City of Glendale, Arizona Comprehensive Annual Financial Report r scal Yea i F e h t F or 30, 2006 e n u J Ended This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTRODUCTORY SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2006 Mayor Elaine M. Scruggs 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 Administrative Services Kenneth A. Reedy Deputy City Manager - Public Works Gloria Santiago-Espino Deputy City Manager Community Information & Services Horatio Skeete Deputy City Manager Community Development 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 For the Fiscal Year Ended June 30, 2006 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 Independent Auditors’ Report ..............................................................................................................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 ........................................................................77 Budgetary Comparison Schedule – Transportation Fund..............................................................79 Notes to Required Supplementary Information.............................................................................80 iii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2006 TABLE OF CONTENTS Page D. COMBINING STATEMENTS Non-Major Governmental Funds Combining Balance Sheet..........................................................................................................84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances..................86 Budgetary Comparison Schedules General Obligation Debt Service Fund (a Major Fund).........................................................88 Municipal Property Corporation Construction Fund (a Major Fund) ....................................89 Parks Bond Construction Fund (a Major Fund) .....................................................................90 Community Development Block Grants Fund.......................................................................91 Highway Users Gas Tax Fund ...............................................................................................92 Development Impact Fees Fund.............................................................................................93 Other Special Revenue Fund..................................................................................................94 Highway User Debt Service Fund..........................................................................................95 Municipal Property Corporation Debt Service Fund ............................................................96 Special Assessment Debt Service Fund .................................................................................97 Streets Construction Fund......................................................................................................98 Fire and Police Construction Fund.........................................................................................99 Other Construction Fund......................................................................................................100 Cemetery Perpetual Care Permanent Fund ..........................................................................101 Non-Major Proprietary Funds – Business-type Activities Combining Statement of Net Assets........................................................................................102 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets...................103 Combining Statement of Cash Flows ......................................................................................104 Budgetary Comparison Schedules Water and Sewer Fund (a Major Fund)................................................................................106 Landfill Fund (a Major Fund) ..............................................................................................108 Sanitation Fund ....................................................................................................................109 Housing Fund.......................................................................................................................110 Internal Service Funds Combining Statement of Net Assets........................................................................................111 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets...................112 Combining Statement of Cash Flows ......................................................................................113 Budgetary Comparison Schedules Risk Management Fund .......................................................................................................114 Workers’ Compensation Fund .............................................................................................115 Employee Benefits Fund......................................................................................................116 E. OTHER SUPPLEMENTARY INFORMATION Federal Financial Data Schedule..........................................................................................117 iv City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2006 TABLE OF CONTENTS III. STATISTICAL SECTION Schedule Page Net Assets by Component .................................................................................................. 1.............122 Changes in Net Assets........................................................................................................ 2.............124 Fund Balances – Governmental Funds............................................................................... 3.............126 Changes in Fund Balances – Governmental Funds ............................................................ 4.............128 Assessed and Estimated Actual Value of Taxable Property............................................... 5.............130 Direct and Overlapping Governments Property Tax Rates ................................................ 6.............131 Principal Property Taxpayers ............................................................................................. 7.............132 Property Tax Levies and Collections ................................................................................. 8.............133 Ratio of Outstanding Debt by Type.................................................................................... 9.............134 Ratios of Net General Bonded Debt Outstanding............................................................. 10.............136 Net Direct and Overlapping Governmental Activities Debt............................................. 11.............137 Legal Debt Margin Information ....................................................................................... 12.............138 Pledged-Revenue Coverage ............................................................................................. 13.............140 Demographic and Economical Statistics .......................................................................... 14.............142 Principal Employers ......................................................................................................... 15.............143 Full-time Equivalent City Government Employees by Function/Program....................... 16.............144 Operating Indicators by Function/Program ...................................................................... 17.............145 Capital Asset Statistics by Function/Program .................................................................. 18.............146 Miscellaneous Water and Sewer Rate Statistics............................................................... 19.............147 Miscellaneous Water and Sewer Statistics ....................................................................... 20.............148 v This page left blank intentionally. vi October 3, 2006 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, 2006. 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, 2006, 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 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 57.9 square miles and serves a population of 243,881. 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 average labor force in the City as 137,663 for the period January through June 2006 and an average employment of 132,337 for the same period. Average employment for the same period last year is 131,504, 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, 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 3.8 million. The state’s population reached 6.24 million in 2006, representing a 8.71% 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 the country’s top five-concert tours in 2005. Nearly 400,000 people attended ticketed events at the arena in 2005. The Cardinals Stadium was built by the State’s Tourism and Sports Authority, opened in August 2006. The stadium is home to the Arizona Cardinals, the Fiesta Bowl, 2007 BCS Championship Bowl and 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 opened in August 2006 and is expected to create about 400 new jobs and estimated to 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 and spa to be developed by John Q. Hammons Hotels, opening in fall 2006. One of the first of its kind in Glendale, the Foothills Recreation & Aquatics Center opened in September 2006. The facility totals 69,800 square feet and consists of a gymnasium, elevated walking/running track, indoor racquetball courts, state of the art weight room and a 30 foot rock climbing wall. The aquatics section will both be used for recreation and competitive purposes. It contains a competitive lap pool, diving well, lazy river and zero depth leisure pool with play features. The City completed a pedestrian friendly downtown campus adjacent to the Civic Center as part of additional meeting space for the Civic Center. The project included constructing additional classroom and display space for the Bead Museum. This cultural treasure is estimated to attract 30,000 visitors annually to downtown. 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 3 4 5 Glendale, Arizona and Neighboring Communities 6 Glendale 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. CHOLLA Beardsley Rd. Bell Rd. N Av en ue SAHUARO G ra nd Loop 101 Union Hills Dr. Greenway Rd. Thunderbird Rd. Cactus Rd. BARREL Peoria Ave. Olive Ave. Northern Ave. Glendale Ave. YUCCA Bethany Home Rd. OCOTILLO YUCCA CACTUS YUCCA 8 43rd Ave. 51st Ave. 59th Ave. 67th Ave. 75th Ave. 83rd Ave. 91st Ave. 99th Ave. 107th Ave. 115th Ave. El Mirage Rd. Dysart Rd. Litchfield Rd. Bullard Ave. Reems Rd. Sarival Ave. Cotton Ln. Citrus Rd. Perryville Rd. Camelback Rd. Mayor & Council City Clerk Pam Hanna Boards & Commissions Intergovernmental Programs Dana Tranberg Marketing & Communications Julie Frisoni City Auditor Candace MacLeod Community Action Program Norma Alvarez City Manager Ed Beasley City Court Judge Elizabeth Finn Assistant City Manager Pam Kavanaugh Special Projects Council Agenda Meaghan Ellsworth Assistant to the Mayor Steven Methvin Human Resources Alma Carmicle Council Office Kristen Kennedy City Attorney Craig Tindall Police Chief Steven Conrad Fire Chief Mark Burdick City Manager Relations Cathy Gorham Mega Events Strategic Initiatives Homeland Security Rob Gunter 9 Deputy City Manager Gloria Santiago-Espino Deputy City Manager Ken Reedy Deputy City Manager Art Lynch Deputy City Manager Horatio Skeete Parks & Recreation Rebecca Benna Envir. Resources Doug Kukino Finance Ray Shuey Transportation Jamsheed Mehta Library Rodeane Widom Field Operations Stuart Kent Budget & Mgt. Sherry Schurhammer Planning Jon Froke Comm. Partnerships Erik Strunk Utilities Roger Bailey Economic Dev. Karen Thoreson Engineering Larry Broyles Information Tech. Chuck Murphy Code Compliance Dan Gunn Building Safety Deborah Mazoyer March 2006 This page left blank intentionally. 10 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 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, 2006 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (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, 2006. 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 2005-06 as follows. • The City’s total net assets increased $46,348 or 4.69%. The governmental net assets increased by $36,244 or 6.11% and the business-type net assets increased by $10,104 or 2.56%. • General revenues from governmental activities increased $20,548 or 13.33%, and were 71.06% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions increased $10,760 or 17.82%. • The business-type activities revenue increased by $3,414 or 3.64%. • The total cost of all City programs increased by $27,320 or 10.17%. • A major governmental fund, the general fund, had $146,468 in revenues, which is an increase of $20,733 or 16.49% 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 $137,590, which is an increase of $19,876 or 16.89% from the prior year. The fund balance increased $6,415 or 9.71%. This increase resulted from increased tax and special assessments revenue, and intergovernmental revenues. • The City issued 1) $80,000 in subordinate lien water and sewer bonds to fund the construction of various water and sewer improvements, 2) $29,365 in general obligation bonds to fund the construction of public improvements, 3) $9,065 in general obligation refunding bonds to advance refund outstanding general obligation bonds, 4) $15,745 in street and highway user revenue bonds to fund the construction of certain street and highway public improvements. In addition, its municipal property corporation (MPC) issued the following: 1) $33,250 in excise tax revenue bonds to fund the construction of a public training facility and constructing infrastructure improvements within the City, and 2) $14,673 in excise tax revenue bonds to finance the development of infrastructure, a convention center, parking structure and media center. 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. 13 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) 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 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. 14 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) 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. 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 $1,033,674 as of June 30, 2006. 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 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (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, 2006, and 2005 (in thousands) Governmental Activities 2006 2005 Current and other assets Capital assets Total assets $ 293,114 869,900 1,163,014 $ Total Primary Government Business-type Activities 2006 2005 277,726 766,969 1,044,695 $ 196,267 457,034 653,301 $ 142,260 423,570 565,830 2006 $ 489,381 1,326,934 1,816,315 2005 $ 419,986 1,190,539 1,610,525 Current liabilities Long-term liabilities Total liabilities 44,443 489,474 533,917 39,346 412,496 451,842 12,003 236,721 248,724 10,873 160,484 171,357 56,446 726,195 782,641 50,219 572,980 623,199 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 398,517 155,163 75,417 629,097 372,778 179,434 40,641 592,853 233,387 12,437 158,753 404,577 274,620 11,249 108,604 394,473 631,904 167,781 233,989 1,033,674 647,398 190,683 149,245 987,326 $ $ $ $ $ $ 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. Changes in net assets. The City’s revenue from governmental activities for the fiscal year ended June 30, 2006, was $245,168. The cost of programs and services for governmental activities were $209,624. The City’s revenue from business-type activities for the fiscal year ended June 30, 2006, was $97,084. The cost of programs and services were $86,280. 