City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTRODUCTORY SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 Mayor Elaine M. Scruggs Councilmembers Steven E. Frate Vice Mayor Sahuaro District Joyce V. Clark - Yucca District Manuel D. Martinez - Cholla District Norma Alvarez - Ocotillo District Yvonne Knaack - Barrel District H. Philip Lieberman - Cactus District Management Staff Horatio Skeete - Acting City Manager Sherry Schurhammer Executive Director Financial Services Prepared by Finance Diane Goke Chief Financial Officer i Return to TOC This page left blank intentionally. ii Return to TOC City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 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 Glendale 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 ................................................................................................................ 27 Statement of Activities .................................................................................................................. 28 Fund Financial Statements: Balance Sheet – Governmental Funds........................................................................................... 30 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets .................................................................................................................................. 31 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds.................................................................................................................. 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............................................. 33 Statement of Net Assets – Proprietary Funds ................................................................................ 34 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds ........... 35 Statement of Cash Flows – Proprietary Funds .............................................................................. 36 Notes to the Financial Statements ..................................................................................................... 38 C. REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund ........................................................................ 81 Budgetary Comparison Schedule – Transportation Fund .............................................................. 83 Notes to Required Supplementary Information ............................................................................. 84 iii Return to TOC City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 TABLE OF CONTENTS Page D. COMBINING STATEMENTS Other Major Governmental Funds Budgetary Comparison Schedule – Western Loop 101 Public Facilities Corporation Debt Service Fund .......................................................................................................................... 85 Budgetary Comparison Schedule – General Obligation Debt Service Fund ............................. 86 Non-Major Governmental Funds Combining Balance Sheet.......................................................................................................... 90 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................. 92 Budgetary Comparison Schedules Community Development Block Grants Fund ....................................................................... 94 Highway Users Gas Tax Fund ............................................................................................... 95 Police and Fire Sales Tax Fund .............................................................................................. 96 Federal Stimulus Fund ........................................................................................................... 97 Other Special Revenue Fund .................................................................................................. 98 Highway User Debt Service Fund .......................................................................................... 99 Municipal Property Corporation Debt Service Fund .......................................................... 100 Transportation Debt Service Fund ....................................................................................... 101 Development Impact Fees Fund........................................................................................... 102 Streets Construction Fund .................................................................................................... 103 Fire and Police Construction Fund ....................................................................................... 104 Parks Bond Construction Fund ............................................................................................ 105 Other Construction Fund ...................................................................................................... 106 Cemetery Perpetual Care Fund ............................................................................................ 107 Non-Major Proprietary Funds – Business-Type Activities Combining Statement of Net Assets ........................................................................................ 110 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets ................... 111 Combining Statement of Cash Flows ...................................................................................... 112 Budgetary Comparison Schedules Water and Sewer Fund (a Major Fund) ................................................................................ 114 Landfill Fund ....................................................................................................................... 116 Sanitation Fund .................................................................................................................... 117 Housing Fund ....................................................................................................................... 118 Internal Service Funds Combining Statement of Net Assets ........................................................................................ 119 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets ................... 120 Combining Statement of Cash Flows ...................................................................................... 121 iv Return to TOC City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 TABLE OF CONTENTS Page Budgetary Comparison Schedules Risk Management Fund ....................................................................................................... 122 Workers’ Compensation Fund ............................................................................................. 123 Employee Benefits Fund ...................................................................................................... 124 E. OTHER SUPPLEMENTARY INFORMATION Federal Financial Data Schedule .......................................................................................... 125 III. STATISTICAL SECTION Schedule Page Net Assets by Component .................................................................................................. 1 ............. 132 Changes in Net Assets ........................................................................................................ 2 ............. 134 Fund Balances – Governmental Funds ............................................................................... 3 ............. 136 Changes in Fund Balances – Governmental Funds ............................................................ 4 ............. 138 Assessed and Estimated Actual Value of Taxable Property ............................................... 5 ............. 140 Direct and Overlapping Governments Property Tax Rates ................................................ 6 ............. 141 Principal Property Taxpayers ............................................................................................. 7 ............. 142 Property Tax Levies and Collections ................................................................................. 8 ............. 143 City Transaction Privilege Taxes (Sales Tax) by Category ................................................ 9 ............. 144 Ratio of Outstanding Debt by Type.................................................................................. 10 ............. 146 Ratios of Net General Bonded Debt Outstanding............................................................. 11 ............. 148 Net Direct and Overlapping Governmental Activities Debt ............................................. 12 ............. 149 Legal Debt Margin Information ....................................................................................... 13 ............. 150 Pledged-Revenue Coverage ............................................................................................. 14 ............. 152 Demographic and Economical Statistics .......................................................................... 15 ............. 154 Principal Employers ......................................................................................................... 16 ............. 155 Full-Time Equivalent City Government Employees by Function/Program ..................... 17 ............. 156 Operating Indicators by Function/Program ...................................................................... 18 ............. 157 Capital Asset Statistics by Function/Program .................................................................. 19 ............. 158 Miscellaneous Water and Sewer Rate Statistics ............................................................... 20 ............. 159 Miscellaneous Water and Sewer Statistics ....................................................................... 21 ............. 160 v Return to TOC This page left blank intentionally. vi Return to TOC January 15, 2013 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Glendale, Arizona: The Finance Division of the Financial Services Department is pleased to submit the City of Glendale, Arizona’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2012. The City annually publishes the CAFR after the close of each fiscal year which includes a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) which are audited by a firm of licensed certified public accountants in accordance with generally accepted auditing standards (GAAS). City 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 has established a comprehensive internal control framework that is designed to both 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. To the best of our knowledge and belief, this financial report is complete and reliable in all material respects and is designed to fairly represent the financial position of the operations of the various funds of the City. This letter of transmittal is best reviewed in conjunction with the Management’s Discussion and Analysis (MD&A) beginning on page 13. The MD&A provides a narrative introduction, overview, and analysis of the basic financial statements of the City. Independent Audit 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 is to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2012, 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. City of Glendale Profile The City of Glendale, Arizona is the fifth largest city in the state with a population of 226,721 people. Located in the northwestern part of the metropolitan Phoenix area and occupying approximately 59 square miles of land, the City is home to the Arizona Cardinals, the Phoenix Coyotes, and owns Camelback Ranch, the spring training facility for the LA Dodgers and Chicago White Sox. 1 Return to TOC The City was incorporated in 1910 and has operated under the council-manager form of government since its incorporation. Policy-making and legislative authority are vested in the City Council which consists of the Mayor and six other members. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, Clerk, Attorney, and Municipal Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, 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 City provides a full range of services including: police and fire protection; water, 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 two legally separate entities - the Municipal Property Corporation and Western Loop 101 Public Facilities Corporation, which are 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 City Manager on or before the last week in December each year. Management uses these requests to develop a budget to propose to City Council for review and adoption. The Council is required to hold public hearings on the proposed budget and adopt the final budget by the first Monday in August. Department heads may request transfers of appropriations within the same fund for his/her department. However, transfers of appropriations between funds require approval of the City Council and can only occur in the last quarter of the fiscal year. Budget-to-actual comparisons are provided in this report for each individual fund for which an appropriated annual budget has been adopted. Economic Conditions and Strategies Before reviewing the presented financial statements, it is important to consider the local and global economic factors that have impacted the City’s financial position. Workforce and Unemployment Currently Glendale, the state, and the nation continue to struggle with high unemployment which greatly impacts the operating budget for the City. For fiscal year 2012, Glendale’s annual average unemployment rate remains relatively high at 7.6%; however this is an improvement from last calendar year’s average of 8.6%. The City relies on local and state shared sales tax as well as state shared income tax as primary revenue sources for the City’s operating budget. Nationally, high unemployment has negatively impacted consumer spending and therefore sales tax revenues; however, this fiscal year we saw a slight increase in the sales tax over last year. In addition, high unemployment has reduced the amount of income tax collected and shared by the state because fewer people are employed, the revenue received by the City from the State in this area is on a two year collection lag, therefore fiscal year 2012 collections were based on 2010 income tax returns filed. Glendale’s workforce is concentrated in the following nonfarm sectors: education and health services (22.99%); trade, transportation, and utilities (21.92%); government (13.88%); and leisure and hospitality (8.09%). Each of Glendale’s nonfarm employment categories, with the exception of mining, have experienced some growth since January 2012; with educational and health services, construction, and government jobs leading in growth. The Arizona Department of Administration projects that in 2013, overall employment in Arizona will grow by 2.5%; nonfarm employment is forecasted to grow by 2.8% in Glendale in 2013. If this improvement in employment continues as forecasted, the revenues which fund the City’s operating budget will slowly recover. 2 Return to TOC Economic Development Job creation and retention is a significant focus of Glendale’s economic development strategy. In fiscal year 2012, Glendale welcomed and retained several new or expanding companies to the City including: WINCO, Tanger, Dignity Health and Alaska USA Federal Credit Union; and the expansions of Bechtel, Midwestern University, and Regional Imaging Center. These new or expanding companies contributed to the creation or retention of 3,690 jobs in Glendale in fiscal year 2012. Financial Strategy Before the economic downturn in 2008, the City built a healthy General Fund balance. The General Fund balance was systematically used in the City’s operating budget in fiscal years 08-09, 09-10, 10-11 and 1112 in order to offset drastic reductions in revenues due to the economy. This decision was made in an effort to maintain the level and quality of services our citizens enjoy by minimizing reductions in services and City personnel. In order to reduce the operating budget, the City instituted and maintained a hiring freeze; required mandatory furloughs for City employees with the exception of sworn public safety personnel; eliminated vacant positions and made reductions to operating budgets. Today, the economy is showing modest signs of improvement. However this improvement has not been significant enough to prevent the need to further assess the City’s finances by looking at new revenue streams and the possible adjustment of existing revenues and expenditures in all funds with an emphasis on the General Fund. Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2011. This was the twenty-fourth consecutive year the City has received this prestigious award, and the twenty-sixth year overall. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document dated 2011-12. This is the twenty-fifth year in a row that the City has received the highest form of recognition in governmental budgeting. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Division. I would like to express appreciation to all members of the division who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor, Council, and City Manager for their unfailing support in maintaining the highest standards of professionalism in the management of the City’s finances. Respectfully submitted, Diane Goke Chief Financial Officer 3 Return to TOC This page left blank intentionally. 4 Return to TOC 5 Return to TOC Glendale, Arizona and Neighboring Communities 6 Return to TOC Glendale City Officials ELAINE M. SCRUGGS Mayor JOYCE V. CLARK Councilmember Yucca District YVONNE KNAACK Councilmember Barrel District STEVE E. FRATE Vice Mayor/ Councilmember Sahuaro District H. PHILIP LIEBERMAN Councilmember Cactus District NORMA ALVAREZ Councilmember Ocotillo District MANUEL D. MARTINEZ Councilmember Cholla District 7 HORATIO SKEETE Acting City Manager Return to TOC Glendale Council District Boundaries Pinnacle Peak Rd. Deer Valley Rd. Cholla Beardsley Rd. Union Hills Dr. Bell Rd. Saquaro Greenway Rd. Thunderbird Rd. Cactus Rd. Peoria Ave. Olive Ave. Barrell Cactus Yucca Yucca Northern Ave. Glendale Ave. Ocotillo Bethany Home Rd. 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. e. Av 8 nd ra G Citrus Rd. Camelback Rd. Return to TOC Mayor & Council City Attorney Craig Tindall ([HFXWLYH'LUHFWRU &RPSOLDQFH $VVHW 0JPW $XGLWLQJ  3URFXUHPHQW &0DF/HRG ([HFXWLYH'LUHFWRU &RPPXQLFDWLRQV 0DUNHWLQJ3XEOLF,QIR &LYLF&HQWHU -)ULVRQL City Manager Ed Beasley 'LUHFWRU (FRQRPLF 'HYHORSPHQW %)ULHGPDQ Assistant City Manager Horatio Skeete City Clerk Pam Hanna Presiding City Judge Elizabeth Finn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his page left blank intentionally. 10 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC 3033 N. Central Ave., Suite 300 Phoenix, Arizona 85012 Tel (602) 277-9449 Fax (602) 277-9297 INDEPENDENT AUDITORS’ REPORT The Honorable Mayor and Members of the City Council City of Glendale, Arizona We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Glendale, Arizona (the City) as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Glendale, Arizona, as of June 30, 2012, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2013, on our consideration of City of Glendale, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 11 TUCSON • PHOENIX • FLAGSTAFF • ALBUQUERQUE www.heinfeldmeech.com Return to TOC Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 13 through 26 and budgetary comparison information on pages 81 through 84 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The accompanying supplementary information such as the introductory section, combining and individual fund financial statements and schedules, other supplementary information, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and schedules and other supplementary information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants January 15, 2013 12 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ MANAGEMENT’S DISCUSSION & ANALYSIS (Required Supplementary Information) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Management’s Discussion and Analysis The following discussion and analysis is provided to readers of the City’s financial statements as a narrative overview of the financial activities of the City for the fiscal year ended June 30, 2012. This discussion and analysis is designed to assist the reader in focusing on significant financial highlights; provide an overview of the City’s financial activity; identify changes in the City’s financial position; identify material deviations from the financial plan (the approved annual budget); and identify individual fund issues or concerns. The Management’s Discussion and Analysis (MD&A) has a different focus and purpose than the letter of transmittal presented on pages 1-3. It is designed to be read in conjunction with the transmittal letter, the financial statements beginning on page 27, and the accompanying notes to the financial statements. Significant Financial Highlights The financial statements illustrate the following significant financial highlights for FY 2011-12: • The City’s total net assets decreased $63,863 or 6.02%. The governmental net assets decreased by $68,036 or 10.54%, and the business-type net assets increased by $4,173 or 1.01%. • General revenues from governmental activities decreased $11,804 or 6.74% and comprised 70.22% of all revenues from governmental activities. There were two primary reasons for this decrease: 1. There was a decrease in state shared income tax which is attributed to the state’s unemployment rate. 2. There was a decrease in the secondary property tax due to declines in the assessed valuations for properties in the community. • Governmental activities program specific revenues in the form of charges for services, grants, and contributions decreased $70,543 or 50.44%; this decrease was primarily due to the recognition of a receivable due from Arizona Sports and Tourism Authority for partial payment of the construction of Camelback Ranch, the spring training facility for the Los Angeles Dodgers and Chicago White Sox in fiscal year 2011. • The total cost of all City programs decreased by $13,526 or 3.33% primarily due to the decrease in expenses through reduction in ongoing operating costs. • A major governmental fund, the General Fund, collected $135,653 in revenues which is a decrease of $11,052 or 7.53% from the prior year. This decrease was due primarily to a one-time payment of $12.5 million related to parking at Jobing.com Arena in fiscal year 2011. The primary sources of revenue in the General Fund are local taxes and intergovernmental taxes. The total expenditures of the General Fund were $126,020, which is a decrease of $3,152 or 2.44%. The economic climate has negatively impacted the City’s revenue streams for the past several fiscal years. In light of this, the City has been reducing expenditures through leaving vacant positions open and diligently reducing non personnel expenses. • The General Fund fund balance decreased $35,984 or 385.47%. This decrease was primarily due to a special item, a commitment of $25 million to the National Hockey League (NHL) related to managing the Jobing.com Arena during the 2011-12 season. In addition, the decrease was due to revenue coming in $7,800 below projections. During the FY2011-12 budget process, the assumption was made that we would receive additional parking revenue at Jobing.com Arena and additional electronic billboards revenue. Neither of those revenues materialized over the course of the year, primarily due to the Jobing.com Arena management agreement not being finalized in the form assumed during the budget process. 13 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) • The City issued $8,665 in Municipal Property Corporation (MPC) revenue refunding bonds. These bonds were used to refund a portion of the 2003, 2004, and 2006 MPC bonds of the City. • The City issued $77,635 in water and sewer revenue refunding obligations. These obligations were used to refund the 2001 and 2010 WIFA loan agreements and the 2003 series subordinate water and sewer obligations. Overview of the Financial Statements This report consists of a series of financial statements that are categorized as government-wide financial statements or fund financial statements. Government-Wide Financial Statements, which include the Statement of Net Assets and the Statement of Activities, are designed to provide the reader with information about the overall activities of the City and the long-term view of the City’s finances. The Fund Financial Statements show how City services were financed in the short-term as well as more detailed information about the City’s most significant funds. Also included in this report are the notes to the financial statements which are provided to help enhance understanding of the content within the financial statements. Government-Wide Financial Statements The Government-Wide Financial Statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The accrual basis of accounting is used for government-wide financial statements. The Statement of Net Assets presented on page 27, provides 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 found on page 28, 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, street maintenance, and interest on long-term debt. The business-type activities of the City include water and sewer services, landfill, sanitation, and housing. Fund Financial Statements The Fund Financial Statements provide more detailed information about the major funds within the City. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or 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 government-wide financial statements, governmental fund financial statements use the modified accrual basis of accounting and focus on near-term 14 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) 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 19 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 16 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 businesstype functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide information for the water and sewer, and data from the other three 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. 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 The Combining Statements and Individual Fund Statements and Schedules section presents combining statements for non-major governmental funds, non-major enterprise funds, and non-major internal service funds, along with budget to actual comparisons on individual funds. 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 $996,230 as of June 30, 2012. 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 are still outstanding. The City uses these capital assets to provide services to citizens. Consequently, these assets are not available for future 15 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) 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. 