Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 Valley Metro Regional Public Transportation Authority Phoenix, Arizona Board of Directors Chair, Vice Mayor Ron Aames, Peoria Vice Chair, Vice Mayor Scott Somers, Mesa Treasurer, Councilmember Trinity Donovan, Chandler Councilmember Jim McDonald, Avondale Councilmember Eric Orsborn, Buckeye Mayor Lana Mook, El Mirage Vice Mayor Jenn Daniels, Gilbert Mayor Elaine Scruggs, Glendale Councilmember Joe Pizzillo, Goodyear Supervisor Mary Rose Wilcox, Maricopa County Mayor Greg Stanton, Phoenix Vice Mayor Bob Littlefield, Scottsdale Mayor Sharon Wolcott, Surprise Councilmember Shana Ellis, Tempe Vice Mayor Kathie Farr, Tolleson Councilmember Rui Pereira, Wickenburg Staff Leadership Team Stephen R. Banta, Chief Executive Officer Raymond Abraham, Chief Operations Officer Hillary Foose, Director Communications & Marketing Wulf Grote, Director Planning and Development Carol Ketcherside, Director Admin & Organizational Development John McCormack, Chief Financial Officer Jyme Sue McLaren, Chief of Staff Gardner Tabon, Chief, Safety and Security Prepared By Finance Department Staff Valley Metro Regional Public Transportation Authority Organization Chart Citizens of Maricopa County Board of Directors Chief Executive Office Communication & Marketing Planning & Development Design & Construction Operations & Maintenance Finance Admin & Organizational Development Valley Metro Regional Public Transportation Authority Table of Contents Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 Page Introductory Section Letter of Transmittal GFOA Certificate of Achievement iii xi Financial Section Independent Auditors’ Report . Management’s Discussion and Analysis (required supplementary information) . Basic Financial Statements: . Government-wide Financial Statements: Statement of Net Assets Statement of Activities . 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 – Transit Planning Fund Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual – Transportation Demand Management 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 Notes to the Financial Statements 1 3 14 15 17 18 19 20 21 22 23 24 25 27 Other Supplementary Information – Combining and Individual Fund Financial Statements and Schedules: Schedule of Revenues, Expenses and Changes in Net Assets – Budget to Actual – Proprietary Funds: Enterprise Funds: Transit Service Operations Fund Valley Metro Rail Fund i 50 51 Valley Metro Regional Public Transportation Authority Table of Contents (Continued) Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 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 ii 53 54 56 60 62 64 66 68 69 71 72 73 75 77 79 81 82 83 85 89 91 Introductory Section The Introductory Section includes the Authority’s transmittal letter and the Certificate of Achievement for Excellence in Financial Reporting. December 18, 2012 To Chair and Members of the Valley Metro RPTA Board of Directors: The comprehensive annual financial report of the Valley Metro Regional Public Transportation Authority (the Authority) for the fiscal year ended June 30, 2012 is hereby submitted as mandated by state statute. The statute requires that the Authority annually issue a report on its financial position and activity, and that this report be audited by an independent firm of certified public accountants. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner that presents fairly the financial position and results of operations of the Authority on both a government-wide and fund basis. All disclosures necessary to enable the reader to gain an understanding of the Authority’s activities have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). The Authority’s management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the Authority are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with GAAP. The Authority’s internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. The independent certified public accounting firm of Heinfeld, Meech & Co., P.C., whose report is included herein, has audited the basic financial statements and related notes. As stated in the independent auditors’ report, the goal of the independent audit was to provide reasonable assurance that the basic financial statements of the Authority for the fiscal year ended June 30, 2012 are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the basic financial statements of the Authority as of and for the fiscal year ended June 30, 2012 are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. iii Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) Management’s Discussion and Analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Additionally, the Authority is required to have an independent audit of expenditures of federal awards received (Single Audit) by the Authority directly from federal agencies, or passed through to the Authority by other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the Authority’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. As a subrecipient of federal and state financial assistance, the Authority is responsible for ensuring that an adequate internal control structure is in place to ensure and document compliance with applicable laws and regulations related to these programs. This internal control structure is subject to periodic evaluation by management and by the Authority’s independent audit firm. As part of the Authority’s Single Audit, tests were made of the internal control structure and of its compliance with applicable laws and regulations, including those related to federal awards. Although this testing was not sufficient to support an opinion on the Authority’s internal control system or its compliance with laws and regulations, the audit of the Authority’s compliance with requirements applicable to each major program and internal control over compliance for the year ended June 30, 2012 resulted in an unqualified opinion of compliance and noted no material weaknesses in internal controls or significant violations of applicable laws and regulations with respect to major programs. The auditors’ reports on internal controls and compliance with applicable laws and regulations are included in the single audit section of this report. PROFILE OF THE AUTHORITY The Authority was established in 1985 along with the passage of a one-half of one percent sales tax increase to fund regional highway and public transportation improvements in Maricopa County, Arizona (the County). The Authority was created to develop a regional transit plan and to develop and operate a regional transit system in the County. The financial reporting entity of the Authority includes all its funds and does not include any component units (i.e., legally separate entities for which the Authority is financially accountable). The Authority is governed by a sixteen-member Board of Directors consisting of a member of the County Board of Supervisors and the mayors (or their designees) of the member cities and towns. For fiscal year 2011-12, 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 Wickenburg. Any municipality in the County may join the Authority and have one elected official serve on the Board of Directors. A Chief Executive Officer, appointed by the Authority’s Board of Directors, is responsible to carry out policy and plan, manage, supervise and coordinate all day-to-day activities. The Authority procures regional bus, dial-a-ride and vanpool services, provides regional transit and capital planning support, coordinates the County’s transportation demand management activities, and provides general operational and administrative support to its members. iv Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) In February 2012, the Boards of Directors of the Authority and Valley Metro Rail, Inc. (METRO) took action to appoint Mr. Stephen R. Banta as the Chief Executive Officer to manage the two financial entities under a single integrated agency. The Authority and METRO entered into an intergovernmental agreement providing for the single CEO to serve both organizations effective March 1, 2012 with the preservation of both RPTA and METRO Boards of Directors The annual budget serves as a foundation for the Authority’s financial planning and control. Activities of the general fund, special revenue funds and enterprise funds are included in the annual appropriated budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed appropriations) 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 Chief Executive Officer. The Authority maintains budgetary control by conducting quarterly evaluations of expenditures against appropriations and through close monitoring of revenues. As demonstrated by the statements included in the financial section of this report, the Authority continues to meet its responsibility for sound financial management. FACTORS AFFECTING FINANCIAL CONDITION Local Economy The Authority serves Maricopa County, which is located in central Arizona. According to the Arizona Department of Commerce, Maricopa County measures 9,222 square miles, 98 square miles of which is water. Twenty-nine percent of this area is owned individually or by corporations, and the U.S. Bureau of Land Management owns 28 percent. The U.S. Forest Service and the State of Arizona each control 11 percent of the County; an additional 16 percent is owned publicly. Almost 5 percent is Indian reservation land. Parts of western Maricopa County have 11 designated Enterprise Zones as well as central and southern areas in the City of Phoenix. The metropolitan area is home to the state capitol and includes the City of Phoenix, population 1.4 million, making it Arizona’s major center of political and economic activity. In fact, more than half of the state’s population resides in Maricopa County, which is home to 15 institutions of higher learning, including Arizona State University; various cultural attractions; professional baseball (Arizona Diamondbacks), basketball (Phoenix Suns and Phoenix Mercury), football (Arizona Cardinals) and hockey (Phoenix Coyotes); and Sky Harbor International Airport one of the top ten busiest airports in the United States with over 1,200 daily flights. The County has grown from just over 2.1 million residents in 1990 to 3.8 million residents in 2010, an increase of 81 percent in just 20 years. According to the Greater Phoenix Economic Council, population is projected to grow 77 percent by 2030, reaching 6.3 million people Maricopa County currently accounts for about 60 percent of the state’s population and attracts a continual inflow of immigrants seeking new opportunities. The total labor force in Maricopa County grew to almost 1.94 million people in 2010, an increase of over 84 percent since 1990. According to the Greater Phoenix Economic Council, Maricopa County has maintained substantial employment growth over the past decade. State transportation planning projections forecast Maricopa County employment to increase by 75 percent, reaching 3.4 million jobs by 2030. v Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) With the recent economic slowdown, population in Maricopa County decreased by approximately 12%. Despite the recent decrease in population, ridership in public transportation has grown by 22.5% over the last five years. Population is projected to increase and continues to challenge the Authority and the County it serves. Increases in population and fuel prices will continue to lead to increased demands for quality public transportation and improved air quality. With the burgeoning increase in population come concerns about how to manage issues of congestion on the Valley’s roadways. As our region grows, it is important that we maintain a safe transportation system that moves people and goods efficiently, and that attracts high quality workers and businesses to the area. On the positive side, the region has taken two major steps toward improving the transportation system. First, thanks to a November 2004 voter-approved transportation tax initiative (Proposition 400), beginning in January 2006 a revenue stream of over $95 million annually injects much needed resources into the region’s transit network, allowing for the expansion and improvement of the entire system. Second, light rail transit began operating in December 2008, is carrying over 40,000 passengers per day, and has fueled the growth of public transit usage in the Valley. Major Initiatives On November 2, 2004, the voters of Maricopa County approved Proposition 400, the continuation of the transportation tax, for a 20-year period, beginning in calendar year 2006. The approximate total vote in favor was 57.5 percent. This was a major milestone in transportation funding and service in the region. The Proposition had unanimous support from the Mayors of all of the cities in the region and the Maricopa County Board of Supervisors, the Maricopa Association of Governments Regional Council, the Authority’s Board of Directors and the Arizona Department of Transportation (ADOT). It also had the support of nearly every major business and community agency in the region. To implement the projects approved with the passage of Proposition 400, staff worked with member agencies and other stakeholders to develop the Transit Life Cycle Program (TLCP). This project included the development of three major program elements: guiding principles, financial model and policies and procedures. The original guiding principles and the 20-year financial model were adopted by the Board in June 2005 and then revised and adopted in April 2010. The original policies for the TLCP were adopted by the Board in October 2005 and have been revised and adopted by the Board in January 2011. The six adopted guiding principles of the TLCP are as follows: 1. A defined and consistent process will be established for allocating funding for projects in the Regional Transportation Plan. 2. A defined and consistent process for Plan amendments and changes will be established. 3. Funding allocations will be regularly monitored and managed. 4. A defined and consistent process will be established to ensure legislated compliance audit, reporting and performance requirements are met. 5. Budgeting and accounting systems will be established Transportation Funds (PTF) and monitor and report results. 