Accounting Book Cover 2008 8/18/09 9:48 AM Page 1 Dr.A.J.Chandler by Igor Zorkin City of Chandler Comprehensive Annual Financial Report Fiscal Year Ended June 30,2009 CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2009 Boyd Dunn, Mayor Bob Caccamo, Vice-Mayor Rick Heumann, Councilmember Matt Orlando, Councilmember Jeff Weninger , Councilmember Trinity Donovan, Councilmember Jack Sellers, 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 Penny Burczyk, Accounting Manager CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2009 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 .................................................................. 27 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds ........................................................................................................................ 29 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities ...................................................................................................................... 30 Statement of Net Assets - Proprietary Funds....................................................................................... 32 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds.............................................................................................................................. 33 Statement of Cash Flows - Proprietary Funds ..................................................................................... 34 Statement of Fiduciary Net Assets-Fiduciary Funds .......................................................................... 36 Statement of Changes in Fiduciary Net Assets- Fiduciary Funds .................................................... 37 Notes to Financial Statements ................................................................................................................... 39 Required Supplementary Information Budgetary Comparison Schedule for the General Fund........................................................................ 74 Note to Required Supplementary Information....................................................................................... 75 Arizona Public Safety Personnel Retirement System Schedules of Funding Progress ..................... 76 Budgetary Comparison Schedules for Other Major Fund Streets Capital Projects Fund ..................................................................................................................... 78 i CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2009 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 ........................................................................................................................................ 80 Combining Statement of Revenues, Expenditures and Changes in Fund BalancesAll Non-Major Governmental Funds - By Fund Type .................................................................... 81 Combining Balance Sheet ....................................................................................................................... 85 Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................... 88 Budgetary Comparison Schedules: Highway User ......................................................................................................................................... 91 Local Transportation Assistance .......................................................................................................... 92 Grants-in-Aid .......................................................................................................................................... 93 Community Development .................................................................................................................... 94 Parks and Recreation ............................................................................................................................. 95 Library...................................................................................................................................................... 96 Community Center Building ................................................................................................................ 97 Chandler Employee................................................................................................................................ 98 Downtown Redevelopment .................................................................................................................. 99 Municipal Arts ...................................................................................................................................... 100 Public Works and General Government ........................................................................................... 101 Community Services ............................................................................................................................ 102 Public Safety Buildings and Improvements ..................................................................................... 103 Capital Equipment Acquisition and Replacement .......................................................................... 104 Special Assessments ........................................................................................................................... 105 Computer Purchase.............................................................................................................................. 106 Fleet Replacement ................................................................................................................................ 107 Non-Major Proprietary Funds: Combining Statement of Net Assets ................................................................................................... 110 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets.................................................................................................................................. 111 Combining Statement of Cash Flows .................................................................................................. 112 Fiduciary Funds: Statement of Changes in Assets and Liabilities - Agency Fund .................................................... 113 ii CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2009 TABLE OF CONTENTS, continued FINANCIAL SECTION, continued Other Supplemental Information: HUD Programs: Combining Statement of Net Assets - All HUD Programs ............................................................ 116 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - All HUD Programs .................................................................................. 118 STATISTICAL SECTION Financial Trends Schedule 1 Net Assets by Component ................................................................................................ 122 Schedule 2a Changes in Net Assets..................................................................................................... 124 Schedule 2b Changes in Net Assets..................................................................................................... 126 Schedule 2c Changes in Net Assets ..................................................................................................... 128 Schedule 3 Fund Balances of Governmental Funds.......................................................................... 130 Schedule 4 Governmental Funds Revenues....................................................................................... 132 Schedule 5 Governmental Funds Expenditures and Debt Service Ratio ....................................... 134 Schedule 6 Other Financial Sources and Uses and Net Changes in Fund Balance, Governmental Funds.......................................................................................................................... 136 Revenue Capacity Schedule 7 Taxable Revenue by Category.......................................................................................... 138 Schedule 8 Direct and Overlapping Sales and Use Tax Rates ......................................................... 140 Schedule 9 Principal Sales and Use Taxpayers .................................................................................. 141 Debt Capacity Schedule 10 Ratios of Outstanding Debt by Type............................................................................. 142 Schedule 11 Direct and Overlapping Governmental Activities Debt............................................. 143 Schedule 12 Legal Debt Margin Information ..................................................................................... 144 Schedule 13a Pledged-Revenue Coverage ......................................................................................... 146 Schedule 13b Pledged-Revenue Coverage ......................................................................................... 147 Schedule 13c Pledged-Revenue Coverage.......................................................................................... 148 Demographic and Economic Information Schedule 14 Demographic and Economic Statistics.......................................................................... 149 Schedule 15 Principal Employers ........................................................................................................ 150 Operating Information Schedule 16 Employees by Function ................................................................................................... 152 Schedule 17 Operating Indicators by Function / Program.............................................................. 154 Schedule 18 Capital Asset Statistics by Function / Program........................................................... 156 iii sector, which is led by high-tech industrial companies such as Intel, Orbital Sciences, Microchip Technologies and Freescale Semiconductor. These three companies combined employ 14,413 in the City. The City boasts a strong labor market serving the high technology field’s demand for skilled workers. Resident population has a median age of 32.9 years and a median household income of $71,287. In addition, approximately 69 percent of the population has a college degree or some college education. This highly educated workforce explains in part why the City had highest average employee wages in the Phoenix metropolitan area, 120% of the statewide average. Over 75 percent of the City’s manufacturing employees are in high technology fields; the national average is 15 percent. The City’s unemployment averaged 4.8 percent for fiscal year 2008/09 compared with 6.3% for Maricopa County and 7.1% for the State of Arizona. The City’s sales tax revenues, which comprise over 40 percent of its general fund, dropped by 13 percent for 2008/09 from the prior year as the full effect of the recession was felt nationally and globally. In response to the economic recession and corresponding declining revenues, the City reduced its spending by $20 million in its General Fund for 2008/09 through a combination of spending cuts and reserves specifically set aside for revenue fluctuations. Further reductions are expected for next fiscal year to make up a continued drop in state shared and local own source revenues. To date, Chandler has weathered the recession better than many other communities through a combination of sound financial policies, healthy reserves and conservative budgeting. 2008/2009 Accomplishments Under the guidance and leadership of the Mayor and Council, along with the expertise and dedication of City management and staff, a number of accomplishments were achieved this last fiscal year. Listed below are just a few of those accomplishments.  Chandler became one of only 40 cities in the nation to receive the 100 Best Communities for Young People award three times from America’s Promise Alliance;  Successfully implemented an early retirement incentive program that resulted in nearly $4 million in ongoing annual savings for the City’s General Fund;  Created and promoted a new Commercial Reinvestment Program, which provides incentives for complete redevelopment of existing commercial centers to accommodate a new mix of sustainable uses.  Implemented a new time and attendance system and the first phase of a citywide enterprise asset management system;  Awarded 21st consecutive Distinguished Budget Presentation Award from the Government Finance Officers Association;  Awarded the 4th consecutive Achievement in Excellence in Procurement Award and 3rd consecutive from the National Institute of Government Purchasing;  Received AAA credit ratings from Standard and Poor’s and Fitch Ratings and AA1 rating from Moody’s Investor Services for its 2009 general obligation bond issue;  Implemented a new enterprise-wide permitting system providing the City with first-ever web-based permitting and inspections scheduling system;  Completed construction on Crossbow Park, West Mini Park, Tumbleweed Parks and Facilities Services Center, and Mesquite Groves Aquatic Center;  Completed construction of the City’s first regional commuter park and ride facility serving four express bus routes;  Entered into a Regional Wireless Cooperative that will provide seamless interoperability with other metropolitan agencies for public safety communications; 2  Established a fire district to provide fire and emergency services on a contractual basis to residents of county islands with the City’s limits; and  Completed construction on the San Tan Vista Water Treatment Plant jointly owned with the Town of Gilbert Strategic Goals The City of Chandler’s continued goal is to provide the highest quality services to the community in the most cost-effective manner. The Council’s strategy to achieve these results is through goals to improve Chandler in a coordinated manner and to make fiscally responsible decisions that will ultimately strengthen the City. The City Council updated its strategic goals in FY 2008-09 to focus on the following organizational priorities over the next two years.  Downtown Downtown Chandler and the Historic Square have served as the focal point of community life since Chandler’s inception. Emerging today as a location for independent business and retail, the downtown also serves as the City’s cultural center providing the community with a sense of identity and uniqueness.  Economic Development The ability of the City to maintain and enhance the quality of life of its residents depends upon a successful economic development program. High paid quality jobs attract potential residents, and diversifying the employment and tax base provides revenue to support the amenities enjoyed by the community.  Neighborhoods As Chandler has grown rapidly from a community of 30,000 in 1980 to 250,000 today, neighborhoods have become increasingly important to help define the community’s quality of life and provide a sense of identity and place. The maintenance and long term care of our neighborhoods will become increasingly important as the community continues to age.  Sustainability In order to assure that Chandler’s quality of life is enjoyed by future generations, it is imperative that the City acts as an effective steward of our financial and environmental resources. This effort is even more critical as city resources are becoming increasingly limited, and as best practices throughout the country have provided ample evidence of the many benefits of doing business in a more sustainable fashion. The City Council is committed to the stewardship of the City’s resources through improved business practices and the conservation of our financial and environmental assets.  Transportation An effective multimodal transportation system is critical to the long-term vitality of the Chandler community. The City must maintain a viable transportation network that includes an efficient arterial street and transit system that is connected regionally, as well as a network that is bicycle and pedestrian friendly. FINANCIAL INFORMATION Internal Control Structure Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting 3 data are compiled to allow for the preparation of financial statements in conformity with GAAP. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. As a recipient of federal, state and county financial assistance, the City is also responsible for ensuring that an adequate internal control structure is in place to ensure and document compliance with applicable laws and regulations related to these programs. This internal control structure is subject to periodic evaluation by management and various other City staff, as needed. Single Audit As a part of the City’s single audit, described earlier, tests were made of the City’s internal control structure and of its compliance with applicable laws and regulations, including those related to federal financial assistance programs. The audit for the fiscal year ended June 30, 2009 disclosed no material internal control weaknesses or material violations of laws and regulations. Budgetary Controls The City maintains budgetary controls as an integral part of its overall system of internal controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, capital projects funds, enterprise funds and internal service funds are included in the annual appropriated budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted (FY 2008/2009, $797,894,348). The City additionally exercises management control and oversight of the budget at the department level within each fund and maintains an encumbrance accounting system as another method of maintaining budgetary control. Encumbered amounts do not lapse at fiscal year-end and subsequent year(s)’ expenditures against those encumbrances are charged against an encumbrance reserve established at the end of the preceding year(s). As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Cash Management Policies and Practices The cash management program of the City provides for the continuous investment of all idle funds. Also, the City utilizes a pooled cash and investment concept for all funds. Each fund type’s portion of the pool is displayed in the financial statements as Equity in Pooled Cash and Investments. External investment management firms at the direction of City staff invested cash temporarily idle during the fiscal year. In addition, the City may invest in direct obligations of the United States of America or any agency thereof, or any obligation guaranteed by the United States of America or any of its agencies. It is the City’s investment policy to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, all cash deposits were either insured by the Federal Depository Insurance Corporation (FDIC) or collateralized. Risk Management The City maintains and has substantially funded a self-insurance program for its liability, property, worker’s compensation and group insurance coverage needs. Public liability, property claims and worker’s compensation are administered by the City’s Risk Management division in the Management Services Department. Liabilities for these claims, as reported in the financial statements, are based on independently prepared actuarial reports and historical analyses performed by the City. Excess 4 5 6 City of Chandler, Arizona Organizational Chart Citizens of Chandler Mayor/City Council Community Services Administration Center for the Arts Building & Facilities Museum General Government Library Park Operations Recreation Aquatics Traffic Engineering Transit Services Street Sweeping Airport Human Resources Neighborhood Resources Administration & Budget Purchasing Accounting Licensing & Tax Central Supply IT/GIS Utility Services Risk Management Environmental Management Fleet Services Police Department Environmental Resources Water Quality Wastewater Collection Wastewater Reserve Osmosis Administration Professional Standards Property & Evidence Forensic Services Wastewater Treatment Wastewater Quality Airport Water Reclamation Operations Criminal Investigation Planning & Research Communications Support Services Detention Services Community Services Neighborhood Services Planning & Development Administration Current Planning Long Range Planning Economic Development Management Services Municipal Utilities Administration Solid Waste Management Water Distribution Water Production Communications & Public Affairs (Video Production, Print, Mail & Graphics) Downtown Redevelopment Real Estate Services Public Works Administration Engineering Transportation & Operations City Magistrate City Attorney City Clerk City Manager Advisory Boards/Commissions Fire Department Housing & Redevelopment Civil Engineering Development Services Administration Emergency Medical Services Operations 7 Community Programs Prevention Support Services Training 8 9 10 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, 2009 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, 2009. 