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, with the exception of unrestricted net assets for governmental activities. The City has addressed this issue by the temporary sales tax increase that was effective August 1, 2012 and the debt refunding that was completed in December, 2012. The same situation held true for the prior fiscal year. The chart below is a comparison of the City’s net assets for fiscal years 2012 and 2011. Condensed Statement of Net Assets As of June 30, 2012, and 2011 (in thousands) Governmental Activities 2012 2011 Current and other assets Capital assets, net Total asse ts $ 242,338 1,235,685 1,478,023 $ 310,855 1,264,076 1,574,931 $ 201,453 558,718 760,171 $ 191,987 573,917 765,904 12,713 328,752 341,465 13,495 338,390 351,885 60,418 1,181,546 1,241,964 66,556 1,214,186 1,280,742 262,554 12,921 143,231 $ 418,706 271,708 29,988 112,323 $ 414,019 723,193 196,750 76,287 996,230 735,669 234,633 89,791 $ 1,060,093 Current liabilities Noncurrent liabilities Total liabilitie s 47,705 852,794 900,499 53,061 875,796 928,857 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total ne t asse ts $ 460,639 183,829 (66,944) 577,524 463,961 204,645 (22,532) 646,074 $ T otal Primary Government 2012 2011 Business-T ype Activities 2012 2011 16 $ $ 443,791 1,794,403 2,238,194 $ 502,842 1,837,993 2,340,835 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) The following presents a summary of the changes in net assets compared to the prior year. Changes in Net Assets As of June 30, 2012, and 2011 (in thousands) Governmental Activities 2012 2011, restated Re ve nue s: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions T otal program revenues $ 36,380 27,636 5,274 69,290 $ T otal Primary Government 2012 2011 Business-T ype Activities 2012 2011, restated 42,144 27,137 70,552 139,833 $ 109,363 9,423 705 119,491 $ 108,102 9,342 1,155 118,599 $ 145,743 37,059 5,979 188,781 $ 150,246 36,479 71,707 258,432 - - 20,232 97,451 17,716 27,189 93,260 18,438 General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain/(loss) on disposal of capital assets Miscellaneous T otal revenues 20,232 97,451 17,716 27,189 93,260 18,438 19,135 7,277 975 56 489 232,621 23,590 7,917 1,482 (677) 3,936 314,968 1,126 (40) 72 120,649 614 137 70 119,420 19,135 7,277 2,101 16 561 353,270 23,590 7,917 2,096 (540) 4,006 434,388 Expe nse s: General government Public safety Public works Community services Community environment Street maintenance Interest on long-term debt Water and sewer Landfill Sanitation Housing Total e xpe nse s Exce ss be fore transfe rs 35,962 112,689 18,435 39,478 6,828 20,045 41,913 275,350 (42,729) 46,233 111,731 20,099 41,136 7,061 21,721 41,967 289,948 25,020 78,917 7,602 15,437 14,827 116,783 3,866 79,160 7,241 14,674 14,636 115,711 3,709 35,962 112,689 18,435 39,478 6,828 20,045 41,913 78,917 7,602 15,437 14,827 392,133 (38,863) 46,233 111,731 20,099 41,136 7,061 21,721 41,967 79,160 7,241 14,674 14,636 405,659 28,729 Transfe rs in (out) Spe cial ite m (307) (25,000) (317) (25,000) 307 - 317 - (25,000) (25,000) (68,036) (297) 645,560 645,857 $ 577,524 $ 645,560 4,173 414,533 $ 418,706 4,026 410,507 $ 414,533 Incre ase (de cre ase ) in ne t asse ts Ne t asse ts, be ginning, as re state d Ne t asse ts, e nding 17 (63,863) 3,729 1,060,093 1,056,364 $ 996,230 $ 1,060,093 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Changes in Net Assets There was a decrease of $68,036 in net assets of the governmental activities. Some notable differences are attributable to the following: • • • • • Recognition of a receivable due from Arizona Sports and Tourism Authority for partial payment of the construction of Camelback Ranch, the spring training facility for the Los Angeles Dodgers and Chicago White Sox, in fiscal year 2011 in the amount of $67,401. Revenues in Charges for Services decreased by $5,764 primarily related to a one-time payment of $12.5 million related to parking at Jobing.com Arena in fiscal year 2011, offset by revenue received in fiscal year 2012 related to the resolution of the Coyotes bankruptcy case in the amount of $4,750 Property Tax revenues decreased by $6,957 due to the decreased assessed valuation of property in the City General Government expenses decreased by $10,271 primarily due to several construction in progress accounts expenses in fiscal year 2011 and the continued action by the City to reduce expenses The Special Item in both fiscal years 2011 and 2012 were $25,000 each year for the NHL’s ownership of the Coyotes hockey team and management of the Jobing.com arena. The City is not expected to pay any more money to the NHL in the future. The City’s revenue from governmental activities for the fiscal year ended June 30, 2012, was $232,621. The cost of programs and services for governmental activities was $275,350. Below shows the performance of the revenues in the governmental activities versus expenses. Expenses and Program Revenues - Governmental Activities expenses program revenues $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- General government Public safety Public works Community services 18 Community environment Street maintenance Interest on longterm debt Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) The increase in net assets of the business type-activities of $4,173 was primarily due to increases in water and sewer revenue and a concerted effort at controlling expenses during the year. The City’s revenue from business-type activities for the fiscal year ended June 30, 2012, was $120,649. The cost of programs and services was $116,783. Below shows the performance of the revenues in the business-type activities versus expenses. Expenses and Program Revenues - Business-Type Activities expenses program revenues $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Water and sewer Landfill Sanitation 19 Housing Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) City Revenue Categories Revenue Sources Fiscal Year 2011-12 Urban revenue sharing (state shared income tax) 5.42% Auto in-lieu taxes 2.06% Investment earnings, unrestricted 0.59% Miscellaneous .16% State shared sales tax 5.01% Charges for services 41.26% Sales taxes 27.59% Property taxes 5.73% Operating grants and contributions 10.49% Capital grants and contributions 1.69% As discussed, the majority (43.75%) of the revenue the City receives comes from sales tax, property tax, and urban revenue sharing (state shared revenue). The second most significant source of revenue comes from charges for some of the services the City provides. The pie chart above shows the different types of revenue the City receives and the proportion of each. 20 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) City Expense Categories Functional Expenses Fiscal Year 2011-12 Housing 3.78% Sanitation 3.94% General government 9.17% Landfill 1.94% Public safety 28.73% Water and sewer 20.13% Interest on long-term debt 10.69% Public works 4.70% Street maintenance 5.11% Community services 10.07% Community environment 1.74% The majority of the City’s expenses (48.86%) are incurred in the Public Safety and Water and Sewer categories. Public Safety expenses include those expenses related to police and fire protection services provided to the community. Water and Sewer expenses include expenses from Water and Environmental Resources services. Public Safety expenses are funded by the general fund; while Water and Sewer expenses are paid by the enterprise fund which is funded primarily through user paid fees for services. 21 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (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 As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $97,355, a decrease of $59,100 or 37.77% in comparison with the prior year due primarily to the $25,000 special item, $13,011 of interest expenses relating to the PFC bonds with no corresponding revenue, and increases in streets construction and other construction expenditures. The City implemented Governmental Accounting Standards Board Statement (GASB) 54 during the prior fiscal year which impacted the presentation of fund balance components more accurately into five classifications: nonspendable, restricted, committed, assigned and unassigned; Note I. K. in the summary of significant accounting policies addresses this in greater detail. In fiscal year 2012, a negative $29,565 of the total fund balance constituted unassigned fund balance. This primarily is a result of the commitment to the NHL for $25 million related to management of the Jobing.com Arena for FY 2011-12, classified as a special item. The remaining fund balance is not available for new spending because it has already been committed, restricted or is nonspendable for specific purposes; examples are artwork and arena stadium activities. The financial performance of the City as a whole is reflected in its governmental funds. Revenues for governmental functions overall totaled $229,766 in fiscal year 2012, a decrease of 7.42% from the previous year total of $248,263. This decrease reflects changes in the state shared income tax and secondary property tax. Expenditures, as well as the special item, for governmental functions totaled $288,713 in fiscal year 2012, a decrease of 2.62% from the previous year total of $296,478. This decrease is primarily due to the decrease in Municipal Property Corporation debt as a result of refunding savings. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the unassigned fund balance of the General Fund was ($29,565), while total fund balance was ($26,649). The City also has $197 of its fund balance as nonspendable; $368 as restricted; and $2,351 as committed. The factors that represent the significant decline in the General Fund are: • • a planned approach to use the fund balance during these extreme economic times the commitment to the National Hockey League (NHL) for management of the Jobing.com Arena for the FY 2011-12 season and FY 2010-11 season (two continuous years of $25 million payments). Overall, the General Fund’s performance resulted in revenues over expenditures of $9,633 in fiscal year 2012. In the prior year, revenues exceeded expenditures by $17,533. The transportation fund accounts for the City’s public transit program and transportation improvement projects. The fund saw an increase in fund balance of $7,818 for the fiscal year ended June 30, 2012. This increase is due to an effort to contain costs and keep a healthy fund balance. The Western Loop 101 Public Facilities Corporation debt service fund accounts for the debt service payments on the bonds issued to finance the Spring Training Baseball Facility. This fund used a combination of appropriated funds and reserve funds to make the debt service payments for the period ending June 30, 2012. Those reserve funds have been depleted in the current fiscal year. The general obligation debt service fund accounts for the resources received from a secondary property tax levy used to repay general obligation debt. The fund had a balance of $16,765 at June 30, 2012. This represents a decrease of $4,485 due to the decrease in secondary property tax received as result of declining home values. 22 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Proprietary Funds Net assets of the enterprise funds increased $4,173 or 1.00%. The enterprise funds’ total net assets were 3.09% restricted, 34.20% unrestricted, and 62.71% is invested in capital assets. 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 $5,446 for the fiscal year ended June 30, 2012. This increase is due to increases in water and sewer revenue and a concerted effort at controlling expenses during the year. The internal service fund accounts for risk management, workers’ compensation, and employee benefits provided to other departments. The fund saw a decrease of $1,770 for the fiscal year ended June 30, 2012. The decrease was due to a decrease in premiums paid during the year. Internal service funds were 100% unrestricted. The policy of the City is to fund the worker’s compensation and risk management funds at a 55% confidence level based on the most recent actuarial valuations. Due to high and ongoing claims in the worker’s compensation fund, the fund balance fell below the confidence level in December, 2012. The City has done a transfer to fund this appropriately. General Fund Budgetary Highlights Consistent with national economic conditions, the City's revenues were negatively impacted by the economic downturn. • The City’s overall revenue decreased this year as a result of the economic pressures currently prevalent in our economy. The decrease can also be attributed to a one-time payment of $12.5 million related to parking at Jobing.com Arena in fiscal year 2011, as well as a decrease in state shared revenues. • General Fund revenues were below the final budget by $7,800 or 4.72%, primarily due to the charges for services budget. During the FY2011-12 budget process, the assumption was made that we would receive additional parking revenue at Jobing.com Arena and additional electronic billboards revenue. Neither of those revenues materialized over the course of the year, primarily due to the Jobing.com Arena management agreement not being finalized in the form assumed during the budget process. • General Fund expenditures were less than the final budget by $12,850 or 6.89%. This positive variance resulted because of the continued steps taken during the fiscal year to decrease expenditures. Such steps included mandatory furlough for employees, leaving positions vacant, and other expenditure reductions. Capital Asset and Debt Administration Capital Assets The City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2012, for its governmental-type activities was $1,235,685 and for the business-type activities was $558,718. 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. Major capital asset projects during the current fiscal year included the following: • • • • Bike overpass bridge at 63rd Avenue and Loop 101, $4,213 Northern Avenue overlay, $2,440 Sewer line and manhole rehabilitation phase I, $3,029 Sewer line rehabilitation phase II, $1,285 23 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) The following table is a summary of capital assets reflected in the June 30, 2012, financial statements as compared to last year’s financial statements. Capital Assets at Year End (Net of depreciation) (in thousands) Governmental Activities 2012 2011 Construction in progress $ 164,713 $ 165,044 Land 90,285 85,029 Water storage rights Artwork 1,676 1,636 Buildings 295,104 303,360 Improvements other than buildings 134,501 143,333 Infrastructure-streets 425,397 438,801 Infrastructure-parks 54,947 53,917 Infrastructure-airport 6,176 6,638 Infrastructure-flood/storm drains 35,413 35,904 Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment 11,353 13,580 Computer equipment 512 754 Software 1,841 103 Automotive equipment 13,767 15,977 T otal $ 1,235,685 $ 1,264,076 Business-T ype Activities 2012 2011 $ 63,100 $ 63,082 26,297 26,297 8,117 8,325 8,496 8,779 45,609 47,835 76,496 78,040 76,375 74,685 127,593 134,596 99,950 103,817 15,583 16,297 2,970 3,072 969 461 197 201 6,966 8,458 $ 558,718 $ 573,945 T otal Primary Government 2012 2011 $ 227,813 $ 228,126 116,582 111,326 8,117 8,325 1,676 1,636 303,600 312,139 180,110 191,168 425,397 438,801 54,947 53,917 6,176 6,638 35,413 35,904 76,496 78,040 76,375 74,685 127,593 134,596 99,950 103,817 15,583 16,297 2,970 3,072 12,322 14,041 709 955 1,841 103 20,733 24,435 $ 1,794,403 $ 1,838,021 The construction commitments at June 30 were $14,800. Additional information on capital assets can be found in Note V of the financial statements. 24 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Long-Term Debt At the end of the current fiscal year, the City had total debt outstanding of $1,064,620 compared to $1,112,550 last year, a 4.38% net decrease. General obligation T ransportation revenue bond Highway users revenue bonds Municipal Property Corporation revenue bonds Western Loop 101 Public Facilities Corporation Capital lease obligation Water and sewer revenue bonds/obligations Notes payable T otal $ $ Governmental Activities 2012 2011 179,010 $ 194,270 97,035 99,815 12,250 16,290 Business-T ype Activities 2012 2011 $ 6,485 $ 7,410 - $ T otal Primary Government 2012 2011 185,495 $ 201,680 97,035 99,815 12,250 16,290 275,090 281,955 - - 275,090 281,955 199,750 11,667 199,750 11,833 - 151 199,750 11,667 199,750 11,984 774,802 803,913 282,625 708 $ 289,818 289,175 11,901 $ 308,637 282,625 708 $ 1,064,620 289,175 11,901 $ 1,112,550 $ The City maintains an “AA” underlying rating from Standard & Poor’s and an “A2” underlying rating from Moody’s for general obligation debt. The senior excise tax bonds are rated “AA+” by Standard and Poor’s and an “A2” by Moody’s. The subordinate lien water and sewer revenue bonds are rated “A1” by Moody’s and “AA” by Standard & Poor’s. Transportation bonds were assigned an underlying rating of “AA” by Standard & Poor’s and “A2” by Moody’s. Street and highway user revenue bonds are rated "AA" by Standard & Poor's and "A2" by Moody's. The Arizona Constitution provides that the general obligation bonded indebtedness for a city for general municipal purposes may not exceed 6% of the secondary assessed valuation of the taxable property in that city. In addition to the 6% limitation for general municipal purpose bonds, cities may issue general obligation bonds up to 20% of the secondary assessed valuation for supplying such city with water, sewer, artificial light, public safety, law enforcement, fire and emergency services, streets and transportation facilities, and for the acquisition and development of land for open space preserves, parks, playgrounds and recreational facilities. The City’s current unused 6% and 20% debt limitation on June 30, 2012, was $57,516 and $70,599, respectively. Additional information on long-term debt can be found in Notes VIII and X of the financial statements. Economic Factors and Next Year’s Budgets and Rates The adopted fiscal year 2012-13 budget is $579,000 (down 5.45% from 2011-12), including a $347,725 operating budget (an decrease of 3.97% from 2012) and $106,163 in capital outlay (down 26.39% from 2011). The fiscal year 2011-12 budget includes $39,097 contingency appropriation to cover emergency expenses or revenue shortages. The economic climate has negatively impacted the City’s revenue streams, including excise taxes, for the past several fiscal years. Total revenues in the General Fund were $166,963 in fiscal year 2008 and fell to $135,653 in fiscal year 2012. To offset the reduction in revenues, the City has been reducing expenditures through mandatory furloughs, leaving vacant positions open and reducing non-personnel expenses. Since fiscal year 2009, the City general fund departmental budgets have been cut by about 25% and the number of full-time employees has decreased by 307 positions, a decrease of 22% of the workforce. The City has also merged departments to cut additional costs. Total expenditures in the General Fund were $157,217 in fiscal year 2008 and were reduced to $126,020 in fiscal year 2012. The General Fund balance decreased from $66,388 in fiscal year 2008 to a June 30, 2012 fund balance of negative ($26,649). The decrease in general fund balance was the result of the City Council’s decision to use fund balance rather than reduce services on its citizens, as well as to 25 Return to TOC CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) fund two payments to the National Hockey League (“NHL”) of $25,000 in each of fiscal years 2011 and 2012, (for a total of $50,000) to manage the City-owned Jobing.com Arena. These two payments were special items that will not occur in the future. For fiscal year 2012, the City’s annual average unemployment rate is 7.6%; this represents an improvement from last calendar year’s average of 8.6%. The City’s unemployment rate is lower than the state’s unemployment rate which is 8.0%. Request for information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Chief Financial Officer, 5850 West Glendale Avenue, Suite 302, Glendale, Arizona 85301. The remainder of this page left blank intentionally. 26 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC City of Glendale, Arizona Statement of Net Assets June 30, 2012 (amounts expressed in thousands) Governmental Activities ASSETS Equity in pooled cash and investments Receivables (net of allowance for uncollectibles) Property taxes Accounts Note Accrued interest Intergovernmental receivable Internal balances Inventories and prepaid items Restricted cash and investments Deferred receivable Capital assets: Non-depreciable Depreciable (net) Equity in joint venture Total assets $ 136,680 Primary Government Business-Type Activities $ 1,002 15,230 70,771 331 6,972 (37,390) 11,564 33,336 3,842 64,037 Total $ 200,717 13,799 106 37,390 4,235 18,157 - 1,002 29,029 70,771 331 7,078 15,799 51,493 3,842 256,674 979,011 1,478,023 89,397 469,321 63,729 760,171 346,071 1,448,332 63,729 2,238,194 12,370 34 5,000 3 15,861 236 2,569 11,632 3,255 41 6,384 316 2,690 27 15,625 75 5,000 3 22,245 552 5,259 11,659 25,014 827,780 900,499 13,705 315,047 341,465 38,719 1,142,827 1,241,964 460,639 262,554 723,193 27,936 88,482 32,044 15,339 5,598 14,430 (66,944) 577,524 10,963 1,958 143,231 418,706 27,936 88,482 32,044 15,339 10,963 5,598 16,388 76,287 996,230 LIABILITIES Vouchers payable Accounts payable Contract 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 Revenue bond retirement, replacement, and extension Perpetual care - nonexpendable Other purposes Unrestricted Total net assets $ $ $ The notes to the financial statements are an integral part of this statement. 27 Return to TOC City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2012 (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 Interest on long-term debt Total governmental activities Business-type activities: Water and sewer Landfill Sanitation Housing Total business-type activities Total primary government $ $ Program Revenues Operating Grants and Contributions Capital Grants and Contributions 35,962 112,689 18,435 39,478 6,828 20,045 41,913 275,350 12,334 5,624 512 17,910 36,380 923 5,651 18 3,111 6,561 11,372 27,636 3,370 96 1,719 89 5,274 78,917 7,602 15,437 14,827 116,783 392,133 82,730 7,185 14,562 4,886 109,363 145,743 574 8,849 9,423 37,059 612 93 705 5,979 $ $ $ General revenues: Taxes: Property taxes levied for: General purposes Debt service Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain/(Loss) on disposal of capital assets Miscellaneous Special item National Hockey League Owners Fee Transfers Total general revenues, special items, and transfers Change in net assets Net assets - beginning - restated Net assets - ending The notes to the financial statements are an integral part of this statement. 28 Return to TOC Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-Type Activities Activities Total $ $ (19,335) (101,318) (17,905) (16,738) (267) (8,584) (41,913) (206,060) $ - $ (19,335) (101,318) (17,905) (16,738) (267) (8,584) (41,913) (206,060) (206,060) 4,999 (417) (875) (999) 2,708 2,708 4,999 (417) (875) (999) 2,708 (203,352) 2,887 17,345 97,451 17,716 19,135 7,277 975 56 489 1,126 (40) 72 2,887 17,345 97,451 17,716 19,135 7,277 2,101 16 561 (25,000) (307) 138,024 (68,036) 645,560 577,524 $ 307 1,465 4,173 414,533 418,706 $ (25,000) 139,489 (63,863) 1,060,093 996,230 29 Return to TOC City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2012 (amounts expressed in thousands) General ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Property taxes Accounts Note Accrued interest Due from other funds Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets LIABILITIES AND FUND BALANCE Liabilities: Vouchers payable Accounts payable Contract 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: Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities and fund balances $ 14,363 $ 147 9,777 331 5,006 1,777 1,000 82 32,483 $ $ 6,506 34 5,000 1,047 154 39,883 2,561 3,947 59,132 197 368 2,351 (29,565) (26,649) 32,483 Major Funds Western Loop 101 Public Facilities Corporation Transportation Debt Service $ 29,365 $ 2,665 2,461 80 34,571 $ $ 518 28 1,066 915 2,527 80 31,964 32,044 34,571 $ 6,545 $ 70,771 77,316 $ $ 6,505 70,771 77,276 40 40 77,316 General Obligation Debt Service $ 16,882 $ 855 17,737 $ $ 334 638 972 16,765 16,765 17,737 Other Non-Major Governmental Funds $ 63,288 $ 2,602 2,734 155 31,594 3,842 104,215 $ $ 3,418 3 158 82 3,936 8 9,022 6,953 5,480 29,060 5,749 69,195 129 82 75,155 104,215 Total Governmental Funds $ 130,443 $ 1,002 15,044 70,771 331 5,006 6,972 1,235 31,676 3,842 266,322 $ $ 10,442 34 5,000 3 1,233 236 44,885 2,569 15,861 83,224 5,480 168,967 6,026 118,332 2,480 82 (29,565) 97,355 266,322 The notes to the financial statements are an integral part of this statement. 30 Return to TOC City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2012 (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 $ 97,355 1,742,880 (507,195) 1,235,685 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 10,297 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds and shown as an internal balance item. 2,489 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. 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 Capital lease obligations Developer payable obligations Compensated absences OPEB obligations Unamortized premium on debt issuance (2,347) (757,655) (11,667) (2,650) (17,487) (39,548) (8,540) (837,547) 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 71,592 $ 577,524 The notes to the financial statements are an integral part of this statement. 31 Return to TOC City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2012 (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 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 60,852 9,172 44,780 9,236 3,374 635 7,604 135,653 Major Funds Western Loop 101 Public Facilities Corporation Transportation Debt Service General Obligation Debt Service Other Non-Major Governmental Funds $ $ $ 20,664 3,179 108 84 2,318 26,353 $ - 17,831 335 334 18,500 18,871 1,626 24,715 2,143 127 1,778 49,260 Total Governmental Funds $ 118,218 10,798 73,009 11,487 3,374 1,180 11,700 229,766 17,696 74,509 7,635 19,209 78 684 1,600 10,913 - 4 - 7 447 25,859 74 3,475 6,625 7,627 175 18,147 100,368 7,709 33,597 6,703 8,311 1,782 167 1,459 2,983 126,020 198 11,111 13,011 13,015 15,260 8,684 23,951 9,520 19,361 16,453 89,616 24,947 42,515 19,634 263,713 9,633 15,242 (13,015) (5,451) (40,356) (33,947) OTHER FINANCING SOURCES (USES) Payment to refunded bonds escrow agent Refunded bonds issued Premium on long-term debt issued Proceeds from equipment disposal Transfers in Transfers out Total other financing sources and uses 535 115 (21,267) (20,617) 5 900 (8,329) (7,424) 2,319 (1,353) 966 (9,320) 8,665 898 6 29,140 (2,970) 26,419 (9,320) 8,665 898 546 32,977 (33,919) (153) Special item National Hockey League Owners Fee Net change in fund balances (25,000) (35,984) 7,818 (4,485) (13,937) (25,000) (59,100) Fund balances, July 1 as restated Fund balances, June 30 $ 9,335 (26,649) $ 24,226 32,044 503 503 (12,512) $ 12,552 40 $ 21,250 16,765 $ 89,092 75,155 $ 156,455 97,355 The notes to the financial statements are an integral part of this statement. 32 Return to TOC 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, 2012 (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 $19,634 did not exceed depreciation of $47,644 for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Gain (loss) on sales (59,100) (28,010) $ 90 (546) 56 (400) 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 Bond premium amortized Payment to refunded bonds escrow agent Principal paid Refunding bonds issued Bond costs amortized Arbitrage rebate 3,786 (898) 602 9,320 24,947 (8,665) (576) 148 24,878 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. 293 Other post employment benefits 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. (7,531) Internal service funds are used by management to charge the costs of workers' compensation, risk management, and employee benefits to individual funds. (1,968) 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 16 $ (68,036) The notes to the financial statements are an integral part of this statement. 