6. Jurisdictional equity will be maintained. vi to manage Public Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) Numerous meetings of the TLCP executive steering committee, TLCP stakeholders committee and TLCP technical working groups were held over a nine-month period in order to complete this project, which was one of the most successful cooperative transit projects this region has ever undertaken. Long-term Financial Planning With the passage of Proposition 400, a new era began for the Authority. For the 20 year period 2006 thru 2025, a significant stream of regional funds will vitalize public transportation in the region. Valley Metro’s mission is to put those funds to work to effectively and efficiently serve our member agencies and their residents for the next 20 years. The continuing development of Valley Metro’s long term financial plan is integral to the success of public transportation in the region. For the first time in the history of the Authority, financing using the sale of bonds occurred during FY 2009. The Authority’s Board of Directors authorized the issuance of Senior Bonds in an amount not to exceed $135 million. The actual issuance of bonds (net of unamortized costs) was $105 million ($50 million for Bus and $55 million for Rail) on June 30, 2009. The Authority will use the bond proceeds for the payment or reimbursement of costs of capital expenditures in the regional transportation plan, including without limitation: relocation of utilities relating to the light rail system; planning, acquisition, construction and equipping expansions of the light rail system; bus transit centers and bus/rail transit centers; acquisition of buses and paratransit vehicles; acquisition, construction and equipment of park-and-ride facilities; and related capital costs. The Authority will undertake a number of key projects during FY 2013 as the agency continues the implementation of TLCP operating and capital projects. The major projects and studies for FY 2013 include the following: • Long-Range Planning Update and/or produce information for the Long-Range Transit Plan for Maricopa County, and annual update to the transit element of the Maricopa Association of Governments’ (MAG) Regional Transportation Plan (RTP). Provide transit data to MAG in updating the regional travel demand model, provide technical support to MAG on commuter rail planning. Participate in public meetings and open house workshops to solicit public review and comment. Provide for support in the development and administration of stakeholder communications, public meetings, and public outreach as required to collect and analyze opinions and input into system, corridor and capital planning programs, the transit lifecycle program, service adjustments, purchases and other agency programs and projects. • Short Range Planning Annual update for the MAG Annual Transportation Report on Prop 400 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 Program annual update that details regionally funded transit investments that will occur within the five year horizon of the Plan. Fulfill planning requirements of Title VI of the Civil Rights act as outlined in FTA vii Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) Circular 4702.1A, addressing how service and project related impacts to minority and low income populations will be addressed, as well as the procedures used to address Title VI-related customer complaints. • Transit Research and Survey Develop, implement, and provide analysis for comprehensive transit research surveys and studies. Information from the surveys will be used to produce a database for transit planning purposes, including route evaluation and service adjustments. Survey information derived from the Origins and Destinations Survey will be used to calibrate the MAG travel model insuring that model outputs provide a more accurate projection of mode split and travel behavior. The inclusion of customer satisfaction questions will assist in monitoring the quality of the services provided on an ongoing basis. • Operations Planning Provide staff support to Regional Transit Advisory Group (RTAG) on development of recommendations to integrate paratransit operations to improve service to riders and service efficiencies. Provide operations planning assistance to RPTA member agencies upon request. • Project Management RPTA provides project management in the implementation of the 20-year capital program identified in the RTP. RPTA is the designated lead agency for development of transit capital and operating projects which are identified in the Regional Transportation Plan and funded through the 1/2 cent sales tax extension authorized by Proposition 400. Project management includes design and construction of facilities and associated support infrastructure. • Regional Marketing Program Transit Book Development and Printing: The Transit Book is the primary route and schedule communications vehicle in conjunction with on-line information for Valley Metro bus riders. It is developed and distributed twice a year. Printed Communications Tools and Signage: Various forms of printed materials are essential for providing transit related information to transit users, non-users, key stakeholders, and partners. This includes brochures, passenger notices, car cards, newsletters, printed guides, kiosk signage, schedules and system maps. Web Site Design and Navigation: The mission of ValleyMetro.org is to provide up-todate information needed to use Valley Metro’s services, educating the public about what services are available and the benefits of using those services, and promoting alternative modes of transportation in an effort to minimize the impact of singleoccupancy vehicle usage in the Valley. With the significant increase in services and information needed to be communicated to the public, ValleyMetro.org requires significant changes to the site design and navigation. Aside from basic Web site navigation features, interactive features such as the Online Trip Planner, the Commuting Cost Calculator and periodic interactive contests will be enhanced for educational purposes and as an incentive to promote the use of alternative modes. ShareTheRide.com is Valley Metro’s tool for carpool and vanpool matching, and is linked to ValleyMetro.org. Information for the Valley METRO Rail is also highlighted. Over time the site design and navigation are essential to delivering a "transit portal" for the entire region encompassing all transit modes. viii Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) Valley Metro Communications Campaign: 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. • Regional Transportation Demand Management (TDM) Program The Regional TDM Program promotes and provides ridesharing and alternative transportation modes services to the general public and over 1,200 Valley employers involved in the Trip Reduction Program. Services include a computerized matching system for carpooling, vanpooling, and bicycle partner opportunities; and assistance with implementing a variety of Transportation Demand Management (TDM) programs such as compressed work weeks and telecommuting programs. The TDM Program oversees and manages regional vanpool services. A public awareness program, the Clean Air Campaign, is administered by Valley Metro. This program is a private/public partnership encouraging participation in alternate modes of transportation, alternate work schedules, and other pollution reducing measures. The TDM Program also oversees regional bicycle and pedestrian safety & education programs. Valley Metro Operations Initiatives • Valley Metro Operations Valley Metro manages fixed route bus, demand response (Dial-a Ride) and vanpool services in cooperation with Member Cities. During fiscal year 2013 the integration of City of Tempe operated bus service will be procured with a single contractor for greater efficiency of operations and consequential cost savings. Dial-a-Ride services have been traditionally provided by a fleet of specialized van-sized vehicles. Valley Metro has initiated a demand response program which will dispatch vehicles which are tailored to the specific customer need. Many Dial-a-Ride trips will be completed in fuel efficient sedans generating substantial savings. • Customer Service The Regional Call Center provides bilingual telephone support for regional transit inquiries including trip planning, addressing customer complaints, lost and found inquiries, and light-rail construction mitigation. With increasing ridership and growing call volumes, staff introduced a self-service automated program called NextRide. Customers may use an interactive voice response system, a mobile phone text messaging application, or internet connection to get the next three arrival times of buses or trains serving a particular location. In the first year of existence, the program has delivered over 3 million NextRide responses to customers. • Growing Ridership In FY 2012, regional public transportation ridership reached 71 million passengers, growing by 3.4 million riders over last year (5.0%) and 13.0 million riders over the past five years (22.5%). ix (This page intentionally left blank) xi (This page intentionally left blank) 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. 1 2 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis As management of Valley Metro Regional Public Transportation Authority (the Authority), we offer this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2012. 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 increased $15.0 million in FY 2012, comprised of a decrease of $5.1 million in governmental activities and an increase of $20.1 million in business-type activities. Total net assets of the Authority are $105.6 million, of which $97.5 million is unrestricted. • The governmental activities revenues increased by approximately $16.4 million (14.9%) over the previous year. • The business-type activities revenues increased by approximately $23.8 million (68.8%) from the previous year. • At June 30, 2012, the Authority’s governmental fund balance sheet reported a combined ending fund balance of $47.4 million, a decrease of $5.0 million (9.5%) 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. Government-wide Financial Statements The government-wide financial statements (see pages 14 - 16) 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 position of the Authority is improving or deteriorating. To assess the overall health of the 4 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) 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 17 - 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 36 - 37). 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). Notes to the Financial Statements – The notes to the financial statements (pages 27 – 48) provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements and should be read with the financial statements. Required supplementary information other than MD&A – Governments have an option of including the budgetary comparison statements of the general fund and major special revenue funds as either part of the fund financial statements within the basic financial statements or as required supplementary information after the footnotes. The Authority has chosen to present these budgetary statements as part of the basic financial statements. 5 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) 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, 2012, 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, 2012 compared to the prior year: Condensed Statement of Net Assets As of June 30 (in thousands of dollars) Governmental Activities 2012 Current and other assets Noncurrent assets Cash and cash equivalents Deferred charges Capital assets $ Business-type Activities 2011 48,029.6 $ - 2012 53,235.3 $ - 75,408.8 Total Primary Government 2011 $ 2012 43,424.5 $ 123,438.4 33,376.2 756.5 93,285.7 2011 $ 96,659.8 27.7% 23,448.7 696.1 86,648.5 33,376.2 756.5 94,632.3 -29.7% -8.0% -8.4% 3.9% 1,346.6 23,448.7 696.1 85,449.3 $ 49,228.7 $ 54,581.9 $ 185,003.0 $ 170,842.9 $ 234,231.7 $ 225,424.8 $ 1,233.6 218.7 $ 1,486.5 247.2 $ $ $ $ $ 1,452.4 $ 1,733.7 $ 127,193.1 $ 133,109.8 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted $ 1,199.1 188.8 46,388.5 $ 1,346.6 178.4 51,323.2 $ 6,528.6 120.7 51,160.6 $ Total net assets $ 47,776.4 $ 52,848.2 $ 57,809.9 $ Total assets Other liabilities Long-term liabilities Total liabilities 1,199.1 29,506.3 97,686.9 29,948.1 103,161.7 Percent Change 30,739.9 97,905.6 31,434.6 103,408.9 -2.2% -5.3% $ 128,645.5 $ 134,843.5 -4.6% 21,322.7 16,410.2 $ 7,727.8 309.4 97,549.1 $ 22,669.3 178.4 67,733.4 -65.9% 73.5% 44.0% 37,732.9 $ 105,586.3 $ 90,581.1 16.6% The Authority’s total net assets increased $15.0 million in FY 2012, comprised of a decrease of $5.1 million in governmental activities and an increase of $20.1 million in business-type activities. Total net assets of the Authority are $105.6 million, of which $97.5 million is unrestricted. Of the $105.6 million total net assets, $7.7 million are 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 10 - 11), the Authority has 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. Approximately $97.5 million of the Authority’s net assets (92.4% of the total) 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 remaining $0.3 million reflects resources that are subject to external restrictions. 6 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) The governmental activities reported a decrease of $4.9 million (9.6%) of unrestricted net assets over the prior year largely attributed to a interfund transfers from the Public Transportation Fund to the Transit Service Operations Fund. The Authority purchased bus fleet and bus stop facilities that were funded with a combination of federal and regional PTF funds. During the year, $28.4 million of the purchased assets were conveyed to Member Cities. The Public Transportation Fund balance was drawn down to cover the local share of the asset purchases. The significant increase of $34.8 million of unrestricted net assets over the prior year in business-type activities is due to PTF transfers to the Valley Metro Rail Fund for capital projects to be expended in FY2013 and FY2014. 