16 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2006 and 2005. Changes in Net Assets (in thousands) Governmental Activities 2006 2005 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues $ 32,769 31,973 6,406 71,148 $ 27,652 26,535 6,201 60,388 Total Primary Government 2006 2005 Business-type Activities 2006 2005 $ 79,251 8,020 5,403 92,674 $ 77,422 8,027 5,954 91,403 $ 112,020 39,993 11,809 163,822 $ 105,074 34,562 12,155 151,791 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 on disposal of capital assets Miscellaneous Total revenues 21,386 90,968 23,298 19,422 77,166 20,271 - - 21,386 90,968 23,298 19,422 77,166 20,271 22,909 10,444 4,395 348 272 245,168 20,115 9,414 2,654 225 275 209,930 3,466 844 100 97,084 2,065 202 93,670 22,909 10,444 7,861 1,192 372 342,252 20,115 9,414 4,719 225 477 303,600 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 Excess before transfers Transfers in (out) 33,329 75,277 13,995 40,275 4,125 22,720 3,020 16,883 209,624 35,544 700 31,603 64,277 14,309 37,394 3,236 21,355 238 16,986 189,398 20,532 (164) 55,607 7,950 13,257 9,466 86,280 10,804 (700) 50,190 7,431 12,287 9,278 79,186 14,484 164 33,329 75,277 13,995 40,275 4,125 22,720 3,020 16,883 55,607 7,950 13,257 9,466 295,904 46,348 - 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 35,016 - Increase in net assets Net assets, beginning Net assets, ending 36,244 592,853 629,097 20,368 572,485 592,853 14,648 379,825 394,473 46,348 987,326 1,033,674 35,016 952,310 987,326 $ $ $ 10,104 394,473 404,577 $ $ The size of the increase in net assets results primarily from sustained economic growth including developer investment in city facilities and infrastructure. 17 $ CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) expenses Expenses and Program Revenues - Governmental Activities program revenues $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $General government Public safety Public works Community services Community environment Street maintenance Expenses and Program Revenues - Business-type Activities Other Interest on longterm debt expenses program revenues $70 ,0 0 0 $6 0 ,0 0 0 $50 ,0 0 0 $4 0 ,0 0 0 $3 0 ,0 0 0 $2 0 ,0 0 0 $10 ,0 0 0 $Wat er and s ewer Land fill Sanit at io n 18 Ho us ing CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Revenue Sources Fiscal Year 2005-06 Investment earnings, unrestricted 2.30% Gain on disposal of capital assets 0.35% Auto in-lieu taxes 3.05% Miscellaneous 0.11% Urban revenue sharing (state shared income tax) 6.69% State shared sales tax 6.81% Sales taxes 26.58% Charges for services 32.73% Operating grants and contributions 11.69% Capital grants and contributions 3.45% Property taxes 6.25% Functional Expenses Fiscal Year 2005-06 Housing 3.20% General government 11.26% Sanitation 4.48% Landfill 2.69% Public safety 25.44% Water and sewer 18.79% Interest on long-term debt 5.71% Other 1.02% Public works 4.73% Street maintenance 7.68% Community services Community environment 13.61% 1.39% 19 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (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 $210,053, an increase of $8,369 or 4.15% in comparison with the prior year. • Unreserved undesignated fund balance, which is available for spending at the City’s discretion within a fund, was $129,642, an increase of $7,605 or 5.99% from the prior year. • The City also had $27,310 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 XV. • 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 $ 10,287 26,273 11,531 98 4,912 $ 53,065 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 $62,166, while total fund balance reached $72,453. 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 45.18% of total general fund expenditures, while total fund balance represents 52.66% of that same amount. The transportation fund accounts for the City’s public transit program. The fund saw a decrease in fund balance of $8,752 for the fiscal year ended June 30, 2006. This decrease is due to increase in capital outlay. The general obligation debt service fund accounts for the accumulation of resources for, and payment of, general obligation debt. The fund saw an increase in fund balance of $1,594 for the fiscal year ended June 30, 2006, due to an increase in revenues collected. The municipal property corporation construction fund accounts for the resources used to finance municipal projects. The fund saw an increase in fund balance of $16,668 for the fiscal year ended June 30, 2006. This was due to bonds being issued. 20 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (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 $9,955 for the fiscal year ended June 30, 2006. 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 $11,293 or 2.81%. The enterprise funds’ total net assets were 3.07% restricted and 39.37% 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 $8,256 for the fiscal year ended June 30, 2006. This increase is due to 1) operating revenue greater than operating expenses, and 2) increased investment earnings. The landfill fund accounts for operations of the City-owned landfill. The fund saw an increase of $1,021 for the fiscal year ended June 30, 2006. This increase is due to operating revenues exceeding operating expenses. The internal service fund accounts for risk management, workers’ compensation, and employee benefits provided to other departments. The fund saw an increase of $1,273 for the fiscal year ended June 30, 2006. This is due to increased operating revenue as a result of increased self-insurance premiums. 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 special regulatory licenses and 2) the completion of the Glendale stadium. • General fund expenditures to appropriations final amended budget exceeded the original budget by $2,215 primarily due to a $5,038 increase in capital outlay for parks projects, of which $2,823 was covered by contingency funds. • General fund revenues exceeded the final amended budget by $24,226 or 16.79%, primarily due to increase in state shared revenues and charges for services. • General fund expenditures were less than the final amended budget by $28,569 or 15.40%. This positive variance resulted from $11,585 in leftover 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, 2006, for its governmental-type activities was $869,900 and for the business-type activities was $457,034. 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 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Major capital asset events during the current fiscal year included the following: • Completion of Recreation & Aquatics Center, $14,710; • Completion of Fire Station No. 159, $3,618; • Completion of Desert Valley Park, $727; • Completion of West Area Water Reclamation Facility, $43,944; and • Purchase of land for Oasis Water Treatment Plant, $3,779. The following table is a summary of capital assets reflected in the June 30, 2006, 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 2006 2005 $ 69,406 98,504 49,762 63,372 1,189 1,189 130,333 145,570 70,927 71,401 355,182 371,535 25,237 51,687 7,401 8,156 25,957 26,804 19,499 17,063 574 421 294 241 11,208 13,957 869,900 $ 766,969 $ $ Business-type Activities 2006 2005 $ 69,715 47,972 9,477 11,609 9,137 8,890 9,850 19,773 65,194 69,298 79,180 80,529 68,976 65,626 81,694 123,531 20,624 19,942 3,681 3,580 537 458 264 217 5,241 5,609 457,034 $ 423,570 Total Primary Government $ $ 2006 146,476 74,981 1,189 154,460 91,174 371,535 51,687 8,156 26,804 69,298 80,529 65,626 123,531 19,942 3,580 17,521 638 241 19,566 1,326,934 $ $ 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 $681,679 compared to $535,306 last year, a 27.3% net increase. Of this amount, $188,230 comprises debt backed by the full faith and credit of the City and $39 is special assessment debt for which the City is liable in the event of default by the property owners subject to the assessment. 22 2005 139,121 59,239 1,189 139,470 80,777 355,182 25,237 7,401 25,957 65,194 79,180 68,976 81,694 20,624 3,681 20,036 838 294 16,449 1,190,539 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2006 (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 2006 2005 175,155 $ 157,065 39 75 35,940 22,455 $ Business-type Activities 2006 2005 13,075 $ 14,005 - $ Total Primary Government 2006 2005 188,230 $ 171,070 39 75 35,940 22,455 223,988 12,875 177,950 13,704 2,613 2,676 223,988 15,488 177,950 16,380 15,689 463,686 18,576 389,825 190,020 12,285 217,993 115,140 13,660 145,481 190,020 27,974 681,679 115,140 32,236 535,306 $ $ $ $ $ The City’s total long-term debt increased by $146,373 from the prior year. A key factor in this increase was the issuance of general obligation, highway user revenue, subordinate lien water and sewer revenue obligations and municipal property corporation excise tax revenue bonds during the year. 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, 2006, was $23,635 and $140,730, 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 2006-07 budget is $913,000 (up 25.07% from 2005-06), including a $337,000 operating budget (an increase of 16.21% from 2006) and $435,000 in capital outlay (up 33.23% from 2006). The fiscal year 2006-07 budget includes $88,000 contingency appropriation to cover emergency expenses or revenue shortages. • • • Fiscal year 2005-06 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 2006 was 4.0%, which is the same rate from a year ago. This compares favorably to the state’s average unemployment rate of 4.6% and the national average rate of 4.6%. 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 This page left blank intentionally. 24 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 This page left blank intentionally. City of Glendale, Arizona Statement of Net Assets June 30, 2006 (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 $ $ 907 12,184 710 9,294 880 5,037 11,235 60,730 Total $ 9,433 242 119 (880) 2,051 72,925 309,025 907 21,617 952 9,413 7,088 84,160 . 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 Transportation Highway and streets Vehicle replacement Revenue bond retirement, replacement, and extension Perpetual care - nonexpendable Other purposes Unrestricted Total net assets 248,295 Primary Government Business-type Activities $ 163,065 706,835 4,572 1,163,014 59,581 397,453 6,355 45,292 653,301 222,646 1,104,288 4,572 6,355 45,292 1,816,315 25,324 693 1,340 7,414 189 1,170 8,313 5,990 30 4,582 278 891 232 31,314 723 1,340 11,996 467 2,061 8,545 34,884 454,590 533,917 10,372 226,349 248,724 45,256 680,939 782,641 398,517 233,387 631,904 72,113 11,927 51,021 6,014 6,146 4,988 2,954 75,417 629,097 1,599 10,017 821 158,753 404,577 72,113 13,526 51,021 6,014 6,146 10,017 4,988 3,775 234,170 1,033,674 The notes to the financial statements are an integral part of this statement. 25 $ $ City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2006 (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 $ $ 33,329 75,277 13,995 40,275 4,125 22,720 3,020 16,883 209,624 55,607 7,950 13,257 9,466 86,280 295,904 $ $ 10,726 1,375 516 20,121 31 32,769 56,153 8,362 14,167 569 79,251 112,020 Program Revenues Operating Grants and Contributions $ $ 592 6,344 170 2,807 3,538 18,522 31,973 8,020 8,020 39,993 Capital Grants and Contributions $ $ 157 1,030 5,219 6,406 5,292 111 5,403 11,809 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 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 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ (21,854) (67,558) (13,309) (16,317) (556) 1,021 (3,020) (16,883) (138,476) $ (138,476) $ 3,643 17,743 90,968 23,298 22,909 10,444 4,395 348 272 700 174,720 36,244 592,853 629,097 - $ 5,838 412 910 (766) 6,394 6,394 $ 3,466 844 100 (700) 3,710 10,104 394,473 404,577 (21,854) (67,558) (13,309) (16,317) (556) 1,021 (3,020) (16,883) (138,476) 5,838 412 910 (766) 6,394 (132,082) $ 3,643 17,743 90,968 23,298 22,909 10,444 7,861 1,192 372 178,430 46,348 987,326 1,033,674 27 City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2006 (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 XV) Unreserved: Designated (Note XV): 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 $ 69,940 $ 156 8,235 610 1,861 2,972 180 117 484 84,555 $ $ The notes to the financial statements are an integral part of this statement. 6,887 693 31 890 185 1,104 2,312 12,102 Major Funds General Obligation Debt Service Transportation $ 24,848 $ 2,145 202 27,195 $ 2,969 67 21 64 3,121 $ 24,173 $ 751 24,924 $ 2,852 524 11,921 15,297 Municipal Property Corp Construction $ 23,863 $ 23,863 $ 6,018 1,177 7,195 Parks Bond Construction Other Non-major Governmental Funds $ 16,449 $ 35 16,484 $ 1,469 59 1,528 $ 73,467 $ 1,788 65 6,120 234 10,968 4,088 96,730 $ 6,787 6 84 4 1,833 66 4,562 6,453 4,660 24,455 Total Governmental Funds $ 232,740 $ 907 12,168 710 1,861 9,294 414 11,085 4,572 273,751 $ 24,130 693 1,340 995 189 1,833 1,170 7,414 9,353 16,581 63,698 10,287 - 9,627 - - 33,187 53,101 3,404 - 212 - - - - 468 23,226 3,404 680 23,226 58,762 72,453 84,555 23,862 24,074 27,195 9,627 24,924 16,668 16,668 23,863 14,956 14,956 16,484 6,138 9,256 72,275 96,730 58,762 30,000 40,880 210,053 273,751 $ $ $ $ $ $ City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2006 (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 $ 210,053 1,141,024 (271,124) 869,900 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 5,403 Internal service funds are used by management to charge 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. 7,106 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 (418,541) (15,689) (12,875) (11,758) (5,542) (464,405) 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 1,040 $ The notes to the financial statements are an integral part of this statement. 29 629,097 City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2006 (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 (under) expenditures OTHER FINANCING SOURCES (USES) Long-term debt issued Refunding bonds issued Premium on long-term debt issued Proceeds from equipment disposal Payment to refunded bonds escrow agent 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 $ 65,463 10,267 57,508 3,594 3,564 3,968 2,104 146,468 Major Funds General Obligation Debt Service Transportation $ 23,215 1,953 188 1,045 327 26,728 $ 17,902 33 17,935 Municipal Property Corp Construction $ - Parks Bond Construction $ 621 21 642 Other Non-Major Governmental Funds $ 5,996 5,772 27,533 5,056 2,158 1,684 48,199 Total Governmental Funds $ 112,576 16,039 86,994 8,838 3,564 7,825 4,136 239,972 19,859 64,721 12,195 23,741 346 2,647 8,863 - 109 419 - 56 - 1,534 8,024 57 3,000 3,632 11,609 162 21,868 72,745 12,252 35,604 3,978 11,609 2,918 3,131 1,208 9,742 137,590 26,532 35,395 10,394 5,936 16,439 30,819 31,238 18,372 18,428 6,803 10,078 45,778 90,677 20,328 17,222 131,243 329,767 8,878 (8,667) 1,496 (31,238) (17,786) (42,478) (89,795) 2,159 - - 9,065 615 (9,582) 46,387 519 1,000 - 7,761 122 - 38,885 526 7 - 93,033 9,065 1,782 3,166 (9,582) 2,036 (6,658) (2,463) 900 (985) (85) 98 47,906 (52) 7,831 17,078 (11,619) 44,877 20,014 (19,314) 98,164 6,415 (8,752) 1,594 16,668 (9,955) 2,399 8,369 66,038 72,453 32,826 24,074 8,033 9,627 16,668 24,911 14,956 69,876 72,275 201,684 210,053 The notes to the financial statements are an integral part of this statement. $ $ $ $ $ $ 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, 2006 (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 $131,243 exceeded depreciation of $31,686 for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Gain on sales 8,369 99,557 $ 5,203 (3,523) 348 2,028 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 Payment to refunded bonds escrow agent Principal paid Long-term debt issued Refunding bonds issued 497 (1,782) 835 9,582 20,328 (93,033) (9,065) (73,135) 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. (1,906) Internal service funds are used by management to charge the costs of workers' compensation, risk management, and employee benefits individual funds. 