valleymetro.org Valley Metro Regional Public Transportation Authority Phoenix, AZ COMPREHENSIVE ANNUAL FINANCIAL REPORT FI S C A L Y E A R ENDED JUNE 30 2015 Valley Metro Regional Public Transportation Authority Phoenix, Arizona For the Fiscal Year Ended June 30, 2015 Board of Directors Chair, Councilmember Jim McDonald, Avondale Vice Chair, Councilmember Gary Sherwood, Glendale Treasurer, Councilmember Thelda Williams, Phoenix Vice Mayor Eric Orsborn, Buckeye Vice Mayor Kevin Hartke, Chandler Councilmember Lynn Selby, El Mirage Councilmember Jenn Daniels, Gilbert Vice Mayor Joe Pizzillo, Goodyear Supervisor Steve Gallardo, Maricopa County Vice Mayor Dennis Kavanaugh, Mesa Vice Mayor Jon Edwards, Peoria Councilmember Suzanne Klapp, Scottsdale Vice Mayor Skip Hall, Surprise Mayor Mark Mitchell, Tempe Councilmember Kathie Farr, Tolleson Councilmember Sam Crissman, Wickenburg Staff Leadership Team Eric Anderson, Interim Chief Executive Officer Jyme Sue McLaren, Chief of Staff Raymond Abraham, Chief Operations Officer Rick Brown, Chief Engineer Hillary Foose, Director Communications & Marketing Wulf Grote, Director Planning and Development Carol Ketcherside, Director of Administration & Organizational Development John McCormack, Chief Financial Officer Adrian Ruiz, Director, Safety & Security Prepared By Finance Division 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, 2015 Page Introductory Section Letter of Transmittal GFOA Certificate of Achievement iii xi Financial Section Independent Auditor’s Report . Management’s Discussion and Analysis (required supplementary information) . Basic Financial Statements: . Government-wide Financial Statements: Statement of Net Position 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 Position – Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds Statement of Cash Flows – Proprietary Funds Notes to the Financial Statements . Required Supplementary Information – Schedule of the Authority's Proportionate Share of the Net Pension Liability and Schedule of the AUthority's Pension Contributions Other Supplementary Information – Combining and Individual Fund Financial Statements and Schedules: . Schedule of Revenues, Expenses and Changes in Net Position – Budget to Actual – Proprietary Funds: Enterprise Funds: Transit Service Operations Fund Valley Metro Rail Fund i 1 3 17 18 20 21 22 23 24 25 26 27 28 29 59 60 61 Valley Metro Regional Public Transportation Authority Table of Contents Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2015 Page Statistical Section Statistical Section Contents Financial Trends Net position by Component Changes in Net Position 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 Transportation Excise Tax Revenue Bonds – Debt Service Revenue and Cost Per Capita Demographic and Economic Information Regional Population Statistics Top Ten Employers for Maricopa County Arizona Lottery 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 62 63 65 69 71 73 75 77 78 80 81 82 83 85 86 88 89 90 92 96 98 Introductory Section The Introductory Section includes the Authority’s transmittal letter and the Certificate of Achievement for Excellence in Financial Reporting. December 21, 2015 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, 2015 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 is 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 is 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 auditor’s report, the goal of the independent audit was to provide reasonable assurance that the basic financial statements of the Authority for the fiscal year ended June 30, 2015 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 auditor’s concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the basic financial statements of the Authority as of and for the fiscal year ended June 30, 2015 are fairly presented, in all material respects, in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview and analysis of the basic financial iii Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) 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. The results of the Authority’s Single Audit for the fiscal year ended June 30, 2015, found no instances of material weakness in the internal control structure or significant violations of applicable laws and regulations with respect to major programs. The auditor’s reports on internal controls and compliance with applicable laws and regulations are included in a separately issued Single Audit 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 2014-15, the members included Maricopa County, the cities of Avondale, Buckeye, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson and the Towns of 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. 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. iv Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) 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 US Census Bureau, Maricopa County measures 9,200 square miles, with a population estimated at 4,100,000 as of 2014. The metropolitan area is home to the state capitol and includes the City of Phoenix, population 1.5 million, making it Arizona’s major center of political and economic activity. In fact, more than 60% of the state’s population resides in Maricopa County, which is home to over 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 20 million annual passenger boardings. The County grew from just over 3.6 million residents in 2005 to 4.1 million residents in 2014, an increase of 12.3 percent. With the recession, population in the county stalled and declined slightly 2011, but rebounded with positive growth in years 2012, 2013 and 2014. According to the Maricopa County Association of Governments (MAG) recent forecasts, population is projected to grow 39 percent by 2030, reaching 5.7 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 employment in Maricopa County grew to 1.8 million people in 2014. MAG planning projections forecast Maricopa County employment to increase substantially to 2.7 million jobs by year 2030. In 2007 and 2008, the region’s historically strong economic growth slowed and sales tax revenues fell with the nation-wide recession. In fiscal years 2009 and 2010 regional tax revenues fell 13.7% and 8.9% respectively. VMR responded to the times with staff reductions in 2009 and with service reductions in 2010. In fiscal years 2012, 2013, 2014 and 2015 regional tax revenues have rebounded, growing by 4.3%, 5.5%, 7.0% and 4.6% respectively. Long range sales tax projections prepared by ADOT forecast the local economy to grow by 5.5 percent per year through 2020 and then level off to 4.5 percent per year through year 2025. Ridership in public transportation has grown by 19.4 % over the 2006-2015 ten year period, faster than the 2005-2014 ten year population growth rate of 12.3%. 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 v Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) improved air quality. With the continuing 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 $1.089 billion has injected 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 44,000 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 June 2015. 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 to manage Public Transportation Funds (PTF) and monitor and report results. 6. Jurisdictional equity will be maintained. 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. vi Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) Valley Metro Operations Initiatives • Valley Metro Operations Under the brand name Valley Metro, the Authority manages fixed route bus, demand response (Dial-a Ride) and vanpool services in cooperation with Member Cities. o During fiscal year 2013 the integration of City of Tempe operated bus service with East Valley bus services operated by RPTA was procured with a single contractor. The unified East Valley Bus Service operation commenced in July 2013 and operated successfully during fiscal years 2014 and 2015. The integration has resulted in greater efficiency of operations and consequential cost savings. o Dial-a-Ride services have been traditionally provided by a fleet of specialized vansized vehicles. In fiscal year 2013, Valley Metro implemented a demand response program which dispatches cab vehicles which are tailored to the specific customer need providing faster and more direct transportation service. Many Dial-a-Ride trips in the East Valley and West Valley cities are now provided in fuel efficient sedans generating substantial savings. Fiscal year 2015, the third year under the new delivery system, saw continuing passenger growth. In contrast to FY12, over 100,000 additional paratransit trips were delivered in FY15 while overall program costs were reduced by $0.9 million. • 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 lightrail 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. • 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-to-date 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 single-occupancy 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 vii Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) 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. Valley Metro Communications Campaign: Valley Metro continues 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, administered by Valley Metro Commute Solutions, provides commute options to the general public and Valley employers. Services include a computerized matching system for carpooling, vanpooling, transit and bicycle partner opportunities; marketing of alternative transportation modes and schedules; and technical assistance and training to participants in the Maricopa County Travel Reduction Program. Commute Solutions also manages the regional vanpool program and the Clean Air Campaign. This Clean Air Campaign is a private/public partnership that increases awareness of air quality and transportation issues and increases the use of alternative modes of transportation and work schedule options. A Clean Air Campaign Awards Luncheon is held annually. 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. Bond Funding: In January of 2014, the Authority issued the second series of Senior Bonds to fund light rail capital construction projects to be managed by Valley Metro Rail. The 2014 issue, sold $115.0 million par value bonds and generated $135.4 million in proceeds at a true interest cost of 2.43%. The initial issuance of Senior Bonds occurred in 2009 totaling $105.0 million ($50.0 million for Bus capital projects and $55.0 million for Rail capital projects). The Authority uses 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 Senior Bonds are funded solely by Prop 400 sales taxes and will be repaid before December 2025, the current sunset of the Public Transportation Fund sales tax revenue. viii Valley Metro Regional Public Transportation Authority Letter of Transmittal (Continued) Planning Projects: • Operations Planning In FY13 and FY14, the Authority led a region-wide effort to develop operating service standards for fixed route (Bus and Rail) and paratransit (Dial A Ride) transit services. The service standards were adopted by the Authority Board of Directors in November 2013. A service planning working group was established to coordinate service changes throughout the region to optimize passenger service within available funding. Service changes recommended by the working group are brought to the Board for approval establishing the baseline for budget and long range financial planning to be incorporated into the TLCP. • Long-Range Planning Valley Metro provides transit 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). • Short Range Planning Valley Metro provides transit information for the MAG Annual Transportation Report on Prop 400 and preparation of Annual Transit Performance Report. In addition, Valley Metro: o Coordinates 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. o Collects and analyzes 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. o Fulfills planning requirements of Title VI of the Civil Rights act as outlined in FTA 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 The Authority develops, implements, and provides analysis for comprehensive transit research surveys and studies. Information from the surveys is used to produce a database for transit planning purposes, including route evaluation and service adjustments. In FY 2015, Valley Metro commenced work on the regional Origins and Destinations Study, which includes an in-depth passenger survey and following analysis to support optimization of passenger services. • Project Management The Authority 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 ix xi (This page intentionally left blank) Financial Section The Financial Section includes the independent auditor’s report, Management’s Discussion and Analysis (MD&A), the basic financial statements (government-wide statements and fund statements), notes to the financial statements, required supplementary information (RSI), other supplementary information (OSI) and other financial schedules. 10120 N. Oracle Road Tucson, Arizona 85704 Tel (520) 742-2611 Fax (520) 742-2718 INDEPENDENT AUDITOR’S REPORT Board of Directors Valley Metro Regional Public Transportation Authority Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, and each major fund of Valley Metro Regional Public Transportation Authority (the Authority), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, and each major fund of the Valley Metro Regional Public Transportation Authority, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparisons for the General Fund and major special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As described in Note 1, the Authority implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, for the year ended June 30, 2015, which represents a change in accounting principle. Our opinion is not modified with respect to this matter. 1 TUCSON • PHOENIX • FLAGSTAFF www.heinfeldmeech.com Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and Schedule of Proportionate Share of the Net Pension Liability, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The accompanying supplementary information such as the Introductory Section, Other Supplementary Information – Combining and Individual Fund Financial Statements and Schedules, and Statistical Section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Other Supplementary Information – Combining and Individual Fund Financial Statements and Schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Other Supplementary Information – Combining and Individual Fund Financial Statements and Schedules information is fairly stated in all material respects in relation to the basic financial statements as a whole. The Introductory Section and Statistical Section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2015, on our consideration of Valley Metro Regional Public Transportation Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Valley Metro Regional Public Transportation Authority’s internal control over financial reporting and compliance. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants December 21, 2015 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, 2015. 