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. Changes in Net Assets Fiscal year ended June 30 (in thousands of dollars) Governmental Activities 2012 REVENUES Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Sales taxes Interest earnings Other $ 2011 153.4 13,601.9 $ - Total revenues EXPENSES Governmental activities: Regional planning Transportation demand management Regional customer services Administration AZ Lottery fund disbursements Business-type activities: Transit service operations Light rail transit Business-type Activities 2012 189.0 2,286.9 $ - Total Primary Government 2012 2011 25,558.8 1,337.1 31,347.3 - $ 23,374.8 2,144.5 8,289.3 $ - 2011 25,712.2 14,939.0 31,347.3 $ Percent Change 23,563.8 4,431.4 8,289.3 9.1% 237.1% 278.2% 112,353.3 73.1 100.2 107,111.1 79.9 233.4 109.8 16.6 215.8 560.6 112,353.3 182.9 116.7 107,111.1 295.7 794.0 4.9% -38.1% -85.3% 126,281.9 109,900.3 58,369.6 34,585.0 184,651.6 144,485.3 27.8% 1,287.4 1,391.3 8,044.5 1,820.5 10,346.0 2,274.7 1,542.4 7,995.4 1,966.3 - 1,287.4 1,391.3 8,044.5 1,820.5 10,346.0 2,274.7 1,542.4 7,995.4 1,966.3 - -43.4% -9.8% 0.6% -7.4% N/A 90,336.8 66,140.2 113,091.6 33,665.2 90,336.8 66,140.2 25.2% -49.1% - - - 113,091.6 33,665.2 - Total expenses 22,889.6 13,778.8 146,756.8 156,477.0 169,646.4 170,255.8 Excess (deficit) before transfers Transfers in (out) 103,392.3 (108,464.1) 96,121.5 (89,250.2) (88,387.2) 108,464.1 (121,892.0) 89,250.2 15,005.1 (25,770.5) - -158.2% N/A $ (25,770.5) -158.2% Increase (decrease) in net assets $ (5,071.8) $ 6,871.3 $ 20,076.9 $ (32,641.8) $ 15,005.1 -0.4% The largest sources of revenue for the Authority are sales taxes (60.8%). The major funding sources of governmental activities are sales taxes (89.0%) and federal and state grants (10.8%) The major funding sources for business-type activities are federal grants (53.7%) and charges for services to member cities (43.8%). The Authority’s overall revenues increased by $40.2 million, or 27.8%, compared to last fiscal year. Total revenues of governmental activities increased by $16.4 million, (14.9%) over the previous year due to increased sales tax revenues from Public Transportation Fund ($5.3 million) as well as the incorporation of Arizona Lottery Fund revenues ($11.7 million) which 7 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) were formerly reported as fiduciary funds. All other governmental program revenues decreased by $0.6 million. Program revenues of business-type activities increased by $24.4 million, or 72.3%, compared to last fiscal year, which is largely attributable to increases in Federal Transit Administration (FTA) capital grants for bus fleet and facilities. Spending of the Authority’s sales tax revenues is limited to funding those activities necessary to implement 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). Regional Area Road Fund (RARF) revenue is limited to fund administration in the General Fund and planning activities. Business-type activities are the largest users of resources for the Authority with $146.8 million of expenses (86.5%) which include Transit Service operations and Light Rail Transit lead agency disbursements. Governmental activities expended $22.9 million, with the largest being AZ Lottery fund disbursements of $10.3 million and Regional Customer Services of $8.0 million. Administration, Regional Planning, and Transportation Demand Management activities totaled $4.5 million for the year. Total Primary Government expenses decreased by $0.6 million, or 0.4%, compared to last fiscal year. The governmental expenses increased by $9.1 million, or 66.1%, over the prior year due to the addition of AZ Lottery fund disbursements $10.3 million. All other governmental activity expenses were reduced down by $1.3 million due to conservative spending practices. Business-type activity expenses were decreased by $9.7 million, or 6.2%, compared to the prior year due to decrease of construction related lead agency disbursements in the Valley Metro Rail Fund, down $32.5 million, offset by cost increases within the Transit Service Operations Fund, which were up 22.8 million. The increases in business-type activity expenses were primarily due to capital conveyances of bus fleet and bus stop facilities to Member Cities with $28.4 million expended in FY 2012 versus $7.7 expended in FY 2011. 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 17 – 22) is to provide information on near-term inflows, outflows and balances of spendable resources. The fund balance of the governmental funds is $47.4 million, a decrease of $5.0 million, or 9.6%, from the previous year. Of the $47.4 million total fund balance, the Authority has designated $0.2 million restricted for special purpose activities the remainder is in unrestricted fund balance in the General Fund (see Note 6 - page 41). Unrestricted 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 $47.4 million fund balance, $47.2 million is unrestricted. The General Fund accounts for activities that include regional customer service, financial management and agency administration. In addition to PTF and RARF sales tax revenues of $112.3 million, in fiscal year 2012, AZ Lottery fund proceeds of $11.7 million have been added to the General Fund accounts. With the change, General Fund revenues increased $17.1 million (15.9%) over the previous year, bolstered by the $5.2 million increase in PTF sales tax 8 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) revenues. The $107.9 million PTF sales tax revenue represents the sixth full year of earned revenue and increased by $5.2 million over last year. The sales tax revenue increase was due to the improving economy in the region. Regional Area Road Funds (RARF) sales tax revenues increased slightly by $41 thousand in FY 2012 to $4.5 million. 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 $0.5 million (64.7%) due to the reduction of FTA grant awards received and reduction of service charges for planning services. The expenditures decreased from $2.3 million to $1.3 million due to reduced planning activities during the year. 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 decreased by 31.0% versus 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 8.9% and expenditures decreased 10.0% from the prior year due to decreases in trip reduction program activities. 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 increased slightly by $0.1 million over the prior year to $25.9 million. 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 27). The Valley Metro Rail Fund has net assets of $31.9 million as of June 30, 2012 as compared to net assets of $12.0 million at the end of the previous year. In fiscal year 2012 the Valley Metro Rail Fund received 43.2% of the total PTF sales tax revenues distributed to the Authority from the Arizona Department of Revenue, totaling $46.7 million and received 11.2% of the $4.5 million RARF sales tax revenue received by the Authority, totaling $0.5 million. Additionally, the Valley Metro Rail Fund received $1.8 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 revised the adopted budget during the fiscal year increasing the General Fund revenues budget from $108.2 million to $112.1 million. The primary change was an increase to the Public Transportation Fund revenue from $103.4 million to $107.1 million. 9 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) For the year ended June 30, 2012, actual expenditures were over the adopted budget amounts by $10.0 million. The variance was attributable to the incorporation of AZ Lottery fund disbursements of $10.3 million as General Fund expenditures which were not included in the annual budget. In prior year financial reporting, the AZ Lottery fund proceeds and disbursements were reported as fiduciary funds and not included in the general fund transactions. The remaining general fund activities were below budget by $0.3 million for the year. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2012, the Authority had $86.7 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 8.4%, a decrease of 10.9% for governmental activities and a decrease of 8.5% for business-type activities for the current year. Major capital asset events in the current year attributing to the decrease included the following: • Depreciation expense in the current year totaled $11.5 million, $11.0 million for business type capital assets and $0.4 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, 2012 with comparative information for the previous year. Additional information on the Authority’s capital assets may be found in Note 7 on pages 42 – 43. Capital Assets, Net of Accumulated Depreciation As of June 30 (in thousands of dollars) Governmental Activities 2011 2012 Non-depreciable assets: Land Work-in-progress Depreciable assets: Transit fleet Building Site improvements Computers & software Equipment Furniture & fixtures Total assets $ - $ 300.4 187.6 572.6 138.6 $ Business-type Activities 1,199.1 $ 2012 - $ 384.5 317.9 460.1 184.0 1,346.5 $ 5,292.0 $ 2,515.4 2011 2012 5,292.0 $ 2,515.4 5,292.0 2,719.1 55,710.4 12,226.3 6,768.1 44.1 2,884.3 8.7 62,411.0 12,517.4 6,610.4 100.6 3,613.4 21.8 85,449.3 $ 93,285.7 10 Total Primary Government $ 2011 Percent Change 5,292.0 2,719.1 0.0% -7.5% 55,710.4 12,226.3 7,068.5 231.6 3,456.9 147.3 62,411.0 12,517.4 6,994.9 418.6 4,073.5 205.8 -10.7% -2.3% 1.1% -44.7% -15.1% -28.4% 86,648.5 $ 94,632.3 -8.4% Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Debt Administration At June 30, 2012, the Authority had total bonded debt outstanding (including unamortized premium) of $102.4 million related to business-type activities. The Authority has pledged future transportation excise tax revenues to repay this outstanding debt. Business-type Activities 2012 Revenue bonds payable Plus unamortized premium: Bond premium payable $ 2011 97.8 $ 4.6 Total $ 102.4 100.1 5.0 $ 105.1 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 10 on pages 44 - 45. ECONOMIC FACTORS RPTA undertook a number of key projects during FY 2012, 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 2012 included: • Successfully completed the first five year performance audit of the Transit Element of the Regional Transportation Plan. The State Auditor General remarked that RPTA had instituted an effective performance management system soon after voter approval of Proposition 400. • Hired a single Chief Executive Officer to manage an integrated RPTA and METRO staff effective March 1, 2012. • Completed the installation of approximately 7,500 NextRide signs throughout the region so customers can call or text requests for the next bus and train arrival times. • Instituted the July 2012 Service Change – New Transit Book and revised system map; and improvements to ValleyMetro.org, Customer Communications, and Signage • Prepared for a pilot program transition for the East Valley Dial-a-Ride program to a brokerage model as a cost savings measure and to reduce travel times for passengers. Under the new program, a contracted broker will dispatch vehicles which are tailored to the specific customer need. Many Dial-a-Ride trips will be completed in fuel efficient sedans generating substantial savings. The pilot program commenced July 1, 2012. 11 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Concluded) The adopted FY 2013 combined operating and capital budget is $277.1 million (up approximately 19% from fiscal year 2012). The FY 2013 budget includes the seventh full year of projects funded with Proposition 400 PTF sales tax revenues ($114.6 million). Of the $114.6 million PTF revenue budgeted, $52.2 million is for bus operating and bus capital and $44.2 million is for light rail/high capacity capital. The total operating budget of $90.9 million represents a $6.2 million (7%) increase over the fiscal year 2012 operating budget of $84.7 million. The primary increases are due to greater PTF disbursements to member cities for ADA transit operations. The total capital budget of $186.3 million represents an $37.8 million (25%) increase over the fiscal year 2012 capital budget of $148.4 million. The major reasons for the increases in the capital budget are increasing bus equipment purchases and increasing lead agency distributions to VMR for capital project expenditures. The increases in capital expenses correspond to projects programmed in the Transit Life Cycle Program (TLCP) for fiscal year 2013. The budget is balanced; decreases in net assets other than depreciation charges to capital assets are not anticipated for fiscal year 2013. 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 Chief Financial Officer, Valley Metro RPTA, 101 N. 1st Avenue, Suite 1300, Phoenix, AZ 85003. 12 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, 2012 Governmental Activities Business-type Activities $ 38,227,820 158,425 9,632,798 10,554 48,029,597 $ 53,503,741 21,902,605 2,500 75,408,846 1,199,127 1,199,127 23,448,746 696,083 7,807,411 77,641,923 109,594,163 23,448,746 696,083 7,807,411 78,841,050 110,793,290 49,228,724 185,003,009 234,231,733 283,008 230,195 138,326 582,109 1,233,638 6,556,638 164,138 14,552,086 5,085,000 2,577,359 571,031 29,506,252 6,839,646 394,333 14,690,412 5,085,000 2,577,359 1,153,140 30,739,890 218,714 218,714 402,428 97,284,446 97,686,874 621,142 97,284,446 97,905,588 1,452,352 127,193,126 128,645,478 1,199,127 100,204 88,588 46,388,453 6,528,635 120,650 51,160,599 7,727,762 100,204 88,588 120,650 97,549,052 $ 47,776,372 $ 57,809,884 $ 105,586,256 Total Assets Current Assets: Cash and cash equivalents Receivables Due from other governments Prepaid Items Total current assets Noncurrent Assets: Restricted cash and cash equivalents Deferred charges Capital assets, not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets $ 91,731,561 158,425 31,535,403 13,054 123,438,443 Liabilities Liabilities: Current Liabilities Accounts payable Accrued salaries and benefits Due to other governments Revenue bonds payable 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 Restricted for transit planning Restricted for transportation demand management Restricted for capital outlay Unrestricted Total net assets See accompanying notes to the financial statements. 