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 2009 as follows:  The City’s total net assets of $823.3 million in governmental activities and $485.8 million in business-type activities represent 62.9% and 37.1% respectively, of the total net assets of $1,309.1 million. General revenues from governmental activities accounted for $222.1 million in revenue, or 78.9% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $59.4 million or 21.1% of total governmental activities revenues. The City had $95.1 million of program revenues and $4.9 million in general revenues and transfers related to business-type activities.  The major governmental funds which includes the General Fund, totaling $221.1 million in revenues, consisting primarily of local taxes, intergovernmental taxes, charges for services, and licenses and permits. The total expenditures of the General Fund were $189.7 million and the fund balance increased from $224.3 million to $224.9 million. The Streets capital projects fund had $10.9 million in revenues. The total expenditures of the Streets Fund were $50.3 million and the fund balance increased by $55.8 million from $9.1 million to $64.9 million consisting primarily of the face amount of bonds issued.  Net assets of the Internal Service Fund increased $1.3 million, and had operating expenses of $6.5 million exceeded operating revenues by $2.8 million consisting primarily of claim settlement payments.  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: 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. 13 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 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 22 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 and the Streets Fund, which are considered to be major funds. Data from the other 20 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules 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. 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. 14 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 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 $1,309.1 million as of June 30, 2009. A significant portion of the City’s net assets (62.7% 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, 2009 and 2008. Governmental Activities Current assets Capital assets, net Non-current assets Total assets $ 2009 457,085,839 756,199,899 4,613,830 1,217,899,568 $ Business-type Activities 2008 403,860,617 666,033,305 3,995,503 1,073,889,425 $ 2009 121,703,908 686,468,986 3,260,776 811,433,670 $ Total (Primary Govt.) 2008 76,276,312 618,009,477 2,472,216 696,758,005 $ 2009 578,789,747 1,442,668,885 7,874,606 2,029,333,238 $ 2008 480,136,929 1,284,042,782 6,467,719 1,770,647,430 Current liabilities Non-current liabilities Total liabilities 57,420,810 337,224,162 394,644,972 54,410,901 266,530,736 320,941,637 30,520,113 295,097,643 325,617,756 51,554,710 148,453,205 200,007,915 87,940,923 632,321,805 720,262,728 105,965,611 414,983,941 520,949,552 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 433,851,899 117,712,539 271,690,158 823,254,596 353,996,843 56,979,639 341,971,306 752,947,788 387,401,986 98,413,928 485,815,914 427,130,654 24,319,427 45,300,009 496,750,090 821,253,885 117,712,539 370,104,086 1,309,070,510 781,127,497 81,299,066 387,271,315 1,249,697,878 $ $ $ $ $ $ Total assets Total liabilities Total net assets - 500 1,000 1,500 Governmental Activities 2,000 2,500 Business-type Activities Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2009 were $380 million. The total cost of all programs and services was $355.6 million. The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2009 and 2008. 15 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 Governmental Activities 2009 Business-type Activities 2008 2009 Total (Primary Govt.) 2008 2009 2008 Revenues: Program revenues Charges for services $ Operating grants and contributions Capital grants and contributions 33,195,803 $ 40,966,791 $ 79,729,536 $ 80,573,787 $ 112,925,339 $ 121,540,578 2,337,910 1,897,300 6,225,928 6,114,138 8,563,838 8,011,438 23,902,360 36,104,151 9,110,319 19,782,193 33,012,679 55,886,344 General revenues Property taxes 38,957,986 34,063,123 - - 38,957,986 34,063,123 Sales tax 85,897,334 97,226,841 - - 85,897,334 97,226,841 3,264,093 3,937,952 - - 3,264,093 3,937,952 13,849,284 15,856,863 - - 13,849,284 15,856,863 Franchise taxes Highway user taxes Other taxes 7,921,275 3,786,677 - - 7,921,275 3,786,677 State shared revenues 61,211,289 62,970,459 - - 61,211,289 62,970,459 Investment income 10,045,274 20,823,059 2,536,237 5,906,545 12,581,511 26,729,604 995,606 767,221 788,478 1,792,816 1,784,084 2,560,037 281,578,214 318,400,437 98,390,498 114,169,479 379,968,712 432,569,916 Miscellaneous Total revenues Expenses: General government 52,293,004 54,459,719 - - 52,293,004 54,459,719 Public safety 87,609,165 80,860,917 - - 87,609,165 80,860,917 Community development 10,429,826 11,692,559 - - 10,429,826 11,692,559 Public works 47,180,197 39,241,652 - - 47,180,197 39,241,652 Community services 34,278,998 33,086,565 - - 34,278,998 33,086,565 Interest and fiscal charges 12,938,524 14,880,604 - - 12,938,524 14,880,604 Water - - 53,201,379 53,554,653 53,201,379 53,554,653 30,657,939 Wastewater - - 36,079,767 30,657,939 36,079,767 Solid waste - - 12,076,998 6,845,979 12,076,998 6,845,979 Airport - - 2,269,691 1,602,268 2,269,691 1,602,268 Housing authority - - 7,239,185 7,593,242 7,239,185 7,593,242 244,729,714 234,222,016 110,867,020 100,254,081 355,596,734 334,476,097 Increase (decrease) before transfers 36,848,500 84,178,421 (12,476,522) 13,915,398 24,371,978 98,093,819 Transfers in (out) (1,542,346) - - Increase (decrease) in net assets 35,306,154 24,371,978 98,093,819 Total expenses Beginning net assets as restated Ending net assets 534,086 84,712,507 787,948,442 $ 823,254,596 1,542,346 (10,934,176) 668,235,281 $ 752,947,788 16 (534,086) 13,381,312 496,750,090 $ 485,815,914 483,368,778 $ 496,750,090 1,284,698,532 $ 1,309,070,510 1,151,604,059 $ 1,249,697,878 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 GOVERNMENT-WIDE FINANCIAL ANALYSIS, concluded Revenue Sources - Fiscal Year 2009 State shared Investment revenues Miscellaneous income 16.1% 0.5% 3.3% Charges for services 29.6% Other taxes 2.1% Highway user taxes 3.6% Operating grants and contributions 2.3% Capital grants and contributions 8.7% Property taxes 10.3% Franchise taxes 0.9% Sales taxes 22.6% Functional Expenses - Fiscal Year 2009 Solid waste 3.4% Airport 0.6% Wastewater 10.1% Housing Authority 2.0% Water 15.1% General government 14.8% Public safety 24.6% Interest expense on long-term debt 3.6% Community services 9.6% Public works 13.3% 17 Community development 2.9% CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 As evident in the previous graph the largest financing source for the City is charges for services at 29.6% 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 22.6% of the total revenues with state shared revenues accounting for an additional 16.1% of the City’s total revenues. The City as a whole uses the largest amount of resources for public safety at 24.6% of the total functional expenses of the City. The next largest users of resources are water services and general government functions at 15.1% and 14.8%, respectively, with wastewater services also accounting for 10.1% 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 $348.9 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 36.6% for encumbrances, debt service, legal restrictions and capital improvements. The remaining 63.4% 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 $194.5 million, while total fund balance reached $224.9 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 102.5% of total general fund expenditures, while total fund balance represents 118.6% of that same amount. The fund balance of the City’s general fund increased by $0.6 million during the current fiscal year. Key factor in this increase was the increase in secondary property taxes. However, sales taxes and licenses and permits decreased 12 percent and 31 percent respectively over the previous year, an effect of the economic recession. 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 $64.9 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 129.0% of that same amount. The fund balance of the City’s street fund increased by $55.8 million during the current fiscal year. A key factor in this increase was a bond issuance in the amount of $87.8 million. 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 $485.8 million and $44.3 million, respectively. Net assets after investing in capital assets and net of related debt is 20.3% unrestricted. The net assets of the water fund increased by $19.2 million, due to a repayment transfer of funds from the wastewater fund. The net assets of the wastewater fund decreased by $31.2 million, primarily due to a repayment transfer of funds to the water fund. 18 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 BUDGETARY HIGHLIGHTS The City of Chandler is conservative in its budgeting approach and continues its commitment to a high quality, well planned, fiscally sound, and diverse community. In keeping with these values, the challenges faced with this year's economic downturn were met head on. City staff members at all levels were involved in the efforts to identify potential areas where expenditures could be reduced and those where revenues could be increased. The balanced budget prepared for fiscal year 2008-2009 supported Council’s vision, citizens’ demands, and high quality services while maintaining financial stability. The City continued with its sound financial policies of only using ongoing revenues to support ongoing expenditures, and one-time funds to support one-time expenditures, and a 12% contingency reserve was included in General Fund for emergency use. In addition, the Council maintained the property tax rate of $1.1814 per $100 of assessed value and no rate increases were included for sewer, water or solid waste. 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 spent well under its legal limit in fiscal year 2008-2009. As a result of the declining economy, the City ended the year 2008-2009 with lower revenues than budgeted, and made adjustments to its expenditures accordingly. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. As of June 30, 2009, the City had invested $821.3 million in capital assets net of related debt, including buildings, facilities, vehicles, computers, equipment, and infrastructure assets. Total depreciation expense for the year was $61.8 million. The following table presents capital asset balances net of accumulated depreciation for the fiscal years, ended June 30, 2009 and 2008. Governmental Activities 2009 Land $ Land improvements Business-type Activities 2008 79,989,613 $ 2009 79,854,613 $ Total (Primary Govt.) 2008 41,256,107 $ 2009 41,256,107 $ 2008 121,245,720 $ 121,110,720 - - 744,511 545,623 744,511 545,623 351,508,864 333,426,304 - - 351,508,864 333,426,304 System improvements - - 529,528,298 400,597,004 529,528,298 400,597,004 System improvements - Joint Venture - - 80,950,007 - 80,950,007 - 176,877,733 161,307,653 9,243,097 9,572,519 186,120,830 170,880,172 25,268,878 23,462,085 2,573,053 2,923,924 27,841,931 26,386,009 - - - 37,414,771 - 37,414,771 122,554,811 67,982,650 22,173,913 125,699,529 144,728,724 193,682,179 686,468,986 $ 618,009,477 1,442,668,885 $ 1,284,042,782 Infrastructure Buildings and improvements Machinery and equipment Construction in progress - Joint Venture Construction in progress Total $ 756,199,899 $ 666,033,305 $ $ Additional information on the City’s capital assets can be found in Note 4 of the financial statements. Debt Administration. At year-end, the City had $636.2 million in long-term debt outstanding with $27.7 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, 2009 and 2008. 19 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2009 Governmental Activities 2009 General obligation bonds $ Revenue bonds 2008 294,588,000 $ 34,690,000 Excise tax revenue bonds Business-type Activities $ 337,098,000 34,040,000 8,345,000 Total 76,415,000 - 7,820,000 - 35,000,654 $ 2008 $ 188,612,000 37,655,000 - Special assessment bonds Accrued interest - capital appreciation bonds 2009 187,645,000 - 268,645,654 Total (Primary Govt.) $ 299,067,000 $ 2009 2008 60,395,000 $ 483,200,000 93,000,000 111,105,000 - 34,040,000 - 7,820,000 $ 153,395,000 $ 130,655,000 8,345,000 $ 636,165,000 248,040,000 35,000,654 $ 422,040,654 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 $701.6 million. The City has $472.3 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 $210.5 million. The City has $10.9 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. Excise Tax bonds are Aa2 from Moody’s Investor Services, AAA 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 In response to the continuing economic crisis, the City of Chandler planned for the economic downturn when preparing the fiscal year 2009-10 budget, and City officials continued to take steps during the process of developing the fiscal year 2009-10 budget to maintain the balance of taxpayer concerns and resource needs. The overall property tax rate of $1.1814 per $100 of assessed value remained constant, with $.03292 allocated to the primary rate and $.08522 to the secondary rate for fiscal year 2009-10. The amounts available for appropriation in the General Fund adopted budget are $336,701,292, a decrease of 6.7% over the prior year adopted budget which includes general obligation supported debt service. For C.A.F.R. purposes the debt service is reflected as a separate fund. While many revenue sources have been impacted by the recession, the principal drivers are local and state shared sales tax. Items added into the General Fund budget for fiscal year 2009-10 were limited to only the most essential requirements, and were primarily related to the previously anticipated operations of recently completed capital projects. Financial strategies put into place during the last fiscal year are ongoing, including the examination of services and service levels, updates to rates and charges, and capital project revenue and priority review. As a result, the fiscal year 2009-10 budget reflects the highest priority needs given the limited available resources. 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, 2009 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 receivables Total current assets Noncurrent assets: Cash and investments - restricted Long-term notes receivable Other assets Capital assets: Non-depreciable Depreciable, net - Joint venture Depreciable, net Total capital assets Total noncurrent assets Total assets 439,276,306 583,439 250,989 1,361,235 2,203,612 770,297 4,353,796 1,098,640 7,007,525 180,000 457,085,839 $ 110,120,224 11,884,137 347,584 (770,297) 24,629 97,631 121,703,908 $ 549,396,530 12,467,576 598,573 1,361,235 2,203,612 4,378,425 1,196,271 7,007,525 180,000 578,789,747 618,087 3,995,743 394,450 2,866,326 1,012,537 6,862,069 202,544,424 553,655,475 756,199,899 760,813,729 63,430,020 80,950,007 542,088,959 686,468,986 689,729,762 265,974,444 80,950,007 1,095,744,434 1,442,668,885 1,450,543,491 1,217,899,568 811,433,670 2,029,333,238 17,313,653 4,129,631 8,665,674 8,214,855 424,302 15,255,000 231,710 3,185,985 57,420,810 8,634,280 447,529 2,140,253 5,516,657 396,912 47,456 12,415,000 69,755 852,271 30,520,113 25,947,933 4,577,160 10,805,927 13,731,512 396,912 471,758 27,670,000 301,465 4,038,256 87,940,923 7,170,867 321,843,000 17,729 7,252,712 939,854 337,224,162 802,066 286,652,000 27,271 5,160,715 2,455,591 295,097,643 7,972,933 608,495,000 45,000 12,413,427 2,455,591 939,854 632,321,805 394,644,972 325,617,756 720,262,728 433,851,899 387,401,986 821,253,885 95,725,396 21,105,405 881,738 117,712,539 271,690,158 98,413,928 95,725,396 21,105,405 881,738 117,712,539 370,104,086 LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Accrued interest Unearned revenue Compensated absences payable - current Bonds payable - current Arbitrage liability - current Other payables - current Total current liabilities Noncurrent liabilities: Compensated absences payable Bonds payable Arbitrage liability Other payables 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 Legal restrictions Total restricted Unrestricted Total net assets $ See accompanying Notes to Basic Financial Statements. 22 823,254,596 $ 485,815,914 $ 1,309,070,510 Component Units Chandler Industrial Development Authority $ $ 395,026 395,026 Chandler Cultural Foundation $ 843,725 5,684 13,632 19,000 882,041 - 1,274,896 - 6,000 - 100,805 100,805 1,381,701 395,026 2,263,742 - 18,569 65,017 83,586 - - - 83,586 - 100,805 395,026 1,274,896 1,274,896 804,455 395,026 $ 2,180,156 23 City of Chandler Statement of Activities and Changes in Net Assets For the year ended June 30, 2009 Program Revenues Functions/Programs Expenses Operating Capital Charges for Grants and Grants and Services Contributions Contributions $ $ Total Primary government: Governmental activities: General government $ 52,293,004 $ 14,349,483 238,179 - $ 87,609,165 4,802,272 1,791,662 Community development 10,429,826 3,581,458 - 1,443,793 5,025,251 Public works 47,180,197 5,226,726 - 22,458,567 27,685,293 Community services 34,278,998 5,235,864 308,069 - 5,543,933 Interest on long-term debt 12,938,524 - - - - 244,729,714 33,195,803 2,337,910 23,902,360 59,436,073 Water 53,201,379 39,707,910 - 3,975,035 43,682,945 Wastewater 36,079,767 25,922,530 - 4,620,013 30,542,543 Solid waste 12,076,998 12,762,120 - 37,332 12,799,452 Airport 2,269,691 741,556 - 324,891 1,066,447 Community services - housing authority 7,239,185 595,420 6,225,928 153,048 6,974,396 110,867,020 79,729,536 6,225,928 9,110,319 95,065,783 $ 355,596,734 $ 112,925,339 $ 8,563,838 $ 33,012,679 $ 154,501,856 $ $ $ - $ - Total governmental activities - 14,587,662 Public safety 6,593,934 Business-type activities: Total business-type activities Total primary government Component Units Chandler Industrial Development Authority Chandler Cultural Foundation Total component units 729 1,254,577 $ 1,255,306 63,539 888,183 $ 951,722 272,594 $ 272,594 $ $ - 1,160,777 $ General revenues and transfers: Taxes: Property taxes, levied for general purposes Sales taxes Franchise fees 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, as restated (Note 18) Net assets - end of year See accompanying Notes to Basic Financial Statements. 