33 Return to TOC City of Glendale, Arizona Statement of Net Assets Proprietary Funds June 30, 2012 (amounts expressed in thousands) Business-Type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Funds Total ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Due from other funds Intergovernment receivable Inventories and prepaid items Total current assets $ 53,270 12,248 (842) 15,000 4,228 83,904 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Due to other funds Intergovernmental payable Deposits Unearned rent Estimated claims payable Current portion of long-term debt: Unamortized premium on debt issuance Revenue bonds/obligations payable Other long-term debt Interest payable Total current liabilities Noncurrent liabilities: Compensated absences General obligation bonds Unamortized premium on debt issuance Revenue bonds/obligations payable OPEB long-term obligations Other long-term debt Claims payable Estimated closure and post-closure costs Total noncurrent liabilities Total liabilities $ 10,767 $ 2,580 (187) 25,368 106 7 38,641 18,094 Equity in joint venture Total noncurrent assets Total assets NET ASSETS Invested in capital assets, net of related debt Restricted for: Revenue bond retirement, replacement and extension Other purposes Unrestricted Total net assets $ 63 64,037 Governmental Activities Internal Service Funds $ 6,237 14,828 (1,029) 40,368 106 4,235 122,545 186 33 6,456 18,157 1,660 764,792 (230,467) 534,325 51,287 (26,894) 24,393 816,079 (257,361) 558,718 63,729 616,148 700,052 24,456 63,097 63,729 640,604 763,149 1,660 8,116 2,745 1,605 316 2,411 - 510 41 735 489 279 27 - 3,255 41 2,340 489 316 2,690 27 - 1,928 5,405 1,112 9,545 708 6,384 24,826 2,081 1,112 9,545 708 6,384 26,907 7,333 598 6,485 11,138 273,080 5,425 296,726 321,552 459 3,295 63 14,504 18,321 20,402 1,057 6,485 11,138 273,080 8,720 63 14,504 315,047 341,954 19 3,111 3,130 10,463 238,161 24,393 262,554 - 10,963 129,376 378,500 1,958 16,344 42,695 10,963 1,958 145,720 421,195 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net assets of business-type activities $ - $ (2,347) (2,347) (2,489) 418,706 The notes to the financial statements are an integral part of this statement. 34 Return to TOC City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) 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 Business-Type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Funds Total Governmental Activities Internal Service Funds $ $ Operating expenses: Water Sewer Landfill Housing Closure/post-closure care adjustment Sanitation Administrative and general Insurance claims and premiums Amortization and depreciation Total operating expenses Operating income (loss) 573 46,523 31,630 3,157 81,883 $ 8,849 4,123 10,432 4,913 2,150 4,998 35,465 $ 9,422 46,523 31,630 4,123 10,432 4,913 2,150 8,155 117,348 23,706 683 24,389 17,967 12,596 10,992 19,857 61,412 20,471 5,906 14,242 693 13,197 2,852 36,890 (1,425) 17,967 12,596 5,906 14,242 693 13,197 10,992 22,709 98,302 19,046 1,493 120 (13,079) (2,848) (202) (1,121) (15,637) 92 20 1,006 (15) (40) (718) 345 92 1,513 1,126 (13,094) (2,848) (202) (40) (1,839) (15,292) Income (loss) before contributions and transfers 4,834 (1,080) 3,754 (2,405) Capital contributions Transfers in Transfers out Change in net assets 612 5,446 1 307 (772) 613 307 4,674 1,835 (1,200) (1,770) Nonoperating revenues (expenses): Capital grant proceeds Impact fees Investment income Interest expense Net loss from joint venture Amortization of bond issuance cost Loss on disposal of assets OPEB expense Total nonoperating revenues (expenses) Total net assets - beginning Total net assets - beginning as restated Total net assets - ending $ 373,054 378,500 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities 43,467 42,695 288 26,525 26,813 (2,424) 19 19 $ $ (577) (2,347) (501) 4,173 The notes to the financial statements are an integral part of this statement. 35 Return to TOC City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Business-Type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Funds Total 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 (used) by operating activities $ Cash flows from noncapital financing activities: Paid to other programs Transfers in Transfers out Net cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities: Proceeds from bonds sold Payment to refunded bonds' escrow agent Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Capital grant proceeds Net cash (used) by capital and related financing activities Cash flows from investing activities: Interest received from investments Net cash provided by investing activities $ $ 108,726 8,977 $ 24,203 - (9,337) (16,473) (15,665) (37,454) (14,968) 39,745 (7,739) 2,132 (22,707) 41,877 (27,845) (288) (3,930) - 1,835 (1,200) (15,000) - 307 - (15,000) 307 - (15,000) 307 (14,693) 635 90,702 (79,401) (16,902) (5,494) 1,493 (20,739) - (143) (1,493) 20 (16) 92 90,702 (79,401) (17,045) (6,987) 1,513 (20,755) 92 - (30,341) (1,540) (31,881) - 1,006 1,006 1,126 1,126 1,905 (3,571) (5,476) $ 26,704 8,977 (6,328) (20,981) 120 120 Net increase (decrease) in cash and cash equivalents during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 82,022 - Governmental Activities Internal Service Funds 76,840 71,364 $ 8,925 10,830 $ 85,765 82,194 19 19 (3,276) $ 11,173 7,897 The notes to the financial statements are an integral part of this statement. 36 Return to TOC Business-Type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Funds Total Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operations: Amortization and depreciation Changes in assets and liabilities: Accounts receivable Due from other funds Intergovernmental receivable Inventories and prepaid items Vouchers and accounts payable Accrued expenses Due to other funds Deposits Unearned rent Compensated absences Claims payable Estimated closure and post-closure costs Net cash provided (used) 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 $ 20,471 $ 19,857 $ $ $ 39,745 $ 2,852 (889) 60 (955) 6 1,099 96 - $ (1,425) 53,270 18,094 71,364 $ 612 (2,848) $ $ 693 2,132 $ 22,709 (65) (158) 466 1 (136) (5) (236) (9) (6) 160 - $ 19,046 Governmental Activities Internal Service Funds - (954) (158) 466 61 (1,091) 1 (236) 1,090 (6) 256 - $ 10,767 63 10,830 $ 1 - $ $ 693 41,877 (2,424) (187) 19 (183) 1 (1,156) $ 64,037 18,157 82,194 $ 613 (2,848) $ $ (3,930) 6,237 1,660 7,897 - 37 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (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 ............................. 39 Compliance – Excess of Expenditures Over Appropriations/Deficits in Fund Equity ............. II ............................. 48 Deposits and Investments ........................................................................................................ III ............................. 48 Note Receivable ....................................................................................................................... IV ............................. 50 Capital Assets ........................................................................................................................... V ............................. 51 Construction Commitments ..................................................................................................... VI ............................. 53 Self-Insurance Funds ..............................................................................................................VII ............................. 53 Leases ................................................................................................................................... VIII ............................. 55 Short-Term Debt ...................................................................................................................... IX ............................. 56 Long-Term Debt ....................................................................................................................... X ............................. 56 Landfill Obligations ................................................................................................................. XI ............................. 66 Interfund Transactions ............................................................................................................XII ............................. 67 Encumbrances....................................................................................................................... XIII ............................. 69 Equity in Joint Venture ......................................................................................................... XIV ............................. 69 Jointly Governed Organizations ............................................................................................ XV ............................. 70 Prior Period Adjustment ....................................................................................................... XVI ............................. 71 Governmental fund balance components and fund type definitions .................................... XVII ............................. 71 Employee Retirement Systems and Pension Plans ............................................................ XVIII ............................. 73 Other Post-Employment Benefits ......................................................................................... XIX ............................. 76 Contingent Liabilities and Commitments .............................................................................. XX ............................. 78 Special Item .......................................................................................................................... XXI ............................. 78 Subsequent Events ............................................................................................................... XXII ............................. 79 38 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) I. Summary of significant accounting policies A. Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the activities of the primary City and its component units. 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. 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 (GASB) Statement 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). Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds.” 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”). The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is 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. The internal service funds are eliminated on an entity-wide basis as per GASB Statement 34. 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 39 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) Council-Manager government. The major operations of the City include providing police and fire services to citizens as well as water and sewer. As required by GAAP, these financial statements present the government and its component units, entities 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 units 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 tax return with the Internal Revenue Service. Copies of the tax return are available from the City’s Finance Division. City of Glendale, Arizona, Western Loop 101 Public Facilities Corporation (PFC) is a non-profit corporation organized under the laws of the State of Arizona to assist the City to finance, construct and equip a spring training baseball facility for two major league teams and all other related infrastructure. The Board of Directors of the PFC, appointed by the City Council, consists of four City employees and one private citizen. The Board of Directors is responsible for authorizing debt (obligations) of the PFC. The City Council also approves the debt of the PFC. Although the PFC is a legally separate entity from the City, the PFC 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. The PFC does not issue separate audited financial statements. The PFC does file a tax return with the Internal Revenue Service. Copies of the tax return are available from the City’s Finance Division. C. Form of presentation – Government-wide financial statements The City reports the following major governmental funds: The general fund is the City’s primary operating fund. It accounts for all financial resources of the 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 Western Loop 101 public facilities corporation debt service fund accumulates monies for payment of debt service to the Western Loop 101 Public Facilities Corporation’s bond holders. 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 City reports the following major proprietary fund: 40 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) The water and sewer fund accounts for operations, maintenance and construction projects of the Cityowned water and sewer systems. Additionally, the City reports the following internal service funds: 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 City-wide 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 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 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 highway user’s 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 fund: Permanent fund is used to account for financial resources to be used by the cemetery fund. 41 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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 City-wide 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 except as described below in relation to grants. Revenues are considered to be available when they are collected within the 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 because of their availability include property tax, sales tax, highway user’s 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. Grant revenues are recognized when all eligibility requirements are met, not necessarily when received. Grant monies that have been received but are as yet unearned are carried forward as deferred revenue. However, earned but not yet received grant monies are recognized as revenue and carried forward as receivables. This practice is defined and supported by GASB Statement 33, as it pertains to “government-mandated nonexchange transactions,” paragraphs 19-25. 42 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) F. 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. G. 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 expenditure at time of purchase (i.e., the purchase method) for budgetary purposes. At June 30, 2012, the postage portion of the general fund supplies inventory was $17. Certain expenditures are recorded for financial reporting purposes as prepaid items. Special reporting treatment is applied to governmental fund inventories and prepaid items to indicate that they represent amounts that are not in spendable form, even though they are a component of current assets. Such amounts are presented as a component of nonspendable fund balance. H. 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 and the escrow agreement. 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. Restricted assets also include cash held at the Maricopa County Treasurer for the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO funds are limited by state and federal law to qualified expenses related to fighting and preventing drug use and organized crime. I. 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 $13,094. In addition, $38 was included as part of the cost of capital assets under construction in connection with water and sewer projects. 43 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) Capital assets 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 carrying value (cost less accumulated depreciation) as of the date of the transfer. J. Water storage rights The City has entered into a lease agreement with Salt River Pima-Maricopa Indian Community (SRPMIC) for the rights to 1,814 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, 2012, is $1,850. 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, 2012, the City has capitalized payment of $4,463 for these water rights. Current year amortization was $112. The net book value of these water rights as of June 30, 2012, is $4,240. The City purchased Central Arizona Project water rights as part of the Salt River Pima-Maricopa Indian Community Water Rights Settlement in November 2007. These rights, as of June 30, 2012, costing $2,027, are a permanent right and are considered to have an indefinite useful life. As such, they are not amortized; therefore, cost and net book value are equal to $2,027. K. Governmental fund balance components/net assets The City has implemented GASB No. 54 fund balance reporting and governmental fund type definitions. The components of governmental fund balance consist of the following: Nonspendable are amounts that cannot be spent due to form or principal cannot be spent such as inventory, prepaid items, and permanent cemetery fund. The permanent cemetery fund is legally or contractually required to be maintained intact. Restricted are amounts constrained for a specific purpose by external parties or laws. Examples of restricted are amounts held to pay for bonded construction projects, debt service, and excise tax revenues collected for voter approved transportation expenditures. Committed are amounts constrained by Mayor and Council authorization and can only be changed by their action through an ordinance, which changes the City Code. An example is amounts committed for artwork. 44 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) Assigned are amounts intended for other purposes by the city manager. The city manager and designees are given authority to establish new funds as needed through the financial policies adopted in the annual Budget Book approved by Mayor and Council. Assigned funds are not constrained by the other above components. Examples include amounts intended for computer replacement or telephone or equipment management services. Unassigned are amounts for any other purpose. The general fund is the only fund that can report a positive or negative unassigned balance. When both restricted and unrestricted resources are available for specific expenditures, unrestricted resources are considered spent before restricted resources. Within unrestricted resources, committed and assigned are considered spent (if available) before unassigned amounts. On the government-wide financial statements, only restrictions imposed by external sources are shown as restricted net assets. L. 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. 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, 2011 August 15, 2011 October 1, 2011 March 1, 2012 November 1, 2011 May 1, 2012 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 ratio 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, 2012, is as follows: Fund General fund General obligation debt service fund Total Rate 0.22 1.37 $ 1.59 $ 45 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) M. Compensated absences Vacation time is accumulated up to a maximum of nine workweeks and compensatory time is earned in lieu of cash payment for overtime. 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. Employees who have ten or more years of service will receive upon retirement 100% of up to 160 hours of vacation accrued. Any remaining vacation time above 160 hours will be 100% contributed to a mandatory Retiree Health Savings plan for the employee. Employees separating from the City receive 100% of accrued vacation time. Sick leave is accumulated without limit and can be used in the event of an illness of the employee or in the immediate family. Accumulated sick leave can be converted to a cash benefit on a biannual basis for employees based on one third of the average hourly rate the last 36 months. Employees must maintain a minimum sick leave balance on the books. Employees who retire and have ten or more years of service will have 40% of their accrued sick time contributed to a mandatory Retiree Health Savings plan based on their average hourly wage over the last 36 months. Employees who separated service and have five or more years of service will receive one-third of their sick leave balance based on their average hourly wage over the last 36 months in cash payout. 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, 2012, 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. All of the outstanding vacation, compensatory time, and sick leave are recorded as a liability on the government-wide financial statements, and the proprietary fund financial statements, according to payment policy. N. 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. 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. In addition, deferred revenue is made up of RICO funds that have been seized by the Police Department and are held until the court case is adjudicated by a judge. O. Long-term obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the 46 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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. P. 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. Q. 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). Also, during the fiscal year 2011, the employees had available to them the option of deferring compensation in Roth IRA. 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 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. R. Investments The City utilizes the following methods and assumptions to account for its investments: 1. 2. 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. 47 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 3. 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 County Treasurer is not subject to custodial credit risk. 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 the fiscal year ended June 30, 2012, was $198. II. Compliance - Excess of expenditures over appropriations/deficits in fund equity For the year ended June 30, 2012, expenditures exceeded appropriations in the housing fund by $1,916. These over-expenditures were funded by beginning fund balance and operating transfers. The City ended the fiscal year June 30, 2012, with a deficit fund balance/net assets in the following funds: General fund Deficit will be funded with a council approved sales tax increase of 0.7% and operating expenditure reductions over the next five fiscal years. Workers’ compensation internal service fund Deficit will be funded by premiums and interfund transfers from other funds in next fiscal year. The deficit is due to a GAAP loss adjustment for estimated claims payable based on an actuarial study Employee benefits internal service fund Deficit will be funded by canceling interfund transfers to other funds in next fiscal year. III. $ 26,649 707 2,488 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 $28,744 and the bank balances were $28,841. The difference of $9,361 represents deposits in transit, outstanding checks, and other reconciling items. At year-end, all of the City's deposits were covered by Federal depository insurance and collateral held in the City’s name. City deposits held with fiscal agents at June 30, 2012, was $66,733 and were uncollateralized. 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), 48 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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, 2012, the City had the following investments: Investment Type Investment Maturities (in years) 1-2 2-3 Fair Value 0-1 Commercial paper Corporate bonds U.S. Agencies Arizona LGIP - State Pool Grand total investments Cash deposits Cash with fiscal agents Total deposits and investments $ 14,961 12,765 23,148 16,953 $ 67,827 $ 15,183 32,051 $ 47,234 $ 2,002 39,670 $ 41,672 $ 14,961 29,950 94,869 16,953 $ 156,733 28,744 66,733 $ 252,210 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. Credit risk: As of June 30, 2012, the City’s investments were rated by Moody’s Investor Service and Standard & Poor’s as follows: Investment Type U.S. Agencies U.S. Agencies Commercial Paper Corporate Corporate Corporate Corporate Corporate Corporate Arizona LGIP-Pool 5 Moody's Rating S&P Rating % of Total Investments Weighted Average Maturity (Years) Aaa P-1 P-1 A1 Aa3 Aa1 Aa3 Aa2 Aaa NA AA+ A-1+ A-1+ AA+ AAAA+ A AA AA+ AAAF/S1+ 57.53% 2.99% 9.55% 5.02% 4.64% 3.76% 2.79% 2.25% 0.65% 10.82% 0.99 0.31 0.00 0.66 1.54 0.28 1.24 1.31 1.43 0.00 49 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (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 FNMA Total FHLB Total FHLMC Total State Pool FFCB Total GE Capital Investment Type U.S. Agencies U.S. Agencies U.S. Agencies Arizona LGIP U.S. Agencies Corporate Amount $ 30,925 29,004 22,622 16,953 12,318 7,864 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. IV. Note receivable On October 22, 2008, the Western Loop 101 Public Facilities Corporation, a blended component of the City, issued $199,750 in third lien excise tax revenue bonds to construct a baseball spring training facility. On October 1, 2009, the City finalized an Intergovernmental Agreement with the Arizona Sports and Tourism Authority (AZSTA) for the Glendale Spring Training Facility Project. The AZSTA agreed to contribute to the City $60,000 for the construction costs plus interest at 5.0% per annum payable semi-annually. A note receivable for the agreed upon contribution amount plus accrued interest on the note in the amount of $10,771 has been recorded at June 30, 2012. No payments have been received by the City on the note as of June 30, 2012. At the time of the intergovernmental agreement between the City and AZSTA, the projections for the AZSTA making payments to the City were in the year 2017. The remainder of this page left blank intentionally. 50 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) V. Capital assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2012, is as follows: Balances June 30, 2011 Gove rnme ntal activitie s Non-depreciable assets: Construction in progress Land Artwork T otal 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 T otal 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 T otal accumulated depreciation T otal depreciable assets, net Governmental activities capital assets, net $ 165,044 85,029 1,636 251,709 378,237 231,531 639,175 78,530 41,650 14,003 44,525 4,394 936 41,262 1,474,243 (74,877) (88,198) (200,374) (24,613) (5,746) (7,365) (30,945) (3,640) (833) (25,285) (461,876) Additions $ 11,422 5,256 15 16,693 T ransfers $ 100 504 101 2,372 3,077 (11,753) 25 (11,728) $ 1,840 803 3,190 4,048 69 1,778 11,728 (10,096) (9,635) (16,694) (3,018) (560) (462) (2,670) (344) (40) (4,125) (47,644) - 1,012,367 (44,567) 11,728 $ 1,264,076 $ (27,874) 51 Disposals $ - - (140) (162) (2,540) (2,842) 79 163 2,083 2,325 $ Balances June 30, 2012 $ 164,713 90,285 1,676 256,674 380,077 232,334 642,465 82,578 41,719 14,003 44,889 4,333 2,714 41,094 1,486,206 (84,973) (97,833) (217,068) (27,631) (6,306) (7,827) (33,536) (3,821) (873) (27,327) (507,195) (517) 979,011 (517) $ 1,235,685 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) Balances June 30, 2011 Busine ss-Type activitie s: Non-depreciable assets: $ Construction in progress - water and sewer Construction in progress - landfill Construction in progress - sanitation Construction in progress - housing authority Land T otal non-depreciable assets Depreciable assets: Buildings Water storage rights 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 T otal depreciable assets at historical cost Less accumulated depreciation for: Buildings Water storage rights 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 T otal accumulated depreciation T otal depreciable assets, net Business-T ype activities capital assets, net $ 62,234 269 165 414 26,297 89,379 Additions $ 5,465 62 5,527 T ransfers $ - Disposals $ (5,258) (251) (5,509) Balances June 30, 2012 $ 62,441 269 165 225 26,297 89,397 16,257 9,211 62,764 113,256 123,002 202,454 134,693 27,609 5,187 3,770 925 20,795 719,923 251 509 885 4,468 697 854 7,664 - (28) (30) (847) (905) 16,508 9,183 63,273 114,141 127,470 202,454 134,693 27,609 5,187 4,437 925 20,802 726,682 (7,481) (887) (14,925) (35,216) (48,318) (67,857) (30,875) (11,312) (2,115) (3,322) (725) (12,352) (235,385) (531) (179) (2,739) (2,429) (2,777) (7,004) (3,868) (714) (102) (173) (3) (2,190) (22,709) - 27 706 733 (8,012) (1,066) (17,664) (37,645) (51,095) (74,861) (34,743) (12,026) (2,217) (3,468) (728) (13,836) (257,361) 484,538 (15,045) - (172) 469,321 573,917 52 $ (9,518) $ - $ (5,681) $ 558,718 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) Depreciation was charged to functions/programs as follows: Governmental activities: General Public safety Public works Street maintenance Community services Community environment Total depreciation expense $ $ Business-Type activities: Water and sewer Landfill Sanitation Housing Total depreciation expense $ $ 15,240 5,677 9,868 11,654 5,183 22 47,644 19,857 737 1,653 462 22,709 Included in the water and sewer depreciation amount is $179 amortization of water storage rights. VI. Construction commitments The City has active construction projects as of June 30, 2012. The projects include street construction, park facilities, and the construction of additional water and sewer facilities. At year-end the government’s commitments with contractors are as follows: Project General government Community services Public safety Public works Street maintenance Water and sewer facilities Landfill Sanitation Housing Total primary government Spent-to-Date $ $ 9,670 25,346 15,812 95,252 18,632 62,441 269 165 225 227,812 Construction Commitment $ $ 4,223 2,172 2 2,735 91 4,594 798 185 14,800 VII. 