Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2010 Valley Metro Regional Public Transportation Authority Phoenix, Arizona Board of Directors Chair, Councilmember Michael Johnson, City of Phoenix Vice Chair, Councilmember Shana Ellis, City of Tempe Secretary, Mayor Lyn Truitt, City of Surprise Treasurer, Vice Mayor Ron Aames, City of Peoria Vice Mayor Jim McDonald, City of Avondale Councilman Eric Orsborn, Town of Buckeye Councilmember Trinity Donovan, City of Chandler Mayor Michele Kern, City of El Mirage Vice Mayor Les Presmyk, Town of Gilbert Mayor Elaine Scruggs, City of Glendale Councilmember Frank Cavaliere, City of Goodyear Supervisor Mary Rose Wilcox, Maricopa County Councilmember Scott Somers, City of Mesa Councilmember Wayne Ecton, City of Scottsdale Mayor Adolfo Gamez, City of Tolleson Councilmember Rui Pereira, Town of Wickenburg Executive Director’s Office David A. Boggs, Executive Director Bryan Jungwirth, Chief of Staff Mike Taylor, Acting Finance Director 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) Valley Metro Regional Public Transportation Authority Table of Contents Comprehensive Annual Financial Report and Single Audit Reports Fiscal Year Ended June 30, 2010 Page Introductory Section Letter of Transmittal GFOA Certificate of Achievement iii-ix xi Financial Section Independent Auditors' Report 1-2 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 Balance - Budget to Actual - General Fund Statement of Revenues, Expenditures and Changes in Fund Balance - 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 Fund Index to the Notes to the Financial Statements Notes to the Financial Statements 18 19 20 21 22 23 24 25 26 27 28-48 Other Supplementary Information - Combining and Individual Fund Financial Statements and Schedules: Nonmajor Governmental Funds - Special Revenue Funds Description Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget to Actual - Nonmajor Governmental Funds: Transit Planning Fund Transportation Demand Management Fund Regional Customer Services Fund Capital and Other Grants Fund Schedule of Revenues, Expenses and Changes in Net Assets Budget to Actual - Proprietary Funds: Enterprise Funds: Transit Service Operations Fund Valley Metro Rail Fund 49 50 51 52 53 54 55 56 57 (Continued) i Valley Metro Regional Public Transportation Authority Table of Contents (Continued) Comprehensive Annual Financial Report and Single Audit Reports Fiscal Year Ended June 30, 2010 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 - Bond Coverage Outstanding Debt by Type Debt Service Revenue and Cost per Capita Demographic and Economic Information Regional Population Statistics Top Ten Employers for Maricopa County 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 Vehicles for Transit Service Operations 59 60-61 62-65 66-67 68-69 70-71 72-73 74 76-77 78 79 80 82-83 84 86-87 88 89 90-91 92-95 96-97 98 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 That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133 Schedule of Findings and Questioned Costs ii 99 100 101-102 103-104 105-107 Introductory Section The Introductory Section includes the Authority’s transmittal letter and the Certificate of Achievement for Excellence in Financial Reporting. (This page intentionally left blank) x (This page intentionally left blank) xii Financial Section The Financial Section includes the independent auditors' report, Management's Discussion and Analysis (MD&A), the basic financial statements (government-wide statements and fund statements), notes to the financial statements, other Required Supplementary Information (RSI) and other financial schedules. 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, 2010, 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 the governmental activities, business-type activities, each major fund and the aggregate remaining fund information of Valley Metro Regional Public Transportation Authority, as of June 30, 2010, 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. An independent member of Nexia International To the Members of the Board of Directors Valley Metro Regional Public Transportation Authority Page 2 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 purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. This supplementary information is the responsibility of management. The combining and individual fund financial statements and schedules and schedule of expenditures of federal awards 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 December 17, 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 December 17, 2010 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, 2010. 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 position, (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 decreased $15.5 million in FY 2010, an increase of $7.5 million in governmental activities and a decrease of $23.0 million in business-type activities. Total net assets of the Authority are $116.3 million, of which $9.1 million is unrestricted.  The governmental activities revenues decreased by approximately $9.8 million (8.5%) over the previous year.  The business-type activities revenues decreased by approximately $31.8 million (40.9%) from the previous year.  At June 30, 2010, the Authority’s governmental fund balance sheet reported a combined ending fund balance of $46.1 million, an increase of $8.1 million (21.3%) compared to the previous fiscal year. OVERVIEW OF THE FINANCIAL STATEMENTS The financial 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 – the display of both the original adopted budget and the revised budget in the budgetary comparison schedules is required by GAAP. These schedules are only required for the general fund and major special revenue funds; these statements are presented as part of the basic financial statements, and the Authority has presented this information for the nonmajor special revenue funds and proprietary funds in the combining and individual fund financial statements and schedules section as additional information.  Required narrative analysis – the financial statements are required to 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). 3 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) As presented below, 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 Comprehensive 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.  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 4 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) 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 - 22) 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 government-wide 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. Notes to the Financial Statements – The notes to the financial statements (pages 28 – 47) 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. 5 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) 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. 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, 2010, 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, 2010 compared to the prior year: Condensed Statement of Net Assets As of June 30 (in thousands of dollars) Governmental Activities 2010 Current and other assets Noncurrent assets Cash and cash equivalents Deferred charges Capital assets Total assets Other liabilities Long-term liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets $ Business-type Activities 2009 46,808.8 $ 39,057.2 689.8 1,229.9 $ 47,498.6 $ 40,287.1 $ 683.8 $ 837.9 $ $ 2010 2009 37,341.4 $ 57,327.0 Total Primary Government $ Percent Change 2010 2009 84,150.2 $ 96,384.2 -12.7% 68,556.2 816.9 108,960.8 73,474.0 111,586.6 -6.7% N/A -2.4% 68,556.2 816.9 108,271.0 73,474.0 110,356.7 $ 214,985.5 $ 241,157.7 $ 262,484.1 $ 281,444.8 -6.7% 1,036.8 755.2 $ 38,262.1 $ 106,348.4 41,995.3 105,849.7 $ 38,945.9 $ 107,186.3 43,032.1 106,604.9 -9.5% 0.5% 1,521.7 $ 1,792.0 $ 144,610.5 $ 147,845.0 $ 146,132.2 $ 149,637.0 -2.3% $ 689.8 $ 45,287.1 1,229.9 37,265.2 $ 106,601.8 $ (36,226.8) 98,580.1 4,062.1 (9,329.5) $ 107,291.6 $ 9,060.3 99,810.0 4,062.1 27,935.7 7.5% -100.0% -67.6% $ 45,976.9 $ 38,495.1 $ 70,375.0 $ 93,312.7 $ 116,351.9 $ 131,807.8 -11.7% The Authority’s total net assets decreased $15.5 million in FY 2010, an increase of $7.5 million in governmental activities and a decrease of $23.0 million in business-type activities. Total net assets of the Authority are $116.3 million, of which $9.1 million is unrestricted. 6 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) A large portion of net assets (92.2%) 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. The remaining 7.8% ($9.1 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 $8.0 million (21.5%) 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 significant decrease of $26.9 million (288.3%) of unrestricted net assets over the prior year in business-type activities is due to decreases in charges for transit service, federal grants, and lower transfers in from the Public Transportation Fund. Additionally, for FY 2010, the agency began making interest payments on its bond proceeds. 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 were 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 2010 REVENUES Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Sales taxes Interest earnings Other $ 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 $ Business-type Activities 2009 150.4 2,055.9 - $ 2,632.5 - $ Total Primary Government 2010 2009 2010 27,253.1 $ 2,607.8 14,996.6 32,505.9 2,609.2 40,555.6 $ 27,403.5 4,663.7 14,996.6 2009 $ Percent Change 32,505.9 5,241.7 40,555.6 -15.7% -11.0% -63.0% 103,722.5 231.4 73.5 113,297.7 36.3 75.2 587.5 650.6 34.8 2,233.4 103,722.5 818.9 724.1 113,297.7 71.1 2,308.6 -8.5% 1051.8% -68.6% 106,233.7 116,041.7 46,095.6 77,938.9 152,329.3 193,980.6 -21.5% 1,822.0 1,808.2 8,497.2 1,879.1 1,948.7 1,882.9 8,747.4 1,910.8 - - 1,822.0 1,808.2 8,497.2 1,879.1 1,948.7 1,882.9 8,747.4 1,910.8 -6.5% -4.0% -2.9% -1.7% - - 93,074.5 60,704.3 99,625.8 70,492.6 93,074.5 60,704.3 99,625.8 70,492.6 -6.6% -13.9% 14,006.5 14,489.8 153,778.8 170,118.4 167,785.3 184,608.2 -9.1% 92,227.2 (84,745.3) 101,551.9 (92,630.6) (107,683.2) 84,745.3 (92,179.5) 92,630.6 (15,456.0) - 9,372.4 - -264.9% N/A (15,456.0) $ 9,372.4 -264.9% 7,481.9 $ 8,921.3 $ (22,937.9) $ 451.1 $ The largest financing source for the Authority as a whole is sales taxes (68.1%). The major funding sources of governmental activities are sales taxes (97.6%) and federal and state grants (1.9%). The major funding sources for business-type activities are charges for services (20.8%) and transfers from the governmental activities (64.8%). Business-type activities also receive substantial federal grants and contributions revenue (13.5%). The Authority’s overall revenues decreased by $41.7 million, or 21.5%, compared to last fiscal year. Total revenues of governmental activities decreased by $9.8 million, or 8.5% over the previous year mainly due to the sales tax revenues shortfall in the Public Transportation Fund. Program revenues of business-type activities decreased by $30.8 million, or 40.7%, compared to last fiscal year, which is largely attributable to decreases in Federal Transit Administration (FTA) capital grants. The Authority’s sales tax revenue over the prior year is limited to incorporating those elements necessary for implementing the fifth year of the Proposition 400 Transit Life Cycle Program (TLCP). The Public Transportation Fund (PTF) revenues are restricted to the implementation of 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. 