City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2005 Estrella Mountains by Ed Mell. Displayed at the City of Glendale Municipal Airport. This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2005 Elaine M. Scruggs Mayor Thomas R. Eggleston Vice Mayor Barrel District Councilmembers Joyce V. Clark - Yucca District Steven E. Frate - Sahuaro District David M. Goulet - Ocotillo District H. Philip Lieberman - Cactus District Manuel D. Martinez - Cholla District Management Staff Ed Beasley - City Manager Pam Kavanaugh - Assistant City Manager Arthur R. Lynch Deputy City Manager Kenneth A. Reedy Deputy City Manager Gloria Santiago-Espino Deputy City Manager Horatio Skeete Deputy City Manager Prepared by the Finance Department Raymond H. Shuey Chief Financial Officer i This page left blank intentionally. ii City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTRODUCTORY SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2005 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Title Page .........................................................................................................................................i Table of Contents ...........................................................................................................................iii Letter of Transmittal .......................................................................................................................1 GFOA Certificate of Achievement..................................................................................................5 Glendale, Arizona and Neighboring Communities .........................................................................6 City Officials...................................................................................................................................7 Glendale Council District Boundaries.............................................................................................8 Organization Chart ..........................................................................................................................9 II. FINANCIAL SECTION Report of Independent Accountants.................................................................................................11 A. MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A).............................................13 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Assets ................................................................................................................25 Statement of Activities ..................................................................................................................26 Fund Financial Statements: Balance Sheet – Governmental Funds...........................................................................................28 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets..................................................................................................................................29 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds..................................................................................................................30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..............................................31 Statement of Net Assets – Proprietary Funds................................................................................32 Statement of Revenues Expenses, and Changes in Fund Net Assets – Proprietary Funds............33 Statement of Cash Flows – Proprietary Funds ..............................................................................34 Notes to the Financial Statements (including an Index of the Notes) ........................................36 C. REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund ........................................................................75 Budgetary Comparison Schedule – Transportation Fund..............................................................77 Notes to Required Supplementary Information.............................................................................78 11/29/2005 3:07 PM N:\FINANCE\05_Audit\CAFR 05\I.iiiIntroductory Section\I-020. Table of Contents 05.doc City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2005 TABLE OF CONTENTS Page D. COMBINING STATEMENTS Non-Major Governmental Funds Combining Balance Sheet..........................................................................................................82 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances..................84 Budgetary Comparison Schedules Community Development Block Grants Fund.......................................................................86 Highway Users Gas Tax Fund ...............................................................................................87 Development Impact Fees Fund.............................................................................................88 Other Special Revenue Fund..................................................................................................89 General Obligation Debt Service Fund (a Major Fund).........................................................90 Special Assessment Debt Service Fund .................................................................................91 Highway User Debt Service Fund..........................................................................................92 Municipal Property Corporation Debt Service Fund (a Major Fund) ....................................93 Arena Construction Fund .......................................................................................................94 Streets Construction Fund......................................................................................................95 Fire and Police Construction Fund.........................................................................................96 Parks Bond Construction Fund (a Major Fund) .....................................................................97 Other Construction Fund........................................................................................................98 Cemetery Perpetual Care Permanent Fund ............................................................................99 Non-Major Proprietary Funds – Business-type Activities Combining Statement of Net Assets........................................................................................100 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets...................101 Combining Statement of Cash Flows ......................................................................................102 Budgetary Comparison Schedules Water and Sewer Fund (a Major Fund)................................................................................104 Landfill Fund (a Major Fund) ..............................................................................................106 Sanitation Fund ....................................................................................................................107 Housing Fund.......................................................................................................................108 Internal Service Funds Combining Statement of Net Assets........................................................................................109 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets...................110 Combining Statement of Cash Flows ......................................................................................111 Budgetary Comparison Schedules Risk Management Fund .......................................................................................................112 Workers’ Compensation Fund .............................................................................................113 Employee Benefits Fund......................................................................................................114 E. OTHER SUPPLEMENTARY INFORMATION Federal Financial Data Schedule..........................................................................................115 11/29/2005 3:07 PM N:\FINANCE\05_Audit\CAFR 05\I.ivIntroductory Section\I-020. Table of Contents 05.doc City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2005 TABLE OF CONTENTS III. STATISTICAL SECTION Schedule Page Net Assets by Component .................................................................................................. 1.............120 Changes in Net Assets........................................................................................................ 2.............122 Fund Balances – Governmental Funds............................................................................... 3.............124 Changes in Fund Balances – Governmental Funds ............................................................ 4.............126 Assessed and Estimated Actual Value of Taxable Property............................................... 5.............128 Direct and Overlapping Governments Property Tax Rates ................................................ 6.............129 Principal Property Taxpayers ............................................................................................. 7.............130 Property Tax Levies and Collections ................................................................................. 8.............131 Ratio of Outstanding Debt by Type.................................................................................... 9.............132 Ratios of Net General Bonded Debt Outstanding............................................................. 10.............134 Net Direct and Overlapping Governmental Activities Debt............................................. 11.............135 Legal Debt Margin Information ....................................................................................... 12.............136 Pledged-Revenue Coverage ............................................................................................. 13.............138 Demographic and Economical Statistics .......................................................................... 14.............140 Principal Employers ......................................................................................................... 15.............141 Full-time Equivalent City Government Employees by Function/Program....................... 16.............142 Operating Indicators by Function/Program ...................................................................... 17.............143 Capital Asset Statistics by Function/Program .................................................................. 18.............144 Miscellaneous Water and Sewer Rate Statistics............................................................... 19.............145 Miscellaneous Water and Sewer Statistics ....................................................................... 20.............146 11/29/2005 3:07 PM N:\FINANCE\05_Audit\CAFR 05\I.v Introductory Section\I-020. Table of Contents 05.doc This page left blank intentionally. vi October 21, 2005 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Glendale, Arizona: State law requires that cities annually publish after the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS) by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Glendale, Arizona (the “City”) for the fiscal year ended June 30, 2005. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City’s financial statements have been audited by Heinfeld, Meech & Co., P.C., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2005, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. 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 audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City’s separately issued Single Audit reporting package. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. City of Glendale Municipal Complex • 5850 West Glendale Avenue • Glendale, Arizona 85301-2599 • Phone (623) 930-2000 www.ci.glendale.az.us 11/29/2005 3:22 PM N:\FINANCE\05_Audit\CAFR 05\I. Introductory Section\I-030. Transmittal Letter 05.doc 1 Profile of the Government The City, incorporated in 1910, is located in the northwestern part of metropolitan Phoenix, which is considered to be one of the top growth areas in the country. The City currently occupies a land area of 56.7 square miles and serves a population of 235,987. The City is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the city council. The City has operated under the council-manager form of government since 1910. Policy-making and legislative authority are vested in a city council consisting of the mayor and six other members. The city council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the government’s manager, clerk, attorney and municipal judges. The government’s manager is responsible for carrying out the policies and ordinances of the city council, for overseeing the day-to-day operations of the government, and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council members serve four-year terms, with three council members elected every two years. The mayor is elected to serve a four-year term. The council members are elected by district. The mayor is elected at large. The City provides a full range of services, including police and fire protection; water and sewer and sanitation services; the construction and maintenance of highways, streets, public facilities and other infrastructure; and recreational activities and cultural events. Certain housing services are provided by the city’s public housing authority, which functions, in essence, as a department of the City and therefore has been included as an integral part of the City’s financial statements. The City also is financially accountable for a legally separate municipal property corporation, which is reported separately within the City’s financial statements. The annual budget serves as the foundation for the City’s financial planning and control. All agencies of the City are required to submit requests for appropriation to the government’s manager on or before the last week in January each year. The government’s manager uses these requests as the starting point for developing a proposed budget. The government’s manager then presents this proposed budget to the council for review during the month of April. The council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 30th, the close of the City’s fiscal year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Department heads may make transfers of appropriations within a department. Transfers of appropriations between funds, however, require the special approval of the governing council. Budget-to-actual comparisons are provided in this report for each individual fund for which an appropriated annual budget has been adopted. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Local economy. The City currently enjoys an economic environment that continues to grow and diversify. Local indicators point to continued stability and strength. The economy of Glendale is based on manufacturing, defense activities, services, private graduate schools, retail trade, restaurants and sports and entertainment. The Arizona Department of Economic Security currently lists the total labor force in the City as 131,504 for the period January through June 2005 with average employment of 126,197. Average employment for the same period last year is 124,708, demonstrating that the positive growth in jobs has kept pace with population growth. The City receives significant “State Shared Revenues” that are allocated to various funds. As a result of this year’s mid-decade census and the recalculation of Glendale’s pro rata portion of state shared revenues, 11/17/2005 6:55 PM N:\FINANCE\05_Audit\CAFR 05\I. Introductory Section\I-030. Transmittal Letter 05.doc 2 the City anticipates a smaller segment of these revenues in future years. The City has taken this into account in the budgeting process and does not expect any operating budget reductions. The City of Glendale has continued to follow its strategy, developed by the Finance Department, to build fund balances. The growth in the various sectors of the City’s economy is reflective of the positive growth trends of the Phoenix metropolitan area and of the state of Arizona. The County’s population is approximately 3.5 million. The state’s population reached 5.74 million in 2004, representing a 3.0% increase over the previous fiscal year. Long-term financial planning. The Glendale Arena opened in 2003 and, in 2004 was named the Best New Concert Venue in North America. The arena has hosted many concerts and special events, including sold-out performances by four of the top ten grossing tours in the U.S. The Cardinals Stadium, which is being built by the State’s Tourism and Sports Authority, is on track for completion in August 2006. The stadium will be home to the Arizona Cardinals, the Fiesta Bowl, the 2008 Super Bowl, as well as other major events. In June 2005, the City entered into an agreement with Cabela’s, the nation’s foremost outfitter of hunting, fishing, and outdoor equipment, to build a 165,000 square-foot retail store just north of the arena and stadium. Cabela’s is scheduled to open in August 2006 and will create about 400 new jobs and attract four million visitors annually. The Ellman Companies continue to develop the 200-acre, mixed-use project adjacent to the arena, dubbed Westgate City Center. Build-out for this mixed-use project should occur over the next seven to ten years and will feature themed restaurants, trendy nightspots, and a premium 4,000-seat theater. The Westgate area will also feature an 80,000 square-foot convention center adjoining a new luxury hotel to be developed by John Q. Hammons Hotels, opening in fall 2006. Vanguard City Home will build 91 condominium lofts in the core downtown area of Glendale. This development will incorporate a historic building, occupy currently vacant property, and will feature ground-floor retail outlets, all to be completed in late 2006. Substantial investments have been made by the City to enact and stay current on issues faced by the water and sewer system in addition to proceeding with the necessary federally mandated upgrades. These have been and continue to be funded with revenue bonds/obligations in order to meet the long-term needs of the City. The debt service funds of the City are backed by property taxes or excise taxes. The City has continued its practice of paying off its general obligation and revenue obligation bond debt rapidly. Cash management policies and practices. Staff invests temporarily idle cash in repurchase agreements collateralized by high quality U.S. government securities, the Arizona State Treasurer’s Local Government Investment Pool or U.S. Treasury obligations. The City’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits are either insured by the Federal Deposit Insurance Corporation or collateralized. All collateral on deposits is held by the City’s agent or financial institution’s trust department in the City’s name. Categorized investments are classified in credit risk category 1 as defined by the Governmental Accounting Standards Board (GASB). Risk management. During 2004-05, the City continued its self-insurance program for public liability and property damage claims. As part of the Risk Management Plan, resources are maintained in the risk management fund to meet potential losses. In the event of a deficit at June 30, premiums charged to other funds are increased in the following fiscal year to cover shortages. The City has implemented various risk 11/17/2005 6:55 PM N:\FINANCE\05_Audit\CAFR 05\I. Introductory Section\I-030. Transmittal Letter 05.doc 3 4 5 Glendale, Arizona and Neighboring Communities 6 City Officials ELAINE M. SCRUGGS Mayor JOYCE V. CLARK Councilmember Yucca District DAVID M. GOULET Councilmember Ocotillo District THOMAS R. EGGLESTON Vice Mayor/ Councilmember Barrel District STEVE E. FRATE Councilmember Sahuaro District MANUEL D. MARTINEZ Councilmember Cholla District H. PHILIP LIEBERMAN Councilmember Cactus District 7 ED BEASLEY City Manager Glendale Council District Boundaries Pinnacle Peak Rd. Deer Valley Rd. Beardsley Rd. CHOLLA N Greenway Rd. Loop 1 01 ue en Av Bell Rd. SAHUARO d an Gr Union Hills Dr. Thunderbird Rd. Cactus Rd. BARREL Peoria Ave. Northern Ave. 43rd Ave. 51st Ave. 59th Ave. 91st Ave. 99th Ave. 107th Ave. El Mirage Rd. Dysart Rd. Litchfield Rd. Bullard Ave. Reems Rd. 115th Ave. 8 67th Ave. YUCCA Camelback Rd. 75th Ave. Bethany Home Rd. OCOTILLO YUCCA 83rd Ave. Glendale Ave. CACTUS Olive Ave. Mayor & Council Boards & Commissions City Manager Ed Beasley City Clerk Pam Hanna Fire Chief Mark Burdick Community Action Program City Auditor City Court Judge Elizabeth Finn City Attorney Craig Tindall Police Preston Becker Acting Chief Assistant City Manager Pam Kavanaugh Marketing & Communications Intergovernmental Programs 9 Deputy City Manager Gloria Santiago-Espino Deputy City Manager Ken Reedy Deputy City Manager Horatio Skeete Deputy City Manager Art Lynch *Library & Arts *Parks & Recreation *Community Partnerships *Engineering *Environmental Resources *Field Operations *Utilities *Planning *Transportation *Building Safety *Code Compliance *Economic Development *New Project - Financial Analysis *Homeland Security *Warehouse *Civic Center *Materials Management Internal Services Departments *City Manager Relations *Human Resources *Budget & Management *Information Technology *Finance This page left blank intentionally. 10 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ MANAGEMENT’S DISCUSSION & ANALYSIS (Required Supplementary Information) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Management’s Discussion and Analysis As management of the City of Glendale (the City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2005. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Financial Highlights The financial statements, which follow the Management’s Discussion and Analysis, provide these significant key financial highlights for 2004-05 as follows. • The City’s total net assets increased $35,016 or 3.67%. The governmental net assets increased by $20,368 or 3.55% and the business-type net assets increased by $14,648 or 3.85%. • General revenues from governmental activities decreased $10,984 or 6.65%, and were 73.50% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions increased $434 or 0.79%. • The business-type activities revenue increased by $6,952 or 8.02%. • The total cost of all City programs increased by $26,813 or 11.09%. • A major governmental fund, the general fund, had $125,735 in revenues, which is an increase of $8,377 or 7.14% from the prior year. The primary sources of revenue in the general fund are local taxes and intergovernmental taxes. The total expenditures of the general fund were $117,714, which is an increase of $14,774 or 14.35% from the prior year. The fund balance increased $5,376 or 8.86%. This increase resulted from increased tax and special assessments revenue, and intergovernmental revenues. • The City issued $11,960 in general obligation bonds to fund the acquisition, improvement, and equipment of a variety of projects in the City. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The Government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Net assets are categorized as capital assets less related debt, restricted by an outside party, and unrestricted. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in 13 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, community services, community environment and street maintenance. The business-type activities of the City include water and sewer, landfill, sanitation, and housing. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmentwide financial statements, governmental 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 evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is 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 City’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 16 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the major funds. Data from the other 11 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules. Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer, landfill, sanitation, and housing services. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its risk management, workers’ compensation and employee benefit activities. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer, and landfill services, which are considered to be major funds of the City. Data from the other two enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major enterprise funds are provided in the form of combining statements and schedules. Conversely, all three internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. 14 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Additional Required Supplementary Information. Following the basic financial statements is Required Supplementary Information (RSI) that further explains and supports the financial information in the financial statements. RSI presents the budgetary comparison schedule for general fund and transportation special revenue fund. Other information. The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the notes to the RSI. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a City’s financial position. In the case of the City, assets exceeded liabilities by $987,326 as of June 30, 2005. By far the largest portion of the City’s net assets reflects its investment in capital assets (e.g., land, building, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is 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 cannot be used to liquidate these liabilities. The City’s financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. The remainder of this page left blank intentionally. 15 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Net Assets The following table reflects the condensed Statement of Net Assets compared to prior year. Condensed Statement of Net Assets As of June 30, 2005, and 2004 (in thousands) Governmental Activities 2005 2004 Current and other assets Capital assets Total assets $ 277,726 766,969 1,044,695 $ Total Primary Government Business-type Activities 2005 2004 276,340 746,074 1,022,414 $ 142,260 423,570 565,830 $ 175,854 395,684 571,538 2005 $ 419,986 1,190,539 1,610,525 2004 $ 452,194 1,141,758 1,593,952 Current liabilities Long-term liabilities Total liabilities 39,346 412,496 451,842 67,010 382,919 449,929 10,873 160,484 171,357 27,021 164,692 191,713 50,219 572,980 623,199 94,031 547,611 641,642 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 372,778 179,434 40,641 592,853 353,135 169,434 49,916 572,485 274,620 11,249 108,604 394,473 228,252 10,479 141,094 379,825 647,398 190,683 149,245 987,326 581,387 179,913 191,010 952,310 $ $ $ $ $ $ At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the City as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. 