Valley Metro Regional Public Transportation Authority Phoenix, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2009 Phoenix, Arizona Board of Directors Chair, Councilman Wayne Ecton, Scottsdale Vice Chair, Council member Michael Johnson, City of Phoenix Secretary, Vice Mayor Joe Johnson, City of Surprise Treasurer, Vice Mayor Shana Ellis, Tempe Councilman Jim McDonald, City of Avondale Mayor Jackie Meck, Town of Bucke)€ Councilmember Trinity Donovan, Chandler Mayor Michele Kern, City of EI Mirage Councilmember Les Presmyk, Gilbert Mayor Elaine Scruggs, City of Glendale Councilmember Frank Cavalier, City of Goodyear Supervisor Mary Rose Wilcox, Maricopa County Councilman Scott Somers, City of Mesa Councilmember Ron Aames, Peoria Mayor Art Sanders, Town of Queen Creek Mayor Adolfo Gamez, City of Tolleson David A. Boggs, Executive Director Bryan Jungwirth, Chief of Staff Mike Taylor, Acting Deputy Executive Director, Finance Pat Dillon, Executive Assistant Carol Lightbourne, Executive Assistant Prepared By Finance Department Valley Metro Regional Public Transportation Authority Organization Chart Citizens of Maricopa County Board of Directors Executive Director’s Office Finance Operations Planning Management Services Marketing & Strategic Services Valley Metro Rail, Inc. Staff (Reports to VMR, Inc. Board of Directors) Regional Public Transportation Authority Table of Contents Comprehensive Annual Financial Report and Single Audit Reports Fiscal Year Ended June 30, 2009 Page x GFOA Certificate of Achievement Financial Section 1-2 Independent Auditors' Report Management's Discussion and Analysis (required supplementary information) 3-14 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets Statement of Activities 15 16-17 Fund Financial Statements: Balance Sheet - Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual - General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual - Public Transportation Fund Statement of Net Assets - Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds Statement of Cash Flows Proprietary Funds Statement of Changes in Fiduciary Net Assets - Fiduciary Index to the Notes to Financial Notes to the Financial Statements 18 19 20 21 22 23 24 25 26 28-48 Other Supplementary Information - Combining and Individual Fund Statements and Schedules: 49 Nonmajor Governmental - Special Revenue Funds Description Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Balances - Nonmajor Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual - Nonmajor Governmental Transit Planning Fund Transportation Demand Management Fund Regional Customer Services Fund Capita! and Other Grants Fund and Changes in Net Assets Schedule of Revenues, l-Iu ... to .-.\J,....... UO. Enterprise Funds: Transit Service Operations Valley Metro Rail Fund 50 52 53 54 55 ..1\..1...., 56 57 (Continued) Regional Public Transportation Authority Table of Contents (Continued) Comprehensive Annual Financial Report and Single Audit Reports Fiscal Year Ended June 30, 2009 Page Statistical Section Statistical Section Contents Financial Trends Net Assets by Component Changes in Net Assets Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Revenue Capacity Sales Tax Revenues by Component Maricopa County Transportation Excise Tax Revenue Distributions Maricopa County Transportation Excise Tax Revenue Collections by Category Arizona Transaction Privilege Tax Excise Tax Rates by Category Debt Capacity Transportation Excise Tax Revenue Bonds Coverage Debt Service Revenue and Cost per Capita Demographic and Economic Information Regional Population Statistics Local Transportation Assistance Funds Demographic and Economic Statistics Operating Information Full-time Equivalent Employees by Function/Program Operating Indicators by Program: Fixed Route System Dial-a-Ride System Shuttle / Circulator System Capital Asset Statistics by Function/Program Revenue Vehicle for Transit Service Operations 58 59-60 61-64 65-66 67-68 69-70 71-72 73 74-75 76 77 78-79 80-81 82 83 84-85 86-89 90-91 92 Single Audit Section Supplementary Schedule of Expenditures of Federal Awards Notes to the Supplementary Schedule of Expenditures of Federal Awards Report on Internal Control Over Financial Reporting and on Compliance And Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Report on Compliance With Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133 Schedule of Findings and Questioned Costs ii 93 94 95-96 97-98 99-101 302 N, First Avenue Suite 700 i Phoenix, AZ 85003 T 602,262,7433 f 602,495,0411 TTY 602,2618208 January 25, 2010 To Chair and Members of the Valley Metro RPT A Board of Directors: The comprehensive annual financial report of the Valley Metro Regional Public Transportation Authority (the Authority) for the fiscal year ended June 30, 2009 is hereby submitted as mandated by state statute. The statute requires that the Authority annually issue a report on its financial position and activity, and that this report be audited by an independent firm of certified public accountants. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner that presents fairly the financial position and results of operations of the Authority on both a ｧｯｶ･ｲｮｭｴｾｷｩ､＠ and fund basis. All disclosures necessary to enable the reader to gain an understanding of the Authority's activities have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). The Authority's management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the Authority 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 Authority's 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. The independent certified public accounting firm of Larson Allen, LLP, whose report is included herein, has audited the basic financial statements and related notes. As stated in the independent auditor's report, the goal of the independent audit was to provide reasonable assurance that the basic financial statements of the Authority for the fiscal year ended June 30, 2009 are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the basic financial statements of the Authority as of and for the fiscal year ended June 30, 2009 are fairly iii Valley Metro is a federally registered trademark of the Regional Public Transportation Authority. Regional Public Transportation Authority Letter of Transmittal (Continued) presented, in all material respects, in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. Management's Discussion and Analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Additionally, the Authority is required to have an independent audit of expenditures of federal awards received (Single Audit) by the Authority directly from federal agencies, or passed through to the Authority by other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the Authority's internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of majorfederal awards. As a subrecipient of federal and state financial assistance, the Authority is 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 by the Authority's independent auditor. As part of the Authority's Single Audit, tests were made of the internal control structure and of its compliance with applicable laws and regulations, including those related to federal awards. Although this testing was not sufficient to support an opinion on the Authority's internal control system or its compliance with laws and regulations, the audit of the Authority's compliance with requirements applicable to each major program and internal control over compliance for the year ended June 30, 2009 resulted in an unqualified opinion of compliance and noted no material weaknesses in internal controls or significant violations of applicable laws and regulations with respect to major programs. The auditors' reports on internal controls and compliance with applicable laws and regulations are included in the single audit section of this report. PROFILE OF THE AUTHORITY The Authority was established in 1985 along with the passage of a one-half of one percent sales tax increase to fund regionai highway and public transportation improvements in Maricopa County, Arizona (the County). The Authority was created to develop a regional transit plan and to develop and operate a regional transit system in the County. The financial reporting entity of the Authority includes all its funds and does not include any component units (Le., legally separate entities for which the Authority is financially accountable). The Authority is governed by a sixteen-member Board of Directors consisting of a member of the County Board of Supervisors and the mayors (or their designees) of the cities of Avondale, Chandler, EI Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson, and the Towns of Buckeye, Gilbert and Queen Creek. Any municipality in the County may join the Authority and have one elected official serve on the Board of Directors by committing a portion of its local transportation assistance funds to local public transportation. An Executive Director, apPointed by the Authority's Board of Directors, is responsible to carry out policy and plan, manage, supervise and coordinate all day-to-day activities. The Authority procures regional bus, dial-a-ride and vanpool services, provides regional transit and capital planning support, coordinates the County's transportation demand management activities, and provides general operational and administrative support to its members. iv over 2.1 million 18 !"'oCll"1ontc 58 ...."" ..,,,,,,, ... '1" consistent process for 4. 5. to rn,,::. n""lil'"'lO Regional Public Transportation Authority Letter of Transmittal (Continued) The Authority will undertake a number of key projects during FY 201 0 as the agency continues the implementation of TLCP operating and capital projects. The major projects and studies for FY 201 0 include the following: • Long Range Planning Update and/or produce information for the Long Range Transit Plan for Maricopa County, and annual update to the transit element of the Maricopa Association of Government's (MAG) Regional Transportation Plan. Provide transit data to MAG in updating the regional travel demand model, provide technical support ,to MAG on commuter rail planning. Participate in public meetings and open house workshops to solicit public review and comment. Provide for support in the development and administration of stakeholder communications, public meetings, and public outreach as required to collect and analyze opinions and input into system, corridor and capital planning programs, the transit lifecycle program, service adjustments, purchases and other agency programs and projects. • Short Range Planning Annual update for the Maricopa Association of Government's (MAG) Annual Transportation Report and preparation of Annual Transit Performance Report. In addition, coordinate with all transit providers and funders in the MAG area on service and route planning activities including Supergrid, Arterial and Freeway Bus Rapid Transit (BRT), Express Bus routes, and Rural Connector routes. Collect and analyze information from operators and area communities to develop a Short Range Transit Plan that details regionally funded transit investments that will occur within the five year horizon of the Plan. Assist with the review and recommendation of grant applications for federal Elderly and Persons with Disabilities Transportation Program funds to the MAG Regional Council for ADOT special transportation capital assistance. • Transit Research and Survey Develop, implement, and provide analysis for comprehensive transit research surveys and studies. Information from the surveys will be used to produce a database for transit planning purposes, including route evaluation and service adjustments. Survey information derived from the Origins and Destinations Survey will be used to calibrate the MAG travel model insuring that model outputs provide a more accurate projection of mode split and travel behavior. The inclusion of customer satisfaction questions will assist in monitoring the quality of the services provided on an ongoing basis. Annual passenger satisfaction surveys will be conducted to monitor changing customer opinions from the baseline survey instrument. • Capital Planning Coordinate, manage, develop and update the transit element of the Maricopa Association of Government's Transportation Improvement Program (TIP) on behalf of Valley Metro members and non-members. The TIP requires description of all transit capital projects in the region which will utilize federal funds as well as most locally funded projects. The TIP provides a method to assess short range improvement potential and funding requirements. • Operations Planning Provide staff support to Valley Metro Operations & Capital Committee (VMOCC) technical advisory committee on development of recommendations to integrate paratransit operations to improve service to riders and service efficiencies. In partnership with Valley Metro Rail (METRO), develop an alternatives analysis for the Scottsdale/Rural Road that will define a locally preferred high capacity transit alternative for this corridor. Develop final design, construction documents, and fleet requirements for Arizona Avenue/Country Club BRT line. vii viii for Excellence in Financial Reporting Presented to Regional Public Transportation Autll0rity, Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. Executive Director x INDEPENDENT AUDITORS’ REPORT To the Members of the Board of Directors Valley Metro Regional Public Transportation Authority We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund and the aggregate remaining fund information of Valley Metro Regional Public Transportation Authority (the Authority) as of and for the year ended June 30, 2009, which collectively comprise the Authority’s basic financial statements, as listed in the table of contents. These financial statements are the responsibility of Valley Metro Regional Public Transportation Authority‘s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of governmental activities, business-type activities, each major fund and the aggregate remaining fund information of the Valley Metro Regional Public Transportation Authority, as of June 30, 2009, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund and Public Transportation Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis on pages 3-14 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. LarsonAllen LLP is a member of Nexia International, a worldwide network of independent accounting and consulting firms. To the Members of the Board of Directors Valley Metro Regional Public Transportation Authority Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The introductory section, combining and individual fund financial statements and schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards as listed in the table of contents is presented for the purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and is not a required part of the basic financial statements. This supplementary information is the responsibility of management. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. In accordance with Government Auditing Standards, we have also issued our report dated January 25, 2010 on our consideration of Valley Metro Regional Public Transportation Authority‘s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. LarsonAllen LLP Mesa, Arizona January 25, 2010 2 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis As management of Valley Metro Regional Public Transportation Authority (the Authority), we offer this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2009. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the Authority’s financial activity, (3) identify changes in the Authority’s financial positions, (4) identify any material deviations from the financial plan (adopted annual budget), and (5) identify individual fund issues or concerns. Financial Highlights • • • • • The Authority’s total net assets increased $9.4 million in FY 2009, an increase of $8.9 million increase in governmental activities and a $0.5 million increase in business-type activities. Total net assets of the Authority are $131.8 million, of which $27.9 million is unrestricted. The governmental activities revenues decreased by approximately $19.2 million (14.2%) over the previous year. The business-type activities revenues increased by approximately $28.9 million (58.9%) from the previous year. At June 30, 2009, the Authority’s governmental fund balance sheet reported a combined ending fund balance of $38.0 million, an increase of $9.3 million (32.2%) compared to the previous fiscal year. On June 30, 2009, the Authority issued $100.1 million of the business-type activities revenue bonds and has pledged future transportation excise tax revenues to repay outstanding bond principal and interest obligations. OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements are presented in accordance with Governmental Accounting Standards Board (GASB) Statement No. 34 – Basic Financial Statements - and Management’s Discussion and Analysis – for State and Local Governments (GASB No. 34). The statements are presented as follows: • • • • Government-wide reporting – presents financial statements on a government-wide basis. Fund financial statements – presents governmental, proprietary and fiduciary fund financial statements, with the focus on major funds within each fund type. Measurement focus for governmental activities – in the government-wide financial statements all activities, including the governmental activities, are reported using the economic resources measurement focus and accrual basis of accounting. The current financial resources focus and modified accrual basis of accounting are followed for the governmental fund financial statements. Budgetary reporting – GASB No. 34 requires the display of both the original adopted budget and the revised budget in the budgetary comparison schedules. These schedules are only required for the general fund and major special revenue funds; these statements are 3 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) presented as part of the basic financial statements and the Authority has presented this information for the nonmajor special revenue funds and proprietary funds as additional information. • Required narrative analysis – GASB No. 34 requires that the financial statements be accompanied by narrative introduction and analytical overview of the government’s financial activities in the form of “Management’s Discussion and Analysis” (MD&A). As presented on the following page, the financial section of the Comprehensive Annual Financial Report (CAFR) for the Authority consists of this discussion and analysis, the basic financial statements and required supplementary information (other than MD&A). There are also additional non-required supplementary schedules presented after the basic financial statements. The basic financial statements include the government-wide financial statements, fund financial statements, including the budgetary statements for the general fund and major special revenue funds, and notes to the financial statements. Required Components of the Annual Financial Report Management's Discussion and Analysis Basic Financial Statements Required Supplementary Information Government-wide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail Government-wide Financial Statements The government-wide financial statements (see pages 15 – 17) are designed to provide a broad overview of the Authority’s finances in a manner similar to those used by private businesses. All of the activities of the Authority, except those of a fiduciary nature, are included in these statements. The activities of the Authority are broken down into two columns on these statements – governmental activities and business-type activities. A total column for the Authority is also provided. • The governmental activities include the basic services of the Authority including general government (administration), regional planning, transportation demand management, and regional customer services. Grants and general revenues generally support these activities. 4 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) • The business-type activities include the private sector type activities which are transit service operations and light rail transit. These activities are partially supported by user charges and provide substantial benefits, both direct and indirect, to the public at large. The statement of net assets presents information on all of the Authority’s assets and liabilities, both current and noncurrent, with the difference between the two reported as net assets. The focus on net assets is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. To assess the overall health of the Authority, other indicators, including non-financial indicators like the Authority’s tax base and the condition of its capital assets, should also be considered. The statement of activities presents information showing how the Authority’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time that the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the Authority, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenues for support. Fund Financial Statements Also presented are more traditional fund financial statements for governmental funds, proprietary funds and fiduciary funds. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or conditions. Funds are used to ensure and demonstrate compliance with finance-related legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the Authority. Governmental funds – Governmental funds are used to account for most of the Authority’s basic services. Unlike the governmental activities column on the government-wide financial statement, these fund financial statements (pages 18 - 20) focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information is useful in looking at the Authority’s near-term financial requirements. Since the governmental activities on the statements focus on near-term spendable resources, while the governmental activities on the government-wide financial statements have a longer term focus, a reconciliation of the differences between the two statements is provided following the fund financial statements and is also provided in Note 2 (pages 37 - 38). Proprietary funds – Proprietary funds are used to account for business-type activities of the Authority. Enterprise funds are used for activities that primarily serve customers outside the governmental unit. The proprietary fund financial statements (pages 23 - 25) are prepared using the same long-term focus as the government-wide financial statements. The enterprise funds generally provide information similar to the business-type activities column of the governmentwide financial statements, but provide more detail and additional information (i.e., cash flows). Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of others. Fiduciary funds are not included in the government-wide financial statements because the resources of those funds are not available to support programs of the Authority. The fiduciary fund statement (page 26) is prepared on the same basis as the government-wide and proprietary fund statements. 5 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Notes to the Financial Statements – The notes to the financial statements (pages 28 – 48) provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements and should be read with the financial statements. Required supplementary information other than MD&A – Governments have an option of including the budgetary comparison statements of the general fund and major special revenue funds as either part of the fund financial statements within the basic financial statements, or as required supplementary information after the footnotes. The Authority has chosen to present these budgetary statements as part of the basic financial statements. Additionally, governments are required to disclose certain information about employee pension funds. The Authority has disclosed this information in Note 10 (pages 46 - 47). GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables and analysis discuss the financial position and changes to the financial position for the Authority as a whole as of and for the year ended June 30, 2009, with comparative information for the previous year. Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets as of June 30, 2009 compared to the prior year: Condensed Statement of Net Assets As of June 30 (in thousands of dollars) Governm ental Activities 2009 2008 Current and other assets $ 39,057.2 $ 30,279.5 Noncurrent assets cash and cash equivalents Capital assets 1,229.9 1,467.0 Total assets Business-type Activities 2009 $ 57,327.0 $ 73,474.0 110,356.7 Total Prim ary Governm ent 2008 45,374.2 2009 $ 72,537.5 96,384.2 $ 73,474.0 111,586.6 2008 Percent Change 75,653.7 27.4% 74,004.5 N/A 50.8% 88.1% $ 40,287.1 $ 31,746.5 $ 241,157.7 $ 117,911.7 $ 281,444.8 $ 149,658.2 $ 1,635.0 $ 157.0 2,022.9 149.8 $ 42,461.0 $ 105,384.0 24,734.1 316.0 $ 44,096.0 $ 105,541.0 26,757.0 465.8 64.8% 22558.0% $ 1,792.0 $ 2,172.7 $ 147,845.0 $ 25,050.1 $ 149,637.0 $ 27,222.8 449.7% Net assets: Invested in capital assets, net of related debt $ 1,229.9 $ 1,467.0 Restricted Unrestricted 37,265.2 28,106.8 $ 98,580.1 $ 4,062.1 (9,329.5) 72,537.5 2,332.5 17,991.6 $ 74,004.5 2,332.5 46,098.4 34.9% 74.2% -39.4% $ 93,312.7 $ 92,861.6 $ 131,807.8 $ 122,435.4 7.7% Current liabilities Noncurrent liabilities Total liabilities Total net assets $ 38,495.1 $ 29,573.8 6 99,810.0 $ 4,062.1 27,935.7 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) The Authority’s total net assets increased $9.4 million in FY 2009, an increase of $8.9 million in governmental activities and a $0.5 million increase in business-type activities. Total net assets of the Authority are $131.8 million, of which $27.9 million is unrestricted. A large portion of net assets (75.7%) represents the Authority’s investment in capital assets net of accumulated depreciation and related outstanding debt used to acquire those assets. The Authority uses these capital assets to provide services to the region’s citizens; consequently, it is not the Authority’s intention to sell these assets and they are therefore not available for future spending. The capital assets are reported net of related debt, as discussed in the Capital Assets and Debt Administration section (pages 11 - 12), the Authority pledged future transportation excise tax revenues to repay the outstanding debt obligations. The capital assets themselves are not intended to be used to liquidate these liabilities. An additional 3.1% ($4.1 million) of the Authority’s net assets reflects resources that are subject to external restrictions, of which $2.2 million consists of unspent bond proceeds net of related outstanding debt that are restricted for capital projects. The remaining 21.2% ($27.9 million) represents unrestricted resources that may be used to meet the Authority’s ongoing obligations to citizens, member agencies, contractors and creditors within the respective governmental and business-type activities. The governmental activities reported an increase of $9.1 million (32.6%) of unrestricted net assets over the prior year largely attributed to a decrease in interfund transfers from the Public Transportation Fund to other funds. The Authority implemented cost reduction measures in anticipation of the public transportation revenue shortfall starting the second quarter of the fiscal year, which resulted conservative spending practices and consequently required less interfund transfers from the Public Transportation Fund to other funds; additionally, some of the capital expenses in the business-type activities were funded with proceeds from the 2009 Bond issuance, thus required less interfund transfers from the Public Transportation Fund. The significant decrease of $27.3 million (151.3%) of unrestricted net assets over the prior year in business-type activities is due to decreases in the Transit Service Operations Fund largely due to the debt obligation of the 2009 bond issuance and lower transfers in from the Public Transportation Fund. Changes in Net Assets The following table compares the revenues and expenses of the Authority for the current and previous fiscal year. The increase (decrease) in net assets for each year represents the extent to which revenues over (under) expenses during the year. (Remainder of this page intentionally left blank) 7 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Changes in Net Assets Fiscal year ended June 30 (in thousands of dollars) Governmental Activities 2009 2008 REVENUES Program revenues: Charges for services $ - $ Operating grants and contributions 2,632.5 Capital grants and contributions General revenues: Sales taxes 113,297.7 Interest earnings 36.3 Other 75.2 Total revenues EXPENSES Governmental activities: Regional planning Transportation demand management Regional customer services Administration Business-type activities: Transit service operations Light rail transit Total expenses Excess (deficit) before transfers Transfers in (out) Increase (decrease) in net assets $ Total Primary Governm ent Business-type Activities 2009 2,062.6 - $ 2008 32,505.9 $ 2,609.2 40,555.6 2009 29,170.6 1,421.9 16,237.0 $ 2008 32,505.9 $ 5,241.7 40,555.6 Percent Change 29,170.6 11.4% 3,484.5 50.4% 16,237.0 149.8% 130,490.8 2,503.9 142.8 34.8 2,233.4 536.1 1,688.2 113,297.7 71.1 2,308.6 130,490.8 3,040.0 1,831.0 -13.2% -97.7% 26.1% 116,041.7 135,200.1 77,938.9 49,053.8 193,980.6 184,253.9 5.3% 1,948.7 1,882.9 8,747.4 1,910.8 2,390.3 1,785.8 8,567.3 1,941.4 - - 1,948.7 1,882.9 8,747.4 1,910.8 2,390.3 1,785.8 8,567.3 1,941.4 -18.5% 5.4% 2.1% -1.6% - - 99,625.8 70,492.6 96,796.9 65,243.4 99,625.8 70,492.6 96,796.9 65,243.4 2.9% 8.0% 14,489.8 14,684.8 170,118.4 162,040.3 184,608.2 176,725.1 4.5% 101,551.9 (92,630.6) 120,515.3 (134,981.4) (92,179.5) 92,630.6 (112,986.5) 134,981.4 9,372.4 - 8,921.3 $ (14,466.1) $ 451.1 $ 21,994.9 $ 9,372.4 7,528.8 24.5% - N/A $ 7,528.8 24.5% The largest financing source for the Authority as a whole is sales taxes (58.4%). The major funding sources of governmental activities are sales taxes (97.6%) and federal and state grants (2.3%). The major funding source for business-type activities is federal grants and contributions revenues (55.4%). Business-type activities also receive substantial charges for services (41.7%). The Authority’s overall revenues increased by $9.7 million, or 5.3%, compared to last fiscal year. Total revenues of governmental activities decreased by $19.2 million, or 14.2% over the previous year mainly due to the sales tax revenues shortfall in the Public Transportation Fund and coupled with lower interest income, which included the write-off of $0.4 million of investments held in the State of Arizona’s Local Government Investment Pool that have no market value at June 30, 2009. Program revenues of business-type activities increased by $28.9 million, or 61.6%, compared to last fiscal year, which is largely attributable to increases in Federal Transit Administration (FTA) capital grants and capital contributions associated with the Mesa Facility purchase in the Transit Service Operations Fund. The Authority’s sales tax revenue over the prior year is limited to incorporating those elements necessary for implementing the fourth year of the Proposition 400 Transit Life Cycle Program (TLCP). The Public Transportation Fund (PTF) revenues are restricted to the implementation of 8 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) the transit element of the Regional Transportation Plan (RTP). The laws pertaining to Regional Area Road Fund (RARF) revenues have changed beginning with FY 2006. Most notably, as a result of changes in the distribution of funds made by House Bill 2292, the amount of money that the Authority received previously has been divided in two, with one half going to the Maricopa Association of Governments (MAG). Additionally, the allowable use of these funds has changed as well. Previously, RARF was unrestricted as to use. However, RARF revenue is now limited to fund administration in the General Fund and planning and is no longer available to fund transit services. The largest user of resources for the Authority as a whole is the business-type activities (92.2%). For the governmental activities, the largest users of resources are regional customer services (60.4%), regional planning (13.4%), administration (13.2%), and transportation demand management (13.0%). Overall expenses increased by $7.9 million, or 4.5%, compared to last fiscal year. The governmental expenses decreased by $.2 million, or 1.3%, over the prior year due to conservative spending practices. The expenses of business-type activities increased by $8.1 million, or 5%, compared to the prior year due to increase of construction related lead agency disbursements in the Valley Metro Rail Fund, increase of cost per mile charged by the contractor and the expansion of transit services in the Transit Service Operations Fund. The increases in the business-type activities’ expenses were adhered to plan as the Authority entered its fourth year of implementing the Proposition 400 TLCP. FINANCIAL ANALYSIS OF THE AUTHORITY’S FUNDS As previously mentioned, the Authority maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental funds The focus of the governmental funds financial statements (pages 18 – 22) is to provide information on near-term inflows, outflows and balances of spendable resources. All major governmental funds are presented in separate columns on these financial statements. All nonmajor governmental funds are aggregated into one column. The fund balance of the governmental funds is $38.0 million, an increase of $9.3 million, or 32.2%, from the previous year. Of the $38.0 million total fund balance, the Authority has designated $0.8 million for compensated absences and the remainder is in unreserved fund balance in the General Fund (see Note 5 - page 41). Unreserved fund balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. Of the $38.0 million fund balance, $3.6 million is reported in the General Fund, $34.0 million is reported in the Public Transportation Fund, which is 34.7% over last fiscal year due to decreases of interfund transfers to other funds as discussed in the Net Assets section on Page 7, and $0.4 million is reported in the Nonmajor Governmental Fund. All other governmental funds are primarily reimbursementbasis special revenue funds (i.e., revenues equal expenditures) that generally do not have fund balance except for the restatement as reported in the FY08 on the beginning fund balances related to the removal of compensated absences. The General Fund accounts for activities that include the Executive Director’s office and finance and management services. General Fund revenues decreased $0.4 million (8.1%) over the 9 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) previous year, partly due to decreases in Regional Area Road Funds (RARF) revenues distributed to the Authority because of the continued weak economy. As mentioned above, RARF revenue is now limited to administration in the General Fund and planning and is no longer available to fund transit services. The Public Transportation Fund was a fund developed in FY 2006 for activities relating to the first year of Proposition 400 Public Transportation Fund (PTF) sales tax revenues. The $109 million PTF sales tax revenue represents the third full year of earned revenue and decreased by $17.3 million from last year. The decrease was due to the continued weak economy during FY 2009 creating a decline in sales tax revenue. The nonmajor governmental funds are aggregated in one column and include the Transit Planning Fund, the Transportation Demand Management Fund, Regional Customer Services, and the Capital and Other Grants Fund. The Transit Planning Fund accounts for activities related to the development of strategies to promote social and economic well being of the community through the provision of an efficient and effective regional transit system. Revenues increased $0.3 million (100.0%) due to a one-time FTA grant award, in addition to the on-going FTA funds available for planning studies. The expenditures decreased 17.8% from the prior year due to conservative spending practices. Prior to 2006, sales taxes allocated to the Transit Planning Fund were shown as revenues. These monies are now shown as transfers in. Total transfers in decreased 35.5% over the prior year. The Transportation Demand Management Fund accounts for activities related to the countywide ridesharing program, trip reduction program and clean air campaign. Revenues increased 5.6% and expenditures increased 5.6% from the prior year due to an increase in grant funds available for trip reduction program. The Regional Customer Services Fund accounts for activities related to marketing, customer services, Americans with Disabilities (ADA) compliance, contract maintenance and quality monitoring, and farebox data reporting for the region. It provides information and customer service for the region through its centralized transit information call center. Revenues increased $0.1 million from the prior year due to reimbursement revenues collected for supports provided to Valley Metro Rail, Inc. Expenditures increased $0.2 million over the prior year in the call center activities were offset by decreases in marketing activities. Prior to 2006, sales taxes allocated to the Regional Customer Services Fund were shown as revenues. Total transfers in of sales taxes decreased $0.2 million (2.4%) over the prior year. The Capital and Other Grants Fund accounts for state and federal grant revenues and expenditures not related to planning, transportation demand management or Regional Customer Services. Expenditures decreased $0.4 million (42.9%) from the prior year due to the implementation of the procurement software project that has been deferred to FY2010. Prior to 2006, sales taxes allocated to the Capital and Other Grants Fund were shown as revenues. These monies are shown as transfers in. Total transfers in decreased $0.3 million (40.6%) over the prior year. Proprietary funds The proprietary fund financial statements (pages 23 – 25) are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional 10 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) detail since each enterprise fund is a major fund and is shown discretely on the fund statements. The Transit Service Operations Fund accounts for the activities related to the operations of local and express bus, paratransit and vanpool services for the region. Net assets decreased $2.7 million (3.1%) over the prior year 2009 due to increases in operation and capital expenses, decreases of transfers in from the Public Transportation Fund, increase of 2009 Bond debt obligations and increase of transfers out of bond proceeds to the Valley Metro Rail Fund. The Valley Metro Rail Fund accounts for staffing and administrative services that are contractually provided by the Authority to Valley Metro Rail, Inc. (VMR) and the PTF sales tax revenues and expenses of such funds related to the Regional Transportation Plan approved light rail projects. Valley Metro Rail, Inc. is a nonprofit corporation organized for the purpose of planning, designing, constructing, and operating the light rail transit project in metropolitan Phoenix (see Note 1(a) on page 28). The Valley Metro Rail Fund has net assets of $10.5 million as of June 30, 2009 as compared to net assets of $7.4 million at the end of the previous year. In fiscal year 2009, the Valley Metro Rail Fund received 43.24% of the total PTF sales tax revenues distributed to the Authority from the Arizona Department of Revenue, totaling $51.5 million and received 11.7% of the $4.3 million RARF sales tax revenue received by the Authority, totaling $0.5 million. Additionally, the Valley Metro Rail Fund received $12.8 million of transfers in of 2009 Bond proceeds from the Transit Service Operations Fund for VMR capital expenditure reimbursements. GENERAL FUND BUDGETARY HIGHLIGHTS During the year there was a decrease of $0.4 million in appropriations between the original and final amended expenditure budget. For the year ended June 30, 2009, actual expenditures were under the final amended budget amounts by $0.2 million. The positive variance was attributable to the Executive Director’s Office and finance and management services activities of the General Fund being under budget because of conservative spending practices. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital assets As of June 30, 2009, the Authority had $111.6 million invested in various capital assets, net of accumulated depreciation, for its governmental and business-type activities. The overall net increase in the authority’s capital assets for the current fiscal year was 50.8%, a decrease of 16.2% for governmental activities and an increase of 52.1% for business type activities for the current year). Major capital asset events in the current year attributed to the increase for business-type activities included the following: • • The Authority had incurred cash outlay of $9.3 million to acquire the Mesa Operations and Maintenance Facility from the City of Mesa; additionally, the authority recorded $16.5 million as capital contributions to account for the fair values of the capital assets associated with this acquisition. The acquired property consists of 22 acres of land, a complex of five buildings constructed in 2004, equipment, fixtures, and other structures and improvements. The City of Mesa had received 57.02% grants from the Federal Transit Administration applied toward the construction costs. Expended $22.1 million during the year on transit fleet for replacement and expansion. 11 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) • Expended $5.2 million during the year on consultant activities and site improvements for the Bus Raid Transit Project. The following table provides a breakdown of capital assets of the Authority at June 30, 2009 with comparative information for the previous year. Additional information on the Authority’s capital assets may be found in Note 6 on pages 42 - 44. Capital Assets, Net of Depreciation As of June 30 (in thousands of dollars) Non-depreciable assets: Land $ Work-in-progress Depreciable assets: Transit fleet Building Site improvements Equipment Computers & softw are Vehicles Furniture & fixtures Total assets $ Governm ental Activities Business-type Activities 2009 2009 14.8 2008 $ 312.4 732.7 34.3 135.7 1,229.9 - $ 366.4 918.9 55.6 126.1 $ 1,467.0 $ Total Primary Governm ent 2008 2009 5,292.0 $ 15,803.7 18,660.2 64,149.9 13,099.6 7,277.9 4,629.6 41.0 63.0 47,892.2 662.3 5,234.0 48.5 40.3 110,356.7 $ 72,537.5 $ $ 2008 Percent Change 5,292.0 $ 15,818.5 18,660.2 N/A -15.2% 64,149.9 13,099.6 7,277.9 4,942.0 773.7 34.3 198.7 47,892.2 662.3 5,600.4 967.4 55.6 166.4 33.9% N/A 998.9% -11.8% -20.0% -38.3% 19.4% 74,004.5 50.8% 111,586.6 $ Debt Administration At June 30, 2009, the Authority had total bonded debt outstanding (net of unamortized costs) of $105.0 million related to business type activities. The Authority has pledged future transportation excise tax revenues to repay this outstanding debt. Business-type Activities 2009 Revenue bonds payable Less unamortized costs: Bond premium Bond issuance costs Total revenue bonds payable, net of unamortized costs $ 2008 100.1 $ 5.8 (0.9) $ 105.0 - $ - The Authority’s current bond ratings on transportation excise revenue tax bonds are AA+ from Standard & Poor’s and AA from Fitch. 12 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Additional information on the Authority’s bonded debt and other long-term liabilities can be found in Note 8 on pages 44 - 45. ECONOMIC FACTORS RPTA undertook a number of key projects during FY 2009, as the agency continues the implementation of the TLCP operating and capital projects. Funding for these projects and studies comes from a combination of sales tax revenues (Public Transportation Funds [PTF] and Regional Area Road Funds [RARF]) and federal grants. The key initiatives for fiscal year 2009 included: • • • • • A new Financial Management system went live on July 1, 2008. With the increased demands of Proposition 400 comes a greater need for accountability. A new system will improve budgeting (which is currently performed outside the financial system), and encumbrance accounting and will better link the procurement and human resources functions, both of which are currently not well integrated in the financial system. The new system will benefit both RPTA and Valley Metro Rail. Develop, implement, and provide analysis for comprehensive transit research surveys and studies. Information from the surveys will be used to produce a database for transit planning purposes, including route evaluation and service adjustments. This includes telephone surveys on trip needs that people may have and other information needed for transit planning. Implementation and launch of key elements of a transit system identity program to include a new logo and new color design. The objective of this program is to refresh and develop a strong Valley Metro brand identity and consistent application of standards. Our visual identity, including the Valley Metro logo, its colors, typefaces and positioning, is a powerful communications tool that identifies us to our customers, prospective customers, investors, business partners, vendors and employees. The Authority will take the first steps toward regionalization of ADA Paratransit Service. These first steps will be based on the results of the paratransit study conducted in FY 2007/08 and recommendations of the Valley Metro Operations & Capital Committee (VMOCC) Technical Advisory Committee (TAC) and Board of Directors approval. Site Selection and Environmental Assessment for multiple regional park and ride locations to allow for accelerated purchase and site preservation of future lot development in accordance with the Regional Transportation Plan (RTP). Also planned are Site Selection and Environmental Assessments for multiple transit center locations to allow for accelerated purchase and site preservation of future facility development in accordance with the RTP. The adopted FY 2010 combined operating and capital budget is $298.1 million (down approximately 6.6% from fiscal year 2009). The FY 2010 budget includes the fourth full year of projects funded with Proposition 400 PTF sales tax revenues ($116.9 million). Of the $116.9 million PTF revenue budgeted, $66.3 million is for bus operating and bus capital and $50.6 million is for light rail/high capacity capital. The total operating budget of $97.0 million represents a $9.1 million (10%) increase over the fiscal year 2009 operating budget of $87.9 million. The total capital budget of $201.1 million represents a $30.0 million (13%) decrease under the fiscal year 2009 capital budget of $231.1 million. The major reason for the increase in the operating budget is directly related to the projects programmed in the Transit Life Cycle Program (TLCP) for fiscal year 2010. The budget is balanced; decreases in net assets other than capital assets are not anticipated for fiscal year 2010. 