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 position decreased ($7.8) million in FY 2015, comprised of an increase of $1.3 million in governmental activities and a decrease of ($9.1) million in businesstype activities. Total net position of the Authority is $69.6 million, of which $6.6 million is unrestricted. • The primary cause of the decrease in net position was due to restatement of FY 2014 net position in conformity with the GASB 68 requirement to recognize a proportional share of pension liabilities which are managed under the Arizona Retirement System. The FY 2014 restatement reduced net position by ($25.9) million. FY15 activities increased net position by $18.0 million. • The governmental activities revenues increased by approximately $6.1 million (4.3%) over the previous year primarily due to increasing sales tax revenue. • The business-type activities revenues decreased by approximately ($18.8) million (20.7%) from the previous year primarily due to reduction of capital expenditure funding requirements. • At June 30, 2015, the Authority’s governmental fund balance sheet reported a combined ending fund balance of $63.1 million, an increase of $10.9 million (21.0%) 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 and proprietary 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. The Authority has presented this information for the proprietary funds in Other Supplementary Information. 3 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) • 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). 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 17 – 19) 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. 4 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) The Statement of Net Position presents information on all of the Authority’s assets and liabilities, both current and noncurrent, with the difference between the two reported as net position. The focus on net position is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. To assess the overall health of the Authority, other indicators, including non-financial indicators like the Authority’s tax base and the condition of its capital assets, should also be considered. The Statement of Activities presents information showing how the Authority’s net position changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net position 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 and proprietary 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 20 - 25) 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 3 (page 40). 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 26 - 28) are prepared using the same long-term focus as the government-wide financial statements. The enterprise funds generally provide information similar to the business-type activities column of the governmentwide financial statements, but provide more detail and additional information (i.e., cash flows). Notes to the Financial Statements – The notes to the financial statements (pages 29 – 58) 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. Beginning FY15, GASB 68 requires governments to present various disclosures related to the Pensions. 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, 2015, with comparative information for the previous year. Net Position Net position may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Position as of June 30, 2015 compared to the prior year: Condensed Statement of Net Position As of June 30 (in thousands of dollars) Governmental Activities 2015 Current and other assets Noncurrent assets Cash and investments Due from Rail - PTF advance bond proceeds Deferred charges Capital assets Total assets $ 65,178.9 Business-type Activities 2014 $ 1,904.7 Total Primary Government 2015 2014 2015 53,150.0 $ 162,378.2 $ 109,936.6 1,970.2 154.5 61,398.7 72,341.7 101,147.0 83,972.3 $ 296,273.2 $ 295,055.9 $ Percent Change 2014 227,557.1 $ 163,086.6 39.5% 154.5 61,398.7 74,246.4 101,147.0 85,942.5 -99.8% 0.0% 0.0% -13.6% $ 363,356.7 $ 350,176.1 3.8% $ 67,083.6 $ 55,120.2 Deferred outflows related to pensions Total deferred outflows of resoures $ $ 1,533.2 1,533.2 $ $ - $ $ 2,686.1 2,686.1 $ $ - $ $ 4,219.3 4,219.3 $ $ - 0.0% 0.0% Other liabilities Long-term liabilities $ 2,575.6 9,651.9 $ 1,460.7 195.4 $ 57,677.7 223,559.2 $ 49,591.4 221,479.1 $ 60,253.3 233,211.1 $ 51,052.1 221,674.5 18.0% 5.2% $ 12,227.5 $ 1,656.1 $ 281,236.8 $ 271,070.5 $ 293,464.3 $ 272,726.6 7.6% Deferred inflows related to pensions Total deferred inflows of resoures $ $ 1,651.7 1,651.7 $ $ - $ $ $ $ $ $ 4,531.0 4,531.0 $ $ - 0.0% 0.0% Net position: Net Investment in capital assets, Restricted Unrestricted $ 1,904.7 3,120.9 49,712.1 $ 1,970.2 2,790.9 48,703.1 $ 43,205.6 14,100.5 (33,320.7) $ 36,455.6 26,582.0 6,543.0 $ 45,175.8 16,891.4 15,382.4 -19.3% 57.4% -57.5% $ 54,737.6 $ 53,464.2 $ 23,985.4 $ 69,580.6 $ 77,449.6 -10.2% Total liabilities Total net position 2,879.4 2,879.4 34,551.0 $ 23,461.1 (43,169.1) 14,843.0 $ - The Authority’s total net position decreased ($7.9) million in FY 2015, comprised of an increase of $10.7 million in governmental activities, an increase of $7.3 million in business-type activities, and a restatement of ($25.9) million in beginning net position in both governmental and business-type activities. As a result of the restatement, the Authority’s total net position change is a decrease of ($7.9) million as presented in the basic financial statements. Total net position of the Authority is $69.6 million, of which $6.6 million is unrestricted. Of the $69.6 million total net position, $36.5 million are the Authority’s net investment in capital assets 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 12 - 13), 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. 6 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Approximately $6.6 million of the Authority’s net position (9.5% 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. In fiscal year 2015 Business-type restricted assets include $19.3 million for cash escrowed for debt service. The remaining $4.1 million reflects resources that are subject to other external restrictions. The governmental activities reported an increase of $1.0 million (2.4%) of unrestricted net position over the prior year largely attributed to sales tax collection increases which were in excess of increases to expense activities of the Authority. The significant decrease of ($9.8) million of unrestricted net position over the prior year in business-type activities is primarily due to a $8.7 million increase to funds restricted for series 2014 debt service principal. The net position of the Business-type activities was restated as of July 1, 2014. In accordance with GASB 68, a proportionate share of the Arizona State Retirement System unfunded net pension liability has been recorded. The Business-type activities portion of the liability was $16.5 million. As a result, net position as stated in the June 30, 2014 CAFR, $24.0 million, has been restated to $7.5 million. Refer to Note 2 on page 39 for more information concerning the accounting change. Changes in Net Position The following table compares the revenues and expenses of the Authority for the current and previous fiscal year. The increase (decrease) in net position for each year represents the extent to which revenues were over (under) expenses during the year. Changes in Net Position Fiscal year ended June 30 (in thousands of dollars) Governmental Activities 2015 REVENUES Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Sales taxes Interest earnings Other $ 2014 173.8 13,929.4 $ Total revenues 2015 167.9 13,147.3 $ Total Primary Government 2014 186.1 1,595.7 139.1 2,498.2 146,572.6 140,509.6 71,988.8 90,827.5 218,561.4 231,337.1 -5.5% 2,722.2 1,359.6 8,817.7 2,506.3 10,534.4 1,351.1 1,471.5 8,473.1 1,934.4 10,795.3 2,722.2 1,359.6 8,817.7 2,506.3 10,534.4 1,351.1 1,471.5 8,473.1 1,934.4 10,795.3 101.5% -7.6% 4.1% 29.6% -2.4% - - - 55,326.4 9,867.7 22,996.1 $ - - $ Percent Change 126,415.6 146.1 632.7 - $ 2014 132,029.1 161.7 278.5 - 55,994.4 11,989.8 2,222.8 2015 56,168.3 25,919.1 2,222.8 132,029.1 347.8 1,874.2 - 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 55,494.3 23,015.0 22,996.1 1.2% 12.6% -90.3% 126,415.6 285.2 3,130.9 4.4% 21.9% -40.1% 119,341.3 55,242.5 148,884.7 108,938.3 119,341.3 55,242.5 148,884.7 108,938.3 -19.8% -49.3% Total expenses 25,940.2 24,025.4 174,583.8 257,823.0 200,524.0 281,848.4 -28.9% Excess (deficit) before transfers Transfers in (out) 120,632.4 (109,915.6) 116,484.2 (113,274.7) (102,595.1) 109,915.6 (166,995.5) 113,274.7 18,037.3 (50,511.3) - -135.7% N/A $ (50,511.3) -135.7% Increase (decrease) in net position $ 10,716.8 $ 3,209.5 $ 7,320.5 $ (53,720.8) $ 18,037.3 The largest sources of revenue for the Authority are sales taxes (60.4%). The major funding sources of governmental activities are sales taxes (90.1%) and federal and state grants (9.5%). The major funding sources for business-type activities in FY 2015 are charges for services to member cities (77.8%) and operating grants and contributions (16.7%). The Authority’s overall 7 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) revenues decreased by ($12.8) million, or (5.5%), compared to last fiscal year. Total revenues of governmental activities increased by $6.1 million, (4.3%) over the previous year primarily due to increased sales tax revenues, up $5.6 million. Program revenues of business-type activities decreased by ($18.0) million or (20.4%), compared to last fiscal year. Charges for Services increased minimally, up $0.7 million 1.2%. Operating grants increased by $2.1 million or 21.5% primarily due to the IRS Fuel Tax Credit, which increased by $2.3 million. Capital grants and contributions decreased substantially by $20.8 million due to reductions in federally funded bus fleet purchases. 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 planning and administration activities of the RTP. Business-type activities are the largest users of resources for the Authority with $174.6 million of expenses (87.1%) which include Transit Service operations and Light Rail Transit lead agency disbursements. Governmental activities expended $25.9 million, with the largest being AZ Lottery Fund Disbursements of $10.5 million and Regional Customer Services of $8.8 million. Administration, Regional Planning, and Transportation Demand Management activities totaled $6.6 million for the year. Total Primary Government expenses decreased by ($81.3) million, or (28.9%) compared to last fiscal year. The governmental expenses increased by $1.9 million, or 8.0%, over the prior year. Regional Planning expenses were up $1.4 million due to the periodic update of the Origins and Destinations Study. Business-type activity expenses were decreased by ($83.2) million, or (32.3%), compared to the prior year. The decreases in business-type activity expenses were ($29.5) million for Transit Service Operations (TSO) and ($53.7) million for Light Rail Transit (VMR). TSO expense activities decreased by ($29.5) million. Bus service delivery costs increased by $7.1 million and paratransit service costs increased by $0.9 million. The operating increases were offset by reductions in non-operating and capital activities. Capital conveyances of bus fleet to Member Cities decreased by ($20.7) million and Lead Agency disbursements decreased by ($11.0) million. With the Series 2014 bond issue, debt service interest expense increased by $3.1 million recognizing the first full twelve months of interest cost for the new bonds. All other TSO expense activities decreased by ($1.0) million versus the prior year. The VMR Fund expense activities decreased by ($53.7) million primarily due to changes in Lead Agency Disbursements, down ($62.7) million for light rail construction project activities (Central Mesa Extension (CME) and Northwest Extension (NWE) located in Phoenix). Under a new funding agreement and related accounting policy, bond-funded disbursements are initially recorded as a note receivable from Valley Metro Rail, Inc. and subsequently recorded to expense upon the payment of related bond debt principal. The amount of Note Receivable advance bond proceeds during FY15 was $69.6 million, which effectively reduced the amount of Lead Agency disbursements recorded in FY15. The aggregate of Lead Agency Disbursements plus Note Receivable Advance Bond Proceeds totaled $101.8 million for the year compared to $94.9 million expended in FY14. The higher overall expenditure level was due to the increased level of construction activity on the CME and NWE projects. See Note 6 for details of the note receivable. 8 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) 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 20 – 25) is to provide information on near-term inflows, outflows and balances of spendable resources. The fund balance of the governmental funds is $63.1 million, an increase of $10.9 million, or 21.0%, from the previous year. Of the $63.1 million total fund balance, the Authority has designated $3.2 million restricted for special purpose activities. The remainder is in unrestricted fund balance in the General Fund (see Note 8 - page 46). 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 $63.1 million fund balance, $59.9 million is unrestricted. The General Fund accounts for activities that include regional customer service, financial management and agency administration. General Fund revenues increased $5.5 million (4.0%) over the previous year. Public Transportation Fund (PTF) sales tax revenue increased by $5.5 million (4.6%) in FY15 to $127.3 million. Regional Area Road Funds (RARF) sales tax revenues increased slightly by $0.1 million (1.5%) in FY15 to $4.7 million. The sales tax revenue increase was due to the improving economy in the region. The remaining General Fund revenues increased by $0.3 million, General Fund expenditures decreased slightly by ($0.3) million (1.3%) from $21.9 to $21.6 million. Excess General Fund revenues over expenditures were $122.5 million for the year versus $116.8 million in the prior year, up $5.8 million or 4.9%. The Transit Planning Fund accounts for activities related to the development of strategies to promote social and economic well-being of the community through the provision of an efficient and effective regional transit system. Revenues increased from $0.3 million to $1.0 million. Expenditures increased substantially from $1.4 million to $2.7 million due to the periodic update of the origins and destinations survey and analysis, which provides passenger information used to optimize service delivery. Total transfers into the Transit Planning Fund from the General Fund were $1.7 million, up $0.7 million over the prior year. The Transportation Demand Management Fund accounts for activities related to the county-wide ridesharing program, trip reduction program and clean air campaign. From the prior year revenues from federal CMAQ and state and county grants decreased ($0.1) million to $1.4 million. Expenditures also decreased ($0.1) million to $1.4 million from the prior year primarily due to decreases in the trip reduction program costs. Proprietary Funds The proprietary fund financial statements (pages 26 – 28) 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 (TSO) Fund accounts for the activities related to the operations of local and express bus, paratransit and vanpool services for the region. In addition, the TSO Fund contains PTF bond financing activities to support the Transit Life Cycle Program (TLCP). In FY15, in order to provide greater transparency for bond financing impacts to the light rail capital program 9 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) (VMR Fund), all bond financing activities related to light rail are now shown in the VMR Fund. Only bus and paratransit capital financing activities are shown in the TSO Fund. The TSO Fund net position increased