16 12/2/2005 11:45 AM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2005, were $303,600. The total cost of all programs and services was $268,584. The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2005, and 2004. Changes in Net Assets (in thousands) Governmental Activities 2005 2004 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues $ 27,652 26,535 1,407 55,594 $ 27,228 24,503 3,429 55,160 Total Primary Government 2005 2004* Business-type Activities 2005 2004* $ 77,422 8,027 242 85,691 $ 75,378 7,643 168 83,189 $ 105,074 34,562 1,649 141,285 $ 102,606 32,146 3,597 138,349 General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain (loss) on disposal of capital assets Miscellaneous Capital contributions Total revenues 19,422 77,166 20,271 18,321 74,763 18,409 - - 19,422 77,166 20,271 18,321 74,763 18,409 20,115 9,414 2,654 225 275 4,794 209,930 19,731 8,978 315 9 349 24,614 220,649 2,065 202 5,712 93,670 1,115 2,414 86,718 20,115 9,414 4,719 225 477 10,506 303,600 19,731 8,978 1,430 9 349 27,028 307,367 Expenses: General government Public safety Public works Community services Community environment Street maintenance Other Interest on long-term debt Water and sewer Landfill Sanitation Housing Total expenses 31,603 64,277 14,309 37,394 3,236 21,355 238 16,986 189,398 24,003 56,176 13,883 33,914 3,446 20,425 142 15,838 167,827 50,190 7,431 12,287 9,278 79,186 46,913 7,164 12,294 8,858 75,229 31,603 64,277 14,309 37,394 3,236 21,355 238 16,986 50,190 7,431 12,287 9,278 268,584 24,003 56,176 13,883 33,914 3,446 20,425 142 15,838 46,913 7,164 12,294 8,858 243,056 20,532 52,822 14,484 11,489 35,016 64,311 Excess before transfers Transfers in (out) (164) Increase in net assets Net assets, beginning Net assets, ending (333) 20,368 $ 572,485 592,853 52,489 $ 519,996 572,485 $ 164 333 - - 14,648 11,822 35,016 64,311 379,825 394,473 $ 368,003 379,825 $ 952,310 987,326 *For 2004, loss on joint venture in business-type activities is included in water and sewer expenses rather than a separate revenue line item, to be consistent with current year treatment. The size of the increase in net assets results primarily from sustained economic growth including developer investment in city facilities and infrastructure. 17 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc $ 887,999 952,310 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) expenses Expenses and Program Revenues - Governmental Activities program revenues $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $General government Public safety Public works Community services Community environment Expenses and Program Revenues - Business-type Activities Street maintenance Other Interest on longterm debt expenses program revenues $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $Water and sewer Landfill Sanitation Housing 18 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Revenue Sources Fiscal Year 2004-05 Investment earnings, unrestricted 1.55% Gain (loss) on disposal of capital assets 0.07% Miscellaneous 0.16% Auto in-lieu taxes 3.10% Capital contributions 3.46% Urban revenue sharing (state shared income tax) 6.63% State shared sales tax 6.68% Charges for services 34.61% Operating grants and contributions 11.38% Capital grants and contributions 0.54% Property taxes 6.40% Sales taxes 25.42% Functional Expenses Fiscal Year 2004-05 Housing 3.45% General government 11.77% Sanitation 4.57% Landfill 2.77% Public safety 23.93% Water and sewer 18.69% Interest on long-term debt 6.32% Other 0.09% Street maintenance 7.95% Public works 5.33% Community services Community environment 13.92% 1.20% 19 12/2/2005 3:08 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Financial Analysis of the City’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a City’s net resources available for spending at the end of the fiscal year. The financial performance of the City as a whole is reflected in its governmental funds. • As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $201,684, a decrease of $1,542 or 0.76% in comparison with the prior year. • Unreserved undesignated fund balance, which is available for spending at the City’s discretion within a fund, was $122,037, an increase of $4,872 or 4.16% from the prior year. • The City also had $31,256 in unreserved, designated fund balance, which represents self-imposed limitations on the use of otherwise available expendable financial resources in governmental funds as discussed in Note XVI. • The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed for a variety of restricted purposes, such as perpetual care for the City’s cemetery, debt service, and development impact fees. Summary of Reserved Fund Balances by Fund Type (in thousands) General Special revenue Debt service Capital projects Permanent Total $ 9,377 24,275 9,899 98 4,742 $ 48,391 The general fund is the chief operating fund of the City. At the end of the current fiscal year, the unreserved fund balance of the general fund was $56,661, while total fund balance reached $66,038. As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 48.13% of total general fund expenditures, while total fund balance represents 56.10% of that same amount. The transportation fund accounts for the City’s public transit program. The fund saw an increase in fund balance of $6,093 for the fiscal year ended June 30, 2005. This increase is due to increased operating revenue over operating expenses. The general obligation debt service fund accounts for the accumulation of resources for and payment of general obligation debt. The fund saw a decrease in fund balance of $526 for the fiscal year ended June 30, 2005, due to more debt being repaid by property taxes instead of revenues. The municipal property corporation debt service fund accounts for the accumulation of resources for and payment of municipal property corporation bond debt. The fund saw a decrease in fund balance of $3,948 for the fiscal year ended June 30, 2005. This was due to no long-term debt and refunding bonds issued. 20 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) The parks bond construction fund accounts for bond proceeds received and expenses paid related to the construction and maintenance of the city parks. The fund saw a decrease in fund balance of $5,179 for the fiscal year ended June 30, 2005. This decrease is due to capital project expenditures. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Net assets of the enterprise funds and the internal service funds increased $14,164 or 3.66%. The enterprise funds’ total net assets were 2.84% restricted and 27.86% unrestricted. Internal service funds were 100.0% unrestricted. The water and sewer fund accounts for operations, maintenance and construction projects of City-owned water and sewer systems. The fund saw an increase in net assets of $11,683 for the fiscal year ended June 30, 2005. This increase is due to 1) increased operating revenue greater than operating expenses, and 2) increased capital contributions. The landfill fund accounts for operations of the City-owned landfill. The fund saw an increase of $1,985 for the fiscal year ended June 30, 2005. This increase is due to an increase in operating revenues and a decrease in operating expenses. The internal service fund accounts for risk management, workers’ compensation, and employee benefits provided to other departments. The fund saw a decrease of $831 for the fiscal year ended June 30, 2005. This is due to increased operating expenses as a result of increased claims. General Fund Budgetary Highlights Consistent with national economic conditions, the City's investment revenue was positively impacted by economic improvement. • Investment revenue was improved this year as a result of increased interest rates. • License and permit revenues were adversely affected by 1) a decrease in development impact fees for roadway improvement and 2) the completion of the Glendale arena. • General fund revenues exceeded the final amended budget by $5,903 or 4.29%, primarily due to an increase in federal grants. • General fund expenditures were less than the final amended budget by $36,214 or 21.28%. This positive variance resulted from $19,485 in left over contingencies appropriation at fiscal year-end. Capital Asset and Debt Administration Capital Assets. The City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2005, for its governmental type activities was $766,969 and for the business type activities was $423,570. The investment in governmental and business type capital assets consisted of land, buildings, machinery and equipment, and infrastructure for streets, parks, airport and street lighting, water and wastewater treatment plants. 21 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Major capital asset events during the current fiscal year included the following: • New Bronto ladder truck, $871; • Purchase land and building for new court, $3,605; • Invested $2,167 in an underground storage facility to store additional reclaimed water; • A new sewage lift station totaling $2,895; • The City invested an additional $9,537 on enhancements at the Cholla Water Treatment Plant; and • Modifications to the West Area Water Reclamation Facility totaling $12,475. The following table is a summary of capital assets reflected in the June 30, 2005, as compared to last year’s financial statements. Capital Assets at Year End (Net of depreciation) (in thousands) Construction in progress Land Artwork Buildings Improvements other than buildings Infrastructure-streets Infrastructure-parks Infrastructure-airport Infrastructure-flood/storm drains Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment Software Automotive equipment Total $ $ Governmental Activities 2005 2004 69,406 $ 44,460 49,762 43,930 1,189 1,175 130,333 132,054 70,927 76,565 355,182 359,367 25,237 23,729 7,401 7,589 25,957 25,532 19,499 22,034 574 510 294 270 11,208 8,859 766,969 $ 746,074 $ $ Business-type Activities 2005 2004 69,715 $ 52,028 9,477 9,477 9,137 9,589 9,850 9,345 65,194 63,698 79,180 78,953 68,976 56,395 81,694 83,802 20,624 21,479 3,681 3,783 537 692 264 327 5,241 6,116 423,570 $ 395,684 $ $ Total Primary Government 2005 2004 139,121 $ 96,488 59,239 53,407 1,189 1,175 139,470 141,643 80,777 85,910 355,182 359,367 25,237 23,729 7,401 7,589 25,957 25,532 65,194 63,698 79,180 78,953 68,976 56,395 81,694 83,802 20,624 21,479 3,681 3,783 20,036 22,726 838 837 294 270 16,449 14,975 1,190,539 $ 1,141,758 Additional information on capital assets can be found in Note IV of the financial statements. Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $535,306, compared to $552,323 last year, a 3.0% net decrease. Of this amount, $171,070 comprises debt backed by the full faith and credit of the City and $75 is special assessment debt for which the City is liable in the event of default by the property owners subject to the assessment. 22 11/30/2005 3:35 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) General obligation Special assessments Highway user revenue bonds Municipal Property Corporation revenue bonds Capital lease obligation Water and sewer revenue bonds/obligations Notes payable Total $ $ Governmental Activities 2005 2004 157,065 $ 153,688 75 109 22,455 22,730 $ Business-type Activities 2005 2004 14,005 $ 16,857 - $ Total Primary Government 2005 2004 171,070 $ 170,545 75 109 22,455 22,730 177,950 13,704 180,230 14,704 2,676 11,005 177,950 16,380 180,230 25,709 18,576 389,825 17,098 388,559 115,140 13,660 145,481 121,470 14,432 163,764 115,140 32,236 535,306 121,470 31,530 552,323 $ $ $ $ $ The City’s total long-term debt decreased by $17,017 from the prior year. A key factor in this decrease was a pay down of capital lease obligations. The City maintains an “AA” rating from Standard & Poor’s and an “Aa2” rating from Moody’s for general obligation debt. The highway user revenue bonds have been rated “Aa3” by Moody’s and “AA-” by Standard & Poors. State statutes limit the amount of general obligation debt a governmental entity may issue to 20% of its total secondary assessed valuation for combined water, sewer, light, parks, open space preserves, playgrounds and recreational facilities nor may outstanding debt for all other purposes exceed 6% of the net secondary assessed valuation. The City’s current unused 6% and 20% debt limitation on June 30, 2005, was $16,991 and $129,570, respectively. Additional information on long-term debt can be found in Note IX of the financial statements. Economic Factors and Next Year’s Budgets and Rates The adopted fiscal year 2005-06 budget is $730,000 (up 11.79% from 2004-05), including a $290,000 operating budget (an increase of 8.2% from 2005) and $326,500 in capital outlay (up 13.76% from 2005). The fiscal year 2005-06 budget includes $66,100 contingency appropriation to cover emergency expenses or revenue shortages. • Fiscal year 2004-05 saw the national, state and regional economies recovering from the effects of a recession in previous years. • While the regional economy remains strong, it is traditionally largely driven by construction, due to the continued population growth of the state and metropolitan area, as well as the financial services and tourism sectors. Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. • The City’s unemployment rate for June 2005 was 4.0%, which is a decrease from a rate of 4.1% a year ago. This compares favorably to the state’s average unemployment rate of 4.4% and the national average rate of 5.0%. Request for Information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Chief Financial Officer, 5850 West Glendale Avenue, Suite 302, Glendale, Arizona 85301. 23 12/21/2005 10:01 AM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-A. MD & A\II-A. MD&A 05.doc This page left blank intentionally. 24 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. City of Glendale, Arizona Statement of Net Assets June 30, 2005 (amounts expressed in thousands) Governmental Activities ASSETS Equity in pooled cash and investments Receivables (net of allowance for uncollectibles) Property taxes Accounts Accrued interest Intergovernmental receivable Internal balances Inventories and prepaid items Restricted cash and investments Capital assets: Non-depreciable Depreciable (net) Deferred receivable Water storage right (net) Equity in joint venture Total assets $ 235,577 $ 768 11,082 929 6,437 978 4,600 12,360 49,389 Total $ 9,341 87 302 (978) 1,336 33,930 284,966 768 20,423 1,016 6,739 5,936 46,290 . LIABILITIES Vouchers payable Accounts payable Retainage payable Accrued interest payable Intergovernmental payable Deposits Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital projects Debt service Revenue bond retirement, replacement, and extension Perpetual care - nonexpendable Other purposes Unrestricted Total net assets Primary Government Business-type Activities $ 120,357 646,612 4,995 1,044,695 79,192 344,378 6,422 42,431 565,830 199,549 990,990 4,995 6,422 42,431 1,610,525 22,707 526 409 7,790 111 628 7,175 6,246 34 125 3,477 248 743 - 28,953 560 534 11,267 359 1,371 7,175 32,248 380,248 451,842 10,199 150,285 171,357 42,447 530,533 623,199 372,778 274,620 647,398 105,197 10,200 4,814 59,223 40,641 592,853 2,494 7,414 1,341 108,604 394,473 105,197 12,694 7,414 4,814 60,564 149,245 987,326 $ $ The notes to the financial statements are an integral part of this statement. 25 12/2/2005 11:55 AM II-B020. Stmt of Net Assets 05.xls City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Charges for Services Expenses Functions/Programs Primary government: Governmental activities: General government Public safety Public works Community services Community environment Street maintenance Other Interest on long-term debt Total governmental activities Business-type activities: Water and sewer Landfill Sanitation Housing Total business-type activities Total primary government $ $ 31,603 64,277 14,309 37,394 3,236 21,355 238 16,986 189,398 50,190 7,431 12,287 9,278 79,186 268,584 $ $ 9,075 1,200 506 16,871 27,652 54,295 8,961 13,624 542 77,422 105,074 Program Revenues Operating Grants and Contributions $ $ 175 3,671 97 1,789 3,130 17,673 26,535 8,027 8,027 34,562 Capital Grants and Contributions $ $ 62 17 1,145 183 1,407 39 203 242 1,649 General revenues: Taxes: Property taxes levied for: General purposes Debt service Sales taxes Unrestricted state shared sales tax Unrestricted urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain on disposal of capital assets Miscellaneous Capital contributions Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The notes to the financial statements are an integral part of this statement. 26 11/17/2005 2:58 PM II-B030. Stmt of Activities 05.xls Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ (22,291) (59,406) (13,689) (17,589) (106) (3,499) (238) (16,986) (133,804) $ (133,804) $ 3,576 15,846 77,166 20,271 20,115 9,414 2,654 225 275 4,794 (164) 154,172 20,368 572,485 592,853 - $ 4,144 1,530 1,337 (506) 6,505 6,505 $ 2,065 202 5,712 164 8,143 14,648 379,825 394,473 (22,291) (59,406) (13,689) (17,589) (106) (3,499) (238) (16,986) (133,804) 4,144 1,530 1,337 (506) 6,505 (127,299) $ 3,576 15,846 77,166 20,271 20,115 9,414 4,719 225 477 10,506 162,315 35,016 952,310 987,326 27 11/17/2005 2:58 PM II-B030. Stmt of Activities 05.xls City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2005 (amounts expressed in thousands) General ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Property taxes Accounts Accrued interest Due from other Funds Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets 28 LIABILITIES AND FUND BALANCE Liabilities: Vouchers payable Accounts payable Retainage payable Compensated absences - current Intergovernmental payable Due to other funds Deposits Matured interest payable Deferred revenue Matured bonds payable Total liabilities Fund Balances: Reserved (Note XVI) Unreserved: Designated (Note XVI): General fund Special revenue funds Capital project funds Undesignated, reported in General fund Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances $ 70,347 $ 139 7,585 807 564 2,861 213 395 1,830 84,741 $ $ 12,910 526 686 109 562 3,910 18,703 Major Funds General Obligation Debt Service Transportation $ 32,582 $ 1,842 20 34,444 $ 1,550 9 15 44 1,618 $ 21,384 $ 629 22,013 $ 1 3,033 438 10,508 13,980 Municipal Property Corporation Parks Bond Construction $ 618 $ 1,022 6,077 7,717 $ 6 4,171 1,885 6,062 Other Non-major Governmental Funds $ 26,574 $ 61 26,635 $ 1,542 167 15 1,724 $ 69,615 $ 1,655 61 3,556 219 5,723 3,165 83,994 $ 5,395 233 70 2 1,543 66 523 5,105 2,836 15,773 Total Governmental Funds $ 221,120 $ 768 11,082 929 1,586 6,437 432 12,195 4,995 259,544 $ 21,404 526 409 771 111 1,543 628 7,727 9,512 15,229 57,860 9,377 1 8,033 1,655 - 29,325 48,391 2,941 - 553 - - - - 461 27,301 2,941 1,014 27,301 53,720 66,038 84,741 32,272 32,826 34,444 8,033 22,013 1,655 7,717 24,911 24,911 26,635 2,134 9,000 68,221 83,994 53,720 34,406 33,911 201,684 259,544 $ $ $ $ $ $ The notes to the financial statements are an integral part of this statement. 12/2/2005 6:32 PM II-B050. Balance Sheet - Governmental Funds 05.xls City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2005 (amounts expressed in thousands) Amounts reported for governmental activities in the statement of net assets are different because: Fund balances - Total governmental funds balance sheet $ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental capital assets Less accumulated depreciation $ 201,684 1,008,827 (241,858) 766,969 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 4,856 Internal service funds are used by management to change the costs of workers' compensation, risk management, and employee benefits to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. 5,833 Long-term liabilities, including bonds payable are not due and payable in the current period and, therefore, are not reported in the funds. Bonds payable Notes payable Capital lease obligations Compensated absences Bond premium (342,315) (18,576) (13,704) (9,852) (4,366) (388,813) Unmatured interest payable (63) Deferred revenue that is measurable but not yet available for governmental fund activities is recognized as revenue for governmental-wide activities. Net assets of governmental activities 2,387 $ 592,853 The notes to the financial statements are an integral part of this statement. 29 11/17/2005 2:59 PM II-B060. Rec of the Bal Sheet of Govt Fds to Stmt of Net Assets 05.xls City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) General REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment income Miscellaneous Total revenues $ 30 EXPENDITURES Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Long-term debt issued Premium on long-term debt issued Proceeds from equipment disposal Other uses: Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1 Fund balances, June 30 $ 56,565 9,631 50,055 2,016 3,247 2,244 1,977 125,735 Major Funds General Obligation Debt Service Transportation $ 19,827 1,981 185 599 22,592 $ 16,002 115 16,117 Municipal Property Corporation $ 55 55 Parks Bond Construction $ 7 558 565 Other Non-Major Governmental Funds $ 4,418 5,866 23,648 3,480 1,191 1,358 39,961 Total Governmental Funds $ 96,812 15,497 75,691 5,681 3,247 4,762 3,335 205,025 19,618 54,593 12,006 21,807 196 - 7,924 - 13 32 10 - 1,264 6,773 75 2,896 2,886 10,535 9 20,892 61,366 12,081 32,627 3,082 10,535 54 3,577 993 4,924 117,714 10,803 18,727 10,508 6,122 16,643 1,885 9,017 10,934 5,769 5,779 2,929 1,099 25,787 54,253 18,899 17,231 47,283 224,050 8,021 3,865 (10,879) (5,214) (14,292) (19,025) 1,018 1,415 1 - 89 234 14,660 230 - 16,075 230 1,342 555 (4,218) (2,645) 900 (88) 2,228 - 6,842 6,931 (199) 35 4,457 (8,413) 10,934 12,754 (12,918) 17,483 5,376 6,093 60,662 66,038 26,733 32,826 $ (526) (526) $ 8,559 8,033 $ (3,948) (5,179) (3,358) 5,603 1,655 30,090 24,911 71,579 68,221 $ $ (1,542) $ 203,226 201,684 The notes to the financial statements are an integral part of this statement. 11/30/2005 4:25 PM II-B070. Stmt of Rev, Exp, and Chgs in Fund Bal - Governmental Fd 05.xls City of Glendale, Arizona Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Amounts for governmental activities in the statement of net assets are different because: Net change in fund balances - total governmental funds $ Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation. This is the amount by which capital outlays of $47,283 exceeded depreciation of $30,876 for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Gain on sales (1,542) 16,407 $ 4,794 (1,342) 225 3,677 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. The net effect of long-term debt issuance and the related transactions is to increase net assets. Bond premium Bonds issuance costs Principal paid Debt issued 522 (230) 146 18,899 (16,075) 2,740 Compensated absences 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. (437) Internal service funds are used by management to charge the costs of workers' compensation, risk management, and employee benefits individual funds. (759) The net revenue of certain activities as unearned revenue is reported in governmental activities. (52) Expenses on the statement of activities differ from governmental funds because of the portion not accrued on the governmental funds. Change in net assets of governmental activities (188) $ 20,368 The notes to the financial statements are an integral part of this statement. 12/1/2005 9:00 AM II-B080. Rec of the Stmt of Rev, Exp, Chgs in Fd Bal of Govt Fds to Stmt of Activities 05.xls 31 City of Glendale, Arizona Statement of Net Assets Proprietary Funds June 30, 2005 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Accrued interest Intergovernment receivable Inventories and prepaid items Total current assets Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Water storage rights, net Equity in joint venture Total noncurrent assets Total assets LIABILITIES Current liabilities: Vouchers payable Accounts payable Retainage payable Compensated absences Due to other funds Intergovernment payable Deposits Unearned rent Estimated claims payable Current portion of long-term debt: General obligation bonds Unamortized premium on debt issuance Revenue bonds/obligations payable Capital lease payable Other long-term debt Interest payable Total current liabilities Noncurrent liabilities: Deferred revenue Compensated absences General obligation bonds Unamortized premium on debt issuance Revenue bonds/obligations payable Other long-term debt Note payable Capital lease obligations Claims payable Estimated closure and post-closure costs Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Revenue bond retirement, replacement and extension Other purposes Unrestricted Total net assets $ 29,925 $ 6,968 (205) 87 2 1,331 38,108 $ 932 (5) 17,507 33,911 2,884 $ 1,677 (25) 300 5 4,841 - 515,577 (115,326) 400,251 6,422 42,431 483,015 521,123 $ 16,580 Total $ 9,577 (235) 87 302 1,336 60,456 19 20,377 (5,921) 14,456 14,456 31,963 49,389 Governmental Activities Internal Service Funds 247 14,703 33,930 19,460 (10,597) 8,863 8,882 13,723 14,456 165 555,414 (131,844) 423,570 6,422 42,431 506,353 566,809 165 14,868 5,626 125 757 159 516 - 379 153 116 - 241 34 233 43 89 108 3 - 6,246 34 125 1,143 43 248 740 3 - 1,304 5,256 760 198 5,120 24 1,375 3,432 18,092 171 638 30 1,487 771 15 1,537 931 198 5,120 1,433 1,375 3,477 21,116 6,560 271 12,375 3,271 110,020 12,285 25 138,247 156,339 44 700 176 9,852 10,772 12,259 211 13 1,042 1,266 2,803 526 13,075 3,271 110,020 13 12,285 1,243 9,852 150,285 171,401 49 2,426 2,475 9,035 254,797 12,772 7,051 274,620 - 2,494 7,414 694 99,385 364,784 6,932 19,704 647 3,222 10,920 2,494 7,414 1,341 109,539 395,408 5,833 5,833 $ Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds Net assets of business-type activities $ $ $ (935) 394,473 The notes to the financial statements are an integral part of this statement. 32 12/21/2005 10:47 AM II-B090. Stmt of Net Assets - Proprietary Funds 05.xls City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds Fiscal Year for the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds Operating revenues: Intergovernmental Metered water sales Sewer service charges Container service Curb service Landfill user fees Self-insurance premium Recycling sales Other fees Total operating revenues $ 39 25,880 19,753 1,477 47,149 Operating expenses: Water Sewer Landfill Housing Closure/post-closure care adjustment Sanitation Administrative and general Insurance claims Amortization and depreciation Total operating expenses Operating income (loss) 14,237 9,383 8,480 10,066 42,166 4,983 Nonoperating revenues (expenses): Impact fees Investment income Interest expense Net loss from joint venture Amortization of bond issuance cost Gain (loss) on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 7,386 1,609 (5,826) (1,947) (49) 1 1,174 Income before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets 6,157 5,712 (186) 11,683 Total net assets - beginning Total net assets - ending $ $ 5,733 2,955 104 8,792 $ 5,555 409 1,125 7,089 1,703 17,719 19,704 977 350 1,327 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities 8,066 25,880 19,753 4,445 9,057 5,733 2,955 2,131 78,020 $ 14,237 9,383 5,555 8,914 409 11,240 8,480 12,396 70,614 7,406 113 33 (83) (9) 203 257 1,985 1,985 $ $ 8,914 11,240 1,205 21,359 720 167 398 (287) 4 282 353,101 364,784 8,027 4,445 9,057 550 22,079 Totals Governmental ActivitiesInternal Service Funds 19,303 19,303 (1,106) 7,666 2,040 (6,196) (1,947) (49) (4) 203 1,713 275 275 9,119 5,712 350 (186) 14,995 (831) (831) 9,593 10,920 $ $ 18,197 18,197 6,664 5,833 (347) 14,648 The notes to the financial statements are an integral part of this statement. 