13 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) FINANCIAL CONTACT The financial report is designed to provide a general overview of the Authority’s finances and to demonstrate accountability for the use of public funds. Questions about any of the information provided in this report, or requests for additional financial information should be addressed to the Authority’s Deputy Executive Director of Finance, Valley Metro RPTA, 302 North First Avenue, Suite 700, Phoenix, Arizona 85003. 14 Basic Financial Statements • Government..wide Financial Statements • Fund Financial Statements • Notes to Financial Statements Valley Metro Regional Public Transportation Authority Statement of Net Assets June 30, 2009 Governmental Activities Activities Assets Current Assets Cash and cash equivalents Receivables Due from other governments Internal balances Other assets Total current assets $ Noncurrent Assets Cash and cash equivalents Capital assets, not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets 27,072,730 63,229 10,024,847 1,755,296 141,081 39,057,183 14,804 1,215,112 1,229,916 40,287,099 Total assets Liabilities Liabilities: Current Liabilities Accounts payable Due to other governments Compensated absences payable Other liabilities 884,752 104,889 598,180 47,199 Total current liabilities $ 27,032,176 $ 138,461 31,911,671 (1,755,296) 54,104,906 201,690 41,936,518 141,081 96,384,195 73,474,013 21,095,722 89,260,943 183,830,678 73,474,013 21,110,526 90,476,055 185,060,594 241 281,444,789 8,832,958 33,139,825 465,687 9,717,710 33,244,714 1,063,867 1,635,020 Noncurrent liabilities: absences payable Revenue bonds payable, net of unamortized cost Total noncurrent liabilities 157,003 Total liabilities 383,332 105,000,672 105,384,004 1,792,023 540,335 1 ＨＩｾ＠ ()()() P.7,) I vv,VVV,VI "- 105,541,007 149,636,993 Net Assets 1,229,916 Invested in capital assets, net of related debt Restricted for: Capital projects Vanpool asset replacement Transit vehicle replacement Unrestricted 37,265,160 Total net assets See accompanying notes to the financiai statements. 15 98,580,060 99,809,976 2,246,490 1,384,526 431,141 2,246,490 1,384,526 431,141 27,935,663 Valley Metro Regional Public Transportation Authority Statement of Activities Fiscal Year Ended June 30, 2009 Program Revenues Charges for Services Expenses Operating Grants Capital Grants and Contributions and Contributions Programs Governmental activities: Regional planning: Long range Short range Capital Program support Transportation demand management: Trip reduction Ridesharing Other programs Regional customer services: Marketing Call center Other programs Administration: Executive director Finance & management services Total governmental activities $ Business-type activities: Transit service operations Light rail transit Total business-type activities Total primary government $ 292,509 317,886 154,523 1,183,750 $ - $ 64,568 461,605 74,319 11,699 $ - 897,234 561,620 424,091 - 881,456 561,620 424,091 - 2,810,408 3,807,893 2,129,063 - 153,105 - - 1,111,340 799,503 14,489,820 - 2,632,463 - 99,625,805 70,492,629 170,118,434 23,891,590 8,614,280 32,505,870 2,609,156 2,609,156 40,555,599 40,555,599 184,608,254 $ 32,505,870 $ 5,241,619 General revenues: Sales taxes: Public transportation funds Regional area road funds Interest earnings Other income Transfers in (out) Total general revenues & transfers Change in net assets Net assets - beginning Net assets - ending 16 $ 40,555,599 Net (Expense) Revenues and Changes in Net Assets Governmental Activities $ Business-Type Activities (227,941) 143,719 (80,204) (1,172,051) $ (227,941) 143,719 (80,204) (1,172,051) (15,778) - (15,778) - (2,810,408) (3,654,788) (2,129,063) (2,810,408) (3,654,788) (2,129,063) (1,111,340) (799,503) (11,857,357) (1,111,340) (799,503) (11,857,357) $ $ Total (32,569,460) (61,878,349) (94,447,809) (32,569,460) (61,878,349) (94,447,809) (11,857,357) (94,447,809) (106,305,166) 109,020,404 4,277,292 36,310 75,176 (92,630,562) 20,778,620 34,862 2,233,476 92,630,562 94,898,900 109,020,404 4,277,292 71,172 2,308,652 115,677,520 8,921,263 451,091 9,372,354 29,573,813 92,861,629 122,435,442 38,495,076 $ 93,312,720 $ 131,807,796 See accompanying notes to the financial statements. 17 Valley Metro Regional Public Transportation Authority Balance Sheet Governmental Funds June 30, 2009 General Public Transportation Nonmajor Governmental Funds Total Governmental Funds Assets Cash and cash equivalents Receivables Due from other governments Due from other funds Other assets Total assets $ 3,487,620 16,870 126,414 224,442 76,983 $ 22,823,736 40,801 8,624,689 2,482,459 - $ 761,374 5,558 1,273,744 64,098 $ 27,072,730 63,229 10,024,847 2,706,901 141,081 $ 3,932,329 $ 33,971,685 $ 2,104,774 $ 40,008,788 $ 166,120 104,889 23,636 $ - $ 718,632 951,605 23,563 $ 884,752 951,605 104,889 47,199 Liabilities and Fund Balances Liabilities: Accounts payable Due to other funds Due to other governments Other liabilities Total liabilities 294,645 - 1,693,800 1,988,445 755,183 - - 755,183 2,882,501 - 33,971,685 410,974 2,882,501 34,382,659 Total fund balances 3,637,684 33,971,685 410,974 38,020,343 Total liabilities and fund balances $ 3,932,329 Fund balances: Unreserved, designated Unreserved, undesignated General fund Special revenue fund $ 33,971,685 $ 2,104,774 $ 40,008,788 $ 38,020,343 Reconciliation of the balance sheet to the statement of net assets Fund balances, total governmental funds balance sheet Amounts reported for governmental activities in the statement of net assets are different because: Governmental capital assets Less accumulated depreciation 3,033,950 (1,804,034) Governmental compensated absences Net assets of governmental activities, statement of net assets See accompanying notes to the financial statements. 18 (755,183) $ 38,495,076 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Fiscal Year Ended June 30, 2009 Public Transportation General Revenues: Sales taxes: Public transportation funds Regional area road funds Intergovernmental: State & county grants Federal Transit Administration CMAQ Interest earnings (loss) Miscellaneous Total revenues $ 4,277,292 $ (63,584) 3,510 4,217,218 109,020,404 - Nonmajor Governmental Funds $ - Total Governmental Funds $ 109,020,404 4,277,292 99,894 109,120,298 455,671 612,190 1,411,497 224,771 2,704,129 455,671 612,190 1,411,497 36,310 228,281 116,041,645 - - 292,509 317,886 154,523 1,183,750 292,509 317,886 154,523 1,183,750 - - 897,234 561,620 424,091 897,234 561,620 424,091 Expenditures: Current: Regional planning: Long range Short range Capital Program support Transportation demand management: Trip reduction Ridesharing Other programs Regional customer services: Marketing Call center Other programs Administration: Executive director's office Finance & management services Capital outlay Total expenditures - - 2,810,408 3,807,893 1,733,413 2,810,408 3,807,893 1,733,413 1,111,340 350,610 1,461,950 - 112,127 384,564 12,680,018 1,111,340 462,737 384,564 14,141,968 Excess (deficiency) of revenues over (under) expenditures 2,755,268 109,120,298 (9,975,889) 101,899,677 (2,239,169) (2,239,169) 516,099 (100,367,282) (100,367,282) 8,753,016 9,975,889 9,975,889 - 9,975,889 (102,606,451) (92,630,562) 9,269,115 3,121,585 25,218,669 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balance, beginning Fund balance, ending $ 3,637,684 See accompanying notes to the financial statements. 19 $ 33,971,685 410,974 $ 410,974 28,751,228 $ 38,020,343 Valley Metro Regional Public Transportation Authority Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Fiscal Year Ended June 30, 2009 Net change in fund balances, total governmental funds $ 9,269,115 The change in net assets reported for governmental activities in the statement of activities is different because: 1. Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of capitalized assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays ($384,564) exceeded depreciation expense ($621,688) in the current period. (237,124) 2. The governmental funds, under the modified accrual basis of accounting, do not report the unpaid compensated absences as expenditure or liability, as they are not paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are used. Change in net assets of governmental activities, statement of activities See accompanying notes to the financial statements. 20 (110,728) $ 8,921,263 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual General Fund Fiscal Year Ended June 30, 2009 Budgeted Amounts Original Final Revenues: Sales taxes: Regional area road funds Interest earnings (loss) Miscellaneous Total revenues $ 4,292,000 350,000 4,642,000 $ 4,277,291 350,000 4,627,291 Variance with Final Budget Over (Under) Actual Amounts $ 4,277,292 (63,584) 3,510 4,217,218 $ 1 (413,584) 3,510 (410,073) Expenditures: Current: Executive director Finance and management services Total expenditures 1,247,273 879,448 2,126,721 1,227,273 466,023 1,693,296 1,111,340 350,610 1,461,950 (115,933) (115,413) (231,346) Excess of revenues over expenditures 2,515,279 2,933,995 2,755,268 (178,727) (2,488,658) (2,488,658) (4,158,966) (4,158,966) (2,239,169) (2,239,169) Other financing uses: Transfers out Total other financing uses Net change in fund balance 26,621 Fund balance, beginning Fund balance, ending (1,224,971) 1,724,017 $ 1,750,638 See accompanying notes to the financial statements. 21 3,121,585 $ 1,896,614 $ 1,919,797 1,919,797 516,099 1,741,070 3,121,585 - 3,637,684 $ 1,741,070 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Public Transportation Fund Fiscal Year Ended June 30, 2009 Budgeted Amounts Original Final Revenues: Sales taxes: Public transportation funds Interest earnings Total revenues $ 133,500,000 1,230,256 134,730,256 Excess of revenues over expenditures Other financing uses: Transfers out Total other financing uses Net change in fund balance $ 109,020,404 99,894 109,120,298 134,730,256 115,118,101 109,120,298 (5,997,803) (133,500,000) (133,500,000) (113,887,845) (113,887,845) (100,367,282) (100,367,282) 13,520,563 13,520,563 1,230,256 $ Actual Amounts 115,118,101 115,118,101 Fund balance, beginning Fund balance, ending $ Variance with Final Budget Over (Under) 1,230,256 7,522,760 - $ 25,218,669 $ 25,218,669 1,230,256 $ 26,448,925 $ 33,971,685 22 (6,097,697) 99,894 (5,997,803) 8,753,016 - See accompanying notes to the financial statements. $ $ 7,522,760 Valley Metro Regional Public Transportation Authority Statement of Net Assets Proprietary Funds June 30, 2009 Business-Type Activities - Enterprise Funds Transit Service Operations Total Proprietary Funds Valley Metro Rail Assets Current assets Cash and cash equivalents Receivables Due from other governments Total current assets $ Noncurrent assets Cash and cash equivalents Capital assets, not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets 112,287 30,790,577 30,902,864 $ 27,032,176 26,174 1,121,094 28,179,444 $ 27,032,176 138,461 31,911,671 59,082,308 73,474,013 21,095,722 - 73,474,013 21,095,722 89,260,943 183,830,678 - 89,260,943 183,830,678 214,733,542 28,179,444 242,912,986 8,531,920 1,755,296 16,483,307 64,323 2,205 26,837,051 301,038 16,656,518 401,364 20,291 17,379,211 8,832,958 1,755,296 33,139,825 465,687 22,496 44,216,262 52,947 330,385 383,332 105,000,672 105,053,619 330,385 105,000,672 105,384,004 131,890,670 17,709,596 149,600,266 98,580,060 - 98,580,060 Liabilities Current liabilities: Accounts payable Due to other funds Due to other governments Compensated absences payable Other current liabilities Total current liabilities Noncurrent liabilities: Compensated absences payable Revenue bonds payable, net of unamortized cost Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restricted: Capital projects Vanpool vehicle replacement Transit vehicle replacement Unrestricted Total net assets 2,246,490 1,384,526 431,141 (19,799,345) $ 82,842,872 See accompanying notes to the financial statements. 23 10,469,848 $ 10,469,848 2,246,490 1,384,526 431,141 (9,329,497) $ 93,312,720 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds Fiscal Year Ended June 30, 2009 Business-Type Activities - Enterprise Funds Operating Revenues: Charges for services Miscellaneous Total operating revenues Transit Service Operations Valley Metro Rail $ $ Operating Expenses: Local & express bus service Light rail staff and administration Paratransit service Vanpool service Safety and security Administrative and general Depreciation Total operating expenses Operating loss Non-Operating Revenues (Expenses): Lead agency disbursements Federal Transit Administration Other federal grants IRS fuel tax credit Interest income Gain on disposal of capital assets Miscellaneous Total non-operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out 23,891,590 826,905 24,718,495 Net assets, ending $ $ 32,505,870 826,905 33,332,775 51,501,081 10,280,588 781,556 344,819 36,653 11,160,298 74,104,995 (49,386,500) 8,614,280 8,614,280 - 51,501,081 8,614,280 10,280,588 781,556 344,819 36,653 11,160,298 82,719,275 (49,386,500) (25,520,810) 23,717,327 2,926,010 1,162,508 241,285 2,778 2,529,098 (61,878,249) 34,862 (100) (61,843,487) (87,399,059) 23,717,327 2,926,010 1,162,508 34,862 241,285 2,678 (59,314,389) (46,857,402) (61,843,487) (108,700,889) 16,521,418 40,570,347 (12,888,563) 64,948,778 - 16,521,418 105,519,125 (12,888,563) (2,654,200) 3,105,291 451,091 85,497,072 7,364,557 92,861,629 Changes in net assets Net assets, beginning 8,614,280 8,614,280 Total Proprietary Funds 82,842,872 See accompanying notes to the financial statements. 24 $ 10,469,848 $ 93,312,720 Valley Metro Regional Public Transportation Authority Statement of Cash Flows Proprietary Funds Fiscal Year Ended June 30, 2009 Business-Type Activities - Enterprise Funds Transit Valley Service Metro Operations Rail Cash flows from operating activities Receipts from customers Payments to suppliers Payments to employees Net cash provided by (used in) operating activities $ 20,002,503 (51,791,879) (894,209) (32,683,585) $ 8,614,280 (358,752) (7,830,627) 424,901 $ Total Proprietary Funds 28,616,783 (52,150,631) (8,724,836) (32,258,684) Cash flows from noncapital and related financing activities Transfers in - sales taxes Lead agency disbursements Due to/from other funds Federal alternative fuel tax credit Due from federal grants Net cash provided by noncapital and related financing activities 35,334,122 (884,968) 4,263,482 1,075,462 (18,723,300) 500,000 (500,000) (309,164) - 35,834,122 (1,384,968) 3,954,318 1,075,462 (18,723,300) 21,064,798 (309,164) 20,755,634 Cash flows from capital and related financing activities Purchases of capital assets Lead agency disbursements Receipts from federal capital grants Proceeds from sale of capital assets Proceeds from sale of revenue bonds Transfers out Transfers in - sales taxes Local member participation Net cash provided by (used in) capital and related financing activities (38,826,239) (24,635,842) 37,252,711 374,368 105,430,672 (12,888,563) 5,236,224 1,740,041 (48,223,513) 68,684,815 - (38,826,239) (72,859,355) 37,252,711 374,368 105,430,672 (12,888,563) 73,921,039 1,740,041 73,683,372 20,461,302 94,144,674 - 26,691 26,691 26,691 26,691 62,064,585 11,409,428 20,603,730 6,428,446 82,668,315 17,837,874 Cash flows from investing activities Interest received on investments Net cash provided by investing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Reconciliation of operating loss to net cash provided by (used in) operating activities Operating loss Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Depreciation (Increase) decrease in assets: Accounts receivable Due from other governments Other assets Increase (decrease) in liabilities: Accounts payable Due to other funds Due to other governments Other current liabilities $ 73,474,013 $ 27,032,176 $ 100,506,189 $ (49,386,500) $ - $ (49,386,500) Total adjustments Net cash provided by (used in) operating activities 11,160,298 - 11,160,298 87,480 (4,803,468) 236,250 - 87,480 (4,803,468) 236,250 (6,463,158) 16,483,307 2,206 404,610 20,291 (6,058,548) 16,483,307 22,497 16,702,915 424,901 17,127,816 $ (32,683,585) $ 424,901 $ (32,258,684) $ 16,521,418 $ - $ 16,521,418 Noncash capital and operating activities Capital assets contributed by a local member city See accompanying notes to the financial statements. 25 Valley Metro Regional Public Transportation Authority Statement of Changes in Fiduciary Net Assets Fiduciary Funds Fiscal Year Ended June 30, 2009 LTAF II Private Purpose Trust Fund Additions Contributions $ Total additions 7,032,776 7,032,776 Deductions Distributions 7,032,776 Total deductions 7,032,776 Changes in net assets - Net assets, beginning $ Net assets, ending See accompanying notes to the financial statements. 26 - Regional Public Transportation Authority Index to the Notes to Financial Statements Page 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . Summary of Significant Accounting Policies a. Financial Reporting Entity b. Basic Financial Statements c. Basis of Presentation d. Measurement Focus, Basis of Accounting, and Financial Statement Presentation e. Budgetary Basis of Accounting f. Deposits and Investments g. Prepaid Items h. Capital Assets i. Transactions between Funds j. Receivables k. Compensated Absences l. Cash Equivalents m. Use of Estimates n. Accounting Pronouncements Reconciliation of Governmental Fund Financial Statements to Government-Wide Statements Deposits and Investments a. Deposits b. Investments Accounts Receivable and Interfund Transactions Fund Balance/Net Assets Reservations and Designations Capital Assets Operating Leases Long-Term Liabilities a. Transportation Excise Tax Revenue Bonds b. Compensated Absences Risk Management Retirement and Pension Plans a. Plan descriptions b. Financial report c. Funding policy Deferred Compensation Plan Contractual and Other Commitments a. Underground Storage Tank Revolving Fund Replenishment b. Commitments Contingencies Related Party Transactions Excess of Expenditures over Appropriations 27 28 28 29-30 30-31 31-33 33 33-34 34 34-35 35 35-36 36 36 36 36-37 37-39 39 39-40 40-41 41 41-43 43 43-44 45 45 45 45 46 46 46 47 47 48 48 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 1. Summary of Significant Accounting Policies The accounting policies of the Regional Public Transportation Authority (the Authority) conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following summary of the more significant accounting policies of the Authority is presented to assist the reader in interpreting these financial statements, and should be viewed as an integral part of this financial report. a. Financial Reporting Entity The Authority was established under the laws of the State of Arizona in 1985 along with the passage of a one-half of one percent sales tax increase to fund regional highway and public transportation improvements. The Authority was charged with developing a regional transit plan and developing and operating a regional transit system for Maricopa County (the County). In 1993, the Authority’s Board of Directors adopted Valley Metro as the identity for the regional transit system. Valley Metro was chosen to give the region’s buses a more recognizable identity and to help unify public transit systems in the County. The Authority is governed by a Board of Directors consisting of a member of the County Board of Supervisors and the mayors (or their designees) of the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson, and the towns of Buckeye, Gilbert and Queen Creek. A municipality may have one elected official serve on the Authority’s Board of Directors by committing a portion of their local transportation assistance funds to local public transportation. In October 2002, the city councils of Glendale, Mesa, Phoenix and Tempe approved the formation of a public nonprofit corporation by the name of Valley Metro Rail, Inc. (VMR). The nonprofit corporation was organized for the purpose of planning, designing, constructing, and operating the Light Rail Transit Project. VMR contracts with the Authority for certain administrative functions, including personnel, administration and financial and accounting services. This activity is recorded in the Authority’s Valley Metro Rail Enterprise Fund. All VMR staff is hired and employed by the Authority but works solely under the direction of the legally separate entity of VMR and its Board of Directors through a contractual arrangement with the Authority. The Board of VMR is solely responsible for the governance of VMR and the Authority’s Board of Directors has no responsibility for VMR. VMR is not a component unit of the Authority because the economic resources received by VMR are entirely for the direct benefit of VMR and the Authority is not entitled to and has no ability to otherwise access any of the economic resources received or held by VMR. However, VMR is a related party of the Authority since the cities who are members of VMR’s Board of Directors are also members of the Authority’s Board of Directors. 