8 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) The largest user of resources for the Authority as a whole is the business-type activities (91.7%). For the governmental activities, the users of resources are regional customer services (60.7%), administration (13.4%), regional planning (13.0%), and transportation demand management (12.9%). Overall expenses decreased by $16.8 million, or 9.1%, compared to last fiscal year. The governmental activities expenses decreased by $.5 million, or 3.3%, over the prior year due to conservative spending practices. The expenses of business-type activities decreased by $16.3 million, or 9.6%, compared to the prior year due to a reduction in express and local bus service and a reduction in PTF and bond proceeds disbursements to Valley Metro Rail. The decreases in the business-type activities’ expenses were adhered to as planned as the Authority entered its fifth 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 $46.1 million, an increase of $8.1 million, or 21.3%, from the previous year. Of the $46.1 million total fund balance, the Authority has designated $0.8 million for payment of compensated absences, and the remainder is in unreserved fund balance (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 $46.1 million fund balance, $4.7 million is reported in the General Fund, and $41.0 million is reported in the Public Transportation Fund, which is an increase of 20.7% over last fiscal year due to decreases of interfund transfers to other funds. The General Fund accounts for activities that include the Executive Director’s office and finance and management services. General Fund revenues increased $0.2 million (4.0%) over the previous year due primarily to an increase in Regional Area Road Funds (RARF) revenue. 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 $99.4 million PTF sales tax revenue represents the fourth full year of earned revenue and decreased by $9.7 million from last year. The decrease was due to the continued weak economy during FY 2010 creating a decline in sales tax revenue. 9 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) The nonmajor governmental funds are aggregated in one column and include the Transit Planning Fund, the Transportation Demand Management Fund, the Regional Customer Services Fund, 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 decreased $0.4 million (61.3%) due to the expiration of a one-time FTA grant award received in the prior year. The expenditures decreased 6.5% 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 increased 18.6% 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 decreased 3.4% and expenditures decreased 4.0% from the prior year due to decreases in grant funds available for regional rideshare, telework and bike education programs. 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. Expenditures decreased $0.3 million over the prior year due to conservative spending practices. Prior to 2006, sales taxes allocated to the Regional Customer Services Fund were shown as revenues. These monies were shown as transfers in. Total transfers in of sales taxes decreased $0.3 million (3.7%) 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 $0.3 million (65.4%) from the prior year due to conservative spending practices and further deferment of the implementation of the procurement software project. 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 (65.7%) 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 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 $21.5 million (26.0%) over the prior year due mainly to decreases in capital contributions and FTA grants. In the prior year the Authority purchased a facility at an amount below the assessed valuation and as a result recorded a capital contribution of $16.5 million. 10 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) 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 $9.0 million as of June 30, 2010 as compared to net assets of $10.5 million at the end of the previous year. In fiscal year 2010, the Valley Metro Rail Fund received 40.3% of the total PTF sales tax revenues distributed to the Authority from the Arizona Department of Revenue, totaling $40.0 million and received 11.4% of the $4.4 million RARF sales tax revenue received by the Authority, totaling $0.5 million. Additionally, the Valley Metro Rail Fund received $10.0 million of transfers in of 2009 Bond proceeds from the Transit Service Operations Fund for VMR capital expenditure reimbursements. GENERAL FUND BUDGETARY HIGHLIGHTS The Authority did not amend their adopted budget during the fiscal year. For the year ended June 30, 2010, actual expenditures were under the adopted budget amounts by $0.3 million. The 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, 2010, the Authority had $109.0 million invested in various capital assets, net of accumulated depreciation, for its governmental and business-type activities. The overall net decrease in the Authority’s capital assets for the current fiscal year was 2.4%, a decrease of 43.9% for governmental activities and a decrease of 1.9% for business-type activities for the current year. Major capital asset events in the current year attributing to the decrease included the following:   Several projects that had been recorded as work in process in the prior year were completed and subsequently handed over to various member cities. This decreased the capital assets in total by $9.8 million. Depreciation expense in the current year totaled $12.2 million, $11.6 million for business type capital assets and $0.6 million for governmental activities capital assets. The depreciation expense was the primary reason for the large decrease in governmental activities capital assets. The following table provides a breakdown of capital assets of the Authority at June 30, 2010 with comparative information for the previous year. Additional information on the Authority’s capital assets may be found in Note 6 on pages 41 – 43. 11 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Capital Assets, Net of Accumulated Depreciation As of June 30 (in thousands of dollars) Governmental Activities 2010 Non-depreciable assets: Land Work-in-progress Depreciable assets: Transit fleet Building Site improvements Computers & software Equipment Vehicles Furniture & fixtures Total assets $ 2009 - $ 338.4 242.7 15.1 93.6 $ Business-type Activities 689.8 14.8 2010 $ 5,292.0 13,467.3 732.7 312.4 34.3 135.7 $ 1,229.9 2009 $ 65,484.3 12,808.5 6,823.2 211.8 4,141.5 42.4 $ 108,271.0 Total Primary Government 5,292.0 15,803.7 $ 64,149.9 13,099.6 7,277.9 41.0 4,629.6 63.0 $ 110,356.7 2009 2010 5,292.0 13,467.3 $ 65,484.3 12,808.5 6,823.2 550.2 4,384.2 15.1 136.0 $ 108,960.8 $ Percent Change 5,292.0 15,818.5 0.0% -14.9% 64,149.9 13,099.6 7,277.9 773.7 4,942.0 34.3 198.7 2.1% -2.2% -6.2% -28.9% -11.3% -56.0% -31.6% 111,586.6 -2.4% Debt Administration At June 30, 2010, the Authority had total bonded debt outstanding (including unamortized premium) of $105.5 million related to business-type activities. The Authority has pledged future transportation excise tax revenues to repay this outstanding debt. Business-type Activities 2010 Revenue bonds payable Plus unamortized premium: Bond premium payable Total $ 100.1 2009 $ 5.4 $ 105.5 100.1 5.8 $ 105.9 The Authority’s current bond ratings on transportation excise revenue tax bonds are AA+ from Standard & Poor’s and AA+ from Fitch. Additional information on the Authority’s bonded debt and other long-term liabilities can be found in Note 8 on pages 44 - 45. 12 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) ECONOMIC FACTORS The Authority undertook a number of key projects during FY 2010, 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 2010 included:       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 Governments’ (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 life cycle program, service adjustments, purchases and other agency programs and projects. Annual update for the Maricopa Association of Governments’ (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 fiveyear horizon of the Plan. 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 ensuring that model outputs provide a more accurate projection of mode split and travel behavior. Valley Metro and our contracted public relations firm, R&R Partners, plan to continue to implement a campaign designed to promote Valley Metro as the transportation solutions provider that makes the Valley a better place to live, work, play and visit. This includes public relations support, creative design and development, and various forms of media purchase and placement including print, radio and online advertising. Coordinate, manage, develop and update the transit element of the Maricopa Association of Governments’ (MAG) Transportation Improvement Program (TIP) on behalf of Valley Metro members and non-members. Provide staff support to the Valley Metro Operations and Capital Committee (VMOCC), a 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, Inc. (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 the Arizona Avenue/Country Club BRT line. 13 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) The adopted FY 2011 combined operating and capital budget is $225.0 million (down approximately 25% from fiscal year 2010). The FY 2011 budget includes the fifth full year of projects funded with Proposition 400 PTF sales tax revenues ($97.3 million). Of the $97.3 million PTF revenue budgeted, $55.2 million is for bus operating and bus capital and $42.1 million is for light rail/high capacity capital. The total operating budget of $85.3 million represents an $11.7 million (12%) decrease under the fiscal year 2010 operating budget of $97.0 million. The total capital budget of $139.7 million represents a $61.4 million (30.5%) decrease under the fiscal year 2010 capital budget of $201.1 million. The major reason for the decrease in the operating budget is directly related to the projects programmed in the Transit Life Cycle Program (TLCP) for fiscal year 2011. The budget is balanced; decreases in net assets other than capital assets are not anticipated for fiscal year 2011. 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 Acting Finance Director, Valley Metro RPTA, 101 North First Avenue, Suite 1100, Phoenix, Arizona 85003. 14 Basic Financial Statements  Government-wide Financial Statements  Fund Financial Statements  Notes to the Financial Statements Valley Metro Regional Public Transportation Authority Statement of Net Assets June 30, 2010 Governmental Activities Business-type Activities Total 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 Deferred charges Capital assets, not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets 48,182,227 $ 504 9,197,884 (10,600,000) 28,176 46,808,791 1,220,374 25,514,728 10,600,000 6,250 37,341,352 $ 49,402,601 504 34,712,612 34,426 84,150,143 689,786 689,786 68,556,165 816,867 18,759,250 89,511,714 177,643,996 68,556,165 816,867 18,759,250 90,201,500 178,333,782 47,498,577 214,985,348 262,483,925 423,176 131,250 112,546 663,685 16,824 6,285,629 75,889 29,277,967 2,622,659 485,426 - 6,708,805 207,139 29,390,513 2,622,659 1,149,111 16,824 1,347,481 38,747,570 40,095,051 174,195 174,195 399,581 105,463,437 105,863,018 573,776 105,463,437 106,037,213 1,521,676 144,610,588 146,132,264 689,786 45,287,115 106,601,704 (36,226,944) 107,291,490 9,060,171 Liabilities Liabilities: Current Liabilities Accounts payable Accrued salaries and benefits Due to other governments Bond interest payable Compensated absences payable Other liabilities Total current liabilities Noncurrent liabilities: Compensated absences payable Revenue bonds payable, including unamortized premium Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Unrestricted $ Total net assets See accompanying notes to the financial statements. 15 45,976,901 $ 70,374,760 $ 116,351,661 Valley Metro Regional Public Transportation Authority Statement of Activities Fiscal Year Ended June 30, 2010 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's office Finance & management services Total governmental activities $ Business-type activities: Transit service operations Light rail transit Total business-type activities Total primary government $ 308,339 358,149 106,185 1,049,353 $ - $ 84,092 77,592 63,035 $ - 1,052,649 504,614 250,976 - 1,034,327 504,614 250,976 - 2,585,192 3,896,440 2,015,543 150,353 - 41,295 - 1,128,667 750,461 14,006,568 150,353 2,055,931 - 93,074,466 60,704,307 153 778 773 153,778,773 19,122,818 8,130,261 27 253 079 27,253,079 2,607,770 2 607 770 2,607,770 14,996,556 14 996 556 14,996,556 167,785,341 $ 27,403,432 $ 4,663,701 $ 14,996,556 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 (Continued) 16 Net (Expense) Revenues and Changes in Net Assets Governmental Activities $ Business-Type Activities (224,247) (280,557) (106,185) (986,318) $ (224,247) (280,557) (106,185) (986,318) (18,322) - (18,322) - (2,585,192) (3,746,087) (1,974,248) (2,585,192) (3,746,087) (1,974,248) (1,128,667) (750,461) (11,800,284) (1,128,667) (750,461) (11,800,284) $ $ Total (56,347,322) (52,574,046) (108 921 368) (108,921,368) (56,347,322) (52,574,046) (108 921 368) (108,921,368) (11,800,284) (108,921,368) (120,721,652) 99,351,318 4,371,192 231,398 73,531 (84,745,330) 19,282,109 587,487 650,591 84,745,330 85,983,408 99,351,318 4,371,192 818,885 724,122 105,265,517 7,481,825 (22,937,960) (15,456,135) 38,495,076 93,312,720 131,807,796 45,976,901 $ 70,374,760 $ 116,351,661 See accompanying notes to the financial statements. 