24 63,539 1,224,316 Net (Expense) Revenue and Changes in Net Assets Primary Government Component Units Chandler Industrial Governmental Business-Type Activities Activities $ (37,705,342) - (81,015,231) - $ (37,705,342) Cultural Authority Foundation $ - $ - (81,015,231) - - (5,404,575) - (5,404,575) - - (19,494,904) - (19,494,904) - - (28,735,065) - (28,735,065) - - (12,938,524) - (12,938,524) - - (185,293,641) - (185,293,641) - - - (9,518,434) (9,518,434) - - - (5,537,224) (5,537,224) - - - - - 722,454 722,454 - (1,203,244) (1,203,244) - - - (264,789) (264,789) - - - (15,801,237) (15,801,237) - - (185,293,641) (15,801,237) (201,094,878) - - - - - 62,810 - - - - - (93,800) - - - 62,810 (93,800) 38,957,986 - 38,957,986 - - 85,897,334 - 85,897,334 - - 3,264,093 - 3,264,093 - - 13,849,284 - 13,849,284 - - 7,921,275 - 7,921,275 - - 149,889,972 - 149,889,972 - - 61,211,289 - 61,211,289 - - 10,045,274 2,536,237 12,581,511 10,923 76,346 995,606 788,478 1,784,084 - 34,608 1,542,346 - - - 220,599,795 4,867,061 225,466,856 10,923 110,954 35,306,154 (10,934,176) 24,371,978 73,733 17,154 787,948,442 496,750,090 1,284,698,532 321,293 2,163,002 823,254,596 $ 485,815,914 (1,542,346) $ $ Total Chandler Development $ 1,309,070,510 $ 395,026 25 $ 2,180,156 City of Chandler Balance Sheet Governmental Funds June 30, 2009 Major Funds Other General Streets Governmental Capital Projects Funds Total ASSETS Equity in pooled cash and investments $ 215,226,608 $ 75,973,422 $ 99,826,277 $ 391,026,307 Accounts receivable 583,357 - 82 583,439 Prepaid items 250,989 - - 250,989 1,361,235 - - 1,361,235 - - 7,007,525 7,007,525 2,201,119 2,493 - 2,203,612 - - 618,087 618,087 29,091,414 - 10,388,971 39,480,385 Due from other funds 3,555,374 - - 3,555,374 Due from other governments 2,926,230 - 1,427,566 4,353,796 Inventories 1,098,640 - - 1,098,640 - - 180,000 Property tax receivable Special assessments receivable Other taxes receivable Notes receivable Advances to other funds Other receivables Total assets 180,000 $ 256,294,966 $ 75,975,915 $ 119,448,508 $ 451,719,389 $ 9,057,014 $ 2,997,744 $ 5,038,725 $ 17,093,483 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll 3,995,338 - 121,105 Trust liabilities and deposits 8,665,674 - - 8,665,674 - - 8,214,855 8,214,855 Accrued interest payable Due to other funds 4,116,443 - - 3,555,374 3,555,374 8,755,729 7,870,000 22,084,359 38,710,088 Arbitrage liability - 160,640 88,799 249,439 Bonds payable (matured) - - 14,750,000 14,750,000 881,339 - 6,620,220 7,501,559 31,355,094 11,028,384 60,473,437 102,856,915 Advances from other funds Deferred revenue Total liabilities Fund Balances: Reserved for: - 64,947,531 30,777,865 95,725,396 Debt service Capital improvements 19,563,351 - 1,542,054 21,105,405 Encumbrances 10,037,222 - - 10,037,222 881,738 - - 881,738 179,882,771 - - 179,882,771 Legal restrictions Unreserved designated for: General purposes Unreserved, undesignated: General fund 14,574,790 - - 14,574,790 Special revenue funds - - 18,786,740 18,786,740 Capital projects funds - - 7,868,412 7,868,412 Total fund balances Total liabilities and fund balances 224,939,872 $ 64,947,531 256,294,966 $ See accompanying Notes to Basic Financial Statements. 26 75,975,915 58,975,071 $ 119,448,508 348,862,474 $ 451,719,389 City of Chandler Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets June 30, 2009 Total Fund Balances - Total Governmental Funds $ 348,862,474 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, they were not reported in the Governmental Funds Balance Sheet. 202,544,424 553,655,475 Non-depreciable Depreciable buildings, property, equipment and infrastructure, net 756,199,899 Total capital assets Certain revenues are not available to pay for current period expenditures and, therefore, are deferred in the funds. 7,501,559 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. 44,328,756 Long-term liabilities are not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds amounts of $3,684,850 which are included above, the long-term liabilities were adjusted as follows: Bonds and other payables Bonds premium Bond issuance costs Other payables Compensated absences (322,848,985) (5,220,887) 3,995,743 (2,023,133) (7,540,830) Total long-term liabilities (333,638,092) Net Assets of Governmental Activities $ See accompanying Notes to Basic Financial Statements. 27 823,254,596 28 City of Chandler Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2009 Major Funds Other General Streets Governmental Capital Projects Funds Total REVENUES: Property taxes $ Sales taxes Franchise taxes Highway user taxes Regional transportation tax State shared 38,677,156 $ - $ - $ 38,677,156 85,897,334 - - 3,264,093 - - 85,897,334 3,264,093 - - 13,849,284 13,849,284 - 7,921,275 - 7,921,275 61,211,289 - - 61,211,289 Grants and entitlements - - 18,168,904 18,168,904 System development fees - 1,386,213 3,088,816 4,475,029 Special assessments - - 863,747 863,747 Licenses and permits 2,667,720 - - 2,667,720 Charges for services 17,943,550 - 1,549,190 19,492,740 Fines and forfeitures 4,912,159 - - 4,912,159 138,667 - - 138,667 50,000 - - 50,000 5,209,297 1,376,849 2,239,549 8,825,695 Rentals Contributions Interest income Miscellaneous 1,172,564 246,382 242,826 1,661,772 221,143,829 10,930,719 40,002,316 272,076,864 General government 40,003,215 - 499,898 40,503,113 Public safety 83,722,259 - 771,557 84,493,816 9,362,459 - 1,147,008 10,509,467 Total revenues EXPENDITURES: Current: Community development Public works 10,687,193 - 8,596,450 19,283,643 Community services 29,423,774 - 492,228 29,916,002 16,510,408 49,627,420 58,543,129 124,680,957 15,275,000 Capital improvements Debt service: Principal - - 15,275,000 Bond issuance costs - 700,690 260,320 961,010 Interest and fiscal charges - - 13,059,295 13,059,295 189,709,308 50,328,110 98,644,885 338,682,303 31,434,521 (39,397,391) (58,642,569) (66,605,439) Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Bond premium - 1,712,609 636,269 2,348,878 Face amount of bonds issued - 87,775,000 32,738,000 120,513,000 142,490 - 77,303 219,793 Transfers in 3,624,429 5,742,068 31,226,822 40,593,319 Transfers out (34,592,156) - (10,345,747) (44,937,903) (30,825,237) 95,229,677 54,332,647 118,737,087 55,832,286 (4,309,922) 52,131,648 Proceeds from disposal of capital assets Total other financing sources (uses) 609,284 NET CHANGE IN FUND BALANCE FUND BALANCES: Beginning of year End of year 224,330,588 $ 224,939,872 9,115,245 $ 64,947,531 See accompanying Notes to Basic Financial Statements. 29 63,284,993 $ 58,975,071 296,730,826 $ 348,862,474 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, 2009 Net Change in Fund Balances - Total Governmental Funds $ 52,131,648 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. 111,503,041 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. (28,770,312) 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 $ (120,513,000) Principal payments on debt 15,275,000 Bond premium (2,348,878) Other postemployment benefits obligation (886,339) Loss on disposal of capital assets (637,501) (109,110,718) 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. 961,010 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. 120,771 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. (698,200) 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. (169,119) 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. 8,071,366 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. 1,266,667 Change in Net Assets of Governmental Activities $ See accompanying Notes to Basic Financial Statements. 30 35,306,154 31 City of Chandler Statement of Net Assets Proprietary Funds June 30, 2009 Major Funds Water Wastewater Other Governmental Proprietary Activities: Internal Funds Total Service Fund ASSETS Current assets: Equity in pooled cash and investments $ 60,790,412 $ 35,650,408 $ 13,679,404 $ 110,120,224 $ 48,249,999 Accounts receivable 6,153,744 4,008,211 1,722,182 11,884,137 Advances to other funds 3,900,000 - - 3,900,000 - - - 24,629 24,629 - Due from other governments - 85,018 - 12,613 97,631 - - - 347,584 347,584 - 70,929,174 39,658,619 15,786,412 126,374,205 48,249,999 1,522,550 1,342,243 1,533 2,866,326 - - - 394,450 394,450 - Non-depreciable 19,100,963 16,159,388 28,169,669 63,430,020 - Depreciable, net - joint venture 80,950,007 - - 80,950,007 - Depreciable, net 265,220,840 247,275,695 29,592,424 542,088,959 - Total capital assets 365,271,810 263,435,083 57,762,093 686,468,986 - Inventories Prepaid invoices Total current assets Noncurrent assets: Other assets Long-term notes receivable Capital assets: Total noncurrent assets 366,794,360 264,777,326 58,158,076 689,729,762 - Total assets 437,723,534 304,435,945 73,944,488 816,103,967 48,249,999 3,242,482 4,577,904 813,894 8,634,280 220,170 220,065 130,284 97,180 447,529 13,188 Trust liabilities and deposits 1,139,787 783,181 217,285 2,140,253 - Accrued interest 3,417,448 2,096,683 2,526 5,516,657 - Arbitrage liability 34,088 35,667 - 69,755 - Unearned revenue 225,122 104,311 67,479 396,912 - 26,679 12,451 8,326 47,456 3,035 Bonds payable 8,161,413 4,253,587 - 12,415,000 - Other payables 316,384 205,091 330,796 852,271 2,685,000 16,783,468 12,199,159 1,537,486 30,520,113 2,921,393 51,304 LIABILITIES Current liabilities: Accounts payable Accrued payroll Compensated absences Total current liabilities Noncurrent liabilities: Compensated absences 450,903 210,471 140,692 802,066 Advances from other funds 313,513 4,306,061 50,723 4,670,297 - Bonds payable 166,898,470 119,552,530 201,000 286,652,000 - Other payables 2,952,124 2,194,294 14,297 5,160,715 8,692 7,263 20,000 8 27,271 - - - 2,455,591 2,455,591 - Arbitrage liability Landfill closure and postclosure costs - - - - 939,854 Total noncurrent liabilities 170,622,273 126,283,356 2,862,311 299,767,940 999,850 Total liabilities 187,405,741 138,482,515 4,399,797 330,288,053 3,921,243 190,211,927 139,628,966 57,561,093 387,401,986 - 60,105,866 26,324,464 11,983,598 98,413,928 44,328,756 Claims payable NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets $ 250,317,793 $ 165,953,430 See accompanying Notes to Basic Financial Statements. 32 $ 69,544,691 $ 485,815,914 $ 44,328,756 City of Chandler Statement of Revenues, Expenses, and Changes in Net Assets Proprietary Funds For the year ended June 30, 2009 Major Funds Water Wastewater Other Governmental Proprietary Activities: Internal Funds Total Service Fund OPERATING REVENUES: Service fees $ 39,707,910 $ 25,922,530 $ 13,502,362 $ 79,132,802 $ - Grants and entitlements - - 6,225,928 6,225,928 Rentals - - 596,734 596,734 - Worker's compensation premiums - - - - 3,320,043 21,540 51,789 193,478 266,807 379,524 39,729,450 25,974,319 20,518,502 86,222,271 3,699,567 General and administrative 4,705,021 2,572,801 2,280,224 9,558,046 - Personal services 7,974,869 3,953,942 3,500,835 15,429,646 1,076,203 Miscellaneous Total operating revenues - OPERATING EXPENSES: Contractual services 6,190,715 6,656,587 8,359,517 21,206,819 729,306 12,213,503 4,480,314 1,175,601 17,869,418 4,457,927 Claims - - - - 193,324 Housing assistance payments - - 4,281,150 4,281,150 - Landfill closure and postclosure - - 56,054 56,054 - Depreciation and amortization 15,896,486 15,203,328 1,918,784 33,018,598 - Total operating expenses 46,980,594 32,866,972 21,572,165 101,419,731 6,456,760 (7,251,144) (6,892,653) (1,053,663) (15,197,460) (2,757,193) 2,536,237 1,219,579 Commodities OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES): Interest revenue 1,410,692 Interest expense (5,904,638) 797,529 328,016 (2,913,514) (2,527) (8,820,679) - Accretion of bond premium 316,384 205,091 196 521,671 Amortization of bond costs (299,230) (287,609) (69) (586,908) - (16,917) (11,672) (11,113) (39,702) 2,043 (4,493,709) (2,210,175) 314,503 (6,389,381) 1,221,622 (11,744,853) (9,102,828) (739,160) (21,586,841) (1,535,571) 3,975,035 4,620,013 515,271 9,110,319 - 27,652,308 806,148 1,925,958 30,384,414 2,830,338 Gain (loss) from disposal of capital assets - Total nonoperating revenues (expenses) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS CAPITAL CONTRIBUTIONS AND TRANSFERS: Capital contributions Transfers in Transfers out (650,385) (27,504,483) (687,200) (28,842,068) (28,100) Total capital contributions and transfers 30,976,958 (22,078,322) 1,754,029 10,652,665 2,802,238 Change in net assets 19,232,105 (31,181,150) 1,014,869 (10,934,176) 1,266,667 231,085,688 197,134,580 68,529,822 496,750,090 43,062,089 NET ASSETS: Beginning of the year End of the year $ 250,317,793 $ See accompanying Notes to Basic Financial Statements. 33 165,953,430 $ 69,544,691 $ 485,815,914 $ 44,328,756 City of Chandler Statement of Cash Flows Proprietary Funds For the year ended June 30, 2009 Major Funds Water Watewater Other Governmental Proprietary Activities: Internal Funds Service Fund Total CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 39,646,342 $ 24,941,911 Cash received from grantors - - Cash payments to suppliers (45,807,260) Cash payments to employees for services Net cash provided (used) by operating activities $ 14,553,348 $ 79,141,601 $ 3,699,567 6,338,167 6,338,167 (15,658,208) (16,324,942) (77,790,410) (5,187,873) - (7,854,419) (3,849,250) (3,473,347) (15,177,016) (1,068,496) (14,015,337) 5,434,453 1,093,226 (7,487,658) (2,556,802) 806,148 1,925,958 30,384,414 2,830,338 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in 27,652,308 Transfers out (650,385) Net cash provided (used) by noncapital financing activities (27,504,483) 27,001,923 (26,698,335) (38,822,082) (59,865,089) (687,200) (28,842,068) 1,238,758 (28,100) 1,542,346 2,802,238 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Proceeds from sales of capital assets Proceeds from debt issuance Principal paid on bond maturities Interest paid on bonds Principal received on mortgage notes Cash payments to other funds Capital contributions Net cash provided (used) by capital and related financing activities (967,585) (99,654,756) 2,043 6,732 2,328 993 10,053 71,623,200 93,702,800 201,000 165,527,000 - (14,493,882) (5,361,118) - (19,855,000) - (4,470,224) (384,324) 3,856 (4,850,692) - - - 136,424 136,424 - (179,541) (68,416) (17,498) (265,455) - 3,146,279 3,575,665 515,271 7,237,215 - 16,810,482 31,601,846 (127,539) 48,284,789 2,043 1,410,692 797,529 328,016 2,536,237 1,219,579 1,410,692 797,529 328,016 2,536,237 1,219,579 31,207,760 11,135,493 2,532,461 44,875,714 1,467,058 CASH FLOWS FROM INVESTING ACTIVITIES: Investment income Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of year End of year 29,582,652 24,514,915 11,146,943 65,244,510 46,782,941 $ 60,790,412 $ 35,650,408 $ 13,679,404 $ 110,120,224 $ 48,249,999 $ (7,251,144) $ (6,892,653) $ (1,053,663) $ (15,197,460) $ (2,757,193) RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) 34 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 15,896,486 15,203,328 1,918,784 33,018,598 - - - 56,054 56,054 - (Increase) decrease in receivables 235,973 (692,935) 93,674 (363,288) - (Increase) decrease in inventories 78,890 - 13,106 91,996 - (Increase) decrease in other assets (347,558) (575,893) (16,668) (940,119) - (22,776,911) (1,948,506) Landfill closure and postclosure costs Changes in assets and liabilities: Increase (decrease) in payables 55,667 (24,669,750) Increase (decrease) in accrued payroll and compensated absences 86,369 84,933 10,753 182,055 Increase (decrease) in deposits (7,001) 219,150 (1,814) 3,899 210,335 - - - - - 192,684 Increase (decrease) in unearned revenue 35,478 17,270 12,614 65,362 - Increase (decrease) in other liabilities 34,081 19,759 4,719 58,559 3,808 Increase (decrease) in claims payable Total adjustments Net cash provided (used) by operating activities (6,764,193) $ (14,015,337) 12,327,106 $ 5,434,453 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES: Contributions of capital assets from developers 828,756 See accompanying Notes to Basic Financial Statements. 35 1,044,348 2,146,889 $ 1,093,226 7,709,802 $ (7,487,658) 200,391 $ (2,556,802) City of Chandler Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2009 Volunteer Fireman's Pension and Relief Trust Fund Agency Funds ASSETS Equity in pooled cash and investments Total assets $ 39,612 $ 18,014 $ 39,612 $ 18,014 $ - $ LIABILITIES Accounts payable Due to others - Total liabilities $ - NET ASSETS Assets held in trust for pension benefits 39,612 Total net assets $ See accompanying Notes to Basic Financial Statements. 36 39,612 18,014 $ 18,014 City of Chandler Statement of Changes in Fiduciary Net Assets Fiduciary Funds - Trust Funds For the year ended June 30, 2009 Volunteer Fireman's Pension and Relief Trust Fund ADDITIONS: Investment income $ Total additions 2,531 2,531 DEDUCTIONS: Benefits paid to plan members and suppliers 4,800 Change in net assets (2,269) NET ASSETS: Beginning of year 41,881 End of year $ See accompanying Notes to Basic Financial Statements. 37 39,612 38 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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. A seven-member council including a separately elected mayor governs the City. 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 85244-4008. 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. 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 85244-4008. 39 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, continued 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. 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 fees, 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. 40 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, continued 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. Streets Fund – This fund is used to account for the acquisition, construction and improvements of City streets’ projects. 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. 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. 41 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, continued 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. The level of control at which expenditures may not exceed budget is by department, except for bond and grants-inaid 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 $50,680,404 was transferred to the contingency reserves within the General, Proprietary, Internal Service, Special Revenue and Capital Projects funds. All appropriations expire at the end of the fiscal year except for encumbered and capital improvements carry forward 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 carry forward 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 post closure 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. 42 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, continued 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. 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. 43 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, continued J. 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. 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: Years 20-40 20 12-50 25 4-7 5-15 Assets Buildings Building Improvements Infrastructure System Improvements Vehicles Machinery and equipment K. 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 governmentwide 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. L. 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. 44 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, continued 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. 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 is expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. M. 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. N. 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. O. 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. P. 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. Q. 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. 45 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 1 - Summary of Significant Accounting Policies, concluded R. 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 $3,940,146, and the bank balance was $4,116,679. The entire bank balance was covered by the FDIC’s Transaction Account Guarantee Program. Investments At June 30, 2009, the City had the following investments and maturities: Investment Maturities (in Years) 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 Gov't Guaranteed- Corporate Bonds: Bank of America Citibank General Elec. Cap. Corp. JPMorgan Chase Morgan Stanley Gov't Guaranteed- Commerical Paper: GE Capital TLGP U.S. Agency Discount Notes: Federal Home Loan Bank Federal Home Loan Mortgage Corp. Federal National Mortage Assn. Money Market - U.S. Treasuries & Agencies Total Concentration of Credit Risk % 1-5 yrs. Fair Value $ 37,636,127 Less than 1 yr. $ 20,367,060 120,474,362 94,016,891 69,501,258 13,256,790 8,217,373 94,788,632 55,521,731 35,338,539 2,086,125 - 25,685,730 38,495,160 34,162,719 11,170,665 8,217,373 22.09 17.24 12.74 2.43 1.51 7,083,536 5,013,133 7,101,262 7,185,133 7,213,512 - 7,083,536 5,013,133 7,101,262 7,185,133 7,213,512 1.30 0.92 1.30 1.32 1.32 1,399,006 1,399,006 - 0.26 42,206,517 29,986,602 10,028,531 85,114,607 545,434,640 42,206,517 29,986,602 10,028,531 85,114,607 $ 376,837,350 $ 168,597,290 $ 46 $ 17,269,067 6.90 % 7.74 5.50 1.84 15.60 100.00 % CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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, Government Guaranteed Corporate Bonds, Government Guaranteed Commercial Paper, U.S. Agency Discount Notes and Money Market Funds were rated AAA, AAA, A1+, A1+, and AAA by Standard & Poor’s respectively as of June 30, 2009. 