City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2013 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTRODUCTORY SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2013 Mayor Jerry Weiers Councilmembers Yvonne J. Knaack, Vice Mayor - Barrel District Manuel D. Martinez - Cholla District Norma Alvarez - Ocotillo District Ian Hugh - Cactus District Samuel U. Chavira - Yucca District Gary D. Sherwood - Sahuaro District Management Staff Brenda S. Fischer - City Manager Prepared by Finance Tom Duensing, Executive Director i This page left blank intentionally. ii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2013 TABLE OF CONTENTS I. Page 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) ............................................. 15 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position .............................................................................................................. 29 Statement of Activities .................................................................................................................. 30 Fund Financial Statements: Balance Sheet – Governmental Funds........................................................................................... 32 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ............................................................................................................................... 33 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds.................................................................................................................. 34 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............................................. 35 Statement of Net Position – Proprietary Funds ............................................................................. 36 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ........ 37 Statement of Cash Flows – Proprietary Funds .............................................................................. 38 Notes to the Financial Statements ..................................................................................................... 40 C. REQUIRED SUPPLEMENTARY INFORMATION Three-Year Trend Information for PSPRS and OPEB .................................................................. 87 Budgetary Comparison Schedule – General Fund ........................................................................ 89 Budgetary Comparison Schedule – Transportation Fund .............................................................. 91 Notes to Required Supplementary Information ............................................................................. 92 iii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2013 TABLE OF CONTENTS Page D. COMBINING STATEMENTS Other Major Governmental Funds Budgetary Comparison Schedule – Western Loop 101 Public Facilities Corporation Debt Service Fund .......................................................................................................................... 93 Budgetary Comparison Schedule – General Obligation Debt Service Fund ............................. 94 Non-Major Governmental Funds Combining Balance Sheet.......................................................................................................... 98 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................ 100 Budgetary Comparison Schedules Community Development Block Grants Fund ..................................................................... 102 Highway Users Gas Tax Fund ............................................................................................. 103 Police and Fire Sales Tax Fund ............................................................................................ 104 Federal Stimulus Fund ......................................................................................................... 105 Other Special Revenue Fund ................................................................................................ 106 Highway User Debt Service Fund ........................................................................................ 107 Municipal Property Corporation Debt Service Fund .......................................................... 108 Transportation Debt Service Fund ....................................................................................... 109 Western Loop 101 Public Facilities Corporation Construction Fund .................................. 110 Development Impact Fees Fund........................................................................................... 111 Streets Construction Fund .................................................................................................... 112 Fire and Police Construction Fund ....................................................................................... 113 Parks Bond Construction Fund ............................................................................................ 114 Other Construction Fund ...................................................................................................... 115 Cemetery Perpetual Care Fund ............................................................................................ 116 Non-Major Proprietary Funds – Business-Type Activities Combining Statement of Net Position ..................................................................................... 118 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................ 119 Combining Statement of Cash Flows ...................................................................................... 120 Budgetary Comparison Schedules Water and Sewer Fund (a Major Fund) ................................................................................ 122 Landfill Fund ....................................................................................................................... 124 Sanitation Fund .................................................................................................................... 125 Housing Fund ....................................................................................................................... 126 Internal Service Funds Combining Statement of Net Position ..................................................................................... 127 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................ 128 Combining Statement of Cash Flows ...................................................................................... 129 iv City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2013 TABLE OF CONTENTS Page Budgetary Comparison Schedules Risk Management Fund ....................................................................................................... 130 Workers’ Compensation Fund ............................................................................................. 131 Employee Benefits Fund ...................................................................................................... 132 E. SUPPLEMENTARY INFORMATION Federal Financial Data Schedule .......................................................................................... 133 III. STATISTICAL SECTION Schedule Page Net Position by Component ............................................................................................... 1 ............. 140 Changes in Net Position ..................................................................................................... 2 ............. 142 Fund Balances – Governmental Funds ............................................................................... 3 ............. 145 Changes in Fund Balances – Governmental Funds ............................................................ 4 ............. 146 Assessed and Estimated Actual Value of Taxable Property ............................................... 5 ............. 148 Direct and Overlapping Governments Property Tax Rates ................................................ 6 ............. 149 Principal Property Taxpayers ............................................................................................. 7 ............. 150 Property Tax Levies and Collections ................................................................................. 8 ............. 151 City Transaction Privilege Taxes (Sales Tax) by Category ................................................ 9 ............. 153 Ratio of Outstanding Debt by Type.................................................................................. 10 ............. 154 Ratios of Net General Bonded Debt Outstanding............................................................. 11 ............. 156 Net Direct and Overlapping Governmental Activities Debt ............................................. 12 ............. 157 Legal Debt Margin Information ....................................................................................... 13 ............. 159 Pledged-Revenue Coverage ............................................................................................. 14 ............. 160 Demographic and Economical Statistics .......................................................................... 15 ............. 162 Principal Employers ......................................................................................................... 16 ............. 163 Full-Time Equivalent City Government Employees by Function/Program ..................... 17 ............. 164 Operating Indicators by Function/Program ...................................................................... 18 ............. 165 Capital Asset Statistics by Function/Program .................................................................. 19 ............. 166 Miscellaneous Water and Sewer Rate Statistics ............................................................... 20 ............. 167 Miscellaneous Water and Sewer Statistics ....................................................................... 21 ............. 168 v This page left blank intentionally. vi December 12, 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, 2013. 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 Clifton Larson Allen LLP, 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, 2013, 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 229,008 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 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 2013, Glendale’s annual average unemployment rate is at 7.2%; this is an improvement from last calendar year’s average of 7.6%. 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. In June 2012, the City Council approved a temporary sales tax rate increase of .7% effective August 1, 2012, through August 1, 2017. This fiscal year we saw a 27.3% increase in the sales tax over last year; the increase is primarily due to the temporary sales tax rate increase. 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 2013 collections were based on 2011 income tax returns filed. Glendale’s workforce is concentrated in the following nonfarm sectors: education and health services (24.78%); trade, transportation, and utilities (22.6%); government (12.45%); construction (8.71%); and leisure and hospitality (8.66%). Each of Glendale’s nonfarm employment categories, with the exception of mining, have experienced some growth; with educational and health services, construction, and government jobs leading in growth. The Arizona Department of Administration projects that in 2014, Arizona nonfarm employment will grow by 2.0%; Glendale is expected to grow faster than the State at 2.2%. If this improvement in employment continues as forecasted, the revenues which fund the City’s operating budget will slowly recover. 2 Economic Development Job creation, business retention and expansion, redevelopment and small business assistance comprise the major programs of Glendale’s economic development strategy. In fiscal year 2013, Glendale welcomed or retained several new or expanding companies to the city including: Arrowhead Cadillac, Performance Steel, ZyTech Building Systems, Terminix, Barron Lighting, and Midwestern University. These new or expanding companies contributed to the creation/expansion or retention of 1,207 jobs and generated over $1.2 million in new revenue to Glendale in fiscal year 2013. 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, 11-12, and 12-13 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, 2012. This was the twenty-fifth consecutive year the City has received this prestigious award, and the twenty-seventh 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 2012-13. This is the twenty-sixth 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, Tom Duensing Executive Director of Financial Services 3 This page left blank intentionally. 4 5 Glendale, Arizona & Neighboring Communities To Flagstaff Cave Creek e fre re Ca 17 Scottsdale 60 El Mirage Peoria Sun City Surprise 303 Luke AFB Phoenix Glendale 51 Fountain Hills Paradise Valley 101 101 10 Goodyear 85 202 Sky Harbor Airport Mesa 89 60 Tempe Chandler 10 To Tucson 6 Gilbert Glendale City Officials Jerry Weiers Mayor Yvonne J. Knaack Vice Mayor/ Councilmember Barrel District Ian Hugh Councilmember Cactus District Manuel D. Martinez Councilmember Cholla District Samuel U. Chavira Norma Alvarez Councilmember Ocotillo District Gary D. Sherwood Councilmember Yucca District Councilmember Sahuaro District 7 Brenda S. Fischer City Manager 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. CITIZENS OF GLENDALE Mayor & Council Boards & Commissions City Attorney Michael D. Bailey 9 Executive Director Public Works (Field Ops. & Engineering) Stuart Kent Executive Director Water Services (Utilities & Environmental Services) Craig Johnson Executive Director Parks, Recreation & Library Services Erik Strunk Police Chief Police Services Debora Black Executive Director Neighborhood & Human Services Sam McAllen Fire Chief Fire Services Mark Burdick Executive Director Technology & Innovation (IT & Innovate) Chuck Murphy City Manager Brenda S. Fischer Interim Assistant City Manager Julie Frisoni Executive Director Community & Economic Development Brian Friedman City Clerk Pam Hanna Executive Director Transportation Services Jamsheed Mehta Interim Executive Director Communications (Marketing, Public Info., Civic Center) Julie Watters Presiding City Judge Elizabeth Finn Executive Director Human Resources & Risk Management Jim Brown Intergovernmental Programs Director Brent Stoddard Executive Director Financial Services (Budget & Finance) Tom Duensing Assistant To The Mayor Thomas Adkins City Auditor Candace MacLeod Council Services Administrator Kristen Krey This page left blank intentionally. 10 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of City of Council City of Glendale, Arizona Glendale, Arizona Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Glendale, Arizona (City), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. An independent member of Nexia International 11 The Honorable Mayor and Members of City of Council City of Glendale, Arizona 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, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of a Matter During the fiscal year ended June 30, 2013, the City adopted the provisions of Governmental Accounting Standards Board Statement (GASBS) No. 61, The Financial Reporting Entity: Omnibus – an amendment of BASB Statement No. 14 and 24, GASBS No. 62, Codification of Accounting and Financial Reporting Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, GASBS No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position, and GASBS No 65, Items Previously Reported as Assets and Liabilities. As a result of the implementation of GASBS No. 65, the City reported a change in accounting principle (See Note XVI) to restate beginning net position for issuance costs that were previously reported as deferred charges. The auditors’ opinion was not modified with respect to the restatement. GASBS No. 61, 62, and 63 did not have a material effect on the financial statements. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 15 – 28, the schedule of funding progress for the public safety personnel retirement system pension plan and other postemployment benefits on pages 87 – 88 and the budgetary comparison schedules for the general fund and major special revenue funds on pages 89 – 91 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Glendale, Arizona’s basic financial statements. The combining and individual nonmajor fund financial statements, supplementary information and the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. 12 The Honorable Mayor and Members of City of Council City of Glendale, Arizona The combining and individual nonmajor fund financial statements and the supplementary information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic 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 it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 12, 2013, on our consideration of the 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 result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Glendale, Arizona’s internal control over financial reporting and compliance. Phoenix, Arizona December 12, 2013 13 This page left blank intentionally. 14 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ MANAGEMENT’S DISCUSSION & ANALYSIS (Required Supplementary Information) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (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, 2013. 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 2012-13: • The City’s total net position increased $4,201 or .43%. The governmental net position decreased by $6,418 or 1.12%, and the business-type net position increased by $10,619 or 2.56%. • General revenues from governmental activities increased $41,652 or 25.50% and comprised 76.35% of all revenues from governmental activities. There were two primary reasons for this increase: 1. There was a .7% increase in the City sales tax rate effective August 1, 2012. 2. The Urban Revenue Sharing (state shared income tax) increased from the prior year. • Governmental activities program specific revenues in the form of charges for services, grants, and contributions decreased $5,780 or 8.34%; this decrease was primarily due to the recognition of a one-time revenue source received in fiscal year 2012 related to the settlement of the Coyotes Hockey bankruptcy. • The total cost of all City programs decreased by $6,021 or 1.54% primarily due to the decrease in expenses through reduction in ongoing operating costs. • A major governmental fund, the General Fund, collected $164,427 in revenues which is an increase of $28,774 or 21.2% from the prior year. This increase was due primarily to a .7% sales tax increase. The total expenditures of the General Fund were $127,327, which is an increase of $1.307 or 1.04%. In light of budgetary pressure with ongoing commitments related to major projects, the City has held the line on expenditures through leaving vacant positions open and diligently reducing non-personnel expenses. • The General Fund balance increased $14,848 or 55.7%. This increase was primarily due to a .7% increase in the City transaction privilege tax rate (sales tax) effective August 1, 2012. • The City issued $239,875 in Municipal Property Corporation (MPC) revenue refunding bonds. These bonds were used to refund a portion of the 2003 and 2004 MPC bonds and all of the outstanding Public Facility Corporation (PFC) bonds of the City. 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 Position 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 15 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) 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 Position presented on page 27, provides information on all of the City’s assets and liabilities with the difference between the two reported as net position. Net position is categorized as capital assets less related debt, restricted by an outside party, and unrestricted. Over time, increases or decreases in net position 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 position changed during the most recent fiscal year. All changes in net position 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 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 15 governmental funds are combined into a single, 16 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) 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, as well as other required supplementary information related to the City’s public safety personnel retirement system and other post-employment benefits. 