17 Valley Metro Regional Public Transportation Authority Balance Sheet Governmental Funds June 30, 2010 Public Transportation General Nonmajor Governmental Funds Total Governmental Funds Assets Cash and cash equivalents Receivables Due from other governments Due from other funds Other assets Total assets $ 4,253,318 86,779 609,113 26,001 $ 43,272,733 8,503,245 - $ 656,176 504 607,860 2,175 $ 48,182,227 504 9,197,884 609,113 28,176 $ 4,975,211 $ 51,775,978 $ 1,266,715 $ 58,017,904 $ 83,106 78,401 112,327 10,610 $ 10,763,768 - $ 340,070 52,849 445,345 219 6,214 $ 423,176 131,250 11,209,113 112,546 16,824 Liabilities and Fund Balances Liabilities: Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Other liabilities Total liabilities Fund balances: Unreserved, designated Unreserved, undesignated General fund Special revenue fund Total fund balances Total liabilities and fund balances $ 284,444 10,763,768 844,697 11,892,909 837,880 - - 837,880 3,852,887 - 41,012,210 422,018 3,852,887 41,434,228 4,690,767 4,975,211 $ 41,012,210 51,775,978 $ 422,018 1,266,715 $ 46,124,995 58,017,904 $ 46,124,995 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 3,073,993 (2,384,207) Governmental compensated absences Net assets of governmental activities, statement of net assets See accompanying notes to the financial statements. 18 (837,880) $ 45,976,901 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Fiscal Year Ended June 30, 2010 Public Transportation General Revenues: Sales taxes: Public transportation funds Regional area road funds Intergovernmental: State & county grants & pass through grants Federal Transit Administration CMAQ Interest earnings Miscellaneous Total revenues $ 4,371,192 $ 99,351,318 - Nonmajor Governmental Funds $ - Total Governmental Funds $ 99,351,318 4,371,192 8,784 7,868 4,387,844 222,614 99,573,932 688,659 266,015 1,101,257 216,120 2,272,051 688,659 266,015 1,101,257 231,398 223,988 106,233,827 - - 308,339 358,149 106,185 1,049,353 308,339 358,149 106,185 1,049,353 - - 1,052,649 504,614 250,976 1,052,649 504,614 250,976 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 - - 2,585,192 3,896,440 1,662,194 2,585,192 3,896,440 1,662,194 1,128,667 335,087 1,463,754 120 120 83,971 61,909 11,919,971 1,128,667 419,178 61,909 13,383,845 Excess (deficiency) of revenues over (under) expenditures 2,924,090 99,573,812 (9,647,920) 92,849,982 (1,871,007) (1,871,007) 1,053,083 (92,533,287) (92,533,287) 7,040,525 9,658,964 9,658,964 11,044 9,658,964 (94,404,294) (84,745,330) 8,104,652 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balances 3,637,684 Fund balance, beginning Fund balance, ending $ 4,690,767 See accompanying notes to the financial statements. 19 33,971,685 $ 41,012,210 410,974 $ 422,018 38,020,343 $ 46,124,995 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, 2010 Net change in fund balances, total governmental funds $ 8,104,652 The change in net assets reported for governmental activities in the statement of 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 depreciation expense ($587,131) exceeded capital outlays ($61,909) in the current period. (525,222) 2. In the Statement of Activities, only the gain/loss on the sale of capital assets is reported, whereas in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differ from the change in fund balance by the book value of capital assets sold. (14,908) 3. The governmental funds, under the modified accrual basis of accounting, do not report the unpaid compensated absences as an 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. (82,697) Change in net assets of governmental activities, statement of activities See accompanying notes to the financial statements. 20 $ 7,481,825 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual General Fund Fiscal Year Ended June 30, 2010 Budgeted Amounts Original & Final Revenues: Sales taxes: Regional area road funds Interest earnings Miscellaneous Total revenues $ 4,389,000 100,000 4,489,000 Variance with Final Budget Over (Under) Actual Amounts $ 4,371,192 8,784 7,868 4,387,844 $ (17,808) (91,216) 7,868 (101,156) Expenditures: Current: Executive director's office Finance & management services Total expenditures 1,283,583 452,054 1,735,637 1,128,667 335,087 1,463,754 (154,916) (116,967) (271,883) Excess of revenues over expenditures 2,753,363 2,924,090 170,727 (3,214,634) (3,214,634) (1,871,007) (1,871,007) 1,343,627 1,343,627 1,053,083 1,514,354 3,637,684 1,741,070 Other financing uses: Transfers out Total other financing uses Net change in fund balance (461,271) 1,896,614 Fund balance, beginning Fund balance, ending $ 1,435,343 See accompanying notes to the financial statements. 21 $ 4,690,767 $ 3,255,424 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual Public Transportation Fund Fiscal Year Ended June 30, 2010 Budgeted Amounts Original & Final Revenues: Sales taxes: Public transportation funds Interest earnings Total revenues $ 116,849,700 116,849,700 Expenditures: Current: Finance & management services Total expenditures Excess of revenues over expenditures Other financing uses: Transfers out Total other financing uses Variance with Final Budget Over (Under) Actual Amounts $ 99,351,318 222,614 99,573,932 120 120 116,849,700 99,573,812 (17,275,888) (122,780,987) (122,780,987) (92,533,287) (92,533,287) 30,247,700 30,247,700 7,040,525 12,971,812 19,372,791 (5,931,287) Fund balance, beginning 14,598,894 $ 33,971,685 8,667,607 $ 41,012,210 $ (17,498,382) 222,614 (17,275,768) - Net change in fund balance Fund balance, ending $ See accompanying notes to the financial statements. 22 120 120 $ 32,344,603 Valley Metro Regional Public Transportation Authority Statement of Net Assets Proprietary Funds June 30, 2010 Business-Type Activities - Enterprise Funds Transit Service Operations Assets Current assets Cash and cash equivalents Due from other governments Due from other funds Other assets Total current assets $ Noncurrent assets Cash and cash equivalents Deferred charges Capital assets, not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets 238,887 24,621,269 2,600,000 6,250 27,466,406 Total Proprietary Funds Valley Metro Rail $ 981,487 893,459 9,666,331 11,541,277 $ 1,220,374 25,514,728 12,266,331 6,250 39,007,683 68,556,165 816,867 18,759,250 - 68,556,165 816,867 18,759,250 89,511,714 177,643,996 - 89,511,714 177,643,996 205,110,402 11,541,277 216,651,679 6,285,629 8,830 1,666,331 27,591,862 2,622,659 71,702 38,247,013 67,059 1,686,105 413,724 2,166,888 6,285,629 75,889 1,666,331 29,277,967 2,622,659 485,426 40,413,901 59,021 340,560 399,581 105,463,437 105,522,458 340,560 105,463,437 105,863,018 143,769,471 2,507,448 146,276,919 106,601,704 (45,260,773) 9,033,829 106,601,704 (36,226,944) Liabilities Current liabilities: Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Bond interest payable Compensated absences payable Total current liabilities Noncurrent liabilities: Compensated absences payable Revenue bonds payable, including unamortized premium Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total net assets $ 61,340,931 See accompanying notes to the financial statements. 23 $ 9,033,829 $ 70,374,760 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds Fiscal Year Ended June 30, 2010 Business-Type Activities - Enterprise Funds Transit Service Operations Operating Revenues: Charges for services Miscellaneous Total operating revenues $ 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 Interest subsidy Interest expense Bond issuance expense Total non-operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Changes in net assets Net assets, beginning Net assets, ending $ 19,122,818 106,662 19,229,480 Total Proprietary Funds Valley Metro Rail $ 8,130,261 8,130,261 $ 27,253,079 106,662 27,359,741 49,283,402 10,017,656 782,665 371,149 32,586 11,574,301 72,061,759 (52,832,279) 8,130,261 8,130,261 - 49,283,402 8,130,261 10,017,656 782,665 371,149 32,586 11,574,301 80,192,020 (52,832,279) (16,267,314) 14,836,822 160,167 581,166 494,304 147,649 591,561 (4,845,393) (47,649) (4,348,687) (52,574,046) 93,183 543,929 (51,936,934) (68,841,360) 14,836,822 160,167 581,166 587,487 147,649 543,929 591,561 (4,845,393) (47,649) (56,285,621) (57,180,966) (51,936,934) (109,117,900) 1,434,610 44,212,964 (9,968,549) 50,500,915 - 1,434,610 94,713,879 (9,968,549) (21,501,941) (1,436,019) (22,937,960) 82,842,872 10,469,848 93,312,720 61,340,931 See accompanying notes to the financial statements. 24 $ 9,033,829 $ 70,374,760 Valley Metro Regional Public Transportation Authority Statement of Cash Flows Proprietary Funds Fiscal Year Ended June 30, 2010 Business-Type Activities - Enterprise Funds Valley Transit 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 $ 16,015,532 (50,537,382) (752,205) (35,274,055) $ 8,287,689 (2,160,558) (6,343,019) (215,888) Total Proprietary Funds $ 24,303,221 (52,697,940) (7,095,224) (35,489,943) 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 Receipts from federal grants Net cash provided by (used in) noncapital and related financing activities 38,526,362 (914,888) (2,688,964) 783,608 1,802,418 500,000 (500,000) (9,682,178) - 39,026,362 (1,414,888) (12,371,142) 783,608 1,802,418 37,508,536 (9,682,178) 27,826,358 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 Interest paid on capital debt Transfers out Transfers in - sales taxes Net cash provided by (used in) capital and related financing activities (8,466,258) (15,352,426) 23,088,235 241,879 (2,637,229) (9,968,549) 5,686,602 (66,500,530) 50,228,550 (8,466,258) (81,852,956) 23,088,235 241,879 (2,637,229) (9,968,549) 55,915,152 (7,407,746) (16,271,980) (23,679,726) Cash flows from investing activities Interest received on investments Net cash provided by investing activities Net decrease in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 494,304 494,304 $ From the Proprietary Funds Statement of Net Assets Current cash and cash equivalents $ Noncurrent cash and cash equivalents Total cash and cash equivalents $ 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 Accrued salaries and benefits Due to other governments Compensated absences payable Total adjustments Net cash provided by (used in) operating activities $ (4,678,961) 73,474,013 68,795,052 119,357 119,357 $ 238,887 68,556,165 68,795,052 $ (52,832,279) (26,050,689) 27,032,176 981,487 613,661 613,661 $ (30,729,650) 100,506,189 69,776,539 $ $ 981,487 981,487 $ 1,220,374 68,556,165 69,776,539 $ - $ (52,832,279) 11,574,301 - 11,574,301 112,287 (3,326,236) (6,250) - 112,287 (3,326,236) (6,250) $ (1,896,707) (21,170) 11,108,544 13,455 17,558,224 (35,274,055) $ $ 1,434,610 $ (238,423) 22,535 (215,888) (215,888) $ (1,896,707) (259,593) 11,108,544 35,990 17,342,336 (35,489,943) $ 1,434,610 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 Fund Fiscal Year Ended June 30, 2010 LTAF II Private Purpose Trust Fund Additions Contributions $ Total additions 5,518,556 5,518,556 Deductions Distributions 5,518,556 Total deductions 5,518,556 Changes in net assets - Net assets, beginning $ Net assets, ending See accompanying notes to the financial statements. 26 - Valley Metro Regional Public Transportation Authority Index to the Notes to the Financial Statements Page 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 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. Long Term Obligations m. Cash Equivalents n. Use of Estimates o. Accounting Pronouncements Reconciliation of Governmental Fund Financial Statements to Government-Wide Statements Deposits and Investments a. Deposits b. Investments Interfund Receivables/Payables 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. Funding policy 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 31-32 33 33 34 34 35 35 35 36 36 36 36 37-38 39 39 39-40 40-41 41 41-43 43 43 43-44 45 45 45 45 46 46 46 46-47 47 47 47 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements Fiscal Year Ended June 30, 2010 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 member cities and towns. For fiscal year 2009-10, the members included 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, 2010 b. Basic Financial Statements 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 fund balances/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. 