693 The net revenue of certain activities as unearned revenue is reported in governmental activities. 4 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 137 $ The notes to the financial statements are an integral part of this statement. 31 36,244 City of Glendale, Arizona Statement of Net Assets Proprietary Funds June 30, 2006 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Proprietary Major Funds 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 $ $ 72,904 $ 4,070 $ 1,710 (26) 117 5 5,876 - 560,477 (126,030) 434,447 6,355 45,292 558,998 606,253 $ 18,476 971 (4) 19,443 6,968 (187) 242 2 2,046 47,255 LIABILITIES Current liabilities: Vouchers payable Accounts 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 obligations 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 38,184 Total $ 9,649 (217) 242 119 2,051 72,574 21 20,423 (7,002) 13,421 13,421 32,864 60,730 Governmental Activities Internal Service Funds 88 15,643 72,925 20,716 (11,550) 9,166 9,187 15,063 15,555 150 601,616 (144,582) 457,034 6,355 45,292 581,606 654,180 150 15,793 5,590 869 166 637 - 265 158 140 - 135 30 267 28 112 109 5 - 5,990 30 1,294 28 278 886 5 - 1,194 4,931 780 341 5,390 25 1,423 4,541 19,762 179 176 19 937 764 22 1,472 959 341 5,390 965 1,423 4,582 22,171 6,125 298 11,595 5,926 184,630 140 10,862 213,451 233,213 232 61 521 10,388 11,202 12,139 259 21 1,648 1,928 3,400 232 618 12,116 5,926 184,630 161 10,862 1,648 10,388 226,581 248,752 2,562 2,562 8,687 214,086 12,546 6,755 233,387 - 1,599 10,017 226 147,112 373,040 8,179 20,725 595 4,313 11,663 1,599 10,017 821 159,604 405,428 7,106 7,106 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net assets of business-type activities The notes to the financial statements are an integral part of this statement. 32 $ $ (851) 404,577 $ City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2006 (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 $ 21 28,412 18,585 1,593 48,611 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) 15,566 9,940 10,410 11,106 47,022 1,589 Nonoperating revenues (expenses): Impact fees Investment income Interest expense Net loss from joint venture Amortization of bond issuance cost Gain on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 7,661 3,154 (6,918) (1,642) (60) 810 3,005 Income before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets 4,594 4,854 (1,192) 8,256 Total net assets - beginning Total net assets - ending $ $ 5,134 2,925 149 8,208 $ 6,272 536 1,126 7,934 274 1,021 1,021 $ 19,704 20,725 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities The notes to the financial statements are an integral part of this statement. 33 $ 9,101 12,319 1,251 22,671 33 154 642 (55) 6 747 364,784 373,040 8,019 4,541 9,567 577 22,704 Total 8,040 28,412 18,585 4,541 9,567 5,134 2,925 2,319 79,523 Governmental ActivitiesInternal Service Funds $ 15,566 9,940 6,272 9,101 536 12,319 10,410 13,483 77,627 1,896 21,048 21,048 20,272 20,272 776 51 88 (60) 28 111 218 7,866 3,884 (7,033) (1,642) (60) 844 111 3,970 497 497 251 492 743 5,866 4,854 492 (1,192) 10,020 1,273 1,273 10,920 11,663 $ $ 84 10,104 5,833 7,106 City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Major Funds Proprietary Landfill Funds Water and Sewer 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 $ 48,595 - $ 8,426 - $ 14,653 8,231 Total $ 71,674 8,231 Governmental Activities Internal Service Funds $ 20,983 - (5,834) (17,833) (1,426) (2,908) (7,413) (8,812) (14,673) (29,553) - (12,859) 12,069 (2,031) 2,061 (5,241) 1,418 (20,131) 15,548 (20,395) 588 (1,192) - 8 492 - 8 492 (1,192) - (1,192) - 500 (692) - 810 83,044 (7,140) (44,884) 7,661 (6,115) - (809) (86) 154 (66) - 599 (1,527) 51 (52) 111 810 83,044 (7,350) (46,497) 7,866 (6,233) 111 - 33,376 (807) (818) 31,751 - Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 2,999 2,999 642 642 88 88 3,729 3,729 496 496 Net increase (decrease) in cash and cash equivalents during fiscal year 47,252 1,896 1,188 50,336 1,084 Cash flows from noncapital financing activities: Proceeds from sale of investments Transfers in Transfers out Net cash provided by (used) noncapital financing activities Cash flows from capital and related financing activities: Proceeds from sale of capital assets Proceeds from bonds sold Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Capital grant proceeds Net cash provided (used) by capital and related financing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 63,836 111,088 $ The notes to the financial statements are an integral part of this statement 34 16,580 18,476 $ 2,903 4,091 $ 83,319 133,655 $ 14,621 15,705 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 Unearned rent Deferred revenue Compensated absences Claims payable Proceeds from disposal of assets 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 $ 1,589 $ 11,106 $ $ $ 12,069 38,184 72,904 111,088 4,854 (1,642) $ 1,126 (18) (714) (36) (119) 121 140 - $ 274 $ $ $ 35 536 2,061 $ 1,251 (40) (115) 24 232 22 2 $ 33 Total 18,476 18,476 $ - $ $ 1,418 $ 13,483 (35) 183 (110) 23 (15) 1 3 84 - $ 1,896 Governmental Activities Internal Service Funds - (93) 183 (714) (261) (119) 23 (15) 146 3 232 246 2 $ 4,070 21 4,091 $ - $ $ 536 15,548 60,730 72,925 133,655 4,854 (1,642) 776 159 (108) (49) (190) - $ $ $ $ 588 15,555 150 15,705 - CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 Expenditures 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 ............................. 64 Encumbrances.........................................................................................................................XII ............................. 66 Equity in Joint Venture......................................................................................................... XIII ............................. 66 Jointly Governed Organizations ........................................................................................... XIV ............................. 67 Fund Balance/Net Assets Reservation, Designation, and Restriction.................................... XV ............................. 67 Employee Retirement Systems and Pension Plans ............................................................... XVI ............................. 72 Other Post-Employment Benefits ........................................................................................XVII ............................. 74 Contingent Liabilities and Commitments .......................................................................... XVIII ............................. 74 Subsequent Events................................................................................................................ XIX ............................. 75 36 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 a 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 unit, 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 (MPC) construction fund accounts for construction of municipal projects such as a public training facility, parking garage, media center, convention center and infrastructure financed by MPC issued excise tax revenue bonds. The parks bond 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 the 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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, 2006, the postage portion of the general fund supplies inventory was $39. 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 the 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 $7,033. In addition, $495 was included as part of the cost of capital assets under construction in connection with water and sewer projects. 41 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) Property, plant, and equipment are 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, 2006, is $2,255. 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, 2006, 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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, 2005 August 15, 2005 October 1, 2005 March 1, 2006 November 1, 2005 May 2, 2006 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, 2006, is as follows: Rate $ 0.33 1.39 $ 1.72 Fund General fund General obligation debt service fund Total N. Compensated absences Vacation time is accumulated up to a maximum of eight 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 fund is equal to: 1) vacation and compensatory time taken and paid during the thirty days following the year ended June 30, 2006, 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 deferred 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 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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. The City provides neither administrative services nor investment advice to the plans; 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 the 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. Neither the County nor LGIP are 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 2005-06 was $5,264. II. Compliance - Excess of expenditures over appropriations For the year ended June 30, 2006, expenditures exceeded appropriations in the housing fund and municipal property corporation construction fund (the legal level of budgetary control) by $89 and $3,053, respectively. These over-expenditures were funded by available fund balance in the housing fund in addition to operating transfers. The over-expenditures in the municipal property corporation construction fund were funded through the issuance of bonds. 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 was $78,734 and the bank balances were $86,841. The difference of $8,107 represents deposits in transit, outstanding checks and other reconciling items. Of 45 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) the bank balance, $300 was insured by the Federal Depository Insurance Corporation (FDIC). The remaining bank balances were covered by $111,255 of collateral held by the City’s agent in the City’s name. 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. 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, 2006, the City had the following investments: Investment Maturities (in years) 0-1 1-2 Fair Value Investment Type Commercial paper U.S. Agencies U.S. Treasuries Total investments State LGIP total Grand total investments Cash deposits Other restricted cash Total deposits and investments $ $ 77,156 99,873 12,920 189,949 78,476 268,425 $ $ 7,819 7,819 7,819 $ $ 77,156 107,692 12,920 197,768 78,476 276,244 78,734 38,207 393,185 Interest rate risk: As a means of limiting its exposure to interest rate risk the City’s investment policy requires all securities to mature in no more than three years. The City also purchases securities to be laddered with staggered maturity dates and limits at least half of the City’s investment portfolio to maturities of 12 months or less. Credit risk: As of June 30, 2006, 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 Moody's Rating S&P Rating % of Investments Weighted Average Maturity (Years) (N/A) Aaa P1 (N/A) AAA A-1+ 6.53% 54.45% 39.02% 0.43 0.31 0.10 46 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 UBS Finance GE Capital CIESCO LP Investment Type U.S. Agencies U.S. Agencies U.S. Agencies Commercial Paper Commercial Paper Commercial Paper $ Amount 16,143 39,634 47,977 10,963 10,449 9,960 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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, 2006, is as follows: Balances June 30, 2005 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 $ 69,406 49,762 1,189 120,357 Additions $ 111,254 13,250 124,504 Transfers $ (82,156) 1,874 (80,282) 163,804 118,732 469,968 35,259 29,056 12,102 28,772 1,591 635 28,551 888,470 145 4,940 119 859 49 53 5,777 11,942 (33,471) (47,805) (114,786) (10,022) (3,099) (4,701) (9,273) (1,017) (341) (17,343) (241,858) (4,608) (6,317) (12,061) (1,412) (393) (399) (3,296) (203) (106) (2,891) (31,686) 98 98 646,612 (19,744) 80,282 766,969 48 $ 104,760 $ 19,845 6,646 23,556 27,862 1,121 1,154 80,184 $ Balances June 30, 2006 Disposals - (1,514) (1,514) $ (227) (45) (62) (2,303) (2,637) 183,649 125,523 498,237 63,121 30,296 13,256 29,586 1,578 688 32,025 977,959 47 46 63 2,166 2,322 (38,079) (54,122) (126,702) (11,434) (3,492) (5,100) (12,523) (1,157) (447) (18,068) (271,124) (315) $ 98,504 63,372 1,189 163,065 (1,829) 706,835 $ 869,900 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) Balances June 30, 2005 Business-type activities: Non-depreciable assets: Construction in progress - water and sewer Construction in progress - landfill 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 $ 69,189 526 9,477 79,192 Additions $ 38,717 53 100 5,718 44,588 Transfers $ - Balances June 30, 2006 Disposals $ (60,307) (53) (253) (3,586) (64,199) $ 47,599 373 11,609 59,581 13,791 13,628 88,214 111,977 105,776 90,674 27,544 5,187 3,550 1,213 14,668 476,222 243 10,669 5,718 3,759 43,944 65 169 1,932 66,499 - (210) (476) (686) 14,034 24,297 93,932 115,736 105,776 134,618 27,609 5,187 3,509 1,213 16,124 542,035 (4,654) (3,778) (23,020) (32,797) (36,800) (8,980) (6,920) (1,506) (3,013) (949) (9,427) (131,844) (490) (746) (1,614) (2,410) (3,350) (2,107) (747) (101) (247) (47) (1,557) (13,416) - 209 469 678 (5,144) (4,524) (24,634) (35,207) (40,150) (11,087) (7,667) (1,607) (3,051) (996) (10,515) (144,582) 344,378 53,083 - 423,570 49 $ 97,671 $ - (8) $ (64,207) 397,453 $ 457,034 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 $ 11,473 3,086 1,298 11,139 4,544 146 $ 31,686 Business-type activities: Water and sewer Landfill Sanitation Housing Total depreciation expense $ 11,039 1,126 877 374 $ 13,416 Construction and other significant commitments The City has active construction projects as of June 30, 2006. 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 $ $ $ 18,020 6,005 19,919 36,217 18,343 47,599 146,103 $ 228 2,682 6,385 21,138 2,183 21,796 54,412 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 $309, 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; loss and destruction of assets; errors and omissions; and natural disaster. The City’s risk management fund purchases commercial 50 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) insurance for liability, property, aviation, errors and omissions, boiler and machinery, and vehicle property damage. The risk management fund was fully self-insured through June 30, 1998, for tort liability loss. Effective July 1, 1998, the City purchased excess public entity liability insurance with $1,000 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 a budget model taking into consideration prior loss experience, staffing and operating budget. Premium payments to insurance carriers are made directly from the risk management fund. There have been no settlements paid in excess of insurance in any of the past three years nor has insurance coverage been significantly reduced in recent years. 