28 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 b. Basic Financial Statements These financial statements are presented in accordance with GASB Statement No. 34 – Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments (GASB No. 34). The government-wide financial statements (statement of net assets and statement of activities) report on the Authority as a whole, excluding fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The government-wide financial statements focus more on the sustainability of the Authority as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between governmental activities and business-type activities are shown in the government-wide financial statements. The government-wide Statement of Net Assets reports all financial and capital resources of the government (excluding fiduciary funds). It is displayed in a format of assets less liabilities equal net assets, with the assets and liabilities shown in order of their relative liquidity. Net assets are required to be displayed in three components: 1) invested in capital assets, net of related debt, 2) restricted and 3) unrestricted. Invested in capital assets, net of related debt is capital assets net of accumulated depreciation and reduced by outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted net assets are those with constraints placed on their use by either: 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation. All net assets not otherwise classified as restricted, are shown as unrestricted. Generally, the Authority would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Reservations or designations of net assets imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are not shown on the government-wide financial statements. Note 5 discusses the internal reservations and designations of net assets in the various funds to demonstrate the government’s intended use of those net assets. The government-wide Statement of Activities demonstrates the degree to which the direct expenses of the various functions and segments of the Authority 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 users who purchase, use or directly benefit from goods, services or privileges provided by a particular 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, investment income and the other revenues not identifiable with particular functions or segments are included as general revenues. The general revenues support the net costs of the functions and segments not covered by program revenues. 29 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Also part of the basic financial statements are fund financial statements 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. Basis of Presentation The accounts of the Authority are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts, which includes assets, liabilities, fund equity, revenues and expenditures/expenses. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The following fund categories (further divided by fund type) are used by the Authority: Governmental Funds Governmental funds are used to account for the Authority’s general government activities. The focus of Governmental Fund measurement, in the fund financial statements, is upon determination of financial position and changes in financial position rather than upon net income. The Authority reports the following major Governmental Funds: The General Fund is the Authority’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Public Transportation Fund accounts for activities related to the 20-year transportation tax. Proprietary Funds Proprietary funds account for activities of the Authority similar to those found in the private sector, where cost recovery and the determination of net income are useful or necessary for sound fiscal management. The focus of proprietary fund measurement is upon the determination of operating income, changes in net assets, financial position and cash flows. Currently, enterprise funds are the only type of proprietary funds that the Authority uses. Enterprise funds are used to account for those operations that provide services to the general public for a fee. Under GASB Statement No. 34, enterprise funds are also required for any activity whose principal revenue sources meet any of the following criteria: 1) any activity that has issued debt backed solely by the fees and charges of the activity, 2) if the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered through fees and charges, or 3) it 30 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 is the policy of the Authority to establish activity fees or charges to recover the cost of providing services, including capital costs. The Authority reports the following major enterprise funds: The Transit Service Operations Fund accounts for the activities related to the operations of local and express bus, dial-a-ride and vanpool services for the region. The Valley Metro Rail Fund accounts for the activities related to the staffing and administrative services that are contractually provided by the Authority to Valley Metro Rail, Inc. and transfers in of the Public Transportation Fund (PTF) and the Regional Area Road Funds (RARF) sales tax revenues and expenses of such funds related to the Regional Transportation Plan approved light rail projects. Fiduciary Funds Fiduciary funds account for assets held by the Authority in a trustee or agency capacity on behalf of others and therefore are not available to support Authority programs. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary funds are not included in the government-wide financial statements since they are not assets of the Authority available to support Authority programs. Currently, private-purpose trust funds are the only type of fiduciary funds that the Authority uses: Private-purpose trust fund accounts for assets held by the Authority under the terms of a formal trust agreement where both the principal and income may be used to support individuals, private organizations or other governments as set forth in the trust agreement. The private-purpose trust fund of the Authority is as follows: The LTAF II Fund accounts for state general fund monies received from the Arizona Department of Transportation and distributed to the cities and county within the Authority’s region. d. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 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. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund types are presented, in the fund financial statements, using the flow of current financial resources measurement focus and modified accrual basis of accounting. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon thereafter to pay liabilities of the 31 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 current period. The Authority considers revenues available under modified accrual, if they are earned by June 30 (all eligibility requirements have been met) and the revenue is expected to be collected within six months after year-end. Expenditures are recorded when the related fund liability is incurred. This is the traditional basis of accounting for governmental funds and also is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to 1) demonstrate legal and covenant compliance, 2) demonstrate the sources and uses of liquid resources, and 3) demonstrate how the Authority’s actual revenues and expenditures conform to the annual budget. Since the governmental fund financial statements are presented on a different basis than the governmental activities column of the government-wide financial statements, a reconciliation is provided immediately following each fund statement. These reconciliations briefly explain the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements. Additional reconciliations are also provided in Note 2. When applying the “susceptible to accrual” concept to intergovernmental revenues pursuant to GASB Statement No. 33 – Recipient Reporting for Certain Shared Nonexchange Transactions (Statement No. 33), receivables and revenues are recognized when the applicable eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met are reported as deferred revenue. Interest income is recognized on the modified accrual basis. Changes in fair value of investments are recognized in investment income at the end of the year. Sales taxes, entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. For the governmental fund statements, grant revenue earned but not expected to be received within six months of year end is deferred. The proprietary fund and private purpose trust funds financial statements are prepared on the same basis (economic resources measurement focus and accrual basis of accounting) as the government-wide financial statements. Therefore, the total enterprise funds on the proprietary fund financial statements will directly reconcile to the businesstype activities column on the government-wide financial statements. The flow of economic resources measurement focus emphasizes the determination of net income. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. On the proprietary fund financial statements, operating revenues are those that flow directly from the operations of that activity, i.e., charges to customers or users who purchase or use the goods or services of that activity. Operating expenses are those that are incurred to provide those goods or services. Non-operating revenues and 32 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 expenses are items like investment income and interest expense that are not a result of the direct operations of the activity. e. Budgetary Basis of Accounting An annual budget of revenues and expenditures is prepared and adopted by the Board of Directors each fiscal year for all funds. The legal level of budgetary control is the total annual appropriated budget. Costs in excess of the total annual appropriated budget require approval of the Board of Directors. Transfers of appropriations between departments require the approval of the Executive Director. The annual budget is adopted on the modified accrual basis. Encumbrance accounting is used and all appropriations lapse at year end. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. During the fiscal year, the Board of Directors approved the decrease of $20.0 million PTF revenue, the increase of $5.7 million grant revenue collections, the increase of $57.4 million 2009 Bond issuance and approved the decrease of expenditures of $58.2 million mainly due to some of the local governments’ construction project reimbursements projects have been deferred. GASB Statement No. 34 requires that budgetary comparison statements for the general fund and major special revenue funds be presented as part of the basic financial statements or as required supplementary information. The Authority has chosen to present this information as part of the basic financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis). Budgetary comparisons for the nonmajor governmental funds and the major enterprise funds are presented in the combining statements following the notes to the financial statements. Where necessary, a reconciliation has been provided of the adjustments required to convert the budgetary revenues and expenditures or changes in net assets on a budgetary basis to revenues and expenditures/expenses or change in net assets on a GAAP basis. f. Deposits and Investments State statutes authorize the Authority to invest in obligations of the U.S. Treasury and any of its agencies, corporations or instrumentalities, collateralized repurchase agreements, certificates of deposit and the State of Arizona’s Local Government Investment Pool (LGIP). Currently the Authority invests only in the LGIP, which is operated by the Arizona State Treasurer’s Office, as authorized by Arizona Revised Statues, §35-326. Arizona Revised Statutes, §35-312 and §35-313 regulate authorized investments. Local Government Investment Pool investments are carried at fair value. The fair value of pooled investments is determined annually and is based on current market prices. The fair value of participants’ position in the pool approximates the value of the pool shares. The method used to determine the value of participants’ equity withdrawn is based on the book value of the participants’ percentage participation at the date of such withdrawal. 33 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 The Authority maintains pooled cash and investments. Income from pooled cash and investments is allocated to the individual funds based on the fund’s month end cash balance in relation to the total pooled cash and investments. Authority management has determined that the investment income related to all funds except the Public Transportation Fund and Valley Metro Rail Enterprise Fund should be allocated to the General Fund. Each fund’s equity in the pooled cash and investments is tracked on an ongoing basis. In the event that a certain fund overdraws its share of pooled cash, the overdraft is reported as a due to the General Fund or Public Transportation Fund at year-end. g. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. h. Capital Assets GASB No. 34 requires that all capital assets, whether owned by governmental activities or business-type activities, be recorded and depreciated (unless the modified approach is used) in the government-wide financial statements. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets are defined as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. The Authority has no public domain infrastructure (e.g., roads, bridges, sidewalks, and other assets that are immovable and of value only to the Authority) or capital construction projects. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. (Remainder of this page intentionally left blank) 34 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Property, plant and equipment are depreciated using the straight-line method over the following estimated useful lives: Useful Life (Years) Assets Equipment Furniture and fixtures Vehicles Cars and vans Buses greater than 30 feet Buses greater than 40 feet Computers and software Site Improvements Buildings 3-20 3-15 4 10 20 3 16-30 46-50 Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) or net realizable value, if lower, as of the date of the transfer. i. Transactions Between Funds Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds”. See Note 4 for further discussion of the interfund receivables/payables at June 30. Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. In the government-wide financial statements, only the net interfund activity and balances between governmental activities and business-type activities are shown (reported as “internal balances”). j. Receivables Receivables primarily result from various grants awarded by the Federal Transit Administration and the Federal Highway Administration. These receivables are passed through to the Authority and are due from the City of Phoenix, Maricopa Association of Governments, Maricopa County, Pima County and the Arizona Department of Transportation as reimbursement for eligible grant expenditures associated with operating, capital projects and capital maintenance. 35 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 During the fiscal year ended June 30, 2009, the Authority recorded $1,162,508 as nonoperating revenues and receivables of alternative fuel tax credit filed with the Internal Revenue Service (IRS) for fuel purchases during the fiscal year. The federal alternative fuel tax credit went into effect October 1, 2006, as part of the 2005 Transportation Act. Government and certain nonprofit organizations that qualify for the credit but do not have excise tax liability can receive cash payment from the federal government in the amount of $0.50 per gallon-equivalent. This credit applies to CNG, LNG, propane, and several other less frequently used fuels. RPTA registered with the IRS and was approved as a qualifying agency to receive the alternative fuel tax credit. k. Compensated Absences Employees of the Authority are entitled to 23.6 - 31.5 paid time off days (vacation and sick leave) per calendar year - based on an eight-hour workday, depending upon length of service. The valuation of accrued leave benefits is calculated in accordance with GASB Statement No. 16. Unpaid compensated absences are recorded as a liability when the benefits are earned in the proprietary fund financial statements. For governmental funds, there is no legal requirement to accumulate expendable available financial resources to liquidate the obligation; thus expenditures are recognized in the governmental funds when payments are made to employees. The current portion of the accrued compensated absences liability is based on the average annual amount of leave charged over the preceding three years. Generally, resources from the General Fund are used to liquidate the governmental funds liabilities for compensated absences. l. Cash Equivalents The Authority considers short-term investments in the State of Arizona’s Local Government Investment Pool, mutual fund-money market, U.S. Treasury bills and notes with maturities of three months or less at acquisition date to be cash equivalents. m. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reporting financial period. Actual results could differ from these estimates. n. Accounting Pronouncements GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, as amended, requires that governments’ enterprise activities apply all applicable GASB pronouncements as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB 36 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins. Governments are given the option whether or not to apply all FASB Statements and Interpretations issued after November 30, 1989, except those that conflict with or contradict GASB pronouncements. The Authority has elected not to implement FASB Statements and Interpretations issued after November 30, 1989. 2. Reconciliation of Governmental Fund Financial Statements to GovernmentWide Statements The governmental fund financial statements are presented on a current financial resources measurement focus and modified accrual accounting basis while the government-wide financial statements are prepared on a long-term economic resources measurement focus and accrual accounting basis. Reconciliations briefly explaining the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements immediately follow each fund financial statement. Additional reconciliations are provided below. Reconciliation of Governmental Funds Balance Sheet and the government-wide Statement of Net Assets: Governmental Funds Assets Cash and cash equivalents Receivables Due from other governments Due from other funds Other assets Capital assets (net) Total assets Liabilties Accounts payable Due to other funds Due to other governments Other liabilities Compensated absences Total liabilities Fund Balance/Net Assets Total fund balance/net assets $ $ $ $ 27,072,730 63,229 10,024,847 2,706,901 141,081 40,008,788 Assets/ Liabilities $ $ 884,752 951,605 104,889 47,199 1,988,445 $ 38,020,343 $ and Eliminations - 1,229,916 1,229,916 $ $ 755,183 755,183 $ 474,733 $ Net Assets Totals - $ (951,605) (951,605) $ - $ (951,605) (951,605) - $ 27,072,730 63,229 10,024,847 1,755,296 141,081 1,229,916 40,287,099 884,752 104,889 47,199 755,183 1,792,023 38,495,076 When capital assets that are to be used in governmental activities are purchased, the costs of those assets are reported as expenditures in governmental funds, and thus a reduction in fund balance. However, the statement of net assets includes those capital assets among the assets of the Authority as a whole: 37 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Cost of capital assets $ Accumulated depreciation Capital assets, net $ 3,033,950 (1,804,034) 1,229,916 Interfund transactions between governmental activities of $951,605 are eliminated in the consolidation of these activities for the statement of net assets. Under the modified accrual basis of accounting, the governmental funds do not accrue for unpaid compensated absences in the amount of $755,184 as liability, as they are not paid with expendable available financial resources. However, the statement of net assets includes the unpaid compensated absences as long-term liabilities regardless of when financial resources are used, and thus a reduction in net assets. Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance and the government-wide Statement of Activities: Total Governmental Funds Revenues Sales taxes Intergovernmental Interest earnings Miscellaneous Total revenues $ 113,297,696 2,479,358 36,310 228,281 116,041,645 Expenditures/Expenses Current: Regional planning Transportation demand management Administration Regional customer services Capital outlay Total expenditures/expenses and other uses Other financing uses/changes in net assets Transfers in Transfers out Net transfers Net change for the year $ - $ - 1,948,668 - - 1,882,945 1,574,077 8,351,714 - 226,038 395,650 384,564 (384,564) 14,141,968 (384,564) 9,975,889 (102,606,451) (92,630,562) $ Depreciation Compensated Disposals Absences Capital Purchases 9,269,115 $ - Statement of Activities Totals $ 113,297,696 2,479,358 36,310 228,281 116,041,645 1,948,668 1,882,945 1,910,843 8,747,364 110,728 621,688 110,728 14,489,820 - - - 9,975,889 - - - $ 384,564 $ (621,688) $ (110,728) (102,606,451) (92,630,562) $ 8,921,263 When capital assets that are to be used in governmental activities are purchased, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the cost of those assets is allocated over their useful lives and reported as depreciation expense. As a result, fund balance decreases by the 38 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 amount of the financial resources expended for capital outlay ($384,564), whereas net assets decrease by the amounts of disposals and depreciation expense charged for the year ($621,688). The governmental funds do not report unpaid compensated absences in the amount of $110,728 as expenditures, as they are not paid with expendable available financial resources. However, the statement of net assets includes the unpaid compensated absences as accrued expenses regardless of when financial resources are used, and thus a reduction in net assets. 