Acct book cover 2008 9/15/08 1:38 PM Page 1 City of Chandler Arizona Comprehensive Annual Financial Report CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2008 Boyd Dunn, Mayor Lowell Huggins, Vice-Mayor Bob Caccamo, Councilmember Matt Orlando, Councilmember Martin Sepulveda, Councilmember Trinity Donovan, Councilmember Jeff Weninger, Councilmember Kevin Hartke, Councilmember Executive Staff: Mark Pentz, City Manager Patrick McDermott, Assistant City Manager Rich Dlugas, Assistant City Manager Prepared by: Management Services Department Dennis Strachota, Director Dawn Lang, Assistant Director for Finance Brian Ritschel, Accounting Manager CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2008 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................................... 1 Organizational Chart .............................................................................................................................................. 7 Certificate of Achievement .................................................................................................................................... 8 FINANCIAL SECTION Independent Auditors' Report .............................................................................................................................. 9 Management’s Discussion and Analysis (MD&A) .......................................................................................... 13 Basic Financial Statements: Government-wide Financial Statements Statement of Net Assets .......................................................................................................................... 22 Statement of Activities ............................................................................................................................ 24 Fund Financial Statements Balance Sheet – Governmental Funds................................................................................................... 26 Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Assets .................................................................. 28 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds ........................................................................................................................ 30 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities ...................................................................................................................... 32 Statement of Net Assets - Proprietary Funds....................................................................................... 34 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds.............................................................................................................................. 35 Statement of Cash Flows - Proprietary Funds ..................................................................................... 36 Statement of Fiduciary Funds Net Assets ............................................................................................ 38 Statement of Changes in Fiduciary Net Assets- Fiduciary Fund ...................................................... 39 Notes to Financial Statements ................................................................................................................... 41 Required Supplementary Information Budgetary Comparison Schedule for the General Fund........................................................................ 76 Note to Required Supplementary Information....................................................................................... 77 Arizona Public Safety Personnel Retirement System Schedules of Funding Progress ..................... 78 Budgetary Comparison Schedules for Other Major Funds General Obligation Bonds Fund................................................................................................................ 80 Streets Fund.................................................................................................................................................. 81 i CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2008 TABLE OF CONTENTS, continued FINANCIAL SECTION, continued Combining Non-Major and Fiduciary Fund Financial Statements: Non-Major Governmental Funds Combining Balance Sheet – All Non-Major Governmental Funds By Fund Type ........................................................................................................................................ 86 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – All Non-Major Governmental Funds - By Fund Type....................................... 87 Combining Balance Sheet ....................................................................................................................... 91 Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................... 94 Budgetary Comparison Schedules: Highway Users ....................................................................................................................................... 96 Local Transportation Assistance .......................................................................................................... 97 Grants-in-Aid .......................................................................................................................................... 98 Community Development .................................................................................................................... 99 Parks and Recreation100 Library.................................................................................................................................................... 101 Community Center Building .............................................................................................................. 102 Chandler Employee.............................................................................................................................. 103 Downtown Redevelopment ................................................................................................................ 104 Municipal Arts ...................................................................................................................................... 105 Public Works and General Government ........................................................................................... 106 Capital Equipment Acquisition and Replacement .......................................................................... 107 Special Assessments 105 ..................................................................................................................... 108 Computer Purchase.............................................................................................................................. 109 Fleet Replacement ................................................................................................................................ 110 Non-Major Proprietary Funds: Combining Statement of Net Assets ................................................................................................... 112 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets.................................................................................................................................. 113 Combining Statement of Cash Flows .................................................................................................. 114 Fiduciary Funds: Statement of Changes in Assets and Liabilities - Agency Fund .................................................... 115 Other Supplemental Information: HUD Programs: Combining Statement of Net Assets - All HUD Programs ............................................................ 118 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - All HUD Programs .................................................................................. 120 ii CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2008 TABLE OF CONTENTS, concluded STATISTICAL SECTION ................................................................................................................................... 122 Financial Trends Schedule 1 Net Assets by Component ................................................................................................ 123 Schedule 2a Changes in Net Assets..................................................................................................... 125 Schedule 2b Changes in Net Assets..................................................................................................... 127 Schedule 2c Changes in Net Assets ..................................................................................................... 129 Schedule 3 Fund Balances of Governmental Funds.......................................................................... 131 Schedule 4 Governmental Fund Revenues......................................................................................... 133 Schedule 5 Governmental Funds Expenditures and Debt Service Ratio ....................................... 135 Schedule 6 Other Financial Sources and Uses and Net Changes in Fund Balance, Governmental Funds.......................................................................................................................... 137 Revenue Capacity Schedule 7 Taxable Revenue by Category.......................................................................................... 139 Schedule 8 Direct and Overlapping Sales and Use Tax Rates ......................................................... 141 Schedule 9 Principal Sales and Use Taxpayers .................................................................................. 142 Debt Capacity Schedule 10 Ratios of Outstanding Debt by Type............................................................................. 143 Schedule 11 Direct and Overlapping Governmental Activities Debt............................................. 144 Schedule 12 Legal Debt Margin Information ..................................................................................... 145 Schedule 13a Pledged-Revenue Coverage ......................................................................................... 147 Schedule 13b Pledged-Revenue Coverage ......................................................................................... 148 Schedule 13c Pledged-Revenue Coverage.......................................................................................... 149 Demographic and Economic Information Schedule 14 Demographic and Economic Statistics.......................................................................... 150 Schedule 15 Principal Employers ........................................................................................................ 151 Operating Information Schedule 16 Employees by Function ................................................................................................... 153 Schedule 17 Operating Indicators by Function / Program.............................................................. 156 Schedule 18 Capital Asset Statistics by Function / Program........................................................... 157 iii 6 City of Chandler, Arizona Organizational Chart Citizens of Chandler Mayor/City Council Advisory Boards/Commissions Community Services Center for the Arts Building & Facilities Community Services Administration City Magistrate City Attorney City Clerk City Manager General Government Library Park Development & Operations Recreation Communications & Public Affairs (Video Production, Administrative Services) Economic Development (Downtown Redevelopment) Public Works Management Services Administration Engineering Transportation & Operations Administration Streets Traffic Engineering Transit Services Street Sweeping Airport Administration & Budget Purchasing & Materials Accounting Licensing,Tax & Utility Services Municipal Utilities Administration Solid Waste Management Water Distribution Water Production Risk Management Environmental Management Fleet Services Police Department Environmental Resources Water Quality Wastewater Collection Wastewater Reserve Osmosis Wastewater Treatment Wastewater Quality Airport Water Reclamation Administration Professional Standards Property & Evidence Forensic Services Operations Criminal Investigation Planning & Research Communications Support Services Detention Services Community Services Neighborhood Services Planning & Development Administration Current Planning Long Range Planning Human Resources Neighborhood Programs IT/GIS Fire Department Development Services Housing & Redevelopment Community Development Administration Emergency Medical Services Operations 7 Prevention Support Services Training 8 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information) 11 12 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 As management of the City of Chandler (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2008. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal beginning on page one and the accompanying notes to the financial statements. FINANCIAL HIGHLIGHTS The financial statements, which follow the Management’s Discussion and Analysis, provide these significant, key financial highlights for 2008 as follows. • The City’s total net assets of $752.9 million in governmental activities and $496.8 million in business-type activities represent 60.2% and 39.8% respectively, of the total net assets of $1,249.7 million. • General revenues from governmental activities accounted for $239.4 million in revenue, or 75.2% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $79.0 million or 24.8% of total governmental activities revenues. The City had $106.5 million of program revenues and $7.2 million in general revenues and transfers related to business-type activities. • The major governmental funds include the General Fund, had $235.3 million in revenues, which primarily consisted of local taxes, intergovernmental taxes, charges for services, and licenses and permits. The total expenditures of the General Fund were $177.3 million and the fund balance increased from $202.0 million to $224.3 million. The General Obligation Debt Service fund had $26.3 million transferred in from the General Fund available for total debt service expenditures of $26.3 million. The Streets capital project fund had $7.3 million in revenues. The total expenditures of the Streets Fund were $44.4 million and the fund balance decreased by $34.3 million from $43.4 million to $9.1 million. The Community Services capital project fund had $5.6 million in revenues, which primarily consisted of system development fees. The total expenditures of the Community Services fund were $31.9 million and the fund balance decreased by $26.3 million from $42.2 million to $15.9 million. The Public Safety Buildings and Improvements capital project fund had $2.8 million in revenues, which primarily consisted of system development fees. The total expenditures of the Public Safety Buildings and Improvements Fund were $8.4 million and the fund balance decreased by $5.7 million from $6.6 million to $0.9 million. • Net assets of the Internal Service Fund increased $2.3 million. exceeded operating revenues of $3.3 million. Operating expenses of $6.5 million OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Net assets are categorized as capital assets less related debt, restricted by an outside third party, and unrestricted. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). In the government-wide financial statements the City’s activities are presented in the following categories: 13 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 • Governmental activities – Most of the City’s basic services are included here, such as general government, public safety, community services, community development, and public works. Sales taxes, state shared revenues, and charges for services finance most of these activities. • Business type activities – The services provided by the City included here are water, wastewater, solid waste, airport services, and housing authority. The services are financed through user fees and charges. • Component units – The discretely presented component units are the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary 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 focus on near-term inflows 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 the City’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 decision. 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 21 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 General Fund, the General Obligation Bonds Fund, the Streets Fund, the Community Services Fund, and the Public Safety Buildings and Improvements Fund, which are considered to be major funds. Data from the other 16 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements and schedules in the supplemental section of this report. 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, wastewater, solid waste, airport, 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 an internal service fund to account for its self-insurance fund. Because the self-insurance fund is funded predominantly by governmental functions rather than business-type functions, it has been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and wastewater, which are considered to be major funds of the City. 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 in the supplemental section of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found immediately following the basic financial statements in this report. 14 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budget process. The City adopts an annual budget for all governmental and enterprise funds. A budgetary comparison schedule has been provided for the General Fund as required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceeded liabilities by $1,249.7 million as of June 30, 2008. A significant portion of the City’s net assets (62.5% percent) reflects its investment in capital assets (e.g., land and improvements, buildings and improvements, improvements other than buildings, vehicles, machinery and equipment and construction in progress), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its 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. Overall, the City’s financial position has improved. The following table presents a condensed statement of the City’s net assets for the fiscal years ended June 30, 2008 and 2007. Governmental Activities Current assets Capital assets, net Non-current assets Total assets $ 2008 403,860,617 666,033,305 3,995,503 1,073,889,425 $ Business-type Activities 2007 424,627,618 558,636,925 3,555,962 986,820,505 $ 2008 76,276,312 618,009,477 2,472,216 696,758,005 $ Total (Primary Govt.) 2007 160,975,468 510,811,362 3,337,812 675,124,642 $ 2008 480,136,929 1,284,042,782 6,467,719 1,770,647,430 $ 2007 585,603,086 1,069,448,287 6,893,774 1,661,945,147 Current liabilities Non-current liabilities Total liabilities 54,410,901 266,530,736 320,941,637 44,668,645 273,916,579 318,585,224 51,554,710 148,453,205 200,007,915 22,508,449 169,247,415 191,755,864 105,965,611 414,983,941 520,949,552 67,177,094 443,163,994 510,341,088 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 353,996,843 56,979,639 341,971,306 752,947,788 289,033,288 115,956,388 263,245,605 668,235,281 427,130,654 24,319,427 45,300,009 496,750,090 347,306,362 57,835,328 78,227,088 483,368,778 781,127,497 81,299,066 387,271,315 1,249,697,878 636,339,650 173,791,716 341,472,693 1,151,604,059 $ $ $ $ Total assets Total net assets $ - 200 400 600 800 Governmental Activities 1,000 1,200 1,400 1,600 1,800 Business-type Activities The following significant current year transaction had an impact on the Statement of Net Assets. • The addition of $37.4 million in joint venture construction in progress in business-type activities. 15 $ CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2008 were $432.6 million. The total cost of all programs and services was $334.4 million. The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2008 and 2007. Governmental Activities 2008 Business-type Activities 2007 2008 Total (Primary Govt.) 2007 2008 2007 Revenues: Program revenues Charges for services $ Operating grants and contributions Capital grants and contributions 40,966,791 $ 42,795,564 $ 80,573,787 $ 74,543,240 $ 121,540,578 $ 117,338,804 1,897,300 3,707,115 6,114,138 6,312,438 8,011,438 10,019,553 36,104,151 26,428,112 19,782,193 28,014,518 55,886,344 54,442,630 General revenues Property taxes 34,063,123 26,921,292 - - 34,063,123 26,921,292 Sales tax 97,226,841 95,410,460 - - 97,226,841 95,410,460 Franchise taxes Highway user taxes Other taxes 3,937,952 3,230,429 - - 3,937,952 3,230,429 15,856,863 16,490,129 - - 15,856,863 16,490,129 3,786,677 3,481,086 - - 3,786,677 3,481,086 State shared revenues 62,970,459 57,716,644 - - 62,970,459 57,716,644 Investment income 20,823,059 17,868,181 5,906,545 6,876,399 26,729,604 24,744,580 767,221 365,379 1,792,816 1,043,406 2,560,037 1,408,785 318,400,437 294,414,391 114,169,479 116,790,001 432,569,916 411,204,392 Miscellaneous Total revenues Expenses: General government 54,459,719 43,260,418 - - 54,459,719 43,260,418 Public safety 80,860,917 76,171,133 - - 80,860,917 76,171,133 Community development 11,692,559 9,154,407 - - 11,692,559 9,154,407 Public works 39,241,652 32,370,473 - - 39,241,652 32,370,473 Community services 33,086,565 29,351,499 - - 33,086,565 29,351,499 Interest and fiscal charges 14,880,604 11,512,436 - - 14,880,604 11,512,436 Water - - 53,554,653 40,566,563 53,554,653 40,566,563 Wastewater - - 30,657,939 27,230,862 30,657,939 27,230,862 9,843,824 Solid waste - - 6,845,979 9,843,824 6,845,979 Airport - - 1,602,268 1,757,279 1,602,268 1,757,279 Housing Authority - - 7,593,242 9,133,427 7,593,242 9,133,427 234,222,016 201,820,366 100,254,081 88,531,955 334,476,097 290,352,321 84,178,421 92,594,025 13,915,398 28,258,046 98,093,819 120,852,071 534,086 469,200 (534,086) (469,200) - - 84,712,507 93,063,225 13,381,312 27,788,846 98,093,819 120,852,071 Total expenses Excess before transfers Transfers in (out) Increase in net assets 668,235,281 Beginning net assets Ending net assets $ 752,947,788 575,172,056 $ 668,235,281 483,368,778 $ 496,750,090 16 455,579,932 $ 483,368,778 1,151,604,059 $ 1,249,697,878 1,030,751,988 $ 1,151,604,059 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 GOVERNMENT-WIDE FINANCIAL ANALYSIS, concluded Revenue Sources - Fiscal Year 2008 State shared revenues Investment income 6.2% 14.6% Miscellaneous 0.6% Charges for services 28.1% Other taxes 0.9% Highway user taxes 3.7% Operating grants and contributions 1.9% Franchise taxes 0.9% Sales taxes 22.5% Property taxes 7.9% Capital grants and contributions 12.9% Functional Expenses - Fiscal Year 2008 Solid waste 2.0% Airport 0.5% Wastewater 9.2% Water 16.0% Housing Authority 2.3% General government 16.3% Public safety 24.2% Interest expense on long-term debt 4.4% Community services 9.9% Public works 11.7% 17 Community development 3.5% CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 As evident in the previous graph the largest financing source for the City is charges for services at 28.1% due primarily to the user fees and charges for services in the business-type activities. Sales taxes also comprise a significant portion of the City’s revenues at 22.5% of the total revenues with state shared revenues accounting for an additional 14.6% of the City’s total revenues. The City as a whole uses the largest amount of resources for public safety at 24.2% of the total functional expenses of the City. The next largest users of resources are general government functions and water services at 16.3% and 16.0%, respectively, with wastewater services also accounting for 9.2% of the City’s total expenses. FINANCIAL ANALYSIS OF THE CITY’S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of the City’s net resources available for spending at the end of the fiscal year. The financial performance of the City as a whole is reflected in its governmental funds. As the City completed the year, its governmental funds reported a combined fund balance of $296.7 million. Total fund balance constitutes reserved and unreserved fund balance, the latter of which is available for spending at the City’s discretion. Fund balance includes reserved fund balance of 24.0% for encumbrances, debt service, and capital improvements. The remaining 76.0% of fund balance is unreserved. The General fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the general fund was $196.1 million, while total fund balance reached $224.3 million. As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 110.6% of total general fund expenditures, while total fund balance represents 126.6% of that same amount. The fund balance of the City’s general fund increased by $22.3 million during the current fiscal year. Key factor in this increase was the increase in property tax and state shared revenues. The Streets fund accounts for the acquisition, construction and improvements of the City’s streets’ projects. At the end of the current fiscal year total fund balance was $9.1 million. As a measure of the streets fund’s liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 20.5% of that same amount. The fund balance of the City’s street fund decreased by $34.3 million during the current fiscal year. A key factor in this decrease was the increase in the utilization of prior years bond proceeds for capital improvement expenditures and a decrease in the amount of funds transferred in. The Community Services fund accounts for the acquisition of land and equipment, development, construction and improvements of the City’s community parks and projects. At the end of the current fiscal year total fund balance was $15.9 million. As a measure of the streets fund’s liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 49.8% of that same amount. The fund balance of the City’s community services fund decreased by $26.3 million during the current fiscal year. A key factor in this decrease was the increase in the utilization of prior years bond proceeds for capital improvement expenditures. The Public Safety Buildings and Improvements fund accounts for public safety (i.e., police and fire department), building construction, renovation and improvements and equipment purchases. At the end of the current fiscal year total fund balance reached $0.9 million. As a measure of the public safety and improvement fund’s liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 10.9% of that same amount. 18 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 The fund balance of the City’s Public Safety Buildings and Improvements fund decreased by $5.7 million during the current fiscal year. A key factor in this decrease was the increase in the utilization of prior years bond proceeds for capital improvement expenditures. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Net assets for the Enterprise Funds and the Internal Service Funds at the end of the fiscal year amounted to $496.8 million and $43.1 million, respectively. Net assets after invested in capital assets, net of related debt are 4.9% restricted and 9.1% unrestricted. The net assets of the water fund decreased by $27.5 million, due to the transfer of funds to the wastewater fund. The net assets of the wastewater fund increased by $32.1 million, due to the transfer of funds from the water fund and an increase in service fee revenue. BUDGETARY HIGHLIGHTS The City of Chandler budgets conservatively while it continues its commitment to high-quality and efficiently provided public services. The challenge faced each year is balancing the growing cost of providing those services with a finite amount of resources. The budget adopted for fiscal year 2007-2008 supported Council’s vision and citizen needs in a fiscally responsible manner. Toward that end the City reaffirmed its comprehensive financial policies, including the requirement that ongoing expenditures be supported only with ongoing revenues, and that that City maintain a 12% contingency reserve in its General Fund. While the adopted budget added nearly 58 positions, including 23 public safety positions, the City’s staffing ratio of 6.96 full-time equivalent positions to each 1,000 population remained next to the lowest in the Phoenix metropolitan area. In addition, the budget included a decrease in the property tax rate from $1.25 to $1.20 per $100 of assessed value and rate increases for sewer and water enterprise operations. A schedule showing the budget amounts compared to the City’s actual financial activity for the General Fund is provided in this report as required supplementary information. The City ended fiscal year 2007-2008 with more revenues than budgeted and spent well under its legal limit. The Management Services Department had a variance between the final budgeted expenditure amount and actual expenditure amount of a positive $102 million, largely due to unspent reserves and capital carry forwards. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. As of June 30, 2008, the City had invested $781.2 million in capital assets net of related debt, including buildings, facilities, vehicles, computers, equipment, and infrastructure assets. Total depreciation expense for the year was $51.7 million. The following table presents capital asset balances net of accumulated depreciation for the fiscal years, ended June 30, 2008 and 2007. Governmental Activities 2008 Land $ Land improvements Infrastructure System improvements Buildings and improvements Machinery and equipment Construction in progress - Joint Venture Construction in progress Total $ Business-type Activities 2007 79,854,613 $ 2008 69,686,670 $ Total (Primary Govt.) 2007 41,256,107 $ 2008 41,056,107 $ 121,110,720 2007 $ 110,742,777 - - 545,623 647,453 545,623 647,453 333,426,304 258,360,239 - - 333,426,304 258,360,239 - - 400,597,004 323,623,455 400,597,004 323,623,455 161,307,653 106,018,686 9,637,056 9,068,711 170,944,709 115,087,397 23,462,085 21,634,144 2,923,924 2,583,224 26,386,009 24,217,368 - - 37,414,771 - 37,414,771 - 67,982,650 102,937,186 125,699,529 133,832,406 193,682,179 236,769,592 618,074,014 $ 510,811,356 $ 1,284,107,319 $ 1,069,448,281 666,033,305 $ 558,636,925 $ Additional information on the City’s capital assets can be found in Note 4 of the financial statements. 19 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2008 Debt Administration. At year-end, the City had $422 million in long-term debt outstanding with $28.8 million due within one year. The following table presents a summary of the City’s outstanding long-term debt for the fiscal years ended June 30, 2008 and 2007. Governmental Activities 2008 General obligation bonds $ Revenue bonds Special assessment bonds Accrued interest - capital appreciation bonds Intergovernmental loans Business-type Activities 2007 187,645,000 $ $ $ 2007 60,395,000 37,655,000 40,480,000 8,345,000 1,099,500 - 35,000,654 34,505,099 Total 2008 197,075,000 268,645,654 93,000,000 $ 273,159,599 Total (Primary Govt.) $ 2008 2007 62,410,000 $ 248,040,000 101,095,000 $ 259,485,000 130,655,000 141,575,000 - 8,345,000 1,099,500 - - 35,000,654 34,505,099 - 16,304 $ 153,395,000 $ 163,521,304 $ 422,040,654 16,304 $ 436,680,903 State statutes currently limit the amount of general obligation debt a city may issue to 20 percent of its total assessed valuation for water, sewer, artificial lighting, open space, parks, public safety and emergency services, streets, transportation, and recreational facilities. The current debt limitation for the City is $691 million. The City has $240.2 million of outstanding general obligation debt for these purposes. State statutes also currently limit the amount of general obligation debt a City may issue to 6 percent of its total assessed valuation for all other purposes. The current debt limitation for the City is $207.3 million. The City has $7.8 million of outstanding general obligation debt for this purpose. The City’s current bond ratings on general obligation bonds are Aa1 from Moody’s Investor Services, AAA from Standard & Poor’s, and AAA from Fitch Ratings. Ratings for the street and highway users are Aa3 from Moody’s, AA from Standard & Poor’s, and AA- from Fitch. Water and wastewater revenue bonds are Aa3 from Moody’s Investor Services, AA from Standard & Poor’s, and AA from Fitch. Additional information on the City’s long-term debt can be found in Note 6 of the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The City of Chandler planned for the economic downturn when preparing the fiscal year 2008-09 budget, and City officials took several steps during the process of developing the fiscal year 2008-2009 budget to balance taxpayer concerns and resource needs. The secondary property tax rate remained at $0.84 while the primary rate was decreased from $0.36 to $0.3414 for an overall property tax of $1.1814 per $100 of assessed value. The amounts available for appropriation in the General Fund budget are $360,705,960, an increase of 6.2% over the prior year. Large capital carryforward appropriations and increases in contingency and reserves are the principal reasons for the increase. New operating and capital spending actually decreased. The increases reflected in the adopted fiscal year 2008-2009 budget were limited to only the most essential ones which included no increases in General Fund positions and only 4 added for Enterprise Funds, and 8.35 full time equivalent positions reduced in General Fund. In addition, no rate increases were implemented in the Solid Waste, Water or Wastewater Funds. Since the United States economic future was difficult to project, financial strategies were put in place through fiscal year 2008-2009 which include the examination of services and service levels, update of rates and charges, and capital project revenue and priority review. Should an economic slowdown turn into a recession, City officials will be prepared to address this. CONTACTING THE CITY’S FINANCE OFFICE This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional information, contact the Management Services Department, City of Chandler, P.O. Box 4008, MS 609, Chandler, AZ 85244-4008. 20 BASIC FINANCIAL STATEMENTS 21 City of Chandler Statement of Net Assets June 30, 2008 Governmental Activities Business-Type Activities Total ASSETS Current assets: Equity in pooled cash and investments Cash and investments Accounts receivable Interest receivable Prepaid items Property taxes receivable Other taxes receivable Internal balances Due from other governments Inventory $ Special assessment receivable Other assets Total current assets Noncurrent assets: Other assets Cash and investments - restricted Long-term notes receivable Capital assets: Non-depreciable - Joint Venture Non-depreciable Depreciable, net Capital assets Total noncurrent assets Total assets 383,062,840 784,392 807,908 5,056,046 1,035,752 4,744,447 875,643 7,493,589 403,860,617 $ 65,244,510 11,408,610 332,449 (1,035,752) 136,868 189,627 76,276,312 $ 448,307,350 12,193,002 332,449 807,908 5,056,046 4,881,315 1,065,270 7,493,589 480,136,929 3,414,947 580,556 1,941,342 530,874 5,356,289 1,111,430 147,837,263 518,196,042 666,033,305 670,028,808 37,414,771 166,955,636 413,639,070 618,009,477 620,481,693 37,414,771 314,792,899 931,835,112 1,284,042,782 1,290,510,501 1,073,889,425 696,758,005 1,770,647,430 13,934,993 3,660,971 10,062,310 8,673,160 636,167 383,300 17,060,000 54,410,901 33,316,045 384,542 1,929,921 3,464,027 388,607 331,550 40,018 11,700,000 51,554,710 47,251,038 4,045,513 11,992,231 12,137,187 1,024,774 331,550 423,318 28,760,000 105,965,611 6,497,895 256,601,311 3,431,530 266,530,736 678,417 145,008,329 36,323 2,730,136 148,453,205 7,176,312 401,609,640 36,323 2,730,136 3,431,530 414,983,941 320,941,637 200,007,915 520,949,552 353,996,843 427,130,654 781,127,497 41,425,462 15,554,177 56,979,639 341,971,306 9,084,313 15,235,114 24,319,427 45,300,009 50,509,775 30,789,291 81,299,066 387,271,315 LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Accrued interest Arbitrage liability Unearned revenue Compensated absences payable - due within one year Bonds and other payables - due within one year Total current liabilities Noncurrent liabilities: Compensated absences payable Bonds and other payables - due in more than a year Arbitrage liability Landfill closure and postclosure costs Claims payable Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital improvements Debt service Donor purposes Total restricted Unrestricted Total net assets $ See accompanying Notes to Basic Financial Statements. 22 752,947,788 $ 496,750,090 $ 1,249,697,878 Component Units Chandler Industrial Development Authority $ $ 290,879 30,414 321,293 Chandler Cultural Foundation $ 1,540,015 20,064 15,061 30,759 1,605,899 - 6,000 802,810 - - - 51,976 51,976 860,786 321,293 2,466,685 - 74,857 228,826 303,683 - - - 303,683 - 51,976 321,293 802,810 802,810 1,308,216 321,293 $ 2,163,002 23 City of Chandler Statement of Activities and Changes in Net Assets For the year ended June 30, 2008 Program Revenues Functions/Programs Expenses Operating Capital Charges for Grants and Grants and Services Contributions Contributions $ $ Total Primary government: Governmental activities: General government $ Public safety 54,459,719 $ 80,860,917 12,629,779 260,307 4,317,843 1,223,800 - $ - 12,890,086 5,541,643 Community development 11,692,559 5,488,535 - 3,641,518 9,130,053 Public works 39,241,652 15,831,165 - 32,462,633 48,293,798 Community services 33,086,565 2,699,469 413,193 - 3,112,662 Interest on long-term debt 14,880,604 - - - - 234,222,016 40,966,791 1,897,300 36,104,151 78,968,242 Water 53,554,653 40,613,727 - 8,912,918 49,526,645 Wastewater 30,657,939 25,145,258 - 7,721,581 32,866,839 Solid waste 6,845,979 12,979,695 - 50,999 13,030,694 Airport 1,602,268 773,449 - 2,942,050 3,715,499 Community services - housing authority 7,593,242 1,061,658 6,114,138 154,645 7,330,441 100,254,081 80,573,787 6,114,138 19,782,193 106,470,118 $ 334,476,097 $ 121,540,578 $ 8,011,438 $ 55,886,344 $ 185,438,360 $ $ $ - $ - Total governmental activities Business-type activities: Total business-type activities Total primary government Component Units Chandler Industrial Development Authority Chandler Cultural Foundation Total component units 17,768 1,047,827 $ 1,065,595 79,616 1,052,316 $ 1,131,932 193,227 $ 193,227 $ General revenues and transfers: Taxes: Property taxes, levied for general purposes Sales taxes Franchise taxes Highway user taxes Other taxes Total taxes State shared revenues (unrestricted) Investment income Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets - beginning of year Net assets - end of year See accompanying Notes to Basic Financial Statements. 24 $ - 79,616 1,245,543 $ 1,325,159 Net (Expense) Revenue and Changes in Net Assets Primary Government Component Units Chandler Industrial Governmental Business-Type Activities Activities $ (41,569,633) (75,319,274) - $ (41,569,633) Cultural Authority Foundation $ - $ - - (75,319,274) - - (2,562,506) - (2,562,506) - - 9,052,146 - 9,052,146 - - (29,973,903) - (29,973,903) - - (14,880,604) - (14,880,604) - - (155,253,774) - (155,253,774) - - - (4,028,008) (4,028,008) - - - 2,208,900 2,208,900 - - - 6,184,715 6,184,715 - - - 2,113,231 2,113,231 - - - - - - - (262,801) (262,801) - 6,216,037 (155,253,774) 6,216,037 (149,037,737) - - - - - 61,848 - - - - - 197,716 - - - 61,848 197,716 6,216,037 34,063,123 - 34,063,123 - - 97,226,841 - 97,226,841 - - 3,937,952 - 3,937,952 - - 15,856,863 - 15,856,863 - - 3,786,677 - 3,786,677 - - 154,871,456 - 154,871,456 - - 62,970,459 - 62,970,459 - - 20,823,059 5,906,545 26,729,604 10,739 118,004 767,221 1,792,816 2,560,037 5,137 18,403 - - - 534,086 $ $ Total Chandler Development (534,086) 239,966,281 7,165,275 247,131,556 15,876 136,407 84,712,507 13,381,312 98,093,819 77,724 334,123 668,235,281 483,368,778 1,151,604,059 243,569 1,828,879 752,947,788 $ 496,750,090 $ 1,249,697,878 $ 321,293 25 $ 2,163,002 City of Chandler Balance Sheet Governmental Funds June 30, 2008 Major Funds Public Safety General Community Obligation General Buildings and Bonds Streets Services Improvements Debt Service Capital Projects Capital Projects Capital Projects $ $ $ ASSETS Equity in pooled cash and investments $ 208,686,861 $ 21,377,621 20,341,253 23,271,857 17,270,178 Accounts receivable 784,231 - - - - Property tax receivable 807,908 - - - - - - - - - 5,056,046 - - - - Special assessments receivable Other taxes receivable Notes receivable Advances to other funds 29,091,414 - - - - Due from other funds 7,167,780 - - - - Due from other governments 2,180,607 - - - - 875,643 - - - - - - - - - Inventories Other assets Total assets $ 254,650,490 $ 21,377,621 $ 20,341,253 $ 23,271,857 $ 17,270,178 $ 6,509,862 $ - $ 2,987,848 $ 1,630,705 $ 612,050 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll 3,533,072 - - - - 10,062,310 - - - - Accrued interest payable - 7,807,621 - - - Due to other funds - - - - - Trust liabilities and deposits 9,617,358 - 7,870,000 5,566,708 15,654,706 Arbitrage liability Advances from other funds - - 368,160 186,145 81,862 Bonds payable (matured) - 13,570,000 - - - 597,300 - - - - 30,319,902 21,377,621 11,226,008 7,383,558 16,348,618 Deferred revenue Total liabilities Fund Balances: Reserved for: - - 9,115,245 15,888,299 921,560 Debt service Capital improvements 13,939,898 - - - - Encumbrances 14,297,623 - - - - 193,303,645 - - - - 2,789,422 - - - - - - - - - - - - Unreserved designated for: General purpose Unreserved, undesignated: General fund Special revenue funds Capital projects funds - Total fund balances Total liabilities and fund balances 224,330,588 $ 254,650,490 $ 21,377,621 See accompanying Notes to Basic Financial Statements. 26 9,115,245 $ 20,341,253 15,888,299 $ 23,271,857 921,560 $ 17,270,178 Other Governmental Funds $ Total 45,332,129 $ 161 336,279,899 784,392 - 807,908 7,493,589 7,493,589 - 5,056,046 580,556 580,556 11,665,475 40,756,889 - 7,167,780 2,563,840 4,744,447 - 875,643 - - $ 67,635,750 $ 404,547,149 $ 1,973,718 $ 13,714,183 102,836 3,635,908 - 10,062,310 865,539 8,673,160 7,167,780 7,167,780 1,012,365 39,721,137 - 636,167 2,965,000 16,535,000 7,073,378 7,670,678 21,160,616 107,816,323 15,500,358 41,425,462 1,614,280 15,554,178 - 14,297,623 - 193,303,645 - 2,789,422 17,752,306 17,752,306 11,608,190 11,608,190 46,475,134 $ 67,635,750 296,730,826 $ 404,547,149 27 City of Chandler Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets June 30, 2008 Total Fund Balances - Total Governmental Funds $ 296,730,826 Amounts reported for governmental activities in the Statement of Net Assets were reported differently because: Capital assets used in governmental activities are not current financial resources. Therefore, were not reported in the Governmental Funds Balance Sheet. 147,837,263 518,196,042 Non-depreciable Depreciable buildings, property, equipment and infrastructure, net 666,033,305 Total capital assets Certain revenues are not available to pay for current period expenditures and, therefore, are deferred in the funds. 7,670,678 The internal service fund is used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service fund is included in governmental activities in the Government-Wide Statement of Net Assets. 43,062,089 Long-term liabilities are not due and payable in the current period. Therefore, were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds amounts of $3,474,979 which are included above, the long-term liabilities were adjusted as follows: Bonds and other payables Bonds premium Bond issuance costs Compensated absences (253,247,448) (3,873,979) 3,414,947 (6,842,630) Total long-term liabilities (260,549,110) Net Assets of Governmental Activities $ 28 752,947,788 29 City of Chandler Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2008 Major Funds General Public Safety Obligation General Community Buildings and Bonds Streets Services Improvements Debt Service Capital Projects Capital Projects Capital Projects $ $ REVENUES: Property taxes $ Sales taxes Franchise taxes 33,844,181 $ - - - $ - 97,226,841 - - - - 3,937,952 - - - - Highway user taxes - - - - - Other taxes - - 3,786,677 - - State shared Grants and entitlements 62,970,459 - - - - - - - - 1,725,740 System development fees - - 1,395,377 3,774,115 Special assessments - - - - - Licenses and permits 3,858,368 - 36,000 - - Charges for services 17,012,433 - - - - Fines and forfeitures 4,342,621 - - - - Rentals 94,575 - - - - Contributions 50,000 - - - - 11,250,079 - 1,810,696 1,863,269 1,049,534 729,732 - 295,227 - - 235,317,241 - 7,323,977 5,637,384 2,775,274 15,169 Interest income Miscellaneous Total revenues EXPENDITURES: Current: General government 50,774,268 - 7,584 15,169 Public safety 77,568,900 - - - - 8,693,171 - - - - Public works 11,746,151 - - - - Community services 28,473,500 - - - - - - 44,439,922 31,904,288 8,412,649 Principal retirement - 13,570,000 - - - Bond issuance costs - - - - - Interest and fiscal charges - 12,703,270 - - - 177,255,990 26,273,270 44,447,506 31,919,457 8,427,818 58,061,251 (26,273,270) (37,123,529) (26,282,073) (5,652,544) Community development Capital improvements Debt service: Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Bond premium (discount) - - - - - Face amount of bonds issued - - - - - 242,539 - - - - - 26,273,270 2,795,280 - - (36,023,172) - - - - (35,780,633) 26,273,270 2,795,280 - - Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) 22,280,618 NET CHANGE IN FUND BALANCE - (34,328,249) (26,282,073) (5,652,544) FUND BALANCES: Beginning of year End of year 202,049,970 $ 224,330,588 $ - See accompanying Notes to Basic Financial Statements. 30 43,443,494 $ 9,115,245 42,170,372 $ 15,888,299 6,574,104 $ 921,560 Other Governmental Funds $ Total - $ - 97,226,841 - 3,937,952 15,856,863 15,856,863 - 3,786,677 - 62,970,459 10,553,680 10,553,680 1,216,365 8,111,597 426,428 426,428 - 3,894,368 242,426 17,254,859 - 4,342,621 - 94,575 - 50,000 2,361,003 18,334,581 230,722 1,255,681 30,887,487 281,941,363 449,659 51,261,849 737,704 78,306,604 2,900,471 11,593,642 7,560,230 19,306,381 357,426 28,830,926 20,079,583 104,836,442 3,089,500 16,659,500 179,201 179,201 1,734,076 14,437,346 37,087,850 325,411,891 (6,200,363) (43,470,528) 165,431 165,431 7,370,000 7,370,000 38,430 280,969 9,374,053 38,442,603 (5,085,170) (41,108,342) 11,862,744 5,150,661 5,662,381 (38,319,867) 40,812,753 $ 33,844,181 46,475,134 335,050,693 $ 296,730,826 31 City of Chandler Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Assets For the year ended June 30, 2008 Net Change in Fund Balances - Total Governmental Funds $ (38,319,867) Governmental activities in the Statement of Activities were reported differently because: Governmental funds report capital outlay as expenditures. However, in the GovernmentWide Statement of Activities and Changes in Net Assets, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount of capital assets recorded and transfered in the current period. 105,189,145 Depreciation expense on capital assets is reported in the Government-Wide Statement of Activities and Changes in Net Assets, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as an expenditure in governmental funds. (24,624,168) Some items reported in the governmental funds are sources and uses of current financial resources and therefore are not reported as revenues or expenses in Statement of Activities. These items include: Bond proceeds $ Principal payments on debt Bond premium Other postemployment benefits obligation Loss on disposal of capital assets (7,370,000) 16,659,500 (165,431) (1,136,794) (616,368) 7,370,907 Bond issuance costs are recognized as debt service expenditures in the governmental funds, however these costs are capitalized on the Statement of Assets and amortized in the Statement of Activities. 179,201 Accrued interest payable related to long-term debt is recognized as an expense in the Statement of Activities, however is not recognized in the governmental funds because it is not payable from current financial resources. (443,258) Compensated absence expenses reported in the Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds. (838,759) Certain revenues in the governmental funds that provide current financial resources are not included in the Statement of Activities because they were recognized in a prior period. However, other revenues that are deferred in the governmental funds because they do not provide current financial resources due to unavailability are recognized in the Statement of Activities. 6,456,637 Capital assets contributed by developers to the City are not recorded in the governmental funds as they do not provide current financial resources but are recognized in the Statement of Activities as program revenues. 27,447,772 The internal service fund is used by management to charge the costs of certain activities, such as insurance, to individual funds. The net revenue of the internal service fund is reported with governmental activities. Change in Net Assets of Governmental Activities 2,294,897 $ See accompanying Notes to Basic Financial Statements. 32 84,712,507 33 City of Chandler Statement of Net Assets Proprietary Funds June 30, 2008 Major Funds Water Wastewater Other Governmental Proprietary Activities: Internal Funds Total Service Fund ASSETS Current assets: Equity in pooled cash and investments $ 29,582,652 $ 24,514,915 $ 11,146,943 $ 65,244,510 $ 46,782,941 Accounts receivable 6,389,717 3,315,276 1,703,617 11,408,610 Advances to other funds 3,900,000 - - 3,900,000 - - - 136,868 136,868 - Due from other governments Inventories Prepaid invoices Total current assets - 163,908 - 25,719 189,627 - - - 332,449 332,449 - 40,036,277 27,830,191 13,345,596 81,212,064 46,782,941 1,174,992 766,350 - 1,941,342 - - - 530,874 530,874 - Noncurrent assets: Other assets Long-term notes receivable Capital assets: Non-depreciable - Joint Venture 37,414,771 - - 37,414,771 - Non-depreciable 67,556,086 71,201,581 28,197,969 166,955,636 - Depreciable, net 236,570,250 146,541,393 30,527,427 413,639,070 - Total capital assets 341,541,107 217,742,974 58,725,396 618,009,477 - Total noncurrent assets 342,716,099 218,509,324 59,256,270 620,481,693 - Total assets 382,752,376 246,339,515 72,601,866 701,693,757 46,782,941 26,019,393 6,526,410 770,242 33,316,045 220,810 211,698 91,153 81,691 384,542 25,063 Trust liabilities and deposits 1,146,788 564,031 219,102 1,929,921 - Accrued interest 2,642,199 821,828 - 3,464,027 - Arbitrage liability 270,930 117,677 - 388,607 - Unearned revenue 189,644 87,041 54,865 331,550 - 22,257 9,866 7,895 40,018 2,148 7,650,932 4,049,068 - 11,700,000 - 38,153,841 12,267,074 1,133,795 51,554,710 248,021 36,417 LIABILITIES Current liabilities: Accounts payable Accrued payroll Compensated absences payable - due within one year Bonds and other payables - due within one year Total current liabilities Noncurrent liabilities: Compensated absences payable 377,323 167,254 133,840 678,417 Advances from other funds 493,054 4,374,477 68,221 4,935,752 - 112,611,178 32,391,099 6,052 145,008,329 4,884 Bonds and other payables - due in more than a year 31,292 5,031 - 36,323 - Landfill closure and postclosure costs - - 2,730,136 2,730,136 - Claims payable - - - - 3,431,530 Arbitrage liability Total noncurrent liabilities 113,512,847 36,937,861 2,938,249 153,388,957 3,472,831 Total liabilities 151,666,688 49,204,935 4,072,044 204,943,667 3,720,852 186,007,061 182,398,197 58,725,396 427,130,654 - NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital improvements 8,995,115 - 89,198 9,084,313 Debt Service 8,843,796 6,391,318 - 15,235,114 - 27,239,716 8,345,065 9,715,228 45,300,009 43,062,089 Unrestricted Total net assets $ 231,085,688 $ 197,134,580 See accompanying Notes to Basic Financial Statements. 34 $ 68,529,822 $ 496,750,090 $ 43,062,089 City of Chandler Statement of Revenues, Expenses, and Changes in Net Assets Proprietary Funds For the year ended June 30, 2008 Major Funds Water Wastewater Other Governmental Proprietary Activities: Internal Funds Total Service Fund OPERATING REVENUES: Service fees $ 40,613,727 $ 25,145,258 $ 14,113,919 $ 79,872,904 $ - Grants and entitlements - - 6,114,138 6,114,138 Rentals - - 700,883 700,883 - Worker's compensation premiums - - - - 3,055,705 402 1,300,585 107,166 1,408,153 66,186 40,614,129 26,445,843 21,036,106 88,096,078 3,121,891 General and administrative 4,164,568 2,949,927 1,308,680 8,423,175 - Personal services 7,618,698 3,571,904 3,257,567 14,448,169 1,077,637 5,989,296 5,578,752 8,737,935 20,305,983 982,514 15,040,056 5,822,506 2,332,911 23,195,473 1,438,158 Miscellaneous Total operating revenues - OPERATING EXPENSES: Contractual services Commodities Claims - - - - 3,008,361 Housing assistance payments - - 4,213,433 4,213,433 - Landfill closure and postclosure - - (5,514,995) (5,514,995) - Depreciation and amortization 14,531,877 10,822,159 1,701,925 27,055,961 - Total operating expenses 47,344,495 28,745,248 16,037,456 92,127,199 6,506,670 (6,730,366) (2,299,405) 4,998,650 (4,031,121) (3,384,779) 4,202,260 1,073,852 630,433 5,906,545 2,488,478 - - 26 26 - OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES): Interest revenue Landfill energy sales Interest expense (5,914,623) (1,643,656) (422) (7,558,701) - Accretion of bond premium 248,171 130,521 - 378,692 Amortization of bond costs (270,521) (247,830) - (518,351) - (25,014) (21,205) 2,334 (43,885) - (1,759,727) (708,318) 632,371 (1,835,674) 2,488,478 (8,490,093) (3,007,723) 5,631,021 (5,866,795) 8,912,918 7,721,581 3,147,694 19,782,193 - - 27,430,185 507,252 27,937,437 3,219,341 (448,886) (28,471,523) Gain (loss) from disposal of capital assets - Total nonoperating revenues (expenses) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS (896,301) CAPITAL CONTRIBUTIONS AND TRANSFERS: Capital contributions Transfers in Transfers out (27,953,081) (69,556) (28,143) Total capital contributions and transfers (19,040,163) 35,082,210 3,206,060 19,248,107 3,191,198 Change in net assets (27,530,256) 32,074,487 8,837,081 13,381,312 2,294,897 258,615,944 165,060,093 59,692,741 483,368,778 40,767,192 NET ASSETS: Beginning of the year End of the year $ 231,085,688 $ See accompanying Notes to Basic Financial Statements. 35 197,134,580 $ 68,529,822 $ 496,750,090 $ 43,062,089 City of Chandler Statement of Cash Flows Proprietary Funds For the year ended June 30, 2008 Major Funds Water Watewater CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 39,653,383 Cash received from grantors - Cash received from interfund services provided - Cash payments to suppliers $ - (1,767,063) Cash payments to employees for services Net cash provided (used) by operating activities 25,891,137 (6,859,583) (11,632,797) (6,457,800) 26,253,523 12,573,754 - 27,430,185 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in Transfers out (27,953,081) Net cash provided (used) by noncapital financing activities (69,556) (27,953,081) 27,360,629 (73,319,173) (49,503,474) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Proceeds from sales of capital assets Principal paid on bond maturities Interest paid on bonds Proceeds from capital grants Principal received on mortgage notes Capital contributions 5,632 11,796 (6,210,227) (3,899,773) (5,049,780) (1,717,660) - Net cash provided (used) by capital and related financing activities - - - 5,475,268 4,127,315 (79,098,280) (50,981,796) 4,202,260 1,073,852 CASH FLOWS FROM INVESTING ACTIVITIES: Investment income Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents 4,202,260 1,073,852 (76,595,578) (9,973,561) CASH AND CASH EQUIVALENTS: Beginning of year 106,178,230 End of year 34,488,476 $ 29,582,652 $ 24,514,915 $ (6,730,366) $ (2,299,405) 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 operating activities: Depreciation 14,531,877 10,822,159 Landfill closure and postclosure costs - - Landfill energy sales - - Changes in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in inventories (Increase) decrease in other assets (1,260,368) 270,521 247,830 Increase (decrease) in payables Increase (decrease) in accrued payroll and compensated absences Increase (decrease) in deposits Increase (decrease) in claims payable 22,601,790 4,541,675 (829,678) (4,359) - 106,759 38,689 (28,401) (100,975) (3,311,100) Increase (decrease) in unearned revenue Increase (decrease) in advances from other funds Increase (decrease) in other liabilities Total adjustments $ Net cash provided (used) by operating activities See accompanying Notes to Basic Financial Statements. 