at a maximum rate of 340 and 50 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 544 hours, respectively. Upon employment termination, payment is made to the employee for the unused leave. City employees are granted 8 hours of sick leave 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 December or May at a rate of 25%, or 50%, according to union or employment status, and the corresponding 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. VII. 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 debt service funds, according to the type of debt and the funds benefiting from that debt. VIII.Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future periods(s) and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The City reports deferred outflows related to pensions and deferred outflows related to bond refunding. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reports deferred inflows related to pensions and unavailable revenue reported from two sources: property taxes and special assessments. IX. Pensions For purposes of measuring the net pension (asset and) liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan’s fiduciary net position and additions to or deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 X. Net Position In the government-wide and proprietary fund financial statements, net position is reported in three categories: net investment in capital assets, restricted, and unrestricted. The net investment in capital assets balances are separately reported because capital assets make up a significant portion of net position. Restricted balances account for the portion of net position restricted by external resource providers or through enabling legislation. Unrestricted balances are the remaining balances not include in the previous two categories. XI. Fund Balance policies In the fund financial statements, governmental funds distinguish between nonspendable and spendable fund balances. Nonspendable balances include amounts that cannot be spent because they are not in a spendable form, such as inventory or prepaid items, or because resources legally or contractually must remain intact. Spendable balances are further classified as restricted, committed, assigned and unassigned based on the relative strength of the constraints that control how specific amount can be spent. Restricted fund balances include amounts that can be spent only for the specific purposes stipulated by external resource providers (creditors, grantors, etc.) or through enabling legislation. Committed fund balances includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. Such 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. Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. 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. Unassigned fund balances represent the residual net resources in excess of the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance and any governmental fund can report a negative unassigned fund balance. As previously noted above, 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. XII. Stabilization arrangements 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 City has the following stabilization arrangements at June 30, 2015:  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 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 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 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 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) and the Half-Cent Sales Tax fund ($1,000,000). 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 enterprise fund 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.  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. F. Property taxes The City Council adopts the annual tax levy each year on or before the third Monday in August based on 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. 53 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 G. 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. Actual results could differ from those estimates. H. New Accounting Principles For the year ended June 30, 2015, the City implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, and GASB Statement No. 69, Government Combinations and Disposals of Governmental Operations. GASB Statement Nos. 68 and 71 establish standards for measuring and recognizing net pension (assets and) liabilities, deferred outflows of resources, deferred inflows of resources, and expenses/expenditures related to pension benefits provided through defined benefit pension plans. In addition, Statement No. 68 requires disclosure of information related to pension benefits. GASB Statement No. 69 establishes accounting and financial reporting standards related to government combinations and disposals of government operations. GASB Statement No. 69 did not impact the preparation of the financial statements. 2. DEPOSITS AND INVESTMENTS A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Certain restricted funds are not part of the City’s pool, but rather are maintained with trustees as required by contractual commitments. At June 30, 2015, the carrying amount of the City's deposits was $74,577,017 and the bank balance was $74,360,765. 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 name. The difference between the City’s carrying amount and the bank balance of $216,252 represents deposits in transit, outstanding checks and other reconciling items. The City maintains cash on hand balances in the form of petty cash and change funds. At June 30, 2015 the total amount of these balances was $6,730. B. Investments The City invests in obligations that fall within the authorization of State of Arizona laws, the City’s regulations and investment policy and applicable legal and contractual commitments. 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, 2015, 70.3% of the City’s investments have a maturity of less than one year and no investments have a maturity of greater than three years. The City’s investment policy also sets a maximum weighted average maturity (WAM) not to exceed three years. The WAM at June 30, 2015 was 345 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, 2015, the City’s investments include $59.9 million in Commercial Paper and no Banker’s Acceptance securities. State law and the City’s investment policy also restricts investments in certificates of deposit (CD) to fully collateralized or insured from eligible Arizona depositories limited on a statewide basis by their capital 54 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 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 collateralization level of at least 102 percent of the market value of principal and accrued interest. Moody’s Rating Investment Type Federal Farm Credit Bank – Agency Note Aaa Federal Farm Credit Bank – Discount Note P-1 Federal Home Loan Bank – Agency Note Aaa Fannie Mae – Agency Note Aaa Freddie Mac – Agency Note Aaa Commercial Paper P-1 The City’s investment in the State of Arizona local government investment pool is limited to a pool that invests only in government securities. At June 30, 2015, the State Treasurer’s pool had a credit rating of AAAF/S1 by Standard and Poor’s (S&P). Concentration of credit risk: The City’s investment policy sets diversification limits on both security types and length of maturity. As of June 30, 2015, the City’s investments include 57.8% invested in U.S. Agency Coupon securities, 5.7% in U.S. Agency Discount Notes, 6.9% in U.S. Treasury Notes, 22.7% in Commercial Paper. 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 safekeeping statements. 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, 2015, the City’s investments included the following: . Unrestricted Investments: U.S. Treasury notes Agency coupon securities Agency discount notes Commercial paper Mutual fund-money market State of Arizona local government investment pool Total unrestricted investments Investment Maturities in Years Less than 1 1-2 2-3 Over 3 $ 18,130,400 69,248,573 14,991,600 56,890,800 2,056,402 407,791 161,725,566 21,403,113 55,347,994 - - 21,403,113 55,347,994 - Fair Value $ 18,130,400 145,999,680 14,991,600 56,890,800 2,056,402 - 407,791 - 238,476,673 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 State of Arizona local government investment pool Total Restricted Investments $ 4,763,742 2,990,946 15,307,297 304,559 23,366,544 1,499,700 1,499,700 Total Investments - - - - - - $ 6,263,442 2,990,946 15,307,297 304,559 $ 24,866,244 263,342,917 55 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 3. DEFICITS IN FUND EQUITY/EXCESS OF EXPENDITURES OVER APPROPRIATIONS At June 30, 2015 the following funds reported deficits in fund balances/net position.   Governmental fund: Internal Service fund: GO Bond Capital Projects Fund Facilities Maintenance Fund The Facilities Maintenance Fund deficit resulted from the implementation of GASB 68, Accounting and Financial Reporting for Pensions, which for the first time reported pension liabilities on financial statements. The GO Bond Capital Projects Fund deficit is the result of construction activity and is expected to be corrected through the issuance of voter authorized general obligation debt in fiscal year 2015-2016. For the year ended June 30, 2015, expenditures, including capital outlay and transfers, did not exceed budget at the fund level (i.e. the level of budgetary control) in any funds. 4. 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, 2015. 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 5,147,877 1,609,107 434,976 973,013 239,740 125,426 8,530,139 10,783 21,889 7,798 174,640 27,206 231,533 - 5,125,988 1,609,107 427,178 973,013 65,100 98,220 8,298,606 10,783 $ 5,911,004 2,663,093 1,644,515 1,057,579 111,546 11,387,737 1,480,370 722,337 473,420 37,103 2,713,230 4,430,634 1,940,756 1,171,095 1,057,579 74,443 8,674,507 $ 19,928,659 2,944,763 16,983,896 $ $ 5. DUE FROM OTHER GOVERNMENTS The City has due from other government receivables from various governments, including the Federal, State and County government. At June 30, 2015 significant receivables due to the City included $2,386,539 from the State of Arizona for State Shared Sales Tax revenues, $246,157 for Auto Tax In-Lieu revenues recorded in the General fund, $891,115 Highway User Revenue Fees revenues recorded in the Highway User Revenue Fund and $2,250,000 from the Maricopa Association of Governments, related to the Lake Pleasant Parkway project, recorded in the Non-Bond fund. Most other receivables are comprised of taxes or various grants due from other governments and agencies. 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 6. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2015, follows: Balances June 30, 2014 Governmental Activities: Non-depreciable assets: Work in Progress Land Disposals/ Transfers Out Balances June 30, 2015 158,344,934 340,088,536 11,355,874 6,316,462 (32,418,485) - 137,282,323 346,404,998 Total non-depreciable assets 498,433,470 17,672,336 (32,418,485) 483,687,321 Depreciable assets: Bulidings & Improvements Equipment; Furniture Vehicles Surface Water System Street System Park System 179,448,618 53,982,329 24,744,630 80,362,819 548,309,673 84,189,123 133,652 1,526,948 2,193,495 55,590,603 5,344,029 (1,455,958) - 179,582,270 55,509,277 25,482,167 80,362,819 603,900,276 89,533,152 Total Depreciable Assets at Historical Cost 971,037,192 64,788,727 (1,455,958) 1,034,369,961 Less Accumulated Depreciation: Bulidings & Improvements Equipment; Furniture Vehicles Surface Water System Street System Park System (46,474,775) (41,786,109) (16,990,840) (23,743,305) (194,916,082) (15,804,602) (4,773,602) (2,684,856) (2,092,438) (1,985,491) (14,611,276) (2,263,736) 1,425,642 - (51,248,377) (44,470,965) (17,657,636) (25,728,796) (209,527,358) (18,068,338) Total Accum. Depreciation (339,715,713) (28,411,399) 1,425,642 (366,701,470) 631,321,479 36,377,328 (30,316) 667,668,491 $ 1,129,754,949 54,049,664 (32,448,801) 1,151,355,812 $ 49,206,607 16,612,889 5,521,239 45,786 (7,236,454) - 47,491,392 16,658,675 65,819,496 5,567,025 (7,236,454) 64,150,067 Depreciable assets: Bulidings & Improvements Equipment; Furniture Vehicles Surface Water System Water Rights Water System Wastewater System 65,194,628 10,679,734 14,826,201 227,934 12,889,809 318,065,020 350,897,554 11,438,065 2,433,502 769,356 3,001,655 14,772,346 14,803,269 (1,000,453) - 76,632,693 13,113,236 14,595,104 3,229,589 12,889,809 332,837,366 365,700,823 Total Depreciable Assets at Historical Cost 772,780,880 47,218,193 (1,000,453) 818,998,620 Assets Net Governmental Activities Capital Assets, Net Business-type Activities: Non-depreciable assets: Work in Progress Land $ Additions/ Transfers In Total non-depreciable assets Less Accum. Depreciation: Bulidings & Improvements Equipment; Furniture Vehicles Surface Water System Water Rights Water System Wastewater System Total Accum. Depreciation Assets Net Business-Type Activities Capital Assets, Net $ - (14,636,006) (4,475,123) (8,646,579) (651) (1,804,573) (81,191,532) (82,115,632) (1,537,684) (651,273) (968,181) (5,907) (257,796) (8,324,812) (8,642,546) 1,000,453 - (16,173,690) (5,126,396) (8,614,307) (6,558) (2,062,369) (89,516,344) (90,758,178) (192,870,096) (20,388,199) 1,000,453 (212,257,842) 579,910,784 26,829,994 645,730,280 32,397,019 (7,236,454) 606,740,778 670,890,845 *The City’s agreement with the Gila River Indian Community provides water rights to 7,000 acre-feet of water each year through 2057. 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Depreciation expense was charged to governmental functions in the government-wide financial statements as follows: General government Culture and recreation Public safety Development services Highways and streets Public works Human services $ 3,767,948 4,649,826 2,933,579 6,493 14,817,347 2,192,061 44,145 Total depreciation expense $ 28,411,399 For the year ended June 30, 2015, 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 $3,098,643. 7. 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. 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. 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 can utilize the City’s excise tax, state shared revenues and other unrestricted revenues for lease payments. 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 58 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 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, 2015, 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, 2015. E. Community Facilities District bonds Community Facilities Districts (CFD’s), are 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 in accordance with relevant state laws and regulations. Operation and maintenance expenditures, bonds and the repayment of bonds issued by these separate legal entities 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. The City Council formed the Vistancia Community Facilities District (VCFD) in October 2002. VCFD was subsequently authorized, by the voters of the district in November 2002, to issue up to $100,000,000 in general obligation bonds to construct public infrastructure within VCFD. VCFD issued general obligations bonds of $21,250,000, $23,550,000 and $22,760,000 in fiscal years 2003, 2005, and 2007, respectively, against this authorization. The City Council formed the Vistancia West Community Facilities District (VWCFD) in August 2014. In December 2014, the VWCFD was authorized through an election to issue up to $9,000,000 of general obligation bonds to construct public infrastructure within the district. VWCFD issued taxable general obligation bonds of $35,000 in the current year. F. 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 $98,085,886 in Water Infrastructure Financing Authority loans issued between 2002-2009. The various bonds and loans 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, 2015, $101,290,497 in bonds and loans remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2015, the pledged revenues, net of operating expenses available for service of this debt were $21,862,764. The debt principal and interest paid on this debt in fiscal year 2015 was $12,307,580. 