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 position may serve over time as a useful indicator of a City’s financial position. In the case of the City, assets exceeded liabilities by $990,703 as of June 30, 2013. By far the largest portion of the City’s net position 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 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 position, 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 17 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) 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 position for fiscal years 2013 and 2012. Condensed Statement of Net Position As of June 30, 2013, and 2012 (in thousands) Governmental Activities 2013 Current and other assets Capital assets, net Total assets $ Deferred Outflows of Resources 233,041 1,205,209 1,438,250 2012, restated $ Total Primary Government Business-Type Activities 233,880 1,235,685 1,469,565 $ 2013 2012, restated 215,370 542,902 758,272 $ 198,156 558,718 756,874 2013 $ 448,411 1,748,111 2,196,522 2012, restated $ 432,036 1,794,403 2,226,439 14,996 2,027 3,689 - 18,685 2,027 Current liabilities Noncurrent liabilities Total liabilities 66,884 821,687 888,571 47,705 852,794 900,499 25,485 310,448 335,933 12,713 328,752 341,465 92,369 1,132,135 1,224,504 60,418 1,181,546 1,241,964 Net position: Net investment in capital assets Restricted Unrestricted Total net position 438,366 186,106 (59,797) 564,675 460,639 183,829 (73,375) 571,093 251,765 12,264 161,999 426,028 262,554 12,921 139,934 415,409 690,131 198,370 102,202 990,703 735,669 234,633 89,791 986,502 $ $ 18 $ $ $ $ CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) The following presents a summary of the changes in net assets compared to the prior year. Changes in Net Position As of June 30, 2013, and 2012 (in thousands) Governmental Activities 2013 2012, restated Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues $ General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain on disposal of capital assets Miscellaneous Total revenues Expenses: General government Public safety Public works Community services Community environment Street maintenance Interest on long-term debt Water and sewer Landfill Sanitation Housing Total expenses Excess before transfers Transfers in (out) Special item Increase (decrease) in net position Net position beginning, as restated Net position ending $ 30,450 25,156 7,904 63,510 $ 36,380 27,636 5,274 69,290 Total Primary Government 2013 2012, restated Business-Type Activities 2013 2012, restated $ 108,885 9,376 831 119,092 $ 109,363 9,423 705 119,491 $ 139,335 34,532 8,735 182,602 $ 145,743 37,059 5,979 188,781 21,372 132,872 18,558 20,232 97,451 17,716 - - 21,372 132,872 18,558 20,232 97,451 17,716 23,159 7,586 716 353 367 268,493 19,135 7,277 975 56 489 232,621 1,878 43 70 121,083 1,126 72 120,689 23,159 7,586 2,594 396 437 389,576 19,135 7,277 2,101 56 561 353,310 37,447 115,694 19,230 33,831 5,655 20,000 42,413 274,270 (5,777) 35,962 112,689 18,435 39,478 6,828 20,045 41,337 274,774 (42,153) 73,460 7,486 16,122 14,037 111,105 9,978 78,756 7,602 15,437 14,827 116,622 4,067 37,447 115,694 19,230 33,831 5,655 20,000 42,413 73,460 7,486 16,122 14,037 385,375 4,201 35,962 112,689 18,435 39,478 6,828 20,045 41,337 78,756 7,602 15,437 14,827 391,396 (38,086) (641) - (307) (25,000) 641 - 307 - - (25,000) (6,418) 571,093 (67,460) 638,553 10,619 415,409 4,374 411,035 4,201 986,502 (63,086) 1,049,588 564,675 $ 19 571,093 $ 426,028 $ 415,409 $ 990,703 $ 986,502 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Changes in Net Position There was a decrease of $6,418 in net position of the governmental activities. The most notable difference is due to the sales tax rate increased the revenue which helped offset expenses. The City’s total revenue from governmental activities for the fiscal year ended June 30, 2013, was $268,493. The cost of programs and services for governmental activities was $274,270. Below shows the performance of the revenues in the governmental activities versus expenses. Expenses and Program Revenues - Governmental Activities expenses program revenues $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- General government Public safety Public works Community services Community environment Street maintenance Interest on longterm debt The government activities sales tax increased $35,421 or 36.35 % due to an increase in the City sales tax rate as well as the opening of a major mall outlet in FY 2013. The special item decreased from prior year by $25,000 million due to the City not having to pay the NHL an owner’s fee for the strike shortened season in FY 2013. The decrease in charges for services is largely due to a decrease in arena special revenue of $4,559. The increase in public safety expense is primarily due to an increase in retirement expense of $1,977. The decrease in community services expense is due to a decrease of $2,756 in salaries expense. 20 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) The increase in net position of the business type-activities of $10,619 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, 2013, was $121,083. The cost of programs and services was $111,105. 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 21 Housing CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) City Revenue Categories Revenue Sources Fiscal Year 2012-13 Urban revenue sharing (state shared income tax) 5.94% Auto in-lieu taxes 1.95% Investment earnings, unrestricted 0.67% Gain on disposal of capital assets 0.10% Miscellaneous 0.11% State shared sales tax 4.76% Charges for services 35.77% Sales taxes 34.11% Operating grants and contributions 8.86% Property taxes 5.49% Capital grants and contributions 2.24% As discussed, the majority (57.45%) of the total 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. 22 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) City Expense Categories Functional Expenses Fiscal Year 2012-13 Housing 3.64% Sanitation 4.18% General government 9.72% Landfill 1.94% Public safety 30.02% Water and sewer 19.06% Interest on long-term debt 11.01% Public works 4.99% Street maintenance 5.19% Community services 8.78% Community environment 1.47% The majority of the City’s expenses (49.08%) 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. 23 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (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 $98,004, an increase of $649 or 0.67% in comparison with the prior year. 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 2013, a negative $11,801 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 $256,583 in fiscal year 2013, an increase of 11.67% from the previous year total of $229,766. This increase reflects changes in the city sales tax rate. Expenditures for governmental functions totaled $257,435 in fiscal year 2013, a decrease of 2.38% from the previous year total of $263,713. This decrease is primarily due to the prior year one-time purchase of airport land. 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 ($14,438), while total fund balance was ($11,801). The City also has $650 of its fund balance as nonspendable; $311 as restricted; and $1,676 as committed. The factors that represent the significant increase in the General Fund from the prior year are: • • Holding the line on expenditures both salary and operating. Increasing the sales tax rate by .7% effective 8/1/2012. Overall, the General Fund’s performance resulted in revenues over expenditures of $37,100 in fiscal year 2013. In the prior year, revenues exceeded expenditures by $9,633. The transportation fund accounts for the City’s public transit program and transportation improvement projects. The fund saw a decrease in fund balance of $1,776 for the fiscal year ended June 30, 2013. This decrease is due to an effort to contain costs and keep a healthy fund balance. The Western Loop 101 Public Facilities Corporation (PFC) 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 a transfer of remaining bond proceeds held the PFC construction fund to make the debt service payments for the period ending June 30, 2013. 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 $12,641 at June 30, 2013. This represents a decrease of $4,124 due to the decrease in secondary property tax received as result of declining home values. 24 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Proprietary Funds Net position of the enterprise funds increased $10,674 or 2.54%. The enterprise funds’ total net position was 2.86% restricted, 38.39% unrestricted, and 58.75% 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 position of $11,233 for the fiscal year ended June 30, 2013. 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 funds saw an increase of $858 for the fiscal year ended June 30, 2013. 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 The City's fund balance was positively impacted by the sales tax increase. • The City’s budgeted revenues met expectations factoring in the sales tax increase and were over $1,099 from the final budgeted amounts. • General Fund expenditures were less than the final budget by $27,462 or 15.49%. A significant item was not paying a budgeted owners fee to the NHL due negotiations with new buyers of the Coyotes hockey team. • Budgetary fund balance increased by $14,949 or 81.25% as a result of the City still holding the line on operational expenditures and additional revenues. • Budgeted equipment purchases did not occur during the fiscal year resulting in general fund capital outlay expenditures that were $3,934 or 86.06% less than the final budget. • The significant increase in the final budget is primarily due to the advance refunding of all outstanding PFC bonds in December 2012. The MPC debt service budget was increased by $8,180. Capital Asset and Debt Administration Capital Assets The City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2013, for its governmental-type activities was $1,205,209 and for the business-type activities was $542,902. 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. 25 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Major capital asset projects capitalized during the current fiscal year included the following: • • • • • • • Storm water monitoring system, $428 Additional Westgate parking, $558 Water and sewer improvements at Arrowhead facility, $2,496 Water system security phase III, $1,363 Flood control project, $14,611 67th Avenue, Cactus to ACDC street project, $5,268 67th Avenue, Olive to Bell street project, $4,980 The following table is a summary of capital assets reflected in the June 30, 2013, financial statements as compared to last year’s financial statements. Capital Assets at Year End (Net of depreciation) (in thousands) Governmental Activities Construction in progress Land Water storage rights Artwork Buildings Improvements other than buildings Infrastructure-streets Infrastructure-parks Infrastructure-airport Infrastructure-flood/storm drains Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment Software Automotive equipment Total $ $ 2013 98,177 90,307 2,378 291,926 152,488 432,348 55,742 6,399 52,679 9,042 299 1,988 11,436 1,205,209 $ $ 2012 164,713 90,285 1,676 295,104 134,501 425,397 54,947 6,176 35,413 11,353 512 1,841 13,767 1,235,685 $ $ Business-Type Activities 2013 2012 61,066 $ 63,100 26,299 26,297 7,938 8,117 8,140 8,496 44,970 45,609 74,735 76,496 73,829 76,375 122,214 127,593 99,047 99,950 14,872 15,583 2,868 2,970 1,730 969 194 197 5,000 6,966 542,902 $ 558,718 Total Primary Government $ $ 2013 159,243 116,606 7,938 2,378 300,066 197,458 432,348 55,742 6,399 52,679 74,735 73,829 122,214 99,047 14,872 2,868 10,772 493 1,988 16,436 1,748,111 $ $ The construction commitments at June 30, 2013, were $3,603. Additional information on capital assets can be found in Note V of the financial statements. 26 2012 227,813 116,582 8,117 1,676 303,600 180,110 425,397 54,947 6,176 35,413 76,496 76,375 127,593 99,950 15,583 2,970 12,322 709 1,841 20,733 1,794,403 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Long-Term Debt At the end of the current fiscal year, the City had total debt outstanding of $1,020,889 compared to $1,064,620 last year, a 4.11% net decrease. Governmental Activities General obligation Transportation 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 Total $ $ 2013 163,130 91,140 8,055 $ 2012 179,010 97,035 12,250 $ Business-Type Activities 2013 2012 5,515 $ 6,485 - Total Primary Government $ 2013 168,645 91,140 8,055 $ 2012 185,495 97,035 12,250 468,875 275,090 - - 468,875 275,090 11,094 199,750 11,667 - - 11,094 199,750 11,667 742,294 774,802 273,080 278,595 282,625 708 289,818 273,080 1,020,889 282,625 708 1,064,620 $ $ $ $ $ The City maintains an “A-” 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, 2013, was $55,527 and $60,760, 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 2013-14 budget is $576,000 (down .01% from 2012-13), including a $346,321 operating budget (a decrease of .01% from 2013) and $99,599 in capital outlay (down 6.1% from 2013). The fiscal year 2013-14 budget includes $40,851 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 but jumped to 164,427 in fiscal year 2013 primarily due to the sales tax increase. 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 and remained steady at $127,327 for fiscal year 2013. The General Fund balance decreased from $66,388 in fiscal year 2008 to a June 30, 2013, fund balance of deficit $11,801. 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 27 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) citizens, as well as to 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 2013, the City’s annual average unemployment rate is 7.2%; this represents an improvement from last calendar year’s average of 7.6%. Request for information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Executive Director of Financial Services, 5850 West Glendale Avenue, Suite 302, Glendale, Arizona 85301. The remainder of this page left blank intentionally. 28 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. City of Glendale, Arizona Statement of Net Position June 30, 2013 (amounts expressed in thousands) 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 deposits Restricted cash and investments Capital assets: Non-depreciable Depreciable (net) Equity in joint venture Total assets Governmental Activities $ DEFERRED OUTFLOWS OF RESOURCES Debit amounts resulting from refunded debt LIABILITIES Vouchers payable Accounts payable Contract payable Retainage payable Accrued interest payable Intergovernmental payable Deposits payable Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities NET POSITION Net investment in capital assets Restricted for: Capital projects Debt service Transportation Highway and streets Revenue bond retirement, replacement, and extension Perpetual care - nonexpendable Other purposes Unrestricted Total net position $ Primary Government Business-Type Activities Total 138,193 84,915 806 24,476 74,019 306 7,527 (37,138) 841 24,011 13,773 71 37,138 712 3,365 15,007 806 38,249 74,019 306 7,598 1,553 3,365 39,018 190,862 1,014,347 1,438,250 87,365 455,537 60,389 758,272 278,227 1,469,884 60,389 2,196,522 14,996 3,689 18,685 12,489 741 5,000 60 11,666 278 2,750 6,864 2,058 65 111 6,576 292 3,452 148 14,547 806 5,000 171 18,242 570 6,202 7,012 27,036 821,687 888,571 12,783 310,448 335,933 39,819 1,132,135 1,224,504 438,366 251,765 690,131 25,973 88,258 31,123 18,453 5,616 16,683 (59,797) 564,675 10,686 1,578 161,999 426,028 25,973 88,258 31,123 18,453 10,686 5,616 18,261 102,202 990,703 The notes to the financial statements are an integral part of this statement. 29 $ $ $ 223,108 City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) 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 Charges for Services Expenses $ $ Program Revenues Operating Grants and Contributions Capital Grants and Contributions 37,447 115,694 19,230 33,831 5,655 20,000 42,413 274,270 12,520 5,778 1,149 11,003 30,450 728 2,976 19 3,530 5,468 12,435 25,156 3,249 19 2,005 2,631 7,904 73,460 7,486 16,122 14,037 111,105 385,375 81,963 7,994 14,791 4,137 108,885 139,335 549 8,827 9,376 34,532 831 831 8,735 $ $ 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 on disposal of capital assets Miscellaneous Transfers Total general revenues, special items, and transfers Change in net position Net position - beginning - restated Net position - ending The notes to the financial statements are an integral part of this statement. 30 $ Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-Type Activities Activities Total $ (20,950) (106,921) (18,062) (17,293) (187) (4,934) (42,413) (210,760) $ (210,760) $ 2,521 18,851 132,872 18,558 23,159 7,586 716 353 367 (641) 204,342 (6,418) 571,093 564,675 - $ 9,883 508 (1,331) (1,073) 7,987 7,987 $ 1,878 43 70 641 2,632 10,619 415,409 426,028 (20,950) (106,921) (18,062) (17,293) (187) (4,934) (42,413) (210,760) 9,883 508 (1,331) (1,073) 7,987 (202,773) $ 2,521 18,851 132,872 18,558 23,159 7,586 2,594 396 437 206,974 4,201 986,502 990,703 31 City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2013 (amounts expressed in thousands) Major Funds Western Loop 101 Public Facilities Corporation Transportation Debt Service General ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 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 Total assets $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Vouchers payable Accounts payable Contract Payable Retainage payable Compensated absences - current Intergovernmental payable Due to other funds Deposits Unearned revenue Advance to other funds Matured interest payable Matured bonds payable Total liabilities Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances $ 30,808 $ 26,579 $ 98 General Obligation Debt Service $ 12,759 Other Non-Major Governmental Funds $ 60,219 Total Governmental Funds $ 130,463 103 13,604 306 2,804 1,985 650 70 50,330 2,689 2,273 61 31,602 74,019 74,117 703 13,462 8,183 3,269 97 22,241 94,009 806 24,476 74,019 306 2,804 7,527 808 22,311 263,520 7,835 741 5,000 950 217 2,741 402 39,685 57,571 363 31 70 15 479 - 301 301 2,745 60 148 61 2,731 9 6,447 11,365 2,790 26,356 10,943 741 5,000 60 1,129 278 2,801 2,750 6,864 39,685 11,666 2,790 84,707 4,560 855 74,019 520 855 80,809 61 30,207 30,268 31,602 98 98 74,117 12,641 12,641 13,462 5,713 60,826 115 144 66,798 94,009 650 311 1,676 (14,438) (11,801) 50,330 $ The notes to the financial statements are an integral part of this statement. 32 $ $ $ $ 6,424 104,083 1,791 144 (14,438) 98,004 263,520 City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2013 (amounts expressed in thousands) Amounts reported for governmental activities in the statement of net position 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 $ 1,755,638 (550,429) 98,004 1,205,209 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred outflow in the funds. 14,996 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds and shown as an internal balance item. 2,544 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 Bond discount OPEB obligations Unamortized premium on debt issuance (1,489) (728,410) (11,094) (2,873) (17,562) 1,526 (50,993) (25,992) (835,398) Unavailable revenue that is measurable but not yet available for governmental fund activities is recognized as revenue for governmental-wide activities. Net position of governmental activities 80,809 $ The notes to the financial statements are an integral part of this statement. 33 564,675 City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) General REVENUES Taxes and special assessments Licenses and permits Intergovernmental Local 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 OTHER FINANCING SOURCES (USES) Payment to refunded bonds escrow agent Refunded bonds issued Premium on long-term debt issued Discount on long-term debt issued Proceeds from equipment disposal Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1 Fund balances, June 30 $ 87,849 9,598 50,040 10,797 3,469 540 2,134 164,427 Major Funds Western Loop 101 Public Facilities Corporation Transportation Debt Service $ 21,691 2,757 128 93 223 24,892 $ - General Obligation Debt Service $ 19,189 630 19,819 Other Non-Major Governmental Funds $ 20,976 775 23,093 36 971 129 1,465 47,445 Total Governmental Funds $ 149,705 10,373 76,520 36 11,896 3,469 762 3,822 256,583 15,785 81,639 7,822 15,371 14 647 2,535 9,685 667 - 4 - 7 276 21,971 37 2,910 5,540 6,991 2,075 16,065 103,610 7,859 27,966 5,554 8,305 4,617 571 2,244 699 127,327 837 11,189 10,210 10,214 15,880 8,056 23,943 9,990 22,528 12,444 84,762 26,441 43,038 13,980 257,435 37,100 13,703 (10,214) (4,124) (37,317) (852) 589 54 (22,895) (22,252) 900 (16,379) (15,479) 10,272 10,272 (256,054) 239,875 19,779 (1,557) 40,910 (13,993) 28,960 (256,054) 239,875 19,779 (1,557) 589 52,136 (53,267) 1,501 14,848 (1,776) 58 (26,649) (11,801) $ 32,044 30,268 The notes to the financial statements are an integral part of this statement. 34 $ 40 98 (4,124) $ 16,765 12,641 (8,357) $ 75,155 66,798 649 $ 97,355 98,004 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, 2013 (amounts expressed in thousands) Amounts for governmental activities in the statement of net position 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 $13,980 did not exceed depreciation of $46,612 for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Gain (loss) on sales (32,632) $ 2,378 (589) 353 2,142 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 discount Bonds discount amortized Bond premium amortized Payment to refunded bonds escrow agent Principal paid Refunding bonds issued 9,217 (19,779) 1,557 (73) 1,190 256,054 26,441 (239,875) 25,515 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. (75) 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. (11,445) Internal service funds are used by management to charge the costs of workers' compensation, risk management, and employee benefits to individual funds. 837 Expenses on the statement of activities differ from governmental funds because of the portion not accrued on the governmental funds. Change in net position of governmental activities (626) $ The notes to the financial statements are an integral part of this statement. 