36 - (27,362) (32,812) 60,822 160,929 43,710 25,342 32,983,889 14,873,159 26,253,523 $ 12,573,754 Other Governmental Proprietary Activities: Internal Service Fund Funds $ Total 14,633,842 $ 80,178,362 $ - 6,019,974 6,019,974 - - - 3,121,891 (16,775,147) (25,401,793) (5,502,197) (3,255,400) (21,345,997) (1,063,997) 39,450,546 (3,444,303) 507,252 27,937,437 3,219,341 (40,539) (28,063,176) 623,269 466,713 (4,965,034) 2,334 (28,143) (125,739) 3,191,198 (127,787,681) - 19,762 (422) - (10,110,000) - (6,767,862) - 154,645 154,645 - 27,500 27,500 - 2,993,049 12,595,632 - (1,787,928) (131,868,004) - 630,434 5,906,546 2,488,478 630,434 5,906,546 2,488,478 (67,512) (86,636,651) 2,235,373 11,214,455 151,881,161 44,547,568 $ 11,146,943 $ 65,244,510 $ 46,782,941 $ 4,998,650 $ (4,031,121) $ (3,384,779) 1,701,925 27,055,961 - (5,514,995) (5,514,995) - 26 26 (360,760) (2,450,806) 19,172 14,813 13,224 531,575 (260,802) - 26,882,663 (141,615) (2,873) 142,575 15,027 (114,349) - - (3,311,100) 68,681 (19,488) (79,662) 28,111 249,862 6,052 623,269 8,756 (230) 75,104 (4,375,381) $ - 4,884 43,481,667 $ 39,450,546 (59,524) $ (3,444,303) 37 City of Chandler Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2008 Volunteer Fireman's Pension and Trust Fund Agency Funds Total ASSETS Equity in pooled cash and investments $ Total assets 42,281 $ 10,977 42,281 $ 10,977 400 $ $ 53,258 53,258 LIABILITIES Accounts payable Due to others - Total liabilities 400 $ - 400 10,977 10,977 10,977 11,377 NET ASSETS Net assets held in trust for pension benefits 41,881 Total net assets $ See accompanying Notes to Basic Financial Statements. 38 41,881 41,881 $ 41,881 City of Chandler Statement of Changes in Fiduciary Net Assets Fiduciary Funds - Trust Funds For the year ended June 30, 2008 Volunteer Fireman's Pension and Pension and Relief Trust Fund ADDITIONS: Investment income $ Total additions 1,088 1,088 DEDUCTIONS: Benefits paid to plan members and suppliers 4,800 Change in net assets (3,712) NET ASSETS: Beginning of year 45,593 End of year $ See accompanying Notes to Basic Financial Statements. 39 41,881 40 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 The City of Chandler (City) was incorporated on February 17, 1920. On May 25, 1964, voters ratified a city charter providing for a Council-Manager form of government. The government of the City is operated by authority of its charter, as limited by the state legislature. The City is governed by an elected mayor and a seven-member council. The following notes to the financial statements are an integral part of the City’s financial statements. NOTE 1 - Summary of Significant Accounting Policies The accounting policies and procedures of the City conform to accounting principles generally accepted in the United States of America (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below. A. Reporting Entity As required by GAAP, these financial statements present the City and its component units, i.e., entities for which the City is considered to be financially accountable and/or exercise significant influence over operations. Blended component units, although legally separate entities, are in substance part of the City’s operations, and therefore data from these units are combined with data of the City. The City’s discretely presented component units, on the other hand, are reported in a separate column in the basic financial statements, to emphasize that they are legally separate from the City. The component units discussed below are included in the City’s reporting entity because of the significance of their operational and/or financial relationships with the City. Each component unit has a June 30 year-end. 1. Blended Component Unit The City of Chandler Municipal Property Corporation (Corporation) is a nonprofit corporation which exists solely for the purpose of constructing or otherwise acquiring or equipping buildings, structures or improvements on land owned by the City for the benefit, common good and general welfare of the City and its citizens. The Chandler City Council appoints the five members of the Board, who are responsible for approving the Corporation’s bond sales. Additionally, all bond sales must be submitted to and approved by the City Council. All financial activities are reported within the enterprise funds of the City. Unaudited financial statements for the Corporation are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 852444008. 2. Discretely Presented Component Units The component unit column in the basic financial statements includes the financial data of the Chandler Industrial Development Authority (Authority). The Authority is responsible for the issuance of tax-exempt bonds for qualified projects approved by the Authority and the City Council. The Authority has a seven-member board of directors appointed by the City Council. The City is able to impose its will on the Authority inasmuch as the City Council must vote to ratify the actions of the Authority with regard to the issuance of bonds. The accounting records of the Authority are maintained by the City and are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 41 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, continued The Chandler Cultural Foundation (Foundation) oversees the operations of the Chandler Center for the Arts for the selection and scheduling of performances, other facility use and general policy setting activities. The City is able to significantly influence its operations. Specifically, the Foundation’s budget is annually reviewed and approved by the City Council and the Foundation’s nine-member Board is appointed by the City Council. Financial statements for the Foundation are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 852444008. B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) present financial information about the City as a whole. The reported information includes all of the nonfiduciary activities of the City and its component units. For the most part, the effect of interfund activity has been removed from these statements. These statements are to distinguish between the governmental and business-type activities of the City. Governmental activities normally are supported by taxes and intergovernmental revenues, and are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, state shared revenues, investment income, and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation Government-wide Financial Statements - The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Agency fund financial statements have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements, the exception is any interfund activity between governmental and business-type activities, such as transfers. Interfund services provided and used are not eliminated. 42 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, continued Fund Financial Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the 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 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service resources are provided during the current year for payment of long-term debt principal and interest due early in the following year (not to exceed one month) and, therefore, the expenditures and related liabilities have been recognized. Compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, licenses and permits, charges for services, special assessments and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash. Delinquent property taxes have been recorded as deferred revenue. Grants and similar awards received before the eligibility requirements are met are also recorded as deferred revenue. Receivables that will not be collected within the available period have also been reported as deferred revenue on the governmental fund financial statements. The City reports the following major governmental funds: General Fund – This fund accounts for all financial resources of the City, except those required to be accounted for in other funds. General Obligation Bonds – This fund accumulates monies for the payment of principal and interest requirements of the City's tax-supported General Obligation Bonds. General Obligation Bonds are repaid from secondary property taxes. Streets Fund – This fund is used to account for the acquisition, construction and improvements of City streets’ projects. Community Services Fund – This fund is used to account for the acquisition of land and equipment, development, construction and improvement of community parks and projects. Public Safety Buildings and Improvements Fund – This fund is used to account for public safety, e.g., police and fire department, building construction, renovation and improvements and equipment purchases. The City reports the following major enterprise funds: Water Services Fund – This fund is used to account for the provision of water services to the residents of the City and certain county residents within the City’s boundaries. All activities necessary to provide such service are accounted for in this fund. Wastewater Services Fund – This fund is used to account for the provision of wastewater services to the residents of the City and certain county residents within the City’s municipal boundaries. All activities necessary to provide such service are accounted for in this fund. 43 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, continued Additionally, the City reports the following fund types: Internal Service Fund - Internal Service Funds are established to account for financing of goods and services provided by one department or agency to other departments or agencies of the City on a cost reimbursement basis. The Internal Service Fund consists of a Self Insurance Fund that administers the City’s self-insured property, liability and workers’ compensation insurance program. Fiduciary Funds – Fiduciary funds account for assets held by the City on behalf of the Volunteer Firefighter’s Relief and Pension Trust Fund and agency funds, which account for resources held by the City in a custodial capacity for marriage licenses and peddler bonds. The Volunteer Firefighter’s Relief and Pension Trust Fund is a single-employer defined benefit pension plan established to provide pension benefits for volunteer firemen of the City. All applicable pronouncements of the Financial Accounting Standards Board (FASB) issued on or before November 30, 1989, as well as the FASB Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins are followed in both the government-wide business-type and enterprise fund financial statements, unless these pronouncements conflict with or contradict GASB pronouncements. Under this requirement, the City is given the option whether or not to apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with or contradict GASB pronouncements. Accordingly, the City has elected not to implement FASB Statements and Interpretations issued after November 30, 1989. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s internal service fund are interfund transfers from the general fund and water fund for property and liability insurance and charges to user departments for premiums related to worker’s compensation and short term disability self-insurance. The principal operating revenues of the City’s enterprise funds are user fees and charges to customers for water, wastewater, solid waste, and airport services. Operating expenses for these funds include the cost of sales and services, administrative expenses, depreciation, claims and premiums. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources, as they are needed. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. Internal service funds are combined and the totals are presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by fund type. D. Budgeting and Budgetary Control The City Council formally adopts an annual operating budget for the General, Special Revenue, Capital Projects, Enterprise and Internal Service Funds. Formal budgetary integration is not employed for the Debt Service Funds because effective budgetary control is alternately achieved through bond indenture provisions. 44 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, continued The level of control at which expenditures may not exceed budget is by department, except for bond and grants-in-aid funds, which are exempted by Arizona Revised Statutes. Upon written request by the City Manager, the City Council has the authority to transfer part or all of any unencumbered appropriation balance from one department to another per City Charter requirement. The City Manager and Department heads have the authority to transfer appropriations between divisions and expenditure categories within departments. Appropriations totaling $2,222,707 were transferred from the contingency reserves within the General, Capital Projects, and Internal Service funds. All appropriations expire at the end of the fiscal year except for encumbered and capital improvements carryforward appropriations. Encumbrance accounting, under which purchase orders, contracts and other commitments for the future expenditure of funds are recorded in order to reserve that portion of the related fund balance, is employed in the governmental fund types. Encumbrances outstanding and capital improvement carryforward appropriations at year-end are reported as reservations of fund balances. The budgets are adopted on a basis differing from GAAP in that for budgetary purposes: (1) current year encumbrances are treated as expenditures; (2) bond proceeds for proprietary funds are considered revenue; (3) capital outlays for enterprise funds are treated as expenditures; (4) debt service principal payments are treated as expenditures for enterprise funds; (5) accrued compensated absences are not recognized as expenditures; (6) depreciation and amortization are not recognized as expenditures; (7) estimated landfill closure and postclosure costs are not recognized as expenditures until incurred; and (8) sales tax collected by merchants but not yet required to be remitted at the end of the fiscal year is not recorded as revenue. On June 3, 1980, the voters of Arizona approved an expenditure limitation for all local governments. This limitation restricts the growth of expenditures to a percentage determined by population and inflation, with certain expenditures excluded from the limitation. Through a Home Rule option, any city can adopt its own alternative expenditure limitation if a majority of the qualified electors vote in favor of the issue at a regular election. At the primary election held March 14, 2006, the City of Chandler voters approved continuance of the Home Rule option. The Home Rule option, currently in effect must be submitted to the electorate for renewal no later than 2010 at which time an additional four-year period can be implemented. E. Pooled Cash and Investments City Charter, Ordinance and Trust Agreements authorize the City to invest in obligations of the U.S. Treasury, its agencies, and instrumentalities, certificates of deposit in eligible depositories, repurchase agreements, and the State of Arizona’s Local Government Investment Pool (LGIP). The City of Chandler Municipal Property Corporation is additionally authorized to invest in bankers acceptances, U.S. Corporate obligations rated Aa3 and AA-, or better, full faith and credit general obligations or special revenue bonds of any state or political subdivision rated AAA and Aaa, Refcorp interest strips and money market funds. Nonparticipating interest-earning investment contracts are stated at cost. Money market investments and participating interest investment contracts with a remaining maturity of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. 45 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, continued Cash resources of the City are combined to form a pool of cash and investments. Excluded from this pool are the cash and investments of the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Interest earned on the pooled cash and investments is distributed each month on the basis of average monthly equity in the pool. F. Restricted Assets Certain proceeds of the City’s enterprise funds revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the Statement of Net Assets because their use is limited by applicable bond covenants. G. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All trade and property tax receivables are shown net of an allowance for uncollectibles. Trade accounts receivable in excess of 90 days comprise the trade accounts receivable allowance for uncollectibles. H. Inventories Inventories are stated at average cost using the first-in/first-out (FIFO) method. Inventories are recorded as expenses/expenditures when consumed in the government-wide financial statements and governmental and proprietary fund financial statements, respectively. I. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. I. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The City defines general government infrastructure capital assets included in capital improvement projects completed at year’s end in excess of $100,000. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are completed. 46 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, continued Estimated useful lives for capital assets were determined based on the City’s historical experience and the various industry standards. Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Building Improvements Infrastructure System Improvements Vehicles Machinery and equipment J. Years 20-40 20 12-50 25 4-7 5-15 Compensated Absences Vacation leave vests with the employee as it is earned. All employees may carry forward only the amount of vacation benefits equal to the maximum allowable earned credits for the preceding calendar year. Upon termination or retirement, an employee will be compensated for accumulated vacation leave dependent on accumulated time and the individual's vacation benefits associated with their rank within the City. Payment will be based on the individual's rate of pay at termination or retirement. Upon death, the same benefits shall be paid to the employee's beneficiary. The amount, including related benefits, for accumulated vacation leave is reported on the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee leave, resignations or retirements. Generally, resources from the general fund are used to pay for compensated absences. Sick leave benefits provided for ordinary sick pay are not vested with the employee. Upon retirement, an employee will be compensated for 50 percent of accumulated sick leave. Payment will be based on the monthly compensation paid to the employee at the time of retirement. Upon death, the same benefits shall be paid to the employee's beneficiary. K. Long-Term Obligations In the government-wide financial statements and proprietary fund statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental or business-type activities and proprietary fund statement of net assets. Bond related charges and credits, such as premiums, discounts and issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. In the fund financial statements, governmental funds 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. 47 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, concluded The debt service funds are specifically established to account for and service the long-term obligations for the governmental funds and special assessment debt. Each enterprise fund individually accounts for and services the applicable bonds and lease purchase obligations which benefit these funds. Long-term obligations are recognized as a liability of a governmental fund when due, or when resources have been accumulated for payment early in the following year. For other long-term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. Deep-discount debt instruments ("capital appreciation bonds") are issued at stated interest rates that are significantly below their effective interest rate, resulting in a substantial (i.e., deep) discount. Implicit interest on these bonds is not paid until the bond matures; therefore, the net value of the bonds is accreted (i.e., the discount is reduced) over the life of the bonds. Accreted interest is calculated each year using the interest method and is treated as an addition to the principal amount of the bonds recorded as long-term obligations. In addition, deep-discount capital appreciation bonds may be sold at a substantial premium. In the government-wide financial statements, premiums on capital appreciation bonds are recorded at face value. L. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Restrictions of retained earnings are limited to outside third-party restrictions. Designations of fund balance represent tentative management plans that are subject to change. M. Capital Contributions - Enterprise Funds Capital contributions as shown in the enterprise funds represent Federal and State grants received, subdividers’ costs of installing water mains, water service connections installed at the customers’ expense, and transfers of equipment from governmental funds. Capital contributions are shown as an inflow of resources in both the government-wide and fund financial statements. N. Post-Employment Health Care and Life Insurance Benefits In addition to providing pension benefits, the City allows for continuance of certain health care and life insurance benefits for retired employees. Substantially all of the City's employees may become eligible for those benefits if they are eligible to receive a retirement pension when leaving employment with the City. The cost of retiree health care and life insurance premiums is borne both by the retiree and the specific retirement plan under which they participated. There is no direct cost paid by the City. O. Statements of Cash Flows The City considers all highly liquid investments (including restricted assets) with an original maturity of three months or less to be cash equivalents. In the statements of cash flows, cash receipts and payments are classified according to whether they stem from operating, noncapital financing, capital and related financing, or investing activities. 48 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 1 - Summary of Significant Accounting Policies, concluded P. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund transfers in the fund statements are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. Q. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - Cash and Investments The City maintains a cash and investment pool that is available for use by all funds, except for the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Each fund’s portion of this pool is displayed on the financial statements as Equity in Pooled Cash and Investments. Pooled cash and investments are stated at fair value with accrued interest shown separately. Restricted cash and investments are amounts held separately by trustees and amounts segregated due to their source and future intent. In addition, the Industrial Development Authority and the Chandler Cultural Foundation separately hold investments. Deposits At year-end, the carrying amount of the City deposits was $5,963,871, and the bank balance was $9,593,365. Of the bank balance, $100,000 was covered by federal depository insurance and $5,013,978 was covered by collateral held in the pledging bank’s trust department in the City’s name. The difference represents outstanding checks and other reconciling items at June 30, 2008. Investments At June 30, 2008, the City had the following investments and maturities: Investment Type U.S. Treasuries U.S. Agencies: Federal Home Loan Bank Federal Home Loan Mortgage Corp. Federal National Mortgage Assn Federal Farm Credit Bank Tennessee Valley Authority Fair Value $ $ 49,086,711 $ 442,343,479 49 3,331,195 $ 68,734,479 51,853,441 63,361,929 15,254,395 138,470,033 85,224,289 132,031,553 5,683,925 15,254,395 Money Market - U.S. Treasuries & Agencies Total 1-5 yrs. Less than 1 yr. 16,592,573 251,622,150 13,261,378 69,735,554 33,370,848 68,669,624 5,683,925 - 49,086,711 $ Concentration of Credit Risk % $ 190,721,329 3.75 % 31.30 19.27 29.85 1.28 3.45 11.10 100.00 % CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 2 - Cash and Investments, concluded Interest Rate Risk. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the maturities of its investment portfolio to five years. Credit Risk. The City’s investment policy allows for investments in obligations guaranteed by the full faith and credit of the United States of America, government sponsored enterprises, government bonds with minimum credit ratings of Aa or AA, commercial paper with a minimum short term rating of P1 or A1, negotiable certificates of deposit, corporate bonds carrying a minimum credit rating of A, and the Local Government Investment Pool. The City’s investment in U.S. Agencies were rated AAA by Standard & Poor’s and the investments in U.S. Agency Discount Notes were rated A1+. As of June 30, 2008, the City’s investment in Money Market Funds did not receive a credit quality rating from a national rating agency. Concentration of Credit Risk. The City’s investment policy does not allow for an investment in any one issuer that is in excess of five percent of the City’s total investments. Securities issues by the United States of America or its agencies are exempt from this provision. More than 5% of the City’s investments are in the U.S. Agencies, U.S. Agency Discount Notes, and U.S. Treasuries and Agencies money market funds. See percentages in above table. NOTE 3 - Property Taxes The City’s property tax is levied and collected by the Maricopa County Treasurer. Property taxes are levied on or before the third Monday in August based upon the previous January 1 full cash value of property as determined by the Maricopa County Assessor. Under Arizona Revised Statutes (A.R.S.), two assessed valuations are used. One is for primary taxes (used to fund operating expenditures) and the other is for secondary taxes (used to meet general obligation debt service requirements). Taxes are due in two equal installments on October 1 and March 1 following the levy date and are delinquent on the first day of November and May, respectively. Delinquent amounts bear interest at the rate of 16 percent. The City also levies various personal property taxes during the year, which are due the second Monday of the month following receipt of the tax notice, and become delinquent 30 days thereafter. Pursuant to A.R.S. a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. The State Constitution and State law specify a property tax levy limitation system. The system consists of two levies, a limited levy known as the primary property tax levy and an unlimited levy referred to as the secondary levy, which may only be used to retire bonded indebtedness. There is also a control on the assessed value of property for primary tax purposes. The base year for the new tax system is fiscal year 1979-80. From this base year, two assessed values evolve. The primary assessed values are allowed to increase by no more than 10 percent a year. The dollar amount of the secondary property tax levy is "unlimited" and the actual full cash value of property is used in determining the tax rate. The primary tax levy is limited to an increase of 2 percent over the previous year's maximum allowable primary levy, plus an increased dollar amount because of a net gain in property not taxed the previous year. Also, the primary property tax from all taxing jurisdictions for homeowners may not exceed 1 percent of the market value of their homes. If the combined primary property tax (for the City, County, School District, etc.) exceeds 1 percent of the market value of the homes, the school districts will reduce their rate until the homeowners' aggregate rate is equal to or less than the allowable 1 percent. The State will then subsidize the school districts for the reduced revenue. This 1 percent limitation applies to primary property taxes only and does not affect the secondary property tax levy. 50 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 3 - Property Taxes, concluded In fiscal year 2007-08, current property tax collections were $33,057,170 or 86.4% percent of the tax levy, and were recognized as revenue when received. At fiscal year end, the delinquent property tax expected to be collected within 60 days is recognized as revenue and recorded as a receivable. Property taxes levied in August 2008 are not available for fiscal year 2007-08; accordingly, such taxes will not be recognized as revenue until fiscal year 2008-2009. NOTE 4 – Capital Assets A summary of changes in capital assets for governmental activities is as follows: Balance July 1, 2007 Governmental Activities Capital asset, not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital asset, being depreciated: Infrastructure Buildings and improvements Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Infrastructure Buildings and improvements Machinery and equipment Total accumulated depreciation Total capital asset, being depreciated, net Governmental activities capital assets, net $ $ 69,686,670 102,937,186 172,623,856 Additions and Transfers In $ 10,167,943 98,142,507 108,310,450 369,411,199 139,325,285 41,048,319 549,784,803 88,852,139 62,122,233 6,460,387 157,434,759 (111,050,960) (33,306,599) (19,414,175) (163,771,734) 386,013,069 558,636,925 (13,786,074) (6,833,266) (4,016,078) (24,635,418) 132,799,341 241,109,791 $ Deletions and Transfers Out $ (133,097,043) (133,097,043) Streets Parks and recreation Buildings and related improvements Total $ 29,503,042 17,011,448 21,468,160 67,982,650 $ 51 $ (1,597,566) (1,597,566) 981,198 981,198 (616,368) $ (133,713,411) Construction in progress in the governmental activities capital assets is comprised of the following: Expended to June 30, 2008 Balance June 30, 2008 Remaining Commitments $ 18,383,329 22,863,160 15,344,095 $ 56,590,584 79,854,613 67,982,650 147,837,263 458,263,338 201,447,518 45,911,140 705,621,996 $ (124,837,034) (40,139,865) (22,449,055) (187,425,954) 518,196,042 666,033,305 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 4 – Capital Assets, continued A summary of changes in capital assets for business-type activities is as follows: Balance July 1, 2007 Business-Type Activities Capital assets, not being depreciated: Land Construction in progress - Joint Venture Construction in progress Total capital assets not being depreciated $ Capital assets, being depreciated: System improvements Building and improvements Vehicles, machinery and equipment Land improvements Total capital assets being depreciated Less accumulated depreciation for: System improvements Buildings and improvements Vehicles, machinery and equipment Land improvements Total accumulated depreciation Total capital assets, being depreciated, net Business-type activities capital assets, net $ 41,056,107 133,832,406 174,888,513 Additions and Transfers In Deletions and Transfers Out $ $ 200,000 37,414,771 88,324,911 125,939,682 (96,457,788) (96,457,788) $ 41,256,107 37,414,771 125,699,529 204,370,407 603,245,963 18,472,563 14,210,759 1,731,950 637,661,235 103,425,167 991,047 981,833 15,922 105,413,969 (555,159) (196,915) (752,074) 706,115,971 19,463,610 14,995,677 1,747,872 742,323,130 (279,622,508) (9,403,847) (11,627,534) (1,084,497) (301,738,386) 335,922,849 (25,896,459) (487,244) (554,506) (117,752) (27,055,961) 78,358,008 110,287 110,287 (641,787) (305,518,967) (9,891,091) (12,071,753) (1,202,249) (328,684,060) 413,639,070 510,811,362 $ 204,297,690 $ (97,099,575) Construction in progress in the business-type activities is comprised of the following: Expended to June 30, 2008 Sewer system improvements Water system improvements Airport improvements Total Balance June 30, 2008 $ 65,375,307 97,106,215 632,778 163,114,300 52 Remaining Commitments 55,795,738 10,591,452 103,903 $ 66,491,093 $ 618,009,477 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 4 – Capital Assets, concluded Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Community services Community development Public works $ Total depreciation expense - governmental activities 1,553,786 3,951,890 4,526,927 51,335 14,540,230 $ 24,624,168 Business-type activities: Water Wastewater Solid waste Airport Chandler housing authority $ 14,531,877 10,822,159 445,296 747,299 509,330 Total depreciation expense - business-type activities $ 27,055,961 NOTE 5 - Operating Leases The City leases approximately 69,000 square feet of office and library space under noncancelable operating leases expiring through June 2020. One office lease allows for basic annual rent escalations of 3% per annum in the 4th, 7th and 10th lease years and the library lease allows for annual rent escalations of 3.5% per annum. Total costs for such leases were $1,085,091 for the year ended June 30, 2008. The future minimum lease payments for these leases are as follows: Year Ending June 30 2009 2010 2011 2012 2013-2017 2018-2020 Total $ $ 53 1,136,648 1,161,625 700,697 444,378 2,466,367 1,688,378 7,598,093 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6 - Long-Term Liabilities A. General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. Bonds issued for business-type activities are reported in the proprietary funds as they are to be repaid from proprietary revenues. In addition, general obligation bonds have been issued to refund other general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds are generally issued as 10 to 15 year serial bonds, except for refunding issues, with varying amounts of principal maturing each year. The City has pledged future ad valorem tax revenues to repay a total of $248,040,000 in outstanding general obligation bonds. Proceeds of the bonds were used for general governmental purposes. The bonds are payable solely from ad valorem taxes and are payable through July 1, 2026. Annual principal and interest payments on the bonds are expected to require less than 74% of total 2007-08 ad valorem taxes. The total principal and interest remaining to be paid on the bonds is $340,119,406. Principal and interest paid for the current year and total ad valorem property taxes were $24,697,530 and $33,844,181, respectively. General Obligation bonds outstanding as reported in governmental and business-type activities at June 30, 2008 were as follows: Outstanding June 30, 2008 Governmental Activities General Obligation Bonds: $25,285,000 Refunding Bonds, Series 1992, due in annual installments of $600,000 to $2,700,000 through 7/1/09; interest at 5 percent to 5.75 percent. $9,850,000 Capital Improvement Bonds, Series 1993, due in annual installments of $100,000 to $5,000,000 through 7/1/13; interest at 4.38 percent to 7.38 percent. $8,275,000 Capital Improvement Bonds, Series 1994, due in an annual installment of $1,450,000 at 7/1/10; interest at 8 percent. $6,650,000 Capital Improvement Bonds, Series 1996, due in annual installments of $125,000 to $3,300,000 through 7/1/15; interest at 5.13 percent to 6.63 percent. $8,205,000 Capital Improvement Bonds, Series 1996B, due in annual installments of $430,000 to $4,000,000 starting 7/1/10 through 7/1/16; interest at 5.25 percent to 7.25 percent. $9,730,000 Refunding Bonds, Series 1997, due in annual installments of $100,000 to $2,350,000 through 7/1/13; interest at 4.7 percent to 7.5 percent. $3,590,000 Capital Improvement Bonds, Series 1998, due in annual installments of $165,000 to $325,000 through 7/1/17; interest at 4.38 percent to 6.3 percent. $6,950,000 Capital Improvement Bonds, Series 1999, due in annual installments of $550,000 to $875,000 starting 7/1/09 through 7/1/18; interest at 4.35 percent to 6.35 percent. 54 $ 2,500,000 1,450,000 1,450,000 925,000 1,905,000 775,000 650,000 4,725,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6 - Long-Term Liabilities, continued Outstanding June 30, 2008 $8,520,000 Capital Improvement Bonds, Series 2000, due in annual installments of $575,000 to $1,025,000 starting 7/1/09 through 7/1/19; interest at 5 percent to 7 percent. $8,040,000 Capital Improvement Bonds, Series 2001, due in annual installments of $475,000 to $905,000 starting 7/1/09 through 7/1/20; interest at 5 percent to 5.5 percent. $23,000,000 Capital Improvement Bonds, Series 2002, due in annual installments of $700,000 to $2,235,000 through 7/1/19; interest at 3 percent to 5 percent. $21,375,000 Capital Improvement Bonds, Series 2003, due in annual installments of $500,000 to $2,775,000 through 7/1/17; interest at 2 percent to 4 percent. $16,265,000 Refunding Bonds, Series 2003, due in annual installments of $730,000 to $2,775,000 starting 7/1/10 through 7/1/16; interest at 2.75 percent to 5 percent. $24,800,000 Capital Improvement Bonds, Series 2005, due in annual installments of $1,200,000 to $4,700,000 starting 7/1/06 through 7/1/15; interest at 3.5 percent to 4 percent. $30,905,000 Capital Improvement Bonds, Series 2006, due in annual installments of $1,455,000 to $6,675,000 starting 7/1/07 through 7/1/17; interest at 4 percent to 4.5 percent. $111,045,000 Capital Improvement Bonds, Series 2007, due in annual installments of $2,475,000 to $9,875,000 starting 7/1/08 through 7/1/26; interest at 3 percent to 5 percent. $22,960,000 Refunding Bonds, Series 2007, due in annual installments of $25,000 to $3,745,000 starting 7/1/09 through 7/1/20; interest at 4 percent to 5 percent. Total Governmental Activities General Obligation Bonds Business-Type Activities Supported General Obligation Bonds: $17,225,000 Refunding Bonds, Series 2001, due in annual installments of $335,000 to $2,290,000 through 7/1/11; interest at 4.25 percent to 5 percent. $16,265,000 Refunding Bonds, Series 2003, due in annual installments of $140,000 to $2,580,000 starting 7/1/10 through 7/1/15; interest at 2.75 percent to 5.0 percent. $111,045,000 Capital Improvement Bonds, Series 2007, due in annual installments of $2,475,000 to $9,875,000 starting 7/1/08 through 7/1/26; interest at 3 percent to 5 percent. Total Business-Type Activities General Obligation Bonds 55 1,175,000 3,325,000 9,800,000 15,575,000 8,935,000 16,600,000 29,450,000 65,445,000 22,960,000 187,645,000 $ Outstanding June 30, 2008 $ 7,605,000 7,190,000 $ 45,600,000 60,395,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6- Long-Term Liabilities, continued B. Street and Highway Revenue Bonds Street and highway revenue bonds are issued specifically for the purpose of constructing street and highway projects. These bonds are payable solely from the revenues derived by the City from highway user taxes, including motor vehicle fuel taxes and all other taxes, fees and charges relating to registration, operation or use of vehicles on public highways or streets or to fuels or any other energy source used for the vehicles collected by the State and returned to the City. The City has pledged future highway user revenues to repay a total of $37,655,000 in outstanding street and highway user revenue bonds. Proceeds of the bonds were used for improvements and expansions to the City’s streets and highways. The bonds are payable solely from state shared gasoline tax revenues and are payable through July 1, 2019. Annual principal and interest payments on the bonds are expected to require less than 28% of total 2007-08 street and highway user revenues. The total principal and interest remaining to be paid on the bonds is $47,381,234. Principal and interest paid for the current year and street and highway user revenue taxes were $4,560,306 and $15,856,863 respectively. Street and highway revenue bonds outstanding as reported in governmental activities at June 30, 2008 were as follows: Outstanding June 30, 2008 Governmental Activities Revenue Bonds: $2,500,000 Street & Highway User Bonds, Series 1993, due in annual installments of $800,000 to $875,000 starting 7/1/11 through 7/1/13; interest at 5 percent to 6 percent. $5,750,000 Street & Highway User Bonds, Series 1994, due in an annual installment of $1,100,000 at 7/1/11; interest at 8 percent. $1,250,000 Street & Highway User Bonds, Series 1996B, due in annual installments of $25,000 to $1,000,000 starting 7/1/06 though 7/1/16; interest at 5.5 percent to 7.5 percent. $5,280,000 Street & Highway User Refunding Bonds, Series 1997, due in annual installments of $25,000 to $2,230,000 through 7/1/14; interest at 5.38 percent to 8 percent. $5,715,000 Street & Highway User Bonds, Series 1998, due in annual installments of $165,000 to $475,000 through 7/1/17; interest at 4.88 percent to 7.38 percent. $3,300,000 Street & Highway User Bonds, Series 1999, due in annual installments of $100,000 to $250,000 through 7/1/17; interest at 4 percent to 7 percent. $2,250,000 Street & Highway User Bonds, Series 2000, due in annual installments of $75,000 to $200,000 through 7/1/18; interest at 5.2 percent to 7 percent. $6,830,000 Street & Highway User Bonds, Series 2001, due in annual installments of $210,000 to $555,000 through 7/1/19; interest at 4.4 percent to 6.4 percent. 56 $ 800,000 1,100,000 200,000 4,935,000 600,000 2,075,000 325,000 4,945,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6 - Long-Term Liabilities, continued Outstanding June 30, 2008 $10,540,000 Street & Highway User Refunding Bonds, Series 2002, due in annual installments of $240,000 to $1,845,000 through 7/1/13; interest at 3 percent to 4.3 percent. $5,000,000 Street & Highway User Bonds, Series 2003, due in annual installments of $1,000,000 to $1,500,000 starting 7/1/16 through 7/1/19; interest at 3.5 percent to 5 percent. $10,920,000 Street & Highway User Refunding Bonds, Series 2004, due in annual installments of $20,000 to $3,360,000 through 7/1/18; interest at 3 percent to 5 percent. Total Governmental Activities Revenue Bonds 7,060,000 5,000,000 10,615,000 $ 37,655,000 C. Water and Sewer Revenue Bonds Water and sewer revenue bonds are issued as authorized by the voters to provide funds to acquire and construct certain improvements to the water and sewer systems of the City and to pay the costs incurred in connection with the issuance of the bonds. These bonds are secured by a pledge of revenues from these systems, and do not constitute a general obligation of the City backed by the general taxing authority. The City has pledged future water and wastewater system revenues, net of operating expenses, to repay a total of $93,000,000 in outstanding water and wastewater system revenue bonds. Proceeds of the bonds were used for improvements and expansions to the City’s water and wastewater system. The bonds are payable solely from net water and wastewater system revenues and are payable through July 1, 2020. Annual principal and interest payments on the bonds are expected to require less than 85% of net 2007-08 water and wastewater system revenue. The total principal and interest remaining to be paid on the bonds is $117,469,983. Principal and interest paid for the current year and net water and wastewater system revenues were $12,509,221 and $14,573,979 respectively. 57 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6 - Long-Term Liabilities, continued Water, and sewer revenue bonds outstanding as reported in business-type activities at June 30, 2008 were as follows: Outstanding June 30, 2008 Business-Type Activities Revenue Bonds: $5,150,000 Water & Sewer Bonds, Series 1994, due in annual installments of $2,150,000 to $3,000,000 starting 7/1/14 through 7/1/15; interest at 6.5 percent to 8 percent. $16,890,000 Water & Sewer Bonds, Series 1996, due in annual installments of $240,000 to $7,500,000 starting 7/1/09 through 7/1/16; interest at 5.25 percent to 7.25 percent. $7,770,000 Water & Sewer Refunding Bonds, Series 1997, due in annual installments of $50,000 to $4,100,000 starting 7/1/15; interest at 5.13 percent to 7percent. $10,330,000 Water & Sewer Bonds, Series 1998, due in annual installments of $250,000 to $4,000,000 through 7/1/17; interest at 4.5 percent to 6.5 percent. $5,985,000 Water & Sewer Bonds, Series 1999, due in annual installments of $275,000 to $575,000 through 7/1/17; interest at 4.2 percent to 6.2 percent. $3,000,000 Water & Sewer Bonds, Series 2000, due in annual installments of $100,000 to $500,000 through 7/1/09 and 7/1/13 through 7/1/17; interest at 5 percent to 6.5 percent. $12,500,000 Water & Sewer Bonds, Series 2001, due in annual installments of $420,000 to $1,045,000 through 7/1/18; interest at 4.25 percent to 6 percent. $26,145,000 Water & Sewer Refunding Bonds, Series 2001, due in annual installments of $515,000 to $3,485,000 through 7/1/10; interest at 4.25 percent to 5 percent. $13,525,000 Sub Lien Water & Sewer Bonds, Series 2002, due in annual installments of $350,000 to $1,185,000 through 7/1/10; interest at 3 percent to 4 percent. $10,970,000 Water & Sewer Refunding Bonds, Series 2002, due in annual installments of $300,000 to $3,755,000 through 7/1/13; interest at 3 percent to 5 percent. $17,830,000 Water & Sewer Refunding Bonds, Series 2003, due in annual installments of $30,000 to $7,515,000 through 7/1/16; interest at 2 percent to 5 percent. $10,000,000 Water & Sewer Bonds, Series 2003, due in annual installments of $ 150,000 to $4,200,000 through 7/1/13; interest at 2 percent to 4 percent. $10,000,000 Water & Sewer Bonds, Series 2005, due in annual installments of $100,000 to $2,500,000 starting 7/1/12 through 7/1/20; interest at 4.125 percent to 5 percent. $15,485,000 Water & Sewer Refunding Bonds, Series 2005, due in annual installments of $245,000 to $5,725,000 starting 7/1/09 through 7/1/17; interest at 3.25 percent to 5 percent. Total Business-Type Activities Revenue Bonds 58 $2,150,000 1,390,000 6,945,000 500,000 1,535,000 450,000 5,150,000 11,610,000 5,355,000 9,200,000 14,030,000 9,200,000 10,000,000 15,485,000 $ 93,000,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6 - Long-Term Liabilities, continued D. Special Assessment Bonds with Governmental Commitment As trustee for improvement districts, the City is responsible for collection of assessments levied against the owners of property within the improvement districts and for disbursement of these amounts for retirement of the respective bonds issued to finance the improvements. At June 30, 2008, the special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, are adequate for the scheduled maturities of the bonds payable and related interest. Special assessment bonds are collateralized by properties within the districts. In the event of default by the property owner, the City may enforce an auction sale to satisfy the debt service requirements of the bonds. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. Special assessment bonds payable with governmental commitment outstanding as reported in governmental activities at June 30, 2008 were as follows: Outstanding June 30, 2008 Governmental Activities Special Assessment Bonds: $1,760,000 Improvement District #89 Bonds, due in annual installments of $85,000 to $160,000 through 1/1/15; interest at 4.75 percent. $7,370,000 Spectrum Improvement District Bonds, due in annual installments of $405,000 to $635,000 through 1/1/23; interest at 4.00 percent. $ 975,000 7,370,000 Total Special Assessment Bonds with Governmental Commitment $ 8,345,000 Changes in Long-Term Liabilities Long-term liability activity for the year ended June 30, 2008 was as follows: Balance July 1, 2007 Governmental Activities: General obligation bonds $ Revenue bonds Additions 197,075,000 $ Balance June 30, 2008 Reductions - $ (9,430,000) $ Due Within One Year 187,645,000 $ 13,570,000 40,480,000 - (2,825,000) 37,655,000 2,965,000 Special assessment bonds 1,099,500 7,370,000 (124,500) 8,345,000 525,000 Post employment benefits - 1,141,678 - 1,141,678 - appreciation bonds 34,505,099 495,555 - 35,000,654 - Deferred bond premiums 4,081,061 - Accrued interest - capital Totals $ $ Balance July 1, 2007 Business-Type Activities: General obligation bonds 277,240,660 $ Revenue bonds Post employment benefits Intergovernmental loans 9,007,233 (207,082) $ Additions 62,410,000 $ (12,586,582) 3,873,979 $ - - 75,104 $ $ Balance June 30, 2008 Reductions 101,095,000 273,661,311 (2,015,000) $ (8,095,000) - 17,060,000 Due Within One Year 60,395,000 $ 3,270,000 93,000,000 8,430,000 75,104 - 16,304 - (16,304) - - Landfill closure/post closure 8,245,131 - (5,514,995) 2,730,136 - Deferred bond premiums 3,589,500 - (351,275) 3,238,225 - Totals $ 175,355,935 $ 75,104 59 $ (15,992,574) $ 159,438,465 $ 11,700,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6-Long-Term Liabilities, continued Statutory Debt Limitation In the absence of more restrictive bond authorization ballot limitations, the City is subject to state limitations on the amount of net bonded debt (exclusive of revenue and improvement district bonds), it may have outstanding. The statutory debt limitation is 20 percent of the secondary assessed valuation for purposes of water, wastewater, artificial light, acquisition and development of land for open space preserves, recreation facilities, public safety and emergency services, streets and transportation, and 6 percent of the secondary assessed valuation for all other purposes (e.g., library, museum, center for the arts). At June 30, 2008, the 6 percent debt limitation was $207,310,517, providing a debt margin of $199,515,517 and the 20 percent debt limitation was $691,035,056, providing a debt margin of $450,790,056. Bond Covenants Pursuant to certain bond indenture agreements, the City is obligated to various limitations and restrictions on annual debt service requirements, maintenance and flow of monies through various restricted accounts, minimum amounts to be maintained in various sinking funds and minimum revenue bond coverages. The City is in compliance with all such significant limitations and restrictions in the opinion of City’s management. Debt Service Requirements to Maturity The following is a summary of debt service requirements to maturity for all bonds, loans and certificates of participation payable as of June 30, 2008: GOVERNMENTAL ACTIVITIES Years Ended June 30 General Obligation Principal 2009 13,570,000 2010 11,700,000 General Obligation Interest $ 11,586,998 Highway Users Highway Users Improvement Improvement Revenue Revenue Districts Districts Principal Interest Principal Interest $ 8,690,679 2,965,000 $ 3,050,000 1,628,797 $ 1,513,999 525,000 $ 505,000 301,806 Total $ 30,577,600 319,213 25,778,890 2011 12,345,000 6,733,235 3,180,000 1,393,821 530,000 298,075 24,480,131 2012 11,070,000 6,216,289 3,320,000 1,236,049 550,000 275,863 22,668,200 2013 11,100,000 5,749,040 3,500,000 1,062,009 575,000 252,813 22,238,861 2014-2018 68,775,000 20,321,410 17,365,000 2,728,259 2,720,000 906,925 112,816,594 2019-2023 33,985,000 8,047,656 4,275,000 163,300 2,940,000 361,800 49,772,756 2024-2028 25,100,000 1,690,500 - - 26,790,500 Total $ 187,645,000 $ 69,035,806 $ - 37,655,000 60 $ 9,726,234 $ 8,345,000 $ 2,716,493 $ 315,123,533 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 6 - Long-Term Liabilities, concluded BUSINESS-TYPE ACTIVITIES Years Ended June 30 General Obligation Principal General Obligation Interest $ Revenue Principal 2,604,731 $ Revenue Interest 8,430,000 $ Total 2009 3,270,000 2010 3,580,000 2,452,663 8,770,000 3,738,009 4,090,615 $ 18,540,671 18,395,346 2011 3,765,000 2,288,413 9,150,000 3,350,934 18,554,346 2012 3,940,000 2,111,013 7,610,000 2,998,526 16,659,539 2013 3,900,000 1,916,313 7,930,000 2,679,858 16,426,170 2014-2018 17,140,000 6,977,938 42,840,000 7,130,138 74,088,076 2019-2023 12,550,000 3,803,031 8,270,000 481,903 25,104,934 2024-2028 12,250,000 829,500 - - 13,079,500 Total $ 60,395,000 $ 22,983,600 $ 93,000,000 $ 24,469,983 $ 200,848,582 Compensated Absences The City’s policy relating to compensated absences is described in Note 1. As shown in the table below, the long-term portion of this debt, amounting to $6,881,195 for governmental activities and $718,435 for business-type activities at June 30, 2008 is expected to be paid in future years from future resources. Compensated absences for governmental activities have been liquidated primarily by the general fund. Balance July 1, 2007 Incurred Satisfied Balance Due Within June 30, 2008 One Year Governmental Activities Compensated Absences $ 6,039,933 $ 5,343,961 $ 4,502,699 $ 6,881,195 $ 383,300 $ 711,266 $ 626,945 $ 619,776 $ 718,435 $ 40,018 Business-Type Activities Compensated Absences NOTE 7 - Defeased Debt In prior years, the City defeased certain general obligation, water and sewer revenue, and street and highway user revenue bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. Bonds that have been advance refunded (defeased) as of June 30, 2008 are as follows: 61 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 7 - Defeased Debt, concluded Refunded Debt Outstanding Water and Sewer Revenue Bonds, Series 1999 Water and Sewer Revenue Bonds, Series 2000 Water and Sewer Revenue Bonds, Series 2001 Streets and Highway User Revenue Bonds, Series 2000 General Obligation Bonds, Series 1993 General Obligation Bonds, Series 1996B General Obligation Bonds, Series 1998 General Obligation Bonds, Series 1999 General Obligation Bonds, Series 2000 General Obligation Bonds, Series 2001 General Obligation Bonds, Series 2002 General Obligation Refunding Bonds, Series 2003 Total Refunded Bonds Outstanding Amount $ 2,950,000 1,225,000 3,625,000 1,250,000 225,000 2,910,000 325,000 2,225,000 7,345,000 4,715,000 6,975,000 140,000 33,910,000 NOTE 8 – Landfill Closure and Postclosure Costs State and federal 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 thirty years after closure. In addition to operating expenses related to landfill activities through its closure date (October 1, 2005), an expense provision and related liability has been recognized based on the future closure and postclosure care costs to be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. As of June 30, 2008, the City estimates total costs related to landfill closure and postclosure care is $13,504,336 and has recognized that entire amount since the landfill no longer accepts waste. To date, $10,774,200 has been paid. The remaining balance of $2,730,136 is recorded as a non-current liability on the City’s financial statements. A current year reduction in the landfill closure/postclosure liability was credited to operating expenses during the fiscal year due to further changes in the planned care costs. The estimated total current cost of the landfill closure and postclosure, $13,504,336, is based on the amount that would be paid if all equipment, facilities and services required to care, monitor and maintain the landfill were acquired as of June 30, 2008. However, the actual cost of closure and postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The City is required by state and federal regulations to comply with local government financial test requirements that assure the City can meet the costs of landfill closure, postclosure care and, if necessary, corrective action when needed. The City complied with all local government financial test requirements for the year ended June 30, 2007. It is anticipated that future inflation costs will be financed in part from earnings on investments. The remaining portion of anticipated future inflation costs and any additional costs that might arise from changes in postclosure requirements, e.g., due to changes in technology or more rigorous environmental regulations, may need to be covered by additional charges to future taxpayers. 