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, 2015, $43,815,000 in bonds remained outstanding to be repaid by these future revenues. The bonds were issued to construct various City operational facilities and to purchase water rights. For the fiscal year ended June 30, 2015, the pledged revenues, net of operating expenses available to service this debt were $120,117,167. The debt principal and interest paid on this debt in fiscal year 2015 was $3,662,083. 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, 2015, $32,915,000 of the bonds 59 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2015, the pledged revenues, net of operating expenses available to service this debt were $127,789,973. The debt principal and interest paid on this debt in fiscal year 2015 was $3,933,325. 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, 2015, $2,855,000 in bonds are outstanding to be repaid by these revenues. For the fiscal year ended June 30, 2015, the net revenues available to service this debt were $1,168,526. The debt principal and interest paid on this debt in fiscal year 2015 was $475,788. G. Tables The following schedule summarizes the City’s long-term liability activity for the year ended June 30, 2015: Beginning Balance Ending Balance Due Within One Year Additions Reductions 35,000 35,000 395,408 9,007,560 9,437,968 9,895,000 4,305,000 340,000 2,765,000 17,305,000 8,699,340 282,285 26,286,625 142,925,000 76,730,000 2,855,000 48,365,000 270,875,000 121,657,840 7,214,360 3,285,584 403,032,784 10,265,000 4,470,000 355,000 2,920,000 18,010,000 5,400,100 23,410,100 1,011,415 1,011,415 4,665,000 4,545,039 1,977,247 1,049,955 276,790 12,514,031 28,055,000 73,235,496 13,696,960 794,800 1,614,224 117,396,480 4,770,000 4,686,158 612,460 10,068,618 Governmental activities: Bonds payable: General obligation bonds $ 152,820,000 MDA Bonds 81,035,000 Special assessment bonds 3,195,000 CFD bonds 51,095,000 Total bonds payable 288,145,000 Net pension liabilities 121,262,432 Compensated absences 6,906,140 Deferred bond premium 3,567,869 Governmental activities totals $ 419,881,441 Business-type activities: Bonds and loans payable: Revenue bonds 32,720,000 WIFA loans 77,780,535 Net pension liabilities 15,674,207 Compensated absences 833,340 Deferred bond premium 1,891,014 Business-type activities totals $ 128,899,096 Bonds and loans payable at June 30, 2015 are comprised of the following: Governmental Activities Debt General Obligation Bonds Series 2007A Series 2007B Series 2009 Series 2010 Series 2012A Series 2012B Maturity Dates Net Interest Rate 7/1/07-26 7/1/07-20 7/1/09-28 7/1/10-30 7/1/12-32 7/1/12-22 4.27 4.00 3.86 4.03 3.32 1.75 Issue Amount $ Total General Obligation Bonds 94,380,000 18,365,000 68,440,000 29,170,000 14,715,000 13,690,000 Outstanding June 30, 2015 $ 54,300,000 7,440,000 34,250,000 22,130,000 13,575,000 11,230,000 $ 238,760,000 $ 142,925,000 $ 6,675,000 47,000,000 7,920,000 35,510,000 $ 4,220,000 32,915,000 6,665,000 32,930,000 $ 97,105,000 $ 76,730,000 Municipal Development Authority Bonds Series 2006 Series 2008 Series 2011 Series 2012 7/1/06-25 7/1/08-26 7/1/12-26 7/1/13-32 4.2 4.6 3.9 3.3 Total Municipal Development Authority Bonds 60 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Special Assessment Bonds Series 2006 Maturity Dates Net Interest Rate 7/1/07-22 4.25 Total Special Assessment Bonds Issue Amount Outstanding June 30, 2015 $ 4,950,000 $ 2,855,000 $ 4,950,000 $ 2,855,000 Community Facility District Bonds VCFD – Series 2002 VCFD – Series 2005 VCFD – Series 2006 VWCFD – Series 2015 7/15/05-22 7/15/07-24 7/15/09-26 7/15/17 6.69 5.47 4.26 1.97 Total Community Facility District Bonds $ 21,250,000 23,550,000 22,760,000 35,000 $ 12,250,000 17,050,000 19,030,000 35,000 $ 67,595,000 $ 48,365,000 Business-Type Activities Debt Revenue Bonds Maturity Dates Net Interest Rate WWW Series 2010 WWW Series 2012 7/1/11-20 7/1/12-21 3.21 1.60 Total Revenue Bonds Issue Amount Outstanding June 30, 2015 $ 15,780,000 23,280,000 $ 11,570,000 16,485,000 $ 39,060,000 $ 28,055,000 $ $ WIFA Loans WIFA Series 2002 WIFA Series 2006 WIFA Series 2008 WIFA Series 2008 WIFA Series 2009 WIFA Series 2009 WIFA Series 2009 WIFA Series 2009 WIFA Series 2009 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 3.94 3.06 3.30 3.48 3.48 2.00 2.00 3.27 3.23 Total WIFA loans 1,964,789 27,183,342 42,741,541 8,575,248 727,612 8,030,339 3,733,794 4,371,597 757,624 $ 98,085,886 970,610 19,704,993 31,963,449 6,827,899 572,171 6,237,532 2,872,652 3,493,392 592,799 $ 73,235,497 The following table discloses the bond debt service requirements as of June 30, 2015, segregating principal and interest, for the next five years and in five-year increments thereafter. Governmental Activities Fiscal year 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2033 Totals Business-type Activities Principal Interest Total $ 18,010,000 18,332,000 18,523,000 19,285,000 20,080,000 104,130,000 60,970,000 11,545,000 $270,875,000 $11,191,568 10,470,287 9,703,618 8,880,694 8,052,851 26,984,262 6,596,702 567,357 $82,447,339 $ 29,201,568 28,802,287 28,226,618 28,165,694 28,132,851 131,114,262 67,566,702 12,112,357 $353,322,339 Principal $ 9,456,159 10,081,747 10,416,947 9,831,905 8,766,775 33,206,906 19,530,058 $101,290,497 61 Interest Total $ 3,171,763 2,845,809 2,494,759 2,143,516 1,820,286 5,371,028 964,744 $18,811,905 $ 12,627,922 12,927,556 12,911,706 11,975,421 10,587,061 38,577,934 20,494,802 $120,102,402 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Long-term compensated absences of governmental activities are expected to be liquidated by the operating funds (primarily the General Fund, Highway User Revenue Fund, Transit Fund and utility funds) as they come due. 8. 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 Risk Management Fund, an Employee Benefits Trust Fund and a Workers’ Compensation Trust Fund (presented in the Self-Insurance Fund of the Internal Service Funds) to account for and finance its uninsured risks of loss. Premiums are paid into the internal service funds 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 funds. 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 public liability up to $1,000,000 with excess coverage insurance policies purchased through commercial insurance carriers cover individual claims in excess of these amounts up to $40,000,000. Also, the City is self-insured for damage to City vehicles valued up to $100,000. Vehicles with a value in excess of $100,000 have a $5,000 deductible. City property is insured through commercial insurance carriers with a $50,000 deductible. The operating funds of the City pay monthly premiums to the risk management fund based upon a model taking into consideration multiple factors including 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 $4,519,271 for fiscal year 2015. Commercial insurance is purchased to cover claims above the self-insurance 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. 62 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Premium payments to insurance carriers, as well as third party administrator costs are made directly from the health insurance trust fund. There have been no settlements in excess of insurance in the past three years, nor have insurance coverage been significantly reduced in recent years. Estimated liability – The total claims liability of $3,932,046 reported in the Self-Insurance Fund at June 30, 2015 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 $1,277,971 for liability/property claims, $2,087,668 for workers’ compensation claims and $566,407 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. Non-incremental claims adjustment expenses are not included in the calculation. Changes in the Self-Insurance Fund’s claims liability amount (claims only, exclusive of other insurance expenses) during the last two fiscal years are as follows: Fiscal Year 2014: Risk management Workers' comp Health insurance 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 Beginning of Fiscal Year Liability $ 1,646,754 1,849,744 566,091 $ 4,062,589 Changes in Estimates $(368,783) 237,924 316 $(130,543) Current Year Claims $ 793,259 800,757 12,572,454 $ 14,166,470 Claims Payments $ (793,259) (800,757) (12,572,454) $(14,166,470) Balance at Fiscal Year-end $ 1,277,971 2,087,668 566,407 $ 3,932,046 Fiscal Year 2015: Risk management Workers' comp Health insurance 9. PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS The City of Peoria contributes to the pension plans described below. The City of Peoria contributes to the Elected Officials Retirement Plan; however the plan is not described below because of its relative insignificance to the financial statements. The plans are component units of the State of Arizona. The City of Peoria reported $11,124,280 of pension expenditures in the governmental funds related to all pension plans to which it contributes. Beginning Net Position Restatement. The implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, represents a change in accounting principle. Net position as of July 1, 2014, has been restated as follows for this change in accounting principle: 63 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Net position, June 30, 2014, as previously reported Net pension liability Deferred outflows - contributions during fiscal year 2014 Net position, June 30, 2014, as restated A. $ $ Statement of Activities 1,716,281,837 (136,936,639) 9,813,170 1,589,158,368 Arizona State Retirement System Plan Description. City of Peoria employees not covered by the other pension plans described after this section participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing multiple-employer defined benefit pension plan, a cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plan, and a cost-sharing multiple-employer defined benefit long-term disability (OPEB) plan. The Arizona State Retirement System Board governs the ASRS according to the provisions of A.R.S. Title 38, Chapter 5, Articles 2 and 2.1. The ASRS issues a publicly available financial report that includes its financial statements and required supplementary information. The report is available on the ASRS website at www.azasrs.gov. Benefits Provided. The ASRS provides retirement, health insurance premium supplement, long-term disability, and survivor benefits. State statute establishes benefit terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: Years of service and age required to receive benefit Final average salary is based on Benefit percent per year of service Retirement Initial Membership Date: Before July 1, 2011 On or After July 1, 2011 Sum of years and age equals 80 30 years age 55 10 years age 62 25 years age 60 5 years age 50* 10 years age 62 Any years age 65 5 years age 50* Any years age 65 Highest 36 months of last 120 months Highest 60 months of last 120 months 2.1% to 2.3% 2.1% to 2.3% *With actuarially reduced benefits Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic cost-of-living adjustments based on excess investment earnings. Members with a membership date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are payable upon a members’ death. For retired members, the survivor benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to the member’s account balance that includes the member’s contributions and employer’s contributions, plus interest earned. Contributions. In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. For the current fiscal year, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.60 percent (11.48 percent for retirement & health insurance benefits and 0.12 percent for long-term disability) of the members’ annual covered payroll, and the City of Peoria was required by statute to contribute at the actuarially determined rate of 11.60 percent (10.89 percent for retirement, 0.59 for health insurance premium benefit, and 0.12 percent for longterm disability) of the members’ annual covered payroll. The City’s contribution to the pension plan for the year ended June 30, 2015 was $5,458,945. 64 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 In addition, the City of Peoria was required by statute to contribute at the actuarially determined rate of 9.57 percent (9.51 for retirement and 0.06 percent for long-term disability) of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to ASRS. The City of Peoria’s contributions for the current and two preceding years for OPEB, all of which were equal to the required contributions, were as follows: Health Benefit Supplement Fund Year ending June 30: 2015 2014 2013 $ 277,654 271,849 320,008 Long-Term Disability Fund $ 56,472 108,739 117,811 Pension Liability. At June 30, 2015, the City of Peoria reported a liability of $77,009,675 for its proportionate share of the net pension liability of the ASRS. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was determined using update procedures to roll forward the total pension liability from an actuarial valuation as of June 30, 2013, to the measurement date of June 30, 2014. The City of Peoria’s proportion of the net pension liability was based on a projection of the City of Peoria’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2014, the City of Peoria’s proportion was 0.520455 percent, which was a decrease from the 0.530105 percent measured as of June 30, 2013. Pension Expense and Deferred Outflows/Inflows of Resources. For the year ended June 30, 2015, the City of Peoria recognized pension expense for ASRS of $4,579,216 and reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources $ 3,913,857 - Deferred Inflows of Resources $ - - 13,466,614 5,663,664 9,577,521 1,123,377 14,589,991 Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between contributions and proportionate share Contributions subsequent to the measurement date Total $ $ The deferred outflows of resources related to ASRS pensions resulting from contributions subsequent to the measurement date as reported in the table above will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pensions will be recognized in pension expense as follows: Year ending June 30: 2016 2017 2018 2019 2020 Thereafter $ 65 2,153,402 2,153,402 3,002,678 3,366,652 - CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Actuarial Assumptions. The significant actuarial assumptions used to measure the total ASRS pension liability are as follows: Actuarial valuation date Actuarial roll forward date Actuarial cost method Discount rate Projected salary increases Inflation Permanent base increases Mortality rates June 30, 2013 June 30, 2014 Entry age normal 8.0% 3.0-6.75% 3% Included 1994 GAM Scale BB The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2012. The purpose of the experience study was to review actual experience in relation to the actuarial assumptions in effect. The ASRS Board adopted the experience study recommended changes which were applied to the June 30, 2013, actuarial valuation. The study did not include an analysis of the assumed investment rate of return. The long-term expected rate of return on ASRS pension plan investments was determined to be 8.79 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class of ASRS are summarized in the following table: Target Allocation 63% 25%% 8%% 4%% 100% Asset Class Equity Fixed income Real estate Commodities Total Long-Term Expected Real Rate of Return 7.03% 3.20% 4.75% 4.50% Discount Rate. The discount rate used to measure the ASRS total pension liability was 8 percent, which is less than the long-term expected rate of return of 8.79 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the City of Peoria’s proportionate share of the net pension liability calculated using the discount rate of 8.0 percent, as well as what the proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate: 1% Decrease (7%) Current Discount Rate (8%) 1% Increase (9%) City of Peoria's proportionate share of the net pension liability $ 97,336,279 66 $ 77,009,675 $ 65,981,471 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in the separately issued ASRS financial report. The report is available on the ASRS website at www.azasrs.gov. B. Public Safety Personnel Retirement System Plan Descriptions. City of Peoria public safety employees who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS). The PSPRS administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) plan. A seven-member board known as the Board of Trustees and the participating local boards govern the PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The PSPRS issues a publicly available financial report that includes their financial statements and required supplementary information. The report is available on the PSPRS website at www.psprs.com. Benefits Provided. The PSPRS provides retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefits terms. Certain retirement and disability benefits are calculated on the basis of age, average monthly compensation, and service credit as follows. See the publicly available PSPRS financial report for additional benefits information. Years of service and age required to receive benefit Final average salary is based on Normal retirement Accidental disability retirement Survivor benefit: Retired members Active members Retirement Initial Membership Date: Before January 1, 2012 On or After January 1, 2012 20 years any age 25 years and age 52.5 15 years age 62 Highest 36 months of last 20 years Highest 60 months of last 20 years 2.5% per year of credited service, 50% less 2.0% for each year of not to exceed 80% credited service less than 20 years or plus 2.0% to 2.5% for each year of credited service over 20 years, not to exceed 80% 50% or normal retirement, whichever is greater 80% of retired member’s pension benefit 80% of accidental disability retirement benefit or 100% of average monthly compensation if death was the result of injuries received on the job Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess investment earning. PSPRS also provides temporary disability benefits of 50 percent of the member's compensation for up to 12 months. Employees Covered by Benefit Terms. At June 30, 2015, the following employees were covered by the agent pension plan’s benefit terms: Inactive employees or beneficiaries currently receiving benefits Inactive employees entitled to but not yet receiving benefits Active employees Total 67 PSPRS Police 66 31 165 262 PSPRS Fire 23 15 136 174 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Contributions and Annual OPEB Cost. State statutes establish the pension contribution requirements for active PSPRS employees. In accordance with state statutes, annual actuarial valuations determine employer contribution requirements for PSPRS pension and health insurance premium benefits. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2015, are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members - pension City of Peoria Pension Health Insurance PSPRS Police 11.05% PSPRS Fire 11.05% 23.89% 1.05% 16.64% 0.99% In addition, the City of Peoria was required by statute to contribute at the actuarially determined rate of 19.65 percent for the PSPRS of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to the PSPRS. For the agent plans, the contributions to the pension plan and annual OPEB cost and contributions for the health insurance premium benefit for the year ended were: Pension: Contributions made Health insurance premium benefit: Annual OPEB cost Contributions made PSPRS - Police PSPRS - Fire $ $ 3,235,398 141,224 141,224 1,842,016 109,573 109,573 Pension Liability. At June 30, 2015, the City of Peoria reported $41,317,616 in net pension liability for police and $17,027,509 net pension liability for fire. The net pension liabilities were measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2014 reflects changes of benefit terms and actuarial assumptions for a court ruling for funding permanent benefit increases and a decrease in the wage growth assumption. Actuarial Assumptions. The significant actuarial assumptions used to measure the total pension liability are as follows: Actuarial valuation date Actuarial cost method Discount rate Projected salary increases Inflation Permanent benefit increase Mortality rates June 30, 2014 Entry age normal 7.85% 4.0 - 8.0% 4.0% Included RP-2000 mortality table, adjusted by 105% for both males and females Actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2014. The long-term expected rate of return on PSPRS pension plan investments was determined to be 7.85 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. 68 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Long-Term Expected Real Rate of Return 3.25% 6.75% 6.04% 4.75% 5.96% 5.73% 9.50% 6.50% 8.00% 8.63% 7.60% Target Allocation 2% 4% 4% 7% 8% 10% 11% 11% 13% 14% 16% 100% Asset Class Short-term investments Absolute return Risk parity Fixed income Real assets GTAA Private equity Real estate Credit opportunities Non-U.S. equity U.S. equity Total Pension Discount Rates. The discount rate of 7.85% was used to measure the total pension liability. The projection of cash flows used to determine the PSPRS discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, PSPRS plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the Agent Plans Net Pension Liability Total Pension Liability PSPRS – Police Balances at June 30, 2014 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences betw een expected and actual experience in the measurement of the pension liability $ $ 2,556,976 6,074,980 1,228,208 Changes of assumptions or other inputs Contributions – employer Contributions – employee Net investment income Benefit payments, including refunds of employee contributions Other changes Balances at June 30, 2015 78,259,854 Increase/(Decrease) Plan Fiduciary Net Position Net Pension Liability $ 45,194,618 $ - 33,065,236 2,556,976 6,074,980 1,228,208 (672,105) 8,103,978 - 2,907,800 1,491,406 5,954,387 (672,105) 8,103,978 (2,907,800) (1,491,406) (5,954,387) (4,300,112) 91,251,779 (4,300,112) (1,313,936) 49,934,163 1,313,936 41,317,616 69 $ $ CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Increase/(Decrease) Plan Fiduciary Net Position Net Pension Liability Total Pension Liability PSPRS – Fire Balances at June 30, 2014 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences betw een expected and actual experience in the measurement of the pension liability $ Changes of assumptions or other inputs Contributions – employer Contributions – employee Net investment income Benefit payments, including refunds of employee contributions Other changes Balances at June 30, 2015 $ 53,020,164 $ 39,772,159 $ 13,248,005 2,013,025 4,197,224 453,523 - 2,013,025 4,197,224 453,523 660,641 3,815,327 - 1,885,422 1,168,186 5,369,649 660,641 3,815,327 (1,885,422) (1,168,186) (5,369,649) (1,117,704) 63,042,200 (1,117,704) (1,063,021) 46,014,691 1,063,021 17,027,509 $ $ Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the City of Peoria’s net pension liability calculated using the discount rates noted above, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1percentage-point higher than the current rate: 1% Decrease Current Discount Rate 1% Increase PSPRS – Police Rate Net pension liability $ 6.85% 53,514,769 $ 7.85% 41,317,616 $ 8.85% 31,278,394 PSPRS – Fire Rate Net pension liability $ 6.85% 25,643,299 $ 7.85% 17,027,509 $ 8.85% 9,908,317 Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in the separately issued PSPRS financial report. The report is available on the PSPRS website at www.psprs.com. Pension Expense. For the year ended June 30, 2015, the City of Peoria recognized the following as pension expense: PSPRS – Police PSPRS – Fire Pension Expense $ 5,572,056 $ 2,359,115 Pension Deferred Outflows/Inflows of Resources. At June 30, 2015, the City of Peoria reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 70 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 PSPRS – Police Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total PSPRS – Fire Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total Deferred Outflows of Deferred Inflows Resources of Resources $ $ 557,755 6,725,188 - $ 3,235,398 9,960,586 1,963,434 2,521,189 $ Deferred Outflows of Deferred Inflows Resources of Resources $ 585,031 $ 3,378,666 - $ 1,842,016 5,805,713 1,770,619 1,770,619 $ The amounts reported as deferred outflows of resources related to pension resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ending June 30: 2016 2017 2018 2019 2020 Thereafter PSPRS Police $ 773,582 773,582 773,582 773,582 1,109,671 - PSPRS - Fire $ 69,616 69,616 69,616 69,616 512,271 1,402,343 Agent Plan OPEB Trend Information. The table below presents the annual OPEB cost information for the health insurance premium benefit for the current and two preceding years: Fiscal Year Ended PSPRS – Police June 30, 2015 June 30, 2014 June 30, 2013 PSPRS – Fire June 30, 2015 June 30, 2014 June 30, 2013 Percentage of Annual Cost Contributed Annual OPEB Cost Net OPEB Obligation $ 141,224 140,406 146,069 $ 141,224 140,406 146,069 $ - $ 109,573 110,819 114,372 $ 109,573 110,819 114,372 $ - Agent Plan OPEB Actuarial Assumptions. Actuarial valuations involve estimates of the reported amounts’ value and assumptions about the probability of events in the future. Amounts determined regarding the funded 71 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 status of the plan and the annual required contributions are subject to continual revision as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress for the health insurance premium benefit presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of the plan’s 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 of Peoria and 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 of Peoria and plan’s members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The significant actuarial methods and assumptions used to establish the fiscal year 2015 PSPRS contribution requirements, are as follows: Actuarial 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 June 30, 2013 Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess 23 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value (80%/120% market) 7.85% 4.5%-8.5% 4.5% The funded status of the PSPRS health insurance premium benefit plan in the June 30, 2014, actuarial valuation was determined using the following actuarial methods and assumptions, applied to all periods included in the measurement. Actuarial 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 June 30, 2014 Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess 22 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value (80%/120% market) 7.85% 4%-8% 4% Agent Plan OPEB Funded Status. The following table presents the funded status of the health insurance premium benefit plan as of the most recent valuation date, June 30, 2014. Actuarial value of assets (a) Actuarial accrued liability (b) Unfunded actuarial accrued liability (funding excess) (b-a) Funded ratio (a/b) Annual covered payroll (c ) Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll ((b-a)/c) 72 PSPRS - Police $ 1,687,575 1,819,628 132,053 92.74% 13,283,045 PSPRS - Fire $ 1,375,003 1,352,871 (22,132) 101.64% 10,735,468 0.99% 0.00% CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 10. DEFERRED COMPENSATION PLAN The City offers deferred compensation plans to its employees and management employees, created in accordance with Internal Revenue Code Section 457 and Section 401a. The plans permit participants to defer contributions into the plan until future years. 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. 11. CONTINGENCIES AND COMMITMENTS 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 City has development agreements where, in return for developers constructing public infrastructure, the City agreed to reimburse the developer for the cost of such infrastructure at some future time contingent on the collection of impact fees and sales tax revenues. The City had the following significant commitments as of June 30, 2015:    $704,543 in the Water and Wastewater utility fund (s) for acquisition and replacement of the supervisory control and data acquisition (SCADA) equipment. $695,909 in the Water utility funds for the construction of new wells. rd $521,362 mostly in the Non-Bond fund for P83 Entertainment District improvements located on 83 avenue and Bell Road. 12. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES At June 30, 2015, there was an interfund loan that is considered to be a long-term loan: The Development Fee Fund owes the MDA Debt Service Fund $929,914 to repay future debt service payments for bonds used to complete construction of Happy Valley Road. In addition, there was an interfund loan from the General Fund to the GO Bond Capital Projects Fund in the amount of $5,932,622 for amounts expended on capital projects that will be funded by general obligations bonds expected to be issued during the next fiscal year. The net transfers from governmental activities to business-type activities presented 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 Vistancia CFD Fund to the Wastewater Utility Fund. 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 2015 that were either nonroutine in nature or inconsistent with the activities of the fund making the transfer. 73 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2015: Fund Governmental funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax 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 Total enterprise funds Internal Service funds Grand totals $ $ Transfers out Transfers in 1,737,456 13,828,046 20,181 2,157,446 12,369,881 30,113,010 8,682,112 1,000,000 6,675,380 16,357,492 3,832,055 748,607 2,803 1,776 654 4,585,895 6,730 34,705,635 998,325 4,663,837 9,496,921 1,100,915 16,259,998 2,088,145 34,705,635 13. STABILIZATION ARRANGEMENTS The committed and assigned fund balances of the governmental funds are shown on the fund financial statements. The following table presents the City’s stabilization reserves included in unrestricted net position on the proprietary fund financial statements at June 30, 2015: Water Utility Fund: Working capital policy reserve Rate stabilization Debt stabilization System asset maintenance Capital equipment replacement $ Wastewater Utility Fund: Working capital policy reserve Rate stabilization Debt stabilization System asset maintenance Capital equipment replacement 6,200,000 1,750,000 4,400,000 7,299,425 914,804 20,564,229 2,625,000 940,000 2,367,000 7,679,000 747,148 14,358,148 Solid Waste Utility Fund: Working capital policy reserve Capital equipment replacement 2,100,000 3,187,784 5,287,784 Stadium Fund: Capital equipment replacement Total proprietary funds 449,303 40,748,766 Internal Service Funds: Capital equipment replacement Risk management purpose Total internal service funds 11,208,548 7,389,071 18,597,619 74 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 14. 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 presented on the face of those statements. 15. SUBSEQUENT EVENTS Utility Company Purchase and Related New Financing The City purchased the New River Water Utility Company (Company) and its assets for a total amount of $10,000,000. The Company services customers that reside within the City’s boundaries. The City entered into an agreement with the Water Infrastructure Finance Authority of Arizona (WIFA) to obtain a loan in the amount of up to $14,000,000, for a term 20 years, at a rate of 2.397%. Annual debt service payments of $889,345 are expected to be made from the City’s utility operations net revenues. The loan proceeds will be used to purchase the New River Utility Company, the CAP allocation of water rights available to the Company, and make a number of upgrades to the New River system, including improving well sites, installing two new interconnections with the Company’s system and replacing and integrating meters into the City’s current radio-read system. Water Utility – Pyramid Peak Water Treatment Plant Expansion The City entered into an intergovernmental agreement with the City of Glendale in May of 1996, as amended in subsequent agreements, providing for the treatment and transportation of 9 million gallons per day (MGD) of the plant’s total resilient capacity of 39 MGD. In October of 2015, the City entered into a new intergovernmental agreement with the City of Glendale to expand the water treatment facility capacity from the current 39 MGD to 54 MGD, which will increase the City’s capacity from 9 MGD to 24 MGD. This expansion will increase the City’s capacity to 44% of the plant’s total capacity from the previous capacity of 23%. The City is responsible for the full cost of the expansion, and once completed, will also be responsible for a proportionate share of the plant’s operating expenses (44%). The City plans to fund the estimated $43 - $46 million cost of the expansion with Water Infrastructure Finance Authority loans. Vistancia Community Facilities District – Debt Refunding and New Debt Issuance In September 2015, the District issued the Series 2015 General Obligation Refunding Bonds in the amount of $36,985,000, maturing in 2026 with a net interest cost of 3.47%. The Refunding Bonds were issued to refund all outstanding amounts of the Series 2002 Bonds, the Series 2005 Bonds and the Series 2006 Bonds, which were issued to finance the costs to acquire and construct certain public infrastructure within the boundaries of the District (see Note 1 and Note 7 for additional information). The proceeds and premiums from the sale of the Bonds, net of issuance costs, along with certain amounts contributed by the District have been placed in an escrow trust account to be used exclusively for the servicing of debt until the refunded bonds are paid off (7/15/16). The district is expected to have net present value savings of $4,447,471. 