35 649 (6,418) City of Glendale, Arizona Statement of Net Position Proprietary Funds June 30, 2013 (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 Intergovernment receivable Inventories and prepaid items Total current assets $ 71,172 Noncurrent assets: Restricted deposits Restricted cash and investments Advance to other funds Capital assets: Capital assets Accumulated depreciation Capital assets, net Equity in joint venture Total noncurrent assets Total assets DEFERRED OUTFLOWS OF RESOURCES LIABILITIES Current liabilities: Vouchers payable Accounts payable Retainage 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 Interest payable Total current liabilities Noncurrent liabilities: Compensated absences Advance from other funds General obligation bonds Unamortized premium on debt issuance Revenue bonds/obligations payable OPEB long-term obligations Other long-term debt Estimated closure and post-closure costs Total noncurrent liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for: Revenue bond retirement, replacement and extension Other purposes Unrestricted Total net position $ $ 13,743 36 84,915 $ 7,730 12,624 (1,228) 671 83,239 2,653 (276) 71 41 16,232 15,277 (1,504) 71 712 99,471 34 7,764 3,365 14,931 14,925 76 25,006 3,365 15,007 39,931 1,700 - 770,203 (249,985) 520,218 52,246 (29,562) 22,684 822,449 (279,547) 542,902 60,389 613,828 697,067 47,766 63,998 60,389 661,594 761,065 1,700 9,464 3,689 - 3,689 - 1,452 111 1,340 292 3,179 - 606 65 652 3 273 148 - 2,058 65 111 1,992 3 292 3,452 148 - 1,546 9,407 1,036 9,755 6,576 23,741 1,747 1,036 9,755 6,576 25,488 10,953 540 5,515 14,139 263,325 7,060 290,579 314,320 460 246 4,379 77 14,953 20,115 21,862 1,000 246 5,515 14,139 263,325 11,439 77 14,953 310,694 336,182 10,953 229,081 22,684 251,765 - 10,686 146,669 386,436 1,578 17,874 42,136 10,686 1,578 164,543 428,572 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net position of business-type activities The notes to the financial statements are an integral part of this statement. $ Governmental Activities Internal Service Funds $ (2,544) 426,028 - $ (1,489) (1,489) City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For the Fiscal Year Ended June 30, 2013 (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) Nonoperating revenues (expenses): Impact fees Investment income Interest expense Gain on disposal of assets OPEB expense Total nonoperating revenues (expenses) 549 45,022 32,905 2,838 81,314 $ 8,827 4,176 10,615 6,322 1,535 4,274 35,749 $ 9,376 45,022 32,905 4,176 10,615 6,322 1,535 7,112 117,063 28,918 143 29,061 16,464 11,854 10,885 19,914 59,117 22,197 5,946 13,340 449 14,001 2,812 36,548 (799) 16,464 11,854 5,946 13,340 449 14,001 10,885 22,726 95,665 21,398 46 28,664 28,710 351 1,268 872 (12,660) 25 (1,634) (12,129) 1,006 (8) 18 (1,083) (67) 1,268 1,878 (12,668) 43 (2,717) (12,196) 17 17 Income (loss) before contributions and transfers 10,068 (866) 9,202 368 Capital contributions Transfers in Transfers out Change in net position 831 375 (41) 11,233 307 (559) 831 682 (41) 10,674 490 858 Total net position - beginning - restated Total net position - ending $ 375,203 386,436 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net position of business-type activities The notes to the financial statements are an integral part of this statement. 37 42,695 42,136 $ $ (55) 10,619 (2,347) (1,489) City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2013 (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: Transfers in Transfers out Advances to/due from other funds Advances from/due to other funds Net cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities: Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Net cash (used) by capital and related financing activities 82,068 - $ 27,041 8,862 $ 109,109 8,862 Governmental Activities Internal Service Funds $ 29,247 - (6,371) (18,723) (9,588) (15,421) (15,959) (34,144) - (15,354) 41,620 (8,279) 2,615 (23,633) 44,235 375 (41) 75 - 307 362 (240) 682 (41) 437 (240) 490 - 409 429 838 490 (28,174) (47) 1,026 (11,223) (4,976) 1,268 (13,231) 14 (1,067) (8) (11,209) (6,043) 1,268 (13,239) - (28,162) (1,061) (29,223) - Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 872 872 1,006 1,006 1,878 1,878 17 17 Net increase (decrease) in cash and cash equivalents during fiscal year 14,739 2,989 17,728 1,533 Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 71,364 86,103 $ The notes to the financial statements are an integral part of this statement. 38 10,830 13,819 $ 82,194 99,922 $ 7,897 9,430 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 Intergovernmental receivable Inventories and prepaid items Vouchers and accounts payable Accrued expenses Deposits Unearned rent Compensated absences Claims payable Proceeds from disposal of assets Estimated closure and post-closure costs Net cash provided (used) by operating activities Reconciliation of statement of net position cash and investments to the statement of cash flows: Per combined statement of net position: 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 Amortization of bond premium/discount $ 22,197 $ 19,914 $ $ $ 41,620 $ $ 831 1,112 $ $ 449 2,615 21,398 $ 22,726 16 35 (34) 120 (6) 121 (82) (17) 71,172 14,931 86,103 39 $ 2,812 10 260 (1,293) 87 768 (323) - $ (799) Governmental Activities Internal Service Funds - 26 35 226 (1,173) 87 762 121 (405) (17) $ 13,743 76 13,819 $ - $ $ 449 44,235 351 186 (1) (382) (19) 891 - $ 84,915 15,007 99,922 $ 831 1,112 $ $ 1,026 7,730 1,700 9,430 - CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 ............................. 41 Compliance – Excess of Expenditures Over Appropriations/Deficits in Fund Equity ............. II ............................. 51 Deposits and Investments ........................................................................................................ III ............................. 51 Note Receivable ....................................................................................................................... IV ............................. 53 Capital Assets ........................................................................................................................... V ............................. 54 Construction Commitments ..................................................................................................... VI ............................. 56 Self-Insurance Funds ..............................................................................................................VII ............................. 56 Leases ................................................................................................................................... VIII ............................. 58 Short-Term Debt ...................................................................................................................... IX ............................. 59 Long-Term Debt ....................................................................................................................... X ............................. 59 Landfill Obligations ................................................................................................................. XI ............................. 70 Interfund Transactions ............................................................................................................XII ............................. 72 Encumbrances....................................................................................................................... XIII ............................. 74 Equity in Joint Venture ......................................................................................................... XIV ............................. 74 Jointly Governed Organizations ............................................................................................ XV ............................. 75 Change in Accounting Estimate ........................................................................................... XVI ............................. 76 Governmental Fund Balance Components and Fund Type Definitions .............................. XVII ............................. 76 Employee Retirement Systems and Pension Plans ............................................................ XVIII ............................. 78 Other Post-Employment Benefits (OPEB) ........................................................................... XIX ............................. 81 Contingent Liabilities and Commitments .............................................................................. XX ............................. 83 Implementation of New Accounting Principles .................................................................... XXI ............................. 83 Subsequent Events ............................................................................................................... XXII ............................. 84 40 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) I. Summary of significant accounting policies A. Reporting entity The City of Glendale, Arizona (City) was incorporated June 18, 1910, under the provisions of Article 13, Sections 1 through 6 of the Constitution of Arizona and Title 9 of the Arizona Revised Statutes. It is governed by a Mayor elected at large, and six district council members. The City operates under a Council-Manager government. 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. B. Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government 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 41 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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). 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. C. Form of presentation – fund 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 special revenue 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. 42 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) The City reports the following major proprietary fund: 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. 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, deferred outflows of resources, liabilities, deferred inflows of resources, 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. Proprietary funds Proprietary funds are used to account for the City’s ongoing operations 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 43 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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. D. 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. Resources that have been received before time requirements are met but after all other eligibility requirements have been met are recorded as a deferred inflow. However, resources transmitted before time requirements are met but after eligibility requirements have been met are recorded as deferred outflows. This practice is defined and supported by GASB Statement 63, as it pertains to Financial reporting of deferred outflows of resources, deferred inflows of resources and net position. E. 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. 44 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) F. Interfund transactions Interfund transactions, consisting of services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as a reimbursement reducing expenditures in the fund performing the services, except for sales of water to other City departments, which are recorded as revenue in the Water Enterprise funds. In addition, operating transfers are made between funds to shift resources from a fund legally authorized to receive revenue to a fund authorized to expend the revenue. Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is classified as due to/from other funds (current portion of interfund loans) and advances to/from other funds (noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. 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, 2013, the postage portion of the general fund supplies inventory was $5. 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. 45 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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 $12,668. In addition, $53 was included as part of the cost of capital assets under construction in connection with water and sewer projects. 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, 2013, is $1,783. 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, 2013, 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, 2013, is $4,128. 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, 2013, 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 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: 46 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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. Amounts must be committed prior to fiscal year end. 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 unassigned fund balance. Other funds with negative fund balances may report a 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. Net position The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted. Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce the balance in this category. Restricted Net Position – This category represents net position that has external restriction imposed by creditors, grantors, contributors, laws or regulations of other governments, and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Position – This category represents net position of the City not restricted for any project or other purpose. M. Property tax The City levies taxes on real and personal property located within its boundaries. Property values are assessed by the Maricopa County Tax Assessor. The tax levy is then approved by the State of Arizona Property Tax Oversight Commission. The County Treasurer bills and collects property taxes and remits them to the City monthly. City property tax revenues are recognized when levied to the extent that they are received within the current period, or soon enough thereafter (within 30 days of year-end), to pay liabilities of the current period. Remaining collectible taxes are accrued and reflected as deferred revenue. 47 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) Property Tax Calendar Lien date Levy (assessment) date (third Monday in August) Due dates: First half of assessment Second half of assessment Penalties and interest added (collection dates): First half of assessment Second half of assessment January 1, 2012 August 18, 2012 October 1, 2012 March 1, 2013 November 1, 2012 May 1, 2013 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, 2013, is as follows: Fund General fund General obligation debt service fund Total Rate 0.22 1.68 $ 1.90 $ N. 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. Represented Fire and Police MOU employees who retire and have ten or more years of service will have 50% of their accrued sick time contributed to a mandatory Retiree Health Savings plan based on their average hourly wage over the last 36 months. Represented Fire and Police MOU employees who retire are paid 100% of accrued vacation time. 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 48 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) June 30, 2013, 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. O. Deferred outflow and deferred inflow of resources Resources transmitted before time requirements are met, but after all other eligibility requirements have been met, are reported as deferred outflows. Reacquisition costs associated with bond refunding is an example of a deferred outflow of resources. Resources received before time requirements are met, but after all other eligibility requirements are met, are recorded as deferred inflows. Certain grant receipts is an example of deferred inflow of resources. Amounts that are reported as deferred outflows are shown as a separate balance sheet section following the assets. Similarly, amounts shown as deferred inflows are shown in a separate balance sheet section following liabilities. P. Long-term obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are reported as long-term liability and amortized over the life of the bonds using the straight-line method, which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Q. Operating revenues and expenses Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds and the City’s internal service funds are charges to customers for sales and services, or housing operational grants from a federal agency. The water and sewer fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. R. Deferred compensation Voluntary Deferred Compensation Plan for Employees of the City of Glendale, State of Arizona; Restated Plan Document (the “Plan document”) was adopted by the Mayor and City Council on November 10, 1998, and amended on January 8, 2002, to incorporate the Federal Economic Growth and Tax Relief Reconciliation Act of 2001. In addition, the Mayor and City Council adopted a defined contribution deferred compensation plan document on April 9, 2002, under the Internal Revenue Code 49 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) Section 401(a). Also, during the fiscal year 2011, the employees had available to them the option of deferring compensation in Roth IRA administered by ICMA Retirement Corporation (ICMA RC). On February 12, 2013 the adoption of a new contract was approved by the Mayor and City Council which allowed the plan to be administered solely by the third-party administrator GREAT WEST LIFE & ANNUITY INSURANCE CO (Great West). 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 the thirdparty administrator, Great West. 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 Great West. Retiree Health Savings (RHS) Plan was originally adopted on July 1, 2008, and amended and restated on February 12, 2013, by Mayor and Council. The purpose of the Plan is to provide certain Employees with an opportunity to receive reimbursement for certain Health Care Expenses as provide in this Plan. It is the intention of the Adopting Employer that the benefits payable under this Plan be eligible for exclusion from the gross income of Participants as provided by Sections 105(b) and 106 of the Code. In addition, it is the intention of the Adopting Employer that the Plan qualify as a Health Reimbursement Arrangement (HRA) under IRS Revenue Ruling 202-41 (June 26, 2002) and IRS Notice 2002-45 (June 26, 2002). The provider for this RHS plan is Educator Benefit Consultants (EBC). The contributions to this Plan is detailed in the Compensated Absences (M) section on this document. S. Investments The City utilizes the following methods and assumptions to account for its investments: 1. 2. 3. Aside from investments clearly identified as belonging to a specific fund, any unrealized gain/loss resulting from the valuation is recognized within the general fund as investment revenue. Investments are recorded at fair value, which is based on quoted market prices as of the valuation date. Pooled investment income is allocated to various funds monthly based on the average equity balances maintained during the month. Arizona Revised Statutes require the City to deposit certain crime-related forfeitures with the County Treasurer. The County Treasurer determines the fair value of those pooled investments. The structure of the pool does not provide for shares and the County has not provided or obtained any legally binding guarantees to support the value of the participants’ investments. The 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 decrease in the fair value of investments during the fiscal year ended June 30, 2013, was $422. 50 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) II. Compliance - Excess of expenditures over appropriations/deficits in fund equity For the year ended June 30, 2013, expenditures exceeded appropriations in the housing fund by $861. These over-expenditures were funded by beginning fund balance and operating transfers. The City ended the fiscal year June 30, 2013, with a deficit fund balance/net position 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. Risk management fund Deficit will be funded by an increase in premiums for fiscal year 2014 and next fiscal year. Employee benefits internal service fund Deficit will be funded by an increase in premiums for fiscal year 2014 and next fiscal year. III. $ 11,801 930 1,996 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 $59,556 and the bank balances were $61,236. The difference of $1,680 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, 2013, was $42,429 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), 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. 51 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) As of June 30, 2013, 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 $ $ 13,495 16,128 30,656 18,179 78,458 $ $ 10,116 28,596 38,712 $ $ 13,010 29,961 42,971 $ 13,495 39,254 89,213 18,179 $ 160,141 59,556 42,429 $ 262,126 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, 2013, the City’s investments were rated by Moody’s Investor Service and Standard & Poor’s as follows: Investment Type S&P Rating Moody's Rating % of Total Investments Weighted Average Maturity (Years) U.S. Agencies Arizona LGIP Commercial Paper Corporate Corporate Corporate U.S. Agencies Corporate Corporate Corporate AA+ NR A-1 AAAA+ AA+ A-1+ A+ A+ AA Aaa NR P-1 Aa3 A1 Aaa P-1 A1 A2 Aa2 52.60% 11.35% 8.43% 8.13% 5.18% 3.76% 3.11% 2.73% 2.51% 2.20% 1.59 0.00 0.00 1.38 1.03 1.78 0.27 0.25 1.60 0.32 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 FFCB Total FHLB Total FNMA Total State Pool FHLMC Total GE Capital Met Life Glob Investment Type U.S. Agencies U.S. Agencies U.S. Agencies Arizona LGIP U.S. Agencies Corporate Corporate 52 Amount $ 24,970 23,718 18,477 18,179 17,071 8,300 8,009 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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 4.13% per annum payable semi-annually. A note receivable for the agreed upon contribution amount plus accrued interest on the note in the amount of $14,019 has been recorded at June 30, 2013. No payments have been received by the City on the note as of June 30, 2013. 