by 65.5 million versus the prior year from ($14.8) million to $50.7 million. The beginning balance was restated to transfer light rail related debt to the VMR Fund, adding $76.3 million. An adjustment to record pension liability in accordance with GASB 68 reduced net position by ($1.3) million. See Note 2 for details of the restatement. Activities for FY15 consisted of the following: • • • • • • TSO operating revenues of $50.4 million were decreased minimally by ($0.2) million. The combined revenues from member charges for services and fare revenues accounted for the majority of the change. Charges to members were favorably impacted by the IRS fuel tax credit which provided $2.6M funding in FY15. TSO Operating expenses of $100.4 million increased by $7.5 million (8.1%). Increases in local and express bus service costs of $7.1 million, with $3.2 million due to cost increases East Valley bus service (up 5.4%) and $3.2 million due to charges for fixed route bus services purchased from the City of Phoenix. Of the Phoenix service increase, $2.0 million was due to an accounting change whereby billings were recorded at full cost of operations in FY15, while in FY14 billings were net of fares collected. Paratransit service costs increased by $0.9 million or 8.6% primarily due to increased passenger trips. Non-Operating revenues of $2.9 million were up by $1.8 million primarily due to IRS fuel tax credits received of $2.6 million versus $0.3 million last year. Gains on disposal of capital assets were $0.2 million lower. Non-operating expenses of $19.1 million decreased by $37.0 million. Capital conveyances of bus fleet to Member Cities decreased by ($20.7) million. The amounts of capital conveyances fluctuate from year to year based on cyclical needs to replace bus fleet. Lead Agency disbursements decreased by ($11.0) million due to reduced levels of regional bus fleet purchases for which the Authority provides local funding match to federal grant funds. Debt service costs allocated to the TSO Fund were down ($5.4) million, primarily due to the allocation of light rail debt service expenses from the TSO Fund to the VMR Fund. Capital Contributions of $2.2 million were down ($20.8) million primarily due to reduced federal funding to support bus fleet and facility purchases during the year. Net Transfers into the TSO from the General Fund of $54.4 million were up by $23.0 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 29). The VMR Fund has net position of ($35.9) million as of June 30, 2015 as compared to net position of $38.8 million at the end of the previous year. The beginning balance was restated to transfer light rail related debt from the TSO Fund to the VMR Fund, reducing net position by ($76.3) million. In addition, an adjustment to record pension liability in accordance with GASB 68 reduced net position by ($15.2) million. See Note 2 for details of the restatement. FY15 activities increased net position by $16.8 million. 10 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) • • • The VMR Fund operating activities are primarily staffing services by RPTA employees performing work for Valley Metro Rail, Inc. In FY15 operating revenues were $15.0 million and expenses were $15.1 million. Revenues and expenses were up by approximately $1.0 million due to expansion of light rail construction and operating activities. Net operating loss in FY15 was ($0.2) million, primarily due to non-cash accruals which are funded in future years. Non Operating expenses include Lead Agency Disbursements to Valley Metro Rail, Inc. to fund light rail capital project development, design and construction. Disbursements in FY15 were $32.2 million versus $94.9 million in FY14. Bond Interest expense related to light rail bond funded activities was $7.9 million in FY15. Interest expenses were partially offset by Build America Bond Interest Subsidy of $1.3 million and interest income of $0.2 million. Total non-operating expense for the VMR Fund in FY 15 was $38.6 million Net transfers into the VMR Fund of PTF from the General Fund and bond proceeds from the TSO fund totaled $55.1 Million for the year. GENERAL FUND BUDGETARY HIGHLIGHTS The Authority revised the adopted FY15 budget down ($32.6) million during the fiscal year, decreasing the overall budget from $324.6 million to $292.0 million. The primary changes were an increase to the operating budget of $0.6 million from $153.5 million to $154.1 million for anticipated demand in the Northwest Valley Dial-a-Ride service. The capital budget change was a ($33.2) million reduction with ($16.9) million decreases due to postponement of fleet purchases, ($14.1) million decrease in bus rapid transit facilities and ($2.2) million reduction for all other capital expenditures. 11 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2015, the Authority had $74.2 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 ($11.7) million, a decrease of ($0.1) million for governmental activities and a decrease of ($11.6) million for business-type activities for the current year. Major capital asset events in the current year attributing to the increase included the following: • • • New capital assets added for Governmental Activities were $0.4 million, offset by depreciation charges of ($0.5) million. Primary additions were computer system upgrades. New capital assets added for Business Activities were $0.1 million, offset by depreciation charges of ($11.8) million. Primary additions were site improvements and equipment. Capital asset retirements for Business Activities were $0.6 million for transit fleet and equipment. The following table provides a breakdown of capital assets of the Authority at June 30, 2015 with comparative information for the previous year. Additional information on the Authority’s capital assets may be found in Note 9 on pages 47 – 48. Capital Assets, Net of Accumulated Depreciation As of June 30 (in thousands of dollars) Governmental Activities 2015 Non-depreciable assets: Land Work-in-progress Depreciable assets: Transit fleet Vehicles Building Site improvements Computers & software Ticket Vending Machines Equipment Furniture & fixtures Infrastructure Total assets $ 14.8 2014 $ 34.4 167.0 1,348.0 275.9 64.6 $ 1,904.7 Business-type Activities 2015 844.1 $ 5,292.0 425.3 55.0 254.5 401.4 341.0 74.2 $ 1,970.2 2014 $ 44,678.2 53.8 11,353.0 5,135.3 1,090.5 4,288.3 25.3 $ 72,341.7 12 Total Primary Government 5,292.0 449.8 2015 $ 54,896.6 77.7 11,644.1 5,635.3 1,150.2 4,799.3 27.3 $ 83,972.3 5,292.0 440.0 2014 $ 44,678.2 88.1 11,353.0 5,302.3 1,348.0 1,090.5 4,564.2 64.6 25.3 $ 74,246.4 $ Percent Change 5,292.0 1,293.9 0.0% -66.0% 54,896.6 132.7 11,644.1 5,889.8 401.4 1,150.2 5,140.3 74.2 27.3 -18.6% -33.6% -2.5% -10.0% 235.8% -5.2% -11.2% -12.9% -7.2% 85,942.5 -13.6% Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Debt Administration At June 30, 2015, the Authority had total bonded debt outstanding (including unamortized premium) of $220.6 million related to business-type activities. The Authority has pledged future transportation excise tax revenues to repay this outstanding debt. The Authority’s current bond ratings on transportation excise revenue tax bonds are AA+ from Standard & Poor’s and AA from Fitch. Business-type Activities 2015 (in millions of dollars) Revenue bonds payable: 2009 Bond Series 2014 Bond Series Plus unamortized premium: 2009 Bond Series premium payable 2014 Bond Series premium payable Total $ 2014 81.9 115.0 $ 3.3 20.4 $ 220.6 87.5 115.0 3.7 20.4 $ 226.6 The Authority issued its second series of revenue bonds in January 2014 to fund light rail capital projects. The $115.0 million issue sold at a premium to generate $135.4 million in proceeds. The bonds mature over a ten year period at a true interest cost of 2.43%. Additional information on the Authority’s bonded debt and other long-term liabilities can be found in Note 12 on pages 49 - 51. ECONOMIC FACTORS and NEXT YEAR’s BUDGET RPTA undertook a number of key initiatives during FY13, FY14, and FY15, as the agency continues the implementation of the TLCP operating and capital projects. Funding for these initiatives comes from a combination of regional sales tax revenues member city service payments and federal grants. East Valley Bus Service Unification On January 24, 2013, the Authority’s Board of Directors unanimously approved an action to authorize the CEO to execute a contract with First Transit, Inc. for unified East Valley fixed route bus operations and maintenance. This action unifies the RPTAmanaged bus operations in Mesa with bus operations in Tempe, which were managed under a City of Tempe contract. With the unified bus operations contract, management staffing will be streamlined and economies of scale will be realized for purchasing, training and administrative functions. In addition, it will equate to lower operating costs as route scheduling is optimized using the two existing Mesa and Tempe bus operations facilities. The new service delivery contract took effect July 1, 2013 and expenditures in fiscal year 2014 and 2015 for the program generated favorable cost per vehicle mile of service when compared with the prior service models. East Valley Bus Unification Million Miles of Revenue Service Delivered East Valley Bus Service Cost $ Millions Cost per Revenue Mile % Savings versus FY13 FY13 FY14 10.7 67.3 6.29 $ $ 13 $ $ FY15 11.0 60.6 5.51 12% $ $ 10.9 62.5 5.73 9% Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) East Valley Dial-a-Ride Program (EVDAR) On July 1, 2012, the Authority commenced a pilot Paratransit service program to serve persons with disabilities and eligible seniors with a new service delivery model. The new taxi cab delivery model incorporates greater efficiency utilizing resources from the private sector, while allowing the custom, door-to-door service that passengers need in their daily travels. In its first year, the program was favorably accepted by the passengers and reduced the cost per trip from $43 under the former program to $27 per trip under the new program. Program cost of operation was $6.8 million in FY13 versus $8.8 million in FY12, a $2.0 million savings. East Valley Dial a Ride Service FY12 FY13 FY14 FY15 Trips Delivered 202,812 251,830 283,484 303,080 Total Program Cost $M $ 8.80 $ 6.80 $ Cost per Trip $ 43.39 $ 27.00 $ (Costs shown are net program cost after fare collection applied) 7.70 $ 7.90 27.16 $ 26.07 In FY15 EVDAR trips delivered were over 303,000; an increase of over 30% above over FY12 levels. Despite the significant increase in service delivered, overall program costs remain $0.9 million below FY12 levels. Net cost per trip remains well below the former program at $26.07. 14 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Continued) Next Year’s Budget Funding Sources The adopted FY16 combined operating and capital budget is $286.9 million (down approximately 12% from fiscal year 2015). Public Transportation Funds are projected to increase by 5% to $133.9 million with continuing improvement to region’s economy. Federal grants are down by ($4.7) million, primary decrease is due to bus fleet capital funding requirements. Fare revenues are anticipated to be level with FY15 levels. With the scheduled completion of the Central Mesa and Northwest LRT extensions to occur in late 2015 and early 2016, construction funding requirements will drop significantly. Series 2014 bond issue proceeds which were carried forward will be expended at lower levels in FY16, $38.0 million versus $80.0 million. RPTA Operating and Capital Budgets Fiscal Years 2016 and 2015 Sources of Funds 15 Valley Metro Regional Public Transportation Authority Management’s Discussion and Analysis (Concluded) Next Year’s Budget Funding Uses Decreases to Uses of Funds in fiscal year 2016 versus 2015 total ($38.0) million. Lead Agency Disbursements are down ($7.5) million primarily due to reduced PTF sales tax transfers to VMR. Transit service contracts and fuel costs are up $4.9 million due to the scheduled contract rate increases for East Valley bus services and anticipated increased customer demand for paratransit service trips. Capital purchases are planned to decrease in FY 2016 by ($4.6) million with reductions in planned bus fleet deliveries and bus facilities expenditures. Lead Agency Bond Disbursements are reduced by ($31.0) million due to ramping down of construction activities for light rail in Phoenix and Mesa. RPTA Operating and Capital Budgets Fiscal Years 2016 and 2015 Uses of Funds The decreases in capital expenses correspond to projects programmed in the Transit Life Cycle Program (TLCP) for fiscal year 2016. The budget is balanced and cash reserves are in place to cover the continuing light rail expansion activities. Net position in the Government Funds is anticipated to remain stable. Net position in the Transit Services Funds will decline as depreciation charges will outpace new capital acquisition. 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. 16 (This page intentionally left blank) Basic Financial Statements • Government-wide Financial Statements • Fund Financial Statements • Notes to the Financial Statements Valley Metro Regional Public Transportation Authority Statement of Net Position Fiscal Year Ended June 30, 2015 Governmental Activities Business-type Activities Total Assets Current Assets: Cash and investments Restricted cash and investments Receivables Due from other governments Due from Rail - PTF advance bond proceeds Interfund Balances Prepaid Items Total current assets $ 57,743,659 18,933 12,050,152 (4,720,093) 86,261 65,178,912 Noncurrent Assets: Restricted cash and investments Due from Rail - PTF advance bond proceeds Capital assets, not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets Deferred Outflows of Resources Deferred outflows related to pensions Total deferred outflows of resources $ 112,057,696 19,129,869 210,231 18,072,842 8,185,000 4,720,093 2,500 162,378,231 $ 169,801,355 19,129,869 229,164 30,122,994 8,185,000 88,761 227,557,143 14,778 1,889,886 1,904,664 154,484 61,398,715 5,717,250 66,624,476 133,894,925 154,484 61,398,715 5,732,028 68,514,362 135,799,589 67,083,576 296,273,156 363,356,732 1,533,212 1,533,212 2,686,078 2,686,078 4,219,290 4,219,290 1,249,890 154,798 26,349 519,354 625,195 2,575,586 8,877,039 433,842 28,172,647 14,020,000 5,109,603 737,062 327,497 57,677,690 10,126,929 588,640 28,198,996 14,020,000 5,109,603 1,256,416 952,692 60,253,276 9,445,091 206,821 9,651,912 16,465,986 511,043 206,582,125 223,559,154 25,911,077 717,864 206,582,125 233,211,066 12,227,498 281,236,844 293,464,342 1,651,655 1,651,655 2,879,392 2,879,392 4,531,047 4,531,047 1,904,664 2,820,054 116,733 184,094 49,712,090 34,550,961 19,284,353 2,972,334 1,204,410 (43,169,060) 36,455,625 2,820,054 19,284,353 116,733 184,094 2,972,334 1,204,410 6,543,030 Liabilities Liabilities: Current Liabilities Accounts payable Accrued salaries and benefits Due to other governments Revenue bonds payable Bond interest payable Compensated absences payable Other liabilities Total current liabilities Noncurrent liabilities: Net Pension liability Compensated absences payable Revenue bonds payable, including unamortized premium Total noncurrent liabilities Total liabilities Deferred Inflows of Resources Deferred inflows related to pensions Total deferred inflows of resources Net Position Net investment in capital assets Restricted for AZ Lottery proceeds Restricted for debt service Restricted for transit planning Restricted for transportation demand management Restricted for vanpool program Restricted for capital outlay-FTA disposals Unrestricted Total Net Position $ 54,737,635 See accompanying notes to the financial statements. 