75 76 Required Supplementary Information CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY COST-SHARING PENSION PLAN JUNE 30, 2015 Reporting Fiscal Year (Measurement Date) 2014 through 2015 (2014) 2006 Arizona State Retirement System Proportion of the net pension liability Proportionate share of the net pension liability Covered-employee payroll Proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability $ $ 0.520455% 77,009,675 46,266,286 166.45% 69.49% See accompanying notes to pension plan schedules 77 Information not available CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY (ASSET) AND RELATED RATIOS AGENT PENSION PLANS JUNE 30, 2015 Public Safety Personnel Retirement System Reporting Fiscal Year (Measurement Date) 2014 through 2015 (2014) 2006 Peoria Police Department Total pension liability Service cost Interest on the total pension liability Changes in benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) $ 2,556,976 6,074,980 1,228,208 (672,105) 8,103,978 $ Plan fiduciary net position Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ $ Net pension liability/(asset) - ending (a)-(b) (4,300,112) 12,991,925 78,259,854 91,251,779 2,907,800 1,491,406 5,954,387 (4,300,112) (1,313,936) 4,739,545 45,194,618 49,934,163 41,317,616 Plan fiduciary net position as a percentage of the total pension liability 54.72% Covered valuation payroll $ Net pension liability/(asset) as a percentage of covered-employee payroll 13,035,510 316.96% See accompanying notes to pension plan schedules 78 Information not available CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY (ASSET) AND RELATED RATIOS AGENT PENSION PLANS JUNE 30, 2015 Public Safety Personnel Retirement System Reporting Fiscal Year (Measurement Date) 2014 through 2015 (2014) 2006 Peoria Fire Department Total pension liability Service cost Interest on the total pension liability Changes in benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) $ 2,013,025 4,197,224 453,523 660,641 3,815,327 $ Plan fiduciary net position Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ $ Net pension liability/(asset) - ending (a)-(b) (1,117,704) 10,022,036 53,020,164 63,042,200 1,885,422 1,168,186 5,369,649 (1,117,704) (1,063,021) 6,242,532 39,772,159 46,014,691 17,027,509 Plan fiduciary net position as a percentage of the total pension liability 72.99% Covered valuation payroll $ Net pension liability/(asset) as a percentage of covered-employee payroll 10,934,868 155.72% See accompanying notes to pension plan schedules 79 Information not available CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION CONTRIBUTIONS JUNE 30, 2015 Reporting Fiscal Year 2015 2014 $ 5,458,945 $ 5,019,946 5,458,945 $ $ 47,561,194 5,019,946 $ $ 46,266,286 2013 through 2006 Arizona State Retirement System Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered-employee payroll Actual contribution as a percentage of covered-employee payroll 11.48% Information not available 10.85% Public Safety Personnel Retirement System Peoria Police Department Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered-employee payroll Actual contribution as a percentage of covered-employee payroll $ 3,235,398 $ 2,907,800 3,235,398 $ $ 13,449,859 2,907,800 $ $ 13,035,510 24.06% Peoria Fire Department Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered-employee payroll Actual contribution as a percentage of covered-employee payroll 22.31% $ 1,842,016 $ 1,885,422 1,842,016 $ $ 11,068,029 1,885,422 $ $ 10,934,868 16.64% See accompanying notes to pension plan schedules 80 Information not available 17.24% Information not available CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO PENSION PLAN SCHEDULES JUNE 30, 2015 Note 1 – Actuarially Determined Contribution Rates Actuarial determined contribution rates for PSPRS are calculated as of June 30 two years prior to the end of the fiscal year in which contributions are made. The actuarial methods and assumptions used to establish the contribution requirements are as follows: Actuarial cost method Entry age method Amortization method Level percent closed for unfunded actuarial accrued liability, open for excess Remaining amortization period as of the 2013 actuarial valuation 23 years for unfunded actuarial liability, 20 years for excess Asset valuation method 7-year smoothed market value; 20% corridor Actuarial assumptions: Investment rate of return Projected salary increases In the 2013 actuarial valuation, the investment rate of return was decreased from 8.0% to 7.85% In the 2013 actuarial valuation, projected salary increases were decreased from 5.0%-9.0% to 4.5%-8.5% Wage growth In the 2013 actuarial valuation, wage growth was decreased from 5.0% to 4.5% Retirement age Experience-based table of rates that is specific to the type of eligibility condition. Last updated for the 2012 valuation pursuant to an experience study of the period July 1, 2006 to June 30, 2011 Mortality RP-2000 mortality table (adjusted by 105% for both males and females) Factors that Affect Trends. The actuarial assumptions used in the June 30, 2013, valuation for ASRS were based on the results of an actuarial experience study for the five-year period ended June 30, 2012. The purpose of the experience study was to review actual experience in relation to the actuarial assumptions in effect. The ASRS Board adopted the experience study recommended changes which were applied to the June 30, 2013, actuarial valuation. The study did not include an analysis of the assumed investment rate of return. The actuarial assumptions used in the June 30, 2014, valuation for PSPRS were based on the results of an actuarial experience study for the 5-year period ended June 30, 2011. The total pension liability used to calculate the net pension liability for PSPRS was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2014, reflects changes of benefit terms and actuarial assumptions for a court ruling for funding permanent benefit increases and a decrease in the wage growth assumption from 4.5% to 4.0%. 81 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF OPEB PLANS' FUNDING PROGRESS JUNE 30, 2015 Health Insurance Premium Benefit Actuarial valuation date Actuarial value of assets (a) Unfunded actuarial accrued Actuarial liability (UAAL) Funded (funding ratio accrued liability (b) excess) (b)-(a) (a)/(b) Annual covered payroll (c ) UAAL (funding excess) as a percentage of covered payroll ((b-a)/c) PSPRS Police 6/30/2014 $ 1,687,575 6/30/2013 6/30/2012 - $ 1,819,628 1,698,633 1,637,968 $ 132,053 1,698,633 1,637,968 92.74% $ 13,283,045 0.00% 13,250,689 0.00% 12,995,169 0.99% 12.82% 12.60% PSPRS Fire 6/30/2014 $ 1,375,003 6/30/2013 6/30/2012 - $ 1,352,871 1,282,533 1,377,734 $ (22,132) 101.64% $ 10,735,468 1,282,533 0.00% 10,431,141 1,377,734 0.00% 10,470,454 0.00% 12.30% 13.16% See accompanying notes to schedule of agent OPEB plans' funding progress 82 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO SCHEDULE OF AGENT OPEB PLANS’ FUNDING PROGRESS JUNE 30, 2015 Note 1 – Factors that Affect the Identification of Trends Beginning in fiscal year 2014, PSPRS established separate funds for pension benefits and health insurance premium benefits. Previously, the plans recorded both pension and health insurance premium contributions in the same Pension Fund. During fiscal year 2014, the plans transferred prior-year health insurance premium benefit contributions that exceeded benefit payments from each plan’s Pension Fund to the new Health Insurance Fund. 83 84 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 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 General Obligation Bonds Capital Projects Fund Municipal Development Authority (MDA) Bonds Capital Projects Fund Non-Bond Capital Projects Fund 87 90 92 94 95 96 97 98 99 100 101 102 Internal Service Funds Combining Statements Combining Statement of Net Position 104 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 105 Combining Statement of Cash Flows 106 Fiduciary Funds Combining Statement of Fiduciary Net Position – Agency Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds 85 108 109 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. 86 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Total revenues $ EXPENDITURES: Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Total other financing sources and uses $ Fund balances - beginning $ 14,476,518 155,000 14,631,518 $ 14,469,957 77,707 14,547,664 $ (6,561) (77,293) (83,854) 9,895,000 6,147,634 16,042,634 9,895,000 6,147,634 16,042,634 9,895,000 5,746,609 15,641,609 (401,025) (401,025) (1,411,116) (1,411,116) (1,093,945) 317,171 - Net change in fund balances Fund balances - ending 14,476,518 155,000 14,631,518 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) - - (1,411,116) (1,411,116) (1,093,945) 28,572,810 28,572,810 26,953,016 27,161,694 87 $ 27,161,694 $ 25,859,071 317,171 (1,619,794) $ (1,302,623) NON-MAJOR GOVERNMENTAL FUNDS OTHER GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for and report the proceeds of specific revenue 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 (MDA) 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. 88 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 and Vistancia West 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. 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. 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. 89 CITY OF PEORIA, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2015 Special Revenue Funds Public Transit Fund ASSETS & DEFERRED OUTFLOWS Pooled cash and investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Special assessments receivable Total assets Total assets & deferred outflows LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Other liabilities Unearned revenue-other Total liabilities Deferred inflows of resources: Unavailable revenue-special assessments Total deferred inflows of resources Fund balances: Restricted for: Debt service Capital projects Grant purposes Committed for: Arts capital Assigned to: Capital projects Other purposes Unassigned: Total fund balance Total liabilities, deferred inflows & fund balance Debt Service Funds Other Grants Fund Municipal Development Authority Bonds Special Assessment Bonds CFD Bonds $ 1,380,392 74,213 652 1,455,257 $ 5,486,939 1,650 3,131 741,216 6,232,936 $ 5,393,849 3,421 929,914 3,662,167 9,989,351 $ 22,357 36 23,554 8,728,624 8,774,571 $ 631,682 387 60,669 2,326,112 3,018,850 $ 1,455,257 $ 6,232,936 $ 9,989,351 $ 8,774,571 $ 3,018,850 $ 1,310 6,100 500 7,910 $ 368,766 13,124 2,130 320,984 705,004 $ $ 276 276 $ - - 1,447,347 $ 1,447,347 1,455,257 - 1,280,252 - $ 8,774,295 - - $ 9,989,351 9,989,351 The accompanying notes are an integral part of the financial statements 90 - 9,989,351 - 4,138,297 109,383 5,527,932 6,232,936 - - $ 8,774,295 8,774,571 2,326,112 2,326,112 692,738 692,738 $ 3,018,850 (continued) CITY OF PEORIA, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2015 Capital Project Funds GO Bond Capital Projects Fund CFD Bonds ASSETS & DEFERRED OUTFLOWS Pooled cash and investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Special assessments receivable Total assets Total assets & deferred outflows LIABILITIES, DEFERRED INFLOWS & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Other liabilities Unearned revenue-other Total liabilities Deferred inflows of resources: Unavailable revenue-special assessments Total deferred inflows of resources Fund balances: Restricted for: Debt service Capital projects Grant purposes Committed for: Arts capital Assigned to: Capital projects Other purposes Unassigned: Total fund balance Total liabilities, deferred inflows & fund balance $ 1,621 6,680,621 6,682,242 $ $ 6,682,242 $ $ 536 536 $ - 6,681,706 - $ 6,681,706 6,682,242 MDA Bonds $ Non-Bond 153 9,813 9,966 $ 14,870,429 9,786 2,260,000 17,140,215 $ 27,763,291 98,220 19,273 929,914 3,024,770 408,835 1,261,786 19,071,412 2,326,112 54,903,613 1,600,225 $ 9,966 $ 17,140,215 $ 54,903,613 473,188 5,932,622 6,405,810 $ 155 155 $ 300,040 72,087 1,054,386 1,426,513 $ 1,144,271 19,224 5,934,752 72,587 1,375,370 8,546,204 - - - 2,326,112 2,326,112 - 9,811 - - 19,456,384 6,691,517 2,727,599 - - - 4,138,297 (4,805,585) (4,805,585) 1,600,225 $ 9,811 9,966 $ The accompanying notes are an integral part of the financial statements 91 Non-Major Governmental Funds $ 86 399,022 1,201,117 1,600,225 - Total 17,546,784 (1,833,082) 15,713,702 17,140,215 $ 17,546,784 109,383 (6,638,667) 44,031,297 54,903,613 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Special Revenue Funds Public Other Transit Grants Fund Fund REVENUES: Taxes Intergovernmental Charges for service Fines and forfeitures Investment earnings Special assessments Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety 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): Bond proceeds Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending 835,781 50,784 4,647 82,766 973,978 $ 986,471 478,215 526,654 1,125,460 838,548 1,759 160,870 137,096 1,123,567 100,013 3,231,519 $ 23,074 23,074 $ 2,433,991 Special Assessment Bonds $ 24,626 1,950,716 4,409,333 - 18,708 - 2,611 381,761 384,372 - 4,305,000 3,308,408 7,613,408 2,765,000 2,711,311 5,495,019 340,000 136,338 476,338 (149,589) 412,900 (7,590,334) (1,085,686) (91,966) 275,000 (654) 274,346 4,427 (528,150) (523,723) 3,707,283 3,707,283 1,163,024 1,163,024 - 124,757 (110,823) (3,883,051) 1,322,590 $ 2,892,171 431,447 156,822 21,117 142,862 3,644,419 Debt Service Funds Municipal Development CFD Authority Bonds Bonds 1,447,347 5,638,755 $ 5,527,932 13,872,402 $ 9,989,351 The accompanying notes are an integral part of the financial statements 92 77,338 (91,966) 8,696,957 $ 8,774,295 784,704 $ 692,738 (continued) CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2015 CFD Bonds REVENUES: Taxes Intergovernmental Charges for service Fines and forfeitures Investment earnings Special assessments Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety 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): Bond proceeds Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending 11,682 11,682 Capital Project Funds GO Bond Capital Projects MDA Fund Bonds $ 1,311 1,311 $ Non-Bond 1,034 3,000 4,034 $ 2,879,208 71,442 353,590 3,304,240 Total Non-Major Governmental Funds $ 2,433,991 6,607,160 482,231 156,822 161,544 381,761 2,532,934 12,756,443 - 1,407,984 - - 659,592 - 496,923 526,654 1,125,460 838,548 2,067,576 1,759 1,147,341 30,598 30,598 4,920,841 6,328,825 - 5,289,532 5,949,124 7,410,000 6,186,655 10,447,482 30,248,398 (18,916) (6,327,514) 4,034 (2,644,884) (17,491,955) 35,000 (3,025,075) (2,990,075) 1,520,243 (1,818,452) (298,209) 5,403 (6,359,753) (6,354,350) (637,797) (637,797) 35,000 6,675,380 (12,369,881) (5,659,501) (3,008,991) (6,625,723) (6,350,316) (3,282,681) (23,151,456) 9,690,697 1,820,138 6,360,127 18,996,383 67,182,753 9,811 $ 15,713,702 $ 6,681,706 $ (4,805,585) $ The accompanying notes are an integral part of the financial statements 93 $ 44,031,297 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Intergovernmental Charges for services Investment earnings Miscellaneous Total inflows $ EXPENDITURES: Current: Human services Capital outlay Total expenditures $ 1,173,050 140,000 1,313,050 Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending 393,200 31,500 2,000 5,000 431,700 $ 393,200 31,500 2,000 