3. Deposits and Investments The Authority maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the government-wide Statement of Net Assets as “Cash and Investments”. a. Deposits The carrying amount of the Authority's deposits at June 30, 2009, was $53,697,230 and the bank ledger balance was $54,084,842. The difference of $387,612 represents deposits in transit and outstanding checks. Of the bank balance, $250,000 was covered by federal depository insurance and $53,834,842 was covered by collateral held by the pledging financial institution in the Authority’s name. Cash held with trustee in the amount of $73,474,013 has federal depository insurance coverage in the amount of $250,000 and $73,224,013 was covered by collateral held by the pledging financial institution in the Authority’s name. b. Investments Interest Rate Risk. As a means of managing its exposure to fair value losses arising from increasing interest rates, the Authority’s investment policy provides for matching investment maturities with anticipated cash flow requirements while maintaining an emphasis on liquidity. Unless matched to a specific cash flow requirement, the Authority will not directly invest in securities maturing more than two years from the date of purchase. Historically, the Authority has limited its investments to participation in the State of Arizona's Local Government Investment Pool (LGIP). As of June 30, 2009, the Authority’s investments in the LGIP, investing in money market mutual funds, have the weighted average maturities less than 90 days. Credit Risk. State statutes authorize the Authority to invest in obligations of the U.S. Treasury and any of its agencies, corporations or instrumentalities, collateralized repurchase agreements, certificates of deposit and the LGIP. The Authority’s investment policy does not further limit its investment choices. The LGIP is operated by the Arizona State Treasurer’s Office, as authorized by Arizona Revised Statutes §35-326. Arizona Revised Statutes §35-312 and §35-313 regulate authorized investments. The LGIP is overseen according to Arizona State Statute by the State Board of Deposit. The Authority's investment in the LGIP is stated at fair value, which is the same as the value of the Authority’s pool shares. The LGIP does not receive a credit quality rating. 39 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Investments at June 30, 2009 consist of the following: State of Arizona Local Government Investment Pool $ 407,676 Governmental Accounting Standards Board Statement No. 40, Deposit and Investment Risk Disclosures, provides for disclosures of custodial credit risk associated with investment securities. An exception is provided for investments in external investment pools and for investments in open-ended mutual funds. Cash and Investments at June 30, 2009 consist of the following: Carrying amount of the Authority's deposits Cash with trustee Investments in the LGIP Total cash and investments 4. $ $ 53,697,230 73,474,013 407,676 127,578,919 Accounts Receivable and Interfund Transactions Net interfund receivables and payables between governmental activities and business-type activities of $1,755,296 are included in the government-wide financial statements at June 30, 2009. The following interfund receivables and payables are included in the fund financial statements at June 30, 2009: Due to / from other funds: Receivable Fund Governmental activities: General Public transportation fund Public transportation fund Payable Fund Nonmajor governmental funds Transit service operations Nonmajor governmental funds Total governmental activities Amount $ 224,442 1,755,296 727,163 $ 2,706,901 The interfund balances at June 30, 2009 are short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to grant and other reimbursements. All interfund balances outstanding at June 30, 2009 are expected to be repaid within one year. Interfund transfers are primarily used for transfers of sales tax revenues from the General fund and the Public Transportation fund to the various funds that receive earmarked sales tax revenues. Interfund transfers between the enterprise funds are for transfers of bond proceeds for reimbursements of light rail capital expenditures. The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2009. 40 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Transfers Out Public Transportation Fund General Fund Transfers In Governmental funds: Nonmajor governmental funds $ Total governmental funds 1,739,169 1,739,169 Enterprise funds: Transit service operations Valley Metro Rail Total enterprise funds Grand totals 500,000 500,000 2,239,169 $ $ $ 8,236,720 8,236,720 40,570,347 51,560,215 92,130,562 100,367,282 Transit Service Operations $ $ Totals - 12,888,563 12,888,563 12,888,563 $ $ 9,975,889 9,975,889 40,570,347 64,948,778 105,519,125 115,495,014 Net transfers from governmental activities to business-type activities on the governmentwide statement of activities to the Enterprise funds are in the amount $92,630,562. 5. Fund Balance/Net Assets Reservations and Designations General Fund: Unreserved/Designated - At June 30, 2009, $755,183 of fund balance was designated by management for the payment of accrued compensated absences. Transit Service Operations Enterprise Fund: Restricted for Capital projects – At June 30, 2009, $2,246,490 (net of related 2009 Bonds payable in the amount of $18,667,673) was restricted for capital projects. Restricted for Vanpool Vehicle Replacement - At June 30, 2009, $1,384,526 was restricted for replacement of vanpool vehicles. Restricted for Transit capital asset Replacement - At June 30, 2009, $431,141 was restricted for capital asset replacement. Unrestricted - At June 30, 2009, a negative amount of $19,799,345 of net assets was unrestricted. This is because of lead agency disbursements that are related to the 2009 bond issuance, which included $75,765,664 of the bond payable. 6. Capital Assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2009: 41 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Balances, July 1, 2008 Governm ental activities: Non-depreciable assets: Work in progress Total non-depreciable assets $ Depreciable assets: Computers & softw are Equipment Vehicles Furniture & fixtures Total depreciable assets at historical cost Less accumulated depreciation for: Computers & softw are Equipment Vehicles Furniture & fixtures Total accumulated depreciation Governmental activities capital assets, net Business-type activities: Non-depreciable assets: Land Work in progress Total non-depreciable assets Increases - $ - $ 14,804 14,804 312,048 12,056 45,656 (18,530) - 2,037,664 572,034 134,911 274,537 2,667,916 369,760 (18,530) 3,019,146 (806,733) (193,538) (97,820) (102,785) (1,200,876) (498,258) (66,046) (21,317) (36,067) (621,688) 18,530 18,530 (1,304,991) (259,584) (100,607) (138,852) (1,804,034) 1,467,040 $ $ 18,660,154 18,660,154 $ Less accumulated depreciation for: Transit fleet Building Site improvements Computers & softw are Equipment Furniture & fixtures Total accumulated depreciation $ 1,725,616 559,978 153,441 228,881 $ Depreciable assets: Transit fleet Building Site improvements Computers & softw are Equipment Furniture & fixtures Total depreciable assets at historical cost 14,804 14,804 Balances, June 30, 2009 Decreases (237,124) $ 5,292,000 20,976,719 26,268,719 $ - $ 1,229,916 - $ (23,833,151) (23,833,151) 5,292,000 15,803,722 21,095,722 80,166,236 732,746 75,932 6,502,424 83,665 26,049,069 13,390,731 7,070,250 18,260 83,907 43,372 (10,946,830) - 95,268,475 13,390,731 7,802,996 94,192 6,586,331 127,037 87,561,003 46,655,589 (10,946,830) 123,269,762 (32,273,993) (70,501) (27,420) (1,268,389) (43,393) (33,683,696) (9,679,744) (291,103) (454,641) (25,818) (688,365) (20,627) (11,160,298) 10,835,175 10,835,175 (31,118,562) (291,103) (525,142) (53,238) (1,956,754) (64,020) (34,008,819) Business-type activities capital assets, net $ 72,537,461 42 $ 61,764,010 $ (23,944,806) $ 110,356,665 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 Depreciation expense was charged to the following functions in the basic financial statements: Government- BusinessWide Type General government $ 226,038 $ Regional customer services 395,650 Transit service operations 11,160,298 Total depreciation expense $ 621,688 $ 11,160,298 The Authority’s enterprise funds in the business type activities have entered into contracts having remaining commitments at June 30, 2009 totaling approximately $3.8 million. These commitments have not been recorded in the accompanying financial statements. Only the currently payable portions of these contracts have been included in the accounts payable in the accompanying financial statements. 7. Operating Leases The Authority leases office space under a lease agreement. Total rent expenditures were $572,570 for the fiscal year ended June 30, 2009. The future minimum lease payments under noncancelable and final option of the operating lease at June 30, 2009 were as follows: Year Ending June 30 2010 2011 2012 Total 8. $ $ 544,776 552,953 280,565 1,378,294 Long-Term Liabilities a. Transportation Excise Tax Revenue Bonds In May 2009, the Board adopted issuance of the transportation revenue bonds, which are specifically for the purpose of payment or reimbursement the costs of capital project expenditures in the regional transportation plan. These bonds are payable solely from the revenues received by the Authority from the Transportation Excise Tax revenues collected by the Arizona Department of Revenue. The bonds were issued on June 30, 2009 in two series. Series 2009A consisted of $73,795,000 transportation excise tax revenue bonds – tax exempt bonds and Series 2009B consisted of $26,280,000 transportation excise tax revenue bonds – federally taxable Build America Bonds. Annual installments of $2,265,000 to $9,260,000 will be made through 2025; interest ranges from 3.25 to 6.46 percent. 43 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 The Authority has pledged future transportation excise tax revenues to repay a total of $100,075,000 in outstanding transportation revenue bonds. Proceeds of the bonds were used for improvements and expansions to the Authority’s bus and light rail projects. The bonds are payable solely from excise tax revenues and are payable through July 1, 2025. For the fiscal year ended June 30, 2009, the revenues available for service of this debt were $109,020,404. Principal payment date is July 1 and is not scheduled to start until July 1, 2011. Interest payment dates are January 1 and July 1, and are not scheduled to start until January 1, 2010. Transportation Excise Revenue Bonds annual debt service requirements at June 30, 2009 were as follows: Year Ending June 30 Principal 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2024 2025 - 2026 $ Total $ Interest - $ 2,265,000 5,085,000 5,290,000 30,545,000 38,740,000 18,150,000 100,075,000 $ Total 2,637,229 5,245,318 5,200,018 5,053,018 4,819,068 19,926,153 11,259,460 1,184,441 $ 2,637,229 5,245,318 7,465,018 10,138,018 10,109,068 50,471,153 49,999,460 19,334,441 55,324,705 $ 155,399,705 The revenue bonds liability activity for the fiscal year ended June 30, 2009 was as follows: Business-Type Activities Revenue Bonds: Balance, July 1, 2008 Revenue bonds payable $ Less unamortized costs: Bond premium Bond issuance costs Total revenue bonds payable, net of unamortized costs $ - Additions $ - 100,075,000 Reductions $ 5,802,932 (877,260) $ 44 105,000,672 $ - Balance, June 30, 2009 Amount Due Within One Year - - $ 100,075,000 $ 5,802,932 (877,260) - $ 105,000,672 - $ - Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 b. Compensated Absences Compensated absences activity for the fiscal year ended June 30, 2009 is as follows: Balance, July 1, 2008 Compensated absences: Governmental activities $ Business-type activities 9. Increases Decreases Amount Due Within One Year Balance, June 30, 2009 644,455 712,973 $ 604,343 582,112 $ (493,615) $ (446,066) 755,183 849,019 $ 598,180 465,687 $ 1,357,428 $ 1,186,455 $ (939,681) $ 1,604,202 $ 1,063,867 Risk Management The Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. The Authority purchases insurance coverage for property, general liability, automobile liability, umbrella liability, commercial crime, public entity employment practices liability, public entity management liability and excess liability. In addition, the Authority purchases workers’ compensation, employee life insurance and health and dental insurance coverage for all of its full-time employees. Settled claims for these risks have never exceeded commercial insurance limits and there were no significant changes in insurance coverage from the prior year. Insurance coverage for transit operations is carried by the contracted operators of service; the operators indemnify the Authority for all liability arising from transit operations. 10. Retirement and Pension Plans Arizona State Retirement System a. Plan descriptions All full-time Authority employees participate in the Arizona State Retirement System (ASRS), a multiple-employer cost sharing defined benefit pension plan. The ASRS is administered in accordance with Title 38, Chapter 5, of the Arizona Revised Statutes. b. Financial report The Arizona State Retirement System issues a publicly available financial report that includes financial statements and required supplementary information. A report may be obtained by writing to ASRS, P.O. Box 33910, Phoenix, Arizona 85067-3910, or by calling 1-800-621-3778. 45 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 c. Funding policy The 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. The Arizona State Legislature establishes and may amend a contribution rate other than the actuarially determined rate. For the year ended June 30, 2009, the Authority and active ASRS members were each required by statute to contribute at the actuarially determined rate of 9.45% (7.90% retirement, 1.05% health insurance premium and 0.50% long-term disability) of the annual covered payroll. The Authority’s contributions from employer to ASRS for the fiscal years ending June 30, 2009, 2008 and 2007 were $1,207,487, $1,044,846 and $859,573, respectively, which were equal to the required contributions for each fiscal year by the employer. Fiscal year ended June 30, 2007 was the first year that the Authority participated in the Arizona State Retirement System. 11. Deferred Compensation Plan The Authority offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. As required by the Internal Revenue Code, the Authority established a trust for the assets and income of the Plan with an independent trustee for the exclusive benefit of participants and their beneficiaries. In accordance with Governmental Accounting Standards Board Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, the Authority does not account for or report the Deferred Compensation Plan in the financial records. The Plan is administered by ICMA Retirement Corporation, 777 North Capital Street, NE, Washington, D.C. 2002-4240. 12. Contractual and Other Commitments a. Underground Storage Tank Revolving Fund Replenishment In fiscal year 1994, the Arizona State Legislature allocated $6,000,000 to the Authority from the Arizona Area A portion of the underground storage tank revolving fund. Beginning with the first fiscal year and in each subsequent fiscal year that the Authority is allocated at least $2,000,000 from the Lottery, the amount allocated to the Authority will be reduced by a maximum of $2,000,000 each fiscal year until a total of $6,000,000 has been withheld to replenish the underground storage tank revolving fund. In the event the Authority does not receive at least $2,000,000 from the Lottery in a given year, no amounts will be withheld from the respective year's allocation. The Authority received a Lottery distribution of $1,760,759 in fiscal year 1998 which is the only year the Authority has received a Lottery distribution. 46 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 b. Commitments The Authority has entered into various contracts for the administration and operation of transit services, travel demand management services, and regional transit planning. Commitments under these contracts exist only to the extent that services are requested or provided, and all contracts provide for cancellation without cause. In addition, the Authority has entered into various contractual agreements to reimburse member cities for bus stop improvements, Happy Valley Park and Ride, Scottsdale Loop 101 Park and Ride, Phoenix Camelback/19th Avenue Transit Center, Surprise Park-andRide, Buckeye Park-and-Ride, Metrocenter Transit Center and ADA reimbursement contracts. At June 30, 2009, the Authority had outstanding contractual commitments for these services aggregating approximately $14.1 million. These commitments have not been recorded in the accompanying financial statements because the member cities either had not incurred the related expenses or had not requested reimbursement for the related expenses. Only the currently payable portions of these contracts have been included in accounts payable in the accompanying financial statements. 13. Contingencies As a subrecipient of federal and state grant monies, amounts passed through or receivable from other agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Authority expects such amounts, if any, to be immaterial. During the fiscal year ended June 30, 2009, the Authority had expenditures of $18,094,020 for various transportation improvement projects. As of June 30, 2009, the projects had been approved by the Maricopa Association of Governments Council and the City of Phoenix but were still waiting for approval from the Federal Transportation Agency (FTA). These expenditures have been reported on the Schedule of Expenditures of Federal Awards because the Authority anticipates the grant agreement to be approved and receive the reimbursement funds from the FTA (passed through the City of Phoenix) in fiscal year 2010. (Remainder of page intentionally left blank) 47 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2009 14. Related Party Transactions As mentioned in Note 1 (a), the members of VMR’s Board of Directors are also members of the fourteen-member Authority’s Board of Directors. VMR contracts with the Authority for certain administrative functions, including personnel, administration, financial and accounting services, purchasing, and computer support services. All VMR staff is hired and employed by the Authority but work solely under the direction of the VMR and its Board of Directors, through a contractual agreement with the Authority. For the period ended June 30, 2009, VMR paid $8,614,380 for services provided by the Authority. At June 30, 2009, the Authority reported $1,121,194 receivable from VMR and $16,656,518 payable to VMR. 15. Excess of Expenditures over Appropriations For the fiscal year ended June 30, 2009, no excess of expenditures over appropriations at the department level of budgetary control occurred. 48 Other upplementa Information Special revenue funds are used to account for specific revenues that are legally restricted to purposes. ell ell ell ell The Transit Planning Fund is used to account for the receipt and expenditure of U. S. Department of Transportation, Federal Transit Administration, Federal Transit Technical Studies grant monies, regional area road fund sales tax revenues and member cities local match restricted for various planning studies. The Transportation Demand Management Fund is used to account for the receipt and expenditure of various grant monies restricted for activities related to the countywide ridesharing program, trip reduction program and clean air campaign. The Regional Customer Services Fund accounts for activities related to marketing, customer services, Americans with Disabilities (ADA) compliance, contract maintenance and quality monitoring, and farebox data reporting for the region. The and Other Grants Fund is used to account for the and expenditure of state and federal grant revenues and expenditures not included in other special revenue funds. Valley Metro Regional Public Transportation Authority Combining Balance Sheet Nonmajor Governmental Funds June 30, 2009 Transit Planning Regional Customer Services Transportation Demand Management Total Nonmajor Governmental Funds Capital and Other Grants Assets Cash and cash equivalents Receivables Due from other governments Other assets Total assets $ 416,016 - $ 3,864 857,728 - $ 728,050 1,694 64,098 $ 33,324 - $ 761,374 5,558 1,273,744 64,098 $ 416,016 $ 861,592 $ 793,842 $ 33,324 $ 2,104,774 $ 89,052 224,442 2,316 $ 56,864 727,163 9,620 $ 539,392 11,627 $ 33,324 - $ 718,632 951,605 23,563 Liabilities and Fund Balances Liabilities: Accounts payable Due to other funds Other liabilities Total liabilities 315,810 793,647 551,019 33,324 1,693,800 Fund balances: Unreserved, undesignated 100,206 67,945 242,823 - 410,974 Total fund balances 100,206 67,945 242,823 - 410,974 Total liabilities and fund balances $ 416,016 $ 861,592 50 $ 793,842 $ 33,324 $ 2,104,774 Valley Metro Regional Public Transportation Authority Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds Fiscal Year Ended June 30, 2009 Transportation Demand Management Transit Planning Revenues: Intergovernmental: State & county grants Federal Transit Administration CMAQ Miscellaneous $ Total revenues Expenditures: Current: Regional planning: Long range Short range Capital Program support Transportation demand management: Trip reduction Ridesharing Other programs Regional customer services: Marketing Call center Other programs Administration: Finance & management services Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Net change in fund balances Fund balance, beginning Fund balance, ending $ 612,190 - $ 455,671 1,411,497 15,777 Regional Customer Services $ Capital and Other Grants 190,398 $ 18,596 Total Nonmajor Governmental Funds $ 455,671 612,190 1,411,497 224,771 612,190 1,882,945 190,398 18,596 2,704,129 292,509 317,886 154,523 1,183,750 - - - 292,509 317,886 154,523 1,183,750 - 897,234 561,620 424,091 - - 897,234 561,620 424,091 - - 2,810,408 3,807,893 1,733,413 - 2,810,408 3,807,893 1,733,413 1,948,668 1,882,945 75,404 8,427,118 112,127 309,160 421,287 112,127 384,564 12,680,018 (1,336,478) - (8,236,720) (402,691) (9,975,889) 1,336,478 1,336,478 - - 8,236,720 8,236,720 - 402,691 402,691 - 9,975,889 9,975,889 - 100,206 67,945 242,823 - 410,974 100,206 $ 67,945 51 $ 242,823 $ - $ 410,974 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Transit Planning Fund Fiscal Year Ended June 30, 2009 Budgeted Amounts Original Final Revenues: Intergovernmental: Federal Transit Administration Miscellaneous Total revenues $ Expenditures: Current: Long range Short range Capital Program support Total expenditures 1,128,470 1,128,470 $ Variance with Final Budget Over (Under) Actual Amounts 343,920 260,000 603,920 $ 612,190 612,190 $ 268,270 (260,000) 8,270 665,505 1,197,909 105,698 2,283,177 4,252,289 563,615 1,198,909 476,544 1,433,818 3,672,886 292,509 317,886 154,523 1,183,750 1,948,668 (271,106) (881,023) (322,021) (250,068) (1,724,218) (3,123,819) (3,068,966) (1,336,478) 1,732,488 3,123,819 3,123,819 3,068,966 3,068,966 1,336,478 1,336,478 (1,732,488) (1,732,488) Net change in fund balance - - - - Fund balance, beginning - - 100,206 100,206 Excess (deficiency) of revenues over (under) expenditures Other financing sources: Transfers in Total other financing sources Fund balance, ending $ - 52 $ - $ 100,206 $ 100,206 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Transportation Demand Management Fund Fiscal Year Ended June 30, 2009 Budgeted Amounts Original Final Revenues: State sources: State grants Intergovernmental: CMAQ Other federal grants Miscellaneous Total revenues $ 847,105 $ Variance with Final Budget Over (Under) Actual Amounts 847,105 $ 455,671 $ (391,434) 1,468,000 42,000 2,357,105 1,468,000 42,000 2,357,105 1,411,497 15,777 1,882,945 (56,503) (42,000) 15,777 (474,160) 842,000 594,000 921,105 2,357,105 