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, Government Guaranteed Corp., U.S. Agency Discount Notes, 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. In fiscal year 2008-09, current property tax collections were $37,854,817 or 95% 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 2009 are not available for fiscal year 2008-09; accordingly, such taxes will not be recognized as revenue until fiscal year 2009-2010. 47 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 4 – Capital Assets A summary of changes in capital assets for governmental activities is as follows: Balance July 1, 2008 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 $ $ 79,854,613 67,982,650 147,837,263 Additions and Transfers In $ 135,000 104,878,034 105,013,034 Deletions and Transfers Out $ (50,305,873) (50,305,873) Balance June 30, 2009 $ 79,989,613 122,554,811 202,544,424 458,263,338 201,447,518 45,911,140 705,621,996 33,584,391 24,570,583 6,712,272 64,867,246 (1,762,930) (1,762,930) 491,847,729 226,018,101 50,860,482 768,726,312 (124,837,034) (40,139,865) (22,449,055) (187,425,954) 518,196,042 666,033,305 (15,501,831) (9,000,503) (4,267,978) (28,770,312) 36,096,934 141,109,968 1,125,429 1,125,429 (637,501) (50,943,374) (140,338,865) (49,140,368) (25,591,604) (215,070,837) 553,655,475 756,199,899 $ $ $ Construction in progress in the governmental activities capital assets is comprised of the following: Expended to June 30, 2009 Streets Parks and recreation Buildings and related improvements Total $ $ 48 59,587,670 28,852,110 34,115,031 122,554,811 Remaining Commitments $ 12,998,151 13,809,701 52,181,612 $ 78,989,464 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 4 – Capital Assets, continued A summary of changes in capital assets for business-type activities is as follows: Balance July 1, 2008 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 System improvements - joint venture 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 $ Additions and Transfers In 41,256,107 37,414,771 125,699,529 204,370,407 $ 43,535,236 75,254,479 118,789,715 Deletions and Transfers Out $ (80,950,007) (178,780,095) (259,730,102) Balance June 30, 2009 $ 41,256,107 22,173,913 63,430,020 706,115,971 19,463,610 14,995,677 1,747,872 742,323,130 160,718,968 80,950,007 168,513 343,818 309,676 242,490,982 (157,134) (157,134) 866,834,939 80,950,007 19,632,123 15,182,361 2,057,548 984,656,978 (305,518,967) (9,891,091) (12,071,753) (1,202,249) (328,684,060) 413,639,070 (31,787,674) (497,935) (622,201) (110,788) (33,018,598) 209,472,384 84,646 84,646 (72,488) (337,306,641) (10,389,026) (12,609,308) (1,313,037) (361,618,012) 623,038,966 618,009,477 $ 328,262,099 $ (259,802,590) $ 686,468,986 Construction in progress in the business-type activities is comprised of the following: Expended to June 30, 2009 Sewer system improvements Water system improvements Airport improvements Total $ $ 49 10,333,113 11,236,322 604,478 22,173,913 Remaining Commitments $ 8,346,781 5,540,954 472,269 $ 14,360,004 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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 Business-type activities: Water Wastewater Solid waste Airport Chandler housing authority 1,709,365 4,261,013 6,374,349 46,377 16,379,208 $ 28,770,312 $ 15,896,486 15,203,328 645,286 745,493 528,005 Total depreciation expense - business-type activities $ 33,018,598 NOTE 5 - Operating Leases The City leases approximately 73,000 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 $1,255,764 for the year ended June 30, 2009. The future minimum lease payments for these leases are as follows: Year Ending June 30 2010 2011 2012-2016 2017-2020 Total $ 1,275,274 858,976 2,382,963 2,216,160 6,733,373 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. 50 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, continued The City has pledged future ad valorem tax revenues to repay a total of $483,200,000 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, 2028. Annual principal and interest payments on the bonds are expected to require less than 80% of total 2008-09 ad valorem taxes. The total principal and interest remaining to be paid on the bonds is $699,180,168. Principal and interest paid for the current year and total ad valorem property taxes were $30,924,945 and $38,677,156, respectively. General obligation bonds outstanding as reported in governmental and business-type activities at June 30, 2009 were as follows: Outstanding June 30, 2009 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. $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. 51 $ 600,000 1,300,000 1,450,000 925,000 1,905,000 650,000 450,000 4,725,000 1,175,000 3,325,000 8,825,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, continued Outstanding June 30, 2009 $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 14,575,000 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 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. $252,000,000 Capital Improvement Bonds, Series 2009, due in annual installments of $2,020,000 to $26,840,000 starting 7/1/09 through 7/1/28; interest at 2.25 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. $252,000,000 Capital Improvement Bonds, Series 2009, due in annual installments of $2,020,000 to $26,840,000 starting 7/1/09 through 7/1/28 at 2.25 percent to 5 percent. Total Business-Type Activities General Obligation Bonds 52 8,935,000 15,400,000 26,775,000 60,100,000 22,960,000 120,513,000 $ 294,588,000 Outstanding June 30, 2009 $ 5,510,000 7,190,000 44,425,000 131,487,000 $ 188,612,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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 $34,690,000 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 34% of total 200809 street and highway user revenues. The total principal and interest remaining to be paid on the bonds is $42,787,437. Principal and interest paid for the current year and street and highway user revenue taxes were $4,622,829 and $13,799,157 respectively. Street and highway revenue bonds outstanding as reported in governmental activities at June 30, 2009 were as follows: Outstanding June 30, 2009 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 through 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. 53 $ 800,000 1,100,000 175,000 4,885,000 300,000 1,900,000 225,000 4,650,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, continued Outstanding June 30, 2009 $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 3.0 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 5.0 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 3.0 percent to 5.0 percent. Total Governmental Activities Revenue Bonds 5,345,000 5,000,000 10,310,000 $ 34,690,000 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 $76,415,000 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, 2028. Annual principal and interest payments on the bonds are expected to require less than 74% of net 2008-09 water and wastewater system revenue. The total principal and interest remaining to be paid on the bonds is $94,828,343. Principal and interest paid for the current year and net water and wastewater system revenues were $12,531,278 and $16,882,688 respectively. 54 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, continued Water, and sewer revenue bonds outstanding as reported in business-type activities at June 30, 2009 were as follows: Outstanding June 30, 2009 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 7 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 from 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 55 $2,150,000 1,390,000 500,000 1,185,000 200,000 4,560,000 8,415,000 1,850,000 8,800,000 12,905,000 8,975,000 10,000,000 15,485,000 $ 76,415,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, continued D. Excise Tax Revenue Bonds On February 4, 2009, the City issued $34,040,000 of Excise Tax Revenue Obligations. The Obligations are being used for the purpose of providing funds to finance certain improvements to the City’s Water System and to refund the 2014 and 2015 maturities of the City’s Water & Sewer Revenue Refunding Bonds. The City has collateralized the obligations by the pledge of all unrestricted excise taxes (transaction, franchise, privilege, business taxes, state-shared sales and income taxes, fees for licenses and permits, and state revenue sharing), including all fines and forfeitures, which the City presently or in the future validity imposes or receives from other entities and which are not earmarked by the contributor for a contrary or inconsistent purpose. The City covenants and agrees that, so long as any of the Obligations remain outstanding and the principal and interest thereon shall be unpaid or unprovided for or any other amounts remain unpaid or unprovided for thereunder, it will not further encumber the Excise Taxes on a basis equal to the pledge thereunder unless the Excise Taxes received by the City in the immediately preceding fiscal year shall have amounted to at least three times the highest combined Debt Service for the current or any succeeding fiscal year for all outstanding Parity Obligations, including the Additional Parity Obligations proposed be secured by a pledge of the same Excise Taxes. The City shall have the right to incur Additional Parity Obligations payable from and secured by the Excise Taxes on parity with the Obligations. Business-Type Activities Excise Tax Revenue Bonds: Outstanding June 30, 2009 $34,040,000 Water & Sewer Excise Tax Bonds, Series 2009, due in annual installments of $500,000 to $2,120,000 starting 7/1/10 through 7/1/28; interest rate at 2.25 percent to 4.375 percent. $ 34,040,000 $ 34,040,000 Total Business-Type Activities Excise Tax Revenue Bonds E. 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, 2009, 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, 2009 were as follows: Outstanding June 30, 2009 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. Total Special Assessment Bonds with Governmental Commitment 56 $ 855,000 6,965,000 $ 7,820,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, continued Changes in Long-Term Liabilities Governmental Activities: Compensated absences Restated Balance July 1, 2008 $ 6,881,195 Additions $ Balance June 30, 2009 Reductions 5,972,247 $ (5,258,273) $ 7,595,169 Due Within One Year $ 424,302 Bonds payable: General obligation bonds Revenue bonds Special assessment bonds Total bonds payable Arbitrage liability 187,645,000 120,513,000 (13,570,000) 294,588,000 11,700,000 37,655,000 - (2,965,000) 34,690,000 3,050,000 8,345,000 - (525,000) 7,820,000 505,000 233,645,000 120,513,000 (17,060,000) 337,098,000 15,255,000 636,167 - (386,728) 249,439 231,710 (4,410,280) 3,624,854 2,685,000 Other payables: Claims payable 3,431,530 4,603,604 Post employment benefits 1,141,678 890,147 Deferred bond premiums 3,873,979 2,348,878 8,447,187 7,842,629 Total other payables Totals $ $ Balance July 1, 2008 Business-Type Activities: Compensated absences 249,609,549 $ 134,327,876 - $ Additions 718,435 $ 2,031,825 - (500,985) 5,721,872 500,985 (4,911,265) 11,378,551 3,185,985 (27,616,266) $ $ $ Balance June 30, 2009 Reductions 738,143 356,321,159 (607,056) $ 849,522 19,096,997 Due Within One Year $ 47,456 Bonds payable: General obligation bonds 60,395,000 131,487,000 (3,270,000) 188,612,000 3,580,000 Revenue bonds 93,000,000 - (16,585,000) 76,415,000 8,835,000 Excise tax revenue bonds Total bonds payable Arbitrage liability - 34,040,000 34,040,000 - 153,395,000 165,527,000 (19,855,000) 299,067,000 12,415,000 424,930 - (327,904) 97,026 69,755 - Other payables: Post employment benefits 75,104 58,559 Deferred bond premiums 3,238,225 2,859,584 (549,086) 3,313,329 2,918,143 (549,086) 2,730,136 56,055 Total other payables Landfill closure/post closure Totals $ 160,581,830 $ 169,239,341 57 - $ (21,339,046) $ 133,663 - 5,548,723 521,671 5,682,386 521,671 2,786,191 330,600 308,482,125 $ 13,384,482 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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, 2009, the 6 percent debt limitation was $210,484,296, providing a debt margin of $199,550,297 and the 20 percent debt limitation was $701,614,321, providing a debt margin of $229,348,322. 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 payable as of June 30, 2009: GOVERNMENTAL ACTIVITIES Years Ended June 30 2010 General Obligation Principal 11,700,000 General Obligation Interest $ Highway Users Highway Users Improvement Improvement Districts Revenue Revenue Districts Interest Principal Interest Principal 13,338,655 $ 3,050,000 $ 1,513,999 $ 505,000 $ 319,213 Total $ 30,426,867 2011 12,845,000 11,842,773 3,180,000 1,393,821 530,000 298,075 30,089,669 2012 11,820,000 11,303,326 3,320,000 1,236,049 550,000 275,863 28,505,238 2013 11,850,000 10,809,827 3,500,000 1,062,009 575,000 252,812 28,049,648 2014 14,105,000 10,253,375 3,680,000 901,011 595,000 228,725 29,763,111 2015-2019 74,324,000 42,056,944 15,905,000 1,950,423 2,670,000 795,800 137,702,167 2020-2024 73,090,000 26,047,559 2,055,000 40,125 2,395,000 244,200 103,871,884 2025-2028 84,854,000 8,644,319 - - 93,498,319 Total $ 294,588,000 $ 134,296,778 $ - 34,690,000 $ 58 8,097,437 $ 7,820,000 $ 2,414,688 $ 481,906,903 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 6 - Long-Term Liabilities, concluded BUSINESS-TYPE ACTIVITIES Years Ended June 30 General Obligation Principal 2010 General Obligation Interest 3,580,000 $ 7,035,159 Revenue Principal $ Revenue Interest 8,835,000 $ Excise Tax Principal 3,373,009 $ Excise Tax Interest - $ 1,029,198 Total $ 23,852,366 2011 5,285,000 7,310,562 7,300,000 3,021,634 500,000 1,125,563 24,542,759 2012 8,760,000 7,013,963 7,610,000 2,669,226 1,100,000 1,105,687 28,258,876 2013 9,420,000 6,640,063 7,930,000 2,350,558 1,100,000 1,080,938 28,521,559 2014 10,595,000 6,247,862 8,260,000 1,999,818 1,100,000 1,056,187 29,258,867 2015-2019 51,086,000 25,895,194 31,480,000 4,792,848 12,995,000 4,186,075 130,435,117 2020-2024 49,100,000 16,136,281 5,000,000 206,250 7,650,000 2,820,487 80,913,018 2025-2028 50,786,000 5,404,306 - - 9,595,000 1,075,406 66,860,712 Total $ 188,612,000 $ 81,683,390 $ 76,415,000 $ 18,413,343 $ 34,040,000 $ 13,479,541 $ 412,643,273 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 $7,595,169 for governmental activities and $849,522 for business-type activities at June 30, 2009 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, 2008 Incurred Satisfied Balance Due Within June 30, 2009 One Year Governmental Activities Compensated Absences $ 6,881,195 $ 5,972,247 $ 5,258,273 $ 7,595,169 $ 424,302 $ 718,435 $ 738,143 $ 607,056 $ 849,522 $ 47,456 Business-Type Activities Compensated Absences NOTE 7 - Defeased Debt Current Year Defeasance On February 4, 2009, the City issued $34,040,000 in Excise Tax Revenue Bonds with an average interest rate of 3.64 percent. $6,480,000 of this issuance was used to advance refund $6,370,000 of Series 1997 Water and Sewer Refunding Bonds with an average interest rate of 5.17 percent. The refunding portion of net proceeds of $6,484,175 (after payment of $66,474 in underwriting fees, insurance, and other issuance costs and receipt of $71,589 in original issue premium) was used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on the 1997 bonds. Only a portion of the future debt service payments for the 1997 bonds was defeased. As a result, this part of the debt service payments for the bonds is considered to be defeased and the liability for that portion of the bonds has been removed from the government-wide and proprietary funds statements of net assets. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $114,175. This difference, reported in the accompanying financial statements as a component of other assets, is being charged to operations through the year 2028 using the straight-line amortization method. The City completed the advance refunding to decrease its total debt service payments over the next 7 years by $944,540 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $854,115. 59 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 7 - Defeased Debt, concluded Prior Year Defeasance 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, 2009 are as follows: Amount 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 $ 2,950,000 1,225,000 3,625,000 1,250,000 125,000 2,910,000 325,000 2,225,000 7,345,000 4,715,000 6,975,000 140,000 33,810,000 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, 2009, the City estimates total costs related to landfill closure and postclosure care is $13,595,644 and has recognized that entire amount since the landfill no longer accepts waste. To date, $10,809,454 has been paid. The remaining balance of $2,786,191 consists of a current liability of $330,600 and $2,455,591 recorded as a non-current liability on the City’s financial statements. The estimated total current cost of the landfill closure and postclosure, $13,595,644, 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, 2009. 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, 2009. 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. 60 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 9 - Capital Contributions Capital contributions in the Water, Wastewater, Solid Waste, Airport, and Housing Authority funds amounted to the following: Water Wastewater Solid Waste Airport Housing Authority Total System Development Fees $ 3,146,279 3,575,665 37,332 $ 6,759,276 Developer Contributions $ 828,756 1,044,348 $ 1,873,104 Government Contributions $ 324,891 153,048 $ 477,939 $ $ Total 3,975,035 4,620,013 37,332 324,891 153,048 9,110,319 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, 2009, were as follows: General Fund Balance: Unreserved: Designated: Capital Improvements Compensated Absences Personnel & Retirement Incentives Expenditure Control Budgeting One Time Citywide Requirements (non-capital) Self-Insurance City Council 12% Contingency Reserve Total Designated Fund Balance $ $ 125,818,097 7,325,246 11,088,217 6,363,057 3,542,324 1,176,094 24,569,736 179,882,771 Reservations of Fund Balances At June 30, 2009, 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 2008/2009 budget. 4) Legal Restrictions - comprises domestic violence fees and court/judicial enhancement funds. 61 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 10 – Fund Equity, concluded Restricted Net Assets At June 30, 2009, reserved amounts of fund balance represent the following: 1) Capital Improvements-amounts reserved for specific projects and amounts appropriated as part of the City’s 2008/2009 budget; and 2) Volunteer Firemen’s Pension – actuarially determined benefits payable under the Volunteer Fireman’s Pension and Relief Trust Fund. 3) 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 4) Legal Restrictions - comprises domestic violence fees and court/judicial enhancement funds. Deficit Fund Balances The City plans to remove the deficit in the Grants-in-Aid Special Revenue Fund of $760,786 by receiving revenues from other governments. The City plans to remove the deficit in the Public Safety Buildings and Improvements Capital Projects Fund of $2,308,511 by receiving revenues from other governments. 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 fulltime City employees, except public safety personnel, participate in the Arizona State Retirement System, a multipleemployer 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. 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, 2009 was 9.45 percent (8.95 percent retirement and 0.50 percent longterm disability) for active members and the City was required to contribute 9.45 percent (7.99 percent for retirement, .96 percent for health insurance premium, and 0.5 percent for long-term disability) of the members’ annual covered 62 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 11 - Retirement and Pension Plans, continued payroll. The City’s contributions to the System for the years ended June 30, 2009, 2008 and 2007, were $6,627,159, $6,311,856, and $5,373,873, 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) 2555575. 