5,000 431,700 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 1,173,050 140,000 1,313,050 835,781 50,784 4,647 82,766 973,978 $ 986,471 137,096 1,123,567 442,581 19,284 2,647 77,766 542,278 (186,579) (2,904) (189,483) (881,350) (881,350) (149,589) 731,761 50,000 275,000 (654) 324,346 50,000 275,000 (654) 324,346 275,000 (654) 274,346 (50,000) (50,000) (557,004) (557,004) 124,757 681,761 694,120 694,120 1,322,590 628,470 137,116 94 $ 137,116 $ 1,447,347 $ 1,310,231 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Intergovernmental: Charges for services Fines and forfeitures Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Public works Human Services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 6,432,169 1,304,278 160,000 14,350 7,910,797 $ 6,432,169 1,304,278 160,000 14,350 7,910,797 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 2,892,171 431,447 156,822 21,117 142,862 3,644,419 $ (3,539,998) (872,831) (3,178) 6,767 142,862 (4,266,378) 422,084 550,727 572,259 1,491,795 827,461 1,482,000 5,346,326 566,965 602,322 2,002,192 1,587,883 949,535 1,751,720 7,460,617 478,215 526,654 1,234,471 838,548 8,971 160,870 100,013 3,347,742 (88,750) (75,668) (767,721) (749,335) 8,971 (788,665) (1,651,707) (4,112,875) 2,564,471 450,180 296,677 (153,503) 3,100,000 (293,558) 2,806,442 1,184,796 (293,558) 891,238 4,427 (411,927) (407,500) (1,184,796) 4,427 (118,369) (1,298,738) 5,370,913 1,341,418 (110,823) (1,452,241) 7,004,117 7,004,117 12,375,030 $ 8,345,535 Explanation of differences between budgetary basis and GAAP revenues and expenditures Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison schedule Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds 95 5,638,755 $ 5,527,932 $ 3,347,742 (116,223) $ 3,231,519 (1,365,362) $ (2,817,603) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Transfers in Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 85,000 85,000 $ 85,000 85,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 23,074 23,074 $ (61,926) (61,926) 4,305,000 4,365,482 8,670,482 4,305,000 4,365,482 8,670,482 4,305,000 3,308,408 7,613,408 (8,585,482) (8,585,482) (7,590,334) 995,148 3,693,782 3,693,782 3,693,782 3,693,782 3,707,283 3,707,283 13,501 13,501 (4,891,700) (4,891,700) (3,883,051) 13,890,371 13,890,371 13,872,402 8,998,671 96 $ 8,998,671 $ 9,989,351 (1,057,074) (1,057,074) 1,008,649 (17,969) $ 990,680 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Transfers in Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 2,444,700 25,000 3,026,812 5,496,512 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 2,444,700 25,000 3,026,812 5,496,512 $ 2,433,991 24,626 1,950,716 4,409,333 $ (10,709) (374) (1,076,096) (1,087,179) 18,200 18,200 18,708 2,765,000 2,713,312 5,496,512 2,765,000 2,713,312 5,496,512 2,765,000 2,711,311 5,495,019 - - (1,085,686) (1,085,686) - - 1,163,024 1,163,024 1,163,024 1,163,024 - - 77,338 77,338 8,680,231 8,680,231 8,696,957 16,726 8,680,231 97 $ 8,680,231 $ 8,774,295 508 (2,001) (1,493) $ 94,064 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE SPECIAL ASSESSMENT DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Investment earnings Special assessments Total revenues $ EXPENDITURES: Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 400 476,288 476,688 $ 400 476,288 476,688 340,000 136,288 476,288 340,000 136,338 476,338 400 350 - - 400 350 121,864 121,864 122,264 98 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 122,214 $ 2,611 381,761 384,372 $ 340,000 136,338 476,338 - (91,966) (92,316) - $ 2,211 (94,527) (92,316) - (91,966) (92,316) 784,704 662,840 692,738 $ 570,524 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Bond proceeds Contingencies Transfers out Total other financing sources and uses $ Fund balances - beginning $ 45,000 45,000 $ 11,682 11,682 $ (33,318) (33,318) 9,648,962 9,648,962 9,648,962 9,648,962 30,598 1,862,051 1,892,649 (7,786,911) (7,786,911) (9,603,962) (9,603,962) (1,880,967) 7,753,593 35,000 (1,163,024) (1,128,024) 35,000 (50,000) (1,163,024) (1,178,024) 6,575,569 50,000 50,000 Net change in fund balances Fund balances - ending 45,000 45,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 50,000 50,000 (9,553,962) (9,553,962) (3,008,991) 9,690,168 9,690,168 9,690,697 136,206 $ 136,206 Explanation of differences between budgetary basis and GAAP revenues and expenditures Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison schedule Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds 99 $ 6,681,706 $ 1,892,649 (1,862,051) $ 30,598 529 $ 6,576,098 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Current: Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Bond proceeds Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances $ $ 1,311 1,311 $ (17,889) (17,889) 268,445 17,306,436 17,574,881 1,407,984 6,734,150 8,142,134 1,139,539 (10,572,286) (9,432,747) (11,646,571) (17,555,681) (8,140,823) 9,414,858 11,300,000 450,000 11,750,000 11,300,000 313,133 11,613,133 1,520,243 (5,143) 1,515,100 (11,300,000) (313,133) 1,520,243 (5,143) (10,098,033) (5,942,548) (6,625,723) (683,175) 1,820,138 883,188 936,950 $ 19,200 19,200 256,039 11,409,732 11,665,771 103,429 Fund balances - beginning Fund balances - ending 19,200 19,200 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 1,040,379 936,950 $ (5,005,598) Explanation of differences between budgetary basis and GAAP revenues and expenditures Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison schedule Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 100 $ (4,805,585) $ 8,142,134 (1,813,309) $ 6,328,825 $ 200,013 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Bond proceeds Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ - $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) - $ 1,034 3,000 4,034 $ 1,034 3,000 4,034 371,332 36,747,803 37,119,135 352,618 36,667,647 37,020,265 6,359,753 6,359,753 (352,618) (30,307,894) (30,660,512) (37,119,135) (37,020,265) (6,355,719) 30,664,546 30,300,000 30,300,000 30,300,000 30,300,000 (6,819,135) (6,720,265) (6,350,316) 369,949 6,819,135 6,819,135 6,360,127 (459,008) - $ 98,870 Explanation of differences between budgetary basis and GAAP revenues and expenditures Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the budgetary comparison schedule Differences - budget to GAAP: Capital outlay recognized as expenditures for budgetary purposes, but assets capitalized in proprietary funds for financial reporting purposes Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - non-major governmental funds 101 5,403 5,403 $ 9,811 $ 6,359,753 (6,359,753) $ - (30,300,000) 5,403 (30,294,597) $ (89,059) CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2015 Actual Amounts (budgetary basis) Budgeted Amounts Original Final REVENUES: Intergovernmental revenue Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: Highways and streets Capital outlay Contingencies Total expenditures Excess (deficiency) of revenues over (under) expenditures 79,000 4,615,795 4,694,795 Fund balances - beginning Fund balances - ending $ 79,000 4,615,795 4,694,795 $ 2,879,208 71,442 353,590 3,304,240 $ 2,879,208 (7,558) (4,262,205) (1,390,555) 584,815 9,715,000 1,200,000 11,499,815 2,076,941 11,823,522 151,005 14,051,468 659,592 5,289,532 5,949,124 (1,417,349) (6,533,990) (151,005) (8,102,344) (6,805,020) (9,356,673) (2,644,884) 6,711,789 - - (637,797) (637,797) (6,805,020) (9,356,673) (3,282,681) 6,073,992 13,689,866 13,689,866 18,996,383 5,306,517 OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources and uses Net change in fund balances $ Variance with Final Budget Over (Under) 6,884,846 102 $ 4,333,193 $ 15,713,702 (637,797) (637,797) $ 11,380,509 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. 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. 103 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2015 ASSETS Current assets: Pooled cash and investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Pooled cash and investments Investments Total restricted assets Capital assets: Buildings and improvements Equipment & furniture Vehicles Less accumulated depreciation Construction in progress Total capital assets, net Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Total deferred outflows of resources 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 Net pension liability Total non-current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted - trust purpose Unrestricted Total net position Motor Pool Fund SelfInsurance Fund $ 8,794,027 6,585 5,589 212,634 9,018,835 $ 8,913,772 4,038 8,548 65,200 8,991,558 1,475,608 25,475,993 (18,841,075) 1,432,329 9,542,855 18,561,690 7,527,799 5,490,272 13,018,071 22,009,629 Facilities Maintenance Fund Information Technology Fund Total $ $ 4,314,991 160 1,776 4,316,927 $ 22,466,300 10,783 16,164 65,200 212,634 22,771,081 443,510 251 443,761 17,741 (8,557) 9,184 452,945 148,102 34,210,275 (28,044,266) 2,806,147 9,120,258 13,437,185 7,527,799 5,490,272 13,018,071 148,102 35,703,624 25,475,993 (46,893,898) 4,238,476 18,672,297 54,461,449 120,737 120,737 22,570 22,570 394,765 394,765 657,538 657,538 1,195,610 1,195,610 212,588 11,443 52,760 276,791 1,109,645 1,751 3,290,217 8,510 4,410,123 37,156 36,530 184,500 258,186 184,201 59,125 286,520 529,846 1,543,590 108,849 3,290,217 532,290 5,474,946 34,760 970,809 1,005,569 1,282,360 641,829 1,770 181,478 825,077 5,235,200 73,740 3,174,172 3,247,912 3,506,098 61,260 5,287,050 5,348,310 5,878,156 641,829 171,530 9,613,509 10,426,868 15,901,814 183,927 183,927 34,382 34,382 601,367 601,367 1,001,667 1,001,667 1,821,343 1,821,343 9,542,855 7,673,285 $ 17,216,140 9,373,545 7,389,072 $ 16,762,617 9,184 (3,268,939) $ (3,259,755) The accompanying notes are an integral part of the financial statements 104 9,120,258 (1,905,358) $ 7,214,900 18,672,297 9,373,545 9,888,060 $ 37,933,902 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2015 SelfInsurance Fund Motor Pool Fund OPERATING REVENUES Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) 6,565,062 1,144 6,566,206 $ 20,050,761 424,638 20,475,399 Facilities Maintenance Fund $ 5,941,567 2,093 5,943,660 Information Technology Fund $ 8,525,283 12,922 8,538,205 Total $ 41,082,673 440,797 41,523,470 865,305 3,776,417 2,202,675 6,844,397 (278,191) 227,443 844,723 15,857,812 16,929,978 3,545,421 2,826,741 3,097,571 2,534 5,926,846 16,814 4,340,670 4,998,514 1,516,602 10,855,786 (2,317,581) 8,260,159 12,717,225 15,857,812 3,721,811 40,557,007 966,463 NON-OPERATING REVENUES (EXPENSES) Interest and investment income Gain (Loss) on sale of capital assets Total non-operating revenues Income (loss) before transfers 40,268 149,515 189,783 (88,408) 63,676 63,676 3,609,097 1,761 1,761 18,575 12,735 12,735 (2,304,846) 118,440 149,515 267,955 1,234,418 Capital contributions Transfers in Transfers out Change in net position 9,000 104,295 (1,589) 23,298 (467) 3,608,630 110,000 (4,674) 123,901 1,873,850 (430,996) 9,000 2,088,145 (6,730) 3,324,833 Total net position - beginning 18,240,511 Cumulative effect of change in accounting principle Total net assets - beginning, restated Total net position - ending (1,047,669) 17,192,842 $ 17,216,140 13,349,833 $ (195,846) 13,153,987 16,762,617 41,817 $ (3,425,473) (3,383,656) (3,259,755) The accompanying notes are an integral part of the financial statements 105 13,351,527 $ (5,705,631) 7,645,896 7,214,900 44,983,688 (10,374,619) 34,609,069 $ 37,933,902 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2015 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 $ 6,559,621 (3,769,309) (870,156) 1,920,156 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 104,295 (1,589) 102,706 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 (3,572,061) 179,832 (3,392,229) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ $ (278,191) $ (467) (467) 5,943,660 (3,124,767) (2,877,966) (59,073) $ 110,000 (4,674) 105,326 - 38,940 38,940 (1,330,427) 10,124,454 8,794,027 20,472,166 (1,083,689) (230,470) (15,988,355) 3,169,652 (745,716) 58,740 (686,976) 8,540,347 (5,260,868) (4,419,869) (1,140,390) 1,873,850 1,873,850 - (343,053) (343,053) 1,625 1,625 12,208 12,208 $ 402,615 3,912,376 4,314,991 $ (2,317,581) $ 2,482,209 13,959,362 16,441,571 $ 47,878 395,632 443,510 $ 3,545,421 $ 16,814 $ 41,515,794 (13,238,633) (8,398,461) (15,988,355) 3,890,345 2,088,145 (6,730) 2,081,415 (3,915,114) 179,832 (3,735,282) (745,716) 111,513 (634,203) 1,602,275 28,391,824 $ 29,994,099 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 Add: Pension expense Subtract: Employer pension contributions (Increase) decrease in assets: Accounts receivable Prepaid items Supplies inventory Increase (decrease) in liabilities: Accounts payable Accrued payroll Claims payable Compensated absences Total adjustments 2,202,675 57,727 (71,397) 10,791 (13,347) (6,585) (17,085) (3,233) (65,200) - - (173,766) (201) (130,543) (270) (375,769) (27,196) 3,734 (10,260) (75,887) 24,193 129 8,690 2,198,347 2,534 188,745 (233,444) Net cash provided (used) by operating activities $ 1,920,156 $ 3,169,652 $ 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 $ 9,000 3,129 12,129 $ 5,437 5,437 $ $ $ (59,073) $ The accompanying notes are an integral part of the financial statements 106 94 94 $ 1,516,602 314,383 (388,835) 3,721,811 571,646 (707,023) 2,142 70,286 - (7,676) 5,086 (17,085) (332,640) 7,443 (12,190) 1,177,191 $ $ $ (1,140,390) 931 931 966,463 (509,409) 11,105 (130,543) (14,030) 2,923,882 $ 3,890,345 $ $ 9,000 9,591 18,591 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. 107 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS JUNE 30, 2015 Terramar Infrastructure Fund ASSETS Pooled cash and investments Interest receivable Total assets LIABILITIES Accounts payable Other liabilities Total liabilities $ 384,970 384,970 384,970 384,970 PLAY Peoria NFP Fund $ 27,182 9 27,191 2,495 24,696 27,191 Peoria Citizens Corp Council NFP Fund $ 2,068 2,068 Westside Fire Training IGA Fund $ 2,068 2,068 The accompanying notes are an integral part of the financial statements 108 32,143 32,143 32,143 32,143 Total $ 446,363 9 446,372 2,495 443,877 446,372 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Balance June 30, 2014 Terramar Infrastructure Fund Assets: Pooled cash and investments Total Assets Liabilities: Other liabilities $ 384,970 384,970 Additions $ Deductions 296,729 296,729 $ 296,729 296,729 Balance June 30, 2015 $ 384,970 384,970 384,970 - - 384,970 PLAY Peoria NFP Fund Assets: Pooled cash and investments Interest receivable Total Assets 23,777 23,777 51,000 9 51,009 47,595 47,595 27,182 9 27,191 Liabilities: Accounts payable Other liabilities Total Liabilities 23,777 23,777 6,848 919 7,767 4,353 4,353 2,495 24,696 27,191 Peoria Citizens Corp Council NFP Fund Assets: Pooled cash and investments Total Assets 2,060 2,060 1,596 1,596 1,588 1,588 2,068 2,068 Liabilities: Other liabilities Total Liabilities 2,060 2,060 8 8 - 2,068 2,068 Westside Fire Training IGA Fund Assets: Pooled cash and investments Total Assets 36,306 36,306 30,366 30,366 34,529 34,529 32,143 32,143 Liabilities: Accounts payable Other liabilities Total Liabilities 36,306 36,306 6,545 6,545 6,545 4,163 10,708 32,143 32,143 Assets: Pooled cash and investments Interest receivable Total Assets 447,113 447,113 379,691 9 379,700 380,441 380,441 446,363 9 446,372 Liabilities: Accounts payable Other liabilities Total Liabilities 447,113 447,113 13,393 927 14,320 10,898 4,163 15,061 2,495 443,877 446,372 Totals - All Agency Funds The accompanying notes are an integral part of the financial statements 109 110 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 113 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 118 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 130 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 140 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 142 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. 