CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2014 Jay Tibshraeny, Mayor Rick Heumann, Vice-Mayor Jack Sellers, Councilmember Trinity Donovan, Councilmember Nora Ellen, Councilmember Kevin Hartke, Councilmember Jeff Weninger, Councilmember Executive Staff Rich Dlugas, City Manager Marsha Reed, Assistant City Manager Nachie Marquez, Assistant City Manager Prepared by Management Services Department Dawn Lang, Management Services Director Penny Malia, Accounting Manager Derrick Beracy, Sr. Financial Reporting Analyst CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2014 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................................... 1 Organizational Chart .............................................................................................................................................. 7 Certificate of Achievement .................................................................................................................................... 8 FINANCIAL SECTION Independent Auditor’s Report.............................................................................................................................. 9 Management’s Discussion and Analysis (MD&A)........................................................................................... 13 Basic Financial Statements: Government-wide Financial Statements Statement of Net Position ....................................................................................................................... 26 Statement of Activities ............................................................................................................................ 28 Fund Financial Statements Balance Sheet – Governmental Funds................................................................................................... 30 Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Position ............................................................... 31 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds ........................................................................................................................ 32 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities...................................................................................................................... 33 Statement of Net Position - Proprietary Funds.................................................................................... 34 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds.............................................................................................................................. 36 Statement of Cash Flows - Proprietary Funds ..................................................................................... 38 Statement of Fiduciary Net Position - Fiduciary Funds ..................................................................... 40 Statement of Changes in Fiduciary Net Position - Fiduciary Funds ................................................ 41 Notes to Financial Statements ................................................................................................................... 43 Required Supplementary Information: Budgetary Comparison Schedule for the General Fund........................................................................ 80 Note to Required Supplementary Information....................................................................................... 81 Arizona Public Safety Personnel Retirement System Schedules of Funding Progress ..................... 82 Post-employment Benefits Other than Pensions Schedule of Funding Progress............................... 82 Other Financial Statements: Budgetary Comparison Schedules for Other Major Fund Streets Capital Projects Fund.................................................................................................................. 84 General Obligation Bonds Debt Service Fund ..................................................................................... 85 i CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2014 TABLE OF CONTENTS, continued FINANCIAL SECTION, continued Non-Major Governmental Funds Combining Balance Sheet ....................................................................................................................... 89 Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................... 92 Budgetary Comparison Schedules: Highway User......................................................................................................................................... 95 Local Transportation Assistance .......................................................................................................... 96 Grants Special Revenue ......................................................................................................................... 97 Community Development .................................................................................................................... 98 Police Confiscated Property.................................................................................................................. 99 Parks and Recreation ........................................................................................................................... 100 Library.................................................................................................................................................... 101 General Government ........................................................................................................................... 102 Public Buildings.................................................................................................................................... 103 Grants Capital Projects ........................................................................................................................ 104 Community Services ............................................................................................................................ 105 Public Safety Buildings and Improvements ..................................................................................... 106 Vehicle and Capital Equipment ......................................................................................................... 107 Special Assessments ........................................................................................................................... 108 Technology Replacement .................................................................................................................... 109 Municipal Arts ...................................................................................................................................... 110 Non-Major Proprietary Funds: Combining Statement of Net Position ................................................................................................ 114 Combining Statement of Revenues, Expenses and Changes in Fund Net Position............................................................................................................................... 116 Combining Statement of Cash Flows .................................................................................................. 118 Fiduciary Funds: Statement of Changes in Assets and Liabilities - Agency Fund .................................................... 120 Other Supplemental Information: HUD Programs: Combining Statement of Net Position - All HUD Programs ......................................................... 124 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - All HUD Programs ............................................................................... 126 ii CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2014 TABLE OF CONTENTS, continued STATISTICAL SECTION Financial Trends Schedule 1 Net Position by Component ............................................................................................. 130 Schedule 2a Changes in Net Position .................................................................................................. 132 Schedule 2b Changes in Net Position.................................................................................................. 134 Schedule 2c Changes in Net Position .................................................................................................. 136 Schedule 3 Fund Balances of Governmental Funds.......................................................................... 138 Schedule 4 Governmental Funds Revenues....................................................................................... 140 Schedule 5 Governmental Funds Expenditures and Debt Service Ratio ....................................... 142 Schedule 6 Other Financial Sources and Uses and Net Changes in Fund Balance, Governmental Funds.......................................................................................................................... 144 Revenue Capacity Schedule 7 Taxable Revenue by Category.......................................................................................... 146 Schedule 8 Direct and Overlapping Sales and Use Tax Rates ......................................................... 148 Schedule 9 Principal Sales and Use Taxpayers.................................................................................. 149 Debt Capacity Schedule 10 Ratios of Outstanding Debt ............................................................................................ 150 Schedule 11 Direct and Overlapping Governmental Activities Debt............................................. 151 Schedule 12 Legal Debt Margin Information ..................................................................................... 152 Schedule 13a Pledged-Revenue Coverage ......................................................................................... 154 Schedule 13b Pledged-Revenue Coverage ......................................................................................... 155 Schedule 13c Pledged-Revenue Coverage.......................................................................................... 156 Demographic and Economic Information Schedule 14 Demographic and Economic Statistics.......................................................................... 157 Schedule 15 Principal Employers ........................................................................................................ 158 Operating Information Schedule 16 Employees by Function ................................................................................................... 160 Schedule 17 Operating Indicators by Function/Program................................................................ 162 Schedule 18 Capital Asset Statistics by Function/Program............................................................. 164 iii December 26, 2014 Honorable Mayor, Members of the City Council, City Manager and Citizens of the City of Chandler: The comprehensive annual financial report of the City of Chandler, Arizona (the City), for the year ended June 30, 2014, is hereby submitted in accordance with City Charter and state statutes. Both the City Charter and state statutes require that the City issue annually a report on its financial position and activity, and that this report be audited by an independent certified public accountant. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City’s management. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component units of the City. Accounting principles generally accepted in the United States of America (GAAP) require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Chandler’s MD&A can be found immediately following the report of the independent auditors. The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1996 and U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Information related to this single audit, including a schedule of expenditures of federal awards, the independent auditors’ reports on the internal control structure and compliance with applicable laws and regulations, and a schedule of findings and questioned costs are included in a separately issued report. GOVERNMENTAL STRUCTURE, LOCAL ECONOMIC CONDITION AND OUTLOOK The City, incorporated on February 17, 1920, is located in the southeastern portion of Maricopa County (the County), and encompasses approximately 65 square miles. The City has operated under a council-manager form of government since May 25, 1964, and is governed by the City Council, consisting of a mayor and a six member council. Councilmembers are elected at-large on a staggered basis; the mayor and councilmembers are elected for four-year terms. The City Council is vested with policy and legislative authority, and is responsible for passing ordinances, adopting the annual budget, appointing committees, commissions and board members, and appointing the positions of City Manager, City Attorney, City Clerk and City Magistrate. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City is the fourth largest city in Arizona and is one of several major cities comprising the greater Phoenix metropolitan area, which is the economic, political and population center of the state of Arizona. Between 1992 and 2010, the City’s population increased by over 100 percent, from 100,416 to 236,598. The City’s growth for nearly two decades prior to the recession is attributable to the growth in its manufacturing sector, which is led by high-tech industrial companies such as Intel, Orbital Sciences, Microchip Technologies and Freescale Semiconductor. These four companies combined employ about 17,400 in the City. Mailing Address Mail Stop 609 PO Box 4008 Chandler, Arizona 85244-4008 Management Services Telephone (480)782-2250 Fax (480) 782-2253 Web www.chandleraz.gov Location Third Floor 175S.Arizona Avenue Chandler, Arizona 85225 The City boasts a strong labor market serving the high technology field’s demand for skilled workers. Resident population has a median age of 35.6 years and a median household income of $65,381. In addition, approximately 74 percent of the population has a college degree or some college education. 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 2013-14 compared with 6.4 percent for Maricopa County and 6.9% for the State of Arizona. The City’s sales tax revenues, which comprise nearly 50 percent of its general fund, increased by 1.6 percent for 2013-14 from the prior year actuals. The City continues to recover from the effects of the recession that was felt nationally and globally and has benefitted from one-time revenues created by a large industrial expansion and new developments. With only slow and steady operating revenue growth anticipated, managing costs of services and maintaining existing infrastructure continues. Consistently applying sound financial practices and achieving notable economic development successes have helped the City recover from the recession while maintaining its AAA General Obligation Bond credit rating from all three ratings agencies. 2013-2014 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. • Maintained AAA General Obligation Bond credit ratings with stable outlook from all three rating agencies; • Located more than 4,500 base industry jobs including Wells Fargo Phase II, ANS Expansion, Black Diamond, and INSYS Therapeutics Corporate Headquarters; • ASU Innovation Center and TechShop opened their doors in Downtown Chandler in partnership with the City; • Recognized as one of the nation’s most transparent local governments on the Web for the fourth year and given an A+ grade by the Sunshine Review; • Completed installation of solar array at the City Hall parking structure and the Police/Courts parking lot; • American Heart Association awarded Chandler the “Fit Friendly Worksite” Gold Level Award for the second consecutive year for its promotion and creation of a worksite environment where Wellness is encouraged at all levels of the organization; • Successfully implemented the roll out of the City’s two new medical plans offered to employees and retirees and negotiated five labor contracts with employee groups; • Chandler Public Library negotiated with Maricopa County Library District to provide a state of the art integrated library system, Polaris; • Chandler earned the national designation of Playful City USA for the eighth consecutive year; • Created a new “Fire Safety Inspected and Educated” certification program that provides equally distributed fire safety messages to over 5,200, ensures annual inspection of all City schools, and empowers teachers and custodians through use of a self-inspection process; • Implemented a new utility billing and payment system creating greater functionality and efficiencies; • Expanded electronic payment options for citizens citywide by implementing a web portal and adding point of sale; • Received 2013 Award of Merit from Valley Forward Environmental Excellence Awards Ceremony for Chandler’s water conservation audit program; • Conducted the third online budget meeting, “Budget Connect” enhancing citizen involvement in the budget process; 2 • Processed over 6,000 building permits and the Small Business Assistance Team assisted 50 new and existing small business owners; and • Police partnered with the FBI (Federal Bureau of Investigations) Human Trafficking Task Force to provide collaborative sharing of personnel, information, and resources, garnering successes. 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 continued with the Council’s strategic goals by focusing on the following organizational priorities. • 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 about 242,500 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. 3 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 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. 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 2013-14, $803,931,786). 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 yearend and appropriation equal to the amount of year-end encumbrances are added to the current year budget in each cost center. Expenditures against those encumbrances are charged to the current year appropriation. 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. OTHER INFORMATION Independent Audit City Charter and state statute require an annual audit by a firm of independent certified public accountants and the firm of Heinfeld, Meech & Co., has been selected by the City to uphold this requirement. In addition to meeting the requirements set forth in City Charter and state statutes, the audit was also designed to meet the requirements of the federal Single Audit Act of 1996 and the related U.S. Office of Management and Budget’s Circular A-133. Auditing standards generally accepted in the United States of America and the standards set forth in the General Accounting Office’s Government Auditing Standards were used by the auditors in conducting the engagement. The Auditor’s report on the basic financial statements is included in the financial section of this report. The auditor’s reports on internal controls and compliance with applicable laws and regulations can be found in a separately issued single audit report. 4 Financial Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Chandler, Arizona for its comprehensive annual financial report for the year ended June 30, 2013, marking the thirty second consecutive year the City has received the GFOA Certificate of Achievement. The Certificate of Achievement is a prestigious national awardrecognizing conformance with the highest standards for preparation of a municipal government financial report. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both GAAP and applicable legal requirements. Additionally, the City of Chandler was also awarded the Distinguished Budget Presentation Award for the year ended June 30, 2014 from the GFOA, marking the twenty-sixth consecutive year of receiving this award. The award reflects the commitment of staff to meeting the highest principles of governmental budgeting. In order to be awarded a Distinguished Budget Presentation Award, the City had to satisfy nationally recognized guidelines for effective budget presentation. The guidelines are designed to assess how well an entity’s budget serves as a policy document, financial plan, operational guide and communications device. The City’s budget also received Special Recognition this year for the quality of the Performance Measures published as part of the budget. The Certificate of Achievement and Distinguished Budget Presentation Awards are valid for a period of one year only. We believe our current Certificate of Achievement report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA. Acknowledgments I wish to express my sincere thanks to the entire staff of the Accounting Division; without whose assistance this report could not have been prepared. Special acknowledgment is made for the work of Penny Malia, Accounting Manager; April Wilkerson, Accounting Supervisor; Derrick Beracy, Senior Financial Reporting Analyst; Rob Coryea, Financial Services Analyst; Robert Steele, Senior Accountant; Tracy Schmidt, Senior Accountant; and Annette Fries, Executive Assistant. Special thanks also go to Julie Buelt, Senior Financial Analyst for assistance in reviewing the final document. Finally, I wish to thank the Mayor and Council, the City Manager and City Staff for their continued support in promoting sound financial policies and internal controls. Respectfully submitted, Dawn Lang Management Services Director 5 6 City of Chandler, Arizona Organizational Chart Citizens of Chandler Mayor/City Council Advisory Boards/Commissions City Magistrate Law City Clerk City Manager Assistant City Managers Community Services Administration Park Dev. & Operations Aquatics Museum General Government Human Resources Building and Facilities Communications & Public Affairs Recreation Sports & Fitness Nature & Recreation Center for the Arts Library (Video Production, Print, Mail & Graphics, Mayor & Council Administration) IT Applications Support IT Infrastructure & Client Support IT Srvc. Delivery & Admin. Environmental Resources Wastewater Collection Lone Butte Wastewater Reverse Osmosis Water/Wastewater Operations Water Systems Maintenance San Tan Vista Water Treatment Meter Services Administration Budget Accounting Utility Services Airport Water Reclamation Wastewater Quality Ocotillo Water Reclamation Transportation Transit Services Streets Civil Plan Review Planning Land Use Planning Site Development Real Estate Development Services Building Inspections Building Plan Review Customer Service Special Projects Group (Tourism, Downtown Redevelopment, Airport) Purchasing Central Supply Tax and License Environmental Management Police Department Administration Professional Standards Property & Evidence Forensic Services Transportation & Development Administration Engineering Mapping/Standards Economic Development Management Services Municipal Utilities Administration Solid Waste Services Water Distribution Water Treatment Water Quality Neighborhood Resources (Code Enforcement, Housing & Redevelopment, Community Development) Field Operations Criminal Investigations Planning & Research Communications Records Detention Services Community Resources & Training Fire Department Administration Support Services Prevention & Preparedness Fleet Services Capital Projects Contract Management Construction Management 7 Emergency Services Operations 8 10120 N. Oracle Road Tucson, Arizona 85704 Tel (520) 742-2611 Fax (520) 742-2718 INDEPENDENT AUDITOR’S REPORT Honorable Mayor and Members of the City Council City of Chandler, Arizona Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the City of Chandler, Arizona (the “City”), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the City of Chandler, Arizona, as of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. 9 TUCSON • PHOENIX • FLAGSTAFF www.heinfeldmeech.com Change in Accounting Principle As described in Note 1, the City implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities for the year ended June 30, 2014, which represents a change in accounting principle. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis on pages 13 through 23, the Budgetary Comparison Schedule for the General Fund on pages 80 and 81, and the Schedules of Funding Progress on page 82, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Introductory Section, the Other Financial Statements, Other Supplemental Information: HUD Programs, and the Statistical Section are presented for additional analysis and are not a required part of the financial statements. The Other Financial Statements and the Other Supplemental Information: HUD Programs, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Other Financial Statements and the Other Supplemental Information: HUD Programs, are fairly stated in all material respects, in relation to the basic financial statements as a whole. The Introductory Section and the Statistical Section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 26, 2014, on our consideration of City of Chandler, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Chandler, Arizona’s internal control over financial reporting and compliance. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants December 26, 2014 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, 2014 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, 2014. 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 fiscal year 2014 as follows: • • • • • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $1.447 billion (net position) which represents an increase of $69.5 million from the prior year. Of this amount, $389.4 million (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors. However, $65.9 million is invested in a joint venture with the Town of Gilbert, and not available for obligations. At June 30, 2014, the City’s governmental funds reported combined ending fund balances of $273.2 million, an increase of $6.4 million in comparison with the prior year. Approximately 61.0 percent of the total amount, $166.6 million, is available for spending at the City’s discretion (assigned or unassigned). At June 30, 2014, total fund balance for the General Fund was $179.7 million which represents an increase of $10.6 million from the prior year; this is primarily due to higher than budgeted revenues, particularly Transaction Privilege Tax and Building Permit revenues. Total revenues exceed the Adopted Budget by more than $14 million. General revenues from governmental activities accounted for $210.1 million, or 71.6 percent, of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $83.5 million or 28.4 percent of total governmental activity revenues. The City had $183.5 million of program revenues and $2.7 million in general revenues and transfers related to business-type activities. At June 30, 2014, the City’s proprietary funds reported combined total net position of $595.1 million, and total unrestricted net position of $206.3 million. A total of $137.8 million of the unrestricted net position is in the Water Fund. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources with the difference reported as net position. Net position is categorized as capital assets less related debt, restricted by an outside third party, and unrestricted. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). 13 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 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, transportation and development, and community services. 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 services. The services are financed through user fees and charges. Component units – The discretely presented component units are the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 21 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Streets Capital Projects Fund, and General Obligation Bonds Debt Service Fund which are considered to be major funds. Data from the other 18 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 financial section of this report. The City adopts an annual appropriated budget for the General, Special Revenue, General Obligation and Highway User Revenue Debt Service, Capital Projects and Proprietary Funds. Budgetary comparison statements have been provided in the basic financial statements for the General, Streets Capital Projects, and General Obligation Bonds Debt Service Funds to demonstrate compliance with the budget. Budgetary comparison schedules for other Non-major Special Revenue and Non-major Capital Projects Funds are also included in the financial section. 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 funds. Because self-insurance funds are 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. 14 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 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 financial 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. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceeded liabilities by $1.447 billion as of June 30, 2014. This reflects continued strong operations in governmental activities and increased investments in capital infrastructure within the business-type activities, including the expansion of City facilities cash funded by Intel due to the direct impact to their $5 billion expansion. A significant portion of the City’s net position (65.8 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. An additional portion of the City’s net position (7.3 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position (26.9 percent) includes $65.9 million which is invested in a joint venture with the Town of Gilbert that may not be used to meet the City’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. There was an increase of $29.3 million in unrestricted net position reported in connection with the City’s business-type activities. This was due primarily to capital contributions during the year. 15 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 The following table presents a condensed statement of the City’s net position for the fiscal years ended June 30, 2014 and 2013. Current assets Capital assets, net Governmental Business-type Total Activities Activities (Primary Govt.) 2014 2013 2014 2013 2014 $ 366,097,177 $ 368,930,801 $ 234,029,568 $ 130,572,271 $ 600,126,745 807,912,209 821,181,806 669,534,355 610,890,919 1,477,446,564 Long-term assets - Total assets 1,174,009,386 Total deferred outflows of resources 42,583 2013 $ 499,503,072 1,432,072,725 3,181,283 66,240,980 71,590,182 66,240,980 74,771,465 1,193,293,890 969,804,903 813,053,372 2,143,814,289 2,006,347,262 - 952,566 - 995,149 - Total assets and deferred outflows of resources Current liabilities 1,174,051,969 1,193,293,890 970,757,469 813,053,372 2,144,809,438 2,006,347,262 52,998,146 52,915,981 43,831,309 40,149,808 96,829,455 93,065,789 Long-term liabilities 269,207,876 290,272,970 331,804,218 240,926,738 601,012,094 531,199,708 Total liabilities 322,206,022 343,188,951 375,635,527 281,076,546 697,841,549 624,265,497 388,837,444 355,015,004 Net position: Net investment in capital assets 563,033,503 558,279,485 Restricted 105,723,768 112,307,412 183,088,676 $ 851,845,947 179,518,042 $ 850,104,939 Unrestricted Total net position 206,284,498 $ 595,121,942 176,961,822 $ 531,976,826 951,870,947 913,294,489 105,723,768 112,307,412 389,373,174 $ 1,446,967,889 356,479,864 $ 1,382,081,765 Millions $0 $1,000 Total assets and deferred outflows of resources $2,000 $3,000 Governmental Actvities Business-type Actvities Total liabilities Total net position 16 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 Changes in net position. The City’s total revenues for the fiscal year ended June 30, 2014 were $479.6 million. The total cost of all programs and services was $410.1 million, which results in an increase in net position of $69.5 million. The following table presents a summary of the changes in net position for the fiscal years ended June 30, 2014 and 2013. Governmental Business-type Total Activities Activities (Primary Govt.) 2014 2013 2014 2013 2014 2013 68,583,660 Revenues: Program revenues Charges for services $ 61,664,262 $ 105,900,166 $101,398,476 $ 174,483,826 $ 163,062,738 Operating grants and contributions Capital grants and contributions General revenues Property taxes Sales taxes Franchise fees $ 4,744,636 10,170,236 3,999,536 9,116,635 5,457,991 72,176,582 5,785,335 81,572,568 10,202,627 82,346,818 9,784,871 90,689,203 28,348,952 103,880,801 3,145,449 29,656,415 102,200,517 2,936,533 70,065 - - 28,348,952 103,950,866 3,145,449 29,656,415 102,200,517 2,936,533 Highway user taxes Other taxes State shared revenues Investment income Miscellaneous Total revenues 13,352,622 3,243,937 55,423,759 1,869,128 819,766 293,582,946 12,929,504 6,295,212 51,347,206 2,843,417 2,181,627 285,170,864 788,025 1,683,332 186,076,161 1,180,290 1,409,437 191,346,106 13,352,622 3,243,937 55,423,759 2,657,153 2,503,098 479,659,107 12,929,504 6,295,212 51,347,206 4,023,707 3,591,064 476,516,970 General government Public safety Tansportation and development Community services 99,231,501 94,738,371 52,183,052 32,331,286 90,143,339 95,974,126 55,846,316 30,979,208 - - 99,231,501 94,738,371 52,183,052 32,331,286 90,143,339 95,974,126 55,846,316 30,979,208 Interest and fiscal charges Water Wastewater Solid waste Airport Housing authority 10,044,363 - 11,777,701 - 55,877,774 41,969,764 14,131,202 1,980,706 7,616,301 55,440,712 40,401,849 13,974,858 1,960,788 7,473,891 10,044,363 55,877,774 41,969,764 14,131,202 1,980,706 7,616,301 11,777,701 55,440,712 40,401,849 13,974,858 1,960,788 7,473,891 288,528,573 284,720,690 121,575,747 119,252,098 410,104,320 403,972,788 5,054,373 450,174 64,500,414 72,094,008 69,554,787 72,544,182 132,082 102,875 - - Expenses: Total expenses Increase (decrease) before transfers Transfers in (out) Increase (decrease) in net position Beginning net position, restated Ending net position (132,082) (102,875) 4,922,291 347,299 64,632,496 72,196,883 69,554,787 72,544,182 846,923,656 849,757,640 530,489,446 459,779,943 1,377,413,102 1,309,537,583 $ 851,845,947 $ 850,104,939 $ 595,121,942 $531,976,826 $1,446,967,889 $ 1,382,081,765 17 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 Revenue Sources - Fiscal Year 2014 Other taxes 0.68% State shared revenues 11.55% Highway user taxes 2.78% Investment income 0.55% Miscellaneous 0.52% Charges for services 36.38% Franchise fees 0.66% Operating grants and contributions 2.13% Sales taxes 21.67% Property taxes 5.91% Capital grants and contributions 17.17% Functional Expenses - Fiscal Year 2014 Solid waste 3.45% Airport 0.48% Wastewater 10.23% Housing authority 1.86% General government 24.20% Water 13.63% Interest expense on long-term debt 2.45% Community services 7.88% Public safety 23.10% Transportation & development 12.72% Governmental activities. The increase in governmental net position totaled $4.9 million for the year ended June 30, 2014 compared with an increase of $347 thousand in the prior year. This reflects larger than normal increases in charges for services and local and state shared sales tax as the economy strengthens and development increases in Chandler. At the same time, increased spending in general government category reflects the City’s use of one-time funds towards maintaining existing infrastructure (ie. streets and parks) resulting in a minimal change in net position. 18 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 Business-type activities. The increase in business-type net position totaled $64.6 million for the year ended June 30, 2014 compared with an increase of $72.2 million in the prior year. This is primarily due to the capital contributions from Intel to reimburse the City for costs to expand water and wastewater infrastructure to support the needs associated with their $5 billion plant expansion. As evident in the previous graph, the largest financing source for the City is charges for services at 36.4 percent associated with the user fees and charges for services. Sales taxes and capital grants and contributions also comprise a significant portion of the City’s revenues at 21.7 percent and 17.2 percent, respectively, of the total revenues with state shared revenues accounting for an additional 11.6 percent of the City’s total revenues. The City as a whole uses the largest amount of resources for general government functions at 24.2 percent of the total functional expenses of the City. The next largest users of resources are public safety and transportation & development at 23.1 percent and 12.7 percent, respectively, with water services accounting for 13.6 percent 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. Fund balances are reported on a hierarchy of five classifications based on spending constraints in order to provide better consistency and clarification. These classifications include Nonspendable, Restricted, Committed, Assigned and Unassigned. The spendable balances are the Restricted, Committed, Assigned and Unassigned fund balances. Additional information on Fund Balances and their classifications can be found in Note 9 of the financial statements. 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 $273.2 million, an increase of $6.4 million in comparison with the prior year. Approximately $166.6 million (61.0 percent) of this amount is combined assigned and unassigned balances, all which may be spent at the City’s discretion. The total compared to the prior years’ assigned and unassigned balances of $153.5 million represents an increase of $13.1 million. This increase is due to the increase in the general fund balance as a result of higher revenues than budgeted. This added an additional $16.4 million to unassigned balances, with an offset of a slight reduction in assigned balances (-$5.9 million). Changes in unassigned balances in Other Governmental Funds make up the difference for the net change of $13.1 million. The remainder of the fund balance comprising of non-spendable and restricted balances amounts to $106.6 million (39.0 percent of the total fund balance). The non-spendable balance consists of inventories and pre-paid amounts. The restricted balance is constrained for specific purposes imposed by external parties or enabling legislation. The total compared to the prior years’ restricted balance of $112.3 million represents a decrease of $6.5 million. The general fund is the chief operating fund of the City. At the end of the current fiscal year, assigned and unassigned fund balance of the general fund was $177.6 million, while total fund balance reached $179.7 million. As a measure of the general fund’s liquidity, it may be useful to compare both assigned and unassigned fund balance and total fund balance to total fund expenditures. Assigned and unassigned fund balance represents 1.04 coverage of total annual general fund expenditures. This is well above the City’s contingency reserve financial policy, allowing the funding of other reserves (i.e. economic development and capital projects, compensated absences). The City’s general fund balance increased by $10.6 million during the current fiscal year primarily due to higher than budgeted revenues, particularly transaction privilege tax and building permit revenues. Total revenues exceeded the adopted budget by more than $14 million. The streets capital projects 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 $32.5 million. The fund balance of the City’s street fund decreased by $3.9 million during the current fiscal year due to a planned drawdown in bond proceeds for Streets projects pending the next general obligation bond sale. Available proceeds are being used and some projects shifted to 19 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 the general fund to minimize future debt service costs. Projects funded by arterial street impact fees are also continuing to spend from available impact fees. The general obligation debt service fund accounts for the accumulation of resources for and payments of general obligation debt. The fund balance restricted for general obligation debt service payments decreased by $233 thousand during the current fiscal year. The decrease is due primarily to the fact that the secondary property tax rate remained unchanged in FY 2013-14 even though secondary property values decreased by 4 percent. This is part of a long range plan to draw down the balance in this fund, while continuing to ensure funds are available for debt service payments in both the near and long term. Proprietary funds. The City’s proprietary funds, which include enterprise and internal service funds, provide the same type of information found in the government-wide financial statements, but in more detail. Net position for the enterprise funds and the internal service funds at the end of the fiscal year amounted to $595.1 million and $35.7 million, respectively, compared to $532 million and $35.6 million in the prior fiscal year. The primary reason for the increase in net position was due to capital contributions during the year. The enterprise funds net position after net investment in capital assets is 34.7 percent unrestricted compared to 33.3 percent in the prior fiscal year. Unrestricted net position of the water fund at the end of the year amounted to $137.8 million, and those for the wastewater fund amounted to $54.8 million, compared to $126.4 million and $36.4 million in the prior fiscal year. BUDGETARY HIGHLIGHTS For the 2013-14 Budget Year, the City of Chandler held to its commitment to engage in fiscally responsible budgeting practices. With signs of modest economic recovery in the City and the region, the City Council adopted a balanced budget for 2013-14, with adjustments to operating and capital expenditure budgets based upon an anticipated ongoing revenue stream and using one-time revenues for select capital projects. Most local revenue sources were expected to see improvement during the year, including the City’s major sources of General Fund revenues: Local Sales Tax, State Shared Sales Tax, and Urban Revenue Sharing (State Shared Income Tax). In addition, several significant one-time expenditures from the prior year (primarily a $8.475 million General Obligation Debt Service expenditure to pay off a 2003-series bond obligation and water and wastewater utility operating fund expenditures for a reimbursed major plant expansion) allowed the City Council to decrease the total City budget by -3.8 percent from the previous year and hold the General Fund budget relatively constant at -0.3 percent from the previous year. As has been the City’s practice, the budget and revenue forecast distinguished between ongoing and one-time revenues and ensured spending programs were aligned with the appropriate category of revenues. The City’s 2013-14 budget included various salary adjustments based on agreements between bargaining units and the City. Other ongoing costs, such as maintenance, utilities, and supplies were managed very closely to ensure they could be covered with ongoing revenues. The City continued to emphasize its strong financial policies, and included a contingency reserve of 12 percent of General Fund budgeted revenues. Beginning in fiscal year 2014-15, the contingency reserve was increased to 15 percent. The Council also continued the Infrastructure Maintenance Reserve to support street and park capital maintenance projects until additional General Obligation bonds can be sold for these purposes. Those Infrastructure Maintenance and Reserve funds are planned for use from 2013-14 through 2016-17. 20 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital assets. As of June 30, 2014, the City had invested $951.9 million in capital assets net of related debt, including buildings, facilities, vehicles, computers, equipment, and infrastructure assets. Total depreciation expense for the year was $82.4 million. The City completed several improvement projects including construction of Alma School/Ray Road intersection improvements at a cost of $15.8 million, construction of Chandler Boulevard/Loop 101 intersection improvements at a cost of $2.7 million, construction of Water Treatment Plant expansion at a cost of $4.9 million and construction of Chandler Sewer Line expansion at a cost of $1.9 million. There were also various other infrastructure and improvement projects for parks and street lights. The following table presents capital asset balances net of accumulated depreciation for the fiscal years, ended June 30, 2014 and 2013: Additional information on the City’s capital assets can be found in Note 4 of the financial statements. Governmental Business-type Total Activities Activities (Primary Govt.) 2014 Land $ Land improvements Infrastructure System improvements Buildings and improvements Vehicles, machinery and equipment Construction in progress Total $ 2013 83,306,168 395,999,265 243,318,226 $ 83,306,168 395,653,277 258,981,815 27,381,060 57,907,490 807,912,209 27,620,200 55,620,346 $ 821,181,806 2014 $ 41,306,107 381,777 367,289,443 9,020,706 1,463,204 250,073,118 $ 669,534,355 21 2013 $ 41,256,107 368,196 394,484,893 8,558,654 1,236,318 164,986,751 $ 610,890,919 2014 $ 124,612,275 381,777 395,999,265 367,289,443 252,338,932 28,844,264 307,980,608 $ 1,477,446,564 2013 $ 124,562,275 368,196 395,653,277 394,484,893 267,540,469 28,856,518 220,607,097 $ 1,432,072,725 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 Long-term Debt. At the end of the current fiscal year, the City of Chandler had total bonded debt outstanding of $592 million in long-term debt outstanding with $37.5 million due within one year. The following table presents a summary of the City’s outstanding long-term obligations for the fiscal years ended June 30, 2014 and 2013. General obligation bonds Revenue bonds Excise tax revenue obligations Governmental Business-type Total Activities Activities (Primary Govt.) 2014 2013 2014 2013 2014 2013 $ 233,678,000 $ 256,288,000 $ 150,972,000 $ 161,567,000 $384,650,000 $ 417,855,000 18,000,000 22,045,000 36,095,000 44,740,000 54,095,000 66,785,000 148,380,000 45,695,000 148,380,000 45,695,000 4,905,000 5,350,000 - - Special assessment bonds 4,905,000 5,350,000 Issuance premiums 4,346,195 4,566,202 12,429,175 3,957,901 16,775,370 8,524,103 Total bonds & obligations payable $ 260,929,195 Arbitrage payable Claims payable Landfill closure/post closure Compensated absences Post employment benefits Total long term liabilities - - $ 288,249,202 $ 347,876,175 $ 255,959,901 $608,805,370 $ 544,209,103 37,392 42,704 42,608 36,186 80,000 78,890 4,602,971 6,236,814 - - 4,602,971 6,236,814 4,340,000 - 4,340,000 - 4,340,000 4,340,000 9,356,834 9,374,341 1,000,172 991,440 10,357,006 10,365,781 15,132,055 11,136,775 1,277,762 882,034 16,409,817 12,018,809 $ 290,058,447 $ 315,039,836 $ 354,536,717 $ 262,209,561 $644,595,164 $ 577,249,397 The City of Chandler’s total debt increased by $67.3 million during the current fiscal year. The key factor in the increase was a new issuance of Excise Tax Revenue obligations to fund water and wastewater projects. 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 $476.3 million. The City has $374.5 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 $142.9 million. The City has $10.2 million of outstanding general obligation debt for this purpose. As of year-end, the City’s current bond ratings on general obligation bonds were Aaa from Moody’s Investor Services, AAA from Standard & Poor’s, and AAA from Fitch Ratings. Ratings for the street and highway users were Aa3 from Moody’s, AA from Standard & Poor’s, and AA from Fitch. Water and wastewater revenue bonds were Aa1 from Moody’s Investor Services, AA+ from Standard & Poor’s, and AA+ from Fitch. Excise Tax bonds were Aa1 from Moody’s Investor Services, AAA from Standard & Poor’s, and AAA from Fitch. Additional information on the City’s long-term debt can be found in Note 5 of the financial statements. 22 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2014 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET Adopting a balanced budget for fiscal year 2014-15 required the combined efforts of citizens, the City Council, Executive Leadership team, and staff members throughout the organization. The City’s overall budget decreased from $804 million in 2013-14 to $783 million in 2014-15, with most of the reduction due to completion of major capital projects in the prior year. Overall increases in general fund revenues and use of fund balance helped support a 10.9 percent increase in the General Fund budget for 2014-15, with the largest portion of the increase ($14 million) designed for one-time general fund capital projects. With the first increase in property assessed values in four years, the City Council was able to decrease the primary property tax rate (from $0.3292 to $0.2992) and the secondary property tax rate (from $0.9422 to $0.88) for 2014-15 for a total reduction of 9.22 cents per $100 of assessed valuation. Despite the recent positive news on revenues and property values, the City continues to maintain a pragmatic view of the future. As part of the 2014-15 budget, the City Council added new funds to the Budget Stabilization Reserve. This reserve provides the opportunity to utilize the reserve to balance the general fund budget in the future for no more than three consecutive years, should state legislation, and unexpected decreases in property values, or other issues cause revenues to suddenly decrease, allowing time to once again structurally balance the City’s budget. Despite the rise in property values, new general obligation bonds remain in a hold status until existing debt service costs decrease (over time or through refunding opportunities) or property values show consistent increases year after year. As a result, the City Council increased the allocation of funds to the Infrastructure Maintenance Reserve by $6 million, which will be appropriated over three years to further supplement the street repaving capital improvement program. Additionally, the City Council increased the general fund operating contingency from 12 percent to 15 percent of revenues to provide a further buffer for emergencies or to support new opportunities, such as unanticipated grants or development agreements. 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 or by calling 480-782-2333. 23 24 BASIC FINANCIAL STATEMENTS 25 City of Chandler Statement of Net Position June 30, 2014 Governmental Activities Business-Type Activities $ 351,522,755 880,463 595,311 424,806 153,751 4,543,346 892,533 4,910,331 448,503 1,725,378 366,097,177 $ 214,934,379 15,739,492 339,998 (153,751) 96,869 331,173 2,741,408 234,029,568 Total Component Units Chandler Industrial Chandler Development Cultural Authority Foundation ASSETS Current assets: Equity in pooled cash and investments Cash and investments Accounts receivable Interest receivable Prepaid items Privilege license tax receivable Property taxes receivable Internal balances Due from other governments Inventories Special assessments receivable Notes receivable - current Other receivables Total current assets Long-term assets: Cash and investments - restricted Notes receivable - long term Investment in joint venture Other assets Capital assets: Non-depreciable Depreciable, net Total capital assets Total long-term assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred amounts on refundings $ 566,457,134 16,619,955 339,998 595,311 424,806 4,640,215 1,223,706 4,910,331 448,503 4,466,786 600,126,745 $ 665,961 2,000 667,961 $ 854,642 22,713 5,621 20,666 903,642 - 336,450 65,904,530 - 336,450 65,904,530 - - 1,394,326 6,000 141,213,658 666,698,551 807,912,209 807,912,209 1,174,009,386 291,379,225 378,155,130 669,534,355 735,775,335 969,804,903 432,592,883 1,044,853,681 1,477,446,564 1,543,687,544 2,143,814,289 667,961 46,483 46,483 1,446,809 2,350,451 42,583 952,566 995,149 - - 26 LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Accrued interest Unearned revenue Customer advances Arbitrage liability Compensated absences payable Bonds payable Issuance premiums Landfill closure and postclosure liability Claims and judgements payable Total current liabilities Long-term liabilities: Compensated absences payable Bonds payable Issuance premiums OPEB liability Arbitrage liability Landfill closure and postclosure liability Claims and judgements payable Total long-term liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for: Transportation and development Capital improvements Community services Community development Debt service Legal restrictions Total restricted Unrestricted Total net position See accompanying Notes to Basic Financial Statements. 