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 18.38 percent of annual covered payroll of which 0.57 percent was the health insurance premium portion. The current aggregate contribution rate for firefighters is 16.70 percent of annual covered payroll of which 0.44 percent was the health insurance premium portion. C. Annual Pension Cost For fiscal year ended June 30, 2009, the City’s annual pension cost of $4,970,190 for police and $2,621,211 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, 2008, actuarial valuations using the individual entry-age actuarial cost method. The contribution requirements for the year ended June 30, 2009 were established by the June 30, 2008 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, 2008, was 30 years for unfunded actuarial accrued liability and 20 years for excess contributions. 63 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 11 –Retirement and Pension Plans, continued 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% 2007 $ 2,344,017 100% 2008 (Pension) $ 2,871,567 100% 2008 (Health) $ 95,474 100% 2009 (Pension) $ 4,941,860 100% 2009 (Health) $ 28,330 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% 2007 $ 1,167,762 100% 2008 (Pension) $ 1,563,938 100% 2008 (Health) $ 50,966 100% 2009 (Pension) $ 2,609,678 100% 2009 (Health) $ 11,533 D. Funded Status and Funding Progress As of June 30, 2008, the most recent actuarial calculation date, the firefighters plan was 77 percent funded. The actuarial accrued liability for benefits was $58.7 million, and the actuarial value of assets was $45.4 million, resulting in an unfunded actuarial accrued liability (UAAL) of $13.3 million. The covered payroll (annual payroll of active employees covered by the plan) was $14.9 million, and the ratio of the UAAL to the covered payroll was 89 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. 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 multiple-employer 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 Cityelected 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. 64 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 11 –Retirement and Pension Plans, concluded 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 2009 was 21.70 percent of the members’ annual covered payroll, of which .96 percent was the health insurance premium portion. The city’s contributions to EORP for the years ended June 30, 2009, 2008, and 2007, were $37,757, $23,105, and $20,164 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, 2009, 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. B. Funding Policy There were no contributions to the Volunteer Firemen's Pension and Relief Fund by the City in fiscal year 2008/09. 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. 65 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 12 – Post-employment Benefits Other Than Pensions, continued The City also provides a Retirement Health Savings Plan (RHSP) for active employees that may be used upon separation from City employment. The City funds $15 per pay period during the term of employment. 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. Upon retirement, the City deposits a one-time payment of $800 per year of City service in the retiree’s account. The retiree must have a minimum of five years City service to receive this contribution. 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 pay-as-you-go method through paying the higher rate for active employees each year. As of June 30, 2009, retirees contributed $897,609 and the City contributed $633,452 (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, 2009: Annual Required Contribution (ARC) ARC Adjustment Interest adjustment to Net OPEB Obligation $ 2,125,569 (49,583) 60,839 Annual OPEB Cost Contributions Made $ 2,136,825 (1,188,119) Increase in Net OPEB Obligation $ 948,706 Net OPEB Obligation - Beginning of year Net OPEB Obligation - End of year 1,216,782 $ 2,165,488 66 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 12 – Post-employment Benefits Other Than Pensions, concluded The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2009 were as follows: Fiscal Year Ended June, 30 2009 Annual OPEB Cost $ 2,136,825 Employer Contributions $ 1,188,119 Percentage of OPEB Cost Contributed 55.60% Net OPEB Obligation $ 2,165,488 E. Funded Status and Funding Progress The funded status of the plan as of June 30, 2009 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. 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 the 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. 67 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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, 2009, amounted to $460,559, and the account is fully funded at June 30, 2009. 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 2008/2009, 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 2008/2009, 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 $3,624,854 reported as claims payable in the Self-Insurance Fund at June 30, 2009, 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 2008 and 2009 were: Years Ended June 30, 2008 2009 Current Year Claims and Changes in Estimates Beginning of Fiscal Year Liability $ $ 3,362,849 3,431,530 $ $ 3,008,361 4,603,604 68 Balance at Fiscal Year End Claim Payments ($2,939,680) ($4,410,280) $ $ 3,431,530 3,624,854 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 NOTE 15 – Interfund Transfers The interfund transfers in and out at June 30, 2009 are as follows: Fund General Transfer Detail Transfers In Capital Projects-Streets $ Non-major Governmental - Transfers Out $ 4,212,291 2,975,884 25,955,168 648,545 1,603,546 Internal Service-Self Insurance Total General Fund 3,624,429 2,821,151 34,592,156 Capital Projects-Streets General Non-major Governmental Total Capital Projects-Streets Fund 4,212,291 1,529,777 5,742,068 Non-major Governmental Funds General Capital Projects-Streets Non-major Governmental Enterprise-Water Enterprise-Wastewater Nonmajor Enterprise Internal Service-Self Insurance Total Non-major Governmental Funds 25,955,168 5,010,943 119,658 74,298 38,655 28,100 31,226,822 2,975,884 1,529,777 5,010,943 222,123 275,421 322,412 9,187 10,345,747 Water Non-major Governmental Enterprise-Wastewater Total Water Fund 222,123 27,430,185 27,652,308 119,658 530,727 650,385 Wastewater Non-major Governmental Enterprise-Water Total Wastewater Fund 275,421 530,727 806,148 74,298 27,430,185 27,504,483 Nonmajor Enterprise Funds General Non-major Governmental Total Nonmajor Enterprise Funds 1,603,546 322,412 1,925,958 648,545 38,655 687,200 Internal Service General Non-major Governmental Total Internal Service 2,821,151 9,187 2,830,338 28,100 28,100 Non-major Enterprise Total $ 69 73,808,071 - $ 73,808,071 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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 2009-10. 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 Advances From General 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 8,755,729 862,945 313,513 406,061 50,723 Total Capital Projects-Capital Equipment 10,388,971 Enterprise-Wastewater 3,900,000 Total $ 43,380,385 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 $1,735,847. 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. B. Interfund Due To/Due From Due from other funds General Due to other funds Total Special Revenue-Grants in Aid Capital Projects-Capital Equipment Acquisition and Replacement $ 3,491,740 Total 70 63,634 $ 3,555,374 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2009 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, which were substantially complete at June 30, 2009, and operating the plant. NOTE 18 –Accounting Restatement On July 1, 2008, beginning net assets of the governmental activities on the government-wide financial statements do not agree to the prior year-end statements due to overstatement of accrued interest on Capital Appreciation Bonds in prior years. This change in financial presentation resulted in a beginning net assets reclassification. There was an increase to net assets of $35,000,654. Govt Activities Net Assets, June 30, 2008, as previously reported Adjustment for accrued interest on Capital Appreciation Bonds $ 752,947,788 35,000,654 Net Assets balance, July 1, 2008, as restated $ 787,948,442 71 72 REQUIRED SUPPLEMENTARY INFORMATION 73 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund For the year ended June 30, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Property taxes $ Sales taxes 38,606,234 $ 98,750,000 Franchise taxes 38,606,234 $ 38,644,104 $ 37,870 98,750,000 85,897,335 (12,852,665) 3,353,500 3,353,500 3,264,093 (89,407) 63,404,859 63,404,859 61,096,684 (2,308,175) Licenses and permits 3,608,536 3,608,536 2,667,720 (940,816) Charges for services 19,563,448 19,563,448 17,943,549 (1,619,899) Fines and forfeitures 5,849,000 5,849,000 4,909,778 (939,222) Rentals 99,740 99,740 138,668 38,928 Contributions 50,000 50,000 50,000 - Interest income 7,250,000 7,250,000 5,209,298 (2,040,702) Miscellaneous 3,334,706 3,334,706 1,174,946 (2,159,760) 243,870,023 243,870,023 220,996,175 (22,873,848) 23,825,971 27,675,244 19,608,770 8,066,474 944,523 906,980 667,162 239,818 2,642,980 2,938,517 2,472,560 465,957 Law 3,501,389 3,445,540 3,208,222 237,318 Magistrate 4,196,814 4,247,335 3,956,240 291,095 145,365,842 135,548,776 54,496,816 81,051,960 954,281 1,073,119 815,746 257,373 Fire 28,122,216 28,137,719 27,841,882 295,837 Police State shared Total revenues EXPENDITURES: General government City manager City clerk Communications and public affairs Management services Mayor and council Public safety 60,386,455 62,016,266 57,864,626 4,151,640 Community development 12,475,878 12,229,646 9,743,317 2,486,329 Public works 18,112,223 20,561,170 16,498,144 4,063,026 Community services 35,151,477 36,842,404 33,922,402 2,920,002 335,680,049 335,622,716 231,095,887 104,526,829 (91,810,026) (91,752,693) (10,099,712) 81,652,981 Proceeds from disposal of capital assets - - 142,490 142,490 Transfers in - - 3,624,429 3,624,429 (32,189,570) (32,137,164) (34,592,156) (2,454,992) (32,189,570) (32,137,164) (30,825,237) 1,311,927 (123,999,596) (123,889,857) (40,924,949) 82,964,908 210,401,744 210,401,744 210,401,744 Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Change in fund balance Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ 86,402,148 See accompanying notes to this schedule. 74 $ 86,511,887 $ 169,476,795 $ 82,964,908 CITY OF CHANDLER, ARIZONA Required Supplementary Information June 30, 2009 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, (2) property tax and state shared revenue accruals, and (3) 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 $ 609,284 Taxes accrued as revenue for GAAP purposes in fiscal year ended June 30, 2008 2,612,534 Taxes accrued as revenue for GAAP purposes in fiscal year ended June 30, 2009 (2,795,332) Accrued payroll not recognized as budgetary basis expenditures for the fiscal year ended June 30, 2008 (3,497,931) Accrued payroll not recognized as budgetary basis expenditures for the fiscal year ended June 30, 2009 3,995,339 Reserved encumbrances at June 30, 2009 recognized as budgetary expenditures in fiscal year ended June 30, 2009 Budgetary Comparison Schedule for the General Fund (41,848,843) $ 75 (40,924,949) CITY OF CHANDLER, ARIZONA Required Supplementary Information June 30, 2009 Arizona Public Safety Personnel Retirement System - Police Schedule of Funding Progress (1) Actuarial Value of Assets Valuation Date 30-Jun 2006 2007 2008 $ 58,256,719 59,909,235 66,242,859 (2) Entry Age Actuarial Accrued Liability (AAL) $ 73,363,294 91,534,641 95,361,375 (3) Percent Funded (1)/(2) (4) Unfunded AAL (2) - (1) (5) Annual Covered Payroll (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) 79.4% 65.4% 69.5% $ 15,106,575 31,625,406 29,118,516 $ 19,977,231 23,460,954 25,093,684 75.6% 134.8% 116.0% (5) Annual Covered Payroll (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) Arizona Public Safety Personnel Retirement System - Firefighters Schedule of Funding Progress Valuation Date 30-Jun 2006 2007 2008 (1) Actuarial Value of Assets $39,694,142 41,392,622 45,433,395 (2) Entry Age Actuarial Accrued Liability (AAL) $ 44,956,349 56,735,431 58,745,529 (4) Unfunded AAL (2) - (1) (3) Percent Funded (1)/(2) 88.3% 73.0% 77.3% 76 $ 5,262,207 15,342,809 13,312,134 $12,235,917 14,050,999 14,906,063 43.0% 109.2% 89.3% BUDGETARY COMPARISON SCHEDULES OTHER MAJOR FUND 77 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Streets Capital Projects For the year ended June 30, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ 1,689,000 $ 1,689,000 $ 89,749 $ (1,599,251) Charges for service 2,666,102 2,666,102 1,386,213 (1,279,889) Regional Transportation Tax 4,456,600 4,456,600 7,921,275 3,464,675 - - 246,383 246,383 8,811,702 8,811,702 9,643,620 831,918 - - 700,690 Capital improvements 204,115,843 204,117,319 63,959,865 140,157,454 Total expenditures 204,115,843 204,117,319 64,660,555 139,456,764 (195,304,141) (195,305,617) (55,016,935) 140,288,682 162,695,000 162,695,000 88,786,919 (73,908,081) 5,742,069 (67,865,387) Miscellaneous Total revenues EXPENDITURES: Bond issuance cost Excess (deficiency) of revenues over expenditures (700,690) Other financing sources (uses): Proceeds from the issuance of debt Transfers in 73,607,456 73,607,456 (67,957,659) (67,957,659) 168,344,797 168,344,797 94,528,988 (73,815,809) Change in fund balances (26,959,344) (26,960,820) 39,512,053 66,472,873 Fund balances (deficits), July 1, 2008 (63,204,908) (51,335,828) (36,227,247) 15,108,581 Transfers out Total other financing sources (uses) Fund balances (deficits), June 30, 2009 $ (90,164,252) 78 $ (78,296,648) - $ 3,284,806 67,957,659 $ 81,581,454 COMBINING NON-MAJOR AND FIDUCIARY FUND FINANCIAL STATEMENTS 79 City of Chandler Combining Balance Sheet All Non-Major Governmental Funds - By Fund Type June 30, 2009 Total Non-Major Special Debt Capital Governmental Revenue Service Projects Funds 18,794,946 $ 24,127,610 $ 56,903,721 82 - - 82 ASSETS Equity in pooled cash and investments $ $ 99,826,277 Receivables (net of allowance for uncollectible): Accounts Special assessments - 7,007,525 - 7,007,525 Notes 618,087 - - 618,087 Other 180,000 - - 180,000 1,427,566 - - 1,427,566 - - 10,388,971 10,388,971 $ 21,020,681 $ 31,135,135 $ 67,292,692 $ 119,448,508 $ 1,186,257 $ $ $ Due from other governments Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 8,006 3,844,462 5,038,725 Accrued payroll 121,105 - - 121,105 Accrued interest - 8,214,855 - 8,214,855 63,634 - 3,491,740 3,555,374 862,945 - 21,221,414 22,084,359 Due to other funds Advances from other funds Arbitrage liability - - 88,799 88,799 Bonds payable - 14,750,000 - 14,750,000 Deferred revenue - 6,620,220 - 6,620,220 2,233,941 29,593,081 28,646,415 60,473,437 Total liabilities Fund Balances: Reserved: Capital improvements - - 30,777,865 30,777,865 Debt service - 1,542,054 - 1,542,054 Special revenue funds 18,786,740 - - 18,786,740 Capital projects funds - - 7,868,412 7,868,412 18,786,740 1,542,054 38,646,277 58,975,071 21,020,681 $ 31,135,135 $ 67,292,692 $ 119,448,508 Unreserved, undesignated: Total fund balances Total liabilities and fund balances $ 80 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, 2009 Total Non-Major Special Debt Capital Governmental Revenue Service Projects Funds REVENUES: Highway user taxes $ Grants and entitlements 13,849,284 $ 18,168,904 - $ - $ 13,849,284 - - 18,168,904 3,088,816 System development fees - - 3,088,816 Special assessments - 863,747 - 863,747 Charges for services 855,190 - 694,000 1,549,190 Interest income 510,091 19,282 1,710,176 2,239,549 Miscellaneous 241,176 - 1,650 242,826 33,624,645 883,029 5,494,642 40,002,316 Total revenues EXPENDITURES: Current: General government 191,524 - 308,374 499,898 Public safety 771,557 - - 771,557 Community development 1,147,008 - - 1,147,008 Public works 8,596,450 - - 8,596,450 Community services 492,228 - - 492,228 Capital improvements 16,284,020 - 42,259,109 58,543,129 15,275,000 Debt service: Principal - 15,275,000 - Bond issuance costs - - 260,320 260,320 Interest and fiscal charges - 13,059,295 - 13,059,295 27,482,787 28,334,295 42,827,803 98,644,885 6,141,858 (27,451,266) (37,333,161) (58,642,569) Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Bond premium - - 636,269 636,269 Face amount of bonds issued - - 32,738,000 32,738,000 Proceeds from disposal of capital assets Transfers in Transfers out 6,730 - 70,573 77,303 37,922 27,590,083 3,598,817 31,226,822 (4,982,628) (10,345,747) 32,061,031 54,332,647 (5,272,130) (4,309,922) 43,918,407 63,284,993 (5,152,076) Total other financing sources (uses) (211,043) (5,107,424) 27,379,040 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 1,034,434 (72,226) FUND BALANCES: Beginning of year End of year 17,752,306 $ 81 18,786,740 1,614,280 $ 1,542,054 $ 38,646,277 $ 58,975,071 82 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 User 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 General Obligation Bonds Accumulates monies for the payment of principal and interest requirements of the City's tax-supported General Obligation Bonds. Revenues for repayment are generated from secondary property taxes. 83 City of Chandler Non-Major Governmental Funds, Continued NON-MAJOR DEBT SERVICE FUNDS, CONTINUED 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. 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. Community Services Used to account for the acquisition of land and equipment, development, construction and improvement of community parks and projects. Public Safety Buildings and Improvements Used to account for public safety, e.g., police and fire department, building construction, renovation and improvements and equipment purchases 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. 