111 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 Fund Balances, Governmental Funds IV Changes in Fund Balances, Governmental Funds 113 114 116 117 Revenue Capacity V City Transaction Privilege Taxes By Category VI Direct and Overlapping Sales Tax Rates VII Sales Tax Payers - By Category VIII Secondary Assessed Value and Full Cash Value of Taxable Property IX Comparative Secondary Assessed Value X Direct and Overlapping Property Tax Rates XI Direct and Overlapping Property Tax Levies XII Principal Property Tax Payers XIII Property Tax Levies and Collections XIV Utility Statistical Data 118 119 120 121 122 123 124 125 126 127 Debt Capacity XV Outstanding Debt By Type XVI Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita XVII Direct and Overlapping General Obligation Bonded Debt – Current Fiscal Year XVIII Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XIX Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XX Legal Debt Margin XXI Pledged Revenue Coverage - Municipal Development Authority Bonds – Governmental Portion XXII Pledged Revenue Coverage – Water and Wastewater Revenue Bonds XXIII Pledged Revenue Coverage - Special Assessment Bonds XXIV Special Assessment Collections 136 137 138 139 Economic and Demographic Information XXV Demographic and Economic Statistics XXVI Major Employers Within the City 140 141 Operating Information XXVII Authorized Full-time Equivalent City Government Employees By Function XXVIII Operating Indicators By Function/Program XXIX Capital Asset Statistics By Function/Program 142 143 144 112 130 131 132 133 134 135 CITY OF PEORIA, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 2006 Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net assets Business-type Activities Net investment in capital assets Restricted Unrestricted Total business-type activities net assets Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net assets Source: $ $ $ $ $ 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 Fiscal Year 2010 2009 $ $ $ $ 2011 829,001,871 131,550,563 149,159,571 $ 1,109,712,005 855,286,264 151,624,692 84,211,745 $ 1,091,122,701 $ 429,764,018 33,558,490 36,507,370 499,829,878 $ $ $ $ $ $ Statement of Net Position City financial records and reports 113 $ $ 1,252,059,372 57,123,435 245,701,059 $ 1,554,883,866 $ $ 1,282,066,150 141,115,975 164,342,264 $ 1,587,524,389 $ $ 1,294,887,932 143,017,781 172,612,856 $ 1,610,518,569 $ 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 $ 2015 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 $ 2014 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 $ 2013 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 $ 2012 690,708,494 54,945,644 207,958,657 953,612,795 $ 1,120,472,512 88,504,134 244,466,027 $ 1,453,442,673 $ Table I $ 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 $ $ 885,716,419 139,143,949 (29,002,988) 995,857,380 568,223,130 23,830,354 54,351,770 646,405,254 $ 1,453,939,549 162,974,303 25,348,782 $ 1,642,262,634 CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2006 Expenses Governmental Activities General Government Culture & Recreation Public Safety* 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 $ 2007 23,226,263 23,185,665 58,702,675 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 56,118,123 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 56,780,852 6,135,184 25,598,067 8,441,912 1,992,977 12,616,562 574,550 $ 160,730,254 $ $ 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 $ $ 22,666,481 12,117,734 103,368,209 $ 138,152,424 $ 23,226,773 13,954,308 59,793,946 96,975,027 $ 25,523,896 14,382,484 41,598,499 81,504,879 $ 20,130,962 12,574,749 51,366,296 84,072,007 $ 17,489,464 13,096,036 55,978,635 86,564,135 $ 17,722,889 13,709,669 34,932,888 66,365,446 $ $ 53,196,965 137,532 14,097,716 $ 67,432,213 $ 205,584,637 $ 61,918,282 135,174 18,219,423 $ 80,272,879 $ 177,247,906 $ 61,936,451 145,841 22,321,213 $ 84,403,505 $ 165,908,384 $ 59,577,008 158,627 12,186,331 $ 71,921,966 $ 155,993,973 $ 62,457,821 177,710 50,899,343 $ 113,534,874 $ 200,099,009 $ 60,595,686 209,878 5,408,859 $ 66,214,423 $ 132,579,869 $ $ $ (37,275,047) 23,412,309 $ (13,862,738) $ (63,700,372) 17,848,311 $ (45,852,061) $ (74,700,001) (7,473,525) $ (82,173,526) $ (69,171,524) 38,066,827 $ (31,104,697) $ (94,364,808) 1,579,184 $ (92,785,624) $ (103,644,609) 4,558,626 $ (99,085,983) $ $ $ $ * Beginning in fiscal year 2015, the Police and Fire line items have been combined and are being presented in the Public Safety line item. 114 $ 2012 17,077,115 21,834,144 54,428,181 6,542,413 22,909,823 7,782,967 2,887,625 11,168,041 574,942 $ 145,205,251 $ $ 2011 24,469,279 17,947,721 45,950,325 5,605,618 23,031,544 6,288,446 2,316,358 8,065,449 575,334 $ 134,250,074 $ $ Fiscal Year 2010 2009 21,608,973 16,304,875 39,910,275 4,882,448 18,713,722 5,791,128 2,054,042 7,223,963 575,334 $ 117,064,760 21,087,664 14,288,769 35,376,433 $ 2008 Table II $ $ $ $ $ $ $ 20,935,141 23,499,906 58,218,954 5,437,784 31,778,203 7,416,026 1,655,935 12,595,752 574,550 162,112,251 2013 $ $ 30,777,765 21,923,061 10,859,872 5,284,940 802,246 400,405 70,048,289 232,160,540 $ 17,331,656 11,071,988 30,063,998 58,467,642 $ 66,048,140 140,461 8,418,314 74,606,915 133,074,557 $ $ $ $ $ $ 19,175,790 22,434,968 56,757,540 8,374,619 29,967,207 6,989,988 2,196,801 12,739,029 574,557 159,210,499 2014 $ $ 29,094,123 20,342,376 10,503,928 5,140,500 806,658 273,528 66,161,113 225,371,612 $ 18,745,123 12,440,760 21,485,029 52,670,912 $ 67,197,303 67,915 7,323,482 74,588,700 127,259,612 $ $ (106,539,587) 8,427,587 $ (98,112,000) $ $ $ $ $ 20,038,112 25,559,518 60,213,181 9,193,743 31,411,752 7,015,316 1,629,118 12,009,243 574,550 167,644,533 2015 $ $ 30,836,235 21,083,666 10,806,101 5,176,689 823,780 68,726,471 236,371,004 $ 19,221,921 12,693,535 11,703,447 43,618,903 $ 69,499,963 9,325,636 78,825,599 122,444,502 $ $ (124,025,630) 10,099,128 $ (113,926,502) $ $ $ $ $ 21,210,452 25,982,440 64,261,923 9,544,919 33,658,672 7,259,675 1,177,275 11,373,755 174,469,111 34,566,373 21,737,995 10,939,896 6,372,954 813,636 74,430,854 248,899,965 25,696,523 13,485,788 22,908,863 62,091,174 68,417,721 29,760,720 98,178,441 160,269,615 $ (112,377,937) 23,747,587 $ (88,630,350) CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2006 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes, levied for general purposes $ 3,274,982 Property taxes, levied for debt service 12,930,561 Sales and use taxes 61,156,870 Franchise taxes 3,004,895 Intergovernmental State shared sales taxes - unrestricted 11,681,284 Urban revenue sharing - unrestricted 11,707,782 Auto in-lieu taxes - unrestricted 5,251,577 Investment Earnings 6,723,061 Gain on sale of capital assets 81,122 Elimination of development agreement debt 17,279 Miscellaneous 5,584,218 Special Item: Close out of Section 8 Housing Transfers in (out) (12,660,507) Total governmental activities $ 108,753,124 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 $ 3,722,092 14,392,472 68,873,970 3,983,701 2008 $ 3,728,615 22,569,309 68,466,910 3,848,746 Fiscal Year 2010 2009 $ 3,629,629 28,162,003 59,004,816 4,019,182 $ 3,833,445 26,225,535 56,276,937 3,955,416 Table II 2011 $ 3,628,286 22,406,879 58,082,217 4,037,897 2012 $ 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 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 10,991,095 20,395,663 5,018,384 7,896,100 115,412 3,528,043 (3,066,497) $ 139,693,830 10,137,682 17,469,936 4,634,263 2,199,984 102,409 5,885,847 (3,029,412) $ 127,692,042 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 $ $ $ $ $ $ $ 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 $ $ $ $ $ $ $ $ $ 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 70,522,306 43,103,798 $ 113,626,104 Statement of Activities City financial records and reports 115 $ 33,327,234 6,433,032 39,760,266 $ 10,355,518 15,984,646 26,340,164 $ 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) 118,459,824 284,427 3,335,912 3,620,339 122,080,163 11,920,237 12,047,926 23,968,163 2013 $ $ $ $ $ $ $ 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) 118,108,913 176,176 (2,101,809) 9,394,454 7,468,821 125,577,734 11,569,326 15,896,408 27,465,734 2014 $ $ $ $ $ $ $ 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) 105,436,326 359,158 28,205,646 28,564,804 134,001,130 (18,589,304) 38,663,932 20,074,628 2015 $ 2,889,150 16,891,026 74,556,024 4,312,836 14,139,128 18,650,521 5,886,971 843,648 $ $ $ $ $ $ 3,216,595 (11,931,172) 129,454,727 348,717 11,931,172 12,279,889 141,734,616 17,076,790 36,027,476 53,104,266 Table III CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2006 General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Nonspendable Restricted Committed Assigned Unassigned Total All Other Governmental Funds * $ 2007 948,135 65,224,766 $ 66,172,901 216,652 74,842,586 $ 75,059,238 $ $ 84,931,450 $154,966,318 $ 143,600,643 49,251,757 18,917,375 $223,135,450 41,501,121 (21,988,077) $104,444,494 $ 2008 $ 264,489 77,741,727 78,006,216 2009 $ 2011 * 2010 241,678 60,238,418 60,480,096 $ $ 165,129,365 $ 147,974,858 $ 62,170,663 23,589,696 - 57,506,689 29,428,677 - 55,546,744 22,203,699 - 108,919 169,837,817 11,040,682 30,055,251 - $ 229,361,002 $ 252,064,731 $ 225,725,301 $ 211,042,669 $ 275,184 67,102,145 67,377,329 $ $ $ 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 95,828 168,127,814 10,064,814 40,566,996 (84,673) $ 218,770,779 $ $ $ 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 $ - 98,819 188,434,944 10,004,379 25,988,041 - 131,641 145,352,432 10,300,556 23,410,508 - $ 224,526,183 $ 179,195,137 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. Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds Balance Sheet - Governmental Funds City financial records and reports 116 2015 $ $ $ 163,703 67,084 36,911,493 3,056,458 21,584,005 61,782,743 70,579 127,294,490 10,572,297 22,821,310 (6,638,667) $ 154,120,009 Table IV CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2006 Revenues Taxes Intergovernmental Charges for Services Licenses and Permits Fines and Forfeitures Rents Investment Earnings Special Asessments Miscellaneous Total Revenues Expenditures General Government Culture & Recreation Public Safety (1) Development Services Highways & Streets Public Works Human Services Other Capital Outlay Debt Service Interest Principal $ 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 2007 $ 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 2008 $ 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 Fiscal Year 2010 2009 $ 93,896,013 62,718,223 18,479,664 1,802,759 3,733,047 395,834 7,174,109 2,200,782 7,488,740 $ 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 2011 $ 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 2012 $ 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 2013 $ 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 2014 $ 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 2015 $ 98,629,880 55,289,472 19,355,378 3,132,178 1,856,640 889,053 725,208 381,761 3,536,024 $ 178,025,080 $ 220,591,297 $ 216,437,439 $ 197,889,171 $ 172,012,184 $ 175,544,268 $ 172,992,735 $ 174,743,639 $ 174,165,451 $ 183,795,594 $ $ $ $ $ $ $ $ $ $ 19,767,909 15,300,068 38,137,983 4,986,442 10,333,402 4,640,211 1,991,939 539 34,944,336 22,833,440 17,013,511 44,685,510 5,526,599 14,679,124 5,010,116 2,291,469 45,912 76,919,805 14,544,047 21,769,313 52,461,747 6,669,979 14,632,287 6,408,150 2,817,716 74,142,416 17,798,947 22,303,852 56,974,453 6,489,199 15,469,695 6,187,633 2,343,847 77,515,142 16,330,159 19,475,634 53,876,911 6,529,594 13,070,648 7,955,394 2,145,702 60,269,181 15,818,173 18,784,735 53,390,368 6,051,667 13,891,078 6,748,102 1,952,861 29,176,335 14,470,822 18,396,187 54,390,977 5,328,403 14,754,432 4,884,713 1,586,315 26,336,595 15,094,866 19,668,598 56,702,266 8,568,013 16,355,505 4,914,720 2,213,374 39,612,698 15,866,612 21,762,725 58,976,873 9,311,964 17,098,590 5,110,924 1,604,288 17,728,188 17,085,501 22,181,064 60,840,413 9,714,954 19,400,893 5,261,842 1,147,341 26,491,974 6,747,072 16,881,632 8,099,492 16,178,431 10,340,704 31,143,531 11,917,582 25,988,554 13,166,242 44,700,092 12,658,032 34,309,287 13,098,263 25,566,028 12,534,039 20,120,163 12,543,974 21,937,761 11,933,264 17,305,000 Total Expenditures $ 153,731,533 $ 213,283,409 $ 234,929,890 $ 242,988,904 $ 237,519,557 $ 192,780,638 $ 178,812,735 $ 195,784,242 $ 181,941,899 $ 191,362,246 Excess of Revenues over (under) Expenditures $ 24,293,547 $ $ (18,492,451) $ (45,099,733) $ (65,507,373) $ (17,236,370) $ (5,820,000) $ (21,040,603) $ (7,776,448) $ (7,566,652) $ 6,722,550 20,559 10,116,361 (26,870,128) $ 47,000,000 273,310 16,426,715 (36,035,044) $ $ 29,170,000 495,890 23,567,886 (20,963,066) $ 7,920,000 16,960 28,388,910 (42,075,019) $ 14,715,000 13,690,000 (13,690,000) 645,188 (464,390) 16,740,587 (18,106,961) $ 35,510,000 1,039,481 16,968,105 (27,205,066) $ 112,000 20,159,941 (48,650,688) $ 35,000 16,357,492 (30,113,010) 32,270,710 $ 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 7,307,888 $ 122,090,000 18,365,000 (18,365,000) 1,502,204 17,798,434 (21,121,233) 68,440,000 808,192 18,855,279 (30,928,896) Total Other Financing Sources (Uses) $ (10,010,658) $ 120,269,405 $ 27,664,981 $ 57,174,575 $ (5,749,149) $ 13,529,424 $ 26,312,520 $ (28,378,747) $ (13,720,518) Net Change in Fund Balance $ $ 127,577,293 $ 9,172,530 $ 12,074,842 $ (33,236,663) $ (22,985,519) $ 7,709,424 $ 5,271,917 $ (36,155,195) $ (21,287,170) 32.65% 28.71% 21.00% 17.73% Debt Service as a percentage of noncapital expenditures (1) 14,282,889 19.89% 17.80% 25.80% 22.91% Beginning in Fiscal Year 2015, Police and Fire expenditures were combined into the Public Safety category. Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 117 25.36% 20.91% CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS Table V Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 38,908,327 6,257,112 7,522,177 7,498,115 1,217,583 9,284,232 1,036,941 718,931 2,112,606 Total $ 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 $ 74,556,024 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other Total Note: 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% 5.5% -0.7% 4.3% 1.5% -3.6% 9.2% 8.0% 15.1% 0.5% 34.3% 12.6% -0.6% -13.8% -4.6% 3.2% 4.5% 8.6% 8.0% 4.7% Includes all governmental fund types Source: City financial records and reports 118 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Year Taxes Are Payable 2009 2010 2011 2006 2007 2008 City Direct Rates (1): Retail Sales (excluding groceries) Groceries Contracting Rentals Hotel/Transient Lodging Utilities Telecommunications Restaurant/Bar Amusement All Others 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% 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% 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) 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% Table VI 2012 2013 2014 2015 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% 1.60% 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% 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% 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 119 CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND NINE YEARS AGO Table VII 2015 Category Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others Total # of Payers Percentage of Total Payers 2006 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 3,360 3,614 357 6,614 11 182 1,505 60 79 21.3% 22.9% 2.3% 41.9% 0.1% 1.1% 9.5% 0.4% 0.5% $ 38,908,327 6,257,112 9,284,232 7,522,177 7,498,115 1,217,583 718,931 1,036,941 2,112,606 52.2% 8.4% 12.5% 10.1% 10.0% 1.6% 1.0% 1.4% 2.8% 2,312 3,549 237 3,144 8 114 825 46 706 21.1% 32.4% 2.3% 28.7% 0.1% 1.0% 7.5% 0.4% 6.5% $ 26,832,950 14,022,558 5,986,135 5,469,550 4,949,457 1,079,620 1,604,174 655,728 556,698 43.9% 22.9% 9.8% 8.9% 8.1% 1.8% 2.6% 1.1% 0.9% 15,782 100.00% $ 74,556,024 100.00% 10,941 100.00% $ 61,156,870 100.00% Source: City Sales Tax system City financial records 120 CITY OF PEORIA, ARIZONA SECONDARY ASSESSED VALUE AND FULL CASH VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 2007 2006 2009 626,591,494 75,761,506 $ 1,041,693,334 116,115,688 $ 1,219,595,280 146,413,989 293,807,014 117,630,028 1,830,109 - 334,323,557 148,077,787 1,918,660 58,450 - 419,192,584 207,476,727 1,837,324 76,020 - Residential (Owner occupied) Residential (Renter occupied) Commercial, Industrial, Mining & Utilities Agriculture & Vacant Railroad Historic & Environmental Public Property Improvements $ 582,512,691 64,003,067 Net Assessed Value % Growth $ 964,469,431 16.5% $ 1,115,620,151 15.7% $ 1,642,187,476 47.2% $ 1,994,591,924 21.5% $ Net Assessed Value Per Capita Population $ $ $ $ $ 242,554,778 73,674,495 1,724,400 - Total Direct Secondary Tax Rate Net Assessed Value as a Percentage of Full Cash Value 6,646 145,125 1.30 Full Cash Value % Growth Full Cash Value Per Capita $ Fiscal Year 2010 2008 1.20 8,736,985,007 16.1% $ 60,203 11.0% 7,264 153,592 1.25 9,999,273,539 14.4% $ 65,103 11.2% 10,557 155,560 97,191 10.9% 1,048,710,389 155,720,660 1,895,163,851 -5.0% 12,301 154,065 114,778 10.9% 111,400 11.0% 818,535,888 147,284,152 $ 2013 687,456,278 122,978,913 378,992,788 85,330,391 1,429,130 140,493 7,869 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% $ 304,844,019 43,659,181 1,118,206 83,177 7,124 614,234,433 199,613,372 298,078,633 42,347,136 1,205,775 59,907 48,182 $ 1,155,587,438 9.3% $ $ $ $ $ 10,377 155,148 8,141 156,780 1.25 1.25 14,588,623,722 -15.0% $ 94,030 $ 11.0% 75,663 10.8% (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 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. 