14 Valley Metro Regional Public Transportation Authority Statement of Activities Fiscal Year June 30, 2012 Program Revenues Charges for Services Expenses 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 AZ Lottery fund disbursements 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 $ $ 161,945 307,283 113,311 704,870 $ 153,445 - Operating Grants and Contributions Capital Grants and Contributions $ $ 589,367 946,643 400,200 - - 779,921 571,187 40,145 - - - 2,018,631 3,578,569 2,447,288 10,345,984 - 11,665,674 - 992,735 827,759 22,889,628 153,445 13,601,884 - 113,091,586 33,665,209 146,756,795 169,646,423 15,857,726 9,701,059 25,558,785 25,712,230 1,337,135 1,337,135 14,939,019 31,347,333 31,347,333 31,347,333 $ $ $ 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 See accompanying notes to the financial statements. (Continued) 15 Net (Expense) Revenues and Changes in Net Assets Governmental Activities $ $ Business Type Activities $ 580,867 639,360 286,889 (704,870) 580,867 639,360 286,889 (704,870) (779,921) (571,187) (40,145) (779,921) (571,187) (40,145) (2,018,631) (3,578,569) (2,447,288) 1,319,690 (2,018,631) (3,578,569) (2,447,288) 1,319,690 (992,735) (827,759) (9,134,299) (992,735) (827,759) (9,134,299) (9,134,299) $ $ 107,889,134 4,464,196 73,104 100,154 (108,464,090) 4,062,498 $ Total (64,549,392) (23,964,150) (88,513,542) (88,513,542) $ (64,549,392) (23,964,150) (88,513,542) (97,647,841) 109,799 16,586 108,464,090 108,590,475 107,889,134 4,464,196 182,903 116,740 112,652,973 (5,071,801) 20,076,933 15,005,132 52,848,173 37,732,951 90,581,124 47,776,372 $ 57,809,884 $ 105,586,256 16 Valley Metro Regional Public Transportation Authority Balance Sheet Governmental Funds June 30, 2012 Transit Planning General Transportation Demand Management Total Governmental Funds Assets Cash and cash equivalents Receivables Due from other governments Due from other funds Prepaid Items Total assets $ 38,162,226 150,405 9,233,293 233,030 10,554 $ 40,143 71,906 - $ 25,451 8,020 327,599 - $ 38,227,820 158,425 9,632,798 233,030 10,554 $ 47,789,508 $ 112,049 $ 361,070 $ 48,262,627 $ 251,841 210,065 138,326 $ 8 11,837 - $ 31,159 8,293 233,030 - $ 283,008 230,195 233,030 138,326 Liabilities and Fund Balances Liabilities: Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Total liabilities Fund balances: Nonspendable: Prepaids Restricted: Unassigned: Total fund balances Total liabilities and fund balances 600,232 11,845 272,482 884,559 10,554 47,178,722 100,204 - 88,588 - 10,554 188,792 47,178,722 47,189,276 $ 47,789,508 100,204 $ 112,049 88,588 $ 361,070 47,378,068 $ 48,262,627 $ 47,378,068 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 4,213,104 (3,013,977) Governmental compensated absences Net assets of governmental activities, statement of net assets See accompanying notes to the financial statements. 17 (800,823) $ 47,776,372 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Fiscal Year Ended June 30, 2012 General Revenues: Sales taxes: Public transportation funds Regional area road funds Intergovernmental: AZ Lottery fund proceeds State & county grants & pass through grants Federal Transit Administration CMAQ Charges for services Interest earnings 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: Executive director’s office Finance & management services AZ Lottery fund disbursements Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) 107,889,134 4,464,196 - $ - $ 107,889,134 4,464,196 296,625 296,625 400,200 946,643 50,556 1,397,399 11,665,674 400,200 589,367 946,643 153,445 73,104 100,154 126,281,917 - 161,939 307,283 113,311 704,870 - 161,939 307,283 113,311 704,870 - - 779,921 571,187 40,142 779,921 571,187 40,142 2,018,631 3,578,569 2,447,288 - - 2,018,631 3,578,569 2,447,288 992,744 453,137 10,345,984 274,580 20,110,933 1,287,403 1,391,250 992,744 453,137 10,345,984 274,580 22,789,586 104,476,960 (990,778) 6,149 103,492,331 8,962,163 (118,421,292) (109,459,129) 990,776 990,776 4,263 4,263 9,957,202 (118,421,292) (108,464,090) 10,412 (4,971,759) 78,176 52,349,827 (4,982,169) Fund balance, beginning 52,171,445 $ $ Total Governmental Funds 11,665,674 292,742 153,445 73,104 49,598 124,587,893 Net change in fund balances Fund balance, ending Transportation Demand Management Transit Planning 47,189,276 See accompanying notes to the financial statements. 18 (2) 100,206 $ 100,204 $ 88,588 $ 47,378,068 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, 2012 $ Net change in fund balances, total governmental funds (4,971,759) 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 ($420,353) exceeded capital outlay expense ($274,580), net of the loss on capital assets ($1,707) in the current period. (145,773) 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. (1,707) 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. 47,438 Change in net assets of governmental activities, statement of activities See accompanying notes to the financial statements. 19 $ (5,071,801) 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, 2012 Budgeted Amounts Final Original Revenues: Sales taxes: Regional area road funds Public Transportation fund Intergovernmental: AZ Lottery Fund Proceeds Federal Transit Administration Charges for Services Interest earnings Miscellaneous Total revenues $ 4,476,000 103,400,000 $ 4,464,196 107,100,000 Variance with Final Budget Over (Under) Actual Amounts $ 4,464,196 107,889,134 $ 789,134 150,000 20,000 152,885 108,198,885 271,281 122,000 20,000 152,885 112,130,362 11,665,674 292,742 153,445 73,104 49,598 124,587,893 11,394,393 170,742 153,445 53,104 (103,287) 12,457,531 Expenditures: Current: Regional Customer Services: Marketing Call Center Other Programs AZ Lottery Fund Disbursements Executive director’s office Finance & management services Capital Outlay Total expenditures 2,154,406 3,718,607 2,449,047 1,181,579 377,399 178,000 10,059,038 2,154,406 3,768,197 2,492,047 1,186,579 377,399 153,000 10,131,628 2,018,631 3,578,569 2,447,288 10,345,984 992,744 453,137 274,580 20,110,933 135,775 189,628 44,759 (10,345,984) 193,835 (75,738) (121,580) (9,979,305) Excess of revenues over expenditures 98,139,847 101,998,734 104,476,960 2,478,226 8,197,175 (102,473,521) (94,276,346) 10,988,034 (105,384,113) (94,396,079) 8,962,163 (118,421,292) (109,459,129) (2,025,871) (13,037,179) (15,063,050) (12,584,824) Other financing uses: Transfers in Transfers out Total other financing uses Net change in fund balance Fund balance, beginning Fund balance, ending $ 3,863,501 7,602,655 (4,982,169) 52,171,445 52,171,445 52,171,445 56,034,946 See accompanying notes to the financial statements. 20 $ 59,774,100 $ 47,189,276 $ (12,584,824) Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual Transit Planning Fund Fiscal Year Ended June 30, 2012 Budgeted Amounts Original Final Revenues: Intergovernmental: Federal Transit Administration Charges for Services Miscellaneous Total revenues $ Expenditures: Current: Regional planning: Long range Short range Capital Program support Total expenditures Excess of revenues over expenditures Other financing uses: Transfers in Total other financing uses Net change in fund balance Fund balance, beginning Fund balance, ending $ 274,720 274,720 Actual Amounts 274,720 274,720 296,625 296,625 115,546 455,166 180,188 705,752 1,456,652 136,723 431,666 145,187 693,626 1,407,202 161,939 307,283 113,311 704,870 1,287,403 (1,181,932) (1,132,482) (990,778) 141,704 1,181,932 1,181,932 1,132,482 1,132,482 990,776 990,776 (141,706) (141,706) - - 100,206 100,206 100,206 $ Variance with Final Budget Over (Under) $ See accompanying notes to the financial statements. 21 100,206 $ 25,216 (124,383) (31,876) 11,244 (119,799) (2) (2) 100,206 $ 100,204 21,905 21,905 $ (2) Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual Transportation Demand Management Fund Fiscal Year Ended June 30, 2012 Budgeted Amounts Original Final Revenues: Intergovernmental: State grants & pass through grants CMAQ Miscellaneous Total revenues $ Expenditures: Current: Transportation Demand Management: Trip reduction Ridesharing Other programs Total expenditures $ 655,000 594,000 346,809 1,595,809 Excess of revenues over expenditures Other financing uses: Transfers in Total other financing uses Net change in fund balance Fund balance, beginning Fund balance, ending 583,001 994,000 1,577,001 $ Variance with Final Budget Over (Under) Actual Amounts 578,001 964,000 1,542,001 $ 620,000 594,000 346,809 1,560,809 400,200 946,643 50,556 1,397,399 $ 779,921 571,187 40,142 1,391,250 (177,801) (17,357) 50,556 (144,602) 159,921 (22,813) (306,667) (169,559) (18,809) (18,808) 6,149 24,957 18,809 18,809 18,808 18,808 4,263 4,263 (14,545) (14,545) 0 - 10,412 10,412 78,176 78,176 78,176 - 78,176 $ See accompanying notes to the financial statements. 22 78,176 $ 88,588 $ 10,412 Valley Metro Regional Public Transportation Authority Statement of Net Assets Proprietary Funds June 30, 2012 Business-Type Activities - Enterprise Funds Transit Service Operations Total Proprietary Funds Valley Metro Rail Assets Current assets Cash and cash equivalents Due from other governments Due from other funds Prepaid Items Total current assets $ Noncurrent assets Restricted cash and cash equivalents Deferred charges Capital assets, not being depreciated Capital assets, net of accumulated depreciation 20,829,904 19,941,339 2,500 40,773,743 $ 32,673,836 1,961,266 1,019,215 35,654,317 23,448,747 696,083 7,807,411 - $ 53,503,740 21,902,605 1,019,215 2,500 76,428,060 23,448,747 696,083 7,807,411 77,641,923 - 77,641,923 Total noncurrent assets 109,594,164 - 109,594,164 Total assets 150,367,907 35,654,317 186,022,224 Current liabilities: Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Bond payable - current Bond interest payable Compensated absences payable 6,556,638 16,669 1,019,215 11,831,858 5,085,000 2,577,359 69,522 147,469 2,720,228 486,614 6,556,638 164,138 1,019,215 14,552,086 5,085,000 2,577,359 556,137 Total current liabilities 27,156,261 3,354,311 30,510,573 52,169 365,153 417,321 97,284,446 - 97,284,446 97,336,615 365,153 97,701,767 124,492,876 3,719,464 128,212,340 6,528,635 120,650 19,225,746 31,934,853 6,528,635 120,650 51,160,599 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 Restricted for capital outlay Unrestricted Total net assets $ 25,875,031 See accompanying notes to the financial statements. 23 $ 31,934,853 $ 57,809,884 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds Fiscal Year Ended June 30, 2012 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 income (loss) Non-Operating Revenues (Expenses): Lead agency disbursements IRS fuel tax credit Interest income Loss on disposal of capital assets AZ Lottery fund proceeds Capital conveyance 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 $ 15,857,726 13,055 15,870,781 Total Proprietary Funds Valley Metro Rail $ 9,701,059 3,531 9,704,590 $ 25,558,785 16,586 25,575,371 42,237,399 10,863,296 749,235 308,911 121,806 11,025,829 65,306,476 (49,435,695) 9,546,161 9,546,161 158,429 42,237,399 9,546,161 10,863,296 749,235 308,911 121,806 11,025,829 74,852,637 (49,277,266) (14,671,568) 512,860 79,323 31,755 262,989 (28,368,147) 589,923 (4,745,395) (60,392) (46,368,652) (24,119,048) 30,476 (24,088,572) (38,790,616) 512,860 109,799 31,755 262,989 (28,368,147) 589,923 (4,745,395) (60,392) (70,457,224) (95,804,347) (23,930,143) (119,734,490) 31,347,333 74,909,938 (10,360,738) 48,969,372 (5,054,482) 31,347,333 123,879,310 (15,415,220) 92,186 19,984,747 20,076,933 25,782,845 11,950,106 37,732,951 25,875,031 See accompanying notes to the financial statements. 24 $ 31,934,853 $ 57,809,884 Valley Metro Regional Public Transportation Authority Statement of Cash Flows Proprietary Funds Fiscal Year Ended June 30, 2012 Business-Type Activities - Enterprise Funds Transit Valley Total Service Metro Proprietary Operations Rail Funds Cash flows from operating activities Receipts from customers Payments to suppliers Payments to employees Net cash provided by (used in) operating activities $ 29,840,735 (54,575,116) (1,038,609) (25,772,990) $ 14,891,978 (2,541,560) (8,846,896) 3,503,522 $ 44,732,713 (57,116,676) (9,885,505) (22,269,468) Cash flows from noncapital and related financing activities Transfers in - sales taxes Transfers out Lead agency disbursements AZ Lottery fund proceeds Due to/from other funds Federal alternative fuel tax credit Net cash provided by (used in) noncapital and related financing activities 74,909,938 (10,360,738) (14,671,568) 262,989 (6,708,344) 512,860 48,969,372 (5,054,482) (500,000) (1,935,645) - 123,879,310 (15,415,220) (15,171,568) 262,989 (8,643,989) 512,860 43,945,137 41,479,245 85,424,382 Cash flows from capital and related financing activities Purchases of capital assets Conveyance of capital assets Principal payments on long-term debt Lead agency disbursements Capital contributions Interest subsidy Interest paid on capital debt Net cash provided by (used in) capital and related financing activities (3,157,735) (28,368,147) (2,265,000) 31,347,333 589,923 (5,205,192) (23,619,048) - (3,157,735) (28,368,147) (2,265,000) (23,619,048) 31,347,333 589,923 (5,205,192) (7,058,818) (23,619,048) (30,677,866) Cash flows from investing activities Interest received on investments Net cash provided by (used in) investing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 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 income (loss) to net cash provided by (used in) operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation (Increase) decrease in assets: Due from other governments 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 79,323 79,323 30,476 30,476 109,799 109,799 $ 11,192,654 33,085,997 44,278,651 $ 21,394,195 11,279,641 32,673,836 $ 32,586,849 44,365,638 76,952,487 $ 20,829,904 23,448,747 44,278,651 $ 32,673,836 32,673,836 $ 53,503,740 23,448,747 76,952,487 (49,435,695) $ See accompanying notes to the financial statements. 25 158,429 (49,277,266) 11,025,829 - 11,025,829 13,983,009 5,190,919 19,173,928 3,332,773 2,975 (4,705,830) 23,949 23,662,705 (25,772,990) 62,162 (1,976,234) 68,247 3,345,093 3,503,522 3,332,773 65,137 (6,682,064) 92,196 27,007,798 (22,269,468) $ $ Notes to the Financial Statements Valley Metro Regional Public Transportation Authority Notes to the Financial Statements Fiscal Year Ended June 30, 2012 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 2011-12, 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 adopting an ordinance declaring its participation. 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. In February of 2012, the Board of Directors for the Authority and VMR took action to appoint a single CEO to manage both financial entities under a single integrated agency. The Authority and VMR entered into an intergovernmental agreement providing for the single CEO to serve both organizations effective March 1, 2012. 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. 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. 27 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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 6 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. 28 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 Also part of the basic financial statements are fund financial statements for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. c. Basis of Presentation The accounts of the Authority are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts, which includes assets, liabilities, fund equity, revenues and expenditures/expenses. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The following fund categories (further divided by fund type) are used by the Authority: Governmental Funds Governmental funds are used to account for the Authority’s general government activities. The focus of Governmental Fund measurement, in the fund financial statements, is upon determination of financial position and changes in financial position rather than upon net income. The Authority reports the following major Governmental Funds: The General Fund is the Authority’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Transit Planning Fund accounts 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 accounts 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. 