62 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 9 - Capital Contributions Capital contributions in the Water, Wastewater, Solid Waste, Airport, and Housing Authority funds amounted to the following: System Development Fees $ 5,475,268 4,127,315 50,999 $ 9,653,582 Water Wastewater Solid Waste Airport Housing Authority Total Developer Contributions $ 3,437,650 3,594,266 $ 7,031,916 Government Contributions $ 2,942,050 154,645 $ 3,096,695 $ $ Total 8,912,918 7,721,581 50,999 2,942,050 154,645 19,782,193 NOTE 10 – Fund Equity Only restrictions imposed by external sources are shown as restricted net assets on the government-wide financial statements. In addition, reserves for encumbrances and inventories are shown on the governmental fund financial statements. The City may also designate through administrative policy portions of fund balance to demonstrate the government’s intended use of those net assets. Designations of fund balances at June 30, 2008, were as follows: General Fund Balance: Unreserved: Designated: Capital Improvements Compensated Absences Expenditure Control Budgeting Self-Insurance City Council 12% Contingency Reserve Total Designated Fund Balance $ $ 151,466,374 6,635,610 6,730,093 805,218 27,666,350 193,303,645 Reservations of Fund Balances At June 30, 2008, reserved amounts of fund balance represent the following: 1) Encumbrances - comprises purchase obligations outstanding at the end of the fiscal year; 2) Debt Service - payment of future principal and interest unpaid at the end of the fiscal year and/or amounts accumulated and reserved/restricted for improvement district debt and general obligation debt; and 3) Capital Improvements - amounts reserved for specific projects and amounts appropriated as part of the City’s 2007/2008 budget. 63 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 10 – Fund Equity, concluded Restricted Net Assets At June 30, 2008, restricted amounts of net assets represent the following: 1) Debt Service - amount reserved pursuant to Municipal Property Corporation bond agreement; 2) Capital Improvements - amounts reserved for specific projects and amounts appropriated as part of the City’s 2007/2008 budget; and 3) Volunteer Firemen’s Pension - actuarially determined benefits payable under the Volunteer Firemen’s Pension and Relief Trust Fund. Deficit Fund Balances The City plans to remove the deficit in the Grants-in-Aid Special Revenue Fund of $2,195,597 by receiving revenues from other governments. The City plans to remove the deficit in the Chandler Employee Special Revenue Fund of $167 by receiving funds from the general fund. NOTE 11 - Retirement and Pension Plans All full-time employees of the City, the Mayor and City Council are covered by one of three pension plans. All full-time City employees, except public safety personnel, participate in the Arizona State Retirement System, a multiple-employer cost-sharing pension plan. Public safety personnel participate in the Public Safety Personnel Retirement System, which is an agent multiple-employer plan. The Mayor and City Council participate in the Elected Officials’ Retirement Plan, a multiple-employer cost sharing pension plan. All three pension plans are administered by the State of Arizona. Arizona State Retirement System A. Plan Description All full-time City employees (except public safety personnel) participate in the Arizona State Retirement System (the System), a multiple-employer cost sharing defined benefit pension, health insurance premium, and long-term disability plan. The System was established by the State of Arizona to provide pension benefits for employees of the state and employees of participating political subdivisions and school districts. The System is administered in accordance with Title 38, Chapter 5, of Arizona Revised Statutes. The System provides for retirement, disability, health insurance premium benefits, and death and survivor benefits. The System issues a publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to Arizona State Retirement System, P.O. Box 33910, Phoenix, AZ 85067-3910, or by calling 1-800621-3778. 64 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 11 - Retirement and Pension Plans, continued B. Funding Policy Arizona Revised Statutes provide statutory authority for determining the employees' and employers' contribution amounts as a percentage of covered payroll. Employers are required to contribute at the same rate as employees. Although Arizona Revised Statutes prescribe the basis of making the actuarial calculation, the Arizona Legislature is able to legislate a contribution rate other than the actuarially determined rate. The actuarially determined contribution rate for the year ended June 30, 2008 was 9.6 percent (9.1 percent retirement and 0.50 percent long-term disability) for active members and the City was required to contribute 9.6 percent (8.05 percent for retirement, 1.05 percent for health insurance premium, and 0.5 percent for long-term disability) of the members’ annual covered payroll. The City’s contributions to the System for the years ended June 30, 2008, 2007 and 2006, were $6,311,856, $5,373,873, and $3,919,701, respectively, equal to the required contributions for each year. Arizona Public Safety Personnel Retirement System (Full-time Police and Fire Employees) A. Plan Description All full-time sworn police officers and fire fighters are eligible to participate in the Public Safety Personnel Retirement System (PSPRS) in separate agent multiple-employer defined benefit retirement and health insurance premium plans. PSPRS was established by Title 38, chapter 5, Article 4 of the Arizona Revised Statutes to provide pension benefits for public safety employees of certain state and local governments. The PSPRS is jointly administered by the fund manager and participating local boards. The fund manager is a five-member board appointed by the Governor and the State Legislature. The fund manager is responsible for establishing contribution rates in accordance with an actuarial study. The PSPRS provides retirement benefits, as well as death and disability and health insurance premium benefits. The PSPRS of the State of Arizona issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Public Safety Personnel Retirement System, 3010 East Camelback Road, Ste 200, Phoenix, AZ 85016 or by calling (602) 255-5575. B. Funding Policy The System is funded through a member contribution of 7.65 percent of gross payroll, an employer contribution set by an actuarial valuation expressed as a percent of gross payroll, and a distribution of the net earnings of the Fund. The City’s current aggregate contribution rate for police is 12.12 percent of annual covered payroll of which 0.39 percent was the health insurance premium portion. The current aggregate contribution rate for firefighters is 11.09 percent of annual covered payroll of which 0.35 percent was the health insurance premium portion. C. Annual Pension Cost For fiscal year ended June 30, 2008, the City’s annual pension cost of $2,967,041 for police and $1,614,904 for firefighters for PSPRS was equal to the City’s required and actual contributions. The required contributions were determined as part of the June 30, 2006, actuarial valuations using the individual entry-age actuarial cost method. 65 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 11 - Retirement and Pension Plans, continued The contribution requirements for the year ended June 30, 2008 were established by the June 30, 2006 actuarial valuations. Those valuations were based on the following. For police, the actuarial assumptions include (a) a rate of return on the investment of present and future assets of 8.5 percent per year compounded annually, attributable to inflation and other across-the-board increases, (b) projected salary increases of 5.5 percent compounded annually attributable to inflation and other across-the-board increases, and (c) additional projected salary increases of 0 percent to 3 percent per year attributable to seniority/merit. For firefighters, the actuarial assumptions include (a) a rate of return on the investment of present and future assets of 8.5 percent per year compounded annually, attributable to inflation and other across-the-board increases, (b) projected salary increases of 5.5 percent compounded annually attributable to inflation and other across-the-board increases, and (c) additional projected salary increases of 0 percent to 3 percent per year attributable to seniority/merit. For both police and firefighters, included in (b) is an inflation component of 5 percent. The actuarial value of PSPRS assets was determined using techniques that smooth the market value of assets over a four-year period. PSPRS’s unfunded accrued liability is being amortized as a level percent of projected payroll on an open basis. The remaining amortization period at July 1, 2006, was 30 years for unfunded actuarial accrued liability and 20 years for excess contributions. Arizona Public Safety Personnel Retirement System - Police Three-Year Trend Information Fiscal Annual Percent Net Pension Year Pension of APC Obligation Ended Cost (APC) Contributed 100% 2006 $ 2,107,136 100% 2007 $ 2,344,017 100% 2008 (Pension) $ 2,871,567 100% 2008 (Health) $ 95,474 Arizona Public Safety Personnel Retirement System - Firefighters Three-Year Trend Information Fiscal Annual Percent Net Pension Year Pension of APC Obligation Ended Cost (APC) Contributed 100% 2006 $ 238,641 100% 2007 $ 1,167,762 100% 2008 (Pension) $ 1,563,938 100% 2008 (Health) $ 50,966 D. Funded Status and Funding Progress As of June 30, 2007, the most recent actuarial calculation date, the firefighters plan was 73 percent funded. The actuarial accrued liability for benefits was $56.7 million, and the actuarial value of assets was $41.4 million, resulting in an unfunded actuarial accrued liability (UAAL) of $15.3 million. The covered payroll (annual payroll of active employees covered by the plan) was $14.1 million, and the ratio of the UAAL to the covered payroll was 109 percent. The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 66 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 11 –Retirement and Pension Plans, continued Elected Officials’ Retirement Plan (Mayor and City Council) A. Plan Description The City’s Mayor and Council participate in the Elected Officials’ Retirement Plan (EORP), a multipleemployer cost sharing defined benefit pension and health insurance premium plan. The EORP was established and is administered by the State of Arizona to provide pension benefits for state and county elected officials, judges, and certain City-elected officials. The fund manager of the PSPRS is also the administrator for the EORP. EORP provides retirement benefits, as well as death and disability benefits. The Elected Officials’ Retirement Plan issues a publicly available financial report that includes financial statements and required supplementary information for EORP. The report may be obtained by writing to Elected Officials’ Retirement Plan, 3010 East Camelback Road, Ste 200, Phoenix, AZ 85016 or by calling (602) 255-5575. B. Funding Policy Covered employees are required by state statute to contribute an amount equal to 7 percent of gross salary. Incorporated city or town employers are required to contribute an amount sufficient to meet both the normal cost of a level-cost method attributable to the EORP, plus the amount required to amortize the unfunded accrued liability for the employer. Such amount is to be determined each year by actuarial valuation and paid as a level percent of compensation. The contribution requirements for plan members are established and may be amended by the Fund Manager, a five-member board. The City’s rate for fiscal year ended June 2008 was 20.21 percent of the members’ annual covered payroll, of which 1.05 percent was the health insurance premium portion. The city’s contributions to EORP for the years ended June 30, 2008, 2007, and 2006, were $23,105, $20,164, and $20,961, respectively, equal to the required contributions for each year. Volunteer Firemen's Pension And Relief Fund A. Plan Description The Volunteer Firemen’s Pension Plan (VFPP) is a single-employer defined benefit pension plan administered by the City. The last actuarial valuation of the Volunteer Firemen's Pension and Relief Fund was made as of November 19, 2004, at which time the actuarial liability was fully funded. As of June 30, 2008, there was one retiree and/or beneficiary of a retiree receiving retirement benefits under the plan. There were no terminated employees entitled to benefits and not yet receiving them. Additionally there are no non-vested active employees and no partially vested employees covered by the plan. The VFPP issues a publicly available financial report that may be obtained from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 67 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 11 - Retirement and Pension Plans, concluded B. Funding Policy There were no contributions to the Volunteer Firemen's Pension and Relief Fund by the City in fiscal year 2007/08. Pursuant to the November 19, 2004, actuarial valuation, the present value of all benefits payable in future years was $57,222 based upon a 6 percent rate of return and the pension obligation was deemed to be fully funded. NOTE 12 – Post-employment Benefits Other Than Pensions The cost of post-employment healthcare benefits, from an accrual accounting perspective, similar to the cost of pension benefits, should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid. A. Plan Description The City provides post-employment medical care (OPEB) for retired employees through a single employer defined benefit medical plan. The plan provides medical benefits for eligible retirees, their spouses and dependents though the City’s group health insurance plans, which covers active and retired members. The benefits, benefit levels and contribution rates are determined annually by the City’s Human Resources Department and approved by the City Council. The plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The plan does not issue a separate financial report. The City also provides a Retirement Health Savings Plan (RHSP) for retired employees. The plan provides medical expense reimbursements eligible under Internal Revenue Code Section 213, other than direct long-term care expenses. The plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The plan does not issue a separate financial report. B. Benefits Provided The City provides post-employment medical care benefits to its retirees. To be eligible for benefits, an employee must qualify for retirement under one of the state retirement plans for public employees and be covered under the City’s medical plan during their active status. The City also provides a RHSP for its retirees. To be eligible for the City’s direct contribution, an employee must have at minimum 5 years of employment with the City. 68 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 12 – Post-employment Benefits Other Than Pensions, Continued C. Funding Policy The plan premium rates are determined annually by the City’s Human Resources Department, in collaboration with an outside consulting firm, and approved by the City Council. The retiree’s contribution is 100% of the actuarially determined blended premium rate. 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. This implied subsidy exists because, on average, retiree health care costs are higher than active employee healthcare costs. By not contributing anything toward this plan in advance, the City employs a payas-you-go method through paying the higher rate for active employees each year. As of June 30, 2008, retirees contributed $888,905 and the City contributed $450,918 (implied subsidy). D. Annual OPEB Costs and Net OPEB Obligation The City’s annual other post-employment benefit (OPEB) cost for each plan is calculated based on the annual required contribution (ARC) of the employer, an 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 to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The City’s annual OPEB cost for the current year and related information for each plan are as follows at June 30, 2008: Annual Required Contribution (ARC) ARC Adjustment Interest adjustment to Net OPEB Obligation $ 2,125,569 - Annual OPEB Cost Contributions Made 2,125,569 908,785 Increase in Net OPEB Obligation 1,216,784 Net OPEB Obligation - Beginning of year - Net OPEB Obligation - End of year $ 1,216,784 The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2008 were as follows: Fiscal Year Ended June, 30 2008 Annual OPEB Cost $ 2,125,569 Employer Contributions $ 908,785 69 Percentage of OPEB Cost Contributed 42.75% Net OPEB Obligation $1,216,784 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 12 – Post-employment Benefits Other Than Pensions, Concluded E. Funded Status and Funding Progress The funded status of the plan as of June 30, 2008 was as follows: Actuarial Accrued Liability Actuarial Value of Plan Assets $ 17,961,768 - Unfunded Actuarial Accrued Liability (UAAL) $ 17,961,768 Funded Ratio 0.0% Covered Payroll 87,610,241 UAAL as a percentage of covered payroll 20.5% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress immediately following the Notes to the Financial Statements presents multi-year trend information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. The actuarial methods and significant assumptions used to determine the ARC for the current year are as follows: 1. 2. 3. The actuarial cost method used is the unit credit method. As of this valuation date, July 1, 2007, there are no assets, hence no need for an actuarial value of assets. The amortization method is level percent of payroll. The amortization period is 30 years. The period is closed. NOTE 13 - Commitments and Contingencies A. Contractual Commitments The City has entered into a contract with the United States Government, the State of Arizona, the Central Arizona Water Conservation District, the Flood Control District of Maricopa County, the Salt River Agricultural Improvement Power District, the Salt River Valley Water User's Association and the cities of Glendale, Phoenix, Mesa, Tempe and Tucson to fund certain facilities of the Central Arizona Project known as "Plan Six." Actual contributions and accumulated earnings at June 30, 2008, amounted to $460,303, and the account is fully funded at June 30, 2008. 70 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 13 – Commitments and Contingencies, concluded B. Litigation The City is subject to a number of lawsuits, investigations, and other claims (some of which involve substantial amounts) that are incidental to the ordinary course of its operations, including those related to wrongful death and personal injury matters. Although the City Attorney does not currently possess sufficient information to reasonably estimate the amounts of the liabilities to be recorded upon the settlement of such claims and lawsuits, some claims could be significant to the City’s operations. While the ultimate resolution of such lawsuits, investigations, and claims cannot be determined at this time, in the opinion of City management, based on the advice of the City Attorney, the resolution of these matters will not have a material adverse effect on the City’s financial position. NOTE 14 - Risk Management The City is exposed to various risks of loss related to litigation, claims and torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters (for which the City carries commercial insurance). The City established a Self-Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. In fiscal year 2007/2008, the Self-Insurance Fund provided coverage for up to a maximum of $2,000,000 per occurrence for liability claims and $50,000 for each property damage claim. The City purchases commercial insurance for claims in excess of coverage provided by the Self-Insurance Fund and for all other risks of loss. During fiscal year 2007/2008, there were no significant reductions in the amounts of excess coverage purchased, nor has the City experienced any settlements in excess of insurance coverage over the past three fiscal years. Premiums are paid into the Internal Service Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. Interfund premiums are used to reduce the amount of claim expenditures reported in the Internal Service Fund. In the opinion of City management, based on the advice of the City Attorney, the outcome of such litigation and claims will not have materially adverse effect on the City’s financial position. The claims liability of $3,431,530 reported as claims payable in the Self-Insurance Fund at June 30, 2008, is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that liabilities be reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $2,000,000 for general liability and $500,000 for worker’s compensation. Liabilities include an amount for claims that have been incurred but not reported (IBNR). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. Changes in the Fund’s claims liability amount in fiscal years 2007 and 2008 were: Years Ended June 30, 2008 2007 2008 Current Year Claims and Changes in Estimates Beginning of Fiscal Year Liability $ $ 3,803,054 3,362,849 $ $ 1,821,685 3,008,361 71 Balance at Fiscal Year End Claim Payments ($2,261,890) ($2,939,680) $ $ 3,362,849 3,431,530 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 15 – Interfund Transfers The interfund operating transfers in and out at June 30, 2008 are as follows: Transfers Out Transfers In General Fund Debt Service-General Obligation Bonds Capital Projects-Capital Equipment Capital Projects-Computer Purchase Capital Projects-Streets Capital Projects-Fleet Replacement Internal Service-Self Insurance Enterprise-Housing Authority Total General Fund Special Revenue Funds Highway User Revenue Fund Total $ Debt Service-Highway User Revenue Bonds Capital Projects-Capital Equipment Capital Projects-Computer Purchase Total Special Revenue-Highway User Revenue Local Transportation Assistance Fund Capital Projects-Computer Purchase Community Development Fund Enterprise-Chandler Housing Fund 4,649,765 153,687 22,628 4,826,080 1,525 222,252 Total Special Revenue Funds Capital Projects Funds Capital Equipment Fund Enterprise Funds Airport Fund Solid Waste Fund 5,049,857 Capital Projects-Computer Purchase 35,313 Total Capital Projects Funds 35,313 Capital Projects-Computer Purchase 4,250 Capital Projects-Capital Equipment 5,958 Capital Projects-Computer Purchase 30,331 Total Solid Waste Fund Wastewater Fund Water Fund 36,289 Capital Projects-Capital Equipment Capital Projects-Computer Purchase Total Wastewater Fund 38,541 31,015 69,556 Capital Projects-Capital Equipment 29,553 Capital Projects-Computer Purchase Enterprise-Wastewater Bond Fund Internal Service-Self Insurance 93,343 27,430,185 400,000 Total Water Fund Chandler Housing Fund 27,953,081 Special Revenue-Community Development 408,347 Total Enterprise Funds Internal Service Self Insurance 26,273,270 1,257,860 2,547,732 2,795,280 44,689 2,819,341 285,000 36,023,172 28,471,523 Capital Projects-Capital Equipment Capital Projects-Computer Purchase Capital Projects-Fleet Replacement Total Internal Service-Self Insurance 43 12,544 15,556 28,143 Total transfers out $ Transfer in of general capital assets: To general capital assets from existing Chandler Housing capital assets (8,627) Total transfers in 72 69,608,008 $ 69,599,381 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 15 – Interfund Transfers concluded Interfund transfers are made from various funds and cost centers to fund costs including dental insurance, computer replacement, capital equipment purchases and debt service. The interfund transfer from the Water fund to the Wastewater fund was to cover construction cost of capital assets until the City issues General Obligation and Revenue bonds in fiscal year 2008-09. The proceeds of the bonds will finance the construction of the capital assets and repay the Water fund. NOTE 16 – Interfund Receivables and Payables A. Interfund Advances To/Advances From Advances To General Advances From Total Capital Projects-Community Services Capital Projects-Public Safety Capital Projects-Streets $ Total General Fund Capital Projects Capital Equipment Enterprise Water 5,566,708 15,654,706 7,870,000 29,091,414 General Special Revenue-Highway User Revenue Enterprise-Water Enterprise-Wastewater Enterprise-Solid Waste 9,617,358 1,012,365 493,054 474,477 68,221 Total Capital Projects-Capital Equipment 11,665,475 Enterprise-Wastewater 3,900,000 Total $ 44,656,889 Interfund advances are made from the general fund to capital projects funds to cover expenditures in impact fee funds until impact fees are received. None will be repaid within one year. Interfund advances are made from the capital projects capital equipment fund to various funds to finance the purchase of capital assets. Amounts to be repaid within one year total $1,455,466. The interfund advance was made from the water enterprise fund to the wastewater system development fees fund of the wastewater enterprise to cover expenditures until system development fees are collected. Amounts to be repaid within one year total $650,000. 73 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2008 NOTE 16- Interfund Receivables and Payables, concluded B. Interfund Due To/Due From Due from other funds General Due to other funds Total Special Revenue-Grants in Aid Special Revenue-Community Development Special Revenue-Chandler Employee Capital Projects-Capital Equipment Acquisition and Replacement Total $ 2,035,254 276,497 168 4,855,861 $ 7,167,780 NOTE 17 – Joint Venture The City and the Town of Gilbert entered into an Intergovernmental Agreement (Agreement) for the design, construction and operation of a Joint Water Treatment Plant. Under the Agreement, the real property, plant infrastructure and raw water pipelines will be jointly owned with each party entitled to 50% of the plant capacity, and each party paying 50% of the construction costs. The Town of Gilbert acts as the Lead Agent, overseeing construction activities, and shall operate the plant following construction. 74 REQUIRED SUPPLEMENTARY INFORMATION 75 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Property taxes $ Sales taxes 34,872,434 $ 34,872,434 $ 33,410,362 $ (1,462,072) 95,895,460 95,895,460 97,226,841 1,331,381 3,257,414 3,257,414 4,023,119 765,705 65,372,485 65,372,485 63,619,472 Licenses and permits 4,431,450 4,431,450 3,858,368 (573,082) Charges for services 18,305,490 18,305,490 17,040,645 (1,264,845) Fines and forfeitures 6,548,131 6,548,131 4,347,544 (2,200,587) Rentals 57,680 57,680 94,575 36,895 Contributions 50,000 50,000 100,000 50,000 5,200,000 5,200,000 11,250,079 6,050,079 754,438 754,438 700,543 234,744,982 234,744,982 235,671,548 926,566 Franchise taxes State shared Interest income Miscellaneous Total revenues (1,753,013) (53,895) EXPENDITURES: General government City Manager 25,324,914 32,682,112 18,437,095 14,245,017 City Clerk 1,012,086 1,119,905 527,816 592,089 Communications and Public Affairs 2,608,434 2,983,034 2,235,095 747,939 Law 3,375,246 3,523,599 2,982,838 540,761 Magistrate 3,932,771 4,078,685 3,850,973 227,712 139,331,123 123,868,205 21,853,581 102,014,624 842,908 944,787 686,522 258,265 Fire 23,985,422 24,604,397 24,696,405 Police Management Services Mayor and Council Public safety (92,008) 55,203,199 56,821,535 52,137,487 4,684,048 Community development 10,324,391 11,341,438 8,619,348 2,722,090 Public works 17,103,843 18,542,901 11,554,310 6,988,591 Community services 29,500,774 31,525,033 28,192,426 3,332,607 312,545,111 312,035,631 175,773,896 136,261,735 (77,800,129) (77,290,649) 59,897,652 137,188,301 Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Transfers out Total other financing sources (uses) Change in fund balance Fund balances (deficits), July 1, 2007 Fund balances (deficits), June 30, 2008 $ - - (51,340,910) (51,340,910) (36,023,172) 15,317,738 (51,340,910) (51,340,910) (35,780,633) 15,560,277 (129,141,039) (128,631,559) 24,117,019 152,748,578 186,284,725 186,284,725 186,284,725 - 57,143,686 See accompanying notes to this schedule. 