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 29 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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. 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 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: 30 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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 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. 31 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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 expenses are items like investment income and interest expense that are not a result of the direct operations of the activity. 32 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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. Budgetary comparison statements for the general fund and major special revenue funds must 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. 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 due to other funds at year end. 33 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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 All capital assets, whether owned by governmental activities or business-type activities, must 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 asset lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. 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. 34 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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. During the fiscal year ended June 30, 2010, the Authority recorded $581,166 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 compressed natural gas (CNG), liquefied natural gas (LNG), propane and several other less frequently used fuels. The Authority 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 35 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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. Long-term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities on the statement of net assets. Bond premiums and discounts, as well as issuance costs and the difference between the reacquisition price and the net carrying amount of the old debt, are deferred and amortized over the life of the bonds using the straight-line method over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. m. 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. n. 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. o. 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 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. 36 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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: Total Governmental Funds Assets Cash and cash equivalents Receivables Due from other governments Due from other funds Internal balances Other assets Capital assets (net) Total assets $ 48,182,227 $ 504 9,197,884 609,113 28,176 $ 58,017,904 $ Liabilties Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Other liabilities Compensated absences Total liabilities Fund Balance/Net Assets Total fund balance/net assets $ Reclassifications for Internal Statement of Balances and Net Assets Eliminations Totals Long-term Assets/ Liabilities 423,176 $ 131,250 11,209,113 112,546 16,824 11,892,909 $ 46,124,995 $ - $ 689,786 689,786 $ - $ 48,182,227 504 9,197,884 (609,113) (10,600,000) (10,600,000) 28,176 689,786 (11,209,113) $ 47,498,577 - $ 837,880 837,880 - $ (11,209,113) (11,209,113) (148,094) $ 423,176 131,250 112,546 16,824 837,880 1,521,676 - $ 45,976,901 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: Cost of capital assets Accumulated depreciation Capital assets, net $ $ 3,073,993 (2,384,207) 689,786 Interfund transactions between governmental activities of $609,113 are eliminated in the consolidation of these activities for the statement of net assets. 37 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 Under the modified accrual basis of accounting, the governmental funds do not accrue for unpaid compensated absences in the amount of $837,880 as a 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 Balances and the Government-wide Statement of Activities: Total Governmental Funds Revenues Sales taxes Intergovernmental Interest earnings Miscellaneous Total revenues $ 103,722,510 2,055,931 231,398 223,988 106,233,827 Expenditures/Expenses Current: Regional planning Transportation demand management Regional customer services Administration Capital outlay Total expenditures/expenses and other uses Other financing uses/changes in net assets Transfers in Transfers out Net transfers 9,658,964 (94,404,294) (84,745,330) Net change for the year $ Depreciation Compensated Capital Purchases and Disposals Absences $ - $ (104) (104) $ - Statement of Activities Totals $103,722,510 2,055,931 231,398 223,884 106,233,723 1,822,026 - - 1,822,026 1,808,239 8,143,826 1,547,845 61,909 - 353,349 248,586 82,697 (61,909) 1,808,239 8,497,175 1,879,128 - 13,383,845 (61,909) 601,935 82,697 - - 8,104,652 $ 61,909 $ (602,039) $ (82,697) 14,006,568 9,658,964 (94,404,294) (84,745,330) $ 7,481,825 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 amount of the financial resources expended for capital outlay ($61,909), whereas net assets decrease by the amounts of disposals and depreciation expense charged for the year ($602,039). The governmental funds do not report the change in unpaid compensated absences in the amount of $82,697 as expenditures, as they are not paid with expendable available financial resources. However, the statement of net assets includes the change in unpaid compensated absences as accrued expenses regardless of when financial resources are used, and thus a reduction in net assets. 38 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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, 2010, was $45,031,644 and the bank ledger balance was $45,190,030. The difference of $158,386 represents deposits in transit and outstanding checks. Of the bank balance, $250,000 was covered by federal depository insurance and $44,940,030 was covered by collateral held by the pledging financial institution in the Authority’s name. Cash held with trustee in the amount of $65,012,200 has federal depository insurance coverage in the amount of $250,000 and $64,762,200 was covered by collateral held by the pledging financial institution’s trust department but not 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, 2010, 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. Investments, including investments held by trustee, at June 30, 2010 consist of the following: State of Arizona Local Government Investment Pool 39 $ 7,914,922 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 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, 2010 consist of the following: Carrying amount of the Authority's deposits Investments in the LGIP Cash and investments with Trustee Total cash and investments 4. $ 45,031,644 7,914,922 65,012,200 117,958,766 $ Interfund Receivables/Payables and Interfund Transactions Interfund receivables and payables within the governmental activities and business-type activities are eliminated for the government-wide financial statements at June 30, 2010. The following interfund receivables and payables are included in the fund financial statements at June 30, 2010: Due from other funds Transit Service Operations General Fund Due to other funds Governmental funds: Pubic Transportation Nonmajor Governmental Funds Total governmental funds Enterprise funds: Transit Service Operations Total enterprise funds Grand totals $ $ 163,768 445,345 609,113 609,113 $ $ 2,600,000 2,600,000 2,600,000 Valley Metro Rail $ $ 8,000,000 8,000,000 1,666,331 1,666,331 9,666,331 Totals $ $ 10,763,768 445,345 11,209,113 1,666,331 1,666,331 12,875,444 The interfund balances for the governmental funds at June 30, 2010 are short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to grant and other reimbursements. 40 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 The interfund balances within the business-type activities funds are amounts held in the Transit Service Operations Fund for debt service payments to be made by the Valley Metro Rail Fund and short-term loans to cover temporary cash deficits in pooled cash accounts. All interfund balances outstanding at June 30, 2010 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, 2010. Transfers Out Public Transportation Fund General Fund Transfers In Governmental funds: Nonmajor Governmental Funds $ Total governmental funds 1,371,007 1,371,007 Enterprise funds: Transit Service Operations Valley Metro Rail Total enterprise funds Grand totals 500,000 500,000 1,871,007 $ $ $ 8,287,957 8,287,957 44,212,964 40,032,366 84,245,330 92,533,287 Transit Service Operations $ $ - 9,968,549 9,968,549 9,968,549 Totals $ $ 9,658,964 9,658,964 44,212,964 50,500,915 94,713,879 104,372,843 Net transfers from governmental activities to business-type activities on the governmentwide statement of activities to the enterprise funds are in the amount $84,745,330. 5. Fund Balance/Net Assets Reservations and Designations General Fund: Unreserved/Designated - At June 30, 2010, $837,880 of fund balance was designated by management for the payment of accrued compensated absences. Transit Service Operations Enterprise Fund: Unrestricted - At June 30, 2010, a negative amount of $45,260,773 of net assets was unrestricted. This is because of $106,601,704 that is reported as invested in capital assets, net of related debt. 6. Capital Assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2010: 41 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 Balances, July 1, 2009 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 Increases Decreases $ 14,804 14,804 $ - $ 2,037,664 572,034 134,911 274,537 $ 61,909 $ - Balances, June 30, 2010 (14,804) $ (14,804) - (7,062) $ - 2,092,511 572,034 134,911 274,537 3,019,146 61,909 (7,062) 3,073,993 (1,304,991) (259,584) (100,607) (138,852) (1,804,034) (456,122) (69,730) (19,159) (42,120) (587,131) 6,958 6,958 (1,754,155) (329,314) (119,766) (180,972) (2,384,207) 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 $ 1,229,916 $ $ 5,292,000 15,803,722 $ Total non-depreciable assets (525,222) $ 18,107,850 $ (14,908) $ 689,786 - $ (20,444,322) 5,292,000 13,467,250 21,095,722 18,107,850 (20,444,322) 18,759,250 Depreciable assets: Transit fleet Building Site improvements Computers & softw are Equipment Furniture & fixtures Total depreciable assets at historical cost 95,268,475 13,390,731 7,802,996 94,192 6,586,331 127,037 11,468,701 2 231,344 213,131 - (4,907,284) - 101,829,892 13,390,733 7,802,996 325,536 6,799,462 127,037 123,269,762 11,913,178 (4,907,284) 130,275,656 Less accumulated depreciation for: Transit fleet Building Site improvements Computers & softw are Equipment Furniture & fixtures (31,118,562) (291,103) (525,142) (53,238) (1,956,754) (64,020) (10,046,164) (291,103) (454,641) (60,528) (701,238) (20,627) 4,819,178 - (36,345,548) (582,206) (979,783) (113,766) (2,657,992) (84,647) (34,008,819) (11,574,301) 4,819,178 (40,763,942) Total accumulated depreciation Business-type activities capital assets, net $ 110,356,665 42 $ 18,446,727 $ (20,532,428) $ 108,270,964 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 Depreciation expense was charged to the following functions in the basic financial statements: Regional customer services Administration Transit service operations Total depreciation expense Government- BusinessWide Type $ 353,349 $ 233,782 11,574,301 $ 587,131 $ 11,574,301 The Authority’s enterprise funds in the business-type activities have entered into contracts having remaining commitments at June 30, 2010 totaling approximately $1.3 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 $552,953 for the fiscal year ended June 30, 2010. The future minimum lease payments under noncancelable and final option of the operating lease at June 30, 2010 were as follows: Year Ending June 30 2011 Total $ $ 280,565 280,565 After year end the Authority entered into two separate operating leases for building space. The future minimum lease payments of the operating leases are as follows: Year Ending June 30 2011 2012 2013 2014 2015 2016-20 2021-25 2026 Total 43 $ 465,162 943,801 957,279 1,037,334 1,117,389 3,394,498 3,056,599 317,633 $ 11,289,695 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 8. Long-Term Liabilities a. Transportation Excise Tax Revenue Bonds In May 2009, the Board adopted the issuance of transportation revenue bonds, which are specifically for the purpose of payment or reimbursement of the costs of capital projects 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. 