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. On December 27, 2012, the City of Glendale Municipal Property Corporation, a blended component of the City, issued subordinate excise tax revenue bonds to refund the $199,750 third lien excise tax revenue bonds. The issuance of $183,405 in tax-exempt bonds and $16,850 in taxable bonds achieved debt service savings and lowered the next five fiscal years’ annual rental payments under the Lease Agreement. The remainder of this page left blank intentionally. 53 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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, 2013, is as follows: Balances June 30, 2012 Governmental activities Non-depreciable assets: Construction in progress Land Artwork Total non-depreciable assets $ Depreciable assets: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total depreciable assets at historical cost Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total accumulated depreciation Total depreciable assets, net Governmental activities capital assets, net $ 164,713 90,285 1,676 256,674 Increase $ 12,443 22 702 13,167 Balances June 30, 2013 Decrease $ (78,979) (78,979) $ 98,177 90,307 2,378 190,862 380,077 232,334 642,465 82,578 41,719 14,003 44,889 4,333 2,714 41,094 1,486,206 6,946 27,129 23,566 3,974 17,827 685 426 69 526 1,297 82,445 (10) (940) (173) (19) (2,733) (3,875) 387,023 259,453 666,031 86,552 59,546 14,688 44,375 4,229 3,221 39,658 1,564,776 (84,973) (97,833) (217,068) (27,631) (6,306) (7,827) (33,536) (3,821) (873) (27,327) (507,195) (10,124) (9,142) (16,615) (3,179) (561) (462) (2,500) (282) (379) (3,368) (46,612) 10 703 173 19 2,473 3,378 (95,097) (106,965) (233,683) (30,810) (6,867) (8,289) (35,333) (3,930) (1,233) (28,222) (550,429) 979,011 35,833 1,235,685 54 $ 49,000 (497) $ (79,476) 1,014,347 $ 1,205,209 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) Balances June 30, 2012 Business-Type activities: Non-depreciable assets: Construction in progress - water and sewer Construction in progress - landfill Construction in progress - sanitation Construction in progress - housing authority Land Total 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 Total 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 Total accumulated depreciation Total depreciable assets, net Business-Type activities capital assets, net $ 62,441 269 165 225 26,297 89,397 Increase $ 4,948 50 118 2 5,118 Balances June 30, 2013 Decrease $ (6,938) (212) (7,150) $ 60,451 319 165 131 26,299 87,365 16,508 9,183 63,273 114,141 127,470 202,454 134,693 27,609 5,187 4,437 925 20,802 726,682 188 2,090 690 378 1,624 2,965 998 20 8,953 (232) (319) (551) 16,696 9,183 65,363 114,831 127,848 204,078 137,658 27,609 5,187 5,203 925 20,503 735,084 (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) (544) (179) (2,729) (2,451) (2,924) (7,003) (3,868) (711) (102) (226) (3) (1,986) (22,726) 221 319 540 (8,556) (1,245) (20,393) (40,096) (54,019) (81,864) (38,611) (12,737) (2,319) (3,473) (731) (15,503) (279,547) 469,321 (13,773) (11) 455,537 558,718 55 $ (8,655) $ (7,161) $ 542,902 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 $ 15,474 4,912 10,114 11,315 4,785 12 $ 46,612 Business-Type activities: Water and sewer Landfill Sanitation Housing Total depreciation expense $ $ 19,914 816 1,529 467 22,726 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, 2013. 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 Spent-to-Date Construction Commitment General government Community services Public safety Public works Street maintenance Water and sewer facilities Landfill Sanitation Housing Total primary government $ $ $ 6,688 16,843 2,030 56,668 15,962 60,462 319 165 130 159,267 $ 1,171 24 1,290 336 782 3,603 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 56 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) insurance for liability, property, aviation, errors and omissions, boiler and machinery, and vehicle property damage. The risk management fund was fully self-insured through June 30, 1998, for tort liability loss. Effective July 1, 1998, the City purchased excess public entity liability insurance with $1,000 of self-insurance retention for claims incurred on or after July 1, 1998. Funds receiving insurance coverage pay monthly premiums to the risk management fund based upon a budget model taking into consideration prior loss experience, staffing, and operating budget. Premium payments to insurance carriers are made directly from the risk management fund. 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. D. Estimated liability Based on information provided by the actuary, liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported, the effects of specific, incremental claim adjustment expenses, and other allocated claim adjustment expenses. The City’s workers’ compensation self-insurance program liability includes recoveries related to subrogation. 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 57 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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 actuarial determined liability of $9,407 as of June 30, 2013. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2013 2012 Unpaid claims, beginning of fiscal year Current year claims and changes in estimate Claims payments $ Balance at fiscal year end $ 2,108 $ 3,877 (1,724) 4,261 Workers' Compensation 2013 2012 2,570 $ (8) (454) $ 4,139 $ (74) (914) 2,108 $ 3,151 2,409 Employee Benefits 2013 2012 $ 5,038 (3,308) $ 4,139 2,269 $ 22,922 (23,196) $ 1,995 4,693 20,813 (23,237) $ 2,269 VIII. Leases A. Capital leases The City’s capital lease activity consists principally of leasing various types of heavy equipment for 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. Leases vary in terms from 7 to 9 years for fire trucks to 10 years for real property. Current year principal expenditures are $573 for governmental activities. The future minimum lease obligation and net present value of lease payments at June 30, 2013, are as follows: Governmental Activities Year Ending June 30 2014 2015 2016 2017 2018 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments 58 $ $ 1,332 1,802 3,357 3,305 3,305 13,101 (2,007) 11,094 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 2,367 197 15,395 18,129 (7,143) 10,986 $ 67 4,695 5,141 4,434 14,337 (9,329) 5,008 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 2012-13 were $350. 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 2013 and beyond. The carrying value of leased assets is $362,102 (cost of $484,151 less accumulated depreciation of $122,049). 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 2014 2015 2016 2017 2018 2019 and beyond Total IX. $ $ 2,559 2,543 2,521 2,528 2,369 55,022 67,542 Short-term debt The City did not issue short-term debt for the year ended June 30, 2013. 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 59 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City and are repaid through the City’s levying of property taxes. Retirement of the general obligation bonds in the business-type activities are intended to be paid back by the revenues of the business-type activities. B. Revenue bonds Highway User Revenue Fund (HURF) bonds are used to construct street and highway projects. The $8,055 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 $8,610. The current year principal and interest amounts of $4,195 and $504, respectively, were funded with transfers of $1,354 from HURF 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 $91,140 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 $139,227. The current year revenues of $21,691 collected in the transportation special revenue fund paid the current year principal and interest amounts of $3,005 and $4,321, 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 $393,809. The current year principal and interest on the bonds were $22,907 and net revenues of the system were $44,251. 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, 60 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) from MPC. In addition, on April 1, 2004, the City entered into a lease agreement with the MPC to issue bonds to finance an escrow account to refund certain outstanding City improvement district bonds. 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. In December 2012, the City entered into a lease agreement with the MPC to issue bonds to partially refund outstanding maturities of the bond series 2003 and 2004, and to fully refund outstanding maturities of the Western Loop 101 Public Facilities Corporation bond series 2008. 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 $811,933 and the transfers of the MPC debt service fund were $20,579. Excise tax revenues pledged for repayment of MPC and PFC bonds was $131,931. The current year principal and interest paid was $17,703. 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. In December 2012, MPC bonds were issued to advance refund all outstanding PFC bonds. 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. Current year interest payments were made from the general fund. Excise tax revenues pledged for repayment of MPC and PFC bonds was $131,931. The current year principal and interest paid was $10,210. 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 in the current year was $59. 61 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) E. Changes in long-term liabilities The following is a summary of changes in long-term liabilities reported in the governmental activities financial statements for the year ended June 30, 2013: June 30, 2012 General obligation (GO) bonds Revenue bonds: Highway user revenue Transportation bonds Municipal Property Corporation Public Facilities Corporation Total bonds payable $ Other long-term obligations: Capital lease obligations OPEB obligations Compensated absences Claims and judgments Unamortized premium on debt issuance Discount on debt issuance Developer payable obligations Total other long-term obligations Total $ Increases 179,010 $ June 30, 2013 Decreases - $ (15,880) $ 163,130 Amounts Due Within One Year $ - 12,250 97,035 275,090 199,750 763,135 239,875 239,875 (4,195) (5,895) (46,090) (199,750) (271,810) 8,055 91,140 468,875 731,200 2,790 2,790 11,667 39,548 18,738 8,516 11,445 12,909 27,616 (573) (12,957) (26,725) 11,094 50,993 18,690 9,407 743 12,454 9,407 8,540 19,779 (2,327) 25,992 1,704 2,650 89,659 (1,557) 223 70,415 31 (42,551) (1,526) 2,873 117,523 (62) 24,246 852,794 $ 310,290 $ (314,361) $ 848,723 $ 27,036 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 $848,723 in the total liabilities, $766,843 is related to net position for the City’s net investment in capital assets. Other obligations not included in the calculation of net position for the City’s net investment in capital assets are OPEB obligations, compensated absences, and claims and judgments. 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 12.0% 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. 62 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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, 2013: June 30, 2012 Water and sewer GO bonds Water and sewer revenue/obligation bonds Total bonds payable $ Notes payable Total notes payable Other long-term obligations: Estimated closure and post-closure costs Unamortized premium on debt issuance OPEB obligations Compensated absences Housing noncurrent liabilities Total other long-term obligations Total $ 6,485 282,625 289,110 Additions $ Reductions - 708 708 - 14,504 449 16,287 8,720 3,397 63 42,971 2,719 1,937 14 5,119 332,789 $ 5,119 $ (970) (9,545) (10,515) $ (708) (708) (1,112) (2,342) (3,454) $ Amounts Due Within One Year June 30, 2013 (14,677) $ 5,515 273,080 278,595 $ 9,755 9,755 - - 14,953 - 15,175 11,439 2,992 77 44,636 1,036 1,992 3,028 323,231 $ 12,783 Of the $323,231 in total liabilities, $293,770 is included in the calculation of net position for the City’s net investment in capital assets. Other obligations not included in the calculation of net position for the City’s net investment 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 $2,633. 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. 63 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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 Municipal Property Corporation Bonds Series 2003A Municipal Property Corporation Bonds Series 2004A Western Loop 101 Public Facilities Corporation Bonds Series 2008A Western Loop 101 Public Facilities Corporation Bonds Series 2008B Western Loop 101 Public Facilities Corporation Bonds Series 2008C Date Refunded November 30, 2010 Remaining Balance $15,740 February 9, 2012 $73,050 February 9, 2012 $1,375 February 9, 2012 $1,765 February 9, 2012 $1,405 December 27, 2012 $41,635 December 27, 2012 $1,865 December 27, 2012 $137,495 December 27, 2012 $48,670 December 27, 2012 $13,585 The remainder of this page left blank intentionally. 64 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2013, 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 Matures Amount of Original Issue Bonds Outstanding June 30, 2013 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 14,655 15,745 2,620 5,435 8,055 2032 109,110 91,140 Revenue bonds payable from the 0.5% transportation sales tax Transportation excise tax 4.00-5.00 2008 Municipal Property Corporation payable from general fund lease payments MPC excise tax 5.00-5.38 2003 2033 MPC excise tax 2003B 1.46-5.58 2003 2033 MPC refunding 4.70-4.70 2004 2033 MPC excise tax 2006A 4.00-5.00 2006 2026 MPC excise tax 2008A 3.00-5.00 2008 2032 MPC excise tax 2008B 5.45-6.16 2008 2033 MPC excise tax 2008C 4.00-5.02 2008 2015 MPC refunding 2012A 3.00-5.00 2012 2021 MPC refunding 2012B 5.00 2013 2033 MPC refunding 2012C 5.00 2013 2031 MPC refunding 2012D 1.30-3.125 2013 2020 Total Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 65 $ 52,525 36,645 11,960 9,065 29,365 61,000 41,650 38,300 $ 5,055 105,260 7,250 33,250 32,315 52,780 9,140 8,665 39,620 183,405 16,850 4,335 17,165 2,740 3,915 17,910 40,960 37,805 38,300 163,130 5,055 95,675 7,250 25,610 32,220 50,605 3,920 8,665 39,620 183,405 16,850 468,875 $ 731,200 (2,790) 728,410 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 Bonds Outstanding June 30, 2013 Amount of Original Issue 2022 13,875 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 80,000 80,000 44,500 65,500 25,685 77,635 $ 5,515 5,515 1,630 72,955 39,075 56,100 25,685 77,635 273,080 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities 278,595 (9,755) $ 268,840 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, 2013, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 62,836 (7,309) 55,527 20% $ $ 209,455 (148,695) 60,760 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. 66 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) H. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of June 30, 2013, are shown below: GO bonds Authorized Amount Issued through June 30, 2013 Authorized but Unissued Voter authorized October 20, 1981 Operations center $ $ $ Voter authorized March 10, 1987 Library 6,750 550 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 Water and sewer(1) Total revenue bonds $ 10,000 10,000 $ - Total bonds $ 512,319 $ 139,480 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 $ 10,000 10,000 $ 372,839 (1) Certain general obligation bonds or revenue bonds can be issued as general obligation bonds, revenue bonds or a combination thereof. 67 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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. The remainder of this page left blank intentionally. 68 $ 2,873 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) J. Debt service requirements Fiscal Year Ending Various Purposes Water and Sewer Revenue G.O. Bonds/ Bonds Obligations HURF Bonds Transportation Bonds MPC Bonds G.O. Bonds 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 $ 4,686 1,953 1,971 8,610 $ 7,326 7,326 7,326 7,327 7,330 7,328 7,326 7,329 7,329 7,328 7,328 7,328 7,330 7,329 7,331 7,328 7,326 7,327 7,325 139,227 $ 32,241 31,444 31,948 31,430 31,195 33,560 34,656 36,581 36,583 36,585 36,584 36,585 36,586 36,581 36,581 36,586 36,585 36,585 36,582 36,583 22,533 22,533 22,532 22,532 22,532 814,723 $ 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 3,135 208,816 $ 1,260 1,249 1,236 1,226 1,214 6,185 $ 32,672 25,453 25,455 25,444 25,455 25,449 25,083 24,413 24,081 25,293 25,292 25,285 25,289 24,165 20,302 7,411 7,267 393,809 $ 100,885 93,163 91,255 88,687 87,833 86,620 83,437 83,768 80,668 72,650 72,611 72,568 72,533 71,358 67,448 54,509 54,313 43,912 43,907 36,583 22,533 22,533 22,532 22,532 22,532 1,571,370 Less interest 555 48,087 345,848 45,686 670 120,729 561,575 $ 8,055 $ 91,140 $ 468,875 $ 163,130 $ 5,515 $ 273,080 $ 1,009,795 Principal 69 Total CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) The following table discloses the debt service requirements as of June 30, 2013, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 Total Principal 53,075 47,040 47,075 46,490 47,760 239,275 246,645 183,615 98,820 $ 1,009,795 Interest 47,810 46,123 44,180 42,197 40,073 167,868 109,873 49,609 13,842 $ 561,575 $ $ Total 100,885 93,163 91,255 88,687 87,833 407,143 356,518 233,224 112,662 $ 1,571,370 $ K. New bonds On December 12, 2012, the City issued $39,620 in Municipal Property Corporation senior lien excise tax revenue refunding bonds to advance refund the 2014-2033 maturities of the Municipal Property Corporation Bond Series issued in 2003, and the 2014 maturity of the Municipal Property Corporation Bond Series issued in 2004. The 2012 bonds mature on various dates starting 2021 to 2033 with an interest rate of 5.00%. The bonds are not a general obligation of the City, but are a limited obligation of the City and are payable from and secured by a senior lien pledge of the City’s unrestricted excise taxes. On December 12, 2012, the City issued $183,405 in Municipal Property Corporation subordinate excise tax revenue refunding bonds to advance refund the Western Loop 101 Public Facilities Corporation taxexempt bond series issued in 2008. The bonds mature on various dates starting 2017 to 2038 with an interest rate of 5.00%. The bonds are not a general obligation of the City, but are a limited obligation of the City and are payable and secured by a subordinate lien pledge of the City’s unrestricted excise taxes. On December, 12, 2013, the City issued $16,850 in Municipal Property Corporation subordinate excise tax revenue refunding bonds taxable series to advance refund the Western Loop 101 Public Facilities Corporation taxable bond series issued in 2008. The bonds mature on various dates starting 2014 to 2020 with various interest rates of 1.30% to 3.125%. The bonds are not a general obligation of the City, but are a limited obligation of the City and are payable from and secured by a subordinate lien pledge of the city’s Unrestricted Excise Taxes. In total, the bonds refunding resulted in an economic reacquisition loss of $13,462 and will be amortized over the life of the new refunding bonds. The City realized a future cash flow savings in the amount of $50,649. 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. 70 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) The landfill closure and post-closure care liability at June 30, 2013, 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 - 21,218 18,849 89% Capacity (cubic yards) Capacity used to date Percentage of capacity used Total closure and post-closure costs in present dollars: as of June 30, 2013 as of June 30, 2012 $ 17,925 $ 17,696 $ 16,833 $ 16,618 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2013 $ 17,925 $ Liability recognized as of June 30, 2013 $ - 1,880 14504 $ 14,953 These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2012-13. 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. 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. The remainder of this page left blank intentionally. 71 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) XII. Interfund transactions Interfund balances at June 30, 2013, consisted of the following: A. Due to/due from Due to general fund from: Transportation Community development block grant Other special revenue Municipal Property Corporation debt service Housing Total due to general fund $ 70 474 889 1,368 3 $ 2,804 The interfund balances at June 30, 2013, 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, 2013, are expected to be repaid within one year. B. Advance to/advance from Advance to general fund from: Water and sewer Landfill Sanitation Total advance to general fund $ 14,925 20,799 3,961 39,685 Advance to landfill from: Sanitation Total advance to landfill Grand total 246 246 $ 39,931 The sanitation, landfill and water and sewer interfund borrowings to the general fund were $3,961, $20,799, and $14,925, respectively. The sanitation and landfill portions of the interfund borrowings were for the Coyotes Newco agreement payment, which are expected to be repaid over 23 years at an interest rate of 3.9%. The $246 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 $14,925 water and sewer interfund borrowing was for the Coyotes Newco agreement payment, which is expected to be repaid over 24 years at an interest rate of 3.245%. 