84 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2009 Special Revenue Highway Local User Transportation Community Fund Assistance Community Parks and Grants-in-Aid Development Recreation $ $ Center Library Building ASSETS Equity in pooled cash and investments $ 14,919,411 $ 2,743,493 - 4,107 $ 277,223 $ 27,274 $ 139 Receivables (net of allowance for uncollectible): Accounts - 82 - - - - - Special assessments - - - - - - - Notes - - - 618,087 - - - Other - - 180,000 - - - - 1,251,350 - 23,979 152,237 - - - - - - - - - - Due from other governments Advances to other funds Total assets $ 16,170,761 $ 2,743,575 $ 203,979 $ 774,431 $ 277,223 $ 27,274 $ 139 $ $ 53,649 $ 892,450 $ 125,303 $ 2,990 $ 1,776 $ - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 107,764 Accrued payroll 103,743 - 8,681 8,681 - - - Accrued interest - - - - - - - - - 63,634 - - - - 862,945 - - - - - - Arbitrage liability - - - - - - - Bonds payable - - - - - - - Deferred revenue - - - - - - - Total liabilities 1,074,452 53,649 964,765 133,984 2,990 1,776 - Capital improvements - - - - - - - Debt service - - - - - - - Special revenue funds 15,096,309 2,689,926 (760,786) 640,447 274,233 25,498 139 Capital projects funds - - - - - - - 15,096,309 2,689,926 (760,786) 640,447 274,233 25,498 139 Due to other funds Advances from other funds Fund Balances: Reserved: Unreserved, undesignated: Total fund balances Total liabilities and fund balances $ 16,170,761 $ 2,743,575 $ 203,979 $ 774,431 $ 277,223 $ 27,274 $ 139 (Continued) 85 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2009 Special Revenue Debt Service Special General Chandler Downtown Municipal Obligation Highway User Assessment Employee Redevelopment Arts Bonds Revenue Bonds Bonds 18,968,834 $ ASSETS Equity in pooled cash and investments $ - $ 7,915 $ 815,384 $ 3,836,415 $ 1,322,361 Receivables (net of allowance for uncollectible): Accounts - - - - - - Special assessments - - - - - 7,007,525 Notes - - - - - - Other - - - - - - Due from other governments - - - - - - Advances to other funds - - - - - - Total assets $ - $ 7,915 $ 815,384 $ 18,968,834 $ 3,836,415 $ 8,329,886 $ - $ - $ 2,325 $ - $ - $ 8,006 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll - - - - - - Accrued interest - - - 7,268,834 786,415 159,606 Due to other funds - - - - - - Advances from other funds - - - - - - Arbitrage liability - - - - - - Bonds payable - - - 11,700,000 3,050,000 - Deferred revenue - - - - - 6,620,220 Total liabilities - - 2,325 18,968,834 3,836,415 6,787,832 Capital projects purposes - - - - - - Debt service - - - - - 1,542,054 Special revenue funds - 7,915 813,059 - - - Capital projects funds - - - - - - Total fund balances - 7,915 813,059 - - 1,542,054 Fund Balances: Reserved: Unreserved, undesignated: Total liabilities and fund balances $ - $ 7,915 $ 815,384 $ 18,968,834 $ 3,836,415 $ 8,329,886 (Continued) 86 Capital Projects Capital Public Works Public Safety Equipment Total Other and General Community Buildings and Acquisition and Special Computer Fleet Governmental Government Services Improvements Replacement Assessments Purchases Replacement Funds $ 8,004,798 $ 26,862,334 $ 14,060,753 $ - $ 4,887,082 $ 2,678,974 $ 409,780 99,826,277 - - - - - - - 82 - - - - - - - 7,007,525 - - - - - - - 618,087 - - - - - - - 180,000 - - - - - - - 1,427,566 - - - 10,388,971 - - - 10,388,971 $ 119,448,508 $ 8,004,798 $ 26,862,334 $ 14,060,753 $ 10,388,971 $ 4,887,082 $ 2,678,974 $ 409,780 $ 782,422 $ 2,241,945 $ 712,671 $ - $ 1,214 $ 106,210 $ - $ 5,038,725 - - - - - - - 121,105 - - - - - - - 8,214,855 - - - 3,491,740 - - - 3,555,374 - 5,566,708 15,654,706 - - - - 22,084,359 22 86,890 1,887 - - - - 88,799 - - - - - - - 14,750,000 - - - - - - - 6,620,220 782,444 7,895,543 16,369,264 3,491,740 1,214 106,210 - 60,473,437 7,222,354 18,966,791 (2,308,511) 6,897,231 - - - 30,777,865 - - - - - 1,542,054 - - - - 18,786,740 - - 4,885,868 2,572,764 409,780 7,868,412 6,897,231 4,885,868 2,572,764 409,780 58,975,071 409,780 $ 119,448,508 7,222,354 $ $ 8,004,798 18,966,791 $ 26,862,334 (2,308,511) $ 14,060,753 $ 10,388,971 $ 4,887,082 $ 2,678,974 $ (Concluded) 87 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2009 Special Revenue Highway Local User Transportation Fund Assistance Grants-in-Aid Community Parks and Development Recreation Community Library Center Building REVENUES: Highway user taxes $ 13,849,284 $ - $ - $ - $ - $ - $ - Grants and entitlements - 1,454,127 15,270,984 1,443,793 - - - System development fees - - - - - - - Special assessments - - - - - - - Charges for services 17,947 - - - - - - 415,206 69,434 6,106 - 6,924 895 - - 130,468 621 - 80,913 29,174 - 14,282,437 1,654,029 15,277,711 1,443,793 87,837 30,069 - - Interest income Miscellaneous Total revenues EXPENDITURES: Current: General government 7,067 - 184,457 - - - Public safety - - 771,557 - - - - Community development - - 1,242 1,145,766 - - - Public works 7,682,176 914,274 - - - - - Community services - - 267,681 - 72,838 23,906 64 Capital improvements 2,909,798 756,260 12,617,962 - - - - Debt service: Principal - - - - - - - Bond issuance costs - - - - - - - Interest and fiscal charges - - - - - - - 10,599,041 1,670,534 13,842,899 1,145,766 72,838 23,906 64 1,434,812 298,027 14,999 6,163 (64) - - - - - Total expenditures REVENUES OVER (UNDER) EXPENDITURES 3,683,396 (16,505) OTHER FINANCING SOURCES (USES): Bond premium Face amount of bonds issued Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) - - 6,730 - - - - - - 36,637 1,117 - - - - - (4,874,438) (1,525) - (276,111) - - - (4,831,071) (408) - (276,111) - - - (1,147,675) (16,913) 1,434,812 14,999 6,163 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 21,916 (64) FUND BALANCES: Beginning of year End of year 16,243,984 2,706,839 $ 15,096,309 $ 2,689,926 (2,195,598) $ (760,786) 618,531 $ 640,447 259,234 $ 274,233 19,335 $ 25,498 203 $ 139 (Continued) 88 Special Revenue Debt Service Capital Projects Special General Chandler Downtown Municipal Obligation Employee Redevelopment Arts Bonds $ - $ $ - $ - Highway User Assessments and General Community Revenue Bonds Bonds Government Services $ - $ - $ - $ - - - - - - - - - - - - - - - 412,563 1,957,010 - - - - - 863,747 - - - - 837,243 - - - - 694,000 2 196 11,328 - - 19,282 74,508 837,026 - - - - - - - - 2 196 848,571 - - 883,029 487,071 3,488,036 - - - - - - 139,649 - - - - - - - - - - - - - - - - - - - - - - - - - - - 127,739 - - - - - - - - - - - 2,520,567 26,492,777 - - - 11,700,000 3,050,000 525,000 - - - - - - - - 4,499 204,971 - - - 11,048,211 1,572,829 438,255 - - - - 127,739 22,748,211 4,622,829 963,255 2,664,715 26,697,748 2 196 720,832 (22,748,211) (4,622,829) (80,226) (2,177,644) (23,209,712) - - - - - - - - 168 - - 22,748,211 4,622,829 - - - - (211,043) - 166 - - 22,748,211 4,622,829 168 196 720,832 - - (2) (168) $ - Public Works - 7,719 $ 7,915 - 92,227 $ 813,059 - $ - - - 500,986 25,800,000 - - - 219,043 - 8,000 1,542,054 26,288,204 (1,602,647) 1,614,280 $ (12,782) 574,997 (72,226) $ 10,997 564,000 3,078,492 8,825,001 $ 7,222,354 15,888,299 $ 18,966,791 (Continued) 89 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2009 Capital Projects Capital Public Safety Equipment Total Other Buildings and Acquisition and Special Computer Fleet Governmental Improvements Replacement Assessments Purchases Replacement Funds REVENUES: Highway user taxes $ Grants and entitlements - $ - System development fees - $ - - $ - - $ - - $ 13,849,284 - 18,168,904 3,088,816 719,243 - - - - Special assessments - - - - - 863,747 Charges for services - - - - - 1,549,190 402,898 150,160 145,047 86,305 14,232 2,239,549 - - 1,650 - - 242,826 1,122,141 150,160 146,697 86,305 14,232 40,002,316 499,898 Interest income Miscellaneous Total revenues EXPENDITURES: Current: General government - - 126,137 42,588 - Public safety - - - - - 771,557 Community development - - - - - 1,147,008 8,596,450 Public works - - - - - Community services - - - - - 492,228 Capital improvements 10,799,648 903,828 - 1,542,289 - 58,543,129 15,275,000 Debt service: Principal Bond issuance costs Interest and fiscal charges Total expenditures - - - - - 50,850 - - - - 260,320 - - - - 13,059,295 10,850,498 903,828 126,137 1,584,877 - 98,644,885 (9,728,357) (753,668) 20,560 (1,498,572) REVENUES OVER (UNDER) EXPENDITURES 14,232 (58,642,569) OTHER FINANCING SOURCES (USES): 124,286 6,374,000 Bond premium Face amount of bonds issued - - - - 636,269 32,738,000 Proceeds from disposal of capital assets - 69,295 - - 1,278 77,303 Transfers in - 1,195,463 58,349 2,284,760 60,245 31,226,822 Transfers out - Total other financing sources (uses) (289,216) (2,684,001) 6,498,286 975,542 (2,625,652) (3,230,071) 221,874 (2,605,092) (1,996,629) - 288,131 (10,345,747) 61,523 54,332,647 75,755 (4,309,922) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (1,210,441) FUND BALANCES: Beginning of year End of year 6,675,357 921,560 $ (2,308,511) $ 6,897,231 7,490,960 $ 4,885,868 3,783,205 $ 2,572,764 334,025 $ 409,780 63,284,993 $ 58,975,071 (Concluded) 90 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Highway user tax $ 16,000,000 $ 16,000,000 19,500 19,500 17,947 (1,553) 550,000 550,000 415,207 (134,793) 1,000 1,000 - (1,000) 16,570,500 16,570,500 14,340,630 (2,229,870) General government 12,389,405 14,284,240 7,067 14,277,173 Public works 14,255,746 11,764,737 11,102,000 662,737 26,645,151 26,048,977 11,109,067 14,939,910 (10,074,651) (9,478,477) 3,231,563 12,710,040 36,637 20,064 Charges for services Interest income Miscellaneous Total revenues $ 13,907,476 $ (2,092,524) EXPENDITURES: Current: Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ 16,573 16,573 (294,844) (295,655) (4,874,438) (4,578,783) (278,271) (279,082) (4,837,801) (4,558,719) (10,352,922) (9,757,559) (1,606,238) 8,151,321 1,179,484 1,272,287 17,196,828 15,924,541 (9,173,438) 91 $ (8,485,272) $ 15,590,590 $ 24,075,862 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ Interest income 1,573,653 $ 70,000 Miscellaneous Total revenues 1,573,653 $ 70,000 1,454,127 $ 69,433 (119,526) (567) 70,347 70,347 130,469 1,714,000 1,714,000 1,654,029 60,122 310,270 200,687 - 200,687 1,415,963 2,368,994 2,075,210 293,784 1,726,233 2,569,681 2,075,210 494,471 (59,971) EXPENDITURES: Current: General government Public works Total expenditures Excess (deficiency) of revenues over expenditures (12,233) (855,681) (421,181) 434,500 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 1,117 1,117 1,117 (5,377) (5,377) (1,525) 3,852 (4,260) (4,260) (408) 3,852 (16,493) (859,941) (421,589) 438,352 1,299,344 $ 1,282,851 92 1,339,440 $ 479,499 - 2,556,428 $ 2,134,839 1,216,988 $ 1,655,340 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 26,247,687 Interest income $ 5,000 Miscellaneous 26,247,687 $ 5,000 15,988,422 $ 6,106 (10,259,265) 1,106 - - 620 620 26,252,687 26,252,687 15,995,148 (10,257,539) 687,546 8,249,077 184,155 8,064,922 Public safety 3,184,362 3,319,000 1,640,815 1,678,185 Public works 31,858,257 24,152,042 15,312,214 8,839,828 - - 1,362 1,761,567 1,767,316 376,008 1,391,308 37,491,732 37,487,435 17,514,554 19,972,881 Change in fund balances (11,239,045) (11,234,748) (1,519,406) 9,715,342 Fund balances, July 1, 2008 (10,503,462) (11,777,250) (7,225,409) 4,551,841 Total revenues EXPENDITURES: Current: General government Community development Community services Total expenditures Fund balances, June 30, 2009 $ (21,742,507) 93 $ (23,011,998) $ (8,744,815) (1,362) $ 14,267,183 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 4,600,000 Interest income Total revenues $ 4,600,000 $ 1,443,793 $ (3,156,207) - - - - 4,600,000 4,600,000 1,443,793 (3,156,207) - - - - 465,207 81,880 - 81,880 4,600,000 4,749,510 1,145,766 3,603,744 5,065,207 4,831,390 1,145,766 3,685,624 EXPENDITURES: Current: Capital improvements General government Community development Total expenditures Excess (deficiency) of revenues over expenditures (465,207) (231,390) 298,027 529,417 Transfers in - - - - Transfers out - - (276,111) (276,111) - - (276,111) (276,111) Change in fund balances (465,207) (231,390) 21,916 253,306 Fund balances, July 1, 2008 (417,498) (600,862) 151,792 752,654 Other financing sources (uses): Total other financing sources (uses) Fund balances, June 30, 2009 $ (882,705) 94 $ (832,252) $ 173,708 $ 1,005,960 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ Miscellaneous 10,000 $ 10,000 $ 6,924 $ (3,076) 62,850 62,850 80,913 18,063 72,850 72,850 87,837 14,987 General government 7,370 2,831 - 2,831 Community services 165,003 169,542 79,787 89,755 172,373 172,373 79,787 92,586 Change in fund balances (99,523) (99,523) 8,050 107,573 Fund balances, July 1, 2008 167,467 167,975 259,520 91,545 Total revenues EXPENDITURES: Current: Total expenditures Fund balances, June 30, 2009 $ 67,944 95 $ 68,452 $ 267,570 $ 199,118 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Library Special Revenue For the year ended June 30, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ Miscellaneous Total revenues 1,000 $ 1,000 $ 895 $ (105) 20,000 20,000 29,174 9,174 21,000 21,000 30,069 9,069 EXPENDITURES: Current: General government 5,063 1,883 - 1,883 Community services 54,000 54,331 4,451 49,880 59,063 56,214 4,451 51,763 (38,063) (35,214) 25,618 60,832 (2,259) (259) 13,878 14,137 Total expenditures Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ (40,322) 96 $ (35,473) $ 39,496 $ 74,969 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, 2009 Total Budgeted Amounts Original Final Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ 8 Total revenues $ 8 $ - $ (8) 8 8 - (8) 8 8 64 (56) 8 8 64 (56) - - (64) (64) 146 146 157 11 EXPENDITURES: Current: General government Total expenditures Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ 146 97 $ 146 $ 93 $ (53) 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ - Total revenues Change in fund balances $ - $ 2 $ 2 - - 2 2 - - 2 2 - - 168 168 - - 168 168 Other financing sources (uses): Transfers in Total other financing sources (uses) Fund balances, July 1, 2008 Fund balances, June 30, 2009 (172) $ (172) 98 (172) $ (172) (171) $ (3) 1 $ 169 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest income $ 250 Total revenues $ 250 $ 196 $ (54) 250 250 196 (54) 250 250 - 250 250 250 - 250 - - 196 196 7,307 7,307 7,703 396 EXPENDITURES: Current: General government Total expenditures Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ 7,307 99 $ 7,307 $ 7,899 $ 592 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, 2009 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Charges for services $ Interest income 308,500 $ 308,500 $ 837,243 $ 528,743 1,500 1,500 11,328 9,828 310,000 310,000 848,571 538,571 General government 85,000 547,797 - 547,797 Community services 225,000 302,095 200,323 101,772 310,000 849,892 200,323 649,569 - (539,892) 648,248 1,188,140 (251,225) (262,082) 45,719 307,801 Total revenues EXPENDITURES: Current: Total expenditures Change in fund balances Fund balances (deficits), July 1, 2008 Fund balances (deficits), June 30, 2009 $ (251,225) 100 $ (801,974) $ 693,967 $ 1,495,941 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ Interest income Total revenues 663,415 663,415 412,563 260,000 $ 260,000 74,530 $ (185,470) (250,852) 923,415 923,415 487,093 (436,322) 17,034,576 3,165,939 139,649 - - 4,499 EXPENDITURES: Current: General government Bond issuance cost Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures 3,026,290 (4,499) 2,890,806 16,759,443 11,515,616 5,243,827 19,925,382 19,925,382 11,659,764 8,265,618 (19,001,967) (19,001,967) (11,172,671) 7,829,296 16,344,342 16,344,342 Other financing sources (uses): Transfers in Bond premium (discount) Face amount of bonds issued Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 (16,344,342) - - 10,997 10,997 550,000 550,000 564,000 14,000 16,894,342 16,894,342 574,997 (2,107,625) (2,107,625) 464,886 $ - (1,642,739) 101 336,191 $ (1,771,434) $ (16,319,345) (10,597,674) (8,490,049) 8,905,865 8,569,674 (1,691,809) $ 79,625 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Charges for services $ - $ - $ 694,000 $ 694,000 System development fees 3,541,398 3,541,398 1,957,010 (1,584,388) Interest income 1,791,000 1,791,000 737,770 (1,053,230) 5,332,398 5,332,398 3,388,780 (1,943,618) Total revenues EXPENDITURES: Current: Bond issuance costs Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures - - 204,971 75,887,266 75,890,218 38,659,664 37,230,554 (204,971) 75,887,266 75,890,218 38,864,635 37,025,583 (70,554,868) (70,557,820) (35,475,855) 35,081,965 61,685,000 61,189,525 26,300,986 (34,888,539) 9,205,000 9,205,000 - 11,205,000 11,205,000 82,095,000 81,599,525 26,288,204 (55,311,321) 11,540,132 11,041,705 (9,187,651) (20,229,356) (147,392,136) (139,132,869) (73,930,989) 65,201,880 $ (135,852,004) $ (128,091,164) Other financing sources (uses): Proceeds from the issuance of debt Transfers in Transfers out Total other financing sources (uses) Change in fund balances Fund balances (deficits), July 1, 2008 Fund balances (deficits), June 30, 2009 102 (9,205,000) (12,782) $ (83,118,640) (11,217,782) $ 44,972,524 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, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ Interest income Total revenues 942,062 $ 942,062 $ 719,243 $ (222,819) 820,000 820,000 322,923 (497,077) 1,762,062 1,762,062 1,042,166 (719,896) - - 50,850 (50,850) EXPENDITURES: Current: Bond issuance costs Capital improvements 41,863,801 41,866,753 12,950,460 28,916,293 41,863,801 41,866,753 13,001,310 28,865,443 (40,101,739) (40,104,691) (11,959,144) 28,145,547 22,780,000 22,780,000 6,498,286 (16,281,714) 22,780,000 22,780,000 6,498,286 (16,281,714) Change in fund balances (17,321,739) (17,324,691) (5,460,858) 11,863,833 Fund balances (deficits), July 1, 2008 (38,118,930) (35,311,458) (19,542,584) 15,768,874 (55,440,669) $ (52,636,149) 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, 2009 $ 103 $ (25,003,442) $ 27,632,707 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, 2009 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Interest income $ Total revenues 175,000 $ 175,000 $ 150,160 $ (24,840) 175,000 175,000 150,160 (24,840) General government 2,200,000 1,318,132 - 1,318,132 Capital improvements 2,744,439 3,626,307 1,105,808 2,520,499 4,944,439 4,944,439 1,105,808 3,838,631 (4,769,439) (4,769,439) EXPENDITURES: Current: Total expenditures Excess (deficiency) of revenues over expenditures (955,648) 3,813,791 Other financing sources (uses): Proceeds from disposal of capital assets Transfers in Transfers out 160,000 69,295 (90,705) 3,025,863 1,195,463 (1,830,400) (35,313) Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 160,000 3,025,863 $ (35,313) 3,150,550 3,150,550 (1,618,889) (1,618,889) 1,766,362 147,473 104 $ 218,590 253,903 1,483,348 (1,667,202) 527,700 2,146,589 1,772,182 4,189,097 2,416,915 153,293 $ 4,716,797 $ 4,563,504 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Special Assessments - Capital Projects Fund For the year ended June 30, 2009 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Investment income $ 180,000 Miscellaneous income $ 180,000 $ 145,047 $ (34,953) - - 1,651 180,000 180,000 146,698 (33,302) 180,000 180,000 129,016 50,984 180,000 180,000 129,016 50,984 - - 17,682 17,682 Transfers in - - 58,350 58,350 Transfers out - - (2,684,001) (2,684,001) - - (2,625,651) (2,625,651) - - (2,607,969) (2,607,969) 5,502,041 5,500,452 7,475,021 1,974,569 Total revenues 1,651 EXPENDITURES: Current: General government Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ 5,502,041 105 $ 5,500,452 $ 4,867,052 $ (633,400) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Computer Purchase - Capital Projects Fund For the year ended June 30, 2009 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Interest income $ Total revenues 125,000 $ 125,000 $ 67,832 $ (57,168) 125,000 125,000 67,832 (57,168) General government 2,263,014 1,773,203 43,629 Capital improvements 2,590,613 3,080,424 2,247,484 832,940 4,853,627 4,853,627 2,291,113 2,562,514 (4,728,627) (4,728,627) (2,223,281) (2,619,682) EXPENDITURES: Current: Total expenditures Excess (deficiency) of revenues over expenditures 1,729,574 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) 2,728,627 2,284,760 (1,996,629) (1,996,629) 731,998 Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 2,728,627 (1,996,629) $ 731,998 (3,996,629) (3,996,629) (163,715) (4,160,344) 106 $ (443,867) - 288,131 (443,867) (1,935,150) (3,063,549) (154,394) 3,615,295 3,769,689 (4,151,023) $ 1,680,145 $ 706,140 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, 2009 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Interest income $ Total revenues 10,000 $ 10,000 $ 14,232 $ 4,232 10,000 10,000 14,232 4,232 100,000 100,000 - 100,000 100,000 100,000 - 100,000 (90,000) (90,000) 14,232 104,232 - - 1,278 1,278 60,245 60,245 60,245 - 60,245 60,245 61,523 1,278 (29,755) (29,755) 75,755 105,510 4,603 4,603 334,025 329,422 EXPENDITURES: Current: General government Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from disposal of capital assets Transfers in Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2008 Fund balances, June 30, 2009 $ (25,152) 107 $ (25,152) $ 409,780 $ 434,932 108 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. 