17 $ 14,842,998 $ 69,580,633 Valley Metro Regional Public Transportation Authority Statement of Activities Fiscal Year Ended June 30, 2015 Program Revenues Charges for Services Expenses Programs Governmental activities: Regional planning: Corridor and Facility Planning Systems and Service Development 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 $ $ 699,024 1,766,588 256,546 $ 5,442 - Operating Grants and Contributions Capital Grants and Contributions $ $ 37,432 981,005 - - 600,632 578,886 180,118 - 731,465 578,704 - - 2,319,857 3,776,394 2,721,436 10,534,411 165,985 2,415 - 32,739 17,911 105,717 11,444,400 - 1,094,407 1,411,924 25,940,223 173,842 13,929,373 - 119,341,286 55,242,525 174,583,811 200,524,034 41,044,930 14,949,518 55,994,448 56,168,290 11,989,759 11,989,759 25,919,132 2,222,823 2,222,823 2,222,823 $ $ $ 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 position Net position - beginning, as restated Net position- ending (Continued) 18 Net (Expense) Revenues and Changes in Net Position Governmental Activities $ $ Business Type Activities (661,592) (780,141) (256,546) $ (661,592) (780,141) (256,546) 130,833 (182) (180,118) 130,833 (182) (180,118) (2,287,118) (3,592,498) (2,613,304) 909,989 (2,287,118) (3,592,498) (2,613,304) 909,989 (1,094,407) (1,411,924) (11,837,008) (1,094,407) (1,411,924) (11,837,008) (11,837,008) - $ $ 127,317,682 4,711,434 161,726 278,546 (109,915,563) 22,553,825 $ Total (64,083,774) (40,293,007) (104,376,781) (104,376,781) $ (64,083,774) (40,293,007) (104,376,781) (116,213,789) 186,059 1,595,672 109,915,563 111,697,294 127,317,682 4,711,434 347,785 1,874,218 134,251,119 10,716,817 7,320,513 18,037,330 44,020,818 7,522,485 51,543,303 54,737,635 $ 14,842,998 $ 69,580,633 See accompanying notes to the financial statements. 19 Valley Metro Regional Public Transportation Authority Balance Sheet Governmental Funds Fiscal Year Ended June 30, 2015 Transit Planning General Transportation Demand Management Total Governmental Funds Assets Cash and investments Receivables Due from other governments Due from other funds Prepaid Items Total assets $ 57,572,259 4,037 11,439,696 16,431 86,261 $ 171,400 312,238 - $ 14,896 298,218 - $ 57,743,659 18,933 12,050,152 16,431 86,261 $ 69,118,684 $ 483,638 $ 313,114 $ 69,915,436 $ 832,935 115,364 4,720,093 3,244 625,195 $ 319,061 24,739 23,105 - $ 97,894 14,695 16,431 - $ 1,249,890 154,798 4,736,524 26,349 625,195 Liabilities and Fund Balances Liabilities: Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Other Liabilities Total liabilities 6,296,831 366,905 129,020 6,792,756 86,261 2,820,054 59,915,538 116,733 - 184,094 - 86,261 3,120,881 59,915,538 Deferred Inflows of Resources Fund balances: Nonspendable: Prepaids Restricted: Unassigned: Total fund balances Total liabilities and fund balances 62,821,853 $ 69,118,684 116,733 $ 483,638 184,094 $ 313,114 63,122,680 $ 69,915,436 $ 63,122,680 Reconciliation of the balance sheet to the statement of net position Fund balances, total governmental funds balance sheet Amounts reported for governmental activities in the statement of net position are different because: Governmental capital assets Less accumulated depreciation 6,312,190 (4,407,526) Governmental compensated absences (726,175) Net pension liability (9,445,091) Deferred outflows of resources related to pensions 1,533,212 Deferred inflows of resources related to pensions Net position of governmental activities, statement of net position See accompanying notes to the financial statements. 20 (1,651,655) $ 54,737,635 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Fiscal Year Ended June 30, 2015 General Revenues: Sales taxes: Public transportation funds Regional area road funds Intergovernmental: AZ Lottery fund proceeds State & county grants & Federal pass through grants Federal Transit Administration CMAQ Charges for services Interest earnings Miscellaneous Total revenues $ Expenditures: Current: Regional planning: Corridor and Facility Planning Systems and Service Development Program support & Administration 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) Net change in fund balances 127,317,682 4,711,434 $ $ - $ 127,317,682 4,711,434 456,624 561,813 5,442 4,431 1,028,310 395,315 914,854 60,039 1,370,208 11,444,400 851,939 718,180 914,854 173,842 161,726 278,546 146,572,603 - 699,024 1,766,588 256,546 - 699,024 1,766,588 256,546 - - 600,632 578,886 180,118 600,632 578,886 180,118 2,319,857 3,776,394 2,475,109 - - 2,319,857 3,776,394 2,475,109 1,094,407 987,332 10,534,411 441,072 21,628,582 2,722,158 1,359,636 1,094,407 987,332 10,534,411 441,072 25,710,376 122,545,503 (1,693,848) 10,572 120,862,227 (111,636,267) (111,636,267) 1,710,370 1,710,370 10,334 10,334 1,720,704 (111,636,267) (109,915,563) 16,522 20,906 10,946,664 51,912,617 $ - Total Governmental Funds 11,444,400 156,367 168,400 161,726 214,076 144,174,085 10,909,236 Fund balance, beginning Fund balance, ending Transportation Demand Management Transit Planning 62,821,853 See accompanying notes to the financial statements. 21 100,211 $ 116,733 163,188 $ 184,094 52,176,016 $ 63,122,680 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, 2015 Net change in fund balances, total governmental funds $ 10,946,664 The change in net position reported for governmental activities in the statement of net position are 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 ($506,616) exceeded capital outlay expense ($441,072), net of the loss on capital assets (0) in the current period. (65,544) 2. 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. (44,100) 3. Pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net position liability is measured a year before the Authority's report date. 668,561 4. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the Statement of Activities. (788,764) Change in net position of governmental activities, statement of activities See accompanying notes to the financial statements. 22 $ 10,716,817 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, 2015 Budgeted Amounts Original Final 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 $ 4,711,000 127,672,000 Other financing uses: Transfers out Total other financing uses $ 4,711,434 127,317,682 $ 434 1,778,978 11,200,000 165,985 20,000 141,635,689 11,444,400 156,367 168,400 161,726 214,076 144,174,085 244,400 156,367 2,415 141,726 214,076 2,538,396 2,491,429 4,269,317 2,661,008 11,200,000 1,120,344 981,646 611,751 23,335,495 2,491,429 4,269,317 2,661,008 11,200,000 1,120,344 981,646 611,751 23,335,495 2,319,857 3,776,394 2,475,109 10,534,411 1,094,407 987,332 441,072 21,628,582 171,572 492,923 185,899 665,589 25,937 (5,686) 170,679 1,706,913 120,433,490 118,300,194 122,545,503 4,245,309 (120,385,358) (120,385,358) (136,333,744) (136,333,744) (111,636,267) (111,636,267) 24,697,477 24,697,477 (18,033,550) 10,909,236 28,942,786 Net change in fund balance 48,132 Fund balance, beginning Fund balance, ending 4,711,000 125,538,704 Actual Amounts 11,200,000 165,985 20,000 143,768,985 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 Excess of revenues over expenditures $ Variance with Final Budget Favorable (Unfavorable) 89,280,681 $ 89,328,813 See accompanying notes to the financial statements. 23 94,688,844 $ 76,655,294 51,912,617 $ 62,821,853 (42,776,227) $ (13,833,441) 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, 2015 Budgeted Amounts Original Final Revenues: Intergovernmental: AZ Lottery Fund Proceeds State & county grants & pass through grants Federal Transit Administration Charges for Services Miscellaneous Total revenues $ Expenditures: Current: Regional planning: Corridor and Facility Planning Systems and Service Development Program support & Administration 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 275,000 526,326 600,000 1,401,326 $ Actual Amounts 275,000 526,326 600,000 1,401,326 $ 456,624 561,813 5,442 4,431 1,028,310 $ (275,000) (69,702) (38,187) 5,442 4,431 (373,016) 1,234,851 2,226,869 324,340 3,786,060 1,234,851 2,226,869 324,340 3,786,060 699,024 1,766,588 256,546 2,722,158 (2,384,734) (2,384,734) (1,693,848) 690,886 2,384,734 2,384,734 2,384,734 2,384,734 1,710,370 1,710,370 (674,364) (674,364) - - 16,522 100,207 $ Variance with Final Budget Favorable (Unfavorable) 100,207 See accompanying notes to the financial statements. 24 100,207 $ 100,207 535,827 460,281 67,794 1,063,902 16,522 100,211 $ 116,733 4 $ 16,526 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, 2015 Actual Amounts 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 $ 620,000 594,000 338,285 1,552,285 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 569,003 964,000 1,533,003 569,003 964,000 1,533,003 $ 620,000 594,000 338,285 1,552,285 395,315 914,854 60,039 1,370,208 $ (173,688) (49,146) 60,039 (162,795) 600,632 578,886 180,118 1,359,636 19,368 15,114 158,167 192,649 (19,282) (19,282) 10,572 29,854 19,282 19,282 19,282 19,282 10,334 10,334 (8,948) (8,948) - - 20,906 20,906 88,588 $ Variance with Final Budget Favorable (Unfavorable) 88,588 88,588 $ See accompanying notes to the financial statements. 25 88,588 163,188 $ 184,094 74,600 $ 95,506 Valley Metro Regional Public Transportation Authority Statement of Net Position Proprietary Funds Fiscal Year Ended June 30, 2015 Business-Type Activities - Enterprise Funds Transit Service Operations Total Proprietary Funds Valley Metro Rail Assets Current assets Cash and investments Restricted cash and cash equivalents Accounts Receivable Due from other governments Due from Rail - PTF advance bond proceeds Due from other funds Prepaid Items Total current assets $ Noncurrent assets Restricted cash and cash equivalents Due from Rail - PTF advance bond proceeds Capital assets, not being depreciated Capital assets, net of accumulated depreciation 20,329,758 3,828,328 64,977 10,923,192 1,250 35,147,505 $ 97,502 5,717,250 91,727,938 15,301,541 145,254 7,149,650 8,185,000 4,720,093 1,250 127,230,726 $ 56,982 61,398,715 - 112,057,696 19,129,869 210,231 18,072,842 8,185,000 4,720,093 2,500 162,378,231 154,484 61,398,715 5,717,250 66,624,476 - 66,624,476 72,439,228 61,455,697 133,894,925 107,586,733 188,686,423 296,273,156 234,241 234,241 2,451,837 2,451,837 2,686,078 2,686,078 Current liabilities: Accounts payable Accrued salaries and benefits Due to other governments Bond payable - current Bond interest payable Compensated absences payable Other liabilities 8,877,039 41,880 4,616,156 2,778,556 1,049,772 54,126 327,497 391,962 23,556,491 11,241,444 4,059,831 682,936 - 8,877,039 433,842 28,172,647 14,020,000 5,109,603 737,062 327,497 Total current liabilities 17,745,026 39,932,664 57,677,690 1,297,233 37,528 15,168,753 473,515 16,465,986 511,043 Total noncurrent assets Total assets Deferred Outflows of Resources Deferred outflows related to pensions Total Deferred Outflows of Resources Liabilities Noncurrent liabilities: Net pension liability Compensated absences payable Revenue bonds payable, including unamortized premium 37,790,724 168,791,401 206,582,125 Total noncurrent liabilities 39,125,485 184,433,669 223,559,154 Total liabilities 56,870,511 224,366,333 281,236,844 226,846 226,846 2,652,546 2,652,546 2,879,392 2,879,392 15,358,523 (51,239,142) 34,550,961 19,284,353 2,972,334 1,204,410 (43,169,060) Deferred Inflows of Resources Deferred inflows related to pensions Total Deferred Inflows of Resources Net Position Net investment in capital assets Restricted for debt service Restricted for vanpool program Restricted for capital outlay-FTA reinvestment Unrestricted Total net position 34,550,961 3,925,830 2,972,334 1,204,410 8,070,082 $ See accompanying notes to the financial statements. 26 50,723,617 $ (35,880,619) $ 14,842,998 Valley Metro Regional Public Transportation Authority Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds Fiscal Year Ended June 30, 2015 Business-Type Activities - Enterprise Funds Transit Service Operations Operating Revenues: Charges for services Fare Revenues Federal Operating Grants 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 Federal Grant Subrecipient Disbursement IRS fuel tax credit Interest income Gain on disposal of capital assets Capital conveyance Interest subsidy Interest expense Total non-operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Changes in net position Net position, beginning, as restated Net position, ending $ 23,864,256 17,180,674 9,365,622 6,242 50,416,794 Total Proprietary Funds Valley Metro Rail $ 14,949,518 4,602 14,954,120 $ 38,813,774 17,180,674 9,365,622 10,844 65,370,914 76,942,766 10,781,223 702,500 140,429 1,255 11,771,187 100,339,360 (49,922,566) 15,144,350 15,144,350 (190,230) 76,942,766 15,144,350 10,781,223 702,500 140,429 1,255 11,771,187 115,483,710 (50,112,796) (16,334,238) (100,000) 2,574,074 1,515 50,063 (663,027) 248,760 (1,904,661) (16,127,514) (32,191,758) 184,544 1,336,068 (7,906,417) (38,577,563) (48,525,996) (100,000) 2,574,074 186,059 50,063 (663,027) 1,584,828 (9,811,078) (54,705,077) (66,050,080) (38,767,793) (104,817,873) 2,222,823 54,363,515 55,552,048 2,222,823 109,915,563 (9,463,742) 16,784,255 7,320,513 60,187,359 (52,664,874) 7,522,485 50,723,617 See accompanying notes to the financial statements. 27 $ (35,880,619) $ 14,842,998 Valley Metro Regional Public Transportation Authority Statement of Cash Flows Proprietary Funds Fiscal Year Ended June 30, 2015 Business-Type Activities - Enterprise Funds Transit Valley Total Service Metro Proprietary Operations Rail Funds Cash flows from operating activities Receipts from customers Receipts from federal operating grants Payments to suppliers Payments to employees Net cash provided by (used in) operating activities $ Cash flows from noncapital and related financing activities Transfers in - sales taxes Lead agency disbursements IRS fuel tax credit Federal grant subrecipient disbursements Net cash provided by (used in) noncapital and related financing activities Cash flows from capital and related financing activities Purchases of capital assets Conveyance of capital assets Principal payments on long-term debt/premium Interest paid on capital debt Advances on bond proceeds Lead agency disbursements Capital contributions Interest subsidy Net cash provided by (used in) capital and related financing activities 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, as restated Cash and cash equivalents, end of year From the Proprietary Funds Statement of Net Position 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: Accounts receivable Due from other governments Other assets Increase (decrease) in liabilities: Accounts payable Accrued salaries and benefits Due to other governments Compensated absences payable Pension expense Employer pension contributions Other liabilities Total adjustments Net cash provided by (used in) operating activities 41,142,175 9,365,622 (82,572,770) (1,455,454) (33,520,427) $ 105,195,470 (500,000) 2,574,074 (100,000) 56,837,589 50,331,955 107,169,544 (90,574) (663,027) (2,645,224) (2,165,675) (16,334,238) 2,222,823 248,760 (2,916,144) (7,740,506) (69,583,715) (28,684,890) 1,336,068 (90,574) (663,027) (5,561,368) (9,906,181) (69,583,715) (45,019,128) 2,222,823 1,584,828 (19,427,155) (107,589,187) (127,016,342) $ $ 24,158,086 97,502 24,255,588 184,544 184,544 $ (57,842,316) 164,928,777 107,086,461 $ 107,029,479 56,982 107,086,461 (49,922,566) 186,059 186,059 $ (53,950,794) 185,292,843 131,342,049 $ 131,187,565 154,484 131,342,049 (190,230) 11,771,187 28 56,091,693 9,365,622 (84,627,074) (15,120,296) (34,290,055) 50,831,955 (500,000) - 3,891,522 20,364,066 24,255,588 $ $ 54,363,515 2,574,074 (100,000) 1,515 1,515 See accompanying notes to the financial statements. 