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 insurance for liability, property, aviation, errors and omissions, boiler and machinery, and vehicle 53 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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. Insurance coverage has not 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 $750 for each workers’ compensation claim and purchases commercial insurance for claims in excess of $750. 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 contribute 75% 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 selfinsured insurance plans. The City is responsible for the first $200 in medical claims per individual per plan year. Claims exceeding $200 for an individual are paid by the reinsurance plan. Premiums for the minimum premium medical plan 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. The employee benefits fund balance has a $1,000 credit in the fiscal year. The credit is recorded in the appropriate departments as a reduction of their expenditures. This credit has been ongoing since the city council approved it in FY2008. 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 54 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) workers’ compensation self-insurance program liability includes recoveries related to subrogation. 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 risk management fund and the workers compensation fund are funded to meet a 55% confidence level of the most recent actuarial report. The City reports the estimated liability in net present value dollars using a future investment yield assumption of .53%. These liabilities are reported in the internal service funds at their present value of $8,516 as of June 30, 2012. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2012 2011 Unpaid claims, beginning of fiscal year $ 2,570 Current year claims and changes in estimate (8) Claims payments (454) $ 2,509 Balance at fiscal year end $ 2,570 $ 2,108 Workers' Compensation 2012 2011 $ 2,409 3,847 (3,786) 5,038 (3,308) $ 4,139 $ 1,857 1,837 (1,285) $ 2,409 Employee Benefits 2012 2011 $ 4,693 $ 2,797 20,813 (23,237) 23,482 (21,586) $ 2,269 $ 4,693 VIII. Leases A. Capital leases The City’s capital lease activity consists principally of leasing various types of heavy equipment for sanitation and fire. Additionally, the City has entered into capital leases involving real property for the general fund. The City pledged the Glendale Regional Public Safety Training Facility as collateral for $11,503 in capital leases in May, 2011. The City’s lease obligations meet the criteria of a capital lease as defined by the Financial Accounting Standards Board in its Accounting Standards Codification “leases” (FASB ASC 840) and have been recorded on the government-wide statements. Leases vary in terms from 5 years for sanitation vehicles, 7-9 years for fire trucks to 10 years for real property. Current year expenditures are $155 for business-type activities and $646 for governmental activities. The future minimum lease obligation and net present value of lease payments at June 30, 2012, are as follows: Governmental Activities Year Ending June 30 $ 2013 2014 2015 2016 2017 2018 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments $ 55 1,190 1,332 1,802 3,357 3,305 3,305 14,291 (2,624) 11,667 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (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 $ $ 170 2,479 197 15,395 18,241 (4,878) 13,363 $ $ 74 4,874 5,141 4,434 14,523 (9,100) 5,423 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 2011-12 were $489. 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 2012 and beyond. The carrying value of leased assets is $262,044 (cost of $359,140 less accumulated depreciation of $97,096). 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 Fiscal Year Revenues 2013 2014 2015 2016 2017 2018 and beyond Total IX. $ $ 1,866 1,853 1,841 1,806 1,792 63,256 72,414 Short-term debt The City did not issue short-term debt for the year ended June 30, 2012. X. Long-term debt A. General obligation bonds (GO) 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 56 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (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 Fund (HURF) bonds are used to construct street and highway projects. The $12,250 HURF bonds outstanding are special obligations of the City and are secured by taxes, fees, charges or other monies collected by the state and returned to the City pursuant to Title 28, Chapter 18, Article 2, A.R.S. as amended. A special revenue fund called highway user gas tax fund has been set up by the City to collect HURF revenues from the state and transferred to the debt service fund to pay for HURF principal and interest. The total principal and interest remaining on the bonds to be paid is $13,309. The current year principal and interest amounts of $4,040 and $656, respectively, were funded with transfers of $1,353 from HURF fund; $1,353 from GO debt service fund; $1,000 from transportation fund; and $1,000 from development impact fee fund. The State Legislature has in the past and may in the future alter the type and/or rate of taxes, fees, and charges as well as allocation of such monies. The transportation revenue bonds are special revenue obligations of the City and are used to construct various transportation projects such as roadway widening, intersection improvements, and right-of-way acquisitions. The $94,145 in bonds outstanding is secured by the City’s pledge of a 0.50% transportation excise tax approved by voters on November 6, 2001. The debt service payments are also secured by the same excise tax. The total remaining principal and interest to be paid to a trustee under a trust agreement is $146,554. The current year revenues of $20,664 collected in the transportation special revenue fund paid the current year principal and interest amounts of $2,890 and $4,437, respectively. For transportation revenue bonds, the pledged revenue coverage covenants in the purchase agreements require the transportation excise taxes received must be equal to or at least one and one-half times the total interest and principal payment required in the current fiscal year. The $273,080 in water and sewer revenue bonds/obligations outstanding has been issued for the construction, acquisition, and equipping of water and sewer facilities and related systems and infrastructure. These are special revenue obligations and are pledged and secured solely by the net revenues of the system. The net revenues of the system consist of revenues collected from customers including development impact fees and interest income less such necessary expenses of operation, maintenance, and repair of the system excluding depreciation, amortization and debt service. The total principal and interest remaining to be paid is $406,962. The current year principal and interest on the bonds were $22,741 and net revenues of the system were $41,941. For water and sewer revenue bond senior obligations, the pledged revenue coverage covenants in the purchase agreements require the revenues received must be equal to or at least one hundred twenty percent of the combined debt service on all outstanding senior obligations. For water and sewer revenue bond subordinate obligations, the pledged revenue coverage covenants in the purchase agreements require the revenues received must be equal to or at least one hundred twenty percent of the combined debt service on all outstanding senior obligations and subordinate obligations. C. Municipal Property Corporation (MPC) bonds In 1982, 2002, 2003, 2006 and 2008 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 57 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) bonds to finance an escrow account to refund certain outstanding City improvement district bonds. In June 2008, the City entered into a lease agreement with the MPC to issue bonds to refund outstanding 2006B bonds. In February 2012, the City entered into a lease agreement with the MPC to issue bonds to partially refund outstanding maturities of the bond series 2003, 2004, and 2006. 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. The total principal and interest remaining to be paid is $458,139 and the revenues and transfers of the MPC debt service fund were $955 and $16,809, respectively. Excise tax revenues pledged for repayment of MPC and PFC bonds was $100,081. The current year principal and interest paid was $16,858. For senior liens, the pledged revenue coverage covenants in the lease agreements require the unrestricted excise taxes received must be equal to or at least three times the senior excise tax obligation payment required in any current fiscal year. The requirement for second liens is the unrestricted excise taxes received must be equal to at least two times the combined total payment on senior excise tax obligations and second lien excise tax obligations in any current fiscal year. D. Western Loop 101 Public Facilities Corporation (PFC) bonds In 2008, the PFC, a non-profit corporation, issued bonds to finance the acquisition and construction of a new spring training baseball facility for Major League Baseball and infrastructure. The bonds are a special obligation of the City and are payable solely from and secured by a pledge of the City’s unrestricted excise taxes. A portion of the bonds was reserved to pay capitalized interest on the bonds to October 30, 2011. Thereafter, an amount equal to the PFC debt service and related miscellaneous fees, is payable in installments by the City. The pledge of unrestricted excise taxes under the lease agreement to secure the payment of principal and interest on the 2008 bonds is junior and subordinate to the City’s pledge of unrestricted excise taxes under an existing lease agreement (the “MPC Lease Agreement”) between the City and the MPC, which secures the payment of principal and interest on the outstanding bonds of the MPC. The total principal and interest remaining to be paid is $435,445 and current year interest payments were made from capitalized interest accounts and the general fund. Excise tax revenues pledged for repayment of MPC and PFC bonds was $100,081. The current year principal and interest paid was $13,011. For third liens, the pledged revenue coverage covenants in the lease agreements require the unrestricted excise taxes received must be equal to at least two times the combined total payment requirements on senior excise tax obligations, subordinate excise tax obligations and third lien excise tax obligations in any current fiscal year. Under the provisions of the lease agreement, the obligation of the City is a limited obligation and is secured by a third-lien claim and pledge of the City's unrestricted excise taxes. This pledge is junior and subordinate to the pledges for senior excise tax obligations and subordinate excise tax obligations. The City may choose to make payments from other legally available funds. 58 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) The 2008 bonds and the obligation of the City to make rental payments under the lease agreement each constitute a limited obligation of the Corporation and the City, respectively, and neither constitutes a general obligation of the Corporation or the City. Under the provisions of an intergovernmental agreement with the City of Phoenix, 80% of the general fund portion of transaction privilege tax revenues received for taxable activities at Camelback Ranch is pledged for payment of outstanding series 2008B bonds. The amount received for FY2012 was $140. 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, 2012: June 30, 2011 General obligation (GO) bonds Revenue bonds: Highway user revenue T ransportation bonds Municipal Property Corporation Public Facilities Corporation T otal bonds payable Other long-term obligations: Capital lease obligations OPEB obligations Compensated absences Claims and judgments Unamortized premium on debt issuance Developer payable obligations Arbitrage rebate payable T otal other long-term obligations T otal Additions $ 194,270 $ - Reductions $ June 30, 2012 (15,260) $ 179,010 Amounts Due Within One Year $ - 16,290 99,815 281,955 199,750 792,080 8,665 8,665 (4,040) (2,780) (15,530) (37,610) 12,250 97,035 275,090 199,750 763,135 2,890 2,590 5,480 11,833 32,016 18,900 9,672 7,532 13,393 25,843 (166) (13,555) (26,999) 11,667 39,548 18,738 8,516 571 12,956 5,405 8,724 2,423 148 83,716 898 227 47,893 (1,082) (148) (41,950) 8,540 2,650 89,659 602 19,534 (79,560) $ 852,794 $ 875,796 $ 56,558 $ $ 25,014 General, transportation, and police and fire sales tax special revenue funds typically have been used to liquidate compensated absences in prior years, since most employees engaged in governmental activities are paid from those funds. Paychecks include payment for leave taken during the current pay period. Of the $852,794 in the total liabilities, $10,946 represents debt related to unspent bond proceeds ($1,912 restricted cash in streets construction fund and $9,034 restricted cash in Western Loop 101 Public Facilities Corporation construction fund) and $775,046 is related to net assets invested in capital assets. Other obligations not included in the calculation of net assets invested in capital assets are OPEB obligations, compensated absences, claims and judgments, and arbitrage rebate payable. No governmental funds cash has been used to fund the net other post-employment benefit obligation (OPEB). The net annual OPEB cost for the current fiscal year was 21.2% funded by the employee benefits internal service fund. This fund receives money from employee contributions as well as general and water and sewer fund contributions. 59 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (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, 2012: June 30, 2011 $ 7,410 Water and sewer GO bonds Water and sewer revenue/obligation bonds 289,175 T otal bonds payable 296,585 Notes payable T otal notes payable Other long-term obligations: Capital lease obligations Estimated closure and post-closure costs Unamortized premium on debt issuance OPEB obligations Compensated absences Housing noncurrent liabilities T otal other long-term obligations T otal Additions $ 77,635 77,635 Reductions $ (925) (84,185) (85,110) Amounts Due Within One Year June 30, 2012 $ 6,485 282,625 289,110 $ 9,545 9,545 11,901 11,901 - (11,193) (11,193) 708 708 708 708 151 - (151) - - 13,811 693 14,504 - 5,864 6,881 3,142 55 29,904 13,067 1,839 2,514 8 18,121 (6,681) (2,259) (9,091) 12,250 8,720 3,397 63 38,934 1,112 2,340 3,452 (105,394) $ 328,752 $ 13,705 $ 338,390 $ 95,756 - $ Of the $328,752 in total liabilities, $302,068 is related to net assets invested in capital assets. Other obligations not included in the calculation of net assets invested in capital assets are estimated closure and post-closure costs, OPEB obligations, compensated absences, and housing noncurrent liabilities. The enterprise funds had unspent bond proceeds at year end in the amount of $5,904. 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. Issue Refunded General Obligation Bonds Series 2003 Water and Sewer Bonds Series 2003 Municipal Property Corporation Bonds Series 2003A Municipal Property Corporation Bonds Series 2004A Municipal Property Corporation Bonds Series 2006A 60 Date Refunded November 30, 2010 Remaining Balance $15,740 February 9, 2012 $74,050 February 9, 2012 $2,765 February 9, 2012 $3,430 February 9, 2012 $2,750 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2012, are comprised of the following: Classified in governmental activities on the government-wide financial statements: Purpose Interest Rate Issued Fiscal Year Ending June 30 Year Series M atures GO bonds payable from secondary assessed property taxes 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 Various 4.00-5.00 2007 Various 1.50-5.63 2010 Refunding 4.00-5.00 2011 Total 2022 2019 2015 2015 2021 2022 2030 2022 Revenue bonds payable from highway user revenue funds Streets 2.50-4.00 2004 Streets 4.00-5.00 2006 Total 2014 2016 Revenue bonds payable from the 0.5% transportation sales tax Transportation excise tax 4.00-5.00 2008 2032 Amount of Original Issue Bonds Outstanding June 30, 2012 $ $ 52,525 36,645 11,960 9,065 29,365 61,000 41,650 38,300 7,865 19,605 4,035 5,725 19,760 44,620 39,100 38,300 179,010 14,655 15,745 5,145 7,105 12,250 109,110 97,035 M unicipal Property Corporation payable from general fund lease payments M PC excise tax 5.00-5.38 2003 2033 M PC excise tax 2003A 2.50-5.00 2003 2024 M PC excise tax 2003B 1.46-5.58 2003 2033 M PC refunding 4.70-4.70 2004 2033 M PC excise tax 2004A 2.00-5.00 2004 2014 M PC excise tax 2006A 4.00-5.00 2006 2026 M PC excise tax 2008A 3.00-5.00 2008 2032 M PC excise tax 2008B 5.45-6.16 2008 2033 M PC excise tax 2008C 4.00-5.02 2008 2015 M PC refunding 2012A 3.00-5.00 2012 2021 Total 5,055 49,940 105,260 7,250 10,880 33,250 32,315 52,780 9,140 8,665 5,055 41,635 96,065 7,250 1,865 25,610 32,220 51,075 5,650 8,665 275,090 Public Facilities Corporation payable from general fund lease payments PFC excise tax 2008A 5.75-7.00 2008 2038 PFC excise tax 2008B 5.00-7.00 2008 2038 PFC excise tax 2008C 7.50 2008 2017 Total 137,495 48,670 13,585 137,495 48,670 13,585 199,750 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 61 $ 763,135 (5,480) 757,655 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (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 GO bonds payable from water and sewer fund Water and sewer 1.50-5.00 2003 Total 2022 Revenue bonds/obligations payable from water and sewer fund Various 4.00-5.00 2004 2023 Various 4.00-5.25 2006 2026 Various 4.25-5.00 2007 2028 Various 3.00-5.00 2008 2028 Various 6.20-6.55 2011 2030 Various refunding 2.00-5.00 2012 2028 Total Bonds Outstanding June 30, 2012 Amount of Original Issue 13,875 $ 80,000 80,000 44,500 65,500 25,685 77,635 6,485 6,485 3,355 76,545 40,850 58,555 25,685 77,635 282,625 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities $ 289,110 (9,545) 279,565 The Arizona Constitution provides that the general obligation bonded indebtedness for a city for general municipal purposes may not exceed 6% of the secondary assessed valuation of the taxable property in that city. In addition to the 6% limitation for general municipal purpose bonds, cities may issue general obligation bonds up to 20% of the secondary assessed valuation for supplying such city with water, sewer, artificial light, public safety, law enforcement, fire and emergency services, streets and transportation facilities, and for the acquisition and development of land for open space preserves, parks, playgrounds and recreational facilities. The City’s unused bonded debt borrowing capacity as of June 30, 2012, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 68,971 (11,455) 57,516 20% $ $ 229,905 (159,306) 70,599 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. 62 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) H. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of June 30, 2012, are shown below: GO bonds Authorized Amount Issued through June 30, 2012 Authorized but Unissued Voter authorized October 20, 1981 Operations center $ $ $ 6,750 Voter authorized March 10, 1987 Library 550 6,200 9,698 8,000 1,698 Cultural facility (1) Economic development 18,215 50,500 4,494 17,873 13,721 32,627 Governmental facilities (1) 40,910 16,910 24,000 17,000 15,398 53,700 64,801 1,460 3,175 62,966 15,540 15,398 50,525 1,835 6,935 185 6,750 20,554 16,155 102,638 79,065 502,319 10,522 1,518 11,827 139,480 10,032 14,637 102,638 67,238 362,839 Voter authorized November 2, 1999 Landfill development Library Open spaces Public safety (1) Transit (1) Voter authorized May 15, 2007 Flood control Parks and recreation Public safety Streets and parking Total GO bonds $ $ $ Revenue bonds Voter authorized November 2, 1999 Water and sewer(1) Total revenue bonds $ 10,000 10,000 $ - $ 10,000 10,000 Total bonds $ 512,319 $ 139,480 $ 372,839 (1) Certain general obligation bonds or revenue bonds can be issued as general obligation bonds, revenue bonds or a combination thereof. 63 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) I. Other debt (developer, notes, long-term) Classified in the governmental activities in the government-wide financial statements: Developer Payable Obligation - On December 1, 2005, the City entered into a development and ground lease agreement with Cabela’s whereby Cabela’s has the option to purchase the City owned property 90 days after the expiration of the 20-year ground lease (option date). In addition, the City entered into a site improvement management agreement on July 1, 2006, whereby Cabela’s accrues a management compensation amount for their actual costs of operation, maintenance, and repair of site improvements. The management compensation amount accrues annually with interest. At the option date Cabela’s can purchase the property at Fair Market Value and receive a credit against the purchase price for the accrued management compensation amount. $ 2,650 Classified in the business-type activities in the government-wide financial statements: Groundwater Treatment Plant's future site of 11.48 acres at 99th and Northern Avenues. The $3,540 note is payable in five annual installments at an interest rate of 5.00% with the final payment due on or before April 1, 2013. Total notes payable recorded in business-type activities Less current portion Long-term portion of notes payable recorded in business-type activities $ 708 $ 708 (708) - The remainder of this page left blank intentionally. 64 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) J. Debt service requirements Various Purposes Fiscal Year Ending 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Total Less interest Principal HURF Bonds $ 4,699 4,686 1,953 1,971 13,309 Transportation Bonds $ 1,059 $ 12,250 $ MPC Bonds 7,326 7,326 7,326 7,326 7,327 7,330 7,328 7,326 7,329 7,329 7,329 7,328 7,328 7,330 7,329 7,331 7,328 7,326 7,327 7,325 146,554 $ 16,949 21,703 19,884 19,996 24,538 24,289 24,582 23,300 23,618 22,307 22,362 23,010 23,064 23,122 20,524 20,583 19,778 20,718 20,778 20,837 13,634 8,563 458,139 PFC Bonds $ 13,011 15,950 17,765 17,657 15,294 15,234 15,180 15,127 15,066 15,017 14,958 14,310 14,256 14,201 16,798 16,738 17,542 16,604 16,543 16,486 16,313 18,340 21,766 21,764 21,765 21,760 435,445 G.O. Bonds $ 23,936 22,700 25,738 23,319 23,260 22,639 20,283 16,372 15,445 12,675 3,444 3,407 3,370 3,328 3,283 3,234 3,184 3,135 232,752 52,409 185,639 235,695 53,742 94,145 $ 272,500 $ 199,750 $ 179,010 Water and Sewer Revenue G.O. Notes Bonds/ Bonds Payable Obligations $ 1,259 1,260 1,249 1,236 1,226 1,214 7,444 $ 959 $ 6,485 $ Total 743 743 $ 22,907 22,917 25,453 25,455 25,444 25,455 25,449 25,083 24,413 24,081 25,293 25,292 25,285 25,289 24,215 20,323 7,396 7,212 406,962 $ 90,830 96,542 99,368 96,960 97,089 96,161 92,822 87,208 85,871 81,409 73,386 73,347 73,303 73,270 72,149 68,209 55,228 54,995 44,648 44,648 29,947 26,903 21,766 21,764 21,765 21,760 1,701,348 35 133,882 663,420 708 $ 273,080 $ 1,037,928 The following table discloses the debt service requirements as of June 30, 2012, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2037 2038 Total Principal 37,303 44,650 49,505 49,425 51,920 253,640 233,640 198,980 98,385 20,480 $ 1,037,928 Interest 53,527 51,892 49,863 47,535 45,169 189,832 131,815 68,748 23,759 1,280 $ 663,420 $ $ 65 Total 90,830 96,542 99,368 96,960 97,089 443,472 365,455 267,728 122,144 21,760 $ 1,701,348 $ Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) K. New bonds On February 9, 2012, the City issued $8,665 in municipal property corporation senior lien excise tax revenue refunding bonds to advance refund the 2012-2013 maturities of the Municipal Property Corporation Bond Series issued in 2003, 2004, and 2006. The 2012 bonds mature on various dates starting 2012 to 2021 with various interest rates of 3.00% to 5.00%. The bonds are not general obligations of the City, but are limited obligations of the City and are payable from and secured by a pledge of the City’s unrestricted excise taxes. The bond refunding resulted in a net present value loss of $424. The City realized a future cash flow loss in the amount of $1,741. On February 9, 2012, the City issued $77,635 in senior lien water and sewer revenue refunding obligation bonds to advance refund the 2001and 2010 WIFA Loan Agreements, the 2014-2028 maturities of the Water and Sewer Subordinate Bond Series December 16, 2003, and to partially refund the 20122013 maturities of that same water and sewer subordinate bond. The bonds mature on various dates starting 2014 to 2028 with various interest rates of 2.00% to 5.00%. The bonds are not general obligations of the City, but are limited obligations of the City and are payable as both principal and interest solely from and secured by a pledge of net revenues of the City’s water and sewer system. The bond refunding resulted in a net present value savings of $8,235. The City realized a future cash flow savings in the amount of $1,552. XI. Landfill obligations The City operates a municipal sanitary landfill under an Aquifer Protection Permit and Solid Waste Facility Plan approval issued by the Arizona Department of Environmental Quality requiring future closure work and post-closure monitoring. The permit meets federal and state regulations. These laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will not be paid until near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and post-closure costs as an operating expense in each period based on landfill capacity used. The landfill closure and post-closure care liability at June 30, 2012, calculated below, represents the cumulative amount reported to date based on the use of estimated capacity of the landfill. North Cell South Cell 31,402 - 22,064 19,257 87% Capacity (cubic yards) Capacity used to date Percentage of capacity used Total closure and post-closure costs in present dollars: as of June 30, 2012 as of June 30, 2011 $ $ 17,696 17,471 $ $ 16,618 16,407 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2012 $ 17,696 $ Liability recognized as of June 30, 2012 $ - $ 2,114 50 14,504 These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2011-12. 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 50 years. 