109 City of Chandler Combining Statement of Net Assets Non-Major Proprietary Funds June 30, 2009 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds ASSETS Current assets: Cash and investments $ 10,483,317 $ 377,269 $ 2,818,818 $ 13,679,404 1,698,273 16 23,893 1,722,182 Due from other governments - - 24,629 24,629 Inventory - 12,613 - 12,613 Prepaid Invoices - - 347,584 347,584 12,181,590 389,898 3,214,924 15,786,412 Other assets - 1,533 - 1,533 Long-term notes receivables - - 394,450 394,450 Non-depreciable 7,088,918 19,482,854 1,597,897 28,169,669 Depreciable, net 10,955,003 11,227,407 7,410,014 29,592,424 Total capital assets 18,043,921 30,710,261 9,007,911 57,762,093 18,043,921 30,711,794 9,402,361 58,158,076 30,225,511 31,101,692 12,617,285 73,944,488 Accounts receivable Total current assets Noncurrent assets: Capital assets: Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable 728,599 21,804 63,491 813,894 Accrued payroll 37,866 14,282 45,032 97,180 Trust liabilities and deposits 16,512 44,368 156,405 217,285 - 2,526 - 2,526 67,479 - - 67,479 Accrued interest Unearned revenue Compensated absences 2,757 1,533 4,036 8,326 330,600 196 - 330,796 1,183,813 84,709 268,964 1,537,486 Compensated absences 46,582 25,902 68,208 140,692 Advances from other funds 50,723 - - 50,723 Bonds payable - 201,000 - 201,000 Other payables 6,660 7,637 - 14,297 - 8 - 8 2,455,591 - - 2,455,591 2,559,556 234,547 68,208 2,862,311 3,743,369 319,256 337,172 4,399,797 18,043,921 30,509,261 9,007,911 57,561,093 8,438,221 273,175 3,272,202 11,983,598 Other payables Total current liabilities Noncurrent liabilities: Arbitrage liability Landfill closure and postclosure costs Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets $ 26,482,142 $ 110 30,782,436 $ 12,280,113 $ 69,544,691 City of Chandler Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Non-Major Proprietary Funds For the year ended June 30, 2009 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds OPERATING REVENUES: $ Service fees 12,762,120 $ 740,242 $ - $ 13,502,362 Grants and entitlements - - 6,225,928 6,225,928 Rentals - 1,314 595,420 596,734 Other revenue - 5,116 188,362 193,478 12,762,120 746,672 7,009,710 20,518,502 Total operating revenues OPERATING EXPENSES: General and administrative 1,416,778 863,446 - 2,280,224 Personal services 1,383,555 445,688 1,671,592 3,500,835 Contractual services 8,088,913 62,030 208,574 8,359,517 475,404 150,333 549,864 1,175,601 - - 4,281,150 4,281,150 Commodities Housing assistance payments 56,054 - - 56,054 Depreciation and amortization Landfill closure and postclosure 645,286 745,493 528,005 1,918,784 Total operating expenses 12,065,990 2,266,990 7,239,185 21,572,165 OPERATING INCOME (LOSS) 696,130 (1,520,318) (229,475) (1,053,663) NONOPERATING REVENUES (EXPENSES): Interest revenue 249,817 Interest expense - Accretion of bond premium - 196 - Amoritization of bond costs - (69) - (69) (105) - (11,113) Gain (loss) on the disposal of capital assets 6,926 (11,008) Total nonoperating revenues (expenses) 238,809 INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 71,273 (2,527) 4,421 934,939 328,016 - (1,515,897) (2,527) 196 71,273 314,503 (158,202) (739,160) CAPITAL CONTRIBUTION AND TRANSFERS: Capital contributions 37,332 324,891 153,048 515,271 Transfers in 43,188 1,321,659 561,111 1,925,958 Transfers out Total transfers Net income (loss) (34,405) (652,795) 46,115 993,755 714,159 1,754,029 981,054 (522,142) 555,957 1,014,869 11,724,156 68,529,822 - (687,200) NET ASSETS 25,501,088 Beginning of year End of year $ 111 26,482,142 31,304,578 $ 30,782,436 $ 12,280,113 $ 69,544,691 City of Chandler Combining Statement of Cash Flows Non-Major Proprietary Funds For the year ended June 30, 2009 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 12,757,471 Cash received from grantors $ - 740,904 $ - 1,054,973 $ 14,553,348 6,338,167 6,338,167 Cash payments to suppliers (9,894,530) (1,074,188) (5,356,224) (16,324,942) Cash payments to employees for services (1,375,635) (438,136) (1,659,576) (3,473,347) 1,487,306 (771,420) Net cash provided (used) by operating activities 377,340 1,093,226 561,111 1,925,958 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in 43,188 Transfers out Net cash provided (used) by noncapital financing activities 1,321,659 (34,405) (652,795) - 8,783 668,864 561,111 (84,835) (404,562) (478,188) (687,200) 1,238,758 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets (967,585) 993 - - 993 Proceeds from debt issuance - 201,000 - 201,000 Interest paid on bonds - 3,856 - 3,856 Principal received on mortgage notes - - 136,424 136,424 Proceeds from sales of capital assets Cash payments to other funds (17,498) Capital contributions Net cash provided (used) by capital and related financing activities - - 37,332 324,891 153,048 515,271 (17,498) (64,008) 125,185 (188,716) (127,539) 71,273 328,016 CASH FLOWS FROM INVESTING ACTIVITIES: Investment income 249,817 Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents 6,926 249,817 6,926 71,273 328,016 1,681,898 29,555 821,008 2,532,461 8,801,419 347,714 1,997,810 11,146,943 CASH AND CASH EQUIVALENTS: Beginning of year End of year $ 10,483,317 $ $ $ 377,269 $ 2,818,818 $ 13,679,404 $ (1,053,663) RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) 696,130 (1,520,318) $ (229,475) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Landfill closure and postclosure costs 645,286 745,493 528,005 1,918,784 56,054 - - 56,054 Changes in assets and liabilities: (Increase) decrease in receivables (17,263) (Increase) decrease in inventories (16) - (Increase) decrease in other assets Increase (decrease) in payables Increase (decrease) in accrued payroll and compensated absences Increase (decrease) in deposits 13,106 Total adjustments $ Net cash provided (used) by operating activities 112 13,106 - (1,533) (15,135) (11,485) (19,413) 5,002 5,751 (16,668) 55,667 - (4,219) 12,614 Increase (decrease) in other liabilities 93,674 - 86,565 - Increase (decrease) in unearned revenue 110,953 10,753 2,405 - (1,814) - 12,614 2,918 1,801 - 4,719 791,176 748,898 606,815 2,146,889 1,487,306 $ (771,420) $ 377,340 $ 1,093,226 City of Chandler Statement of Changes in Assets and Liabilities - Agency Fund Fiduciary Funds For the year ended June 30, 2009 Balance Balance July 1, 2008 Additions Deletions June 30, 2009 Miscellaneous Deposit Fund Assets: Equity in pooled cash and investments Total assets $ 10,977 $ 138,381 $ (131,344) $ 18,014 $ 10,977 $ 138,381 $ (131,344) $ 18,014 $ 10,977 $ 145,229 $ (138,192) $ 18,014 $ 10,977 $ 145,229 $ (138,192) $ 18,014 Liabilities: Due to others Total liabilities 113 114 City of Chandler Financial Data Schedule Housing and Redevelopment For the year ended June 30, 2009 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. 115 City of Chandler Financial Data Schedule Housing and Redevelopment June 30, 2009 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 $ 408,885 13,800 53,103 $ 197,162 52,752 $ 606,047 13,800 105,855 13,249 14,576 (7,718) 5,060 11,380 11,406 (1,899) 3,731 24,629 25,982 (9,617) 8,791 1,883,351 4,376,703 175,545 (4,632,817) - 1,572,093 8,335,338 71,601 (3,616,984) 335,950 3,455,444 12,712,041 247,146 (8,249,801) 335,950 2,303,737 $ 6,972,530 $ 9,276,267 LIABILITIES 312 321 322 341 342 345 Accounts Payable Accrued Wage/Payroll Taxes Payable Accrued Compensated Absences - Current Tenant Security Deposits Deferred Revenues Other Current Liabilities 28,222 13,614 869 53,103 3,260 17,972 8,436 302 52,752 7,081 46,194 22,050 1,171 105,855 10,341 353 354 Noncurrent Liabilities - Other Accrued Compensated Absences - Noncurrent 13,800 14,687 5,112 13,800 19,799 127,555 91,655 219,210 1,802,782 13,800 359,600 6,362,048 518,827 8,164,830 13,800 878,427 2,176,182 6,880,875 9,057,057 TOTAL LIABILITIES 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 $ 2,303,737 $ 6,972,530 $ 9,276,267 (Continued) 116 Business Activities Central Office 14.850a $ $ $ Other Business 394,959 - $ Housing Choice Vouchers 14.871 Total Business Activities 1,388,346 2,000 $ 1,783,305 2,000 $ 284,903 22,909 - - - - 7,528 338,793 32,718 (8,982) - 200,000 520,613 129,670 (38,947) 58,500 200,000 520,613 162,388 (47,929) 58,500 35,470 (27,461) - 418,695 $ 2,260,182 $ 2,678,877 $ 662,142 Total $ 2,674,255 36,709 107,855 24,629 7,528 25,982 (9,617) 347,584 3,655,444 13,232,654 445,004 (8,325,191) 394,450 $ 12,617,286 5,433 13,372 2,126 - 1,193 2,000 1,500 6,626 13,372 2,126 2,000 1,500 10,671 9,610 739 - 35,928 - 35,928 22,909 12,481 63,491 45,032 4,036 107,855 11,841 36,709 68,208 56,859 4,693 61,552 56,410 337,172 23,736 338,100 811,336 1,444,153 835,072 1,782,253 8,009 545,732 51,991 9,007,911 559,532 2,712,671 361,836 2,255,489 2,617,325 605,732 12,280,114 418,695 $ 2,260,182 $ 2,678,877 $ 662,142 $ 12,617,286 (Concluded) 117 City of Chandler Financial Data Schedule Housing and Redevelopment For the year ended June 30, 2009 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 70300 70400 70600 70610 70710 70720 70730 71100 713 713.1 71400 71500 72000 258,421 7,648 940,362 129,189 4,903 37,874 - 333,574 45 451,882 23,859 15,306 34,333 - 591,995 7,693 1,392,244 153,048 20,209 72,207 - 1,378,397 858,999 2,237,396 Administrative Salaries Auditing Fees Management Fees Bookkeeping Fees Compensated Absences Employee Benefit Contributions - Administrative Office Expenses 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 Maintenance Insurance Other General Expenditures Compensated Absences Payments in Lieu of Taxes Bad Debt - Tenant rents Total Operating Expenditures 159,168 1,500 111,133 14,392 53,223 4,154 15,535 19,560 45,798 12,604 762 33,622 44,915 1,442 35,659 168,695 147,139 92,715 54,130 9,970 10,375 4,363 11,181 1,052,035 108,775 1,500 95,620 12,390 32,681 1,875 12,389 16,800 2,037 6,588 171 2,813 173,109 110,208 85,113 51,778 16,956 1,959 16,308 749,070 267,943 3,000 206,753 26,782 85,904 6,029 27,924 36,360 45,798 12,604 762 35,659 51,503 1,613 38,472 341,804 257,347 177,828 105,908 26,926 12,334 4,363 27,489 1,801,105 Other Expenditures: Housing assistance Payments Depreciation TOTAL EXPENDITURES 226,792 1,278,827 261,667 1,010,737 488,459 2,289,564 99,570 (151,738) (52,168) 15,000 (15,000) 241,455 15,000 (15,000) 34,656 30,000 (30,000) 276,111 241,455 34,656 276,111 341,025 (117,082) Net Tenant Rental Revenue Tenant Revenue - Other HUD Operating Grants HUD Capital Grants Management Fees Earned Asst Management Fees Earned Bookkeeping Fees Earned Investment Income - Unrestricted Proceeds from disposition of assets held for sale Cost of Sale of Assets Fraud Recovery Other Revenue Investment Income - Restricted TOTAL REVENUES EXPENSES 91100 91200 91300 91301 914 91500 91600 91900 92000 92100 92300 92400 93100 93200 93300 93800 94100 94200 94300 94500 96100 96200 96210 96300 96400 97300 97400 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES BEFORE OTHER FINANCING SOURCES (USES) OTHER FINANCING SOURCES (USES) 10010 10020 10030 Operating Transfers In Operating Transfers Out Operating Transfers In from Primary Government TOTAL OTHER FINANCING SOURCES (USES) CHANGE IN NET ASSETS 223,943 TOTAL NET ASSETS, BEGINNING OF YEAR 1,835,157 6,997,957 8,833,114 NET ASSETS, END OF YEAR 2,176,182 6,880,875 9,057,057 1,956 1,901 1,680 1,634 3,636 3,535 OTHER MEMORANDUM AMOUNTS 70600 11190 11210 Maximum Annual Contributions Commitment Unit Months Available Number of Unit Months Leased (Continued) 118 Business Activities Central Office 14.850a Other Business Housing Choice Vouchers 14.871 Total Business Activities Eliminations Total 275,656 43,336 69,765 3,477 - 3,425 33,436 - 3,425 275,656 43,336 69,765 36,913 - 4,833,684 2,763 8,918 99,544 11,389 (275,656) (43,336) (69,765) - 595,420 7,693 6,225,928 153,048 59,885 8,918 171,751 11,389 392,234 36,861 429,095 4,956,298 (388,757) 7,234,032 230,741 81,105 12,709 92,717 1,114 31,774 5,925 456,085 1,888 7,155 30 2,890 865 1,381 955 1,457 735 3,700 17,625 1,040 39,721 232,629 7,155 30 81,105 15,599 865 1,381 955 1,457 93,452 4,814 17,625 31,774 5,925 1,040 495,806 212,734 3,000 68,724 42,953 87,242 2,796 32,758 42,865 18,620 9,263 921 521,876 (282,632) (69,765) (36,360) (388,757) 713,306 6,000 254,251 8,825 76,281 88,663 31,224 762 36,524 52,884 2,568 39,929 435,256 262,161 195,453 137,682 26,926 21,597 11,209 1,040 27,489 2,430,030 3,674 459,759 34,949 74,670 38,623 534,429 4,281,150 923 4,803,949 (388,757) 4,281,150 528,005 7,239,185 (67,525) (37,809) (105,334) 152,349 - (5,153) 135,000 - 135,000 150,000 - 30,000 (30,000) 561,111 135,000 - 135,000 150,000 - 561,111 67,475 (37,809) 29,666 302,349 - 555,958 294,361 2,293,298 2,587,659 303,383 - 11,724,156 361,836 2,255,489 2,617,325 605,732 - 12,280,114 - - - 4,833,684 5,760 5,750 (Concluded) 119 120 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 122 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 138 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 142 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 144 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 152 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. 121 CITY OF CHANDLER, ARIZONA NET ASSETS BY COMPONENT LAST EIGHT 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 90,046,996 110,932,310 346,949,775 186,420,301 224,309,216 214,663,854 307,220,491 359,495,671 416,021,275 488,386,189 207,918,704 232,259,546 252,117,283 275,991,278 76,248,944 70,198,611 63,985,390 72,538,299 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets 71,248,431 70,831,613 82,444,533 78,334,422 355,416,079 373,289,770 398,547,206 426,863,999 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 145,892,629 288,223,514 353,782,346 438,781,303 98,545,735 187,310,013 154,032,386 183,470,609 418,198,206 662,636,570 $ 257,251,914 732,785,441 $ 306,753,749 814,568,481 $ 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. 122 Schedule 1 Fiscal Year 2006 $ $ 2007 260,653,345 (1) $ 288,893,354 106,396,966 115,343,816 2008 $ 353,996,843 2009 $ 56,979,639 433,851,899 117,712,539 208,727,675 265,645,323 341,971,306 271,690,158 575,777,986 669,882,493 752,947,788 823,254,596 325,992,618 347,306,362 427,130,654 387,401,986 52,511,899 57,835,328 24,319,427 - 76,090,729 78,718,941 45,300,009 98,413,928 454,595,246 483,860,631 496,750,090 485,815,914 586,645,963 636,199,716 781,127,497 821,253,885 158,908,865 173,179,144 81,299,066 117,712,539 284,818,404 1,030,373,232 $ 344,364,264 1,153,743,124 $ 387,271,315 1,249,697,878 $ 123 370,104,086 1,309,070,510 CITY OF CHANDLER, ARIZONA CHANGES IN NET ASSETS LAST EIGHT 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. 124 Schedule 2a Fiscal Year 2006 $ 36,669,140 2007 $ 42,317,392 2008 $ 54,459,719 2009 $ 52,293,004 63,840,179 76,200,082 80,860,917 87,609,165 8,706,473 9,154,407 11,692,559 10,429,826 31,940,075 32,402,242 39,241,652 47,180,197 24,087,695 29,464,039 33,086,565 34,278,998 11,658,090 11,479,112 14,880,604 12,938,524 176,901,652 201,017,274 234,222,016 244,729,714 38,582,431 40,687,283 53,554,653 53,201,379 25,294,189 27,230,862 30,657,939 36,079,767 8,154,317 9,843,824 6,845,979 12,076,998 1,765,772 1,757,279 1,602,268 2,269,691 6,713,829 9,133,427 7,593,242 7,239,185 80,510,538 88,652,675 100,254,081 110,867,020 257,412,190 $ 289,669,949 $ 334,476,097 $ 355,596,734 125 CITY OF CHANDLER, ARIZONA CHANGES IN NET ASSETS LAST EIGHT 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. 126 Schedule 2b Fiscal Year 2006 $ 2007 12,359,183 $ 12,793,179.00 2008 $ 12,629,779 2009 $ 14,349,483 3,303,895 4,178,941 4,317,843 4,802,272 8,338,156 10,405,425 5,488,535 3,581,458 13,145,192 15,831,165 5,226,726 2,272,826 2,699,469 5,235,864 24,529,838 (1) 2,272,309 2,167,327 3,707,115 1,897,300 2,337,910 12,751,519 26,428,112 36,104,151 23,902,360 65,722,227 72,930,790 78,968,242 59,436,073 38,112,680 39,054,531 40,613,727 39,707,910 20,499,458 21,083,587 25,145,258 25,922,530 12,218,720 12,769,423 12,979,695 12,762,120 1,005,728 974,190 773,449 741,556 648,766 661,509 1,061,658 595,420 6,634,435 6,312,438 6,114,138 6,225,928 23,547,210 28,014,518 19,782,193 9,110,319 102,666,997 108,870,196 106,470,118 95,065,783 $ 168,389,224 $ 181,800,986 $ 185,438,360 $ 154,501,856 $ (111,179,425) $ (128,086,484) $ (155,253,774) $ (185,293,641) $ 22,156,459 (89,022,966) $ 20,217,521 (107,868,963) $ 6,216,037 (149,037,737) $ (15,801,237) (201,094,878) 127 CITY OF CHANDLER, ARIZONA CHANGES IN NET ASSETS LAST EIGHT 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 Franchise taxes 1,957,618 2,249,190 2,365,749 Highway user taxes - - - Other taxes - - - 37,850,975 39,559,356 37,903,674 8,105,353 15,165,191 State shared revenues System development fees 8,320,712 Investment income (loss) 7,677,017 Miscellaneous Westcor contract payment Transfers (4,895,290) (1) 162,714 261,069 - - 690,493 Total governmental activities 2,391,875 695,312 - (767,922) 127,731,669 621,256 123,079,699 146,632,728 Business-type activities: Investment income (loss) 4,007,601 Miscellaneous Transfers 639,190 (690,493) Total business-type activities: Total primary government (2,624,182) (1) 3,956,298 $ 131,687,967 $ $ 57,838,779 $ 31,776,811 89,615,590 1,199,710 897,511 767,922 376,917 (621,256) (958,749) 955,371 122,120,950 $ 147,588,099 $ 52,275,180 $ 56,525,604 $ 17,873,691 70,148,871 $ 25,257,436 81,783,040 Change in Net Assets Governmental activities Business-type activities Total primary government (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. 128 Schedule 2c Fiscal Year 2005 $ 2006 22,743,537 $ 2007 25,016,760 $ 2008 26,921,292 $ 95,410,460 2009 34,063,123 $ 97,226,841 38,957,986 75,702,332 82,327,461 85,897,334 3,032,260 2,198,738 3,230,429 3,937,952 3,264,093 - - 16,490,129 15,856,863 13,849,284 - - 3,481,086 3,786,677 7,921,275 40,050,636 45,853,506 57,716,644 62,970,459 61,211,289 13,878,663 - - - - 7,862,804 12,286,630 17,868,181 20,823,059 10,045,274 362,343 10,736 1,822,070 767,221 995,606 - 34,500,000 - - 924,227 478,441 469,201 534,086 164,556,802 202,672,272 223,409,492 239,966,281 220,599,795 4,069,440 6,424,600 6,876,399 5,906,545 2,536,237 1,043,407 (469,200) 1,792,816 (534,086) 788,478 1,542,346 7,450,606 7,165,275 4,867,061 232,589 (924,227) (2) 532,354 (478,441) 3,377,802 6,478,513 $ 167,934,604 $ 209,150,785 $ 230,860,098 $ $ 72,364,914 $ 22,796,183 $ 28,316,793 100,681,707 $ 28,634,972 51,431,155 $ 95,323,008 $ 27,668,127 122,991,135 129 (1,542,346) 247,131,556 $ 225,466,856 $ 84,712,507 $ 35,306,154 $ 13,381,312 98,093,819 $ (10,934,176) 24,371,978 CITY OF CHANDLER, ARIZONA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2000 General fund Reserved $ Unreserved Total general fund 54,443,256 2001 $ 82,988,035 20,504,156 2002 $ 146,099,948 2003 27,158,273 $ 149,678,534 34,328,283 135,307,858 $ 137,431,291 $ 166,604,104 $ 176,836,807 $ 169,636,141 $ 6,233,287 $ 12,041,889 $ 74,230,663 $ 91,320,181 All other governmental funds Reserved Unreserved, reported in: Special revenue funds 6,443,322 6,187,316 7,022,854 5,677,614 Capital projects funds 49,174,492 56,774,094 - - Total all other governmental funds $ 61,851,101 $ 75,003,299 130 $ 81,253,517 $ 96,997,795 Schedule 3 Fiscal Year 2004 $ 2005 50,644,739 $ 126,091,872 2006 56,325,826 $ 124,519,771 15,211,490 2007 $ 148,606,301 12,349,638 2008 $ 189,087,760 28,237,521 2009 $ 196,093,067 30,482,311 194,457,561 $ 176,736,611 $ 180,845,597 $ 163,817,791 $ 201,437,398 $ 224,330,588 $ 224,939,872 $ 76,703,585 $ 99,267,829 $ 100,167,158 $ 109,777,210 $ 43,039,742 $ 97,267,450 $ 5,648,789 9,259,261 8,089,144 14,064,542 17,752,306 18,786,740 - - 253,903 9,158,971 11,608,190 7,868,412 82,352,374 $ 108,527,090 $ 108,510,205 $ 131 133,000,723 $ 72,400,238 $ 123,922,602 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS REVENUE LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2000 Taxes - local $ Taxes - intergovernmental 2001 59,732,188 $ 41,594,096 2002 69,079,352 $ 43,772,423 2003 72,951,061 $ 48,797,917 2004 82,591,633 $ 49,850,293 91,492,704 50,173,867 Property taxes - - - - - Sales taxes - - - - - Franchise taxes - - - - - Highway user taxes - - - - - Other taxes - - - - - State shared - - - - - Grants and entitlements 8,572,276 10,377,193 7,748,473 3,983,091 4,217,697 System development fees 7,600,252 9,394,230 8,320,712 8,105,353 15,165,191 Special assessments 221,530 187,819 175,152 513,242 251,608 License and permits 5,572,080 6,627,557 5,651,522 6,386,478 7,500,437 10,151,578 11,987,802 12,373,053 12,843,147 13,386,852 1,969,478 2,233,173 2,796,157 3,975,613 3,517,080 516,855 608,896 17,625 93,630 18,012 - - - - 11,250,246 13,735,770 6,885,010 1,169,275 1,526,134 1,151,110 Charges for current services Fines and forfeitures Rentals Contributions Investment income (loss) Miscellaneous Total revenues $ 148,349,854 $ 169,530,349 $ 166,867,792 5,980 (4,330,308) (1) 2,170,414 1,538,830 $ 165,551,002 2,204,555 $ (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. 