14,949,518 (2,054,304) (13,664,842) (769,628) (50,112,796) - 11,771,187 97,245 4,548,230 (1,250) (144,666) (1,250) (47,421) 4,548,230 (2,500) (1,420,162) 23,434 1,356,880 1,519 108,333 (115,486) 32,209 16,402,139 (33,520,427) (1,250) (17,811) (748,176) 130,219 1,266,750 (1,063,214) (579,398) (769,628) (1,421,412) 5,623 608,704 131,738 1,375,083 (1,178,700) 32,209 15,822,741 (34,290,055) $ $ Notes to the Financial Statements Valley Metro Regional Public Transportation Authority Notes to the Financial Statements Fiscal Year Ended June 30, 2015 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 2015, the members included the cities of Avondale, Buckeye, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson, the towns of Gilbert and Wickenburg, and Maricopa County. 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. 29 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 b. Basic Financial Statements The government-wide financial statements (Statement of Net Position and Statement of Activities) report on the Authority as a whole. 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 Position reports all financial and capital resources of the government. It is displayed in a format of assets less liabilities equal net position, with the assets and liabilities shown in order of their relative liquidity. Net position is required to be displayed in three components: 1) net investment in capital assets 2) restricted and 3) unrestricted. Net investment in capital assets 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 position is 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 position that is not otherwise classified as restricted is 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 position is available. Reservations of net position 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 8 discusses the internal reservations of fund balances/net position in the various funds to demonstrate the government’s intended use of those net position. 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. 30 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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. During the year ended June 30, 2015, the Authority implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. This Statement replaces the requirements of prior GASB standards for pensions accounting and reporting. This Statement requires governments providing defined benefit pensions to recognize the long-term obligation for pension benefits as a liability, and to more comprehensively and comparably measure the annual costs of pension benefits. Each employer participating in a multiple-employer defined benefit pension plan will be required to record a liability representing their “proportionate share” of the plan’s total net position liability. The Statement also enhances accountability and transparency through revised note disclosures and new required supplementary information. In conjunction with GASB 68, the Authority implemented the provisions of GASB 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. This Statement will require governments switching to new pension standards to acknowledge the start of deferred outflow of resources for pension contributions made from the measurement date of the beginning net pension liability to the start of the first fiscal year’s implementation. In addition, the statements may report a separate section for deferred inflows of resources. These represent an acquisition of net position that applies to a future period (s). See Note 1m and 1n. 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. 31 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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 position, financial position and cash flows. Currently, enterprise funds are the only type of proprietary funds that the Authority uses. Enterprise funds are used to account for those operations that provide services to the general public for a fee. Enterprise funds are also required for any activity whose principal revenue sources meet any of the following criteria: 1) any activity that has issued debt backed solely by the fees and charges of the activity, 2) if the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered through fees and charges, or 3) it is the policy of the Authority to establish activity fees or charges to recover the cost of providing services, including capital costs. The Authority reports the following major enterprise funds: 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 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 32 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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 120 days 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 3. 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 inflows of resources. 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 120 days 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. 33 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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 a basis consistent with generally accepted accounting principles for the governmental and proprietary funds. Encumbrance accounting is used and all appropriations lapse at year end. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. Budgetary comparison statements for the general fund and major special revenue funds must be presented as part of the basic financial statements or as required supplementary information. The Authority has chosen to present this information as part of the basic financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis). Budgetary comparisons for the major enterprise funds are presented in the combining statements following the notes to the financial statements. Where necessary, reconciliation has been provided of the adjustments required to convert the budgetary revenues and expenditures or changes in net position on a budgetary basis to revenues and expenditures/expenses or change in net position 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 in the LGIP, which is operated by the Arizona State Treasurer’s Office, as authorized by Arizona Revised Statues, §35326. 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. 34 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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. 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 35 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 “due to/from other funds”. See Note 7 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. k. Compensated Absences Employees of the Authority are entitled to 15.0 - 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 Position. Bond premiums and discounts, 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. Issuance costs are expensed in the current period. In the fund financial statements, governmental fund types recognize bond premiums and discounts 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 expensed in the current period. 36 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 m. Deferred Outflows and Inflows of Resources The statement of net position and balance sheet include separate sections for deferred outflows of resources and deferred inflows of resources. Deferred outflows of resources represent a consumption of net position that applies to future periods that will be recognized as an expense or expenditure in future periods. Deferred inflows of resources represent an acquisition of net position or fund balance that applies to future periods and will be recognized as a revenue in future periods. n. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. o. Net Position In the government-wide financial statements, net position is reported in three categories: net investment in capital assets; restricted net position; and unrestricted net position. Net investment in capital assets is separately reported because capital assets make up a significant portion of total net position. Restricted net position accounts for the portion of net position restricted by parties outside the Authority. Unrestricted net position is the remaining net position not included in the previous two categories. p. 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. 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 37 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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. 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. q. 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. r. 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. 38 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 2. Prior Period Adjustment The July 1, 2014, government-wide net position and the net position of the Proprietary Funds and Governmental Activities do not agree to the prior year financial statements due to a change in accounting principle. Per GASB Statement No. 68, implemented in FY15, requires a restatement of the net position for the proportionate share of the ASRS’s unfunded net pension liability. Further, to provide greater transparency to the impact of bond funding to the light rail transit business activities (VMR fund) the portion of bond proceeds and related debt service amounts are reallocated from the TSO fund. Total Governmental Activities Transit service operations Light rail transit Total Business-Type Activities/ Enterprise Funds Net Position/ Fund Balances As Previously Stated $ 53,464,149 Restatement Due to Change in Accounting Principle GASB 68 $ (9,443,331) Restatement Due to Change in Accounting Principle Debt service presentation $ - $ (14,814,968) 38,800,370 $ (1,296,991) (15,165,926) $ $ 23,985,402 $ (16,462,917) $ 76,299,318 (76,299,318) - Net Position/ Fund Balances As Restated $ 44,020,818 $ 60,187,359 (52,664,874) $ 7,522,485 The financial statement line items affected by the restatement are as follows: Balances As Previously Stated Business-Type Activities/Enterprise Funds Transit service operations: Current assets: Cash and investments Restricted cash and cash equivalents Accounts Receivable Noncurrent assets: Restricted cash and cash equivalents Current liabilities: Accounts payable Bond payable - current Bond interest payable Deferred outflows related to pensions Noncurrent liabilities: Net pension liability Revenue bonds payable, including unamortized premium Transit service operations total Light rail transit: Current assets: Cash and investments Restricted cash and cash equivalents Accounts Receivable Noncurrent assets: Restricted cash and cash equivalents Current liabilities: Accounts payable Bond payable - current Bond interest payable Deferred outflows related to pensions Noncurrent liabilities: Net pension liability Revenue bonds payable, including unamortized premium Light rail transit total $ 21,614,768 8,146,511 162,810 $ - 101,147,040 - (10,298,451) (5,555,000) (4,796,578) - 84,561 - $ (1,250) 2,909,777 3,680,675 - (1,296,991) 54,384,524 - 180,249,917 76,299,318 $ $ 16,448,333 1,438,321 162,222 2,482,452 (10,299,701) (2,645,223) (1,115,903) 84,561 (1,381,552) (40,766,704) 5,166,435 6,708,190 588 59,550,959 6,708,190 588 - 98,664,588 98,664,588 1,250 (2,909,777) (3,680,675) - 1,250 (2,909,777) (3,680,675) 988,789 (16,154,715) - Balances As Restated - 988,789 - (5,166,435) (6,708,190) (588) (98,664,588) (1,381,552) (221,016,621) 39 Restatement Due to Change in Accounting Principle Debt service presentation Restatement Due to Change in Accounting Principle GASB 68 (15,165,926) - $ (180,249,917) (76,299,318) (16,154,715) (180,249,917) Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 3. Reconciliation of Governmental Fund Financial Statements to GovernmentWide Statements The governmental fund financial statements are presented on a current financial resources measurement focus and modified accrual accounting basis while the government-wide financial statements are prepared on a long-term economic resources measurement focus and accrual accounting basis. Reconciliations briefly explaining the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements immediately follow each fund financial statement. Additional reconciliations are provided below. Reconciliation of Governmental Funds Balance Sheet and the Government-Wide Statement of Net Position: Total Governmental Funds Assets Cash and investments Receivables Due from other governments Due from other funds Prepaid items Capital assets (net) Total assets $ $ 57,743,659 18,933 12,050,152 16,431 86,261 69,915,436 Deferred Outflows of Resources Deferred outflows related to pensions Total Deferred Outflows of Resources Liabilties Accounts payable Accrued salaries and benefits Due to other funds Due to other governments Other liabilities Compensated absences Net pension liability Total liabilities $ $ $ 1,904,664 1,904,664 - 1,533,212 1,533,212 1,249,890 154,798 4,736,524 26,349 625,195 6,792,756 726,175 9,445,091 10,171,266 - 1,651,655 1,651,655 Deferred Inflows of Resources Deferred inflows related to pensions Total Deferred Inflows of Resources Fund Balance/Net Position Total fund balance/net position Long-term Assets/ Liabilities 63,122,680 40 $ (8,385,045) Reclassifications for Internal Balances and Eliminations $ $ (16,431) (16,431) Statement of Net Position Totals $ $ - 1,533,212 1,533,212 (16,431) (16,431) 1,249,890 154,798 4,720,093 26,349 625,195 726,175 9,445,091 16,947,591 - $ - 57,743,659 18,933 12,050,152 86,261 1,904,664 71,803,669 1,651,655 1,651,655 $ 54,737,635 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 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 Position includes those capital assets among the assets of the Authority as a whole: Cost of capital assets Accumulated depreciation Capital assets, net $ 6,312,190 (4,407,526) 1,904,664 $ Interfund transactions between governmental activities of $16,431 are eliminated in the consolidation of these activities for the Statement of Net Position. Under the modified accrual basis of accounting, the governmental funds do not accrue for unpaid compensated absences in the amount of $726,175 as a liability, as they are not paid with expendable available financial resources. However, the Statement of Net Position includes the unpaid compensated absences as long-term liabilities regardless of when financial resources are used, and thus a reduction in net position. Net pension liability is not due and payable in the current period and therefore, is not reported as a liability in the funds. Further, deferred outflows and inflows of resources related to pensions are applicable to future reporting periods and therefore, are not reported in the funds. 