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 29 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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: 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. 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 unrestricted 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. 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. 30 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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 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. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The Authority has elected not to follow subsequent private-sector guidance. 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 Chief Executive Officer. 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. 31 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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 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. 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. 32 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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 Vehicles Cars and vans Buses greater than 30 feet Buses greater than 40 feet Computers and software Site improvements Buildings 3-20 4 10 20 3 16-30 46-50 Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) or net realizable value, if lower, as of the date of the transfer. i. Transactions Between Funds Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds”. See Note 5 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 accrued member city service billings and various grants awarded by the Federal Transit Administration and the Federal Highway Administration. The grant receivables are passed through to the Authority and are due from the City of Phoenix, Maricopa Association of Governments, Maricopa County, and the Arizona Department of Transportation as reimbursement for eligible grant expenditures associated with operating, capital projects and capital maintenance. 33 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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. For governmental funds, there is no legal requirement to accumulate expendable available financial resources to liquidate the obligation; thus expenditures are recognized in the governmental funds when payments are made to employees. The current portion of the accrued compensated absences liability is based on the average annual amount of leave charged over the preceding three years. Generally, resources from the General Fund are used to liquidate the governmental funds liabilities for compensated absences. l. Long-term Obligation 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. Net Assets In the government-wide financial statements, net assets are reported in three categories: net assets invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. Net assets invested in capital assets, net of related debt is separately reported because capital assets make up a significant portion of total net assets. Restricted net assets account for the portion of net assets restricted by parties outside the Authority. Unrestricted net assets are the remaining net assets not included in the previous two categories. n. Fund Balances Fund balances of the governmental funds are reported separately within classifications based on a hierarchy of the constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable and spendable fund balances. Spendable fund balances include restricted, committed, assigned and unassigned fund balance classifications. The nonspendable fund balance classification includes amounts that cannot be spent because they are either not in spendable form such as inventories, or are legally or contractually required to be maintained intact. 34 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 Restricted fund balances are those that have externally imposed restrictions on their usage by creditors (such as through debt covenants), grantors, contributors, or laws and regulations. The committed fund balances are self-imposed limitations approved by the Authority’s Board of Directors, which is the highest level of decision-making authority within the Authority. Only RPTA’s Board of Directors can remove or change the constraints placed on committed fund balances. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board of Directors at a Board of Directors meeting. The Board of Directors must commit fund balances before the end of the fiscal year. Assigned fund balances are resources constrained by the Authority’s intent to be used for specific purposes, but are neither restricted nor committed. The Board of Directors has authorized the Chief Executive Officer or designee to make assignments of resources for a specific purpose. The unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not reported in the other classifications. Also, deficits in fund balances of the other governmental funds are reported as unassigned. When an expenditure is incurred, it is the Authority’s policy to use restricted fund balance first, then committed, assigned and unassigned fund balances as resources are available. o. 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. p. 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. 35 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 2. Reconciliation of Governmental Fund Financial Statements to Government-Wide 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 Prepaid items Capital assets (net) Total assets Liabilties Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Compensated absences Total liabilities Fund Balance/Net Assets Total fund balance/net assets $ $ 38,227,820 158,425 9,632,798 233,030 10,554 48,262,627 Reclassifications for Internal Balances and Eliminations Long-term Assets/ Liabilities $ $ 1,199,127 1,199,127 $ $ $ 283,008 230,195 233,030 138,326 884,559 $ 800,823 800,823 $ $ 47,378,068 $ 398,304 $ (233,030) (233,030) (233,030) (233,030) - Statement of Net Assets Totals $ $ 38,227,820 158,425 9,632,798 10,554 1,199,127 49,228,724 $ 283,008 230,195 138,326 800,823 1,452,352 $ 47,776,372 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 $ $ 4,213,104 (3,013,977) 1,199,127 Interfund transactions between governmental activities of $233,030 are eliminated in the consolidation of these activities for the statement of net assets. 36 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 Under the modified accrual basis of accounting, the governmental funds do not accrue for unpaid compensated absences in the amount of $800,823 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 Charges for services Miscellaneous Total revenues $ 112,353,330 13,601,884 73,104 153,445 100,154 126,281,917 Capital Purchases $ - Depreciation and Disposals Compensated Absences $ $ - Statement of Activities Totals - $ 112,353,330 13,601,884 73,104 153,445 100,154 126,281,917 - 1,287,409 Expenditures/Expenses Current: Regional planning Transportation demand management Regional customer services AZ Lottery fund disbursements Administration Capital outlay Total expenditures/expenses and other uses 1,391,253 7,915,241 10,345,984 1,575,119 274,580 (274,580) 129,247 292,813 - (47,438) - 1,391,253 8,044,488 10,345,984 1,820,494 - 22,789,586 (274,580) 422,060 (47,438) 22,889,628 Other financing uses/changes in net assets Transfers in Transfers out Net transfers 9,957,202 (118,421,292) (108,464,090) Net change for the year 1,287,409 $ (4,971,759) - - $ 274,580 $ (422,060) $ 47,438 9,957,202 (118,421,292) (108,464,090) $ (5,071,801) 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 ($274,580), whereas net assets decrease by the amounts of disposals and depreciation expense charged for the year ($422,060). The governmental funds do not report the change in unpaid compensated absences in the amount of ($47,438) 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. 37 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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, 2012, was $81,105,635 and the bank ledger balance was $83,920,575. The difference of $2,814,940 represents deposits in transit and outstanding checks. Of the bank balance, $250,000 was covered by federal depository insurance and $83,670,575 was covered by collateral held by the pledging financial institution in the Authority’s name. Cash held with trustee in the amount of $30,981,067 has federal depository insurance coverage in the amount of $250,000 and $30,731,067 was covered by a Tri-Party Collateral Agreement held by the Wells Fargo Bank, N.A., the Bank of New York Mellon, and the Authority. 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, 2012, 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 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, 2012 consist of the following: State of Arizona Local Government Investment Pool $ 3,093,605 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. 38 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 Cash and Investments at June 30, 2012 consist of the following: $ 81,105,635 3,093,605 30,981,067 $ 115,180,307 Carrying amount of the Authority’s deposits Investments in the LGIP Cash and investments with Trustee Total cash and investments 4. Receivables and Due from Other Governments Receivables primarily result from accrued member city service billings and various grants awarded by the Federal Transit Administration and the Federal Highway Administration. The grant receivables are passed through to the Authority and are due from the City of Phoenix, Maricopa Association of Governments, Maricopa County, and the Arizona Department of Transportation as reimbursement for eligible grant expenditures associated with operating, capital projects and capital maintenance. Due from Other Governments at June 30, 2012 consist of the following: Due from Other Governments By Fund Type Governmental Funds Proprietary Funds Total Due from Other Governments Arizona State Treasurer-PTF Funds AZ Dept of Transportation City of Mesa City of Peoria City of Phoenix City of Tempe Maricopa Assoc. of Governments Maricopa County TRP/DOT Town of Gilbert Valley Metro Rail, Inc. Total Due from Other Governments $ 9,106,246 81,006 131 183,430 11,976 96,858 151,947 1,203 9,632,798 $ 39 $ $ 107,364 386,161 42,175 17,472,084 1,707,245 226,310 1,961,266 21,902,605 $ $ 9,106,246 188,370 386,293 42,175 17,655,514 1,719,221 96,858 151,947 226,310 1,962,469 31,535,403 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 5. 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, 2012. The following interfund receivables and payables are included in the fund financial statements at June 30, 2012: Due from other Funds General Fund Due to other funds Governmental funds: Transportation Demand Management Total governmental funds Enterprise funds: Transit Service Operations Total enterprise funds Grand totals $ $ 233,030 233,030 233,030 Valley Metro Rail $ $ Total - 1,019,215 1,019,215 1,019,215 $ $ 233,030 233,030 1,019,215 1,019,215 1,252,245 The interfund balances for the governmental funds at June 30, 2012 are short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to grant and other reimbursements. 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, 2012 are expected to be repaid within one year. 40 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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, 2012. Transfers Out Transit Service Operations General Fund Transfers In Governmental funds: General Transit Planning Transit Demand Management Total governmental funds Enterprise funds: Transit Service Operations Valley Metro Rail Total enterprise funds Grand totals $ 8,962,163 990,776 4,263 9,957,202 69,855,456 38,608,634 108,464,090 $ 118,421,292 $ $ Valley Metro Rail - 10,360,738 10,360,738 10,360,738 $ $ Totals - 5,054,482 5,054,482 5,054,482 $ 8,962,163 990,776 4,263 9,957,202 74,909,938 48,969,372 123,879,310 $ 133,836,512 Net transfers from governmental activities to business-type activities on the government-wide statement of activities to the enterprise funds are in the amount $108,464,090. 6. Fund Balance Classifications Fund Balance classifications reported in the governmental funds include the following: 41 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 7. Capital Assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2012: Balances, July 01, 2011 Governmental activities: Depreciable assets: Site Improvements Computers & software Equipment Vehicles Furniture & fixtures Total depreciable assets at historical cost $ Less accumulated depreciation for: Site Improvements Computers & software Equipment Vehicles Furniture & fixtures Total accumulated depreciation Governmental activities capital assets, net Business-type activities: Non-depreciable assets: Land Work in progress Total non-depreciable assets 430,572 2,332,952 767,146 134,911 376,337 $ 34,159 240,421 - Balances, June 30, 2012 Decreases $ (50,315) (32,585) (20,494) $ 430,572 2,316,796 974,982 134,911 355,843 4,041,918 274,580 (103,394) 4,213,104 (46,071) (2,015,016) (307,010) (134,914) (192,300) (2,695,311) (84,076) (164,537) (126,283) (45,457) (420,353) 50,315 30,878 20,494 101,687 (130,147) (2,129,238) (402,415) (134,914) (217,263) (3,013,977) $ 1,346,607 $ (145,773) $ (1,707) $ 1,199,127 $ 5,292,000 2,719,141 8,011,141 $ 689,907 689,907 $ (893,637) (893,637) $ 5,292,000 2,515,411 7,807,411 Depreciable assets: Transit fleet Building Site improvements Computers & software Equipment Furniture & fixtures Total depreciable assets at historical cost Less accumulated depreciation for: Transit fleet Building Site improvements Computers & software Equipment Furniture & fixtures Total accumulated depreciation Business-type activities capital assets, net Increases $ 103,911,625 13,390,733 8,046,479 271,461 7,000,464 127,037 2,916,802 640,279 14,509 - (3,601,218) - 103,227,209 13,390,733 8,686,758 271,461 7,014,973 127,037 132,747,799 3,571,590 (3,601,218) 132,718,171 (41,500,644) (873,309) (1,436,115) (170,829) (3,387,096) (105,274) (47,473,267) (9,438,991) (291,103) (482,554) (56,556) (743,534) (13,090) (11,025,828) 3,422,847 3,422,847 (47,516,788) (1,164,412) (1,918,669) (227,385) (4,130,630) (118,364) (55,076,248) 93,285,673 $ 42 (6,764,331) $ (1,072,008) $ 85,449,334 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 Depreciation expense was charged to the following functions in the basic financial statements: GovernmentWide $ 129,247 291,106 $ 420,353 Regional customer services Administration Transit service operations Total depreciation expense BusinessType $ $ 11,025,828 11,025,828 The Authority’s enterprise funds in the business-type activities have entered into contracts having remaining construction commitments at June 30, 2012 totaling approximately $0.6 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. 