132 190,104,397 Schedule 4 Fiscal Year 2005 $ $ 2006 102,701,196 $ 2007 109,141,434 $ 2008 $ 2009 - (2) 51,677,502 60,107,031 - (2) - - - - 26,909,841 (2) 33,844,181 38,677,156 - - 95,410,460 (2) 97,226,841 85,897,334 - - 3,230,429 3,937,952 3,264,093 - - 16,490,129 15,856,863 13,849,284 - - 3,481,086 3,786,677 7,921,275 - - 57,716,644 62,970,459 61,211,289 (2) - $ - 14,100,944 9,296,423 7,610,807 10,553,680 18,168,904 13,878,663 10,322,313 11,871,969 8,111,597 4,475,029 439,565 303,336 309,386 426,428 863,747 7,262,403 5,541,215 6,728,309 3,894,368 2,667,720 15,133,670 15,475,362 18,216,653 17,254,859 19,492,740 4,136,342 4,231,306 4,058,090 4,342,621 4,912,159 19,580 8,363 89,875 94,575 138,667 250 500 50,000 50,000 50,000 6,987,824 10,699,944 15,589,318 18,334,581 8,825,695 2,667,611 1,632,785 1,830,328 1,255,681 1,661,772 219,005,550 $ 226,760,012 $ 269,593,324 $ 281,941,363 133 $ 272,076,864 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2000 General government $ Public safety 2001 18,850,899 $ 35,994,889 2002 19,919,757 $ 42,355,666 2003 28,858,549 $ 49,910,766 29,448,025 53,885,322 Community development 11,822,939 15,217,991 6,757,787 7,061,116 Public works 12,237,692 13,593,511 20,314,406 19,096,782 Community services 14,075,303 16,560,173 17,575,610 20,310,994 Capital improvements 17,093,743 21,296,370 32,346,642 33,211,184 Debt service: Principal retirement 6,144,000 420,000 3,679,500 6,614,500 Interest and fiscal charges 9,228,823 9,747,597 9,730,214 8,515,445 - - - 100,000 Bond issuance costs Total expenditures Debt service as a percentage of noncapital expenditures $ 125,448,288 14.2% 134 $ 139,111,065 8.6% $ 169,173,474 10.1% $ 178,243,368 11.1% Schedule 5 Fiscal Year 2004 $ $ 2005 31,024,154 $ 2006 41,135,736 $ 2007 33,729,455 $ 2008 38,124,478 $ 2009 51,261,849 $ 40,503,113 58,407,246 57,630,321 64,090,649 75,800,634 78,306,604 84,493,816 7,449,114 7,438,317 8,740,380 8,989,308 11,593,642 10,509,467 23,028,537 38,421,485 32,555,171 22,987,692 19,306,381 19,283,643 21,048,659 20,893,626 22,738,420 25,714,032 28,830,926 29,916,002 36,794,139 33,828,009 49,884,875 75,524,840 104,836,442 124,680,957 8,689,500 8,329,500 17,122,071 12,374,500 16,659,500 15,275,000 9,641,321 9,180,338 10,465,983 10,669,877 14,437,346 961,010 - 174,917 135,437 189,840 179,201 13,059,295 196,082,670 12.4% $ 217,032,249 11.1% $ 239,462,441 $ 15.9% 270,375,201 12.1% 135 $ 325,411,891 14.1% $ 338,682,303 7.1% CITY OF CHANDLER, ARIZONA OTHER FINANCING SOURCES AND USES AND NET CHANGES IN FUND BALANCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2000 2001 2002 2003 Other Financing Sources (Uses) Bond premium $ Face amount of bonds issued Proceeds from sale of capital assets Payment to escrow agent Westcor contract payment Transfers in Transfers out Total other financing sources and (uses) Net change in fund balances $ - $ - $ 212,486 10,770,000 14,870,000 23,000,000 3,000 131,450 159,247 - - - $ 1,026,142 45,850,000 91,245 (20,488,542) - - - - 23,840,419 15,790,022 20,152,263 32,480,447 (25,720,821) (18,885,745) (23,649,139) (37,723,314) 8,892,598 11,905,727 19,874,857 21,235,978 27,717,386 $ 136 42,325,011 $ 17,569,175 $ 8,543,612 Schedule 6 Fiscal Year 2004 $ 2005 - $ 852,671 $ 2007 515,129 $ 2008 1,975,876 $ 2009 165,431 $ 2,348,878 - 35,720,000 30,905,000 88,405,000 7,370,000 120,513,000 680,019 264,352 205,936 173,742 280,969 219,793 - (11,228,422) - $ 2006 - - (24,335,292) 34,500,000 - - - - - 26,072,155 33,226,080 37,204,132 31,525,563 38,442,603 40,593,319 (28,318,852) (35,170,013) (39,584,767) (34,246,951) (41,108,342) (44,937,903) (1,566,678) 23,664,668 63,745,430 63,497,938 5,150,661 118,737,087 (7,544,951) $ 25,637,969 $ (17,956,999) $ 62,716,055 137 $ (38,319,867) $ 52,131,648 CITY OF CHANDLER, ARIZONA TAXABLE REVENUE BY CATEGORY LAST TEN FISCAL YEARS Fiscal Year 2000 Amusements Contracting General Retail Hotel/Motel Miscellaneous Related Revenue Publishing Rentals - Personal Property Rentals - Real Property Restaurant/Bar Telecommunications Use Tax Utilities Total Sales and Use Taxes City Direct Sales Tax Rate 2 2001 2002 2003 $ 338,387 9,233,519 16,762,997 1,048,010 907,662 609,677 1,247,486 3,297,849 2,949,472 2,500,653 1,019,338 5,371,404 $ 326,154 11,563,422 18,152,267 1,299,873 2,053,581 626,200 1,573,050 3,759,161 3,416,147 2,931,529 807,287 6,058,546 $ 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 $ 410,039 11,467,704 22,261,109 1,212,328 2,201,668 669,702 2,008,711 5,207,175 4,482,235 3,124,021 634,029 6,648,449 $ 45,286,454 $ 52,567,217 $ 54,760,212 $ 60,327,170 1 1.77% 1.75% 1.76% Source: Tax & License Division 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. Tax rates vary by category, currently ranging from 1.5% to 4.4%. 138 1.73% Schedule 7 Fiscal Year 2004 2005 2006 2007 2008 2009 $ 477,089 13,008,527 25,638,223 1,309,463 1,583,458 711,215 1,994,513 5,454,033 5,015,335 3,006,992 750,291 7,448,823 $ 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 1,898,671 699,456 1,743,393 7,141,065 6,994,533 3,603,977 989,767 8,910,538 $ 679,666 15,665,738 41,719,797 1,938,442 2,765,527 723,532 1,935,981 7,883,794 7,655,093 3,709,781 1,044,225 9,688,886 $ 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 $ 623,159 9,352,480 36,851,140 1,672,893 2,774,033 389,046 2,474,464 8,520,878 7,267,718 4,057,982 930,636 10,982,905 $ 66,397,962 $ 75,619,727 $ 89,390,316 $ 95,410,462 $ 97,226,776 $ 85,897,334 1.74% 1.70% 1.72% 1.72% 1.72% 139 1.75% CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING SALES AND USE TAX RATES LAST TEN FISCAL YEARS Schedule 8 Overlapping Rates Fiscal Year City Direct 1 Tax Rate Maricopa County Tax Rate 2 State of Arizona Tax Rate 3 Tourism & Sports Authority 4 Tax Rate 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1.77% 1.75% 1.76% 1.73% 1.74% 1.70% 1.72% 1.72% 1.72% 1.75% 0.67% 0.68% 0.67% 0.68% 0.67% 0.67% 0.68% 0.68% 0.68% 0.67% 4.64% 4.69% 5.12% 5.10% 5.06% 5.13% 5.14% 5.12% 5.09% 5.02% 0.00% 0.00% 0.01% 0.02% 0.00% 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. 140 CITY OF CHANDLER, ARIZONA PRINCIPAL SALES AND USE TAXPAYERS CURRENT YEAR AND TEN YEARS AGO Schedule 9 Fiscal Year 2009 Taxpayer Business Type Taxpayer A Taxpayer B Taxpayer C Taxpayer D Taxpayer E Taxpayer F Taxpayer G Taxpayer H Taxpayer I Taxpayer J Taxpayer K Taxpayer L Taxpayer M Taxpayer N Utility Department store Grocery Retailer Department store Grocery Telecommunications Department store Utility Department store Auto dealer Telecommunications Auto dealer Grocery Sales and Use Tax Payments $ $ 8,081,196 2,486,012 2,264,854 1,481,953 1,343,092 1,342,988 1,251,954 1,228,121 1,199,128 1,101,592 21,780,890 Fiscal Year 2000 Rank Percentage of Total Sales and Use Tax Payments 1 2 3 4 5 6 7 8 9 10 9.41% 2.89% 2.64% 1.73% 1.56% 1.56% 1.46% 1.43% 1.40% 1.28% 25.36% Rank Percentage of Total Sales and Use Tax Payments 3,899,898 867,960 1,185,517 1 7 2 8.61% 1.92% 2.62% 1,126,167 924,546 3 5 2.49% 2.04% 771,937 8 1.70% 999,725 900,192 716,970 602,416 4 6 9 10 2.21% 1.99% 1.58% 1.33% Sales and Use Tax Payments $ $ 11,995,327 26.49% Source: Tax & License Division Notes: The identities of the ten largest revenue payers are prohibited from disclosure per State statute. Alternatively, the business type of the top ten taxpayers for each period has been disclosed along with the appropriate data. 141 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 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 116,673,232 121,796,310 87,250,000 106,970,000 102,480,000 120,805,000 140,130,000 197,075,000 187,645,000 294,588,000 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 25,369,934,857 Percentage of Estimated Actual Taxable Value of Property 1.69% 1.65% 1.04% 1.19% 0.93% 0.99% 1.01% 1.30% 0.72% 1.16% Other Governmental Activities Debt Special Assessment Bonds Per Capita 1 Revenue Bonds 652 641 434 505 456 510 579 798 749 1,169 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 34,690,000 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 7,820,000 Percentage of Personal Income 1 Accrued Interest Capital Appreciation Bonds 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 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 41,070,541 35,203,528 25,770,000 25,395,000 23,705,000 21,270,000 19,415,000 62,410,000 60,395,000 188,612,000 Revenue Bonds Certificates of Participation Excise Tax Revenue Bonds Intergovernmental Loans Total Primary Government 2 152,083,366 154,190,353 117,540,000 122,735,000 116,140,000 114,800,000 108,870,000 101,095,000 93,000,000 76,415,000 19,148,890 12,510,000 11,035,000 10,210,000 9,335,000 - 34,040,000 142,398 126,972 110,755 93,706 75,783 56,942 37,135 16,304 - 395,153,793 424,597,213 317,229,963 345,648,936 331,682,173 345,042,011 346,212,051 436,680,903 422,040,654 636,165,000 * 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. 2 Includes general bonded debt, other governmental activities debt and business-type activities debt. 142 9.32% 9.08% 6.17% 6.51% 5.71% 5.82% 5.45% 6.81% 5.81% 8.59% Per Capita 1 2,209 2,234 1,576 1,631 1,476 1,457 1,431 1,767 1,684 2,524 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30, 2009 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 EastValley 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 43,230,079 263,702,755 337,098,000 Total direct and overlapping debt 100.00 337,098,000 $ 600,800,755 Source: J.P Morgan Trust Company Note: The applicable percentage of overlap for each type of debt was computed on the ratio of secondary assessed valuation as calculated for fiscal year 2008/09 for the overlapping jurisdiction to the amount of such valuation which lies within the City of Chandler 143 CITY OF CHANDLER, ARIZONA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 2000 2001 2002 2003 6% General Obligation Bond Limitation Debt limit $ Total net debt applicable to limit Legal debt margin 55,406,326 $ 65,967,141 23,625,000 $ 31,781,326 $ 23,160,000 $ 42,807,141 74,634,001 $ 34,020,000 $ 40,614,001 98,302,556 45,475,000 $ 52,827,556 Total net debt applicable to the limit as a percentage of the debt limit 43% 35% 46% 46% 20% General Obligation Bond Limitation Debt limit $ Total net debt applicable to limit Legal debt margin 184,687,754 $ 219,890,471 60,410,000 $ 124,277,754 $ 66,860,000 $ 153,030,471 248,780,004 $ 76,970,000 $ 171,810,004 327,675,186 80,710,000 $ 246,965,186 Total net debt applicable to the limit as a percentage of the debt limit 33% 30% 31% 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. 144 25% Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2009 Net secondary assessed valuation as of June 30, 2009 $ Debt limit (6% of assessed value) 3,508,071,609 210,484,297 Debt applicable to limit: 6% general obligation bonds 10,934,000 Legal 6% debt margin $ 199,550,297 Debt limit (20% of assessed value) $ 701,614,322 Debt applicable to limit: 20% general obligation bonds 472,266,000 Legal 20% debt margin $ 229,348,322 Fiscal Year 2004 $ 108,344,928 2005 $ 37,575,000 $ 70,769,928 361,149,760 $ 289,029,760 20% 57,089,422 $ 395,831,408 $ 315,416,408 20% $ 41,729,443 $ 388,164,810 179,351,393 $ 303,339,810 22% $ 37% $ $ (1) 597,837,975 $ 145 199,515,517 691,035,056 $ (1) 450,790,056 35% 210,484,297 10,934,000 $ 199,550,297 5% $ 240,245,000 404,812,975 32% $ 4% 193,025,000 $ 207,310,517 2009 7,795,000 112,891,393 84,825,000 $ 2008 66,460,000 64% 80,415,000 $ 116,449,443 2007 74,720,000 52% 72,120,000 $ $ 61,660,000 35% $ 118,749,422 2006 701,614,322 472,266,000 $ 229,348,322 67% CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13a Street & Highway Revenue Bonds Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Highway User Taxes 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 13,849,284 Less: Operating Expenses 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 10,599,041 Net Available Revenue 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 3,250,243 Debt Service Principal Interest 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 3,050,000 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 1,572,829 Coverage 0.70 1.11 0.94 0.99 1.17 1.15 1.42 1.75 1.65 0.70 Water Revenue Bonds Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Utility Service Charges 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 39,707,910 Less: Operating Expenses 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 31,084,108 Net Available Revenue 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 8,623,802 Debt Service Principal Interest 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 4,854,151 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 2,419,526 Coverage 2.22 2.60 2.02 1.32 1.64 1.62 2.08 2.08 1.06 1.19 Excise Tax Revenue Obligations Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Excise Tax Collections 148,768,677 Less: Operating Expenses Net Available Revenue Principal - 148,768,677 - Debt Service 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. See Note 6 for breakdown of revenue pledged for Excise Tax Revenue Obligations first pledged February 4, 2009 146 462,667 Coverage 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 321.55 CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13b Wastewater Revenue Bonds Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Utility Service Charges 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 25,922,530 Less: Operating Expenses 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 17,663,644 Net Available Revenue 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 8,258,886 Debt Service Principal Interest 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 3,915,849 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 1,341,752 Coverage 2.92 2.08 2.12 0.58 2.66 1.61 1.18 1.26 1.35 1.57 Solid Waste Revenue Bonds Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Utility Service Charges 7,514,525 8,173,254 8,571,736 9,257,218 9,825,572 9,773,505 - Less: Operating Expenses 5,894,509 6,423,477 7,781,800 13,627,896 9,035,882 8,703,517 - Net Available Revenue 1,620,016 1,749,777 789,936 (4,370,678) 789,690 1,069,988 - Debt Service Principal Interest 100,000 100,000 125,000 125,000 125,000 - 229,750 222,688 215,750 206,969 152,469 71,844 - Coverage 4.91 5.42 2.32 -13.17 2.85 14.89 0.00 0.00 0.00 0.00 (1) (2) 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. 147 CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13c Municipal Property Corporation Certificates of Participation Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Water & Sewer Utility Service Charges 46,744,191 49,161,079 50,838,015 54,148,991 55,998,112 57,401,553 - Less: Operating Expenses 25,497,416 26,733,797 29,124,534 33,136,452 36,382,039 38,173,781 - Debt Service Net Available Revenue 21,246,775 22,427,282 21,713,481 21,012,539 19,616,073 19,227,772 - Principal 625,000 650,000 700,000 775,000 825,000 875,000 - 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. 148 Interest 1,012,595 959,470 915,595 867,295 813,045 755,295 - Coverage 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) 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 2009 252,056 7,409,186,120 32.8 6.2% 29,395 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. 149 CITY OF CHANDLER, ARIZONA PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO 2009 Employer Employees Rank Percentage of Total City Employment Intel Corporation 10,000 1 8.34% Bank of America Chandler Unified School District Wells Fargo Ocotillo Corp. Campus City of Chandler Chandler Regional Hospital Microchip Technology Verizon Wireless Freescale Semiconductor Orbital Sciences MCI Worldcom Motorola Ryobi Outdoor Products, Inc. Innovex Speedfam/IPEC Amkor Bank First 3,500 3,000 2,243 1,652 1,600 1,538 1,500 1,450 1,425 2 3 4 5 6 7 8 9 10 2.92% 2.50% 1.87% 1.38% 1.34% 1.28% 1.25% 1.21% 1.19% Total 27,908 23.28% Source: City's Economic Development Division and City of Chandler Human Resources 150 Schedule 15 2000 Employees Rank Percentage of Total City Employment 9,600 1 18.46% 690 6 1.33% 480 700 2,330 1,000 680 700 240 250 10 4 2 3 7 5 8 9 0.92% 1.35% 4.48% 1.92% 1.31% 1.35% 0.46% 0.48% 16,670 32.06% 151 CITY OF CHANDLER, ARIZONA EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Fiscal Year 2000 2001 2002 2003 2004 Mayor and council 4 4 City clerk City manager Communications/public affairs 5 23 8 6 26 10 City magistrate Law Management services 37 21 113 39 21 127 4 6 30 11 40 23 124 4 6 69 17 41 25 97 4 6 71 17 41 23 99 Total General Government 211 233 238 259 261 Total Planning and Development 116 124 115 117 117 Total Community Services 154 162 170 178 183 Public works administration Streets 6 53 7 57 Airport Engineering, development and Real estate Total Public Works 6 6 5 53 6 2 53 5 3 53 6 77 142 85 155 75 139 72 132 78 140 Police Fire Total Public Safety 378 142 520 420 160 580 423 174 597 440 181 621 438 179 617 5 6 76 32 20 133 81 27 22 136 4 81 38 24 147 5 90 39 24 158 5 85 29 20 139 1,276 1,390 1,406 1,465 1,457 Full Time Equivalent Personnel Municipal utilities administration Water Wastewater Solid waste Total Municipal Utilities Total Primary Government (1) (1) 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. 152 Schedule 16 Fiscal Year 2005 2006 2007 2008 2009 5 6 70 18 40 24 96 5 5 74 18 39 25 95 5 5 5 6 79 17 6 104 18 44 27 101 48 29 106 43 28 105 259 261 279 316 308 111 108 111 114 103 178 182 219 243 207 3 48 6 3 55 6 3 59 3 64 3 57 6 6 6 74 131 71 135 76 144 85 158 80 146 436 195 631 460 207 667 487 219 706 496 228 724 483 223 706 5 85 41 18 149 5 85 41 21 152 5 5 5 85 42 21 153 88 43 20 156 86 41 18 150 1,459 1,505 1,612 1,711 1,620 (2) 153 6 103 18 CITY OF CHANDLER, ARIZONA OPERATING INDICATORS BY FUNCTION / PROGRAM LAST TEN 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 2000 2001 2002 2003 2004 3,042 * * * * 2,749 * * * * 13,437 450 1,109 43 2.95 14,843 501 947 46 3.72 15,713 504 996 47 3.77 4,929 8,779 8,737 9,723 11,688 Community Services Library circulation Center for the arts events & exhibits 804,530 * 1,257,387 * 1,501,217 523 1,700,786 535 1,817,536 1,010 Public Safety Crime rate (per 1,000 population) Total calls for police services (estimated) Total calls for fire services Fire inspections Fire investigations * 100,808 395 2,568 112 * 107,999 355 3,155 43 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 54,955 * 45,000,000 58,310,000 * 657 42,217 92,068 19,050 58,114 * 67,110,000 58,310,000 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 Planning & Development Building permits issued 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) 708 49,670 106,259 19,664 Source: City of Chandler Departments * The city implemented Statement 34 in 2002, therefore, some of the information presented on this schedule was unavailable before that year. 154 Schedule 17 Fiscal Year 2005 2006 2007 2008 2009 16,663 534 1,542 49 3.46 20,464 505 1,292 57 2.78 20,652 721 1,292 57 3.32 22,980 470 1,188 61 3.94 23,460 479 1,055 66 2.5 8,951 7,909 6,474 5,750 3,800 1,967,446 1,027 2,004,000 1,024 2,082,000 1,024 2,349,232 989 2,506,602 977 40.7 136,942 15,310 3,767 58 40 151,941 16,662 4,375 73 38 160,355 16,682 4,878 74 35 159,535 16,709 3,585 57 35 157,039 16,537 3,891 49 70,375 23 57,400,000 45,000,000 66,750 796 62,591 117,813 23,379 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 77,596 29 66,020,000 60,000,000 71,880 857 67,902 89,408 24,596 155 CITY OF CHANDLER, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION / PROGRAM LAST TEN FISCAL YEARS Fiscal Year Function/Program Community Services Developed parks Developed acres Undeveloped acres 2000 2001 2002 2003 2004 41 459 * 45 702 * 48 752 432 49 796 405 51 870 333 4 5 5 5 5 32 316,125 36 356,678 32 373,527 32 405,986 32 422,841 613 18,160 97 * 710 18,890 101 * 743 20,400 118 415 762 22,154 136 411 768 23,140 153 433 Public Safety Police stations Fire stations * 5 * 5 1 5 1 7 1 8 Municipal Utilities Water mains (miles) Fire hydrants Average daily treament (mgd) * * * * * * 985 8,617 19 1,000 9,393 19 1,021 10,368 21 Swimming pools Other recreational facilities (lighted fields) Library bookstock Public Works Total miles streets (center line) Street lights Signalized intersections Based aircraft 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, some information presented on this schedule was unavailable before that year. 156 Schedule 18 Fiscal Year 2005 2006 51 874 349 2007 53 889 535 (1) 2008 2009 54 959 468 58 1,099 455 59 1,133 407 5 5 5 5 6 32 450,068 33 469,000 34 483,128 34 469,023 34 472,266 775 24,218 166 434 785 25,100 189 457 812 25,307 192 499 822 26,326 200 442 832 26,500 205 449 1 9 2 9 2 10 3 10 3 10 1,051 10,799 21 1,063 10,952 22 1,080 12,291 24 1,117 13,033 24 1,189 13,750 24 157 Accounting Book Back Cover 2009 12/23/09 3:40 PM Page 1 Phone (480) 782-2333 www.chandleraz.gov Mailing Address Mail Stop 702 P.O. Box 4008 Chandler, Arizona 85244-4008 Management Services Suite 201 55 North Arizona Place Chandler, Arizona 85225