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 $ 132,029,116 13,929,373 161,726 173,842 278,546 146,572,603 Expenditures/Expenses Current: Regional planning Transportation demand management Regional customer services AZ Lottery fund disbursements Administration Capital outlay Total expenditures/expenses and other uses 1,359,636 8,571,360 10,534,411 2,081,739 441,072 25,710,376 Other financing uses/changes in net position Transfers in Transfers out Net transfers 1,720,704 (111,636,267) (109,915,563) Net change for the year Capital Purchases $ 2,722,158 $ 10,946,664 - Depreciation and Disposals Compensated Absences Pension Contributions $ $ $ - - - $ $ 132,029,116 13,929,373 161,726 173,842 278,546 146,572,603 - 2,722,158 - (441,072) 246,327 260,289 - 44,100 - (668,561) - 788,764 - 1,359,636 8,817,687 10,534,411 2,506,331 - (441,072) 506,616 44,100 (668,561) 788,764 25,940,223 - - 441,072 $ (506,616) $ (44,100) - - - $ - Statement of Activities Totals Pension Expense $ 668,561 $ (788,764) 1,720,704 (111,636,267) (109,915,563) $ 10,716,817 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 41 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 amount of the financial resources expended for capital outlay ($441,072), whereas net position decreases by the amounts of disposals and depreciation expense charged for the year ($506,616). The governmental funds do not report the change in unpaid compensated absences in the amount of ($44,100) as expenditures, as they are not paid with expendable available financial resources. However, the Statement of Net Position includes the change in unpaid compensated absences as accrued expenses regardless of when financial resources are used, and thus a reduction in net position. Pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension liability is measured a year before the Authority’s report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the Statement of Activities. 4. 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 Position as “Cash and investments”. a. Deposits The carrying amount of the Authority’s deposits at June 30, 2015, was $153,720,690 and the bank ledger balance was $154,996,197. The difference represents $1,275,507 in deposits in transit and outstanding checks, ($26,000) in cash contained in the TVM coin vaults, and ($100) in Imprest funds. Of the bank balance, $250,000 was covered by federal depository insurance and $154,746,197 was covered by collateral held by the pledging financial institution in the Authority’s name. Certificates of Deposit held with various financial institutions totaled $6,707,543, are fully insured by FDIC and have a weighted average maturity of 285 days. Further, cash held with the bond fund trustee was $19,134,455. Of this amount, $8,039,534 was held for the debt service payment on July 1st. The remaining amount of $11,094,921 was held with the trustee in a commercial money market account. 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, 2015, the Authority’s investment in the LGIP 5 totaled $9,373,122, invested in money market mutual funds, has weighted average maturities of 40 days. The LGIP 7, which is a short-term fund that invests in only products backed by the full faith and credit of the 42 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 United States Government, totaled $149,898 and has weighted average maturities of 47 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 §35326. 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 5 has a rating of AAAF/S1+ while the LGIP 7 has an AAA weighted average rating. Governmental Accounting Standards Board Statement No. 40, Deposit and Investment Risk Disclosures, provides for disclosures of custodial credit risk associated with investment securities. An exception is provided for investments in external investment pools and for investments in open-ended mutual funds. Cash and Investments at June 30, 2015 consist of the following: Carrying amount of the Authority’s deposits Certificates of Deposit Investments in the LGIP Cash and investments with bond fund trustee Total cash and investments $ 153,720,690 6,707,543 9,523,020 19,134,455 $ 189,085,708 43 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 5. 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, 2015 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 Arizona State University AZ Dept of Transportation City of Avondale City of Buckeye City of Glendale City of Mesa City of Phoenix City of Scottsdale City of Surprise City of Tempe City of Tolleson Internal Revenue Service Maricopa Assoc. of Governments Maricopa County TRP/DOT Town of Gilbert Valley Metro Rail, Inc. Total Due from Other Governments 6. $ $ 10,916,034 1,624 97,428 5,442 323,028 131 26,570 275,540 71,642 332,713 12,050,152 $ $ 106,561 50,566 7,215 166 386,355 4,367,063 148,039 4,955,783 20,495 838,727 29,405 7,162,467 18,072,842 $ $ 10,916,034 1,624 203,989 50,566 12,657 166 386,355 4,690,091 131 148,039 4,982,353 20,495 838,727 275,540 71,642 29,405 7,495,180 30,122,994 Due from VMR/Note Receivable for Advance Bond Proceeds During FY15, RPTA and VMR Boards amended the interagency LRT Program Agreement, whereby RPTA will hold an inter-agency receivable from VMR for the advance of bond proceeds. In order to accelerate planning, design and construction of the Light Rail Capital Projects as identified in the Regional Transportation Plan, RPTA advances bond proceeds prior to the collection of sales tax proceeds necessary to fund the debt service payments. The inter-agency receivable from VMR of the Advance Bond Proceeds shall be paid from the collection of PTF Sales Taxes and payment of related debt principal. As debt service payments are made, RPTA will record Lead Agency disbursements expense and reduce the note receivable. 44 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 As of June 30, 2015, PTF Advance Bond Proceeds totaled $69,583,715. Principal and interest payments follow the Series 2014 Debt Service schedule as shown in table below. Fiscal Original Note Interest Debt Principal Debt Balance Year End Balance Service Payments Service Payments Remaining $ 69,583,715 2015 $ 69,583,715 $ 1,260,656 $ 61,398,715 8,185,000 2,985,765 2016 52,968,715 8,430,000 2017 2,859,579 44,118,715 8,850,000 2018 2,642,975 34,823,715 9,295,000 2,415,579 2019 25,043,715 9,780,000 2020 2,164,808 14,748,715 10,295,000 2021 1,900,952 3,913,715 10,835,000 1,623,201 2022 3,913,715 1,330,882 2023 69,583,715 $ $ 19,184,397 $ Total 69,583,715 $ 7. 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, 2015. The following interfund receivables and payables are included in the fund financial statements at June 30, 2015: Due from other Funds Valley Metro Rail General Due to other funds Governmental funds: General Fund Transportation Demand Management Total governmental funds $ 16,431 16,431 $ $ $ 4,720,093 4,720,093 Total $ $ 4,720,093 16,431 4,736,524 The interfund balances for the governmental funds at June 30, 2015 are short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to grant and other reimbursements. The interfund balances for the proprietary funds at June 30, 2015 are for the June 2015 PTF Revenue allocation for the VMR portion. Interfund transfers are primarily used for transfers of sales tax revenues from the General Fund to the various funds that receive earmarked sales tax revenues. Interfund transfers between the enterprise funds are for transfers of bond proceeds to fund light rail capital expenditures. 45 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2015. Transfers Out General Transfers In Governmental funds: Transit Planning Transportation Demand Management Total governmental funds $ Enterprise funds: Transit Service Operations Valley Metro Rail Total enterprise funds Grand totals 1,710,370 10,334 1,720,704 54,363,515 55,552,048 109,915,563 $ 111,636,267 Net transfers from governmental activities to business-type activities on the government-wide statement of activities are in the amount $109,915,563. 8. Fund Balance Classifications Fund Balance classifications reported in the governmental funds include the following: General Nonspendable Prepaids Spendable Restricted for AZ Lottery proceeds Regional Planning activities Clean Air Activities Unassigned Transportation Demand Management Fund Transit Planning Fund $ 86,261 $ 2,820,054 59,915,538 62,821,853 $ - $ 116,733 116,733 Total $ - $ 184,094 184,094 $ 86,261 $ 2,820,054 116,733 184,094 59,915,538 63,122,680 In the Restricted for AZ Lottery proceeds fund balance in General fund, the total is further broken down into two separate restrictions as follows: AZ Lottery Fund Balance Maricopa County Restricted-no match El Mirage-Restricted June 30, 2015 Balance $ 2,551,545 268,509 $ 2,820,054 Maricopa County and City of El Mirage have executed Intergovernmental Agreements (IGA) with RPTA that allows for the holding of the funds on behalf of each government and requires spending for transit purposes in that jurisdiction. Maricopa County has two restrictions. The funds held prior to FY2012 have a 50% match restriction while funds received after FY 2012 have no match restriction. As of June 30, 2015, Marcopa County has used up the remaining funds having a 50% match restriction. 46 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 9. Capital Assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2015: Balances, July 01, 2014 Governmental activities: Non-depreciable assets: Work in progress Total non-depreciable assets $ Depreciable assets: Site Improvements Computers & software Equipment Vehicles Furniture & fixtures Total depreciable assets at historical cost 844,079 844,079 Increases $ 14,778 14,778 (844,079) (844,079) $ 14,778 14,778 27,982 1,133,285 92,472 16,634 (28,948) (12,056) - 614,644 3,902,143 1,209,253 198,895 372,477 5,068,043 1,270,373 (41,004) 6,297,412 28,948 12,056 41,004 (447,625) (2,554,119) (933,382) (164,516) (307,884) (4,407,526) (332,118) (2,396,410) (787,869) (143,888) (281,629) (3,941,914) (115,507) (186,657) (157,569) (20,628) (26,255) (506,616) Total Governmental activities capital assets being depreciated, net 1,126,129 763,757 Business-type activities: Non-depreciable assets: Land Work in progress Total non-depreciable assets $ 586,662 2,797,806 1,128,837 198,895 355,843 Less accumulated depreciation for: Site Improvements Computers & software Equipment Vehicles Furniture & fixtures Total accumulated depreciation Governmental activities capital assets, net Balances, June 30, 2015 Decreases - 1,889,886 $ 1,970,208 $ 778,535 $ (844,079) $ 1,904,664 $ 5,292,000 449,793 5,741,793 $ - $ (24,543) (24,543) $ 5,292,000 425,250 5,717,250 Depreciable assets: Transit fleet Vehicles Building Site improvements Computers & software Ticket Vending Machines Equipment Furniture & fixtures Infrastructure Total depreciable assets at historical cost 108,929,013 95,878 13,390,733 8,686,758 271,461 1,237,920 9,970,423 127,037 29,424 68,169 22,998 74,015 - (450,885) (145,362) - 108,478,128 95,878 13,390,733 8,754,927 271,461 1,260,918 9,899,076 127,037 29,424 142,738,647 165,182 (596,247) 142,307,582 Less accumulated depreciation for: Transit fleet Vehicles Building Site improvements Computers & software Ticket Vending Machines Equipment Furniture & fixtures Infrastructure Total accumulated depreciation (54,032,465) (18,159) (1,746,618) (3,051,469) (271,461) (87,745) (5,171,087) (127,037) (2,125) (64,508,166) (10,218,321) (23,969) (291,103) (568,175) (82,637) (585,020) (1,962) (11,771,187) 450,885 145,362 596,247 (63,799,901) (42,128) (2,037,721) (3,619,644) (271,461) (170,382) (5,610,745) (127,037) (4,087) (75,683,106) 78,230,481 (11,606,005) - 83,972,274 $ (11,606,005) Total Business-type capital assets being depreciated, net Business-type activities capital assets, net $ 47 $ (24,543) 66,624,476 $ 72,341,726 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 Depreciation expense was charged to the following functions in the basic financial statements: Depreciation Expense: GovernmentWide $ 246,327 260,289 $ 506,616 Regional customer services Administration Transit service operations Total depreciation expense BusinessType $ $ 11,771,187 11,771,187 The Authority’s enterprise funds in the business-type activities had construction commitments totaling $2.74 million at June 30, 2015. Only the currently payable portions of these contracts have been included in the accounts payable in the accompanying financial statements. See Note 14b. 10. 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, 2015 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 Peoria City of Phoenix City of Scottsdale City of Surprise City of Tempe City of Tolleson Gila River Indian Community Maricopa Assoc. of Governments Town of Fountain Hills Town of Gilbert Town of Youngtown Valley Metro Rail, Inc. Total Due to Other Governments $ $ 48 23,105 3,244 26,349 $ $ 153,462 154,182 512,529 40,338 914,751 119,058 10,047 2,267,988 11,337 354,290 4,643 52,814 1,143 23,576,065 28,172,647 $ $ 153,462 154,182 512,529 40,338 914,751 119,058 10,047 2,267,988 11,337 354,290 23,105 4,643 52,814 1,143 23,579,309 28,198,996 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 11. Operating Leases The Authority leases office space and small office equipment under various operating lease agreements. Total lease expenditures were $1,153,027 for the fiscal year ended June 30, 2015. The future minimum lease payments under noncancelable and final option of the operating lease at June 30, 2015 were as follows: June 30 2016 2017 2018 2019 2020 2021-2025 2026 Total $ $ 1,165,943 1,176,219 1,187,344 1,194,143 1,205,009 6,182,574 633,849 12,745,081 Beginning on July 1, 2014, VMR entered into a new contract to lease office space for a 12 year term which included 57,007 square feet of building space. Simultaneously, a sublease between VMR and the Authority took effect for 26,324 square feet. The 12 year term sublease total is $7,502,340. 12. 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, 2015, the revenues available for service of this debt were $127,317,682 while total debt service requirements were $4,547,943 interest and $5,555,000 principal. Interest expense of $9,811,078 on the Statement of Revenues, Expenses and Changes in Fund Net Position, Proprietary Funds, includes Bank charges of $6,368 and the annual amortization of premium expense of $414,496. 49 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 In addition, a portion of the bonds are qualified Build America Bonds. As such, $522,386 is received as a direct subsidy payment from the United States of America for a portion of the interest due on the bonds. In November 2013, the Board approved the issuance of the Series 2014 transportation revenue bonds which are specifically for the purpose of payment or reimbursement of the costs of light rail capital projects expenditures in the regional transportation plan. The bonds were issued on January 14, 2014 in the amount of $115,000,000 and sold at a premium of $20,406,165. The 2014 Series 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 are payable through July 1, 2025. Annual installments of $2,453,169 to $13,992,988 will be made through 2025; coupon interest rates range from 3.00 to 5.25 percent with average True Interest Cost at 2.43 percent. At June 30, 2015, the debt service expense included an accrual for interest costs of $5,810,138. As of June 30, 2015, 2014 Series Bond expenditures to date for the light rail program totaled $135,406,165 on an accrual basis. In addition, on the VMR Central Mesa capital project, financing costs are included in the Project Construction Grant Agreement (PCGA) project budget. Through June 30, 2015, a federal reimbursement of $1,062,442 has been recorded in the Valley Metro Rail Proprietary fund as a contra interest expense cost (interest subsidy) to the Transit Services Operations bond debt interest expense. In FY15, a restatement due to change in accounting principle - debt service presentation was made to break out the debt service totals into RPTA and VMR portions. See Note 2 for the restatement of the Enterprise funds beginning net position and the line items that are affected. Previously, all debt service was classified in the Transit Service Operations fund (TSO). The restatement moves the Light Rail debt out of TSO and into the Valley Metro Rail fund. In the TSO fund, only the RPTA portion of the debt remains. 