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 a budget model taking into consideration prior loss experience, staffing level, and the National Council on Compensation insurance workers’ compensation manual rates. 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 medical, vision, dental, and life insurance plans are determined prior to each renewal period by estimating the costs of claims and administration of the plan based on a variety of factors including: the demographics of the group, previous claims history, plan design changes and any new mandated benefits. These insurance benefits are provided through minimum premium and self-insured insurance plans. The City is responsible for the first $150 in medical claims per individual plan year. Any claims exceeding $150 are paid by the reinsurance plan. 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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. The self-insurance programs do not include a provision for unallocated claim adjustment expenses except for the workers’ compensation fund, which provides for unallocated claims adjustment expenses and Industrial Commission taxes and fees. 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 $7,493 as of June 30, 2006. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2006 2005 Unpaid claims, beginning of fiscal year Current year claims and changes in estimate Claims payments $ Balance at fiscal year end $ 2,960 $ 2,833 (1,956) Workers' Compensation 2006 2005 2,568 $ 2,363 (1,971) 3,837 $ 2,247 $ 388 (673) 2,960 $ 1,962 2,194 Employee Benefits 2006 2005 $ 1,486 (1,433) $ 2,247 2,475 $ 15,603 (16,384) $ 1,694 2,079 13,319 (12,923) $ 2,475 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 at June 30, 2006, are as follows: Governmental Activities Year Ending June 30 2007 2008 2009 2010 2011 2012-2016 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments 52 $ $ 1,921 2,395 2,304 2,170 2,805 5,160 16,755 (3,880) 12,875 Business-type Activities $ $ 1,049 583 508 368 304 2,812 (199) 2,613 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 4,044 7,688 (3,419) 4,269 $ 250 6,790 150 2,389 9,579 (3,759) 5,820 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 2005-06 were $428. 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 2008 and beyond. The carrying value of leased assets is $191,624 (cost of $213,115 less accumulated depreciation of $21,491). 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: Total Revenues $ 1,077 459 284 208 136 445 $ 2,609 Fiscal Year 2007 2008 2009 2010 2011 Beyond 2012 Total VIII. Short-term debt The City did not issue short-term debt for the year ended June 30, 2006. 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 53 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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. 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 (MPC) bonds In 1982, 2002, 2003 and 2006 the MPC, a non-profit corporation, issued bonds to finance the construction of a new municipal office complex, hockey arena, public safety training center, parking garage, media center, convention center and city infrastructure, respectively. On October 19, 1982, July 31, 2002, May 1, 2003, and June 1, 2006, the City entered into a lease purchase agreement with MPC, whereby the City is purchasing the constructed municipal office complex, hockey arena, public safety training center, parking garage, media center, convention center and city infrastructure, 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. 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, 2006, 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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, 2006. June 30, 2005 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 $ 157,065 Additions $ June 30, 2006 Reductions 38,430 $ (20,340) $ 175,155 Amounts Due Within One Year $ 11,921 75 - (36) 39 39 22,455 177,950 357,545 15,745 47,923 102,098 (2,260) (1,885) (24,521) 35,940 223,988 435,122 1,875 2,785 16,620 18,576 18,576 - (2,887) (2,887) 15,689 15,689 2,711 2,711 13,704 10,623 7,682 2,136 18,824 (829) (6) (19,013) 12,875 12,753 7,493 1,051 9,196 4,931 4,366 36,375 1,782 22,742 (606) (20,454) 5,542 38,663 375 15,553 412,496 $ 124,840 $ (47,862) $ 489,474 $ 34,884 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 $39 is due six months after fiscal year-end. 55 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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, 2006. June 30, 2005 Water and sewer G.O. bonds Landfill G.O. bonds Water and sewer revenue/obligation bonds Total bonds payable $ Notes payable Total notes payable Capital lease obligations Estimated closure and post-closure costs Unamortized premium on debt issuance Compensated absences Housing noncurrent liabilities Arbitrage rebate payable Total other long-term obligations Total $ 13,135 870 115,140 129,145 Additions $ June 30, 2006 Reductions 80,000 80,000 $ (760) (170) (5,120) (6,050) $ 12,375 700 190,020 203,095 Amounts Due Within One Year $ 780 179 5,390 6,349 13,660 13,660 - (1,375) (1,375) 12,285 12,285 1,423 1,423 2,676 1,370 (1,433) 2,613 965 9,852 536 10,388 - 3,469 1,669 13 17,679 3,044 275 8 140 5,373 6,267 1,912 21 140 21,341 341 1,294 2,600 160,484 $ 85,373 (246) (32) (1,711) $ (9,136) $ 236,721 $ 10,372 F. Advance refunded bonds The City issued refunding bonds to defease certain outstanding bonds, thus achieving debt service savings. The City has placed the proceeds from the refunding issue in an irrevocable escrow account with a trust agent, which will provide amounts sufficient for future payment of principal and interest of the issue refunded. Accordingly, the trust account assets and liabilities for the defeased bonds are not included in the City’s financial statements. Although defeased, the refunded debt from this issue will not be actually retired until the call dates have come due or until maturity if they are not callable issues. The City issued advance refunding bonds for the fiscal year ending June 30, 2006. Issue Refunded General Obligation Bonds Series 2000 Date Refunded April 11, 2006 56 Remaining Balance $9,255 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2006, 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 Various 4.15-4.60 1998 Various 5.00-5.40 2000 Various 2.50-5.00 2002 Various 1.50-5.00 2003 Various 3.00-5.00 2004 Various 3.50-4.00 2005 Refunding 5.00-5.00 2006 Various 4.00-5.00 2006 Total 2007 2008 2015 2022 2022 2019 2015 2015 2021 Revenue bonds payable from highway user revenue funds Streets 5.00-5.37 2000 Streets 2.50-4.00 2004 Streets 4.00-5.00 2006 Total 2010 2014 2016 Amount of Original Issue Bonds Outstanding June 30, 2006 $ $ 36,125 12,000 20,215 40,235 52,525 36,645 11,960 9,065 29,365 8,750 14,655 15,745 7,500 12,695 15,745 35,940 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 MPC excise tax 2006A 4.00-5.00 2006 2026 33,250 MPC excise tax 2006B 8.00-8.00 2006 2021 14,673 Total Special assessment bonds payable due from assessments on property owners District 73 5.35 1997 2007 Total Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 57 1,775 4,200 6,355 33,125 45,040 34,270 11,960 9,065 29,365 175,155 6,400 5,055 49,940 97,040 7,250 10,380 33,250 14,673 223,988 299 39 39 $ 435,122 (16,620) 418,502 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) Classified in business-type activities on the government-wide financial statements: Purpose Interest Rate Issued Fiscal Year Ending June 30 Year Series Matures G.O. bonds payable from landfill fund Landfill 5.00-5.40 2000 Total G.O. bonds payable from water and sewer fund Refunding 5.05-5.55 1993 Water and sewer 1.50-5.00 2003 Total 2015 Amount of Original Issue Bonds Outstanding June 30, 2006 $ $ 1,460 700 700 2007 2022 20,375 13,875 5 12,370 12,375 Revenue bonds/obligations payable from water and sewer fund Various 4.75-5.75 2000 2010 Various 4.00-5.00 2004 2023 Various 4.00-5.25 2006 2026 Total 53,000 80,000 80,000 30,020 80,000 80,000 190,020 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities $ 203,095 (6,349) 196,746 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, 2006, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 76,174 (52,539) 23,635 20% $ $ 253,914 (113,184) 140,730 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) H. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of July 1, 2006, are 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, 2006 $ 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 22,909 13,721 34,412 15,951 Governmental facilities(1) 40,910 12,055 28,855 Landfill development Library Open spaces Parks and recreation Public safety 17,000 15,398 53,700 57,188 64,801 1,460 3,175 49,741 22,491 15,540 15,398 50,525 7,447 42,310 Streets and parking(1) 38,050 29,780 8,270 Voter authorized November 2, 1999 (1) (1) Transit Total G.O. bonds $ 6,935 418,005 $ 185 170,928 $ 6,750 247,077 $ 56,000 $ 49,657 $ 6,343 Revenue bonds Voter authorized March 10, 1987 Water and sewer Voter authorized November 2, 1999 Water and sewer(1) Total revenue bonds Total bonds 10,000 66,000 $ 484,005 49,657 $ 220,585 10,000 16,343 $ 263,420 (1) Certain General Obligation Bonds or Revenue Bonds can be issued as General Obligation Bonds, Revenue Bonds or a combination thereof. 59 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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. 198 638 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. 11,278 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. 2,160 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 $ 15,689 (2,711) 12,978 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. $ 822 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. 11,463 Total notes payable recorded in business-type activities Less current portion Long-term portion of notes payable recorded in business-type activities 12,285 (1,423) 10,862 60 $ CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) J. Debt service requirements Fiscal Year Ending 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 Highway User Revenue Bonds $ Less interest 4,721 4,705 4,696 4,699 4,690 4,696 4,699 4,686 1,953 1,971 41,516 Municipal Property Corporation Bonds Special Assessment District Bonds $ $ $ 7,451 Less future draws Principal Landfill G.O. Bonds 50 $ 34,065 216 216 139 571 $ 13,058 24,430 25,502 23,991 24,528 24,642 24,672 24,734 22,833 22,893 25,266 25,318 25,371 25,423 25,486 25,530 15,255 15,904 15,958 16,014 13,420 13,478 12,674 13,612 13,671 13,732 6,532 8,563 542,490 248,960 - 72,327 521 $ 221,203 40 40 1 $ Various Purposes G.O. Bonds $ Water and Sewer Notes Payable 19,025 18,292 16,823 16,953 16,910 16,921 16,941 16,955 16,912 13,364 13,280 13,229 8,802 5,482 5,496 2,761 218,146 54,912 $ G.O. Bonds Notes Payable 3,788 3,435 3,224 3,112 2,563 2,563 2,563 199 199 199 21,845 $ 1,267 1,263 1,264 1,256 1,251 1,251 1,259 1,260 1,249 1,236 1,226 1,214 14,996 $ 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 1,128 18,063 6,156 3,401 7,201 Revenue Bonds/ Obligations $ 14,712 14,733 14,728 14,726 13,739 13,736 13,743 13,730 13,735 13,737 13,735 13,734 13,734 13,737 13,738 13,734 14,866 14,863 14,864 14,867 7,696 7,696 298,583 Total $ 57,956 68,203 67,505 65,866 64,810 64,938 65,006 62,693 58,010 54,529 54,636 54,624 49,036 45,771 45,849 43,153 30,121 30,767 30,822 30,881 21,116 21,174 12,674 13,612 13,671 13,732 6,532 8,563 1,156,250 113,953 - - - - - - 39 $ 163,234 $ 15,689 $ 11,595 $ 10,862 $ 184,630 442,085 72,327 $ The following table discloses the debt service requirements as of June 30, 2006, segregating principal and interest, for the next five years and in five-year increments thereafter. Note: the principal column includes the future draws. Fiscal Year 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2031 2032-2034 Total Principal 27,628 31,605 33,151 33,014 33,483 175,235 164,328 123,436 65,670 26,615 $ 714,165 Interest 30,328 36,598 34,354 32,852 31,327 129,941 85,588 42,308 16,577 2,212 $ 442,085 $ $ 61 Total 57,956 68,203 67,505 65,866 64,810 305,176 249,916 165,744 82,247 28,827 $ 1,156,250 $ 641,838 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) K. New bonds On February 13, 2006, the City issued $80,000 in subordinate lien water and sewer revenue obligation bonds to fund the construction of various water and sewer improvements in the City. The bonds mature on various dates starting 2011 through 2026 with various interest rates of 4.00% to 5.25%. The bonds are not general obligations of the City, but are limited obligations of the City and are payable as to both principal and interest solely from and secured by a subordinate pledge of net revenues of the system. On April 11, 2006, the City issued $29,365 in general obligation bonds to finance the costs of acquisition, improvement and equipment of various projects relating to public safety, parks, flood control, and streets. The bonds mature on various dates starting 2007 through 2021 with various interest rates of 4.00% to 5.00%. The bonds are direct and general obligations of the City and are payable as to both principal and interest from ad valorem taxes against all taxable property within the City subject to taxation. On April 11, 2006, the City issued $9,065 in general obligation refunding bonds to be used to advance refund the 2011-2015 maturities of the City’s General Obligation Bonds Series June 1, 2000, in the amount of $9,255. This transaction resulted in an economic gain of $323 and a $419 reduction in future debt service payments. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $328. The bonds mature on various dates starting 2011 through 2015 with an interest rate of 5.00%. 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. On April 22, 2006, the city issued $15,745 in street and highway user revenue bonds to fund street and highway improvements within the City. The bonds mature on various dates starting 2007 through 2016 with various interest rates of 4.00% to 5.00%. The bonds are not general obligations of the City, but are limited obligations of the City and are payable as to both principal and interest solely from revenues received by the City from highway user taxes collected by the State. On May 31, 2006, the City issued $33,250 of Municipal Property Corporation (MPC) Excise Tax Revenue Bonds Series 2006A Tax Exempt to finance the cost of developing, constructing and equipping a public safety training facility, constructing infrastructure improvements within the City and to pay the cost of issuing the 2006A Bonds. The bonds mature on various dates starting 2008 through 2026 with various interest rates of 4.00% to 5.00%. The principal and interest on the bonds are not a general obligation of the Corporation and City, but a limited obligation of the Corporation and City payable solely from and are secured by a pledge of the City’s unrestricted excise taxes. On June 16, 2006, the City entered into a bridge financing agreement whereby the maximum amount of Municipal Property Corporation (MPC) Subordinate Excise Tax Revenue Bonds Series 2006B to be issued by February 1, 2007, is $87,000. As of June 30, 2006, $14,673 bonds had been issued to finance the construction of a parking garage, media center, convention center, and infrastructure improvements. The bonds mature on various dates starting 2007 through 2021 with a maximum interest rate not to exceed 8.00%. The principal and interest on the bonds are not a general obligation of the Corporation and City, but a limited obligation of the Corporation and City payable solely from and are secured by a pledge of the City’s unrestricted excise taxes. 