9,707,284 6,105,797 10,744,169 5,243,254 347,071 17,392 66,925 15,975,000 648,580 4,142,674 52,998,146 10,539,950 709,960 2,742,898 6,659,157 446,845 17,608 7,063 21,565,000 1,048,382 94,446 43,831,309 20,247,234 6,815,757 13,487,067 11,902,411 347,071 446,845 35,000 73,988 37,540,000 1,696,962 94,446 4,142,674 96,829,455 - 41,073 261,031 302,104 9,289,909 240,608,000 3,697,615 15,132,055 20,000 460,297 269,207,876 322,206,022 993,109 313,882,000 11,380,793 1,277,762 25,000 4,245,554 331,804,218 375,635,527 10,283,018 554,490,000 15,078,408 16,409,817 45,000 4,245,554 460,297 601,012,094 697,841,549 - 302,104 563,033,503 388,837,444 951,870,947 - 46,483 48,046,794 22,142,411 16,744,808 449,627 17,174,023 1,166,105 105,723,768 183,088,676 $ 851,845,947 206,284,498 $ 595,121,942 48,046,794 22,142,411 16,744,808 449,627 17,174,023 1,166,105 105,723,768 389,373,174 $ 1,446,967,889 667,961 667,961 1,394,326 1,394,326 607,538 2,048,347 27 $ $ City of Chandler Statement of Activities For the year ended June 30, 2014 Program Revenues Functions/Programs Expenses Operating Capital Charges for Grants and Grants and Services Contributions Contributions $ $ Total Primary government: Governmental activities: General government $ 99,231,501 $ 38,832,417 Public safety 94,738,371 5,861,044 Transportation and development 52,183,052 Community services 32,331,286 Interest on long-term debt 3,340,104 - $ 42,172,521 1,132,225 - 6,993,269 16,145,692 - 10,170,236 26,315,928 7,744,507 272,307 - 8,016,814 10,044,363 - - - - 288,528,573 68,583,660 4,744,636 10,170,236 83,498,532 Water 55,877,774 49,588,376 - 11,717,412 61,305,788 Wastewater 41,969,764 40,509,289 - 59,322,977 99,832,266 Solid waste 14,034,894 Total governmental activities Business-type activities: 14,131,202 14,034,894 - - Airport 1,980,706 961,067 - 817,424 1,778,491 Chandler housing authority 7,616,301 806,540 5,457,991 318,769 6,583,300 121,575,747 105,900,166 5,457,991 72,176,582 183,534,739 $ 410,104,320 $ 174,483,826 $ 82,346,818 $ 267,033,271 $ $ $ Total business-type activities Total primary government 10,202,627 $ - $ Component units Chandler Industrial Development Authority Chandler Cultural Foundation Total component units 854 1,304,659 $ 1,305,513 64,789 1,193,464 $ 1,258,253 226,237 $ 226,237 $ General revenues and transfers: Taxes: Property taxes, levied for general purposes Sales taxes Highway user taxes Other taxes Total taxes Franchise fees State shared revenues (unrestricted) Investment income Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - beginning of year, restated Net position - end of year See accompanying Notes to Basic Financial Statements. 28 - $ - 64,789 1,419,701 $ 1,484,490 Net (Expense) Revenue and Changes in Net Position Primary Government Component Units Chandler Industrial Governmental Business-Type Activities Activities $ (57,058,980) $ - $ (57,058,980) Cultural Authority Foundation $ - $ - (87,745,102) - (87,745,102) - - (25,867,124) - (25,867,124) - - (24,314,472) - (24,314,472) - - (10,044,363) - (10,044,363) - - (205,030,041) - (205,030,041) - - - 5,428,014 5,428,014 - - - 57,862,502 57,862,502 - - - (96,308) (96,308) - - - (202,215) (202,215) - - - (1,033,001) (1,033,001) - - - 61,958,992 61,958,992 - - 61,958,992 (143,071,049) - - (205,030,041) - - - 63,935 - - - - - 115,042 - - - 63,935 115,042 28,348,952 - 28,348,952 - - 103,880,801 70,065 103,950,866 - - 13,352,622 - 13,352,622 - - 3,243,937 - 3,243,937 - - 148,826,312 70,065 148,896,377 - - 3,145,449 - 3,145,449 - - 55,423,759 - 55,423,759 - - 1,869,128 788,025 2,657,153 1,619 7,265 819,766 1,683,332 2,503,098 - - 132,082 - - - 209,952,332 2,673,504 212,625,836 1,619 7,265 4,922,291 64,632,496 69,554,787 65,554 122,307 846,923,656 530,489,446 1,377,413,102 602,407 1,926,040 (132,082) $ Total Chandler Development 851,845,947 $ 595,121,942 $ 1,446,967,889 $ 667,961 29 $ 2,048,347 City of Chandler Balance Sheet Governmental Funds June 30, 2014 Major Funds General Obligation Other Streets Bonds Governmental General Capital Projects Debt Service Funds 171,781,801 $ Total ASSETS Equity in pooled cash and investments $ 37,607,698 $ 32,643,132 $ 68,951,040 $ 310,983,671 Accounts receivable 823,793 - - 100 823,893 Privilege license tax receivable 595,311 - - - 595,311 Property taxes receivable 112,166 - 312,640 - 424,806 4,910,331 Special assessments receivable - - - 4,910,331 Notes receivable - - - 448,503 448,503 20,528,358 - - - 20,528,358 Advances to other funds Due from other funds Due from other governments Inventories Other receivables Total assets 505,813 - - - 505,813 2,107,691 - - 2,435,655 4,543,346 892,533 - - - 892,533 15 1,715,340 $ 199,018,794 1,671,328 $ 37,651,695 43,997 $ 32,955,772 $ 76,745,644 $ 346,371,905 $ 4,817,340 $ 2,235,004 $ - $ 2,538,154 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll 5,825,903 8,937 Trust liabilities and deposits $ 9,590,498 - 211,072 6,045,912 8,327,176 - - 2,416,993 10,744,169 Accrued interest - - 4,980,966 262,288 5,243,254 Due to other funds - - - 352,062 352,062 - 2,814,300 - 17,714,058 20,528,358 Unearned revenue 259,581 43,997 - 35,000 338,578 Arbitrage liability - 3,190 - 14,202 17,392 Bonds payable (matured) - - 11,535,000 3,975,000 15,510,000 19,230,000 5,105,428 16,515,966 27,518,829 68,370,223 Advances from other funds Total liabilities Deferred inflows of resources: Unavailable revenues - special assessments Unavailable revenues - property taxes Total deferred inflows of resources - - - 4,435,612 4,435,612 90,998 - 253,634 - 344,632 90,998 - 253,634 4,435,612 4,780,244 Fund balances: Nonspendable Restricted Committed 892,533 - - - 892,533 1,166,105 32,546,267 16,186,172 55,825,224 105,723,768 - - - - - Assigned 95,185,696 - - - 95,185,696 Unassigned 82,453,462 - - 179,697,796 32,546,267 16,186,172 Total fund balances Total liabilities, deferred inflows and fund balances $ 199,018,794 See accompanying Notes to Basic Financial Statements. 30 $ 37,651,695 $ 32,955,772 (11,034,021) 44,791,203 $ 76,745,644 71,419,441 273,221,438 $ 346,371,905 City of Chandler Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position June 30, 2014 $ Total Fund Balances - Total Governmental Funds 273,221,438 Amounts reported for governmental activities in the Statement of Net Position 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. Non-depreciable 141,213,658 Depreciable buildings, property, equipment and infrastructure, net 666,698,551 Total capital assets 807,912,209 Certain revenues are not available to pay for current period expenditures and, therefore, are unavailable in the funds. 4,780,244 Deferred charges on refundings are not financial resources and, therefore, are not reported in the funds. 42,583 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 are included in governmental activities in the Government-Wide Statement of Net Position. 35,712,467 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 $4,708,061 which are included above, the long-term liabilities were adjusted as follows: Bonds payable (241,073,000) Bonds premium (4,346,195) OPEB liability (15,084,873) Arbitrage liability (20,000) Compensated absences (9,298,926) Total long-term liabilities (269,822,994) $ Net Position of Governmental Activities See accompanying Notes to Basic Financial Statements. 31 851,845,947 City of Chandler Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2014 Major Funds General General Obligation Other Streets Bonds Governmental Capital Projects Debt Service Funds Total REVENUES: Property taxes $ Sales taxes Franchise fees Highway user taxes Regional transportation taxes State shared 7,313,625 $ - $ 21,129,198 $ - $ - 28,442,823 103,880,801 103,880,801 - - 3,145,449 - - - 3,145,449 - - - 13,352,622 13,352,622 - 3,243,937 - - 3,243,937 55,423,759 - - - 55,423,759 Grants and entitlements - - - 10,187,895 10,187,895 System development fees - 6,688,524 - 5,157,751 11,846,275 - - - 678,843 678,843 Licenses and permits 5,479,384 - - - 5,479,384 Charges for services 20,127,222 - - 142,754 20,269,976 Fines and forfeitures 3,700,048 - - 922,167 4,622,215 Rentals 732,807 - - - 732,807 Contributions 100,000 - - - 100,000 Interest revenue 905,529 188,100 134,519 395,825 1,623,973 Miscellaneous 351,186 410 - 298,521 650,117 201,159,810 10,120,971 21,263,717 31,136,378 263,680,876 General government 42,062,743 5,906 - 4,739,098 46,807,747 Public safety 88,121,170 - - 1,947,048 90,068,218 Transportation and development 14,763,361 874,255 - 7,780,559 23,418,175 Community services 22,921,330 - - 850,595 23,771,925 2,329,269 13,609,604 - 29,718,392 45,657,265 Principal - - 11,535,000 4,420,000 15,955,000 Interest and fiscal charges - - 9,961,931 720,275 10,682,206 Bond issuance costs - - - 145,970 145,970 170,197,873 14,489,765 21,496,931 50,321,937 256,506,506 30,961,937 (4,368,794) Special assessments Total revenues EXPENDITURES: Current: Capital outlay Debt service: Total expenditures REVENUES OVER (UNDER) EXPENDITURES (233,214) 7,174,370 (19,185,559) OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets 4,349 - - 156,777 Bond premium - - - 562,052 562,052 Face amount of bonds issued - - - 8,660,000 8,660,000 Payment to escrow agent - - - (9,061,800) (9,061,800) Transfers in - 488,911 - 24,097,507 24,586,418 (20,340,386) - - (5,313,355) (25,653,741) (20,336,037) 488,911 - 19,101,181 Transfers out Total other financing sources (uses) 10,625,900 NET CHANGE IN FUND BALANCE (3,879,883) (233,214) 161,126 (745,945) (84,378) 6,428,425 FUND BALANCES: Beginning of year End of year See accompanying Notes to Basic Financial Statements. 169,071,896 $ 179,697,796 36,426,150 $ 32,546,267 32 16,419,386 $ 16,186,172 44,875,581 $ 44,791,203 266,793,013 $ 273,221,438 City of Chandler Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the year ended June 30, 2014 $ Net Change in Fund Balances - Total Governmental Funds 6,428,425 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 Position, 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. 27,875,453 Depreciation expense on capital assets is reported in the Government-Wide Statement of Activities and Changes in Net Position, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as an expenditure in governmental funds. (45,533,321) 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: Principal payments on debt 15,955,000 Face amount of bonds issued (8,660,000) Payment to escrow agent 9,061,800 Bond premium (562,052) Other postemployment benefits obligation (3,986,208) Loss on disposal of capital assets (375,962) 11,432,578 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. 637,843 Arbitrage liability 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. 5,310 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. 16,004 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 unavailable in the governmental funds because they do not provide current financial resources due to unavailability are recognized in the Statement of Activities. (798,957) 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. 4,764,233 The internal service fund is used by management to charge the costs of certain activities, such as insurance, to individual funds. The change in financial position of the internal service fund is reported with governmental activities. 94,723 $ Change in Net Position of Governmental Activities See accompanying Notes to Basic Financial Statements. 33 4,922,291 City of Chandler Statement of Net Position Proprietary Funds June 30, 2014 Major Funds Water Other Governmental Proprietary Activities: Internal Funds Wastewater Total Service Fund ASSETS Current assets: Equity in pooled cash and investments $ 93,450,674 $ 103,936,044 $ 17,547,661 $ 214,934,379 $ 40,539,084 Accounts receivable 7,095,139 7,035,669 1,608,684 15,739,492 56,570 Advances to other funds 3,900,000 - - 3,900,000 - - - 96,869 96,869 - 297,279 - 33,894 331,173 - - - 339,998 339,998 - 72 2,691,987 49,349 2,741,408 10,038 104,743,164 113,663,700 19,676,455 238,083,319 40,605,692 Due from other governments Inventories Prepaid items Other receivables Total current assets Long-term assets: Notes receivable Investment in joint venture - - 336,450 336,450 - 65,904,530 - - 65,904,530 - 54,749,018 208,056,028 28,574,179 291,379,225 - 178,439,075 173,774,310 25,941,745 378,155,130 - 233,188,093 381,830,338 54,515,924 669,534,355 - Capital assets: Non-depreciable Depreciable, net Total capital assets Total long-term assets 299,092,623 381,830,338 54,852,374 735,775,335 - Total assets 403,835,787 495,494,038 74,528,829 973,858,654 40,605,692 584,834 367,732 - 952,566 - 1,133,584 8,536,990 869,376 10,539,950 116,786 348,630 217,507 143,823 709,960 59,885 DEFERRED OUTFLOW OF RESOURCES Deferred amounts on refundings LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits 1,447,789 986,603 308,506 2,742,898 - Accrued interest 3,216,368 3,441,095 1,694 6,659,157 - - - 153,751 153,751 - Due to other funds 34 Unearned revenue Customer advances Compensated absences payable Bonds payable Issuance premiums - 105,215 96,128 446,845 8,493 245,502 3,986 1,824 1,253 7,063 414 13,368,000 8,177,000 20,000 21,565,000 - 498,695 549,491 196 1,048,382 - - 4,954 12,650 4 17,608 Landfill closure and postclosure liability - - 94,446 94,446 - Claims and judgements payable - - - - 4,142,674 20,267,508 22,028,375 1,689,177 43,985,060 4,328,252 553,251 253,228 186,630 993,109 57,494 - 3,900,000 - 3,900,000 - 150,338,000 163,443,000 101,000 313,882,000 - 4,801,286 6,576,961 2,546 11,380,793 - 701,877 388,870 187,015 1,277,762 47,182 12,110 12,890 - 25,000 - Landfill closure and postclosure liability - - 4,245,554 4,245,554 - Claims and judgements payable - - - - 460,297 Total long-term liabilities 156,406,524 174,574,949 4,722,745 335,704,218 564,973 Total liabilities 176,674,032 196,603,324 6,411,922 379,689,278 4,893,225 89,901,014 244,472,644 54,463,786 388,837,444 - 54,785,802 13,653,121 206,284,498 35,712,467 Arbitrage liability Total current liabilities Long-term liabilities: Compensated absences payable Advances from other funds Bonds payable Issuance premiums OPEB liability Arbitrage liability NET POSITION Net investment in capital assets 137,845,575 Unrestricted Total net position $ 227,746,589 $ 299,258,446 See accompanying Notes to Basic Financial Statements. 35 $ 68,116,907 $ 595,121,942 $ 35,712,467 City of Chandler Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the year ended June 30, 2014 Major Funds Water Other Governmental Proprietary Activities: Internal Funds Wastewater Total Service Fund OPERATING REVENUES: Service fees $ Grants and entitlements 49,588,376 $ - 40,509,289 $ 14,995,961 $ 105,093,626 - 5,457,991 5,457,991 $ - Rentals - - 806,540 806,540 - Sales taxes - - 70,065 70,065 25,521,990 - - - - 33,897 70,468 673,812 778,177 169,649 49,622,273 40,579,757 22,004,369 112,206,399 25,691,639 General and administrative 3,797,454 2,733,487 1,311,017 7,841,958 - Personal services 8,680,901 4,432,487 3,627,743 16,741,131 1,502,391 Contractual services 5,587,444 5,265,379 10,601,648 21,454,471 2,803,851 Commodities 9,793,071 6,367,708 1,680,336 17,841,115 1,447,180 - - - 21,018,580 Self insurance premiums Miscellaneous Total operating revenues OPERATING EXPENSES: Claims expense Housing assistance payments Depreciation and amortization expense Total operating expenses OPERATING INCOME (LOSS) - - 4,699,645 4,699,645 - 18,179,643 16,914,120 1,780,432 36,874,195 - 46,038,513 35,713,181 23,700,821 105,452,515 26,772,002 3,583,760 4,866,576 (1,696,452) 6,753,884 (1,080,363) NONOPERATING REVENUES (EXPENSES): Interest revenue 392,395 Interest and fiscal charges Accretion of bond premium Amortization of deferred bond items Bond issuance costs Gain (loss) on disposal of capital assets Equity interest in joint venture 284,582 (6,174,031) (5,796,301) 416,135 (77,519) (280,355) (14,000) 488,824 (49,416) (403,866) (7,000) (3,293,356) 788,025 111,048 - 905,155 (684,221) (45,000) - - (3,293,356) - 83,856 (14,430,052) 239,845 (1,612,596) (7,676,168) (840,518) 196 - (126,935) (24,000) - 239,845 (11,973,720) (3,388) Total nonoperating revenues (expenses) (9,030,731) (5,483,177) (5,446,971) (616,601) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS CAPITAL CONTRIBUTIONS AND TRANSFERS: Capital contributions Transfers in Transfers out 11,717,412 59,322,977 1,136,193 72,176,582 - - - 951,149 951,149 950,000 (437,471) (819,067) (14,759) (268,924) Total capital contributions and transfers Change in Net Position (112,672) 11,448,488 59,210,305 1,649,871 72,308,664 935,241 6,001,517 58,593,704 37,275 64,632,496 94,723 221,745,072 240,664,742 68,079,632 530,489,446 35,617,744 NET POSITION: Beginning of year, restated End of year See accompanying Notes to Basic Financial Statements. $ 227,746,589 $ 36 299,258,446 $ 68,116,907 $ 595,121,942 $ 35,712,467 37 City of Chandler Statement of Cash Flows Proprietary Funds For the year ended June 30, 2014 Other Proprietary Funds Major Funds Water Wastewater CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers Cash received from grantors Cash payments to suppliers Cash payments to employees for services Net cash provided (used) by operating activities $ CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in Transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Proceeds from debt issuance Principal paid on bond maturities 49,892,856 (19,805,457) (8,391,509) 21,695,890 $ 45,277,835 (13,668,191) (4,221,165) 27,388,479 $ Total 16,172,541 5,357,404 (17,657,159) (3,478,508) 394,278 $ 111,343,232 5,357,404 (51,130,807) (16,091,182) 49,478,647 (268,924) (268,924) (112,672) (112,672) 951,149 (437,471) 513,678 951,149 (819,067) 132,082 (11,712,086) (80,092,332) (1,419,129) (93,223,547) 38,923,525 78,962,468 (12,949,925) (12,905,795) - Governmental Activities: Internal Service Fund $ 25,630,362 (26,892,570) (1,480,809) (2,743,017) 950,000 (14,759) 935,241 - 117,885,993 - (20,000) (25,875,720) - (3,788) Interest paid on bonds (5,882,179) (4,537,055) (10,423,022) - Cash received from capital contributions Net cash provided (used) by capital and related financing activities 11,143,221 19,522,556 58,375,508 39,802,794 318,769 (1,124,148) 69,837,498 58,201,202 - CASH FLOWS FROM INVESTING ACTIVITIES: Investment income Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents 392,395 392,395 41,341,917 284,583 284,583 67,363,184 111,048 111,048 (105,144) 788,026 788,026 108,599,957 CASH AND CASH EQUIVALENTS: Beginning of year End of year $ 52,108,757 93,450,674 38 $ 36,572,860 103,936,044 $ 17,652,805 17,547,661 $ 106,334,422 214,934,379 239,845 239,845 (1,567,931) $ 42,107,015 40,539,084 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation Changes in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in inventories (Increase) decrease in prepaid items (Increase) decrease in other assets Increase (decrease) in payables Increase (decrease) in accrued payroll and compensated absences Increase (decrease) in deposits Increase (decrease) in claims payable Increase (decrease) in unearned revenue $ NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES: Contributions of capital assets from developers Contributions of capital assets from city government Loss on disposal of assets Accretion of bond premiums Amortization of deferred bond charges $ 18,179,643 (42,816) $ 220,563 18,112,130 21,695,890 $ 574,191 14,000 416,135 77,519 See accompanying Notes to Basic Financial Statements. 39 4,866,576 $ 16,914,120 130,308 (113,963) (264,672) (513,525) 68,829 447,763 - Increase (decrease) in customer advances Increase (decrease) in other liabilities Total adjustments Net cash provided (used) by operating activities 3,583,760 (1,696,452) $ 1,780,432 6,753,884 36,874,195 4,842,278 (146,429) 698,383 100,720 74,835 - 151,579 (195) 5,979 142,420 9,222 20,489 - 5,124,165 (114,158) (405,122) 327,278 178,771 543,087 - (72,606) (83,759) (199,181) $ 110,602 22,521,903 27,388,479 $ $ 947,469 $ 7,000 488,824 49,416 64,563 2,090,730 394,278 817,424 14,000 196 - $ $ 395,728 42,724,763 49,478,647 (1,080,363) (54,133) 600 10,284 12,510 (1,633,843) (7,144) - $ 9,072 (1,662,654) (2,743,017) - City of Chandler Statement of Fiduciary Net Position Fiduciary Funds June 30, 2014 Volunteer Firemen's Pension and Relief Trust Fund Agency Funds ASSETS Equity in pooled cash and investments Total assets $ 18,943 $ 7,000 $ 18,943 $ 7,000 $ - $ - LIABILITIES Due to others Total liabilities NET POSITION Assets held in trust for pension benefits 18,943 $ Total net position See accompanying Notes to Basic Financial Statements. 40 18,943 7,000 $ 7,000 City of Chandler Statement of Changes in Fiduciary Net Position Fiduciary Funds - Trust Funds For the year ended June 30, 2014 Volunteer Firemen's Pension and Relief Trust Fund ADDITIONS: Net investment income $ 117 Other contributions - Total additions 117 DEDUCTIONS: Benefits paid to plan members 2,400 Change in net position (2,283) NET POSITION: Beginning of year 21,226 End of year See accompanying Notes to Basic Financial Statements. $ 41 18,943 42 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 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. 43 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 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 Position 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. 44 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 1 - Summary of Significant Accounting Policies, continued Delinquent property taxes have been recorded as deferred inflows of resources. Grants and similar awards received before the eligibility requirements are met are recorded as unearned revenue. Cash receipts received in advance of being billed have also been reported as unearned 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. General Obligation Bonds Fund – This fund 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. The City reports the following major proprietary funds: Water 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 municipal boundaries. All activities necessary to provide such service are accounted for in this fund. Wastewater 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 Self Insurance Funds that administer the City’s self-insured property, liability, health, dental, short term disability, and workers’ compensation insurance programs. Fiduciary Funds – Fiduciary funds account for assets held by the City on behalf of the Volunteer Firemen’s Pension and Relief Trust Fund, and agency funds which account for resources held by the City in a custodial capacity for peddler bonds. The Volunteer Firemen’s Pension and Relief Trust Fund is a single-employer defined benefit pension plan established to provide pension benefits for volunteer firemen of the City. 45 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 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 for property and liability insurance and charges to user departments for premiums related to health, dental, workers’ 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 where allowable, 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, Internal Service Funds, and debt service funds. The level of control at which expenditures may not exceed budget is by department. 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 $4,536,143 were transferred from the contingency reserves within the General, Enterprise, Internal Service, and Capital Projects funds. All appropriations expire at the end of the fiscal year except for encumbered and capital improvements carryforward appropriations. Encumbrance accounting, under which purchase orders, contracts and other commitments for the future expenditure of funds are recorded in order to reserve that portion of the related fund balance, is employed in the governmental and proprietary fund types. Encumbrances outstanding at year-end are reported as part of unassigned fund balance and capital improvement carry forward at year-end are reported as part of assigned fund balance. Significant encumbrances for the general fund are $6,875,039, for the streets capital projects fund are $6,458,759, for water enterprise fund are $4,953,184, for wastewater enterprise fund are $24,383,304, and for nonmajor governmental funds are $14,443,949. 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; (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; and (9) investments are recorded at cost. 46 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 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. On November 2, 2010, the City of Chandler voters approved to continue under Home Rule for the next four years. Subsequent to year end, on August 26, 2014, the City of Chandler voters approved to continue under Home Rule for an additional four years. E. Pooled Cash and Investments City Charter, Ordinance and Trust Agreements authorize the City to invest 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, repurchase agreements, and the Local Government Investment Pool. The City of Chandler Municipal Property Corporation is additionally authorized to invest in banker’s 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 Health Care Benefits Trust, Workers’ Compensation and Employer Liability Trust, 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. 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. G. 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. H. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 47 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 1 - Summary of Significant Accounting Policies, continued I. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The City defines general government infrastructure capital assets included in capital improvement projects completed at year’s end in excess of $100,000. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are completed. Estimated useful lives for capital assets were determined based on the City’s historical experience and the various industry standards. Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Building improvements Infrastructure System improvements Vehicles Machinery and equipment J. Years 20-40 20 12-50 25 4-7 5-15 Compensated Absences Vacation leave vests with the employee as it is earned dependent on accumulated time and the individual’s vacation benefits associated with their rank within the City. All employees may carryforward 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 and paid into a Retirement Health Savings Plan. Upon death, the same benefits shall be paid to the employee's beneficiary. K. Long-Term Obligations In the government-wide financial statements and proprietary fund statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental or business-type activities and proprietary fund statement of net position. Bond related items, such as premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are expensed in the current period. 48 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 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 the portion that is expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. L. Fund Equity In the fund financial statements, governmental funds report fund balances as Nonspendable, Restricted, Committed, Assigned and Unassigned. Nonspendable, Restricted and Committed classifications represent “reserved” fund balances whereas Assigned and Unassigned classifications represent “unreserved” fund balances (See Note 9 for a more detailed explanation of fund balance classifications). M. Capital Contributions - Enterprise Funds Capital contributions as shown in the enterprise funds represent federal and state grants received, subdividers’ costs of installing water mains, water service connections installed at the customers’ expense, and transfers of equipment from governmental funds. Capital contributions are shown as an inflow of resources in both the government-wide and fund financial statements (See Note 8). N. Post-Employment Health Care and Life Insurance Benefits In addition to providing pension benefits, the City allows for continuance of certain health care and life insurance benefits for retired employees. Substantially all of the City's employees may become eligible for those benefits if they are eligible to receive a retirement pension when leaving employment with the City. The cost of retiree health care and life insurance premiums is borne both by the retiree and the specific retirement plan under which they participated. There is no direct cost paid by the City. O. Statements of Cash Flows The City considers all highly liquid investments (including restricted assets) with an original maturity of three months or less to be cash equivalents. In the statements of cash flows, cash receipts and payments are classified according to whether they stem from operating, noncapital financing, capital and related financing, or investing activities. P. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund transfers in the fund statements are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. 49 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 1 - Summary of Significant Accounting Policies, concluded Q. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. R. Implementation of New Accounting Standards In addition to assets, the statement of financial position may report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until that time. In addition to liabilities, the statement of financial position may report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. S. Implementation of New Accounting Standards During the year ended June 30, 2014, the City implemented the provisions of GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB Statement No. 65 establishes reporting guidance for certain elements of the financial statements which are distinct from assets and liabilities. 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, the Chandler Cultural Foundation, the Chandler Health Care Benefits Trust, and the Chandler Workers Compensation Employer Liability Trust. 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, the Chandler Cultural Foundation, the Chandler Health Care Benefits Trust, and the Chandler Workers Compensation Employer Liability Trust separately hold investments. Deposits At year-end, cash on hand was $85,420, the carrying amount of the City deposits was $3,939,385, and the bank balance was $3,569,343. Of the bank balance, $250,000 was covered by federal depository insurance and $3,319,343 was covered by collateral held in the pledging bank’s trust department in the City’s name. In addition, at year ended June 30, 2014, the City had $117,844,834 of restricted cash held by paying agent consisting of the July 1, 2014 debt service payment. The cash held by paying agent is in money market funds invested primarily in short-term U.S. Treasury securities. 50 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 2 – Cash and Investments, continued At June 30, 2014, 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 Commercial Paper: BNP Paribas Financial Inc Corporate Bonds: Alabama Power Co Apple Inc Global Bank of New York Mellon Berkshire Hathaway Inc Branch Banking and Trust Caterpillar Financial Services Corp Charles Schwab Corp Cisco Systems Inc Costco Wholesale Corp The Coca-Cola Company Exxon Mobile Corp General Electric Capital Corp IBM Corp John Deere Capital Johnson & Johnson JP Morgan Chase Merck and Co Inc National Rural Utility Cooperative Paccar Financial Corp Pepsico, Inc PNC Bank INA US Bankcorp Wal-Mart Stores, Inc Wells Fargo Municipal Bonds: Arizona School Facilities Board Money Market Certificate of Deposit Money Market U.S. Treasuries & Agencies State Investment Pool Total Fair Value $ 174,893,165 Less than 1 $ 38,325,524 1-5 $ 136,567,641 11,139,157 36,386,218 62,991,809 1,181,889 7,023,534 15,390,029 9,957,268 29,362,684 47,601,780 4,995,870 4,995,870 2,164,782 4,243,002 8,906,867 7,381,541 2,911,316 2,896,552 1,808,418 3,521,148 3,514,264 2,515,346 2,177,881 8,728,895 250,866 3,526,794 2,506,559 8,078,718 3,513,244 3,830,734 3,275,322 2,445,243 3,971,490 3,102,276 1,680,997 203,756 8,906,867 3,090,193 2,896,552 1,760,089 4,900,899 250,866 3,750,862 3,275,322 201,092 - 1,361,518 20,506,284 45,089,029 94,377 $ 444,613,438 - Concentration of Credit Risk % 39.34 % 2.51 8.18 14.17 Credit Rating AA+/Aaa/AAA AA+/Aaa/AAA AA+/Aaa/AAA 1.12 A-1/P-1 2,164,782 4,243,002 4,291,348 2,911,316 1,808,418 3,521,148 3,514,264 755,257 2,177,881 3,827,996 3,526,794 2,506,559 4,327,856 3,513,244 3,830,734 2,244,151 3,971,490 3,102,276 1,680,997 203,756 0.49 0.95 2.00 1.66 0.65 0.65 0.41 0.79 0.79 0.57 0.49 1.96 0.06 0.79 0.56 1.82 0.79 0.86 0.74 0.55 0.89 0.70 0.38 0.05 A1/A/A+ AA+/Aa1 A1/A+/AAAA/Aa2/A+ A1/A/A+ A/A2/A A/A2/A A1/AA-/NA A1/AA-/NA AA/Aa3/A+ AAA/Aaa AA+/A1/NR AA-/Aa3 A/A2/NA AAA/Aaa/AAA A3/A/A+ AA/A2/A+ A+/A1/NA A+/A1/NA A-/A1 A/A2/A+ A+/A1/AA AA/Aa2 A+/A2 45,089,029 94,377 1,361,518 20,506,284 - 0.31 4.61 10.14 0.02 $ 141,132,994 $ 303,480,444 AAA/Aaa Aaa/AAAm/NR 100.00 % 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. 51 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 2 – Cash and Investments, concluded 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, repurchase agreements, and the Local Government Investment Pool. The City’s investment in U.S. Agencies, Corporate Bonds and Money Market Funds were rated no lower than AA+, A-, and AAAm by Standard & Poor’s respectively as of June 30, 2014. 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 percent of the City’s investments are in the U.S. Agencies, and U.S. Treasuries and Agencies money market funds. See percentages in above table. NOTE 3 - Property Taxes The City’s property tax is levied and collected by the Maricopa County Treasurer. Property taxes are levied on or before the third Monday in August based upon the previous January 1 full cash value of property as determined by the Maricopa County Assessor. Under Arizona Revised Statutes (A.R.S.), two assessed valuations are used. One is for primary taxes (used to fund operating expenditures) and the other is for secondary taxes (used to meet general obligation debt service requirements). Taxes are due in two equal installments on October 1 and March 1 following the levy date and are delinquent on the first day of November and May, respectively. Delinquent amounts bear interest at the rate of 16 percent. The City also levies various personal property taxes during the year, which are due the second Monday of the month following receipt of the tax notice, and become delinquent 30 days thereafter. Pursuant to A.R.S. a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. The State Constitution and State law specify a property tax levy limitation system. The system consists of two levies, a limited levy known as the primary property tax levy and an unlimited levy referred to as the secondary levy, which may only be used to retire bonded indebtedness. There is also a control on the assessed value of property for primary tax purposes. The base year for the new tax system is fiscal year 1979-80. From this base year, two assessed values evolve. The primary assessed values are allowed to increase by no more than 10 percent a year. The dollar amount of the secondary property tax levy is "unlimited" and the actual full cash value of property is used in determining the tax rate. The primary tax levy is limited to an increase of 2 percent over the previous year's maximum allowable primary levy, plus an increased dollar amount because of a net gain in property not taxed the previous year. Also, the primary property tax from all taxing jurisdictions for homeowners may not exceed 1 percent of the market value of their homes. If the combined primary property tax (for the City, County, School District, etc.) exceeds 1 percent of the market value of the homes, the school districts will reduce their rate until the homeowners' aggregate rate is equal to or less than the allowable 1 percent. The State will then subsidize the school districts for the reduced revenue. This 1 percent limitation applies to primary property taxes only and does not affect the secondary property tax levy. In fiscal year 2013-14, current property tax collections were $27,466,421 or 99.5 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 2014 are not available for fiscal year 2013-14; accordingly, such taxes will not be recognized as revenue until fiscal year 2014-15. 52 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 4 – Capital Assets A summary of changes in capital assets for governmental activities is as follows: Balance July 1, 2013 Governmental Activities Capital assets, not being depreciated: Land Construction in progress $ 83,306,168 55,620,346 Additions and Transfers In Deletions and Transfers Out $ $ 23,214,818 (20,927,674) Balance June 30, 2014 $ 83,306,168 57,907,490 Total capital assets not being depreciated 138,926,514 23,214,818 (20,927,674) 141,213,658 Capital assets, being depreciated: Infrastructure Building and improvements Machinery and equipment 618,391,513 363,103,080 68,660,587 24,629,824 541,334 5,181,384 (1,707,271) 643,021,337 363,644,414 72,134,700 1,050,155,180 30,352,542 (1,707,271) 1,078,800,451 (222,738,236) (104,121,265) (41,040,387) (24,283,836) (16,204,923) (5,044,562) 1,331,309 (247,022,072) (120,326,188) (44,753,640) (367,899,888) (45,533,321) 1,331,309 (412,101,900) Total capital assets, being depreciated, net 682,255,292 (15,180,779) Governmental activities capital assets, net $ 821,181,806 Total capital assets being depreciated Less accumulated depreciation for: Infrastructure Building and improvements Machinery and equipment Total accumulated depreciation $ (375,962) 8,034,039 $ (21,303,636) Construction in progress in the governmental activities capital assets is comprised of the following: Expended to June 30, 2014 Streets $ 31,487,428 Remaining Commitments $ 9,577,164 Parks and recreation 11,688,324 2,713,121 Buildings and related improvements 14,731,738 8,362,329 Total $ 53 57,907,490 $ 20,652,614 666,698,551 $ 807,912,209 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 4 – Capital Assets, continued A summary of changes in capital assets for business-type activities is as follows: Balance July 1, 2013 Business-Type Activities Capital assets, not being depreciated: Land Construction in progress Total capital assets not being depreciated $ Capital assets, being depreciated: System improvements Building and improvements Vehicles, machinery and equipment Land improvements Total capital assets being depreciated Less accumulated depreciation for: System improvements Buildings and improvements Vehicles, machinery and equipment Land improvements Total accumulated depreciation Total capital assets, being depreciated, net Business-type activities capital assets, net $ 41,256,107 164,986,751 206,242,858 Additions and Transfers In $ 50,000 92,437,672 92,487,672 884,924,187 21,348,754 15,151,955 2,117,236 923,542,132 8,740,250 1,046,691 527,114 111,577 10,425,632 (490,439,294) (12,790,100) (13,915,637) (1,749,040) (518,894,071) 404,648,061 (35,935,700) (584,639) (255,227) (97,996) (36,873,562) (26,447,930) 610,890,919 Deletions and Transfers Out Balance June 30, 2014 $ (7,351,305) (7,351,305) $ 41,306,107 250,073,118 291,379,225 (109,391) (109,391) 893,664,437 22,395,445 15,569,678 2,228,813 933,858,373 64,390 64,390 (45,001) $ 66,039,742 $ (7,396,306) Construction in progress in the business-type activities capital assets is comprised of the following: Expended to June 30, 2014 Remaining Commitments Sewer system improvements $ 202,229,754 $ Water system improvements 22,518,918 46,884,375 3,657,575 Solid waste system improvements 164,656 18,920 Airport improvements 794,333 1,671 Total $ 250,073,118 54 $ 26,197,084 (526,374,994) (13,374,739) (14,106,474) (1,847,036) (555,703,243) 378,155,130 $ 669,534,355 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 4 – Capital Assets, concluded Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Community services Transportation and development Total depreciation expense - governmental activities Business-type activities: Water Wastewater Solid waste Airport Chandler housing authority Total depreciation expense - business-type activities $ 5,371,297 6,116,763 8,757,645 25,287,616 $ 45,533,321 $ 18,179,332 16,913,798 482,465 810,445 487,522 $ 36,873,562 NOTE 5 - 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 enterprise funds as they are to be repaid from enterprise revenues. In addition, general obligation bonds have been issued to refund other general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds are generally issued as 10 to 15 year serial bonds, except for refunding issues, with varying amounts of principal maturing each year. The City has pledged future ad valorem tax revenues and net enterprise revenues to repay a total of $384,650,000 in outstanding general obligation bonds. Proceeds of the bonds were used for governmental and business-type activities. The bonds are payable from ad valorem taxes and enterprise fund revenues and are payable through July 1, 2028. Governmental Activities General Obligation Bonds Annual principal and interest payments on the government activities bonds are expected to require approximately 76 percent of total 2013-14 ad valorem taxes. The total principal and interest remaining to be paid on the governmental activities portion of the bonds is $311,573,684. Principal and interest paid for the current year and total ad valorem property taxes were $21,496,931 and $28,442,823 respectively. 55 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued General obligation bonds outstanding as reported in governmental and business-type activities at June 30, 2014 were as follows: Outstanding Governmental Activities General Obligation Bonds: June 30, 2014 $16,265,000 Refunding Bonds, Series 2003, due in annual installments of $1,050,000 to $2,585,000 through 7/1/16; interest at 4.25 percent to 5 percent. 3,635,000 $24,800,000 Capital Improvement Bonds, Series 2005, due in annual installments of $2,750,000 to $2,900,000 through 7/1/15; interest at 4 percent. 5,650,000 $30,905,000 Capital Improvement Bonds, Series 2006, due in annual installments of $2,500,000 to $6,675,000 through 7/1/17; interest at 4 percent to 4.5 percent. 16,725,000 $111,045,000 Capital Improvement Bonds, Series 2007, due in annual installments of $1,000,000 to $6,600,000 through 7/1/26; interest at 3 percent to 5 percent. 54,100,000 $22,960,000 Refunding Bonds, Series 2007, due in annual installments of $845,000 to $4,240,000 through 7/1/20; interest at 4 percent to 5 percent. 20,030,000 $252,000,000 Capital Improvement Bonds, Series 2009, due in annual installments of $1,005,000 to $17,000,000 through 7/1/28; interest at 2.25 percent to 5 percent. 117,763,000 $9,925,000 Capital Improvement Bonds, Series 2011A, due in annual installments of $500,000 to $3,300,000 starting 7/1/15 through 7/1/20; interest at 3 percent to 4 percent. 9,925,000 $10,360,000 Refunding Bonds, Series 2011B, due in annual installment of $795,000 to $2,510,000 through 7/1/18; interest at 2.25 percent to 4 percent. 5,850,000 Total Governmental Activities General Obligation Bonds $ 233,678,000 Business-Type Activity General Obligation Bonds Annual principal and interest payments on the business-type activities bonds are expected to require more than 39 percent of total 2013-14 net water and wastewater system and airport revenues. The total principal and interest remaining to be paid on the business-type activities portion of the general obligation bonds is $198,407,781. Principal and interest paid for the current year and total net water and wastewater system and airport revenues and were $16,935,963 and $43,281,347 respectively. 56 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued Business-Type Activities General Obligation Bonds: Outstanding June 30, 2014 $16,265,000 Refunding Bonds, Series 2003, due in annual installments of 4,965,000 $2,385,000 to $2,580,000 through 7/1/15; interest at 5 percent. $111,045,000 Capital Improvement Bonds, Series 2007, due in annual installments of $1,800,000 to $3,275,000 through 7/1/26; 32,900,000 interest at 3 percent to 5 percent. $252,000,000 Capital Improvement Bonds, Series 2009, due in annual installments of $6,500,000 to $11,086,000 through 7/1/28; interest 113,107,000 at 2.25 percent to 5 percent. Total Business-Type Activities General Obligation Bonds $ 150,972,000 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 $18,000,000 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 percent of total 2013-14 street and highway user revenues. The total principal and interest remaining to be paid on the bonds is $19,501,509. Principal and interest paid for the current year and street and highway user revenue taxes were $4,490,175 and $13,352,622, respectively. 57 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued Street and highway revenue bonds outstanding as reported in governmental activities at June 30, 2014 were as follows: Outstanding June 30, 2014 Governmental Activities Revenue Bonds: $1,250,000 Street & Highway User Bonds, Series 1996B, due in annual 50,000 installments of $25,000 through 7/1/15; interest at 5.5 percent to 6.4 percent. $5,000,000 Street & Highway User Bonds, Series 2003, due in annual installments of $1,000,000 starting 7/1/16 through 7/1/17; 2,000,000 interest at 5 percent. $10,920,000 Street & Highway User Refunding Bonds, Series 2004, due in 985,000 an annual installment of $985,000 on 7/1/14; interest at 4 percent. $10,450,000 Street & Highway User Refunding Bonds, Series 2010, due in annual installments of $535,000 to $2,965,000 through 7/1/19; 6,305,000 interest at 2.25 percent to 3.5 percent. $8,660,000 Street & Highway User Refunding Bonds, Series 2014, due in annual installments of $645,000 to $3,225,000 through 7/1/19; 8,660,000 interest at 2 percent to 4 percent. Total Governmental Activities Revenue Bonds $ 18,000,000 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 $36,095,000 in outstanding water and wastewater system revenue bonds. improvements and expansions to the City’s water and wastewater systems. water and wastewater system revenues and are payable through July 1, payments on the bonds are expected to require less than 14 percent of net revenue. operating expenses, to repay a total of Proceeds of the bonds were used for The bonds are payable solely from net 2020. Annual principal and interest 2013-14 water and wastewater system The total principal and interest remaining to be paid on the bonds is $40,138,743. Principal and interest paid for the current year and net water and wastewater system revenues were $5,939,093 and $43,477,153 respectively. 58 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued Water and sewer revenue bonds outstanding as reported in business-type activities at June 30, 2014 were as follows: Business-Type Activities Revenue Bonds: $5,150,000 Water & Sewer Bonds, Series 1994, due in an annual installment of $2,150,000 at 7/1/14; interest at 8 percent. $17,830,000 Water & Sewer Refunding Bonds, Series 2003, due in annual installments of $35,000 to $4,035,000 through 7/1/15; interest at 3.4 percent to 5 percent. $10,000,000 Water & Sewer Bonds, Series 2005, due in annual installments of $225,000 to $1,750,000 through 7/1/17; interest at 4 percent to 5 percent. $15,485,000 Water & Sewer Refunding Bonds, Series 2005, due in annual installments of $1,750,000 to $5,725,000 through 7/1/17; interest at 5 percent. $15,400,000 Water & Sewer Refunding Bonds, Series 2014, due in annual installments of $2,340,000 to $7,555,000 beginning 7/1/16 through 7/1/20; interest at 2 percent to 4 percent. Total Business-Type Activities Revenue Bonds Outstanding June 30, 2014 $2,150,000 4,070,000 2,525,000 11,950,000 15,400,000 $ 36,095,000 D. Excise Tax Revenue Obligations Excise tax revenue obligations are issued 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 obligations. The City has collateralized the obligations by the pledge of all unrestricted excise taxes (transaction privilege tax, franchise fees, state-shared sales and income taxes, and fees for licenses and permits) including all fines and forfeitures, which the City presently or in the future imposes or receives from other entities and which are not earmarked by the contributor for a contrary or inconsistent purpose. The City agrees that, so long as any of the obligations remain outstanding and their principal and interest are unpaid, it will not further encumber the excise taxes unless the excise taxes received by the City in the immediately preceding fiscal year are 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 does have the right to incur additional parity obligations payable from and secured by the excise taxes on parity with the obligations. Annual principal and interest payments on the obligations are being repaid from net water and wastewater system revenues and are expected to require less than 25 percent of net 2013-14 system revenues. The total principal and interest to be paid on the obligations is $224,924,044. Principal and interest paid for the current year and net water and wastewater system revenues were $10,663,622 and $43,477,153, respectively. Total excise tax revenues collected were $162,664,325. Principal and interest paid in 2013-14 equal less than 7 percent of total excise tax revenues collected. 59 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued Business-Type Actvities Excise Tax Revenue Obligations: $34,040,000 Water & Sewer Excise Tax Obligations, Series 2009, due in annual installments of $1,300,000 to $5,455,000 through 7/1/28; interest at 2.25 percent to 4.375 percent. $15,000,000 Water & Sewer Excise Tax Obligations, Series 2011, due in annual installments of $725,000 to $1,210,000 through 7/1/28; interest at 3 percent to 5 percent. $104,500,000 Water & Sewer Excise Tax Obligations, Series 2013, due in annual installments of $500,000 to $12,000,000 starting 7/1/15 through 7/1/33; interest at 4 percent to 5 percent. Total Business-Type Activities Excise Tax Revenue Obligations Outstanding June 30, 2014 $ 30,240,000 13,640,000 104,500,000 $ 148,380,000 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, 2014, 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, 2014 were as follows: Outstanding Governmental Activities Special Assessment Bonds: June 30, 2014 $7,370,000 Spectrum Improvement District Bonds, due in annual installments of $465,000 to $635,000 through 1/1/23; interest at 4 percent. Total Special Assessment Bonds with Governmental Commitment 60 $ 4,905,000 $ 4,905,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued Changes in Long-Term Liabilities Balance Governmental Activities: July 1, 2013 Compensated absences $ 9,374,341 Additions $ Reductions 1,163,370 $ (1,180,877) Balance Due Within June 30, 2014 One Year $ 9,356,834 $ 66,925 Bonds payable: General obligation bonds 256,288,000 - (22,610,000) 233,678,000 11,535,000 Revenue bonds Special assessment bonds 22,045,000 5,350,000 8,660,000 - (12,705,000) (445,000) 18,000,000 4,905,000 3,975,000 465,000 4,566,202 288,249,202 562,052 9,222,052 (782,059) (36,542,059) 4,346,195 260,929,195 648,580 16,623,580 42,704 6,236,814 11,136,775 11,792 20,880,610 3,995,280 (17,104) (22,514,453) - 37,392 4,602,971 15,132,055 17,392 4,142,674 - $ 315,039,836 $ 35,273,104 $ (60,254,493) $ 290,058,447 $ 20,850,571 Balance July 1, 2014 Additions Reductions Balance June 30, 2014 Due Within One Year Issuance premiums Total bonds payable Arbitrage liability Claims payable Post employment benefits Totals Business-Type Activities: Compensated absences Bonds & obligations payable: General obligation bonds Revenue bonds Excise tax revenue obligations Issuance premiums Total bonds & obligations payable Arbitrage liability Post employment benefits Landfill closure/post closure Totals $ 991,440 $ 124,969 $ (116,237) $ 1,000,172 $ 7,063 161,567,000 44,740,000 45,695,000 3,957,901 255,959,901 15,400,000 104,500,000 9,489,296 129,389,296 (10,595,000) (24,045,000) (1,815,000) (1,018,022) (37,473,022) 150,972,000 36,095,000 148,380,000 12,429,175 347,876,175 10,900,000 4,485,000 6,180,000 1,048,382 22,613,382 36,186 882,034 4,340,000 16,947 395,728 - (10,525) - 42,608 1,277,762 4,340,000 17,608 94,446 $ 262,209,561 $ 129,926,940 $ (37,599,784) $ 354,536,717 $ 22,732,499 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 bonds, excise tax revenue obligations 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, 2014, the 6 percent debt limitation was $142,895,404, providing a debt margin of $132,697,404 and the 20 percent debt limitation was $476,318,016, providing a debt margin of $101,866,016. 61 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, continued 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, 2014: Years Ended June 30 2015 2016 2017 2018 2019 2020-2024 2029 Total GOVERNMENTAL ACTIVITIES Highway Highway General Improvement Improvement Users Users Obligation Districts Districts Revenue Revenue Interest Principal Interest Principal Interest General Obligation Principal Total 11,535,000 15,020,000 13,340,000 13,930,000 16,109,000 78,890,000 84,854,000 9,728,050 9,191,869 8,610,506 8,028,581 7,396,800 26,295,559 8,644,319 3,975,000 3,970,000 3,370,000 2,415,000 2,220,000 2,050,000 - 397,372 416,687 316,044 210,212 121,594 39,600 - 465,000 480,000 500,000 520,000 545,000 2,395,000 - 196,200 177,600 158,400 138,400 117,600 244,200 - 26,296,622 29,256,156 26,294,950 25,242,193 26,509,994 109,914,359 93,498,319 $ 233,678,000 $ 77,895,684 $18,000,000 $1,501,509 $ 4,905,000 $ 1,032,400 $ 337,012,593 BUSINESS-TYPE ACTIVITIES Years Ended June 30 General Obligation Principal General Obligation Interest Revenue Principal Excise Tax Principal Revenue Interest Excise Tax Interest Total 2015 10,900,000 5,862,113 4,485,000 1,190,418 6,180,000 6,116,419 34,733,950 2016 10,910,000 5,507,075 6,760,000 1,103,400 4,770,000 5,976,450 35,026,925 2017 9,525,000 5,172,512 9,530,000 811,350 2,805,000 5,860,775 33,704,637 2018 9,825,000 4,849,763 7,475,000 500,675 3,605,000 5,743,750 31,999,188 2019 9,926,000 4,503,731 3,160,000 250,600 3,760,000 5,600,556 27,200,887 2020-2024 49,100,000 16,136,281 4,685,000 187,300 29,065,000 24,574,838 123,748,419 2025-2029 50,786,000 5,404,306 - - 39,195,000 16,643,756 112,029,062 2030-2034 - - - - 59,000,000 6,027,500 65,027,500 $150,972,000 $47,435,781 $36,095,000 $ 4,043,743 $148,380,000 $76,544,044 $463,470,568 Total 62 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 5 - Long-Term Liabilities, concluded Compensated Absences The City’s policy relating to compensated absences is described in Note 1. The long-term portion of this debt 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, 2013 Balance Due Within June 30, 2014 One Year Incurred Satisfied $1,163,370 $ (1,180,877) $ 9,356,834 $ 66,925 $ $ $ 1,000,172 $ 7,063 Governmental Activities Compensated Absences $ 9,374,341 $ 991,440 Business-Type Activities Compensated Absences 124,969 (116,237) NOTE 6 - Defeased Debt Current Year Defeasance On June 25, 2014, the City issued $15,400,000 in Water & Sewer Revenue Refunding Bonds with an average interest rate of 1.14 percent. This issuance was used to refund $1,045,000 of Series 2001 Water & Sewer Revenue Bonds with an average interest rate of 4.5 percent; $7,515,000 of Series 2003 Water & Sewer Refunding Bonds with an average interest rate of 5 percent; and $7,225,000 of Series 2005 Water & Sewer Revenue Bonds with an average interest rate of 4.125 percent. The advanced refunding portion of the total net proceeds of $16,435,904 (after payment of $162,826 in underwriting fees, insurance, and other issuance costs, receipt of $1,214,406 in original issue premium and $15,676 deposit to city debt service fund) were used to purchase $7,515,501 in 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 2005 Revenue Bonds. As a result the liability for that portion of the bonds has been removed from the government-wide and statement of net assets. The refunding issuance resulted in a deferred outflow of $538,036. This difference will be allocated to operations through the fiscal year 2021 using the straight-line amortization method. The City completed the refunding to decrease its total debt service payments over the next 7 years by $1,340,355 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $1,313,955. Also on June 25, 2014, the City issued $8,660,000 in Street & Highway User Revenue Refunding Bonds with an average interest rate of 1 percent. This issuance was used to refund $3,000,000 of Series 2003 Street & Highway User Revenue Bonds with an average interest rate of 3.5 percent and $5,875,000 of Series 2004 Street & Highway User Revenue Bonds with an average interest rate of 4.57 percent. The refunding portion of net proceeds of $9,061,800 (after payment of $145,970 in underwriting fees, insurance, and other issuance costs and receipt of $562,052 in original issue premium) was used to fund an irrevocable trust with an escrow agent to refund the bonds in full as of 7/1/2014. The refunding issuance resulted in a deferred outflow of $42,583. This difference will be allocated to operations through the fiscal year 2020 using the straight-line amortization method. The City completed the refunding to decrease its total debt service payments over the next 5 years by $494,528 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $502,963. 