11/17/2005 3:02 PM II-B100. Stmt of Rev, Exp, and Chgs in Fund Net Assets Proprietary Funds 05.xls 33 City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds Cash flows from operating activities: Cash received from customers Cash received from federal government Cash paid to suppliers: Internal city departments External vendors Cash paid for insurance and in settlement of claims Cash paid to employees for services Net cash provided by operating activities $ Cash flows from (used) for noncapital financing activities: Proceeds from sale of investments Transfers in Transfers out Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Proceeds from sale of capital assets Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Capital grant proceeds Net cash provided by or used for capital and related financing activities 47,184 - $ 13,986 8,195 $ 69,812 8,195 $ 18,237 - (2,368) (1,195) (1,029) (12,251) (8,394) (31,145) - (11,548) 12,940 (1,905) 3,174 (6,705) 2,196 (20,158) 18,310 (17,278) 959 (186) - (30) 350 - (30) 350 (186) - (186) - 320 134 - 1 (9,826) (41,083) 7,386 (6,466) - (7,268) (41) 167 (366) - (1,191) (615) 113 (88) 203 1 (18,285) (41,739) 7,666 (6,920) 203 - (49,988) (7,508) (1,578) (59,074) - 1,579 1,579 Net increase (decrease) in cash and cash equivalents during fiscal year (35,655) $ 8,642 - (4,997) (17,699) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ Totals Governmental Activities Internal Service Funds 99,491 63,836 398 398 (3,936) $ 20,516 16,580 $ 33 33 2,010 2,010 971 (38,620) 1,932 2,903 $ 121,939 83,319 276 276 1,235 $ 13,386 14,621 The notes to the financial statements are an integral part of this statement. 34 11/30/2005 4:42 PM II-B110. Statement of Cash Flows - Proprietary Funds 05.xls Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Amortization and Depreciation Changes in assets and liabilities: Accounts receivable Intergovernmental receivable Inventories and prepaid items Vouchers payable Accrued expenses Intergovernmental payable Due to other funds Deposits Deferred revenue Compensated absences Claims payable Estimated closure and post-closure costs Net cash provided by operating activities Reconciliation of statement of net assets cash and investments to the statement of cash flows: Per combined statement of net assets: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents Noncash investing, capital, and financing activities: Contributions of capital assets Loss on joint venture $ 4,983 $ 10,066 $ $ $ 12,940 $ 1,125 (80) 4 75 (589) (1,566) 54 (7) - $ 1,703 29,925 33,911 63,836 $ 5,712 (1,947) $ $ 35 409 3,174 $ 1,205 (186) 88 36 (1) - $ 720 Totals 14,928 1,652 16,580 $ - $ $ 2,196 $ 12,396 (75) 147 102 (3) 21 (14) 7 86 - $ 7,406 Governmental Activities Internal Service Funds - (341) 151 75 (399) (1,569) 21 (14) 97 78 - $ 2,884 19 2,903 $ - $ $ 409 18,310 (1,106) 47 14 1,169 (7) 842 $ 47,737 35,582 83,319 $ 5,712 (1,947) $ $ 959 14,456 165 14,621 - 11/30/2005 4:42 PM II-B110. Statement of Cash Flows - Proprietary Funds 05.xls CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) 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. Index Note Page Summary of Significant Accounting Policies.............................................................................I ............................. 37 Compliance – Excess of Expenditure Over Appropriations ..................................................... II ............................. 45 Deposits and Investments ........................................................................................................ III ............................. 45 Capital Assets ..........................................................................................................................IV ............................. 48 Construction and Other Significant Commitments................................................................... V ............................. 50 Self-Insurance Funds ...............................................................................................................VI ............................. 50 Leases .....................................................................................................................................VII ............................. 52 Short-Term Debt................................................................................................................... VIII ............................. 53 Long-Term Debt ......................................................................................................................IX ............................. 53 Landfill Obligations.................................................................................................................. X ............................. 62 Interfund Transactions.............................................................................................................XI ............................. 63 Encumbrances.........................................................................................................................XII ............................. 65 Equity in Joint Venture......................................................................................................... XIII ............................. 65 Jointly Governed Organizations ........................................................................................... XIV ............................. 66 Related Party Transaction...................................................................................................... XV ............................. 66 Fund Balance/Net Assets Reservation, Designation, and Restriction................................... XVI ............................. 66 Employee Retirement Systems and Pension Plans ..............................................................XVII ............................. 71 Other Post-Employment Benefits ...................................................................................... XVIII ............................. 73 Contingent Liabilities and Commitments ............................................................................. XIX ............................. 74 Subsequent Events................................................................................................................. XX ............................. 74 Implementation of GASB Statement No. 44 ........................................................................ XXI ............................. 74 36 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) I. Summary of significant accounting policies A. Entity-wide and fund financial statements The Entity-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the activities of the primary City and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of 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 operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. B. Reporting entity The City of Glendale, Arizona (City) was incorporated June 18, 1910, under the provisions of Article 13, Sections 1 through 6 of the Constitution of Arizona and Title 9 of the Arizona Revised Statutes. It is governed by Mayor elected at large, and six district council members. The City operates under a Council-Manager government. As required by GAAP, these financial statements present the government and its component units, an entity for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of a government’s operations, so data from these units are combined with data of the primary government. A discretely presented component unit, on the other hand, is reported in a separate column in combined financial statements to emphasize that it is legally separate from the government. The City has no discretely presented component units. Blended component unit City of Glendale, Arizona, Municipal Property Corporation (MPC) is a non-profit corporation organized under the laws of the State of Arizona to assist the City in the acquisition and financing of municipal projects and facilities. MPC is governed by a board of directors, who are responsible for approving the corporation’s bond sales. Bond sales must also be approved by the City Council. Although it is legally separate from the City, MPC is reported as if it is part of the primary government because its sole purpose is to finance and construct public facilities for the City. MPC does not issue separate audited financial statements. However, it does file a separate annual report with the Arizona Corporation Commission (ACC). Copies of the ACC report are available from the City’s Finance Department. It is the only blended component unit. C. Form of presentation – Government-wide financial statements The City reports the following major governmental funds: 37 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) The general fund is the City’s primary operating fund. It accounts for all financial resources of the general City, except those required to be accounted for in another fund. The transportation fund accounts for the City’s public transit program including activities funded by Federal grants and distributions received from the Arizona State Lottery. Additionally, on November 6, 2001, Glendale voters authorized a new half-cent sales tax to pay for transportation projects and programs for all modes of transportation. The general obligation debt service fund accounts for the resources accumulated through a secondary property tax levy and payments made for principal and interest on long-term general obligation debt of governmental funds. The municipal property corporation debt service fund accounts for building lease payments received from the general fund and subsequently paid as debt service to Municipal Property Corporation bondholders. The parks construction fund accounts for the construction of parks and recreation improvements. The City reports the following major proprietary funds: The water and sewer fund accounts for operations, maintenance and construction projects of the Cityowned water and sewer systems. The landfill fund accounts for operations of the City-owned landfill. It provides services to residential and commercial users of the City. Additionally, the City reports the following fund types: Internal service funds account for risk management, workers’ compensation and employee benefits provided to other departments. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the Citywide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Cities also have the option of following subsequent private-sector guidance for their businesstype activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. D. Form of presentation – fund financial statements The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures/expenses, as appropriate. Government resources are allocated to, and accounted for, in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The following funds are presented in the accompanying financial statements. Governmental funds Governmental funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City’s expendable financial resources and related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is based upon determination of financial position and changes in financial position, 38 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) rather than upon the determination of net income. The following governmental funds are presented in the accompanying financial statements. General fund: The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special revenue funds: Special revenue funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts if any, or major capital projects) that are legally restricted to expenditures for specified purposes. Debt service funds: Debt service funds are used to account for the accumulation of financial resources for the payment of general long-term debt principal, interest, and related costs, except the debt service accounted for in the enterprise funds. Debt service funds also include the debt payable from special assessments, Highway User Gas Tax Revenues and Unrestricted Excise Tax Revenues as well as debt funded by property taxes levied by the City on property located within the City. Capital projects funds: Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Permanent funds: Permanent funds are used to account for financial resources to be used by cemetery fund. Proprietary funds Proprietary funds are used to account for the City’s ongoing organizations and activities, which are similar to those found in the private sector. The measurement focus is based upon the determination of net income. Enterprise funds: Enterprise funds are used to account for operations, including debt service, 1) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or 2) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The enterprise funds, which the City currently maintains, are the water and sewer, landfill, sanitation, and housing funds. Internal service funds: Internal service funds are used to account for the financing of self-insurance provided by one City department to other City departments on a cost-reimbursement basis. E. Measurement focus and basis of accounting The citywide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. 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 both measurable and available. Revenues are considered to be available when they are collectible within the 39 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 30 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the related debt service fund for payments to be made shortly after fiscal year end. Revenues susceptible to accrual include property tax, sales tax, highway users tax, state shared sales tax, vehicle license tax, and interest earned on investments. Licenses and permits, charges for services, fines and forfeitures, and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. In applying the susceptible to accrual concept to intergovernmental revenues, the decision to accrue depends on the terms of the arrangement or agreement. Generally, these resources are reflected as revenue at the time of receipt or earlier if they meet the available criterion. Certain grant revenues are recognized based on expenditures recorded. Special assessment levies are reported as revenue when measurable and available. F. Interfund transactions There are several types of transactions that are reported in the financial statements as interfund items. Transactions that would be treated as revenue, expenditures or expenses if they involved organizations external to the governmental unit, like the sale of water from the water and sewer fund to various functions of the general fund, are accounted for as revenue and expenditures or expenses in the funds involved. Transactions that constitute reimbursement to a fund for expenditures or expenses initially made from that fund, which are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is being reimbursed. Governmental Accounting Standards Board Statement (GASBS) 34 also requires that administrative service fees charged to other operating funds to support general services used by the other operating funds (like purchasing, accounting and administration) should be treated as reimbursement transactions and the revenue and expenditures/expenses reduced in the allocating fund. Transfers between funds are included in the results of both governmental and proprietary funds (as other sources/uses in governmental funds and as non-operating revenues/expenses in proprietary funds). Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds.” Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. These transactions include transfers between funds and interdepartmental service charges. In the government-wide financial statements, only the net interfund activity and balances between governmental activities and business-type activities are shown (reported as “internal balances”). G. Statement of cash flows The City considers short-term investments (including restricted assets) in the State of Arizona Local Government Investment Pool (LGIP), mutual fund-money market, U.S. Treasury bills and notes with original maturities of three months or less at acquisition date to be cash equivalents. 40 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) H. Inventories and prepaid items Inventories of the governmental and enterprise funds consist primarily of expendable supplies held for consumption. These inventories are maintained on a perpetual system verified through cyclical physical counts and are valued using a weighted average cost. Generally, expenditures are recorded at the time inventories are used (i.e., the Consumption Method) for both GAAP reporting and budgetary purposes. However, the City postage inventory is recorded as an expenditure at time of purchase (i.e., the Purchase Method) for budgetary purposes. At June 30, 2005, the postage portion of the general fund supplies inventory was $21. Certain expenditures are recorded for financial reporting purposes as prepaid items. Special reporting treatment is applied to governmental fund inventories to indicate that they do not represent available expendable financial resources, even though they are a component of current assets. Such amounts have been offset by a fund balance reserve account. I. Restricted assets Certain proceeds of the City’s bonds, as well as certain resources set aside for their repayment, are classified as restricted on the balance sheet, or statement of net assets, because they are maintained in separate bank accounts and their use is limited by applicable debt covenants. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. J. Capital assets The City has chosen not to apply the modified approach to any networks or subsystems of infrastructure assets. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are defined as assets with an initial, individual cost of more than $5 and an estimated useful life greater than three years. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense incurred by the enterprise funds during the current fiscal year was $6,196. In addition, $676 was included as part of the cost of capital assets under construction in connection with water and sewer projects. 41 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Property, plant, and equipment is depreciated using the straight line method over the following estimated useful lives: Assets Buildings Improvements other than buildings Infrastructure Machinery and equipment Automotive equipment Software Computer equipment Useful Life (Years) 30 10-20 10-100 5-8 6-8 3 3-5 Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) as of the date of the transfer. K. Water storage rights The City has entered into a lease agreement with Salt River Pima-Maricopa Indian Community (SRPMIC) for the rights to 1814 acre-feet of water each year through 2099. These rights costing $2,693 are being amortized over 40 years on a straight-line basis starting January 1, 2000. Current year amortization was $67. The net book value of water rights as of June 30, 2005, is $2,322. In addition, the City will be responsible for paying for the cost of water delivered each year. The City participates in the Plan Six cost sharing agreement to construct the Waddell Dam on the Agua Fria River and modify the Roosevelt and Stewart Mountain Dams on the Salt River. The parties to this agreement include the United States government, State of Arizona, Central Arizona Water Conservation District, Salt River Project, and the cities of Phoenix, Chandler, Glendale, Mesa, Scottsdale, Tempe and Tucson. The federal government has determined that this agreement does not constitute a joint venture. As of June 30, 2005, the City has capitalized payment of $4,100 for these water rights. Upon completion, the City will amortize this asset over 40 years on a straight-line basis. L. Fund balance/net assets reservations and designations In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation by legislative action by the City Council or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Only restrictions imposed by external sources are shown as Restricted Net Assets on the government-wide financial statements. Reservations or designations of net assets imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are shown in aggregate on the governmental fund financial statements. M. Property tax The City levies taxes on real and personal property located within its boundaries. Property values are assessed by the Maricopa County Tax Assessor. The tax levy is then approved by the State of Arizona Property Tax Oversight Commission. The County Treasurer bills and collects property taxes and remits them to the City monthly. City property tax revenues are recognized when levied to the extent that they are received within the current period, or soon enough thereafter (within 30 days of year end), to pay liabilities of the current period. Remaining collectible taxes are accrued and reflected as deferred revenue. 42 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Property Tax Calendar Lien date Levy (assessment) date (third Monday in August) Due dates: First half of assessment Second half of assessment Penalties and interest added (collection dates): First half of assessment Second half of assessment January 1, 2004 August 16, 2004 October 1, 2004 March 1, 2005 November 1, 2004 May 2, 2005 The City currently levies less than the maximum allowed by State Statutes for primary property taxes. The City is permitted to levy an increase of two percent over the previous year’s maximum allowable primary levy plus an increased dollar amount due to a net gain in property not taxed the previous year. The secondary property tax levy is made for the purpose of retiring the principal, interest and servicing fees on bonded indebtedness. The City may levy the amount deemed necessary to meet its bonded debt service requirements. Assessed values are established by the Maricopa County Tax Assessor each year on a uniform basis ratios to full cash value of each property class as required by State Statutes. The distribution of the City’s levy (tax rate per $100 assessed value) to its funds for the year ended June 30, 2005, is as follows: Fund General fund General obligation debt service fund Total Rate $ 0.33 1.39 $ 1.72 N. Compensated absences Vacation time is accumulated up to a maximum of six workweeks. Compensatory time is earned in lieu of cash payment for overtime and is accumulated up to a maximum of 80 hours. Both vacation and compensatory time can either be taken as time off from work within certain limitations or may be payable to employees upon termination or retirement. Sick leave is accumulated without limit and can be used in the event of an illness in the immediate family. Accumulated sick leave is convertible to a partial-cash benefit upon termination or retirement after five years of service, or annually through an irrevocable declaration. The current portion of the liability for compensated absences recorded in the governmental funds, which is equal to: 1) vacation and compensatory time taken and paid during the thirty days following the year ended June 30, 2005, and 2) sick leave, taken and paid for illness during that period, paid to terminating employees or paid under the optional annual declaration. Long-term liabilities of governmental funds are not shown on the fund financial statements. For the government-wide financial statements, as well as the proprietary fund financial statements, all of the outstanding vacation, compensatory time, and sick leave are recorded as a liability. O. Deferred revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. 43 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Revenues related to time payment contracts are recorded as deferred revenue earned but not available in the permanent fund. Revenues related to Court fines are recorded as unearned revenue until adjudicated by the Court. Revenues related to property tax levies are recorded as deferred revenue until available to fund current activities. Special revenue funds’ deferred revenue and receivables consist principally of low interest rate loans made with grants from the Community Development Block Grant program for rehabilitation of homes for low to moderate income Glendale residents. Revenue will be recognized in future periods as loans are repaid or forgiven based on the homeowner’s loan contract. An expenditure was recorded when the loans were made. P. Long-term obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method, which approximates 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, as well as bond issuance costs, during the current period. 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. Q. Operating revenues and expenses 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 enterprise funds, and of the City’s internal service funds are charges to customers for sales and services, or housing operational grants from a federal agency. The water and sewer fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. R. Deferred compensation Voluntary Deferred Compensation Plan for Employees of the City of Glendale, State of Arizona; Restated Plan Document (the “Plan document”) was adopted by the Mayor and City Council on November 10, 1998, and amended on January 8, 2002, to incorporate the federal Economic Growth and Tax Relief Reconciliation Act of 2001. In addition, the Mayor and City Council adopted a defined contribution deferred compensation plan document on April 9, 2002, under the Internal Revenue Code Section 401(a). Through the Plan document, the City offers its employees a deferred compensation plan that permits them to defer a portion of their current salary until future years. Any contributions made to the deferred compensation plan, in compliance with Section 457 and 401(a) of the Internal Revenue Code, are not available to employees until termination of employment, retirement, death or an unforeseen emergency. Contributions to the plan are administered by one of two third-party administrators, ICMA 44 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Retirement Corporation (ICMA-RC) and PEBSCO Securities Corporation (Nationwide Retirement Solutions). In compliance with the provisions of the U.S. Internal Revenue Code Sections 457(g) and 401(a), the plan assets are in custodial or trust accounts for the exclusive benefit of the plans’ participants and beneficiaries. In accordance with GASBS 32, the City provides neither administrative services nor investment advice to the plans and therefore, no fiduciary relationship exists between the City and the deferred compensation pension plan. Therefore, Plan assets are not included as a fund of the City. To further clarify the legal trust status in Arizona of plan assets with ICMA-RC and Nationwide Retirement Solutions, a Trust Agreement was executed by the City management on May 19, 2001. S. Investments The City utilizes the following methods and assumptions to account for its investments: 1. 2. 