8. Due to Other Governments Payables to other governments primarily result from accrued member city billings for transportation services and lead agency disbursements for capital transportation projects which are funded by the Authority. Due to Other Governments at June 30, 2012 consist of the following: Due to Other Governments By Fund Type Governmental Funds Proprietary Funds Total Due to Other Governments City of Avondale City of Chandler City of Mesa City of Phoenix City of Scottsdale City of Surprise City of Tempe Gila River Indian Community Town of Buckeye Town of Gilbert Valley Metro Rail, Inc. Total Due to Other Governments $ 138,326 138,326 $ 43 $ $ 136,088 84,794 594,398 205,020 41,198 10,701,432 18,124 5,110 45,694 2,720,228 14,552,086 $ $ 136,088 84,794 594,398 138,326 205,020 41,198 10,701,432 18,124 5,110 45,694 2,720,228 14,690,412 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 9. Operating Leases The Authority leases office space under two separate lease agreements. Total rent expenditures were $955,258 for the fiscal year ended June 30, 2012. The future minimum lease payments under noncancelable and final option of the operating lease at June 30, 2012 were as follows: June 30 2013 2014 2015 2016 2017 2018-2022 2023-2026 Total 957,279 1,037,334 1,117,389 1,141,992 546,439 2,898,897 1,872,423 $ 9,571,753 $ 10. 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, 2012, the revenues available for service of this debt were $107,889,134 while total debt service requirements were $5,053,018 interest and $2,265,000 principal. 44 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 Transportation Excise Revenue Bonds annual debt service requirements at June 30, 2012 were as follows: Year Ending June 30 2013 2014 2015 2016 2017 2018-2022 2023-2026 Total Principal 5,085,000 5,290,000 5,555,000 5,835,000 6,085,000 35,215,000 34,745,000 $ 97,810,000 Year Ending June 30 $ Premium Amortization 60,392 60,392 60,392 60,392 60,392 301,962 92,160 696,083 $ Total $ 10,138,018 10,109,068 10,102,943 10,117,006 10,092,593 50,326,715 39,165,798 $ 140,052,140 $ Issuance Costs 2013 2014 2015 2016 2017 2018-2022 2023-2026 Total . Interest 5,053,018 4,819,068 4,547,943 4,282,006 4,007,593 15,111,715 4,420,798 $ 42,242,140 $ $ 414,495 414,495 414,495 414,495 414,495 2,072,476 414,495 4,559,446 $ The revenue bonds liability activity for the fiscal year ended June 30, 2012 was as follows: Balance, July 1, 2011 Revenue bonds payable Plus: Bond premium Total b. Additions Amount Due Within One Year Balance, June 30, 2012 Reductions $ 100,075,000 4,973,942 $ - $ (2,265,000) (414,496) $ 97,810,000 4,559,446 $ 5,085,000 - $ 105,048,942 $ - $ (2,679,496) $ 102,369,446 $ 5,085,000 Compensated Absences Compensated absences activity for the fiscal year ended June 30, 2012 is as follows: Balance, July 1, 2011 Compensated absences: Governmental activities Business-type activities Reductions Additions Amount Due Within One Year Balance, June 30, 2012 $ 848,261 881,263 $ 584,509 667,837 $ (631,947) (575,641) $ 800,823 973,459 $ 582,109 571,031 $ 1,729,524 $ 1,252,346 $ (1,207,588) $ 1,774,282 $ 1,153,140 45 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 11. 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. 12. 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 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 10.74 percent (10.50 percent for retirement and 0.24 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 10.74 percent (9.87 percent for retirement, 0.63 percent for health insurance premium, and 0.24 percent for long-term disability) of the members’ annual covered payroll. 46 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2012 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: 2012 2011 2010 $ 1,260,530 1,104,744 1,053,332 Health Benefit Supplement Fund Long-Term Disability Fund $ $ 83,182 72,342 83,357 30,713 30,653 50,520 13. 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. 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. The outstanding commitments for FY 2012 were for the following projects: the Surprise Park-and-Ride, the Buckeye Park-and-Ride, and Bus Stop Improvements. At June 30, 2012, the Authority had outstanding contractual commitments for these services aggregating approximately $3.1 million. These commitments have not been recorded in the accompanying financial statements because the member cities either had not incurred the related expenses or had not requested reimbursement for the related expenses. Only the currently payable portions of these contracts have been included in accounts payable in the accompanying financial statements. 14. 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. 47 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Concluded) Fiscal Year Ended June 30, 2012 15. 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, 2012, VMR paid $9,853,944 for services provided by the Authority. At June 30, 2012, the Authority reported $1,961,266 receivable from VMR and $2,720,228 payable to VMR. 48 Other Supplementary Information 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, 2012 Actual Amounts (budgetary basis) Budgeted Amounts Original Final Operating Revenues: Charges for services Miscellaneous Total operating revenues $ 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) Non-Operating Revenues (Expenses): Lead agency disbursements IRS fuel tax credit Interest income Proceeds from disposition of capital assets AZ Lottery Proceeds (Disbursements) Capital conveyence Interest subsidy Debt Service Bond issuance expense Total nonoperating revenues (expenses) Income (loss) before transfers Capital Contributions Transfers in Transfers out Change in net assets budgetary basis $ 19,506,262 1,799,664 21,305,926 $ 18,274,607 1,576,212 19,850,819 $ 15,857,726 13,055 15,870,781 Variance with Final Budget Over (Under) $ 2,416,881 1,563,157 3,980,038 45,851,933 23,470,799 774,242 553,000 21,050 941,012 71,612,037 (50,306,111) 46,780,085 23,602,503 789,389 553,000 21,050 941,012 72,687,039 (52,836,220) 42,237,399 10,863,296 749,235 308,911 121,806 3,367,860 57,648,507 (41,777,726) (4,542,686) (12,739,207) (40,154) (244,089) 100,756 (941,012) 3,367,860 (15,038,532) 11,058,494 1,175,000 110,000 10,239,718 - 825,000 40,000 271,281 10,239,718 - (14,671,568) 512,860 79,323 262,989 (28,368,147) 589,923 (4,745,395) (60,392) (14,671,568) (312,140) 79,323 (40,000) (8,292) (28,368,147) 589,923 (14,985,113) (60,392) 11,524,718 11,375,999 (46,400,407) (57,776,406) (38,781,393) (41,460,221) (88,178,133) (46,717,912) 53,524,958 69,691,835 (74,195,682) 31,372,058 57,023,768 (36,695,887) 31,347,333 74,909,938 (10,360,738) (24,725) 17,886,170 26,335,149 10,239,718 Explanation of differences between budgetary basis and GAAP basis 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 Depreciation is not a budgeted expense, but is an expense for GAAP purposes Proceeds from disposition of assets increase financial resources for budgetary basis, but is not a revenue for GAAP basis Changes in net assets per the statement of revenues, expenses and changes in fund net assets . 50 $ 10,239,718 $ 7,718,400 $ 7,718,400 3,367,860 (11,025,829) 31,755 $ 92,186 $ (2,521,318) 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, 2012 Budgeted Amounts Original Final Operating Revenues: Charges for services Miscellaneous Total operating revenues $ Operating Expenses: Light rail staff and administration Total operating expenses Operating income (loss) Non-Operating Revenues (Expenses): Lead agency disbursements Interest income Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Transfers out Change in net assets budgetary basis $ 8,965,065 8,965,065 $ Variance with Final Budget Over (Under) Actual Amounts 10,925,028 10,925,028 $ 9,701,059 3,531 9,704,590 $ 1,223,969 (3,531) 1,220,438 8,965,065 8,965,065 - 10,925,028 10,925,028 - 9,546,161 9,546,161 158,429 (39,846,471) (39,846,471) (39,846,471) (39,846,471) (24,119,048) 30,476 (24,088,572) 15,727,423 30,476 15,757,899 (39,846,471) (39,846,471) (23,930,143) 15,916,328 54,950,471 (15,104,000) 54,950,471 (15,104,000) 48,969,372 (5,054,482) (5,981,099) 10,049,518 - 51 $ - $ 19,984,747 1,378,867 1,378,867 (158,429) $ 19,984,747 (This page intentionally left blank) 52 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. 53 Valley Metro Regional Public Transportation Authority Net Assets By Component Last Ten Fiscal Years (accrual basis of accounting) FY 2002/03 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net asset Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ $ $ $ $ $ FY 2003/04 175,418 2,303,561 2,478,979 $ 14,186,807 1,116,356 943,423 16,246,586 $ 14,362,225 1,116,356 3,246,984 18,725,565 $ 54 $ $ $ FY 2004/05 199,619 3,300,859 3,500,478 $ 11,497,494 1,559,108 1,250,277 14,306,879 $ 11,697,113 1,559,108 4,551,136 17,807,357 $ $ $ $ FY 2005/06 161,090 3,300,859 3,461,949 $ 12,283,769 1,827,192 1,299,780 15,410,741 $ 12,444,859 1,827,192 4,600,639 18,872,690 $ $ $ $ 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 2006/07 $ 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 $ $ $ $ $ FY 2009/10 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 $ $ 107,291,490 9,060,171 $ 116,351,661 $ 99,809,976 4,062,157 27,935,663 $ 131,807,796 $ 55 689,786 45,287,115 45,976,901 FY 2010/11 $ $ $ $ FY 2011/12 1,346,607 178,382 51,323,184 52,848,173 $ 21,322,728 16,410,223 37,732,951 $ 22,669,335 178,382 67,733,407 90,581,124 $ $ $ 1,199,127 188,792 46,388,453 47,776,372 6,528,635 120,650 51,160,599 57,809,884 7,727,762 309,442 97,549,052 $ 105,586,256 Valley Metro Regional Public Transportation Authority Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) FY 2002/03 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 AZ Lottery Fund Disbursements 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 $ 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 FY 2005/06 $ 187,496 322,430 197,256 534,285 820,699 589,798 294,016 784,056 656,311 267,869 931,196 514,977 486,102 865,290 645,052 326,903 226,215 207,283 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 3,735,795 514,158 207,304 549,635 4,349,809 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 38,578,007 5,767,760 16,909,968 61,255,735 42,454,400 Total primary government expenses 56 $ 41,414,335 $ 47,360,605 $ 65,605,544 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 FY 2011/12 FY 2010/11 $ 101,121 1,063,291 113,073 997,203 $ 161,945 307,283 113,311 704,870 719,854 594,549 385,257 819,553 592,460 373,833 897,234 561,620 424,091 1,052,649 504,614 250,976 909,742 590,062 42,633 779,921 571,187 40,145 2,578,094 3,087,948 1,623,744 1,712,451 260,965 715,001 14,103,177 3,110,366 3,599,018 1,857,934 1,033,066 908,275 14,684,781 2,810,408 3,807,893 2,129,063 1,111,340 799,503 14,489,820 2,585,192 3,896,440 2,015,543 1,128,667 750,461 14,006,568 2,201,863 3,833,319 1,960,196 1,284,141 13,778,841 2,018,631 3,578,569 2,447,288 10,345,984 992,735 827,759 22,889,628 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 90,336,819 66,140,185 156,477,004 113,091,586 33,665,209 146,756,795 $ 137,419,068 $ 176,725,049 $ 184,608,254 $ 167,785,341 $ 170,255,845 57 682,197 $ 169,646,423 Valley Metro Regional Public Transportation Authority Changes in Net Assets (Continued) Last Ten Fiscal Years (accrual basis of accounting) 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 Net (Expense)/Revenue Governmental activities Business-type activities Total primary government net expense General Revenues and Other Changes in Net Assets Governmental activities: Sales taxes Interest earnings Other income Transfers in (out) Total governmental activities 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 $ 3,370 2,259,396 94,488 FY 2004/05 FY 2003/04 FY 2002/03 Program revenues Governmental activities: Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues $ 32,501 1,949,879 92,140 $ 49,642 2,288,916 172,438 FY 2005/06 $ 2,357,254 2,074,520 2,510,996 2,482,162 14,423,963 4,623,029 594,796 56,957 3,997,064 2,569,035 4,108,637 609,542 15,487,044 4,640,901 534,764 70,001 4,378,852 2,982,701 1,834,067 820,223 18,135,892 5,344,925 526,891 49,550 4,962,128 3,667,400 5,140,813 387,845 18,963,733 4,075,963 692,342 182,809 3,376,143 5,209,939 1,186,038 17,286,134 30,983,023 30,748,553 38,215,444 50,973,101 $ 33,340,277 $ 32,823,073 $ 40,726,440 $ $ (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) $ $ $ $ $ $ 75,295 2,358,485 48,382 2,587,302 64,528 21,603 (1,828,543) 844,890 4,914,755 22,702 1,828,543 6,766,000 7,610,890 22,744 (1,525,977) (1,503,233) 58 $ $ $ $ $ 3,071,725 83,977 966 (1,139,423) 2,017,245 4,516,066 320 1,139,423 5,655,809 7,673,054 1,021,499 (1,939,707) (918,208) $ $ $ $ $ 1,154,022 103,981 1,047 1,259,050 6,559,344 2,774 6,562,118 7,821,168 34,251 1,152,752 1,187,003 53,455,263 (1,867,647) (10,282,634) $ (12,150,281) $ $ $ $ 55,084,706 124,312 (44,329,950) 10,879,068 44,578 44,329,950 44,374,528 55,253,596 9,011,421 34,091,894 43,103,315 FY 2006/07 $ $ 25,046 2,494,611 198,777 FY 2007/08 $ 2,062,602 - FY 2008/09 $ 2,632,463 - FY 2009/10 $ 150,353 2,055,931 - $ 189,000 2,286,930 FY 2011/12 $ 153,445 13,601,884 - 2,718,434 2,062,602 2,632,463 2,206,284 2,475,930 13,755,329 20,131,861 2,118,843 685,743 36,729 5,565,540 642,313 19,041,093 19,861,844 2,043,104 844,115 6,421,524 1,421,891 16,237,008 19,936,194 3,029,151 926,245 8,614,280 2,609,156 40,555,599 15,849,887 2,408,268 864,663 8,130,261 2,607,770 14,996,556 9,811,268 2,431,467 318,945 2,611,481 8,201,600 2,144,496 8,289,329 10,256,090 2,637,827 181,929 2,781,880 9,701,059 1,337,135 31,347,333 48,222,122 46,829,486 75,670,625 44,857,405 33,808,586 58,243,253 50,940,556 $ 48,892,088 $ 78,303,088 $ 47,063,689 $ (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) $ 134,235,260 1,664,357 (92,948,387) 42,951,230 $ $ $ $ 945,155 2,564,291 92,948,387 96,457,833 $ 139,409,063 $ $ $ $ FY 2010/11 31,566,487 21,364,064 52,930,551 $ 130,490,779 2,503,935 142,810 (134,981,389) (1,843,865) 536,116 1,688,207 134,981,389 137,205,712 135,361,847 (14,466,044) 21,994,930 7,528,886 $ $ $ $ 113,297,696 36,310 75,176 (92,630,562) 20,778,620 34,862 2,233,476 92,630,562 94,898,900 115,677,520 8,921,263 451,091 9,372,354 $ $ $ $ 59 103,722,510 231,398 73,531 (84,745,330) 19,282,109 587,487 650,591 84,745,330 85,983,408 105,265,517 7,481,825 (22,937,960) (15,456,135) $ 36,284,516 $ 71,998,582 $ (9,134,299) (88,513,542) (97,647,841) (11,302,911) (122,668,418) $ (133,971,329) $ $ $ $ $ $ $ 107,111,118 79,874 233,357 (89,250,166) 18,174,183 215,800 560,643 89,250,166 90,026,609 108,200,792 6,871,272 (32,641,809) (25,770,537) $ $ $ 112,353,330 73,104 100,154 (108,464,090) 4,062,498 109,799 16,586 108,464,090 108,590,475 112,652,973 (5,071,801) 20,076,933 15,005,132 Valley Metro Regional Public Transportation Authority Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) FY 2002/03 General fund: Reserved Unreserved, designated Unreserved, undesignated Nonspendable: Prepaid Items Unassigned Total general fund All other governmental funds: Reserved Unreserved, designated, reported in special revenue funds Unreserved, undesignated, reported in special revenue funds Nonspendable: Prepaid Items Restricted Total all other governmental funds FY 2003/04 FY 2004/05 FY 2005/06 $ 318,191 1,985,370 $ 384,887 2,915,972 $ 350,173 2,950,686 $ 649,225 1,638,892 $ 2,303,561 $ 3,300,859 $ 3,300,859 $ 2,288,117 $ - $ - $ - $ - $ - - - - - - - $ - $ - Note: 2011 was the first year the Authority implemented GASB Statement No. 54. 