63 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 6 - Defeased Debt, concluded Prior Year Defeasance In prior years, the City defeased certain general obligation 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, 2014: Refunded Debt Outstanding Amount General Obligation Bonds, Series 1996 (Final Redemption 7/1/16) 2,910,000 Water and Sewer Revenue Bonds, Series 2005 (Final Redemption 7/1/15) 7,225,000 Total Refunded Bonds Outstanding $ 10,135,000 NOTE 7 – 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, 2014, the City estimates total costs related to landfill closure and postclosure care is $15,474,061 and has recognized that entire amount since the landfill no longer accepts waste. To date, $11,134,061 has been paid. The remaining balance of $4,340,000 consists of a current liability of $94,446 and $4,245,554 recorded as a non-current liability on the City’s financial statements. The estimated total current cost of the landfill closure and postclosure, $15,474,061, 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, 2014. 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, 2013. 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. 64 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 8 - Capital Contributions Capital contributions in the Water, Wastewater, Airport, and Housing Authority funds are the result of system development fees, developer contributions and government contributions. Developer Contributions include $5,576,306 (Water) and $51,657,795 (Wastewater) for agreed reimbursements from Intel Corporation for certain City enterprise fund infrastructure projects directly related to Intel's FAB 42 expansion. Total capital contributions amounted to the following: System Water Wastewater Development Developer Government Fees Contributions Contributions $ $ $ 5,566,915 6,150,497 Total - $ 11,717,412 6,717,713 52,605,264 - 59,322,977 Airport - - 318,769 318,769 Housing Authority - - 817,424 817,424 $ 12,284,628 $ 58,755,761 1,136,193 $ 72,176,582 Total $ NOTE 9 – Fund Equity In the fund financial statements, fund balances are reported in five classifications that comprise a hierarchy based on spending constraints placed on the purposes for which resources can be used for better consistency and clarification. The classifications of fund balance are explained below: Nonspendable fund balance includes amounts that cannot be spent because either, 1) it is not in a spendable form, such as inventory or prepaid items or 2) it is legally or contractually required to be maintained intact. Restricted fund balance includes amounts constrained to specific purposes by their providers which are either imposed 1) by external parties (grantors, bondholders and higher levels of government), 2) by law through constitutional provisions or 3) by enabling legislation legally enforceable by external parties. Committed fund balance includes amounts with self-imposed limitations to be used only for a specific purpose pursuant to constraints by formal action of the highest level of decision making authority, namely Mayor and Council. Mayor and Council approval is required to commit resources and amounts cannot be used for any other purpose unless Mayor and Council take the same formal action to remove or change the commitment. Assigned fund balance includes amounts intended to be used for a specific purpose. For general fund, the assigned fund balance must be for a specific purpose and for all other governmental funds the assigned fund balance represents the residual balance of the fund. Fund balance assignments are approved through the Annual Budget Fund Policies section by Mayor and Council. Unlike committed fund balances, assigned fund balance amounts can be changed without formal action by the City Manager. Unassigned fund balance includes amounts available for any purpose; these amounts are reported only in the general fund. In addition, other governmental funds that result in a negative fund balance are presented in this classification. Generally, the City would first apply restricted resources, then committed, assigned and unassigned resources when an expense is incurred for purposes for which more than one classification of fund balance is available. 65 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 9 – Fund Equity, concluded As of June 30, 2014 the constraints placed on fund balance for the major governmental funds and other non-major governmental funds are presented in the following table: Streets Capital Projects General Non-spendable Inventories Total non-spendable Restricted for Court enhancement Judicial enhancement Transportation and development Debt service reserve Community development Community services Other capital projects Total restricted Committed to Total committed Assigned to Domestic violence prevention Self-insurance purposes Infrastructure maintenance Capital improvement projects Economic development projects Total assigned Unassigned Total unassigned Total fund balances $ 892,533 $ G.O. Bonds Debt Service - $ Other Governmental - $ - Total $ 892,533 892,533 - - - 892,533 903,070 263,035 - 32,546,267 - 16,186,172 - 15,500,527 987,851 449,627 16,744,808 22,142,411 903,070 263,035 48,046,794 17,174,023 449,627 16,744,808 22,142,411 1,166,105 32,546,267 16,186,172 55,825,224 105,723,768 - - - - - - - - - - 297,251 396,555 31,950,000 49,460,890 13,081,000 - - - 297,251 396,555 31,950,000 49,460,890 13,081,000 95,185,696 - - - 95,185,696 82,453,462 - - (11,034,021) 71,419,441 82,453,462 - - (11,034,021) 71,419,441 $ 179,697,796 $ 32,546,267 $ 16,186,172 $ 44,791,203 $ 273,221,438 The City’s General Fund Reserve Policy requires an amount equal to 12 percent of adopted General Fund operating revenues, excluding transfers in for fiscal year 2013-2014. This reserve has been increased to 15 percent for fiscal year 14-15. This amounts to $29,311,659 and is included in unassigned above. 66 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 10 - 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 and elected officials) 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 A.R.S. Title 38, Chapter 5. 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 1-800-621-3778. 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, 2014 was 11.54 percent (11.30 percent retirement and 0.24 percent longterm disability) for active members and the City was required to contribute 11.54 percent (10.70 percent for retirement, 0.60 percent for health insurance premium, and 0.24 percent for long-term disability) of the members’ annual covered payroll. The City’s contributions to the System for the years ended June 30, 2014, 2013, and 2012, were $7,703,535, $7,484,021, and $6,346,391, 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 A.R.S. Title 38, Chapter 5, Article 4 to provide pension benefits for public safety employees of certain state and local governments. The PSPRS is jointly administered by the board of trustees and participating local boards. The board of trustees is a five-member board appointed by the Governor and the State Legislature. The board of trustees is responsible for establishing contribution rates in accordance with an actuarial study. The PSPRS provides retirement benefits, as well as death and disability and health insurance premium benefits. The PSPRS of the State of Arizona issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Public Safety Personnel Retirement System, 3010 East Camelback Road, Ste 200, Phoenix, AZ 85016 or by calling (602) 255-5575. 67 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 10 - Retirement and Pension Plans, continued 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 23.55 percent of annual covered payroll of which 1.14 percent was the health insurance premium portion. The current aggregate contribution rate for firefighters is 20.54 percent of annual covered payroll of which 1.03 percent was the health insurance premium portion. C. Annual Pension Cost For fiscal year ended June 30, 2014, the City’s annual pension cost of $5,702,722 for police and $3,165,856 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, 2012, actuarial valuations using the entry-age actuarial cost and level percent of payroll closed amortization methods. The contribution requirements for the year ended June 30, 2014 were established by the June 30, 2012 actuarial valuations. Those valuations were based on the following. For police, the actuarial assumptions include (1) a rate of return on the investment of present and future assets of 8 percent per year compounded annually, attributable to inflation and other across-the-board increases, (2) projected salary increases of 5.0 percent compounded annually attributable to inflation and other across-the-board increases, and (3) additional projected salary increases of 5.0 percent to 9.0 percent per year attributable to seniority/merit. For firefighters, the actuarial assumptions include (1) a rate of return on the investment of present and future assets of 8 percent per year compounded annually, attributable to inflation and other across-the-board increases, (2) projected salary increases of 5.0 percent compounded annually attributable to inflation and other across-the-board increases, and (3) additional projected salary increases of 5.0 percent to 9.0 percent per year attributable to seniority/merit. The actuarial value of PSPRS assets was determined using techniques that smooth the market value of assets over a seven-year period. PSPRS’s unfunded accrued liability is being amortized as a level percent of projected payroll over a closed period of 24 years. If the actuarial value of assets exceeded the actuarial accrued liability, the excess was amortized over an open period of 20 years. The remaining amortization period at July 1, 2012, was 24 years for unfunded actuarial accrued liability and 20 years for excess contributions. 68 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 10 – Retirement and Pension Plans, continued Arizona Public Safety Personnel Retirement System - Police Three-Year Trend Information Annual Percent Pension of APC Cost (APC) Contributed Fiscal Year Ended Net Pension Obligation 2012 (Pension) $ 4,258,298 100% - 2012 (Health) $ 100% - 2013 (Pension) $ 5,205,497 100% - 2013 (Health) $ 63,225 100% - 2014 (Pension) $ 5,637,711 100% - 2014 (Health) $ 100% - 51,720 65,011 Arizona Public Safety Personnel Retirement System - Firefighters Three-Year Trend Information Fiscal Year Ended Annual Pension Cost (APC) Percent of APC Contributed Net Pension Obligation 2012 (Pension) $ 2,340,237 100% - 2012 (Health) $ 100% - 25,072 2013 (Pension) $ 2,913,144 100% - 2013 (Health) $ 100% - 31,508 2014 (Pension) $ 3,133,248 100% - 2014 (Health) $ 100% - 32,608 D. Funded Status and Funding Progress As of June 30, 2014, the firefighters plan was 66.9 percent funded and police was 59.5 percent funded. The actuarial accrued liability for benefits was $106 million and $177 million, and the actuarial value of assets was $70.7 million and $105.3 million, resulting in an unfunded actuarial accrued liability (UAAL) of $35.0 million and $71.6 million respectively. The covered payrolls (annual payrolls of active employees covered by the plans) were $15.2 million and $24.1 million, and the ratio of the UAAL to the covered payroll was 230.0 percent and 296.7 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. 69 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 10 – 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 2014 was 39.62 percent of the members’ annual covered payroll, of which 1.56 percent was the health insurance premium portion. The city’s contributions to EORP for the years ended June 30, 2014, 2013, and 2012, were $52,244, $60,215, and $52,623 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 June 30, 2004, at which time the actuarial liability was fully funded. As of June 30, 2014, there were no 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 2013-14. Pursuant to the June 30, 2004, actuarial valuation, the present value of all benefits payable in future years was $30,494 based upon a 6 percent rate of return and the pension obligation was deemed to be fully funded. NOTE 11 – 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 health care (OPEB) for retired employees through a single employer defined benefit health plan. The plan provides health 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. 70 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 11 – 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 health expense reimbursements eligible under Internal Revenue Code Section 213, other than direct longterm 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 health 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 health 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 Retirement Health Savings Plan account. The retiree must have a minimum of five years of 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, reviewed and recommended by a five member Health Care Benefits Trust Board, and approved by the City Council. The retiree’s contribution is 100 percent 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 healthcare 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, 2014, retirees contributed $1,584,112 and the City contributed $1,352,308 (implied subsidy). For both the governmental and proprietary activities, the corresponding fund is used to liquidate the OPEB liability. 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, 2014: 71 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 11 – Post-Employment Benefits Other Than Pensions, continued Annual Required Contribution (ARC) $ ARC Adjustment 5,806,989 (544,425) Interest Adjustment to Net OPEB Obligation 480,752 Annual OPEB Cost $ Contributions Made 5,743,316 (1,352,308) Increase in Net OPEB Obligation $ Net OPEB Obligation - Beginning of year 4,391,008 12,018,809 Net OPEB Obligation - End of year $ 16,409,817 The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2014 were as follows: Percentage of Fiscal Year Annual Employer OPEB Cost Net OPEB Ended June, 30 2014 OPEB Cost $ 5,743,316 Contributions $ 1,352,308 Contributed 23.55% Obligation $ 16,409,817 2013 $ 4,199,727 $ 980,252 23.34% $ 12,018,809 2012 $ 3,954,406 $ 1,124,164 28.43% $ 8,799,334 E. Funded Status and Funding Progress The funded status of the plan as of June 30, 2013, the most recent actuarial valuation, is as follows: Actuarial Accrued Liability $ 52,300,279 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (UAAL) Funded Ratio $ 52,300,279 0.0% Covered Payroll $ 96,935,187 UAAL as a percentage of covered payroll 54.0% 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. 72 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 11 – Post-Employment Benefits Other Than Pensions, concluded 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 projected unit credit method. As of the valuation date, July 1, 2013, 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 open. In the June 30, 2013 actuarial valuation, the projected unit credit actuarial cost method was used along with a discount rate of 4 percent. In addition, the actuarial assumptions included: an annual healthcare inflation rate of 9 percent initially, reduced by decrements to an ultimate rate of 4.5 percent after 9 years, and an annual projected salary increase of 2 percent. NOTE 12 - Commitments and Contingencies The City is subject to a number of lawsuits, investigations, and other claims (some of which involve alleged damages in substantial amounts) that are incidental to the ordinary course of its operations, including those related to property damage and personal injury matters as well as alleged civil rights violations. All cases are being vigorously defended by the City of Chandler both as to liability as well as the amount of damages claimed. Although the City Attorney cannot reasonably estimate the actual results upon disposition of the outstanding cases, some could be significant to the City’s operations, which is why the City not only self-insures with a $2,000,000 liability retention, but carries an additional $50,000,000 in liability insurance policies which are in excess of its self-insured retention. 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 13 - 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; employee health claims; 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. This fund is broken down into the following areas: workers’ compensation insurance, property and liability insurance, health insurance, dental insurance, and short-term disability insurance. Premiums are paid into the Internal Service Fund by all other funds for worker’s compensation insurance and by the general fund for property and liability insurance. The premiums are available to pay claims, fund claim reserves and pay 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. In fiscal year 2013-14, the Self-Insurance Fund provided coverage for up to a maximum of $50,000 for each property damage claim and $2,000,000 per occurrence for general liability claims. Coverage is also provided for claims up to $600,000 in worker’s compensation. 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 2013-14, 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. 73 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 13 - Risk Management, concluded The City also has commercial stop loss insurance that provides specific (by individual member) coverage for health insurance claims incurred in excess of $200,000 within the plan year, and aggregate (plan wide) coverage for health insurance claims incurred above 110 percent of total plan wide claims for the plan year. 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. The claims liability of $4,602,971 reported as claims payable in the Self-Insurance Fund at June 30, 2014, 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. This includes known future payments made for insurance as well as estimated IBNR calculations. Changes in the Fund’s claims liability amount in fiscal years 2013 and 2014 were: Years Ended June 30, 2013 2014 Risk of Loss Workers' compensation Current Year Claims and Changes in Estimates Beginning of Fiscal Year Balance $ - Property and liability 1,846,273 Health 2,931,202 Dental - Workers' compensation $ 4,777,475 $ $ 2,706,547 $ Health Dental (1,060,215) $ 2,706,547 (175,058) 954,586 18,068,477 (18,570,637) 2,429,042 1,921,813 (1,775,174) 146,639 23,040,423 $ (21,581,084) $ 6,236,814 62,395 $ (1,569,953) $ 1,198,989 954,586 207,298 (199,714) 962,170 2,429,042 18,747,498 (18,878,548) 2,297,992 146,639 $ $ (716,629) $ Property and liability 3,766,762 Claim Payments Balance at Fiscal Year End 6,236,814 74 1,863,419 $ 20,880,610 (1,866,238) $ (22,514,453) $ 143,820 4,602,971 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 14 – Interfund Transfers The interfund transfers in and out at June 30, 2014 are as follows: Fund General Transfer Detail Capital projects-streets Non-major governmental Non-major enterprise Internal service Total general fund Transfers In $ - Capital projects-streets General Total capital projects Non-major governmental General Non-major governmental Enterprise-water Enterprise-wastewater Non-major enterprise Internal service Total non-major governmental funds Water Non-major governmental Transfers Out $ 488,911 18,413,607 487,868 950,000 20,340,386 488,911 488,911 Total water fund - 18,413,607 4,850,074 268,924 112,672 437,471 14,759 24,097,507 4,850,074 463,281 5,313,355 - 268,924 - 268,924 - 112,672 112,672 Wastewater Non-major governmental Total wastewater fund Non-major enterprise General Non-major governmental Total non-major enterprise funds 487,868 463,281 951,149 437,471 437,471 Internal service General Non-major governmental Total internal service fund 950,000 950,000 14,759 14,759 Total $ 26,487,567 $ 26,487,567 Interfund transfers are made from various funds and cost centers to fund costs including property and liability insurance, technology replacement, vehicle replacement, debt service, streets capital projects and general government Capital projects. 75 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 15 – Interfund Receivables and Payables A. Interfund Advances To/Advances From Advances To General Advances From Total Capital projects-public safety buildings & improvements $ 13,794,706 Capital projects-streets 2,814,300 Capital projects-public buildings 3,919,352 Total general fund 20,528,358 Enterprise Water Enterprise-wastewater 3,900,000 Total $ 24,428,358 Interfund advances were 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. 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. None will be repaid within one year. B. Interfund Due To/Due From Due from other funds Due to other funds General Special revenue-community development General Non-major enterprise-Chandler housing authority Total $ 352,062 153,751 $ 505,813 Interfund due to/due from other funds was made as a short term loan until the community development special revenue fund and Chandler Housing Authority enterprise fund due from other government’s balances are received. 76 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 16 – 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 percent of the plant capacity, and each party paying 50 percent of the construction costs. The Town of Gilbert acts as the Lead Agent, overseeing construction activities, which were substantially complete at June 30, 2014, and operating the plant. The City’s investment in the joint venture is reflected as a separate line item in the proprietary funds financial statements. Separate financial statements for the joint venture are not prepared. Total Investment as of June 30, 2014, was: City of Chandler's Share $65,904,530 Town of Gilbert's Share 72,199,454 $138,103,984 NOTE 17 – Deficit in Fund Balances The police confiscated property fund had a deficit fund balance of $35,247. The deficit will be covered by future revenues. The public buildings capital projects fund and the public safety buildings and improvements capital projects fund had deficit fund balances of $3,665,457, and $7,333,317 respectively. The funds were financed by advances of interfund loans and will be paid back by future impact fee revenues. NOTE 18 – Prior Period Adjustment The July 1, 2013, net position of the Business-type Activities of the Water, Wastewater and Airport proprietary funds and Governmental Activities does not agree to the prior year financial statements due to the implementation of GASB Statement 65, Items Previously Reported as Assets and Liabilities. Proprietary Funds Net position, June 30, 2013, as previously reported Implementation of GASB 65 Net position, July 1, 2013, as restated $ Water 222,447,724 (702,652) 221,745,072 Wastewater $ 241,448,268 (783,526) $ 240,664,742 Net position, June 30, 2013, as previously reported Implementation of GASB 65 Net position, July 1, 2013, as restated Governmental Activities $ 850,104,939 (3,181,283) $ 846,923,656 Business-type Activities $ 531,976,826 (1,487,380) $ 530,489,446 $ 77 Other Proprietary Funds $ 68,080,834 (1,202) $ 68,079,632 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2014 NOTE 19 – New Accounting Pronouncement GASB Statement No. 68, Accounting and Financial Reporting for Pensions will be effective for the City’s June 30, 2015 fiscal year end. This Statement replaces the requirements of prior GASB standards for pensions accounting and reporting. This Statement requires governments providing defined benefit pensions to recognize the long-term obligation for pension benefits as a liability, and to more comprehensively and comparably measure the annual costs of pension benefits. Each employer participating in a multiple-employer defined benefit pension plan will be required to record a liability representing their “proportionate share” of the plan’s total net pension liability. This Statement also enhances accountability and transparency through revised note disclosures and new required supplementary information. 