3. Aside from investments clearly identified as belonging to a specific fund, any unrealized gain/loss resulting from the valuation is recognized within the general fund as investment revenue. Investments are recorded at fair value, which is based on quoted market prices as of valuation date. Pooled investment income is allocated to various funds monthly based on the average equity balances maintained during the month. Arizona Revised Statutes require the City to deposit certain crime-related forfeitures with the County Treasurer. The County Treasurer determines the fair value of those pooled investments. The structure of the pool does not provide for shares and the County has not provided or obtained any legally binding guarantees to support the value of the participants’ investments. The City’s investment in LGIP represents shares of the pool’s portfolio. The fair value of each share in the LGIP is one dollar. These shares are not identified with specific investments and are not subject to custodial credit risk. Both the County and LGIP are not registered with the Securities and Exchange Commission as investment companies. The State Board of Deposits provides oversight, and the Local Government Investment Pool Advisory Committee provides consultation and advice to the LGIP. There is no regulatory oversight of the County Treasurer’s operations. The net increase in the fair value of investments during fiscal year 2004-05 was $1,629. II. Compliance - Excess of expenditure over appropriations For the year ended June 30, 2005, expenditures exceeded appropriations in the housing fund (the legal level of budgetary control) by $158. These over-expenditures were funded by available fund balance in the housing fund in addition to operating transfers. III. Deposits and investments The City maintains a cash management pool for its cash and cash equivalents in which each fund and/or account or sub-account of a fund participates on a dollar equivalent basis. Deposits At year-end, the carrying amount of the City’s deposits, excluding restricted cash, was $83,138 and the bank balances were $81,677. The difference of $1,461 represents deposits in transit, outstanding checks and other reconciling items. Of the bank balance, $300 was insured by the Federal Depository Insurance Corporation (FDIC), $43 was uninsured and uncollateralized. The remaining bank balances were covered by $100,352 of collateral held by the City’s agent in the City’s name. 45 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Investments State Statutes and the City’s investment policy authorize the City to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, repurchase agreements, commercial paper (A-1/P-1 rated), interest-earning money market accounts, certificates of deposit, and the State of Arizona Local Government Investment Pool (LGIP). Investments may not exceed three years to maturity from the date of purchase. Governmental Accounting Standards Board Statement No. 40 – Deposit and Investment Risk Disclosures (Statement 40) requires the City to disclose its deposit and investment policies regarding certain type of investment risks. The City’s investment in the LGIP is stated at fair value, which also approximates the value of the investment upon withdrawal. As of June 30, 2005, the City had the following investments: Investment Type 0-1 Commercial paper Corporate U.S. Agencies U.S. Treasuries Total investments State LGIP total Grand total investments Cash deposits Other restricted cash Total deposits and investments $ $ Investment Maturities (in years) 1-2 Fair Value 6,918 1,989 56,010 53,848 118,765 97,322 216,087 $ $ 16,899 2,961 19,860 19,860 $ $ 6,918 1,989 72,909 56,809 138,625 97,322 235,947 83,138 12,171 331,256 Interest rate risk: As a means of limiting its exposure to interest rate risk the City’s investment policy requires all securities to a final maturity of no more than three years. Also, the City purchases securities to be laddered with staggered maturity dates and limits at least half of the City’s investment portfolio to maturates of 12 months or less. Credit risk: As of June 30, 2005, the City’s investments were rated by Moody’s Investor Service and Standard & Poor’s as follows: Investment Type U.S. Treasuries U.S. Agencies Commercial paper Corporate Moody's Rating S&P Rating Aaa Aaa P1 Aaa AAA AAA A-1+ AAA % of Investments 40.98% 52.59% 4.98% 1.43% Weighted Average Maturity (Years) 0.50 0.45 0.31 0.57 46 12/2/2005 9:25 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Concentration of credit risk: The investment policy of the City contains no limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of the total investments are as follows: Issuer FHLB FNMA FHLMC Investment Type U.S. Agencies U.S. Agencies U.S. Agencies Amount $ 36,281 25,818 10,810 Custodial credit risk: To control custodial credit risk, the City’s investment policy requires all securities and collateral to be held by an independent third party custodian in the City’s name. The custodian provides the City with monthly market values along with original safekeeping receipts. The remainder of this page left blank intentionally. 47 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) IV. Capital assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2005, is as follows: Balances June 30, 2004 Governmental activities Non-depreciable assets: Construction in progress Land Artwork Total non-depreciable assets $ Depreciable assets: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total depreciable assets at historical cost Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total accumulated depreciation Total depreciable assets, net Governmental activities capital assets, net $ 44,460 43,930 1,175 89,565 Additions $ 33,338 6,105 14 39,457 Transfers $ Disposals (8,392) (8,392) 160,919 118,047 462,307 32,439 28,249 11,898 28,137 1,413 515 25,207 869,131 2,170 73 4,686 108 671 284 120 4,509 12,621 (28,865) (41,482) (102,940) (8,710) (2,717) (4,309) (6,103) (903) (245) (16,348) (212,622) (4,606) (6,323) (11,846) (1,312) (382) (392) (3,206) (220) (96) (2,493) (30,876) - 656,509 (18,255) 8,392 746,074 $ 21,202 $ 715 612 2,975 2,820 699 204 367 8,392 $ - (273) (273) Balances June 30, 2005 $ (36) (106) (1,532) (1,674) 163,804 118,732 469,968 35,259 29,056 12,102 28,772 1,591 635 28,551 888,470 36 106 1,498 1,640 (33,471) (47,805) (114,786) (10,022) (3,099) (4,701) (9,273) (1,017) (341) (17,343) (241,858) (34) $ 69,406 49,762 1,189 120,357 (307) 646,612 $ 766,969 48 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Balances June 30, 2004 Business-type activities: Non-depreciable assets: Construction in progress - water and sewer Construction in progress - housing authority Land Total non-depreciable assets $ Depreciable assets: Buildings Improvements other than buildings Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment Automotive equipment Total depreciable assets at historical cost Less accumulated depreciation for: Buildings Improvements other than buildings Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment Automotive equipment Total accumulated depreciation Total depreciable assets, net Business-type activities capital assets, net $ 51,700 328 9,477 61,505 Additions $ 35,391 198 35,589 Transfers $ - Disposals $ (17,902) (17,902) Balances June 30, 2005 $ 69,189 526 9,477 79,192 13,753 12,471 85,224 109,442 90,622 90,674 27,650 5,187 3,594 1,213 14,951 454,781 38 1,157 2,990 2,535 15,154 149 673 22,696 - (106) (193) (956) (1,255) 13,791 13,628 88,214 111,977 105,776 90,674 27,544 5,187 3,550 1,213 14,668 476,222 (4,164) (3,126) (21,526) (30,489) (34,227) (6,872) (6,171) (1,404) (2,902) (886) (8,835) (120,602) (490) (652) (1,494) (2,308) (2,573) (2,108) (749) (102) (260) (63) (1,532) (12,331) - 149 940 1,089 (4,654) (3,778) (23,020) (32,797) (36,800) (8,980) (6,920) (1,506) (3,013) (949) (9,427) (131,844) 334,179 10,365 - 395,684 $ 45,954 $ - (166) $ (18,068) 344,378 $ 423,570 49 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Depreciation was charged to functions/programs as follows: V. Governmental activities: General Public safety Public works Street maintenance Community services Community environment Total depreciation expense $ 11,541 2,682 1,148 10,983 4,376 146 $ 30,876 Business-type activities: Water and sewer Landfill Sanitation Housing Total depreciation expense $ 10,001 1,125 847 358 $ 12,331 Construction and other significant commitments The City has active construction projects as of June 30, 2005. The projects include street construction, park facilities, field operation complex, and the construction of additional water and sewer facilities. At year-end the government’s commitments with contractors are as follows: Project Spent-to-Date Construction Commitment General government Community services Public safety Public works Street maintenance Water and sewer facilities Total government activities $ $ $ 1,556 10,074 6,615 27,669 23,492 68,128 137,534 $ 272 18,711 5,491 6,085 15,584 12,093 58,236 The City, under the memorandum of agreement with the Arizona Sports and Tourism Authority (AZSTA) and B & B Holdings (DBA Arizona Cardinals), irrevocably assigns, transfers and pledges unrestricted excise taxes collected at the Multipurpose Facility site (Stadium). In consideration for the pledge of unrestricted excise tax revenues, the AZSTA issued bonds to improve the Stadium infrastructure. The City’s obligation is to make monthly payments to the AZSTA for sales tax payments collected from the site only. The AZSTA bonds do not constitute a legal debt of the City. In addition, the City has agreed to make an annual payment to the Authority in the amount of $300, escalating 3% annually, for marketing events at the Stadium. VI. Self-insurance funds The City is exposed to various risks of loss. Certain of these risks are accounted for within the internal service fund type. A. Risk management On January 1, 1987, the City established a risk management fund for torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disaster. The City’s risk management fund 50 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) purchases commercial insurance for property, aviation, Inland Marine, errors and omissions, boiler and machinery, special events, and vehicle property damage. The risk management fund was fully selfinsured through June 30, 1998, for tort liability loss. Effective July 1, 1998, the City purchased excess public entity liability insurance with $1 million of self-insurance retention for claims incurred on or after July 1, 1998. Funds receiving insurance coverage pay monthly premiums to the risk management fund based upon an actuarial review and recommendation made by the insurance advisor. 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. B. Workers’ compensation On July 1, 1994, the City established a workers’ compensation fund for work-related injuries to employees. The workers’ compensation fund provides coverage up to a maximum of $500 for each workers’ compensation claim and purchases commercial insurance for claims in excess of $500. Funds receiving insurance coverage pay monthly premiums to the workers’ compensation fund based upon an actuarial review and recommendation made by the insurance advisor. Premium payments to insurance carriers are made directly from the workers’ compensation fund. There have been no settlements paid in excess of insurance in any of the past three years. C. Employee benefits On July 1, 2000, the City established an employee benefits fund to meet future cost increases for healthrelated insurance. Premiums are collected through contributions from employee paychecks and department budgets. Retirees and COBRA participants contribute 100% of premiums for their insurance benefit coverage. Premiums for the vision, dental, and life insurance plans are determined prior to each renewal period by a variety of factors including: the number of plan participants, the demographics of the group and previous claims history. These insurance benefits are provided through fully insured, mini-premium and selfinsured insurance plans. The medical insurance plan covers individual claims in excess of $150 for each plan year. These premiums are set prior to the beginning of each plan year equal to 105% of the expected claims liability. Premium payments to insurance carriers are made directly from the 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. D. Estimated liability Based on information provided by the actuary, liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported, the effects of specific, incremental claim adjustment expenses, and other allocated claim adjustment expenses. The City’s workers’ compensation self-insurance program liability includes recoveries related to subrogation. 51 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Salvage and subrogation are immaterial to both risk management and employee benefits self-insurance programs and are not incorporated into the liability. None of the self-insurance programs include a provision for unallocated claim adjustment expenses. The City claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and societal factors. The City reports the estimated liability in net present value dollars using a future investment yield assumption of 5%. These liabilities are reported in the internal service funds at their present value of $7,682 as of June 30, 2005. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2005 2004 Unpaid claims, beginning of fiscal year Current year claims and changes in estimate Claims payments $ Balance at fiscal year end $ 2,568 $ 2,363 (1,971) 2,318 Workers' Compensation 2005 2004 $ 1,462 (1,212) 2,960 $ 2,568 2,194 $ 1,486 (1,433) $ 2,247 2,503 Employee Benefits 2005 2004 $ 435 (744) $ 2,194 2,079 $ 13,319 (12,923) $ 2,475 1,879 11,847 (11,647) $ 2,079 VII. Leases A. Capital leases The City’s capital lease activity consists principally of leasing various types of heavy equipment for landfill, sanitation, and fire. Additionally, the City has entered into capital leases involving real property for various funds. The City’s lease obligations meet the criteria of a capital lease as defined by Statement of Financial Accounting Standards No. 13 “Accounting for Leases,” and have been recorded on the government-wide statements. The future minimum lease obligation and net present value of lease payments for the leases at June 30, 2005, is as follows: Capital Leases Year Ending June 30 2006 2007 2008 2009 2010 2011-2015 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments $ $ 3,083 2,671 2,675 2,508 2,235 7,965 21,137 (4,757) 16,380 52 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) The assets acquired through capital leases are as follows: Class of Property Equipment Automotive equipment Building Other Less: Accumulated depreciation Total Governmental Activities Business-type Activities $ $ $ 472 2,975 197 5,493 9,137 (3,437) 5,700 $ 250 5,412 150 2,389 8,201 (2,888) 5,313 B. Operating lease expenditures The City leases office space and vehicles under various cancelable operating lease agreements expiring at various dates. Certain leases contain provisions for possible future increased rentals based upon changes in the Consumer Price Index. Combined annual rental payments in fiscal year 2004-05 were $300. C. Operating lease revenue The City also leases various City-owned properties and buildings under cancelable and non-cancelable long-term lease agreements through fiscal year 2007 and beyond. The carrying value of leased assets is $197,207 (cost of $210,554 less accumulated depreciation of $13,347). The leased properties and buildings are included as capital assets in the government-wide financial statements. Certain leases contain provisions for future increased revenues based upon changes in the Consumer Price Index. Scheduled minimum revenues for non-cancelable leases for succeeding fiscal years ending June 30 are as follows: Fiscal Year 2006 2007 2008 2009 Beyond 2010 Total Total Revenues $ 1,073 993 435 253 746 $ 3,500 VIII. Short-term debt The City did not issue short-term debt for the year ended June 30, 2005. IX. Long-term debt A. General obligation bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City and are repaid through the City’s levying of property taxes. Retirement of the general obligation bonds in the business-type activities are intended to be paid back by the revenues of the business-type activities. 53 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) B. Revenue bonds Highway User Revenue Bonds are used to construct street and highway projects. The debt service is repaid through the highway user revenue fund, a special revenue fund, from the City’s share of the gasoline taxes that are collected by the State of Arizona and distributed to cities and towns based on a formula of population and gasoline sales within the county. Water and Sewer Revenue Bonds are issued, pursuant to voter authorization, for the construction, acquisition, and equipping of water and sewer facilities and related systems and infrastructure. Water and Sewer Revenue Obligations are issued pursuant to a Trust Agreement entered into between a Trustee and the City to acquire and construct various improvements to water and sewer facilities and extensions of the system. The bonds and obligations are backed by the revenues of the water and sewer systems. C. Municipal property corporation bonds (MPC) In 1982, 2002, and 2003 the MPC, a non-profit corporation, issued bonds to finance the construction of a new municipal office complex and hockey arena, respectively. On October 19, 1982, July 31, 2002, and May 1, 2003, the City entered into a lease purchase agreement with MPC, whereby the City is purchasing the constructed municipal office complex and hockey arena, respectively, from MPC. In addition, on April 1, 2004, the City entered into a lease agreement with the MPC to issue bonds to finance an escrow account to refund certain outstanding City improvement district bonds. An amount equal to the MPC debt service and related miscellaneous fees, is payable to the MPC in monthly installments by the City, which commenced July 1, 1983, February 1, 2003, July 1, 2003, and January 1, respectively. Under the provisions of the purchase agreement, the City has pledged for the payment of the purchase price: 1) all net revenues derived by it from the municipal office complex and arena, and 2) all excise, transaction, privilege and franchise taxes which it currently collects, which it may collect or which are allocated to it by any other governmental unit or municipal corporation, except its share of such amounts which by state law, rule or regulation must be expended for other purposes. However, under no circumstances shall such pledge constitute a general obligation of the City or will the purchase price be payable from the proceeds of ad valorem taxes. D. Special assessment bonds The City has a trust relationship for special assessment districts whereby it collects the assessments levied against owners of property within established districts and disburses the amounts collected to retire the bonds issued to finance related improvements. The City is required to annually appropriate from the tax revenues of the general fund monies to be applied in payment of the outstanding bonds to the extent that the funds derived from the collection of the unpaid special assessments are insufficient for the payment of the principal and interest falling due in any year. At June 30, 2005, 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. Improvement bonds are collateralized by properties within the districts. In the event of default by the property owner, the City may auction the property to satisfy debt service requirements subject to federal bankruptcy laws. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. 54 12/21/2005 11:35 AM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) E. Changes in long-term liabilities The following is a summary of changes in long-term liabilities reported in the governmental activities financial statements for the year ended June 30, 2005. June 30, 2004 General obligation (G.O.) bonds Special assessment debt with governmental commitment Revenue bonds: Street and highway Municipal property corporation Total bonds payable $ Notes payable: Notes payable Total debt service Other long-term obligations: Capital lease obligations Compensated absences Claims and judgments Unamortized premium on debt issuance Total other long-term obligations Total $ Additions 153,688 $ June 30, 2005 Reductions 11,960 $ (8,583) $ 157,065 Amounts Due Within One Year $ 11,085 109 - (34) 75 36 22,730 180,230 356,757 11,960 (275) (2,280) (11,172) 22,455 177,950 357,545 2,260 1,885 15,266 17,098 17,098 4,114 4,114 (2,636) (2,636) 18,576 18,576 2,839 2,839 14,704 10,194 6,841 720 17,168 (1,000) (291) (16,327) 13,704 10,623 7,682 825 7,794 5,256 4,381 36,120 230 18,118 (245) (17,863) 4,366 36,375 268 14,143 409,975 $ 34,192 $ (31,671) $ 412,496 $ 32,248 General fund typically has been used to liquidate compensated absences in prior years, since most employees engaged in governmental activities are paid from that fund. Paychecks include payment for leave taken during the current pay period. Special assessment debt with governmental commitment of $36 is due six months after fiscal year end. 55 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) The following is a summary of changes in long-term liabilities reported in the business-type activities financial statements for the year ended June 30, 2005. June 30, 2004 Water and sewer G.O. bonds Landfill G.O. bonds Water and sewer revenue/obligation bonds Total bonds payable $ 15,825 1,032 121,470 138,327 Additions $ - June 30, 2005 Reductions $ (2,690) (162) (6,330) (9,182) $ 13,135 870 115,140 129,145 Amounts Due Within One Year $ 760 170 5,120 6,050 Notes payable Total notes payable 14,433 14,433 - (773) (773) 13,660 13,660 1,375 1,375 Capital lease obligations Estimated closure and post-closure costs Unamortized premium on debt issuance Compensated absences Housing noncurrent liabilities Total other long-term obligations 11,007 - (8,331) 2,676 1,433 9,443 409 9,852 - 3,667 1,590 43 25,750 1,139 1,548 3,469 1,669 13 17,679 198 1,143 2,774 Total $ 178,510 $ 1,548 (198) (1,060) (30) (9,619) $ (19,574) $ 160,484 $ 10,199 F. Advance refunded bonds In prior years, the City issued refunding bonds to defease certain outstanding bonds, thus achieving debt service savings. The City has placed the proceeds from the refunding issues in irrevocable escrow accounts with a trust agent, which will provide amounts sufficient for future payment of principal and interest of the issues refunded. Accordingly, the trust account assets and liabilities for the defeased bonds are not included in the City’s financial statements. 56 12/21/2005 11:35 AM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2005, are comprised of the following: Classified in governmental activities on the government-wide financial statements: General Obligation Bonds: Purpose Interest Rate Issued Fiscal Year Ending June 30 Year Series Matures G.O. bonds payable from secondary assessed property taxes Refunding 5.05-5.55 1993 2007 Various 4.15-4.60 1998 2008 Various 5.00-5.40 2000 2015 Various 2.50-5.00 2002 2022 Various 1.50-5.00 2003 2022 Various 3.00-5.00 2004 2019 Various 3.50-4.00 2005 2015 Total Amount of Original Issue Bonds Outstanding June 30, 2005 $ $ Revenue bonds payable from highway user revenue funds Streets 5.00-5.37 2000 2010 Streets 2.50-4.00 2004 2014 Total 36,125 12,000 20,215 40,235 52,525 36,645 11,960 8,750 14,655 2,900 5,475 16,645 35,630 47,810 36,645 11,960 157,065 7,800 14,655 22,455 Municipal property corporation payable from general fund lease payments Refunding 4.25-4.90 2000 2009 12,615 MPC excise tax 5.00-5.38 2003 2033 5,055 MPC excise tax 2003A 2.50-5.00 2003 2024 49,940 MPC excise tax 2003B 1.46-5.58 2003 2033 105,260 MPC refunding 4.70-4.70 2004 2033 7,250 MPC excise tax 2004A 2.00-5.00 2004 2014 10,880 Total 7,785 5,055 49,940 97,040 7,250 10,880 177,950 Special assessment bonds payable due from assessments on property owners District 73 5.35 1997 2007 299 Total 75 75 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities $ 357,545 (15,266) 342,279 57 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Classified in business-type activities on the government-wide financial statements: Issued Fiscal Year Ending June 30 Year Series Matures 2000 2015 G.O. bonds payable from water and sewer fund Refunding 5.05-5.55 1993 Water and sewer 1.50-5.00 2003 Total 2007 2022 Purpose Interest Rate G.O. bonds payable from landfill fund Landfill 5.00-5.40 Amount of Original Issue Bonds Outstanding June 30, 2005 $ $ Revenue bonds/obligations payable from water and sewer fund Various 4.75-5.75 2000 2010 Various 4.00-5.00 2004 2023 Total 1,460 870 20,375 13,875 5 13,130 13,135 53,000 80,000 35,140 80,000 115,140 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities $ 129,145 (6,050) 123,095 Under the provisions of the State Constitution, outstanding G.O. bonded debt for combined water, sewer, light, parks, open space preserves, playgrounds and recreational facilities may not exceed 20% of the City’s net secondary assessed valuation, nor may outstanding G.O. bonded debt for all other purposes exceed 6% of the City’s net secondary assessed valuation. The City’s unused bonded debt borrowing capacity as of June 30, 2005, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 68,673 (51,682) 16,991 20% $ $ 228,910 (99,340) 129,570 The various bond indentures contain significant limitations and restrictions on annual debt service requirements, maintenance and flow of monies through various restricted accounts, and minimum revenue and bond coverage. The City is in compliance with all such significant limitations and restrictions. 58 12/21/2005 11:35 AM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) H. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of July 1, 2005, as shown below: Authorized Amount G.O. Bonds Voter authorized October 20, 1981 Operations center $ Voter authorized March 10, 1987 Library 6,750 Issued through June 30, 2005 $ 550 Authorized but Unissued $ 6,200 9,698 8,000 1,698 Cultural facility(1) Economic development Flood control 18,215 50,500 38,860 4,494 16,088 15,023 13,721 34,412 23,837 Governmental facilities(1) 40,910 12,055 28,855 Landfill development(1) Library Open spaces Parks and recreation Public safety 17,000 15,398 53,700 57,188 64,801 1,460 3,175 41,981 9,904 15,540 15,398 50,525 15,207 54,897 Streets and parking(1) 38,050 22,787 15,263 6,935 418,005 185 135,702 Voter authorized November 2, 1999 Transit(1) Total G.O. bonds $ $ $ 6,750 282,303 Revenue bonds Voter authorized March 10, 1987 Streets and highway Water and sewer $ 57,770 56,000 $ 47,890 49,657 $ 9,880 6,343 Voter authorized November 2, 1999 Water and sewer(1) Total revenue bonds Total bonds 10,000 123,770 $ 541,775 97,547 $ 233,249 10,000 26,223 $ 308,526 (1) Certain General Obligation Bonds or Revenue Bonds can be issued as General Obligation Bonds, Revenue Bonds or a combination thereof. 59 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) I. Other debt (notes, long-term) Classified in the governmental activities in the government-wide financial statements: Downtown Glendale Building Purchase - The $3,500 note dated June 5, 2000, is payable in fourteen semi-annual installments at an interest rate of 8.20% with the final payment due on or before June 1, 2007. $ Downtown Glendale Building Purchase - The $1,779 note dated June 5, 2000, is an assumed loan payable in 98 installments at an interest rate of 9.00% with the final payment due on or before September 1, 2008. 699 873 Northern Crossing Land Purchase - The $14,500 note dated November 15, 2002, is payable in nine annual installments at a variable interest rate with the final payment due on or before September 15, 2012. The interest rate assumption stays level after the 2008 fiscal year. 12,889 Larry Miller Land & Building Purchase - The $2,700 note dated December 30, 2004, is payable in five annual installments at an interest rate of 1.68% with the final payment due on or before December 30, 2009. 2,700 Arizona Department of Transportation Land Purchase - The $1,415 note dated June 27, 2005, is payable in ten annual installments at an interest rate of 6.75% with the final payment due on or before August 2, 2015. 