76 $ 57,653,166 242,539 $ 210,401,744 242,539 $ 152,748,578 CITY OF CHANDLER, ARIZONA Required Supplementary Information June 30, 2008 NOTE 1 – Budgetary Basis of Accounting The adopted budget of the City is prepared on a basis consistent with accounting principles generally accepted in the United States of America with the following exceptions: (1) reserved encumbrances at year end are recognized as expenditures and (2) accrued compensated absences and accrued payroll were not recognized as expenditures. Consequently, the following adjustments are necessary to present the change in fund balance on a budgetary basis in order to provide a meaningful comparison. Change in Fund Balances Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds $ 22,280,618 Taxes accrued as revenue for GAAP purposes in fiscal year ended June 30, 2007 2,948,038 Taxes accrued as revenue for GAAP purposes in fiscal year ended June 30, 2008 (2,647,675) Cash receipts accured as revenue for GAAP purposes in fiscal year ended June 30, 2007 927,256 Cash receipts accured as revenue for GAAP purposes in fiscal year ended June 30, 2007 (29,571) Accrued payroll not recognized as budgetary basis expenditures for the fiscal year ended June 30, 2007 (2,429,308) Accrued payroll not recognized as budgetary basis expenditures for the fiscal year ended June 30, 2008 3,497,931 Reserved encumbrances at June 30, 2007 recognized as budgetary expenditures in fiscal year ended June 30, 2007 9,212,341 Reserved encumbrances at June 30, 2008 recognized as budgetary expenditures in fiscal year ended June 30, 2008 (9,642,611) Budgetary Comparison Schedule for the General Fund $ 77 24,117,019 CITY OF CHANDLER, ARIZONA Required Supplementary Information June 30, 2008 Arizona Public Safety Personnel Retirement System - Police Schedule of Funding Progress (1) Actuarial Value of Assets Valuation Date 30-Jun 2005 2006 2007 $ 54,046,707 58,256,719 59,909,235 (2) Entry Age Actuarial Accrued Liability (AAL) $ 63,630,411 73,363,294 91,534,641 84.9% 79.4% 65.4% (5) Annual Covered Payroll (4) Unfunded AAL (2) - (1) (3) Percent Funded (1)/(2) $ 9,583,704 15,106,575 31,625,406 $ 18,172,035 19,977,231 23,460,954 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) 52.7 75.6 134.8 Arizona Public Safety Personnel Retirement System - Firefighters Schedule of Funding Progress Valuation Date 30-Jun 2005 2006 2007 (1) Actuarial Value of Assets $38,535,167 39,694,142 41,392,622 (2) Entry Age Actuarial Accrued Liability (AAL) $ 39,111,395 44,956,349 56,735,431 (4) Unfunded AAL (2) - (1) (3) Percent Funded (1)/(2) 98.5% 88.3% 73.0% 78 $ 576,228 5,262,207 15,342,809 (5) Annual Covered Payroll $11,330,132 12,235,917 14,050,999 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) 5.1 43.0 109.2 BUDGETARY COMPARISON SCHEDULES OTHER MAJOR FUNDS 79 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Obligation Bonds For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget EXPENDITURES: Debt service: Principal retirement $ Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures 12,010,459 $ 12,010,459 $ 13,570,000 $ (1,559,541) 12,789,507 12,789,507 12,703,270 24,799,966 24,799,966 26,273,270 (1,473,304) 86,237 (24,799,966) (24,799,966) (26,273,270) (1,473,304) - - 26,273,270 26,273,270 - - 26,273,270 26,273,270 (24,799,966) (24,799,966) - 24,799,966 - - - - Other financing sources (uses): Transfers in Total other financing sources (uses) Change in fund balances Fund balances (deficits), July 1, 2007 Fund balances (deficits), June 30, 2008 $ (24,799,966) 80 $ (24,799,966) $ - $ 24,799,966 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Streets Capital Projects For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Other taxes $ System development fees 4,190,000 $ 4,190,000 $ 3,786,677 $ (403,323) 6,700,000 6,700,000 1,395,377 854,000 854,000 1,810,696 956,696 - - 295,227 295,227 11,744,000 11,744,000 7,287,977 Capital improvements 169,929,318 158,060,238 46,421,519 111,638,719 Total expenditures 169,929,318 158,060,238 46,421,519 111,638,719 (158,185,318) (146,316,238) (39,133,542) 107,182,696 Proceeds from the issuance of debt 87,875,000 87,875,000 - (87,875,000) Transfers in 52,999,395 52,999,395 2,795,280 (50,204,115) (46,005,000) (46,005,000) 94,869,395 94,869,395 2,795,280 (92,074,115) (63,315,923) (51,446,843) (36,338,262) 15,108,581 Interest income Miscellaneous Total revenues (5,304,623) (4,456,023) EXPENDITURES: Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances Fund balances (deficits), July 1, 2007 Fund balances (deficits), June 30, 2008 111,015 $ (63,204,908) 81 - 111,015 $ (51,335,828) 46,005,000 111,015 $ (36,227,247) $ 15,108,581 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Community Services - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Charges for Services System development fees $ 694,000 6,400,000 $ 694,000 $ - 6,400,000 3,774,115 $ (694,000) (2,625,885) 818,900 818,900 1,863,269 1,044,369 7,912,900 7,912,900 5,637,384 (2,275,516) - 18,120 15,169 2,951 106,909,106 98,631,719 31,157,274 67,474,445 106,909,106 98,649,839 31,172,443 67,477,396 (98,996,206) (90,736,939) (25,535,059) 65,201,880 Proceeds from the issuance of debt 47,733,000 47,733,000 - (47,733,000) Transfers in 10,727,000 10,727,000 - (10,727,000) (12,727,000) (12,727,000) (2,000,000) 10,727,000 (2,000,000) (2,000,000) (2,000,000) - (100,996,206) (92,736,939) (27,535,059) 65,201,880 (46,395,930) (46,395,930) (46,395,930) - $ (147,392,136) $ (139,132,869) Interest income Total revenues EXPENDITURES: Current: General government Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances (deficits), June 30, 2008 82 $ (73,930,989) $ 65,201,880 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Public Safety Buildings and Improvements - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ 2,015,000 $ 2,015,000 $ 1,725,740 $ (289,260) 95,000 95,000 1,049,534 954,534 2,110,000 2,110,000 2,775,274 665,274 - 18,120 15,169 2,951 46,788,721 46,788,721 43,981,249 43,981,249 8,412,649 8,412,649 35,568,600 35,568,600 (44,678,721) (41,871,249) (5,637,375) 36,233,874 20,465,000 20,465,000 - (20,465,000) 20,465,000 20,465,000 - (20,465,000) Change in fund balances (24,213,721) (21,406,249) (5,637,375) 15,768,874 Fund balances, July 1, 2007 (13,905,209) (13,905,209) (13,905,209) - Interest income Total revenues EXPENDITURES: Current: General government Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from the issuance of debt Total other financing sources (uses) Fund balances (deficits), June 30, 2008 $ (38,118,930) 83 $ (35,311,458) $ (19,542,584) $ 15,768,874 84 COMBINING NON-MAJOR AND FIDUCIARY FUND FINANCIAL STATEMENTS 85 City of Chandler Combining Balance Sheet All Non-Major Governmental Funds - By Fund Type June 30, 2008 Total Non-Major Special Debt Capital Governmental Revenue Service Projects Funds ASSETS Equity in pooled cash and investments $ 19,432,759 $ 5,032,074 $ 20,867,296 $ 45,332,129 161 - - 161 Receivables (net of allowance for uncollectible): Accounts Special assessments - 7,493,589 - 7,493,589 580,556 - - 580,556 2,563,840 - - 2,563,840 - - 11,665,475 11,665,475 $ 22,577,316 $ 12,525,663 $ 32,532,771 $ 67,635,750 $ 1,400,769 $ $ $ 1,973,718 Notes Due from other governments Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll Accrued interest 7,466 99,957 - 565,483 2,879 102,836 - 865,539 - 865,539 Due to other funds 2,311,919 - 4,855,861 7,167,780 Advances from other funds 1,012,365 - - 1,012,365 Bonds payable - 2,965,000 - 2,965,000 Deferred revenue - 7,073,378 - 7,073,378 4,825,010 10,911,383 5,424,223 21,160,616 Total liabilities Fund Balances: Reserved: Capital projects purposes - - 15,500,358 15,500,358 Debt service - 1,614,280 - 1,614,280 Special revenue funds 17,752,306 - - 17,752,306 Capital projects funds - - 11,608,190 11,608,190 17,752,306 1,614,280 27,108,548 46,475,134 22,577,316 $ 12,525,663 $ 32,532,771 Unreserved, undesignated: Total fund balances Total liabilities and fund balances $ $ 67,635,750 (Continued) 86 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances All Non-Major Governmental Funds - By Fund Type For the year ended June 30, 2008 Total Non-Major Special Debt Capital Governmental Revenue Service Projects Funds REVENUES: Highway user taxes $ Grants and entitlements 15,856,863 $ 10,553,680 - $ - $ 15,856,863 - - 10,553,680 1,216,365 System development fees - - 1,216,365 Special assessments - 426,428 - 426,428 Charges for services 242,426 - - 242,426 1,033,328 - 1,327,675 2,361,003 145,497 - 85,225 230,722 27,831,794 426,428 2,629,265 30,887,487 Interest income Miscellaneous Total revenues $ EXPENDITURES: Current: General government 167,834 - 281,825 449,659 Public Safety 737,704 - - 737,704 Community development 2,900,471 - - 2,900,471 Public works 7,560,230 - - 7,560,230 Community services Capital outlay 357,426 - - 357,426 7,803,833 - 12,275,750 20,079,583 - Debt service: - - Principal - 3,089,500 - Bond issuance costs - - 179,201 179,201 Interest and fiscal charges - 1,734,076 - 1,734,076 19,527,498 4,823,576 12,736,776 37,087,850 8,304,296 (4,397,148) (10,107,511) (6,200,363) Total expenditures REVENUES OVER (UNDER) EXPENDITURES 3,089,500 OTHER FINANCING SOURCES (USES): Bond premium (discount) - - 165,431 165,431 Face amount of bonds issued - - 7,370,000 7,370,000 Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) 33,605 - 4,825 38,430 399,720 4,649,765 4,324,568 9,374,053 (5,049,857) - (4,616,532) 4,649,765 11,829,511 (35,313) 11,862,744 (5,085,170) 252,617 1,722,000 5,662,381 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 3,687,764 FUND BALANCES: Beginning of year End of year 14,064,542 $ 17,752,306 1,361,663 $ 1,614,280 25,386,548 $ 27,108,548 40,812,753 $ 46,475,134 (Concluded) 87 88 City of Chandler Non-Major Governmental Funds NON-MAJOR SPECIAL REVENUE FUNDS A Special Revenue Fund is used to finance particular activities and is created out of receipts of specific taxes or other earmarked revenues. Such funds are authorized by statutory or charter provisions to pay for certain activities with some special form of continuing revenues. Highway Users Used to account for the receipt and expenditure of the City’s allocation of State highway user taxes. State law restricts the use of these monies to maintenance, construction and reconstruction of streets, and repayment of transportation-related debt. Local Transportation Assistance Used to account for the receipt and expenditure of the City’s allocation of State lottery monies. State law restricts the use of these monies to street and highway projects in the public right-of-way and to mass transportation purposes. Grants-in-Aid Used to account for the receipt and expenditure of miscellaneous federal and state grants awarded to the City for various, specific purposes. Community Development Used to account for monies received from the U.S. Department of Housing and Urban Development and Maricopa County for affordable housing activities including housing rehabilitation and redevelopment activities. Parks and Recreation Use to account for donations for park improvements and programs restricted pursuant to donor covenants. Library Used to account for donations for library improvements and programs restricted pursuant to donor covenants. Community Center Building Used to account for donations restricted for improvements to the City's Community Services Building and facilities. Chandler Employee Used to account for monies derived from vending machine income utilized to defray expenses associated with Citysponsored employee functions. Downtown Redevelopment Used to account for contributions earmarked for downtown improvements. Municipal Arts Used to account for amounts earmarked for municipal arts. NON-MAJOR DEBT SERVICE FUNDS Highway User Revenue Bonds Accumulates monies for the payment of principal and interest requirements of the City's Highway User Revenue Bonds. Revenues for repayment are generated from gas tax generated within the State of Arizona. 89 City of Chandler Non-Major Governmental Funds, Continued NON-MAJOR DEBT SERVICE FUNDS, CONTINUED Special Assessment Bonds Accumulates monies for the payment of principal and interest on Special Assessment Bonds that were issued to finance costs of improvements applicable to benefiting properties within certain improvement districts. CAPITAL PROJECTS FUNDS Public Works and General Government Used to account for the acquisition, construction, reconstruction, improvement and renovation of general government projects. Capital Equipment Acquisition and Replacement Used to account for the purchase and/or replacement of general equipment-type assets, e.g., vehicles, furniture, office equipment. Special Assessments Used to account for expenditures related to special assessment districts within the City. Computer Purchase Used to account for the purchase and/or replacement of computer equipment. Fleet Replacement Used to account for the replacement of vehicle fleet. 90 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2008 Special Revenue Highway Local User Transportation Fund Assistance Community Parks and Grants-in-Aid Development Recreation $ $ Library ASSETS Equity in pooled cash and investments $ 16,303,725 $ 2,743,721 - - $ 262,356 $ 22,714 Receivables (net of allowance for uncollectible): Accounts - 161 - - - - Special assessments - - - - - - Notes Due from other governments Advances to other funds Total assets - - - 580,556 - - 1,309,542 - 717,438 536,860 - - - - - - - - $ 17,613,267 $ 2,743,882 $ 717,438 $ 1,117,416 $ 262,356 $ 22,714 $ 265,114 $ 37,043 $ 876,094 $ 215,923 $ 3,122 $ 3,379 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll 91,804 - 1,688 6,465 - - Accrued interest - - - - - - - - 2,035,254 276,497 - - 1,012,365 - - - - - Bonds payable - - - - - - Deferred revenue - - - - - - 1,369,283 37,043 2,913,036 498,885 3,122 3,379 Capital projects purposes - - - - - - Debt service - - - - - - Special revenue funds 16,243,984 2,706,839 (2,195,598) 618,531 259,234 19,335 Capital projects funds - - - - - - 16,243,984 2,706,839 (2,195,598) 618,531 259,234 19,335 Due to other funds Advances from other funds Total liabilities Fund Balances: Reserved: Unreserved, undesignated: Total fund balances Total liabilities and fund balances $ 17,613,267 $ 2,743,882 $ 717,438 $ 1,117,416 $ 262,356 $ 22,714 (Continued) 91 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2008 Special Revenue Debt Service Special Community Chandler Downtown Municipal Highway User Assessment Center Building Employee Redevelopment Arts Revenue Bonds Bonds ASSETS Equity in pooled cash and investments $ 203 $ - $ 7,719 $ 92,321 $ 3,807,383 $ 1,224,691 Receivables (net of allowance for uncollectible): Accounts - - - - - - Special assessments - - - - - 7,493,589 Notes - - - - - - Due from other governments - - - - - - Advances to other funds - - - - - - Total assets $ 203 $ - $ 7,719 $ 92,321 $ 3,807,383 $ 8,718,280 $ - $ - $ - $ 94 $ - $ 7,466 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll - - - - - - Accrued interest - - - - 842,383 23,156 Due to other funds - 168 - - - - Advances from other funds - - - - - - Bonds payable - - - - 2,965,000 - Deferred revenue - - - - - 7,073,378 - 168 - 94 3,807,383 7,104,000 Capital projects purposes - - - - - Debt service - - - - - 1,614,280 7,719 92,227 - - - - - - 7,719 92,227 - 1,614,280 Total liabilities Fund Balances: Reserved: Unreserved, undesignated: Special revenue funds 203 Capital projects funds - Total fund balances 203 Total liabilities and fund balances $ 203 (168) (168) $ - $ 92 7,719 $ 92,321 $ 3,807,383 $ 8,718,280 Capital Projects Capital Public Works Equipment and General Acquisition and Special Computer Fleet Governmental Government Replacement Assessment Purchases Replacement Funds $ $ 8,863,159 Total Other - $ 7,495,055 $ 4,175,057 $ 334,025 $ 45,332,129 - - - - - 161 - - - - - 7,493,589 - - - - - 580,556 - - - - - 2,563,840 - 11,665,475 - - - 11,665,475 $ 8,863,159 $ 11,665,475 $ 7,495,055 $ 4,175,057 $ 334,025 $ 67,635,750 $ 38,158 $ $ 1,216 $ 391,852 $ - $ 1,973,718 $ 134,257 - - 2,879 - - 102,836 - - - - - 865,539 - 4,855,861 - - - 7,167,780 - - - - - 1,012,365 - - - - - 2,965,000 - - - - - 7,073,378 38,158 4,990,118 4,095 391,852 - 21,160,616 8,825,001 6,675,357 - - - 15,500,358 - - - - - 1,614,280 - - - - 17,752,306 - - 7,490,960 3,783,205 334,025 11,608,190 8,825,001 6,675,357 7,490,960 3,783,205 334,025 46,475,134 8,863,159 $ 11,665,475 $ 7,495,055 $ 4,175,057 $ 334,025 $ 67,635,750 (Concluded) 93 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2008 Special Revenue Highway Local User Transportation Fund Assistance Grants-in-Aid Community Parks and Development Recreation Library Community Chandler Center Building Employee REVENUES: Highway user taxes $ 15,856,863 $ - $ - $ - $ - $ - $ - $ - Grants and entitlements - 1,457,982 5,454,180 3,641,518 - - - - System development fees - - - - - - - - Special assessments - - - - - - - - Charges for services 22,531 - - - - 871,392 128,905 11,170 - 14,719 1,378 Interest income Miscellaneous Total revenues - - 11 1 442 62,510 519 - 57,174 24,852 - - 16,751,228 1,649,397 5,465,869 3,641,518 71,893 26,230 11 1 6,416 - 161,418 - - - - - - - 737,704 - - - - - EXPENDITURES: Current: General government Public safety Community development - - - 2,900,471 - - - 7,056,221 348,450 155,559 - - - - - - - 109,423 - 66,214 21,005 - - 1,236,592 84,636 6,182,621 299,984 - - - - Principal - - - - - - - - Bond issuance costs - - - - - - - - Interest and fiscal charges - - - - - - - - 8,299,229 433,086 7,346,725 3,200,455 66,214 21,005 - - 8,451,999 1,216,311 441,063 5,679 5,225 11 1 Bond premium (discount) - - - - - - - - Face amount of bonds issued - - - - - - - - 33,605 - - - - - - - - - - 399,720 - - - - Public works Community services Capital improvements Debt service: Total expenditures REVENUES OVER (UNDER) EXPENDITURES (1,880,856) OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) (4,826,080) (1,525) - (222,252) - - - - (4,792,475) (1,525) - 177,468 - - - - 618,531 5,679 5,225 11 1 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 3,659,524 1,214,786 (1,880,856) FUND BALANCES: Beginning of year End of year 12,584,460 $ 16,243,984 $ 1,492,053 (314,742) 2,706,839 $ (2,195,598) $ 618,531 253,555 $ 259,234 14,110 $ 19,335 192 $ 203 (169) $ (168) (Continued) 94 Debt Service Special Revenue Capital Projects Capital Special Public Works Equipment Total Other Downtown Municipal Highway User Assessment and General Acquisition and Special Computer Fleet Governmental Redevelopment Arts Revenue Bonds Bonds Government Replacement Assessment Purchases Replacement Funds $ - $ - - $ - - $ - - $ - - - $ - $ - - $ - - $ - - $ 10,553,680 1,216,365 - - - - 1,216,365 - - - - - - - 426,428 - - - - - 426,428 - 219,895 - - - - - - - 242,426 396 5,356 - - 426,266 253,987 417,381 213,460 16,581 2,361,003 - - - - 2,493 82,732 - - - 230,722 396 225,251 - 426,428 1,645,124 336,719 417,381 213,460 16,581 30,887,487 - - - - 99,688 - 122,720 59,417 - 449,659 - - - - - - - - - 737,704 - - - - - - - - - 7,560,230 - 2,900,471 - 160,784 - - - - - - - 357,426 - - - - - 4,062,236 5,686,342 2,465,731 61,441 20,079,583 - - 2,965,000 124,500 - - - - - 3,089,500 - - - - - - 179,201 - - 179,201 - - 1,684,765 49,311 - - - - 1,734,076 - 160,784 4,649,765 173,811 99,688 4,062,236 5,988,263 2,525,148 61,441 37,087,850 396 64,467 (4,649,765) 252,617 1,545,436 (3,725,517) (5,570,882) (2,311,688) (44,860) (6,200,363) - - - - - - 165,431 - - 165,431 - - - - - - 7,370,000 - - 7,370,000 - - - - - 2,533 - - 2,292 38,430 - - 4,649,765 - - 1,485,642 - 2,778,681 60,245 9,374,053 - - - - - - - - - - 4,649,765 - - 1,452,862 7,535,431 2,778,681 62,537 11,862,744 396 64,467 - 252,617 1,545,436 (2,272,655) 1,964,549 466,993 17,677 5,662,381 7,323 $ 15,856,863 - 7,719 27,760 $ 92,227 $ - 1,361,663 $ 1,614,280 (35,313) 8,948,012 7,279,565 $ 8,825,001 $ 6,675,357 5,526,411 $ 7,490,960 3,316,212 $ 3,783,205 (5,085,170) 316,348 $ 334,025 40,812,753 $ 46,475,134 (Concluded) 95 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Highway User Special Revenue For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Highway user tax $ Charges for services 16,371,002 $ 16,371,002 $ 15,856,863 $ (514,139) 41,000 41,000 22,531 (18,469) 275,000 275,000 871,392 596,392 1,000 1,000 442 16,688,002 16,688,002 16,751,228 63,226 General government 11,384,864 11,602,419 6,416 11,596,003 Public works 12,826,915 12,534,557 8,252,636 4,281,921 24,211,779 24,136,976 8,259,052 15,877,924 (7,523,777) (7,448,974) 8,492,176 15,941,150 Interest income Miscellaneous Total revenues (558) EXPENDITURES: Current: Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ 294,659 294,659 278,049 (16,610) 294,659 294,659 278,049 (16,610) (7,229,118) (7,154,315) 8,770,225 15,924,540 8,426,602 8,426,602 8,426,602 - 1,197,484 96 $ 1,272,287 $ 17,196,827 $ 15,924,540 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Local Transportation Assistance Special Revenue For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ Interest income 1,580,826 $ 18,000 Miscellaneous Total revenues 1,580,826 $ 18,000 1,457,981 $ (122,845) 128,906 110,906 75,000 75,000 62,509 (12,491) 1,673,826 1,673,826 1,649,396 (24,430) 230,166 30,045 - 30,045 1,482,774 1,642,799 435,278 1,207,521 1,712,940 1,672,844 435,278 1,237,566 982 1,214,118 1,213,136 EXPENDITURES: Current: General government Public works Total expenditures Excess (deficiency) of revenues over expenditures (39,114) Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 (5,377) (5,377) (1,525) 3,852 (5,377) (5,377) (1,525) 3,852 (44,491) (4,395) 1,343,835 $ 1,299,344 97 1,343,835 $ 1,339,440 $ 1,212,593 1,216,988 1,343,835 - 2,556,428 $ 1,216,988 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Grants-in Aid Special Revenue For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 30,223,285 Interest income $ - Miscellaneous 30,223,285 $ - 8,870,500 $ 11,170 (21,352,785) 11,170 - - 520 520 30,223,285 30,223,285 8,882,190 (21,341,095) 863,308 348,130 161,311 186,819 Public safety 4,049,981 4,097,903 1,103,535 2,994,368 Public works 26,314,124 28,017,142 5,816,051 22,201,091 752,430 790,456 279,798 510,658 31,979,843 33,253,631 7,360,695 25,892,936 Change in fund balances (1,756,558) (3,030,346) 1,521,495 4,551,841 Fund balances, July 1, 2007 (8,746,904) (8,746,904) (8,746,904) Total revenues EXPENDITURES: Current: General government Community services Total expenditures Fund balances, June 30, 2008 $ (10,503,462) 98 $ (11,777,250) $ (7,225,409) $ 4,551,841 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Community Development Special Revenue For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ Interest income Total revenues 4,823,000 $ 4,823,000 $ 3,243,774 $ (1,579,226) 77,000 77,000 171,273 94,273 4,900,000 4,900,000 3,415,047 (1,484,953) 5,317,498 5,500,862 3,440,723 2,060,139 5,317,498 5,500,862 3,440,723 2,060,139 EXPENDITURES: Current: General government Total expenditures Excess (deficiency) of revenues over expenditures (417,498) (600,862) (25,676) 575,186 Transfers in - Transfers out - 399,720 399,720 - - (222,252) (222,252) - - 177,468 177,468 (417,498) (600,862) 151,792 752,654 - - - - Other financing sources (uses): Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ (417,498) 99 $ (600,862) $ 151,792 $ 752,654 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Parks and Recreation Special Revenue For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ Miscellaneous 7,500 $ 7,500 $ 14,719 $ 7,219 61,736 61,736 57,174 (4,562) 69,236 69,236 71,893 2,657 General government 795 - - - Community services 154,815 155,102 66,214 88,888 155,610 155,102 66,214 88,888 Change in fund balances (86,374) (85,866) 5,679 91,545 Fund balances, July 1, 2007 253,841 253,841 253,841 - Total revenues EXPENDITURES: Current: Total expenditures Fund balances, June 30, 2008 $ 167,467 100 $ 167,975 $ 259,520 $ 91,545 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Library Special Revenue For the year ended June 30, 2008 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Charges for services $ 32,000 $ 32,000 $ - $ (32,000) 450 450 1,378 18,000 18,000 24,852 6,852 50,450 50,450 26,230 (24,220) General government 2,000 - - - Community services 59,362 59,362 21,005 38,357 61,362 59,362 21,005 38,357 (10,912) (8,912) 5,225 14,137 8,653 8,653 8,653 - Interest income Miscellaneous Total revenues 928 EXPENDITURES: Current: Total expenditures Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ (2,259) 101 $ (259) $ 13,878 $ 14,137 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Community Center Building Special Revenue For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ - $ - $ 11 $ 11 Total revenues - - 11 11 Change in fund balances - - 11 11 146 146 146 - Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ 146 102 $ 146 $ 157 $ 11 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Chandler Employee - Special Revenue Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ - $ - $ 1 $ 1 Total revenues - - 1 1 Change in fund balances - - 1 1 (172) Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ (172) 103 (172) $ (172) (172) $ (171) $ 1 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Downtown Redevelopment - Special Revenue Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ 175 $ 175 $ 396 $ 221 175 175 396 221 175 175 - 175 175 175 - 175 - - 396 396 7,307 7,307 7,307 - Total revenues EXPENDITURES: Current: General government Total expenditures Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ 7,307 104 $ 7,307 $ 7,703 $ 396 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Municipal Arts - Special Revenue Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Charges for services $ 547,716 $ 547,716 $ 219,895 $ (327,821) 5,500 5,500 5,356 (144) 553,216 553,216 225,251 (327,965) General government 560,694 547,797 - 547,797 Community services 225,000 248,754 160,785 87,969 785,694 796,551 160,785 635,766 (232,478) (243,335) 64,466 307,801 (18,747) (18,747) (18,747) Interest income Total revenues EXPENDITURES: Current: Total expenditures Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ (251,225) 105 $ (262,082) $ 45,719 $ 307,801 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Public Works and General Government - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ Interest income Total revenues 1,250,000 $ 1,250,000 $ 1,216,365 $ (33,635) 200,000 200,000 426,266 226,266 1,450,000 1,450,000 1,642,631 192,631 22,486,209 22,614,904 237,861 22,377,043 22,486,209 22,614,904 237,861 22,377,043 (21,036,209) (21,164,904) 1,404,770 22,569,674 14,000,000 14,000,000 - (14,000,000) 14,000,000 14,000,000 - (14,000,000) (7,036,209) (7,164,904) 1,404,770 8,569,674 7,501,095 7,501,095 7,501,095 - EXPENDITURES: Current: General government Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ 464,886 106 $ 336,191 $ 8,905,865 $ 8,569,674 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Capital Equipment Acquisition and Replacement - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ 210,000 Total revenues $ 210,000 $ 253,987 $ 43,987 8,000 8,000 82,732 74,732 218,000 218,000 336,719 118,719 Miscellaneous EXPENDITURES: Current: General government Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures 2,190,104 646,767 - 646,767 5,338,506 6,876,023 4,062,236 2,813,787 7,528,610 7,522,790 4,062,236 3,460,554 (7,310,610) (7,304,790) (3,725,517) 3,579,273 Other financing sources (uses): Proceeds from disposal of capital assets Transfers in 124,000 2,533 (121,467) 2,648,000 2,648,000 1,485,642 (1,162,358) (35,313) Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 124,000 $ (35,313) (35,313) - 2,612,687 2,612,687 1,450,329 (1,162,358) (4,697,923) (4,692,103) (2,275,188) 2,416,915 6,464,285 6,464,285 6,464,285 1,766,362 107 $ 1,772,182 $ 4,189,097 $ 2,416,915 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Special Assessment - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ Total revenues 120,000 $ 120,000 $ 417,381 $ 297,381 120,000 120,000 417,381 297,381 7,300 EXPENDITURES: Current: 128,431 130,020 122,720 Capital improvements - - 5,686,342 (5,686,342) Bond issuance cost - - 179,201 (179,201) 128,431 130,020 5,988,263 (5,858,243) (10,020) (5,570,882) (5,560,862) General government Total expenditures (8,431) Excess (deficiency) of revenues over expenditures Other financing sources (uses): Bond premium (discount) - - 165,431 165,431 Face amount of bonds issued - - 7,370,000 7,370,000 - - 7,535,431 7,535,431 (10,020) 1,964,549 1,974,569 5,510,472 - Total other financing sources (uses) (8,431) Change in fund balances 5,510,472 Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ 5,502,041 108 5,510,472 $ 5,500,452 $ 7,475,021 $ 1,974,569 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Computer Purchases - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ Total revenues 86,000 $ 86,000 $ 213,460 $ 127,460 86,000 86,000 213,460 127,460 3,398,017 2,567,790 60,125 2,507,665 2,622,862 3,443,768 2,465,023 978,745 6,020,879 6,011,558 2,525,148 3,486,410 (5,934,879) (5,925,558) (2,311,688) 3,613,870 2,622,862 2,622,862 2,778,681 155,819 2,622,862 2,622,862 2,778,681 155,819 (3,312,017) (3,302,696) 466,993 3,769,689 3,148,302 3,148,302 3,148,302 - EXPENDITURES: Current: General government Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ (163,715) 109 $ (154,394) $ 3,615,295 $ 3,769,689 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Fleet Replacement - Capital Projects Fund For the year ended June 30, 2008 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ Total revenues 8,000 $ 8,000 $ 16,581 $ 8,581 8,000 8,000 16,581 8,581 303,774 303,774 - 303,774 EXPENDITURES: Current: General government Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures 76,216 76,216 61,441 14,775 379,990 379,990 61,441 318,549 (371,990) (371,990) (44,860) 327,130 Other financing sources (uses): - - 2,292 2,292 60,245 60,245 60,245 - 60,245 60,245 62,537 2,292 (311,745) (311,745) 17,677 329,422 316,348 316,348 316,348 - Proceeds from disposal of capital assets Transfers in Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2007 Fund balances, June 30, 2008 $ 4,603 110 $ 4,603 $ 334,025 $ 329,422 City of Chandler Non-Major Proprietary Funds Solid Waste Used to account for the provision of solid waste (refuse) services to the residential customers of the City. All activities necessary to provide such service are accounted for in this fund Airport Used to account for the provision of airport services at the City's municipal airport. All activities necessary to provide such service are accounted for in this fund, including but not limited to administration, operation, maintenance, financing, and related debt service, billing and collection. Chandler Housing Authority Used to account for expenditures of the City's housing assistance programs which consist of housing owned and operated by the City and rent subsidy payments to private sector owners of dwelling units. Financing for this fund is derived from tenants and the United States Department of Housing and Urban Development. 