78 REQUIRED SUPPLEMENTARY INFORMATION 79 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Property taxes $ Sales taxes 7,250,000 $ 95,200,000 Franchise fees State shared 7,250,000 $ 7,313,625 $ 103,880,801 95,200,000 63,625 8,680,801 2,886,000 2,886,000 3,145,449 259,449 53,613,700 53,613,700 55,423,759 1,810,059 Licenses and permits 3,476,000 3,476,000 5,479,384 2,003,384 Charges for services 18,956,508 18,956,508 20,127,222 1,170,714 Fines and forfeitures 3,439,300 3,439,300 3,695,761 256,461 Rentals 1,053,850 1,053,850 732,807 Contributions 100,000 100,000 100,000 - Interest revenue 637,000 637,000 905,544 268,544 Miscellaneous 215,000 415,000 343,417 (71,583) 186,827,358 187,027,358 201,147,769 14,120,411 23,296,664 24,838,838 23,671,025 1,167,813 578,404 593,495 540,441 53,054 2,033,439 2,254,969 1,915,177 339,792 Law 3,511,051 3,576,414 3,204,014 372,400 City magistrate 4,146,959 4,203,078 3,780,446 422,632 44,624,370 37,223,033 10,536,822 26,686,211 794,651 806,152 764,092 42,060 Fire 29,673,552 30,060,645 29,798,463 262,182 Police 59,651,242 60,971,888 59,729,240 1,242,648 Transportation and development 18,359,774 19,761,013 18,229,425 1,531,588 Community services 23,354,305 24,423,168 23,531,904 891,264 210,024,411 208,712,693 175,701,049 33,011,644 (23,197,053) (21,685,335) 25,446,720 47,132,055 Total revenues (321,043) EXPENDITURES: General government City manager City clerk Communications and public affairs Management services Mayor and council Public safety Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in - Transfers out - - - (17,412,150) (17,412,270) (20,340,386) (2,928,116) (17,412,150) (17,412,270) (20,336,037) (2,923,767) Change in fund balance (40,609,203) (39,097,605) 5,110,683 44,208,288 Fund balances, July 1, 2013 169,071,896 169,071,896 169,071,896 - Total other financing sources (uses) Fund balances, June 30, 2014 $ 128,462,693 See accompanying notes to this schedule. 80 $ 129,974,291 $ 174,182,579 $ 44,208,288 CITY OF CHANDLER, ARIZONA Required Supplementary Information June 30, 2014 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 exception: reserved encumbrances at year end are recognized as expenditures. Consequently, the following adjustment is 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 $ 10,625,900 Reserved encumbrances at June 30, 2014 recognized as budgetary expenditures in fiscal year ended June 30, 2014 Budgetary Comparison Schedule for the General Fund (5,515,217) $ 81 5,110,683 CITY OF CHANDLER, ARIZONA Required Supplementary Information June 30, 2014 Arizona Public Safety Personnel Retirement System - Police Schedule of Funding Progress (1) Actuarial Value of Assets Valuation Date 30-Jun 2012 2013 2014 (2) Actuarial Accrued Liability (AAL) Note 1 $ 97,906,676 104,171,101 105,289,281 $ 145,061,169 152,068,214 176,848,516 (3) Percent Funded (1)/(2) 67.5% 68.5% 59.5% (4) Unfunded AAL (2) - (1) $ 47,154,493 47,897,113 71,559,235 (5) Annual Covered Payroll $ 24,439,914 23,985,615 24,120,110 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) 192.9% 199.7% 296.7% Arizona Public Safety Personnel Retirement System - Firefighters Schedule of Funding Progress (1) Actuarial Value of Assets Valuation Date 30-Jun 2012 2013 2014 (2) Actuarial Accrued Liability (AAL) Note 1 $ 65,390,559 68,896,411 70,669,121 $ 87,095,848 91,765,966 105,634,896 (3) Percent Funded (1)/(2) 75.1% 75.1% 66.9% (4) Unfunded AAL (2) - (1) $ 21,705,289 22,869,555 34,965,775 (5) Annual Covered Payroll $ 15,497,570 15,395,116 15,201,535 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) 140.1% 148.6% 230.0% Post-Employment Benefits Other than Pensions Schedule of Funding Progress (1) Actuarial Value of Assets Valuation Date 01-Jul 2009 2011 2013 (2) Actuarial Accrued Liability (AAL) Note 2 $ - $ 26,120,095 33,009,726 52,300,279 (3) Percent Funded (1)/(2) 0.0% 0.0% 0.0% (4) Unfunded AAL (2) - (1) $ Note 1 The actuarial cost method used is entry age normal method. Note 2 The actuarial cost method used is projected unit credit method. 82 26,120,095 33,009,726 52,300,279 (5) Annual Covered Payroll $ 98,508,058 93,253,195 96,935,187 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) 26.5% 35.4% 54.0% OTHER FINANCIAL STATEMENTS 83 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Streets Capital Projects For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Interest revenue $ System development fees Regional transportation tax Miscellaneous Total revenues 152,000 $ 152,000 $ 188,093 $ 36,093 536,400 536,400 6,688,524 6,152,124 2,208,000 2,208,000 3,243,937 1,035,937 - - 410 410 2,896,400 2,896,400 10,120,964 7,224,564 3,340,809 EXPENDITURES: General government 3,207,400 3,346,715 5,906 24,646,232 57,244 910,218 7,106,810 34,568,476 20,032,398 14,536,078 34,960,442 37,972,435 20,948,522 17,023,913 (32,064,042) (35,076,035) (10,827,558) 24,248,477 Transfers in 7,420,000 7,420,000 Transfers out (6,420,000) (6,420,000) 1,000,000 1,000,000 (31,064,042) (34,076,035) (10,338,647) 36,426,150 36,426,150 36,426,150 Transportation and development Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures (852,974) Other financing sources (uses): Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2013 Fund balances (deficits), June 30, 2014 $ 5,362,108 84 $ 2,350,115 488,910 (6,931,090) 1 6,420,001 488,911 $ 26,087,503 (511,089) 23,737,388 $ 23,737,388 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Obligation Bonds Debt Service For the year ended June 30, 2014 Positive (Negative) Budgeted Amounts Original Final Actual Variance with Amounts Final Budget REVENUES: Property taxes $ Interest revenue Total revenues 20,796,000 $ 20,796,000 $ 21,129,198 $ 333,198 77,000 77,000 134,519 57,519 20,873,000 20,873,000 21,263,717 390,717 11,535,000 11,535,000 11,535,000 - 9,961,931 9,961,932 9,961,931 1 21,496,931 21,496,932 21,496,931 1 EXPENDITURES: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures (623,931) (623,932) (233,214) 390,718 Other financing sources (uses): Transfers in Total other financing sources (uses) Change in fund balances - - - - - - - (623,931) Fund balances, July 1, 2013 Fund balances, June 30, 2014 - (623,932) 16,419,386 $ 15,795,455 85 (233,214) 16,419,386 $ 15,795,454 390,718 16,419,386 $ 16,186,172 $ 390,718 86 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 Used to account for the receipt and expenditure of miscellaneous federal and state grants awarded to the City for various, specific operational 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. Police Confiscated Property Used to account for monies confiscated by the police department and monies received from the sale of confiscated property. 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. NON-MAJOR DEBT SERVICE FUNDS Highway User Revenue Bonds Accumulates monies for the payment of principal and interest requirements of the City's Highway User Revenue Bonds. Revenues for repayment are generated from gas tax generated within the State of Arizona. 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. 87 City of Chandler Non-Major Governmental Funds, Continued NON-MAJOR CAPITAL PROJECTS FUNDS General Government Used to account for the acquisition, construction, reconstruction, improvement and renovation of general government projects. Public Buildings Used to account for bond proceeds used for the acquisition, construction, reconstruction, improvement and renovation of City buildings. Grants Used to account for the receipt and expenditure of miscellaneous federal and state grants awarded to the City for various, specific capital purposes. 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. Vehicle and Capital Equipment Replacement Used to account for the purchase and/or replacement of general equipment-type assets, e.g., vehicles, furniture, and office equipment. Special Assessments Used to account for expenditures related to special assessment districts within the City. Technology Replacement Used to account for the purchase and/or replacement of technology assets. Municipal Arts Used to account for amounts earmarked for the acquisition of art for public spaces. 88 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2014 Special Revenue Local Police Highway Transportation User Assistance Grants $ 4,211,101 $ 1,224,048 - - 100 Special assessments - - - - - - - Notes - - - 448,503 - - - Community Confiscated Parks and Property Recreation Library - $ 2,004,117 $273,924 $ 117,250 - - - - Development ASSETS Equity in pooled cash and investments $ 8,687,225 Receivables (net of allowance for uncollectible): Accounts Other Due from other governments Total assets $ - - - - - 15 - 1,255,302 - 143,542 736,077 298,375 - - $ 9,942,527 $ 4,211,101 $ 1,367,690 $ 1,184,580 $ 2,302,492 $273,939 $ 117,250 $ $ $ $ $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll 15,918 $ 201,997 88,647 $ 13,169 153,221 361,605 144 - 38,228 12,993 - 683 3,617 - Trust liabilities and deposits - - - 167,901 2,249,092 - Accrued interest - - - - - - - Due to other funds Advances from other funds Unearned revenue Arbitrage liability - current Bonds payable - current - - - 352,062 - - - - - - - - - - 514,826 144 54,146 734,953 2,337,739 13,852 3,617 - - - - - - - - - - - - - - 9,427,701 - 4,210,957 - 1,313,544 - 449,627 - (35,247) 260,087 - 113,633 - 9,427,701 4,210,957 1,313,544 449,627 (35,247) 260,087 113,633 $ 9,942,527 $ 4,211,101 $ 1,367,690 $ 1,184,580 $273,939 $ 117,250 Total liabilities Deferred inflows of resources: Unavailable revenues - special assessments Total deferred inflows of resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities, deferred inflows and fund balances 89 $ 2,302,492 (Continued) City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2014 Debt Service Capital Projects Special Highway User Assessment General Public Revenue Bonds Bonds Government Buildings Grants ASSETS Equity in pooled cash and investments $ Receivables (net of allowance for uncollectible): Accounts 4,350,270 $ 413,156 $ 358,276 $ $ 630,334 - - - Special assessments - 4,910,331 - - - Notes - - - - - Other Due from other governments Total assets - 253,906 - - - - - - - - - - 2,359 $ 4,350,270 $ 5,323,487 $ 358,276 $ $ - $ 8,006 $ 320,909 $ 253,906 $ 632,693 - $ 84,368 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll - Trust liabilities and deposits Accrued interest - 2,367 - - - - - - - 164,188 98,100 - - - Due to other funds Advances from other funds - - - - - - Unearned revenue Arbitrage liability - current Bonds payable - current 5,000 3,975,000 - 35,000 - 3,919,352 11 - - 4,144,188 106,106 358,276 3,919,363 84,368 - 4,435,612 - - - - 4,435,612 - - - 206,082 - 781,769 - - (3,665,457) 548,325 - 206,082 781,769 - (3,665,457) 548,325 Total liabilities Deferred inflows of resources: Unavailable revenues - special assessments Total deferred inflows of resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities, deferred inflows and fund balances $ 4,350,270 $ 5,323,487 90 $ 358,276 $ 253,906 $ 632,693 Capital Projects Public Safety Community Services Total Other Buildings and Capital Equipment Improvements $ 17,138,858 Vehicle and $ 6,463,830 Replacement $ 13,570,840 Special Technology Municipal Governmental Assessments Replacement Arts Funds $ 4,575,031 $ 4,629,660 $ 49,214 $ 68,951,040 - - - - - - 100 - - - - - - 4,910,331 - - - - - - 448,503 - - - - - - - - - - - - 15 2,435,655 4,575,031 $ 4,629,660 $ 49,214 $ 76,745,644 $ $ - $ 2,538,154 $ 17,138,858 $ 6,463,830 $ 13,570,840 $ $ $ - $ 167,755 $ 809,211 1,023 - - 38 462,770 2,557 - - 211,072 - - - - - - 2,416,993 - - - - - - 262,288 - - - - - - 6,750 - 13,794,706 2,441 - - - - - 352,062 17,714,058 35,000 14,202 3,975,000 816,984 13,797,147 167,755 2,595 462,770 - 27,518,829 - - - - - - 4,435,612 - - - - - - 4,435,612 16,321,874 - (7,333,317) 13,403,085 - 4,572,436 - 4,166,890 - 49,214 - 55,825,224 (11,034,021) 16,321,874 (7,333,317) 13,403,085 4,572,436 4,166,890 49,214 44,791,203 4,575,031 $ 4,629,660 $ 17,138,858 $ 6,463,830 $ 13,570,840 $ 91 $ 49,214 $ 76,745,644 (Concluded) City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2014 Special Revenue Local Police Highway Transportation User Assistance Grants Community Confiscated Parks and Development Property Recreation Library REVENUES: Highway user taxes $ 13,352,622 $ - $ - $ - $ - $ - $ - Grants and entitlements - 696,693 4,837,064 2,458,702 - 86,204 53,450 System development fees - - - - - - - Special assessments - - - - - - - Charges for services - 87,753 - - - - - Fines and forfeitures - - - - 922,167 - - 68,249 25,318 7,337 776 - 1,882 749 138,806 128,426 - - - - 546 13,559,677 938,190 4,844,401 2,459,478 922,167 88,086 54,745 General government - - 874,951 2,304,176 - - - Public safety - - 1,045,343 - 542,492 - - 7,395,651 310,512 - - - - - - - 160,368 - - 116,468 31,661 Interest revenue Miscellaneous Total revenues EXPENDITURES: Current: Transportation and development Community services Capital outlay 3,151,381 2,601 436,598 15,056 276,444 281 - Debt service: Principal Interest and fiscal charges - - - - - - - - - - - - - - Bond issuance costs - - - - - - - 10,547,032 313,113 2,517,260 2,319,232 818,936 116,749 31,661 3,012,645 625,077 2,327,141 140,246 103,231 (28,663) 23,084 - - - - - Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Bond Premium Face amount of bonds issued Payment to escrow agent Transfers in - Transfers out Total other financing sources (uses) - - - - 339,674 - - - (4,846,073) (4,001) - (463,281) - - - (4,846,073) (4,001) - (123,607) - - - REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (1,833,428) 621,076 2,327,141 16,639 103,231 (28,663) 23,084 FUND BALANCES (DEFICITS): Beginning of year End of year 11,261,129 $ 9,427,701 3,589,881 $ 4,210,957 (1,013,597) $ 1,313,544 92 432,988 $ 449,627 (138,478) $ (35,247) $ 288,750 90,549 260,087 $ 113,633 Debt Service Capital Projects Special Highway User Assessment General Public Revenue Bonds Bonds Government Buildings $ - $ $ - $ $ - Services - $ - - - - - 2,055,782 - - - - 234,353 - 3,675,956 - 678,843 - - - - - - - - - - - - - - - - - 2,439 4 3,314 - 92,459 - - - - - 3,419 - 681,282 4 237,667 2,055,782 3,771,834 11,812 - - 812,773 5,906 1,835 - - 359,156 - - - - - 67,368 - 7,028 - - - 61,286 - 85,467 336,733 - - 12,475,700 - 1,906,311 3,584,683 3,975,000 445,000 - - - - 515,175 205,100 - - - - 145,970 - - - - - 4,636,145 650,100 13,776,283 5,906 2,000,641 3,933,228 (4,636,145) 31,182 (13,776,279) 231,761 55,141 562,052 8,660,000 (9,061,800) - - - - - 4,676,975 - 13,776,279 - - - - - - - - - 4,837,227 - 13,776,279 - - - 201,082 31,182 - 231,761 55,141 5,000 $ - Community Grants 206,082 750,587 $ 781,769 $ - (3,897,218) $ (161,394) (161,394) 493,184 (3,665,457) $ 548,325 16,483,268 $ 16,321,874 (Continued) 93 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2014 Capital Projects Public Safety Vehicle and Total Other Buildings and Capital Equipment Improvements Replacement Special Technology Municipal Governmental Assessments Replacement Arts Funds REVENUES: Highway user taxes $ Grants and entitlements - $ - System development fees - $ - - $ - - $ - - $ 13,352,622 - 10,187,895 5,157,751 1,247,442 - - - - Special assessments - - - - - 678,843 Charges for services - - - - 55,001 142,754 Fines and forfeitures - - - - - 922,167 39,497 93,583 28,934 31,006 278 395,825 - 27,324 - - - 298,521 1,286,939 120,907 28,934 31,006 55,279 31,136,378 12,888 - 69,780 644,977 - 4,739,098 57 - - - - 1,947,048 Transportation and development - - - - - 7,780,559 Community services - - - - 58,612 850,595 10,176 4,568,182 - 3,290,979 - 29,718,392 - - - - - 4,420,000 - - - - - - - - - - 720,275 145,970 23,121 4,568,182 69,780 3,935,956 58,612 50,321,937 (4,447,275) (40,846) (3,904,950) (3,333) (19,185,559) Interest income Miscellaneous Total revenues EXPENDITURES: Current: General government Public safety Capital outlay Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures REVENUES OVER (UNDER) EXPENDITURES 1,263,818 OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets - 156,777 - Transfers in - Transfers out - Bond premium Face amount of bonds issued Payment to escrow agent Total other financing sources (uses) - - - 156,777 562,052 8,660,000 (9,061,800) 2,744,193 - - - 2,560,386 - 24,097,507 - - 2,900,970 - (5,313,355) 2,560,386 - 19,101,181 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 1,263,818 (1,546,305) (40,846) (1,344,564) (3,333) (84,378) FUND BALANCES (DEFICITS): Beginning of year End of year (8,597,135) $ (7,333,317) 14,949,390 $ 13,403,085 4,613,282 $ 4,572,436 5,511,454 $ 4,166,890 52,547 $ 49,214 44,875,581 $ 44,791,203 (Concluded) 94 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, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Highway user taxes $ 13,000,000 $ 13,000,000 - - - - 48,000 48,000 68,248 20,248 - - 138,806 138,806 13,048,000 13,048,000 13,559,676 511,676 4,426,700 4,147,630 - 4,147,630 10,014,007 8,542,400 7,961,619 580,781 2,515,364 4,101,205 3,559,456 541,749 16,956,071 16,791,235 11,521,075 5,270,160 (3,908,071) (3,743,235) 2,038,601 5,781,836 (4,846,043) (4,846,043) (4,846,073) (30) (4,846,043) (4,846,043) (4,846,073) (30) Change in fund balances (8,754,114) (8,589,278) (2,807,472) Fund balances, July 1, 2013 11,261,129 11,261,129 11,261,129 2,507,015 $ 2,671,851 Charges for services Interest revenue Miscellaneous Total revenues $ 13,352,622 $ 352,622 EXPENDITURES: General government Transportation and development Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Fund balances, June 30, 2014 $ 95 $ 8,453,657 5,781,806 $ 5,781,806 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, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 692,821 $ 692,821 $ 696,693 $ 3,872 Charges for services 86,000 86,000 87,753 Interest revenue 11,000 11,000 25,318 14,318 - - 128,426 128,426 789,821 789,821 938,190 148,369 102,400 100,378 - 100,378 1,847,350 1,487,944 311,774 1,176,170 - 404,621 363,467 41,154 1,949,750 1,992,943 675,241 1,317,702 (1,159,929) (1,203,122) 262,949 1,466,071 (4,001) (4,001) (4,001) - (4,001) (4,001) (4,001) - (1,163,930) (1,207,123) 3,589,881 3,589,881 Miscellaneous Total revenues 1,753 EXPENDITURES: General government Transportation and development Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2013 Fund balances, June 30, 2014 $ 2,425,951 96 $ 2,382,758 $ 258,948 1,466,071 3,589,881 - 3,848,829 $ 1,466,071 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Grants Special Revenue For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 5,277,438 Interest revenue $ 5,077,438 $ 4,837,064 $ (240,374) - - 7,334 5,277,438 5,077,438 4,844,398 General government 1,482,514 1,506,633 883,782 622,851 Public safety 2,640,021 2,639,820 1,114,240 1,525,580 Transportation and development 728,649 - - - Community services 554,602 524,409 195,898 328,511 1,501,886 1,429,636 545,140 884,496 6,907,672 6,100,498 2,739,060 3,361,438 Change in fund balances (1,630,234) (1,023,060) 2,105,338 3,128,398 Fund balances (deficits), July 1, 2013 (1,013,597) (1,013,597) (1,013,597) Total revenues 7,334 (233,040) EXPENDITURES: Capital outlay Total expenditures Fund balances (deficits), June 30, 2014 $ (2,643,831) 97 $ (2,036,657) $ 1,091,741 $ 3,128,398 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, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 3,035,000 Interest revenue Total revenues $ 3,035,000 $ 2,458,702 $ (576,298) - - 773 773 3,035,000 3,035,000 2,459,475 (575,525) 3,148,400 3,704,069 2,979,370 724,699 200,000 624,925 15,056 609,869 3,348,400 4,328,994 2,994,426 1,334,568 EXPENDITURES: General government Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures (313,400) (1,293,994) (534,951) 759,043 Other financing sources (uses): Transfers in - - 339,674 (339,674) Transfers out - - (463,281) (463,281) - - (123,607) (802,955) (658,558) (43,912) Total other financing sources (uses) Change in fund balances (313,400) 432,988 Fund balances, July 1, 2013 Fund balances (deficits), June 30, 2014 (1,293,994) $ 119,588 98 432,988 $ (861,006) 432,988 $ (225,570) $ (43,912) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Police Confiscated Property Special Revenue For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Fines and forfeitures $ 3,000,000 $ 3,000,000 Total revenues 3,000,000 $ 3,000,000 922,167 $ 922,167 (2,077,833) (2,077,833) EXPENDITURES: 190,000 450 - 450 Public safety General government 1,605,000 1,885,917 557,622 1,328,295 Capital outlay 1,395,000 1,250,677 325,829 924,848 3,190,000 3,137,044 883,451 2,253,593 175,760 Total expenditures Change in fund balances (190,000) (137,044) 38,716 Fund balances (deficits), July 1, 2013 (138,478) (138,478) (138,478) Fund balances (deficits), June 30, 2014 $ (328,478) 99 $ (275,522) $ (99,762) $ 175,760 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, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ Interest revenue Total revenues 73,350 $ 73,350 $ 86,204 $ 12,854 1,000 1,000 1,885 885 74,350 74,350 88,089 13,739 322,756 322,892 116,468 206,424 - - 281 322,756 322,892 116,749 206,143 (248,406) (248,542) (28,660) 219,882 288,750 288,750 288,750 EXPENDITURES: Community services Capital outlay Total expenditures Change in fund balances Fund balances, July 1, 2013 Fund balances, June 30, 2014 $ 40,344 100 $ 40,208 $ 260,090 (281) $ 219,882 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Library Special Revenue For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ 93,000 Interest revenue $ - Miscellaneous Total revenues 93,000 $ - 53,450 $ 751 (39,550) 751 - - 546 93,000 93,000 54,747 (38,253) 93,000 35,038 35,331 (293) 90,500 34,712 35,331 (619) 2,500 58,288 19,416 (38,872) 90,549 90,549 90,549 546 EXPENDITURES: Community services Total expenditures Change in fund balances Fund balances, July 1, 2013 Fund balances, June 30, 2014 $ 93,049 101 $ 148,837 $ 109,965 $ (38,872) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Government Capital Projects For the year ended June 30, 2014 Total Budgeted Amounts Original Final Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Miscellaneous $ 250,000 $ 250,000 $ - $ (250,000) 250,000 250,000 - General government Public safety Transportation and development Community services 12,093,956 1,818,900 337,633 485,566 5,264,832 785,293 83,601 1,160,302 444,575 67,368 74,850 Capital outlay 17,369,019 28,493,031 15,471,450 13,021,581 32,105,074 34,626,757 17,218,545 17,408,212 (31,855,074) (34,376,757) (17,218,545) (17,658,212) 27,120,069 27,120,069 13,776,279 (13,343,790) - - - 27,120,069 27,120,069 13,776,279 (13,343,790) (4,735,005) (7,256,688) (3,442,266) (31,002,002) Total revenues (250,000) EXPENDITURES: Total expenditures Excess (deficiency) of revenues over expenditures $ 4,104,530 340,718 (67,368) 8,751 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Change in fund balances - Fund balances, July 1, 2013 Fund balances (deficits), June 30, 2014 $ (4,735,005) 102 $ (7,256,688) - $ (3,442,266) $ (31,002,002) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Public Buildings Capital Projects For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ Interest revenue 41,500 $ 41,500 $ 234,353 $ 192,853 1,000 1,000 3,314 2,314 42,500 42,500 237,667 195,167 67,921 69,118 5,906 63,212 - - - - 67,921 69,118 5,906 63,212 Excess (deficiency) of revenues over expenditures (25,421) (26,618) 231,761 258,379 Change in fund balances (25,421) (26,618) 231,761 258,379 (3,897,218) (3,897,218) Total revenues EXPENDITURES: General government Capital outlay Total expenditures Fund balances (deficits), July 1, 2013 Fund balances (deficits), June 30, 2014 $ (3,922,639) 103 $ (3,923,836) (3,897,218) $ (3,665,457) $ 258,379 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Grants Capital Projects For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: Grants and entitlements $ Total revenues 14,796,058 $ 14,796,058 $ 2,055,782 $ (12,740,276) 14,796,058 14,796,058 2,055,782 (12,740,276) General government 3,125,115 644,987 1,835 643,152 Transportation and development 7,155,413 69,334 7,028 62,306 268,767 183,176 119,602 63,574 9,981,269 20,303,809 4,037,363 16,266,446 20,530,564 21,201,306 4,165,828 17,035,478 (5,734,506) (6,405,248) (2,110,046) 4,295,202 EXPENDITURES: Community services Capital outlay Total expenditures Change in fund balances 493,184 Fund balances, July 1, 2013 Fund balances (deficits), June 30, 2014 $ (5,241,322) 104 493,184 $ (5,912,064) 493,184 $ (1,616,862) $ 4,295,202 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Community Services Capital Projects For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ Interest revenue 1,366,000 $ 1,366,000 $ 3,675,956 $ 2,309,956 53,000 53,000 92,461 39,461 - - 3,419 3,419 1,419,000 1,419,000 3,771,836 2,352,836 Community services 3,250,602 4,586,837 3,718,298 425,650 11,812 379,415 (3,706,486) (46,235) Capital outlay 4,918,369 7,807,278 5,903,805 (1,903,473) 12,755,808 11,951,226 6,295,032 (5,656,194) Excess (deficiency) of revenues over expenditures (11,336,808) (10,532,226) (2,523,196) (3,303,358) Change in fund balances (11,336,808) (10,532,226) (2,523,196) 8,009,030 16,483,268 16,483,268 16,483,268 Miscellaneous Total revenues EXPENDITURES: General government Total expenditures Fund balances, July 1, 2013 Fund balances, June 30, 2014 $ 5,146,460 105 $ 5,951,042 $ 13,960,072 $ 8,009,030 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Public Safety Buildings and Improvements Capital Projects For the year ended June 30, 2014 Positive Budgeted Amounts Original Final Non-GAAP (Negative) Actual Variance with Amounts Final Budget REVENUES: System development fees $ Interest revenue 220,300 $ 220,300 $ 1,247,442 $ 1,027,142 24,000 24,000 39,497 15,497 244,300 244,300 1,286,939 1,042,639 198,923 201,550 12,888 188,662 Public safety 2,103,707 674,573 57 674,516 Capital outlay 2,636,527 4,065,428 3,322,406 743,022 4,939,157 4,941,551 3,335,351 1,606,200 Excess (deficiency) of revenues over expenditures (4,694,857) (4,697,251) (2,048,412) 2,648,839 Change in fund balances (4,694,857) (4,697,251) (2,048,412) 2,648,839 Fund balances (deficits), July 1, 2013 (8,597,135) (8,597,135) (8,597,135) - (13,291,992) $ (13,294,386) Total revenues EXPENDITURES: General government Total expenditures Fund balances (deficits), June 30, 2014 $ 106 $ (10,645,547) $ 2,648,839 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Vehicle and Capital Equipment Capital Projects For the year ended June 30, 2014 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Interest revenue $ Miscellaneous 58,000 $ 58,000 $ 93,582 $ 35,582 15,000 15,000 27,324 12,324 73,000 73,000 120,906 47,906 General government 3,650,000 1,786,136 - 1,786,136 Capital outlay 5,790,305 7,588,926 5,104,342 2,484,584 9,440,305 9,375,062 5,104,342 4,270,720 (9,367,305) (9,302,062) (4,983,436) 4,318,626 Total revenues EXPENDITURES: Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from disposal of capital assets 67,000 67,000 156,777 2,744,193 2,744,193 2,744,193 - 2,811,193 2,811,193 2,900,970 89,777 Change in fund balances (6,556,112) (6,490,869) (2,082,466) Fund balances, July 1, 2013 14,949,390 14,949,390 14,949,390 8,393,278 $ 8,458,521 $ 12,866,924 Transfers in Total other financing sources (uses) Fund balances, June 30, 2014 $ 107 89,777 4,408,403 $ 4,408,403 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Special Assessments Capital Projects For the year ended June 30, 2014 Positive (Negative) Budgeted Amounts Original Final Actual Variance with Amounts Final Budget REVENUES: Interest revenue $ 16,000 $ 16,000 $ 28,935 $ 12,935 16,000 16,000 28,935 12,935 71,905 72,046 69,780 2,266 71,905 72,046 69,780 2,266 Excess (deficiency) of revenues over expenditures (55,905) (56,046) (40,845) 15,201 Change in fund balances (55,905) (56,046) (40,845) 15,201 Total revenues EXPENDITURES: General government Total expenditures 4,613,282 Fund balances, July 1, 2013 Fund balances, June 30, 2014 $ 4,557,377 108 4,613,282 $ 4,557,236 4,613,282 $ 4,572,437 $ 15,201 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Technology Replacement Capital Projects For the year ended June 30, 2014 Positive Non-GAAP (Negative) Actual Variance with Amounts Final Budget Budgeted Amounts Original Final REVENUES: Interest revenue $ 23,000 $ 23,000 Total revenues 23,000 23,000 $ 31,006 $ 31,006 8,006 8,006 EXPENDITURES: General government 1,128,740 748,510 780,462 Capital outlay 3,366,800 3,812,273 3,478,990 333,283 4,495,540 4,560,783 4,259,452 301,331 (4,472,540) (4,537,783) (4,228,446) (293,325) 2,559,036 2,559,036 2,560,386 1,350 2,559,036 2,559,036 2,560,386 1,350 (1,913,504) (1,978,747) (1,668,060) 5,511,454 5,511,454 5,511,454 3,532,707 $ 3,843,394 Total expenditures Excess (deficiency) of revenues over expenditures (31,952) Other financing sources (uses): Transfers in Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2013 Fund balances, June 30, 2014 $ 3,597,950 109 $ (291,975) $ (291,975) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Municipal Arts Capital Projects For the year ended June 30, 2014 Positive (Negative) Budgeted Amounts Original Final Actual Variance with Amounts Final Budget REVENUES: Charges for services $ - Interest revenue $ - $ 55,001 $ 55,001 1,000 1,000 279 1,000 1,000 55,280 54,280 62,050 63,250 59,612 3,638 62,050 63,250 59,612 3,638 (61,050) (62,250) (4,332) 57,918 52,547 52,547 52,547 Total revenues (721) EXPENDITURES: Community services Total expenditures Change in fund balances Fund balances , July 1, 2013 Fund balances (deficits), June 30, 2014 $ (8,503) 110 $ (9,703) $ 48,215 $ 57,918 111 112 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. 