72 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) C. Interfund transfers Interfund transfers for the year ended June 30, 2013, consisted of the following: Transfers to general fund from: Capital projects funds Streets construction fund Enterprise funds Water and sewer enterprise fund Total transfers to general fund $ 13 41 54 Transfers to transportation fund from: General fund Total transfers to transportation fund Transfers to Public Facilities Corporation debt service fund from: Western Loop 101 PFC construction fund Total transfers to Public Facilities Corporation debt service fund Transfers to non-major special revenue fund from: General fund Total transfers to non-major special revenue fund Transfers to non-major debt service funds from: General fund Transportation fund Highway users gas tax Non-major governmental funds Development impact fees Total transfers to non-major debt service funds Transfers to capital projects fund from: General fund Transportation fund Total transfers to capital projects fund 900 900 10,272 10,272 244 244 20,578 8,331 2,708 1,000 32,617 1 8,048 8,049 Transfers to water and sewer proprietary fund from: General fund Total transfers to water and sewer proprietary fund 375 375 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 Grand total all transfers 73 490 490 $ 53,308 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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, 2013, the City intended to honor $5,040 of outstanding encumbrances in the new year. Fund Major: General Transportation Water and sewer Non-Major: Community development block grant Police and fire sales tax Federal stimulus Other special revenue Development impact fee Streets capital Landfill Sanitation Total XIV. $ $ 83 2,386 857 200 34 75 343 16 124 45 877 5,040 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 latest available audited financial information on the joint venture is as of and for the fiscal year ended June 30, 2012. 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 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. 74 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) Summary of audited financial information on the joint venture as of and for the fiscal year ended June 30, 2012, is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets $ Liabilities Net assets $ Total revenues Total expenses Decrease in net assets 44,912 868,922 913,834 35,952 877,882 $ 76,906 (103,445) $ (26,539) 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. 75 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) XVI. Change in accounting principle The City of Glendale implemented Governmental Accounting Standards Board (GASB) statement No. 65, Items previously reported as assets and liabilities. Implementation of this statement resulted in a change in accounting for bond issuance costs from amortizing the costs over the life of the bonds to recognizing the issuance cost as an expense in the year incurred. The result of the change in accounting principle is reflected below in the governmental and business type activities net position. The governmental and business-type activities net position as restated: Government Activities Net position - beginning Adjustment Net position beginning - restated XVII. $ 577,524 (6,431) $ 571,093 Business Activities $ $ 418,706 (3,297) 415,409 Major Funds Water and Sewer T otal $ $ 996,230 (9,728) 986,502 $ $ 378,500 (3,297) 375,203 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, 2013, primarily due to the NHL payment of $50 million expensed in the prior years. According to the policy, the deficiency will be replenished over a period not to exceed five years. 76 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) General Nonspendable Inventories and prepaid items Cemetery perpetual care Total Nonspendable Restricted Public transit State drug enforcement U.S. drug enforcement Debt service Court security Court time payments Court computer upgrade HOME program Highway user gas tax Police activities Fire activities Federal stimulus activities Development impact fees Street G.O. bond projects HURF bond projects Transportation construction Fire and police construction Park bond construction Economic development Open space/trails Cultural and historical projects Government facilities Flood control construction Other Total restricted Committed Arena stadium activities Artwork Pool/park repair Other Total committed Assigned Other Total assigned Unassigned fund balance $ $ 650 650 Western Loop 101 Public Facilities General Other Non-Major Total Corporation Obligation Governmental Governmental Transportation Debt Service Debt Service Funds Funds $ 61 61 $ - $ - $ 97 5,616 5,713 $ 808 5,616 6,424 36 203 72 311 30,207 30,207 98 98 12,641 12,641 4,008 250 980 58 18,356 9,499 1,446 24 11,160 2,754 300 906 2,183 283 1,123 588 262 69 6,345 232 60,826 30,207 4,008 250 13,719 36 203 72 58 18,356 9,499 1,446 24 11,160 2,754 300 906 2,183 283 1,123 588 262 69 6,345 232 104,083 57 1,170 449 1,676 - - - 115 115 57 1,170 115 449 1,791 30,268 98 12,641 144 144 66,798 (14,438) (11,801) $ 77 $ $ $ $ 144 144 (14,438) 98,004 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 capital assets of the water and sewer fund. $ Total restricted for water and sewer 10,686 10,686 NON-MAJOR PROPRIETARY FUNDS Net position held by the housing fund may only be used for that purpose. 1,578 $ Total restricted for enterprise fund type 12,264 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. SB 1609 makes change to the existing contributions and benefits structures for the ASRS, PSPRS, and EORP plans. Beginning on July 1, 2012, employers are required to pay an Alternate Contribution Rate 78 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) (ACR) for retired member who perform services that would otherwise be performed by an employee of the employer. The ACR percentage is calculated as the greater of 2% or two times the “deficit” payment, and calculates the ACR by adding the employer ASRS Contribution Rate to the employer LTD Contribution Rate, and then subtracting the normal cost. The cap for this rate cannot be higher than the employer’s portion of the total ASRS Contribution Rate which is the Defined Benefit plus LTD. 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, 2013, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 11.14% (10.25% for retirement, 0.65% for health insurance premiums, and 0.24% long-term disability) of the members’ annual covered payroll. The ASRS ACR rate was 8.64%. The City’s employer contributions to ASRS for the years ended June 30, 2013, 2012, and 2011 were $6,346, $6,876, and $6,278, respectively, which were equal to the required contributions for the year. The City’s employee contributions to ASRS were equal to the employers required contribution. Agent Plans. For the year ended June 30, 2013, PSPRS members were required by statute to contribute 9.55% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 22.06% and 24.84% for Fire and Police, respectively. The PSPRS ACR rates for both Fire and Police were 14.57%. The health insurance premium portion of the contribution for fire and police members was computed as $125 and $280 for the year, respectively. In addition, active EORP members were required by statute to contribute 11.50% of the members’ annual covered payroll. The City was required to remit contributions of 36.44% of the members’ annual covered payroll, as determined by actuarial valuation. The City’s employer contributions to EORP for the years ended June 30, 2013, 2012, and 2011, were $60, $57, and $47, respectively, which were equal to the required contributions for the year. The City’s employee contributions to EORP were equal to the employers required contribution. 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. 79 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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, 2013, the date of the most recent available actuarial valuation, and related information follow. GASB statement No. 25 supplementary information actuarial methods, rates, and cost. Contribution rates: City Fire Police 22.06% 24.84% Plan members 9.55% 9.55% $3,863 $7,111 Entry age normal Entry age normal 7.85% 4.50% - 8.50% 4.50% 7.85% 4.50% - 8.50% 4.50% Level percent-of-pay, closed Level percent-of-pay, closed 23 years for unfunded actuarial accrued liability, 20 years for excess 23 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market 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, 2013, follows. Contributions required and contributions made Year Ended June 30 Police 2013 2012 2011 Fire 2013 2012 2011 Percentage of APC Contributed APC $ 7,111 6,243 6,163 100.0 % 100.0 % 100.0 % 3,863 3,280 3,186 100.0 % 100.0 % 100.0 % Includes insurance premium tax, where applicable. 80 Net Pension Obligation $ - CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 30-Jun Police 2013 Valuation Date 30-Jun Fire 2013 Actuarial Value of Plan Assets $ 108,107 Actuarial Value of Plan Assets $ 88,686 Actuarial Accrued Liability $ 192,310 Funding Liability (Excess) $ 84,203 Actuarial Accrued Liability $ 124,713 Funding Liability (Excess) $ 36,027 Annual Covered Payroll Funded Ratio 56.2% $ 28,336 Annual Covered Payroll Funded Ratio 71.1% $ 18,548 Unfunded Liability as Percentage of Covered Payroll 297.2% Unfunded Liability as Percentage of Covered Payroll 194.2% 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. For the fiscal year ending June 30, 2013, the amount of $3,592 was contributed to the plan by active retirees, in the form of current premiums and the City contributed $1,942 (implied subsidy). The required contribution was 3.47% of covered payroll. 81 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) 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 1,723 active and 602 retiree members for the plan year ending June 30,2013. 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, 2013. 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 1,665 1,932 16,106 Contributions made Net OPEB obligation beginning of year Net OPEB obligation end of year (1,942) 48,268 62,432 $ The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2013 is as follows: Fiscal Year 2013 Annual OPEB Cost $16,104 Percentage of Annual OPEB Cost Contributed 12.0% Net OPEB Obligation $62,432 D. Funding status The City’s funding status for OPEB is as follows (determined by an actuarial study): 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% 82 July 1, 2009 $ $ 106,578 $ 106,578 -% $ 109,704 97.2% July 1, 2007 $ $ 101,281 $ 101,281 -% $ 109,391 92.6% CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (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 June 30, 2012, the last 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. Implementation of new accounting principles GASB statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, improves financial reporting by establishing recognition, measurement, and disclosure requirements for service concession arrangements (SCAs). An SCA is an arrangement between a transferor (a government) and an operator (governmental or nongovernmental entity) in which (1) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset in exchange for significant consideration and (2) the operator collects and is compensated by fees from third parties. The requirements of this Statement improve financial reporting by establishing recognition, measurement, and disclosure requirements for SCAs for both transferors and governmental operators, requiring governments to account for and report SCAs in the same manner, which improves the comparability of financial statements. GASB statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34, improves financial reporting for a governmental financial reporting entity. The requirements of this statement result in more relevant financial statements by improving guidance for including, presenting, and disclosing information about component units and equity interest transactions of 83 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) a financial reporting entity. This Statement provides amendments to Statement No. 14, The Financial Reporting Entity, and Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. GASB statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in PreNovember 30, 1989 FASB and AICPA Pronouncements, improves financial reporting by contributing to the GASB’s efforts to codify all sources of generally accepted accounting principles for state and local governments so that they derive from a single source. This Statement will eliminate the need for financial statement preparers and auditors to determine which FASB and AICPA pronouncement provisions apply to state and local governments, resulting in more consistent application of applicable guidance. GASB statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources. Concepts Statement No. 4, Elements of Financial Statements, introduced and defined these elements as a consumption of net assets by the government that is applicable to a future reporting period, and an acquisition of net assets by the government that is applicable to a future reporting period, respectively. This statement amends the net asset reporting requirements in Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, and other pronouncements by incorporating deferred outflows of resources and deferred inflows of resources into the definitions of the required components of the residual measure and by renaming that measure as net position, rather than net assets. GASB statement No. 65, Items Previously Reported as Assets and Liabilities, establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities. XXII. Subsequent events On August 5, 2013, the City entered into Professional Management Services Agreement, an Arena Lease Agreement and Non Relocation Agreement with the new owners of the Coyotes Hockey team, IceArizona Hockey, Co., LLC, and Arena Manager, IceArizona Manager Co., LLC. The fifteen-year agreement requires the City to pay an annual management fee of $15,000 to the arena manager, IceArizona Manager Co., LLC, including a capital maintenance fee of $500 and increasing to $1,000 in fiscal year 2021. The City is entitled to receive specified revenues as defined in the agreement. The agreement does have an out clause whereby the team can relocate after five years if the cumulative team losses exceed $50,000. The City is then entitled to a City Shortfall payment which is the difference between $45,000 less specified revenues collected in the agreement over the five-year period. On August 19, 2013, the City paid off the remaining principal amount of Water and Sewer General Obligation Bonds Series 2003 in the amount of $5,515. The City realizes a future interest expense savings of $638. On August 23, 2013, 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 Hurf Bonds Transportation Bonds Water and Sewer Obligations Before A2 A2 A3 A2 A2 A1 84 After A3 A3 Baa1 A3 A3 A1 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2013 (amounts expressed in thousands) On September 20, 2013, the City and the National Hockey League (NHL) reached an agreement which calls for the final payment of the NHL 2011-12 owners fee in the amount of $5,000 to be paid by the City on September 20, 2016. This amount has been recorded and reflected as a contract payable in the general fund as of June 30, 2013. The remainder of this page left blank intentionally. 85 This page left blank intentionally. 86 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Three-Year Trend June 30, 2013 (amounts expressed in thousands) Three-Year Trend Information for PSPRS and OPEB Schedule of funding progress The following information is presented as an analysis of funding progress excluding health insurance subsidy: Valuation Date June 30 Fire 2013 2012 2011 Valuation Date June 30 Police 2013 2012 2011 Actuarial Value of Plan Assets $ 88,686 84,891 77,133 Actuarial Accrued Liability Funding Liability (Excess) $ 124,713 119,523 104,035 $ 36,027 34,631 26,902 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) $ 108,107 102,979 96,829 $ 192,310 182,264 157,063 $ 84,203 79,285 60,234 87 Funded Ratio 71.1 % 71.0 74.1 Funded Ratio 56.2 % 56.5 61.6 Annual Covered Payroll $ 18,548 18,406 16,811 Annual Covered Payroll $ 28,336 29,356 27,576 Unfunded Liability as Percentage of Covered Payroll 194.2 % 188.2 160.0 Unfunded Liability as Percentage of Covered Payroll 297.2 % 270.1 218.4 GASB STATEMENT NO. 45 SUPPLEMENTARY INFORMATION Schedule of Funding Progress The following information is presented concerning the post-retirement health insurance subsidy. Valuation Date June 30 Fire 2013 2012 2011 Police 2013 2012 2011 Unfund AAL (UAAL) Actuarial Accrued Liability (AAL) $ - $ 2,942,098 2,901,819 2,899,671 $ 2,942,098 2,901,819 2,899,671 0.0 % 0.0 0.0 $ 18,547,600 18,406,246 16,811,098 15.86 % 15.77 17.25 $ - $ 5,603,302 5,436,679 5,397,269 $ 5,603,302 5,436,679 5,397,269 0.0 % 0.0 0.0 $ 28,335,867 29,355,876 27,575,979 19.77 % 18.52 19.57 Funded Ratio Annual Covered Payroll UAAL as a % of Covered Payroll Actuarial Value of Assets Annual OPEB cost and net OPEB obligation The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011, 2012, and 2013 are as follows: Fiscal Year 2011 2012 2013 Percentage of Annual OPEB Cost Contributed 12.6% 21.2 12.0 Annual OPEB Cost $11,638 12,676 16,104 88 Net OPEB Obligation $38,897 48,268 62,430 1 of 2 City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment income (loss) Proceeds from disposal of assets Loan proceeds 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 Contingencies Miscellaneous Debt service: Principal Interest Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2013 $ Final (1,489) $ (1,489) Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 18,399 $ 19,888 86,890 8,701 50,319 33,339 3,479 287 250 3,227 186,492 (18,842) 166,161 86,890 8,701 50,319 33,339 3,479 287 250 3,227 186,492 (27,093) 157,910 87,849 9,598 50,040 32,962 3,469 987 589 25 2,072 187,591 54 (22,895) 183,149 959 897 (279) (377) (10) 700 339 25 (1,155) 1,099 54 4,198 25,239 43,694 80,392 20,043 17,996 20 791 3,851 43,260 82,920 20,844 17,010 20 1,283 331 3,987 25,379 81,647 20,144 15,763 14 647 2,535 17,881 1,273 700 1,247 6 636 331 1,452 571 619 4,957 172,934 793 2,244 4,571 177,263 791 2,244 637 149,801 2 3,934 27,462 (6,773) $ (19,353) $ 33,348 $ 52,701 (Continued) 89 2 of 2 City of Glendale, Arizona Budgetary Comparison Schedule (continued) General Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) 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 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. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. The notes to the financial statements are an integral part of this statement. 90 $ 183,149 (18,399) (8,862) (447) (13,303) (589) (25) 62 (54) 22,895 $ 164,427 $ 149,801 (220) 62 (22,316) $ 127,327 City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 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 Street maintenance Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 26,938 Final $ 26,938 Actual Amounts (budgetary basis) $ 32,082 Variance with Final Budget Positive (Negative) $ 5,144 20,862 7,146 135 95 10 2,000 30,248 (35,295) 21,891 20,862 7,146 135 95 10 2,000 30,248 (35,295) 21,891 21,691 2,757 128 93 223 24,892 900 (16,379) 41,495 829 (4,389) (7) (2) (10) (1,777) (5,356) 900 18,916 19,604 14,165 5,594 19,759 13,767 6,034 19,801 9,685 667 837 11,189 4,082 (667) 5,197 8,612 2,132 $ 2,090 $ 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. 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 statement of revenues, expenditures, and changes in fund balances - governmental funds. The notes to the financial statements are an integral part of this statement. 91 30,306 $ 28,216 $ 41,495 (32,082) (900) 16,379 $ 24,892 $ 11,189 $ 11,189 CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2013 (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. 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. 92 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule Western Loop 101 Public Facilities Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current General administration Debt service Interest expense Total charges to appropriations Budgetary fund balance, June 30, 2013 Actual Amounts (budgetary basis) Final - $ - $ - Variance with Final Budget Positive (Negative) $ - 9,010 9,010 10,272 10,272 10,272 10,272 10 10 4 (6) 9,000 9,010 10,230 10,240 10,210 10,214 (20) (26) $ - $ 32 $ 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. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 93 58 - $ $ (26) 10,272 (10,272) $ - $ 10,214 $ 10,214 City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Investments Taxes Intergovernmental Total inflows Less: Transfers out Amounts available for appropriation $ 658 19,403 20,061 (1,374) 35,202 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2013 16,515 Final $ 16,515 Actual Amounts (budgetary basis) $ 659 19,404 20,063 (20) 36,558 16,765 Variance with Final Budget Positive (Negative) $ 19,189 630 19,819 36,584 250 (659) (215) 630 (244) 20 26 340 340 7 333 15,880 8,056 24,276 15,880 8,056 24,276 15,880 8,056 23,943 333 10,926 $ 12,282 $ 12,641 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 statement of revenues, expenditures, and changes in fund balances - governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 94 $ 359 $ 36,584 (16,765) $ 19,819 $ 23,943 $ 23,943 This page left blank intentionally. 