66 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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. XII. Interfund transactions A. Interfund receivables Interfund balances at June 30, 2012, consisted of the following: Due From Due To Major governmental funds: General Transportation special revenue fund $ Non-major governmental funds: Community development block grants fund Police and fire sales tax Other special revenue funds Municipal Property Corporation debt service Non-major enterprise funds: Water and sewer fund Landfill fund Sanitation fund Housing fund Total $ 5,006 - $ 39,883 1,066 - 130 247 1,994 1,565 15,000 21,387 3,981 45,374 488 1 45,374 $ The interfund balances at June 30, 2012, include 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, 2012, are expected to be repaid within one year, except for sanitation, landfill and water and sewer interfund borrowings to the general fund of $3,492, $21,387 and $15,000 respectively. The sanitation and landfill portions of the interfund borrowings were for the Coyotes Newco agreement payment, which are expected to be repaid over 24 years at an interest rate of 3.9%. The $488 interfund borrowing from sanitation to landfill for rear and side loaders is expected to be repaid over three years at an interest rate of 1.87%. The $15,000 water and sewer interfund borrowing, was for the Coyotes Newco agreement payment which is expected to be repaid over 25 years at an interest rate of 3.245%. 67 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) B. Interfund transfers Interfund transfers for the year ended June 30, 2012, consisted of the following: Transfers to general fund from: Non-major governmental funds Other special revenue fund - parks Other construction fund Total transfers to general fund $ Transfers to transportation fund from: General fund Total transfers to transportation fund 110 5 115 900 900 Transfers to general obligation debt service fund: General fund Non-major governmental funds Development impact fees Total transfers to general obligation debt service Transfers to major debt service fund from: General fund Total transfers to major debt service 1,978 341 2,319 503 503 Transfers to non-major special revenue funds from: General fund Non-major governmental funds Highway user gas tax Other special revenue fund Total transfers to non-major special revenue funds Transfers to non-major debt service funds from: General fund Transportation fund General obligation debt service fund Non-major governmental funds Highway user gas tax Development impact fees Total transfers to non-major debt service funds 136 62 99 297 16,808 8,329 1,353 1,353 1,000 28,843 Transfers to non-major enterprise fund from: General fund Total transfers to non-major enterprise fund 307 307 Transfers to internal service fund from: General fund Total transfers to internal service fund 635 635 Grand total all transfers $ 33,919 68 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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. XIII. 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, 2012, the City intended to honor $12,551 of outstanding encumbrances in the new year. Fund Major: General Transportation Water and sewer Non-Major: Community development block grant Highway user gas tax Police and fire sales tax Federal stimulus Other special revenue Development impact fee Streets capital Fire and police capital Other capital Landfill Sanitation Risk management internal services Total XIV. $ $ 596 621 4,594 31 34 14 621 883 24 3,480 2 655 798 185 13 12,551 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, 2012, the City recognized a loss of $2,848. The City has financed its share of construction costs through the issuance of revenue bonds, development fees and grants. The bonds are 69 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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, 2012, (unaudited) is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets $ Liabilities Net assets 44,912 868,922 913,834 35,952 877,882 $ Total revenues Total expenses Decrease in net assets $ 76,906 (103,445) $ (26,539) Calculation of the City’s equity: City’s share of SROG equity (Total equity of $877,882 plus unrealized loss of $2,424 less assets not owned by the City of $177,290 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 decrease in equity $ 60,389 $ 3,294 46 63,729 $ $ 51 (2,848) (2,797) Copies of separate financial statements of the joint venture can be obtained from Arizona Municipal Water Users Association, 4041 North Central Avenue, Phoenix, Arizona 85012. XV. 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. 70 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) XVI. Prior period adjustment In August of 2011, funds were garnished from the City’s checking account in the amount of $2,335 for a claim against the City. The transaction was recorded as an expense of the risk management fund. In researching further and after our financial reports were issued for FY2011, it was determined that the general fund should be responsible for this claim. Therefore, the beginning fund balance for the general fund is decreasing and the beginning fund balance for the risk management internal service fund is increasing by $2,335. In addition, the net assets for governmental activities decreased by $514 and the business activities increased by $514. This is due to restating the adjustment to reflect the consolidation of internal service activities for enterprise funds. The governmental fund balances as restated: Western Loop 101 Public Facilities General Other Non-Major T otal Corporation Obligation Governmental Governmental T ransportation Debt Service Debt Service Funds Funds General Balance July 1 Adjustment Balance restated July 1 $ $ 11,670 (2,335) 9,335 $ $ $ 24,226 24,226 $ 12,552 12,552 $ 21,250 21,250 $ $ $ 89,092 89,092 $ $ 158,790 (2,335) 156,455 The internal service funds net assets as restated: Net assets - beginning Adjustment Net assets beginning - restated Risk Management Workers' Compensation $ $ $ (1,487) 2,335 848 $ Employee Benefits 734 734 $ $ (2,159) (2,159) T otal $ $ (2,912) 2,335 (577) The governmental and business-type activities net assets as restated: Government Activities Net assets - beginning Adjustment Net assets beginning - restated XVII. Business Activities $ 646,074 (514) $ 645,560 $ $ 414,019 514 414,533 T otal $ 1,060,093 $ 1,060,093 Governmental fund balance components and fund type definitions The City has a formally adopted minimum fund balance policy for the general fund. This policy was adopted though the annual budget process. The policy states that the general fund should maintain a minimum unassigned fund balance between 5% and 10% of general fund revenues received less revenues associated with the sporting facilities, certain rental revenues, replacement fund revenues and monies set aside for library, court, art commission, marketing self-sustaining and employee groups divisions. The City has not complied with the minimum fund balance requirement at the end of June 30, 2012, primarily due to 71 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) the NHL payment of $25 million expensed in the current year and prior year. According to the policy, the deficiency will be replenished over a period not to exceed five years. General Nonspe ndable $ 197 Inventory Cemetery perpetual care T otal Nonspendable 197 Re stricte d Public transit State drug enforcement U.S. drug enforcement Debt service Court security 49 Court time payments 261 Court computer upgrade 58 HOME program Highway user gas tax Police activities Fire activities Federal stimulus activities PFC construction Development impact fees Street G.O. bond projects HURF bond projects T ransportation construction Fire and police construction Park bond construction Economic development Open space/trails Cultural and historical project Government facilities Flood control construction Other T otal restricted 368 Committe d Arena stadium activities 556 Artwork 1,256 Pool/park repair Other 539 T otal committed 2,351 Assigne d Other T otal assigned Unassigne d fund balance (29,565) $ (26,649) Western Loop 101 Public Facilities General Other Non-Major T otal Corporation Obligation Governmental Governmental T ransportation Debt Service Debt Service Funds Funds $ $ 80 80 $ - $ - $ 151 5,598 5,749 $ 428 5,598 6,026 31,964 31,964 40 40 16,765 16,765 5,714 251 906 107 15,188 7,661 247 24 10,214 11,343 3,227 306 1,335 2,512 312 1,810 587 316 170 6,750 215 69,195 31,964 5,714 251 17,711 49 261 58 107 15,188 7,661 247 24 10,214 11,343 3,227 306 1,335 2,512 312 1,810 587 316 170 6,750 215 118,332 - - - 129 129 556 1,256 129 539 2,480 32,044 40 16,765 82 82 75,155 72 $ $ $ $ 82 82 (29,565) 97,355 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) Enterprise Fund Type WATER AND SEWER FUND 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. 10,963 $ 10,963 Total restricted for water and sewer $ 0B NON-MAJOR PROPRIETARY FUNDS Net assets held by the housing fund may only be used for that purpose. 1,958 $ Total restricted for enterprise fund type 2B 12,921 XVIII. 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 retirement benefits are generally paid at a percentage, based on years of service, of the retiree’s average compensation. Long-term disability benefits vary by circumstance, but generally pay a percentage of the employee’s monthly compensation. Health insurance premium benefits are generally paid as a flat dollar amount per month towards the retiree’s health care insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefit pension plan; a cost-sharing multiple-employer defined benefit health insurance premium plan; and a cost-sharing multiple-employer defined benefit long-term disability plan that covers employees of the State of Arizona and employees of participating political subdivisions and school districts. 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 and a cost-sharing multiple-employer defined benefit health insurance premium plan that covers State of Arizona and City elected officials and judges, and elected officials of participating cities. The EORP is administered by The Fund Manager of PSPRS according to the provisions of ARS Title 38, Chapter 5, Article 3. Because the health insurance premium plan benefit of the EORP is not established as a formal trust, it is reported in accordance with GASB Statement No. 45 as an agent multiple-employer plan. Accordingly, the disclosures that follow reflect the EORP as if it were an agent multiple-employer plan. 73 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) 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 Phoenix, Arizona 85012-0250 PSPRS or EORP 3010 East Camelback Road #200 Phoenix, Arizona 85016 (602) 240-2000 or (800) 621-3778 www.azasrs.gov (602) 255-5575 www.psprs.com 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, 2012, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 10.74% (9.87% for retirement, 0.63% for health insurance premiums, and 0.24% 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, 2012, 2011, and 2010 were $13,752, $12,555, and $12,810, respectively, which were equal to the required contributions for the year. Agent Plans. For the year ended June 30, 2012, PSPRS members were required by statute to contribute 8.65% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 18.66% and 21.25% for Fire and Police, respectively. The health insurance premium portion of the contribution for fire and police members was computed as $128 and $272 for the year, respectively. In addition, active EORP members were required by statute to contribute 10.00% of the members’ annual covered payroll. The City was required to remit contributions of 32.99% 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, 2012, 2011, and 2010 were $113, $93, and $84, respectively, which were equal to the required contributions for the year. Annual Pension Cost (APC). Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions are subject to continual revision as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress provides multi-year trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on 1) the plans as understood by the City and plans’ members and include the types of benefits in force at the valuation date, and 2) the pattern of sharing benefit costs between the City and plans’ members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The City’s pension cost for Fire and Police for the year ended June 30, 2012, the date of the most recent available actuarial valuation, and related information follow. 74 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) GASB statement No. 25 supplementary information actuarial methods, rates, and cost. Contribution rates: City Fire Police 18.66% 21.25% Plan members 8.65% 8.65% $3,280 $6,243 Entry age normal Entry age normal 8.00% 5.00% - 9.00% 5.00% 8.00% 5.00% - 9.00% 5.00% Level percent-of-pay, closed Level percent-of-pay, closed 24 years for unfunded actuarial accrued liability, 20 years for excess 24 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value 80%/120% market 7-year smoothed market value 80%/120% market Annual pension cost Actuarial cost method** Actuarial assumptions**: Investment rate of return Projected salary increases* Includes inflation at* Amortization method** Remaining amortization period** Asset valuation method** *Does not include payroll of members participating in the deferred retirement option plan (if any). **Actuarial presented summary of methods and assumptions used to determine the employer contribution for fiscal year 2013-14. 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, 2012, follows. Contributions required and contributions made Year Ended June 30 Police 2012 2011 2010 Fire 2012 2011 2010 Percentage of APC Contributed APC Net Pension Obligation $ $ $ 6,243 6,163 5,869 100.0 % 100.0 % 100.0 % $ $ $ - $ $ $ 3,280 3,186 3,123 100.0 % 100.0 % 100.0 % $ $ $ - Includes insurance premium tax, where applicable. 75 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) E. Schedule of funding progress The following information is presented as an analysis of funding progress excluding health insurance subsidy: Valuation Date June 30 Police 2012 2011 2010 Valuation Date June 30 Fire 2012 2011 2010 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) $ 102,979 $ 96,829 $ 91,492 $ 182,264 $ 157,063 $ 141,093 $ 79,285 $ 60,234 $ 49,601 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) $ 84,891 $ 77,133 $ 72,387 $ 119,523 $ 104,035 $ 90,570 $ 34,631 $ 26,902 $ 18,183 Funded Ratio 56.5% 61.6% 64.8% Funded Ratio 71.0% 74.1% 79.9% Annual Covered Payroll $ 29,356 $ 27,576 $ 28,329 Annual Covered Payroll $ 18,406 $ 16,811 $ 16,908 Unfunded Liability as Percentage of Covered Payroll 270.1% 218.4% 175.1% Unfunded Liability as Percentage of Covered Payroll 188.2% 160.0% 107.5% The EORP, by statute, is a cost-sharing plan. However, because of its statutory construction, in accordance with GASB Statement No. 43, paragraphs 5 and 41, the EORP is reported for such purposes as an agent multiple-employer plan. The Fund Manager obtains an actuarial valuation for the EORP on its statutory basis as a cost-sharing plan and, therefore, actuarial information for the City as a participating government, is not available. XIX. Other Post-Employment Benefits (OPEB) A. Plan description The City of Glendale post-employment healthcare plan is a single-employer defined benefit plan administered by the City of Glendale. The plan provides medical, dental, and vision coverage for eligible retirees and their dependents. Retirees can also continue their basic life insurance benefit. Retirees pay their own insurance premiums. In order for employees to be eligible for this benefit, they need 5 years of service if they were hired prior to July 1, 2005, and 10 years of service if they were hired after July 1, 2005. The Mayor and Council have authority each budget year to establish, eliminate, or amend benefit provisions through the annual budget process. A separate report is not provided as the plan financial information is included in the governmental-wide basis and proprietary funds as part of the City of Glendale reporting entity. B. Funding policy The City pays for and reports retiree health care benefits on a pay-as-you-go basis, which is the practice of paying for these benefits as they become due each year. Contributions to the plan by retirees are established at the beginning of each fiscal year through the annual budget process. The City makes no contribution to the retirees’ premiums other than allowing them to participate through the City’s pooled benefits. By providing retirees with access to the City’s healthcare plans based on the same rates it charges to active employees, the City is in effect providing a subsidy to retirees. 76 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) For the fiscal year ending June 30, 2012, the amount of $3,167 was contributed to the plan by active retirees, in the form of current premiums and the City contributed $2,688 (implied subsidy). The required contribution was 3.47% of covered payroll. C. Annual OPEB cost and net OPEB obligation The City of Glendale’s annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), and amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City had 1,834 active and 617 retiree members for the plan year ending June 30, 2012. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and any changes in the net OPEB obligation as of June 30, 2012. Normal cost Minimum amortization of unfunded actuarial liability (UAL) Annual required contribution $ 7,046 5,463 12,509 ARC adjustment Interest adjustment to net obligation OPEB cost (1,389) 1,556 12,676 Adjustment to net OPEB obligation Contributions made Net OPEB obligation beginning of year Net OPEB obligation end of year (616) (2,688) 38,896 48,268 $ The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010, 2011, and 2012 are as follows: Fiscal Year 2010 2011 2012 Percentage of Annual OPEB Cost Contributed 12.9% 12.6 21.2 Annual OPEB Cost $ 10,946 11,638 12,676 Net OPEB Obligation $ 28,723 38,897 48,268 D. Funding status The City’s funding status for OPEB is as follows: Actuarial valuation date Actuarial value of assets Actuarial accrued liability Unfunded Actuarial Liability (UAL) Funded ratio Annual covered payroll Ratio of UAL to annual covered payroll June 30, 2012 $ $ 152,974 $ 152,974 -% $ 105,550 144.9% 77 July 1, 2009 $ $ 106,578 $ 106,578 -% $ 109,704 97.2% July 1, 2007 $ $ 101,281 $ 101,281 -% $ 109,391 92.6% Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) E. Actuarial methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and actuarial value of assets, consistent with the long-term perspective of the calculations. For the June 30, 2012, actuarial valuation the actuarial cost method used is the entry age normal method. A 4.00% pay as you go discount/investment rate was used. No actuarial valuation of assets was done as there were no assets at the valuation date. The amortization method is level percent of payroll amortized over 30 years and the period is open. The healthcare cost trend rate used in the actuarial assumptions averaged 7.5% for the medical and dental plans for the 2011-12 fiscal year. No salary or post-retirement benefit increases were projected. Inflation rate is unknown at this time. XX. 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 City management, based on the advice of the City attorney, the resolution of such claims and litigation are believed to have no material adverse effect on the financial position or the future operations of the City. 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) to AZSTA. 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. XXI. Special item As of the fall of 2012, the National Hockey League (NHL) is in official negotiations with a prospective buyer of the team with the goal of keeping the Coyotes operating as the anchor tenant in Jobing.com Arena. The City has given approval of an arena management agreement (for more discussion on this see note XXII). This has been an ongoing process over the past four years. The $25,000 special item represents commitment to the National Hockey League (NHL) for having the Coyotes hockey team play at the Jobing.com arena for the 2011-12 hockey season. $20,000 of the owner’s fee was funded with $5,000 from the general fund and a $15,000 inter-fund loan from the water and sewer fund to the general fund. The inter-fund loan is expected to be paid back over 25 years. The additional $5,000 balance due is a contract payable in the general fund at the end of fiscal year 2012, however that funding is most likely to come from the water and sewer fund. 78 Return to TOC CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2012 (amounts expressed in thousands) XXII. Subsequent events On June 12, 2012, the Mayor and City Council adopted a 0.7% increase in the general transaction privilege (sales) tax from 1.2% to 1.9% across most categories effective August 1, 2012. The dedicated public safety tax of 0.5% and transportation tax of 0.5% remained the same for a total rate of 2.9%. The retail sales and use category of single items costing over $5 remained the same at a total rate of 2.2%. After the increase to the sales tax was adopted, an initiative challenging the increase was brought forward by the voters at the November 6, 2012 election. The initiative failed by a 66% no vote. The 0.7% increase will terminate on August 1, 2017. On November 13, 2012, Mayor and Council adopted an ordinance authorizing the city manager to refinance the Municipal Property Corporation debt not to exceed $61,000 and the Western Loop 101 Public Facilities Corporation debt not to exceed $203,000. On December 13, 2012, $239,875 in refunding bonds were sold by the Municipal Property Corporation. This transaction resulted in a $38,000 cash flow savings for the general fund over the next five years, a net present value savings of $43,000 and will not increase the original term of the bonds. As a result, the Western Loop 101 Public Facilities Corporation no longer has any debt associated with it and will be dissolved. On November 27, 2012, Mayor and Council approved a revised Arena Lease and Management agreement with the Arizona Hockey Arena Partners, LLC and Arena Hockey Partners, LLC to keep the Coyotes hockey team playing in the city-owned Jobing.com arena for the next 20 years. The City would be required to pay $5,500 as a management fee to the Arena operator in fiscal year 2012-13, with annual payments in subsequent years increasing to $18,000 in years 2-10 and then declining to $13,000 in years 17-20. In addition, the City would also fund a capital improvement account in the amount of $500 per year with an additional $500 in years 2021-2024. The effective date of the amended agreement and payment of the management fee is contingent upon the proposed buyer closing on its purchase of the Team from the NHL prior to January 31, 2013. On November 30, 2012, the Moody’s rating agency revised the bond ratings for the City. Listed below are the categories of bonds showing the before and after ratings. Bond Category GO Bonds Senior MPC Bonds Subordinate MPC Bonds Third Lien MPC Bonds HURF Bonds Transportation Bonds Water and Sewer Obligations Before Aa3 A1 A2 A3 Aa2 Aa3 Aa3 After A2 A2 A3 A3 A2 A2 A1 On December 6, 2012, Standard and Poor’s revised the rating on the Municipal Property Corporation Subordinate Lien Bonds from AA+ to AA. On December 12, 2012, Standard and Poor’s revised the rating on the general obligation bonds from A+ to A-. 79 Return to TOC This page left blank intentionally. 80 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 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 Street maintenance Miscellaneous Debt service: Principal Interest Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2012 $ Final 39,532 $ 39,532 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 38,737 $ (795) 61,447 8,840 44,842 37,675 4,045 856 252 7,302 165,259 19,007 (40,155) 183,643 61,447 8,840 44,842 37,675 4,043 856 252 7,302 165,257 19,007 (40,155) 183,641 60,852 9,172 44,780 30,922 3,374 371 513 7,473 157,457 15,115 (19,289) 192,020 (595) 332 (62) (6,753) (669) (485) 261 171 (7,800) (3,892) 20,866 8,379 46,694 76,573 20,899 19,627 84 791 2,631 57,484 77,492 20,900 20,371 134 791 2,631 49,698 76,685 20,087 20,161 128 684 1,601 7,786 807 813 210 6 107 1,030 11 406 5,689 173,405 131 1,616 4,921 186,471 287 1,459 2,831 173,621 (156) 157 2,090 12,850 10,238 $ (2,830) $ 18,399 $ 21,229 (Continued) 81 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule (continued) General Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) 2 of 2 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Indirect cost allocation Interest earned on restricted investments not available for appropriation Internal charges for services provided. Proceeds from disposal of assets. Interfund loan from water and sewer Miscellaneous revenue not reported GAAP basis. Less: Transfers in. Add: Transfers out. Total revenues as reported in the combining 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. Differences - budget to GAAP: Principal retirement. Capital outlay funded by long-term debt. Internal charges for services provided. Special item. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 192,020 (38,737) (8,862) 263 (12,823) (513) (15,000) 131 (115) 19,289 $ 135,653 $ 173,621 (120) 152 (22,633) (25,000) $ 126,020 The notes to the financial statements are an integral part of this statement. 82 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Proceeds from disposal of assets Miscellaneous revenues Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 10,929 Final $ 10,929 Actual Amounts (budgetary basis) $ 24,369 Variance with Final Budget Positive (Negative) $ 13,440 19,300 4,981 128 98 2,000 26,507 900 (15,793) 22,543 19,300 4,981 128 98 2,000 26,507 900 (15,793) 22,543 20,664 3,179 108 84 5 2,318 26,358 900 (8,329) 43,298 1,364 (1,802) (20) (14) 5 318 (149) 7,464 20,755 12,609 5,518 18,127 12,963 5,210 18,173 11,018 198 11,216 1,945 5,012 6,957 4,416 $ 4,370 $ 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. Proceeds from disposal of assets. Less: Transfers in. Add: Transfers out. Total revenues as reported in the combining 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. Differences - budget to GAAP: Salaries payable. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 32,082 $ 27,712 $ 43,298 (24,369) (5) (900) 8,329 $ 26,353 $ 11,216 (105) $ 11,111 The notes to the financial statements are an integral part of this statement. 83 Return to TOC CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2012 (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, capital and debt service 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 sets 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 sets appropriations for each fund. Budget basis expenditures may not exceed appropriations for each fund, except in conjunction with the transfer of contingency funds and/or unused appropriation authority from another fund that is backed by additional revenue or fund balance in the fund receiving the appropriation. 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 budget amendments, but may not increase total appropriations above the total budget, which was legally adopted for the fiscal year. The City Council may authorize a transfer of unencumbered appropriation balanced within an individual city office, department or agency at any time during the fiscal year. During the last three months of the fiscal year, the City Council may approve transfers among city offices, departments, and agencies as necessary. Interfund transfers (i.e., transfers between funds) must be specifically approved by City Council. Procedures for requesting City Council approval of appropriation transfers and delegation of budget responsibility will be set by the City Manager. Budgetary authorization and spending management controls are employed during the year for all funds except the Western Loop 101 Public Facilities Corporation construction fund. 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. 84 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Western Loop 101 Public Facilities Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Debt service: Interest Total charges to appropriations Budgetary fund balance, June 30, 2012 Actual Amounts (budgetary basis) Final - $ - $ - 380 380 380 380 503 503 - - 4 380 380 503 503 499 503 $ - $ (123) $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Less: Transfers in. Total revenues as reported in the combining 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. Differences - budget to GAAP: Interest. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. - Variance with Final Budget Positive (Negative) $ - 123 123 (4) 4 $ 123 $ 503 (503) $ - $ 503 12,512 $ 13,015 85 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Investments Taxes Intergovernmental Total inflows Add: Transfers in Less: Transfers out Amounts available for appropriation $ 669 18,144 18,813 208 (1,353) 38,784 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2012 21,116 Final $ 21,116 Actual Amounts (budgetary basis) $ 669 18,144 18,813 208 (1,353) 38,784 23,228 340 7 15,260 8,683 24,283 15,260 8,683 24,283 15,260 8,684 23,951 $ 14,501 $ 334 17,831 335 18,500 341 (1,353) 40,716 340 14,501 Variance with Final Budget Positive (Negative) $ 16,765 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. Less transfers in. Add transfers out. Total revenues as reported in the combining 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 combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 2,112 (335) (313) 335 (313) 133 1,932 333 (1) 332 $ 2,264 $ 40,716 (23,228) (341) 1,353 $ 18,500 $ 23,951 $ 23,951 86 Return to TOC 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 User 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. Police and Fire Sales Tax Fund This fund accounts for police and fire activities funded by a .5 percent sales tax levied directly by voter initiative. Federal Stimulus Fund This fund accounts for the three-year federal stimulus grants that were started in FY 2010 and were allocated to the City of Glendale as part of the American Reinvestment and Recovery Act (ARRA), the federal stimulus package. Other Special Revenue Fund This fund accounts for various activities, including the airport, miscellaneous grants, and other recreation programs. 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 User 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 other funds to fund this debt. Municipal Property Corporation Debt Service This fund accounts for building lease payments received from the general fund and subsequently paid as debt service to Municipal Property Corporation bondholders. Transportation Debt Service This fund accumulates monies for payment of the transportation revenue bonds. Transportation excise taxes are transferred from a special revenue fund to fund this debt. 87 Return to TOC 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). Western Loop 101 Public Facilities Corporation Construction Fund This fund accounts for the construction and equipping of a spring training baseball facility and related infrastructure. The facility and infrastructure are financed by PFC issued excise tax revenue bonds. Development Impact Fees Fund This fund accounts for fees covered by Chapter 28, Article VI of the Municipal Code and is restricted in use by ARS 9-463.05. 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. Streets Construction Fund This fund accounts for the construction of streets, sidewalks, streetlights, traffic signals, and street landscaping funded through GO and revenue bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. In addition, this fund accounts for transportation projects funded by transportation excise tax revenue bonds issued on October 27, 2007. Fire and Police Construction Fund This fund accounts for the construction of fire and police department facilities. Funding is provided through GO bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Parks Bond Construction Fund This fund accounts for the construction of parks and recreation improvements. Other Construction Fund This fund accounts for the construction of various City projects. Funding is provided through GO bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999, and the Federal Aviation Administration. • • • • • • • Flood control facilities Library Transit projects Economic development Open space/trails Government facilities Cultural facilities Permanent Fund 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 Fund This fund is used to account for the revenues received by the City from the sale of cemetery lots and other related services. 88 Return to TOC This page left blank intentionally. 89 Return to TOC City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2012 (amounts expressed in thousands) Special Revenue Funds Community ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts 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: Nonspendable Restricted Committed Assigned Total fund balances Total liabilities and fund balances Police and Highway Development User Fire Federal Block Grants Gas Tax Sales Tax Stimulus $ 292 $ 2 429 3,842 4,565 $ $ 295 6 130 4,027 4,458 107 107 4,565 $ 14,378 $ 1,103 151 15,632 $ $ 270 23 293 151 15,188 15,339 15,632 $ 7,366 $ 2,526 9,892 $ $ 724 114 247 899 1,984 7,908 7,908 9,892 $ 841 $ 29 870 $ $ 356 490 846 24 24 870 Other $ 674 $ 2 1,173 1 8,797 10,647 $ $ 852 3 15 1 1,994 8 1,383 4,256 6,180 129 82 6,391 10,647 90 Return to TOC Debt Service Funds Municipal Highway Property User Corporation $ 16 $ 16 $ $ 16 16 16 $ 19 $ 11,851 11,870 $ $ 21 1,565 6,804 2,590 10,980 890 890 11,870 Transportation $ 5,108 $ 5,108 $ $ 2,218 2,890 5,108 5,108 Permanent Fund Capital Project Funds Western Loop 101 Public Facilities Development Corporation Impact Streets Police Bond Construction Fees Construction Construction Construction $ 3,417 $ 2,904 $ 312 $ 9,754 $ 1,912 5,329 $ 2,904 $ 312 $ 3 9,757 $ 1,180 $ 9,034 10,214 $ $ 10,214 10,214 10,214 $ 11,429 $ 11,429 $ $ 86 86 11,343 11,343 11,429 Fire and $ $ 341 60 60 461 4,868 4,868 5,329 $ $ 392 392 2,512 2,512 2,904 Cemetery Total Non-Major Other Perpetual Governmental Construction Care Funds Parks $ $ 312 312 312 $ $ 102 22 124 9,633 9,633 9,757 $ 5,598 $ 72 5,670 $ $ 72 72 5,598 5,598 5,670 $ 63,288 $ 2,602 2,734 155 31,594 3,842 104,215 $ $ 3,418 3 158 82 3,936 8 9,022 6,953 5,480 29,060 5,749 69,195 129 82 75,155 104,215 91 Return to TOC 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, 2012 (amounts expressed is thousands) Special Revenue Funds Police REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Investments Miscellaneous Total revenues Community Highway and Development User Fire Federal Block Grants Gas Tax Sales Tax Stimulus $ 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) Refunded bonds redeemed Long-term debt issued Premium on long-term debt issued Proceeds from equipment disposal Transfers in Transfers out Total other financing sources and uses $ $ 18,871 18,871 $ 1,373 1,373 $ 7,583 1,190 65 712 9,550 7,591 - 19,140 - 43 1,306 - 3 4,625 48 1,789 1,614 8 2 5,013 7,591 19,140 1,349 601 8,688 15 3,762 24 862 (269) 99 (1,415) (1,316) 15 $ 11,353 11,353 5,011 - - Excess (deficiency) of revenues and other sources over Net change in fund balances Fund balances, July 1 Fund balances, June 30 4,252 776 5,028 Other - 2,446 92 107 $ 12,893 15,339 - (269) $ 8,177 7,908 198 (209) (11) 24 $ 24 851 $ 5,540 6,391 92 Return to TOC Debt Service Funds Municipal $ Highway Property User Corporation - $ Transportation $ - Permanent Fund Fire Total Public Facilities Development Corporation Impact Streets Police Bond Construction Fees Construction Construction Construction $ $ $ $ $ 140 140 $ 1,626 31 1,657 and 14 7 21 Parks 2 2 - Cemetery Non-Major Other Perpetual Governmental Construction Care Funds 7 288 295 $ 15 15 $ 18,871 1,626 24,715 2,143 127 1,778 49,260 1 242 165 1 - 16 239 2 - 130 140 34 - 2,051 - 24 - 32 26 1 - - 447 25,859 74 3,475 6,625 7,627 175 4,040 656 4,697 2,590 14,268 17,265 2,890 4,437 7,328 35 35 257 10,159 10,463 2,051 78 102 5,578 5,637 - 9,520 19,361 16,453 89,616 (4,697) (16,310) (7,328) 105 1,400 (10,442) (2,049) (102) (5,342) 15 (40,356) 4,706 4,706 (9,320) 8,665 898 16,809 17,052 7,328 7,328 - (5) (5) - (9,320) 8,665 898 6 29,140 (2,970) 26,419 - 105 (5,347) 15 (13,937) 9 $ 953 2 955 Capital Projects Funds Western Loop 101 7 16 742 $ 148 890 $ - $ 10,109 10,214 (1,341) (1,341) 6 6 59 $ 11,284 11,343 - (10,436) $ 15,304 4,868 - (2,049) $ 4,561 2,512 (102) $ 414 312 $ 14,980 9,633 $ 5,583 5,598 $ 89,092 75,155 93 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 1,474 Actual Amounts (budgetary basis) Final $ 1,474 $ 98 Variance with Final Budget Positive (Negative) $ (1,376) RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation 9,168 364 9,532 11,006 9,168 364 9,532 11,006 4,252 776 5,028 5,126 (4,916) 412 (4,504) (5,880) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital Outlay Total charges to appropriations 10,993 10,993 10,994 10,994 5,011 2 5,013 5,983 (2) 5,981 Budgetary fund balance, June 30, 2012 $ 13 $ 12 $ 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. Total revenues as reported in the combining statement of revenues, expenditures, and changes in fund balance - governmental funds. Uses/outflows of resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 113 $ 101 $ 5,126 (98) $ 5,028 $ 5,013 $ 5,013 94 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 12,741 Final $ 12,741 Actual Amounts (budgetary basis) $ 13,127 Variance with Final Budget Positive (Negative) $ 386 RESOURCES (INFLOWS): Intergovernmental Total revenues Add: Transfers in Amounts available for appropriation 11,416 11,416 24,157 11,416 11,416 24,157 11,353 11,353 99 24,579 (63) (63) 99 422 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Street maintenance Transfers out Total charges to appropriations 22,477 1,353 23,830 15,854 1,353 17,207 7,738 1,415 9,153 8,116 (62) 8,054 Budgetary fund balance, June 30, 2012 $ 327 $ 6,950 $ 15,426 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. Less: Transfers in. Total revenues as reported in the combining 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. Differences - budget to GAAP: Transfers out Salaries payable. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 8,476 $ 24,579 (13,127) (99) $ 11,353 $ 9,153 (1,415) (147) $ 7,591 95 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Police and Fire Sales Tax Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 5,085 Final $ 5,085 Actual Amounts (budgetary basis) $ 8,744 Variance with Final Budget Positive (Negative) $ 3,659 RESOURCES (INFLOWS): Taxes Total revenues Amounts available for appropriation 18,384 18,384 23,469 18,384 18,384 23,469 18,871 18,871 27,615 487 487 4,146 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public safety Capital outlay Total charges to appropriations 20,545 25 20,570 21,666 25 21,691 19,557 19,557 2,109 25 2,134 Budgetary fund balance, June 30, 2012 $ 2,899 $ 1,778 $ 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. Total revenues as reported in the combining 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. Differences - budget to GAAP: Salaries payable. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 8,058 $ 6,280 $ 27,615 (8,744) $ 18,871 $ 19,557 (417) $ 19,140 96 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Federal Stimulus Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Amounts (budgetary basis) Final - $ - $ - Variance with Final Budget Positive (Negative) $ - RESOURCES (INFLOWS): Intergovernmental Total revenues Amounts available for appropriation 2,672 2,672 2,672 2,672 2,672 2,672 1,373 1,373 1,373 (1,299) (1,299) (1,299) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public safety Community services Capital outlay Total charges to appropriations 75 2,595 2 2,672 50 2,876 2 2,928 43 1,307 (1) 1,349 7 1,569 3 1,579 Budgetary fund balance, June 30, 2012 $ - $ (256) $ 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. Total revenues as reported in the combining 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 combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 24 $ 280 $ 1,373 $ 1,373 $ 1,349 $ 1,349 97 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 5,462 Final $ 5,462 Actual Amounts (budgetary basis) $ 5,600 Variance with Final Budget Positive (Negative) $ 138 RESOURCES (INFLOWS): Intergovernmental Charges for services Investments Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 21,840 992 95 20,303 43,230 119 48,811 21,840 992 95 20,303 43,230 119 48,811 7,584 1,189 65 712 9,550 198 (209) 15,139 (14,256) 197 (30) (19,591) (33,680) 79 (209) (33,672) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public safety Public works Community services Community environment Miscellaneous Capital outlay Total charges to appropriations 21,362 177 2,701 1,701 20,688 46,629 11,141 177 2,689 1,728 17,754 33,489 3 4,625 48 1,839 1,607 8 601 8,731 (3) 6,516 129 850 121 (8) 17,153 24,758 Budgetary fund balance, June 30, 2012 $ 2,182 $ 15,322 $ 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. Less: Transfers in. Add: Transfers out. Total revenues as reported in the combining 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. Differences - budget to GAAP: Salaries payable. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 6,408 $ (8,914) $ 15,139 (5,600) (198) 209 $ 9,550 $ 8,731 (43) $ 8,688 98 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2012 Actual Amounts (budgetary basis) Final - $ - $ 7 Variance with Final Budget Positive (Negative) $ 7 4,706 4,706 4,706 4,706 4,706 4,713 7 10 9 1 8 4,040 656 4,706 4,040 656 4,705 4,040 656 4,697 8 $ - $ 1 $ 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. Less: Transfers in. Total revenues as reported in the combining 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 combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 16 $ 15 $ 4,713 (7) (4,706) $ - $ 4,697 $ 4,697 99 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Charges for services Miscellaneous revenues 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, 2012 $ 1,534 Actual Amounts (budgetary basis) Final $ 1,534 $ - Variance with Final Budget Positive (Negative) $ (1,534) 1,057 1,057 19,442 22,033 1,057 1,057 19,442 22,033 953 2 955 16,809 17,764 35 35 16 19 6,960 14,452 21,447 6,960 14,452 21,447 2,590 14,268 16,874 4,370 184 4,573 586 $ 586 $ 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: Transfers in. Total revenues as reported in the combining 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. Differences - budget to GAAP: Other financing uses on bond refunding. Cost of issuance on long-term debt issued. Arbitrage rebate. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 890 (104) 2 (102) (2,633) (4,269) $ 304 $ 17,764 (16,809) $ 955 $ 16,874 243 148 $ 17,265 100 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Transportation Debt Service Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2012 Actual Amounts (budgetary basis) Final - $ - $ - Variance with Final Budget Positive (Negative) $ - 7,327 7,327 7,327 7,327 7,328 7,328 1 1 - 2 1 1 2,890 4,437 7,327 2,890 4,437 7,329 2,890 4,437 7,328 1 $ - $ (2) $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Differences - budget to GAAP: Less: Transfers in. Total revenues as reported in the combining 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 combining statement of revenues, expenditures, and changes in fund balances - governmental funds. - $ 2 $ 7,328 (7,328) $ - $ 7,328 $ 7,328 101 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Amounts (budgetary basis) Final 11,015 $ 11,015 RESOURCES (INFLOWS): Licenses and permits Investments Total revenues Less: Transfers out Amounts available for appropriation 678 50 728 (1,209) 10,534 678 50 728 (1,209) 10,534 CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Street maintenance Community services Capital outlay Total charges to appropriations 202 1,180 67 8,354 731 10,534 202 1,180 67 8,354 763 10,566 Budgetary fund balance, June 30, 2012 $ - $ (32) $ 11,285 Variance with Final Budget Positive (Negative) $ 1,626 31 1,657 (1,340) 11,602 948 (19) 929 (131) 1,068 16 2 239 257 $ 11,345 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. Add: Transfers out. Total revenues as reported in the combining 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 combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 270 186 1,180 65 8,115 763 10,309 $ 11,377 $ 11,602 (11,285) 1,340 $ 1,657 $ 257 $ 257 102 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Final 23,628 $ 23,628 $ Final Budget Amounts Positive (budgetary basis) (Negative) 15,301 $ (8,327) RESOURCES (INFLOWS): 18 18 9 (9) Intergovernmental Investments - - 15 15 Proceeds from asset disposal - - 6 6 Long-term debt issued 13,000 13,000 - (13,000) Total revenues 13,018 13,018 30 (12,988) Add: Transfers in 7,467 7,467 - (7,467) 44,113 44,113 15,331 (28,782) - - 130 1,214 1,303 139 Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Street maintenance Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2012 (130) 1,164 108 252 34 218 42,791 46,181 10,160 36,021 44,113 47,736 10,463 37,273 $ - $ (3,623) $ 4,868 $ 8,491 $ 15,331 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. (15,301) Market adjustment on restricted investments not available for appropriation. (3) Proceeds from disposal of assets (6) Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. $ 21 $ 10,463 $ 10,463 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. 103 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Final 4,683 $ 4,683 Final Budget Amounts Positive (budgetary basis) (Negative) $ 4,561 $ (122) RESOURCES (INFLOWS): Investments 6 6 2 (4) 6 6 2 (4) 4,689 4,689 4,563 (126) Public safety 2,347 2,347 2,051 296 Capital outlay 2,342 2,540 - 2,540 4,689 4,887 2,051 2,836 Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Total charges to appropriations Budgetary fund balance, June 30, 2012 $ - $ (198) $ 2,512 $ (2,710) $ 4,563 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. 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. (4,561) Total revenues as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 2 $ 2,051 $ 2,051 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 104 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Final 348 $ 348 Final Budget Amounts Positive (budgetary basis) (Negative) $ 414 $ 66 RESOURCES (INFLOWS): Investments 2 2 - 2 2 - 350 350 414 64 183 183 24 159 166 291 78 213 349 474 102 372 Total revenues Amounts available for appropriation (2) (2) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2012 $ 1 $ (124) $ 312 $ 436 $ 414 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. (414) Total revenues as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ - $ 102 $ 102 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 105 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Final 15,725 $ 15,725 Final Budget Amounts Positive (budgetary basis) (Negative) $ 14,977 $ (748) RESOURCES (INFLOWS): Investments Miscellaneous Total revenues Less: Transfers out Amounts available for appropriation 39 39 7 - - 288 288 (32) 39 39 295 256 - - 15,764 15,764 15,267 - 6 32 2,427 2,592 1 (5) (5) (497) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Public Works Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2012 $ (26) 2,591 5 5 26 13,332 13,161 5,578 7,583 15,764 15,764 5,637 10,127 - $ - $ 9,630 (21) $ 9,630 $ 15,267 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. (14,977) Add: Transfers out. 5 Total revenues as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 295 Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. $ 5,637 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 5,637 Uses/outflows or resources: 106 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ Actual Amounts (budgetary basis) Final 5,576 $ 5,576 $ 5,583 RESOURCES (INFLOWS): Investments Total revenues Amounts available for appropriation 22 22 5,598 22 22 5,598 15 15 5,598 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public works Total charges to appropriations 5,598 5,598 5,598 5,598 - Budgetary fund balance, June 30, 2012 $ - $ - $ 5,598 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. Total revenues as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. Variance with Final Budget Positive (Negative) $ 7 (7) (7) - 5,598 5,598 $ 5,598 $ 5,598 (5,583) $ 15 107 Return to TOC This page left blank intentionally. 108 Return to TOC NON-MAJOR PROPRIETARY FUNDS – BUSINESS-TYPE ACTIVITIES Proprietary funds are used to account for City operations that are run like a business. These funds are responsible for providing enough operational revenue to cover all expenses. Landfill This fund accounts for the operation of the City owned landfill and recycling operations. Fees charged for the use of the landfill are used to maintain and improve the landfill operations as well as fund future closure costs. Sanitation This fund accounts for the City’s trash collection services including curb, roll-off, bulk, and front-load services to individuals and businesses. Revenues collected are used to keep the City clean. Housing This fund accounts for operations to provide affordable housing to those who cannot afford it in the private market. This is done through administration of Federal Section 8 Housing Choice and Conventional Public Housing programs. 109 Return to TOC City of Glendale, Arizona Combining Statement of Net Assets Non-Major Proprietary Funds - Business-Type Activities June 30, 2012 (amounts expressed in thousands) Landfill ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Due from other funds Intergovernmental receivable Inventories and prepaid items Total current assets $ 7,312 $ 598 (5) 21,387 29,292 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Total noncurrent assets Total assets $ $ 2,697 Total $ 2 106 7 2,812 - 23,945 (11,460) 12,485 12,485 41,777 Noncurrent liabilities: Compensated absences OPEB long-term obligations Other long-term debt Estimated closure and post-closure costs Total noncurrent liabilities Total liabilities 758 Housing 1,980 (182) 3,981 6,537 - LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Due to other funds Deposits Unearned rent Total current liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Other purposes Unrestricted Total net assets Sanitation 2,580 (187) 25,368 106 7 38,641 63 13,573 (7,366) 6,207 6,207 12,744 10,767 63 13,769 (8,068) 5,701 5,764 8,576 51,287 (26,894) 24,393 24,456 63,097 300 347 135 782 210 365 488 106 1,169 41 23 1 38 27 130 510 41 735 489 279 27 2,081 135 926 14,504 15,565 16,347 121 1,848 1,969 3,138 203 521 63 787 917 459 3,295 63 14,504 18,321 20,402 12,485 6,207 5,701 24,393 12,945 25,430 3,399 9,606 1,958 7,659 1,958 16,344 42,695 $ $ $ 110 Return to TOC 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, 2012 (amounts expressed in thousands) Business-Type Activities Enterprise Funds Operating revenues: Intergovernmental Container service Curb service Landfill user fees Recycling sales Other fees Total operating revenues Landfill $ Operating expenses: Landfill Housing Closure/post-closure care adjustment Sanitation Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Capital grant proceeds Impact fees Investment income Interest expense/loss Gain (loss) on disposal of assets OPEB expense Total nonoperating revenue (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Change in net assets Total net assets - beginning Total net assets - ending Sanitation 4,913 2,150 108 7,171 $ $ Total 8,849 4,886 13,735 $ 8,849 4,123 10,432 4,913 2,150 4,998 35,465 5,906 693 737 7,336 (165) 13,197 1,653 14,850 (291) 14,242 462 14,704 (969) 5,906 14,242 693 13,197 2,852 36,890 (1,425) 14 849 4 (198) 669 6 157 (15) (44) (397) (293) 92 (123) (31) 92 20 1,006 (15) (40) (718) 345 504 (584) (1,000) (1,080) - 1 - 1 - - 307 307 (693) (772) 504 $ 4,123 10,432 4 14,559 Housing 24,926 25,430 (583) $ 10,189 9,606 $ 8,352 7,659 $ 43,467 42,695 111 Return to TOC City of Glendale, Arizona Combining Statement of Cash Flows Non-Major Proprietary Funds - Business-Type Activities For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Landfill 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 (used) by operating activities Cash flows from noncapital financing activities: Transfers in Net cash provided by (used) 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) capital and related financing activities Sanitation 7,309 - $ 14,486 - (1,115) (2,477) (2,410) 1,307 Housing $ (8,222) (970) (4,139) 1,155 4,909 8,977 Total $ (13,026) (1,190) (330) 26,704 8,977 (9,337) (16,473) (7,739) 2,132 - - 307 307 - - 307 307 (682) 14 - (151) (718) 6 (16) - 8 (93) 92 (143) (1,493) 20 (16) 92 (668) (879) 7 (1,540) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 849 849 157 157 - 1,006 1,006 Net increase (decrease) in cash and cash equivalents during fiscal year 1,488 433 Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 5,824 7,312 325 758 $ $ (16) $ 2,776 2,760 1,905 $ 8,925 10,830 112 Return to TOC Landfill Sanitation Reconciliation of operating income (loss) to net cash provided (used) by operating activities: $ Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operations: Depreciation Changes in assets and liabilities: Accounts receivable Due from other funds Intergovernmental receivable Inventories and prepaid items Vouchers payable Accrued expenses Due to other funds Deposits Unearned rent Compensated absences Estimated closure and post-closure costs Net cash provided by (used) operating activities $ 693 1,307 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 $ $ 7,312 7,312 $ - Noncash investing, capital, and financing activities: Contributions of capital assets $ (165) $ 737 (291) Housing $ 1,653 (191) 339 (168) (10) 72 1,155 $ 462 (92) 19 54 (5) (237) (1) 55 $ (969) Total 2,852 26 14 128 1 (22) 1 2 (6) 33 $ $ $ 758 758 $ 1 (330) (1,425) (66) (158) 467 1 (136) (5) (236) (9) (6) 160 $ 693 2,132 $ $ 2,697 63 2,760 $ 10,767 63 10,830 $ - $ 1 113 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Intergovernmental Charges for services: Metered water sales Sewer service charges Impact fees Other fees Investments Miscellaneous Proceeds from equipment disposal Total revenues Less: Transfers out Amounts available for appropriation Budgetary fund balance, June 30, 2012 Final 56,465 $ - CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Public works: Water Sewer Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations $ Actual Amounts (budgetary basis) 56,465 $ - 65,818 Variance with Final Budget Positive (Negative) $ 573 9,353 573 45,609 31,441 700 1,216 111 206 39 79,322 (106) 135,681 45,609 31,441 700 1,216 111 206 39 79,322 (106) 135,681 45,975 31,630 1,493 1,904 120 1,247 82,942 (15,000) 133,760 11,890 11,964 11,109 855 21,512 14,441 5,000 53,099 21,399 14,486 5,000 52,354 17,607 12,471 5,691 3,792 2,015 5,000 46,663 12,583 14,306 132,831 13,291 14,376 132,870 11,178 13,702 71,758 2,113 674 61,112 2,850 $ 2,811 $ 62,002 366 189 793 688 9 1,041 (39) 3,620 (14,894) (1,921) $ 59,191 114 Return to TOC 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. Revenues offset directly by bad debt expense on budgetary basis. 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 excluding capital contributions. 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. Amortization and depreciation expense. Bond issuance costs. Principal payments on long-term obligations. OPEB expense. 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. $ 133,760 (65,818) 636 (82) 15,000 $ 83,496 $ 71,758 636 199 (5,691) 95 19,857 4 (11,178) 1,120 (623) (82) (281) $ 75,814 115 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 20,249 Final $ 20,249 Actual Amounts (budgetary basis) $ 5,765 Variance with Final Budget Positive (Negative) $ (14,484) RESOURCES (INFLOWS): Charges for services: Landfill user fees Recycling fees Other fees Proceeds from equipment disposal Proceeds from interfund loan Investments Impact fees Total revenues Amounts available for appropriation 5,968 1,820 58 10 230 140 27 8,253 28,502 5,968 1,820 58 10 230 140 27 8,253 28,502 5,341 2,150 108 5 338 849 14 8,805 14,570 (627) 330 50 (5) 108 709 (13) 552 (13,932) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Contingencies Landfill Capital outlay Total charges to appropriations 2,000 7,099 1,731 10,830 2,000 7,099 1,735 10,834 6,332 693 7,025 2,000 767 1,042 3,809 Budgetary fund balance, June 30, 2012 $ 17,672 $ 17,668 $ 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. Proceeds from loan. Total revenues as reported in 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. Differences - budget to GAAP: Bad debt expense. Capital outlay expenditures. Change in compensated absences liability. Change in estimated landfill post-closure liability. Depreciation expense. OPEB expense. 