113 City of Chandler Combining Statement of Net Position Non-Major Proprietary Funds June 30, 2014 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds ASSETS Current assets: Equity in pooled cash and investments Accounts receivable $ 13,102,056 $ 81,334 $ 4,364,271 $ 17,547,661 1,508,139 58,539 42,006 1,608,684 Due from other governments - - 96,869 96,869 Inventories - 33,894 - 33,894 Prepaid items - - 339,998 339,998 43,006 6,343 - 49,349 14,653,201 180,110 4,843,144 19,676,455 - - 336,450 336,450 7,253,574 19,672,708 1,647,897 28,574,179 Other receivables Total current assets Long-term assets: Notes receivable Capital assets: Non-depreciable Depreciable, net Total capital assets Total long-term assets Total assets 8,346,259 9,905,059 7,690,427 25,941,745 15,599,833 29,577,767 9,338,324 54,515,924 15,599,833 29,577,767 9,674,774 54,852,374 30,253,034 29,757,877 14,517,918 74,528,829 LIABILITIES Current liabilities: Accounts payable 829,944 3,307 36,125 Accrued payroll 52,326 22,578 68,919 869,376 143,823 Trust liabilities and deposits 15,527 41,993 250,986 308,506 114 Accrued interest - Due to other funds 1,694 - 1,694 - - 153,751 153,751 77,169 18,959 - 96,128 472 222 559 1,253 Bonds payable - 20,000 - 20,000 Issuance premiums - 196 - 196 Customer advances Compensated absences payable - 4 - 4 94,446 - - 94,446 1,069,884 108,953 510,340 1,689,177 65,531 30,833 90,266 186,630 Bonds payable - 101,000 - 101,000 Issuance premiums - 2,546 - 2,546 Arbitrage liability Landfill closure and postclosure liability Total current liabilities Long-term liabilities: Compensated absences payable OPEB liability Landfill closure and postclosure liability Total long-term liabilities Total liabilities 138,569 48,446 - 187,015 4,245,554 - - 4,245,554 4,449,654 182,825 90,266 4,722,745 5,519,538 291,778 600,606 6,411,922 15,599,833 29,525,629 9,338,324 54,463,786 4,578,988 13,653,121 NET POSITION Investment in capital assets 9,133,663 Unrestricted Total net position $ 24,733,496 (59,530) $ 29,466,099 115 $ 13,917,312 $ 68,116,907 City of Chandler Combining Statement of Revenues, Expenses, and Changes in Net Position Non-Major Proprietary Funds For the year ended June 30, 2014 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds OPERATING REVENUES: Service fees $ 14,034,894 $ 961,067 $ - $ 14,995,961 Grants and entitlements - - 5,457,991 5,457,991 Rentals - - 806,540 806,540 Sales taxes - 70,065 - 70,065 30 8,373 665,409 673,812 14,034,924 1,039,505 6,929,940 22,004,369 General and administrative 1,211,017 100,000 - 1,311,017 Personal services 1,411,630 550,247 1,665,866 3,627,743 10,241,531 143,024 217,093 10,601,648 Commodities Housing assistance payments 770,559 363,602 546,175 - - 4,699,645 1,680,336 4,699,645 Depreciation and amortization expense 482,465 810,445 487,522 1,780,432 14,117,202 1,967,318 7,616,301 23,700,821 Miscellaneous Total operating revenues OPERATING EXPENSES: Contractual services Total operating expenses (82,278) OPERATING INCOME (LOSS) (927,813) (686,361) (1,696,452) NONOPERATING REVENUES (EXPENSES): Interest revenue 86,108 Interest expense - Accretion of bond premium Gain (loss) on disposal of capital assets 600 - Total nonoperating revenues (expenses) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 111,048 24,340 (3,388) 196 - (3,388) - 196 (24,000) (14,000) (10,000) - 72,108 (12,592) 24,340 (10,170) (940,405) (662,021) (1,612,596) 83,856 CAPITAL CONTRIBUTION AND TRANSFERS: Capital contributions - 817,424 318,769 1,136,193 Transfers in - 202,868 748,281 951,149 (15,843) (339,674) (437,471) Transfers out (81,954) Total transfers (81,954) 1,004,449 727,376 1,649,871 Change in net position (92,124) 64,044 65,355 37,275 29,402,055 13,851,957 68,079,632 NET POSITION Beginning of year, restated 24,825,620 End of year $ 116 24,733,496 $ 29,466,099 $ 13,917,312 $ 68,116,907 117 City of Chandler Combining Statement of Cash Flows Non-Major Proprietary Funds For the year ended June 30, 2014 Solid Waste CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers Cash received from grantors Cash payments to suppliers Cash payments to employees for services $ 14,189,636 (12,227,326) (1,363,147) Net cash provided (used) by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in Transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Chandler Housing Authority Airport $ 1,027,327 (649,562) (524,945) $ 955,578 5,357,404 (4,780,271) (1,590,416) Total Other Proprietary Funds $ 16,172,541 5,357,404 (17,657,159) (3,478,508) 599,163 (147,180) (57,705) 394,278 (81,954) 202,868 (15,843) 748,281 (339,674) 951,149 (437,471) (81,954) 187,025 408,607 513,678 (130,529) (80,333) (1,208,267) (1,419,129) Principal paid on bond maturities - (20,000) - (20,000) Interest paid on bonds Capital contributions - (3,788) - 318,769 (3,788) 318,769 (130,529) Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Investment income Net cash provided (used) by investing activities End of year (1,124,148) 600 24,340 111,048 86,108 600 24,340 111,048 (514,256) (105,144) (63,676) 12,629,268 $ 13,102,056 118 (889,498) 86,108 472,788 Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of year (104,121) $ 145,010 4,878,527 81,334 $ 4,364,271 17,652,805 $ 17,547,661 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Changes in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in inventories (Increase) decrease in other assets Increase (decrease) in payables Increase (decrease) in accrued payroll and compensated absences Increase (decrease) in deposits Increase (decrease) in customer advances $ Increase (decrease) in other liabilities Total adjustments Net cash provided (used) by operating activities NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES: Accretion of bond premiums Contributions of capital assets from city government (82,278) $ (927,813) $ $ (1,696,452) 482,465 810,445 487,522 236,860 (4,219) 468 (522) (81,626) (11,888) (195) (42,741) 8,754 (2,427) 2,137 (73,393) 5,979 189,380 23,438 (4,270) 48,015 16,548 - 64,563 681,441 780,633 628,656 2,090,730 $ 599,163 $ (147,180) $ $ - $ 196 817,424 $ 119 (686,361) (57,705) - 1,780,432 151,579 (195) 5,979 142,420 9,222 20,489 (83,759) $ 394,278 $ 196 817,424 City of Chandler Statement of Changes in Assets and Liabilities - Agency Fund Fiduciary Funds For the year ended June 30, 2014 Balance Balance July 1, 2013 Additions Deletions June 30, 2014 Miscellaneous Deposit Fund Assets: Equity in pooled cash and investments Total assets $ 7,000 $ 2,000 $ (2,000) $ 7,000 $ 7,000 $ 2,000 $ (2,000) $ 7,000 $ 7,000 $ 2,000 $ (2,000) $ 7,000 $ 7,000 $ 2,000 $ (2,000) $ 7,000 Liabilities: Due to others Total liabilities 120 121 122 City of Chandler Financial Data Schedule Housing and Redevelopment For the year ended June 30, 2014 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. 123 City of Chandler Financial Data Sheet Housing and Redevelopment June 30, 2014 Combining statement of net position - all HUD programs FDS Line # Low Rent Public Housing AMP 1 14.850a Account description AMP 2 14.850a All AMPs 14.850a ASSETS 111 113 114 115 Cash - unrestricted Cash - restricted for FSS escrow accounts Cash - security deposits Cash-restricted for payment of current liabilities 122 125 126 126.1 142 Accounts receivable - HUD other projects Accounts receivable - miscellaneous Accounts receivable - tenants - dwelling rents Allowance for doubtful accounts - dwelling rents Prepaid expenses and other assets 161 162 164 166 171 $ Land Buildings Furniture, equipment, machinery - admin Accumulated depreciation Notes and mortgages receivable - non-current TOTAL ASSETS AND DEFERRED OUTFLOW OF RESOURCES 1,302,476 11,114 59,924 - $ 1,097,921 2,309 58,870 - $ 2,400,397 13,423 118,794 - 52,486 5,990 (3,640) - 43,909 5,483 (2,868) - 96,395 11,473 (6,508) - 2,036,068 5,350,424 130,354 (5,653,764) - 1,590,642 9,408,947 60,106 (4,999,619) - 3,626,710 14,759,371 190,460 (10,653,383) - 3,291,432 7,265,700 10,557,132 LIABILITIES 312 321 322 331 333 341 345 Accounts payable Accrued wage/payroll taxes payable Accrued compensated absences - current Accounts payable - HUD PHA programs Accounts payable - other government Tenant security deposits Other current liabilities 12,651 21,513 169 49,249 59,924 6,596 16,374 11,810 84 38,679 58,870 5,539 29,025 33,323 253 87,928 118,794 12,135 353 354 Noncurrent liabilities - other Accrued compensated absences - noncurrent 11,114 23,456 2,309 11,651 13,423 35,107 184,672 145,316 329,988 Net investment in capital assets Restricted net position Unrestricted net position 1,863,082 11,114 1,232,564 6,060,076 2,309 1,057,999 7,923,158 13,423 2,290,563 TOTAL NET POSITION 3,106,760 7,120,384 10,227,144 TOTAL LIABILITIES NET POSITION 508.1 511.1 512.1 TOTAL LIABILITIES AND NET POSITION $ 124 3,291,432 $ 7,265,700 $ 10,557,132 Business Activities Central Office 14.850a $ Other Business 748,122 - $ 32,718 (25,718) $ 42 - 1,725,788 4,825 - $ 42 - Total 100,138 906 $ 474 37,000 339,998 4,126,185 113,561 123,619 906 96,869 37,000 11,515 (6,508) 339,998 250,000 1,227,704 129,670 (199,208) 336,450 250,000 1,227,704 162,388 (224,926) 336,450 35,470 (35,470) 755,122 2,727,149 3,482,271 478,516 14,517,919 345 20,682 266 - 3,059 - 3,404 20,682 266 - 4,825 1,570 4,825 1,570 2,791 14,823 131 906 65,823 50,065 35,220 68,828 650 906 153,751 123,619 63,770 36,960 50,173 18,199 63,596 90,266 - 36,960 $ 977,666 4,825 - Housing Choice Vouchers 14.871 Total Business Activities - 3,876,710 15,987,075 388,318 (10,913,779) 336,450 - 58,253 9,454 67,707 202,911 600,606 7,000 689,869 1,408,166 1,309,529 1,415,166 1,999,398 309 275,296 9,338,324 13,732 4,565,257 696,869 2,717,695 3,414,564 275,605 13,917,313 755,122 $ 2,727,149 $ 3,482,271 $ 478,516 $ 125 14,517,919 City of Chandler Financial Data Sheet Housing and Redevelopment For the year ended June 30, 2014 Statement of revenues, expenses, and changes in fund net position - all HUD programs FDS Line # Low Rent Public Housing AMP 1 14.850a Account description AMP 2 14.850a All AMPs 14.850a REVENUES 70300 70400 70600 70610 70710 70720 70730 71100 713 713.1 71400 71500 71600 72000 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 Gain or loss on sale of capital assets Investment income - restricted $ TOTAL REVENUES 340,886 8,050 894,285 279,308 8,590 26,304 - $ 422,141 443,131 39,461 6,678 17,452 - $ 763,027 8,050 1,337,416 318,769 15,268 43,756 - 1,557,423 928,863 2,486,286 131,285 2,450 121,024 14,475 78,429 2,016 13,047 19,560 52,256 4,544 300 31,616 42,812 1,153 50,401 188,275 149,834 121,832 75,291 11,973 11,220 23,625 85,727 2,000 104,119 12,458 48,706 1,961 12,329 16,800 217,012 4,450 225,143 26,933 127,135 3,977 25,376 36,360 52,256 4,544 600 34,057 49,444 1,213 54,358 271,589 205,420 190,624 114,372 31,658 15,922 35,360 EXPENSES 91100 91200 91300 91310 91500 91600 91900 92000 92100 92300 92400 93100 93200 93300 93800 94100 94200 94300 94500 96100 96200 96210 96300 96400 96500 97300 97350 97400 Administrative salaries Auditing fees Management fees Bookkeeping fees 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 Bad Debt - mortgages Total operating expenditures 7,545 1,154,963 Other expenditures: Housing assistance payments HAP portability-in Depreciation TOTAL EXPENDITURES 174,613 1,329,576 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES BEFORE OTHER FINANCING SOURCES (USES) 300 2,441 6,632 60 3,957 83,314 55,586 68,792 39,081 19,685 4,702 11,735 - 5,219 - 585,604 - 286,800 872,404 227,847 - - 12,764 - 1,740,567 - 461,413 2,201,980 56,459 284,306 OTHER FINANCING SOURCES (USES) 10010 10020 10030 11040 Operating transfers in Operating transfers out Operating transfers in from primary government Equity transfers 123,607 TOTAL OTHER FINANCING SOURCES (USES) CHANGE IN NET POSITION TOTAL NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR $ - - - 123,607 123,607 - 123,607 351,454 56,459 407,913 2,755,306 7,063,925 9,819,231 3,106,760 $ 7,120,384 $ 10,227,144 OTHER MEMORANDUM AMOUNTS 70600 11190 11210 Maximum annual contributions commitment Unit months available Number of unit months leased 1,956 1,930 126 1,680 1,663 3,636 3,593 Central Office 14.850a $ Business Activities Other Business 296,990 36,360 70,485 4,825 - $ 408,660 329,099 129,607 5,561 1,422 37,226 502,915 2,325 505,240 - 2,823 412 - 23,403 - 130 677 69 1,686 6,658 18,680 608 - 58 - 9,483 55,204 - 22,291 77,495 - 329,099 2,823 412 129,607 - 28,964 - 130 677 - 69 1,686 8,080 18,680 608 - 37,226 58 - 24,616 582,735 135,000 $ 2,717,695 60 60 - 43,611 22,391 - - 13,131 18,330 524,800 - - 150,000 - (296,990) (36,360) (70,485) - (296,990) (70,485) - (36,360) - - (403,835) (403,835) $ - - 712,733 7,788 - 351,152 9,168 99,952 - 95,867 26,935 600 34,187 50,121 1,213 54,427 273,275 213,500 209,304 114,980 31,658 29,053 90,916 58 12,764 9,483 2,429,134 - - 408,607 - 408,607 - 65,355 618,764 - 13,851,958 4,120,575 5,832 5,752 $ - - (333,769) (343,159) 275,605 - 4,156,196 543,449 487,522 7,606,818 - - 806,540 8,050 5,457,991 318,769 24,340 12,378 644,981 7,273,049 - 150,000 $ Total (403,835) (493,159) 3,413,963 3,414,564 $ 4,156,196 543,449 1,493 5,225,938 601 $ 4,120,575 3,159 12,378 596,667 - 166,622 3,338 69,024 43,140 94,410 5,191 45,612 - 135,000 2,755,514 Eliminations 4,732,779 (124,916) (37,819) 658,449 $ 9,483 558,119 - 38,420 696,869 - - - 43,513 296,990 36,360 70,485 5,913 4,558 - 457,819 (28,336) 135,000 $ $ 49,159 (96,580) 135,000 43,513 1,088 4,558 - Housing Choice Vouchers 14.871 Total Business Activities $ 13,917,313 127 - 128 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 130 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 146 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 150 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 157 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 160 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. 129 CITY OF CHANDLER, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 Governmental activities Net investment in capital assets 260,653,345 (1) $ 288,893,354 Restricted $ 110,932,310 106,396,966 115,343,816 56,979,639 Unrestricted 214,663,854 208,727,675 265,645,323 341,971,306 488,386,189 575,777,986 669,882,493 752,947,788 275,991,278 325,992,618 347,306,362 427,130,654 Restricted 72,538,299 52,511,899 57,835,328 24,319,427 Unrestricted 78,334,422 76,090,729 78,718,941 45,300,009 426,863,999 454,595,246 483,860,631 496,750,090 Net investment in capital assets 438,781,303 586,645,963 636,199,716 781,127,497 Restricted 183,470,609 158,908,865 173,179,144 81,299,066 Unrestricted Total primary government net position 292,998,276 915,250,188 284,818,404 1,030,373,232 344,364,264 1,153,743,124 387,271,315 1,249,697,878 Total governmental activities net position 162,790,025 $ $ 353,996,843 Business-type activities Net investment in capital assets Total business-type activities net position Primary government $ $ (1) The significant increase in this year is due to the addition of the retroactive infrastructure. 130 $ $ Schedule 1 Fiscal Year 2009 $ $ 2010 433,851,899 $ 2011 537,576,346 $ 2012 534,292,488 $ 2013 545,926,100 $ 2014 558,279,485 $ 563,033,503 117,712,539 94,440,806 41,906,129 44,047,942 112,307,412 105,723,768 271,690,158 198,059,181 260,307,288 259,783,598 179,518,042 183,088,676 823,254,596 830,076,333 836,505,905 849,757,640 850,104,939 851,845,947 387,401,986 298,938,820 281,936,017 280,440,445 355,015,004 388,837,444 - - - - - - 98,413,928 163,103,784 168,164,942 179,339,498 176,961,822 206,284,498 485,815,914 462,042,604 450,100,959 459,779,943 531,976,826 595,121,942 821,253,885 836,515,166 816,228,505 826,366,545 913,294,489 951,870,947 117,712,539 94,440,806 41,906,129 44,047,942 112,307,412 105,723,768 370,104,086 1,309,070,510 361,162,965 1,292,118,937 428,472,230 1,286,606,864 439,123,096 1,309,537,583 356,479,864 1,382,081,765 $ $ $ 131 $ $ 389,373,174 1,446,967,889 CITY OF CHANDLER, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 Expenses Governmental activities: General government $ Public safety 38,116,265 $ 56,022,025 Community development Public works Transportation and development Community services Interest and fiscal charges 36,669,140 $ 63,840,179 42,317,392 $ 54,459,719 76,200,082 80,860,917 6,973,474 8,706,473 9,154,407 11,692,559 17,175,426 31,940,075 32,402,242 39,241,652 - - - - 19,017,024 24,087,695 29,464,039 33,086,565 10,649,133 11,658,090 11,479,112 14,880,604 147,953,347 176,901,652 201,017,274 234,222,016 Water 41,689,649 38,582,431 40,687,283 53,554,653 Wastewater 25,825,966 25,294,189 27,230,862 30,657,939 Solid waste 9,598,287 8,154,317 9,843,824 6,845,979 Airport 1,582,079 1,765,772 1,757,279 1,602,268 Chandler housing authority 7,773,223 6,713,829 9,133,427 7,593,242 86,469,204 80,510,538 88,652,675 100,254,081 Total governmental activities expenses Business-type activities: Total business-type activities expenses Total primary government expenses $ 234,422,551 $ 257,412,190 $ 289,669,949 $ 334,476,097 (1) In FY 2011 the City changed its functional categories to eliminate "Community development" and "Public works" and add "Transportation and development." 132 Schedule 2a Fiscal Year 2009 $ $ 2010 52,293,004 $ 2011 48,920,813 $ 2012 67,808,567 87,609,165 92,421,801 90,738,477 10,429,826 11,715,276 - 47,180,197 56,155,939 - - - 50,909,361 $ 2013 88,876,901 $ 2014 90,143,339 $ 99,231,501 89,141,559 95,974,126 94,738,371 (1) - - - (1) - - - (1) 52,111,019 55,846,316 52,183,052 34,278,998 35,299,676 28,919,560 28,966,271 30,979,208 32,331,286 12,938,524 13,541,708 12,767,934 12,425,819 11,777,701 10,044,363 244,729,714 258,055,213 251,143,899 271,521,569 284,720,690 288,528,573 53,201,379 62,556,496 57,452,876 56,277,327 55,440,712 55,877,774 36,079,767 38,227,999 37,896,180 38,804,360 40,401,849 41,969,764 12,076,998 14,605,448 13,443,102 13,756,352 13,974,858 14,131,202 2,269,691 1,797,991 2,107,354 1,941,752 1,960,788 1,980,706 7,239,185 7,654,449 7,580,783 7,642,503 7,473,891 7,616,301 110,867,020 124,842,383 118,480,295 118,422,294 119,252,098 121,575,747 355,596,734 $ 382,897,596 $ 369,624,194 $ 389,943,863 133 $ 403,972,788 $ 410,104,320 CITY OF CHANDLER, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 Program Revenues Governmental activities: Charges for services: General government $ Public safety 11,770,912 $ 12,359,183 $ 12,793,179 $ 12,629,779 2,921,707 3,303,895 4,178,941 4,317,843 Community development 10,119,322 8,338,156 10,405,425 5,488,535 Public works 14,037,835 13,145,192 15,831,165 Transportation and development Community services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues 24,529,838 (1) - - - - 1,988,832 2,272,309 2,272,826 2,699,469 1,041,858 2,167,327 3,707,115 1,897,300 13,880,993 12,751,519 26,428,112 36,104,151 55,761,459 65,722,227 72,930,790 78,968,242 Business-type activities: Charges for services: Water 36,860,006 38,112,680 39,054,531 40,613,727 Wastewater 20,541,547 20,499,458 21,083,587 25,145,258 Solid waste 12,979,695 9,787,298 12,218,720 12,769,423 Airport 931,547 1,005,728 974,190 773,449 Community services - housing authority 631,494 648,766 661,509 1,061,658 Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues 6,839,056 6,634,435 6,312,438 6,114,138 35,817,247 23,547,210 28,014,518 19,782,193 111,408,195 102,666,997 108,870,196 106,470,118 $ 167,169,654 $ 168,389,224 $ 181,800,986 $ 185,438,360 $ (92,191,888) $ (111,179,425) $ (128,086,484) $ (155,253,774) $ (149,037,737) Net (expense)/revenue Governmental activities Business-type activities Total primary government net (expense) 24,938,991 $ (67,252,897) 22,156,459 $ (89,022,966) 20,217,521 $ (107,868,963) (1) System development fees were reclassed to charges for services under program revenues. (2) In FY 2011 the City changed its functional categories to eliminate "Community development" and "Public works" and add "Transportation and development." 134 6,216,037 Schedule 2b Fiscal Year 2009 $ 2010 14,349,483 $ 2011 16,621,003 $ 2012 22,548,679 $ 2013 31,381,062 $ 2014 35,898,378 $ 38,832,217 4,802,272 7,110,304 5,658,628 3,581,458 3,336,188 - 5,226,726 6,025,846 - (2) - - - - - 11,884,554 (2) 27,905,311 10,150,102 16,145,692 5,235,864 4,515,980 4,079,359 4,136,285 8,240,732 7,744,507 2,337,910 5,510,710 5,890,147 6,162,320 3,999,536 4,744,636 23,902,360 8,159,960 16,041,213 11,016,136 9,116,635 10,170,236 59,436,073 51,279,991 66,102,580 86,395,443 74,780,433 83,498,332 39,707,910 42,276,145 43,708,974 49,565,071 48,258,282 49,588,376 25,922,530 28,406,808 31,610,009 35,907,085 37,690,400 40,509,289 12,762,120 12,891,628 13,277,403 13,890,957 13,836,363 14,034,894 741,556 815,751 995,307 996,605 976,102 961,067 595,420 521,404 457,781 466,556 637,329 806,540 6,225,928 6,367,024 6,297,200 6,341,087 5,785,335 5,457,991 9,110,319 8,484,239 8,659,772 19,118,567 81,572,568 72,176,582 95,065,783 99,762,999 105,006,446 126,285,928 188,756,379 183,534,739 (2) 5,794,329 7,375,050 5,861,044 - - - $ 154,501,856 $ 151,042,990 $ 171,109,026 $ 212,681,371 $ 263,536,812 $ 267,033,071 $ (185,293,641) $ (206,775,222) $ (185,041,319) $ (185,126,126) $ (209,940,257) $ (205,030,041) $ (143,071,049) (15,801,237) $ (201,094,878) (25,079,384) $ (231,854,606) (13,473,849) $ (198,515,168) 7,863,634 $ 135 (177,262,492) 69,504,281 $ (140,435,976) 61,958,992 CITY OF CHANDLER, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2005 2006 2007 2008 Governmental Revenues and Other Changes in Net Position Governmental activities: Taxes: Property taxes $ Sales taxes Franchise fees Highway user taxes Other taxes 22,743,537 $ 25,016,760 $ 26,921,292 $ 34,063,123 97,226,841 75,702,332 82,327,461 95,410,460 3,032,260 2,198,738 3,230,429 3,937,952 - - 16,490,129 15,856,863 - - 3,481,086 3,786,677 State shared revenues 40,050,636 45,853,506 57,716,644 62,970,459 System development fees 13,878,663 - - - 7,862,804 12,286,630 17,868,181 20,823,059 362,343 10,736 1,822,070 767,221 - 34,500,000 - - 924,227 478,441 469,201 534,086 164,556,802 202,672,272 223,409,492 239,966,281 Investment income Miscellaneous Westcor contract payment Transfers in (out) Total governmental activities (1) Business-type activities: Sales tax Investment income Miscellaneous Transfers in (out) - - - 6,424,600 6,876,399 5,906,545 1,043,407 (469,200) 1,792,816 (534,086) 7,450,606 7,165,275 232,589 (924,227) Total business-type activities: Total primary government 4,069,440 532,354 (478,441) 3,377,802 $ 6,478,513 167,934,604 $ 209,150,785 $ $ 72,364,914 $ 28,316,793 100,681,707 230,860,098 $ $ 22,796,183 $ 28,634,972 51,431,155 247,131,556 $ 95,323,008 $ 84,712,507 $ 27,668,127 122,991,135 $ 13,381,312 98,093,819 Change in Net Position Governmental activities Business-type activities Total primary government (1) System development fees were reclassed to charges for services under program revenues. 136 Schedule 2c Fiscal Year 2009 $ 2010 38,957,986 $ 85,897,334 40,617,269 $ 83,019,726 2012 36,158,574 $ 86,523,295 2013 31,877,716 $ 97,485,387 2014 29,656,415 $ 102,200,517 28,348,952 103,880,801 3,264,093 3,174,390 2,819,521 2,988,456 2,936,533 3,145,449 13,849,284 13,116,481 13,287,878 11,823,280 12,929,504 13,352,622 7,921,275 13,965,973 88,561 5,979,715 6,295,212 3,243,937 61,211,289 54,492,427 47,732,614 45,958,627 51,347,206 55,423,759 - - - - - - 10,045,274 3,487,145 1,841,244 1,221,923 2,843,417 1,869,128 995,606 850,191 3,071,588 1,116,832 2,181,627 819,766 - - - - - (1,542,346) 873,357 220,599,795 $ 2011 (244,702) 213,596,959 (74,075) 191,278,573 - (102,875) 198,377,861 (132,082) 210,287,556 209,952,332 - - - - - 70,065 2,536,237 756,641 533,313 389,446 1,180,290 788,025 788,478 1,542,346 1,422,790 (873,357) 946,507 244,702 1,351,829 74,075 1,409,437 102,875 1,683,332 132,082 4,867,061 1,306,074 1,724,522 1,815,350 2,692,602 2,673,504 225,466,856 $ 214,903,033 $ $ 35,306,154 $ (10,934,176) 24,371,978 193,003,095 $ 200,193,211 $ $ 6,821,737 $ (23,773,310) (16,951,573) $ 6,237,254 $ 13,251,735 $ (11,749,327) (5,512,073) $ 9,678,984 22,930,719 137 212,980,158 $ 212,625,836 $ 347,299 $ 4,922,291 $ 72,196,883 72,544,182 $ 64,632,496 69,554,787 CITY OF CHANDLER, ARIZONA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2005 General fund Reserved $ Unreserved 2006 56,325,826 $ 124,519,771 2007 15,211,490 $ 148,606,301 2008 12,349,638 $ 189,087,760 28,237,521 196,093,067 Nonspendable - - - - Restricted - - - - Assigned - - - - Unassigned Total general fund $ 180,845,597 $ 163,817,791 $ 201,437,398 $ 224,330,588 $ 99,267,829 $ 100,167,158 $ 109,777,210 $ 43,039,742 All other governmental funds Reserved Unreserved, reported in: Special revenue funds 9,259,261 8,089,144 14,064,542 17,752,306 Capital projects funds - 253,903 9,158,971 11,608,190 Restricted - - - - Unassigned - - - - Total all other governmental funds $ 108,527,090 $ 108,510,205 (1) In FY 2011 the City implemented GASB 54, thus changing how fund balance is categorized. 