95 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. 96 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. 97 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2013 (amounts expressed in thousands) Special Revenue Funds Community ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Assets: Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Intergovernmental receivable Due from other funds Inventories and prepaid items Restricted cash and investments Total assets Development User Fire Federal Block Grants Gas Tax Sales Tax Stimulus $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Vouchers payable Retainage payable Compensated absences - current Intergovernmental payable Due to other funds Deposits Unearned revenue Matured interest payable Matured bonds payable Total liabilities Deferred Inflows of Resources Fund balances: Nonspendable Restricted Committed Assigned Total fund balances Total liabilities, deferred outflows of resources and fund balances $ 98 Police and Highway - $ 17,466 $ 8,990 $ Other 93 $ 467 4,098 667 4,765 1,173 97 18,736 3,758 12,748 16 109 255 1,413 5,784 7,919 132 5 4 474 4,092 4,707 262 21 283 837 111 948 1 84 85 493 12 1 889 9 1,766 3,170 - - 855 - - 58 58 4,765 97 18,356 18,453 18,736 10,945 10,945 12,748 24 24 109 4,490 115 144 4,749 7,919 $ $ $ $ Debt Service Funds Municipal $ $ Highway Property User Corporation 25 $ 18 Transportation $ 3 Permanent Fund Capital Project Funds Western Loop 101 Public Facilities Development Corporation Impact Streets Police Bond Construction Fees Construction Construction Construction $ $ $ $ $ - $ 11,160 Fire and 5,392 Cemetery Total Non-Major Other Perpetual Governmental Construction Care Funds Parks 2,183 283 8,523 $ 5,616 $ 60,219 25 16,457 16,475 3 - 11,160 5,392 2,183 283 8,523 72 5,688 8,183 3,269 97 22,241 94,009 - 1,368 11,365 2,790 15,523 - - - 907 55 60 410 1,432 - - 113 23 136 72 72 2,745 60 148 61 2,731 9 6,447 11,365 2,790 26,356 - - - - - - - - - - 855 25 25 25 952 952 16,475 3 3 3 - 11,160 11,160 11,160 3,960 3,960 5,392 2,183 2,183 2,183 283 283 283 8,387 8,387 8,523 5,616 5,616 5,688 5,713 60,826 115 144 66,798 94,009 $ $ $ $ $ 99 $ $ $ $ $ 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, 2013 (amounts expressed is thousands) Special Revenue Funds Police REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Investments Local 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 $ 20,976 1 20,977 $ 1,243 11 1,254 $ 5,429 971 31 36 641 7,108 17,913 - 846 - 3,607 25 1,892 1,190 7 6 4,356 38 6,627 27 17,940 408 1,254 2,273 8,994 5,822 3,037 - - - 3,037 - (2,708) (2,708) (49) $ $ 6,589 - - Excess (deficiency) of revenues and other sources over Net change in fund balances 12,415 34 12,449 4,350 - (49) OTHER FINANCING SOURCES (USES) Payment to refunded bond escrow agent Refunding bonds issued Premium on long-term debt issued Discount on long-term debt issued Transfers in Transfers out Total other financing sources and uses Fund balances, July 1 Fund balances, June 30 3,948 359 4,307 Other 107 58 3,114 $ 100 15,339 18,453 $ 7,908 10,945 $ 24 24 (1,886) 244 244 (1,642) $ 6,391 4,749 Debt Service Funds Municipal $ Highway Property User Corporation - $ $ - Permanent Fund Fire Total Public Facilities Development Corporation Impact Streets Police Bond Construction Fees Construction Construction Construction $ $ $ $ $ 58 58 $ 775 37 200 1,012 and 20 90 110 Parks 3 119 122 - Cemetery Non-Major Other Perpetual Governmental Construction Care Funds 9 21 30 $ 18 18 $ 20,976 775 23,093 971 129 36 1,465 47,445 - 2,066 2 - 75 111 9 - 160 61 393 - 451 - 3 10 - 38 2 - - 276 21,971 37 2,910 5,540 6,991 2,075 4,195 504 4,699 2,790 17,703 22,559 3,005 4,321 7,328 - 195 8,438 9,052 451 16 29 1,238 1,278 - 9,990 22,528 12,444 84,762 (4,699) (22,559) (7,328) 58 817 (8,942) (329) (29) (1,248) 4,708 4,708 (256,054) 239,875 19,779 (1,557) 20,578 22,621 7,331 7,331 (10,272) (10,272) (1,000) (1,000) 8,047 (13) 8,034 3 (10,214) (183) (908) 9 $ Transportation - Capital Projects Funds Western Loop 101 16 25 62 $ 890 952 $ 3 $ 10,214 - $ 11,343 11,160 $ 4,868 3,960 101 - - (329) $ 2,512 2,183 2 2 (29) $ 312 283 (1,246) $ 9,633 8,387 $ 18 (37,317) - (256,054) 239,875 19,779 (1,557) 40,910 (13,993) 28,960 18 (8,357) 5,598 5,616 $ 75,155 66,798 City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Actual Amounts (budgetary basis) Final - $ - $ 113 Variance with Final Budget Positive (Negative) $ 113 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation 5,284 110 5,394 5,394 5,284 110 5,394 5,394 3,948 359 4,307 4,420 (1,336) 249 (1,087) (974) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital Outlay Total charges to appropriations 5,394 5,394 5,397 5,397 4,350 6 4,356 1,047 (6) 1,041 Budgetary fund balance, June 30, 2013 $ - $ (3) $ 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. 102 64 $ 67 $ 4,420 (113) $ 4,307 $ 4,356 $ 4,356 City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Street maintenance Capital outlay Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2013 $ 14,301 Final $ 14,301 Actual Amounts (budgetary basis) $ 15,426 Variance with Final Budget Positive (Negative) $ 1,125 12,759 12,759 27,060 12,759 12,759 27,060 12,415 34 12,449 27,875 (344) 34 (310) 815 12,486 11,556 1,354 13,840 2,709 14,265 6,601 38 2,708 9,347 4,955 (38) 1 4,918 13,220 $ 12,795 $ 18,528 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. 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. 103 $ 5,733 $ 27,875 (15,426) - $ 12,449 $ 9,347 (2,708) (12) $ 6,627 City of Glendale, Arizona Budgetary Comparison Schedule Police and Fire Sales Tax Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 8,664 Final $ 8,664 Actual Amounts (budgetary basis) $ 8,058 Variance with Final Budget Positive (Negative) $ (606) RESOURCES (INFLOWS): Taxes Miscellaneous Total revenues Amounts available for appropriation 19,004 19,004 27,668 19,004 19,004 27,668 20,976 1 20,977 29,035 1,972 1 1,973 1,367 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public safety Capital outlay Total charges to appropriations 20,751 49 20,800 20,984 25 21,009 17,904 27 17,931 3,080 (2) 3,078 Budgetary fund balance, June 30, 2013 $ 6,868 $ 6,659 $ 11,104 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. 104 $ 4,445 $ 29,035 (8,058) $ 20,977 $ 17,931 9 $ 17,940 City of Glendale, Arizona Budgetary Comparison Schedule Federal Stimulus Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Actual Amounts (budgetary basis) Final 180 $ 180 $ 24 Variance with Final Budget Positive (Negative) $ (156) RESOURCES (INFLOWS): Intergovernmental Investments Total revenues Amounts available for appropriation 1,787 1,787 1,967 1,787 1,787 1,967 1,243 11 1,254 1,278 (544) 11 (533) (689) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations 1,967 1,967 1,967 1,967 846 408 1,254 1,121 (408) 713 Budgetary fund balance, June 30, 2013 $ - $ - $ 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. 105 24 $ 24 $ 1,278 $ 1,254 $ 1,254 $ 1,254 City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 5,314 Final $ 5,314 Actual Amounts (budgetary basis) $ 6,408 Variance with Final Budget Positive (Negative) $ 1,094 RESOURCES (INFLOWS): Intergovernmental Charges for services Investments Local Miscellaneous Total revenues Add: Transfers in Amounts available for appropriation 22,172 1,184 64 14,303 37,723 202 43,239 22,172 1,184 64 14,303 37,723 272 43,309 5,429 971 31 36 641 7,108 244 13,760 (16,743) (213) (33) 36 (13,662) (30,615) (28) (29,549) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public safety Public works Community services Community environment Miscellaneous Capital outlay Total charges to appropriations 15,624 145 2,413 1,462 18,467 38,111 10,458 145 3,177 1,464 10,537 25,781 3,607 25 1,892 1,190 7 2,273 8,994 6,851 120 1,285 274 (7) 8,264 16,787 Budgetary fund balance, June 30, 2013 $ 5,128 $ 17,528 $ 4,766 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. 106 $ (12,762) $ 13,760 (6,408) (244) - $ 7,108 $ 8,994 $ 8,994 City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 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, 2013 Actual Amounts (budgetary basis) Final 7 $ 7 $ 16 Variance with Final Budget Positive (Negative) $ 9 4,709 4,716 4,709 4,716 4,708 4,724 10 10 - 10 4,195 504 4,709 4,195 504 4,709 4,195 504 4,699 10 $ 7 $ 7 $ 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. 107 25 (1) 8 $ 18 $ 4,724 (16) (4,708) $ - $ 4,699 $ 4,699 City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 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, 2013 $ Actual Amounts (budgetary basis) Final - $ - $ 890 16,489 16,489 24,669 24,669 20,578 20,578 40 40 23 2,290 14,159 16,489 2,290 18,249 20,579 2,790 17,703 20,516 - $ 4,090 $ 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. Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 108 62 Variance with Final Budget Positive (Negative) $ (4,091) (4,091) 17 (500) 546 63 $ (4,028) $ 20,578 (20,578) $ - $ 20,516 2,043 $ 22,559 City of Glendale, Arizona Budgetary Comparison Schedule Transportation Debt Service Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 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, 2013 Actual Amounts (budgetary basis) Final - $ - $ - Variance with Final Budget Positive (Negative) $ - 7,331 7,331 7,331 7,331 7,331 7,331 - 5 5 2 3 3,005 4,321 7,331 3,005 4,321 7,331 3,005 4,321 7,328 3 $ - $ - $ 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. 109 3 $ 3 $ 7,331 (7,331) $ - $ 7,328 $ 7,328 City of Glendale, Arizona Budgetary Comparison Schedule Western Loop 101 Public Facilities Corporation Construction Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Intergovernmental Miscellaneous revenues Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Transfers out Total charges to appropriations Budgetary fund balance, June 30, 2013 $ Actual Amounts (budgetary basis) Final - $ - $ - 105 11,300 11,405 11,405 105 11,300 11,405 11,405 58 10,214 10,272 10,272 9,010 9,010 10,273 10,273 10,272 10,272 2,395 $ 1,132 $ 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: Miscellaneous income. 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 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. 110 - Variance with Final Budget Positive (Negative) $ (47) (1,086) (1,133) (1,133) 1 1 $ (1,132) $ 10,272 (10,214) $ 58 $ 10,272 (10,272) $ - City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Licenses and permits Investments Miscellaneous Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Street maintenance Community services Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2013 Actual Amounts (budgetary basis) Final 10,447 $ 10,447 581 38 619 (1,209) 9,857 581 38 619 (1,209) 9,857 214 1,366 7,364 913 9,857 244 1,366 7,374 911 9,895 $ - $ (38) $ 11,345 $ 775 37 200 1,012 (1,000) 11,357 $ 11,162 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. 898 194 (1) 200 393 209 1,500 75 9 111 195 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. 111 Variance with Final Budget Positive (Negative) 169 1,366 (9) 7,263 911 9,700 $ 11,200 $ 11,357 (11,345) 1,000 $ 1,012 $ 195 $ 195 City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Final 10,620 $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 10,620 $ 4,868 $ (5,752) RESOURCES (INFLOWS): Investments Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 1 1 27,863 (40) 38,444 1 1 27,863 (39) 38,445 20 90 110 8,047 (13) 13,012 19 90 109 (19,816) 26 (25,433) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Street maintenance Capital outlay Total charges to appropriations 1,518 287 36,639 38,444 715 1,568 287 36,642 39,212 160 61 393 8,438 9,052 555 1,507 (106) 28,204 30,160 Budgetary fund balance, June 30, 2013 $ - $ (767) $ 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 on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 112 3,960 $ 4,727 $ 13,012 (4,868) (8,047) 13 $ 110 $ 9,052 $ 9,052 City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Variance with Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Actual Final 2,429 $ 2,429 Final Budget Amounts Positive (budgetary basis) (Negative) $ 2,512 $ 83 RESOURCES (INFLOWS): Investments 1 1 3 2 Miscellaneous - - 119 119 Total revenues Amounts available for appropriation 1 1 122 121 2,430 2,430 2,634 204 1,843 1,892 451 1,441 587 619 2,430 2,511 451 2,060 CHARGES TO APPROPRIATIONS (OUTFLOWS): Public safety Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2013 $ - $ (81) 619 $ 2,183 $ 2,264 $ 2,634 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. (2,512) Total revenues as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 122 Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. $ 451 Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds. $ 451 Uses/outflows or resources: 113 City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Final 280 $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 280 $ 312 $ 32 RESOURCES (INFLOWS): Amounts available for appropriation 280 280 312 32 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Public works Capital outlay Total charges to appropriations 138 142 280 137 168 305 3 10 16 29 134 (10) 152 276 Budgetary fund balance, June 30, 2013 $ - $ (25) $ 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. 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. 114 283 $ 308 $ 312 (312) $ - $ 29 $ 29 City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Final 9,406 $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 9,406 $ 9,630 $ 224 RESOURCES (INFLOWS): Investments Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 3 3 (33) 9,376 3 3 1 (27) 9,383 9 21 30 2 9,662 6 21 27 1 27 279 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Public Works Capital outlay Total charges to appropriations 4,898 5 4,473 9,376 4,898 5 4,715 9,618 38 2 1,238 1,278 (38) 4,898 3 3,477 8,340 Budgetary fund balance, June 30, 2013 $ - $ (235) 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. 115 $ 8,384 $ 8,619 $ 9,662 (9,630) (2) $ 30 $ 1,278 $ 1,278 City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ Actual Amounts (budgetary basis) Final 5,605 $ 5,605 $ 5,598 RESOURCES (INFLOWS): Investments Total revenues Amounts available for appropriation 21 21 5,626 21 21 5,626 18 18 5,616 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public works Total charges to appropriations 5,626 5,626 5,626 5,626 - Budgetary fund balance, June 30, 2013 $ - $ - $ 5,616 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. 116 Variance with Final Budget Positive (Negative) $ (7) (3) (3) (10) 5,626 5,626 $ 5,616 $ 5,616 (5,598) $ 18 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. 117 City of Glendale, Arizona Combining Statement of Net Position Non-Major Proprietary Funds - Business-Type Activities June 30, 2013 (amounts expressed in thousands) Landfill ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Intergovernmental receivable Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments Advance to other funds Capital assets: Capital assets Accumulated depreciation Capital assets, net Total noncurrent assets Total assets LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Due to other funds Deposits Unearned Rent Total current liabilities Noncurrent liabilities: Advance from other funds Compensated absences OPEB long-term obligations Other long-term debt Estimated closure and post-closure costs Total noncurrent liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for: Other purposes Unrestricted Total net position $ Sanitation 9,669 $ 1,429 563 (5) 10,227 2,085 (271) 3,243 21,045 3,961 24,900 (12,344) 12,556 33,601 43,828 13,450 (8,683) 4,767 8,728 11,971 Housing $ 2,645 Total $ 5 71 41 2,762 13,743 2,653 (276) 71 41 16,232 76 - 76 25,006 13,896 (8,535) 5,361 5,437 8,199 52,246 (29,562) 22,684 47,766 63,998 338 293 125 756 268 337 109 714 65 22 3 39 148 277 606 65 652 3 273 148 1,747 129 1,213 14,953 16,295 17,051 246 130 2,461 2,837 3,551 201 705 77 983 1,260 246 460 4,379 77 14,953 20,115 21,862 12,556 4,767 5,361 22,684 14,221 26,777 3,653 8,420 1,578 6,939 1,578 17,874 42,136 $ 118 $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Non-Major Proprietary Funds - Business-Type Activities For the Fiscal Year Ended June 30, 2013 (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) 6,322 1,535 137 7,994 $ 5,946 449 816 7,211 783 Nonoperating revenues (expenses): Investment income Interest expense Gain (loss) on disposal of assets OPEB expense Total nonoperating revenue (expenses) 848 2 (286) 564 Income (loss) before contributions and transfers 1,347 Transfers in - Change in net position Total net position - beginning Total net position - ending Sanitation 25,430 26,777 119 $ $ 8,827 4,176 10,615 6,322 1,535 4,274 35,749 13,340 467 13,807 (843) 5,946 13,340 449 14,001 2,812 36,548 (799) 158 (8) 16 (613) (447) (184) (184) 1,006 (8) 18 (1,083) (67) (1,186) (1,027) (866) (1,186) $ 8,827 4,137 12,964 Total 14,001 1,529 15,530 (739) - 1,347 $ 4,176 10,615 14,791 Housing 9,606 8,420 $ 307 307 (720) (559) 7,659 6,939 $ 42,695 42,136 City of Glendale, Arizona Combining Statement of Cash Flows Non-Major Proprietary Funds - Business-Type Activities For the Fiscal Year Ended June 30, 2013 (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 $ Sanitation 7,999 - $ (1,170) (2,220) (2,578) 2,031 Cash flows from noncapital financing activities: Transfers in Advances to/due from other funds Advances from/due to other funds Net cash provided by (used) noncapital financing activities 14,786 - Housing $ (8,418) (1,076) (4,473) 819 Total 4,256 8,862 $ (12,125) (1,228) (235) 27,041 8,862 (9,588) (15,421) (8,279) 2,615 342 - 20 (242) 307 2 307 362 (240) 342 (222) 309 429 (864) - (76) (8) 14 (127) - 14 (1,067) (8) (864) (84) (113) (1,061) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 848 848 158 158 Net increase (decrease) in cash and cash equivalents during fiscal year 2,357 671 Cash flows from capital and related financing activities: Increase principal obligations Acquisition of capital assets and rights Interest payments on obligations Net cash (used) capital and related financing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 7,312 9,669 120 $ 758 1,429 - 1,006 1,006 (39) $ 2,760 2,721 2,989 $ 10,830 13,819 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 Intergovernmental receivable Inventories and prepaid items Vouchers payable Accounts payable Accrued expenses Deposits Unearned rent Compensated absences Proceeds from disposal of assets Estimated closure and post-closure costs Net cash provided by (used) operating activities $ 449 2,031 Reconciliation of statement of net position 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 9,669 9,669 $ $ 783 $ 816 $ 1,529 35 38 (10) (60) (20) 121 (739) Housing $ $ $ (843) $ 467 (16) 58 3 (19) 3 (3) 35 (34) 24 1 121 (3) - 819 (235) 1,429 1,429 Total $ $ $ 2,645 76 2,721 (799) 2,812 16 35 (34) 96 24 (6) 121 (82) (17) $ $ $ 449 2,615 13,743 76 13,819 City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Intergovernmental Charges for services: Metered water sales Sewer service charges Impact fees Other fees Investments Miscellaneous Proceeds from loan Proceeds from equipment disposal Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation Budgetary fund balance, June 30, 2013 Final 64,305 $ - CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Water Sewer Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations $ Actual Amounts (budgetary basis) 64,305 $ - 62,002 Variance with Final Budget Positive (Negative) $ 549 (2,303) 549 43,465 32,114 350 1,804 22 124 27 77,906 (115) 142,096 43,465 32,114 350 1,804 22 124 27 77,906 (126) 142,085 44,729 32,905 1,268 1,778 872 1,054 75 27 83,257 375 (41) 145,593 12,056 21,403 14,641 5,000 31,857 11,855 21,537 14,689 5,000 31,302 11,007 16,374 11,870 4,950 848 5,163 2,819 5,000 26,352 10,725 13,441 109,123 11,433 13,476 109,292 11,433 13,476 69,110 40,182 32,973 122 $ 32,793 $ 76,483 1,264 791 918 (26) 850 930 75 5,351 375 85 3,508 $ 43,690 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. Revenues offset directly by bad debt expense on budgetary basis. Proceeds from loan. Proceeds from equipment disposals. Gain on disposal of assets. Internal staff and administrative charges reported as revenue only on budgetary basis. Less: Transfers in. Add: Transfers out. Total revenues as reported on the statement of revenues, expenses, and changes in fund net position, 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. Capital outlay expenditure. Change in compensated absences liability. Amortization and depreciation expense. 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 position, excluding loss from joint venture. 