50 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 Transportation Excise Revenue Bonds annual debt service requirements at June 30, 2015 were as follows: 2009 Revenue Bonds Series: Year Ending June 30 2016 2017 2018 2019 2020 2021-2025 2026 Total Principal 5,835,000 6,085,000 6,380,000 6,690,000 7,025,000 40,605,000 9,260,000 $ 81,880,000 $ $ $ Interest 4,282,006 4,007,593 3,705,368 3,383,243 3,040,368 9,104,435 299,098 27,822,111 Total Debt Service $ 10,117,006 10,092,593 10,085,368 10,073,243 10,065,368 49,709,435 9,559,098 $ 109,702,111 Premium Amortization $ 414,495 414,495 414,495 414,495 414,495 1,243,485 $ 3,315,960 Interest 5,687,363 5,353,837 4,921,837 4,456,594 3,955,875 11,299,181 348,994 36,023,681 Total Debt Service $ 13,872,363 13,783,837 13,771,837 13,751,594 13,735,875 68,464,181 13,643,994 $ 151,023,681 Premium Amortization $ 1,855,106 1,855,106 1,855,106 1,855,106 9,275,529 1,855,106 1,855,106 $ 20,406,165 2014 Revenue Bonds Series: Year Ending June 30 2016 2017 2018 2019 2020 2021-2025 2026 Total Principal 8,185,000 8,430,000 8,850,000 9,295,000 9,780,000 57,165,000 13,295,000 $ 115,000,000 $ $ $ b. Summary of all Long-Term Liabilities The net pension liability, compensated absences payable, and revenue bonds liability activity for the fiscal year ended June 30, 2015 was as follows: Balance, July 1, 2014 Governmental Activities Net Pension liability Compensated absences payable Total Governmental Activities Long-term Liabilities Business-type Activities Net Pension liability Compensated absences payable Revenue bonds payable: 2009 Revenue bonds payable 2009 Bond premium 2014 Revenue bonds payable 2014 Bond premium Total Business-Type Long-term Liabilities Additions Amount Due Within One Year Balance, June 30, 2015 Reductions $ 9,443,331 682,075 $ 2,321,976 576,443 $ (2,320,216) (532,343) $ 9,445,091 726,175 $ 519,354 $ 10,125,406 $ 2,898,419 $ (2,852,559) $ 10,171,266 $ 519,354 $ 16,462,917 1,116,368 $ 4,061,161 976,009 $ (4,058,092) (844,272) $ 16,465,986 1,248,105 $ 737,062 87,435,000 3,730,455 115,000,000 20,406,165 $ - 244,150,905 $ 51 5,037,170 (5,555,000) (414,495) $ (10,871,859) $ 81,880,000 3,315,960 115,000,000 20,406,165 5,835,000 8,185,000 - 238,316,216 $ 14,757,062 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 13. 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. 14. 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, marketing 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. As of June 30, 2015: Contract Type Bus Operations Contracts Paratransit & Mobility Center Contracts Communications & Marketing Contracts Vanpool Contracts $ $ Commitment 172,846,413 62,366,014 6,407,915 4,791,656 246,411,998 $ $ Spent-to-date 116,365,997 33,833,175 2,202,756 830,353 153,232,281 $ $ Remaining 56,480,416 28,532,839 4,205,159 3,961,303 93,179,717 In addition, the outstanding Intergovernmental commitments for FY 2015 were for the following projects: the Desert Sky Park-and-Ride, the East Baseline and 24th Street Park-and-Ride and the Park-and-Ride at Laveen and 59th Avenue. At June 30, 2015, 52 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 the Authority had outstanding contractual commitments for these services aggregating approximately $2.74 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. 15. 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. 16. Lawsuits The Authority is a party to a number of various types of lawsuits, many of which normally occur in governmental operations. The ultimate outcome of the actions is not determinable, however, Authority management believes that the outcome of these proceedings, either individually or in the aggregate, will not have a materially adverse effect on the accompanying financial statements. 17. Related Party Transactions As mentioned in Note 1 (a), all of the five member cities of VMR’s Board of Directors are also member cities of the sixteen-member Authority’s Board of Directors. The Board members of the cities of Glendale, Phoenix, and Tempe represent their cities on both Boards. 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, 2015, VMR incurred costs of $16,061,804 for services provided by the Authority. At June 30, 2015, the Authority reported $77,078,895 receivable from VMR and $23,579,309 payable to VMR. 18. Pension Effective FY15, GASB has implemented major Pension reporting standards for governmental entities. See Note 1b for further information on GASB Statements 68 and 71. The Authority contributes to the Arizona State Retirement System (ASRS) plan described below. All VMR staff are employees of Regional Public Transportation Authority (RPTA) who contributes to the ASRS on VMR’s behalf. The plan is a component unit of the State of Arizona. The Authority reported $668,561 of Retirement pension expenditures in the governmental funds related to the ASRS pension plan to which it contributes. 53 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 A. Arizona State Retirement System Plan Description - All Authority employees participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing multiple-employer defined benefit pension plan, a cost-sharing multiple-employer defined benefit health insurance premium supplement (OPEB) plan, and a cost-sharing multiple-employer defined benefit long-term disability (OPEB) plan. The Arizona State Retirement System Board governs the ASRS according to the provisions of A.R.S. Title 38, Chapter 5, Articles 2 and 2.1. The ASRS issues a publicly available financial report that includes its financial statements and required supplementary information. The report is available on the ASRS website at www.azasrs.gov. Benefits Provided. The ASRS provides retirement, health insurance premium supplement, long-term disability, and survivor benefits. State statute establishes benefit terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: Years of service and age required to receive benefit Retirement Initial Membership Date: Before July 1, 2011 On or After July 1, 2011 Sum of years and age equals 80 30 years age 55 10 years age 62 25 years age 60 55 years age 50* 10 years age 62 Any years age 65 5 years age 50* Any years age 65 Final average salary is based on Highest 36 consecutive months of last 120 months Benefit percent per year of service 2.1% to 2.3% Highest 60 consecutive months of last 120 months 2.1% to 2.3% * With actuarially reduced benefits Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic cost-of-living adjustments based on excess investment earnings. Members with a membership date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are payable upon a member’s death. For retired members, the survivor benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to the member’s account balance that includes the member’s contributions and employer’s contributions, plus interest earned. Contributions - In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. For the current fiscal year, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.60 percent (11.48 percent for retirement and 0.12 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 11.60 percent (10.89 percent for retirement, 0.59 percent for health insurance premium benefit, and 0.12 percent for long-term disability) of the members’ annual covered payroll. 54 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 In addition, the Authority was required by statute to contribute at the actuarially determined rate of 9.57 percent (9.31 percent for retirement, 0.20 percent for health insurance premium benefit, and 0.06 percent for long-term disability) of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to ASRS. During FY15, the Authority did not make any alternative contributions. The Authority’s contributions for the current and two preceding years for the Arizona State Retirement System OPEB, all of which were equal to the required contributions, were as follows: Year ending June 30: 2015 2014 2013 Health Benefit Supplement Fund Long-Term Disability Fund $ $ 100,081 94,528 95,636 20,355 37,811 35,312 During the fiscal year 2015, the Authority paid for ASRS pension contributions as follows: 36% from the Governmental activities, 6% from the Transit Service Operations Fund and 58% from the Valley Metro Rail Fund. Pension Liability. At June 30, 2015, the Authority reported a liability of $25,911,076 for its proportionate share of the net pension liability of the ASRS. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was determined using update procedures to roll forward the total pension liability from an actuarial valuation as of June 30, 2013, to the measurement date of June 30, 2014. The Authority’s proportion of the net pension liability was based on a projection of the Authority’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2014, the Authority’s proportion was 0.175115 percent, which was an increase of 0.009122 percent from its proportion measured as of June 30, 2013. Pension Expense and Deferred Outflows/Inflows of Resources. For the year ended June 30, 2015, the Authority recognized pension expense for ASRS of $2,163,847 and reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between contributions and proportionate share of contributions Contributions subsequent to the measurement date Total 55 Deferred Outflows of Resources $ 1,316,877 - Deferred Inflows of Resources $ - - 4,531,047 1,055,151 $ 1,847,261 4,219,289 $ 4,531,047 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 The deferred outflows of resources related to ASRS pensions resulting from contributions subsequent to the measurement date as reported in the table above will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pensions will be recognized in pension expense as follows: Year Ending June 30: 2016 $ 2017 2018 2019 (101,445) (101,445) (823,367) (1,132,762) Actuarial Assumptions. The significant actuarial assumptions used to measure the total ASRS pension liability are as follows: Actuarial valuation date Actuarial roll forward date Actuarial cost method Investment rate of retrun Projected salary increases Inflation Permanent base increases Mortality rates June 30, 2013 June 30, 2014 Entry age normal 8.0% 3.0-6.75% 3.0% Included 1994 GAM Scale BB The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2012. The purpose of the experience study was to review actual experience in relation to the actuarial assumptions in effect. The ASRS Board adopted the experience study recommended changes which were applied to the June 30, 2013, actuarial valuation. The study did not include an analysis of the assumed investment rate of return. The long-term expected rate of return on ASRS pension plan investments was determined to be 8.79 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 56 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Continued) Fiscal Year Ended June 30, 2015 The target allocation and best estimates of arithmetic real rates of return for each major asset class of ASRS are summarized in the following table: Asset Class Equity Fixed income Real Estate Commodities Total Target Allocation 63% 25% 8% 4% 100% Long-Term Expected Real Rate of Return 7.03% 3.20% 4.75% 4.50% Discount Rate. The discount rate used to measure the ASRS total pension liability was 8.0 percent, which is less than the long-term expected rate of return of 8.79 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the Authority’s proportionate share of the net pension liability calculated using the discount rate of 8.0 percent, as well as what the proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentagepoint lower or 1-percentage-point higher than the current rate: The Authority’s proportionate share of the net pension liability 1% Decrease (7.0%) Current Discount Rate (8.0%) 1% Increase (9.0%) 32,750,271 25,911,076 22,200,469 Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in the separately issued ASRS financial report. The report is available on the ASRS website at www.azasrs.gov. 57 Valley Metro Regional Public Transportation Authority Notes to the Financial Statements (Concluded) Fiscal Year Ended June 30, 2015 Beginning Net Position Restatement. The implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, represents a change in accounting principle. Net position as of July 1, 2014, has been restated as follows for this change in accounting principle: Net position, June 30, 2014, as previously reported Net pension liability Deferred outflows - contributions during fiscal year 2014 Net position, July 1, 2014, as restated 58 Statement of Activities $ 77,449,551 (27,595,285) 1,689,037 $ 51,543,303 Required Supplementary Information Valley Metro Regional Public Transportation Authority Required Supplementary Information Cost-Sharing Pension Plan Fiscal Year Ended June 30, 2015 Schedule of the Authority's Proportionate Share of the Net Pension Liability Arizona Retirement System Reporting Fiscal Year (Measurement Date) 2015 (2014) Authority's proportion of the net pension liability Authority's proportionate share of the net pension liability Authority's covered-employee payroll Authority's proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability $ $ 0.175% 25,911,076 15,754,697 60.80% 69.49% Schedule of the Authority's Pension Contributions Arizona Retirement System Reporting Fiscal Year (2014) 2015 Statutorily required contribution Authority's contributions in relation to the statutorily required contribution Authority's contribution deficiency (excess) $ Authority's covered-employee payroll Authority's contributions as a percentage of covered-employee payroll $ 16,962,914 $ 15,754,697 10.89% 10.70% See accompanying notes to the financial statements. 59 $ 1,847,261 1,847,261 - $ $ 1,685,753 1,685,753 - Other Supplementary Information Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenses and Changes in Net Position – Budget to Actual Transit Service Operations Fund Fiscal Year Ended June 30, 2015 Budgeted Amounts Original Final Operating Revenues: Charges for services Fare revenues Federal Operating Grants Miscellaneous Total operating revenues $ 29,413,976 16,971,535 8,854,356 55,239,867 $ 29,634,840 16,971,535 9,204,241 55,810,616 Operating Expenses: Local & express bus service Paratransit service Vanpool service Safety and security Administrative and general Lead agency disbursements Contingency Capital outlay Total operating expenses Operating income (loss) 79,679,599 10,730,017 768,568 332,189 16,432,860 1,429,999 2,823,818 112,197,050 (56,957,183) 79,679,599 11,302,366 768,568 332,189 16,432,860 1,429,999 8,750 109,954,331 (54,143,715) Non-Operating Revenues (Expenses): Lead agency disbursements Federal Transit Administration grants Other federal grants IRS fuel tax credit Interest income Capital conveyence Interest subsidy Debt Service (7,408,111) (27,032,160) (4,878,101) (465,540) (3,988,241) (4,878,101) Total nonoperating revenues (expenses) Income (loss) before transfers Capital Contributions Transfers in Change in net position budgetary basis $ Variance with Final Budget Favorable (Unfavorable) Actual Amounts $ 23,864,256 17,180,674 9,365,622 6,242 50,416,794 $ (5,770,584) 209,139 161,381 6,242 (5,393,822) 76,949,919 10,781,223 702,500 140,429 1,255 15,494,584 * 140,639 104,210,549 (53,793,755) 2,729,680 521,143 66,068 191,760 (1,255) 938,276 1,429,999 (131,889) 5,743,782 349,960 (839,654) (100,000) 2,574,074 1,515 (663,027) 248,760 (4,683,217) (374,114) (100,000) 2,574,074 1,515 3,325,214 248,760 194,884 (39,318,372) (9,331,882) (3,461,549) 5,870,333 (96,275,555) (63,475,597) (57,255,304) 6,220,293 27,433,173 81,637,074 2,660,415 80,239,823 2,222,823 54,363,515 (437,592) (25,876,308) 12,794,692 Explanation of differences between budgetary basis and GAAP basis Change in net position - 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 Debt service principal payments are recorded for budgetary purposes, but are not recorded for GAAP purposes Pension expense is not recorded for budgetary purposes, but is an expense for GAAP purposes Pension contributions are recorded for budgetary purposes, but are not recorded for GAAP purposes Changes in net position per the statement of revenues, expenses and changes in fund net position $ 19,424,641 $ (668,966) $ (668,966) $ (20,093,607) 140,639 (11,771,187) 50,063 2,778,556 (108,333) 115,486 $ (9,463,742) *Lead agency disbursements for Paratransit activities are reported as operating expenses in the adopted budget. The actual amount of $15,494,584 for lead agency disbursements included in the total operating expenses above is presented as a non-operating expense in the Statement of Revenues, Expenses, and Changes in Fund Net Position for GAAP Purposes. 