138 $ 133,000,723 $ 72,400,238 Schedule 3 Fiscal Year 2009 $ 2010 30,482,311 $ 2011 62,149,646 $ 2012 - (1) 137,041,044 - (1) - - - - - 893,067 (1) 947,804 938,549 892,533 - - 844,754 (1) 939,867 939,867 1,166,105 - - 61,733,537 (1) 102,635,587 101,115,766 95,185,696 224,939,872 199,190,690 $ 98,872,954 162,344,312 (1) $ $ 97,267,450 $ 61,355,662 $ - (1) $ - $ 2014 194,457,561 $ $ 2013 - $ - $ 69,223,074 173,746,332 $ 66,077,714 169,071,896 $ 82,453,462 179,697,796 $ - $ - $ - 18,786,740 18,103,651 - (1) - - 7,868,412 7,379,375 - (1) - - - - - 105,756,072 (1) 111,378,788 111,367,545 104,557,663 - - (12,315,197) (1) (12,798,348) (13,646,428) (11,034,021) 123,922,602 $ 86,838,688 $ 93,440,875 $ 98,580,440 139 $ 97,721,117 - $ 93,523,642 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS REVENUES LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2005 Taxes - local $ 2006 102,701,196 $ 2007 109,141,434 2008 - (1) $ $ - 51,677,502 60,107,031 - (1) - Property taxes - - 26,909,841 (1) 33,844,181 Sales taxes - - 95,410,460 (1) 97,226,841 Taxes - intergovernmental Franchise fees - - 3,230,429 3,937,952 Highway user taxes - - 16,490,129 15,856,863 Other taxes - - State shared revenues - - 57,716,644 62,970,459 Grants and entitlements 14,100,944 9,296,423 7,610,807 10,553,680 System development fees 8,111,597 3,481,086 (1) 3,786,677 13,878,663 10,322,313 11,871,969 Special assessments 439,565 303,336 309,386 426,428 License and permits 7,262,403 5,541,215 6,728,309 3,894,368 15,133,670 15,475,362 18,216,653 17,254,859 4,136,342 4,231,306 4,058,090 4,342,621 19,580 8,363 89,875 94,575 250 500 50,000 50,000 Investment income 6,987,824 10,699,944 15,589,318 18,334,581 Miscellaneous 2,667,611 1,632,785 1,830,328 1,255,681 Charges for current services Fines and forfeitures Rentals Contributions Total revenues $ 219,005,550 $ 226,760,012 $ 269,593,324 (1) As of fiscal year ended June 30, 2007 the City reclassed the governmental funds revenues of Taxes-local and Taxes-intergovernmental to Property taxes, Sales taxes, and Other taxes. 140 $ 281,941,363 Schedule 4 Fiscal Year 2009 $ $ 2010 - $ 2011 - $ 2012 - $ 2013 - $ 2014 - $ - - - - - - - 38,677,156 40,259,579 36,301,709 32,329,560 29,841,739 28,442,823 85,897,334 83,019,726 86,523,295 97,485,387 102,200,517 103,880,801 3,264,093 3,174,390 2,819,521 2,988,456 2,936,533 3,145,449 13,849,284 13,116,481 13,287,878 11,823,280 12,929,504 13,352,622 7,921,275 13,965,973 88,561 5,979,715 6,295,212 3,243,937 61,211,289 54,492,427 47,732,614 45,958,627 51,347,206 55,423,759 18,168,904 10,377,502 14,759,620 13,826,606 9,480,090 10,187,895 4,475,029 4,768,306 6,739,920 11,724,823 7,781,083 11,846,275 863,747 663,209 673,064 678,027 676,127 678,843 2,667,720 2,758,392 3,208,944 6,955,605 4,887,466 5,479,384 19,492,740 19,420,434 18,002,168 19,938,566 19,786,513 20,269,976 4,912,159 5,336,294 4,697,317 4,700,430 5,825,098 4,622,215 138,667 101,322 387,952 455,842 570,638 732,807 50,000 50,000 100,000 100,000 100,000 100,000 8,825,695 3,171,308 1,635,258 1,034,895 2,529,078 1,623,973 1,661,772 1,913,571 4,593,104 1,392,691 1,384,123 650,117 272,076,864 $ 256,588,914 $ 241,550,925 $ 141 257,372,510 $ 258,570,927 $ 263,680,876 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2005 General government $ Public safety 2006 41,135,736 $ 57,630,321 Community development Public works Transportation and development 2007 33,729,455 $ 64,090,649 2008 38,124,478 $ 75,800,634 51,261,849 78,306,604 7,438,317 8,740,380 8,989,308 11,593,642 38,421,485 32,555,171 22,987,692 19,306,381 - - - - Community services 20,893,626 22,738,420 25,714,032 28,830,926 Capital improvements 33,828,009 49,884,875 75,524,840 104,836,442 Principal retirement 8,329,500 17,122,071 12,374,500 16,659,500 Interest and fiscal charges 9,180,338 10,465,983 10,669,877 14,437,346 174,917 135,437 189,840 179,201 Debt service: Bond issuance costs Total expenditures Debt service as a percentage of noncapital expenditures $ 217,032,249 $ 11.1% 239,462,441 15.9% $ 270,375,201 12.1% (1) In FY 2011 the City changed its functional categories to eliminate "Community development" and "Public works" and add "Transportation and development." 142 $ 325,411,891 14.1% Schedule 5 Fiscal Year 2009 $ $ 2011 2010 40,503,113 $ 44,663,091 84,493,816 85,390,303 10,509,467 11,614,214 19,283,643 17,664,633 - - $ 2012 43,636,784 $ 84,007,752 2013 48,894,811 $ 2014 44,512,533 $ 46,807,747 82,820,106 89,587,613 90,068,218 - (1) - - - - (1) - - - 22,126,233 (1) 25,532,739 24,807,578 23,418,175 29,916,002 30,078,856 22,836,317 23,255,568 23,554,854 23,771,925 124,680,957 106,366,737 67,299,941 29,787,069 41,793,319 45,657,265 15,275,000 17,260,000 15,090,000 15,970,000 26,870,000 15,955,000 13,059,295 13,646,479 12,901,616 12,550,323 11,908,025 10,682,206 961,100 183,969 278,512 - - 145,970 338,682,393 12.5% $ 326,868,282 13.3% $ 268,177,155 $ 238,810,616 13.3% 13.5% 143 $ 263,033,922 16.4% $ 256,506,506 11.6% 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 2005 2006 2007 2008 Other Financing Sources (Uses) Bond premium $ Face amount of bonds issued Proceeds from sale of capital assets Payment to escrow agent 852,671 $ 30,905,000 264,352 205,936 (11,228,422) Westcor contract payment 515,129 35,720,000 $ - 1,975,876 $ 165,431 88,405,000 7,370,000 173,742 280,969 (24,335,292) - - 34,500,000 - - Transfers in 33,226,080 37,204,132 31,525,563 38,442,603 Transfers out (35,170,013) (39,584,767) (34,246,951) (41,108,342) 23,664,668 63,745,430 63,497,938 5,150,661 Total other financing sources and (uses) Net change in fund balances $ 25,637,969 144 $ (17,956,999) $ 62,716,055 $ (38,319,867) Schedule 6 Fiscal Year 2009 $ 2010 2,348,878 $ 120,513,000 290,569 $ 10,450,000 219,793 97,609 (10,556,600) - $ 2011 2012 1,047,424 $ 2013 - $ 2014 - 20,285,000 - - 108,929 89,007 76,381 - - (10,816,839) $ 562,052 8,660,000 161,126 (9,061,800) - - - - - - 40,593,319 46,309,016 41,605,646 20,576,188 32,849,979 24,586,418 (44,937,903) (39,144,322) (56,040,439) (22,685,504) (33,997,394) (25,653,741) 118,737,087 7,446,272 (3,810,279) (2,020,309) (1,071,034) (745,945) 52,131,648 $ (62,833,096) $ (30,436,509) $ 16,541,585 145 $ (5,533,759) $ 6,428,425 CITY OF CHANDLER, ARIZONA TAXABLE REVENUE BY CATEGORY LAST TEN FISCAL YEARS Fiscal Year 2005 2006 2007 2008 Amusements Contracting General Retail Hotel/Motel 1 Miscellaneous Related Revenue Publishing Rentals - Personal Property Rentals - Real Property Restaurant/Bar Telecommunications Use Tax Utilities $ 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 Total Sales and Use Taxes $ 75,619,727 $ 89,390,316 $ 95,410,462 $ 97,226,776 City Direct Sales Tax Rate 2 1.70% 1.72% 1.72% 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%. 146 1.72% Schedule 7 Fiscal Year 2009 2010 2011 2012 2013 2014 $ 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 $ 602,027 6,573,348 36,560,075 1,611,912 2,911,821 382,080 2,389,241 8,921,788 7,436,900 3,974,448 869,092 10,786,994 $ 673,666 6,380,957 38,741,270 1,973,790 2,551,354 351,250 2,462,219 9,479,850 7,971,183 3,524,076 1,000,342 11,413,338 $ 714,641 10,869,566 42,844,871 2,255,786 2,334,179 352,550 2,606,371 10,025,726 8,670,199 3,628,007 1,054,968 12,128,475 $ 717,442 10,408,518 45,331,307 2,288,989 2,937,426 334,981 2,884,618 10,817,611 9,069,109 3,731,350 1,315,599 12,363,565 $ 728,110 9,780,645 47,454,681 2,472,754 2,660,201 258,547 2,949,421 11,058,203 9,542,714 3,533,636 1,090,428 12,421,526 $ 85,897,334 $ 83,019,726 $ 86,523,295 $ 97,485,337 $ 102,200,515 $ 103,950,866 1.75% 1.75% 1.77% 1.76% 147 1.75% 1.75% CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING SALES AND USE TAX RATES LAST TEN FISCAL YEARS Schedule 8 Overlapping Rates Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 City Direct Maricopa County Tax Rate Tax Rate 1.70% 1.72% 1.72% 1.72% 1.75% 1.75% 1.77% 1.76% 1.75% 1.75% 1 0.67% 0.68% 0.68% 0.68% 0.67% 0.67% 0.67% 0.67% 0.67% 0.68% 2 State of Arizona Tourism & Sports Authority Tax Rate 3 Tax Rate 4 5.13% 5.14% 5.12% 5.09% 5.02% 5.05% 5.85% 5.90% 5.80% 5.07% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% Source: Tax & License Division 1 The City's direct tax rate was calculated using a weighted average of the actual revenues collected for each category. Tax rates vary by category, currently ranging from 1.5% to 4.4%. City tax rates were last increased effective 5/01/1994. 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%. No rate changes in the past ten fiscal years. 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 6.5% to 6.6%. State tax rate increases during the past ten fiscal years: 1.0% effective 6/01/2010 through 5/31/2013. 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. 148 CITY OF CHANDLER, ARIZONA PRINCIPAL SALES AND USE TAXPAYERS CURRENT YEAR AND TEN YEARS AGO Schedule 9 Fiscal Year 2014 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 Taxpayer O Utility Department Store Grocery Store Department Store Home Improvement Telecommunications Department Store Utility Vehicle Dealer Department Store Grocery Store Construction Vehicle Dealer Vehicle Dealer Construction Sales and Use Tax Payments $ $ 9,489,412 3,138,381 2,357,350 1,757,921 1,492,709 1,405,133 1,357,116 1,323,354 1,298,513 1,116,571 Fiscal Year 2005 Rank Percentage of Total Sales and Use Tax Payments 1 2 3 4 5 6 7 8 9 10 9.13% 3.02% 2.27% 1.69% 1.44% 1.35% 1.31% 1.27% 1.25% 1.07% $ 23.80% $ 24,736,460 Rank Percentage of Total Sales and Use Tax Payments 6,045,093 1 7.99% 2,020,967 2 2.67% 1,384,671 4 1.83% 1,260,875 6 1,461,943 1,364,173 1,221,700 1,199,217 1,039,586 1,031,823 3 5 7 8 9 10 Sales and Use Tax Payments 18,030,048 0.00% 1.93% 1.80% 1.62% 1.59% 1.37% 1.36% 23.84% 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. 149 CITY OF CHANDLER, ARIZONA RATIOS OF OUTSTANDING DEBT LAST TEN FISCAL YEARS Schedule 10 Governmental Activities Fiscal Year General Obligation Bonds Revenue Bonds 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 120,805,000 140,130,000 197,075,000 187,645,000 294,588,000 282,888,000 279,968,000 268,148,000 256,288,000 233,678,000 45,015,000 42,920,000 40,480,000 37,655,000 34,690,000 31,800,000 28,620,000 25,745,000 22,045,000 18,000,000 Special Assessment Bonds Accrued Interest - Capital Appreciation Bonds 1,333,500 1,219,000 1,099,500 8,345,000 7,820,000 7,315,000 6,190,000 5,780,000 5,350,000 4,905,000 32,426,569 33,620,916 34,505,099 35,000,654 - Business-type Activities Fiscal Year General Obligation Bonds Revenue Bonds Certificates of Participation 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 21,270,000 19,415,000 62,410,000 60,395,000 188,612,000 185,032,000 179,747,000 170,987,000 161,567,000 150,972,000 114,800,000 108,870,000 101,095,000 93,000,000 76,415,000 67,580,000 60,280,000 52,670,000 44,740,000 36,095,000 9,335,000 - 34,040,000 34,040,000 48,540,000 47,440,000 45,695,000 148,380,000 Net General Bonded Debt Outstanding Estimated Actual Taxable Value of Property Percentage of Estimated Actual Taxable Value of Property 142,075,000 159,545,000 259,485,000 248,040,000 483,200,000 467,920,000 441,393,462 419,876,316 401,435,614 368,463,828 12,256,368,621 13,936,132,832 15,180,800,679 26,166,428,389 30,523,597,506 31,011,422,761 22,396,334,191 21,102,582,630 21,502,506,694 23,588,561,444 1.16% 1.14% 1.71% 0.95% 1.58% 1.51% 1.97% 1.99% 1.87% 1.56% Fiscal Year General Bonded Debt 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 142,075,000 159,545,000 259,485,000 248,040,000 483,200,000 467,920,000 459,715,000 439,135,000 417,855,000 384,650,000 Less Amount Available in Debt Service Fund 18,321,538 19,258,684 16,419,386 16,186,172 Excise Tax Revenue Obligations Intergovernmental Loans Total Primary Government 2 56,942 37,135 16,304 - 345,042,011 346,212,051 436,680,903 422,040,654 636,165,000 608,655,000 603,345,000 570,770,000 535,685,000 592,030,000 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. 150 Percentage of Personal Income 1 5.97% 5.70% 7.23% 6.22% 9.20% 9.35% 9.22% 7.84% 6.71% 7.54% Per Capita 1 1,495 1,496 1,877 1,804 2,704 2,578 2,535 2,383 2,213 2,452 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30, 2014 Schedule 11 Governmental Unit Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt Debt repaid with property taxes State of Arizona Maricopa County Maricopa County Community College District East Valley Institute of Technology Chandler Unified School District No. 80 Mesa Unified School District No. 4 Gilbert Unified School District No. 41 Kyrene Elementary School District No. 28 Tempe Union High School District No. 213 None None $ 766,085,000 None 194,110,000 226,400,000 135,405,000 116,020,000 80,225,000 4.05% 6.75 6.75 13.52 71.08 4.96 1.99 21.97 16.21 None None $ Subtotal, overlapping debt 51,708,805 None 137,969,927 11,232,863 2,690,620 25,493,284 13,000,461 242,095,960 384,650,000 City direct debt 100.00 384,650,000 $ Total direct and overlapping debt 626,745,960 Source: Piper Jaffray & Co. 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 2013-14 for the overlapping jurisdiction to the amount of such valuation which lies within the City of Chandler. 151 CITY OF CHANDLER, ARIZONA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 2005 2006 2007 2008 6% General Obligation Bond Limitation Debt limit $ Total net debt applicable to limit Legal debt margin 118,749,422 $ 116,449,443 61,660,000 $ 57,089,422 $ 74,720,000 $ 41,729,443 179,351,393 $ 66,460,000 $ 207,310,517 7,795,000 112,891,393 $ 199,515,517 Total net debt applicable to the limit as a percentage of the debt limit 52% 64% 37% (1) 4% 20% General Obligation Bond Limitation Debt limit $ Total net debt applicable to limit Legal debt margin 395,831,408 $ 388,164,810 80,415,000 $ 315,416,408 $ 84,825,000 $ 303,339,810 597,837,975 $ 193,025,000 $ 691,035,056 240,245,000 404,812,975 $ 450,790,056 Total net debt applicable to the limit as a percentage of the debt limit 20% 22% 32% (1) 35% Source: Piper Jaffray, Inc. (1) In November 2006, Arizona Revised Statutes were amended to move public safety and emergency services, streets and transportation from the 6 percent category to the 20 percent category. 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, transportation, playgrounds and recreational facilities up to an amount not to exceed 20 percent of secondary assessed valuation. Cities may issue general obligation bonds for any other purpose up to an amount not to exceed 6 percent of secondary assessed valuation. 152 Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2014 Net secondary assessed valuation as of June 30, 2014 $ Debt limit (6% of assessed value) 2,381,590,083 142,895,404 Debt applicable to limit: 6% general obligation bonds 10,198,000 Legal 6% debt margin $ 132,697,404 Debt limit (20% of assessed value) $ 476,318,016 Debt applicable to limit: 20% general obligation bonds 374,452,000 Legal 20% debt margin $ 101,866,016 Fiscal Year 2009 $ 210,484,297 2010 $ 10,934,000 $ 199,550,297 701,614,322 $ 229,348,322 67% 200,990,297 $ 701,614,322 $ 243,188,322 65% $ 135,310,758 134,756,597 $ 493,725,323 $ 47,371,323 90% $ 123,470,758 $ 451,035,860 $ 23,740,860 95% 153 $ 119,653,600 $ 435,075,335 $ 28,089,335 94% 132,697,404 7% $ 406,986,000 $ 142,895,404 10,198,000 8% 427,295,000 $ 130,522,600 2014 10,869,000 9% 446,354,000 $ 2013 11,840,000 9% 458,426,000 $ 148,117,597 2012 13,361,000 5% 472,266,000 $ $ 9,494,000 5% $ 210,484,297 2011 476,318,016 374,452,000 $ 101,866,016 79% CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13a Street & Highway Revenue Bonds Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Highway User Taxes 12,852,329 13,870,790 16,490,129 15,856,863 13,849,284 13,116,481 13,287,878 11,823,280 12,929,504 13,352,622 Less: Operating Expenses 8,302,871 7,731,437 8,527,904 8,299,229 10,599,041 9,018,598 9,336,554 7,895,663 10,893,216 10,547,032 Net Available Revenue 4,549,458 6,139,353 7,962,225 7,557,634 3,250,243 4,097,883 3,951,324 3,927,617 2,036,288 2,805,590 Debt Service Principal Interest 2,095,000 2,440,000 2,825,000 2,965,000 3,050,000 3,180,000 2,875,000 3,700,000 3,830,000 3,975,000 1,863,289 1,870,433 1,735,306 1,628,797 1,572,829 1,198,194 1,176,009 936,975 833,475 515,175 Coverage 1.15 1.42 1.75 1.65 0.70 0.94 0.98 0.85 0.44 0.62 Water Revenue Bonds Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Utility Service Charges 36,860,006 38,112,680 39,054,531 40,613,727 39,707,910 42,276,145 43,708,974 49,556,831 48,258,282 49,588,376 Less: Operating Expenses 25,371,528 22,633,168 23,844,731 32,812,618 31,084,108 31,137,157 26,834,274 26,351,735 26,890,219 27,840,478 Net Available Revenue 11,488,478 15,479,512 15,209,800 7,801,109 8,623,802 11,138,988 16,874,700 23,205,096 21,368,063 21,747,898 Debt Service Principal Interest 4,282,606 4,275,097 4,447,321 4,643,032 4,854,151 5,471,256 6,007,332 6,498,090 6,062,435 3,300,000 2,798,390 3,181,666 2,881,971 2,700,799 2,419,526 2,205,623 1,875,330 1,641,612 1,375,854 869,064 Coverage 1.62 2.08 2.08 1.06 1.19 1.45 2.14 2.85 2.87 5.22 Excise Tax Revenue Obligations Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Excise Tax Collections 148,768,677 141,025,083 136,164,353 148,885,867 156,621,139 162,664,325 Less: Operating Expenses Net Available Revenue - 148,768,677 141,025,083 136,164,353 148,885,867 156,621,139 162,664,325 Debt Service Principal 500,000 1,100,000 1,745,000 1,815,000 6,180,000 Interest 462,667 1,133,063 1,118,063 1,703,358 1,584,863 4,483,662 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 5 for breakdown of revenue pledged for Excise Tax Revenue Obligations first pledged February 4, 2009. 154 Coverage 0.00 0.00 0.00 0.00 321.55 86.36 61.39 43.18 46.07 15.25 CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13b Wastewater Revenue Bonds Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Utility Service Charges 20,541,547 20,499,458 21,083,587 25,145,258 25,922,530 28,406,808 31,610,009 35,907,085 37,690,400 40,509,289 Less: Operating Expenses 12,802,253 14,217,466 14,349,752 17,923,089 17,663,644 15,821,939 15,759,431 16,752,467 18,879,022 18,780,034 Net Available Revenue 7,739,294 6,281,992 6,733,835 7,222,169 8,258,886 12,584,869 15,850,578 19,154,618 18,811,378 21,729,255 Debt Service Principal Interest 3,207,394 3,499,903 3,647,679 3,786,968 3,915,849 3,678,744 1,602,668 1,431,910 2,197,565 1,185,000 1,592,081 1,828,920 1,691,169 1,554,504 1,341,752 1,104,530 947,148 874,363 809,286 585,029 Coverage 1.61 1.18 1.26 1.35 1.57 2.63 6.22 8.31 6.26 12.28 Solid Waste Revenue Bonds Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Utility Service Charges 9,773,505 - Less: Operating Expenses 8,703,517 - Debt Service Net Available Revenue Principal 1,069,988 - - Note: 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 debt was defeased June 29, 2005. 155 Interest 71,844 - Coverage 14.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (1) CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13c Municipal Property Corporation Certificates of Participation Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Water & Sewer Utility Service Charges 57,401,553 - Less: Operating Expenses 38,173,781 - Debt Service Net Available Revenue 19,227,772 - Principal Interest 875,000 - Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) All remaining debt was defeased in 2006. 156 755,295 - Coverage 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 (2) 2005 230,845 5,777,588,660 30.8 3.3% 25,028 2006 231,399 6,075,380,745 31.6 3.0% 26,255 2007 232,699 6,038,771,749 31.1 2.5% 25,951 2008 233,998 6,787,111,990 31.2 3.2% 29,005 2009 235,298 6,916,584,710 32.8 6.2% 29,395 2010 236,123 6,507,077,634 32.5 6.9% 27,558 2011 237,979 6,541,804,731 31.7 6.6% 27,489 2012 239,538 7,279,080,744 32.4 6.1% 30,388 2013 242,115 7,983,015,780 34.9 6.0% 32,972 2014 241,460 7,846,725,620 35.0 5.5% 32,497 (4) (5) Sources: 1 City's Planning Division based on July 1st 2 3 City's Economic Development Division Arizona Office of Employment and Population Statistics 4 Interim U.S. Census 5 Official U.S. Census Notes: 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. 157 CITY OF CHANDLER, ARIZONA PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO 2014 Percentage Employer Employees Rank of Total City Employment Intel Corporation 11,800 1 9.13% Bank of America 3,800 2 2.94% Chandler Unified School District 3,000 3 2.32% Freescale Semiconductors 3,000 4 2.32% Wells Fargo Ocotillo Corp. Campus 2,600 5 2.01% Verizon Wireless 2,300 6 1.78% Chandler Regional Hospital 2,100 7 1.63% Paypal 1,900 8 1.47% Orbital Sciences 1,650 9 1.28% Microchip Technology 1,626 10 1.26% City of Chandler - - - Motorola - - - Countrywide Home Mortgage - - - Americredit - - - Amkor - - - Total 33,776 Source: City's Economic Development Division and Arizona Office of Employment and Population Statistics. 158 26.14% Schedule 15 2005 Percentage Employees Rank of Total City Employment 9,500 1 - - 2,400 2 1.89% 1,800 4 1.42% 2,200 3 1.74% - - 1,100 7 - - 1,100 7 0.87% 1,485 6 1.17% 1,523 5 1.20% 1,100 7 0.87% 800 8 0.63% 650 9 0.51% 600 10 0.47% 24,258 7.50% 0.87% 19.14% 159 CITY OF CHANDLER, ARIZONA EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Fiscal Year 2005 2006 2007 2008 5 6 70 18 40 24 96 5 5 74 18 39 25 95 5 5 6 79 17 6 104 18 44 27 101 48 29 106 Total General Government 259 261 279 316 Total Planning and Development 111 108 111 114 178 182 219 243 3 55 6 3 59 3 64 Airport Engineering, development and Real estate Total Public Works 3 48 6 6 6 74 131 71 135 76 144 85 158 Police Fire Total Public Safety 436 195 631 460 207 667 487 219 706 496 228 724 5 85 41 18 149 5 85 41 21 152 5 5 85 42 21 153 88 43 20 156 1,459 1,505 1,612 1,711 Full Time Equivalent Personnel Mayor and council City clerk City manager Communications/public affairs City magistrate Law Management services Total Transportation and Development Total Community Services Public works administration Streets Municipal utilities administration Water Wastewater Solid waste Total Municipal Utilities Total Primary Government Source: City's Human Resources Division (1) The significant change in this year is a result of the Neighborhood Programs moving from the Mayor and Council to the City Manager Department. Code Enforcement, Tourism, and Real Estate Services Downtown are new to the City Manager Department. (2) The significant change in this year is a result of the City offering a retirement incentive, voluntary separation packages, and movement between departments to retain employees. (3) The significant change in this year is the result of Public Works Department and Planning and Development Department consolidated into one Transportation and Development 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. 160 (1) Schedule 16 Fical Year 2009 2010 2011 2012 2013 2014 5 5 5 6 4 4 6 103 18 6 96 15 5 122 12 4 124 14 5 178 19 6 174 13 43 28 105 41 27 95 40 27 85 38 30 72 39 29 72 35 29 66 308 285 296 288 346 327 103 80 (2) (2) (2) - (3) - - - 172 (3) 170 163 159 231 192 199 207 226 229 3 57 3 50 - (3) (3) - - - 6 6 (3) - - - 80 146 74 133 - (3) - - - 483 223 706 478 219 697 467 218 685 467 238 705 468 234 702 467 224 691 5 6 5 5 4 5 86 41 18 150 80 42 20 148 88 42 20 155 89 42 19 155 85 46 18 153 87 46 16 154 1,620 1,569 1,537 1,549 1,556 1,530 161 CITY OF CHANDLER, ARIZONA OPERATING INDICATORS BY FUNCTION / PROGRAM LAST TEN FISCAL YEARS Fiscal Year Function/Program 2005 General Government Privilege tax licenses Meeting notices posted City council actions and agenda items prepared Grant awards received Inventory turnover ratio Transportation & Development Building permits issued Community Services Library circulation Center for the Arts events & exhibits Public Safety Crime rate (per 1,000 population) Total calls for police services (estimated) Total calls for fire services Fire inspections Fire investigations Municipal Utilities Water connections Operating wells Daily pumping capacity - wells (gallons) Daily pumping capacity - plants (gallons) Sewer connections Sanitary sewer (miles) Solid waste customers served Solid waste refuse collected (tons) Solid waste refuse recycled (tons) 2006 2007 2008 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 8,951 7,909 6,474 5,750 2,082,000 1,024 2,349,232 989 38.0 160,355 16,682 4,878 74 34.9 159,535 16,709 3,585 57 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 1,967,446 1,027 40.7 136,942 15,310 3,767 58 70,375 23 57,400,000 45,000,000 66,750 796 62,591 117,813 23,379 2,004,000 (3) 1,024 39.9 151,941 16,662 4,375 73 73,822 23 59,900,000 45,000,000 68,515 814 65,173 99,547 25,017 Source: City of Chandler Departments (1) The 2010 Center for the Arts events & exhibits is the result of renovations within the Center for the Arts (2) The 2010 increase in Daily pumping capacity-plants (gallons) is the result of the completion of the San Tan Water Treatment Plant and the Chandler Water Treatment Plant (3) Beginning in 2006 Library circulation includes e-material (4) Beginning in 2011 the previous named Planning & Development Department consolidated into Transportation & Development Department 162 Schedule 17 Fiscal Year 2009 2010 2011 2012 2013 2014 23,460 479 1,055 66 2.50 22,715 481 977 40 2.10 23,821 506 848 43 2.22 25,726 599 908 26 2.07 27,387 584 834 43 1.89 27,467 564 780 53 2.10 3,800 3,883 2,330 5,462 3,785 5,490 2,494,009 1,050 2,489,741 1,000 2,395,192 1,003 2,332,758 938 34.4 141,279 17,892 4,424 46 33.2 137,170 17,950 5,188 34 28.0 137,485 18,474 5,029 22 26.7 145,400 18,865 5,442 16 77,408 30 64,460,000 72,000,000 73,118 866 69,480 88,466 20,832 77,626 28 61,920,000 72,000,000 73,712 868 70,179 85,257 21,096 79,278 26 64,790,000 72,000,000 74,606 869 70,667 86,557 20,680 79,766 27 64,710,000 72,000,000 75,564 890 71,269 83,950 21,046 2,506,602 977 35.2 157,039 18,474 3,891 49 77,596 29 66,020,000 60,000,000 71,880 857 67,902 89,408 24,596 2,592,243 335 (1) 31.8 146,508 16,904 3,208 43 76,894 31 70,700,000 72,000,000 (2) 73,042 862 68,362 85,160 22,245 163 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 Swimming pools Other recreational facilities (lighted fields) Library bookstock Transportation and Development Total miles streets (center line) Street lights Signalized intersections Public Safety Police stations Fire stations General Government Based aircraft Municipal Utilities Water mains (miles) Fire hydrants Average daily treament (mgd) 2005 2006 2007 51 874 349 53 889 535 (1) 5 54 959 468 58 1,099 455 5 5 34 483,128 34 469,023 5 32 450,068 33 469,000 (3) 2008 775 24,218 166 785 25,100 189 812 25,307 192 822 26,326 200 1 9 2 9 2 10 3 10 434 457 499 442 1,051 10,799 21 1,063 10,952 22 1,080 12,291 24 1,117 13,033 24 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 (2) The 2010 decrease in Fire Hydrants is due to the City adjusting the count to include only hydrants owned and maintained by the City (3) Beginning in 2006 Library bookstock is inclusive of electronic circulation items (4) Beginning in 2011 Public Works Department merged into Transportation and Development Department (5) Beginning in 2013 Airport Division moved from Transportation and Development Department to City Manager Department 164 Schedule 18 Fiscal Year 2009 2010 2011 2012 2013 2014 59 1,133 407 61 1,198 336 61 1,192 342 61 1,196 338 61 1,198 336 62 1,208 325 6 6 6 6 6 6 34 472,266 34 446,675 34 429,604 34 555,924 39 550,857 39 595,969 832 26,500 205 829 26,600 208 829 26,600 208 829 26,600 212 831 26,900 216 838 27,100 216 3 10 3 10 3 10 3 10 3 10 3 10 449 449 437 399 1,223 12,925 24 1,227 10,877 24 (4) 1,189 13,750 24 1,194 12,318 (2) 22 165 388 (5) 1,227 12,553 26 415 1,227 12,717 26