1,415 Total notes payable recorded in governmental activities Less current portion Long-term portion of notes payable recorded in governmental activities $ 18,576 (2,839) 15,737 $ 1,619 Classified in the business-type activities in the government-wide financial statements: Arrowhead Ranch Wastewater Reclamation Facility - The total loan amount of $7,171 is scheduled to be paid in 10 annual installments through July 1, 2006, with an interest rate of 3.69%. Principal and interest are payable from water and sewer fund on a parity with outstanding revenue bond obligations pursuant to the provisions of the City's Master Ordinance 1323 new series. Cholla Water Treatment Plant Solids Handling Facilities - The maximum available under the loan is $15,400 of which $12,598 was drawn down and recorded as a liability as of June 30, 2004. The loan is scheduled to be paid in annual installments over 20 years with an interest rate of 4.40%. Principal and interest are payable from the water and sewer fund. 12,041 Total notes payable recorded in business-type activities Less current portion Long-term portion of notes payable recorded in business-type activities 13,660 (1,375) 12,285 $ 60 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) J. Debt service requirements Fiscal Year Ending 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Total Less interest Principal Highway User Revenue Bonds $ 2,727 2,723 2,723 2,728 2,727 2,723 2,726 2,728 2,725 24,530 Landfill G.O. Bonds Municipal Property Corporation Bonds Special Assessment District Bonds $ $ $ 4,335 $ 20,195 $ 215 216 216 139 786 11,656 11,486 11,442 12,509 11,006 11,542 11,657 11,689 11,753 9,848 9,906 12,275 12,330 12,384 12,442 12,497 12,549 12,605 13,249 13,308 13,363 13,420 13,478 12,674 13,611 13,671 13,732 6,532 8,563 347,177 86 171,112 700 $ 176,065 $ 39 40 79 Various Purposes G.O. Bonds $ 18,124 16,197 15,561 14,094 14,228 14,216 14,230 14,273 14,288 14,266 10,652 10,583 10,530 6,092 2,759 2,761 2,762 195,616 G.O. Bonds Notes Payable Revenue Bonds/ Obligations 4,114 4,112 3,435 3,223 3,112 2,563 2,563 2,563 199 199 26,083 $ 1,275 1,267 1,263 1,264 1,256 1,251 1,251 1,259 1,260 1,249 1,236 1,226 1,214 16,271 $ 1,977 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 20,041 $ 10,975 10,996 11,017 11,012 11,010 6,568 6,568 6,564 6,568 6,564 6,568 6,569 6,567 6,566 6,566 6,567 6,568 7,693 7,696 7,694 7,693 7,696 7,697 179,982 Notes Payable $ Water and Sewer Total $ 51,102 48,166 46,786 46,098 44,468 39,992 40,124 40,205 37,922 33,255 29,491 31,782 31,770 26,171 22,896 22,954 23,008 20,298 20,945 21,002 21,056 21,116 21,175 12,674 13,611 13,671 13,732 6,532 8,563 810,565 4 49,636 7,507 3,896 7,756 69,962 314,294 75 $ 145,980 $ 18,576 $ 12,375 $ 12,285 $ 110,020 $ 496,271 The following table discloses the debt service requirements as of June 30, 2005, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2006 2007 2008 2009 2010-2014 2015-2019 2020-2024 2025-2029 2030-2034 Total Principal $ 26,479 25,274 25,016 25,331 114,133 90,153 67,690 72,850 49,345 $ 496,271 Interest $ 24,623 22,892 21,770 20,767 88,578 62,316 42,411 24,173 6,764 $ 314,294 Total $ 51,102 48,166 46,786 46,098 202,711 152,469 110,101 97,023 56,109 $ 810,565 61 12/21/2005 11:35 AM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) K. New bonds On June 1, 2005, the City issued $11,960 in general obligation bonds for the purpose of acquisition, improvement, and equipment of a variety of projects in the City. The bonds mature on various dates starting 2006 through 2015 with various interest rates of 3.5% to 5.0%. The bonds are direct and general obligations of the City and are payable as to both principal and interest from ad valorem taxes levied against all taxable property within the City subject to taxation. X. Landfill obligations The City operates a municipal sanitary landfill under an Aquifer Protection Permit and Solid Waste Facility Plan approval issued by the Arizona Department of Environmental Quality requiring future closure work and post-closure monitoring. The permit meets federal and state regulations. These laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will not be paid until near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and post-closure costs as an operating expense in each period based on landfill capacity used. The landfill closure and post-closure care liability at June 30, 2005, calculated below, represents the cumulative amount reported to date based on the use of estimated capacity of the landfill. North Cell Capacity (cubic yards) Capacity used to date Percentage of capacity used South Cell 32,100 0% Total closure and post-closure costs in present dollars: as of June 30, 2005 as of June 30, 2004 22,594 16,328 72% $ 14,559 14,322 $ 13,633 13,411 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2005 $ 14,559 $ 3,781 Liability recognized as of June 30, 2005 $ - $ 9,852 These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2004-05. The estimated costs are subject to changes due in inflation, deflation, new technology, and applicable laws and regulations. Assets are not restricted to fund the obligations. The estimated remaining life of the landfill is approximately 40 years. According to state and federal laws and regulations, the City must comply with the local government financial test requirements that assure the City can meet the cost of landfill closure, post-closure, and corrective action when needed. The City is in compliance with these requirements. 62 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) XI. Interfund transactions A. Interfund receivables Interfund balances at June 30, 2005, consisted of the following (amounts in thousands): Due To Major governmental funds: General Municipal property corporation debt service $ Non-major governmental funds: Community development block grant fund Other special revenue fund Due From 564 1,022 $ - Non-major enterprise funds: Housing fund Total $ 1,586 - 110 1,433 $ 43 1,586 The interfund balances at June 30, 2005, are short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to bond sales or grant reimbursements. All interfund balances outstanding at June 30, 2005, are expected to be repaid within one year. The remainder of this page left blank intentionally. 63 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) B. Interfund transfers Interfund transfers for the year ended June 30, 2005, consisted of the following: Transfers to general fund from: Transportation special revenue fund Parks bond construction Non-major governmental funds Highway users gas tax special revenue fund Development impact fees Special assessment debt service Streets construction capital project fund Fire and police bond construction fund Other construction capital project fund Water and sewer enterprise fund Total transfers to general fund Transfers to transportation special revenue fund from: General fund $ 61 199 11 2 8 24 32 32 186 555 900 Transfers to municipal property corporation debt service fund from: General fund Special revenue fund arena Total transfers to municipal property corporation debt service fund 1,754 5,088 6,842 Transfers to non-major governmental funds from: General fund 1,215 Transfers to non-major debt service funds from: Non-major governmental funds Highway users gas tax special revenue fund 3,242 Transfers to non-major enterprise funds from: General fund Grand total all transfers 350 $ 13,104 Transfers are used to: 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, 2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and 3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. The interfund transfers are all classified as transfers and are included in the results of operations of both governmental and proprietary funds. There were no significant transfers during fiscal year 2005 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. 64 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) XII. Encumbrances The Arizona Revised Statutes allow cities to encumber unused appropriations for up to sixty days after the end of the fiscal year. However, effective July 1, 1987, the City adopted a policy of not recognizing encumbrances at year-end. All appropriations lapse on the last day of the fiscal year. Any outstanding commitments that the City intends to honor are rebudgeted in the new fiscal year. At June 30, 2005, the City intended to honor $36,051 of outstanding encumbrances in the new year. XIII. Equity in joint venture The City, along with the cities of Phoenix, Mesa, Scottsdale and Tempe participates in the Sub-Regional Operating Group (SROG), a joint venture. SROG constructs, operates and maintains jointly used facilities including the 91st Avenue Waste Water Treatment Plant (Plant) and certain sewage transportation facilities. The City of Phoenix acts as lead agency, and as such, is responsible for the planning, budgeting, construction, operation and maintenance of the Plant. In addition, the City of Phoenix provides all management personnel and financing arrangements and accepts federal grants on behalf of the participants. Each participant pays for its costs of operation and maintenance based on relative sewage flows and strengths and for purchased capacity in plant and related transportation facilities based on ownership. The City accounts for its approximate 8.59% investment using the equity method in the water and sewer fund. For the year ended June 30, 2005, the City recognized a loss of $1,947. The City has financed its share of construction costs through the issuance of revenue bonds, development fees and grants. The bonds are collateralized by a pledge of water revenues and are reflected in the financial statements of the water and sewer fund. The joint venture itself has not issued any debt. Summary financial information on the joint venture as of and for the fiscal year ended June 30, 2005, (unaudited) is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets $ Liabilities Net assets $ Total revenues Total expenses Increase in net assets $ $ 63,525 589,140 652,665 46,353 606,312 105,953 (53,220) 52,733 65 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Calculation of the City’s equity: City’s share of SROG equity (Total equity of $606,312 less ADOT settlement of $6,920 totaling $599,392 plus unrealized loss of $732 less assets not owned by the City of $177,612 multiplied by 8.59%) Net capitalized interest on the City’s records City contributions not yet received by SROG Total City equity Change in the City’s equity: Capital contributed to the joint venture Net loss on joint venture Net increase in equity $ 36,294 $ 946 5,191 42,431 $ $ 6,825 (1,947) 4,878 Copies of separate financial statements of the joint venture can be obtained from the AMWUA office, 4041 North Central Avenue, Phoenix, Arizona 85012. XIV. Jointly governed organizations The Regional Public Transit Authority (RPTA) is a voluntary association of local governments, including Glendale, Phoenix, Mesa, Tempe, Scottsdale, and Maricopa County. Its purpose is to ensure that a viable public transportation system is provided as an alternative for regional mobility and to ease the traffic congestion and air pollution caused by over-reliance on the single occupant vehicle. The Board of Directors consists of the mayors of those cities and a member of the County Board of Supervisors. Arizona Municipal Water Users Association (AMWUA) is a non-profit corporation established and funded by cities in Maricopa County for the development of an urban water policy and to represent the cities' interests before the Arizona legislature. In addition, AMWUA contracts with the cities jointly using the 91st Avenue Waste Water Treatment Plant to perform certain accounting, administrative and support services. XV. Related party transaction Included in the special assessment debt service fund deferred receivables at June 30, 2005, is $2 owed by the City’s governmental funds. XVI. Fund balance/net assets reservation, designation, and restriction The following is a list of reserves, designations, and restrictions with an explanation for each by fund type. General Fund Type Reserved for inventory Amount available only for expenditure (i.e., consumption of existing supplies inventories that have already been purchased). Reserved for capital leases The City periodically enters into capital leases. In governmental funds, revenue is recognized when the proceeds are received. However, the unspent portion of the proceeds is restricted to the capital items identified in the lease agreement. $ 213 2,739 66 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Reserved for cable equipment (PEG) Amount to be used only for expenditure by City’s cable television station as required by agreement with cable system providers. Reserved for “From the Heart” program Certain donations made to the City are required by ordinance to benefit Glendale residents through providing grants to non-profit social service organizations. $ 4 52 Reserved for court security Security surcharges collected by the City Court are required by ordinance to be spent solely on court security. 130 Reserved for court computer upgrade Surcharge that provides for monies to improve, maintain and enhance the ability to collect and manage monies received by courts and to improve court automation and improve case processing (administration of justice). 107 Reserved for court time payment Court time payment fees are used by the City Court to improve, maintain and enhance the ability to collect and manage monies assessed or received by the court, to improve court automation and to improve case processing or the administration of justice. Reserved for garden for visually impaired A donation was made to the City for the purpose of establishing a tactile garden for the visually impaired. Reserved for acquisition of artwork Acquisition of artwork by the City’s Arts Commission is provided through a surcharge on eligible capital projects as directed by the City Council. 81 239 1,430 Reserved for vehicle/equipment replacement For future scheduled replacement of existing equipment and vehicles. Total reserved for general fund type 4,382 $ 9,377 Designated for computer replacement For future schedule replacement of existing personal computers. $ 2,632 Designation for library activities A minor portion of future operating expenditures of the library has been authorized through the City budget to be paid from net revenues collected through library activities. 141 Designated for cable television station Amount to be used only for expenditure by the City’s cable television station from net revenues collected by Cable from special activities. 48 Designated for local improvement districts administration Portion of City special assessment bond proceeds identified exclusively for future costs of administering and accounting for existing improvement districts. 114 Designated for equipment management For maintenance of City equipment. Total designated for general fund type 6 $ 2,941 67 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Special Revenue Fund Type NON-MAJOR GOVERNMENTAL FUNDS Reserved for inventory Amount available only for expenditure (i.e., consumption of existing supplies inventories that have already been purchased). Reserved for capital leases The City periodically enters into capital leases. In governmental funds, revenue is recognized when the proceeds are received. However, the unspent portions of the proceeds are restricted to the capital items identified in the lease agreement. Reserved for drug enforcement Reserved by agreement with state and federal authorities for use in furthering the drug enforcement effort. Revenues for this reserve are received through the public courts’ prosecution of drug offenses. State Federal Total reserved for Drug Enforcement Reserved for development impact fees The development impact fees are covered by Chapter 28, Article VI of the Municipal Code. Development impact fees are used exclusively to provide the necessary public facilities and services to development. Residential development impact fees may be spent only in the district (residential development district, not political district) in which they were collected. This reserve is categorized as follows: Parks and Recreation: Citywide Parks Citywide Recreation Facilities Citywide Open Space & Trails District No. 1 District No. 2 District No. 3 Library: Buildings Books Library Fire protection facilities Police facilities Transportation General government Total reserved for Development Impact fees Reserved for police and fire activities In accordance with a voter initiative, beginning April 1994 the City collected an additional separate sales tax for Police and Fire activities. Police Fire Total reserved for Police and Fire activities $ 121 47 383 71 454 1,519 836 284 450 1,221 463 2,636 296 2,248 290 1,907 7,833 2,462 22,445 926 281 1,207 TRANSPORTATION FUND Reserved for transportation 68 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Amount to be used only for expenditures by the City’s Transportation Department for the replacement of equipment. Total reserved for special revenue fund type $ 1 $ 24,275 TRANSPORTATION FUND Designated for local transportation assistance For specific transit-related buildings and equipment $ NON-MAJOR GOVERNMENTAL FUNDS Designated for home program For community development block grant home program activities. Designated for pool/park repair For repair of area schools and City recreational facilities. The City contributes to maintenance of area school’s facilities in which the City has no equity interest. Total designated for special revenue fund type 553 65 396 $ 1.014 Debt Service Fund Type Reserved for debt service Certain assets have been reserved for future payment of debt service based upon the requirements of the various bond ordinances. General obligation debt service Municipal property corporation Non-major governmental funds Total reserved for debt service fund type $ 8,033 1,655 211 $ 9,899 Capital Projects Fund Type NON-MAJOR GOVERNMENTAL FUNDS Reserved for capital projects Certain assets have been reserved for future flood control storm drain construction. Total reserved for capital projects fund type $ $ Designated for street G.O. bond projects Accounts for the construction of street lights, traffic signals, street landscaping, streets and parking funded by authorization approved by voters on March 10, 1987, and November 2, 1999. $ 7,234 Designated for HURF bond projects Accounts for the construction of streets and sidewalks. Funding is provided through bonds issued under an authorization approved by voters on March 10, 1987. Designated for transit projects Accounts for G.O. bond funds used to plan, acquire, construct and expand transit services, passenger amenities and park-and-ride facilities; replacement of transit buses, cars and computer equipment; transit administrative facilities upgrades and renovations; and acquiring land as necessary for such facilities and purposes. Funding is provided under an authorization approved by voters on November 2, 1999. 98 98 7,523 139 69 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Designated for airport projects Accounts for grant funds used to plan, acquire, construct and expand airport runways, taxiways, aprons and certain roads within airport boundaries, as well as other improvements to airport facilities. $ 222 Designated for government facilities Accounts for G.O. bond funds used to plan and construct a new public works operations center; housing, streets and park maintenance; transit, utilities, a tourism visitor center and similar projects. Funding is provided under an authorization approved by voters on November 2, 1999. 1,411 Designated for economic development Accounts for G.O. bond funds used to promote new private sector job creation through development and redevelopment in the City. Funding is provided under an authorization approved by voters on November 2, 1999. 577 Designated for open space/trails Accounts for G.O. bond funds used to plan and acquire land and interests for the preservation of open space; and planning, acquiring and constructing multi-use trails and linear parks. Funding is provided under an authorization approved by voters on November 2, 1999. 1,845 Designated cultural and historical projects Accounts for acquisitions and improvements in the historical downtown Glendale area. Funding is provided through bonds issued under an authorization approved by voters November 2, 1999. 3,732 Designated for Arena projects Accounts for construction for a multi-purpose arena complex financed with Municipal Property Corporation Excise Tax Revenue Bonds. Total designated for capital projects fund type 4,618 $ 27,301 Enterprise Fund Type WATER AND SEWER FUND Restricted for debt service The City is also required by ordinance to have accumulated sufficient funds to pay all principal and interest due on the following July 1 and January 1 payment dates. Since the July 1 payment is already accrued as a current liability at year-end, only the January 1 payment is included in the reserve. $ 277 The City’s bond ordinances require an additional reserve for any Water and Sewer Bond debt that is not insured by a surety bond. This reserve must be maintained at a balance equal to the highest principal and interest coming due in any twelve-month period. As of June 30, 2005, only the loans with the State Revolving Fund (authorized by revenue bond election in 1961) were not covered by a surety bond. 2,217 Restricted for revenue bond retirement/replacement and extension Two percent of net water revenues must, by bond ordinance, be reserved for the replacement and extension of the City’s water distribution system, or for the retirement of water revenue bonds. The reservation is only required to the extent that the reserve equals two percent of the value of net fixed assets of the water and sewer fund. 7,414 70 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Restricted for other purposes Deposits related to a multi-jurisdictional water project are held in an escrow account maintained by the State Treasurer, and are restricted as to use. Total water and sewer NON-MAJOR PROPIETARY FUNDS Net assets held by the housing fund may only be used for that purpose. Total restricted for enterprise fund type Permanent Fund Type NON-MAJOR GOVERNMENTAL FUNDS Reserved for cemetery perpetual care Funds are reserved by ordinance for future cemetery maintenance and operational expenses. Total reserved for permanent fund type $ 694 10,602 647 $ 11,249 $ 4,742 $ 4,742 XVII. Employee retirement systems and pension plans A. Plan descriptions The City contributes to the three retirement plans described below. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefit pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of ARS Title 38, Chapter 5, Article 2. The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a five member board, known as The Fund Manager, and 162 local boards according to the provisions of ARS Title 38, Chapter 5, Article 4. PSPRS is agent for the eligible Glendale Fire and Glendale Police personnel. The Elected Officials Retirement Plan (EORP) is a cost-sharing multiple-employer defined benefit pension plan that covers elected officials and judges of certain state and local governments. The EORP is administered by The Fund Manager of PSPRS according to the provisions of ARS Title 38, Chapter 5, Article 3. B. Financial reports Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by writing or calling the applicable plan. ASRS 3300 North Central Avenue P.O. Box 33910 Phoenix, Arizona 85067-3910 PSPRS or EORP 3010 East Camelback Road #200 Phoenix, Arizona 85016 (602) 240-2000 or (800) 621-3778 (602) 255-5575 71 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) C. Funding policy The Arizona State Legislature establishes and may amend contribution rates for active plan members and the City. Cost Sharing Plans. For the year ended June 30, 2005, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 5.7% (5.2% retirement and 0.5% long-term disability) of the members’ annual covered payroll. The City’s contributions from employer and employees to ASRS for the years ended June 30, 2005, 2004 and 2003 were $7,094, $6,860 and $2,940, respectively, which were equal to the required contributions for the year. In addition, active EORP members were required by statute to contribute 7.0% of the members’ annual covered payroll. The City was required to remit contributions of 13.49% of the members’ annual covered payroll, as determined by actuarial valuation. The City’s contributions from employer and employees to EORP for the years ended June 30, 2005, 2004 and 2003 were $29, $29 and $20, respectively, which were equal to the required contributions for the year. Agent Plans. For the year ended June 30, 2005, PSPRS members were required by statute to contribute 7.65% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 7.43% and 11.80% for Fire and Police, respectively. Annual Pension Cost (APC). The City’s pension cost for Police and Fire for the year ended June 30, 2005, the date of the most recent available actuarial valuation, and related information follow. Fire Police Contribution rates: City Plan members 7.43% 7.65% 11.80% 7.65% Annual pension cost $ 895 $ 2,172 Entry Age Entry Age 8.50% 6.00% - 9.00% 5.00% 8. 50% 6.00% - 9.00% 5.00% Level % open Level % open Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Amortization method Remaining amortization period Asset Valuation method 20 years Smoothed market value 20 years Smoothed market value D. Three year trend information for PSPRS Information for the agent plan for PSPRS for Glendale Fire and Police as of the most recent available actuarial valuations for June 30, 2005, follows. 72 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) Contributions required and contributions made Year Ended Percentage of APC June 30 APC Contributed Police 2005 $2,172 100.0% 2004 $1,906 100.0% 2003 $1,489 100.0% Fire 2005 $ 895 100.0% 2004 $ 622 100.0% 2003 $ 443 100.0% Includes insurance premium tax, where applicable. Net Pension Obligation $ $ $ - $ $ $ - E. Required supplementary information Analysis of funding progress for the agent plan as of the most recent available actuarial valuation, June 30, 2005, follows. Valuation Date June 30 Police 2005 2004 2003 Valuation Date June 30 Fire 2005 2004 2003 Actuarial Value of Plan Assets $ $ $ 74,645 72,743 71,955 $ $ $ Actuarial Value of Plan Assets $ $ $ Funding Liability (Excess) Actuarial Accrued Liability 99,251 86,792 79,669 $ $ $ Funding Liability (Excess) Actuarial Accrued Liability 58,641 56,727 56,183 $ $ $ 63,740 54,893 50,467 24,605 14,050 7,714 $ $ $ 5,099 (1,834) (5,716) Annual Covered Payroll Funded Ratio 75.2% 83.8% 90.3% $ $ $ Annual Covered Payroll Funded Ratio 92.0% 103.3% 111.3% 19,240 17,343 16,906 $ $ $ 11,376 9,849 9,236 Unfunded Liability as Percentage of Covered Payroll 127.9% 81.0% 45.6% Unfunded Liability as Percentage of Covered Payroll 44.8% -% -% XVIII. Other post-employment benefits Other than the pension benefits through the Arizona State Retirement System or the Arizona Public Safety Personnel Retirement System, the City does not provide post-employment benefits. However, the City does allow all of its retired employees to participate in the health care and life insurance plan provided to active employees. The plan provides health, dental, and/or life insurance to participants. The retired employees pay the entire cost of their participation in the plan. The City makes no contribution to the plan for former employees. Since the number of retirees is small, and their portion of the premium cost is paid to providers at the same time as the City’s active employee portion, the City has chosen to account for monies received from retirees, but not yet paid out, as a part of employee benefits fund liability. 