123 $ 145,593 (62,002) 381 (75) (27) 25 (82) (375) 41 $ 83,479 $ 69,110 381 (4,950) (323) 19,914 (11,433) 1,634 (816) (81) (24) $ 73,412 City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 6,881 Final $ 6,881 Actual Amounts (budgetary basis) $ 7,545 Variance with Final Budget Positive (Negative) $ 664 RESOURCES (INFLOWS): Charges for services: Landfill user fees Recycling fees Other fees Proceeds from equipment disposal Proceeds from interfund loan Investments Total revenues Add: Transfers in Amounts available for appropriation 5,620 1,836 131 15 230 60 7,892 920 15,693 5,620 1,836 131 15 230 60 7,892 920 15,693 6,753 1,535 137 2 342 848 9,617 17,162 1,133 (301) 6 (13) 112 788 1,725 (920) 1,469 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Contingencies Landfill Capital outlay Total charges to appropriations 2,000 6,978 2,770 11,748 2,000 6,954 2,770 11,724 6,441 887 7,328 2,000 513 1,883 4,396 Budgetary fund balance, June 30, 2013 $ 3,945 $ 3,969 $ 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. Proceeds from loan. Total revenues as reported in the combining statement of revenues, expenses, and changes in fund net position. 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 position. 124 9,834 $ 5,865 $ 17,162 (7,545) (431) 2 (2) (342) $ 8,844 $ 7,328 2 (887) (60) 449 816 286 (6) (431) $ 7,497 City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Investments Proceeds from equipment disposal Proceeds from interfund loan Total revenues Add: Transfers in 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, 2013 $ 1,809 Final $ 1,809 Actual Amounts (budgetary basis) $ 2,496 Variance with Final Budget Positive (Negative) $ 687 4,354 10,447 4 30 14,835 175 16,819 4,354 10,447 4 30 14,835 175 16,819 4,223 10,525 158 16 20 14,942 17,438 14,573 1,280 14,757 1,280 13,989 88 768 1,192 242 8 16,103 242 8 16,287 242 8 14,327 1,960 716 $ 532 $ 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 interfund loan. Total revenues as reported in the combining statement of revenues, expenses, and changes in fund net position 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. 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 position 125 3,111 (131) 78 154 (14) 20 107 (175) 619 $ 2,579 $ 17,438 (2,496) (47) 90 (20) $ 14,965 $ 14,327 90 (88) (19) 1,529 613 (242) (12) (47) $ 16,151 City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 1,769 Final $ 1,769 Actual Amounts (budgetary basis) $ 2,475 Variance with Final Budget Positive (Negative) $ 706 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Investments Total revenues Add: Transfers in Amounts available for appropriation 10,119 4,100 14,219 307 16,295 10,119 4,100 14,219 307 16,295 8,953 4,010 1 12,964 307 15,746 (1,166) (90) 1 (1,255) (549) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations 12,490 210 12,700 12,501 210 12,711 13,340 221 13,561 (839) (11) (850) Budgetary fund balance, June 30, 2013 $ 3,595 $ 3,584 $ 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 position, 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 position. 126 2,185 $ (1,399) $ 15,746 (2,475) (307) $ 12,964 $ 13,561 467 (221) 184 $ 13,991 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTERNAL SERVICE FUNDS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. City of Glendale, Arizona Combining Statement of Net Position Internal Service Funds June 30, 2013 (amounts expressed in thousands) ASSETS Current assets: Equity in pooled cash and investments Inventories and prepaid items Total current assets Risk Management $ 3,330 34 3,364 Workers' Compensation $ 4,345 4,345 Employee Benefits $ 55 55 Total $ 7,730 34 7,764 Noncurrent assets: Restricted deposits - 275 1,425 1,700 Total assets 3,364 4,620 1,480 9,464 33 4,261 4,294 4,294 32 3,151 3,183 3,183 1,481 1,995 3,476 3,476 1,546 9,407 10,953 10,953 1,437 (1,996) (1,489) LIABILITIES Current liabilities: Vouchers payable Estimated claims payable Total current liabilities Total liabilities NET POSITION Unrestricted Total net position (930) $ (930) $ 127 1,437 $ (1,996) $ (1,489) City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds For the Fiscal Year Ended June 30, 2013 (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 $ 4,801 4,801 Operating income (loss) (2,277) Nonoperating revenues: Investment income (loss) 9 Income (loss) before transfers 490 Change in net position (1,778) $ 848 (930) 128 2,384 24 2,408 Employee Benefits $ $ 24,034 95 24,129 Total $ 28,918 143 29,061 275 275 46 23,588 23,634 46 28,664 28,710 2,133 495 351 11 (2,268) Operating transfers in Net position - beginning Net position - ending 2,500 24 2,524 Workers' Compensation (3) 17 2,144 492 368 - - 490 2,144 492 858 (707) 1,437 $ (2,488) (1,996) $ (2,347) (1,489) City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2013 (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 $ $ 2,524 (2,694) - Net cash provided by (used for) operating activities (170) Cash flows from noncapital financing activities: Operating transfers in (out) Cash flows from investing activities: Interest received Net increase (decrease) in cash during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 Reconciliation of operating income (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 2,408 Employee Benefits $ (1,268) - Total 24,315 $ (24,212) (47) 29,247 (28,174) (47) 1,140 56 1,026 490 - - 490 9 11 (3) 17 329 1,151 53 1,533 $ 3,001 3,330 $ 3,469 4,620 $ 1,427 1,480 $ 7,897 9,430 $ (2,277) $ 2,133 $ 495 $ 351 - - (1) (27) (18) 2,153 $ $ $ (170) 3,330 3,330 129 (5) (988) 186 186 (350) (1) (274) (1) (382) (19) 891 $ 1,140 $ 56 $ 1,026 $ 4,345 275 4,620 $ 55 1,425 1,480 $ 7,730 1,700 9,430 $ $ $ City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 3,601 Final $ 3,601 Actual Amounts (budgetary basis) $ 2,943 RESOURCES (INFLOWS): Self-insurance premiums Investments Other Total revenues Add: Transfers in Amounts available for appropriation 2,500 10 30 2,540 6,141 2,500 9 30 2,539 6,140 2,500 9 24 2,533 490 5,966 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General Administration Insurance and claims Total charges to appropriations 3,262 2,763 6,025 3,000 2,759 5,759 2,666 2,666 Budgetary fund balance, June 30, 2013 $ 116 $ 381 $ 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 on the combining statement of revenues, expenses, and changes in fund net position. 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 position. 130 3,300 Variance with Final Budget Positive (Negative) $ (658) (6) (6) 490 (174) 3,000 93 3,093 $ 2,919 $ 5,966 (2,943) (490) $ 2,533 $ 2,666 2,153 (18) $ 4,801 City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 2,229 Final $ 2,229 Actual Amounts (budgetary basis) $ 3,402 Variance with Final Budget Positive (Negative) $ 1,173 RESOURCES (INFLOWS): Self-insurance premiums Investments Other Total revenues Amounts available for appropriation 984 9 30 1,023 3,252 984 9 30 1,023 3,252 2,384 11 24 2,419 5,821 1,400 2 (6) 1,396 2,569 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 1,407 1,407 1,407 1,407 1,263 1,263 144 144 Budgetary fund balance, June 30, 2013 $ 1,845 $ 1,845 $ 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. Total revenues as reported in the combining statement of revenues, expenses, and changes in fund net position. 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 position. 131 4,558 $ 2,713 $ 5,821 (3,402) $ 2,419 $ 1,263 (988) $ 275 City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2013 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2012 $ 1,312 Final $ 1,312 Actual Amounts (budgetary basis) $ (218) RESOURCES (INFLOWS): Self-insurance premiums Investments loss Other Total revenues Amounts available for appropriation 22,295 19 22,314 23,626 22,295 19 22,314 23,626 24,034 (3) 95 24,126 23,908 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General Administration Insurance and claims Total charges to appropriations 22,349 22,349 40 24,434 24,474 46 23,862 23,908 Budgetary fund balance, June 30, 2013 $ 1,277 $ (848) $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses 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, expenses, and changes in fund net position. 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 position. 132 - Variance with Final Budget Positive (Negative) $ (1,530) 1,739 (22) 95 1,812 282 (6) 572 566 $ 848 $ 23,908 218 $ 24,126 $ 23,908 (274) $ 23,634 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. City of Glendale, Arizona 1 of 6 Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2013 (rounded to nearest dollar) 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 133 121 122 124 125 126 126.1 126.2 127 128 128.1 129 120 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 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 161 162 163 164 165 166 167 168 160 171 172 173 174 176 180 190 AMPS $ $ 26,523 5,050 416 31,989 13,956 (698) 937,992 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 853,314 39,431 892,745 HCV 135,533 10,417,083 523,882 178,682 2,257,869 (8,372,541) 130,022 5,270,530 $ 5,270,530 6,208,522 1,087,715 664,697 1,752,412 DVP $ - $ Eliminations - 43,981 43,981 - - 76,500 27,746 23,028 1,923,667 24,536 24,536 18,025 18,025 - - 24,536 18,025 149,998 102,908 (162,567) 90,339 $ DHAP 90,339 2,014,006 $ $ $ Total - $ - 43,981 26,523 5,050 416 75,970 (65,589) 76,500 27,746 13,956 (698) 2,838,631 (65,589) - $ (65,589) 1,941,029 664,697 39,431 2,645,157 135,533 10,567,081 523,882 281,590 2,257,869 (8,535,108) 130,022 5,360,869 $ 5,360,869 8,199,500 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2013 (rounded to nearest dollar) Line Item No. (continued) Balance Sheet Account Description 134 311 312 313 321 322 324 325 331 332 333 341 342 343 344 345 346 347 348 310 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 $ $ 40,144 12,138 39,431 3,575 7,039 44,183 146,510 HCV $ 20,618 10,224 141,715 172,557 DVP $ 14,623 14,623 DHAP $ 2,761 6,783 9,544 Eliminations $ (65,589) (65,589) Total $ 60,762 22,362 39,431 148,051 7,039 277,645 109,238 397,429 506,667 653,177 76,500 92,020 307,912 476,432 648,989 14,623 9,544 (65,589) 76,500 201,258 705,341 983,099 1,260,744 5,270,530 284,815 5,555,345 6,208,522 90,339 664,697 609,981 1,365,017 2,014,006 9,913 9,913 24,536 8,481 8,481 18,025 (65,589) 5,360,869 664,697 913,190 6,938,756 8,199,500 $ $ $ $ $ (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2013 (rounded to nearest dollar) 70600 70610 70710 70720 70730 70740 70750 70700 70800 71100 71200 71300 71310 71400 71500 71600 72000 70000 (continued) Income Statement Account Description Line Item No. 70300 70400 70500 3 of 6 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 $ 279,615 9,562 289,177 HCV $ DVP - $ DHAP - $ Eliminations - $ Total - $ 279,615 9,562 289,177 481,165 126,333 - 8,345,818 - - - - 8,826,983 126,333 - 591 691 28,595 926,552 688 26,214 3,665,213 12,037,933 - - - 1,279 26,905 3,693,808 12,964,485 135 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2013 (rounded to nearest dollar) (continued) Income Statement Account Description Line Item No. 91100 91200 91300 91310 91400 91500 91600 91700 91800 91810 91900 91000 4 of 6 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 136 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 269,479 50 116,989 28,452 1,395 33 27,011 443,409 $ DVP 540,453 50 290,495 39,105 100 28,451 898,654 $ DHAP - $ Eliminations - $ Total - $ 809,932 100 407,484 67,557 1,495 33 55,462 1,342,063 - - - - - - 13,515 13,515 - - - - 13,515 13,515 Water Electricity Gas Fuel Labor Sewer Employee benefit contributions- utilities Other utilities expense Total utilities 63,673 24,482 2,566 39,811 130,532 - - - - 63,673 24,482 2,566 39,811 130,532 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials & other Ordinary maintenance and operations - contract costs Employee benefit contributions - ordinary maintenance Total maintenance 264,773 68,871 133,697 126,503 593,844 16,206 16,206 - - - 264,773 85,077 133,697 126,503 610,050 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2013 (rounded to nearest dollar) 5 of 6 (continued) Income Statement Account Description Line Item No. AMPS HCV DVP DHAP Eliminations Total 137 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 36,955 3,577 40,532 24,637 2,384 27,021 - - - 61,592 5,961 67,553 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 - 25,957 25,957 3,625 3,625 - - 29,582 29,582 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 3,625 - - 2,193,295 (3,625) - - 10,771,190 97000 Excess revenue over operating expenses $ - 1,221,832 (295,280) $ - 967,838 11,070,095 $ - $ - $ - $ - 97100 97200 Extraordinary maintenance Casualty losses - non-capitalized - - - - - - 97300 Housing assistance payments - 7,840,145 - - - 7,840,145 462,582 1,684,414 3,491,186 4,061 12,303,230 3,625 - - 3,491,186 466,643 13,991,269 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 (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2013 (rounded to nearest dollar) (continued) Income Statement Account Description Line Item No. 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 7,446 (7,446) $ 307,000 307,000 $ (450,862) DVP - $ $ (265,297) DHAP - $ $ (3,625) Eliminations - $ $ Total (7,446) 7,446 $ 307,000 307,000 - $ (719,784) - $ - - $ - $ MEMO ACCOUNT INFORMATION 138 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 $ $ - $ - $ - $ - 6,006,207 1,630,314 13,538 8,481 - 7,658,540 1,726 1,716 676,405 700,320 664,697 12,648 12,579 - - - - 700,320 664,697 14,374 14,295 676,405 105,173 8,192 12,968 - $ - $ - $ - $ - $ 105,173 8,192 12,968 - City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2013 This page left blank intentionally. STATISTICAL SECTION This part of the City of Glendale’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city’s overall financial health. Contents Pages Financial Trends These schedules contain trend information to help the reader understand how the city’s financial performance and well-being have changed over time. 140-147 Revenue Capacity These schedules contain information to help the reader assess the city’s local revenue source, the property tax and sales tax. 148-153 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. 154-161 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. 162-163 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. 164-168 139 City of Glendale, Arizona Net Position by Component Last Ten Fiscal Years (amounts expressed in thousands) Government activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position 2013 $ Business-type activities Net investment in capital assets Restricted Unrestricted Total business-type activities net position Primary government Net investment in capital assets Restricted Unrestricted Total primary government net position $ 438,366 186,106 (59,797) 2012, restated $ 460,639 183,829 (73,375) 2011 $ 463,961 204,645 (22,532) 2010 $ 457,773 176,400 11,684 564,675 571,093 646,074 645,857 251,765 12,264 161,999 262,554 12,921 139,934 271,708 29,988 112,323 271,969 13,988 124,550 426,028 415,409 414,019 410,507 690,131 198,370 102,202 723,193 196,750 66,559 735,669 234,633 89,791 729,742 190,388 136,234 986,502 $ 1,060,093 $ 1,056,364 990,703 $ 140 Schedule 1 2009 $ 471,484 144,422 51,500 2008 $ 499,322 133,695 51,850 2007 $ 2006 446,828 180,303 44,573 $ 398,517 155,163 75,417 2005 $ 372,778 179,434 40,641 2004 $ 353,135 169,434 49,916 667,406 684,867 671,704 629,097 592,853 572,485 286,452 13,249 114,814 297,329 12,836 107,384 249,569 11,881 155,325 233,387 12,437 158,753 274,620 11,249 108,604 228,252 10,479 141,094 414,515 417,549 416,775 404,577 394,473 379,825 757,936 157,671 166,314 796,651 146,531 159,234 696,397 192,184 199,898 631,904 167,600 234,170 647,398 190,683 149,245 581,387 179,913 191,010 $ 1,081,921 $ 1,102,416 $ 1,088,479 $ 1,033,674 141 $ 987,326 $ 952,310 Schedule 2 City of Glendale, Arizona Changes in Net Position Last Ten Fiscal Years (amounts expressed in thousands) 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Expenses Governmental activities: General government $ Public safety 37,447 $ 115,694 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 Public works 19,230 18,435 20,099 16,627 15,040 16,006 14,816 13,995 14,309 13,883 Community services 33,831 39,478 41,136 44,524 48,143 52,185 45,481 40,275 37,394 33,914 Community environment Street maintenance Other 5,655 6,828 7,061 6,316 3,539 5,164 4,698 4,125 3,236 3,446 20,000 20,045 21,721 23,058 23,978 26,175 24,906 22,720 21,355 20,425 - - - - - - - 3,020 238 142 Interest on long-term debt 42,413 41,913 41,967 42,286 38,982 28,475 23,551 16,883 16,986 15,838 Total governmental activities expenses 274,270 275,350 289,434 283,649 278,363 281,288 243,849 209,624 189,398 167,827 73,460 78,917 79,444 81,910 74,424 74,581 63,289 55,607 50,190 45,628 7,486 7,602 7,280 8,454 8,045 8,067 8,264 7,950 7,431 7,164 16,122 15,437 14,814 14,093 14,039 15,209 13,847 13,257 12,287 12,294 Business-type activities: Water and sewer Landfill Sanitation Housing 142 Total business-type activities expenses Total primary government expenses 14,037 14,827 14,687 14,180 11,840 9,862 8,951 9,466 9,278 8,858 $ 111,105 385,375 $ 116,783 392,133 $ 116,225 405,659 $ 118,637 402,286 $ 108,348 386,711 $ 107,719 389,007 $ 94,351 338,200 $ 86,280 295,904 $ 79,186 268,584 $ 73,944 241,771 $ 12,520 $ 12,334 $ 24,822 $ 14,232 $ 11,879 $ 12,132 $ 11,610 $ 10,726 $ 9,075 $ Program revenues Governmental activities: Charges for services: General government Public safety Public works Community services 5,778 5,624 5,094 5,824 4,670 5,744 1,964 1,375 1,200 9,092 1,043 1,149 512 495 7,447 588 543 531 516 506 148 11,003 17,910 11,733 11,918 15,661 22,859 22,285 20,121 16,871 16,942 3 Community environment - - - - 3,045 - - 31 - Street maintenance - - - 2 36 - 48 - - - 25,156 27,636 27,137 29,596 24,146 33,191 36,566 31,973 26,535 24,503 Operating grants and contributions Capital grants and contributions Total governmental activities program revenues 7,904 5,274 70,552 3,755 2,600 14,491 26,247 6,406 1,407 3,429 63,510 69,290 139,833 72,774 62,625 88,960 99,251 71,148 55,594 55,160 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Business-type activities: Charges for services: Water and sewer Landfill Sanitation Housing Operating grants and contributions Capital grants and contributions 81,963 82,730 80,513 76,603 67,810 66,316 62,125 56,153 54,295 7,994 7,185 8,027 6,987 7,304 9,196 9,742 8,362 8,961 52,456 9,593 14,791 14,562 14,733 15,048 15,258 14,684 14,653 14,167 13,624 12,817 4,137 4,886 4,829 4,870 2,042 816 662 569 542 512 9,376 9,423 9,342 9,331 8,701 8,348 8,254 8,020 8,027 7,643 831 705 1,155 690 1,207 4,346 5,125 5,403 242 168 Total business-type activities program revenues 119,092 119,491 118,599 113,529 102,322 103,706 100,561 92,674 85,691 83,189 Total primary government program revenues 182,602 188,781 258,432 186,303 164,947 192,666 199,812 163,822 141,285 138,349 Governmental activities (210,760) (206,060) (149,601) (210,875) (215,738) (192,328) (144,598) (138,476) (133,804) (112,667) Business-type activities Total primary government net expense 7,987 (202,773) $ 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) $ 21,372 $ 20,232 $ 27,189 $ 33,749 $ 32,890 $ 28,826 $ 23,085 $ 21,386 $ 19,422 $ Net (expense)/revenue $ 9,245 (103,422) General revenues and other changes in net position Governmental activities: Taxes: Property taxes $ Sales taxes 18,321 132,872 97,451 93,260 92,717 97,054 105,175 97,825 90,968 77,166 74,763 18,558 17,716 18,438 17,786 19,321 22,237 23,037 23,298 20,271 18,409 23,159 19,135 23,590 31,292 36,267 34,109 27,518 22,909 20,115 19,731 7,586 7,277 7,917 8,130 8,808 9,730 10,044 10,444 9,414 8,978 Investment earnings, unrestricted 716 975 1,482 286 1,668 4,742 5,557 4,395 2,654 315 Gain (loss) on disposal of capital assets 353 56 879 202 348 225 9 Miscellaneous 367 489 302 301 272 275 349 - 4,794 24,614 Unrestricted state shared sales tax 143 Unrestricted urban revenue sharing (state shared income tax) Auto in-lieu taxes Capital contributions - Transfers (317) (25,000) (25,000) Total governmental activities 204,342 138,024 1,878 1,126 (52) 5,406 - (307) - 330 3,936 - (641) Special item (677) 2,872 - - (370) - (551) - (509) (364) 700 (164) (333) - - - - - - - 149,818 189,326 198,277 205,491 187,205 174,720 154,172 165,156 614 460 2,069 4,044 5,381 3,466 2,065 1,115 137 187 282 126 103 844 - Business-type activities: Investment earnings, unrestricted Gain (loss) on disposal of capital assets 43 Loss on joint venture Miscellaneous Capital contributions Transfers Total business-type activities Total primary government $ (40) - - - - - - - - - 70 72 70 83 90 108 140 100 202 - - - - - - - - - 5,712 2,414 641 307 317 370 551 509 364 2,632 206,974 $ 1,465 139,489 $ 1,138 150,956 $ 1,100 190,426 $ 2,992 201,269 $ 4,787 210,278 $ 5,988 193,193 $ (68,036) $ 217 $ (21,549) $ (17,461) $ 13,163 $ 42,607 $ 4,173 (63,863) $ 3,512 3,729 $ (4,008) (25,557) $ (3,034) (20,495) $ 774 13,937 $ 12,198 54,805 (700) $ 3,710 178,430 $ 36,244 $ 10,104 46,348 (1,285) 164 333 $ 8,143 162,315 $ 2,577 167,733 $ 20,368 $ 52,489 $ 14,648 35,016 $ 11,822 64,311 Changes in net position Governmental activities Business-type activities Total primary government $ (6,418) $ 10,619 4,201 This page left blank intentionally. 