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, 2010, the revenues available for service of this debt were $99,351,318 while interest paid on the debt was $5,259,888. 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, with the first payment on January 1, 2010. Transportation Excise Revenue Bonds annual debt service requirements at June 30, 2010 were as follows: Year Ending June 30 Principal 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2025 2026 $ Total $ - $ 2,265,000 5,085,000 5,290,000 5,555,000 32,015,000 40,605,000 9,260,000 100,075,000 44 $ Interest Total 5,245,318 $ 5,200,018 5,053,018 4,819,068 4,547,943 18,418,578 9,104,436 299,098 5,245,318 7,465,018 10,138,018 10,109,068 10,102,943 50,433,578 49,709,436 9,559,098 52,687,477 $ 152,762,477 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 The revenue bonds liability activity for the fiscal year ended June 30, 2010 was as follows: Business-Type Activities Revenue Bonds: Balance, July 1, 2009 Revenue bonds payable Plus: Bond premium Total Additions Reductions Balance, June 30, 2010 Amount Due Within One Year $ 100,075,000 5,802,932 $ - $ - $ 100,075,000 (414,495) 5,388,437 $ - $ 105,877,932 $ - $ (414,495) $ 105,463,437 $ - b. Compensated Absences Compensated absences activity for the fiscal year ended June 30, 2010 is as follows: Balance, July 1, 2009 Compensated absences: Governmental activities $ Business-type activities 9. Increases 755,183 849,019 $ 649,362 599,516 $ 1,604,202 $ 1,248,878 Decreases $ Amount Due Within One Year Balance, June 30, 2010 (566,665) $ (563,528) 837,880 885,007 $ 663,685 485,426 $ (1,130,193) $ 1,722,887 $ 1,149,111 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 a. Plan descriptions The Authority contributes to a cost-sharing, multiple-employer defined benefit pension plan; a cost-sharing multiple employer defined benefit health care plan; and a costsharing, multiple-employer defined benefit long-term disability plan, all of which are administered by the Arizona State Retirement System (ASRS). The ASRS (through its Retirement Fund) provides retirement (i.e., pension), death and survivor benefits; the Health Benefit Supplement Fund provides health insurance premium benefits (i.e., a 45 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 monthly subsidy); and the Long-Term Disability Fund provides long-term disability benefits. Benefits are established by state statute. The System is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The System issues a comprehensive annual financial report that includes financial statements and required supplementary information. The most recent report may be obtained by writing the System, 3300 North Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling (602) 240-2000 or (800) 621-3778. b. Funding policy The Arizona State Legislature establishes and may amend active plan members’ and the Authority’s contribution rates. For the current fiscal year, active ASRS members were required by statute to contribute at the actuarially determined rate of 9.40 percent (9.00 percent for retirement and 0.40 percent for long-term disability) of the members’ annual covered payroll and the Authority was required by statute to contribute at the actuarially determined rate of 9.40 percent (8.34 percent for retirement, 0.66 percent for health insurance premium, and 0.40 percent for long-term disability) of the members’ annual covered payroll. The Authority’s contributions for the current and two preceding years, all of which were equal to the required contributions, were as follows. Retirement Fund Year ending June 30: 2010 2009 2008 11. $ 1,053,332 1,071,324 927,023 Health Benefit Supplement Fund $ 83,357 84,781 73,362 Long-Term Disability Fund $ 50,520 51,382 44,461 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, 2010 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, the Happy Valley Park-and-Ride, the Scottsdale Loop 101 Park-and-Ride, the Phoenix Camelback/19th Avenue Transit Center, the Surprise Park-and-Ride, the Buckeye Park-and-Ride, the Metrocenter Transit Center and ADA reimbursement contracts. At June 30, 2010, the Authority had outstanding contractual commitments for these services aggregating approximately $16.3 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. 12. Contingencies As a sub-recipient 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, 2010, the Authority had expenditures of $7,730,988 for various transportation improvement projects. As of June 30, 2010, 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 2011. 13. Related Party Transactions As mentioned in Note 1 (a), the members of VMR’s Board of Directors are also members of the sixteen-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, 2010, VMR paid $8,130,261 for services provided by the Authority. At June 30, 2010, the Authority reported $893,459 receivable from VMR and $1,686,105 payable to VMR. 47 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2010 14. Excess of Expenditures over Appropriations For the fiscal year ended June 30, 2010, the Public Transportation Fund incurred $120 of bank charges that were not budgeted. 48 Other Supplementary Information Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Special Revenue Funds Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes.  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 taxes 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 Capital and Other Grants Fund is used to account for the receipt and expenditure of state and federal grant revenues and expenditures not included in other special revenue funds. 49 Valley Metro Regional Public Transportation Authority Combining Balance Sheet Nonmajor Governmental Funds June 30, 2010 Transit Planning Transportation Demand Management Regional Customer Services Capital and Other Grants Total Nonmajor Governmental Assets Cash and cash equivalents Receivables Due from other governments Other assets Total assets $ $ 246,646 246,646 $ 504 566,470 2,175 569,149 $ $ $ 409,357 41,390 450,747 $ $ 173 173 $ $ 656,176 504 607,860 2,175 1,266,715 Liabilities and Fund Balances Liabilities: Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Other liabilities $ Total liabilities 138,739 7,482 219 - $ 32,594 6,007 445,345 6,214 $ 168,564 39,360 - $ 173 - $ 340,070 52,849 445,345 219 6,214 146,440 490,160 207,924 173 844,697 Fund balances: Unreserved, undesignated 100,206 78,989 242,823 - 422,018 Total fund balances 100,206 78,989 242,823 - 422,018 Total liabilities and fund balances $ 246,646 $ 569,149 50 $ 450,747 $ 173 $ 1,266,715 Valley Metro Regional Public Transportation Authority Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds Fiscal Year Ended June 30, 2010 Transportation Demand Management Transit Planning Revenues: Intergovernmental: State & county grants & pass through 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 Excess (deficiency) of revenues over (under) expenditures $ Net change in fund balances Fund balance, beginning $ 688,659 1,101,257 29,367 $ Capital and Other Grants 41,295 166,645 $ 7,680 Total Nonmajor Governmental Funds $ 688,659 266,015 1,101,257 216,120 237,148 1,819,283 207,940 7,680 2,272,051 308,339 358,149 106,185 1,049,353 - - - 308,339 358,149 106,185 1,049,353 - 1,052,649 504,614 250,976 - - 1,052,649 504,614 250,976 - - 2,585,192 3,896,440 1,662,194 - 2,585,192 3,896,440 1,662,194 1,822,026 1,808,239 8,143,826 83,971 61,909 145,880 83,971 61,909 11,919,971 (7,935,886) (138,200) (9,647,920) (1,584,878) Other financing sources: Transfers in Total other financing sources Fund balance, ending 224,720 12,428 Regional Customer Services 11,044 1,584,878 1,584,878 - 7,935,886 7,935,886 138,200 138,200 9,658,964 9,658,964 100,206 11,044 67,945 242,823 - 11,044 410,974 100,206 $ 51 78,989 $ 242,823 $ - $ 422,018 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual Transit Planning Fund Fiscal Year Ended June 30, 2010 Budgeted Amounts Original & Final Revenues: Intergovernmental: Federal Transit Administration Miscellaneous Total revenues $ 778,320 368,000 1,146,320 Expenditures: Current: Regional planning: Long range Short range Capital Program support Total expenditures Variance with Final Budget Over (Under) Actual Amounts $ 224,720 12,428 237,148 $ (553,600) (355,572) (909,172) 236,035 1,210,375 941,428 1,449,587 3,837,425 308,339 358,149 106,185 1,049,353 1,822,026 72,304 (852,226) (835,243) (400,234) (2,015,399) (2,691,105) (1,584,878) 1,106,227 2,691,105 2,691,105 1,584,878 1,584,878 (1,106,227) (1,106,227) Net change in fund balance - - - Fund balance, beginning - 100,206 100,206 Deficiency of revenues 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 Balance - Budget to Actual Transportation Demand Management Fund Fiscal Year Ended June 30, 2010 Budgeted Amounts Original & Final Revenues: Intergovernmental: State grants & pass through grants CMAQ Miscellaneous Total revenues $ 831,880 1,510,000 2,341,880 Expenditures: Current: Transportation demand management: Trip reduction Ridesharing Other programs Total expenditures Actual Amounts $ 1,276,380 594,000 474,000 2,344,380 Excess (deficiency) of revenues over (under) expenditures 688,659 1,101,257 29,367 1,819,283 $ 1,052,649 504,614 250,976 1,808,239 (2,500) Other financing sources: Transfers in Total other financing sources Variance with Final Budget Over (Under) (143,221) (408,743) 29,367 (522,597) (223,731) (89,386) (223,024) (536,141) 11,044 13,544 2,500 2,500 - Net change in fund balance - 11,044 11,044 Fund balance, beginning - 67,945 67,945 Fund balance, ending $ - 53 $ 78,989 (2,500) (2,500) $ 78,989 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual Regional Customer Services Fund Fiscal Year Ended June 30, 2010 Budgeted Amounts Original & Final Revenues: Intergovernmental: Federal Transit Administration Miscellaneous Total revenues $ 100,000 150,258 250,258 Variance with Final Budget Over (Under) Actual Amounts $ 41,295 166,645 207,940 $ (58,705) 16,387 (42,318) Expenditures: Current: Regional customer services: 3,128,435 3,851,478 1,753,633 145,000 8,878,546 2,585,192 3,896,440 1,662,194 8,143,826 (543,243) 44,962 (91,439) (145,000) (734,720) (8,628,288) (7,935,886) 692,402 8,628,288 8,628,288 7,935,886 7,935,886 (692,402) (692,402) Net change in fund balance - - - Fund balance, beginning - 242,823 242,823 Marketing 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 Balance - Budget to Actual Capital and Other Grants Fund Fiscal Year Ended June 30, 2010 Budgeted Amounts Original & Final Revenues: Miscellaneous Total revenues $ - Expenditures: Administration: Finance & management services Capital outlay Total expenditures Variance with Final Budget Over (Under) Actual Amounts $ 7,680 7,680 $ 7,680 7,680 120,000 470,000 590,000 83,971 61,909 145,880 (36,029) (408,091) (444,120) (590,000) (138,200) 451,800 590,000 590,000 138,200 138,200 (451,800) (451,800) Net change in fund balance - - - Fund balance, beginning - - - Deficiency of revenues 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, 2010 Actual Amounts (budgetary basis) Budgeted Amounts Original & Final Operating Revenues: Charges for services Miscellaneous Total operating revenues $ 25,227,297 25,227,297 $ 19,122,818 106,662 19,229,480 Variance with Final Budget Over (Under) $ (6,104,479) 106,662 (5,997,817) 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) 58,520,163 12,759,711 940,070 1,394,220 33,322 1,161,849 47,803,513 122,612,848 (97,385,551) 49,283,402 10,017,656 782,665 371,149 32,586 8,026,259 68,513,717 (49,284,237) (9,236,761) (2,742,055) (157,405) (1,023,071) (736) (1,161,849) (39,777,254) (54,099,131) 48,101,314 Non-Operating Revenues (Expenses): Lead agency disbursements Federal Transit Administration grants Other federal grants IRS fuel tax credit Interest income Proceeds from disposition of capital assets Interest subsidy Interest expense Bond issuance expense Total nonoperating revenues (expenses) (19,729,291) 23,752,822 1,568,400 275,000 5,866,931 (16,267,314) 14,836,822 160,167 581,166 494,304 241,879 591,561 (4,845,393) (47,649) (4,254,457) 3,461,977 (8,916,000) (1,408,233) 306,166 494,304 