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. 7,545 $ (10,123) $ 14,570 (5,765) (431) 3 (5) 4 (338) $ 8,038 $ 7,025 3 (693) 73 693 737 198 (71) (431) $ 7,534 116 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Impact fees Investments Miscellaneous Proceeds from equipment disposal Proceeds from interfund loan 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, 2012 $ 5,869 Final $ 5,869 Actual Amounts (budgetary basis) $ 2,148 Variance with Final Budget Positive (Negative) $ (3,721) 4,395 10,554 4 35 80 15,068 20,937 4,395 10,554 4 35 80 15,068 20,937 4,170 10,311 6 157 4 77 19 14,744 16,892 (225) (243) 2 122 4 (3) 19 (324) (4,045) 14,676 1,863 14,676 1,863 13,197 795 1,479 1,068 388 17 16,944 388 17 16,944 388 17 14,397 2,547 3,993 $ 3,993 $ 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. Proceeds from interfund loan. Total revenues as reported in 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. Differences - budget to GAAP: Bad debt expense. Capital outlay. Change in compensated absences liability. Depreciation expense. Interest expense. OPEB 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. 2,495 $ (1,498) $ 16,892 (2,148) (47) 121 (77) (44) (19) $ 14,678 $ 14,397 121 (795) 54 1,653 (2) 397 (388) (128) (47) $ 15,262 117 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 828 Final $ 828 Actual Amounts (budgetary basis) $ 2,866 Variance with Final Budget Positive (Negative) $ 2,038 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Add: Transfers in Amounts available for appropriation 9,143 4,100 13,243 307 14,378 9,143 4,100 13,243 307 14,378 8,941 4,886 13,827 307 17,000 (202) 786 584 2,622 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations 12,385 224 12,609 12,385 224 12,609 14,242 283 14,525 (1,857) (59) (1,916) Budgetary fund balance, June 30, 2012 $ 1,769 $ 1,769 $ 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. Non operating revenue on a GAAP basis Less: Transfers in. Total revenues as reported in the combining statement of revenues, expenses, and changes in fund net assets, excluding capital grant proceeds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Depreciation expense. Capital outlay. OPEB expense. Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets. 2,475 $ 706 $ 17,000 (2,866) (92) (307) $ 13,735 $ 14,525 462 (283) 123 $ 14,827 118 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTERNAL SERVICE FUNDS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC City of Glendale, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2012 (amounts expressed in thousands) Risk Management ASSETS Current assets: Equity in pooled cash and investments Accounts receivable, net Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments 3,001 33 3,034 Workers' Compensation $ 3,234 3,234 Employee Benefits $ 2 186 188 Total $ 6,237 186 33 6,456 - 235 1,425 1,660 3,034 3,469 1,613 8,116 LIABILITIES Current liabilities: Vouchers payable Estimated claims payable Total current liabilities 60 1,872 1,932 37 1,264 1,301 1,831 2,269 4,100 1,928 5,405 7,333 Noncurrent liabilities: Compensated absences Estimated claims payable Total noncurrent liabilities Total liabilities 18 236 254 2,186 2,875 2,875 4,176 1 1 4,101 19 3,111 3,130 10,463 (2,488) (2,347) Total assets NET ASSETS Unrestricted Total net assets 848 $ 848 (707) $ (707) $ (2,488) $ (2,347) 119 Return to TOC 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, 2012 (amounts expressed in thousands) Operating revenues: Self-insurance premiums Other Total operating revenues Risk Management $ Operating expenses: Administrative and general Insurance claims and premiums Total operating expenses Operating income (loss) Nonoperating revenues: Investment income $ Operating transfers in Operating transfers out Change in net assets $ 984 26 1,010 253 1,080 1,333 3,659 3,659 1,193 (2,649) 7 Income (loss) before transfers Net assets - beginning as restated Net assets - ending 2,500 26 2,526 Workers' Compensation Employee Benefits $ 20,222 631 20,853 Total $ 35 21,786 21,821 288 26,525 26,813 (968) 8 23,706 683 24,389 (2,424) 4 19 1,200 (2,641) (964) (2,405) (1,200) 1,200 - 635 - 1,835 (1,200) - (1,441) (329) (1,770) 848 848 734 (707) (2,159) (2,488) (577) (2,347) $ $ $ 120 Return to TOC City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Cash flows from operating activities: Cash received from customers Cash paid for insurance and in settlement of claims Cash paid to employees for services Risk Management Workers' Compensation $ $ (1,718) (254) Net cash provided by (used for) operating activities 554 Cash flows from noncapital financing activities: Operating transfers in (out) (1,200) Cash flows from investing activities: Interest received 7 Net increase (decrease) in cash during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operations: Change in accounts receivable Change in inventories and prepaid items Change in vouchers payable Change in compensated absences Change in claims payable Net cash provided by (used for) operating activities Reconciliation of statement of net assets cash and investments to the statement of cash flows: Per combined statement of net assets: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents 2,526 (639) 1,011 Employee Benefits $ (940) (3,544) (3,930) 1,200 635 635 8 4 19 (2,905) $ 3,201 3,469 $ $ 1,193 $ (2,649) $ (22) 1,731 554 $ $ 3,001 3,001 $ $ $ 24,203 (27,845) (288) 3,640 3,001 $ $ (24,176) (34) $ 19 (195) (463) 20,666 (1,951) - 268 - Total (940) 3,234 235 3,469 4,332 1,427 (968) (3,276) $ 11,173 7,897 $ (2,424) (187) (187) 34 1 (2,424) 19 (183) 1 (1,156) $ (3,544) $ (3,930) $ 2 1,425 1,427 $ 6,237 1,660 7,897 $ $ 121 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 4,477 Final $ 4,477 Actual Amounts (budgetary basis) $ 3,394 Variance with Final Budget Positive (Negative) $ (1,083) RESOURCES (INFLOWS): Self-insurance premiums Investments Other Total revenues Less: Transfers out Amounts available for appropriation 2,500 17 26 2,543 7,020 2,500 17 26 2,543 7,020 2,500 7 26 2,533 (1,200) 4,727 (10) (10) (1,200) (2,293) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General Administration Insurance and claims Total charges to appropriations 3,308 2,760 6,068 2,808 2,738 5,546 261 1,523 1,784 2,547 1,215 3,762 Budgetary fund balance, June 30, 2012 $ 952 $ 1,474 $ 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. Add: Transfers out. 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. Differences - budget to GAAP: Insurance and claims recorded gaap basis only. Change in compensated absences liability. Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets. 2,943 $ 1,469 $ 4,727 (3,394) 1,200 $ 2,533 $ 1,784 (443) (8) $ 1,333 122 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 1,284 Final $ 1,284 Actual Amounts (budgetary basis) $ 3,112 Variance with Final Budget Positive (Negative) $ 1,828 RESOURCES (INFLOWS): Self-insurance premiums Investments Other Total revenues Add: Transfers in Amounts available for appropriation 984 7 26 1,017 2,301 984 7 26 1,017 2,301 984 8 26 1,018 1,200 5,330 1 1 1,200 3,029 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 1,407 1,407 1,928 1,928 1,928 1,928 - Budgetary fund balance, June 30, 2012 $ 894 $ 373 $ 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. Less: Transfers in. Total revenues as reported in 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. Differences - budget to GAAP: Change in estimated claims payable. Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets. 3,402 $ 3,029 $ 5,330 (3,112) (1,200) $ 1,018 $ 1,928 1,731 $ 3,659 123 Return to TOC City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2012 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2011 $ 2,584 Final $ 2,584 Actual Amounts (budgetary basis) $ 2,533 Variance with Final Budget Positive (Negative) $ (51) RESOURCES (INFLOWS): Self-insurance premiums Investments Other Total revenues Add: Transfers in Amounts available for appropriation 21,878 17 21,895 24,479 21,878 17 21,895 24,479 20,222 4 631 20,857 635 24,025 (1,656) (13) 631 (1,669) 635 (454) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General Administration Insurance and claims Total charges to appropriations 6 23,112 23,118 40 24,204 24,244 35 24,208 24,243 5 (4) 1 Budgetary fund balance, June 30, 2012 $ 1,361 $ 235 $ 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. Less: Transfers in. Total revenues as reported in 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. Differences - budget to GAAP: Change in estimated claims payable liability. Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets. (218) $ $ (453) 24,025 (2,533) (635) $ 20,857 $ 24,243 (2,422) $ 21,821 124 Return to TOC City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2012 (rounded to nearest dollar) 1 of 6 The following is the schedule of Federal Financial Data as required by the United States Department of Housing and Urban Development under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H. Line Item No. 111 112 113 114 115 100 Balance Sheet Account Description ASSETS: Current assets: Cash: Cash - unrestricted Cash - restricted - modernization and development Cash - other restricted Cash - tenant security deposits Cash - restricted for payment of current liability Total cash AMPS $ 855,524 38,255 893,779 HCV $ 1,128,241 632,742 1,760,983 DVP $ DHAP 24,536 24,536 $ Eliminations 18,025 18,025 125 121 122 124 125 126 126.1 126.2 127 128 128.1 129 120 Accounts receivables: Accounts receivable - PHA projects Accounts receivable - HUD other projects Accounts receivable - other government Accounts receivable - miscellaneous Accounts receivable - tenants Allowance for doubtful accounts - tenants Allowance for doubtful accounts - other Notes, loans, & mortgages receivable - current Fraud recovery Allowance for doubtful accounts - fraud Accrued interest receivable Total receivables, net of allowances for doubtful accounts 2,517 1,618 (95) 4,040 79,367 79,367 24,245 24,245 - 131 132 135 142 143 143.1 144 145 150 Current investments: Investments - unrestricted Investments - restricted Investments - restricted for payment of current liability Prepaid expenses and other assets Inventories Allowance for obsolete inventories Inter program - due from Assets held for sale Total current assets 7,838 (392) 905,265 62,707 43,389 1,946,446 48,781 18,025 - - 48,781 18,025 161 162 163 164 165 166 167 168 160 171 172 173 174 176 180 190 Non-current assets: Capital assets: Land Buildings Furniture, equipment & machinery - dwellings Furniture, equipment & machinery - administration Leasehold improvements Accumulated depreciation Construction in progress Infrastructure Total capital assets, net of accumulated depreciation Notes, loans, & mortgages receivable - non-current Notes, loans, & mortgages receivable - non-current - past due Grants receivable - non-current Other assets Investment in joint venture Total non-current assets Total assets 135,533 10,228,655 515,204 178,682 2,233,891 (7,909,959) 224,286 5,606,292 $ 5,606,292 6,511,557 149,998 102,908 (158,506) 94,400 $ 94,400 2,040,846 $ $ $ Total - $ - 79,367 26,762 1,618 (95) 107,652 (43,389) 62,707 7,838 (392) 2,875,128 (43,389) - $ (43,389) 2,026,326 632,742 38,255 2,697,323 135,533 10,378,653 515,204 281,590 2,233,891 (8,068,465) 224,286 5,700,692 $ 5,700,692 8,575,820 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2012 (rounded to nearest dollar) Line Item No. (continued) Balance Sheet Account Description 126 311 312 313 321 322 324 325 331 332 333 341 342 343 344 345 346 347 348 310 LIABILITIES AND EQUITY/NET ASSETS: LIABILITIES: Current liabilities: Bank Overdraft Accounts payable <= 90 days Accounts payable > 90 days past due Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accrued contingency liability Accrued interest payable Accounts payable - HUD PHA Programs Accounts payable - PHA projects Accounts payable - other government Tenant security deposits Deferred revenues Total Current portion of L/T debt - capital pjts/mortgage rev bonds Current portion of L/T debt - operating borrowings Other current liabilities Accrued liabilities - other Inter program - due to Loan liability - current Total current liabilities 351 352 353 354 355 356 357 350 300 Noncurrent liabilities: Total L/T debt, net of current- capital pjts/mortgage rev bonds Long-term debt, net of current- operating borrowings Noncurrent liabilities- other Accrued compensated absences - noncurrent Loan Liability - noncurrent FASB 5 liabilities Accrued pension and OPEB liability Total noncurrent liabilities Total liabilities 508.1 509.2 511.1 511.2 512.1 512.2 513 600 2 of 6 EQUITY/NET ASSETS: Invested in capital assets, net of related debt Fund balance reserved Restricted net assets Unreserved designated fund balance Unrestricted net assets Unreserved undesignated fund balance Total equity/net assets Total liabilities and equity/net assets AMPS $ $ 21,531 12,306 38,255 4,602 6,545 1,363 84,602 HCV $ 14,133 10,303 19,430 43,866 DVP $ 35,243 35,243 DHAP $ 2,761 6,783 9,544 Eliminations $ (43,389) (43,389) Total $ 35,664 22,609 38,255 26,793 6,545 129,866 110,751 312,737 423,488 508,090 62,707 92,728 208,491 363,926 407,792 35,243 9,544 (43,389) 62,707 203,479 521,228 787,414 917,280 5,606,292 399,915 6,006,207 6,514,297 94,400 632,742 903,172 1,630,314 2,038,106 13,538 13,538 48,781 8,481 8,481 18,025 (43,389) 5,700,692 632,742 1,325,106 7,658,540 8,575,820 $ $ $ $ $ (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2012 (rounded to nearest dollar) Line Item No. 70300 70400 70500 70600 70610 70710 70720 70730 70740 70750 70700 70800 71100 71200 71300 71310 71400 71500 71600 72000 70000 3 of 6 (continued) Income Statement Account Description REVENUE: Net tenant rental revenue Tenant revenue - other Total tenant revenue HUD PHA operating grants - other Capital grants Management fee Asset management fee Bookkeeping fee Front line service fee Other fees Total fee revenue Other government grants Investment income - unrestricted Mortgage interest income Proceeds from disposition of assets held for sale Cost of sale of assets Fraud recovery - other Other revenue Gain or loss on the sale of capital assets Investment income - restricted Total revenue AMPS $ 292,028 13,094 305,122 HCV $ DVP - $ DHAP - $ Eliminations - $ Total - $ 292,028 13,094 305,122 528,631 92,000 - 8,320,178 - - - - 8,848,809 92,000 - 989 41,599 968,341 1,297 8,870 4,527,485 847 12,858,677 - - - 2,286 8,870 4,569,084 847 13,827,018 127 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2012 (rounded to nearest dollar) Line Item No. 91100 91200 91300 91310 91400 91500 91600 91700 91800 91810 91900 91000 4 of 6 (continued) Income Statement Account Description EXPENSES: Administrative salaries Auditing fees Management fee Bookkeeping fee Advertising and marketing Employee benefit contributions - administrative Office expenses Legal expense Travel Allocated overhead Other Total operating - administrative 128 92000 Asset management fee 92100 92200 92300 92400 92500 Tenant services - salaries Relocation costs Employee benefit contributions - tenant services Tenant services - other Total Tenant services 93100 93200 93300 93400 93500 93600 93700 93800 93000 94100 94200 94300 94500 94000 AMPS $ HCV 288,091 133,384 36,610 727 80 28,504 487,396 $ DVP 549,349 224,302 42,160 7 16,433 832,251 $ DHAP - $ Eliminations - $ Total - $ 837,440 357,686 78,770 727 87 44,937 1,319,647 - - - - - - 17,553 17,553 - - - - 17,553 17,553 Water Electricity Gas Fuel Labor Sewer Employee benefit contributions- utilities Other utilities expense Total utilities 78,576 23,412 2,901 34,620 139,509 - - - - 78,576 23,412 2,901 34,620 139,509 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials & other Ordinary maintenance and operations - contract costs Employee benefit contributions - ordinary maintenance Total maintenance 257,710 62,802 141,164 88,820 550,496 17,269 17,269 - - - 257,710 80,071 141,164 88,820 567,765 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2012 (rounded to nearest dollar) Line Item No. 5 of 6 (continued) Income Statement Account Description AMPS HCV DVP DHAP Eliminations Total 129 95100 95200 95300 95500 95000 Protective services - labor Protective services - other contract costs Protective services - other Employee benefit contributions - protective services Total protective services 96110 96120 96130 96140 96100 Property insurance Liability insurance Workman's compensation All other insurance Total insurance premiums 34,020 1,277 35,297 23,307 851 24,158 - - - 57,327 2,128 59,455 96200 96210 96300 96400 96500 96600 96800 96000 Other general expenses Compensated absences Payments in lieu of taxes Bad debt - tenant rents Bad debt- mortgages Bad debt - other Severance expense Total other general expenses - 27,584 27,584 - - - 27,584 27,584 96710 96720 96730 96700 Interest of mortgage (or bonds) payable Interest on notes payable (short and long term) Amortization of bond issue costs Total Interest expense and amortization cost - - - - - - 96900 Total operating expenses 97000 Excess revenue over operating expenses 97100 97200 Extraordinary maintenance Casualty losses - non-capitalized 97300 Housing assistance payments 97350 97400 97500 97600 97700 97800 90000 HAP Portability-in Depreciation expense Fraud losses Capital outlays - governmental funds Debt principal payment 0 governmental funds Dwelling units rent expense Total expenses $ - 1,230,251 $ - $ - $ - $ - $ - 901,262 - - - 2,131,513 11,957,415 - - - 11,695,505 538 - - - - - 538 - - 7,974,291 - - - 7,974,291 457,338 1,688,127 4,259,444 4,262 13,139,259 - - - 4,259,444 461,600 14,827,386 (261,910) (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2012 (rounded to nearest dollar) Line Item No. (continued) Income Statement Account Description 10010 10020 OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out 10030 10040 10050 10060 10070 10080 10091 10092 10093 10094 10100 Operating transfers from/to primary government Operating transfers from/to component unit Proceeds from notes, loans and bonds Proceeds from property sales Extraordinary items, net gain/loss Special items, net gain/loss Inter project excess cash transfer in Inter project excess cash transfer out Transfers between program and project - in Transfers between program and project - out Total other financing sources (uses) 10000 6 of 6 Excess (deficiency) of total revenues over (under) total expenses AMPS $ HCV 2,530 (2,530) $ 307,000 307,000 $ (412,786) DVP - $ $ (280,582) DHAP - $ $ Eliminations - $ - - $ - $ Total (2,530) 2,530 $ 307,000 307,000 (693,368) - - $ - $ - $ - $ MEMO ACCOUNT INFORMATION 130 11020 Required annual debt principal payments 11030 Beginning equity 11040 11050 11060 11070 11080 11090 11100 11170 11180 11190 11210 11270 Prior period adjustments, equity transfers & correction of errors Changes in compensated absence balance Changes in contingent liability balance Changes in unrecognized pension transition liability Changes in special term/severance benefits liability Changes in allowance for doubtful accounts - dwelling rents Changes in allowance for doubtful accounts - other Administrative fee equity Housing assistance payments equity Unit months available Unit months leased Excess cash 11610 11620 11630 11640 11650 11660 13510 13901 Land purchases Building purchases Furniture & equipment - dwelling purchases Furniture & equipment - administrative purchases Leasehold improvements purchases Infrastructure purchases CFFP debt service payments Replacement housing factor funds $ $ - $ - $ - 6,418,993 1,910,896 13,538 8,481 - 8,351,908 1,738 1,722 722,437 1,048,422 632,742 12,768 12,445 - - - - 1,048,422 632,742 14,506 14,167 722,437 49,188 30,047 12,765 - $ - $ - $ - $ - $ 49,188 30,047 12,765 - City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Return to TOC This page left blank intentionally. Return to TOC 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. 132-139 Revenue Capacity These schedules contain information to help the reader assess the city’s local revenue source, the property tax and sales tax. 140-144 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. 146-153 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. 154-155 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. 156-160 131 Return to TOC City of Glendale, Arizona Net Assets by Component Last Ten Fiscal Years (amounts expressed in thousands) Government activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets 2012 $ 460,639 183,829 (66,944) 2011 $ 463,961 204,645 (22,532) 2010 $ 457,773 176,400 11,684 2009 $ 471,484 144,422 51,500 577,524 646,074 645,857 667,406 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets 262,554 12,921 143,231 271,708 29,988 112,323 271,969 13,988 124,550 286,452 13,249 114,814 418,706 414,019 410,507 414,515 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets 723,193 196,750 76,287 735,669 234,633 89,791 729,742 190,388 136,234 757,936 157,671 166,314 996,230 $ 1,060,093 $ 1,056,364 $ 1,081,921 $ 132 Return to TOC Schedule 1 2008 $ 499,322 133,695 51,850 2007 $ 446,828 180,303 44,573 2006 $ 2005 398,517 155,163 75,417 $ 372,778 179,434 40,641 2004 $ 353,135 169,434 49,916 2003 $ 259,802 127,393 132,801 684,867 671,704 629,097 592,853 572,485 519,996 297,329 12,836 107,384 249,569 11,881 155,325 233,387 12,437 158,753 274,620 11,249 108,604 228,252 10,479 141,094 275,204 10,235 82,564 417,549 416,775 404,577 394,473 379,825 368,003 796,651 146,531 159,234 696,397 192,184 199,898 631,904 167,600 234,170 647,398 190,683 149,245 581,387 179,913 191,010 535,006 137,628 215,365 $ 1,102,416 $ 1,088,479 $ 1,033,674 $ 987,326 $ 952,310 $ 887,999 133 Return to TOC City of Glendale, Arizona Changes in Net Assets Last Ten Fiscal Years (amounts expressed in thousands) Schedule 2 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Expenses Governmental activities: General government $ Public safety 35,962 $ 112,689 46,233 $ 111,217 42,530 $ 108,308 39,545 $ 109,136 39,998 $ 113,285 37,992 $ 92,405 33,329 $ 75,277 31,603 $ 64,277 24,003 $ 56,176 20,209 52,625 Public works 18,435 20,099 16,627 15,040 16,006 14,816 13,995 14,309 13,883 11,411 Community services 39,478 41,136 44,524 48,143 52,185 45,481 40,275 37,394 33,914 32,210 Community environment Street maintenance Other 6,828 7,061 6,316 3,539 5,164 4,698 4,125 3,236 3,446 3,433 20,045 21,721 23,058 23,978 26,175 24,906 22,720 21,355 20,425 20,308 - - - - - - 3,020 238 142 148 Interest on long-term debt 41,913 41,967 42,286 38,982 28,475 23,551 16,883 16,986 15,838 7,223 Total governmental activities expenses 275,350 289,434 283,649 278,363 281,288 243,849 209,624 189,398 167,827 147,567 78,917 79,444 81,910 74,424 74,581 63,289 55,607 50,190 45,628 43,442 7,602 7,280 8,454 8,045 8,067 8,264 7,950 7,431 7,164 7,784 15,437 14,814 14,093 14,039 15,209 13,847 13,257 12,287 12,294 12,353 Business-type activities: Water and sewer Landfill Sanitation Housing 134 Total business-type activities expenses Total primary government expenses 14,827 14,687 14,180 11,840 9,862 8,951 9,466 9,278 8,858 8,033 79,186 73,944 71,612 $ 108,348 386,711 86,280 $ 118,637 402,286 94,351 $ 116,225 405,659 107,719 $ 116,783 392,133 $ 389,007 $ 338,200 $ 295,904 $ $ 12,334 $ 24,822 $ 14,232 $ 11,879 $ 12,132 $ 11,610 $ 10,726 $ 268,584 $ 9,075 $ 241,771 $ 219,179 9,092 $ 10,029 Program revenues Governmental activities: Charges for services: General government Public safety 5,624 5,094 5,824 4,670 5,744 1,964 1,375 1,200 1,043 Public works 512 495 7,447 588 543 531 516 506 148 526 17,910 11,733 11,918 15,661 22,859 22,285 20,121 16,871 16,942 13,439 Community services 1,897 Community environment - - - 3,045 - - 31 - 3 - Street maintenance - - 2 36 - 48 - - - 7 27,636 27,137 29,596 24,146 33,191 36,566 31,973 26,535 24,503 22,522 5,274 70,552 3,755 2,600 14,491 26,247 6,406 1,407 3,429 4,294 69,290 139,833 72,774 62,625 88,960 99,251 71,148 55,594 55,160 52,714 Operating grants and contributions Capital grants and contributions Total governmental activities program revenues 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Business-type activities: Charges for services: Water and sewer Landfill Sanitation Housing Operating grants and contributions Capital grants and contributions 82,730 80,513 76,603 67,810 66,316 62,125 56,153 54,295 52,456 7,185 8,027 6,987 7,304 9,196 9,742 8,362 8,961 9,593 52,088 8,644 14,562 14,733 15,048 15,258 14,684 14,653 14,167 13,624 12,817 11,918 4,886 4,829 4,870 2,042 816 662 569 542 512 494 9,423 9,342 9,331 8,701 8,348 8,254 8,020 8,027 7,643 7,091 705 1,155 690 1,207 4,346 5,125 5,403 242 168 520 Total business-type activities program revenues 119,491 118,599 113,529 102,322 103,706 100,561 92,674 85,691 83,189 80,755 Total primary government program revenues 188,781 258,432 186,303 164,947 192,666 199,812 163,822 141,285 138,349 133,469 Governmental activities (206,060) (149,601) (210,875) (215,738) (192,328) (144,598) (138,476) (133,804) (112,667) (94,853) Business-type activities Total primary government net expense $ 2,708 (203,352) $ 2,374 (147,227) $ (5,108) (215,983) $ (6,026) (221,764) $ (4,013) (196,341) $ 6,210 (138,388) $ 6,394 (132,082) $ 6,505 (127,299) $ 9,245 (103,422) $ $ 20,232 $ 27,189 $ 33,749 $ 32,890 $ 28,826 $ 23,085 $ 21,386 $ 19,422 $ 18,321 $ Net (expense)/revenue 9,143 (85,710) General revenues and other changes in net assets Governmental activities: Taxes: Property taxes 16,739 135 Sales taxes 97,451 93,260 92,717 97,054 105,175 97,825 90,968 77,166 74,763 63,832 Unrestricted state shared sales tax 17,716 18,438 17,786 19,321 22,237 23,037 23,298 20,271 18,409 17,113 19,135 23,590 31,292 36,267 34,109 27,518 22,909 20,115 19,731 23,288 7,277 7,917 8,130 8,808 9,730 10,044 10,444 9,414 8,978 975 1,482 286 1,668 4,742 5,557 4,395 2,654 315 Unrestricted urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain (loss) on disposal of capital assets 56 Miscellaneous Capital contributions Transfers Special item Total governmental activities (677) 879 202 348 225 9 489 3,936 5,406 2,872 302 301 272 275 349 299 - - - - - - - 4,794 24,614 27,042 (307) (317) (25,000) (25,000) 138,024 149,818 330 (52) 8,619 (1,602) (370) (551) (509) (364) 700 (164) 445 (333) (67) - - - - - - - - 189,326 198,277 205,491 187,205 174,720 154,172 165,156 155,708 Business-type activities: Investment earnings, unrestricted 1,126 Gain (loss) on disposal of capital assets Loss on joint venture Miscellaneous Capital contributions Transfers Total business-type activities Total primary government 614 460 2,069 4,044 5,381 3,466 2,065 1,115 137 187 282 126 103 844 - - - - - - - - - - 72 70 83 90 108 140 100 202 - - - - - - - - - 5,712 2,414 7,241 (40) 307 317 370 551 509 364 1,465 1,138 1,100 2,992 $ 5,988 193,193 $ 42,607 $ 12,198 54,805 150,956 $ 190,426 $ 201,269 $ 4,787 210,278 $ 217 $ (21,549) $ (17,461) $ 13,163 $ 3,512 3,729 $ (4,008) (25,557) $ (3,034) (20,495) $ 774 13,937 $ 139,489 $ $ (68,036) $ 4,173 (63,863) (700) $ 3,710 178,430 $ 36,244 $ 10,104 46,348 (123) (725) (1,285) (1,011) 164 333 67 $ 8,143 162,315 $ 2,577 167,733 $ 5,449 161,157 $ 20,368 $ 52,489 $ 60,855 $ 14,648 35,016 $ 11,822 64,311 $ 14,592 75,447 Changes in net assets Governmental activities Business-type activities Total primary government City of Glendale, Arizona Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) Schedule 3 2012(1) General fund Reserved Unreserved Total general fund General fund Nonspendable Restricted Committed Assigned Unassigned Total general fund 136 All other governmental funds Reserved Unreserved, report in: Special revenue funds Capital projects funds Total all other governmental funds All other governmental funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds $ $ $ $ $ $ $ $ 2011(1) - 197 368 2,351 (29,565) (26,649) $ $ $ $ - $ 5,829 117,964 129 82 124,004 $ $ $ 2010 - 9,383 29,463 38,846 $ $ $ - - $ 76,055 $ 50,478 41,046 167,579 5,822 129,635 11,464 199 147,120 $ 463 5,403 1,965 9,253 (5,414) 11,670 $ 2009 $ $ $ - 2008 10,450 42,180 52,630 $ $ $ - $ 83,966 $ 57,555 27,474 168,995 $ $ $ - 2007 9,271 57,117 66,388 $ $ $ - $ 58,146 $ 76,493 18,436 153,075 $ $ $ - $ 2006 10,500 50,880 61,380 $ $ $ $ - $ 45,029 $ 34,369 68,932 148,330 $ $ Note: (1) Changes made per GASB 54 requirement fund balance reporting, effective June 30, 2011. - 2005 10,287 62,166 72,453 $ $ $ $ - $ 42,910 $ 30,584 64,106 137,600 $ $ - 2004 9,377 56,661 66,038 $ $ $ $ - $ 39,014 $ 34,867 61,765 135,646 $ $ - 2003 9,582 51,080 60,662 $ $ 17,315 31,727 49,042 $ $ - $ - $ 41,188 $ 33,527 $ 29,807 71,569 142,564 $ 23,553 126,252 183,332 $ $ - $ $ - This page left blank intentionally. 