842,000 594,000 921,105 2,357,105 897,234 561,620 424,091 1,882,945 55,234 (32,380) (497,014) (474,160) Excess revenues over expenditures - - - - Fund balance, beginning - - 67,945 67,945 Expenditures: Current: Trip reduction Ridesharing Other programs Total expenditures Fund balance, ending $ - 53 $ - $ 67,945 $ 67,945 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Regional Customer Services Fund Fiscal Year Ended June 30, 2009 Budgeted Amounts Final Original Revenues: Miscellaneous Total revenues $ $ Variance with Final Budget Over (Under) Actual Amounts $ 190,398 190,398 $ 37,293 37,293 - 153,105 153,105 3,663,320 3,635,898 1,828,646 159,700 9,287,564 3,116,580 3,847,663 1,802,456 159,700 8,926,399 2,810,408 3,807,893 1,733,413 75,404 8,427,118 (306,172) (39,770) (69,043) (84,296) (499,281) (9,287,564) (8,773,294) (8,236,720) 536,574 9,287,564 9,287,564 8,773,294 8,773,294 8,236,720 8,236,720 (536,574) (536,574) Net change in fund balance - - - - Fund balance, beginning - - 242,823 242,823 Expenditures: Current: Regional marketing Regional call center Other programs Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Fund balance, ending $ - 54 $ - $ 242,823 $ 242,823 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Capital and Other Grants Fund Fiscal Year Ended June 30, 2009 Budgeted Amounts Original Final Variance with Final Budget Over (Under) Actual Amounts Revenues: Miscellaneous $ Total revenues Expenditures: Administration: Finance & management services Capital outlay Total expenditures - $ - $ 18,596 18,596 $ 18,596 18,596 120,000 470,000 590,000 120,000 470,000 590,000 112,127 309,160 421,287 (7,873) (160,840) (168,713) (590,000) (590,000) (402,691) 187,309 590,000 590,000 590,000 590,000 402,691 402,691 (187,309) (187,309) Net change in fund balance - - - - Fund balance, beginning - - - - Excess (deficiency) of revenues over (under) expenditures Other financing sources: Transfers in Total other financing sources Fund balance, ending $ - 55 $ - $ - $ - Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenses and Changes in Net Assets - Budget to Actual Transit Service Operations Fund Fiscal Year Ended June 30, 2009 Actual Amounts (budgetary basis) Budgeted Amounts Final Original Operating Revenues: Charges for services Miscellaneous Total operating revenues $ 24,925,728 24,925,728 $ 24,781,846 26,460 24,808,306 $ 23,891,590 826,905 24,718,495 Variance with Final Budget Over (Under) $ (890,256) 800,445 (89,811) Operating Expenses: Local & express bus service Paratransit service Vanpool service Safety and security Administrative and general Contingency Capital outlay Total operating expenses Operating income (loss) 51,348,243 9,862,198 1,708,618 1,153,641 38,518 7,833,270 36,775,001 108,719,489 (83,793,761) 52,550,666 9,855,898 1,523,721 555,142 36,668 400,000 36,474,220 101,396,315 (76,588,009) 51,501,081 10,280,588 781,556 344,819 36,653 32,569,737 95,514,434 (70,795,939) (1,049,585) 424,690 (742,165) (210,323) (15) (400,000) (3,904,483) (5,881,881) 5,792,070 Non-Operating Revenues (Expenses): Lead agency disbursements Federal Transit Administration grants Other federal grants IRS fuel tax credit Proceeds from disposition of capital assets Miscellaneous Proceeds from revenue bond issuance Total nonoperating revenues (expenses) (61,195,645) 14,495,027 990,000 77,600,000 31,889,382 (31,033,379) 21,001,394 990,000 135,000,000 125,958,015 (25,520,810) 23,717,327 2,926,010 1,162,508 374,368 2,778 105,000,672 107,662,853 5,512,569 2,715,933 2,926,010 172,508 374,368 2,778 (29,999,328) (18,295,162) (51 904 379) (51,904,379) 49 49,370,006 370 006 36 36,866,914 866 914 (12 503 092) (12,503,092) 64,761,875 (26,100,000) 55,337,485 (14,700,000) 40,570,347 (12,888,563) (14,767,138) 1,811,437 I Income (loss) (l )b before f ttransfers f Transfers in Transfers out Change in net assets budgetary basis $ (13,242,504) $ 90,007,491 $ 64,548,698 $ 64,548,698 $ Explanation of differences between budgetary basis and GAAP basis Excess revenues over expenses - budgetary basis Bond proceeds are recorded as a financing source for budgetary purposes, and as a liability for GAAP purposes Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes Contributed capital is not a budgeted revenue, but is revenue for GAAP purposes Depreciation is not a budgeted expense, but is an expense for GAAP purposes Proceeds from disposition of assets increase financial resources for budgetary basis, but is not a revenue for GAAP basis The gain on disposal of capital assets is not a budgeted revenue, but is a revenue for GAAP purposes Changes in net assets per the statement of revenues, expenses and changes in fund net assets $ (105,000,672) 32,569,737 16,521,418 (11,160,298) (374,368) 241,285 (2,654,200) This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 56 (25,458,793) Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenses and Changes in Net Assets - Budget to Actual Valley Metro Rail Fund Fiscal Year Ended June 30, 2009 Actual Amounts (budgetary basis) Budgeted Amounts Final Original Operating Revenues: Charges for services Total operating revenues $ 10,087,924 10,087,924 $ 10,087,924 10,087,924 $ 8,614,280 8,614,280 Variance with Final Budget Over (Under) $ (1,473,644) (1,473,644) Operating Expenses: Light rail staff and administration Total operating expenses Operating income (loss) 10,087,924 10,087,924 (10,087,924) 10,087,924 10,087,924 (10,087,924) 8,614,280 8,614,280 (8,614,280) (1,473,644) (1,473,644) 1,473,644 Non-Operating Revenues (Expenses): Lead agency disbursements Interest income Miscellaneous Total nonoperating revenues (expenses) (84,325,400) (84,325,400) (64,977,066) (64,977,066) (61,878,249) 34,862 (100) (61,843,487) 3,098,817 34,862 (100) 3,133,579 (84,325,400) (64,977,066) (61,843,487) 3,133,579 84,325,400 64,977,066 64,948,778 Income (loss) before transfers Transfers in Excess revenues over expenses budgetary basis $ - $ - $ 3,105,291 (28,288) $ This schedule is prepared on a budgetary basis for the operating accounts of the proprietary fund and as such does not present the results of operations on the basis of generally accepted accounting principles, but is presented for supplemental information. 57 3,105,291 Statistical Section Financial Trends These schedules contain trend information to help the reader understand how the Authority's financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the Authority's most significant local revenue source, the sales tax. These schedules contain information to help the reader assess the affordability of the Authority's current levels of outstanding debt, the Authority's ability to issue additional debt in the future. offer demographic and economic indicators to help the reader understand the environment within which the Authority's financial activities take place. infrastructure to information in the Authority's financial report it .... ,.....4",.... .......... ,. . " I " ' T ' " IIT·O,..., ... Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The Authority implemented GASB schedules presenting government-wide information include Statement No. 34 in FY 2001 information beginning in that year. Valley Metro Regional Public Transportation Authority Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) FY 2001/02 FY 2002/03 FY 2003/04 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net asset $ 152,674 2,303,561 $ 2,456,235 $ 175,418 2,303,561 $ 2,478,979 199,619 3,300,859 $ 3,500,478 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 17,034,467 726,021 12,075 $ 17,772,563 $ 14,186,807 1,116,356 943,423 $ 16,246,586 $ 11,497,494 1,559,108 1,250,277 $ 14,306,879 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 17,187,141 726,021 2,315,636 $ 20,228,798 $ 14,362,225 1,116,356 3,246,984 $ 18,725,565 $ 11,697,113 1,559,108 4,551,136 $ 17,807,357 59 $ FY 2004/05 $ FY 2005/06 FY 2006/07 161,090 3,300,859 $ 3,461,949 $ 249,177 12,224,193 $ 12,473,370 $ $ 12,283,769 1,827,192 1,299,780 $ 15,410,741 $ 27,042,048 5,301,289 17,159,298 $ 49,502,635 $ $ 12,444,859 1,827,192 4,600,639 $ 18,872,690 $ 27,291,225 5,301,289 29,383,491 $ 61,976,005 $ $ FY 2007/08 1,362,413 42,677,444 44,039,857 $ 47,945,807 1,778,889 21,142,003 70,866,699 $ $ 49,308,220 1,778,889 63,819,447 $ 114,906,556 60 $ $ $ FY 2008/09 1,467,040 28,106,773 29,573,813 $ 1,229,916 $ 37,265,160 38,495,076 72,537,461 2,332,524 17,991,644 92,861,629 $ 74,004,501 2,332,524 46,098,417 $ 122,435,442 $ $ 98,580,060 4,062,157 (9,329,497) 93,312,720 99,809,976 4,062,157 27,935,663 $ 131,807,796 Valley Metro Regional Public Transportation Authority Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) FY 2001/02 Expenses Governmental activities: Regional planning: Long range planning Short range planning Capital planning Program support Transportation demand management: Trip reduction Ridesharing Other programs Regional customer services: Marketing Call center Other programs Administration: Executive director's office Communications & government relations Finance & management services Community funded transportation Capital outlay Total governmental activities expenses Business-type activities: Transit service operations Regional customer services Light rail transit Total business-type activities expenses Total primary government expenses $ 212,391 256,925 307,518 29,746 FY 2002/03 $ 367,279 274,302 118,161 43,722 FY 2003/04 $ 167,057 242,945 163,818 53,199 FY 2004/05 $ 162,287 145,690 236,219 171,169 853,216 608,955 497,885 820,699 589,798 294,016 784,056 656,311 267,869 931,196 514,977 486,102 - - - - 262,172 162,556 87,255 1,000,000 134,200 4,412,819 226,215 207,283 91,684 51,652 94,589 3,179,400 238,134 247,948 106,305 51,652 90,972 3,070,266 400,777 161,979 293,648 51,652 180,099 3,735,795 28,475,928 5,010,019 16,765,586 50,251,533 30,011,849 4,229,972 5,033,179 39,275,000 30,650,723 4,710,645 2,982,701 38,344,069 34,834,292 5,123,118 3,667,400 43,624,810 $ 54,664,352 $ 42,454,400 $ 41,414,335 $ 47,360,605 61 FY 2005/06 $ 187,496 322,430 197,256 534,285 FY 2006/07 $ 403,337 558,664 164,722 1,298,591 FY 2007/08 $ 316,147 735,888 224,767 1,113,474 FY 2008/09 $ 292,509 317,886 154,523 1,183,750 865,290 645,052 326,903 719,854 594,549 385,257 819,553 592,460 373,833 897,234 561,620 424,091 - 2,578,094 3,087,948 1,623,744 3,110,366 3,599,018 1,857,934 2,810,408 3,807,893 2,129,063 514,158 207,304 549,635 4,349,809 1,712,451 260,965 715,001 14,103,177 1,033,066 908,275 14,684,781 1,111,340 799,503 14,489,820 38,578,007 5,767,760 16,909,968 61,255,735 60,090,164 63,225,727 123,315,891 96,796,902 65,243,366 162,040,268 99,625,805 70,492,629 170,118,434 $ 65,605,544 $ 137,419,068 $ 176,725,049 $ 184,608,254 (Continued) 62 Valley Metro Regional Public Transportation Authority Changes in Net Assets (Continued) Last Eight Fiscal Years (accrual basis of accounting) FY 2001/02 Program revenues Governmental activities: Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues $ 2,486,448 122,392 2,608,840 FY 2002/03 $ 3,370 2,259,396 94,488 2,357,254 FY 2003/04 $ 32,501 1,949,879 92,140 2,074,520 FY 2004/05 $ 49,642 2,288,916 172,438 2,510,996 Business-type activities: Charges for services Transit service operations: Local & express bus service Paratransit service Vanpool service Other activities Regional customer services Light rail transit Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues 11,474,892 4,603,962 319,875 53,288 4,683,109 5,323,908 13,324,905 5,374,355 45,158,294 $ 47,767,134 14,423,963 4,623,029 594,796 56,957 3,997,064 2,569,035 4,108,637 609,542 30,983,023 $ 33,340,277 15,487,044 4,640,901 534,764 70,001 4,378,852 2,982,701 1,834,067 820,223 30,748,553 $ 32,823,073 18,135,892 5,344,925 526,891 49,550 4,962,128 3,667,400 5,140,813 387,845 38,215,444 $ 40,726,440 Net (Expense)/Revenue Governmental activities Business-type activities Total primary government net expense $ (1,803,979) (5,093,239) $ (6,897,218) $ (822,146) (8,291,977) $ (9,114,123) $ (995,746) (7,595,516) $ (8,591,262) $ (1,224,799) (5,409,366) $ (6,634,165) General Revenues and Other Changes in Net Assets Governmental activities: Sales taxes Interest earnings Other income Transfers in (out) Total governmental activities $ 1,941,168 167,272 (789,672) 1,318,768 $ 2,587,302 64,528 21,603 (1,828,543) 844,890 $ 3,071,725 83,977 966 (1,139,423) 2,017,245 $ 1,154,022 103,981 1,047 1,259,050 5,400,322 45,490 16,775 789,672 6,252,259 $ 7,571,027 4,914,755 22,702 1,828,543 6,766,000 $ 7,610,890 4,516,066 320 1,139,423 5,655,809 $ 7,673,054 6,559,344 2,774 6,562,118 $ 7,821,168 $ $ $ 1,021,499 (1,939,707) $ (918,208) $ Business-type activities: Sales taxes Interest earnings Other income Transfers in (out) Total business-type activities: Total primary government Change in net assets: Governmental activities Business-type activities Total primary government net expense (485,211) 1,159,020 $ 673,809 63 22,744 (1,525,977) $ (1,503,233) 34,251 1,152,752 $ 1,187,003 FY 2005/06 $ 75,295 2,358,485 48,382 2,482,162 FY 2006/07 $ 25,046 2,494,611 198,777 2,718,434 $ 2,062,602 2,062,602 $ 2,632,463 2,632,463 $ $ (1,867,647) (10,282,634) $ (12,150,281) $ (11,384,743) (75,093,769) $ (86,478,512) $ (12,622,179) (115,210,782) $ (127,832,961) $ $ 55,084,706 124,312 (44,329,950) 10,879,068 $ 134,235,260 1,664,357 (92,948,387) 42,951,230 $ 130,490,779 2,503,935 142,810 (134,981,389) (1,843,865) $ 113,297,696 36,310 75,176 (92,630,562) 20,778,620 44,578 44,329,950 44,374,528 $ 55,253,596 945,155 2,564,291 92,948,387 96,457,833 $ 139,409,063 536,116 1,688,207 134,981,389 137,205,712 $ 135,361,847 34,862 2,233,476 92,630,562 94,898,900 $ 115,677,520 $ $ $ (14,466,044) 21,994,930 $ 7,528,886 $ $ 31,566,487 21,364,064 52,930,551 $ 64 19,861,844 2,043,104 844,115 6,421,524 1,421,891 16,237,008 46,829,486 48,892,088 FY 2008/09 18,963,733 4,075,963 692,342 182,809 3,376,143 5,209,939 1,186,038 17,286,134 50,973,101 $ 53,455,263 9,011,421 34,091,894 $ 43,103,315 20,131,861 2,118,843 685,743 36,729 5,565,540 642,313 19,041,093 48,222,122 50,940,556 FY 2007/08 $ 19,936,194 3,029,151 926,245 8,614,280 2,609,156 40,555,599 75,670,625 78,303,088 (11,857,357) (94,447,809) $ (106,305,166) $ 8,921,263 451,091 9,372,354 Valley Metro Regional Public Transportation Authority Fund Balances of Governmental Funds Last Eight Fiscal Years (modified accrual basis of accounting) General fund: Reserved Unreserved, designated Unreserved, undesignated Total general fund All other governmental funds: Reserved Unreserved, designed, reported in Special revenue funds Unreserved, undesignated, reported in Special revenue funds Total all other governmental funds FY 2001/02 FY 2002/03 FY 2003/04 $ $ $ 238,405 2,065,156 $ 2,303,561 318,191 1,985,370 $ 2,303,561 384,887 2,915,972 $ 3,300,859 $ $ $ - $ 65 - - $ - - $ - FY 2004/05 FY 2005/06 $ FY 2006/07 FY 2007/08 FY 2008/09 350,173 2,950,686 $ 3,300,859 $ 649,225 1,638,892 $ 2,288,117 $ 1,002,229 1,433,788 $ 2,436,017 $ 233,480 2,888,105 $ 3,121,585 $ $ $ $ $ $ $ - - - - 755,184 2,882,500 $ 3,637,684 - - - 21,059,001 410,974 - - 9,936,076 $ 9,936,076 19,182,426 $ 40,241,427 25,218,669 $ 25,629,643 34,382,659 $ 34,382,659 66 Valley Metro Regional Public Transportation Authority Changes in Fund Balances of Governmental Funds Last Eight Fiscal Years (modified accrual basis of accounting) Revenues Sales taxes Intergovernmental: State & county grants Federal Transit Administration CMAQ Other federal grants Charges for services Interest earnings Other Total revenues FY 2001/02 FY 2002/03 FY 2003/04 $ 1,941,168 $ 2,587,302 $ 3,071,725 409,000 553,492 1,604,348 42,000 167,272 4,717,280 400,000 599,460 1,312,424 42,000 3,370 64,528 21,603 5,030,687 400,000 335,365 1,264,654 42,000 32,501 83,977 966 5,231,188 212,391 256,925 307,518 29,746 367,279 274,302 118,161 43,722 167,057 242,945 163,818 53,199 853,216 608,955 497,885 820,699 589,798 294,016 784,056 656,311 267,869 - - - 262,172 226,215 238,134 162,556 87,255 1,000,000 153,369 4,431,988 207,283 91,684 51,652 117,333 3,202,144 247,948 106,305 51,652 115,173 3,094,467 285,292 1,828,543 2,136,721 (789,672) (789,672) (1,828,543) (1,828,543) (1,139,423) (1,139,423) Expenditures Governmental activities: Regional planning: Long range planning Short range planning Capital planning Program support Transportation demand management: Trip reduction Ridesharing Other programs Regional customer services: Marketing Call center Other programs Administration: Executive director's office Communications & government relations Finance & management services Community funded transportation Capital outlay Total expenditures Excess of revenues over expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances $ 67 (504,380) $ - $ 997,298 FY 2004/05 FY 2005/06 FY 2006/07 $ 1,154,022 $ 55,084,706 $ 134,235,260 400,000 526,176 1,493,178 42,000 49,642 103,981 1,047 3,770,046 400,000 569,622 1,395,577 41,668 75,295 124,312 57,691,180 400,000 993,727 1,298,056 1,604 25,046 1,664,357 138,618,050 422,887 268,661 1,287,054 84,000 2,503,935 144,672 135,201,988 455,671 612,190 1,411,497 36,310 228,281 116,041,645 162,287 145,690 236,219 171,169 187,496 322,430 197,256 534,285 403,337 558,664 164,722 1,298,591 311,129 733,017 222,439 1,104,198 292,509 317,886 154,523 1,183,750 931,196 514,977 486,102 865,290 645,052 326,903 719,854 594,549 385,257 816,128 601,220 370,142 897,234 561,620 424,091 - - 2,578,094 3,087,948 1,511,164 3,084,872 3,563,629 1,380,563 2,810,408 3,807,893 1,733,413 400,777 514,158 1,712,451 1,030,804 1,111,340 161,979 293,648 51,652 214,350 3,770,046 207,304 419,571 218,151 4,437,896 260,965 580,415 765,641 14,621,652 318,945 1,078,709 14,615,795 462,737 384,564 14,141,968 - 53,253,284 123,996,398 120,586,193 101,899,677 - 814,701 (45,144,651) (44,329,950) 9,349,388 (102,892,535) (93,543,147) 11,165,777 (146,147,166) (134,981,389) 9,975,889 (102,606,451) (92,630,562) $ - $ 8,923,334 $ 30,453,251 68 FY 2007/08 $ $ 130,490,779 (14,395,196) FY 2008/09 $ $ 113,297,696 9,269,115 Valley Metro Regional Public Transportation Authority Sales Tax Revenues by Component (1) Last Ten Fiscal Years (accrual basis of accounting) Governmental activities Regional area road funds Public transportation funds Total governmental activities sales taxes Business-type activities Regional area road funds Public transportation funds Total business-type activities sales taxes Primary government Regional area road funds Public transportation funds Total primary government sales taxes FY 1999/00 FY 2000/01 FY 2001/02 FY 2002/03 $ 7,090,674 $ 7,090,674 $ 7,193,836 $ 7,193,836 $ 1,941,168 $ 1,941,168 $ 2,587,302 $ 2,587,302 $ $ - $ 5,400,322 $ 5,400,322 $ 4,914,755 $ 4,914,755 $ 7,193,836 $ 7,193,836 $ 7,341,490 $ 7,341,490 $ 7,502,057 $ 7,502,057 - $ $ 7,090,674 $ 7,090,674 $ (1) With the implementation of GASB Statement #34 in FY 2002, activities related to transit service operations, light rail transit and regional customer services were changed from general governmental to proprietary (business-type). Therefore, the functional expenditures listed for FY 2000/01 and earlier include the activities of these functions as part of general governmental, and the activities listed for FY 2001/02 and later exclude these activities from general governmental. As a result, most revenue categories will be greater for FY 2000/01 and prior years and should not be used as comparative data against FY 2001/02 activity and beyond. (2) With the implementation of the Public Transportation sales tax in January 2006, several changes to sales tax distributions were made. The regional area road fund sales tax distribution was reduced to one-half of the amount distributed in prior years. The collections of sales taxes under the new statute are distributed 33.3% to the Authority on a monthly basis. During FY 2005/06, only six months of collections were reported. 69 FY 2003/04 $ FY 2004/05 FY 2005/06 (2) FY 2006/07 (2) FY 2007/08 (2) $ $ $ FY 2008/09 (2) 3,071,725 3,071,725 $ 1,154,022 $ 1,154,022 3,938,570 51,146,136 $ 55,084,706 4,047,593 130,187,667 $ 134,235,260 4,167,168 126,323,611 $ 130,490,779 $ $ 4,516,066 $ 4,516,066 $ 6,559,344 $ 6,559,344 $ $ $ $ $ 7,587,791 $ 7,587,791 $ 7,713,366 $ 7,713,366 $ $ - $ $ 3,938,570 51,146,136 $ 55,084,706 $ - 4,047,593 130,187,667 $ 134,235,260 70 $ $ - 4,167,168 126,323,611 $ 130,490,779 $ $ $ $ 4,277,292 109,020,404 113,297,696 - 4,277,292 109,020,404 113,297,696 Valley Metro Regional Public Transportation Authority Maricopa County Transportation Excise Tax Revenue Distributions Last Ten Fiscal Years (in thousands) Regional area road funds Freeways Regional Public Transportation Authority / Maricopa Association of Governments (1) Arterial streets Total regional area road fund distributions FY 1999/00 FY 2000/01 FY 2001/02 FY 2002/03 $ $ $ $ 241,505 Source: Note: 261,219 7,194 7,341 7,502 248,596 264,723 267,563 268,721 - $ 260,222 7,091 Public transportation funds Total Maricopa County transportation excise tax revenue distributions 257,529 248,596 - $ 264,723 - $ 267,563 The Maricopa County Transportation Excise Tax Year-End Report for Fiscal Year 2008, dated July 2008, prepared by the Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. The Maricopa County Transportation Excise Tax, often referred to as the "1/2 cent sales tax," is levied upon business activities in Maricopa County, including retail sales, contracting, utilities, rental of real and personal property, restaurant and bar receipts, and other activities. Under Proposition 300 (passed by the voters in 1985 becoming effective on January 1, 1 1986), 1986) the transportation excise tax revenues are deposited in the Maricopa County Regional Area Road Fund (RARF) which is administered by the Arizona Department of Transportation. The revenues deposited into the RARF account are the principal sources of funding for the Regional Freeway System in Maricopa County and the Regional Public Transportation Authority and are dedicated through December 31, 2005. In November 2004, Maricopa County's voters approved Proposition 400, Maricopa County Transportation Excise Tax, which became effective on January 1, 2006, and extends the 1/2 cent sales tax for another 20 years through December 31, 2025. The sales tax extension will be used for construction of new freeways, widening of existing freeways and highways, improvements to the arterial street system, regional bus service and high capacity transit services such as light rail. The collections of the Maricopa County Transportation Excise Tax are as follows: Freeways 56.2%, Public Transportation Fund 33.3%, and Arterial Streets 10.5%. (1) The Authority received a portion of the RARF excise tax funds for transit costs through December 31, 2005. (2) Distributions are a mix of both Proposition 300 and Proposition 400 collections. 