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 62 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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, 2006, 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, 2006 as of June 30, 2005 22,594 16,790 74% $ 14,928 14,559 $ 13,979 13,633 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2006 $ 14,928 $ 3,591 Liability recognized as of June 30, 2006 $ - $ 10,388 These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2005-06. The estimated costs are subject to changes due to 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 39 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. 63 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) XI. Interfund transactions A. Interfund receivables Interfund balances at June 30, 2006, consisted of the following: Due To Major governmental funds: General $ 1,861 Non-major governmental funds: Community development block grant fund Other special revenue fund Other capital projects Non-major enterprise funds: Housing fund Total Due From $ - - 417 1,312 104 $ 1,861 28 $ 1,861 The interfund balances at June 30, 2006, 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, 2006, are expected to be repaid within one year. The remainder of this page left blank intentionally. 64 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) B. Interfund transfers Interfund transfers for the year ended June 30, 2006, 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 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 Transfers to non-major governmental funds from: General fund Transportation special revenue fund Total transfers to non-major governmental fund Transfers to non-major debt service funds from: General fund Non-major governmental funds Highway users gas tax special revenue fund Special revenue fund arena Capital projects Total transfers to non-major debt service fund Transfers to non-major enterprise funds from: General fund Grand total all transfers $ 234 52 47 26 10 276 199 1,192 2,036 900 3,503 750 4,253 1,762 2,728 3,567 4,768 12,825 492 $ 20,506 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 2006 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. 65 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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, 2006, the City intended to honor $55,549 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, 2006, the City recognized a loss of $1,642. 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, 2006, (unaudited) is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets $ Liabilities Net assets $ Total revenues Total expenses Decrease in net assets $ $ 66 77,406 596,544 673,950 69,808 604,142 60,554 (62,724) (2,170) CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) Calculation of the City’s equity: City’s share of SROG equity (Total equity of $604,142 plus unrealized loss of $1,977 less assets not owned by the City of $178,301 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 $ 36,750 $ 813 7,729 45,292 $ $ 4,525 (1,642) 2,883 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. 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. 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. 67 $ 180 2,635 5 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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. $ 55 Reserved for court security Security surcharges collected by the City Court are required by ordinance to be spent solely on court security. 120 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). 105 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. 122 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. 211 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. 2,439 Reserved for vehicle/equipment replacement For future scheduled replacement of existing equipment and vehicles. Total reserved for general fund type 4,415 $ 10,287 Designated for computer replacement For future schedule replacement of existing personal computers. $ 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. 3,035 177 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. 68 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. 106 Designated for telephone For payment of future telephone charges and maintenance Total designated for general fund type 68 18 $ 3,404 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (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 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 $ 117 47 1,851 1,095 372 551 880 457 2,586 307 2,715 529 2,185 8,252 1,957 23,737 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 1,073 175 1,248 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 758 366 1,124 $ 26,273 Total reserved for special revenue fund type 69 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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 212 87 $ 381 680 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 9,627 1,700 204 $ 11,531 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 $ $ 98 98 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. $ 7,786 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. $ 12,120 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. 101 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. 396 70 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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. $ 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. 564 1,219 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. 951 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 89 $ 23,226 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. $ 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, 2006, only the loans with the State Revolving Fund (authorized by revenue bond election in 1961) were not covered by a surety bond. 241 1,358 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. 10,017 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 226 11,842 NON-MAJOR PROPRIETARY FUNDS Net assets held by the housing fund may only be used for that purpose. Total restricted for enterprise fund type 71 595 $ 12,437 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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 $ 4,912 $ 4,912 XVI. 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 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, 2006, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 7.4% (6.9% 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, 2006, 2005 and 2004 were $9,310, $7,094 and $6,860, respectively, which were equal to the required contributions for the year. 72 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) 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 20.54% 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, 2006, 2005 and 2004 were $39, $29 and $29, respectively, which were equal to the required contributions for the year. Agent Plans. For the year ended June 30, 2006, 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 9.92% and 13.86% for Fire and Police, respectively. Annual Pension Cost (APC). The City’s pension cost for Police and Fire for the year ended June 30, 2006, the date of the most recent available actuarial valuation, and related information follow. Fire Police Contribution rates: City Plan members 9.92% 7.65% 13.86% 7.65% Annual pension cost $842 $2,991 Projected unit credit Projected unit credit Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at 8.50% 5.50% - 8.50% 5.00% 8.50% 5.50% - 8.50% 5.00% Amortization method Level % open Level % open 30 years for unfunded actuarial accrued liability, 20 years for excess 30 years for unfunded actuarial accrued liability, 20 years for excess Smoothed market value Smoothed market value Actuarial cost method Remaining amortization period Asset valuation method 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, 2006, follows. Contributions required and contributions made Year Ended June 30 Police 2006 2005 2004 Fire 2006 2005 2004 Percentage of APC Contributed APC Net Pension Obligation $ $ $ 2,991 2,172 1,906 100.0 % 100.0 % 100.0 % $ $ $ - $ $ $ 842 895 622 100.0 % 100.0 % 100.0 % $ $ $ - Includes insurance premium tax, where applicable. 73 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) E. Required supplementary information Analysis of funding progress for the agent plan as of the most recent available actuarial valuation, June 30, 2006, follows. Valuation Date June 30 Police 2006 2005 2004 Valuation Date June 30 Fire 2006 2005 2004 Actuarial Value of Plan Assets $ $ $ 77,968 74,645 72,743 Actuarial Accrued Liability $ $ $ Actuarial Value of Plan Assets $ $ $ 60,772 58,641 56,727 110,181 96,763 86,792 Funding Liability (Excess) $ $ $ Actuarial Accrued Liability $ $ $ 74,401 63,202 54,893 32,213 22,117 14,050 Funding Liability (Excess) $ $ $ 13,629 4,561 (1,834) Annual Covered Payroll Funded Ratio 70.8% 77.1% 83.8% $ $ $ Annual Covered Payroll Funded Ratio 81.7% 92.8% 103.3% 22,052 19,240 17,343 $ $ $ 13,518 11,376 9,849 Unfunded Liability as Percentage of Covered Payroll 146.1% 115.0% 81.0% Unfunded Liability as Percentage of Covered Payroll 100.8% 40.1% -% XVII. 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. XVIII. 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. 74 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2006 (amounts expressed in thousands) XIX. Subsequent events On September 15, 2006, the City made a total payment of $7,000 on the Northern Crossing Land Purchase note dated November 15, 2002. This amount included a prepayment of $5,369 in principal without penalty. The payment was programmed in the 2006-07 adopted budget out of the general fund. The City has issued an additional $3,402 on July 26, 2006, in Municipal Property Corporation (MPC) Subordinate Excise Tax Revenue Bond Series 2006B under the bridge financing agreement. The remainder of this page left blank intentionally. 75 This page left blank intentionally. 76 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 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 Miscellaneous Debt service: Principal Interest Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2006 $ Final 59,617 $ 59,617 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 68,302 $ 8,685 59,378 12,881 47,010 13,458 545 1,168 9,884 144,324 8,242 (12,684) 199,499 59,378 12,881 47,010 13,458 545 1,168 9,883 144,323 8,242 (12,706) 199,476 65,463 10,267 57,508 23,738 3,564 3,752 2,154 2,103 168,549 8,792 (13,461) 232,182 6,085 (2,614) 10,498 10,280 3,019 2,584 2,154 (7,780) 24,226 550 (755) 32,706 31,618 64,029 24,711 29,823 657 17,544 500 31,289 64,965 25,535 28,575 554 11,585 3,556 27,405 64,257 24,198 24,099 346 2,649 3,884 708 1,337 4,476 208 11,585 907 3,130 1,729 9,579 183,320 3,130 1,729 14,617 185,535 3,131 1,208 9,673 156,966 (1) 521 4,944 28,569 16,179 $ 13,941 $ 75,216 $ 61,275 (Continued) 77 City of Glendale, Arizona Budgetary Comparison Schedule (continued) General Fund For the Fiscal Year Ended June 30, 2006 (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. Market adjustment on restricted investments not available for appropriation. 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. Capital outlay funded by capital lease. 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. 78 $ 232,182 (68,302) 217 (20,144) (2,154) (8,792) 13,461 $ 146,468 $ 156,966 68 718 (18) (20,144) $ 137,590 City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 31,083 Final $ 31,083 Actual Amounts (budgetary basis) $ 32,885 Variance with Final Budget Positive (Negative) $ 1,802 RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Revenues Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 20,534 22,991 200 447 44,172 900 (750) 75,405 20,534 22,991 200 447 44,172 900 (701) 75,454 23,215 1,953 188 1,045 327 26,728 900 (985) 59,528 2,681 (21,038) (12) 598 327 (17,444) (284) (15,926) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations 13,108 61,473 74,581 9,815 61,554 71,369 8,841 26,532 35,373 974 35,022 35,996 Budgetary fund balance, June 30, 2006 $ 824 $ 4,085 $ 24,155 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. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 79 $ 20,070 $ 59,528 (32,885) (900) 985 $ 26,728 $ 35,373 6 16 $ 35,395 CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2006 (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. 80 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 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. Municipal Property Corporation Debt Service 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. 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. 81 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). 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. 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. 82 This page left blank intentionally. 83 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2006 (amounts expressed in thousands) Special Revenue Funds Community Development Block Grants 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 $ - $ 19 964 1 3,365 4,349 $ 473 5 417 3,365 4,260 $ 84 Highway Users Gas Tax $ 3,681 $ 1,489 117 5,287 $ 470 43 55 568 Other Special Revenue Fund Development Impact Fees $ 24,686 $ 24,686 $ 949 949 $ 1,185 $ 1,621 9 3,476 18 2,448 717 9,474 $ 1,052 36 4 1,312 11 2,725 5,140 - 164 23,737 2,372 87 2 89 4,349 4,555 4,719 5,287 23,737 24,686 381 1,581 4,334 9,474 $ $ $ Debt Service Funds Highway Users $ 2,366 $ 4 2,370 $ $ 5 426 1,875 2,306 Municipal Property Corporation Special Assessment Debt Service Streets Construction $ 104 $ 141 $ 20,892 $ 8,516 8,620 $ 6 147 $ 38 20,930 $ 4,135 2,785 6,920 $ 1 6 7 $ 895 129 1,024 Capital Project Funds Fire and Police Other Construction Construction $ 4,820 $ 4,820 $ 2,692 2,692 $ 10,680 $ 72 18 191 98 11,059 $ 251 6 104 152 513 Permanent Fund Cemetery Perpetual Care $ 4,912 $ 76 4,988 $ 76 76 Total Non-major Governmental Funds $ 73,467 $ 1,788 65 6,120 234 10,968 4,088 96,730 $ 6,787 6 84 4 1,833 66 4,562 6,453 4,660 24,455 64 1,700 140 - - 98 4,912 33,187 64 2,370 1,700 8,620 140 147 19,906 19,906 20,930 2,128 2,128 4,820 3,320 7,128 10,546 11,059 4,912 4,988 23,694 15,394 72,275 96,730 $ $ $ $ 85 $ $ $ 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, 2006 (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 $ 2,777 357 3,134 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 Transfers in Transfers out Total other financing sources and uses $ 86 $ 5,771 877 6,648 $ 5,823 7,677 5,056 61 917 19,534 11,534 - 37 28 5 - 887 7,980 57 2,917 523 70 144 1 3,110 29 7 2,463 14,033 2,067 345 2,848 5,330 11 3,025 15,614 24 2,855 1,318 3,920 7 2,544 (2,775) (224) 24 $ 16,888 16,888 Other Special Revenue Fund Development Impact Fees 3,109 - - Excess (deficiency) of revenues and other sources over Net change in fund balances Fund balances, July 1 Fund balances, June 30 Highway Users Gas Tax 65 89 (26) (26) 2,631 $ 2,088 4,719 1,709 (3,566) (1,857) 1,292 $ 22,445 23,737 2,063 $ 2,271 4,334 Debt Service Funds Municipal Property Corporation Highway Users $ $ 4 4 $ 84 84 Special Assessment Debt Service $ 29 29 Capital Projects Funds Fire and Streets Police Other Construction Construction Construction Permanent Fund $ $ 428 241 669 $ 120 120 $ 144 1 191 414 169 919 Total Non-major Governmental Funds Cemetery Perpetual Care 170 170 $ 5,996 5,772 27,533 5,056 2,158 1,684 48,199 2 16 - 155 - 406 44 - 49 55 - - 1,534 8,024 57 3,000 3,632 11,609 162 1,875 852 2,729 2,785 8,871 11,672 36 3 39 12,433 12,588 16,197 16,647 8,811 8,915 - 6,803 10,078 45,778 90,677 (2,725) (11,588) (10) (11,919) (16,527) (7,996) 170 (42,478) 2,728 2,728 1,536 10,097 11,633 16,873 205 (10) 17,068 12,589 197 (276) 12,510 7,887 124 (4,966) 3,045 - 38,885 526 7 17,078 (11,619) 44,877 3 45 5,149 (4,017) (4,951) 170 61 64 $ 1,655 1,700 - (10) $ 150 140 $ 14,757 19,906 $ 87 6,145 2,128 $ 15,497 10,546 $ 4,742 4,912 2,399 $ 69,876 72,275 City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ RESOURCES (INFLOWS): Investments Taxes Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2006 $ 7,363 Final $ 7,363 Actual Amounts (budgetary basis) $ 8,033 17,947 17,947 25,310 17,947 17,947 25,310 33 17,902 17,935 25,968 337 337 11 10,394 5,905 16,636 11,777 5,905 18,019 10,394 5,936 16,341 8,674 $ 7,291 $ 9,627 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. Issuance lost due to a refunding bond issue. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 88 Variance with Final Budget Positive (Negative) $ 670 33 (45) (12) 658 326 1,383 (31) 1,678 $ 2,336 $ 25,968 (8,033) $ 17,935 $ 16,341 98 $ 16,439 City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Construction Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Actual Final - $ - Final Budget Amounts Positive (budgetary basis) (Negative) $ - $ - RESOURCES (INFLOWS): Long-term debt issued - 28,185 46,387 18,202 Proceeds from equipment disposal - - 1,000 1,000 Premium on long-term debt - - 519 519 - 28,185 47,906 19,721 - 28,185 47,906 19,721 Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administrative - - 419 (419) Capital Outlay - 28,185 30,819 (2,634) - 28,185 31,238 (3,053) Total charges to appropriations Budgetary fund balance, June 30, 2005 $ - $ - $ 16,668 $ 16,668 $ 47,906 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: Less: Proceeds from equipment disposal. (1,000) Long-term debt issued. (46,387) Premium for long-term debt. (519) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. $ - $ 31,238 $ 31,238 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. 89 City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Actual Final 28,852 $ 28,852 Final Budget Amounts Positive (budgetary basis) (Negative) $ 24,911 $ (3,941) RESOURCES (INFLOWS): Investments 477 477 573 96 - - 21 21 6,000 6,000 7,761 1,761 Miscellaneous Long-term debt issued Premium on long-term debt issued Total revenues Less: Transfers out - - 122 122 6,477 6,477 8,477 2,000 (42) Amounts available for appropriation (45) 35,287 (52) 35,284 (7) 33,336 (1,948) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2006 3,470 - 56 31,817 27,673 18,372 9,301 35,287 27,673 18,428 9,245 $ - $ 7,611 $ 14,908 (56) $ 7,297 $ 33,336 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. (24,911) Long-term debt issued. (7,761) Premium on long-term debt issued. (122) Market adjustment on restricted investments not available for appropriation. 48 Add: Transfers out. 52 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. $ 642 $ 18,428 $ 18,428 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 City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Actual Amounts (budgetary basis) Final 325 $ 325 $ 71 Variance with Final Budget Positive (Negative) $ (254) RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation 5,508 5,508 5,833 5,508 5,508 5,833 2,774 357 3,131 3,202 (2,734) 357 (2,377) (2,631) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital outlay Total charges to appropriations 5,755 78 5,833 5,755 40 5,795 3,108 1 3,109 2,647 39 2,686 Budgetary fund balance, June 30, 2006 $ - $ 38 $ 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. 91 93 $ 55 $ 3,202 3 (71) $ 3,134 $ 3,109 1 $ 3,110 City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 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, 2006 Actual Amounts (budgetary basis) Final 565 $ 565 $ 2,190 Variance with Final Budget Positive (Negative) $ 1,625 15,173 15,173 1,794 (2,728) 14,804 15,297 15,297 1,794 (2,728) 14,928 16,888 16,888 2,544 (2,728) 18,894 12,138 2,630 12,407 2,485 11,519 2,455 888 30 29 7 14,804 29 7 14,928 29 7 14,010 918 $ - $ - $ 4,884 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. Capital outlay. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 92 1,591 1,591 750 3,966 $ 4,884 $ 18,894 (2,190) (2,544) 2,728 $ 16,888 $ 14,010 7 16 $ 14,033 City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Final 24,408 $ 24,408 Actual Amounts (budgetary basis) $ 22,446 Variance with Final Budget Positive (Negative) $ (1,962) RESOURCES (INFLOWS): Licenses and permits Intergovernmental Investments Total revenues Less: Transfers out Amounts available for appropriation 8,245 109 449 8,803 (7) 33,204 8,245 109 449 8,803 (7) 33,204 5,771 877 6,648 (26) 29,068 (2,474) (109) 428 (2,155) (19) (4,136) CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Street Maintenance Community services Capital outlay Principal retirement Interest expense Total charges to appropriations 3,261 3,510 12,266 11,755 2,067 345 33,204 243 2,704 4,621 12,334 2,067 345 22,314 37 5 28 2,848 2,067 345 5,330 206 2,704 (5) 4,593 9,486 16,984 Budgetary fund balance, June 30, 2006 $ - $ 10,890 $ 23,738 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. 93 $ 12,848 $ 29,068 (22,446) 26 $ 6,648 $ 5,330 $ 5,330 City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments 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 Street maintenance Miscellaneous Contingencies Capital outlay Debt service: Principal Total charges to appropriations Budgetary fund balance, June 30, 2006 $ 2,902 Final $ 2,902 Actual Amounts (budgetary basis) $ 2,361 Variance with Final Budget Positive (Negative) $ (541) 6,156 10,277 2,829 35 3,185 22,482 1,264 (5,435) 21,213 6,156 10,277 2,829 35 3,185 22,482 1,264 (5,435) 21,213 5,823 7,677 5,056 61 917 19,534 1,710 (3,567) 20,038 (333) (2,600) 2,227 26 (2,268) (2,948) 446 1,868 (1,175) 756 9,093 1,072 3,927 533 500 4,235 821 10,649 340 4,062 565 218 500 3,519 881 7,943 56 2,915 522 70 144 3,025 (60) 2,706 284 1,147 43 (70) 74 500 494 11 20,127 11 20,685 11 15,567 5,118 1,086 $ 528 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. 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. 94 4,471 $ 3,943 $ 20,038 (2,361) (1,710) 3,567 $ 19,534 $ 15,567 47 $ 15,614 City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 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, 2006 $ Actual Amounts (budgetary basis) Final 60 $ 60 $ 61 Variance with Final Budget Positive (Negative) $ 1 2,728 2,788 2,728 2,788 4 4 2,728 2,793 4 4 5 1 2 2 - 1,875 852 2,728 1,875 852 2,729 1,875 852 2,729 - 60 $ 59 $ 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. 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. 95 64 $ $ 5 2,793 (2,728) (61) $ 4 $ 2,729 $ 2,729 City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ RESOURCES (INFLOWS): Investments 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, 2006 $ 5,422 Actual Amounts (budgetary basis) Final $ 5,422 $ 1,655 Variance with Final Budget Positive (Negative) $ (3,767) 17 17 7,201 12,640 17 17 7,201 12,640 84 84 10,097 11,836 23 23 16 7 2,785 8,871 11,679 2,785 8,871 11,679 2,785 8,871 11,672 7 961 $ 961 $ 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. 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. 96 164 67 67 2,896 (804) $ $ (797) 11,836 (1,655) (10,097) $ 84 $ 11,672 $ 11,672 City of Glendale, Arizona Budgetary Comparison Schedule Special Assessment Debt Service Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ RESOURCES (INFLOWS): Special assessments Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2006 $ Actual Amounts (budgetary basis) Final 160 $ 160 $ 150 Variance with Final Budget Positive (Negative) $ (10) 15 15 175 15 15 175 29 29 179 14 14 4 - 1 - 1 36 3 39 36 3 40 36 3 39 1 136 $ 135 $ 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. 97 140 $ 5 $ 179 (150) $ 29 $ 39 $ 39 City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Actual Final 15,364 $ 15,364 $ Final Budget Amounts Positive (budgetary basis) (Negative) 14,757 $ (607) RESOURCES (INFLOWS): Intergovernmental Investments 1,196 1,196 - 255 255 399 144 - - 241 241 13,928 13,928 16,873 2,945 - - 205 205 15,379 15,379 17,718 2,339 Miscellaneous Long-term debt issued Premium on long-term debt issued Total revenues Less: Transfers out (123) Amounts available for appropriation (138) (1,196) (10) 128 30,620 30,605 32,465 1,860 - - 155 Contingencies 1,049 1,049 - Community services 2,579 - - - 153 153 - 153 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General adminstration Street maintenance Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2006 (155) 1,049 26,839 26,041 12,433 13,608 30,620 27,243 12,588 14,655 $ - $ 3,362 $ 19,877 $ 16,515 $ 32,465 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: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. (14,757) Market adjustment on restricted investments not available for appropriation 29 Long-term debt issued. (16,873) Premium on long-term debt issued. (205) Add: Transfers out. 10 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. $ 669 $ 12,588 $ 12,588 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 City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Actual Final 8,095 $ 8,095 Final Budget Amounts Positive (budgetary basis) (Negative) $ 6,145 $ (1,950) RESOURCES (INFLOWS): Investments Long-term debt issued 23 23 98 75 12,250 12,250 12,589 339 Premium on long-term debt issued Miscellaneous Total revenues Less: Transfers out - - 197 12,000 12,000 - (12,000) 24,273 24,273 12,884 (11,389) (168) Amounts available for appropriation (168) 32,200 197 (276) 32,200 18,753 - - 406 2,789 2,818 44 (108) (13,447) CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2006 (406) 2,774 29,411 24,138 16,197 7,941 32,200 26,956 16,647 10,309 $ - $ 5,244 $ 2,106 $ (3,138) $ 18,753 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. (12,589) Premium on long-term debt issued. (197) Market adjustment on restricted investments not available for appropriation. 22 Add: Transfers out. 276 The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. (6,145) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. $ 120 $ 16,647 $ 16,647 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. 99 City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Actual Final 11,640 $ 11,640 Final Budget Amounts Positive (budgetary basis) (Negative) $ 15,399 $ 3,759 RESOURCES (INFLOWS): Licenses and permits Intergovernmental - - 1 1 12,591 12,591 191 (12,400) Taxes Investments - - 144 144 102 102 384 282 - - 169 169 6,960 6,960 7,887 927 - - 124 19,653 19,653 8,900 Miscellaneous Long-term debt issued Premium on long-term debt issued Total revenues Less: Transfers out (81) Amounts available for appropriation (90) 31,212 124 (10,753) (4,966) (4,876) 31,203 19,333 (11,870) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government 873 873 49 824 Community services 1,524 1,379 55 1,324 28,815 27,030 8,811 18,219 31,212 29,282 8,915 20,367 Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2006 $ - $ 1,921 $ 10,418 $ 8,497 $ 19,333 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. (15,399) Market adjustment on restricted investments not available for appropriation. 30 Long-term debt issued. (7,887) (124) Premium on long-term debt issued. Add: Transfers out. 4,966 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. $ 919 $ 8,915 $ 8,915 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. 100 City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Permanent Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ Final 4,692 $ 4,692 Actual Amounts (budgetary basis) $ 4,742 Variance with Final Budget Positive (Negative) $ 50 RESOURCES (INFLOWS): Investments Total revenues Amounts available for appropriation 48 48 4,740 48 48 4,740 170 170 4,912 122 122 172 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public Works Total charges to appropriations 4,740 4,740 3,269 3,269 - 3,269 3,269 Budgetary fund balance, June 30, 2006 $ - $ 1,471 $ 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. 101 4,912 $ 3,441 $ 4,912 (4,742) $ 170 City of Glendale, Arizona Combining Statement of Net Assets Non-Major Proprietary Funds - Business-type Activities June 30, 2006 (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 $ Housing 3,218 $ 1,709 (26) 4,901 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Total noncurrent assets Total assets 852 Total $ 1 117 5 975 - 1,710 (26) 117 5 5,876 21 9,530 (5,861) 3,669 3,669 8,570 11,186 (5,689) 5,497 5,518 6,493 4,070 21 20,716 (11,550) 9,166 9,187 15,063 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 135 249 15 72 - 30 18 28 97 37 5 135 30 267 28 112 109 5 764 22 1,257 215 764 22 1,472 Noncurrent liabilities: Compensated absences Other long-term debt Capital lease obligations Total noncurrent liabilities Total liabilities 94 1,648 1,742 2,999 165 21 186 401 259 21 1,648 1,928 3,400 1,258 5,497 6,755 4,313 5,571 595 6,092 595 4,313 11,663 NET ASSETS Invested in capital assets, net of related debt Restricted for: Other purposes Unrestricted Total net assets $ 102 $ $ 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, 2006 (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) $ 12,319 877 13,196 920 Nonoperating revenues (expenses): Impact fees Investments Interest expense Gain on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 1,027 Transfers in - Change in net assets 1,027 $ 103 4,544 5,571 8,019 569 8,588 Total $ 9,101 374 9,475 (887) 51 88 (60) 28 107 Income before contributions and transfers Total net assets - beginning Total net assets - ending 4,541 9,567 8 14,116 Housing $ 8,019 4,541 9,567 577 22,704 9,101 12,319 1,251 22,671 33 111 111 51 88 (60) 28 111 218 (776) 251 492 492 (284) 743 6,376 6,092 $ 10,920 11,663 City of Glendale, Arizona Combining Statement of Cash Flows Non-Major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) 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 $ 14,081 - Housing $ (7,413) (1,159) (3,819) 1,690 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 572 8,231 $ (7,653) (1,422) (272) 14,653 8,231 (7,413) (8,812) (5,241) 1,418 - 8 492 8 492 - 500 500 599 (1,384) 51 (52) - (143) 111 599 (1,527) 51 (52) 111 (786) (32) (818) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 88 88 - 88 88 Net increase (decrease) in cash and cash equivalents during fiscal year 992 196 1,188 Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 104 2,226 3,218 $ 677 873 $ 2,903 4,091 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 Unearned rent 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 $ $ $ $ 105 920 Housing $ (887) Total $ 33 877 374 1,251 (34) (106) (4) 37 1,690 (1) 183 (4) 27 1 3 (15) 47 (272) (35) 183 (110) (4) 27 1 3 (15) 84 1,418 3,218 3,218 $ $ $ 852 21 873 $ $ $ 4,070 21 4,091 City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 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 Final $ 90 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Water Sewer Bond issuance cost Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2006 57,268 $ Actual Amounts (budgetary basis) 57,268 $ 90 51,250 Variance with Final Budget Positive (Negative) $ 21 (6,018) (69) 31,021 21,169 7,725 981 231 59,600 120,817 (242) 177,843 31,021 21,169 7,725 981 231 59,600 120,817 (242) 177,843 28,447 18,585 7,661 1,110 2,615 3,580 83,044 4,393 149,456 (1,192) 199,514 (2,574) (2,584) (64) 1,110 1,634 3,349 23,444 4,393 28,639 (950) 21,671 10,356 15,650 12,557 2,000 121,896 10,563 15,733 12,244 2,000 117,025 10,613 15,230 9,903 734 49,171 (50) 503 2,341 (734) 2,000 67,854 7,617 6,636 176,712 8,728 6,636 172,929 7,617 7,639 100,907 1,111 (1,003) 72,022 1,131 106 $ 4,914 $ 98,607 $ 93,693 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. Interest earned on restricted assets not available for appropriation. Market adjustment on restricted investments not available for appropriation. Revenues offset directly by bad debt expense on budgetary basis. Capital outlay contributed. Bond proceeds. Proceeds from equipment disposals. 