7,087 160,504 1.25 11,862,384,776 -18.7% 21% 22% 21% 20% 18% 17% 15% 15% 15% 16% 121 341,042,160 54,523,204 1,399,678 103,122 7,964 546,593,560 161,107,937 $ 1,057,413,204 -7.0% Railroad Source: Arizona Department of Revenue - Property Tax Division-Abstract of the Assessment Roll City Financial Records $ $ 1,137,434,740 -10.9% Property Tax Assessment Ratios (a) Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 620,970,965 119,387,647 2015 $ 1,276,335,862 -20.7% 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: Commercial, Industrial, Mining & Utilities (b) 25.0% 24.5% 24.0% 23.0% 22.0% 21.0% 20.0% 20.0% 19.5% 19.0% $ 2014 $ 1,609,972,512 -15.0% 17,162,776,025 -6.1% $ 2012 495,318,990 147,216,152 1,563,689 53,641 - 1.25 18,279,838,277 20.9% $ $ 495,336,050 193,685,182 1,647,040 64,530 - 1.25 15,118,988,316 51.2% $ 12,524 159,263 $ 2011 Table VIII 10,635,350,631 -10.3% $ 66,262 10.7% 6,444 164,104 1.25 1.25 10,057,364,678 -5.4% $ 61,287 10.5% 6,860 168,450 11,162,489,178 11.0% $ 66,266 10.4% CITY OF PEORIA, ARIZONA COMPARATIVE SECONDARY ASSESSED VALUE LAST TEN FISCAL YEARS Table IX Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 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 $ 1,155,587,438 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 1,471,213,352 Maricopa County 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 35,079,646,593 State of Arizona 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 55,349,948,120 2006 City of Peoria Peoria Unified School District No. 11 $ Source: Arizona Department of Revenue - Property Tax Division Abstract of the Assessment Roll City financial records 122 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) Total Direct City Primary Secondary Total Peoria Unified School District No. 11 (1) Primary Secondary Total Maricopa County (2) Primary Secondary Total State of Arizona Primary Secondary Fiscal Year 2010 2011 2006 2007 2008 2009 $ 0.29 1.30 1.59 $ 0.28 1.20 1.48 $ 0.24 1.25 1.49 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 4.13 3.80 7.93 4.29 3.31 7.60 3.82 2.72 6.54 3.77 1.90 5.67 2.59 0.51 3.10 2.06 0.68 2.74 1.92 0.59 2.51 1.78 0.59 2.37 - - - - 4.42 6.56 10.98 6.63 5.19 11.82 5.98 4.56 10.54 Table X 2012 2013 2014 2015 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 2.99 2.46 5.45 3.24 2.09 5.33 3.71 1.68 5.39 4.01 3.02 7.03 4.18 3.35 7.53 4.43 2.84 7.27 2.05 0.59 2.64 2.20 0.64 2.84 2.68 0.54 3.22 2.87 0.78 3.65 3.11 0.86 3.98 3.11 0.86 3.98 - - - - - - 6.58 3.47 10.05 7.07 5.05 12.12 7.48 5.47 12.94 7.73 4.95 12.69 Total Primary Secondary Total 5.74 3.74 9.48 5.23 4.30 9.53 5.63 3.98 9.61 (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 $ 4.41 $ 2.07 (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 2015 Tax Rate Primary $ 1.32 0.51 1.28 $ 3.11 Secondary $ 0.24 0.14 0.01 0.06 0.19 0.08 0.14 $ 0.86 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates Publication 123 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 2006 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 2007 2,640,883 12,538,103 15,178,986 $ 2008 3,012,725 13,387,442 16,400,167 $ Tax Levy Fiscal Year 2010 2011 2009 3,002,150 20,527,343 23,529,493 $ 2,849,397 24,932,399 27,781,796 $ 3,202,665 23,689,548 26,892,213 $ 2,411,739 15,954,198 18,365,937 $ 2014 2,154,484 14,217,934 16,372,418 $ 2015 1,998,305 13,217,665 15,215,970 $ 2,115,212 14,444,843 16,560,055 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 62,749,751 41,807,627 398,725,245 167,896,576 696,740,167 240,972,424 751,042,721 272,271,935 811,397,481 312,172,569 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 1,043,203,072 274,744,408 - 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 Primary 93,211,327 $ Secondary 45,570,443 (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 2015 Tax Levy 2,901,540 20,124,656 23,026,196 2013 58,945,121 48,531,032 - $ $ 2012 50,475,795 49,294,120 (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 Table XI Primary 442,762,977 170,582,239 429,857,856 $ 1,043,203,072 $ Secondary 82,901,341 43,660,332 3,946,541 19,504,284 65,124,108 10,531,190 49,076,612 $ 274,744,408 $ Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates and Levies publication 124 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 1,108,068,035 330,996,878 1,439,064,913 CITY OF PEORIA, ARIZONA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XII 2015 Taxpayer Arizona Public Service Sprint Nextel Wireless LP Vestar Arizona XLVIII LLC Parke West LLC Miller Family Real Estate LLC DDRA Arrowhead Crossing LLC Southwest Gas Corporation Vestar LPTC LLC Excel Lake Pleasant LLC Target Corporation Qwest Corporation Safeway Sprint Spectrum LP Larry Miller Real Estate - Dealerships Cox Communications 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 Telecommunications Grocery Store Telecommunications Auto/Light Truck Dealership Cable & Telecommunications Gas & Electric Utility Taxable Secondary Assessed Value $ 24,001,357 5,591,596 5,075,133 5,027,237 4,586,391 4,423,574 4,063,367 3,806,948 3,775,669 3,757,848 $ 64,109,120 Rank 1 2 3 4 5 6 7 8 9 10 2006 % of Taxable Secondary Assessed Value 2.08% 0.48% 0.44% 0.44% 0.40% 0.38% 0.35% 0.33% 0.33% 0.33% 5.55% Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For fiscal year 2015, the assessed value of Salt River Project property within the City of Peoria is $19,018,409. Source - Maricopa County Treasurer's Office 125 Taxable Secondary Assessed Value $ 15,364,233 6,115,921 4,155,418 3,871,230 11,160,630 4,478,046 5,087,587 4,892,616 5,874,935 17,210,325 $ 78,210,941 Rank 2 % of Taxable Secondary Assessed Value 1.59% 4 9 0.63% 0.43% 10 3 8 6 7 5 1 0.40% 1.16% 0.46% 0.53% 0.51% 0.61% 1.78% 8.11% CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Year Ended Taxes Levied for the Fiscal Year (1) June 30, 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Notes: $ (1) (2) Source: 16,560,055 15,215,970 16,372,418 18,365,937 23,026,196 26,892,213 27,781,796 23,529,493 16,400,167 15,178,986 Collected with the (2) Fiscal Year of the Levy Percentage Amount of Levy $ 16,290,571 14,882,168 15,962,490 17,628,300 21,884,397 25,561,505 26,280,210 22,741,557 15,784,673 14,715,154 98.37% 97.81% 97.50% 95.98% 95.04% 95.05% 94.60% 96.65% 96.25% 96.94% Table XIII Collections in Subsequent Years (2) $ 204,426 244,230 372,754 542,930 788,216 935,430 718,125 406,008 346,463 Levy figures obtained from Maricopa County Tax Levy Books-February Publication. Collection amount obtained from Maricopa County Treasurer's Secured Levy Report at 6/30/2015. Maricopa County Treasurer's Office Maricopa County Assessor's Office City financial records and reports 126 Total Collections To Date Percentage Amount $ 16,290,571 15,086,594 16,206,720 18,001,054 22,427,327 26,349,721 27,215,640 23,459,682 16,190,681 15,061,617 of Levy 98.37% 99.15% 98.99% 98.01% 97.40% 97.98% 97.96% 99.70% 98.72% 99.23% CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS Average Utility Bill Amounts Last Ten Fiscal Years 2009 2010 2006 2007 2008 $34.59 -2.65% $34.85 0.75% $35.59 2.12% $36.73 3.20% 18.74 -3.75% 21.52 14.83% 21.24 -1.30% 14.58 9.46% 14.91 2.26% 14.85 -0.40% Table XIV 2011 2012 2013 2014 2015 $35.46 -3.46% $34.36 -3.10% $38.00 10.59% $37.41 -1.55% $37.31 -0.27% $35.54 -4.74% 21.36 0.56% 21.45 0.42% 20.45 -4.66% 21.49 5.09% 24.16 12.42% 23.36 -3.31% 23.99 2.70% 15.18 2.22% 15.36 1.19% 15.35 -0.07% 15.40 0.33% 13.38 -13.12% 13.38 0.00% 13.35 -0.22% Utility Service Connections Last Ten Fiscal Years 2008 2009 2010 2011 2012 2013 2014 2015 Water Average bill % Increase Wastewater Average bill % Increase Residential Solid Waste Average bill % Increase Water # of Accounts % Increase Wastewater # of Accounts % Increase Residential Solid Waste # of Accounts % Increase 2006 2007 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% 51,405 2.00% 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% 54,599 1.96% 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% 52,640 2.00% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2015 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, 2015 Monthly Base Fee (a) Monthly Volume Charge (b) Meter Size All Customers 5/8"-3/4" $ 7.42 2.18 1" 7.42 1 1/2" 12.23 2" 17.49 3" 31.55 4" 47.34 6" 91.18 8" 143.82 (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) 127 Table XIV CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA Volume Charges for Water Services Usage Per Month As of June 30, 2015 Volume Consumption (gallons) 0 - 4,000 4,001 - 10,000 10,001 - 20,000 10,001 - 25,000 Residential (per 1,000 gallons) $ 1.00 2.59 3.66 4.00 0 - 10,000 10,001 - 50,000 50,001+ Multiplex (per 1,000 gallons) $ - - Commercial (per 1,000 gallons) $ - 1.00 2.59 3.66 Water Meter Permit Charges As of June 30, 2015 Meter Size 3/4" 1 1/2" 2" 3" 4" 6" Hydrant meter Commercial accounts 1.00 2.59 3.66 Charges for Storm Water As of June 30, 2015 Monthly Charge $ Charges for Residential Solid Waste As of June 30, 2015 Monthly fee Single container & recycling $ 13.10 Additional container 10.50 317 493 629 - 1,033 1,751 - 2,662 2,231 - 3,172 3,781 - 5,086 1,280 By meter size Base charge All Customers $ (a) Base service charge is based on each bill rendered. (b) For residential & multiplex users, volume is measured as the rate per 1,000 gallons of a three-month winter average (December - February). For commercial customers, the volume charge is based on actual monthly usage. Source: City customer service and billing records (continued) 128 1.00 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND TEN YEARS AGO Table XIV 2006 2015 Entity City of Peoria Padre's Pump Station Trilogy at Vistancia Ventana Lakes N. of Beardsley Lake Desert Harbor Lake Liberty High School Sun Garden Park II HOA New River Utility Company Christ's Church of the Valley Sun Garden Mobile Home Park Pleasant Valley HOA Freedom Plaza LTD Partnership Polynesian Village Parkridge Park City of Peoria Beardsley WRF Equity Lifestyle Prop Inc - Casa Del Sol % Avg Avg Monthly Monthly Water Usage Rank Water Usage 5,581 1 0.83% 3,088 2 0.46% 2,957 3 0.44% 2,442 4 0.36% 2,093 5 0.31% 1,924 6 0.29% 1,889 7 0.28% 1,513 8 0.22% 1,438 9 0.21% 1,391 10 0.21% Type of User Sports Complex Commercial Landscape Homeowner's Association Homeowner's Association Public School Homeowner's Association Private Water Utility Church Homeowner's Association Homeowner's Association Healthcare Facility Homeowner's Association City Park Water Reclamation Facility Multi-Family Residential 8,090,136 Source: City customer service and billing records (concluded) 129 674,178 Avg Monthly Water Usage Rank 7,166 2 4,089 3 Monthly Water Usage 1.09% 0.62% 8,540 1 1.30% 2,444 4 0.37% 1,514 10 0.23% 1,937 1,978 2,097 2,370 1,688 8 7 6 5 9 0.29% 0.30% 0.32% 0.36% 0.26% 7,889,653 657,471 Table XV CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Fiscal Year 2006 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 Loans Municipal Development Authority Bonds Long-Term Loan Payable 2007 51,205,000 24,628,578 3,830,000 9,822,570 44,075,000 $ 23,275,000 47,387,253 2,226,422 - 2008 142,835,000 21,653,530 3,570,000 13,292,064 66,085,000 $ 21,050,000 88,021,820 1,906,470 - 2009 126,195,000 65,795,653 3,295,000 12,027,427 64,610,000 $ 19,555,000 127,917,495 1,579,347 1,235,000 2010 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 2011 184,960,000 55,943,338 8,042,321 60,890,000 $ 15,780,000 130,298,508 861,662 6,883,276 2012 167,580,000 58,365,965 6,155,000 58,615,000 $ 15,780,000 121,975,538 449,034 - 2013 170,960,000 52,480,000 4,660,000 56,230,000 $ 38,480,000 89,803,906 - 2014 162,375,000 85,230,000 3,520,000 53,725,000 $ 37,295,000 82,212,652 - 2015 152,820,000 81,035,000 3,195,000 51,095,000 $ 32,720,000 77,780,535 - 145,088,146 77,797,482 2,865,416 48,409,540 29,669,224 73,235,496 - Total Primary Government $ 206,449,823 $ 358,413,884 $ 422,209,922 $ 458,153,746 $ 463,659,105 $ 428,920,537 $ 412,613,906 $ 424,357,652 $ 398,645,535 $ 377,065,304 Total Debt Per Capita $ 1,422.57 $ 2,333.55 $ 2,714.13 $ 2,876.71 $ 3,009.50 $ 2,764.59 $ 2,631.80 $ 2,643.91 $ 2,429.22 $ 2,238.44 Total Debt as a % of Personal Income 4.1% 6.2% 7.1% 7.6% Source: City financial records. Debt schedule exhibits and Long-term liability activity footnote 130 8.5% 7.8% 7.4% 7.1% 6.4% 5.8% CITY OF PEORIA, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO FULL CASH VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Table XVI Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Bonded Debt (1) Less: Debt Service Reserves (2) $ 51,205,000 $ 142,835,000 $ 126,195,000 $ 183,060,000 $ 184,960,000 $ 167,580,000 $ 170,960,000 $ 162,375,000 $ 152,820,000 $ 145,088,146 24,205,524 34,727,031 Net Bonded Debt $ 26,999,476 $ 108,107,969 $ 36,464,380 44,978,714 35,352,142 31,849,469 30,782,503 30,825,566 28,924,537 25,859,071 89,730,620 $ 138,081,286 $ 149,607,858 $ 135,730,531 $ 140,177,497 $ 131,549,434 $ 123,895,463 $ 119,229,075 Percentage of Net Bonded Debt to Full Cash Value 0.3% 1.1% 0.6% 0.8% 0.9% 0.9% 1.2% 1.2% 1.2% 1.1% Percentage of Net Bonded Debt to Secondary Assessed Value 2.8% 9.7% 5.5% 6.9% 7.9% 8.4% 11.0% 11.6% 11.7% 10.3% Net Bonded Debt Per Capita $186 $704 $577 $867 $971 $875 $894 $820 $755 $708 Net Bonded Debt as a % of Personal Income 0.53% 1.88% 1.50% 2.30% 2.74% 2.47% 2.53% 2.20% 1.99% 1.83% (1) Represents face value of general obligation debt outstanding (2) Fund balance of GO Bond Debt Service Fund per the fund financial statements Note: Personal income and population information may be found on Table XXV Full cash value information may be found on Table VIII Sources - City debt service schedules & Long-term liability footnote. 