241,879 591,561 (4,845,393) (47,649) (10,121,388) (91,518,620) (53,538,694) 37,979,926 91,518,620 - 44,212,964 (9,968,549) (47,305,656) (9,968,549) Income (loss) before transfers Transfers in Transfers out Change in net assets budgetary basis $ - $ (19,294,279) $ (19,294,279) Explanation of differences between budgetary basis and GAAP basis $ (19,294,279) Excess revenues over expenses - budgetary basis Capital outlay is an expense for budgetary purposes, but assets are capitalized and are not an expense for GAAP purposes 8,026,259 Contributions are not a budgeted revenue, but is revenue for GAAP purposes 1,434,610 Depreciation is not a budgeted expense, but is an expense for GAAP (11,574,301) purposes Proceeds from disposition of assets increase financial resources for (241,879) 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 147,649 Changes in net assets per the statement of revenues, expenses and changes in fund net assets $ (21,501,941) 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 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, 2010 Budgeted Amounts Original & Final Operating Revenues: Charges for services Total operating revenues $ 9,858,369 9,858,369 Operating Expenses: Light rail staff and administration Total operating expenses Operating income (loss) Income (loss) before transfers Transfers in Change in net assets budgetary basis Actual Amounts $ 9,858,369 9,858,369 - Non-Operating Revenues (Expenses): Lead agency disbursements Interest income Miscellaneous Total nonoperating revenues (expenses) Variance with Final Budget Over (Under) 8,130,261 8,130,261 $ (1,728,108) (1,728,108) 8,130,261 8,130,261 - (1,728,108) (1,728,108) - (117,253,666) (117,253,666) (52,574,046) 93,183 543,929 (51,936,934) 64,679,620 93,183 543,929 65,316,732 (117,253,666) (51,936,934) 65,316,732 117,253,666 50,500,915 (66,752,751) $ - 57 $ (1,436,019) $ (1,436,019) (This page intentionally left blank) 58 Statistical Section The Statistical Section includes selected financial and demographic information regarding the Authority. Statistical Section The Statistical Section presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the Authority’s overall financial health. 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. Debt Capacity 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. There is no statute on the Authority’s debt limit on the issuance of bonds. The only limitation is the ability to secure the debts with available excise tax monies. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Authority’s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Authority’s financial report relates to the services the Authority provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The Authority implemented GASB Statement No. 34 in FY 2001-02; schedules presenting government-wide information include information beginning in that year. 59 Valley Metro Regional Public Transportation Authority Net Assets by Component Last Nine Fiscal Years (accrual basis of accounting) FY 2001/02 FY 2002/03 FY 2003/04 FY 2004/05 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 $ 3,500,478 161,090 3,300,859 $ 3,461,949 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 $ 12,283,769 1,827,192 1,299,780 $ 15,410,741 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 $ 12,444,859 1,827,192 4,600,639 $ 18,872,690 60 $ FY 2005/06 $ FY 2006/07 249,177 12,224,193 $ 12,473,370 $ $ 27,042,048 5,301,289 17,159,298 $ 49,502,635 $ $ 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 $ $ FY 2008/09 1,467,040 28,106,773 29,573,813 $ $ 72,537,461 2,332,524 17,991,644 92,861,629 $ $ $ 74,004,501 2,332,524 46,098,417 $ 122,435,442 $ 1,229,916 37,265,160 38,495,076 $ 98,580,060 4,062,157 (9,329,497) 93,312,720 $ 106,601,704 (36,226,944) $ 70,374,760 99,809,976 4,062,157 27,935,663 $ 131,807,796 61 FY 2009/10 $ 689,786 45,287,115 45,976,901 $ 107,291,490 9,060,171 $ 116,351,661 Valley Metro Regional Public Transportation Authority Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) FY 2001/02 Expenses 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'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 62 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 FY 2009/10 $ 308,339 358,149 106,185 1,049,353 865,290 645,052 326,903 719,854 594,549 385,257 819,553 592,460 373,833 897,234 561,620 424,091 1,052,649 504,614 250,976 - 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 2,585,192 3,896,440 2,015,543 514,158 207,304 549,635 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 1,128,667 750,461 14,006,568 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 93,074,466 60,704,307 153,778,773 $ 65,605,544 $ 137,419,068 $ 176,725,049 $ 184,608,254 $ 167,785,341 (Continued) 63 Valley Metro Regional Public Transportation Authority Changes in Net Assets (Continued) Last Nine 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 64 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 $ 150,353 2,055,931 2,206,284 $ (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) $ (11,857,357) (94,447,809) $ (106,305,166) (11,800,284) (108,921,368) $ (120,721,652) $ 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 $ 103,722,510 231,398 73,531 (84,745,330) 19,282,109 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 $ 115,677,520 587,487 650,591 84,745,330 85,983,408 $ 105,265,517 $ $ $ (14,466,044) 21,994,930 $ 7,528,886 $ $ $ 31,566,487 21,364,064 52,930,551 65 $ $ 19,936,194 3,029,151 926,245 8,614,280 2,609,156 40,555,599 75,670,625 78,303,088 FY 2009/10 $ $ 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 8,921,263 451,091 9,372,354 $ 15,849,887 2,408,268 864,663 8,130,261 2,607,770 14,996,556 44,857,405 47,063,689 $ $ 7,481,825 (22,937,960) (15,456,135) Valley Metro Regional Public Transportation Authority Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) FY 2001/02 General fund: Reserved Unreserved, designated Unreserved, undesignated Total general fund All other governmental funds: Reserved Unreserved, designated, reported in special revenue funds Unreserved, undesignated, reported in special revenue funds Total all other governmental funds $ $ 238,405 2,065,156 2,303,561 $ - FY 2002/03 FY 2003/04 $ $ 318,191 1,985,370 $ 2,303,561 384,887 2,915,972 $ 3,300,859 350,173 2,950,686 $ 3,300,859 $ $ $ - $ 66 - FY 2004/05 $ - - $ - $ - - $ - FY 2005/06 FY 2006/07 $ FY 2007/08 1,002,229 1,433,788 $ 2,436,017 233,480 2,888,105 $ 3,121,585 755,184 2,882,500 $ 3,637,684 837,880 3,852,887 $ 4,690,767 $ $ $ $ $ - $ FY 2009/10 649,225 1,638,892 $ 2,288,117 - $ FY 2008/09 - $ - $ - - 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 41,434,228 $ 41,434,228 67 Valley Metro Regional Public Transportation Authority Changes in Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) FY 2001/02 Revenues Sales taxes Intergovernmental: State & county grants & pass through grants Federal Transit Administration CMAQ Other federal grants Charges for services Interest earnings Miscellaneous Total revenues Expenditures 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'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 $ FY 2002/03 FY 2003/04 FY 2004/05 1,941,168 $ 2,587,302 $ 3,071,725 $ 1,154,022 409,000 553,492 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 5,231,188 400,000 526,176 1,493,178 42,000 49,642 103,981 1,047 3,770,046 212,391 256,925 307,518 29,746 367,279 274,302 118,161 43,722 167,057 242,945 163,818 53,199 162,287 145,690 236,219 171,169 853,216 608,955 497,885 820,699 589,798 294,016 784,056 656,311 267,869 931,196 514,977 486,102 - - - - 262,172 226,215 238,134 400,777 162,556 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 3,094,467 161,979 293,648 51,652 214,350 3,770,046 285,292 1,828,543 2,136,721 - (789,672) (789,672) (1,828,543) (1,828,543) (1,139,423) (1,139,423) - (504,380) 68 $ - $ 997,298 $ - FY 2005/06 FY 2006/07 $ 55,084,706 $ 134,235,260 400,000 569,622 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 36,310 228,281 116,041,645 688,659 266,015 1,101,257 231,398 223,988 106,233,827 187,496 322,430 197,256 534,285 403,337 558,664 164,722 1,298,591 311,129 733,017 222,439 1,104,198 292,509 317,886 154,523 1,183,750 308,339 358,149 106,185 1,049,353 865,290 645,052 326,903 719,854 594,549 385,257 816,128 601,220 370,142 897,234 561,620 424,091 1,052,649 504,614 250,976 - 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 2,585,192 3,896,440 1,662,194 514,158 1,712,451 1,030,804 1,111,340 1,128,667 207,304 419,571 218,151 4,437,896 260,965 580,415 765,641 14,621,652 318,945 1,078,709 14,615,795 462,737 384,564 14,141,968 419,178 61,909 13,383,845 53,253,284 123,996,398 120,586,193 101,899,677 92,849,982 814,701 (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) 9,658,964 (94,404,294) (84,745,330) $ 8,923,334 $ 30,453,251 FY 2007/08 $ $ 130,490,779 (14,395,196) 69 FY 2008/09 $ $ 113,297,696 9,269,115 FY 2009/010 $ $ 103,722,510 8,104,652 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 2000/01 FY 2001/02 FY 2002/03 FY 2003/04 FY 2004/05 $ 7,193,836 $ 7,193,836 $ 1,941,168 $ 1,941,168 $ 2,587,302 $ 2,587,302 $ 3,071,725 $ 3,071,725 $ 1,154,022 $ 1,154,022 $ - $ 5,400,322 $ 5,400,322 $ 4,914,755 $ 4,914,755 $ 4,516,066 $ 4,516,066 $ 6,559,344 $ 6,559,344 $ 7,193,836 $ 7,193,836 $ 7,341,490 $ 7,341,490 $ 7,502,057 $ 7,502,057 $ 7,587,791 $ 7,587,791 $ 7,713,366 $ 7,713,366 $ (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 of the Public Transportation sales tax were reported. 70 FY 2005/06 (2) FY 2006/07 (2) FY 2007/08 (2) FY 2008/09 (2) $ 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 $ 4,277,292 109,020,404 $ 113,297,696 $ $ - $ - $ - $ - $ 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 $ 4,277,292 109,020,404 $ 113,297,696 $ $ $ $ $ $ 71 FY 2009/10 (2) $ $ $ 4,371,192 99,351,318 103,722,510 - 4,371,192 99,351,318 103,722,510 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 2000/01 FY 2001/02 FY 2002/03 $ $ 260,222 $ 261,219 7,194 7,341 7,502 264,723 267,563 268,721 Public transportation funds Total Maricopa County transportation excise tax revenue distributions 257,529 - $ 264,723 - $ 267,563 - $ 268,721 Source: The Maricopa County Transportation Excise Tax Year-End Report prepared by the Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. Note: 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. On January 1, 2006 these funds are distributed evenly to the Authority and the Maricopa Association of Governments to be used for administrative and planning purposes per Proposition 400. These funds are netted from the Freeway funds. (2) Distributions are a mix of both Proposition 300 and Proposition 400 collections. 72 FY 2003/04 $ 281,012 FY 2004/05 $ $ 292,487 $ 213,119 FY 2007/08 $ 205,576 FY 2008/09 $ 176,235 FY 2009/10 $ 159,604 7,588 7,713 7,877 8,095 8,334 8,555 8,742 288,600 316,805 16,127 316,491 41,050 262,264 39,832 253,742 34,376 219,166 31,327 199,673 51,146 130,188 126,324 109,020 99,351 - $ 309,092 FY 2005/06 (2) FY 2006/07 (2) 288,600 - $ 316,805 $ 367,637 $ 392,452 $ 380,066 73 $ 328,186 $ 299,024 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 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 (1) 2006/07 (1) 2007/08 (1) 2008/09 (1) 2009/10 (1) Source: $ 131,608 131,393 133,922 144,817 158,179 182,378 187,817 177,845 153,681 143,205 Contracting $ 38,820 41,218 38,894 43,524 52,325 64,822 73,864 66,046 46,865 28,953 Utilities $ 17,862 18,432 18,485 19,980 20,813 23,600 26,697 28,630 28,510 29,385 Restaurant and Bar $ 21,395 21,748 22,646 24,807 27,191 30,656 33,073 33,021 30,763 30,558 Rental Real Property $ 24,112 24,529 25,747 27,163 29,310 32,949 36,398 38,605 37,757 35,825 Rental Personal Property Other $ 14,416 13,928 12,834 12,631 12,624 13,923 15,053 15,111 13,470 11,983 $ 16,509 16,315 16,193 15,678 16,363 19,309 19,550 20,808 17,140 19,115 Total $ 264,722 267,563 268,721 288,600 316,805 367,637 392,452 380,066 328,186 299,024 The Maricopa County Transportation Excise Tax Year-End Report, prepared by the Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. Note: 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%. Note: Information for individual taxpayers is confidential, and state statutes prohibit releasing the information. (1) 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. 