111 City of Chandler Combining Statement of Net Assets Non-Major Proprietary Funds June 30, 2008 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds ASSETS Current assets: Cash and investments $ 8,801,419 $ 347,714 $ 1,997,810 $ 11,146,943 1,681,010 - 22,607 1,703,617 Due from other governments - - 136,868 136,868 Inventory - 25,719 - 25,719 Prepaid Invoices - - 332,449 332,449 10,482,429 373,433 2,489,734 13,345,596 - - 530,874 530,874 Accounts receivable Total current assets Noncurrent assets: Long-term notes receivables Capital assets: Non-depreciable 7,088,918 19,511,154 1,597,897 28,197,969 Depreciable, net 11,527,454 11,540,143 7,459,830 30,527,427 Total capital assets 18,616,372 31,051,297 9,057,727 58,725,396 18,616,372 31,051,297 9,588,601 59,256,270 29,098,801 31,424,730 12,078,335 72,601,866 770,242 Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable 642,034 33,289 94,919 Accrued payroll 31,945 10,729 39,017 81,691 Trust liabilities and deposits 16,512 48,587 154,003 219,102 Unearned revenue 54,865 - - 54,865 2,799 1,406 3,690 7,895 748,155 94,011 291,629 1,133,795 Compensated absences 47,459 23,831 62,550 133,840 Advances from other funds 68,221 - - 68,221 3,742 2,310 - 6,052 2,730,136 - - 2,730,136 2,849,558 26,141 62,550 2,938,249 3,597,713 120,152 354,179 4,072,044 18,616,372 31,051,297 9,057,727 58,725,396 Compensated absences - due within one year Total current liabilities Noncurrent liabilities: Bonds and other payables - due in more than a year Landfill closure and postclosure costs Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for capital improvements Unrestricted Total net assets $ - 89,198 - 89,198 6,884,716 164,083 2,666,429 9,715,228 25,501,088 112 $ 31,304,578 $ 11,724,156 $ 68,529,822 City of Chandler Combining Statement of Revenues, Expenses, and Changes in Net Assets Non-Major Proprietary Funds For the year ended June 30, 2008 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds OPERATING REVENUES: $ Service fees 12,979,695 $ 773,354 $ 360,870 $ 14,113,919 Grants and entitlements - - 6,114,138 6,114,138 Rentals - 95 700,788 700,883 Proceeds from disposition of assets held for resale - - - - Other revenue - 5,250 101,916 107,166 12,979,695 778,699 7,277,712 21,036,106 Total operating revenues OPERATING EXPENSES: General and administrative 1,308,680 - - 1,308,680 Personal services 1,279,307 399,080 1,579,180 3,257,567 Contractual services 8,076,667 41,016 620,252 8,737,935 Commodities 1,247,413 414,451 671,047 2,332,911 - - 4,213,433 - - Housing assistance payments Landfill closure and postclosure (5,514,995) 4,213,433 (5,514,995) Depreciation and amortization 445,296 747,299 509,330 1,701,925 Total operating expenses 6,842,368 1,601,846 7,593,242 16,037,456 OPERATING INCOME (LOSS) 6,137,327 (823,147) (315,530) 4,998,650 459,500 18,992 151,941 26 - - 26 - (422) NONOPERATING REVENUES (EXPENSES): Interest revenue Landfill energy sales Interest expense - Gain (loss) on the disposal of capital assets (422) (3,611) Total nonoperating revenues (expenses) 455,915 INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 6,593,242 630,433 - 5,945 2,334 18,570 157,886 632,371 (804,577) (157,644) 5,631,021 CAPITAL CONTRIBUTION AND TRANSFERS: Capital contributions Transfers in 50,999 2,942,050 154,645 3,147,694 - - 507,252 507,252 (408,347) (448,886) (36,289) Transfers out Total transfers Net income (loss) (4,250) 14,710 2,937,800 253,550 3,206,060 6,607,952 2,133,223 95,906 8,837,081 18,893,136 29,171,355 11,628,250 59,692,741 NET ASSETS Beginning of year End of year $ 113 25,501,088 $ 31,304,578 $ 11,724,156 $ 68,529,822 City of Chandler Combining Statement of Cash Flows Non-Major Proprietary Funds For the year ended June 30, 2008 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 12,711,007 Cash received from grantors $ - Cash payments to suppliers Cash payments to employees for services $ - 1,128,496 $ 14,633,842 6,019,974 6,019,974 (10,867,865) (459,362) (5,447,920) (16,775,147) (1,283,219) (391,989) (1,580,192) (3,255,400) 559,923 Net cash provided (used) by operating activities 794,339 (57,012) 120,358 623,269 507,252 507,252 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in - Transfers out Net cash provided (used) by noncapital financing activities - (36,289) (4,250) - (36,289) (4,250) 507,252 (604,102) (3,088,829) (40,539) 466,713 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Proceeds from sales of capital assets (3,611) Interest paid on bonds - Proceeds from capital grants - Principal received on mortgage notes Capital contributions (1,272,103) - (4,965,034) 5,945 (422) 2,334 - (422) - 154,645 154,645 - - 27,500 27,500 50,999 2,942,050 - 2,993,049 (556,714) (147,201) 459,500 18,992 151,942 630,434 Net cash provided (used) by investing activities 459,500 18,992 151,942 630,434 Net increase (decrease) in cash and cash equivalents 426,420 (189,471) (304,461) (67,512) Net cash provided (used) by capital and related financing activities (1,084,013) (1,787,928) CASH FLOWS FROM INVESTING ACTIVITIES: Investment income CASH AND CASH EQUIVALENTS: Beginning of year 8,374,999 End of year 537,185 2,302,271 $ 8,801,419 $ 347,714 $ $ 6,137,327 $ (823,147) $ 11,214,455 1,997,810 $ 11,146,943 $ 4,998,650 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) (315,530) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 445,296 Landfill closure and postclosure costs (5,514,995) Landfill energy sales 26 747,299 509,330 - - - - * 1,701,925 (5,514,995) 26 Changes in assets and liabilities: (Increase) decrease in receivables (258,612) 168 (102,316) (360,760) (Increase) decrease in inventories - 19,172 - 19,172 (Increase) decrease in other assets - - 13,224 13,224 6,335 (260,802) Increase (decrease) in payables (263,242) Increase (decrease) in accrued payroll and compensated absences (3,895) (7,654) Increase (decrease) in deposits - Increase (decrease) in unearned revenue (10,076) Increase (decrease) in advances from other funds Increase (decrease) in other liabilities Total adjustments 114 - 5,712 9,315 (9,412) (2,873) 15,027 - (19,488) 28,111 - - 28,111 3,742 2,310 - 6,052 (5,577,404) $ Net cash provided (used) by operating activities 4,781 559,923 766,135 $ (57,012) 435,888 $ 120,358 (4,375,381) $ 623,269 City of Chandler Statement of Changes in Assets and Liabilities - Agency Fund Fiduciary Funds For the year ended June 30, 2008 Balance Balance July 1, 2007 Additions Deletions June 30, 2008 Miscellaneous Deposit Fund Assets: Equity in pooled cash and investments Total assets $ 14,129 $ 149,091 $ (152,243) $ 10,977 $ 14,129 $ 149,091 $ (152,243) $ 10,977 $ 14,129 $ 145,050 $ (148,202) $ 10,977 $ 14,129 $ 145,050 $ (148,202) $ 10,977 Liabilities: Due to others Total liabilities 115 116 City of Chandler Financial Data Schedule Housing and Redevelopment For the year ended June 30, 2008 AS SUBMITTED ELECTRONICALLY TO: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT REAL ESTATE ASSESSMENT CENTER (REAC) The Financial Data Schedule is a required electronic submission to the U.S. Department of Housing and Urban Development by all Housing Authorities receiving HUD funding. Financial data on each of the grant programs is presented in a combining schedule. The Financial Data Schedule presented herein has been submitted electronically to HUD. The activities of the City of Chandler Housing and Redevelopment Division are reported as an enterprise fund in the City's Comprehensive Annual Financial Report. 117 City of Chandler Financial Data Schedule Housing and Redevelopment June 30, 2008 COMBINING STATEMENT OF NET ASSETS - ALL HUD PROGRAMS Low Rent Public Housing AMP 1 14.850a FDS Line # AMP 2 14.850a All AMPs 14.850a Account Description ASSETS 111 113 114 122 124 125 126 126.1 127 142 161 162 164 166 167 171 Cash - Unrestricted Cash - Restricted for FSS Escrow Accounts Cash - Security Deposits $ Accounts Receivable - HUD Other Projects Accounts Receivable - Other Governments Accounts Receivable - Miscellaneous Accounts Receivable - Tenants - Dwelling Rents Allowance for Doubtful Accounts - Dwelling Rents Notes and Mortgages Receivable - current Prepaid Expenses and Other Assets Land Buildings Furniture, Equipment, Machinery - Admin Accumulated Depreciation Construction in Progress Notes and Mortgages Receivable - non-current TOTAL ASSETS 184,907 9,619 53,275 $ 103,266 8,035 50,567 $ 288,173 17,654 103,842 73,628 31,333 (24,095) 3,535 63,239 25,855 (10,901) 3,236 136,867 57,188 (34,996) 6,771 1,608,977 4,260,216 183,262 (4,413,742) - 1,254,647 8,565,456 71,601 (3,355,317) 335,950 2,863,624 12,825,672 254,863 (7,769,059) 335,950 $ 1,970,915 $ 7,115,634 $ 9,086,549 $ 47,136 9,918 624 53,275 4,614 - $ 33,178 9,895 591 50,567 5,385 $ 80,314 19,813 1,215 103,842 4,614 5,385 LIABILITIES 311 312 321 322 341 342 345 Bank Overdraft Accounts Payable Accrued Wage/Payroll Taxes Payable Accrued Compensated Absences - Current Tenant Security Deposits Deferred Revenues Other Current Liabilities 353 354 Noncurrent Liabilities - Other Accrued Compensated Absences - Noncurrent TOTAL LIABILITIES 9,619 10,572 8,035 10,026 17,654 20,598 135,758 117,677 253,435 1,638,713 9,619 186,825 6,536,387 8,035 453,535 8,175,100 17,654 640,360 1,835,157 6,997,957 8,833,114 NET ASSETS 508.1 511.1 512.1 Invested in Capital Assets, net of related debt Restricted Net Assets Unrestricted Net Assets TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS $ 118 1,970,915 $ 7,115,634 $ 9,086,549 Housing Choice Vouchers 14.871 Business Activities Central Office 14.850a $ Total Business Activities Other Business 315,675 - $ - 1,252,822 - $ - 32,718 (5,307) - 1,568,497 - $ - 200,000 520,613 129,670 (3,998) 194,924 Total 22,508 - $ 414 325,678 136,867 414 57,188 (34,996) 332,449 35,470 (26,538) - 200,000 520,613 162,388 (9,305) 194,924 1,856,670 40,162 103,842 3,063,624 13,346,285 452,721 (7,804,902) 530,874 $ 343,086 $ 2,294,031 $ 2,637,117 $ 357,532 $ 12,081,198 $ 6,363 10,234 1,790 - $ 733 - $ 7,096 10,234 1,790 - $ 2,862 7,510 8,970 685 - $ - 2,862 94,920 39,017 3,690 103,842 4,614 5,385 $ 30,338 - 30,338 22,508 11,614 40,162 62,550 48,725 733 49,458 54,149 357,042 27,411 266,950 846,285 1,447,013 873,696 1,713,963 8,932 22,508 271,943 9,057,728 40,162 2,626,266 294,361 2,293,298 2,587,659 303,383 11,724,156 343,086 $ 2,294,031 $ 2,637,117 119 $ 357,532 $ 12,081,198 City of Chandler Financial Data Schedule Housing and Redevelopment For the year ended June 30, 2008 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS - ALL HUD PROGRAMS Low Rent Public Housing AMP 1 14.850a FDS Line # AMP 2 14.850a All AMPs 14.850a Account Description REVENUES 703 704 706 706.1 707.1 707.2 707.3 708 711 714 715 716 720 Net Tenant Rental Revenue Tenant Revenue - Other HUD Operating Grants HUD Capital Grants Management Fees Earned Asst Management Fees Earned Bookkeeping Fees Earned Other Government Grants Investment Income - Unrestricted Fraud Recovery Other Revenue Gain/Loss on sale of Fixed Assets Investment Income - Restricted $ 314,825 8,469 756,650 99,197 9,086 40,043 - $ 378,703 135 576,430 55,447 54,648 36,326 - $ 693,528 8,604 1,333,080 154,644 63,734 76,369 - 1,228,270 1,101,689 2,329,959 Administrative Salaries Auditing Fees Management Fees Bookkeeping Fees Employee Benefit Contributions - Administrative Other Operating - Administrative Asset Management Fees Tenant Services - Salaries Employee Benefit Contributions - Tenant Services Tenant Services - Other Water Electricity Gas Other Utility Expenditures Ordinary Maintenance and Operations - Labor Ordinary Maintenance and Operations - Materials Ordinary Maintenance and Operations - Contract Costs Ordinary Maintenance and Operations - Ordinary Maintenan Insurance Other General Expenditures Bad Debt - Tenant rents Total Operating Expenditures 108,577 1,500 100,424 14,258 34,269 20,189 19,560 54,597 9,617 394 34,954 43,785 2,056 36,990 195,010 163,887 160,899 58,402 10,444 17,249 25,352 1,112,413 106,438 1,500 86,309 12,255 32,933 14,987 16,800 2,074 5,956 400 2,819 142,000 106,763 153,480 46,242 16,666 3,370 16,429 767,421 215,015 3,000 186,733 26,513 67,202 35,176 36,360 54,597 9,617 394 37,028 49,741 2,456 39,809 337,010 270,650 314,379 104,644 27,110 20,619 41,781 1,879,834 Other Expenditures: Housing assistance Payments Depreciation TOTAL EXPENDITURES 200,162 1,312,575 291,193 1,058,614 491,355 2,371,189 TOTAL REVENUES EXPENSES 911 912 913 91310 915 916 92000 921 923 924 931 932 933 938 941 942 943 945 961 962 964 973 974 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES BEFORE OTHER FINANCING SOURCES (USES) (84,305) 43,075 (41,230) 15,000 (15,000) 42,361 170,000 - 15,000 (15,000) 179,891 (170,000) (234,000) 30,000 (30,000) 222,252 170,000 (170,000) (234,000) 212,361 (224,109) (11,748) 128,056 (15,670) 1,722,771 (181,034) (747,024) 7,926,015 (52,978) (762,694) 9,648,786 OTHER FINANCING SOURCES (USES) 1001 1002 1003 10091 10092 10094 Operating Transfers In Operating Transfers Out Operating Transfers In from Primary Government Transfer In - Project to Project Transfer Out - Project to Project Transfer Out - Project to Other Program TOTAL OTHER FINANCING SOURCES (USES) CHANGE IN NET ASSETS 1104 Residual Equity Transfer TOTAL NET ASSETS, BEGINNING OF YEAR NET ASSETS, END OF YEAR $ 1,835,157 $ 6,997,957 $ 8,833,114 OTHER MEMORANDUM AMOUNTS 1113 1120 1121 Maximum Annual Contributions Commitment Unit Months Available Number of Unit Months Leased 1,956 1,901 120 1,680 1,634 3,636 3,535 Business Activities Central Office 14.850a $ 255,181 36,360 69,330 4,215 2,531 - Other Business $ 114,000 69,451 450 - $ 255,181 36,360 69,330 114,000 73,666 450 2,531 - $ 4,667,059 3,635 17,061 7,720 2,386 10,907 Eliminations $ Total 255,181 36,360 69,330 - $ 693,528 8,604 6,000,139 154,644 114,000 141,035 17,061 84,539 4,917 10,907 367,617 183,901 551,518 4,708,768 360,871 7,229,374 238,021 79,338 33,278 84,850 1,126 28,380 464,993 2,134 1,574 291 3,999 240,155 79,338 34,852 291 84,850 1,126 28,380 468,992 255,131 3,000 68,448 42,817 103,194 41,615 7,449 521,654 255,181 69,330 36,360 360,871 710,301 6,000 249,734 111,643 54,597 9,617 394 37,028 50,032 2,456 39,809 421,860 271,776 314,379 133,024 27,110 28,068 41,781 2,509,609 3,674 468,667 3,998 7,997 7,672 476,664 4,213,433 10,303 4,745,390 360,871 4,213,433 509,330 7,232,372 175,904 74,854 (36,622) - (2,998) 135,000 234,000 - 135,000 234,000 150,000 - - 30,000 (30,000) 507,252 170,000 (170,000) - 369,000 - 369,000 150,000 - 507,252 267,950 26,411 - 175,904 736,283 1,381,111 443,854 762,694 1,381,111 113,378 190,005 - 504,254 11,219,902 (101,050) $ Housing Choice Vouchers 14.871 Total Business Activities 294,361 $ 2,293,298 $ 2,587,659 $ 303,383 4,667,059 5760 5709 121 $ - $ 11,724,156 CITY OF CHANDLER, ARIZONA Statistical Section This part of the City of Chandler’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 Page Financial Trends 123 Schedules 1-6 contain information to help the reader understand how the city’s financial performance and well-being have changed over time. Revenue Capacity 139 Schedules 7-9 contain information to help the reader assess the factors affecting the city’s ability to generate its sales and use tax. Debt Capacity 143 Schedules 10-13 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. Demographic and Economic Information 150 Schedules 14-15 offer demographic and economic indicators to help the reader understand the environment within which the city’s financial activities take place and to help make comparisons over time and with other governments. Operating information 153 Schedules 16-18 contain information about the city’s operations and resources to help the reader understand how the city’s financial information relates to the services the city provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 122 CITY OF CHANDLER, ARIZONA NET ASSETS BY COMPONENT LAST SEVEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2002 2003 2004 2005 Governmental Activities Invested in Capital Assets, Net of Related Debt $ Restricted Unrestricted Total Governmental Activities Net Assets (62,026,075) $ 55,963,968 $ 101,665,063 $ 162,790,025 22,296,791 117,111,402 90,046,996 110,932,310 346,949,775 186,420,301 224,309,216 214,663,854 307,220,491 359,495,671 416,021,275 488,386,189 Business-type Activities Invested in Capital Assets, Net of Related Debt 207,918,704 232,259,546 252,117,283 275,991,278 Restricted 76,248,944 70,198,611 63,985,390 72,538,299 Unrestricted 71,248,431 70,831,613 82,444,533 78,334,422 355,416,079 373,289,770 398,547,206 426,863,999 145,892,629 288,223,514 353,782,346 438,781,303 98,545,735 187,310,013 154,032,386 183,470,609 418,198,206 257,251,914 306,753,749 Total Business-type Activities Net Assets Primary Government Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Primary Government Net Assets $ 662,636,570 $ 732,785,441 $ 814,568,481 292,998,276 $ 915,250,188 (1) The significant increase in this year is due to the addition of the retroactive infrastructure. The city implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 123 Schedule 1 Fiscal Year $ $ 2006 2007 260,653,345 (1) $ 288,893,354 106,396,966 115,343,816 56,979,639 208,727,675 265,645,323 341,971,306 575,777,986 669,882,493 752,947,788 325,992,618 347,306,362 427,130,654 52,511,899 57,835,328 24,319,427 76,090,729 78,718,941 45,300,009 454,595,246 483,860,631 496,750,090 586,645,963 636,199,716 781,127,497 158,908,865 173,179,144 81,299,066 284,818,404 344,364,264 387,271,315 1,030,373,232 $ 1,153,743,124 2008 $ $ 353,996,843 1,249,697,878 124 CITY OF CHANDLER, ARIZONA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2002 2003 2004 2005 Expenses Governmental Activities: General Government $ Public Safety Community Development Public Works 32,159,571 $ 30,610,529 $ 32,925,516 $ 38,116,265 50,221,565 54,854,074 59,666,119 6,760,718 7,067,675 7,457,073 56,022,025 6,973,474 20,516,230 161,195,319 21,309,408 17,175,426 Community Services 17,668,011 19,823,356 20,200,390 19,017,024 Interest and fiscal charges 12,398,031 10,858,078 11,426,919 10,649,133 139,724,126 284,409,031 152,985,425 147,953,347 Total Governmental Activities Expenses Business-type Activities: Water 33,004,765 35,992,958 40,544,967 41,689,649 Wastewater 21,800,113 22,986,319 24,505,362 25,825,966 Solid Waste 8,675,676 14,414,774 9,705,932 9,598,287 Airport 1,305,935 1,420,574 1,458,068 1,582,079 Community Services - Housing Authority 6,584,884 7,082,747 8,977,049 7,773,223 71,371,373 81,897,372 85,191,378 86,469,204 238,176,803 234,422,551 Total Business-type Activities Expenses Total Primary Government Expenses $ 211,095,499 $ 366,306,403 $ The city implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 125 Schedule 2a Fiscal Year 2006 $ 36,669,140 2007 $ 42,317,392 2008 $ 54,459,719 63,840,179 76,200,082 80,860,917 8,706,473 9,154,407 11,692,559 31,940,075 32,402,242 39,241,652 24,087,695 29,464,039 33,086,565 11,658,090 11,479,112 14,880,604 176,901,652 201,017,274 234,222,016 38,582,431 40,687,283 53,554,653 25,294,189 27,230,862 30,657,939 8,154,317 9,843,824 6,845,979 1,765,772 1,757,279 1,602,268 6,713,829 9,133,427 7,593,242 80,510,538 88,652,675 100,254,081 257,412,190 $ 289,669,949 $ 334,476,097 126 CITY OF CHANDLER, ARIZONA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2002 2003 2004 2005 Program Revenues Governmental Activities: Charges for Services: General Government $ 13,215,733 $ 10,972,432 $ 14,339,606 $ 11,770,912 Public Safety 2,045,039 2,962,608 2,515,026 2,921,707 Community Development 7,980,393 8,407,356 7,833,679 10,119,322 11,087,995 11,764,790 12,879,966 14,037,835 1,339,966 1,950,792 1,713,889 1,988,832 Public Works Community Services Operating Grants and Contributions 1,691,043 3,323,489 1,488,369 1,041,858 32,016,067 29,223,045 22,107,766 13,880,993 69,376,236 68,604,512 62,878,301 55,761,459 Water 32,210,935 34,895,930 36,148,220 36,860,006 Wastewater 18,627,080 19,253,061 19,849,892 20,541,547 Solid Waste 9,787,298 Capital Grants and Contributions Total Governmental Activities Program Revenues Business-type Activities: Charges for Services: 8,575,815 9,290,021 9,850,919 Airport 737,950 832,232 896,968 931,547 Community Services - Housing Authority 698,274 684,758 1,744,088 631,494 Operating Grants and Contributions Capital Grants and Contributions Total Business-type Activities Program Revenues Total Primary Government Program Revenues 5,588,924 6,165,984 6,655,089 6,839,056 32,752,908 29,607,826 34,348,267 35,817,247 99,191,886 100,729,812 109,493,443 111,408,195 $ 168,568,122 $ 169,334,324 $ 172,371,744 $ 167,169,654 $ (70,347,890) $ (70,804,519) $ (90,107,124) $ (92,191,888) $ 27,820,513 (42,527,377) $ 18,742,440 (52,062,079) $ 24,302,065 (65,805,059) $ 24,938,991 (67,252,897) Net (Expense)/Revenue Governmental Activities Business-type Activities Total Primary Government Net Expense (1) System Development Fees were reclassed to charges for services under program revenues. The city implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 127 Schedule 2b Fiscal Year 2006 $ 2007 12,359,183 $ 12,793,179.00 2008 $ 12,629,779 3,303,895 4,178,941 8,338,156 10,405,425 5,488,535 13,145,192 15,831,165 2,272,826 2,699,469 24,529,838 (1) 2,272,309 4,317,843 2,167,327 3,707,115 1,897,300 12,751,519 26,428,112 36,104,151 65,722,227 72,930,790 78,968,242 38,112,680 39,054,531 40,613,727 20,499,458 21,083,587 25,145,258 12,218,720 12,769,423 12,979,695 1,005,728 974,190 773,449 648,766 661,509 1,061,658 6,634,435 6,312,438 6,114,138 23,547,210 28,014,518 19,782,193 102,666,997 108,870,196 106,470,118 $ 168,389,224 $ 181,800,986 $ 185,438,360 $ (111,179,425) $ (128,086,484) $ (155,253,774) $ 22,156,459 (89,022,966) $ 20,217,521 (107,868,963) $ 6,216,037 (149,037,737) 128 CITY OF CHANDLER, ARIZONA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2002 2003 2004 Governmental Revenues and Other Changes in Net Assets Governmental Activities: Taxes: Property taxes $ Sales taxes 16,001,578 $ 17,953,164 $ 20,818,622 55,070,562 60,614,779 66,671,049 2,365,749 1,957,618 2,249,190 Highway user taxes Franchise taxes - - - Other taxes - - - 37,850,975 39,559,356 37,903,674 System development fees State shared revenues 8,320,712 8,105,353 15,165,191 Investment Income (loss) 7,677,017 Miscellaneous (4,895,290) (1) 162,714 Westcor Contract Payment Transfers Total Governmental Activities 2,391,875 261,069 695,312 - - - 690,493 (767,922) 621,256 127,731,669 123,079,699 146,632,728 Business-type Activities: Investment Income (loss) 4,007,601 Miscellaneous Transfers Total Business-type Activities: Total Primary Government (2,624,182) (1) 639,190 (690,493) 3,956,298 1,199,710 897,511 767,922 376,917 (621,256) (958,749) 955,371 $ 131,687,967 $ 122,120,950 $ 147,588,099 $ 57,838,779 $ 52,275,180 $ 56,525,604 $ 81,783,040 Change in Net Assets Governmental Activities Business-type Activities Total Primary Government 31,776,811 $ 89,615,590 17,873,691 $ 70,148,871 25,257,436 (1) The negative income this year is the result of the City's share of a loss recognized by the State of Arizona's Local Government Investment Pool (2) System Development Fees were reclassed to charges for services under program revenues. The city implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 129 Schedule 2c Fiscal Year 2005 $ 2006 22,743,537 $ 26,921,292 $ 95,410,460 34,063,123 3,032,260 2,198,738 3,230,429 3,937,952 - - 16,490,129 15,856,863 97,226,841 - - 3,481,086 3,786,677 40,050,636 45,853,506 57,716,644 62,970,459 - - 7,862,804 12,286,630 - (2) 17,868,181 20,823,059 362,343 10,736 1,822,070 767,221 - 34,500,000 - - 924,227 478,441 469,201 534,086 164,556,802 202,672,272 223,409,492 239,966,281 4,069,440 6,424,600 532,354 (478,441) 3,377,802 6,478,513 167,934,604 $ 72,364,914 $ 28,316,793 $ $ 82,327,461 232,589 (924,227) $ 25,016,760 2008 75,702,332 13,878,663 $ 2007 100,681,707 209,150,785 $ 22,796,183 $ 28,634,972 $ 51,431,155 6,876,399 5,906,545 1,043,407 (469,200) 1,792,816 (534,086) 7,450,606 7,165,275 230,860,098 $ 95,323,008 $ 27,668,127 $ 247,131,556 84,712,507 13,381,312 122,991,135 $ l. 130 98,093,819 CITY OF CHANDLER, ARIZONA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modfied accrual basis of accounting) Fiscal Year 1999 General Fund Reserved $ Unreserved Total General Fund 65,025,595 2000 $ 54,443,256 52,375,240 2001 $ 82,988,035 20,504,156 2002 $ 146,099,948 27,158,273 149,678,534 $ 117,400,835 $ 137,431,291 $ 166,604,104 $ 176,836,807 $ 9,833,555 $ 6,233,287 $ 12,041,889 $ 74,230,663 All Other Governmental Funds Reserved Unreserved, Reported in: Special Revenue Funds 6,127,574 6,443,322 6,187,316 7,022,854 Capitol Projects Funds 38,125,074 49,174,492 56,774,094 - Total All Other Governmental Funds $ 54,086,203 $ 61,851,101 131 $ 75,003,299 $ 81,253,517 Schedule 3 Fiscal Year 2003 $ 2004 34,328,283 $ 135,307,858 2005 50,644,739 $ 126,091,872 2006 56,325,826 $ 15,211,490 124,519,771 2007 $ 148,606,301 12,349,638 2008 $ 189,087,760 28,237,521 196,093,067 $ 169,636,141 $ 176,736,611 $ 180,845,597 $ 163,817,791 $ 201,437,398 $ 224,330,588 $ 91,320,181 $ 76,703,585 $ 99,267,829 $ 100,167,158 $ 109,777,210 $ 43,039,742 $ 5,677,614 5,648,789 9,259,261 8,089,144 14,064,542 17,752,306 - - - 253,903 9,158,971 11,608,190 96,997,795 $ 82,352,374 $ 108,527,090 $ 108,510,205 132 $ 133,000,723 $ 72,400,238 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS REVENUE LAST TEN FISCAL YEARS (modfied accrual basis of accounting) Fiscal Year 1999 Taxes - Local $ Taxes - Intergovernmental 2000 54,743,902 $ 2001 59,732,188 $ 2002 69,079,352 $ 2003 72,951,061 $ 82,591,633 38,188,387 41,594,096 43,772,423 48,797,917 49,850,293 Property taxes - - - - - Sales taxes - - - - - Franchise taxes - - - - - Highway user taxes - - - - - Other taxes - - - - - State shared - - - - - Grants and Entitlements 6,684,846 8,572,276 10,377,193 7,748,473 3,983,091 System Development Fees 5,555,693 7,600,252 9,394,230 8,320,712 8,105,353 785,170 221,530 187,819 175,152 513,242 Special Assessments License and Permits 5,699,464 5,572,080 6,627,557 5,651,522 6,386,478 Charges for Current Services 8,012,514 10,151,578 11,987,802 12,373,053 12,843,147 Fines and Forfeitures 2,627,517 1,969,478 2,233,173 2,796,157 3,975,613 623,837 516,855 608,896 17,625 93,630 - - - - - Investment Income (loss) 8,516,969 11,250,246 13,735,770 6,885,010 Miscellaneous 1,848,209 1,169,275 1,526,134 1,151,110 Rentals Contributions Total Revenues $ 133,286,508 $ 148,349,854 $ 169,530,349 $ 166,867,792 (4,330,308) (1) 1,538,830 $ 165,551,002 (1) The negative income in this year is the result of the City's share of a loss recognized by the State of Arizona's Local Government Investment Pool. (2) As of fiscal year ended June 30, 2007 the City reclassed the governmental funds revenues local and intergovernmental taxes to Property, Sales, and Other taxes. 