73 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2005 (amounts expressed in thousands) XIX. Contingent liabilities and commitments 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 is subject to claims and litigation, which arise in the ordinary course of its operations. In the opinion of the City Attorney, the resolution of such claims and litigation will have no material adverse effect on the financial position or the future operations of the City. XX. Subsequent events On September 1, 2005, the City entered into an Intergovernmental Agreement with the Arizona Sports and Tourism Authority (AZSTA) for the funding and development of youth Sports fields. The AZSTA will fund $1,000 of the total estimated City cost of $6,925. This project is phased. The first phase is $2,600. On July 26, 2005, the Mayor and Council approved the City entering into the following agreements with: • • • • • • Cabela’s Retail to develop a 165,000 square foot retail facility. The City committed $10,000 to infrastructure costs and land acquisition; Zanjero Boulevard Land Company, LLC to develop land. The City committed infrastructure costs up to $6,700; Loop 303 Peoria, LLC as a pre-annexation agreement. The Developer proposes to develop retail and auto dealerships at the site. The City committed up to $10,000 in infrastructure costs to be paid back by sales tax generated the first three years of business. Dealership and retail development economic incentives become effective after the third year the first dealership opens for business; Fiesta Bowl. The Fiesta Bowl will make a one-time development fee contribution of $500 for the use of land the next 10 years; Coyotes Center Development (CCD) to purchase land from to be used in the development of the hotel, conference center, media center and parking structure at Westgate; and John Q. Hammons, LLC to develop a 320 room hotel, 80,000 square foot conference center, a 40,000 square foot media center and a 690 space parking structure at Westgate. The City will own the conference center, media center, and parking structure. Effective July 1, 2005, the Human Resources Polices and Procedures increased from 240 hours to 320 hours, the maximum amount of vacation time that can be accrued by a full-time normal 40 hour work week employee. XXI. Implementation of GASB Statement No. 44 In May, 2004 GASB issued Statement No. 44 Economic Condition Reporting; The Statistical Section. The statistical section presents detailed information, typically in 10-year trends that assists users in utilizing the basic financial statements, notes to the basic financial statements and required supplementary information to assess the economic condition of the government. This statement is effective for periods beginning after June 15, 2005. Management of the City has elected to early implement GASB 44. 74 12/2/2005 7:55 PM N:\FINANCE\05_Audit\CAFR 05\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 05.doc City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment income (loss) Proceeds from disposal of assets Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public safety Public works Community services Community environment Contingencies Debt service: Principal Interest Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2005 $ Final 49,146 $ 49,146 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 62,455 $ 13,309 51,854 11,723 45,086 18,387 3,608 923 5,970 137,551 (4,546) 182,151 51,854 11,723 45,086 18,387 3,608 923 5,970 137,551 (4,546) 182,151 56,565 9,631 50,055 18,743 3,247 2,244 992 1,977 143,454 2,414 (6,077) 202,246 4,711 (2,092) 4,969 356 (361) 1,321 992 (3,993) 5,903 2,414 (1,531) 20,095 30,936 55,619 23,064 23,759 150 16,485 30,981 57,479 24,015 24,129 480 19,485 26,134 54,382 21,699 22,066 196 - 4,847 3,097 2,316 2,063 284 19,485 3,164 1,440 8,361 162,978 3,234 1,451 8,904 170,158 3,577 993 4,897 133,944 (343) 458 4,007 36,214 19,173 $ 11,993 $ 68,302 $ 56,309 (Continued) 75 11/17/2005 3:05 PM II-B140. Budgetary Comparison Schedule - General Fund 05.xls City of Glendale, Arizona Budgetary Comparison Schedule (continued) General Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) 2 of 2 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Internal charges for services provided. Proceeds from disposal of assets. Less: Transfers in. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Noncash exchange for capital outlay. Salaries payable. Change in prepaid assets or inventory. Internal charges for services provided. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 76 $ 202,246 (62,455) (16,727) (992) (2,414) 6,077 $ 125,735 $ 133,944 27 420 45 (16,722) $ 117,714 11/17/2005 3:05 PM II-B140. Budgetary Comparison Schedule - General Fund 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Actual Amounts (budgetary basis) Final 26,348 $ 26,348 $ 26,789 Variance with Final Budget Positive (Negative) $ 441 RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Proceeds from disposal of assets Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 19,252 7,898 200 391 27,741 2,086 (1,186) 54,989 19,252 7,898 200 391 27,741 2,086 (1,186) 54,989 19,827 1,980 185 599 1 22,592 2,087 (1,275) 50,193 575 (5,918) (15) 208 1 (5,149) 1 (89) (4,796) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations 11,589 43,400 54,989 11,505 43,484 54,989 7,919 9,389 17,308 3,586 34,095 37,681 Budgetary fund balance, June 30, 2005 $ - $ - $ 32,885 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Less: Transfers in. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Change in compensated absences liability. Salaries payable. Acquisition of land. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 77 $ 32,885 $ 50,193 (26,789) (2,087) 1,275 $ 22,592 $ 17,308 (5) 10 1,414 $ 18,727 11/17/2005 3:06 PM II-B150. Budgetary Comparison Schedule - Transportation Fd 05.xls CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2005 (amounts expressed in thousands) I. Budgetary basis of accounting The City prepares its annual budget on a basis, which differs from the GAAP basis. Budgetary comparison schedules for the general and transportation funds are included as required supplementary information to provide a meaningful comparison of actual results to budget on the budget basis. Budgetary comparison schedules for all other funds are presented as other supplemental information after the combining statements. In all cases, the budgetary schedules include a reconciliation of the adjustments required to convert the budgetary revenues and expenditures or change in net assets on a budgetary basis, to revenues and expenditures/expenses or change in net assets on a GAAP basis. II. Budgetary information The City utilizes the following procedures in establishing the budgetary data reflected in the financial statements. 1. 2. 3. 4. 5. 6. III. Prior to the first of June of each year, the City Manager submits to the Mayor and Council a proposed operating budget for the fiscal year commencing the following July 1. The budget includes proposed operating and capital expenditures and the means of financing them. The projected beginning budgeted fund balances for each fund are based on preliminary estimates of the June 30th ending actual budget basis fund balances rather than the June 30th ending budgeted fund balances. These two amounts will differ because of differences in actual results for the year versus planned results and by unused contingency appropriations. Prior to July 1, after receiving comments in a public hearing, a tentative budget is adopted by the City Council, which fixes an upper-dollar limit for all funds combined, beyond which the City may not increase appropriations. After two weeks of legal advertising, the City Council legally adopts a final budget ordinance, which fixes appropriations for each fund, except for the nonexpendable trust fund. Budget basis expenditures may not exceed appropriations for each fund, except in conjunction with the transfer of contingency funds. Contingency funds are appropriated for several funds as identified in the budget basis schedules and may only be transferred with City Council approval. The City Council may reallocate appropriations through amendment, but may not increase total appropriations above the total budget, which was legally adopted for the fiscal year. The Director of Management and Budget is generally authorized to transfer budgeted amounts within departments’ approved capital or operating budgets, and the City Manager is authorized to transfer appropriations between departments. Any new capital improvement projects or any nonbudgeted projects require City Council approval. Formal budgetary integration is employed as a management control device during the year for all funds. Contingency appropriation The principal purpose of a contingency appropriation is to cover any unforeseen expenditure, which may arise after the budget is adopted. It is impossible to estimate revenues exactly or to determine in a prior year the exact expenditures of each program or activity for the ensuing year. Thus, a contingency is essential for budgetary purposes. Contingency appropriation is re-established each fiscal year based on available fund balance and balancing needs of the budget year. The unused balances of contingency appropriations are reflected in the budget basis financial statements. 78 12/1/2005 7:47 AM II-B160 Notes to Required Supplementary Information 05.doc City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. NON-MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for revenues from specific taxes or other earmarked revenue sources, which by law are designated to finance particular functions or activities of government and which, therefore, cannot be diverted to other uses. Community Development Block Grants Fund This fund accounts for a series of ongoing entitlements received directly from the U. S. Department of Housing and Urban Development (HUD). This fund also includes the HUD Rental Rehabilitation and HOME programs. Highway Users Gas Tax Fund This fund accounts for capital outlay and maintenance of municipal streets and highways, as mandated by the Arizona Revised Statutes. Financing for this fund is provided by state-shared fuel taxes. Development Impact Fees Fund This fund accounts for fees covered by Chapter 28, Article VI of the Municipal Code. The fees are used exclusively to provide the necessary public facilities and services for development. Residential development impact fees may be spent only in the district (residential development district, not political district) in which they are collected. Other Special Revenue Fund This fund accounts for various activities, including both the airport and civic center. Neither is considered to be an enterprise fund for financial reporting purposes and the City Council’s present intent is not to have user fees cover the total costs of providing services. • • • • Municipal airport and civic center operations Miscellaneous grants received from Federal, State or local governments Recreation programs and site maintenance Police and fire activities funded by a one percent sales tax levied directly by voter initiative Debt Service Funds Debt service funds are used to account for the accumulation of resources for, and the payment of, general longterm debt principal, interest and related costs. Highway Users Debt Service Fund This fund accumulates monies for payment of all street and highway revenue bonds of the City. Highway user fuel taxes are transferred from a special revenue fund to fund this debt. Special Assessment Debt Service Fund This fund collects the assessments levied against owners of property within the districts and disburses the amount collected to retire the bonds issued to finance related improvements. Capital Projects Funds Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). 79 12/2/2005 5:00 PM II-C010. Non-major Governmental Funds 05.doc Streets Construction Fund This fund accounts for the construction of streets, sidewalks, streetlights, traffic signals, and street landscaping funded through G.O. and revenue bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Fire and Police Construction Fund This fund accounts for the construction of fire and police department facilities. Funding is provided through G.O. bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Arena Project Construction Fund This fund accounts for the construction of a multipurpose arena complex. Funding for the project is provided through excise tax revenue bonds issued by the City of Glendale Municipal Property Corporation. Other Construction Fund This fund accounts for the construction of various City projects. Funding is provided through G.O. bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999, and the Federal Aviation Administration. • • • • • • • • Flood control facilities Library Airport Transit projects Economic development Open Space/Trails Government facilities Cultural facilities Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting City’s programs. Cemetery Perpetual Care Permanent Fund This fund is used to account for the revenues received by the City from the sale of cemetery lots and other related services. 80 12/2/2005 5:00 PM II-C010. Non-major Governmental Funds 05.doc This page left blank intentionally. 81 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2005 (amounts expressed in thousands) Special Revenue Funds ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Accrued interest Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets LIABILITIES AND FUND BALANCES: Liabilities: Vouchers payable Retainage payable Compensated absences - current Intergovernmental payable Due to other funds Deposits Matured interest payable Deferred revenue Matured bonds payable Total liabilities Fund balances: Reserved Unreserved: Designated Undesignated Total fund balances Total liabilities and fund balances Community Development Block Grants $ 4 $ 29 429 3,148 3,610 $ 284 3 110 3,148 3,545 $ 82 Highway Users Gas Tax $ 1,076 $ 1,614 121 48 2,859 $ 675 42 54 771 Other Special Revenue Fund Development Impact Fees $ 23,199 $ 23,199 $ 115 63 576 754 $ 1,783 $ 1,554 3 1,379 1,440 6,159 $ 829 25 2 1,433 12 1,587 3,888 - 168 22,445 1,661 65 65 3,610 1,920 2,088 2,859 22,445 23,199 396 214 2,271 6,159 $ $ $ 11/17/2005 3:10 PM II-C020. Combining Balance Sheet Non-Major Govt Fds 05.xls Debt Service Funds Special Assessment Highway Debt Users Service $ 2,784 $ 2,784 $ $ 5 458 2,260 2,723 $ 152 $ 17 169 $ 2 17 19 Streets Construction Capital Project Funds Fire and Police Arena Construction Project Other Construction $ 15,527 $ 7,381 $ 11,997 $ 33 110 15,670 $ 7,381 $ 25 24 98 12,144 $ 722 62 129 913 $ 1,099 137 1,236 Permanent Fund $ 970 $ 4,235 5,205 $ 587 587 $ 1,079 34 152 1,265 Cemetery Perpetual Care $ 4,742 $ 72 4,814 $ 72 72 Total Non-major Governmental Funds $ 69,615 $ 1,655 61 3,556 219 5,723 3,165 83,994 $ 5,395 233 70 2 1,543 66 523 5,105 2,836 15,773 61 150 - - - 98 4,742 29,325 61 2,784 150 169 14,757 14,757 15,670 6,145 6,145 7,381 4,618 4,618 5,205 7,926 2,855 10,879 12,144 4,742 4,814 27,762 11,134 68,221 83,994 $ $ $ $ 83 $ $ $ 11/17/2005 3:10 PM II-C020. Combining Balance Sheet Non-Major Govt Fds 05.xls City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds For the Fiscal Year Ended June 30, 2005 (amounts expressed is thousands) Special Revenue Funds Community Development Block Grants REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Investments Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Long-term debt issued Premium on long-term debt issued Transfers in Transfers out Total other financing sources and uses $ $ 5,866 450 6,316 $ 4,389 4,991 3,480 35 858 13,753 10,445 - 446 51 88 - 668 6,595 75 2,468 433 81 5 271 2,724 28 8 955 11,436 585 127 5,260 6,557 22 1 1,842 12,190 17 4,473 (241) 1,563 637 (3,253) (2,616) 2,700 (2) 2,698 578 (5,089) (4,511) 1,857 2,457 (2,948) 17 $ 15,909 15,909 Other Special Revenue Fund Development Impact Fees 2,453 - - Excess (deficiency) of revenues and other sources over Net change in fund balances Fund balances, July 1 Fund balances, June 30 2,567 174 2,741 Highway Users Gas Tax 48 65 $ 231 2,088 $ 19,988 22,445 $ 5,219 2,271 11/17/2005 3:11 PM II-C030. Comb Stmt of Rev, Exp, and Chgs in Fd Bal Non-Major Govt Fds 05.xls 84 Debt Service Funds Special Assessment Highway Debt Users Service $ $ 39 39 $ 29 29 Streets Construction Capital Projects Funds Fire and Police Arena Construction Project Other Construction $ $ $ 121 336 326 783 - $ Permanent Fund 111 111 60 123 183 Total Non-major Governmental Funds Cemetery Perpetual Care $ 97 97 $ 4,418 5,866 23,648 3,480 1,191 1,358 39,961 2 2 3 9 - 79 120 - 7 20 - 71 317 - - 1,264 6,773 75 2,896 2,886 10,535 9 2,260 958 3,220 34 5 41 6,181 6,193 3,998 4,197 56 83 7,224 7,612 - 2,929 1,099 25,787 54,253 (3,181) (12) (5,410) (4,197) 28 (7,429) 97 (14,292) 3,242 3,242 (8) (8) (24) (24) 6,466 124 (32) 6,558 - 5,494 106 (5) 5,595 - 14,660 230 4,457 (8,413) 10,934 61 (20) (5,434) 28 (1,834) 97 (3,358) 61 $ 170 150 $ 20,191 14,757 2,361 $ 3,784 6,145 $ 4,590 4,618 $ 12,713 10,879 $ 4,645 4,742 $ 71,579 68,221 11/17/2005 3:11 PM II-C030. Comb Stmt of Rev, Exp, and Chgs in Fd Bal Non-Major Govt Fds 05.xls 85 City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Actual Amounts (budgetary basis) Final 112 $ 112 $ 55 Variance with Final Budget Positive (Negative) $ (57) RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation 5,546 45 5,591 5,703 5,546 45 5,591 5,703 2,572 174 2,746 2,801 (2,974) 129 (2,845) (2,902) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital outlay Total charges to appropriations 5,618 85 5,703 5,307 311 5,618 2,459 271 2,730 2,848 40 2,888 Budgetary fund balance, June 30, 2005 $ - $ 85 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. Change in intergovernmental revenue due to receivable for reimbursement of payroll accrual. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 86 71 $ (14) $ 2,801 (5) (55) $ 2,741 $ 2,730 (6) $ 2,724 11/17/2005 3:11 PM II-C040. Community Development Block Grants Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Intergovernmental Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Street maintenance Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 Actual Amounts (budgetary basis) Final 205 $ 205 $ 308 Variance with Final Budget Positive (Negative) $ 103 15,382 15,382 637 (3,280) 12,944 15,395 15,395 637 (3,280) 12,957 15,909 15,909 637 (3,253) 13,601 11,557 1,350 11,570 1,350 10,420 955 1,150 395 28 9 12,944 28 9 12,957 28 8 11,411 1 1,546 $ - $ - $ 2,190 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Less: Transfers in. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 87 514 514 27 644 $ 2,190 $ 13,601 (308) (637) 3,253 $ 15,909 $ 11,411 25 $ 11,436 11/17/2005 3:12 PM II-C045. Highway Users Gas Tax Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Final 17,996 $ 17,996 Actual Amounts (budgetary basis) $ 19,988 Variance with Final Budget Positive (Negative) $ 1,992 RESOURCES (INFLOWS): Licenses and permits Investments Total revenues Less: Transfers out Amounts available for appropriation 7,608 491 8,099 26,095 7,608 491 8,099 26,095 5,866 450 6,316 (2) 26,302 (1,742) (41) (1,783) (2) 207 CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Community services Capital outlay Principal retirement Interest expense Total charges to appropriations 53 2,067 7,878 15,394 576 127 26,095 329 2,078 7,878 13,995 576 127 24,983 446 50 88 2,560 585 127 3,856 (117) 2,028 7,790 11,435 (9) 21,127 Budgetary fund balance, June 30, 2005 $ - $ 1,112 $ 22,446 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Capital outlay. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 88 $ 21,334 $ 26,302 (19,988) 2 $ 6,316 $ 3,857 2,700 $ 6,557 11/17/2005 3:13 PM II-C050. Development Impact Fees Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Capital lease proceeds Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ 6,747 Final $ 6,747 Actual Amounts (budgetary basis) $ 5,309 Variance with Final Budget Positive (Negative) $ (1,438) 4,088 8,621 2,432 66 2,890 22 18,119 845 (6,536) 19,175 4,088 8,621 2,432 66 2,890 22 18,119 845 (6,536) 19,175 4,389 4,991 3,480 35 858 13,753 578 (5,089) 14,551 301 (3,630) 1,048 (31) (2,032) (22) (4,366) (267) 1,447 (4,624) 698 8,896 1,067 5,863 374 200 1,447 701 9,572 594 5,273 508 180 200 1,444 668 6,607 75 2,461 428 81 5 1,842 33 2,965 519 2,812 80 99 (5) 200 (398) 22 1 18,568 22 1 18,495 22 1 12,190 6,305 607 $ 680 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Less: Transfers in. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Change in compensated absences liability. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 89 2,361 $ 1,681 $ 14,551 (5,309) (578) 5,089 $ 13,753 $ 12,190 (8) 8 $ 12,190 11/17/2005 3:14 PM II-C060. Other Special Rev Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Investments Taxes Total inflows Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ Actual Amounts (budgetary basis) Final 8,481 $ 8,481 $ 8,559 Variance with Final Budget Positive (Negative) $ 78 15,940 15,940 60 24,481 15,940 15,940 60 24,481 115 16,002 16,117 24,676 - - 13 (13) 11,298 5,996 17,294 11,298 5,996 17,294 10,508 6,122 16,643 790 (126) 651 7,187 $ 7,187 $ 8,033 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 90 115 62 177 195 $ 846 $ 24,676 (8,559) $ 16,117 $ 16,643 $ 16,643 11/17/2005 3:15 PM II-C070. General Obligation Debt Svc Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Special Assessment Debt Service Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Special assessments Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ Actual Amounts (budgetary basis) Final 587 $ 587 $ 170 Variance with Final Budget Positive (Negative) $ 587 587 - 2 2 - 34 5 39 34 5 41 34 5 41 - 548 $ 546 29 29 (8) 191 (417) $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 91 150 29 29 (8) (396) $ (396) $ 191 (170) 8 $ 29 $ 41 $ 41 11/17/2005 3:16 PM II-C080. Special Assessment Debt Svc Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Investments Total Revenues Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 Actual Amounts (budgetary basis) Final - $ - $ - Variance with Final Budget Positive (Negative) $ - 3,280 3,280 3,280 3,280 39 39 3,242 3,281 (39) (39) (38) (77) - - 2 (2) 2,205 1,075 3,280 2,205 1,075 3,280 2,260 958 3,220 (55) 117 60 $ - $ - $ 61 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Less: Transfers in. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 92 $ $ 61 3,281 (3,242) $ 39 $ 3,220 $ 3,220 11/17/2005 3:16 PM II-C085. Highway User Debt Svc Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Investments Proceeds from equipment disposal Total revenues Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ Actual Amounts (budgetary basis) Final 4,675 $ 4,675 $ 5,603 Variance with Final Budget Positive (Negative) $ 928 35 35 8,290 13,000 35 35 8,290 13,000 55 89 144 6,842 12,589 20 89 109 (1,448) (411) - - 32 (32) 1,885 9,017 10,902 1,885 9,181 11,066 1,885 9,017 10,934 2,098 $ 1,934 $ 1,655 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Less: Transfers in. Less: Proceeds from equipment disposal Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 93 164 132 $ $ (279) 12,589 (5,603) (6,842) (89) $ 55 $ 10,934 $ 10,934 11/17/2005 3:17 PM II-C090. Municipal Prop Corp Debt Svc Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Arena Construction Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ 8,684 Final $ 8,684 Actual Amounts (budgetary basis) $ 4,590 RESOURCES (INFLOWS): Investments Total revenues Amounts available for appropriation 100 100 8,784 100 100 8,784 111 111 4,701 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Public safety Capital outlay Total charges to appropriations 250 707 26 6,809 7,792 250 707 26 60 1,043 20 7 56 83 Budgetary fund balance, June 30, 2005 $ 992 $ 7,741 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 94 4,618 Variance with Final Budget Positive (Negative) $ (4,094) 11 11 (4,083) 250 687 19 4 960 $ (3,123) $ 4,701 (4,590) $ 111 $ 83 $ 83 11/17/2005 3:17 PM II-C100. Arena Construction Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Final 20,712 $ 20,712 Actual Amounts (budgetary basis) $ 20,191 RESOURCES (INFLOWS): Intergovernmental Investments Miscellaneous Total revenues Less: Transfers out Amounts available for appropriation 415 415 21,127 415 415 21,127 121 336 326 783 (24) 20,950 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Contingencies Community services Street maintenance Capital outlay Total charges to appropriations 9 2,490 160 18,468 21,127 9 2,316 160 18,131 20,616 3 9 6,181 6,193 Budgetary fund balance, June 30, 2005 $ - $ 511 $ 14,757 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 95 Variance with Final Budget Positive (Negative) $ (521) 121 (79) 326 368 (24) (177) 9 2,313 151 11,950 14,423 $ 14,246 $ 20,950 (20,191) 24 $ 783 $ 6,193 $ 6,193 11/17/2005 3:17 PM II-C110. Streets Construction Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Final 3,671 $ 3,671 Actual Amounts (budgetary basis) $ 3,784 RESOURCES (INFLOWS): Investments Long-term debt issued Total revenues Less: Transfers out Amounts available for appropriation 73 5,904 5,977 9,648 73 5,904 5,977 9,648 6,590 6,590 (32) 10,342 CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Capital outlay Total charges to appropriations 9,647 9,647 398 8,808 9,206 79 120 3,998 4,197 Budgetary fund balance, June 30, 2005 $ 1 $ 442 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Long-term debt issued. Add: Transfers out. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 96 6,145 Variance with Final Budget Positive (Negative) $ 113 (73) 686 613 (32) 694 319 (120) 4,810 5,009 $ 5,703 $ 10,342 (6,590) 32 (3,784) $ - $ 4,197 $ 4,197 11/17/2005 3:18 PM II-C120. Fire and Police Construction Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Final 31,583 $ 31,583 Actual Amounts (budgetary basis) $ 30,090 Variance with Final Budget Positive (Negative) $ (1,493) RESOURCES (INFLOWS): Intergovernmental Investments Total revenues Less: Transfers out Amounts available for appropriation 632 632 32,215 632 632 32,215 7 558 565 (199) 30,456 7 (74) (67) (199) (1,759) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Capital outlay Total charges to appropriations 1,139 31,076 32,215 1,139 29,050 30,189 10 5,535 5,545 1,129 23,515 24,644 Budgetary fund balance, June 30, 2005 $ - $ 2,026 $ 24,911 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Add: Transfers out. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Noncash exchange for capital outlay. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 97 $ 22,885 $ 30,456 (30,090) 199 $ 565 $ 5,545 234 $ 5,779 11/17/2005 3:18 PM II-C130. Parks Bond Construction Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Final 15,168 $ 15,168 Actual Amounts (budgetary basis) $ 12,615 Variance with Final Budget Positive (Negative) $ (2,553) RESOURCES (INFLOWS): Intergovernmental Investments Long-term debt issued Total revenues Less: Transfers out Amounts available for appropriation 13,698 293 4,979 18,970 34,138 13,698 293 4,979 18,970 34,138 60 123 5,600 5,783 (5) 18,393 (13,638) (170) 621 (13,187) (5) (15,745) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Community services Capital outlay Total charges to appropriations 1,970 5,603 26,565 34,138 1,068 5,603 25,886 32,557 71 317 7,224 7,612 997 5,286 18,662 24,945 Budgetary fund balance, June 30, 2005 $ - $ 1,581 $ 10,781 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Add: Transfers out. Long-term debt issued. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 98 $ 9,200 $ 18,393 (12,615) 5 (5,600) $ 183 $ 7,612 $ 7,612 11/17/2005 3:19 PM II-C140. Other Construction Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Permanent Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ Actual Amounts (budgetary basis) Final 4,647 $ 4,647 $ 4,645 Variance with Final Budget Positive (Negative) $ (2) RESOURCES (INFLOWS): Investments Total revenues Amounts available for appropriation 79 79 4,726 79 79 4,726 97 97 4,742 18 18 16 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public Works Total charges to appropriations 4,726 4,726 4,726 4,726 - 4,726 4,726 Budgetary fund balance, June 30, 2005 $ - $ - $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. 