71 - $ 268,721 FY 2003/04 FY 2004/05 $ $ 281,012 $ 292,487 FY 2006/07 (2) $ 213,119 FY 2007/08 $ 205,576 FY 2008/09 $ 176,235 7,588 7,713 7,877 8,095 8,334 8,555 288,600 316,805 16,127 316,491 41,050 262,264 39,832 253,742 34,376 219,166 51,146 130,188 126,324 109,020 - $ 309,092 FY 2005/06 (2) 288,600 - $ 316,805 $ 367,637 72 $ 392,452 $ 380,066 $ 328,186 Valley Metro Regional Public Transportation Authority Maricopa County Transportation Excise Tax Revenue Collections by Category Last Ten Fiscal Years (in thousands) Fiscal Year Retail Sales 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 (1) 2006/07 (1) 2007/08 (1) 2008/09 (1) Source: Note: (1) $124,428 131,608 131,393 133,922 144,817 158,179 182,378 187,817 177,845 153,681 Contracting $37,384 38,820 41,218 38,894 43,524 52,325 64,822 73,864 66,046 46,865 Utilities $16,437 17,862 18,432 18,485 19,980 20,813 23,600 26,697 28,630 28,510 Restaurant and Bar Rental Real Property Rental Personal Property $20,005 21,395 21,748 22,646 24,807 27,191 30,656 33,073 33,021 30,763 $22,080 24,112 24,529 25,747 27,163 29,310 32,949 36,398 38,605 37,757 $13,434 14,416 13,928 12,834 12,631 12,624 13,923 15,053 15,111 13,470 Other Total $14,828 16,509 16,315 16,193 15,678 16,363 19,309 19,550 20,808 17,140 $248,596 264,722 267,563 268,721 288,600 316,805 367,637 392,452 380,066 328,186 The Maricopa County Transportation Excise Tax Year-End Report for Fiscal Year 2009, dated July 2009, prepared by the Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. The Maricopa County Transportation Excise Tax, often referred to as the "1/2 cent sales tax," is levied upon business activities in Maricopa County, including retail sales, contracting, utilities, rental of real and personal property, restaurant and bar receipts, and other activities. Under Proposition 300 (passed by the voters in 1985 becoming effective on January 1, 1986), the transportation excise tax revenues are deposited in the Maricopa County Regional Area Road Fund (RARF) which is administered by the Arizona Department of Transportation. The revenues deposited into the RARF account are the principal sources of funding for the Regional Freeway System in Maricopa County and the Regional Public Transportation Authority and are dedicated through December 31, 2005. In November 2004, Maricopa County's voters approved Proposition 400, Maricopa County Transportation Excise Tax, which became effective on January 1, 2006, and extends the 1/2 cent sales tax for another 20 years through December 31, 2025. The sales tax extension will be used for construction of new freeways, widening of existing freeways and highways, improvements to the arterial street system, regional bus service and high capacity transit services such as light rail. The collections of the Maricopa County Transportation Excise Tax are as follows: Freeways 56.2%, Public Transportation Fund 33.3%, and Arterial Streets 10.5%. Fiscal year collections are a mix of both Proposition 300 and Proposition 400 collections. Revenue Category Definitions: Retail Sales Includes retail sales of automobiles, durable goods and other general merchandise, apparel, building materials, furniture and other tangible personal property. The tax on food was repealed in July 1980. Contracting Includes prime contracting and dealership of manufactured buildings and owner-builder operations. Utilities Includes producing and/or furnishing to consumers electricity, natural or artificial gas, and water. Restaurant and Bar Includes operations of restaurants and drinking establishments. Rental of Real Property Includes leasing or renting real property, hotels and motels. Rental of Personal Property Includes leasing or renting tangible personal property such as leased vehicles and construction equipment. Other Includes intrastate transportation of persons, freight or operations of property, intrastate telecommunication services, intrastate operation of pipelines for oil or natural or artificial gas, job printing, engraving, embossing and publication, publication of newspapers, magazines and other periodicals, operations of amusement places and miscellaneous other revenues. 73 Valley Metro Regional Public Transportation Authority Arizona Transaction Privilege Tax Excise Tax Rates by Category Last Ten Fiscal Years Retail sales Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Contracting Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Rental of Real Property (including hotels and motels) (1) Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Restaurants and Bars Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Utilities Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Rental of Personal Property Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Communications Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Amusements Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Publishing and Printing Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Other Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate Mining Percent of Total Maricopa County Transaction Privilege Tax Collections Transaction Privilege Tax Rate Transportation Excise Tax Rate FY 1999/00 FY 2000/01 FY 2001/02 FY 2002/03 50.0500% 5.0000% 0.5000% 49.7200% 5.0000% 0.5000% 49.1100% 5.0000% 0.5000% 49.8400% 5.0000% 0.5000% 15.0400% 5.0000% 0.5000% 14.6600% 5.0000% 0.5000% 15.4000% 5.0000% 0.5000% 14.4700% 5.0000% 0.5000% 8.8800% 1.8200% 0.5120% 9.1100% 1.8200% 0.5120% 9.1700% 1.8200% 0.5120% 9.5800% 1.8200% 0.5120% 8.0500% 5.0000% 0.5000% 8.0800% 5.0000% 0.5000% 8.1300% 5.0000% 0.5000% 8.4300% 5.0000% 0.5000% 6.6100% 5.0000% 0.5000% 6.7500% 5.0000% 0.5000% 6.8900% 5.0000% 0.5000% 6.8800% 5.0000% 0.5000% 5.4000% 5.0000% 0.5000% 5.4500% 5.0000% 0.5000% 5.2100% 5.0000% 0.5000% 4.7800% 5.0000% 0.5000% 3.4100% 5.0000% 0.5000% 3.7200% 5.0000% 0.5000% 3.7300% 5.0000% 0.5000% 3.4500% 5.0000% 0.5000% 1.1400% 5.0000% 0.5000% 1.0800% 5.0000% 0.5000% 1.1200% 5.0000% 0.5000% 1.1100% 5.0000% 0.5000% 0.8700% 5.0000% 0.5000% 0.7800% 5.0000% 0.5000% 0.7000% 5.0000% 0.5000% 0.7000% 5.0000% 0.5000% 0.5500% 5.0000% 0.5000% 0.6500% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 0.7600% 5.0000% 0.5000% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% Source: The Maricopa County Transportation Excise Tax Year-End Report for the applicable fiscal year prepared by the Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. (1) In 1990 and 1993, legislation reduced the transaction privilege tax rate for real property rentals; however, for transportation excise tax purposes, the rate was retained at its prior level. 74 FY 2003/04 FY 2004/05 FY 2005/06 FY 2006/07 FY 2007/08 FY 2008/09 50.1800% 5.0000% 0.5000% 49.9300% 5.0000% 0.5000% 49.9300% 5.0000% 0.5000% 47.8600% 5.0000% 0.5000% 46.8000% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 15.0800% 5.0000% 0.5000% 16.5200% 5.0000% 0.5000% 16.5200% 5.0000% 0.5000% 18.8200% 5.0000% 0.5000% 17.4000% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 9.0500% 1.8200% 0.5120% 9.2500% 1.8200% 0.5120% 9.2500% 1.8200% 0.5120% 9.2700% 1.8200% 0.5120% 10.1000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 8.6000% 5.0000% 0.5000% 8.5800% 5.0000% 0.5000% 8.5800% 5.0000% 0.5000% 8.4300% 5.0000% 0.5000% 8.7000% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 6.9200% 5.0000% 0.5000% 6.5700% 5.0000% 0.5000% 6.5700% 5.0000% 0.5000% 6.8000% 5.0000% 0.5000% 7.5000% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 4.3800% 5.0000% 0.5000% 3.9800% 5.0000% 0.5000% 3.9800% 5.0000% 0.5000% 3.8400% 5.0000% 0.5000% 4.0000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 3.3400% 5.0000% 0.5000% 3.2000% 5.0000% 0.5000% 3.2000% 5.0000% 0.5000% 2.9300% 5.0000% 0.5000% 3.3000% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 1.0600% 5.0000% 0.5000% 1.0500% 5.0000% 0.5000% 1.0500% 5.0000% 0.5000% 1.0600% 5.0000% 0.5000% 1.1000% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 0.6300% 5.0000% 0.5000% 0.6100% 5.0000% 0.5000% 0.6100% 5.0000% 0.5000% 0.5300% 5.0000% 0.5000% 0.5000% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.7600% 5.0000% 0.5000% 0.3100% 5.0000% 0.5000% 0.3100% 5.0000% 0.5000% 0.4600% 5.0000% 0.5000% 0.6000% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 75 Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Bond Coverage For the fiscal year ended June 30, 2009 Fiscal Year 2009 Principal $ Interest - $ Total - $ Pledged Revenue - $ 109,020,404 Coverage N/A Note: On June 30, 2009 Regional Public Transportation Authority raised $100,075,000 on bonds issued secured by its portion of the Transportation Excise Tax revenues collected by the Arizona Department of Revenue. As of June 30, 2009 no amounts were required to fund the debt service accounts. 76 Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Debt Service Revenue and Cost Per Capita For the fiscal year ended June 30, 2009 Fiscal Year 2009 Principal $ Total Cost Interest - $ - $ Revenue - $109,020,404 Maricopa County Population (1) 3,987,942 Cost Per Capita $ (1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation 77 - Revenue Per Capita $ 27 Valley Metro Regional Public Transportation Authority Regional Population Statistics Last Ten Fiscal Years Maricopa County Avondale Chandler El Mirage Gilbert Glendale Goodyear (3) Mesa Peoria Phoenix Queen Creek (3) Scottsdale Surprise (3) Tempe Buckeye FY 1999/00 (1) FY 2000/01 (2) FY 2001/02 (1) 2,913,475 32,270 169,000 5,860 100,850 208,095 N/A 374,560 101,235 1,240,775 N/A 204,660 N/A 161,995 N/A 3,072,149 35,883 176,581 7,609 109,697 218,812 N/A 396,375 108,364 1,321,045 N/A 202,705 30,848 158,625 N/A 3,192,125 40,445 186,875 11,915 122,360 224,970 N/A 414,075 117,200 1,344,775 N/A 209,960 38,400 159,435 N/A FY 2002/03 (1) 3,296,250 47,610 194,390 20,645 133,640 227,495 N/A 427,550 122,655 1,365,675 N/A 214,090 45,125 159,425 N/A (1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation (2) Source: U.S. Census (3) Data for fiscal years prior to membership of the Authority was not available. The Regional Public Transportation Authority ("Authority") was established in 1985 to develop a regional transit plan and to develop and operate a regional transit system in Maricopa County, Arizona. The Authority is governed by a fifteen-member Board of Directors consisting of a member of the Maricopa County Board of Supervisors, and the mayors (or their designees) of the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe, and the towns of Gilbert , Queen Creek and Buckeye. Any municipality in Maricopa County may join the Authority and have one elected official serve on the Board of Directors by committing a portion of its local transportation assistance funds to local State legislation designates that 100% of the proceeds received by participating municipalities with 300,000 or more in population from the Arizona State Lottery, known as local transportation assistance funds, must be expended for public transportation in the respective municipalities to maintain a position on the Authority's Board of Directors. For all other municipalities, the requirement is 33.3% for cities with a population between 60,000 and 300,000 and 75% for cities with less than 60,000 population. Local transportation assistance funds ("LTAF") and minimum public transportation expenditures for participating municipalities for the last ten years are on the LTAF statistics table. 78 FY 2003/04 (1) FY 2004/05 (1) FY 2005/06 (1) FY 2006/07 (1) FY 2007/08 (1) 3,406,170 54,200 209,140 25,550 151,975 231,150 N/A 435,380 126,815 1,390,830 N/A 218,095 51,885 159,905 N/A 3,537,630 60,490 221,555 28,420 165,325 234,225 N/A 448,845 132,805 1,421,450 N/A 221,980 64,210 161,420 N/A 3,648,545 66,110 231,785 29,630 178,000 236,030 N/A 452,355 137,285 1,452,825 N/A 223,835 78,265 160,735 N/A 3,792,675 72,210 235,450 32,605 185,030 243,540 49,720 451,360 145,135 1,505,265 18,690 237,120 98,140 165,890 N/A 3,907,492 75,256 241,205 33,583 203,656 246,076 55,954 456,344 151,541 1,538,568 21,363 240,126 104,895 167,871 N/A 79 FY 2008/09 (1) 3,987,942 76,648 244,376 33,647 214,820 248,435 59,436 459,682 155,557 1,561,485 23,329 242,337 108,761 172,641 50,143 Valley Metro Regional Public Transportation Authority Local Transportation Assistance Funds Last Ten Fiscal Years FY 1999/2000 Avondale Local transportation assistance funds received Minimum local expenditures required Percentage required Buckeye (1) Local transportation assistance funds received Minimum local expenditures required Percentage required Chandler Local transportation assistance funds received Minimum local expenditures required Percentage required El Mirage Local transportation assistance funds received Minimum local expenditures required Percentage required Gilbert Local transportation assistance funds received Minimum local expenditures required Percentage required Glendale Local transportation assistance funds received Minimum local expenditures required Percentage required Goodyear (1) Local transportation assistance funds received Minimum local expenditures required Percentage required Mesa Local transportation assistance funds received Minimum local expenditures required Percentage required Peoria Local transportation assistance funds received Minimum local expenditures required Percentage required P t i d Phoenix Local transportation assistance funds received Minimum local expenditures required Percentage required Queen Creek (1) Local transportation assistance funds received Minimum local expenditures required Percentage required Scottsdale Local transportation assistance funds received Minimum local expenditures required Percentage required Surprise (1) (2) Local transportation assistance funds received Minimum local expenditures required Percentage required Tempe Local transportation assistance funds received Minimum local expenditures required Percentage required $ FY 2000/2001 175,624 131,718 75.0% $ 190,883 143,162 75.0% FY 2001/2002 $ 203,685 152,764 75.0% FY 2002/2003 $ 220,818 165,614 75.0% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 981,869 327,290 33.3% 999,497 333,166 33.3% 1,002,340 334,113 33.3% 1,020,285 340,095 33.3% 35,891 26,918 75.0% 34,647 25,985 75.0% 43,192 32,394 75.0% 65,053 48,790 75.0% 560,035 186,678 33.3% 596,742 198,914 33.3% 622,681 207,560 33.3% 668,051 222,684 33.3% 1,206,502 402,167 33.3% 1,230,349 410,116 33.3% 1,242,059 414,020 33.3% 1,228,273 409,424 33.3% NA NA NA NA NA NA NA NA NA NA NA NA 2,220,982 2,220,982 100.0% 2,216,247 2,216,247 100.0% 2,249,873 2,249,873 100.0% 2,260,734 2,260,734 100.0% 551,269 183,756 33 3% 33.3% 598,664 199,555 33.3% 33 3% 616,116 205,372 33.3% 33 3% 639,879 213,293 33.3% 33 3% 7,483,045 7,483,045 100.0% 7,336,182 7,336,182 100.0% 7,498,747 7,498,747 100.0% 7,342,097 7,342,097 100.0% NA NA NA NA NA NA NA NA NA NA NA NA 1,198,380 399,460 33.3% 1,210,039 403,346 33.3% 1,150,630 383,543 33.3% 1,146,323 382,108 33.3% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 976,015 325,338 33.3% 957,785 319,262 33.3% 800,415 266,805 33.3% 870,471 290,157 33.3% Source: State of Arizona, Office of the Treasurer (1) Data for fiscal years prior to membership of the Authority was not available. The Regional Public Transportation Authority ("Authority") was established in 1985 to develop a regional transit plan and to develop and operate a regional transit system in Maricopa County, Arizona. The Authority is governed by a fifteen-member Board of Directors consisting of a member of the Maricopa County Board of Supervisors, and the mayors (or their designees) of the cities of Avondale, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe, and the towns of Gilbert, Queen Creek and Buckeye. Any municipality in Maricopa County may join the Authority and have one elected official serve on the Board of Directors by committing a portion of its local transportation assistance funds to local public transportation. State legislation designates that 100% of the proceeds received by participating municipalities with 300,000 or more in population from the Arizona State Lottery, known as local transportation assistance funds, must be expended for public transportation in the respective municipalities to maintain a position on the Authority's Board of Directors. For all other municipalities, the requirement is 33.3% for cities with a population between 60,000 and 300,000 and 75% for cities with less than 60,000 population. Local transportation assistance funds ("LTAF") and minimum public transportation expenditures for participating municipalities for the last ten years are shown above. (2) Percentages of proceeds designated for expenditures have been revised according to the reported population starting FY2004/2005 80 FY 2003/2004 $ 252,589 189,442 75.0% FY 2004/2005 $ 277,421 208,066 75.0% FY 2005/2006 $ 299,299 99,667 33.3% FY 2006/2007 $ 317,127 105,603 33.3% FY 2007/2008 $ 331,478 110,382 33.3% FY 2008/2009 $ 318,231 105,971 33.3% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 171,121 128,341 75.0% 1,031,314 343,771 33.3% 1,072,387 357,462 33.3% 1,096,287 365,064 33.3% 1,111,863 370,250 33.3% 1,080,826 359,915 33.3% 1,019,970 339,650 33.3% 109,530 82,148 75.0% 130,312 97,734 75.0% 140,622 105,467 75.0% 142,134 106,600 75.0% 149,672 112,254 75.0% 142,011 106,508 75.0% 709,012 236,337 33.3% 778,323 259,441 33.3% 818,025 272,402 33.3% 853,858 284,335 33.3% 849,374 282,842 33.3% 861,189 286,776 33.3% 1,206,948 402,316 33.3% 1,186,391 395,464 33.3% 1,158,998 385,946 33.3% 1,132,226 377,031 33.3% 1,117,962 372,281 33.3% 1,040,568 346,509 33.3% NA NA NA NA NA NA NA NA NA 197,755 148,316 75.0% 228,238 171,179 75.0% 236,610 177,458 75.0% 2,268,317 2,268,317 100.0% 2,233,853 2,233,853 100.0% 2,220,987 2,220,987 100.0% 2,169,928 2,169,928 100.0% 2,071,953 2,071,953 100.0% 1,929,717 1,929,717 100.0% 650,732 216,911 33.3% 33 3% 650,326 216,775 33.3% 33 3% 657,162 218,835 33.3% 33 3% 658,598 219,313 33.3% 33 3% 666,237 221,857 33.3% 33 3% 640,826 213,395 33.3% 33 3% 7,245,430 7,245,430 100.0% 7,138,976 7,138,976 100.0% 7,033,839 7,033,839 100.0% 6,969,140 6,969,140 100.0% 6,909,870 6,909,870 100.0% 6,506,059 6,506,059 100.0% NA NA NA NA NA NA NA NA NA 76,224 57,168 75.0% 85,796 64,347 75.0% 91,884 68,913 75.0% 1,135,830 378,610 33.3% 1,119,229 373,076 33.3% 1,098,399 365,767 33.3% 1,073,727 357,551 33.3% 1,088,492 362,468 33.3% 1,015,408 338,131 33.3% 239,405 179,554 75.0% 265,383 88,373 33.3% 317,703 105,795 33.3% 375,434 125,019 33.3% 450,508 150,019 33.3% 443,564 147,707 33.3% 845,811 281,937 33.3% 821,152 273,717 33.3% 798,826 266,009 33.3% 771,039 256,756 33.3% 761,513 253,584 33.3% 709,867 236,386 33.3% 81 Valley Metro Regional Public Transportation Authority Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year Population (1,2) 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 4,105,823 3,992,887 3,792,675 3,648,545 3,537,630 3,498,587 3,388,711 3,293,441 3,195,893 3,096,692 Income (1,2) $127,844,676 124,229,595 120,716,738 117,663,888 114,336,690 111,103,576 102,277,852 96,998,974 93,544,549 89,771,608 Per Capita Income (1,2) Median Age (1,3) School Enrollment (4) Unemployment Rate (5) $31,137 31,113 31,829 32,250 32,320 31,757 30,182 29,452 29,270 28,990 33.6 33.7 33.4 33.0 33.0 33.0 33.0 33.0 33.0 32.0 683,966 732,146 707,771 689,411 652,333 626,461 600,577 565,517 544,617 519,222 8.1% 4.2% 3.5% 3.6% 4.1% 4.4% 5.2% 5.6% 4.2% 3.3% (1) Calendar year (2) Source: Arizona Workforce Informer, Labor Market Information, for Maricopa County Population for fiscal years 2005 through 2009 are estimates from the Department of Economic Security Personal income for fiscal years 2005 through 2009 were not available. The income amounts provided are estimates based on a 2.91% growth rate. (3) For years through 2000, median age is based on the 1990 U.S. Census. For 2001 through 2008, median age is based on the 2000 U.S. Census. For 2009, median age is from Maricopa Association of Governments Human services Coordination Transportation Plan, 2009 Update. (4) Source: Arizona Department of Education, Research and Evaluation Section. School enrollment is based on the census at the start of the school year. (5) Maricopa County Labor Force and NonFarm Employment June 2009. 82 Valley Metro Regional Public Transportation Authority Full-time Equivalent Employees (FTE) by Function/Program Last Ten Fiscal Years 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Function/Program Governmental activities: Regional planning Transportation demand management Regional customer services Administration Total governmental activities FTE 4.85 9.33 8.00 22.18 4.26 10.91 7.90 23.07 3.58 10.25 7.80 21.63 4.45 10.25 7.90 22.60 4.59 10.25 4.72 7.90 27.46 4.54 10.25 4.67 8.90 28.36 7.91 10.25 4.20 14.75 37.11 7.88 9.00 71.50 20.10 108.48 8.13 10.50 74.60 22.20 115.43 8.03 10.00 78.24 22.20 118.47 Business-type activities: Transit service operations Light rail transit (1) Total business-type activities FTE 7.70 2.12 9.82 7.60 4.33 11.93 6.09 21.28 27.37 6.40 31.00 37.40 4.54 33.00 37.54 4.64 42.00 46.64 4.89 47.00 51.89 10.52 51.00 61.52 8.57 58.00 66.57 8.53 92.00 100.53 32.00 35.00 49.00 60.00 65.00 75.00 89.00 170.00 182.00 219.00 Total primary government FTE Source: Adopted Valley Metro Operating Budgets for the applicable years. (1) Light rail transit staff report to the Valley Metro Rail, Inc. Board of Directors. 83 Valley Metro Regional Public Transportation Authority Operating Indicators by Program - Fixed Route System Last Ten Fiscal Years FY 1999/2000 Fixed Route System (1) City of Phoenix Transit System Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Regional Public Transportation Authority (2) Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Tempe Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Glendale - Luke Link Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Total fixed route system Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ $ $ 30,656,284 11,261,534 756,527 54,726,226 1.79 35.3% 4,266,198 4,305,173 311,975 12,618,457 2.96 22.1% 2,394,572 2,350,597 192,313 6,902,393 2.88 12.8% 50,530 121,712 8,069 249,717 4.94 8.7% 37,367,584 18,039,016 1,268,884 74,496,793 1.99 30.9% FY 2000/2001 $ $ $ $ $ $ $ $ $ $ 31,897,150 12,525,236 801,069 65,946,654 2.07 33.5% 4,179,015 4,702,350 320,533 15,585,768 3.73 18.3% 3,201,550 3,302,089 246,388 12,028,529 3.76 13.9% 35,978 103,338 5,530 245,369 6.82 10.1% 39,313,693 20,633,013 1,373,520 93,806,320 2.39 28.4% FY 2001/2002 $ $ $ $ $ $ $ $ $ $ 34,642,732 14,498,806 941,752 76,314,996 2.20 25.5% 4,979,305 4,727,196 321,379 17,271,336 3.47 16.3% 3,865,511 3,730,509 350,657 12,485,395 3.23 17.2% 36,404 89,650 3,876 136,565 3.75 22.3% 43,523,952 23,046,161 1,617,664 106,208,292 2.44 23.0% FY 2002/2003 37,543,692 16,479,011 1,089,891 90,376,532 2.41 23.0% $ $ 5,688,992 4,799,475 379,892 17,059,807 3.00 19.7% $ $ 4,906,953 3,814,559 267,347 13,110,640 2.67 20.6% $ $ 51,246 106,326 4,630 163,768 3.20 30.5% $ $ $ $ 48,190,883 25,199,371 1,741,760 120,710,747 2.50 22.3% Source: Reports prepared by the Regional Public Transportation Authority (RPTA): Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008, data for FY 2009 pending RPTA Board approval. (1) Fixed route systems are comprised of various operators and contractors of service in Maricopa County; as the regional authority, the Regional Public Transportation Authority in its role compiles and reports on system efficiency and effectiveness performance indicators. (2) The Regional Public Transportation Authority statistics include the City of Mesa fixed route system and the City of Scottsdale fixed route system that were separately managed through fiscal year 2004 and fiscal year 2001, respectively. (3) Shuttle/Circulator System statistics were included in the Fixed Route System statistics through fiscal year 2000. See Operating Indicators by Program - Shuttle / Circulator System. (4) NA - City of Glendale did not run a fixed route. 