133 Schedule 4 Fiscal Year 2004 $ $ 2005 91,492,704 $ 2006 102,701,196 $ 2007 109,141,434 $ 2008 - (2) 50,173,867 51,677,502 60,107,031 - (2) $ - - - - 26,909,841 (2) 33,844,181 - - - 95,410,460 (2) 97,226,841 - - - 3,230,429 - - - 16,490,129 - - - 3,481,086 - - - 57,716,644 62,970,459 3,937,952 15,856,863 (2) 3,786,677 4,217,697 14,100,944 9,296,423 7,610,807 10,553,680 15,165,191 13,878,663 10,322,313 11,871,969 8,111,597 251,608 439,565 303,336 309,386 426,428 7,500,437 7,262,403 5,541,215 6,728,309 3,894,368 13,386,852 15,133,670 15,475,362 18,216,653 17,254,859 3,517,080 4,136,342 4,231,306 4,058,090 4,342,621 18,012 19,580 8,363 89,875 94,575 5,980 250 500 50,000 50,000 2,170,414 6,987,824 10,699,944 15,589,318 18,334,581 2,204,555 2,667,611 1,632,785 1,830,328 1,255,681 190,104,397 $ 219,005,550 $ 226,760,012 $ 269,593,324 134 $ 281,941,363 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO LAST TEN FISCAL YEARS (modfied accrual basis of accounting) Fiscal Year 1999 General Government $ 2000 19,510,963 $ 2001 18,850,899 $ 19,919,757 $ 42,355,666 28,858,549 Public Safety 33,611,007 Community Development 10,658,913 11,822,939 15,217,991 6,757,787 9,347,934 12,237,692 13,593,511 20,314,406 Community Services 11,103,823 14,075,303 16,560,173 17,575,610 Capital Improvements 17,514,335 17,093,743 21,296,370 32,346,642 Public Works 35,994,889 2002 49,910,766 Debt Service: Principal Retirement Interest and Fiscal Charges Bond Issuance Costs Total Expenditures Debt Service as a Percentage of Noncapital Expenditures $ 13,089,500 6,144,000 420,000 3,679,500 7,398,827 9,228,823 9,747,597 9,730,214 - - - - 122,235,302 19.6% 135 $ 125,448,288 14.2% $ 139,111,065 8.6% $ 169,173,474 10.1% Schedule 5 Fiscal Year 2003 $ $ 2004 29,448,025 $ 2005 31,024,154 $ 2006 41,135,736 $ 2007 33,729,455 $ 2008 38,124,478 $ 51,261,849 53,885,322 58,407,246 57,630,321 64,090,649 75,800,634 78,306,604 7,061,116 7,449,114 7,438,317 8,740,380 8,989,308 11,593,642 19,096,782 23,028,537 38,421,485 32,555,171 22,987,692 19,306,381 20,310,994 21,048,659 20,893,626 22,738,420 25,714,032 28,830,926 33,211,184 36,794,139 33,828,009 49,884,875 75,524,840 104,836,442 6,614,500 8,689,500 8,329,500 17,122,071 12,374,500 16,659,500 8,515,445 9,641,321 9,180,338 10,465,983 10,669,877 14,437,346 100,000 - 174,917 135,437 189,840 179,201 178,243,368 11.1% $ 196,082,670 12.4% $ 217,032,249 $ 239,462,441 11.1% 15.9% 136 $ 270,375,201 12.1% $ 325,411,891 14.1% CITY OF CHANDLER, ARIZONA OTHER FINANCING SOURCES AND USES AND NET CHANGES IN FUND BALANCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modfied accrual basis of accounting) Fiscal Year 1999 2000 2001 2002 Other Financing Sources (Uses) Bond Premium $ Face Amount of Bonds Issued Proceeds from Sale of Capital Assets - $ - $ - $ 212,486 12,010,000 10,770,000 14,870,000 23,000,000 40,265 3,000 131,450 159,247 Payment to Escrow Agent - - - - Westcor Contract Payment - - - - 15,147,955 23,840,419 15,790,022 20,152,263 (17,066,096) (25,720,821) (18,885,745) (23,649,139) 10,132,124 8,892,598 11,905,727 19,874,857 Transfers in Transfers out Total Other Financing Sources and (Uses) Net Change in Fund Balances $ 17,569,175 $ 137 17,569,175 $ 17,569,175 $ 17,569,175 Schedule 6 Fiscal Year 2003 $ $ 2004 1,026,142 $ 2005 - 45,850,000 - 91,245 680,019 $ 2006 852,671 $ 2007 515,129 35,720,000 30,905,000 264,352 205,936 $ 2008 1,975,876 $ 165,431 88,405,000 7,370,000 173,742 280,969 (20,488,542) - (11,228,422) - (24,335,292) - - - 34,500,000 - - 32,480,447 26,072,155 33,226,080 37,204,132 31,525,563 38,442,603 (37,723,314) (28,318,852) (35,170,013) (39,584,767) (34,246,951) (41,108,342) 21,235,978 (1,566,678) 23,664,668 63,745,430 63,497,938 5,150,661 8,543,612 $ (7,544,951) $ 25,637,969 $ (17,956,999) 138 $ 62,716,055 - $ (38,319,867) CITY OF CHANDLER, ARIZONA TAXABLE REVENUE BY CATEGORY LAST TEN FISCAL YEARS Fiscal Year 1999 Amusements Contracting General Retail Hotel/Motel Miscellaneous Related Revenue 1 Publishing Rentals - Personal Property Rentals - Real Property Restaurant/Bar Telecommunications Use Tax Utilities $ Total Sales and Use Taxes $ City Direct Sales Tax Rate 2 315,740 10,193,338 14,634,802 941,574 2000 $ 904,227 581,107 1,009,416 2,826,184 2,578,012 2,106,833 959,732 5,225,365 42,276,330 338,387 9,233,519 16,762,997 1,048,010 2001 $ 326,154 11,563,422 18,152,267 1,299,873 907,662 609,677 1,247,486 3,297,849 2,949,472 2,500,653 1,019,338 5,371,404 $ 1.77% 45,286,454 1.77% $ 52,567,217 1.75% 1 Includes license application fees, annual license fees, audit assessments, penalties, and interest. 2 The direct tax rate was calculated using a weighted average of the actual revenues collected for each category. 139 $ 2,053,581 626,200 1,573,050 3,759,161 3,416,147 2,931,529 807,287 6,058,546 Source: Tax & License Division Tax rates vary by category, currently ranging from 1.5% to 4.4%. 2002 347,405 11,290,014 19,596,953 1,161,330 1,440,490 586,054 1,760,707 4,530,384 3,921,958 2,869,467 837,932 6,417,518 $ 54,760,212 1.76% Schedule 7 Fiscal Year 2003 $ 410,039 11,467,704 22,261,109 1,212,328 2004 $ 2,201,668 669,702 2,008,711 5,207,175 4,482,235 3,124,021 634,029 6,648,449 $ 60,327,170 1.73% 477,089 13,008,527 25,638,223 1,309,463 2005 $ 1,583,458 711,215 1,994,513 5,454,033 5,015,335 3,006,992 750,291 7,448,823 $ 66,397,962 1.74% 2006 $ 499,388 14,966,943 28,835,490 1,508,509 3,156,782 754,016 1,807,806 6,074,236 5,618,535 3,336,576 1,132,268 7,929,178 $ 611,352 16,580,509 38,501,000 1,716,055 2007 $ 1,898,671 699,456 1,743,393 7,141,065 6,994,533 3,603,977 989,767 8,910,538 75,619,727 $ 1.70% 89,390,316 1.72% 140 679,666 15,665,738 41,719,797 1,938,442 2008 $ 2,765,527 723,532 1,935,981 7,883,794 7,655,093 3,709,781 1,044,225 9,688,886 $ 95,410,462 1.72% 660,985 15,519,590 41,253,934 2,103,714 3,329,891 492,770 2,177,125 8,449,059 7,908,883 3,978,715 950,808 10,401,302 $ 97,226,776 1.72% CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING SALES AND USE TAX RATES LAST TEN FISCAL YEARS Schedule 8 Overlapping Rates Fiscal Year City Direct Tax Rate 1 Maricopa County Tax Rate 2 State of Arizona Tax Rate 3 Tourism & Sports Authority Tax Rate 4 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1.77% 1.77% 1.75% 1.76% 1.73% 1.74% 1.70% 1.72% 1.72% 1.72% 0.49% 0.49% 0.58% 0.67% 0.67% 0.67% 0.67% 0.68% 0.68% 0.68% 4.67% 4.64% 4.69% 5.12% 5.12% 5.12% 5.13% 5.14% 5.12% 5.09% 0.00% 0.00% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% Source: Tax & License Division 1 The City's direct tax rate was calculated using a weighted average of the actual revenues collected for each category. Tax rates vary by category, currently ranging from 1.5% to 4.4%. 2 The overlapping County tax rate was calculated using a weighted average of the actual revenues the City collected for each category. Tax rates vary by category, currently ranging from 0.5% to 0.77%. 3 The overlapping State tax rate was calculated using a weighted average of the actual revenues the City collected for each category. Tax rates vary by category, currently ranging from 5.5% to 5.6%. 4 The Tourism & Sports Authority (TSA) was authorized by Maricopa County voters on November 7, 2000. An additional tax rate of 1.0% is to be levied from March 1, 2001 through February 28, 2031. The only category the overlapping tax rate applies to is the Hotel/Motel category. The overlapping tax rate is calculated using a weighted average of the actual revenues the City collected for this category. 141 CITY OF CHANDLER, ARIZONA PRINCIPAL SALES AND USE TAXPAYERS CURRENT YEAR AND TEN YEARS AGO Schedule 9 Fiscal Year 2008 Taxpayer Business Type Taxpayer A Taxpayer B Taxpayer C Utility Department Store Grocery Taxpayer D Taxpayer E Taxpayer F Taxpayer G Taxpayer H Taxpayer I Taxpayer J Taxpayer K Taxpayer L Taxpayer M Taxpayer N Taxpayer O Home Improvement Vehicle Dealer Department Store Department Store Grocery Department Store Utility Retailer Vehicle Dealer Telecommunications Vehicle Dealer Grocery Sales and Use Tax Payments $ $ Fiscal Year 1999 Percentage of Total Sales and Use Tax Payments Rank 7,417,028 2,401,856 2,209,475 1 2 3 7.63% 2.47% 2.27% 1,510,381 1,479,721 1,402,927 1,385,439 1,269,767 1,243,635 1,136,918 4 5 6 7 8 9 10 1.55% 1.52% 1.44% 1.42% 1.31% 1.28% 1.17% 21,457,145 22.07% Sales and Use Tax Payments $ $ 3,899,898 867,960 1,185,517 1 7 3 9.22% 2.05% 2.80% 924,546 5 2.19% 771,937 1,126,167 999,725 900,192 716,970 602,416 8 2 4 6 9 10 1.83% 2.66% 2.36% 2.13% 1.70% 1.42% 11,995,328 Source: City's Licensing, Tax and Utility Services Division. Notes: The identities of the ten largest revenue payers are prohibited from disclosure per State Statute. The business type of the top ten taxpayers has been disclosed along with the appropriate data. Information for fiscal year 1999 was only available rounded to the nearest thousand. 142 Rank Percentage of Total Sales and Use Tax Payments 28.37% CITY OF CHANDLER, ARIZONA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Schedule 10 Governmental Activities - General Obligation Bonds Fiscal Year General Obligation Bonds Estimated Actual Taxable Value of Property 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $ 116,183,499 116,673,232 121,796,310 87,250,000 106,970,000 102,480,000 120,805,000 140,130,000 197,075,000 187,645,000 $ 5,487,333,654 6,924,106,131 7,361,557,694 8,368,335,959 8,981,174,789 10,999,084,221 12,256,368,621 13,936,132,832 15,180,800,679 26,166,428,389 Percentage of Estimated Actual Taxable Value of Property 2.12% 1.69% 1.65% 1.04% 1.19% 0.93% 0.99% 1.01% 1.30% 0.72% Other Governmental Activities Debt Per Capita 1 679 652 641 434 505 456 510 579 798 749 Revenue Bonds $ 61,730,081 61,595,906 67,413,061 45,300,000 48,725,000 46,700,000 45,015,000 42,920,000 40,480,000 37,655,000 Special Assessment Bonds $ 3,194,439 2,619,743 2,372,449 1,647,000 1,547,500 1,443,000 1,333,500 1,219,000 1,099,500 8,345,000 Accrued Interest Capital Appreciation Bonds $ 16,990,505 20,968,607 24,345,650 27,102,208 29,147,730 30,928,390 32,426,569 33,620,916 34,505,099 35,000,654 Business-type Activities Fiscal Year General Obligation Bonds 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $ 43,458,068 41,070,541 35,203,528 25,770,000 25,395,000 23,705,000 21,270,000 19,415,000 62,410,000 60,395,000 Revenue Bonds $ 156,676,973 152,083,366 154,190,353 117,540,000 122,735,000 116,140,000 114,800,000 108,870,000 101,095,000 93,000,000 Certificates of Participation 31,266,625 19,148,890 12,510,000 11,035,000 10,210,000 9,335,000 - Intergovernmental Loans $ 157,072 142,398 126,972 110,755 93,706 75,783 56,942 37,135 16,304 - Total Primary Government 2 $ 231,558,738 395,153,793 424,597,213 317,229,963 345,648,936 331,682,173 345,042,011 346,212,051 436,680,903 422,040,654 Percentage of Personal Income 1 * 9.32% 9.08% 6.17% 6.51% 5.71% 5.82% 5.45% 6.81% 5.81% * Information not available Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1 Population and personal income data can be found in Schedule 14. 1999-Personal Income information not available. 2 Includes general bonded debt, other governmental activities debt and business-type activities debt. 143 Per Capita 1 $ 1,354 2,209 2,234 1,576 1,631 1,476 1,457 1,431 1,767 1,684 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30, 2008 Schedule 11 Governmental Unit Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt Debt repaid with property taxes State of Arizona Maricopa County Maricopa County Community College District East Valley Institute of Technology Chandler Unified School District No. 80 Mesa Unified School District No. 4 Gilbert Unified School District No. 41 Kyrene Elementary School District No. 28 Tempe Union High School District No. 213 None None $ 507,390,000 None 159,525,000 101,010,000 98,000,000 206,630,000 266,770,000 4.05% 5.96 5.96 13.52 75.59 4.98 2.96 29.87 16.21 None None $ Subtotal, overlapping debt City direct debt 30,250,592 None 120,578,567 5,026,258 2,896,880 61,720,381 43,230,079 263,702,755 482,690,000 Total direct and overlapping debt 100.00 482,690,000 $ Source: J.P Morgan Trust Company 144 746,392,755 CITY OF CHANDLER, ARIZONA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 1999 2000 2001 2002 6% General Obligation Bond Limitation Debt limit $ Total net debt applicable to limit Legal debt margin 48,974,614 $ 24,760,000 $ 55,406,326 $ 23,625,000 24,214,614 $ 31,781,326 65,967,141 $ 23,160,000 $ 42,807,141 74,634,001 34,020,000 $ 40,614,001 Total net debt applicable to the limit as a percentage of the debt limit 51% 43% 35% 46% 20% General Obligation Bond Limitation Debt limit $ Total net debt applicable to limit Legal debt margin 163,248,714 $ 56,965,000 $ 184,687,754 $ 60,410,000 106,283,714 $ 124,277,754 219,890,471 $ 66,860,000 $ 153,030,471 248,780,004 76,970,000 $ 171,810,004 Total net debt applicable to the limit as a percentage of the debt limit 35% 33% 30% Source: Peacock, Hislop, Staley & Given, Inc. for 1997 - 2001, Piper Jaffray, Inc. for 2002-2006. Notes: Under Arizona law, cities may issue general obligation bonds for purposes of water, wastewater, artificial light, open space preserves, parks, public safety and emergency services, streets, transportaiton, playgrounds and recreational facilities up to an amount not to exceed 20% of secondary assessed valuation. Cities may issue general obligation bonds for any other purpose up to an amount not to exceed 6% of secondary assessed valuation. (1) In November 2006, Arizona Revised Statutes were amended to more public safety and emergency services, streets and transportation from the 6% category to the 20% category. 145 31% Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2008 Net Secondary Assessed Valuation as of June 30, 2008 $ Debt limit (6% of assessed value) 3,455,175,278 207,310,517 Debt applicable to limit: 6% general obligation bonds 7,795,000 Legal 6% debt margin $ 199,515,517 Debt limit (20% of assessed value) $ 691,035,056 Debt applicable to limit: 20% general obligation bonds 240,245,000 Legal 20% debt margin $ 450,790,056 Fiscal Year 2003 $ 98,302,556 2004 $ 45,475,000 $ 52,827,556 327,675,186 $ 246,965,186 25% 70,769,928 $ 361,149,760 $ 289,029,760 20% 118,749,422 $ $ 57,089,422 $ $ 41,729,443 395,831,408 $ 388,164,810 $ $ 20% 303,339,810 22% 146 179,351,393 $ $ $ (1) 597,837,975 $ 691,035,056 240,245,000 404,812,975 32% 199,515,517 4% 193,025,000 $ 207,310,517 7,795,000 112,891,393 37% 84,825,000 315,416,408 2008 66,460,000 64% 80,415,000 $ 116,449,443 2007 74,720,000 52% 72,120,000 $ 2006 61,660,000 35% 80,710,000 $ $ 37,575,000 46% $ 108,344,928 2005 $ (1) 450,790,056 35% CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13a Street & Highway Revenue Bonds Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Less: Operating Expenses Highway User Taxes $ 9,035,776 9,468,864 9,865,633 10,946,942 11,443,762 12,225,100 12,852,329 13,870,790 16,490,129 15,856,863 $ 5,098,331 5,930,349 6,338,691 6,859,931 7,453,094 7,125,374 8,302,871 7,731,437 8,527,904 8,299,229 Debt Service Net Available Revenue $ 3,937,445 3,538,515 3,526,942 4,087,011 3,990,668 5,099,726 4,549,458 6,139,353 7,962,225 7,557,634 Principal $ 2,155,000 2,400,000 420,000 1,910,000 2,025,000 2,110,000 2,095,000 2,440,000 2,825,000 2,965,000 Interest $ 3,663,378 2,666,316 2,763,717 2,460,983 2,021,322 2,255,270 1,863,289 1,870,433 1,735,306 1,628,797 Coverage 0.68 0.70 1.11 0.94 0.99 1.17 1.15 1.42 1.75 1.65 Water Revenue Bonds Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Less: Operating Expenses Utility Service Charges $ 27,673,581 29,363,716 31,348,875 32,210,935 34,895,930 36,148,220 36,860,006 38,112,680 39,054,531 40,613,727 $ 12,128,606 14,425,308 15,231,413 18,245,708 21,435,429 24,536,695 25,371,528 22,633,168 23,844,731 32,812,618 Debt Service Net Available Revenue $ 15,544,975 14,938,408 16,117,462 13,965,227 13,460,501 11,611,525 11,488,478 15,479,512 15,209,800 7,801,109 Principal $ 1,535,000 2,765,000 3,087,800 3,561,504 7,255,900 3,853,756 4,282,606 4,275,097 4,447,321 4,643,032 Interest $ Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest, depreciation or amortization expenses. 147 3,895,336 3,976,266 3,116,390 3,366,721 2,965,187 3,232,596 2,798,390 3,181,666 2,881,971 2,700,799 Coverage 2.86 2.22 2.60 2.02 1.32 1.64 1.62 2.08 2.08 1.06 CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13b Waste Water Revenue Bonds Fiscal Year Utility Service Charges 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $ 16,824,564 17,380,475 17,812,204 18,627,080 19,253,061 19,849,892 20,541,547 20,499,458 21,083,587 25,145,258 Less: Operating Expenses $ 10,208,357 11,072,108 11,502,384 10,878,826 11,701,023 11,845,344 12,802,253 14,217,466 14,349,752 17,923,089 Net Available Revenue $ 6,616,207 6,308,367 6,309,820 7,748,254 7,552,038 8,004,548 7,739,294 6,281,992 6,733,835 7,222,169 Debt Service Principal Interest $ 270,000 540,000 1,342,200 1,548,496 10,714,100 1,296,244 3,207,394 3,499,903 3,647,679 3,786,968 $ Coverage 1,594,596 1,620,041 1,696,904 2,098,401 2,295,089 1,713,875 1,592,081 1,828,920 1,691,169 1,554,504 3.55 2.92 2.08 2.12 0.58 2.66 1.61 1.18 1.26 1.35 Solid Waste Revenue Bonds Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Less: Operating Expenses Utility Service Charges $ 6,997,570 7,514,525 8,173,254 8,571,736 9,257,218 9,825,572 9,773,505 - $ 5,124,323 5,894,509 6,423,477 7,781,800 13,627,896 9,035,882 8,703,517 - Net Available Revenue $ 1,873,247 1,620,016 1,749,777 789,936 (4,370,678) 789,690 1,069,988 - Debt Service Principal Interest $ 100,000 100,000 100,000 125,000 125,000 125,000 - $ Coverage 236,813 229,750 222,688 215,750 206,969 152,469 71,844 - Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest, depreciation or amortization expenses. (1) Expenses for FY 03 include $5,323,714 in landfill closure and post closure costs. The amount expensed in FY 02 was $812,319. The increase in comparable amounts is due to an increase in costs related to a change in the planned usage of the property following closure. (2) All debt was defeased June 29, 2005. 148 5.56 4.91 5.42 2.32 -13.17 2.85 14.89 0.00 0.00 0.00 (1) (2) CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13c Municipal Property Corporation Certificates of Participation Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Water & Sewer Utility Service Charges $ 44,498,145 46,744,191 49,161,079 50,838,015 54,148,991 55,998,112 57,401,553 - Less: Operating Expenses $ 22,336,963 25,497,416 26,733,797 29,124,534 33,136,452 36,382,039 38,173,781 - Debt Service Net Available Revenue $ Principal $ 22,161,182 21,246,775 22,427,282 21,713,481 21,012,539 19,616,073 19,227,772 - 575,000 625,000 650,000 700,000 775,000 825,000 875,000 - Interest $ Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest, depreciation or amortization expenses. (1) All remaining debt was defeased in 2006. 149 1,389,362 1,012,595 959,470 915,595 867,295 813,045 755,295 - Coverage 11.28 12.97 13.93 13.44 12.79 11.98 11.79 (1) - CITY OF CHANDLER, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Schedule 14 Total Fiscal Year Population (1) Per Capita Personal Median Unemployment Personal Income (2) Age (2) Rate (3) Income (4) 1999 171,047 * 30.6 1.8% * 2000 178,921 $ 4,240,427,700 30.6 1.7% 23,700 2001 190,019 4,677,887,742 31.2 2.8% 24,618 2002 201,262 5,139,225,170 31.2 4.2% 25,535 2003 211,984 5,310,835,152 31.2 4.0% 25,053 2004 224,644 5,805,699,536 31.2 3.1% 25,844 2005 236,877 5,928,557,556 30.8 3.3% 25,028 2006 241,910 6,351,347,050 31.6 3.0% 26,255 2007 247,097 6,412,414,247 31.1 2.5% 25,951 2008 250,619 7,269,204,095 31.2 3.2% 29,005 *Information not available Sources: 1 City's Long Range Planning Division 2 City's Economic Development Division 3 Arizona Department of Economic Security 4 SitesUSA Note: Total personal income is composed of earned income, dividends, interest and rents, and government transfer payments. Per capita personal income is calculated by dividing total personal income by population; amounts may not be exact due to rounding. 150 CITY OF CHANDLER, ARIZONA PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO 2008 Employer Employees Intel Corporation Chandler Unified School District Countrywide Home Mortage Wells Fargo Ocotillo Corp. Campus Chandler Regional Hospital City of Chandler Verizon Wireless Orbital Sciences Microchip Technology Freescale Semiconductor Motorola Ryobi Outdoor Products, Inc. AdFlex Solutions Basha's Corporate & Markets 11,400 2,400 2,350 2,200 1,784 1,701 1,695 1,525 1,485 1,400 Total 27,940 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Total City Employment 11.28% 2.38% 2.33% 2.18% 1.77% 1.68% 1.68% 1.51% 1.47% 1.39% 27.66% Source: City's Ecomonic Development Division, Chandler Unified School District, Chandler Regional Hospital, and City of Chandler Human Resources 151 Schedule 15 1999 Employees Rank Percentage of Total City Employment 9,200 2,175 1 2 12.44% 2.94% 910 1,071 6 5 1.23% 1.45% 450 750 10 8 0.61% 1.01% 1,400 1,200 800 700 3 4 7 9 1.89% 1.62% 1.08% 0.95% 18,656 25.22% 152 CITY OF CHANDLER, ARIZONA EMPLOYEES BY FUNCTION LAST SEVEN FISCAL YEARS Fiscal Year 1999 2000 2001 2002 2003 4 6 69 17 41 25 97 Full Time Equivalent Personnel Mayor and Council 2 4 4 City Clerk City Manager Communications/Public Affairs 4 21 6 5 23 8 6 26 10 City Magistrate Law Management Services 32 20 106 37 21 113 39 21 127 4 6 30 11 40 23 124 Total General Government 191 211 233 238 259 Total Planning and Development 101 116 124 115 117 Total Community Services 131 154 162 170 178 Public Works Administration Streets 5 49 6 53 7 57 Airport Engineering, Development and Real Estate Total Public Works 4 6 6 5 53 6 2 53 5 65 123 77 142 85 155 75 139 72 132 Police Fire Total Public Safety 357 129 486 378 142 520 420 160 580 423 174 597 440 181 621 Municipal Utilities Administration Water Wastewater Solid Waste Total Municipal Utilities Total Primary Government 4 5 6 73 26 18 121 76 32 20 133 81 27 22 136 4 81 38 24 147 5 90 39 24 158 1,153 1,276 1,390 1,406 1,465 Source: City's Human Resources Division (1) The significant change in this year is a result of the Information Technology Division moving from the Management Services Department to the City Manager Department. (2) The significant change in this year is a result of the Neighborhood Programs moving from the Mayor and Council to the City Manager Department. The Code Enforcement, Tourism, and Real Estate Services Downtown are new to the City Manager Department Notes: The calculation of full time equivalent personnel includes full time and part time regular employees as of the last pay period of the fiscal year. 153 (1) (1) Schedule 16 Fiscal Year 2004 2005 2006 2007 2008 4 6 71 17 41 23 99 5 6 70 18 40 24 96 5 5 74 18 39 25 95 5 5 6 79 17 6 104 18 44 27 101 48 29 106 261 259 261 279 316 117 111 108 111 114 183 178 182 219 243 3 53 6 3 48 6 3 55 6 3 59 3 64 6 6 78 140 74 131 71 135 76 144 85 158 438 179 617 436 195 631 460 207 667 487 219 706 496 228 724 5 85 29 20 139 5 85 41 18 149 5 85 41 21 152 5 5 85 42 21 153 88 43 20 156 1,457 1,459 1,505 1,612 1,711 154 (2) CITY OF CHANDLER, ARIZONA OPERATING INDICATORS BY FUNCTION / PROGRAM LAST SEVEN FISCAL YEARS Fiscal Year Function/Program General Government Privilege Tax Licenses Issued Meeting Notices Posted City Council Actions and Agenda Items Prepared Grant Awards Received Inventory Turnover Ratio Planning & Development Building Permits Issued Community Services Library Circulation Center for the Arts Events & Exhibits Public Safety Crime Rate (per 1,000 population) Total Calls for Police Services (estimated) Total Calls for Fire Services Fire Inspections Fire Investigations Municipal Utilities Water Connections Operating Wells Daily Pumping Capacity - Wells (gallons) Daily Pumping Capacity - Plants (gallons) Sewer Connections Sanitary Sewer (miles) Solid Waste Customers Served Solid Waste Refuse Collected (tons) Solid Waste Refuse Recycled (tons) 2002 2003 2004 2005 13,437 450 1,109 43 2.95 14,843 501 947 46 3.72 15,713 504 996 47 3.77 16,663 534 1,542 49 3.46 8,737 9,723 11,688 8,951 1,501,217 523 1,700,786 535 1,817,536 1,010 1,967,446 1,027 51.8 125,817 13,646 2,386 86 54.1 126,710 13,614 3,705 49 48.1 113,501 14,560 2,236 33 40.7 136,942 15,310 3,767 58 58,962 23 62,090,000 45,000,000 56,313 712 52,615 110,495 19,490 64,862 21 55,800,000 45,000,000 61,911 755 55,526 125,158 20,417 66,105 21 55,800,000 45,000,000 62,107 780 59,107 134,571 21,678 70,375 23 57,400,000 45,000,000 66,750 796 62,591 117,813 23,379 Source: City of Chandler Departments The city implemented Statement 34 in 2002, therefore, information presented on this schedule was unavailable before that year. 155 Schedule 17 Fiscal Year 2006 2007 2008 20,464 505 1,292 57 2.78 20,652 721 1,292 57 3.32 22,980 470 1,188 61 3.94 7,909 6,474 5,750 2,004,000 1,024 2,082,000 1,024 2,349,232 989 40 151,941 16,662 4,375 73 38 160,355 16,682 4,878 74 35 159,535 16,709 3,585 57 73,822 23 59,900,000 45,000,000 68,515 814 65,173 99,547 25,017 74,406 23 58,400,000 45,000,000 70,169 828 66,451 97,646 25,877 74,841 26 65,100,000 60,000,000 70,863 837 67,433 94,633 25,555 156 CITY OF CHANDLER, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION / PROGRAM LAST SEVEN FISCAL YEARS Schedule 18 Fiscal Year Function/Program Community Services Developed Parks Developed Acres Undeveloped Acres Swimming Pools 2002 2003 2004 2005 2006 48 752 432 49 796 405 51 870 333 51 874 349 5 5 5 5 32 373,527 32 405,986 32 422,841 743 20,400 118 415 762 22,154 136 411 1 5 985 8,617 19 2007 53 889 535 (1) 2008 54 959 468 58 1,099 455 5 5 5 32 450,068 33 469,000 34 483,128 34 469,023 768 23,140 153 433 775 24,218 166 434 785 25,100 189 457 812 25,307 192 499 822 26,326 200 442 1 7 1 8 1 9 2 9 2 10 3 10 1,000 9,393 19 1,021 10,368 21 1,051 10,799 21 1,063 10,952 22 1,080 12,291 24 1,117 13,033 24 Other Recreational Facilities (Lighted Fields) Library Bookstock Public Works Total Miles Streets (center line) Street Lights Signalized Intersections Based Aircraft Public Safety Police Stations Fire Stations Municipal Utilities Water Mains (miles) Fire Hydrants Average Daily Treament (mgd) Source: City of Chandler Departments (1) The 2006 increase in Undeveloped Acres is due to the purchasing of more land at the following sites: Tumbleweed, Landfill and Veteran Oasis. The city implemented Statement 34 in 2002, therefore, information presented on this schedule was unavailable before that year. 157 Back Cover 2008 9/15/08 1:40 PM Page 1 C HA LER, ARIZ ND ON A In 2007, Chandler was named one of the 100 Best Communities for Young People in the country. The winning communities – ranging from small towns to urban neighborhoods across America – are celebrated for their commitment to provide healthy, safe and caring environments for young people. Phone (480) 782-2333 www.chandleraz.gov Mailing Address Mail Stop 702 P.O. Box 4008 Chandler, Arizona 85244-4008 Managemnet Services Suite 201 55 North Arizona Place Chandler, Arizona 85225