99 4,742 $ 4,742 $ 4,742 (4,645) $ 97 11/17/2005 3:19 PM II-C150. Cemetery Perpetual Care Perm Fd 05.xls City of Glendale, Arizona Combining Statement of Net Assets Non-Major Proprietary Funds - Business-type Activities June 30, 2005 (amounts expressed in thousands) Sanitation ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Intergovernmental receivable Inventories and prepaid items Total current assets $ 2,220 Housing $ 1,676 (25) 3,871 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Total noncurrent assets Total assets 664 Total $ 1 300 5 970 6 1,677 (25) 300 5 4,841 13 8,416 (5,282) 3,134 3,140 7,011 11,044 (5,315) 5,729 5,742 6,712 2,884 19 19,460 (10,597) 8,863 8,882 13,723 LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Due to other funds Intergovernmental payable Deposits Unearned rent Current portion of long-term debt: Capital lease payable Interest payable Total current liabilities 241 219 19 72 - 34 14 43 70 36 3 241 34 233 43 89 108 3 771 15 1,337 200 771 15 1,537 Noncurrent liabilities: Compensated absences Other long-term debt Capital lease obligations Total noncurrent liabilities Total liabilities 88 1,042 1,130 2,467 123 13 136 336 211 13 1,042 1,266 2,803 1,322 5,729 7,051 3,222 4,544 647 6,376 647 3,222 10,920 NET ASSETS Invested in capital assets, net of related debt Restricted for: Other purposes Unrestricted Total net assets $ 100 $ $ 11/17/2005 3:20 PM II-C160. Comb Stmt of Net Assets - Non-Major Prop Fds 05.xls City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Non-Major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Business-type Activities Enterprise Funds Sanitation Operating revenues: Intergovernmental Container service Curb service Other fees Total operating revenues $ Operating expenses: Housing Sanitation Depreciation Total operating expenses Operating income (loss) $ 11,240 847 12,087 1,423 Nonoperating revenues (expenses): Impact fees Investments Interest expense Loss on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 1,477 Transfers in - Change in net assets 1,477 $ 3,067 4,544 8,027 542 8,569 Total $ 8,914 358 9,272 (703) 113 33 (83) (9) 54 Income before contributions and transfers Total net assets - beginning Total net assets - ending 4,445 9,057 8 13,510 Housing 8,914 11,240 1,205 21,359 720 203 203 113 33 (83) (9) 203 257 (500) 977 350 350 (150) $ 8,027 4,445 9,057 550 22,079 6,526 6,376 1,327 $ 9,593 10,920 11/17/2005 3:20 PM II-C170. Comb Stmt of Rev, Exp, and Chgs in Fd Net Assets Non-Major Prop Fds 05.xls 101 City of Glendale, Arizona Combining Statement of Cash Flows Non-Major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Housing Sanitation Cash flows from operating activities: Cash received from customers Cash received from federal government Cash paid to suppliers: Internal city departments External vendors Cash paid to employees for services Net cash provided by (used in) operating activities $ 13,442 - $ (1,029) (3,323) (6,748) 2,342 Cash flows from noncapital financing activities: Proceeds from sale of investments Transfers in Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Capital grant proceeds Net cash used for capital and related financing activities Total 544 8,195 $ 13,986 8,195 (8,928) 43 (146) (1,029) (12,251) (6,705) 2,196 - (30) 350 (30) 350 - 320 320 (1,191) (406) 113 (88) - (209) 203 (1,191) (615) 113 (88) 203 (1,572) (6) (1,578) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 33 33 - 33 33 Net increase (decrease) in cash and cash equivalents during fiscal year 803 168 971 Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 102 1,423 2,226 $ 509 677 $ 1,932 2,903 12/1/2005 7:56 AM II-C180. Comb Stmt of Cash Flows - Non-Major Prop Fds 05.xls Sanitation Reconciliation of operating loss to net cash provided by (used by) operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Depreciation Changes in assets and liabilities: Accounts receivable Intergovernmental receivable Vouchers payable Accrued expenses Intergovernmental payable Deposits Due to other funds Compensated absences Net cash provided by (used in) operating activities Reconciliation of statement of net assets cash and investments to the statement of cash flows: Per combined statement of net assets: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents $ $ $ $ 103 1,423 Housing $ (703) Total $ 720 847 358 1,205 (74) 116 (3) 4 29 2,342 (1) 147 (14) 21 3 (14) 57 (146) (75) 147 102 (3) 21 7 (14) 86 2,196 2,220 6 2,226 $ $ $ 664 13 677 $ $ $ 2,884 19 2,903 12/1/2005 7:56 AM II-C180. Comb Stmt of Cash Flows - Non-Major Prop Fds 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Intergovernmental Charges for services: Metered water sales Sewer service charges Impact fees Other fees Investments Miscellaneous Proceeds from bonds sold Proceeds from equipment disposal Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Water Sewer Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ 114,383 Actual Amounts (budgetary basis) Final $ 114,383 $ 83,686 Variance with Final Budget Positive (Negative) $ 90 90 29,924 21,037 7,593 609 49,600 108,853 223,236 29,924 21,037 7,593 609 49,600 108,853 223,236 25,999 19,753 7,386 1,134 1,592 343 9 56,255 (186) 139,755 (3,925) (1,284) (207) 1,134 983 343 (49,600) 9 (52,598) (186) (83,481) 8,970 16,121 10,565 2,000 128,246 8,963 27,987 11,565 484 116,903 8,608 14,186 9,401 42,339 355 13,801 2,164 484 74,564 7,282 6,956 180,140 7,282 6,956 180,140 7,290 6,681 88,505 (8) 275 91,635 43,096 $ 43,096 39 (30,697) $ 51,250 (51) $ 8,154 (Continued) 104 11/17/2005 3:22 PM II-C190. Water and Sewer Fd 05.xls/II-D170 City of Glendale Budgetary Comparison Schedule (continued) Water and Sewer Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) 2 of 2 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Capital outlay contributed by developers Interest earned on restricted assets not available for appropriation. Proceeds from equipment disposals. Proceeds from disposal of capital assets. Internal staff and administrative charges reported as revenue only on budgetary basis. Add: Transfers out. Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Amortization of capitalized bond issuance expense. Capital outlay expenditure. Change in compensated absences liability. Change in prepaid assets or inventory. Amortization and depreciation expense. Principal payments on long-term obligations. Interest expense. Internal staff and administrative charges reported as revenue only on budgetary basis. Change in accrued payroll. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets, excluding loss from joint venture and disposal of assets. 105 $ 139,755 (83,686) 17 (9) 1 (120) 186 $ 56,144 $ 88,505 (39) (42,339) (7) (14) 10,066 (7,290) (767) (120) 46 $ 48,041 11/17/2005 3:22 PM II-C190. Water and Sewer Fd 05.xls/II-D170 City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Charges for services: Landfill user fees Recycling fees Other fees Proceeds from equipment disposal Investments Impact fees Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contingencies Landfill Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ 19,937 Final $ 19,937 Actual Amounts (budgetary basis) $ 20,783 Variance with Final Budget Positive (Negative) $ 846 7,277 1,432 8 302 206 9,225 29,162 7,277 1,432 8 302 206 9,225 29,162 6,103 2,955 106 4 398 167 9,733 30,516 2,000 6,464 56 6,464 56 5,918 45 546 11 1,625 366 10,511 7,094 366 13,980 7,260 363 13,586 (166) 3 394 18,651 $ 15,182 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Internal staff and administrative charges reported as revenue only on budgetary basis. Proceeds from disposal of capital assets. Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets, excluding gain on disposal of assets. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Capital outlay expenditures. Change in compensated absences liability. Change in estimated landfill post-closure liability. Depreciation expense. Principal payments on long-term obligations. Interest expense. Accrued payroll. Internal staff and administrative charges reported as revenue only on budgetary basis. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets. 106 16,930 (1,174) 1,523 98 4 96 (39) 508 1,354 $ 1,748 $ 30,516 (20,783) (372) (4) $ 9,357 $ 13,586 (45) (1) 409 1,125 (7,260) (76) 8 (370) $ 7,376 11/17/2005 3:22 PM II-C200. Landfill Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Impact fees Recycle sales Investments Proceeds from equipment disposal Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Sanitation Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2005 $ 1,358 Actual Amounts (budgetary basis) Final $ 1,358 $ 3,054 Variance with Final Budget Positive (Negative) $ 1,696 4,562 8,246 99 17 12,924 14,282 4,561 8,581 99 17 13,258 14,616 4,445 9,090 113 10 33 5 13,696 16,750 (116) 509 14 10 16 5 438 2,134 12,026 935 12,026 1,292 11,228 411 798 881 1,118 110 14,189 1,118 110 14,546 1,162 88 12,889 (44) 22 1,657 93 $ 70 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Proceeds from disposal of capital assets. Internal staff and administrative charges reported as revenue only on budgetary basis. Total revenues as reported on the combining statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds, excluding gain on disposal of goods. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Depreciation expense. Interest expense. Change in compensated absences liability. Accrued payroll. Internal staff and administrative charges reported as revenue only on budgetary basis. Principal payments on long-term obligations. Capital outlay. Loss on disposal of assets. Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds. 107 3,861 $ 3,791 $ 16,750 (3,054) (5) (35) $ 13,656 $ 12,889 847 (5) 29 17 (33) (1,162) (411) 8 $ 12,179 12/1/2005 8:02 AM II-C210 Sanitation Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ 799 Final $ 799 Actual Amounts (budgetary basis) $ 576 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Add: Transfers in Amounts available for appropriation 7,697 7,697 350 8,846 7,697 7,697 350 8,846 8,230 542 8,772 350 9,698 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations 8,177 531 8,708 8,177 531 8,708 8,857 9 8,866 Budgetary fund balance, June 30, 2005 $ 138 $ 138 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Less: Transfers in. Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Change in compensated absences liability. Accrued payroll. Depreciation expense. Capital outlay. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds. 108 832 Variance with Final Budget Positive (Negative) $ (223) 533 542 1,075 852 (680) 522 (158) $ 694 $ 9,698 (576) (350) $ 8,772 $ 8,866 57 358 (9) $ 9,272 11/17/2005 3:23 PM II-C220. Housing Fd 05.xls City of Glendale, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2005 (amounts expressed in thousands) Risk Management ASSETS Current assets: Equity in pooled cash and investments Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments 3,397 247 3,644 Workers' Compensation $ 4,427 4,427 Employee Benefits $ 6,632 6,632 Total $ 14,456 247 14,703 - 150 15 165 3,644 4,577 6,647 14,868 LIABILITIES Current liabilities: Vouchers payable Estimated claims payable Total current liabilities 507 1,705 2,212 38 1,076 1,114 759 2,475 3,234 1,304 5,256 6,560 Noncurrent liabilities: Deferred revenue Estimated claims payable Total noncurrent liabilities Total liabilities 1,255 1,255 3,467 1,171 1,171 2,285 49 49 3,283 49 2,426 2,475 9,035 177 2,292 3,364 5,833 Total assets NET ASSETS Unrestricted Total net assets $ 177 $ 109 2,292 $ 3,364 $ 5,833 11/17/2005 3:24 PM II-C230. Comb Stmt of Net Assets - Internal Svc Fds 05.xls City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Internal Service Funds For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Risk Management Operating revenues: Self-insurance premiums $ Operating expenses: Insurance claims and premiums $ 3,654 Operating income (loss) Change in net assets $ $ 14,763 Total $ 14,101 18,197 19,303 (415) 662 93 117 275 (1,288) (322) 779 (831) (1,288) (322) 779 (831) 65 Income (loss) before transfers 1,133 Employee Benefits 1,548 (1,353) Nonoperating revenues: Investments Net assets - beginning Net assets - ending 2,301 Workers' Compensation 1,465 177 110 $ 2,614 2,292 $ 2,585 3,364 (1,106) $ 6,664 5,833 11/17/2005 3:24 PM II-C240. Comb Stmt of Rev, Exp, and Chgs in Fd Net Assets -Internal Svc Fds 05.xls City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Cash flows from operating activities: Cash received from customers Cash paid for insurance and in settlement of claims Risk Management Workers' Compensation $ $ Net cash provided by (used for) operating activities Cash flows from investing activities: Interest received Net increase (decrease) in cash during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 Reconciliation of operating income to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Change in accounts receivable Change in inventories and prepaid items Change in vouchers payable Change in claims payable Change in deferred revenue Net cash provided by (used for) operating activities Reconciliation of statement of net assets cash and investments to the statement of cash flows: Per combined statement of net assets: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents 2,301 (2,806) (1,476) (505) (343) 65 94 (440) (249) $ 3,837 3,397 $ $ (1,353) $ $ $ $ 1,133 4,826 4,577 (415) - - 14 442 392 - 19 53 - (505) 3,397 3,397 111 $ $ $ (343) 4,427 150 4,577 Employee Benefits $ 14,803 Total $ (12,996) 18,237 (17,278) 1,807 959 117 276 1,924 1,235 $ 4,723 6,647 $ 13,386 14,621 $ 662 $ (1,106) 47 47 708 397 (7) 14 1,169 842 (7) $ 1,807 $ 959 $ 6,632 15 6,647 $ 14,456 165 14,621 $ $ 12/1/2005 8:09 AM II-C250. Comb Stmt of Cash Flows - Internal Svc Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ 1,056 Final $ 1,056 Actual Amounts (budgetary basis) $ 3,773 Variance with Final Budget Positive (Negative) $ 2,717 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Transfers in Amounts available for appropriation 2,301 18 2,319 3,375 2,301 18 2,319 3,375 2,301 65 2,366 6,139 47 47 2,764 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 2,250 2,250 3,250 3,250 3,248 3,248 2 2 Budgetary fund balance, June 30, 2005 $ 1,125 $ 125 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expense Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the combining statement of revenues, expenses, and changes in fund net assets. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Change in estimated claims payable. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets. 112 2,891 $ 2,766 $ 6,139 (3,773) $ 2,366 $ 3,248 406 $ 3,654 11/17/2005 3:25 PM II-C260. Risk Mgmt Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ 7,311 Final $ 7,311 Actual Amounts (budgetary basis) $ 4,709 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 1,133 123 1,256 8,567 1,133 123 1,256 8,567 1,133 93 1,226 5,935 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 1,407 1,407 1,427 1,427 1,427 1,427 Budgetary fund balance, June 30, 2005 $ 7,160 $ 7,140 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Change in estimated claims payable. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets. 113 4,508 Variance with Final Budget Positive (Negative) $ (2,602) (30) (30) (2,632) $ (2,632) $ 5,935 (4,709) $ 1,226 $ 1,427 121 $ 1,548 11/17/2005 3:25 PM II-C270. Workers Comp Fd 05.xls City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2005 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2004 $ 2,909 Final $ 2,909 Actual Amounts (budgetary basis) $ 4,720 Variance with Final Budget Positive (Negative) $ 1,811 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 13,128 76 13,204 16,113 13,129 76 13,205 16,114 14,756 117 14,873 19,593 1,627 41 1,668 3,479 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 13,356 13,356 13,731 13,731 13,705 13,705 26 26 Budgetary fund balance, June 30, 2005 $ 2,757 $ 2,383 $ 5,888 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Miscellaneous. Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Change in estimated claims payable liability. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets. 114 $ 3,505 $ 19,593 (4,720) 7 $ 14,880 $ 13,705 396 $ 14,101 11/17/2005 3:26 PM II-C280. Employee Benefits Fd 05.xls City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2005 (rounded to nearest dollar) 1 of 4 The following is the schedule of Federal Financial Data as required by the United States Department of Housing and Urban Development under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H. Line Item No. 111 100 115 121 122 125 126 126.1 126.2 120 132 143 143.1 144 150 161 162 163 164 165 166 167 160 180 190 Low Rent Public Housing Account Description ASSETS: Current assets: Cash: Cash - unrestricted Total cash $ Accounts receivables: Accounts receivable - PHA projects Accounts receivable - HUD other projects Accounts receivable - miscellaneous Accounts receivable - tenants - dwelling rents Allowance for doubtful accounts - dwelling rents Allowance for doubtful accounts - other Total receivables, net of allowances for doubtful accounts Current investments Investments - restricted Inventories Allowance for obsolete inventories Interprogram - due from Total current assets Non-current assets Fixed assets: Land Buildings Furniture, equipment & machinery - dwellings Furniture, equipment & machinery - administration Leasehold improvements Accumulated depreciation Construction in progress Total fixed assets, net of accumulated depreciation Total non-current assets Total assets Public and Indian Housing Drug Elimination Program $ 392,998 392,998 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 271,328 271,328 $ Total - $ 664,326 664,326 448 448 - - - 181,966 114,016 295,982 4,039 4,039 181,966 118,055 448 300,469 5,012 252,947 651,405 - - - 13,037 580,347 4,039 13,037 5,012 252,947 1,235,791 - - - 149,998 127,767 (142,437) 135,328 135,328 715,675 135,533 7,713,149 362,029 116,900 1,860,800 (5,150,930) 5,037,481 5,037,481 5,688,886 $ - $ $ $ $ 29,955 22,232 (22,159) 525,855 555,883 555,883 559,922 $ 135,533 7,863,147 391,984 266,899 1,860,800 (5,315,526) 525,855 5,728,692 5,728,692 6,964,483 (continued) 11/17/2005 3:29 PM II-D240. Federal Financial Data Schedule 05.xls City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2005 (rounded to nearest dollar) Line Item No. 312 322 332 333 341 342 347 310 2 of 4 (continued) Low Rent Public Housing Account Description LIABILITIES AND EQUITY/NET ASSETS LIABILITIES: Current liabilities Accounts payable <= 90 days Accrued compensated absences - current portion Accounts payable - PHA projects Accounts payable - other government Tenant security deposits Deferred revenues Interprogram - due to Total current liabilities Public and Indian Housing Drug Elimination Program $ 51,833 6,545 67,278 35,581 3,004 164,241 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 25,421 7,090 3,001 248,908 284,420 $ 4,039 4,039 Total $ 77,254 13,635 3,001 67,278 35,581 3,004 252,947 452,700 116 353 354 350 300 Noncurrent liabilities Noncurrent liabilities- other Accrued compensated absences - noncurrent Total noncurrent liabilities Total liabilities 58,904 58,904 223,145 - - - 63,813 13,037 76,850 361,270 4,039 63,813 71,941 135,754 588,454 508 508.1 511 511.1 512.1 513 600 EQUITY/NET ASSETS: Total contributed capital Invested in capital assets, net of related debt Total reserved fund balance Restricted net assets Unrestricted net assets Total equity/net assets Total liabilities and equity/net assets 5,037,481 428,260 5,465,741 5,688,886 - - - 135,328 219,077 354,405 715,675 555,883 555,883 559,922 5,728,692 647,337 6,376,029 6,964,483 $ $ $ $ $ $ $ (continued) 11/17/2005 3:29 PM II-D240. Federal Financial Data Schedule 05.xls City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2005 (rounded to nearest dollar) Line Item No. 703 704 705 706 706.1 715 720 700 117 911 912 914 915 916 924 931 932 933 938 941 942 943 945 952 961 962 963 964 969 970 973 974 900 1001 1002 1004 1010 1000 3 of 4 (continued) Low Rent Public Housing Account Description REVENUE: Net tenant rental revenue Tenant revenue - other Total tenant revenue $ HUD PHA operating grants Capital grants Other revenue Investment income - restricted Total revenue EXPENDITURES: Administrative salaries Auditing fees Compensated absences Employee benefit contributions - administrative Other operating - administrative Tenant services - other Water Electricity Gas Other utilities expense Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials & other Ordinary maintenance and operations - contract costs Employee benefit contributions - ordinary maintenance Protective services - other contract costs Insurance premiums Other general expenses Payments in lieu of taxes Bad debt - tenant rents Total operating expenditures Excess operating revenue over expenditures Housing assistance payments Depreciation expense Total expenditures OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out Operating transfers from/to component unit Total other financing sources (uses) Excess (deficiency) of total revenues over (under) total expenditures Public and Indian Housing Drug Elimination Program $ 259,426 11,472 270,898 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ - $ Total - $ 259,426 11,472 270,898 375,670 26,552 673,120 - - 80,208 80,208 7,489,285 244,857 7,734,142 81,422 203,427 284,849 8,026,585 203,427 271,409 8,772,319 370,723 27,296 98,184 61,516 7,925 41,645 14,280 1,043 22,431 198,650 55,925 87,696 54,282 10,704 17,982 1,070,282 (397,162) - - 80,208 80,208 - 487,840 29,571 128,872 77,621 9,626 5,629 47,617 786,776 6,947,366 48,140 915 49,055 235,794 858,563 56,867 227,056 187,277 88,133 41,645 14,280 1,043 22,431 198,650 66,466 87,696 54,282 16,333 47,617 17,982 1,986,321 6,785,998 337,669 1,407,951 - - 80,208 6,927,187 9,276 7,723,239 11,176 60,231 6,927,187 358,121 9,271,629 32,367 350,000 382,367 - - - - (352,464) $ - $ - $ - $ 10,903 (32,367) (32,367) $ 192,251 32,367 (32,367) 350,000 350,000 $ (149,310) (continued) 11/17/2005 3:29 PM II-D240. Federal Financial Data Schedule 05.xls City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2005 (rounded to nearest dollar) Line Item No. 1102 1103 1104 1113 1114 1115 1116 1120 1121 4 of 4 (continued) Low Rent Public Housing Account Description MEMO ACCOUNT INFORMATION Debt principal payments - enterprise funds Beginning equity Total prior period adjustments, equity transfers and correction of errors Maximum annual contributions commitment (per ACC) Prorata maximum annual contributions applicable to a period of less than twelve months Contingency reserve, ACC program reserve Total annual contributions available Unit months available Number of unit months leased Public and Indian Housing Drug Elimination Program $ 5,781,051 37,154 1,838 1,836 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program 37,154 (37,154) - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 343,502 6,866,755 4,526,718 11,393,473 12,648 12,197 $ Total 363,632 - $ 6,525,339 6,866,755 4,526,718 11,393,473 14,486 14,033 118 11/17/2005 3:29 PM II-D240. Federal Financial Data Schedule 05.xls City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2005 This page left blank intentionally. STATISTICAL SECTION This part of the City of Glendale’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city’s overall financial health. Contents Pages Financial Trends These schedules contain trend information to help the reader understand how the city’s financial performance and well-being have changed over time. 120-127 Revenue Capacity These schedules contain information to help the reader assess the city’s local revenue source, the property tax. 128-131 Debt Capacity 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. 132-139 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the city’s financial activities take place. 140-141 Operating Information 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. 142-146 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented GASB Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 119 City of Glendale, Arizona Net Assets by Component Last Four Fiscal Years (amounts expressed in thousands) Schedule 1 2005 Government activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets 2004 2003 2002* $ 372,778 179,434 40,641 $ 353,135 169,434 49,916 $ 259,802 127,393 132,801 $ 31,260 91,203 9,232 $ 592,853 $ 572,485 $ 519,996 $ 131,695 274,620 11,249 108,604 $ 394,473 228,252 10,479 141,094 $ 647,398 190,683 149,245 $ 987,326 379,825 275,204 10,235 82,564 $ 581,387 179,913 191,010 $ 952,310 368,003 269,007 20,092 64,312 $ 535,006 137,628 215,365 $ 887,999 353,411 300,267 111,295 73,544 $ 485,106 * First year of GASB 34 reporting requirements implemented by the City. 12/2/2005 2:14 PM 05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-010. Schedule 1 Net Assets by Component.xls 120 This page left blank intentionally. 121 City of Glendale, Arizona Changes in Net Assets Last Four Fiscal Years (amounts expressed in thousands) 2005 Expenses Governmental activities: General government Public safety Public works Community services Community environment Street maintenance Other Interest on long-term debt Total governmental activities expenses Business-type activities: Water and sewer Landfill Sanitation Housing Total business-type activities expenses Total primary government expenses Program revenues Governmental activities: Charges for services: General government Public safety Public works Community services Community environment Street maintenance Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services: Water and sewer Landfill Sanitation Housing Other activities 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 $ $ $ 31,603 64,277 14,309 37,394 3,236 21,355 238 16,986 189,398 50,190 7,431 12,287 9,278 79,186 268,584 9,075 1,200 506 16,871 26,535 1,407 55,594 2004 $ $ $ 24,003 56,176 13,883 33,914 3,446 20,425 142 15,838 167,827 45,628 7,164 12,294 8,858 73,944 241,771 9,092 1,043 148 16,942 3 24,503 3,429 55,160 2003 $ $ $ 20,209 52,625 11,411 32,210 3,433 20,308 148 7,223 147,567 43,442 7,784 12,353 8,033 71,612 219,179 10,029 1,897 526 13,439 7 22,522 4,294 52,714 2002* $ $ $ 22,490 53,779 12,766 30,919 3,414 12,534 19 5,864 141,785 39,909 1,189 10,180 7,513 58,791 200,576 4,464 325 479 4,409 25 22,640 2,589 34,931 54,295 8,961 13,624 542 52,456 9,593 12,817 512 52,088 8,644 11,918 494 46,068 9,610 11,808 422 $ 8,027 242 85,691 141,285 $ 7,643 168 83,189 138,349 $ 7,091 520 80,755 133,469 $ 6,592 673 75,173 110,104 $ (133,804) 6,505 (127,299) $ (112,667) 9,245 (103,422) $ (94,853) 9,143 (85,710) $ (106,854) 16,382 (90,472) 11/17/2005 3:41 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-020. Schedule 2 Changes in Net Assets.xls 122 Schedule 2 2005 General revenues and other changes in net assets Governmental activities: Taxes: Property taxes Sales taxes Unrestricted state shared sales tax Unrestricted urban revenue sharing (state shared income tax) Auto in-lieu taxes Franchise fees License fees Impact fees Investment earnings, unrestricted Gain (loss) on disposal of capital assets Miscellaneous Capital contributions Transfers Total governmental activities Business-type activities: Impact fees Investment earnings, unrestricted Gain (loss) on disposal of capital assets Loss on joint venture Miscellaneous Capital contributions Transfers Total business-type activities Total primary government Changes in net assets Governmental activities Business-type activities Total primary government $ $ $ $ 19,422 77,166 20,271 2004 $ 18,321 74,763 18,409 2003 $ 16,739 63,832 17,113 2002* $ 16,459 52,580 16,862 20,115 9,414 2,654 225 275 4,794 (164) 154,172 19,731 8,978 315 9 349 24,614 (333) 165,156 23,288 8,619 (1,602) 445 299 27,042 (67) 155,708 22,822 7,219 3,260 634 4,995 1,397 (345) 289 6,205 (228) 132,149 2,065 202 5,712 164 8,143 162,315 1,115 (1,285) 2,414 333 2,577 167,733 (123) (725) (1,011) 7,241 67 5,449 161,157 3,751 1,215 (168) (1,054) 4,591 228 8,563 140,712 20,368 14,648 35,016 $ $ $ 52,489 11,822 64,311 $ $ $ 60,855 14,592 75,447 $ $ $ 25,295 24,945 50,240 * First year of GASB 34 reporting requirements implemented by the City of Glendale. 