74 (This page intentionally left blank) 75 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 2000/01 FY 2001/02 FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06 49.7200% 5.0000% 0.5000% 49.1100% 5.0000% 0.5000% 49.8400% 5.0000% 0.5000% 50.1800% 5.0000% 0.5000% 49.9300% 5.0000% 0.5000% 49.9300% 5.0000% 0.5000% 14.6600% 5.0000% 0.5000% 15.4000% 5.0000% 0.5000% 14.4700% 5.0000% 0.5000% 15.0800% 5.0000% 0.5000% 16.5200% 5.0000% 0.5000% 16.5200% 5.0000% 0.5000% 9.1100% 1.8200% 0.5120% 9.1700% 1.8200% 0.5120% 9.5800% 1.8200% 0.5120% 9.0500% 1.8200% 0.5120% 9.2500% 1.8200% 0.5120% 9.2500% 1.8200% 0.5120% 8.0800% 5.0000% 0.5000% 8.1300% 5.0000% 0.5000% 8.4300% 5.0000% 0.5000% 8.6000% 5.0000% 0.5000% 8.5800% 5.0000% 0.5000% 8.5800% 5.0000% 0.5000% 6.7500% 5.0000% 0.5000% 6.8900% 5.0000% 0.5000% 6.8800% 5.0000% 0.5000% 6.9200% 5.0000% 0.5000% 6.5700% 5.0000% 0.5000% 6.5700% 5.0000% 0.5000% 5.4500% 5.0000% 0.5000% 5.2100% 5.0000% 0.5000% 4.7800% 5.0000% 0.5000% 4.3800% 5.0000% 0.5000% 3.9800% 5.0000% 0.5000% 3.9800% 5.0000% 0.5000% 3.7200% 5.0000% 0.5000% 3.7300% 5.0000% 0.5000% 3.4500% 5.0000% 0.5000% 3.3400% 5.0000% 0.5000% 3.2000% 5.0000% 0.5000% 3.2000% 5.0000% 0.5000% 1.0800% 5.0000% 0.5000% 1.1200% 5.0000% 0.5000% 1.1100% 5.0000% 0.5000% 1.0600% 5.0000% 0.5000% 1.0500% 5.0000% 0.5000% 1.0500% 5.0000% 0.5000% 0.7800% 5.0000% 0.5000% 0.7000% 5.0000% 0.5000% 0.7000% 5.0000% 0.5000% 0.6300% 5.0000% 0.5000% 0.6100% 5.0000% 0.5000% 0.6100% 5.0000% 0.5000% 0.6500% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 0.7600% 5.0000% 0.5000% 0.7600% 5.0000% 0.5000% 0.3100% 5.0000% 0.5000% 0.3100% 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% 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. 76 FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 47.8600% 5.0000% 0.5000% 46.8000% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 18.8200% 5.0000% 0.5000% 17.4000% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 9.2700% 1.8200% 0.5120% 10.1000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 8.4300% 5.0000% 0.5000% 8.7000% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 6.8000% 5.0000% 0.5000% 7.5000% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 3.8400% 5.0000% 0.5000% 4.0000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 2.9300% 5.0000% 0.5000% 3.3000% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 1.0600% 5.0000% 0.5000% 1.1000% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 0.5300% 5.0000% 0.5000% 0.5000% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.4600% 5.0000% 0.5000% 0.6000% 5.0000% 0.5000% 0.5600% 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% 77 Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Bond Coverage Last Two Fiscal Years Fiscal Year 2009 2010 Principal $ - Interest $ 5,259,888 $ Total Pledged Revenue 5,259,888 $ 109,020,404 99,351,318 Coverage N/A 18.89 Note: On June 30, 2009, the 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. Note: The pledged revenues of the Authority represent future sales taxes to be collected and used to repay the debt outstanding. 78 Valley Metro Regional Public Transportation Authority Outstanding Debt by Type Last Two Fiscal Years Business-type Activities Fiscal Year Ended June 30 2009 2010 Transportation Excise Tax Revenue Bonds $ Percentage of Personal Income 100,075,000 100,075,000 0.07% 0.07% Source: The source of this information is the Authority's financial records. 79 Per Capita $ 24.31 26.35 Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Debt Service Revenue and Cost Per Capita Last Two Fiscal Years Fiscal Year 2009 2010 Principal $ - Total Cost Interest $ 5,259,888 $ 5,259,888 Revenue $109,020,404 99,351,318 Maricopa County Population (1) 3,987,942 4,115,811 Cost Per Capita $ (1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation 80 1 Revenue Per Capita $ 27 24 (This page intentionally left blank) 81 Valley Metro Regional Public Transportation Authority Regional Population Statistics Last Ten Fiscal Years Maricopa County Avondale Buckeye Chandler El Mirage Gilbert Glendale Goodyear (3) Mesa Peoria Phoenix Queen Creek (3) Scottsdale Surprise (3) Tempe Tolleson FY 2000/01 (2) FY 2001/02 (1) FY 2002/03 (1) 3,072,149 35,883 N/A 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 N/A 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 3,296,250 47,610 N/A 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 FY 2003/04 (1) 3,406,170 54,200 N/A 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 (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 sixteen-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 Tolleson and the towns of Buckeye, Gilbert and Queen Creek. 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 from the Arizona State Lottery received by participating municipalities with 300,000 or more in population, 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. 82 FY 2004/05 (1) FY 2005/06 (1) FY 2006/07 (1) FY 2007/08 (1) FY 2008/09 (1) FY 2009/10 (1) 3,537,630 60,490 N/A 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 N/A 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 N/A 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 N/A 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 3,987,942 76,648 50,143 244,376 33,647 214,820 248,435 59,436 459,682 155,557 1,561,485 23,329 242,337 108,761 172,641 N/A 4,023,331 76,900 52,764 245,087 33,610 217,521 249,197 61,916 461,102 158,709 1,575,423 24,926 243,501 109,482 174,833 6,923 83 Valley Metro Regional Public Transportation Authority Top Ten Employers for Maricopa County Current Year and Nine Years Ago 2009 Employer State of Arizona Wal-Mart Stores, Inc. Banner Health Systems City of Phoenix Maricopa County Wells Fargo & Company Arizona State University Honeywell Aerospace U.S. Postal Services Basha's Inc. Fry's Food and Drug Stores Motorola Total for Principal Employers Total Employment in Maricopa County As of June 30 Employees Rank 50,936 32,814 23,100 17 068 17,068 14,014 14,000 13,005 12,600 10,545 10,460 1 2 3 4 5 6 7 8 9 10 198,542 2000 Percentage of Total County Employment 3.06% 1.97% 1.39% 1 03% 1.03% 0.84% 0.84% 0.78% 0.76% 0.63% 0.63% 11.93% 1,663,600 Employees Rank 59,348 13,800 13,973 12 917 12,917 13,860 9,837 1 6 4 7 5 8 3.85% 0.89% 0.91% 0 84% 0.84% 0.90% 0.64% 17,500 9,756 2 9 1.13% 0.63% 15,500 9,700 3 10 1.00% 0.63% 176,191 1,542,765 Source: The Business Journal, Book of Lists Workforce Informer Arizona at www.workforce.az.gov for total employed in Maricopa County. Note: The information for FY 2010 was not available at the time the CAFR was drafted. 84 Percentage of Total County Employment 11.42% (This page intentionally left blank) 85 Valley Metro Regional Public Transportation Authority Local Transportation Assistance Funds Last Ten Fiscal Years FY 2000/2001 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 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 Tolleson Local transportation assistance funds received Minimum local expenditures required Percentage required $ 190,883 143,162 75.0% FY 2001/2002 $ 203,685 152,764 75.0% FY 2002/2003 FY 2003/2004 $ $ 220,818 165,614 75.0% 252,589 189,442 75.0% FY 2004/2005 $ 277,421 208,066 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 N/A N/A N/A 999,497 333,166 33.3% 1,002,340 334,113 33.3% 1,020,285 340,095 33.3% 1,031,314 343,771 33.3% 1,072,387 357,462 33.3% 34,647 25,985 75.0% 43,192 32,394 75.0% 65,053 48,790 75.0% 109,530 82,148 75.0% 130,312 97,734 75.0% 596,742 198,914 33.3% 622,681 207,560 33.3% 668,051 222,684 33.3% 709,012 236,337 33.3% 778,323 259,441 33.3% 1,230,349 410,116 33.3% 1,242,059 414,020 33.3% 1,228,273 409,424 33.3% 1,206,948 402,316 33.3% 1,186,391 395,464 33.3% NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 2,216,247 2,216,247 100.0% 2,249,873 2,249,873 100.0% 2,260,734 2,260,734 100.0% 2,268,317 2,268,317 100.0% 2,233,853 2,233,853 100.0% 598,664 199,555 33.3% 616,116 205,372 33.3% 639,879 213,293 33.3% 650,732 216,911 33.3% 650,326 216,775 33.3% 7,336,182 7,336,182 100.0% 7,498,747 7,498,747 100.0% 7,342,097 7,342,097 100.0% 7,245,430 7,245,430 100.0% 7,138,976 7,138,976 100.0% NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 1,210,039 403,346 33.3% 1,150,630 383,543 33.3% 1,146,323 382,108 33.3% 1,135,830 378,610 33.3% 1,119,229 373,076 33.3% N/A N/A N/A N/A N/A N/A N/A N/A N/A 239,405 179,554 75.0% 265,383 88,373 33.3% 957,785 319,262 33.3% 800,415 266,805 33.3% 870,471 290,157 33.3% 845,811 281,937 33.3% 821,152 273,717 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 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 sixteen-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 Tolleson and the towns of Buckeye, Gilbert and Queen Creek. 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 FY2004/05. 86 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% FY 2009/2010 $ 185,086 61,634 33.3% N/A N/A N/A N/A N/A N/A N/A N/A N/A 171,121 128,341 75.0% 121,083 90,812 75.0% 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% 590,108 196,506 33.3% 140,622 105,467 75.0% 142,134 106,600 75.0% 149,672 112,254 75.0% 142,011 106,508 75.0% 81,249 60,937 75.0% 818,025 272,402 33.3% 853,858 284,335 33.3% 849,374 282,842 33.3% 861,189 286,776 33.3% 518,737 172,739 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% 599,909 199,770 33.3% NA NA NA 197,755 148,316 75.0% 228,238 171,179 75.0% 236,610 177,458 75.0% 143,523 107,642 75.0% 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% 1,110,018 1,110,018 100.0% 657,162 218,835 33.3% 658,598 219,313 33.3% 666,237 221,857 33.3% 640,826 213,395 33.3% 375,639 125,088 33.3% 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% 3,770,600 3,770,600 100.0% NA NA NA 76,224 57,168 75.0% 85,796 64,347 75.0% 91,884 68,913 75.0% 57,536 43,152 75.0% 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% 585,184 194,866 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% 262,631 87,456 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% 416,885 138,823 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 16,500 12,375 75.0% 87 Valley Metro Regional Public Transportation Authority Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year Population (1,2) Income (1,2) (in thousands) Per Capita Income (1,2) Median Age (1,3) School Enrollment (4) Unemployment Rate (5) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 4,115,811 3,987,942 3,907,492 3,792,675 3,648,545 3,537,630 3,498,587 3,388,711 3,293,441 3,195,893 $152,216,281 147,912,041 143,729,512 139,665,253 134,339,487 120,716,738 110,278,789 101,378,940 96,998,974 93,544,549 $36,983 37,090 36,783 36,825 36,820 34,124 31,521 29,917 29,452 29,270 36.8 33.6 33.7 33.4 33.0 33.0 33.0 33.0 33.0 33.0 684,510 683,966 732,146 707,771 689,411 652,333 626,461 600,577 565,517 544,617 8.8% 8.1% 4.2% 3.5% 3.6% 4.1% 4.4% 5.2% 5.6% 4.2% (1) Calendar year (2) Source: Arizona Workforce Informer, Labor Market Information, for Maricopa County Population for fiscal years 2005 through 2010 are estimates from the Department of Economic Security. Personal income for fiscal years 2008 through 2010 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 and 2010, 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. 88 Valley Metro Regional Public Transportation Authority Full-time Equivalent Employees (FTE) by Function/Program Last Ten Fiscal Years 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Function/Program Governmental activities: Regional planning Transportation demand management Regional customer services Administration Total governmental activities FTE 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 8.10 10.00 78.26 22.20 118.56 Business-type activities: Transit service operations Light rail transit (1) Total business-type activities FTE 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 8.44 96.00 104.44 35.00 49.00 60.00 65.00 75.00 89.00 170.00 182.00 219.00 223.00 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. 89 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. (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. Note: Information for fiscal year 2009-10 was not available at the time the CAFR was drafted. 