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: Bad debt expense. Amortization of capitalized bond issuance expense. Capital outlay expenditure. Change in compensated absences liability. Change in prepaid assets or inventory. Amortization and depreciation expense. Bond issuance costs. 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. 107 $ 199,514 (51,250) 32 507 180 (3,101) (83,044) (4,394) (210) 1,192 $ 59,426 $ 100,907 180 60 (49,171) 140 (2) 11,106 (734) (7,617) (721) (210) 62 $ 54,000 City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 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, 2006 $ 17,967 Final $ 17,967 Actual Amounts (budgetary basis) $ 16,930 Variance with Final Budget Positive (Negative) $ (1,037) 4,820 2,113 500 400 171 8,004 25,971 4,820 2,113 500 400 171 8,004 25,971 5,505 2,692 149 7 642 154 9,149 26,079 685 579 (351) 7 242 (17) 1,145 108 2,000 6,592 176 2,000 6,592 176 6,380 91 2,000 212 85 851 63 9,682 851 63 9,682 817 62 7,350 34 1 2,332 16,289 $ 16,289 $ 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. Revenues offset directly by bad debt expense 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. Bad debt expense. 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. 108 18,729 $ 2,440 $ 26,079 (16,930) (370) 232 (7) $ 9,004 $ 7,350 232 (91) 22 536 1,126 (817) (6) 7 (370) $ 7,989 City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Impact fees Recycle sales Investments Proceeds from equipment disposal Proceeds from lease 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, 2006 $ 3,457 Final $ 3,457 Actual Amounts (budgetary basis) $ 3,861 Variance with Final Budget Positive (Negative) $ 404 4,548 9,638 70 20 14,276 17,733 4,548 9,638 70 20 14,276 17,733 4,541 9,532 51 8 88 23 1,370 15,613 19,474 (7) (106) (19) 8 68 23 1,370 1,337 1,741 12,896 1,818 12,873 1,841 12,234 1,407 639 434 739 51 15,504 739 51 15,504 771 52 14,464 (32) (1) 1,040 2,229 $ 2,229 $ 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. 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. Internal staff and administrative charges reported as revenue only on budgetary basis. Revenues offset directly by bad debt expense on budgetary basis. Proceeds from disposal of capital assets. Gain on disposal of assets. Capital lease proceeds. 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. Bad debt expense. Capital outlay. Change in compensated absences liability. Depreciation expense. Interest expense. Principal payments on long-term obligations. Accrued payroll. Internal staff and administrative charges reported as revenue only on budgetary basis. Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds. 109 5,010 $ 2,781 $ 19,474 (3,861) (40) 75 (23) 28 (1,370) $ 14,283 $ 14,464 75 (1,407) 37 877 8 (771) 13 (40) $ 13,256 City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 437 Actual Amounts (budgetary basis) Final $ 437 $ 832 Variance with Final Budget Positive (Negative) $ 395 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Add: Transfers in Amounts available for appropriation 8,423 8,423 430 9,290 8,423 8,423 430 9,290 8,130 569 8,699 492 10,023 (293) 569 276 62 733 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations 8,308 952 9,260 8,308 952 9,260 9,055 294 9,349 (747) 658 (89) Budgetary fund balance, June 30, 2006 $ 30 $ 30 $ 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. 110 674 $ 644 $ 10,023 (832) (492) $ 8,699 $ 9,349 47 374 (295) $ 9,475 City of Glendale, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2006 (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 3,413 71 3,484 Workers' Compensation $ 4,799 4,799 Employee Benefits $ 7,343 17 7,360 Total $ 15,555 88 15,643 - 150 - 150 3,484 4,949 7,360 15,793 LIABILITIES Current liabilities: Vouchers payable Estimated claims payable Total current liabilities 3 2,194 2,197 30 1,043 1,073 1,161 1,694 2,855 1,194 4,931 6,125 Noncurrent liabilities: Estimated claims payable Total noncurrent liabilities Total liabilities 1,643 1,643 3,840 919 919 1,992 2,855 2,562 2,562 8,687 2,957 4,505 7,106 Total assets NET ASSETS Unrestricted Total net assets (356) $ (356) 111 $ 2,957 $ 4,505 $ 7,106 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, 2006 (amounts expressed in thousands) Risk Management Operating revenues: Self-insurance premiums $ Operating expenses: Insurance claims and premiums $ 3,185 Operating income (loss) Nonoperating revenues: Investments Income (loss) before transfers Change in net assets Net assets - beginning Net assets - ending 2,556 Workers' Compensation $ 1,137 Employee Benefits $ 17,355 Total $ 21,048 625 16,462 20,272 (629) 512 893 776 96 153 248 497 (533) 665 1,141 1,273 (533) 665 1,141 1,273 177 (356) 112 $ 2,292 2,957 $ 3,364 4,505 $ 5,833 7,106 City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2006 (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 $ $ 2,556 (2,636) Net cash provided by (used for) operating activities 1,138 Employee Benefits $ (918) 17,289 Total $ (16,841) 20,983 (20,395) (80) 220 448 588 Cash flows from investing activities: Interest received 96 152 248 496 Net increase (decrease) in cash during fiscal year 16 372 696 1,084 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 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 $ $ 3,397 3,413 (629) $ 4,577 4,949 $ 6,647 7,343 $ 14,621 15,705 $ 512 $ 893 $ 776 175 (503) 877 $ $ $ (80) 3,413 3,413 113 (8) (285) - (16) 403 (782) (49) 159 (108) (190) (49) $ 219 $ 449 $ 588 $ 4,799 150 4,949 $ 7,343 7,343 $ 15,555 150 15,705 $ $ $ City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 3,843 Final $ 3,843 Actual Amounts (budgetary basis) $ 2,891 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Transfers in Amounts available for appropriation 2,556 20 2,576 6,419 2,556 20 2,576 6,419 2,556 96 2,652 5,543 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 5,750 5,750 5,750 5,750 2,133 2,133 Budgetary fund balance, June 30, 2006 $ 669 $ 669 $ 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. 114 3,410 Variance with Final Budget Positive (Negative) $ (952) 76 76 (876) 3,617 3,617 $ 2,741 $ 5,543 (2,891) $ 2,652 $ 2,133 1,052 $ 3,185 City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 4,573 Final $ 4,573 Actual Amounts (budgetary basis) $ 4,508 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 1,137 118 1,255 5,828 1,137 118 1,255 5,828 1,137 153 1,290 5,798 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 1,407 1,407 1,407 1,407 910 910 Budgetary fund balance, June 30, 2006 $ 4,421 $ 4,421 $ 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. 115 4,888 Variance with Final Budget Positive (Negative) $ (65) 35 35 (30) 497 497 $ 467 $ 5,798 (4,508) $ 1,290 $ 910 (285) $ 625 City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2006 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2005 $ 6,212 Final $ 6,212 Actual Amounts (budgetary basis) $ 5,888 Variance with Final Budget Positive (Negative) $ (324) RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 18,520 75 18,595 24,807 18,520 75 18,595 24,807 17,305 249 17,554 23,442 (1,215) 174 (1,041) (1,365) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 13,692 13,692 18,792 18,792 17,244 17,244 1,548 1,548 Budgetary fund balance, June 30, 2006 $ 11,115 $ 6,015 $ 6,198 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. 116 $ 183 $ 23,442 (5,888) 49 $ 17,603 $ 17,244 (782) $ 16,462 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 This page left blank intentionally. 117 118 119 120 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2006 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. 122-129 Revenue Capacity These schedules contain information to help the reader assess the city’s local revenue source, the property tax. 130-133 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. 134-141 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. 142-143 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. 144-148 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. 121 City of Glendale, Arizona Net Assets by Component Last Five Fiscal Years (amounts expressed in thousands) Schedule 1 2006 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 $ 398,517 155,163 75,417 2005 $ 2004 372,778 179,434 40,641 $ 353,135 169,434 49,916 2003 $ 259,802 127,393 132,801 2002* $ 31,260 91,203 9,232 629,097 592,853 572,485 519,996 131,695 233,387 12,437 158,753 274,620 11,249 108,604 228,252 10,479 141,094 275,204 10,235 82,564 269,007 20,092 64,312 404,577 394,473 379,825 368,003 353,411 631,904 167,600 234,170 647,398 190,683 149,245 581,387 179,913 191,010 535,006 137,628 215,365 300,267 111,295 73,544 $ 1,033,674 $ 987,326 $ * First year of GASB 34 reporting requirements implemented by the City. 122 952,310 $ 887,999 $ 485,106 This page left blank intentionally. 123 City of Glendale, Arizona Changes in Net Assets Last Five Fiscal Years (amounts expressed in thousands) 2006 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 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 $ 33,329 75,277 13,995 40,275 4,125 22,720 3,020 16,883 209,624 55,607 7,950 13,257 9,466 86,280 295,904 10,726 1,375 516 20,121 31 31,973 6,406 71,148 2005 $ $ $ 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 56,153 8,362 14,167 569 8,020 5,403 92,674 163,822 54,295 8,961 13,624 542 8,027 242 85,691 141,285 52,456 9,593 12,817 512 7,643 168 83,189 138,349 52,088 8,644 11,918 494 7,091 520 80,755 133,469 46,068 9,610 11,808 422 6,592 673 75,173 110,104 (138,476) 6,394 (132,082) (133,804) 6,505 (127,299) (112,667) 9,245 (103,422) (94,853) 9,143 (85,710) (106,854) 16,382 (90,472) $ 124 $ $ $ Schedule 2 2006 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 $ $ $ $ 21,386 90,968 23,298 2005 $ 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 22,909 10,444 4,395 348 272 700 174,720 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 3,466 844 100 (700) 3,710 178,430 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 36,244 10,104 46,348 $ $ $ * First year of GASB 34 reporting requirements implemented by the City of Glendale. 125 20,368 14,648 35,016 $ $ $ 52,489 11,822 64,311 $ $ $ 60,855 14,592 75,447 $ $ $ 25,295 24,945 50,240 City of Glendale, Arizona Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) Schedule 3 2006 General fund Reserved Unreserved Total general fund 126 All other governmental funds Reserved Unreserved, report in: Special revenue funds Debt service fund Capital projects funds Total all other governmental funds $ 2005 $ $ 10,287 62,166 72,453 $ 42,910 30,584 64,106 $ 137,600 $ 9,377 56,661 66,038 $ 39,014 34,867 61,765 $ 135,646 2004 $ $ 9,582 51,080 60,662 $ 41,188 29,807 71,569 $ 142,564 2003 $ $ 17,315 31,727 49,042 $ 33,527 23,553 126,252 $ 183,332 2002 $ $ 17,998 7,119 25,117 $ 28,460 $ 8,596 37,932 74,988 2001 $ $ 13,232 24,716 37,948 $ 19,473 $ 2,585 28,369 50,427 2000 $ $ 13,147 35,460 48,607 $ 16,147 $ 2,410 33,717 52,274 1999 $ $ 5,373 33,043 38,416 $ 13,812 $ 2,375 11,782 27,969 1998 $ 1997 $ 4,247 32,183 36,430 $ $ 2,899 31,121 34,020 $ 12,947 $ 7,166 $ 1,724 21,861 36,532 $ 1,688 16,133 24,987 This page left blank intentionally. 127 City of Glendale, Arizona Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2006 Schedule 4 2005 2004 2003 2002 2001 2000 1999 1998 1997 Revenues Taxes and special assessments Licenses and permits Intergovernmental Local revenues $ 112,576 $ 96,812 $ 93,655 $ 82,458 $ 70,526 $ 60,911 $ 57,681 $ 54,355 $ 51,253 $ 47,892 16,039 15,497 16,667 16,771 10,663 9,897 8,280 7,902 9,197 6,691 86,994 75,691 73,166 73,836 68,479 72,216 70,269 66,609 61,845 55,558 - - - - - 6,417 11,020 10,904 12,355 23,130 Charges for services 8,838 5,681 4,824 3,313 2,516 5,347 4,862 4,737 4,735 3,813 Fines and forfeitures 3,564 3,247 3,169 3,246 2,859 2,381 2,413 2,951 2,646 2,701 Investment income (loss) 7,825 4,762 1,511 2,572 8,303 4,533 5,017 5,185 4,556 Miscellaneous 4,136 3,335 2,774 2,834 2,729 3,687 1,905 1,770 1,971 2,943 Total revenues 239,972 205,025 195,766 181,653 160,344 169,159 160,963 154,245 149,187 147,284 General government 21,868 20,892 17,274 20,321 20,064 21,583 17,122 15,340 14,666 13,287 Public safety 72,745 61,366 53,805 49,571 49,126 43,741 41,155 37,912 36,847 34,318 Public works 12,252 12,081 12,816 10,118 11,364 12,688 11,884 10,457 9,797 9,114 Community services 35,604 32,627 30,006 28,391 27,502 22,832 21,332 18,514 16,697 15,521 (805) Expenditures 128 Community environment 3,978 3,082 3,311 3,282 3,223 2,379 2,052 2,508 2,991 1,883 11,609 10,534 9,811 9,994 11,493 10,320 9,541 9,516 9,109 8,600 - - - - - 6,201 5,645 5,312 5,064 4,887 Miscellaneous 2,918 55 555 80 71 475 458 21 88 150 Contingencies - - - - - - - - 40 316 Capital outlay 131,243 47,283 120,833 142,213 38,636 37,029 42,178 42,363 37,130 41,520 Principal 20,328 18,899 18,090 21,680 20,574 16,501 27,574 14,359 12,897 11,426 Interest 17,222 17,231 15,998 8,155 5,925 6,605 5,422 6,180 6,308 6,905 329,767 224,050 282,499 293,805 187,978 180,354 184,363 162,482 151,634 147,927 (89,795) (19,025) (86,733) (112,152) (27,634) (11,195) (23,400) Street maintenance Community housing Debt service: Total expenditures Excess of revenues over (under) expenditures (8,237) (2,447) (643) 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 Other financing sources (uses) Discount on long-term debt - - - - - - - - - 93,033 - - - 200 - 5,279 - 1,858 3,316 16,075 69,522 215,920 40,563 - 41,997 - 12,073 301 Refunding bonds issued 9,065 - - - - - - - - - Premium on long-term debt issued 1,782 230 1,114 14,500 - - - - - - Proceeds from equipment disposal 3,166 1,342 8,198 2,802 82 - - - - - - - 428 11,266 - - 9,139 - 1,290 - Proceeds from loans Long-term debt issued Capital lease proceeds (82) Payment to refunded bonds escrow agent (9,582) 20,014 - - - - - Transfers in 15,800 - (21,262) 32,943 12,851 - 15,936 (4,533) 15,015 15,814 18,218 18,476 15,703 Transfers out (19,314) (15,964) (33,276) (12,918) (16,165) (16,325) (14,333) (16,559) (17,295) (14,257) 98,164 17,483 57,585 244,421 36,083 (1,310) 57,896 1,659 16,402 5,063 Total other financing sources (uses) 129 Net change in fund balances $ 8,369 $ (1,542) $ (29,148) $ 132,269 $ 8,449 $ (12,505) $ 34,496 $ (6,578) $ 13,955 $ 4,420 Debt service as a percentage of noncapital expenditures 18.91% 20.44% 21.09% 19.68% 17.74% 16.12% 23.21% 17.10% 16.77% 17.23% City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1996-97 Real Estate $ 191,755 Improvements $ 401,560 Secured Personal $ 2,564 Schedule 5 Utilities Rails and Wires Unsecured Personal $ 23,711 $ 46,017 Less: Tax Exempt Property $ 65,362 Net Assessed Value (1) $ 600,245 Total Direct Tax Rate $ 1.88 Estimated Actual Value(2) $ Assessed Value as a Percentage Of Actual Value(3) 5,022,245 13.253 % 130 1997-98 206,083 475,031 2,688 29,718 46,299 62,626 697,193 1.83 5,824,504 13.045 1998-99 215,309 485,708 2,974 29,627 44,837 61,065 717,390 1.78 5,931,081 13.125 1999-00 223,785 548,672 2,748 30,259 45,209 62,981 787,692 1.73 6,526,885 13.033 2000-01 233,712 619,842 2,609 39,388 46,580 65,228 876,903 1.72 7,288,261 12.927 2001-02 253,580 686,608 2,609 43,470 51,547 83,695 954,119 1.72 8,010,100 12.956 2002-03 258,224 733,234 2,383 39,629 54,189 98,565 989,094 1.72 8,331,442 13.055 2003-04 298,152 820,414 2,113 35,832 58,517 135,011 1,080,017 1.72 9,391,120 12.938 2004-05 342,689 893,850 1,661 43,584 56,582 193,816 1,144,550 1.72 10,065,003 13.297 2005-06 368,181 989,418 1,450 45,025 58,101 192,607 1,269,568 1.72 11,296,734 12.943 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. (2) Assessed values are established each year by the County. The tax rate is $100 per assessed value (reference note I. M, page 42). (3) The assessed value as a percentage of actual value does not include tax exempt property. 