11/17/2005 3:41 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-020. Schedule 2 Changes in Net Assets.xls 123 City of Glendale, Arizona Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) Schedule 3 2005 General fund Reserved Unreserved Total general fund All other governmental funds Reserved Unreserved, report in: Special revenue funds Debt service fund Capital projects funds Total all other governmental funds $ 2004 $ $ 9,377 56,661 66,038 $ 39,014 $ 34,867 61,765 135,646 2003 $ $ 9,582 51,080 60,662 $ 41,188 $ 29,807 71,569 142,564 2002 $ $ 17,315 31,727 49,042 $ 33,527 $ 23,553 126,252 183,332 2001 $ $ 17,998 7,119 25,117 $ 28,460 $ 8,596 37,932 74,988 2000 $ $ 13,232 24,716 37,948 $ 19,473 $ 2,585 28,369 50,427 1999 $ $ 13,147 35,460 48,607 $ 16,147 $ 2,410 33,717 52,274 1998 $ $ 5,373 33,043 38,416 $ 13,812 $ 2,375 11,782 27,969 1997 $ $ 4,247 32,183 36,430 $ 12,947 $ 1,724 21,861 36,532 1996 $ $ 2,899 31,121 34,020 $ 2,426 23,860 26,286 $ 7,166 $ 4,464 $ 1,688 16,133 24,987 $ 3,947 19,891 28,302 124 11/17/2005 3:42 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-030. Schedule 3 - Fund balances-governmental funds.xls This page left blank intentionally. 125 City of Glendale, Arizona Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2005 Schedule 4 2004 2003 2002 2001 2000 1999 1998 1997 1996 Revenues Taxes and special assessments Licenses and permits Intergovernmental Local revenues Charges for services Fines and forfeitures Interest Investment income (loss) Special interest programs Miscellaneous Total revenues $ 96,812 15,497 75,691 5,681 3,247 4,762 3,335 $ 93,655 16,667 73,166 4,824 3,169 1,511 2,774 $ 82,458 16,771 73,836 3,313 3,246 (805) 2,834 $ 70,526 10,663 68,479 2,516 2,859 2,572 2,729 $ 60,911 9,897 72,216 6,417 5,347 2,381 8,303 3,687 $ 57,681 8,280 70,269 11,020 4,862 2,413 4,533 1,905 $ 54,355 7,902 66,609 10,904 4,737 2,951 5,017 1,770 $ 51,253 9,197 61,845 12,355 4,735 2,646 5,185 1,971 $ 47,892 6,691 55,558 23,130 3,813 2,701 4,556 2,943 $ 44,313 5,739 48,219 15,941 2,963 2,029 3,706 66 397 1,756 126 205,025 195,766 181,653 160,344 169,159 160,963 154,245 149,187 147,284 125,129 20,892 61,366 12,081 32,627 3,082 10,534 55 47,283 17,274 53,805 12,816 30,006 3,311 9,811 555 120,833 20,321 49,571 10,118 28,391 3,282 9,994 80 142,213 20,064 49,126 11,364 27,502 3,223 11,493 71 38,636 21,583 43,741 12,688 22,832 2,379 10,320 6,201 475 37,029 17,122 41,155 11,884 21,332 2,052 9,541 5,645 458 42,178 15,340 37,912 10,457 18,514 2,508 9,516 5,312 21 42,363 14,666 36,847 9,797 16,697 2,991 9,109 5,064 88 40 37,130 13,287 34,318 9,114 15,521 1,883 8,600 4,887 150 316 41,520 11,449 30,005 7,858 13,917 1,615 7,676 4,763 241 31,094 18,899 17,231 224,050 18,090 15,998 282,499 21,680 8,155 293,805 20,574 5,925 187,978 16,501 6,605 180,354 27,574 5,422 184,363 14,359 6,180 162,482 12,897 6,308 151,634 11,426 6,905 147,927 13,454 7,106 129,178 (19,025) (86,733) (112,152) (27,634) (11,195) (23,400) Expenditures General government Public safety Public works Community services Community environment Street maintenance Community housing Miscellaneous Contingencies Capital outlay Debt service: Principal Interest Total expenditures Excess of revenues over (under) expenditures (8,237) (2,447) (643) (4,049) 11/17/2005 3:43 PM N:\FINANCE\05_Audit\CAFR05\III. Statistical Section\GSB Stmt 44 New Statistical Tables\III-040. Schedule 4 - Changes in Fund Balances-Governmental Funds.xls 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Other financing sources (uses) Discount on long-term debt Proceeds from loans Long-term debt issued Premium on long-term debt issued Proceeds from equipment disposal Capital lease proceeds Payment to refunded bonds escrow agent Bond issuance cost Transfers in Transfers out Total other financing sources (uses) 127 Net change in fund balances Debt service as a percentage of noncapital expenditures $ 16,075 230 1,342 - (82) 69,522 1,114 8,198 428 215,920 14,500 2,802 11,266 200 40,563 82 - - 5,279 41,997 - - 1,858 12,073 - 3,316 301 - 19,000 - - 9,139 - 1,290 - - 15,800 (15,964) (21,262) 32,943 (33,276) 12,851 (12,918) (4,533) 15,936 (16,165) 15,015 (16,325) 15,814 (14,333) 18,218 (16,559) 18,476 (17,295) 15,703 (14,257) (131) 14,629 (13,412) 17,483 57,585 244,421 36,083 (1,310) 57,896 1,659 16,402 5,063 20,086 (1,542) 20.44% $ (29,148) 21.09% $ 132,269 19.68% $ 8,449 17.74% $ (12,505) 16.12% $ 34,496 23.21% $ (6,578) 17.10% $ 13,955 16.77% $ 4,420 17.23% $ 16,037 20.96% 11/17/2005 3:43 PM N:\FINANCE\05_Audit\CAFR05\III. Statistical Section\GSB Stmt 44 New Statistical Tables\III-040. Schedule 4 - Changes in Fund Balances-Governmental Funds.xls City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year Real Estate Improvements Secured Personal Schedule 5 Unsecured Personal Utilities Rails and Wires Less: Tax Exempt Property Net Assessed Value (1) Total Direct Tax Rate 128 1995-96 161,175 358,969 2,045 25,714 31,092 815 578,180 1.93 1996-97 191,755 401,560 2,564 23,711 46,017 65,362 600,245 1.88 1997-98 206,083 475,031 2,688 29,718 46,299 62,626 697,193 1.83 1998-99 215,309 485,708 2,974 29,627 44,837 61,065 717,390 1.78 1999-00 223,785 548,672 2,748 30,259 45,209 62,981 787,692 1.73 2000-01 233,712 619,842 2,609 39,388 46,580 65,228 876,903 1.72 2001-02 253,580 686,608 2,609 43,470 51,547 83,695 954,119 1.72 2002-03 258,224 733,234 2,383 39,629 54,189 98,565 989,094 1.72 2003-04 298,152 820,414 2,113 35,832 58,517 135,011 1,080,017 1.72 2004-05 342,689 893,850 1,661 43,584 56,582 193,816 1,144,550 1.72 Source: Maricopa County Assessor's Office Notes: (1) Fiscal year 1996-97 gross valuation and exemptions increased due to a change in methodology by Maricopa County. Beginning that year, items such as churches and universities were included in both the gross valuation and the exemption amounts. The net effect of this change to the assessed value is zero. 12/2/2005 5:32 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-050. Schedule 5 - Assessed Value and Actual Value of Taxable Property.xls City of Glendale, Arizona Direct and Overlapping Governments Property Tax Rates Last Ten Fiscal Years Per $100 Assessed Valuation Schedule 6 Overlapping Rates* Fiscal Year 1995-96 Basic Rate $ 0.59 General Obligation Debt Service $ 1.34 Glendale Elementary and High School Districts City of Glendale $ 1.93 $ 17.96 Peoria Unified School Districts $ 14.34 Deer Valley Unified School Districts $ 15.25 1996-97 0.54 1.34 1.88 16.44 14.03 15.47 1997-98 0.49 1.34 1.83 16.62 14.75 15.01 1998-99 0.44 1.34 1.78 17.15 15.20 15.03 1999-00 0.39 1.34 1.73 16.72 14.86 14.33 2000-01 0.38 1.34 1.72 15.81 14.55 13.12 2001-02 0.36 1.36 1.72 15.36 13.73 13.12 2002-03 0.35 1.37 1.72 15.51 13.69 12.59 2003-04 0.34 1.38 1.72 14.79 13.59 12.06 2004-05 0.33 1.39 1.72 14.88 13.22 11.78 Source: Maricopa County 2004 Tax Rates Note: The City rounds the rates to two digits from the four presented by the county. * Overlapping rates are those of local and county governments that apply to property owners within the City of Glendale. Not all overlapping rates apply to all City of Glendale property owners (e.g., the rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district). 11/17/2005 3:56 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical TablesIII-060. Schedule 6 - Prop Tax Rates.xls 129 City of Glendale, Arizona Principal Property Taxpayers Current Year and Nine Years Ago June 30, 2005 (amounts expressed in thousands) Schedule 7 Tax Year 2005 130 Taxpayer Qwest Corporation/U.S. West Comm. Arizona Public Service Company New River Associates Honeywell, Inc. Wal-Mart Stores, Inc. Southwest Gas Corporation Toys DC South LLC VHS of Arrowhead, Inc. 51 Bell Limited Partnership Corning Gilbert, Inc. Price Reit, Inc. Sanderson Ford Atchison Topeka & Santa Fe Meridian Trust Company Parcel 18 Associates VW Mall, Inc. Total principal taxpayers Rank 1 2 3 4 5 6 7 8 9 10 Assessed Valuation $ 15,872 14,691 9,293 7,596 6,119 5,965 4,704 4,235 4,000 3,786 $ 76,261 Tax Year 1996 Percentage of Total City Taxable Assessed Value 1.39 % 1.28 0.81 0.66 0.53 0.52 0.41 0.37 0.35 0.33 6.65 % Rank 1 2 3 Assessed Valuation $ 11,820 11,462 7,230 Percentage of Total City Taxable Assessed Value 2.04 % 1.98 1.25 4 3,826 0.66 5 6 7 8 9 10 3,475 3,218 2,916 2,475 2,371 2,300 0.60 0.56 0.50 0.43 0.41 0.40 $ 51,093 8.83 % Source: Maricopa County Treasurer's Office Notes: (1) The Salt River Project Agriculture Improvement and Power District assessed valuation is not reflected in the total assessed valuation of the City of Glendale. The Project is subject to "voluntary contribution" in lieu of ad valorem taxation. 11/17/2005 3:45 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\ III-070. Schedule 7 - Principal Prop Taxpayers 05.xls City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Schedule 8 Collected within the Fiscal Year of Levy Total Collections to Date Collections(2) Total(1) Tax Levy Fiscal Year 1995-96 $ 10,506 Amount $ Percent of Levy 10,241 97.48 % in Subsequent Years $ 265 Amount $ 10,506 Percent of Levy 100.00 % 131 1996-97 10,761 10,448 97.09 304 10,752 99.92 1997-98 12,051 11,661 96.76 387 12,048 99.98 1998-99 12,131 11,764 96.98 367 12,131 100.00 1999-00 12,978 12,507 96.37 471 12,978 100.00 2000-01 14,227 13,833 97.23 394 14,227 100.00 2001-02 16,136 15,529 96.24 588 16,117 99.88 2002-03 16,743 16,289 97.29 443 16,732 99.93 2003-04 18,468 17,899 96.92 538 18,437 99.83 2004-05 19,534 19,011 97.32 0 19,011 97.32 Source: Maricopa County Treasurer's Office (1) Total levy includes only secured property. (2) Includes collections and resolutions. 12/1/2005 8:47 AM N:\FINANCE\05_Audit\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-080. Schedule 8 - Prop Tax Levies and Collections 05.xls City of Glendale, Arizona Schedule 9 Ratio of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands) (1) Fiscal General Obligation Special Assignment Year Bonds Bonds 1995-96 $ 50,410 $ Government Activities Street and Highway Municipal Revenue Property Bonds 23,827 $ 32,520 Corporation $ 15,825 $ Capital Notes Leases Payable 1,613 $ - 132 1996-97 44,800 22,925 29,650 14,490 1,188 3,316 1997-98 50,740 21,858 26,585 13,040 2,056 3,841 1998-99 43,025 20,733 23,230 12,265 1,573 1,852 1999-00 55,055 19,278 28,380 12,000 10,198 6,693 2000-01 46,917 17,621 24,310 11,215 8,865 5,754 2001-02 82,637 16,247 24,310 11,215 4,498 4,340 2002-03 127,104 12,036 20,030 170,590 14,971 20,193 2003-04 153,688 109 22,730 180,230 14,704 17,098 2004-05 157,065 75 22,455 177,950 13,704 18,876 11/17/2005 3:46 PM III-090. Schedule 9 - Ratio of O_S Debt by Type.xls Fiscal Water Sewer Landfill Business Activities Water Sewer Revenue Year G.O. Bonds G.O. Bonds Bonds 1995-96 $ 16,750 $ - $ 26,870 $ Notes Capital Total Primary Per Payable Leases Government Capita(2) 2,379 $ 983 $ 171,177 $ 920 133 1996-97 14,000 - 22,140 3,090 1,260 156,859 817 1997-98 11,835 - 17,145 5,250 3,713 156,063 792 1998-99 10,000 - 13,305 4,569 2,779 133,331 644 1999-00 8,175 1,460 63,560 3,866 15,952 224,617 1,055 2000-01 6,165 1,333 56,705 3,357 13,783 196,025 875 2001-02 6,165 1,333 56,705 6,358 15,291 229,099 1,005 2002-03 17,845 1,186 49,280 14,831 12,838 460,904 1,995 2003-04 15,825 1,032 121,470 14,433 11,007 552,326 2,370 2004-05 13,135 870 115,140 13,660 2,676 535,606 2,270 Note: Details of the outstanding debt can be found in the notes to the financial statements. (1) Does not include other long term obligations such as compensated absences, unamortized premiums, claims/judgments, arbitrage, post closure costs, etc. (2) See schedule 14 for personal income and population data. 11/17/2005 3:46 PM III-090. Schedule 9 - Ratio of O_S Debt by Type.xls City of Glendale, Arizona Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years (amounts expressed in thousands) 1995-96 Less: Amounts Available in Debt Service Funds General Obligation Bonds Fiscal Year $ 50,410 Schedule 10 $ 1,714 Total $ Percentage of Actual Taxable Value of Property 48,696 8.42 % Per Capita $ 261.81 1996-97 44,800 1,638 43,162 7.19 224.80 1997-98 50,740 2,667 48,073 6.90 244.03 1998-99 43,025 2,061 40,964 5.71 197.89 1999-00 55,055 2,276 52,779 6.70 247.79 2000-01 46,917 2,966 43,951 5.01 196.21 2001-02 82,637 5,881 76,756 8.04 336.65 2002-03 127,104 5,533 121,571 12.29 526.28 2003-04 153,688 8,559 145,129 13.44 639.62 2004-05 157,065 8,033 149,032 13.02 631.49 Note: Principal and interest expenditures for 1999-00 include a current refunding transaction. 11/17/2005 3:48 PM 134 N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-100. Schedule 10 - Ratios of Gen Bonded Debt OS 05.xls City of Glendale, Arizona Net Direct and Overlapping Governmental Activities Debt June 30, 2005 (amounts expressed in thousands) Jurisdiction Peoria Unified School District No. 11 Schedule 11 Net Debt Outstanding $ 188,101 Percentage Applicable to Glendale 26.3126 % Amount Applicable to Glendale $ 49,494 Glendale Elementary School District No. 40 32,490 98.7312 32,078 Deer Valley Unified School District No. 97 213,195 23.3977 49,883 Alhambra Elementary School District No. 68 35,465 18.5072 6,564 Glendale Union High School District No. 205 102,745 21.2034 21,785 - 3.8067 - Maricopa County Community College District 399,805 3.8067 15,219 Phoenix Union High School District No. 210 253,640 1.5075 3,824 Pendergast Elementary School District No. 92 20,230 11.9099 2,409 Tolleson Union High School District No. 214 44,320 4.3592 1,932 129,985 2.7754 3,608 Dysart Unified School District No. 89 61,055 0.0325 20 Agua Fria Union High School District No. 216 43,095 0.0324 14 Litchfield Elementary School District No. 79 17,040 0.0509 9 - 0.0000 - Maricopa County Washington Elementary School District No. 6 Cartwright Elementary School District No. 83 Total Overlapping Debt 1,541,166 186,839 137,947 137,947 City of Glendale Debt Total $ 1,679,113 $ 324,786 Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness. 135 11/17/2005 3:48 PM III-110. Schedule 11 - Comp of Net D & O GO Bond Debt 0.xls City of Glendale, Arizona Legal Debt Margin Information Last Ten Fiscal Years (amounts expressed in thousands) Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2005 6% Type Bonds Assessed value Debt limit (6% of assessed value) Debt applicable to limit: General obligation bonds Less: Amount set aside for repayment of general obligation debt Total net debt applicable to limit Legal debt margin 1996 Debt limit Total net debt applicable to limit $ Legal debt margin $ 1997 34,691 $ 18,418 136 Total net debt applicable to the limit as a percentage of debt limit 16,273 36,015 1998 $ 14,197 $ 53.09% 21,818 39.42% 41,832 1999 $ 21,929 $ 19,903 52.42% 47,262 2000 $ 19,190 $ 28,072 40.60% 20% Type Bonds 47,262 2001 $ 26,107 $ 21,155 55.24% 52,614 2002 $ 21,602 $ 31,012 41.06% 57,247 27,080 52.70% $ 2003 $ 30,167 $ $ 59,346 2004 $ 47,813 $ 11,533 80.57% 64,801 15,402 1998 1999 2000 2001 2002 2003 2004 Debt limit Total net debt applicable to limit $ 115,636 $ 120,049 $ 139,439 $ 157,538 $ 157,538 $ 175,381 $ 190,824 $ 197,818 $ 216,003 47,015 42,965 37,979 31,774 36,307 29,847 43,972 80,844 101,153 Legal debt margin $ 77,084 $ 101,460 $ 125,764 $ 121,231 $ 145,534 $ 146,852 $ 116,974 $ 114,850 Total net debt applicable to the limit as a percentage of debt limit 40.66% 35.79% 27.24% 20.17% 23.05% 17.02% 23.04% 40.87% $ 46.83% 16,991 75.26% $ 1997 68,673 51,682 $ 1996 $ $ 76.23% Assessed value Debt limit (20% of assessed value) Debt applicable to limit: General obligation bonds Less: Amount set aside for repayment of general obligation debt Total net debt applicable to limit Legal debt margin 68,621 2005 49,399 $ 1,144,550 68,673 68,525 (16,843) 51,682 16,991 1,144,550 228,910 102,545 (3,205) 99,340 129,570 2005 $ 228,910 99,340 $ 129,570 43.40% 11/17/2005 3:49 PM N:\FINANCE\05_Audit\CAFR 05\III. Statistical Section\GASB Stmt 44 New Statistical Tables\III-120. Schedule 12 - Legal debt margin information.xls This page left blank intentionally. 137 City of Glendale, Arizona Pledged-Revenue Coverage Last Ten Fiscal Years (amounts expressed in thousands) Schedule 13 Fiscal Utility Service Less: Operating Year Charges(1) Expenses(2) 1995-96 $ 42,265 $ 18,231 Water and Sewer Revenue Bonds Net Debt Service Available Principal(3) Revenue $ 24,034 $ 4,905 Interest(3) $ Coverage 1,574 3.71 138 1996-97 46,204 20,273 25,931 5,350 1,383 3.85 1997-98 50,249 21,004 29,245 5,635 1,153 4.31 1998-99 49,843 22,429 27,414 4,521 923 5.04 1999-00 49,243 24,071 25,172 3,426 753 6.02 2000-01 52,482 28,334 24,148 7,558 3,387 2.21 2001-02 50,549 27,620 22,929 8,463 3,022 2.00 2002-03 51,922 30,537 21,385 9,116 2,745 1.80 2003-04 53,209 31,445 21,764 7,102 4,760 1.83 2004-05 56,144 32,100 24,044 6,495 6,168 1.90 12/1/2005 8:27 AM III-130. Schedule 13 - pledged revenue coverage.xls Municipal Property Corporation Bonds Special Assessment Bonds Special Assessment Fiscal 1995-96 Debt Service Revenues Year $ 2,674 Excise Tax Principal $ (4) 1,291 (5) Interest $ Coverage 1,506 (0.04) Debt Service Principal Revenue $ 55,356 $ 1,255 Interest $ Coverage 1,195 22.59 139 1996-97 3,179 1,201 1,441 1.20 61,978 1,335 1,105 25.40 1997-98 3,860 1,068 1,370 1.58 66,417 1,450 1,008 27.02 1998-99 2,705 1,125 1,299 1.12 73,572 775 907 43.74 1999-00 2,390 1,455 1,216 (0.11) 79,850 615 431 76.34 2000-01 2,675 1,657 1,115 (0.03) 83,739 785 548 62.82 2001-02 2,267 1,374 1,017 (0.05) 85,322 880 515 61.16 2002-03 1,627 4,211 847 (0.68) 88,071 1,240 1,510 32.03 2003-04 12,395 11,927 692 0.98 94,277 2,280 8,530 8.72 2004-05 29 34 5 (0.26) 98,143 1,885 9,017 9.00 Source: City of Glendale Finance Department Notes: (1) Operating revenues and nonoperating revenues excluding non-cash contributions, gains and losses. (2) Excluding depreciation. (3) Principal and interest amounts include debt service on the note payable to the Waste Infrastructure Financing Authority of Arizona for the 96-97 and 00-01 loans. (4) The 03-04 principal payments include the refunding of Improvement District 57 and 59 bonds issued August 1992. (5) Special assessment principal and interest for 95-96 , 99-00, 00-01, 01-02, 02-03, 04-05 were covered by accumulated fund balance in the debt service fund. 12/1/2005 8:27 AM III-130. Schedule 13 - pledged revenue coverage.xls City of Glendale, Arizona Demographic and Economical Statistics Last Ten Fiscal Years (amounts expressed in thousands) Schedule 14 Personal Income (1) (thousands of dollars) Per Capita (1) Personal Income Unemployment Rate 23,182 3.3 Fiscal Year Maricopa County Population 1995-96 2,703 1996-97 2,805 68,656,472 24,476 3.6 1997-98 2,909 75,639,499 26,002 2.6 1998-99 3,005 80,924,901 26,930 2.9 1999-00 3,096 89,771,608 28,993 2.3 2000-01 3,196 92,913,124 29,068 3.7 2001-02 3,295 95,618,598 29,020 5.0 2002-03 3,397 98,401,099 28,968 5.3 2003-04 3,524 101,264,571 28,734 4.4 2004-05 3,524 104,211,370 29,570 3.9 $ 62,663,789 $ % Source: Maricopa County Finance Department Note: (1) Personal Income and Per Capita Income figures are for Maricopa County. City of Glendale is one of several Valley cities that comprise Maricopa County, including Phoenix, Mesa and Scottsdale. 140 11/17/2005 5:18 PM III-140. Schedule 14 - Demographic Stats 05.xls City of Glendale, Arizona Principal Employers Current Year and Nine Years Ago Schedule 15 2005 Employer Luke Air Force Base Honeywell Arrowhead Towne Center Banner Thunderbird Health System City of Glendale Glendale Union High School District Glendale Elementary School District Deer Valley Unified School District Glendale Community College Schuck and Sons U.S. Postal Service Gilbert Engineering Total Employees 7,907 2,762 2,500 2,036 2,021 1,862 1,684 1,432 1,220 1,150 Rank 1 2 3 4 5 6 7 8 9 10 24,574 1996 Percentage of Total City Employment 7.64 % 2.67 2.42 1.97 1.95 1.80 1.63 1.38 1.18 1.11 23.75 % Employees 7,165 2,910 1,500 1,100 1,302 1,200 1,108 400 450 418 17,553 Rank 1 2 3 7 4 5 6 10 8 9 Percentage of Total City Employment 7.56 % 3.07 1.58 1.16 1.37 1.27 1.17 0.42 0.47 0.44 18.51 % Source: City of Glendale 141 11/17/2005 3:51 PM III-150. Schedule 15 - Principal Employers.xls City of Glendale, Arizona Full-time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Function/Program 142 General government Management services Finance Planning Building Legal Other Police Fire Community Service Parks and recreation Library Public Works Engineering Transportation Utilities Total 2005 2004 2003 32.00 85.75 26.15 57.75 67.00 94.50 507.50 216.00 82.75 86.75 87.76 266.00 45.00 80.25 140.00 1875.16 34.00 84.75 26.15 44.75 61.00 93.50 473.50 196.00 75.25 80.40 87.75 267.00 44.00 80.25 132.00 1780.30 32.50 84.75 27.15 40.75 58.00 93.50 455.50 195.00 75.25 79.40 87.75 270.00 44.00 78.25 132.00 1753.80 Schedule 16 Full-time Equivalent Employees as of June 30 2002* 2001 2000 1999 33.50 82.75 27.15 32.50 50.00 93.50 455.50 190.00 73.75 78.40 87.75 272.00 43.00 65.25 132.00 1717.05 31.50 83.50 23.65 29.50 47.00 97.50 421.50 167.50 67.00 73.40 86.75 268.00 42.00 65.25 125.00 1629.05 30.50 82.00 21.65 28.50 47.00 89.00 397.00 167.50 61.00 63.90 84.50 228.00 41.00 60.25 124.00 1525.80 41.00 65.00 33.15 27.50 39.00 69.50 380.00 163.50 50.00 60.65 84.25 228.00 41.00 54.25 127.00 1463.80 1998 1997 1996 40.00 63.00 33.65 26.50 39.00 67.50 365.00 162.50 50.00 60.00 60.25 220.00 40.00 53.25 119.00 1399.65 37.00 59.00 32.65 25.50 36.00 62.00 353.00 156.00 51.00 59.75 59.50 216.00 38.00 51.25 115.00 1351.65 35.50 55.00 30.65 23.50 32.00 58.25 332.00 140.50 52.00 59.75 59.50 215.75 36.00 49.25 112.00 1291.65 Source: City Budget Office * First year of GASB 34 reporting requirements implemented by the City of Glendale. 12/1/2005 8:41 AM III-160. Schedule 16 - Fulltime Equivalent City Gov Employees by Function.xls City of Glendale, Arizona Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 143 Police Calls for service Bookings Criminal Offense Reports Fire EMS Calls Fire Calls Refuse collection (3) Residential Curb Service (tons per year) Commercial Container Service (tons per year) Airport Departures/arrivals (2) General Government Building Permits Library Volumes in collection Transit Dial-A-Ride passengers Schedule 17 Fiscal Year 2001 2000 2005 2004 2003 2002 158,507 8,138 33,578 161,722 8,057 34,847 154,374 7,980 33,956 153,691 8,781 34,224 144,183 7,744 33,102 24,025 3,335 23,126 3,379 21,372 3,379 57,942 44,441 56,902 44,681 55,718 48,583 49,747 45,798 108,887 118,140 88,449 7,079 6,330 620,130 87,831 18,977 2,642 (1) (1) 1999 1998 1997 1996 137,809 773 30,984 133,124 10,062 27,415 130,033 7,882 27,508 123,917 8,410 27,213 108,913 8,577 28,581 20,722 3,110 19,272 2,958 18,208 2,755 17,135 2,695 16,446 2,823 16,309 3,102 118,703 110,631 112,570 133,220 115,056 130,263 119,866 6,299 5,428 7,090 7,925 8,561 8,942 8,393 7,143 601,440 600,477 606,676 544,467 562,532 342,042 311,870 334,156 333,827 86,132 81,768 76,622 66,527 69,081 70,032 67,626 68,727 65,362 Source: Various city departments Note: Water and sewer statistics are contained in Schedule 19 and 20 (1) Fire department figures are on a calendar year, 2004-2005 is through September 30, 2005. (2) Departures/arrivals are based on calendar year. 2005 figures are through October 2005. (3) Sanitation figures were only available from 2000-2001 through present. 12/2/2005 5:48 PM III-170. Schedule 17 - Operating Indicators by Function.xls City of Glendale, Arizona Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 144 Police Stations Patrol vehicles Fire stations General government City square miles Landfill Landfill capacity - south cell Landfill capacity used - south cell Other public works Streets (miles) Parks and recreation Number of parks/retention basins Acres of parks Transit Dial -A-Ride minibuses Schedule 18 Fiscal Year 2001 2000 2005 2004 2003 2002 1999 1998 1997 1996 3 156 9 3 151 8 3 156 8 3 150 7 3 92 7 3 101 7 3 103 7 3 108 7 3 110 6 3 69 6 57 57 57 56 55 55 55 54 54 54 22,594 16,328 22,594 15,910 22,594 15,408 22,594 14,669 16,351 14,060 16,351 13,450 16,351 12,865 16,351 12,342 13,771 8,562 13,771 8,223 709 702 702 692 660 650 630 625 625 620 92 2,052 93 1,998 89 1,984 89 1,984 89 1,984 87 1,844 88 1,845 74 1,682 73 1,682 68 1,534 25 22 19 17 21 17 16 15 12 9 Source: Various city departments 11/17/2005 3:36 PM III-180. Schedule 18 - Capital Assets Statistics by Function.xls City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2005 Schedule 19 WATER RATES PER METER SIZE Commercial Monthly Base Charge Meter Size (inch) Inside City Outside City 3/4 1 $ 12.02 13.15 $ 15.63 17.10 1 1/2 2 3 4 6 19.84 26.53 53.02 77.65 132.69 25.79 34.50 68.93 100.95 172.50 Residential Monthly Base Charge Inside City Meter Size $ 12.02 All Sizes Gallons per Month 0 - 3,000 4,000 - 15,000 16,000 - 30,000 over 31,000 Outside City $ 15.63 Residential and 3/4 Commercial Commercial 1 inch Meter Size Meter Size and Greater (1) All Year Inside Outside City City -$ 1.27 1.59 2.22 All Year Inside Outside City City -$ 1.65 2.06 2.86 1.25 1.25 1.25 1.25 $ 1.63 1.63 1.63 1.63 Summer Excess Rate Inside Outside City City $ 2.22 2.22 2.22 2.22 SEWER SERVICE RATES Type of Service Inside City Single Family Dwelling Unit $ 18.16 Office Building 28.06 Apartment - Average 5 units 53.00 Apartment - Average 35 units 302.13 Retail/Wholesale 42.30 (1) Per 1,000 gallons SOURCE: City of Glendale Finance Department 145 Outside City $32.53 N/A 57.48 82.65 N/A $ 2.89 2.89 2.89 2.89 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2005 Schedule 20 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS (1) Residential Commercial (2) Total 43,230 45,421 47,363 49,556 3,964 4,165 4,343 4,544 47,194 49,586 51,706 54,100 50,324 4,590 54,914 2001 51,169 4,649 55,818 2002 52,736 5,197 57,933 2003 53,654 5,431 59,085 2004 54,349 4,361 58,710 2005 55,139 4,491 59,630 Fiscal Year Ending June 30 1996 1997 1998 1999 2000 (3) (1) Total meters in the system being read monthly. Slightly lower figure for active accounts due to vacant properties. (2) Includes multi-family housing facilities. (3) As of April 3, 2000. SOURCE: City of Glendale Finance Department. WATER DELIVERIES Acre Feet Calendar Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 Residential (1) 29,458 31,294 30,477 32,779 35,135 34,667 36,044 34,348 34,427 Commercial 6,202 4,562 4,491 4,739 9,413 8,865 8,865 5,342 8,382 Other 9,081 8,667 6,344 8,942 893 722 1,031 1,042 1,211 Total 44,741 44,523 41,312 46,460 45,441 44,254 45,940 40,732 44,020 (1) Residential includes both single and multi-family housing. SOURCE: Annual Report of Arizona Department of Water Resources. SEWERAGE ACCOUNTS BILLED AND SEWAGE TREATED Fiscal Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 No. of Sewer Multi-City Plant Accounts Billed 44,090 45,813 47,064 49,021 50,564 52,688 55,506 55,239 55,670 (MGD) Actual 11.0 12.3 10.4 10.9 11.7 11.4 11.9 10.8 7.9 (1) Estimated. (2) Peak Day is based on 150% of the Multi-City Plant Use. (3) Began operations in 2000. (4) As of July 29, 2004. SOURCE: City of Glendale Finance and Utilities Departments. 146 Arrowhead (MGD) 1.6 1.9 2.2 2.7 2.8 2.8 2.8 3.0 3.0 (1) West (3) Peak (MGD) (MGD) (2) 16.5 18.5 15.6 16.4 17.6 17.1 17.9 16.2 16.2 4.3 4.3 4.3 7.0 7.0 This page left blank intentionally. City of Glendale Finance Department 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480