144 City of Glendale, Arizona Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) Schedule 3 2013(1) General fund Reserved Unreserved Total general fund General fund Nonspendable Restricted Committed Assigned Unassigned Total general fund 145 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 $ $ $ $ $ $ $ $ 2012(1) - 650 311 1,676 (14,438) (11,801) $ $ $ $ - $ 5,774 103,772 115 144 109,805 $ $ $ 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 $ $ $ Note: (1) Changes made per GASB 54 requirement fund balance reporting, effective June 30, 2011. - 2006 10,500 50,880 61,380 $ $ $ - $ 45,029 $ 34,369 68,932 148,330 $ $ $ - 2005 10,287 62,166 72,453 $ $ $ - $ 42,910 $ 30,584 64,106 137,600 $ $ $ - 2004 9,377 56,661 66,038 $ $ $ - $ - $ 39,014 $ 41,188 $ 34,867 61,765 135,646 $ 29,807 71,569 142,564 $ $ $ - $ $ $ 9,582 51,080 60,662 - City of Glendale, Arizona Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2013 Schedule 4 2012 2011 2010 2009 2008 2007 2006 2005 2004 Revenues Taxes and special assessments Licenses and permits $ 149,705 $ 118,218 $ 120,974 $ 126,291 $ 130,119 $ 133,746 $ 121,122 $ 112,576 $ 96,812 $ 93,655 10,373 10,798 9,367 9,734 10,503 17,385 17,839 16,039 15,497 16,667 76,520 73,009 79,760 90,047 91,642 101,821 107,699 86,994 75,691 73,166 36 - - - - - - - - - Charges for services 11,896 11,487 10,461 13,640 9,881 14,125 10,086 8,838 5,681 4,824 Fines and forfeitures 3,469 3,374 3,806 4,052 4,064 4,507 3,932 3,564 3,247 3,169 762 1,180 1,841 774 3,805 9,986 10,905 7,825 4,762 1,511 Miscellaneous 3,822 11,700 22,054 18,000 9,346 4,915 4,212 4,136 3,335 2,774 Total revenues 256,583 229,766 248,263 262,538 259,360 286,485 275,795 239,972 205,025 195,766 Intergovernmental Local revenues Investment income (loss) Expenditures 146 General government Public safety Public works Community services 16,065 18,147 19,668 23,085 26,048 25,364 24,524 21,868 20,892 17,274 103,610 100,368 95,270 96,161 103,624 100,384 86,753 72,745 61,366 53,805 7,859 7,709 8,859 11,569 11,072 11,743 12,155 12,252 12,081 12,816 27,966 33,597 33,887 37,518 42,294 44,767 39,150 35,604 32,627 30,006 Community environment 5,554 6,703 6,853 6,160 3,478 4,972 4,657 3,978 3,082 3,311 Street maintenance 8,305 8,311 9,038 10,388 11,901 13,045 13,372 11,609 10,534 9,811 Miscellaneous 4,617 1,782 1,577 2,026 1,666 1,629 3,059 2,918 55 555 Capital outlay 13,980 19,634 22,093 63,529 186,175 141,060 179,421 131,243 47,283 120,833 Principal 26,441 24,947 31,640 29,451 29,670 32,151 28,096 20,328 18,899 18,090 Interest 43,038 42,515 42,593 42,913 39,571 32,294 20,630 17,222 17,231 15,998 257,435 263,713 271,478 322,800 455,499 407,409 411,817 329,767 224,050 282,499 (33,947) (23,215) (60,262) (196,139) (120,924) (136,022) (89,795) (19,025) (86,733) Debt service: Total expenditures Excess of revenues over (under) expenditures (852) 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Other financing sources (uses) Refunding lease issued Discount on long-term debt - - 11,503 - - - - - 8,665 38,300 41,650 Refunding bonds issued 239,875 - Payment to redeem lease Premium on long-term debt issued 19,779 898 Proceeds from equipment disposal 589 546 - - (1,557) Proceeds from loans Long-term debt issued Capital lease proceeds - - - - - - - - - 199,750 109,986 133,327 93,033 - - 16,075 69,522 - (3,136) (82) - - 93,815 - 9,065 - 10 1,894 2,192 1,198 1,782 - - 230 1,114 331 482 344 8,714 850 3,166 1,342 8,198 - 44 - - 668 - - 428 (11,355) 3,369 Payment to redeem/refunded bonds escrow agent Transfers in (256,054) 52,136 (9,320) 32,977 (41,251) 38,728 36,306 21,914 (83,521) 51,626 24,945 (9,582) 20,014 15,800 32,943 Transfers out (53,267) (33,919) (39,045) (33,430) (22,465) (52,135) (25,309) (19,314) (15,964) (33,276) - (25,000) (25,000) - - - - - - - 1,501 (25,153) (24,420) 45,062 198,301 130,677 135,679 98,164 17,483 57,585 Special item - (21,262) Total other financing sources (uses) 147 Net change in fund balances $ 649 $ (59,100) $ (47,635) $ (15,200) $ 2,162 $ 9,753 $ (343) $ 8,369 $ (1,542) $ (29,148) Debt service as a percentage of noncapital expenditures 28.54% 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. Schedule 5 City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Major Components Fiscal Year 2003-04 Real Estate $ 298,152 Improvements $ 820,414 Utilities Rails and Wires Personal (3) $ 37,945 $ 58,517 Less: Tax Exempt Property $ 135,011 Net Assessed Value (1) $ Total Direct Tax Rate 1,080,017 1.72 Estimated Actual Value(1) $ Assessed Value as a Percentage of Actual Value(2) 9,391,120 12.938 148 2004-05 342,689 893,850 45,245 56,582 193,816 1,144,550 1.72 10,065,003 13.297 2005-06 368,181 989,418 46,475 58,101 192,607 1,269,568 1.72 11,296,734 12.943 2006-07 463,560 1,033,129 47,129 58,111 230,940 1,370,989 1.72 12,107,926 13.230 2007-08 593,311 1,406,513 51,889 60,680 285,374 1,827,019 1.62 16,733,846 12.624 2008-09 739,936 1,821,057 56,528 61,347 485,193 2,193,675 1.59 21,034,639 12.736 2009-10 739,388 1,844,506 60,888 62,176 576,051 2,130,907 1.59 20,635,557 13.118 2010-11 654,550 1,593,536 59,049 56,217 609,782 1,753,570 1.59 17,333,074 13.635 2011-12 330,057 1,189,718 49,391 53,746 473,388 1,149,524 1.59 12,040,482 13.479 2012-13 304,041 1,130,460 45,507 53,158 485,894 1,047,273 1.90 11,471,039 13.366 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. (3) The Assessor's Office no longer breaks down the secured and unsecured personal property as of 2013. All prior years secured and unsecured have been combined. Schedule 6 City of Glendale, Arizona Direct and Overlapping Governments Property Tax Rates Last Ten Fiscal Years Per $100 Assessed Valuation Overlapping Rates* City of Glendale Glendale Elementary and High School Districts Peoria Unified School Districts Deer Valley Unified School Districts 149 Fiscal Year Basic Rate General Obligation Debt Service 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 2012-13 0.22 1.68 1.90 22.93 18.08 17.75 Source: Maricopa County 2012 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). Schedule 7 City of Glendale, Arizona Principal Property Taxpayers Current Year and Ten Years Ago June 30, 2013 (amounts expressed in thousands) Tax Year 2013 150 Taxpayer Arizona Public Service Company VHS of Arrowhead, Inc. Arrowhead Towne Center LLC Wal-Mart Stores, Inc. JQH-Glendale Az Development LLC Centurylink (Qwest Corporation) New Westgate LLC Stadium Development LLC Southwest Gas Corporation Outlets at Westgate LLC Honeywell, Inc. New River Associates Corning Gilbert, Inc. KB Toys Chase Commercial Mtg. Lexington Glendale LLC May Department Stores Total principal taxpayers Rank 1 2 3 4 5 6 7 8 9 10 $ $ Assessed Valuation 17,905 11,631 10,495 7,353 6,818 6,497 6,287 4,618 3,956 3,682 79,242 Tax Year 2003 Percentage of Total City Taxable Assessed Value 1.71 % 1.11 1.00 0.70 0.65 0.62 0.60 0.44 0.38 0.35 7.56 % Rank 1 Assessed Valuation $ 15,145 Percentage of Total City Taxable Assessed Value 1.53 % 2 13,251 1.34 5 5,136 0.52 3 4 6 7 8 9 10 11,346 10,822 4,349 4,080 3,581 3,369 3,134 1.15 1.09 0.44 0.41 0.36 0.34 0.32 74,213 7.50 % $ 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. Schedule 8 City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Collected within the Fiscal Year of Levy Total Collections to Date Collections Fiscal Year 2003-04 Total Percent of (1) Tax Levy $ 18,468 Amount $ in Subsequent Years Levy 17,899 96.92 % Percent of (2) $ Amount 561 $ Levy 18,460 99.96 % 151 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 96.85 551 28,374 98.77 2008-09 33,927 32,411 95.53 1,004 33,415 98.49 2009-10 33,617 32,260 95.96 640 32,900 97.87 2010-11 27,534 26,469 96.13 97 26,566 96.48 2011-12 20,787 20,090 96.65 296 20,386 98.07 2012-13 21,841 21,268 97.38 - 21,268 97.38 Source: Maricopa County Treasurer's Office (1) Total levy includes only secured property. (2) Includes collections and resolutions. This page left blank intentionally. 152 Schedule 9 City of Glendale, Arizona City Transaction Privilege Taxes (Sales Tax) by Category Last Ten Fiscal Years (amounts expressed in thousands) 2013 Retail sales $ Contracting 67,133 2012 $ 49,686 2011 $ 48,089 2010 $ 49,127 2009 $ 48,353 2008 $ 54,416 2007 $ 50,733 2006 $ 48,743 2005 $ 41,883 2004 $ 41,262 4,721 5,170 6,742 4,458 6,378 9,540 10,483 9,729 7,716 7,709 Rentals 14,182 11,550 11,854 12,729 11,511 12,082 9,895 8,897 8,228 7,752 Utilities 8,028 6,393 6,449 6,829 6,449 5,359 4,724 4,168 1,967 2,606 Telecom/cable TV 5,540 5,144 6,093 6,156 6,722 6,174 5,914 5,300 5,179 4,290 14,284 11,975 11,207 10,791 10,863 10,995 9,335 8,163 7,031 6,676 Restaurant/bar Amusement 2,154 2,896 1,860 3,697 3,659 3,034 3,288 1,934 1,043 1,058 Other 6,920 3,816 5,568 4,018 4,002 3,575 3,453 4,034 4,119 3,410 Total $ 122,962 $ 96,630 $ 97,862 $ 97,805 $ 97,937 $ 105,175 $ 97,825 $ 90,968 $ 77,166 $ 74,763 % Growth by year 153 Retail sales 35.1 % 4.1 % 16.4 % 1.5 % 12.6 % Contracting (8.7) (23.3) 51.0 (30.1) (33.1) (9.0) 7.8 26.1 0.1 36.7 Rentals 22.8 (2.6) (7.0) 10.6 (4.7) 22.1 11.2 8.1 6.1 8.2 Utilities 25.6 (0.9) (6.0) 5.9 20.3 13.4 13.3 111.9 (24.5) 47.6 76.0 Telecom/cable TV 3.3 % (2.0) % 1.6 % (11.1) % 7.3 % 7.7 (15.6) (1.0) (8.4) 8.9 4.4 11.6 2.3 20.7 19.3 6.9 4.0 (0.7) (1.2) 17.8 14.4 16.1 5.3 8.9 (25.6) 55.7 (50.0) 1.0 20.6 (7.7) 70.0 85.4 (1.4) 76.0 Other 81.3 (31.5) 39.0 0.4 11.9 3.5 (14.5) (2.1) 20.8 (1.3) Total 27.3 % (6.9) % 7.5 % Restaurant/bar Amusement (1.3) % 0.1 % (0.1) % 7.5 % 17.9 % 3.2 % Source: City of Glendale Tax and License Division Note: The 2012 and prior years 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 2013 tax rate for City activities is 2.9% except for telecommunications which is 6.1%, restaurant/bars 3.9%, hotel/motel 7.9%, retail sales food for home consumption 2.5%, and retail sales of individual items over $5,000 2.2% The amounts represent sales tax dollars collected for the fiscal year presented. 17.1 % Schedule 10 City of Glendale, Arizona Ratio of Outstanding Debt by Type(1) Last Ten Fiscal Years (amounts expressed in thousands) General Obligation Bonds Fiscal Year 2003-04 $ Special Assessment Bonds 153,688 $ 109 Government Activities Street and Highway Revenue Bonds $ Excise Tax Revenue Bonds 22,730 $ 180,230 Transportation Bonds $ - Capital Leases $ 14,704 Notes Payable $ 17,098 154 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 - 2012-13 163,130 (4) - 8,055 (4) 468,875 91,140 11,094 - Water Sewer G.O. Bonds Fiscal Year 2003-04 $ Landfill G.O. Bonds 15,825 $ 1,032 Business Activities Water Sewer Revenue Bonds $ 121,470 Notes Payable $ Total Primary Government Capital Leases 14,433 $ 11,007 $ Total Debt per Capita(3) Percentage of Personal Income(2) 552,326 2,370 8.25 155 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 (4) - 282,625 708 - 1,064,620 4,694 13.27 2012-13 5,515 (4) - 273,080 - - 1,023,896 4,471 12.21 (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. Schedule 11 City of Glendale, Arizona Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years (amounts expressed in thousands) General Obligation Fiscal (1) (2) Bonds Year 2003-04 Less: Amounts Available in Debt Service $ Funds 170,545 $ 18,526 Total $ Percentage of Net Assessed Per Value of Property Capita(3) 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 2012-13 168,645 (4) 12,641 156,004 14.90 681.22 Note: (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. 156 Schedule 12 City of Glendale, Arizona Net Direct and Overlapping Governmental Activities Debt June 30, 2013 (amounts expressed in thousands) Jurisdiction Peoria Unified School District No. 11 Net Debt Percentage Applicable Amount Applicable Outstanding to Glendale to Glendale (2) $ 211,910 21.5051 % $ 45,571 Glendale Elementary School District No. 40 14,885 99.0481 14,743 Deer Valley Unified School District No. 97 180,800 20.2875 36,680 Alhambra Elementary School District No. 68 5,675 18.6307 1,057 Glendale Union High School District No. 205 81,460 19.7245 16,068 Maricopa County Community College District 766,085 3.2483 24,885 Phoenix Union High School District No. 210 246,635 1.1448 2,823 9,265 26.2002 2,427 Tolleson Union High School District No. 214 54,215 7.5111 4,072 Washington Elementary School District No. 6 83,440 2.4749 2,065 170,995 0.0843 144 Agua Fria Union High School District No. 216 54,795 0.0439 24 Litchfield Elementary School District No. 79 32,750 0.0665 22 Cartwright Elementary School District No. 83 16,360 Maricopa County Pendergast Elementary School District No. 92 Dysart Unified School District No. 89 - - Total Overlapping Debt 1,929,270 150,581 City of Glendale Debt(1) 150,489 150,489 Total $ 2,079,759 $ 301,070 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. 157 This page left blank intentionally. 158 Schedule 13 City of Glendale, Arizona Legal Debt Margin Information Last Ten Fiscal Years (amounts expressed in thousands) Legal Debt Margin Calculation for Fiscal Year 2013 6% Type Bonds Assessed value $ 1,047,273 Debt limit (6% of assessed value) 62,836 Debt applicable to limit: General obligation bonds 8,194 Less: Amount set aside for repayment of general obligation debt (885) Total net debt applicable to limit Legal debt margin 2004 Debt limit $ 64,801 2005 $ 68,673 2006 $ 76,174 2007 $ 82,259 2008 $ 109,621 $ 2009 $ 131,621 2011(1) 2010 $ 127,854 $ 105,214 2012(1) $ 68,971 7,309 55,527 2013(1) $ 62,836 Total net debt applicable to limit Legal debt margin 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 7,309 $ 55,527 Total net debt applicable to the 159 limit as a percentage of debt limit 76.23% 75.26% 68.97% 47.41% 20% Type Bonds 39.55% 24.40% 22.69% 13.69% 16.61% Assessed value 11.63% $ 1,047,273 Debt limit (20% of assessed value) 209,455 Debt applicable to limit: General obligation bonds 160,451 Less: Amount set aside for repayment of general obligation debt (11,756) Total net debt applicable to limit Legal debt margin 2004 Debt limit $ 216,003 2005 $ 228,910 2006 $ 253,914 2007 $ 274,198 2008 $ 365,404 $ 2009 $ 438,735 2011(1) 2010 $ 426,181 $ 350,714 2012(1) $ 229,905 148,695 60,760 2013(1) $ 209,455 Total net debt applicable to limit Legal debt margin 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 $ 70,599 148,695 $ 60,760 Total net debt applicable to the limit as a percentage of debt limit 46.83% 43.40% 44.58% 63.00% (1) Debt applicable to limit: General obligation bonds net of July 1 payment made prior to June 30. 41.09% 31.53% 38.44% 47.34% 69.29% 70.99% City of Glendale, Arizona Pledged-Revenue Coverage Last Ten Fiscal Years (amounts expressed in thousands) Utility Service Charges(1) Fiscal Year 2003-04 $ 53,209 Schedule 14 Less: Operating Expenses(2) $ 31,445 Water and Sewer Revenue Bonds Net Debt Service Available Revenue Principal Interest $ 21,764 $ 7,102 (3) $ Coverage 4,760 (3) 1.84 160 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 (3) 1.84 2012-13 83,454 39,203 44,251 9,755 13,152 1.93 Fiscal Year 2003-04 Transportation Bonds (4) Transportation Sales Tax $ - Debt Service Principal Interest $ - $ Excise Tax Revenue Coverage - $ - Excise Tax Revenue Bonds (5) $ Debt Service Principal Interest 94,277 $ 2,280 $ Coverage 8,530 8.72 161 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 (7) 2,590 (6) 27,279 3.35 2012-13 21,691 3,005 4,321 2.96 131,931 (7) 2,790 (6) 30,713 (8) 3.94 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 - 2011-12 Water & Sewer Revenue Bond $74,050 and Excise Tax Revenue Bonds $8,945; and 2012-13 Excise Tax Revenue Bonds $243,250. (7) Excise tax revenue amounts include state shared revenues. (8) Includes interest expense from refunding the Western Loop 101 Public Facilities Bonds in December 2012. Schedule 15 City of Glendale, Arizona Demographic and Economical Statistics Last Ten Fiscal Years (amounts expressed in thousands) City of Glendale Fiscal Maricopa County (2) Per Capita Personal (6) Year Population Population 2003-04 233 3,498 2004-05 236 3,638 2005-06 244 2006-07 Personal Income $ (1) $ Rate 31,526 4.4 120,716,738 33,182 3.9 3,793 134,339,487 35,418 3.9 246 3,907 139,665,253 35,747 3.1 2007-08 249 3,988 145,880,680 36,580 3.6 2008-09 250 4,116 146,898,132 35,690 8.4 2009-10 250 4,023 142,091,681 35,320 9.1 2010-11 227 3,817 142,091,681 (3) 37,226 9.2 2011-12 229 (5) 3,880 142,091,681 (3) 36,622 7.6 2012-13 229 (5) 3,880 142,091,681 (3) 36,622 7.2 (3) 110,278,789 Income Unemployment (1)(4) % 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 previous fiscal year Maricopa County CAFR provides the most current number. (4) Calculation based on personal income divided by Maricopa County population. (5) Estimate provided by Arizona Department of Administration, Office of Employment and Population Statistics website. (6) Maricopa County population extracted from Maricopa County CAFR statistical section. 162 Schedule 16 City of Glendale, Arizona Principal Employers Current Year and Ten Years Ago 2013 Employer Luke Air Force Base Banner Thunderbird Health System WalMart Glendale Union High School District Glendale Community College 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 2,008 2,000 1,725 1,684 1,432 1,325 959 Rank 1 2 3 4 5 6 7 8 9 10 22,499 2003 Percentage of Total City Employment 5.41 % 2.45 1.86 1.72 1.71 1.47 1.44 1.22 1.13 0.82 19.23 % Source: City of Glendale Economic Development Department Department of Economic Security, Research Administration, LAUS Report 163 Employees 7,907 Rank 1 Percentage of Total City Employment 6.34 % 1,220 1,862 2,021 1,684 1,432 9 6 5 7 8 0.98 1.49 1.62 1.35 1.15 2,500 2,762 2,036 900 2 4 3 10 2.00 2.21 1.63 0.72 24,324 19.49 % Schedule 17 City of Glendale, Arizona Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Function/Program 164 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 2013 2012 2011 34.00 54.00 13.00 21.00 67.00 73.00 505.00 260.00 56.00 75.00 32.00 165.00 18.00 60.00 172.00 1,605.00 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 Sources: City Budget Division for 2004-08 City of Glendale Human Resources Department for 2009-13 Full-Time Equivalent Employees as of June 30 2010 2009 2008 2007 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 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 2006 34.00 86.75 26.50 55.75 67.00 101.00 506.50 237.50 84.25 89.75 87.76 266.00 46.00 81.25 146.00 1,916.01 2005 2004 32.00 85.75 26.15 57.75 67.00 94.50 507.50 216.00 82.75 86.75 87.76 266.00 45.00 80.25 140.00 1,875.16 34.00 84.75 26.15 44.75 61.00 93.50 473.50 196.00 75.25 80.40 87.75 267.00 44.00 80.25 132.00 1,780.30 City of Glendale, Arizona Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 165 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 2008 2013 2012 2011 2010 2009 2007 2006 2005 2004 127,333 8,588 34,995 127,829 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 30,082 3,478 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 46,833 40,272 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 76,390 80,416 80,291 69,834 91,998 137,762 152,194 143,798 108,887 118,140 6,383 5,304 5,619 5,194 5,289 6,931 6,310 7,888 7,079 6,330 415,695 446,010 529,113 523,512 540,352 546,136 557,342 596,266 620,130 601,440 85,798 90,577 92,134 89,808 91,841 88,638 84,132 89,055 87,831 86,132 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. (1) (1) 18,977 2,642 (3) (3) 24,025 3,335 Schedule 19 City of Glendale, Arizona Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 166 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 Note: Landfill capacity in thousands 2013 2012 2011 2010 Fiscal Year 2009 2008 2007 2006 2005 2004 3 139 9 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 59 59 59 59 59 58 57 57 57 57 21,218 18,849 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 15,910 718 717 802 736 736 736 736 733 709 702 100 2,189 100 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 21 21 21 22 23 22 22 25 25 22 Schedule 20 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2013 WATER RATES PER METER SIZE Commercial and Residential Monthly Base Charge Inside Outside City City Meter Size (inch) 5/8 3/4 1 1 1/2 2 3 4 6 8 10 12 $ 9.70 12.30 17.40 35.30 62.90 106.00 189.00 376.00 557.00 896.00 1,326.00 $ Residential Meter Size 12.61 15.99 22.62 45.89 81.77 137.80 245.70 488.80 724.10 1,164.80 1,723.80 Commercial 3/4 inch 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 6.85 $ 2.97 2.97 2.97 2.97 Summer Excess Rate Inside Outside City City $ 2.85 2.85 2.85 2.85 SEWER SERVICE RATES Type of Service Inside City Single Family Dwelling Unit $ 32.68 Office Building 44.09 Apartment - Average 5 units 90.14 Apartment - Average 35 units 533.39 Retail/Wholesale 64.05 (1) Per 1,000 gallons SOURCE: City of Glendale Finance as of October 2013 167 Outside City $ 40.18 N/A 96.63 124.85 N/A $ 3.72 3.72 3.72 3.72 Schedule 21 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2013 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS Fiscal Year Ending June 30 2004 2005 2006 2007 2008 2009 (3) (3) 2010 (3) 2011 (4) 2012 (3) 2013 Residential 54,349 55,139 55,354 55,395 54,396 53,523 55,169 55,318 55,524 55,725 Commercial 4,361 4,491 4,650 5,305 5,411 5,556 5,919 5,938 5,954 5,976 (1) (2) Total 58,710 59,630 60,004 60,700 59,807 59,079 61,088 61,256 61,478 61,701 (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 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Residential (1) 34,348 34,427 33,567 34,660 34,594 32,278 31,457 27,537 27,409 27,695 Commercial 5,342 8,382 9,580 10,951 11,281 10,764 10,122 10,482 11,143 11,278 Other (2) 1,042 1,211 5,636 3,730 3,937 2,818 5,606 4,455 9,558 3,683 Total 40,732 44,020 48,783 49,341 49,812 45,860 47,185 42,474 48,110 42,656 (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 Ending June 30 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 No. of Sewer Accounts Billed 55,239 55,670 55,995 56,737 54,662 54,936 56,709 56,868 57,087 57,300 Multi-City Plant (1) (MGD) Actual 10.8 7.9 8.2 8.2 7.8 6.8 6.8 8.3 7.9 7.3 (1) SROG - Sub Regional Operating Group SOURCE: City of Glendale Finance and Utilities Departments. 168 Arrowhead (MGD) 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.3 2.3 2.5 West (MGD) 7.0 7.0 8.5 9.2 9.1 8.6 8.4 5.4 4.4 5.8 City of Glendale Finance Division 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480