60 9,936,076 $ 9,936,076 FY 2006/07 $ FY 2007/08 1,002,229 1,433,788 $ FY 2009/10 FY 2008/09 233,480 2,888,105 $ 755,184 2,882,500 $ FY 2010/11 837,880 3,852,887 $ 2,436,017 $ 3,121,585 $ 3,637,684 $ 4,690,767 $ - $ - $ - $ - 21,059,001 19,182,426 $ 40,241,427 410,974 25,218,669 $ 25,629,643 34,382,659 $ 34,382,659 $ FY 2011/12 - $ - 6,797 52,164,648 $ 52,171,445 10,554 47,178,722 $ 47,189,276 $ $ - - 41,434,228 - - $ 41,434,228 3,372 175,010 178,382 188,792 188,792 61 $ $ Valley Metro Regional Public Transportation Authority Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) FY 2002/03 Revenues Sales taxes Intergovernmental: AZ Lottery Proceeds 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 AZ Lottery Fund Expenditures Capital outlay Total expenditures $ $ $ Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) 367,279 274,302 118,161 43,722 3,071,725 $ 400,000 335,365 1,264,654 42,000 32,501 83,977 966 5,231,188 400,000 599,460 1,312,424 42,000 3,370 64,528 21,603 5,030,687 Excess of revenues over expenditures Net change in fund balances 2,587,302 $ FY 2005/06 FY 2004/05 FY 2003/04 167,057 242,945 163,818 53,199 1,154,022 $ 400,000 569,622 1,395,577 41,668 75,295 124,312 57,691,180 400,000 526,176 1,493,178 42,000 49,642 103,981 1,047 3,770,046 $ 162,287 145,690 236,219 171,169 55,084,706 $ 187,496 322,430 197,256 534,285 820,699 589,798 294,016 784,056 656,311 267,869 931,196 514,977 486,102 865,290 645,052 326,903 - - - - 226,215 238,134 400,777 514,158 207,283 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 3,770,046 207,304 419,571 218,151 4,437,896 1,828,543 2,136,721 - 53,253,284 (1,828,543) (1,828,543) (1,139,423) (1,139,423) - 814,701 (45,144,651) (44,329,950) $ - 62 $ 997,298 $ - $ 8,923,334 FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/010 FY 2010/011 FY 2011/012 $ 134,235,260 $ 130,490,779 $ 113,297,696 $ 103,722,510 $ 107,111,118 $ 112,353,330 400,000 993,727 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 1,101,257 231,398 223,988 106,233,827 635,647 799,840 851,443 189,000 79,874 233,357 109,900,279 11,665,674 400,200 589,367 946,643 153,445 73,104 100,154 126,281,917 $ $ 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 $ 101,121 1,063,291 113,073 997,203 $ 161,939 307,283 113,311 704,870 719,854 594,549 385,257 816,128 601,220 370,142 897,234 561,620 424,091 1,052,649 504,614 250,976 909,742 590,062 42,633 779,921 571,187 40,142 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 2,201,863 3,833,319 1,815,740 2,018,631 3,578,569 2,447,288 1,712,451 1,030,804 1,111,340 1,128,667 1,284,141 992,744 260,965 580,415 765,641 14,621,652 318,945 1,078,709 14,615,795 462,737 384,564 14,141,968 419,178 61,909 13,383,845 359,637 1,113,456 14,425,281 453,137 10,345,984 274,580 22,789,586 123,996,398 120,586,193 101,899,677 92,849,982 95,474,998 103,492,331 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) 1,447,579 (90,697,745) (89,250,166) 9,957,202 (118,421,292) (108,464,090) 30,453,251 $ (14,395,196) $ 9,269,115 $ 8,104,652 63 $ 6,224,832 $ (4,971,759) Valley Metro Regional Public Transportation Authority Sales Tax Revenues by Component 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 2004/05 FY 2003/04 FY 2002/03 2,587,302 2,587,302 4,914,755 4,914,755 7,502,057 7,502,057 $ $ $ $ $ $ 3,071,725 3,071,725 4,516,066 4,516,066 7,587,791 7,587,791 $ $ $ $ $ $ 1,154,022 1,154,022 6,559,344 6,559,344 7,713,366 7,713,366 FY 2005/06 (1) $ $ $ $ $ $ 3,938,570 51,146,136 55,084,706 - 3,938,570 51,146,136 55,084,706 (1) 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. 64 FY 2006/07 (1) FY 2007/08 (1) FY 2008/09 (1) FY 2009/10 (1) FY 2010/11 (1) FY 2011/12 (1) $ 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 $ 4,371,192 99,351,318 $ 103,722,510 $ 4,422,559 102,688,559 $ 107,111,118 $ $ - $ - $ - $ - $ - $ 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 $ 4,371,192 99,351,318 $ 103,722,510 $ 4,422,559 102,688,559 $ 107,111,118 $ $ $ $ $ $ 65 $ 4,464,196 107,889,134 $ 112,353,330 $ - 4,464,196 107,889,134 $ 112,353,330 Valley Metro Regional Public Transportation Authority Maricopa County Transportation Excise Tax Revenue Distributions Last Ten Fiscal Years (in thousands) FY 2002/03 Regional area road funds Freeways Regional Public Transportation Authority / Maricopa Association of Governments (1) Arterial streets Total regional area road fund distributions $ Public transportation funds Total Maricopa County transportation excise tax revenue distributions $ 261,219 $ FY 2005/06 (2) FY 2004/05 FY 2003/04 281,012 $ 309,092 $ 292,487 7,502 7,588 7,713 7,877 268,721 288,600 316,805 16,127 316,491 - - - 51,146 268,721 $ 288,600 $ 316,805 $ 367,637 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, 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. 66 FY 2006/07 (2) $ $ 213,119 FY 2007/08 $ 205,576 FY 2008/09 $ 176,235 FY 2009/10 $ 159,604 FY 2010/11 $ 165,321 FY 2011/12 $ 173,334 8,095 8,334 8,555 8,742 8,845 8,928 41,050 262,264 39,832 253,742 34,376 219,166 31,327 199,673 32,379 206,545 34,019 216,281 130,188 126,324 109,020 99,351 102,689 107,889 392,452 $ 380,066 $ 328,186 $ 67 299,024 $ 309,234 $ 324,170 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 2002/03 2003/04 2004/05 2005/06 (1) 2006/07 (1) 2007/08 (1) 2008/09 (1) 2009/10 (1) 2010/11 (1) 2011/12 (1) 133,922 144,817 158,179 182,378 187,817 177,845 153,681 143,205 152,003 162,391 Contracting 38,894 43,524 52,325 64,822 73,864 66,046 46,865 28,953 28,012 30,513 Utilities 18,485 19,980 20,813 23,600 26,697 28,630 28,510 29,385 29,511 30,217 Restaurant and Bar 22,646 24,807 27,191 30,656 33,073 33,021 30,763 30,558 31,729 34,279 Rental Real Property 25,747 27,163 29,310 32,949 36,398 38,605 37,757 35,825 35,731 36,415 Rental Personal Property 12,834 12,631 12,624 13,923 15,053 15,111 13,470 11,983 11,606 11,966 Other 16,193 15,678 16,363 19,309 19,550 20,808 17,140 19,115 20,643 18,389 Total 268,721 288,600 316,805 367,637 392,452 380,066 328,186 299,024 309,235 324,170 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, 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. 68 (This page intentionally left blank) Valley Metro Regional Public Transportation Authority Arizona Transaction Privilege Tax Excise Tax Rates by Category Last Ten Fiscal Years FY 2002/03 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 2003/04 FY 2004/05 FY 2005/06 FY 2006/07 49.8400% 5.0000% 0.5000% 50.1800% 5.0000% 0.5000% 49.9300% 5.0000% 0.5000% 49.9300% 5.0000% 0.5000% 47.8600% 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% 18.8200% 5.0000% 0.5000% 9.5800% 1.8200% 0.5120% 9.0500% 1.8200% 0.5120% 9.2500% 1.8200% 0.5120% 9.2500% 1.8200% 0.5120% 9.2700% 1.8200% 0.5120% 8.4300% 5.0000% 0.5000% 8.6000% 5.0000% 0.5000% 8.5800% 5.0000% 0.5000% 8.5800% 5.0000% 0.5000% 8.4300% 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% 6.8000% 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% 3.8400% 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% 2.9300% 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% 1.0600% 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% 0.5300% 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% 0.4600% 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% 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. 69 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 46.8000% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 49.1600% 5.0000% 0.5000% 50.1000% 5.0000% 0.5000% 17.4000% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 9.0600% 5.0000% 0.5000% 9.4000% 5.0000% 0.5000% 10.1000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 11.5500% 1.8200% 0.5120% 11.2000% 1.8200% 0.5120% 8.7000% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 10.2600% 5.0000% 0.5000% 10.6000% 5.0000% 0.5000% 7.5000% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 9.5400% 5.0000% 0.5000% 9.3000% 5.0000% 0.5000% 4.0000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 3.7500% 5.0000% 0.5000% 3.7000% 5.0000% 0.5000% 3.3000% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 3.2700% 5.0000% 0.5000% 3.1000% 5.0000% 0.5000% 1.1000% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 1.1800% 5.0000% 0.5000% 1.2000% 5.0000% 0.5000% 0.5000% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.5200% 5.0000% 0.5000% 0.4000% 5.0000% 0.5000% 0.6000% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 1.7100% 5.0000% 0.5000% 1.0000% 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% 70 Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Bond Coverage Last Three Fiscal Years Fiscal Year 2010 2011 2012 Principal $ 2,265,000 5,085,000 Interest $ 5,259,888 5,245,318 5,053,018 Pledged Revenue Total $ 5,259,888 7,510,318 10,138,018 $ 99,351,318 102,688,559 107,889,134 Coverage 18.89 13.67 10.64 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. 71 Valley Metro Regional Public Transportation Authority Outstanding Debt by Type Last Three Fiscal Years Business-type Activities Fiscal Year Ended June 30 2010 2011 2012 Transportation Excise Tax Revenue Bonds $ Percentage of Personal Income 100,075,000 100,075,000 97,810,000 0.07% 0.06% 0.06% Source: The source of this information is the Authority’s financial records. 72 Per Capita $ 26.35 26.22 25.62 Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Debt Service Revenue and Cost Per Capita Last Three Fiscal Years Fiscal Year 2010 2011 2012 Principal $ 2,265,000 5,085,000 Interest Total Cost $ 5,259,888 5,245,318 5,053,018 $ 5,259,888 7,510,318 10,138,018 $ Revenue Maricopa County Population (1) 99,351,318 102,688,559 107,889,134 $ 4,115,811 3,817,117 3,817,117 Cost Per Capita Revenue Per Capita $ $ (1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation 73 1 2 3 24 27 28 (This page intentionally left blank) 74 Valley Metro Regional Public Transportation Authority Regional Population Statistics Last Ten Fiscal Years FY 2001/02 (1) Maricopa County Avondale Buckeye Chandler El Mirage Gilbert Glendale Goodyear (3) Mesa Peoria Phoenix Queen Creek (3) Scottsdale Surprise (3) Tempe 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 FY 2002/03 (1) 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 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 FY 2004/05 (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 FY 2005/06 (1) 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 (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 sixteenmember 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. 75 FY 2006/07 (1) 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 FY 2007/08 (1) 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 FY 2008/09 (1) FY 2009/10 (1) 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 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 76 FY 2010/11 (1) 3,817,117 76,238 50,876 236,123 31,797 208,453 226,721 65,275 439,041 154,065 1,445,632 26,361 217,385 117,517 161,719 Valley Metro Regional Public Transportation Authority Top Ten Employers for Maricopa County Previous Year and Ten Years Ago Employer State of Arizona Banner Health Systems Wal-Mart Stores, Inc. City of Phoenix Maricopa County Frys Food Stores Bank of America Wells Fargo & Company Intel Corporation Honeywell Motorola US Postal Service - Arizona District Raytheon Missile Systems Total for Principal Employers Total Employment in Maricopa Cty Employees 24,200 23,100 15,000 13,500 13,500 12,600 12,000 10,100 10,100 8,800 2011 Rank % of Total 1 2 3 4 5 6 7 8 9 10 1.50% 1.43% 0.93% 0.84% 0.84% 0.78% 0.74% 0.63% 0.63% 0.54% 8.85% 176,191 142,900 2002 Rank % of Total 59,348 13,973 13,800 12,917 13,860 9,837 1 4 6 7 5 8 3.82% 0.90% 0.89% 0.83% 0.89% 0.63% 17,500 15,500 9,756 9,700 2 3 9 10 1.13% 1.00% 0.63% 0.62% Employees 1,615,100 1,552,400 Source: Maricopa County Association of Governments, Employer Database (2011) Arizona Department of Administration, Current Employment Statistics (CES) Phoenix Business Journal Book of Lists Note: The information for FY 2012 was not available at the time the CAFR was drafted. 77 11.34% (This page intentionally left blank) 78 Valley Metro Regional Public Transportation Authority Local Transportation Assistance Funds Last Ten Fiscal Years FY 2001/2002 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 203,685 152,764 75.0% FY 2002/2003 220,818 165,614 75.0% N/A N/A N/A N/A N/A N/A FY 2003/2004 252,589 189,442 75.0% N/A N/A N/A FY 2004/2005 277,421 208,066 75.0% N/A N/A N/A FY 2005/2006 299,299 99,667 33.3% N/A N/A N/A 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% 1,096,287 365,064 33.3% 43,192 32,394 75.0% 65,053 48,790 75.0% 109,530 82,148 75.0% 130,312 97,734 75.0% 140,622 105,467 75.0% 622,681 207,560 33.3% 668,051 222,684 33.3% 709,012 236,337 33.3% 778,323 259,441 33.3% 818,025 272,402 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% 1,158,998 385,946 33.3% NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 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% 2,220,987 2,220,987 100.0% 616,116 205,372 33.3% 639,879 213,293 33.3% 650,732 216,911 33.3% 650,326 216,775 33.3% 657,162 218,835 33.3% 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% 7,033,839 7,033,839 100.0% NA NA NA 1,150,630 383,543 33.3% NA NA NA 1,146,323 382,108 33.3% N/A N/A N/A 800,415 266,805 33.3% N/A N/A N/A 870,471 290,157 33.3% N/A N/A N/A N/A N/A N/A NA NA NA NA NA NA NA NA NA 1,135,830 378,610 33.3% 1,119,229 373,076 33.3% 1,098,399 365,767 33.3% 239,405 179,554 75.0% 265,383 88,373 33.3% 317,703 105,795 33.3% 845,811 281,937 33.3% 821,152 273,717 33.3% 798,826 266,009 33.3% 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. (2) Percentages of proceeds designated for expenditures have been revised according to the reported population starting FY2004/05. 