84 FY 2003/2004 $ $ $ $ $ $ $ $ $ $ 40,427,904 16,956,333 1,115,462 93,661,178 2.32 24.8% 6,503,504 4,971,133 375,171 18,200,836 2.80 18.3% 4,813,237 3,826,195 314,932 14,864,954 3.09 18.2% 70,823 131,400 7,088 228,160 3.22 20.9% 51,815,468 25,885,061 1,812,653 126,955,128 2.45 23.1% FY 2004/2005 $ $ $ $ $ $ $ $ $ $ 42,909,890 17,420,722 1,146,819 89,543,836 2.09 27.0% 6,203,696 4,379,307 276,517 16,445,778 2.65 23.1% 4,805,598 3,797,053 311,852 15,738,112 3.27 17.3% 93,024 139,789 7,962 218,243 2.35 26.8% 54,012,208 25,736,871 1,743,150 121,945,969 2.26 25.2% FY 2005/2006 $ $ $ $ $ $ $ $ $ $ FY 2006/2007 FY 2007/2008 FY 2008/2009 44,182,683 17,166,702 1,166,967 93,058,555 2.11 26.6% 44,101,320 18,412,020 1,166,986 $ 108,350,712 $ 2.46 27.0% 42,670,621 18,826,324 998,142 $ 117,350,016 $ 2.75 27.5% 43,281,117 15,280,011 1,172,816 $ 109,867,153 $ 2.54 32.1% 6,484,886 4,956,352 389,349 19,613,325 3.02 20.7% 6,772,065 5,521,319 381,620 22,493,215 3.32 20.2% 7,908,819 6,218,876 377,267 30,076,788 3.80 18.1% 8,390,453 6,548,640 372,580 34,853,186 4.15 15.5% 5,063,284 3,868,790 297,027 16,738,459 3.31 17.9% 101,444 142,109 8,121 232,802 2.29 27.5% 55,832,297 26,133,953 1,861,464 129,643,141 2.32 24.6% 85 $ $ $ 6,808,547 4,497,200 364,249 19,496,217 2.86 16.2% $ $ $ 4,896,103 4,372,291 326,640 19,947,661 4.07 16.6% $ $ $ 5,593,702 4,779,775 367,302 26,885,980 4.81 11.8% 227,702 252,413 19,455 435,099 1.91 227.5% NA NA NA NA NA NA NA NA NA NA NA NA 57,909,634 28,682,952 1,932,310 $ 150,775,243 $ 4.32 224.6% 55,475,543 29,417,491 1,702,049 $ 167,374,465 $ 3.02 24.5% 57,265,272 26,608,425 1,912,698 $ 171,606,319 $ 3.00 25.6% $ Valley Metro Regional Public Transportation Authority Operating Indicators by Program - Dial-a-Ride System Last Ten Fiscal Years FY 1999/2000 Dial-a-Ride System (1) Phoenix Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Phoenix Reserve-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio East Valley Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Maricopa County STS Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Sun Cities Area Transit Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ $ $ FY 2000/2001 179,094 2,113,092 140,909 4,733,615 26.43 7.2% $ $ 221,991 646,039 53,846 2,289,621 10.31 3.2% $ $ 258,880 1,841,774 115,478 4,423,962 17.09 7.7% $ $ 132,490 818,046 56,405 1,691,032 12 76 12.76 3.2% $ $ 59,777 219,408 18,838 498,481 8.34 30.5% $ $ 237,886 2,961,140 191,525 6,909,752 29.05 6.4% 203,616 567,565 50,909 2,442,020 11.99 2.6% 266,624 1,952,587 115,673 4,524,032 16.97 8.0% 141,541 634,593 45,553 1,653,677 11 68 11.68 4.3% 61,317 222,535 18,847 617,129 10.06 25.3% FY 2001/2002 $ $ $ $ $ $ $ $ 270,493 3,238,681 230,951 9,462,730 34.98 5.2% 193,986 550,850 51,559 2,589,906 13.35 3.3% 252,441 1,995,550 116,884 4,772,217 18.90 7.6% 124,822 455,897 56,251 1,379,719 11 05 11.05 4.5% $ $ 60,400 218,313 17,998 656,655 10.87 22.9% Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008; data for FY 2008 has been updated; data for FY 2009 pending RPTA Board approval. (1) Dial-a-ride systems are comprised of various operators and contractors of service in Maricopa County; as the regional authority, the Regional Public Transportation Authority in its role compiles and reports on system efficiency and effectiveness performance indicators. NR Not reported 86 FY 2002/2003 $ $ $ $ $ $ $ $ $ $ 333,860 3,687,477 255,922 10,385,900 31.11 4.9% 162,760 540,282 47,155 2,689,066 16.52 3.2% 240,879 1,371,852 117,217 5,076,798 21.08 7.0% 106,395 732,376 70,238 1,587,982 14 93 14.93 1.1% 60,345 226,194 19,226 671,365 11.13 22.4% FY 2003/2004 $ $ $ $ $ $ $ $ $ $ 369,791 3,901,614 262,372 11,150,114 30.15 4.8% 153,697 540,388 50,754 2,757,131 17.94 3.1% 222,736 2,048,542 111,514 4,963,617 22.28 6.5% 103,533 730,180 67,836 1,534,951 14 83 14.83 1.0% 61,147 229,917 20,015 671,410 10.98 22.7% FY 2004/2005 $ $ $ $ $ $ $ $ $ $ 393,053 4,084,991 274,099 12,375,324 31.49 4.0% FY 2005/2006 $ $ FY 2006/2007 415,733 4,276,365 285,137 12,452,214 29.95 5.0% $ $ 410,838 NA 287,882 13,655,624 33.24 4.7% FY 2007/2008 $ $ 391,420 4,806,031 292,601 14,759,075 37.71 4.1% FY 2008/2009 $ $ 396,474 4,064,584 295,057 14,991,465 37.81 4.2% 152,631 518,616 47,282 2,853,105 18.69 2.7% NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR 223,130 1,622,795 118,032 5,338,924 23.93 6.6% 220,153 1,796,728 121,607 6,596,249 29.96 5.2% 226,050 NA 126,131 7,685,324 34.00 5.0% 240,424 NA 131,842 8,461,088 35.19 4.6% 262,364 2,090,445 137,604 9,760,107 37.20 4.1% 105,342 523,119 41,189 3,249,859 30 85 30.85 0.4% 58,069 254,897 22,648 714,915 12.31 21.3% $ $ $ $ $ $ $ $ 100,243 913,009 56,585 3,312,076 33 04 33.04 0.3% $ $ 57,091 230,472 21,802 689,473 12.08 23.5% $ $ 91,082 NA 49,524 3,368,464 36 98 36.98 0.0% 45,612 NA 16,526 697,877 15.30 18.0% $ $ $ $ $ $ 87,134 NA 47,511 3,350,837 38 46 38.46 0.0% 34,924 NA 12,974 560,024 16.04 22.0% $ $ $ $ $ $ 35,488 362,525 24,641 256,574 7 7.23 23 0.0% 27,652 109,741 13,081 610,581 22.08 17.4% (Continued) 87 Valley Metro Regional Public Transportation Authority Operating Indicators by Program - Dial-a-Ride System (Continued) Last Ten Fiscal Years FY 1999/2000 Dial-a-Ride System (1) Glendale Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Peoria Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio El Mirage Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Surprise Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Total Dial-a-Ride System Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ $ $ FY 2000/2001 69,081 280,529 21,174 1,312,716 19.00 6.1% $ $ 30,395 125,632 6,466 506,767 16.67 7.1% $ $ 3,318 9,820 2,080 41,355 12.46 5.7% $ $ 7,261 40,772 3,080 76,997 10 60 10.60 9.2% $ $ 962,287 6,095,112 418,276 15,574,546 16.18 7.0% $ $ 66,536 281,461 20,718 1,442,170 21.68 5.4% 33,540 169,360 8,352 598,195 17.84 6.1% 2,054 12,698 2,080 88,592 43.13 1.7% 5,777 38,834 2,726 77,418 13 40 13.40 8.5% 1,018,891 6,840,773 456,383 18,352,985 18.01 6.7% FY 2001/2002 $ $ $ $ $ $ $ $ $ $ 76,622 316,961 22,662 1,807,835 23.59 4.9% 32,176 196,224 9,457 624,322 19.40 5.4% 1,204 6,020 750 93,178 77.39 1.5% 7,775 45,800 2,818 105,800 13 61 13.61 6.2% 1,019,919 7,024,296 509,330 21,492,362 21.07 6.0% FY 2002/2003 $ $ $ $ $ $ $ $ $ $ 81,768 376,504 25,782 2,074,611 25.37 4.7% 30,399 189,984 9,276 727,770 23.94 5.0% 1,103 9,172 1,834 93,632 84.89 0.9% 7,094 43,716 3,881 162,931 22 97 22.97 4.6% 1,024,603 7,177,557 550,531 23,470,055 22.91 5.4% Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008, data for FY 2009 pending RPTA Board approval. (1) Dial-a-ride systems are comprised of various operators and contractors of service in Maricopa County; as the regional authority, the Regional Public Transportation Authority in its role compiles and reports on system efficiency and effectiveness performance indicators. NR Not reported 88 FY 2003/2004 $ $ $ $ $ $ $ $ $ $ 86,132 387,531 26,252 2,255,038 26.18 4.7% 29,258 158,456 7,920 738,683 25.25 4.5% 1,061 7,230 NR 76,813 72.40 1.0% 7,387 48,768 4,891 185,646 25 13 25.13 4.3% 1,034,742 8,052,626 551,554 24,333,403 23.52 5.2% FY 2004/2005 $ $ $ $ $ $ $ $ $ $ 87,831 386,587 29,554 2,247,156 25.58 5.0% 33,805 153,805 8,258 827,786 24.49 4.0% 1,558 10,017 NR 70,459 45.22 1.7% 8,181 68,291 5,016 283,624 34 67 34.67 3.5% 1,063,600 7,623,118 546,078 27,961,152 26.29 4.5% FY 2005/2006 $ $ $ $ $ $ $ $ $ $ FY 2006/2007 89,055 390,561 29,594 2,387,554 26.81 4.6% $ $ 42,560 159,903 9,975 927,312 21.79 5.1% $ $ 1,466 12,284 1,613 74,023 50.49 2.0% $ $ 12,578 86,045 6,554 367,093 29 19 29.19 3.5% $ $ 938,879 7,865,367 532,887 26,805,994 28.55 4.9% $ 89 84,132 NA 29,448 2,446,602 29.08 3.3% 45,790 NA 12,663 1,045,445 22.83 4.5% 1,947 NA 1,820 99,256 50.98 3.7% 17,339 NA 8,037 506,921 29 24 29.24 3.6% 922,790 NA 532,031 29,505,513 31.97 4.4% FY 2007/2008 $ $ $ $ $ $ $ $ $ 88,638 NA 30,642 2,878,740 32.48 3.8% 40,122 NA 14,875 1,239,982 30.91 3.2% 1,131 NA 1,764 97,262 86.00 2.3% 20,075 NA 8,698 589,469 29 36 29.36 3.7% 903,868 NA 540,907 31,936,477 35.33 4.1% FY 2008/2009 $ $ $ $ $ $ $ $ $ 92,381 408,986 30,594 2,431,098 26.32 4.4% 38,978 212,812 14,567 1,239,982 31.81 3.1% 1,459 NA 1,680 102,139 70.01 2.9% 19,336 79,989 7,918 644,740 33 34 33.34 3.0% 874,132 7,329,082 524,842 30,057,041 34.39 4.3% Valley Metro Regional Public Transportation Authority Operating Indicators by Program - Shuttle / Circulator System Last Eight Fiscal Years FY 2001/2002 Shuttle/Circulator System City of Phoenix Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Tempe Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Scottsdale Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Glendale Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Regional Public Transportation Authority (6) Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Total Shuttle/Circulator System Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ $ $ 437,421 361,830 26,505 1,058,452 2.42 0.0% 1,222,122 601,509 61,681 1,995,345 1.63 0.0% 42,456 30,060 4,676 290,066 6.83 0.0% 51,180 66,784 8,055 267,801 5.23 4.6% FY 2002/2003 $ $ $ $ $ $ $ $ 770,348 604,325 40,480 1,619,238 2.10 0.0% 1,445,714 441,587 30,949 1,517,734 1.05 0.0% 49,498 33,129 4,683 308,684 6.24 0.0% 54,093 78,895 6,361 185,407 3.43 5.7% FY 2003/2004 $ $ $ $ $ $ $ $ 747,351 577,579 37,636 1,435,044 1.92 0.0% 1,705,025 487,780 40,149 1,771,216 1.04 0.0% 52,599 37,272 6,185 377,726 7.18 0.0% 59,692 93,794 7,897 203,149 3.39 5.9% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,753,179 1,060,183 100,917 3,611,664 2.06 N/A 2,319,653 1,157,936 82,473 3,631,063 1.57 N/A 2,564,667 1,196,425 91,867 3,787,135 1.48 N/A $ $ $ $ Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008, data for FY 2009 pending RPTA Board approval. (1) City of Phoenix - Alex, Dart, Dash, Deer Run, Durango Shuttle, Mart & Smart; prior to FY 07-08 included only Dash and Alex. (2) City of Tempe - FLASH, Orbit-Earth, Jupiter, Mars, Mercury, Neighborhood FLASH & Venus; prior to FY 07-08 included only Flash, Neighborhood Flash. (3) City of Scottsdale - Neighborhood Trolley and Downtown Trollye; prior to FY 07-08 included only Roundup. (4) City of Scottsdale did not track revenue miles. (5) City of Glendale - GUS 7 Luke Link (6) RPTA- BUZZ 90 FY 2004/2005 $ $ $ $ $ $ $ $ $ $ 794,945 601,547 38,156 2,386,820 3.00 0.0% 1,999,795 475,609 39,831 1,835,387 0.92 0.0% 92,139 57,696 8,167 547,764 5.94 0.0% 82,569 100,295 8,301 144,934 1.76 11.0% FY 2005/2006 $ $ $ $ $ $ 766,676 580,884 36,923 1,812,780 2.36 0.0% 2,034,656 479,595 48,794 1,954,659 0.96 0.0% 125,435 80,489 14,025 953,477 7.60 0.0% FY 2006/2007 $ $ $ $ $ $ 735,941 580,080 36,710 1,889,393 2.57 0.0% 1,616,729 482,538 52,379 2,091,895 1.29 0.0% 274,961 219,861 33,828 1,887,546 6.86 0.0% FY 2007/2008 $ $ $ $ $ $ 1,799,974 1,614,317 79,529 7,173,722 3.99 0.1% 2,456,646 1,613,904 150,171 6,833,012 2.78 0.0% 384,000 0 48,240 2,400,000 6.25 0.0% 96,258 96,838 7,969 158,442 1.65 10.3% 97,681 NR NR NR NR NR N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2,969,448 1,235,147 94,455 4,914,905 4.20 N/A 3,023,025 1,237,806 107,711 4,879,358 1.61 N/A 2,725,312 1,282,479 122,917 5,868,834 2.15 N/A 4,751,561 3,338,226 286,798 16,583,308 3.49 0.18% $ $ $ $ $ $ 91 $ $ $ $ 110,941 110,005 8,858 176,574 1.59 16.25% FY 2008/2009 $ $ $ $ $ $ $ $ $ $ $ $ 2,068,042 1,842,602 107,221 8,800,658 4.26 0.0% 3,307,223 2,105,878 206,964 11,414,395 3.45 0.0% 567,816 439,307 48,648 2,627,403 4.63 0.0% 113,382 98,760 8,735 668,581 5.90 3.62% 80,133 60,795 5,755 319,570 3.99 0.00% 6,136,596 4,547,341 377,323 23,830,608 3.88 0.10% Valley Metro Regional Public Transportation Authority Capital Asset Statistics by Function/Program Revenue Vehicles for Transit Service Operations Last Ten Fiscal Years Fiscal Year 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Source: Local and Express Bus Paratransit / Dail-a-Ride 98 72 72 80 80 133 181 172 192 257 Vanpool 86 63 63 67 62 61 57 75 76 76 NA NA NA NA NA 250 303 308 347 421 National Transit Data Base (1999/00-2007/08) FAS GOV 100 Asset Accounting (2008/09) (1) For years FY98 through FY04, the NTD reported numbers included vans that were owned by the contractor, thus those assets are not reported. (2) The numbers of vans for 2006/07 Vanpool have been updated. 92 Single ｾｵ､ｩｴ＠ Section The ｓｩｮｧｬｴｾ＠ Audit Section includes the Authority's schedule of expenditures of federal awards, and the Jndependent auditors' reports on internal controls and compliance with applicable laws and regulations. Valley Metro Regional Public Transportation Authority Supplementary Schedule of Expenditures of Federal Awards Fiscal Year Ended June 30, 2009 Federal Grantor Agency and Program Title CFDA Number Pass-Through Grantor Pass-Through Identifying Number Awards Expended Department of Transportation Federal Transit Administration Urbanized Area Formula (Section 5307) Urbanized Area Formula (Section 5307) Urbanized Area Formula (Section 5307) Urbanized Area Formula (Section 5307) Alternatives Analysis (Section 5339) 20.507 20.507 20.507 20.507 20.522 City of Phoenix City of Phoenix City of Phoenix City of Phoenix City of Phoenix AZ-90-X074 AZ-90-X080 AZ-90-X088 AZ-90-X096 AZ-39-0001 FHWA Transfer Funds (STP/CMAQ) FHWA Transfer Funds (STP/CMAQ) New Freedoms (Section 5317) 20.205 City of Phoenix 20.205 City of Phoenix 20.521 City of Phoenix AZ-90-X080 AZ-95-0004 AZ-57-X001 523,744 2,401,491 192,037 Capital Funding (Section 5309) Fixed Guideway Modernization Formula (Section 5309) Total Transit Cluster 20.500 City of Phoenix 20.500 City of Phoenix AZ-04-0008 AZ-05-0202 3,490,000 1,790,072 26,547,429 State Rural Area Formula (Section 5311) State Rural Area Formula (Section 5311) Ajo/Phoenix Regional Transit Connector Service Ajo/Phoenix Regional Transit Connector Service Federal Transit Technical Studies Grant 20.509 20.509 20.509 20.509 20.505 AZ-18-0026 AZ-18-0027 JPA 06-011T JPA 06 024T 0118 12,055 78,682 239,973 152,286 224,327 ADOT ADOT ADOT ADOT MAG $ Total Federal Transit Administration 27,254,752 Federal Highway Administration Congestion Mitigation and Air Quality Improvement Program Funds: Regional Ridesharing Program 20.205 Trip Reduction Program 20.205 Telework 20.205 Bike Education 20.205 Transportation Enhancement Funds: Regional Bicycle & Pedestrian Safety Education Program Regional Bicycle Safe Routes to School Support Center Project Total Federal Highway Administration 481,252 370,156 4,096,866 12,813,948 387,863 MAG Maricopa County MAG MAG 20.200 ADOT 264 C-85-07-009-3-01 270 0359 561,620 425,786 221,941 202,150 JPA 08-0851 Fed aid #: TEA-VMT 0-(207)A JPA 08-083-1 Fed aid # TEA-VMT-0(200)A 108,770 81,889 1,602,156 20.200 ADOT $ Total Expenditures of Federal Awards See accompanying notes to the Supplementary Schedule of Expenditures of Federal Awards. 93 28,856,908 Valley Metro Regional Public Transportation Authority Notes to the Supplementary Schedule of Expenditures of Federal Awards Fiscal Year Ended June 30, 2009 1. General The Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the Regional Public Transportation Authority (the “Authority”). All federal awards received are passed through the City of Phoenix, Arizona Department of Transportation, Maricopa County and Maricopa Association of Governments. Federal financial award activities are reported in the special revenue and enterprise funds in the Authority's fund financial statements. 2. Basis of Accounting and Reporting Entity The accompanying Schedule of Expenditures of Federal Awards is presented using a basis of accounting that is consistent with the basic financial statements, as is described in Note 1 of the Authority's basic financial statements. The Authority, for purposes of the Schedule of Expenditures of Federal Awards, includes all funds of the primary government as defined by Governmental Accounting Standards Board Statement No. 14, The Financial Reporting Entity. 3. Catalog of Federal Domestic Assistance (CFDA) Numbers The program titles and CFDA numbers were obtained from the 2009 Catalog of Federal Domestic Assistance. 4. Pass-Through Grantors Reference The Authority receives all federal awards as pass-through from other governmental and non-profit agencies. Abbreviations are as follows: ADOT MAG 5. Arizona Department of Transportation Maricopa Association of Governments Period of Award There is no specified time period in which the grant award must be spent. 94 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Board of Directors of the Valley Metro Regional Public Transportation Authority We have audited the financial statements of the Valley Metro Regional Public Transportation Authority (the Authority) as of and for the year ended June 30, 2009, and have issued our report thereon dated January 25, 2010. 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. Internal Control over Financial Reporting In planning and performing our audit, we considered the Valley Metro Regional Public Transportation Authority’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Valley Metro Regional Public Transportation Authority’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Authority’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the Authority’s financial statements that is more than inconsequential will not be prevented or detected by the Authority’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Authority’s internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weakness, as defined above. (95) LarsonAllen LLP is a member of Nexia International, a worldwide network of independent accounting and consulting firms. The Board of Directors of the Valley Metro Regional Public Transportation Authority January 25, 2010 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Valley Metro Regional Public Transportation Authority’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Board of Directors, Management, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. LarsonAllen LLP Mesa, Arizona January 25, 2010 (96) REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 The Board of Directors of the Valley Metro Regional Public Transportation Authority Compliance with Requirements Applicable to Each Major Program We have audited the compliance of the Valley Metro Regional Public Transportation Authority (The Authority) with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2009. The Valley Metro Regional Public Transportation Authority’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grant agreements applicable to each of its major federal programs is the responsibility of the Valley Metro Regional Public Transportation Authority’s management. Our responsibility is to express an opinion on the Valley Metro Regional Public Transportation Authority’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Valley Metro Regional Public Transportation Authority’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the Valley Metro Regional Public Transportation Authority’s compliance with those requirements. In our opinion, the Valley Metro Regional Public Transportation Authority complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009. (97) LarsonAllen LLP is a member of Nexia International, a worldwide network of independent accounting and consulting firms. The Board of Directors of the Valley Metro Regional Public Transportation Authority January 25, 2010 Internal Control over Compliance in Accordance with OMB Circular A-133 The management of the Valley Metro Regional Public Transportation Authority is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the Valley Metro Regional Public Transportation Authority’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over compliance. A control deficiency in the Authority’s internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Authority’s ability to administer a major federal program such that there is more than a remote likelihood that the noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the Authority’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the Authority’s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, the business-type activities, each major fund and aggregate remaining fund information of the Valley Metro Regional Public Transportation Authority as of and for the year ended June 30, 2009, and have issued our report thereon dated Report Date. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. This report is intended solely for the information and use of the Board of Directors, Management, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. LarsonAllen LLP Mesa, Arizona January 25, 2010 (98) Valley Metro Regional Public Transportation Authority Schedule of Findings and Questioned Costs Fiscal Year Ended June 30, 2009 SECTION I - SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditor’s report issued: Internal control over financial reporting: Unqualified • Material weakness(es) identified? ______ yes X no Significant deficiency (ies) identified not considered to be material weaknesses? ______ yes X none reported ______ yes X no ______ yes X no ______ yes X none reported X no • Noncompliance material to financial statements noted? Federal Awards Internal Control over major programs: • • Material weakness(es) identified? Significant Deficiency(ies) identified not considered to be material weaknesses? Type of auditor’s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? ______ yes Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster 20.500 and 20.507 Federal Transit Cluster Dollar threshold used to distinguish between Type A and Type B programs: $865,707 Auditee qualified as low-risk auditee? X (99) yes no Valley Metro Regional Public Transportation Authority Schedule of Findings and Questioned Costs Fiscal Year Ended June 30, 2009 SECTION II—FINANCIAL STATEMENT FINDINGS None noted SECTION III—FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None Noted SECTION IV—SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FEDERAL TRANSIT GRANT FEDERAL TRANSIT ADMINISTRATION PASSED THROUGH CITY OF PHOENIX AND ADOT CFDA NO. 20.507 08-1 Condition/ Context The first, second and third quarter grant status reports were not properly supported during the fiscal year. Status Corrected in the current fiscal year. (100) VALLEY METRO 302 N. First Avenue | Suite 700 | Phoenix, AZ 85003 | ValleyMetro.org