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 1996-97 Basic Rate $ 0.54 General Obligation Debt Service $ 1.34 Glendale Elementary and High School Districts City of Glendale $ 1.88 $ 16.44 Peoria Unified School Districts $ 14.03 Deer Valley Unified School Districts $ 15.47 131 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 2005-06 0.31 1.41 1.72 20.96 18.45 16.98 Source: Maricopa County 2005 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). City of Glendale, Arizona Principal Property Taxpayers Current Year and Nine Years Ago June 30, 2006 (amounts expressed in thousands) Schedule 7 Tax Year 2006 132 Taxpayer Arizona Public Service Company Qwest Corporation (US West) Wal-Mart Stores, Inc. New River Associates Southwest Gas Corporation Toys DC South LLC VHS of Arrowhead, Inc. 51 Bells Limited Partnership Burlington/Santa Fe Railroad 5353 Bell Road LLC Price Reit Sanderson Ford Atchison Topeka & Santa Fe Meridian Trust Co. Parcel 18 Associates Shea Homes Total principal taxpayers Rank 1 2 3 4 5 6 7 8 9 10 Assessed Valuation $ 15,546 15,022 10,526 8,925 6,217 5,779 4,250 4,000 3,690 3,668 $ 77,623 Tax Year 1997 Percentage of Total City Taxable Assessed Value 1.22 % 1.18 0.83 0.70 0.49 0.46 0.33 0.32 0.29 0.29 6.11 % Rank 2 1 Assessed Valuation $ 12,001 12,450 Percentage of Total City Taxable Assessed Value 2.00 % 2.07 3 4 7,230 3,940 1.20 0.66 5 6 7 8 9 10 3,475 3,207 2,784 2,475 2,266 2,265 0.58 0.53 0.46 0.41 0.38 0.38 $ 52,093 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. 8.67 % 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 (2) Collections (1) Total Tax Levy Fiscal Year 1996-97 $ 10,761 Amount $ Percent of Levy 10,448 97.09 % in Subsequent Years $ 304 Amount $ Percent of Levy 10,752 99.92 % 133 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 96.92 547 18,446 99.88 2004-05 19,534 19,011 97.32 426 19,437 99.50 2005-06 21,566 20,980 97.28 - 20,980 97.28 Source: Maricopa County Treasurer's Office (1) Total levy includes only secured property. (2) Includes collections and resolutions. 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 1996-97 $ 44,800 $ Government Activities Street and Highway Municipal Revenue Property Bonds 22,925 $ 29,650 Corporation $ 14,490 $ Capital Notes Leases Payable 1,188 $ 3,316 134 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 2005-06 175,155 39 35,940 223,988 12,875 15,689 Fiscal Water Sewer Landfill Business Activities Water Sewer Revenue Year G.O. Bonds G.O. Bonds Bonds 1996-97 $ 14,000 $ - $ 22,140 $ Notes Capital Total Primary Per Payable Leases Government Capita(2) 3,090 $ 1,260 $ 156,859 $ 817 135 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 2005-06 12,375 700 190,020 12,285 2,613 681,679 2,806 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. City of Glendale, Arizona Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years (amounts expressed in thousands) General Obligation Bonds(1) Fiscal Year 1996-97 $ 58,800 Less: Amounts Available in Debt Service Funds(2) $ 9,998 Schedule 10 Total $ Percentage of Net Assessed Value of Property 48,802 8.13 % Per Capita $ 254.18 1997-98 62,575 10,892 51,683 7.41 262.35 1998-99 53,025 11,611 41,414 5.77 200.07 1999-00 64,690 12,416 52,274 6.63 245.42 2000-01 54,415 13,241 41,174 4.69 183.81 2001-02 90,135 16,281 73,854 7.74 323.92 2002-03 146,135 17,768 128,367 12.98 555.70 2003-04 170,545 18,526 152,019 14.08 652.44 2004-05 171,070 19,472 151,598 13.25 642.36 2005-06 188,230 22,507 165,723 13.05 679.19 Note: Principal and interest expenditures for 1999-00 include a current refunding transaction. (1) These figures include general obligation water & sewer and general obligation landfill bonds. (2) These figures include the current general obligation bond liability plus the general obligation service fund balance at June 30. 136 City of Glendale, Arizona Net Direct and Overlapping Governmental Activities Debt June 30, 2006 (amounts expressed in thousands) Jurisdiction Peoria Unified School District No. 11 Schedule 11 Net Debt Outstanding Percentage Applicable to Glendale Amount Applicable to Glendale $ 234,117 25.9252 % $ 60,695 Glendale Elementary School District No. 40 34,665 98.7836 34,243 Deer Valley Unified School District No. 97 183,660 22.2171 40,804 Alhambra Elementary School District No. 68 33,645 18.3172 6,163 Glendale Union High School District No. 205 123,965 21.6233 26,805 - 3.8243 - Maricopa County Community College District 369,320 3.8243 14,124 Phoenix Union High School District No. 210 240,230 1.4602 3,508 Pendergast Elementary School District No. 92 17,350 11.5981 2,012 Tolleson Union High School District No. 214 61,790 4.0610 2,509 120,200 2.7781 3,339 Dysart Unified School District No. 89 74,005 0.0420 31 Agua Fria Union High School District No. 216 55,690 0.0375 21 Litchfield Elementary School District No. 79 14,350 0.0577 8 Maricopa County Washington Elementary School District No. 6 Total Overlapping Debt 1,562,987 194,262 City of Glendale Debt(1) 153,608 153,608 $1,716,595 $ 347,870 Total Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness. (1) Does not include landfill nor water and sewer general obligation debt. 137 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 2006 6% Type Bonds Assessed value $ Debt limit (6% of assessed value) 76,174 Debt applicable to limit: General obligation bonds 72,180 Less: Amount set aside for repayment of general obligation debt (19,641) Total net debt applicable to limit 52,539 Legal debt margin 1997 Debt limit $ 36,015 1998 $ 41,832 1999 $ 47,262 2000 $ 47,262 2001 $ 52,614 $ 2002 $ 57,247 1,269,568 2003 $ 59,346 2004 $ 64,801 2005 $ 68,673 23,635 2006 $ 76,174 Total net debt applicable to limit Legal debt margin 14,197 $ 21,818 21,929 $ 19,903 19,190 $ 28,072 26,107 $ 21,155 21,602 $ 31,012 30,167 $ 27,080 47,813 $ 11,533 49,399 $ 15,402 51,682 $ 16,991 52,539 $ 23,635 138 Total net debt applicable to the limit as a percentage of debt limit 39.42% 52.42% 40.60% 55.24% 20% Type Bonds 41.06% 52.70% 80.57% 76.23% 75.26% Assessed value 68.97% $ Debt limit (20% of assessed value) 253,914 Debt applicable to limit: General obligation bonds 116,050 Less: Amount set aside for repayment of general obligation debt (2,866) Total net debt applicable to limit 113,184 Legal debt margin 1997 Debt limit $ 120,049 1998 $ 139,439 1999 $ 157,538 2000 $ 157,538 2001 $ 175,381 $ 2002 $ 190,824 1,269,568 2003 $ 197,818 2004 $ 216,003 2005 $ 228,910 140,730 2006 $ 253,914 Total net debt applicable to limit Legal debt margin 42,965 $ 77,084 37,979 $ 101,460 31,774 $ 125,764 36,307 $ 121,231 29,847 $ 145,534 43,972 $ 146,852 80,844 $ 116,974 101,153 $ 114,850 99,340 $ 129,570 113,184 $ 140,730 Total net debt applicable to the limit as a percentage of debt limit 35.79% 27.24% 20.17% 23.05% 17.02% 23.04% 40.87% 46.83% 43.40% 44.58% This page left blank intentionally. 139 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) 1996-97 $ 46,204 $ 20,273 Water and Sewer Revenue Bonds Net Debt Service Available Principal(3) Revenue $ 25,931 $ 5,350 Interest(3) $ Coverage 1,383 3.85 140 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 2005-06 59,426 35,916 23,510 6,813 7,143 1.68 Municipal Property Corporation Bonds Special Assessment Bonds Fiscal Special Assessment 1996-97 Debt Service Revenues Year $ 3,179 Excise Tax Principal $ (4) 1,201 (5) Coverage Interest $ 1,441 $ 1.20 Debt Service Revenue $ 61,978 Principal $ 1,335 Interest $ Coverage 1,105 25.40 141 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 2005-06 29 36 3 (0.26) 114,066 2,785 8,871 9.79 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, 05-06 were covered by accumulated fund balance in the debt service fund. City of Glendale, Arizona Demographic and Economical Statistics Last Ten Fiscal Years (amounts expressed in thousands) Schedule 14 Fiscal Year City of Glendale Population Maricopa County Population Personal Income (1) (thousands of dollars) 1996-97 192 2,805 $ 68,656,472 1997-98 197 2,909 1998-99 207 1999-00 Per Capita (1) Personal Income 24,476 3.6 75,639,499 26,002 2.6 3,005 80,924,901 26,930 2.9 213 3,096 89,771,608 28,993 2.3 2000-01 224 3,196 92,913,124 29,068 3.7 2001-02 228 3,295 95,618,598 29,020 5.0 2002-03 231 3,397 98,401,099 28,968 5.3 2003-04 233 3,524 101,264,571 28,734 4.4 2004-05 236 3,524 104,211,370 29,570 3.9 244 3,764 115,863,448 30,782 3.9 2005-06 (2) $ Unemployment Rate Source: Maricopa County Finance Department Arizona Department of Economic Security, Research Administration, Population Statistics Unit Maricopa County FY 2005-06 Annual Budget Report 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. (2) Estimates 142 % City of Glendale, Arizona Principal Employers Current Year and Nine Years Ago Schedule 15 2006 Employer Luke Air Force Base 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 Gilbert Engineering Honeywell, Inc. U.S. Postal Service Arrowhead Community Hospital American Graduate School of Int'l Management Life Care Center of North Glendale Wal-Mart Total Employees 8,400 2,500 2,036 2,021 1,862 1,684 1,432 1,220 1,150 800 Rank 1 2 3 4 5 6 7 8 9 10 1997 Percentage of Total City Employment 8.12 % 2.42 2.00 2.00 1.81 1.63 1.38 1.21 1.11 0.77 Employees 7,114 1,500 1,100 1,150 3,870 600 320 300 230 195 23,105 Source: City of Glendale 143 22.45 % 16,379 Rank 1 3 5 4 2 6 7 8 9 10 Percentage of Total City Employment 6.93 % 1.46 1.07 1.12 3.77 0.58 0.31 0.29 0.22 0.19 15.94 % City of Glendale, Arizona Full-time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Function/Program 144 General government Management services Finance Planning Building Legal Other Police Fire Community service Parks and recreation Library Public works Engineering Transportation Utilities Total Source: City Budget Office 2006 34.00 86.75 26.50 55.75 67.00 101.00 506.50 237.50 84.25 89.75 87.76 266.00 46.00 81.25 146.00 1,916.01 2005 2004 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 1,875.16 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 1,780.30 Schedule 16 Full-time Equivalent Employees as of June 30 2003 2002 2001 2000 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 1,753.80 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 1,717.05 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 1,629.05 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 1,525.80 1999 1998 1997 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 1,463.80 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 1,399.65 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 1,351.65 City of Glendale, Arizona Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 145 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 2002 2001 2006 2005 2004 2003 148,633 8,640 34,271 158,507 8,138 33,578 161,722 8,057 34,847 154,374 7,980 33,956 153,691 8,781 34,224 24,025 3,335 23,126 3,379 22,284 5,886 (1) (1) 18,977 2,642 (4) (4) 2000 1999 1998 1997 144,183 7,744 33,102 137,809 773 30,984 133,124 10,062 27,415 130,033 7,882 27,508 123,917 8,410 27,213 21,372 3,379 20,722 3,110 19,272 2,958 18,208 2,755 17,135 2,695 16,446 2,823 63,521 49,517 57,942 44,441 56,902 44,681 55,718 48,583 49,747 45,798 - - - - - 143,798 108,887 118,140 88,449 118,703 110,631 112,570 133,220 115,056 130,263 7,888 7,079 6,330 6,299 5,428 7,090 7,925 8,561 8,942 8,393 596,266 620,130 601,440 600,477 606,676 544,467 562,532 342,042 311,870 334,156 89,055 87,831 86,132 81,768 76,622 66,527 69,081 70,032 67,626 68,727 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, January 1, 2006 through November 3, 2006. (2) Departures/arrivals are based on calendar year prior to 2005-2006. 2005 figures are through October 2005. (3) Sanitation figures were only available from 2000-2001 through present. (4) Amounts based on calendar year; January 1, 2005, through September 30, 2005. City of Glendale, Arizona Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 146 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 Source: Various city departments Schedule 18 2006 2005 2004 2003 Fiscal Year 2002 2001 2000 1999 1998 1997 3 156 9 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 57 57 57 57 56 55 55 55 54 54 22,594 16,790 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 8,562 733 709 702 702 692 660 650 630 625 625 92 2,058 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 25 25 22 19 17 21 17 16 15 12 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2006 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 Meter Size Inside City All Sizes $ 12.02 Outside City $ 15.63 Residential and 3/4 Commercial Commercial 1 inch Meter Size Meter Size and Greater (1) Gallons per Month All Year Inside Outside City City All Year Inside Outside City City 0 - 3,000 4,000 - 15,000 16,000 - 30,000 over 31,000 $ 1.55 1.95 2.73 $ 1.55 1.55 1.55 1.55 $ 2.02 2.54 3.55 $ 2.02 2.02 2.02 2.02 Summer Excess Rate Inside Outside City City $ 2.73 2.73 2.73 2.73 SEWER SERVICE RATES Type of Service Inside City Single Family Dwelling Unit $ 25.09 Office Building 34.05 Apartment - Average 5 units 62.89 Apartment - Average 35 units 386.97 Retail/Wholesale 53.13 (1) Per 1,000 gallons SOURCE: City of Glendale Finance Department 147 Outside City $ 45.32 N/A 63.57 80.05 N/A $ 3.55 3.55 3.55 3.55 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2006 Schedule 20 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS (1) Residential Commercial (2) Total 45,421 47,363 49,556 4,165 4,343 4,544 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 2006 55,139 55,354 4,491 4,650 59,630 60,004 Fiscal Year Ending June 30 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 2005 Residential (1) 29,458 31,294 30,477 32,779 35,135 34,667 36,044 34,348 34,427 33,567 Commercial 6,202 4,562 4,491 4,739 9,413 8,865 8,865 5,342 8,382 8,282 Other 9,081 8,667 6,344 8,942 893 722 1,031 1,042 1,211 1,298 Total 44,741 44,523 41,312 46,460 45,441 44,254 45,940 40,732 44,020 43,147 (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 Ending June 30 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 No. of Sewer Accounts Billed 44,090 45,813 47,064 49,021 50,564 52,688 55,506 55,239 55,670 55,995 Multi-City Plant (2) (MGD) Actual 11.0 12.3 10.4 10.9 11.7 11.4 11.9 10.8 7.9 8.2 (1) Began operations in 2000. (2) SROG - Sub Regional Operating Group SOURCE: City of Glendale Finance and Utilities Departments. 148 Arrowhead (MGD) 1.6 1.9 2.2 2.7 2.8 2.8 2.8 3.0 3.0 3.0 (1) West (1) Pyramid Peak (MGD) (MGD) 16.5 18.5 15.6 16.4 17.6 17.1 17.9 16.2 16.2 28.6 4.3 4.3 4.3 7.0 7.0 8.5 This page left blank intentionally. City of Glendale Finance Department 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480