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. (3) LTAF Program was eliminated in March 2010. 79 FY 2006/2007 317,127 105,603 33.3% N/A N/A N/A FY 2007/2008 331,478 110,382 33.3% N/A N/A N/A FY 2008/2009 FY 2009/2010 FY 2010/2011 (3) 318,231 105,971 33.3% 185,086 61,634 33.3% 0.0% 171,121 128,341 75.0% 121,083 90,812 75.0% 0.0% 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% 0.0% 142,134 106,600 75.0% 149,672 112,254 75.0% 142,011 106,508 75.0% 81,249 60,937 75.0% 0.0% 853,858 284,335 33.3% 849,374 282,842 33.3% 861,189 286,776 33.3% 518,737 172,739 33.3% 0.0% 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% 0.0% 197,755 148,316 75.0% 228,238 171,179 75.0% 236,610 177,458 75.0% 143,523 107,642 75.0% 0.0% 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% 0.0% 658,598 219,313 33.3% 666,237 221,857 33.3% 640,826 213,395 33.3% 375,639 125,088 33.3% 0.0% 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% 0.0% 76,224 57,168 75.0% 85,796 64,347 75.0% 91,884 68,913 75.0% 57,536 43,152 75.0% 0.0% 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% 0.0% 375,434 125,019 33.3% 450,508 150,019 33.3% 443,564 147,707 33.3% 262,631 87,456 33.3% 0.0% 771,039 256,756 33.3% 761,513 253,584 33.3% 709,867 236,386 33.3% 416,885 138,823 33.3% 0.0% 16,500 12,375 75.0% 0.0% N/A N/A N/A N/A N/A N/A N/A N/A N/A 80 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) 3,817,117 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 $ 135,393,497 152,216,281 147,912,041 143,729,512 139,665,253 134,339,487 120,716,738 110,278,789 101,378,940 96,998,974 $ 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 27,185 36,983 37,090 36,783 36,825 36,820 34,124 31,521 29,917 29,452 Median Age (1,3) School Enrollment (4) Unemployment Rate (5) 684,028 684,510 683,966 732,146 707,771 689,411 652,333 626,461 600,577 565,517 8.3% 8.8% 8.1% 4.2% 3.5% 3.6% 4.1% 4.4% 5.2% 5.6% 34.8 36.8 33.6 33.7 33.4 33.0 33.0 33.0 33.0 33.0 (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. 81 Valley Metro Regional Public Transportation Authority Full-time Equivalent Employees (FTE) by Function/Program Last Ten Fiscal Years 2003 2004 2005 2007 2008 2009 2010 2011 2012 7.9 10.3 4.2 14.8 37.1 7.9 9.0 71.5 20.1 108.5 8.1 10.5 74.6 22.2 115.4 8.0 10.0 78.2 22.2 118.5 8.1 10.0 78.3 22.2 118.6 7.7 9.0 72.9 20.4 110.0 7.9 8.5 73.3 19.5 109.1 4.6 42.0 46.6 4.9 47.0 51.9 10.5 51.0 61.5 8.6 58.0 66.6 8.5 92.0 100.5 8.4 96.0 104.4 10.1 84.0 94.1 10.4 88.5 98.9 75.0 89.0 170.0 182.0 219.0 223.0 204.0 208.0 Function/Program Governmental activities: Regional planning Transportation demand management Regional customer services Administration Total governmental activities FTE 4.5 10.3 7.9 22.6 4.6 10.3 4.7 7.9 27.5 4.5 10.3 4.7 8.9 28.4 Business-type activities: Transit service operations Light rail transit (1) Total business-type activities FTE 6.4 31.0 37.4 4.5 33.0 37.5 60.0 65.0 Total primary government FTE 2006 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. 82 Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Fixed Route System Last Ten Fiscal Years FY 2001/2002 Fixed Route System (1) City of Phoenix Transit System Total boardings 34,642,732 Revenue miles 14,498,806 Revenue hours 941,752 Operating cost $ 76,314,996 Operating cost per boarding $ 2.20 Farebox recovery ratio 25.5% Regional Public Transportation Authority (2) Total boardings 4,979,305 Revenue miles 4,727,196 Revenue hours 321,379 Operating cost $ 17,271,336 Operating cost per boarding $ 3.47 Farebox recovery ratio 16.3% City of Tempe Total boardings 3,865,511 Revenue miles 3,730,509 Revenue hours 350,657 Operating cost $ 12,485,395 Operating cost per boarding $ 3.23 Farebox recovery ratio 17.2% City of Glendale - Luke Link Total boardings 36,404 Revenue miles 89,650 Revenue hours 3,876 Operating cost $ 136,565 Operating cost per boarding $ 3.75 Farebox recovery ratio 22.3% Total fixed route system Total boardings 43,523,952 Revenue miles 23,046,161 Revenue hours 1,617,664 $ 106,208,292 Operating cost Operating cost per boarding $ 2.44 Farebox recovery ratio 23.0% FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006 37,543,692 16,479,011 1,089,891 $ 90,376,532 $ 2.41 23.0% 40,427,904 16,956,333 1,115,462 $ 93,661,178 $ 2.32 24.8% 42,909,890 17,420,722 1,146,819 $ 89,543,836 $ 2.09 27.0% 44,182,683 17,166,702 1,166,967 $ 93,058,555 $ 2.11 26.6% 5,688,992 4,799,475 379,892 $ 17,059,807 $ 3.00 19.7% 6,503,504 4,971,133 375,171 $ 18,200,836 $ 2.80 18.3% 6,203,696 4,379,307 276,517 $ 16,445,778 $ 2.65 23.1% 6,484,886 4,956,352 389,349 $ 19,613,325 $ 3.02 20.7% 4,906,953 3,814,559 267,347 $ 13,110,640 $ 2.67 20.6% 4,813,237 3,826,195 314,932 $ 14,864,954 $ 3.09 18.2% 4,805,598 3,797,053 311,852 $ 15,738,112 $ 3.27 17.3% 5,063,284 3,868,790 297,027 $ 16,738,459 $ 3.31 17.9% 51,246 106,326 4,630 163,768 3.20 30.5% 70,823 131,400 7,088 228,160 3.22 20.9% 93,024 139,789 7,962 218,243 2.35 26.8% 101,444 142,109 8,121 232,802 2.29 27.5% $ $ 48,190,883 25,199,371 1,741,760 $ 120,710,747 $ 2.50 22.3% $ $ 51,815,468 25,885,061 1,812,653 $ 126,955,128 $ 2.45 23.1% $ $ 54,012,208 25,736,871 1,743,150 $ 121,945,969 $ 2.26 25.2% $ $ 55,832,297 26,133,953 1,861,464 $ 129,643,141 $ 2.32 24.6% 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 2011-12 was not available at the time the CAFR was drafted. 83 FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011 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% 35,806,019 17,692,736 1,196,437 $ 113,744,493 $ 3.18 30.9% 37,437,652 16,915,379 1,125,763 $ 130,360,068 $ 3.48 25.7% 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% 7,277,608 6,392,468 438,051 $ 33,248,059 $ 4.57 20.4% 8,054,520 5,902,973 355,964 $ 34,380,383 4.27 $ 20.9% 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% 5,217,425 4,889,470 370,738 $ 28,676,837 $ 5.50 17.2% 8,313,058 5,678,666 498,944 $ 24,851,193 $ 2.99 19.3% 227,702 252,413 19,455 435,099 1.91 227.5% NA NA NA NA NA NA NA NA NA NA NA NA 116,952 101,154 37,006 820,392 7.01 3.1% 110,913 99,773 8,713 786,101 7.09 3.1% 57,909,634 28,682,952 1,932,310 $ 150,775,243 2.60 $ 224.6% 55,475,543 29,417,491 1,702,049 $ 167,374,465 $ 3.02 24.5% 58,878,857 29,540,027 1,916,841 $ 171,911,518 $ 2.92 25.5% $ $ $ $ 48,418,004 29,075,828 2,042,232 $ 176,489,781 $ 3.65 26.6% 84 $ $ 53,916,143 28,596,791 1,989,384 $ 190,377,745 $ 3.53 23.9% Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Dial-a-Ride System Last Ten Fiscal Years FY 2001/2002 Dial-a-Ride System (1) Phoenix Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Phoenix Reserve-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio East Valley Dial-a-Ride Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Maricopa County STS Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Sun Cities Area Transit Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ $ $ 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% 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% 60,345 226,194 19,226 671,365 11.13 22.4% FY 2003/2004 $ $ $ $ $ $ $ $ $ $ 369,791 3,901,614 262,372 11,150,114 30.15 4.8% 153,697 540,388 50,754 2,757,131 17.94 3.1% 222,736 2,048,542 111,514 4,963,617 22.28 6.5% 103,533 730,180 67,836 1,534,951 14.83 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 $ $ 152,631 518,616 47,282 2,853,105 18.69 2.7% 223,130 1,622,795 118,032 5,338,924 23.93 6.6% 105,342 523,119 41,189 3,249,859 30.85 0.4% $ $ 58,069 254,897 22,648 714,915 12.31 21.3% 415,733 4,276,365 285,137 12,452,214 29.95 5.0% NR NR NR NR NR NR $ $ $ $ $ $ 220,153 1,796,728 121,607 6,596,249 29.96 5.2% 100,243 913,009 56,585 3,312,076 33.04 0.3% 57,091 230,472 21,802 689,473 12.08 23.5% 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 2011-12 was not available at the time the CAFR was drafted. 85 FY 2006/2007 $ $ 410,838 NA 287,882 13,655,624 33.24 4.7% FY 2007/2008 $ $ NR NR NR NR NR NR $ $ $ $ $ $ 226,050 NA 126,131 7,685,324 34.00 5.0% 91,082 NA 49,524 3,368,464 36.98 0.0% 45,612 NA 16,526 697,877 15.30 18.0% 391,420 4,806,031 292,601 14,759,075 37.71 4.1% FY 2008/2009 $ $ NR NR NR NR NR NR $ $ $ $ $ $ 240,424 NA 131,842 8,461,088 35.19 4.6% 87,134 NA 47,511 3,350,837 38.46 0.0% 34,924 NA 12,974 560,024 16.04 22.0% 396,474 4,064,584 295,057 14,991,465 37.81 4.2% FY 2009/2010 $ $ 353,674 3,675,478 283,686 14,749,818 41.70 7.3% NR NR NR NR NR NR $ $ $ $ $ $ 262,364 2,090,445 137,604 9,760,107 37.20 4.1% $ $ NR NR NR NR NR NR $ $ 248,462 2,123,274 129,168 9,322,558 37.52 4.9% 35,488 362,525 24,641 256,574 7.23 0.0% 27,652 109,741 13,081 610,581 22.08 17.4% FY 2010/2011 NR NR NR NR NR NR $ $ NR NR NR NR NR NR $ $ 30,509 120,305 30,509 558,965 18.32 18.6% 86 328,502 3,464,880 257,874 15,519,920 47.24 6.3% 234,095 2,191,197 128,335 9,096,936 38.86 7.8% NR NR NR NR NR NR $ $ 14,715 53,614 5,367 228,146 15.50 24.9% Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Dial-a-Ride System (Continued) Last Ten Fiscal Years FY 2001/2002 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 $ $ $ $ $ $ $ $ $ $ 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 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 4.6% 1,024,603 7,177,557 550,531 23,470,055 22.91 5.4% 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 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 3.5% $ $ $ $ 1,063,600 7,623,118 546,078 27,961,152 26.29 4.5% FY 2005/2006 $ $ $ $ $ $ $ $ $ $ 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 3.5% 938,879 7,865,367 532,867 26,805,994 28.55 4.9% Source: Reports prepared by the Regional Public Transportation Authority: Performance Management Analysis System for fiscal years 2001 through 2007. Annual Transit Performance Report for fiscal years beginning FY 2008. (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 2011-12 was not available at the time the CAFR was drafted. 87 FY 2006/2007 $ $ $ $ $ $ $ $ $ $ 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 3.6% 920,843 NA 532,031 29,505,513 32.04 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 3.7% 902,737 4,806,031 540,907 31,936,477 35.38 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% FY 2009/2010 $ $ $ $ 89,808 411,136 29,927 2,430,543 27.06 4.3% 32,921 158,846 13,218 1,109,380 33.70 2.9% 1,459 NA 1,680 102,139 70.01 2.9% 19,336 79,989 7,918 644,740 33.34 3.0% 872,673 7,329,082 525,142 30,036,686 34.42 4.3% FY 2010/2011 $ $ $ $ NR NR NR NR NR NR $ $ $ $ 22,151 83,761 8,561 591,150 26.69 3.8% 777,525 6,572,800 495,069 28,762,414 36.99 6.2% 88 97,741 406,413 30,347 2,604,743 26.65 4.0% 29,317 122,789 8,156 1,006,618 34.34 3.1% NR NR NR NR NR NR $ $ $ $ 23,942 81,859 8,601 617,751 25.80 4.1% 728,312 6,320,752 438,680 29,074,114 39.92 6.8% Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Shuttle / Circulator System Last Ten Fiscal Years 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 Source: FY 2001/2002 FY 2002/2003 FY 2003/2004 FY 2004/2005 FY 2005/2006 437,421 361,830 26,505 1,058,452 2.42 0.0% 770,348 604,325 40,480 1,619,238 2.10 0.0% 747,351 577,579 37,636 1,435,044 1.92 0.0% 794,945 601,547 38,156 2,386,820 3.00 0.0% 766,676 580,884 36,923 1,812,780 2.36 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% $ $ $ $ $ $ $ $ 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% $ $ $ $ $ $ $ $ 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% $ $ $ $ $ $ $ $ 1,999,795 475,609 39,831 1,835,387 0.92 0.0% 92,139 57,696 8,167 547,764 5.94 0.0% 82,569 100,295 8,301 144,934 1.76 11.0% $ $ $ $ $ $ $ $ 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% 96,258 96,838 7,969 158,442 1.65 10.3% 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 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,753,179 1,060,183 100,917 3,611,664 2.06 N/A 2,319,653 1,157,936 82,473 3,631,063 1.57 N/A 2,564,667 1,196,425 91,867 3,787,135 1.48 N/A 2,969,448 1,235,147 94,455 4,914,905 1.66 N/A 3,023,025 1,237,806 107,711 4,879,358 1.61 N/A $ $ $ $ $ $ $ $ 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) City of Phoenix - Alex, Dash, Mary & Smart; prior to FY 07-08 included only Dash and Alex. (2) City of Tempe - FLASH, Orbit-Earth, Jupiter, Mars, Mercury & Venus; prior to FY 07-08 included only FLASH, Neighborhood FLASH. (3) City of Scottsdale - Neighborhood Trolley, Miller Road 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. (5) City of Glendale - GUS (6) RPTA- Mesa BUZZ Note: Information for fiscal year 2011-12 was not available at the time the CAFR was drafted. 89 FY 2006/2007 FY 2007/2008 FY 2008/2009 FY 2009/2010 FY 2010/2011 735,941 580,080 36,710 1,889,393 2.57 0.0% 1,799,974 1,614,317 79,529 7,173,722 3.99 0.1% 2,599,292 1,960,474 118,173 9,626,975 3.70 0.0% 2,643,678 1,609,412 99,367 7,306,773 2.76 0.0% 1,410,810 624,617 37,488 4,062,374 2.88 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% 97,681 NR NR NR NR NR N/A N/A N/A N/A N/A N/A $ $ 2,725,312 1,282,479 122,917 5,868,834 2.15 N/A $ $ $ $ $ $ $ $ $ $ 2,456,646 1,613,904 150,171 6,833,012 2.78 0.0% 3,307,223 2,105,878 206,964 $ 11,414,395 $ 3.45 0.0% 384,000 48,240 2,400,000 6.25 0.0% 572,925 439,307 48,648 2,627,403 4.59 0.0% 110,941 110,005 8,858 176,574 1.59 16.3% N/A N/A N/A N/A N/A N/A 4,751,561 3,338,226 286,798 $ 16,583,308 $ 3.49 0.2% $ $ $ $ $ $ 113,382 98,760 8,735 668,581 5.90 3.6% 80,133 60,795 5,755 319,570 3.99 0.0% 6,672,955 4,665,214 388,275 $ 23,988,343 $ 3.59 0.1% $ $ 3,660,543 1,819,126 194,057 $ 10,070,159 $ 2.75 0.0% 652,230 358,482 37,006 N/A N/A N/A $ $ $ $ 116,952 104,154 12,412 820,392 7.01 3.1% 200,504 105,935 8,726 547,823 2.73 0.0% 7,273,907 3,997,109 351,568 $ 18,745,147 $ 2.58 N/A 90 $ $ $ $ $ $ $ $ $ $ 3,143,824 1,489,463 169,543 9,191,363 2.92 0.0% 897,858 619,658 N/A 2,570,545 2.86 N/A 110,915 99,773 8,713 786,101 7.09 3.1% 211,887 104,540 8,044 618,061 2.92 0.0% 5,775,294 2,938,051 223,788 $ 17,228,444 $ 2.98 0.1% Valley Metro Regional Public Transportation Authority Capital Asset Statistics by Function/Program Revenue Vehicles for Transit Service Operations Last Ten Fiscal Years Fiscal Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 Paratransit / Dail-a-Ride Local and Express Bus 67 62 61 57 75 76 76 111 80 58 80 80 133 181 172 192 257 251 242 205 Vanpool NA NA 250 303 308 347 421 376 376 400 Source: National Transit Data Base (NTD) (1999/00-2007/08) FAS GOV 100 Asset Accounting (2008/09-current) (1) For years FY98 through FY04, the NTD reported numbers included vans that were owned by the contractor; thus, those assets are not reported. 91 101 North 1st Avenue, Suite 1300 • Phoenix, Arizona 85003 602-262-7433 • www.ValleyMetro.org