90 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% 44,642,019 18,238,826 1,172,816 $ 109,867,153 $ 2.46 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% $ $ $ $ 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% $ $ $ $ 5,846,385 4,752,561 371,445 27,191,179 4.65 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% 58,878,857 29,507,613 1,916,841 $ 171,911,518 $ 3.00 25.5% $ $ 91 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 F b recovery ratio Farebox ti Sun Cities Area Transit Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ $ $ 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 3.2% 3 2% 59,777 219,408 18,838 498,481 8.34 30.5% FY 2000/2001 $ $ $ $ $ $ $ $ $ $ 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 4.3% 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 4.5% 4 5% 60,400 218,313 17,998 656,655 10.87 22.9% 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 1.1% 1 1% 60,345 226,194 19,226 671,365 11.13 22.4% 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. (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 Note: Information for fiscal year 2009-10 was not available at the time the CAFR was drafted. 92 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 1.0% 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 $ $ 415,733 4,276,365 285,137 12,452,214 29.95 5.0% FY 2006/2007 $ $ 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 0 4% 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 0.3% 0 3% 57,091 230,472 21,802 689,473 12.08 23.5% $ $ $ $ 91,082 NA 49,524 3,368,464 36.98 0.0% 0 0% 45,612 NA 16,526 697,877 15.30 18.0% $ $ $ $ $ $ $ $ 87,134 NA 47,511 3,350,837 38.46 0.0% 0 0% 34,924 NA 12,974 560,024 16.04 22.0% $ $ $ $ $ $ 35,488 362,525 24,641 256,574 7.23 0.0% 0 0% 27,652 109,741 13,081 610,581 22.08 17.4% (Continued) 93 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 Dial-a-Ride 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. (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 Note: Information for fiscal year 2009-10 was not available at the time the CAFR was drafted. 94 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% $ $ 95 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 (1) Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Tempe (2) 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 (5) 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% $ $ FY 2004/2005 $ $ $ $ $ $ $ $ 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 2,969,448 1,235,147 94,455 4,914,905 4.20 N/A $ $ $ $ $ $ (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 Trolley; prior to FY 07-08 included only Roundup. (4) City of Scottsdale did not track revenue miles for FY 07-08. City of Glendale - GUS 7 Luke Link 82,569 100,295 8,301 144,934 1.76 11.0% N/A N/A N/A N/A N/A N/A Annual Transit Performance Report for fiscal years beginning FY 2008. RPTA- BUZZ 92,139 57,696 8,167 547,764 5.94 0.0% N/A N/A N/A N/A N/A N/A Performance Management Analysis System for fiscal years 2001 through 2007. (6) 1,999,795 475,609 39,831 1,835,387 0.92 0.0% N/A N/A N/A N/A N/A N/A Source: Reports prepared by the Regional Public Transportation Authority: (5) 794,945 601,547 38,156 2,386,820 3.00 0.0% Note: Information for fiscal year 2009-10 was not available at the time the CAFR was drafted. 96 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 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 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% $ $ $ $ $ $ 110,941 110,005 8,858 176,574 1.59 16.25% FY 2008/2009 $ $ $ $ $ $ $ $ $ $ $ $ 2,599,292 1,960,474 118,173 9,626,975 3.70 0.0% 3,307,223 2,105,878 206,964 11,414,395 3.45 0.0% 572,925 439,307 48,648 2,627,403 4.59 0.0% 113,382 98,760 8,735 668,581 5.90 3.62% 80,133 60 795 60,795 5,755 319,570 3.99 0.00% 6,672,955 4,665,213 388,275 24,656,925 3.88 0.10% 97 Valley Metro Regional Public Transportation Authority Capital Asset Statistics by Function/Program Revenue Vehicles for Transit Service Operations Last Ten Fiscal Years Fiscal Year 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Source: (1) Local and Express Bus 72 72 80 80 133 181 172 192 257 251 Paratransit / Dail-a-Ride 63 63 67 62 61 57 75 76 76 111 Vanpool NA NA NA NA 250 303 308 347 421 376 National Transit Data Base (NTD) (1999/00-2007/08) FAS GOV 100 Asset Accounting (2008/09-current) For years FY98 through FY04, the NTD reported numbers included vans that were owned by the contractor; thus, those assets are not reported. 98 Single Audit Section The Single Audit Section includes the Authority's schedule of expenditures of federal awards, and the independent 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, 2010 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) Urbanized Area Formula (Section 5307) Urbanized Area Formula (Section 5307) Urbanized Area Formula (Section 5307)-ARRA Total Transit Cluster FHWA Transfer Funds (STP/CMAQ) FHWA Transfer Funds (STP/CMAQ) New Freedoms (Section 5317) New Freedoms (Section 5317) New Freedoms (Section 5317) Job Access/Reverse Commute -JARC (Section 5316) State Rural Area Formula (Section 5311) ARRA Gila Bend/Phoenix Regional Transit Connector Service Wickenburg Regional Transit Connector Service Federal Transit Technical Studies Grant 20.507 20.507 20.507 20.507 20.507 20.507 20.500 City of Phoenix City of Phoenix City of Phoenix City of Phoenix City of Phoenix City of Phoenix City of Phoenix AZ-90-X070 AZ-90-X074 AZ-90-X080 AZ-90-X088 AZ-90-X096 AZ-90-X103 AZ-96-X002 20.205 20.205 20.521 20.521 20.521 20.518 20.509 20.509 20.509 20.505 City of Phoenix City of Phoenix City of Phoenix City of Phoenix City of Phoenix City of Phoenix ADOT ADOT ADOT MAG AZ-90-X080 AZ-95-0004 AZ-57-X001 AZ-57-X008 AZ-57-X009 AZ-37-X011 AZ-18-X042 JPA 06-011T JPA 06 024T 388 $ 252,122 161,826 168,721 73,371 156,460 315,662 188,290 335,938 184,745 224,720 Total Federal Transit Administration 15,222,674 Federal Highway Administration Congestion Mitigation and Air Quality Improvement Program Funds: Regional Ridesharing Program 20.205 Trip Reduction Program 20.205 Trip Reduction Program 20.205 Trip Reduction Program 20.205 Telework 20.205 Bike Education 20.205 Transportation Enhancement Funds: Regional Bicycle & Pedestrian Safety Education Program 20.200 Regional Bicycle Safe Routes to School Total Federal Highway Administration 328,480 170,505 95,384 7,526 216,695 7,577,910 4,764,319 13,160,819 MAG Maricopa County Maricopa County Maricopa County MAG MAG ADOT 413 C-85-09-006-3-00 C-85-10-021-3-01 C-85-10-009-3-00 264 391 355,725 94,989 250,678 254,226 285,425 114,441 1,355,484 JPA 08-0851 Fed aid #: TEA-VMT 0-(207)A JPA 08-083-1 Fed aid # TEA-VMT-0(200)A 272,092 162,340 1,789,916 20.200 ADOT Department of Homeland Security Homeland Security Grant Program TARR Training Total Department of Homeland Security City of Phoenix 97.067 through AZDOHS Total Expenditures of Federal Awards 333219 40,330 40,330 $ 99 17,052,920 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 governmental activities, business-type activities, each major fund and the aggregate remaining fund information of the Valley Metro Regional Public Transportation Authority (the Authority) as of and for the year ended June 30, 2010, which collectively comprise the basic financial statements and have issued our report thereon dated December 17, 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 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 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 deficiency in internal control 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 and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Authority’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses as defined above. (101) An independent member of Nexia International The Board of Directors of the Valley Metro Regional Public Transportation Authority Compliance and Other Matters As part of obtaining reasonable assurance about whether 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 December 17, 2010 (102) INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROLOVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 The Board of Directors of the Valley Metro Regional Public Transportation Authority Compliance We have audited Valley Metro Regional Public Transportation Authority’s (the Authority) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the Authority’s major federal programs for the year ended June 30, 2010. The Authority's major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the Authority's management. Our responsibility is to express an opinion on the 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 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 of Valley Metro Regional Public Transportation Authority's compliance with those requirements. In our opinion, Valley Metro Regional Public Transportation Authority complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2010. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items 2010-1. (103) An independent member of Nexia International The Board of Directors of the Valley Metro Regional Public Transportation Authority December 17, 2010 Internal Control over Compliance Management of Valley Metro Regional Public Transportation Authority is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Valley Metro Regional Public Transportation Authority's internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 Valley Metro Regional Public Transportation Authority’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, 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. However, we identified a deficiency in internal control over compliance that we consider to be a significant deficiency as described in the accompanying schedule of findings and questioned costs as item 2010-1. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Valley Metro Regional Public Transportation Authority’s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit Valley Metro Regional Public Transportation Authority’s response and, accordingly, we express no opinion on the response. 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 December 17, 2010 (104) Valley Metro Regional Public Transportation Authority Schedule of Findings and Questioned Costs Fiscal Year Ended June 30, 2010 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 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: X yes_____ none reported Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? X yes_____ no Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster 20.500 and 20.507 Federal Transit Cluster 20.509 Formula Grants Other Than Urbanized Areas 20.205 Highway Planning and Construction Dollar threshold used to distinguish between Type A and Type B programs: $511,588 Auditee qualified as low-risk auditee? X (105) yes no Valley Metro Regional Public Transportation Authority Schedule of Findings and Questioned Costs Fiscal Year Ended June 30, 2010 SECTION II—FINANCIAL STATEMENT FINDINGS None noted SECTION III—FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Department of Transportation Federal Transit Cluster CFDA Number: 20.500 and 20.507 Passed Through the City of Phoenix Pass-Through Numbers: AZ-90-X070 AZ-90-X074 AZ-90-X080 AZ-90-X088 AZ-90-X096 AZ-90-X103 AZ-96-X002 2010-1 Condition: Requests for reimbursement were not made within a reasonable time period of incurring those costs. Criteria: OMB Circular A-133 – Cash Management and internal control procedures. Effect: Noncompliance with OMB Circular A-133 as grants were being reconciled one time a year and requests for reimbursement were being made at the end of the fiscal year. Cause: The Authority was only requesting reimbursements one time a year (the end of the fiscal year). The requests were being once a year because the Authority could not reasonably estimate or was not requesting vendors to bill for maintenance costs throughout the year. Recommendation: In order to comply with OMB Circular A-133 and strengthen internal controls over cash management of the grants, the Authority should request reimbursement within a reasonable time period of incurring the expenses. The Authority should consider requesting reimbursement at least quarterly. Corrective Action: The Authority concurs with this recommendation and implemented, during the fiscal year 2010-11 a system in which requests are being prepared quarterly to ensure requests are made within a reasonable time period of the actual expenses/expenditures being incurred. Contact: Mike Taylor, Finance Director (106) Valley Metro Regional Public Transportation Authority Schedule of Findings and Questioned Costs Fiscal Year Ended June 30, 2010 SECTION IV—SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS No Prior Year Federal Award Findings (107) 101 North 1st Avenue, Suite 1100 • Phoenix, Arizona 85003 602-262-7433 • www.ValleyMetro.org