137 Return to TOC City of Glendale, Arizona Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2012 Schedule 4 2011 2010 2009 2008 2007 2006 2005 2004 2003 Revenues Taxes and special assessments Licenses and permits $ 118,218 10,798 $ 120,974 9,367 $ 126,291 $ 130,119 $ 133,746 $ 121,122 $ 112,576 $ 96,812 $ 93,655 $ 82,458 9,734 10,503 17,385 17,839 16,039 15,497 16,667 16,771 73,836 Intergovernmental 73,009 79,760 90,047 91,642 101,821 107,699 86,994 75,691 73,166 Charges for services 11,487 10,461 13,640 9,881 14,125 10,086 8,838 5,681 4,824 3,313 Fines and forfeitures 3,374 3,806 4,052 4,064 4,507 3,932 3,564 3,247 3,169 3,246 Investment income (loss) 1,180 1,841 774 3,805 9,986 10,905 7,825 4,762 1,511 Miscellaneous 11,700 22,054 18,000 9,346 4,915 4,212 4,136 3,335 2,774 2,834 (805) Total revenues 229,766 248,263 262,538 259,360 286,485 275,795 239,972 205,025 195,766 181,653 20,321 Expenditures General government 138 18,147 19,668 23,085 26,048 25,364 24,524 21,868 20,892 17,274 Public safety 100,368 95,270 96,161 103,624 100,384 86,753 72,745 61,366 53,805 49,571 Public works 7,709 8,859 11,569 11,072 11,743 12,155 12,252 12,081 12,816 10,118 28,391 33,597 33,887 37,518 42,294 44,767 39,150 35,604 32,627 30,006 Community environment Community services 6,703 6,853 6,160 3,478 4,972 4,657 3,978 3,082 3,311 3,282 Street maintenance 8,311 9,038 10,388 11,901 13,045 13,372 11,609 10,534 9,811 9,994 Miscellaneous 1,782 1,577 2,026 1,666 1,629 3,059 2,918 55 555 80 Capital outlay 19,634 22,093 63,529 186,175 141,060 179,421 131,243 47,283 120,833 142,213 Principal 24,947 31,640 29,451 29,670 32,151 28,096 20,328 18,899 18,090 21,680 Interest 42,515 42,593 42,913 39,571 32,294 20,630 17,222 17,231 15,998 8,155 263,713 271,478 322,800 455,499 407,409 411,817 329,767 224,050 282,499 293,805 (33,947) (23,215) (60,262) (196,139) (120,924) (136,022) (89,795) (19,025) (86,733) (112,152) Debt service: Total expenditures Excess of revenues over (under) expenditures 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Other financing sources (uses) Refunding lease issued Discount on long-term debt Proceeds from loans Long-term debt issued Refunding bonds issued - 11,503 - - - - 8,665 38,300 41,650 - Payment to redeem lease - - - - - - - - - - - 199,750 109,986 133,327 93,033 - - - 16,075 69,522 215,920 (82) - - - 93,815 - 9,065 - - - 10 1,894 2,192 1,198 1,782 - - 14,500 Premium on long-term debt issued 898 230 1,114 Proceeds from equipment disposal 546 331 482 344 8,714 850 3,166 1,342 8,198 2,802 - - 44 - - 668 - - 428 11,266 Capital lease proceeds (11,355) 3,369 (3,136) Payment to redeem/refunded bonds escrow agent Transfers in (9,320) 32,977 (41,251) 38,728 36,306 21,914 (83,521) 51,626 24,945 (9,582) 20,014 15,800 - (21,262) 32,943 12,851 - Transfers out (33,919) (39,045) (33,430) (22,465) (52,135) (25,309) (19,314) (15,964) (33,276) (12,918) Special item (25,000) (25,000) - - - - - - - - (25,153) (24,420) 45,062 198,301 130,677 135,679 98,164 17,483 57,585 244,421 Total other financing sources (uses) Net change in fund balances $ (59,100) $ (47,635) $ (15,200) $ 2,162 $ 9,753 $ (343) $ 8,369 $ (1,542) $ (29,148) $ 132,269 139 Debt service as a percentage of noncapital expenditures 27.64% 29.77% 27.91% 25.71% 24.20% 20.97% 18.91% 20.44% 21.09% Note: The debt service percentage of noncapital expenditures does not include other financing sources/uses. The percentage equals the total principal and interest expenditures divided by the total expenditures less capital outlay. 19.68% City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Schedule 5 Major Components Fiscal Year 2002-03 Real Estate $ 258,224 Improvements $ 733,234 Secured Personal $ 2,383 Utilities Rails and Wires Unsecured Personal $ 39,629 $ 54,189 Less: Tax Exempt Property $ 98,565 Net Assessed Value (1) $ Total Direct Tax Rate 989,094 1.72 Estimated Actual Value(1) $ Assessed Value as a Percentage of Actual Value(2) 8,331,442 13.055 140 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 2006-07 463,560 1,033,129 1,373 45,756 58,111 230,940 1,370,989 1.72 12,107,926 13.230 2007-08 593,311 1,406,513 1,759 50,130 60,680 285,374 1,827,019 1.62 16,733,846 12.624 2008-09 739,936 1,821,057 1,865 54,663 61,347 485,193 2,193,675 1.59 21,034,639 12.736 2009-10 739,388 1,844,506 1,698 59,190 62,176 576,051 2,130,907 1.59 20,635,557 13.118 2010-11 654,550 1,593,536 1,669 57,380 56,217 609,782 1,753,570 1.59 17,333,074 13.635 2011-12 330,057 1,189,718 1,307 48,084 53,746 473,388 1,149,524 1.59 12,040,482 13.479 Source: Maricopa County Assessor's Office Notes: (1) Assessed values are established each year by the County. The tax rate is $100 per assessed value (reference note I. L). (2) 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* General Obligation Debt Service Glendale Elementary and High School Districts Peoria Unified School Districts Deer Valley Unified School Districts 141 Fiscal Year Basic Rate 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 2006-07 0.29 1.43 1.72 19.84 17.26 15.34 2007-08 0.27 1.35 1.62 17.74 15.33 13.97 2008-09 0.24 1.35 1.59 15.85 14.09 13.03 2009-10 0.22 1.37 1.59 15.18 13.81 12.74 2010-11 0.22 1.37 1.59 16.35 14.13 14.18 2011-12 0.22 1.37 1.59 20.69 15.54 16.47 City of Glendale Source: Maricopa County 2011 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 Ten Years Ago June 30, 2012 (amounts expressed in thousands) Schedule 7 Tax Year 2012 142 Taxpayer Arizona Public Service Company New Westgate LLC VHS of Arrowhead, Inc. Arrowhead Towne Center LLC JQH-Glendale Az Development LLC Wal-Mart Stores, Inc. Centurylink (Qwest Corporation) Stadium Development LLC BNSF Railway Corporation Southwest Gas Corporation Honeywell, Inc. New River Associates Corning Gilbert, Inc. KB Toys Chase Commercial Mtg. May Department Stores JC Penney Co. Total principal taxpayers Rank 1 2 3 4 5 6 7 8 9 10 $ $ Assessed Valuation 17,785 12,584 12,016 11,416 8,380 8,275 7,724 5,297 4,162 3,331 90,970 Tax Year 2002 Percentage of Total City Taxable Assessed Value 1.55 % 1.09 1.05 0.99 0.73 0.72 0.67 0.46 0.36 0.29 7.91 % Rank 1 Assessed Valuation $ 15,145 Percentage of Total City Taxable Assessed Value 1.59 % 2 13,251 1.39 5 3 4 6 7 8 9 10 5,136 11,346 10,822 4,349 4,080 3,581 3,134 3,050 0.54 1.19 1.13 0.45 0.43 0.37 0.33 0.32 73,894 7.74 % $ Source: Maricopa County Treasurer's Office Note: 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. City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Schedule 8 Collected within the Fiscal Year of Levy Total Collections to Date Collections Fiscal Year 2002-03 Total Percent of (1) Tax Levy $ 16,743 Amount $ in Subsequent Years Levy 16,289 97.29 % Percent of (2) $ Amount 440 $ Levy 16,729 99.92 % 143 2003-04 18,468 17,899 96.92 561 18,460 99.96 2004-05 19,534 19,011 97.32 427 19,438 99.51 2005-06 21,566 20,980 97.28 494 21,474 99.57 2006-07 23,423 22,721 97.00 409 23,130 98.75 2007-08 28,728 27,823 96.85 562 28,385 98.81 2008-09 33,927 32,411 95.53 1,003 33,414 98.49 2009-10 33,617 32,260 95.96 682 32,942 97.99 2010-11 27,534 26,469 96.13 362 26,831 97.45 2011-12 20,787 20,090 96.65 - 20,090 96.65 Source: Maricopa County Treasurer's Office (1) Total levy includes only secured property. (2) Includes collections and resolutions. City of Glendale, Arizona City Transaction Privilege Taxes (Sales Tax) by Category Last Ten Fiscal Years (amounts expressed in thousands) 2012 Retail sales Contracting $ 49,686 2011 $ 48,089 Schedule 9 2010 $ 49,127 2009 $ 48,353 2008 $ 54,416 2007 $ 50,733 2006 $ 48,743 2005 $ 41,883 2004 $ 41,262 2003 $ 36,639 5,170 6,742 4,458 6,378 9,540 10,483 9,729 7,716 7,709 5,638 Rentals 11,550 11,854 12,729 11,511 12,082 9,895 8,897 8,228 7,752 7,164 Utilities 6,393 6,449 6,829 6,449 5,359 4,724 4,168 1,967 2,606 1,765 Telecom/cable TV 5,144 6,093 6,156 6,722 6,174 5,914 5,300 5,179 4,290 2,437 11,975 11,207 10,791 10,863 10,995 9,335 8,163 7,031 6,676 6,132 Amusement 2,896 1,860 3,697 3,659 3,034 3,288 1,934 1,043 1,058 601 Other 3,816 5,568 4,018 4,002 3,575 3,453 4,034 4,119 3,410 3,456 Restaurant/bar Total % Growth by year Retail sales Contracting $ 96,630 $ 3.3 % (23.3) 97,862 (2.0) % $ 97,805 1.6 % 51.0 (30.1) $ 97,937 (11.1) % (33.1) $ 105,175 7.3 % (9.0) $ 97,825 $ 90,968 1.5 % 12.6 % 18.7 % 36.7 54.1 144 (7.0) 10.6 (4.7) 22.1 11.2 8.1 5.9 20.3 13.4 13.3 111.9 (15.6) (1.0) (8.4) 8.9 4.4 11.6 6.9 4.0 (0.7) (1.2) 17.8 14.4 55.7 (50.0) 1.0 20.6 (7.7) 70.0 (31.5) 39.0 0.4 11.9 3.5 (14.5) (6.9) % 7.5 % (1.3) % 0.1 % (0.1) % 63,832 0.1 (6.0) Total $ 16.4 % (2.6) Other 74,763 26.1 (0.9) Amusement $ 4.1 % Rentals Telecom/cable TV 77,166 7.8 Utilities Restaurant/bar $ 7.5 % 6.1 8.2 24.8 (24.5) 47.6 19.1 2.3 20.7 76.0 63.6 16.1 5.3 8.9 12.0 85.4 (1.4) 76.0 11.5 (2.1) 20.8 (1.3) 3.6 17.9 % Source: City of Glendale Tax and License Division Note: The tax rate for City activities is 2.2% except for telecommunications which is 5.4%, restaurant bars 3.2%, hotel/motel 5.6%, and retail sales food for home consumption 1.8%. The amounts represent sales tax dollars collected for the fiscal year presented. 3.2 % 17.1 % 21.4 % This page left blank intentionally. 145 Return to TOC City of Glendale, Arizona Ratio of Outstanding Debt by Type(1) Last Ten Fiscal Years (amounts expressed in thousands) General Obligation Bonds Fiscal Year 2002-03 Schedule 10 $ Special Assessment Bonds 127,104 $ 12,036 Government Activities Street and Highway Revenue Bonds $ Excise Tax Revenue Bonds 20,030 $ 170,590 Transportation Bonds $ - Capital Leases $ 14,971 Notes Payable $ 20,193 146 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 2006-07 224,234 - 34,065 293,530 - 12,492 6,279 2007-08 212,524 - 30,895 298,050 109,110 10,838 9,045 2008-09 197,738 - 27,480 493,880 105,035 9,076 7,637 2009-10 225,595 - 23,910 487,305 102,490 7,493 6,288 2010-11 194,270 (4) - 16,290 (4) 481,705 99,815 11,833 - 2011-12 179,010 (4) - 12,250 (4) 474,840 97,035 11,667 - Business Activities Water Sewer Revenue Bonds Water Sewer G.O. Bonds Landfill G.O. Bonds 2002-03 17,845 1,186 49,280 14,831 12,838 460,904 1,995 6.71 2003-04 15,825 1,032 121,470 14,433 11,007 552,326 2,370 8.25 2004-05 13,135 870 115,140 13,660 2,676 535,606 2,270 7.67 2005-06 12,375 700 190,020 12,285 2,613 681,679 2,794 9.08 2006-07 11,595 520 229,130 10,862 2,349 825,056 3,354 9.86 2007-08 10,805 331 288,950 10,240 1,688 982,476 3,946 11.32 2008-09 9,995 132 282,345 12,425 1,080 1,146,823 4,587 13.11 2009-10 9,160 - 273,140 14,278 592 1,150,251 4,601 13.56 2010-11 8,300 - 289,175 11,901 151 1,113,440 4,901 14.12 2011-12 6,485 - 282,625 708 - 1,064,620 4,694 13.27 Fiscal Year 147 (5) Notes Payable Total Primary Government Capital Leases Total Debt per Capita(3) Percentage of Personal Income(2) (1) Does not include other long-term obligations such as compensated absences, unamortized premiums, claims/judgments, arbitrage, post-closure costs, etc. (2) Calculate by dividing Glendale population with Maricopa County population and multiplying by total personal income to arrive at Glendale personal income (data from Schedule 15). Then divide total primary government amount by Glendale personal income to arrive at percentage of personal income. (3) Numbers not expressed in thousands. (4) Amounts outstanding less July 1 City of Glendale, Arizona Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Less: Amounts Available in Debt Service General Obligation (1) Schedule 11 Percentage of Net Assessed Per Total Value of Property Capita(3) 17,768 $ 128,367 12.98 % (2) Year Bonds 2002-03 $ 146,135 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 2006-07 236,349 24,600 211,749 15.45 859.44 2007-08 223,660 30,145 193,515 10.59 778.01 2008-09 207,865 37,418 170,447 7.77 682.30 2009-10 234,755 41,934 192,821 9.05 770.75 2010-11 201,680 (4) 21,250 180,430 10.29 794.09 2011-12 185,495 (4) 16,765 168,730 14.68 744.22 Note: Funds $ $ 555.70 (1) These figures include general obligation water and sewer bonds. (2) These figures include the current general obligation bond liability plus the general obligation debt service fund balance at June 30. (3) Per capita is in actual dollars. (4) Amount reflects July 1 payment. 148 Return to TOC City of Glendale, Arizona Net Direct and Overlapping Governmental Activities Debt June 30, 2012 (amounts expressed in thousands) Jurisdiction Peoria Unified School District No. 11 Schedule 12 Net Debt Percentage Applicable Outstanding to Glendale $ 185,730 21.1126 % Amount Applicable (2) to Glendale $ 39,212 Glendale Elementary School District No. 40 18,060 99.1374 17,904 Deer Valley Unified School District No. 97 186,625 20.1372 37,581 Alhambra Elementary School District No. 68 10,995 19.0292 2,092 Glendale Union High School District No. 205 88,350 20.1584 17,810 Maricopa County Community College District 671,250 3.3353 22,388 Phoenix Union High School District No. 210 271,745 1.2129 3,296 Maricopa County Pendergast Elementary School District No. 92 9,930 27.6915 2,750 Tolleson Union High School District No. 214 65,315 7.9351 5,183 Washington Elementary School District No. 6 92,475 2.6041 2,408 Dysart Unified School District No. 89 174,425 0.0339 59 Agua Fria Union High School District No. 216 60,220 0.0417 25 Litchfield Elementary School District No. 79 35,675 0.0651 23 Cartwright Elementary School District No. 83 16,820 - - Total Overlapping Debt 1,887,615 150,731 (1) 162,245 162,245 City of Glendale Debt Total $ 2,049,860 $ 312,976 Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness. (1) The City of Glendale debt includes total General Obligation (GO) debt outstanding (not including landfill or water and sewer GO debt) less GO debt service fund balance. (2) Calculation based on Net Debt Outstanding multiplied by Percentage Applicable to Glendale, which is determined by dividing the tax area code net secondary assessed value by the tax authority net secondary assessed value. 149 Return to TOC City of Glendale, Arizona Legal Debt Margin Information Last Ten Fiscal Years (amounts expressed in thousands) Schedule 13 Legal Debt Margin Calculation for Fiscal Year 2011 Assessed value 6% Type Bonds $ 1,149,524 Debt limit (6% of assessed value) 68,971 Debt applicable to limit: General obligation bonds 12,634 Less: Amount set aside for repayment of general obligation debt (1,179) Total net debt applicable to limit 11,455 Legal debt margin 2003 Debt limit $ 59,346 2004 $ 64,801 2005 $ 68,673 2006 $ 76,174 2007 $ 82,259 $ 2008 $ 109,621 2009 $ 131,621 2011(1) 2010 $ 127,854 $ 105,214 57,516 2012(1) $ 68,971 Total net debt applicable to limit Legal debt margin 47,813 $ 11,533 49,399 $ 15,402 51,682 $ 16,991 52,539 $ 23,635 38,998 $ 43,261 43,358 $ 66,263 32,121 $ 99,500 29,010 $ 98,844 14,399 $ 90,815 11,455 $ 57,516 Total net debt applicable to the 150 limit as a percentage of debt limit 80.57% 76.23% 75.26% 68.97% 47.41% 39.55% 24.40% 22.69% 13.69% Assessed value 20% Type Bonds 16.61% $ 1,149,524 Debt limit (20% of assessed value) 229,905 Debt applicable to limit: General obligation bonds 172,861 Less: Amount set aside for repayment of general obligation debt (13,555) Total net debt applicable to limit 159,306 Legal debt margin 2003 Debt limit $ 197,818 2004 $ 216,003 2005 $ 228,910 2006 $ 253,914 2007 $ 274,198 $ 2008 $ 365,404 2009 $ 438,735 2011 2010 $ 426,181 $ (1) 350,714 70,599 2012(1) $ 229,905 Total net debt applicable to limit Legal debt margin 80,844 $ 116,974 101,153 $ 114,850 99,340 $ 129,570 113,184 $ 140,730 172,751 $ 101,447 150,157 $ 215,247 138,326 $ 300,409 163,811 $ 262,370 166,031 $ 184,683 159,306 $ 70,599 Total net debt applicable to the limit as a percentage of debt limit 40.87% 46.83% 43.40% 44.58% (1) Debt applicable to limit: General obligation bonds net of July 1 payment made prior to June 30. 63.00% 41.09% 31.53% 38.44% 47.34% 69.29% This page left blank intentionally. 151 Return to TOC City of Glendale, Arizona Pledged-Revenue Coverage Last Ten Fiscal Years (amounts expressed in thousands) Schedule 14 Fiscal Utility Service Less: Operating Year Charges(1) Expenses(2) 2002-03 $ 51,922 $ 30,537 Water and Sewer Revenue Bonds Net Debt Service Available Revenue $ 21,385 Principal $ Interest 9,116 (3) $ Coverage 2,745 (3) 1.80 152 2003-04 53,209 31,445 21,764 7,102 (3) 4,760 (3) 1.84 2004-05 56,144 32,100 24,044 6,495 (3) 6,168 (3) 1.90 2005-06 59,426 35,916 23,510 6,813 (3) 7,143 (3) 1.68 2006-07 66,646 40,825 25,821 6,303 (3) 9,280 (3) 1.66 2007-08 69,490 44,247 25,243 7,252 (3) 11,918 (3) 1.32 2008-09 69,300 40,175 29,125 9,876 (3) 13,539 (3) 1.24 2009-10 76,987 43,628 33,359 10,347 (3) 13,082 (3) 1.42 2010-11 81,127 41,550 39,577 11,107 (3) 13,598 (3) 1.60 2011-12 83,496 41,555 41,941 9,545 (6) 13,306 1.84 Fiscal Transportation Sales Year Tax 2002-03 $ Transportation Bonds (4) - Excise Tax Debt Service Principal $ Interest - $ Excise Tax Revenue Bonds (5) Coverage - $ - Debt Service Revenue $ Principal 88,071 $ 1,240 Interest $ Coverage 1,510 32.03 153 2003-04 - - - - 94,277 2,280 8,530 8.72 2004-05 - - - - 98,143 1,885 9,017 9.00 2005-06 - - - - 114,066 2,785 8,871 9.79 2006-07 - - - - 123,602 2,715 10,343 9.47 2007-08 23,672 4,075 3,255 3.23 127,373 7,399 17,617 5.09 2008-09 20,875 2,545 4,782 2.85 118,277 6,575 24,074 3.86 2009-10 19,488 2,675 4,655 2.66 109,536 5,600 27,812 3.28 2010-11 19,486 2,780 4,548 2.66 102,962 6,585 27,612 3.01 2011-12 20,665 2,890 4,437 2.82 100,081 2,590 27,279 3.35 (7) 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 Water Infrastructure Financing Authority of Arizona for the 00-01 loan and the 09-10 loan for fiscal years through 2010-11. (4) FY 2008 is the first year the City of Glendale has issued transportation bonds. (5) Excise tax revenue bonds include the Municipal Property Corporation and the Western Loop 101 Public Facilities Corporation. (6) Excluding reductions to principal by refunded bonds - Water & Sewer Revenue Bond $74,050 and Excise Tax Revenue Bonds $8,945. (7) Excise tax revenue amounts include state shared revenues. City of Glendale, Arizona Demographic and Economical Statistics Last Ten Fiscal Years (amounts expressed in thousands) Fiscal City of Glendale (2) Schedule 15 Maricopa County Per Capita Personal Year Population Population 2002-03 231 3,389 2003-04 233 3,498 2004-05 236 2005-06 Personal Income $ (1) 101,378,940 Income $ Unemployment (1) Rate 29,914 5.3 110,278,789 31,526 4.4 3,638 120,716,738 33,182 3.9 244 3,793 134,339,487 35,418 3.9 2006-07 246 3,907 139,665,253 35,747 (4) 3.1 2007-08 249 3,988 (5) 145,880,680 36,580 (4) 3.6 2008-09 250 4,116 (6) 146,898,132 35,690 (4) 8.4 2009-10 250 4,023 (6) 142,091,681 (3) 35,320 (4) 9.1 2010-11 227 4,023 (6) 142,091,681 (3) 35,320 (4) 9.2 2011-12 227 4,023 (6) 142,091,681 (3) 35,320 (4) 7.6 % 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) Estimate provided by City of Glendale Planning Department (3) The current fiscal year Maricopa County CAFR provides the most current number. (4) Calculation based on personal income divided by population. (5) Draft figure for Maricopa County population provided by City of Glendale Planning Department. (6) Maricopa County population provided by Maricopa County CAFR statistical section. 154 Return to TOC City of Glendale, Arizona Principal Employers Current Year and Ten Years Ago Schedule 16 2012 Employer Luke Air Force Base Banner Thunderbird Health System WalMart Glendale Community College Glendale Union High School District City of Glendale Glendale Elementary School District Deer Valley Unified School District AAA Arrowhead Community Hospital Arrowhead Towne Center Honeywell, Inc. Thunderbird Samaritan Hospital Schuck Component Systems Total Employees 6,325 2,866 2,175 2,000 2,008 1,725 1,684 1,432 1,325 959 Rank 1 2 3 4 5 6 7 8 9 10 22,499 2002 Percentage of Total City Employment 5.46 % 2.47 1.88 1.73 1.73 1.49 1.45 1.24 1.14 0.83 19.42 % Employees 6,321 Rank 1 Percentage of Total City Employment 5.10 % 1,000 1,862 1,900 1,525 1,432 9 6 5 7 8 0.81 1.50 1.53 1.23 1.16 2,500 2,000 2,036 925 2 4 3 10 2.02 1.62 1.64 0.75 21,501 17.36 % Source: City of Glendale Economic Development Department Department of Economic Security, Research Administration, LAUS Report 155 Return to TOC City of Glendale, Arizona Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Function/Program 156 General government Management services Finance Planning Building Legal Other Police Fire Homeland security Community service Parks and recreation Library Public works Engineering Transportation Utilities Total 2012 2011 2010 36.00 57.00 14.00 24.00 66.00 77.00 534.00 269.00 60.00 92.00 48.00 179.00 19.00 65.00 185.00 1,725.00 45.00 59.00 15.00 26.00 70.00 90.00 544.00 270.00 72.00 123.00 56.00 203.00 26.00 69.00 167.00 1,835.00 43.00 61.00 24.00 32.00 73.00 96.00 554.00 276.00 72.00 122.00 57.00 225.00 27.00 63.00 170.00 1,895.00 Sources: City Budget Division City of Glendale Human Resources Department for 2012 Schedule 17 Full-Time Equivalent Employees as of June 30 2009 2008 2007 2006 38.00 69.00 33.00 43.00 70.00 104.00 567.00 278.00 6.00 69.00 85.00 65.00 256.00 39.00 67.00 171.00 1,960.00 35.00 86.75 28.50 53.75 78.00 108.50 557.50 263.50 7.00 93.75 99.25 87.76 281.00 45.00 89.25 186.00 2,100.51 35.00 86.75 28.50 51.75 78.00 105.50 543.50 251.50 7.00 87.25 98.75 88.76 271.00 45.00 88.25 165.00 2,031.51 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 2003 32.00 85.75 26.15 57.75 67.00 94.50 507.50 216.00 82.75 86.75 87.76 266.00 45.00 80.25 140.00 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 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 City of Glendale, Arizona Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 157 Police Calls for service Bookings Criminal offense reports Fire EMS calls Fire calls Refuse collection Residential curb service (tons per year) Commercial container service (tons per year) Airport Departures/arrivals (2) General government Building permits Library Volumes in collection (4) Transit Dial-A-Ride passengers Schedule 18 Fiscal Year 2006 2012 2011 2010 2009 2008 2007 2005 2004 2003 127,829 7,083 33,938 129,161 9,902 27,304 129,868 11,015 29,765 137,586 11,990 32,599 146,489 12,902 32,918 154,176 12,119 35,169 148,633 8,640 34,271 158,507 8,138 33,578 161,722 8,057 34,847 154,374 7,980 33,956 29,321 3,495 27,751 3,573 26,591 3,847 24,419 3,900 25,851 4,216 25,819 4,322 22,284 5,886 24,025 3,335 23,126 3,379 48,187 39,722 49,784 40,451 52,634 41,797 53,493 44,600 58,865 48,267 60,914 51,425 63,521 49,517 57,942 44,441 56,902 44,681 55,718 48,583 80,416 80,291 69,834 91,998 137,762 152,194 143,798 108,887 118,140 88,449 5,304 5,619 5,194 5,289 6,931 6,310 7,888 7,079 6,330 6,299 446,010 529,113 523,512 540,352 546,136 557,342 596,266 620,130 601,440 600,477 90,577 92,134 89,808 91,841 88,638 84,132 89,055 87,831 86,132 81,768 (1) (1) Source: Various city departments and FAA ATADS report Note: Water and sewer statistics are contained in Schedule 20 and 21. (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. 2009 figures are through October 30, 2009. 2010 forward are based on fiscal year. (3) Amounts based on calendar year: January 1, 2005, through September 30, 2005. (4) Includes all formats: books, magazines, CD's, DVD's and electronic/downloadable collection. 18,977 2,642 (3) (3) City of Glendale, Arizona Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 158 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/facilities Acres of parks Transit Dial-A-Ride minibuses Source: Various city departments Schedule 19 2012 2011 2010 2009 Fiscal Year 2008 2007 2006 2005 2004 2003 3 154 9 3 174 9 3 157 9 3 159 9 3 158 9 3 157 9 3 156 9 3 156 9 3 151 8 3 156 8 59 59 59 59 58 57 57 57 57 57 22,065 19,257 21,912 18,444 21,666 18,529 21,666 18,126 22,594 17,776 22,594 17,358 22,594 16,790 22,594 16,328 22,594 15,910 22,594 15,408 717 802 736 736 736 736 733 709 702 702 100 2,189 100 2,189 100 2,189 99 2,199 99 2,125 95 2,125 92 2,058 92 2,052 93 1,998 89 1,984 21 21 22 23 22 22 25 25 22 19 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2012 Schedule 20 WATER RATES PER METER SIZE Commercial and Residential Monthly Base Charge Inside Outside City City Meter Size (inch) $ 9.70 12.30 17.40 35.30 62.90 106.00 189.00 376.00 557.00 896.00 1,326.00 5/8 3/4 1 1 1/2 2 3 4 6 8 10 12 $ 12.61 15.99 22.62 45.89 81.77 137.80 245.70 488.80 724.10 1,164.80 1,723.80 Residential Commercial 3/4 inch Meter Size Meter Size and Greater (1) Gallons per Month All Year Inside Outside City City All Year Inside Outside City City 0 - 6,000 7,000 - 15,000 16,000 - 30,000 over 31,000 $ 2.14 2.68 3.76 5.27 $ 2.28 2.28 2.28 2.28 $ 2.79 3.49 4.89 6.86 $ 2.97 2.97 2.97 2.97 Summer Excess Rate Inside Outside City City $ 2.85 2.85 2.85 2.85 $ 3.71 3.71 3.71 3.71 SEWER SERVICE RATES Type of Service Inside City Single Family Dwelling Unit $ 33.67 Office Building 46.79 Apartment - Average 5 units 89.33 Apartment - Average 35 units 548.81 Retail/Wholesale 66.68 (1) Per 1,000 gallons SOURCE: City of Glendale Finance as of October 2012 Outside City $ 44.79 N/A 98.46 80.87 N/A 159 Return to TOC City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2012 Schedule 21 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS (1) Fiscal Year Residential 53,654 54,349 55,139 55,354 55,395 54,396 Commercial (2) 5,431 4,361 4,491 4,650 5,305 5,411 Total 59,085 58,710 59,630 60,004 60,700 59,807 (3) 53,523 5,556 59,079 2010 (3) 55,169 5,919 61,088 2011 (3) 55,318 5,938 61,256 2012 (4) 55,524 5,954 61,478 Ending June 30 2003 2004 2005 2006 2007 2008 2009 (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 October. (4) As of August 2012. SOURCE: City of Glendale Finance. WATER DELIVERIES Acre Feet Calendar Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Residential (1) 36,044 34,348 34,427 33,567 34,660 34,594 32,278 31,457 27,537 27,409 Other (2) 1,031 1,042 1,211 5,636 3,730 3,937 2,818 5,606 4,455 9,558 Commercial 8,865 5,342 8,382 9,580 10,951 11,281 10,764 10,122 10,482 11,143 Total 45,940 40,732 44,020 48,783 49,341 49,812 45,860 47,185 42,474 48,110 (1) Residential includes both single and multi-family housing. (2) Starting in 2005, Other represents unbilled water and system loses. SOURCE: Annual Report of Arizona Department of Water Resources. SEWERAGE ACCOUNTS BILLED AND SEWAGE TREATED Fiscal Year No. of Sewer Ending June 30 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Accounts Billed 55,506 55,239 55,670 55,995 56,737 54,662 54,936 56,709 56,868 57,087 Multi-City Plant (MGD) Actual 11.9 10.8 7.9 8.2 8.2 7.8 6.8 6.8 8.3 7.9 (1) Arrowhead West (MGD) 2.8 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.3 2.3 (MGD) 4.3 7.0 7.0 8.5 9.2 9.1 8.6 8.4 5.4 4.4 (1) SROG - Sub Regional Operating Group SOURCE: City of Glendale Finance and Utilities Departments. 160 Return to TOC Return to TOC City of Glendale Finance Division 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480 Return to TOC