131 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2015 Secondary Assessed Valuation Governmental Unit Overlapping: State of Arizona Maricopa County Maricopa 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 (3) $ 55,349,948,120 35,079,646,593 35,079,646,593 31,365,181,149 35,079,646,593 35,079,646,593 35,079,646,593 35,054,723,160 13,001,468,671 General Obligation Bonds Outstanding (2) $ Unified School Districts: Peoria No. 11 999,514,414 Deer Valley No. 97 154,451,149 Nadaburg No. 81 1,355,749 Sub-total - Unified school district overlapping Total overlapping Percentage Applicable to City of Peoria (1) Table XVII Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 654,190,000 34,045,000 2.09% 3.29% 3.29% 3.68% 3.29% 3.29% 3.29% 3.30% 8.89% $ 21,550,210 3,025,964 24,576,174 169,664,320 209,175,912 190,775,000 1,010,000 86.49% 13.37% 0.12% 180,916,246 25,506,618 1,212 206,424,076 231,000,250 145,088,146 100.00% 145,088,146 $ 0.24 0.14 0.06 0.01 0.19 0.14 0.08 2.84 2.07 0.37 Direct: City of Peoria $ 1,155,587,438 $ Total direct and overlapping debt $ 376,088,396 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 132 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2015 Secondary Assessed Valuation 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 (3) $ 55,349,948,120 35,079,646,593 35,079,646,593 31,365,181,149 35,079,646,593 35,079,646,593 35,079,646,593 35,054,723,160 13,001,468,671 Unified School Districts: Peoria No. 11 Deer Valley No. 97 Nadaburg No. 81 Sub-total - Unified school district overlapping Total overlapping Direct: City of Peoria Debt Outstanding (2) $ 999,514,414 154,451,149 1,355,749 1,155,587,438 $ Total direct and overlapping debt Percentage Applicable to City of Peoria (1) 654,190,000 34,045,000 2.09% 3.29% 3.29% 3.68% 3.29% 3.29% 3.29% 3.30% 8.89% $ 209,175,912 190,775,000 1,010,000 86.49% 13.37% 0.12% 180,916,246 25,506,618 1,212 206,424,076 231,000,250 274,160,584 100.00% 274,160,584 $ 21,550,210 3,025,964 24,576,174 298,736,758 505,160,834 (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. - City of Peoria financial records - Maricopa County Treasurer - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 133 Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 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. Sources: Table XVIII $ 0.24 0.14 0.06 0.01 0.19 0.14 0.08 2.84 2.07 0.37 $ 1.25 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Fiscal Year 2010 2011 Governmental Unit 2007 2006 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 Sub-total - Unified school district overlapping $ 11,594,345 11,594,345 163,028,901 $ 10,710,280 10,710,280 297,071,313 2008 $ 18,505,348 18,505,348 331,783,787 2009 $ 17,301,999 17,301,999 393,645,062 $ 21,354,408 21,354,408 405,549,288 $ 23,908,932 23,908,932 384,534,551 Table XIX 2012 $ 22,084,125 22,084,125 371,967,077 2013 $ 25,357,414 3,241,000 28,598,414 394,056,576 2014 $ 23,384,382 3,198,843 26,583,225 317,946,402 2015 $ 21,550,210 3,025,964 24,576,174 298,736,758 196,625,176 20,573,318 - 205,291,709 24,204,834 - 224,219,333 15,471,750 - 210,241,616 21,558,687 - 166,217,415 26,201,313 - 196,735,864 24,618,198 7,800 177,729,492 25,445,126 4,524 163,033,794 25,160,995 284,900 208,200,535 27,264,686 2,286 180,916,246 25,506,618 1,212 217,198,494 229,496,543 239,691,083 231,800,303 192,418,728 221,361,862 203,179,142 188,479,689 235,467,507 206,424,076 Total overlapping 228,792,839 240,206,823 258,196,431 249,102,302 213,773,136 245,270,794 225,263,267 217,078,103 262,050,732 231,000,250 Direct (2): City of Peoria 151,434,556 286,361,033 313,278,439 376,343,063 384,194,880 360,625,619 349,882,952 365,458,162 291,363,177 274,160,584 625,445,365 $ 597,968,016 $ 605,896,413 $ 575,146,219 $ 582,536,265 $ 553,413,909 $ 505,160,834 Total direct and overlapping debt $ 380,227,395 $ 526,567,856 $ 571,474,870 $ (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 134 CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS Table XX Fiscal Year 2006 2007 Secondary Assessed Value $ 964,469,431 6% Limitation Debt limit $ 57,868,166 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 44,518,166 Total net debt applicable to the limit as a percentage of debt limit 155,038,886 19.6% 2011 2012 2013 2014 2015 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 $ 1,155,587,438 $ $ 98,531,249 $ 119,675,515 $ 113,709,831 $ 4 96,598,351 $ 76,580,152 $ 68,246,084 $ 63,444,792 $ 69,335,246 66,937,209 28,470,000 $ 38,467,209 13,310,000 $ 42.5% $ 37,855,000 $ 2010 $ 23.1% 192,893,886 2009 $ 1,115,620,151 13,350,000 $ 2008 223,124,030 108,759,030 51.3% $ 13.5% $ 114,365,000 $ 85,221,249 6,745,000 328,437,495 215,552,495 34.4% $ 108,144,831 5.6% $ 112,885,000 $ 112,930,515 5,565,000 398,918,385 222,603,385 $ 4.9% $ 176,315,000 $ 4,570,000 379,032,770 199,637,770 44.2% 47.3% Source: Maricopa County Assessor 135 $ 4.7% $ 179,395,000 $ 92,028,351 2,735,000 321,994,502 158,984,502 50.6% $ 3.6% $ 163,010,000 $ 73,845,152 1,665,000 255,267,172 87,042,172 65.9% $ 2.4% $ 168,225,000 $ 66,581,084 350,000 227,486,948 66,776,948 70.6% $ 0.6% $ 160,710,000 $ 63,094,792 - 211,482,641 0.0% $ 152,470,000 $ 59,012,641 72.1% 69,335,246 231,117,488 142,925,000 $ 88,192,488 61.8% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - MUNICIPAL DEVELOPMENT AUTHORITY BONDS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS 2006 2007 2008 2009 Fiscal Year 2010 2011 2012 Table XXI 2013 2014 2015 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) $ 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 $ 63,331,915 14,139,128 18,650,521 4,312,836 3,132,178 1,699,818 12,703,987 2,146,784 $ 120,117,167 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 2,020,000 1,642,083 3,662,083 30.58 26.74 29.12 24.97 22.50 21.54 47.36 61.49 30.67 32.80 117,848,611 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 10,861,145 121,178,183 116,455,084 11,334,889 127,789,973 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 2,285,000 1,648,325 3,933,325 Estimated Coverage - 32.48 25.98 26.04 27.16 29.40 30.95 32.49 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 136 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - WATER AND WASTEWATER REVENUE BONDS LAST TEN FISCAL YEARS Table XXII Fiscal Year 2006 2007 2008 2009 (2) 2010 2011 2012 (6) 2013 2014 Gross Revenue (1) Operating and Maintenance Expenses (2) Net Revenue Available for Debt Service $ 44,982,822 27,318,074 $ 17,664,748 $ 53,290,996 30,532,640 $ 22,758,356 $ 49,812,486 34,287,751 $ 15,524,735 $ 46,956,831 33,751,517 $ 13,205,314 $ 48,087,688 28,067,908 $ 20,019,780 $ 46,141,098 28,610,625 $ 17,530,473 $ 50,720,705 28,823,261 $ 21,897,444 $ 52,680,761 28,974,990 $ 23,705,771 $ 54,515,296 30,942,736 $ 23,572,560 $ 52,770,260 35,326,061 17,444,199 Development Fee Revenue Total Net Revenue 12,887,675 $ 30,552,423 8,826,809 $ 31,585,165 5,821,318 $ 21,346,053 1,841,126 $ 15,046,440 1,616,718 $ 21,636,498 1,899,935 $ 19,430,408 2,820,416 $ 24,717,860 3,205,623 $ 26,911,394 4,311,153 $ 27,883,713 $ 4,418,565 21,862,764 4,672,124 2,961,997 7,634,121 4,855,563 2,641,850 7,497,413 4,220,006 3,316,344 7,536,350 4,372,224 4,852,315 9,224,539 7,362,889 4,332,089 $ 11,694,978 7,025,129 4,501,266 $ 11,526,395 7,941,123 4,242,754 $ 12,183,877 8,776,254 3,579,904 $ 12,356,158 9,007,117 3,343,413 $ 12,350,530 $ 9,210,038 3,097,542 12,307,580 Debt Service Requirements Principal (3) Interest (4) Total Debt Service Requirements $ $ $ $ 2015 $ Ratio of Total Net Revenue/ Total Bond Expense 4.00 4.21 2.83 1.63 1.85 1.69 2.03 2.18 2.26 1.78 Ratio of Net Available/ Total Bond Expense (5) 2.31 3.04 2.06 1.43 1.71 1.52 1.80 1.92 1.91 1.42 (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 loans. 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 XXI. (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 Position Repayment schedules for debt serviced by Water and Wastewater Utility Enterprise funds 137 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS Fiscal Year 2010 2011 2006 2007 2008 2009 Pledged Revenues (1) $ 3,516,277 $ 3,216,095 $ 3,167,933 $ 3,365,342 $ 3,402,865 Debt Service Requirements Principal Interest (2) Total Annual Requirements 1,608,983 747,720 $ 2,356,703 1,480,506 638,657 $ 2,119,163 1,264,637 697,840 $ 1,962,477 1,624,615 675,958 $ 2,300,573 1.49 1.52 1.61 1.46 Estimated Coverage Table XXIII 2012 2013 2014 2015 $ 2,645,451 $ 2,262,112 $ 1,484,283 $ 1,259,303 $ 1,168,526 2,360,492 559,205 $ 2,919,697 1,887,322 432,302 $ 2,319,624 1,495,000 316,720 $ 1,811,720 1,140,000 222,820 $ 1,362,820 325,000 149,600 474,600 340,000 135,788 475,788 1.17 1.14 1.25 1.09 $ (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 138 2.65 $ 2.46 CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due 2006 $ 1,987,461 Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) 1,983,885 275,392 $ 2,259,277 Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) 99.8% $ 9,243,866 $ 2007 1,965,107 $ 1,961,724 7,818 1,969,542 99.8% $ 12,782,394 Table XXIV $ 2008 1,749,724 2009 $ 2,196,027 Fiscal Year 2010 $ 2,211,609 2011 $ 2,171,435 2012 $ 1,849,026 2013 $ 1,213,646 $ $ 1,749,246 44,061 1,793,307 2,193,992 2,041 $ 2,196,033 2,211,599 38,301 $ 2,249,900 2,171,435 $ 2,171,435 1,848,788 205,901 $ 2,054,689 1,213,646 $ 1,213,646 455,116 675,958 $ 1,131,074 100.0% $ 11,476,365 99.9% $ 9,871,061 100.0% $ 8,141,515 100.0% $ 6,328,423 100.0% $ 4,551,324 (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 may include 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. (4) 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, $23,400,000 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 139 100.0% $ 3,520,000 2014 (3) 455,116 100.0% $ 2,603,127 $ 2015 (4) 381,761 $ 381,761 381,761 100.0% $ 2,326,112 CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 2006 2007 2008 City Of Peoria Population % growth Unemployment Rate Personal income ($000's) ** 145,125 5.9% 2.6% 5,058,622 153,592 5.8% 2.1% 5,762,618 Maricopa County Population % growth Unemployment Rate Per Capita Income 3,792,675 3.0% 3.7% 35,595 State of Arizona Population % growth Unemployment Rate Per Capita Income United States of America Unemployment Rate Phoenix MSA Per Capita Income 2012 2013 2014 2015 155,560 1.3% 3.6% 5,964,948 159,263 154,065 155,148 156,780 2.4% -3.3% 0.7% 1.1% 6.7% 7.0% 8.7% 7.1% 5,998,322 5,462,529 5,489,757 5,547,504 160,504 2.4% 6.8% 5,966,094 164,104 2.2% 6.0% 6,236,937 168,450 2.6% 5.0% 6,526,595 3,879,150 2.3% 3.0% 38,520 3,987,492 2.8% 5.1% 39,530 4,105,623 4,217,427 4,328,379 4,438,459 3.0% 2.7% 2.6% 2.5% 9.4% 9.7% 9.0% 7.6% 38,811 36,530 36,643 38,411 3,922,600 -11.6% 7.1% 39,300 3,944,859 0.6% 6.4% 40,030 4,008,651 1.6% 5.3% NA 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 6,999,810 7,186,070 7,370,993 2.8% 2.8% 2.7% 2.6% 10.2% 10.6% 10.0% 8.7% 35,772 33,972 33,967 35,446 6,553,800 -11.1% 8.5% 36,243 6,581,054 0.4% 7.5% 36,823 6,667,241 1.3% 6.3% 37,895 4.8% 4.7% 5.7% 7.8% 6.3% 5.3% 34,857 37,519 38,345 2009 9.7% 37,663 2010 * 9.6% 35,456 2011 Table XXV 9.3% 35,384 8.4% 37,171 38,006 38,745 NA = 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 - U.S. Bureau of Labor Statistics (www.bls.gov) and Arizona Department of Commerce (www.workforce.az.gov). 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, Info available through 2013 for Phoenix & Maricopa County and 2014 for State of Arizona 140 NA CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND TEN YEARS AGO Table XXVI 2015 Employer Peoria Unified School District City of Peoria Brookdale Senior Living Walmart (3 Locations) Younger Brothers Fry's Food Stores (4 Locations) Target (3 Locations) Antigua OakCraft Arizona Medical Clinic Immanuel Care Campus Albertson's (2 Locations) Northern Pipeline Safeway (4 Locations) Total Total City Employment # of Employees 3,429 1,107 630 579 525 498 385 330 302 300 2006 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Total City Employment 4.3% 1.4% 0.8% 0.7% 0.7% 0.6% 0.5% 0.4% 0.4% 0.4% 8,085 10.2% 79,665 Sources: City of Peoria Economic Development Department & MAG Database Arizona Unemployment Statistics Program Special Employment Report www.azstats.gov 141 # of Employees 4,346 1,537 600 Rank 1 2 3 487 391 4 6 336 7 257 297 400 311 10 9 5 8 8,962 Percentage of Total City Employment 6.7% 2.4% 0.9% 0.8% 0.6% 0.0% 0.5% 0.4% 0.5% 0.6% 13.4% CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Table XXVII Full-time Equivalent Employees as of June 30, 2015 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 Note: 2006 2007 2008 2009 2010 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 1,135.88 1,239.99 1,341.04 1,332.59 1,264.02 2011 * 2012 2013 2014 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 80.00 115.97 292.00 168.50 13.50 33.25 38.80 57.95 7.50 55.50 29.50 45.50 40.00 17.50 16.00 8.00 17.50 26.00 7.00 20.90 30.50 80.00 115.97 292.00 168.50 14.00 33.25 38.80 57.95 7.50 55.50 29.50 45.50 40.00 17.50 1,218.62 1,181.47 1,185.87 1,118.87 1,121.87 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 142 2015 Governmental Activities: General Government Registered Voters in City 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 (E) Annual Consumption (000's gal) 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 CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year 2008 2009 2010 2011 2012 Table XXVIII 2006 2007 62,328 25.4% 63,544 25.4% 71,051 60.6% 76,323 81.2% 75,145 5,160 * 77,602 4,923 * 119,620 6,692 * 131,372 6,237 * 102,385 4.80 103,921 5.20 62,341(A) 5.98 60,219 5.47 56,683 5.65 56,764 5.87 57,184 6.01 54,159 (C) 4.52 52,193 4.39 (C) 47,612 4.55 (C) 12,445 4.30 12,788 4.40 13,649 4.40 13,361 4.43 14,874 5.02 15,403 5.19 17,717 5.08 18,719 5.14 19,312 5.30 20,873 5.24 4,811 $412.3 3,692 $368.8 2,943 $225.5 1,486 $84.5 1,497 $131.8 1,401 $63.8 2,371 $111.2 3,625(D) $169.0 3,993(D) $188.3 4,534(D) $221.1 5,035 8,697 218 7,999 8,496 275 8,365 7,604 381 2,832 5,935 422 2,677 6,159 85 (B) 2,038 6,202 163 3,122 6,143 187 2,227 5,660 205 2,302 4,968 211 2,441 7,526 423 82,578 29.2% 132,391 5,903 46,578 86,803 29.2% 134,661 5,968 60,715 85,592 23.7% 136,200 6,106 65,347 2013 2014 2015 87,432 23.7% 89,604 24.9% 87,541 31.3%(F) 134,045 5,396 73,800 122,318 5,533 74,950 5,920 5,787 5,679 5,917 5,697 5,856 5,608 5,899 5,464 5,493 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 ** ** 850 30,212 ** ** 7,889,653 8,220,760 8,626,688 8,674,450 8,212,711 8,003,947 8,448,795 8,405,929 8,662,507 8,090,136 3.55 3.67 3.60 3.90 3.70 3.50 3.61 3.64 3.69 3.74 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 51,666 25,227 16,077 200,153 * * 220,357 195 54 230,434 234 83 211,243 246 66 200,029 208 74 188,244 336 108 190,643 350 134 196,881 290 143 192,513 322 146 238,847 297 151 840 831 840 827 840 812 840 796 840 745 840 787 840 813 840 797 NA*** NA*** NA*** NA*** Notes: * Information is not available for these fiscal years. ** 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. (A) 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. (E) Beginning in FY15, Average Gallons/Household/Year is no longer being presented. (F) Percentage reflects voter participation in March 2015 Special General Election for Mesquite District Council. Eligible registered voters = 16,582. Source: Various City Departments 120,232 5,483 79,550 143 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 Neighborhood Park Acreage # of Community Parks Total Community 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 2006 2007 2008 2009 177.9 177.9 177.9 177.9 26 264 1 52 26 264 1 52 26 264 1 52 2 90 2 101 6/1 8 1 518 Fiscal Year 2010 Table XXIX 2011 2012 2013 2014 2015 179.0 179.1 179.1 179.1 179.1 179.1 28 314 1 52 28 322 1 52 28 322 1 52 32 285 1 52 33 294 1 52 33 294 2 139 34 305 2 139 2 103 2 92 2 86 2 86 2 86 2 86 2 88 2 88 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 7/1 8 2 537 538 551 554 584 590 622 1452 1,165,460 88 (A) 1505 1,156,722 96 14,786 738 14,945 732 25 15 38 30 25 14 40 30 * * * * * * * * * * * * * * * * 12,000 621 12,737 661 13,618 720 13,726 683 13,901 670 14,093 673 14,333 687 15,006 714 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * (A) 9 11 11 11 9 7 7 7 6 5 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 51,405 42.0 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 54,599 16.25 44,198 46,309 47,146 48,006 43,382 48,752 49,506 50,727 51,609 52,640 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 N/A** 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 144 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. 145 Continuing Disclosures Annual Report For the Year Ended June 30, 2015 Audited Financial Statements The City’s Comprehensive Annual Financial Report for fiscal year ended June 30, 2015 is included as part of this submittal. Other Financial Information Information concerning the outstanding debt by type of bond can be found in the Notes to the Financial Statements on page 58, Note 7 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 VIII 121 Comparison of Secondary Assessed Value to Full Cash Value Table VIII 121 Comparative Secondary Assessed Value Table IX 122 Direct and Overlapping Assessed Value Direct and Overlapping Tax Rates Table XVII Table X 132 123 Real and Personal Property Tax Collections Table XIII 126 Net Direct and Overlapping General Obligation Bonds Direct General Obligation Debt Ratios Table XVII Table XVI 132 131 Legal Debt Limitation and Unused Borrowing Capacity Table XX 135 Statement of Net Revenues and Debt Service Coverage Table XXII 137 Number of Utility Service Connections Table XIVa 127 List of Top 10 Water Account Users Table XIVc 129 Municipal Development Authority Bonds (CUSIP 71284R and 71285A) Excise Tax and State Shared Revenues and Debt Service Coverage Table XXI 136 Privilege and Use Tax Rates by Category Table VI 119 Schedule of Annual Debt Service Requirements Table XXI 136 Legal Debt Limitation and Unused Borrowing Capacity Table XX 135 Secondary Assessed Value by Property Classification Table VIII 121 Real and Personal Property Tax Collections Table XIII 126 Status of Payment of Assessment and Full Cash Value of Properties Table XXIV 139 Water and Wastewater Revenue Bonds (CUSIP 712851) Improvement District Bonds (CUSIP 712844) 146 City of Peoria FINANCE & BUDGET DEPARTMENT 8401 West Monroe Street Peoria, Arizona 85345 www.peoriaaz.gov