60 Valley Metro Regional Public Transportation Authority Schedule of Revenues, Expenses and Changes in Net Position – Budget to Actual Valley Metro Rail Fund Fiscal Year Ended June 30, 2015 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 subsidy Interest income Debt service Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Change in net position budgetary basis $ 15,273,647 15,273,647 $ 15,273,647 15,273,647 Variance with Final Budget Favorable (Unfavorable) Actual Amounts $ 14,949,518 4,602 14,954,120 $ 15,273,647 15,273,647 - 15,273,647 15,273,647 - (109,706,179) (19,361,105) (129,067,284) (109,288,179) (19,361,105) (128,649,284) (32,191,758) * 1,336,068 184,544 (19,147,861) (49,819,007) 77,096,421 1,336,068 184,544 213,244 78,830,277 (129,067,284) (128,649,284) (49,805,701) 78,843,583 53,689,905 53,689,905 55,552,048 1,862,143 (75,377,379) $ Explanation of differences between budgetary basis and GAAP basis Change in net position - budgetary basis Debt service principal payments are recorded for budgetary purposes, but are not recorded for GAAP purposes Pension expense is not recorded for budgetary purposes, but is an expense for GAAP purposes Pension contributions are recorded for budgetary purposes, but are not recorded for GAAP purposes Changes in net position per the statement of revenues, expenses and changes in fund net position (74,959,379) 14,940,814 14,940,814 13,306 (324,129) 4,602 (319,527) $ 5,746,347 $ 5,746,347 332,833 332,833 13,306 $ 80,705,726 11,241,444 (1,266,750) 1,063,214 $ 16,784,255 *Under a new funding agreement, bond-funded disbursements are initially recorded as a note receivable from Valley Metro Rail, Inc. and subsequently recorded to expense upon the payment of related bond debt principal. The amount of Note Receivable advance bond proceeds during FY15 was $69.6 million, which effectively reduced the amount of Lead Agency disbursements recorded in FY15. The aggregate of Lead Agency Disbursements plus Note Receivable Advance Bond Proceeds totaled $101.8 million for the year compared to $94.9 million expended in FY14. 61 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. 62 Valley Metro Regional Public Transportation Authority Net Position By Component Last Ten Fiscal Years (accrual basis of accounting) FY 2005/06 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net position Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net position Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net position $ $ $ $ $ $ FY 2006/07 249,177 12,224,193 12,473,370 $ 27,042,048 5,301,289 17,159,298 49,502,635 $ 27,291,225 5,301,289 29,383,491 61,976,005 $ FY 2007/08 1,362,413 42,677,444 44,039,857 $ 47,945,807 1,778,889 21,142,003 70,866,699 $ 49,308,220 1,778,889 63,819,447 $ 114,906,556 $ $ $ FY 2008/09 1,467,040 28,106,773 29,573,813 $ 72,537,461 2,332,524 17,991,644 92,861,629 $ 74,004,501 2,332,524 46,098,417 $ 122,435,442 $ $ $ $ $ 1,229,916 37,265,160 38,495,076 98,580,060 4,062,157 (9,329,497) 93,312,720 99,809,976 4,062,157 27,935,663 $ 131,807,796 (1) Total business-type activities net position was restated as of 7/1/13 due to a change in accounting principle (GASB 65). (2) Total governmental activities and business-type activities net position was restated as of 7/1/14 due to a change in accounting principle (GASB 68) and in Debt service presentation. 63 FY 2009/10 $ $ 689,786 45,287,115 45,976,901 FY 2010/11 $ $ $ 106,601,704 (36,226,944) $ 70,374,760 $ $ 107,291,490 9,060,171 $ 116,351,661 $ $ $ FY 2011/12 FY 2012/13 (1) FY 2013/14 (2) 1,199,127 188,792 46,388,453 47,776,372 $ 1,308,720 2,117,782 46,828,164 50,254,666 $ 6,528,635 120,650 51,160,599 57,809,884 $ 8,437,699 8,286,530 61,617,707 78,341,936 $ 43,205,572 14,100,480 (33,320,650) $ 23,985,402 $ 7,727,762 309,442 97,549,052 $ 105,586,256 $ 9,746,419 10,404,312 108,445,871 $ 128,596,602 $ $ 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 $ $ $ $ $ 64 $ $ 1,970,208 2,790,890 48,703,051 53,464,149 45,175,780 16,891,370 15,382,401 77,449,551 FY 2014/15 $ $ $ $ 1,904,664 3,120,881 49,712,090 54,737,635 34,550,961 23,461,097 (43,169,060) 14,842,998 36,455,625 26,581,978 6,543,030 69,580,633 Valley Metro Regional Public Transportation Authority Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) FY 2005/06 Expenses Governmental activities: Regional planning: Long range Short range Capital Corridor and Facility Planning Systems and Service Development 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 Total governmental activities expenses $ Business-type activities: Transit service operations Regional customer services Light rail transit Total business-type activities expenses Total primary government expenses $ 187,496 322,430 197,256 534,285 FY 2006/07 $ 403,337 558,664 164,722 1,298,591 FY 2007/08 $ 316,147 735,888 224,767 1,113,474 FY 2008/09 $ 292,509 317,886 154,523 1,183,750 865,290 645,052 326,903 719,854 594,549 385,257 819,553 592,460 373,833 897,234 561,620 424,091 514,158 207,304 549,635 4,349,809 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 38,578,007 5,767,760 16,909,968 61,255,735 60,090,164 63,225,727 123,315,891 96,796,902 65,243,366 162,040,268 99,625,805 70,492,629 170,118,434 65,605,544 $ 137,419,068 $ 176,725,049 $ 184,608,254 (1) Total business-type activities net position was restated as of 7/1/13 due to a change in accounting principle (GASB 65). (2) In FY14, Regional Planning Program activities and titles were changed as part of the budget process to realign the Planning department. Long range, short range and capital activities were replaced by Corridor and Facility Planning and Systems and Service Development. (3) Total governmental activities and business-type activities net position was restated as of 7/1/14 due to a change in accounting principle (GASB 68) and in Debt service presentation. 65 FY 2009/10 $ 308,339 358,149 106,185 1,049,353 FY 2010/11 $ 101,121 1,063,291 113,073 997,203 FY 2011/12 $ 161,945 307,283 113,311 704,870 FY 2012/13 (1) $ 147,932 298,472 138,819 659,732 FY 2013/14 (2,3) $ 231,494 818,072 301,508 FY 2014/15 $ 699,024 1,766,588 256,546 1,052,649 504,614 250,976 909,742 590,062 42,633 779,921 571,187 40,145 776,881 666,966 143,291 682,022 588,880 200,556 600,632 578,886 180,118 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 1,284,141 682,197 13,778,841 2,018,631 3,578,569 2,447,288 10,345,984 992,735 827,759 22,889,628 2,049,382 3,547,025 2,603,690 10,200,055 905,972 1,082,966 23,221,183 1,863,098 3,713,351 2,661,189 10,795,306 995,036 1,174,829 24,025,341 2,319,857 3,776,394 2,721,436 10,534,411 1,094,407 1,411,924 25,940,223 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 91,327,298 50,687,217 142,014,515 148,884,691 108,938,262 257,822,953 119,341,286 55,242,525 174,583,811 $ 167,785,341 $ 170,255,845 $ 169,646,423 $ 66 165,235,698 $ 281,848,294 $ 200,524,034 Valley Metro Regional Public Transportation Authority Changes in Net Position (Continued) Last Ten Fiscal Years (accrual basis of accounting) FY 2005/06 Program revenues Governmental activities: Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues 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 Position 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 position: Governmental activities Business-type activities Total primary government net expense $ $ 75,295 2,358,485 48,382 FY 2006/07 $ 25,046 2,494,611 198,777 FY 2007/08 $ 2,062,602 - FY 2008/09 $ 2,482,162 2,718,434 2,062,602 2,632,463 18,963,733 4,075,963 692,342 182,809 3,376,143 5,209,939 1,186,038 17,286,134 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 50,973,101 48,222,122 46,829,486 75,670,625 53,455,263 $ $ 50,940,556 $ 48,892,088 $ (1,867,647) (10,282,634) $ (12,150,281) $ (11,384,743) (75,093,769) $ (86,478,512) $ (12,622,179) (115,210,782) $ (127,832,961) $ $ 55,084,706 124,312 (44,329,950) 10,879,068 $ 134,235,260 1,664,357 (92,948,387) 42,951,230 $ $ 44,578 44,329,950 44,374,528 55,253,596 945,155 2,564,291 92,948,387 96,457,833 $ 139,409,063 $ 9,011,421 34,091,894 43,103,315 $ $ $ $ $ 2,632,463 - $ 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 78,303,088 (11,857,357) (94,447,809) $ (106,305,166) $ $ $ 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 (1) Total business-type activities net position was restated as of 7/1/13 due to a change in accounting principle (GASB 65). (2) Total governmental activities and business-type activities net position was restated as of 7/1/14 due to a change in accounting principle (GASB 68) and in Debt service presentation. 67 FY 2009/10 $ $ 150,353 2,055,931 - FY 2010/11 $ 189,000 2,286,930 - FY 2011/12 $ 176,058 13,102,554 - $ 167,915 13,147,266 - $ 173,842 13,929,373 - 13,755,329 13,278,612 13,315,181 14,103,215 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 9,172,758 2,101,275 176,775 2,121,480 12,293,635 10,716,993 19,661,120 31,040,857 4,418,487 410,899 5,421,162 14,034,959 9,867,680 22,996,095 31,474,293 4,410,179 287,365 4,873,092 14,949,518 11,989,759 2,222,823 44,857,405 33,808,586 58,243,253 56,244,036 88,190,139 70,207,030 47,063,689 $ 36,284,516 $ 71,998,582 $ 69,522,648 $ (9,134,299) (88,513,542) (97,647,841) $ (9,942,571) (85,770,478) (95,713,049) $ (10,710,160) (169,632,814) $ (180,342,974) $ 112,353,330 73,104 100,154 (108,464,090) 4,062,498 $ 118,336,024 114,061 126,982 (106,156,202) 12,420,865 $ $ $ (11,302,911) (122,668,418) $ (133,971,329) $ $ $ $ $ $ FY 2014/15 2,475,930 (11,800,284) (108,921,368) $ (120,721,652) $ 153,445 13,601,884 - FY 2013/14 (2) 2,206,284 $ $ FY 2012/13 (1) 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) $ $ $ 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) $ $ $ $ $ 109,799 16,586 108,464,090 108,590,475 112,652,973 $ (5,071,801) 20,076,933 15,005,132 $ $ 68 137,006 9,322 106,156,202 106,302,530 118,723,395 2,478,294 20,532,052 23,010,346 $ $ $ 101,505,320 126,415,618 146,051 632,661 (113,274,687) 13,919,643 139,093 2,498,190 113,274,687 115,911,970 129,831,613 3,209,483 (53,720,844) (50,511,361) $ 84,310,245 (11,837,008) (104,376,781) $ (116,213,789) $ $ $ 132,029,116 161,726 278,546 (109,915,563) 22,553,825 186,059 1,595,672 109,915,563 111,697,294 134,251,119 10,716,817 7,320,513 18,037,330 Valley Metro Regional Public Transportation Authority Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) FY 2005/06 General fund: Reserved Unreserved, designated Unreserved, undesignated Nonspendable: Inventories Prepaid Items Restricted Unassigned Total general fund All other governmental funds: Reserved Unreserved, designated, reported in special revenue funds Unreserved, undesignated, reported in special revenue funds Nonspendable: Inventories Prepaid Items Restricted Assigned Unassigned Total all other governmental funds FY 2006/07 FY 2007/08 FY 2008/09 $ 649,225 1,638,892 $ 1,002,229 1,433,788 $ 233,480 2,888,105 $ 755,184 2,882,500 $ 2,288,117 $ 2,436,017 $ 3,121,585 $ 3,637,684 $ - $ - $ - $ - 9,936,076 $ 9,936,076 21,059,001 19,182,426 $ 40,241,427 410,974 25,218,669 $ 25,629,643 Note: 2011 was the first year the Authority implemented GASB Statement No. 54. 69 34,382,659 $ 34,382,659 FY 2009/10 $ FY 2010/11 837,880 3,852,887 $ FY 2011/12 - $ 6,797 FY 2012/13 - $ 4,690,767 $ 52,164,648 52,171,445 $ 10,554 47,178,722 47,189,276 $ - $ - $ - 41,434,228 $ 41,434,228 $ $ FY 2013/14 - $ 8,201 1,886,764 47,544,772 49,439,737 $ - $ FY 2014/15 - $ - $ 2,527,491 49,385,126 51,912,617 $ 86,261 2,820,054 59,915,538 62,821,853 $ - $ - - - - - - 3,372 175,010 188,792 188,792 231,018 231,018 263,399 263,399 300,827 300,827 178,382 $ $ 70 $ $ Valley Metro Regional Public Transportation Authority Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) FY 2005/06 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 Corridor and Facility Planning Systems and Service Development 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 Excess of revenues over expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances $ FY 2006/07 FY 2007/08 FY 2008/09 55,084,706 $ 134,235,260 $ 130,490,779 $ 113,297,696 400,000 569,622 1,395,577 41,668 75,295 124,312 57,691,180 400,000 993,727 1,298,056 1,604 25,046 1,664,357 138,618,050 422,887 268,661 1,287,054 84,000 2,503,935 144,672 135,201,988 455,671 612,190 1,411,497 36,310 228,281 116,041,645 187,496 322,430 197,256 534,285 403,337 558,664 164,722 1,298,591 311,129 733,017 222,439 1,104,198 292,509 317,886 154,523 1,183,750 865,290 645,052 326,903 719,854 594,549 385,257 816,128 601,220 370,142 897,234 561,620 424,091 - 2,578,094 3,087,948 1,511,164 3,084,872 3,563,629 1,380,563 2,810,408 3,807,893 1,733,413 514,158 1,712,451 1,030,804 1,111,340 207,304 419,571 218,151 4,437,896 260,965 580,415 765,641 14,621,652 318,945 1,078,709 14,615,795 462,737 384,564 14,141,968 53,253,284 123,996,398 120,586,193 101,899,677 814,701 (45,144,651) (44,329,950) 9,349,388 (102,892,535) (93,543,147) 11,165,777 (146,147,166) (134,981,389) 9,975,889 (102,606,451) (92,630,562) 8,923,334 $ 30,453,251 $ (14,395,196) (1) Commencing in FY2013/14, the Budget categories for Regional Planning changed from Long range and Short range to Corridor and Facility Planning and Systems and Service Development. 71 $ 9,269,115 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 (1) FY 2014/15 (1) $ 103,722,510 $ 107,111,118 $ 112,353,330 $ 118,336,024 $ 126,415,618 $ 132,029,116 688,659 266,015 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 11,224,800 480,217 364,784 1,032,753 176,058 114,061 126,982 131,855,679 11,262,600 680,581 229,713 974,372 167,915 146,051 632,661 140,509,511 11,444,400 851,939 718,180 914,854 173,842 161,726 278,546 146,572,603 308,339 358,149 106,185 1,049,353 101,121 1,063,291 113,073 997,203 161,939 307,283 113,311 704,870 147,932 298,472 138,819 659,732 231,494 818,072 301,508 699,024 1,766,588 256,546 1,052,649 504,614 250,976 909,742 590,062 42,633 779,921 571,187 40,142 776,881 666,966 143,291 682,022 588,880 200,556 600,632 578,886 180,118 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 2,049,382 3,547,025 2,603,690 1,863,098 3,713,351 2,661,189 2,319,857 3,776,394 2,475,109 1,128,667 1,284,141 992,744 905,972 975,968 1,094,407 419,178 61,909 13,383,845 359,637 1,113,456 14,425,281 453,137 10,345,984 274,580 22,789,586 692,811 10,200,055 575,762 23,406,790 756,333 10,795,306 1,141,786 24,729,563 987,332 10,534,411 441,072 25,710,376 92,849,982 95,474,998 103,492,331 108,448,889 115,779,948 120,862,227 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) 1,093,168 (107,249,370) (106,156,202) 1,029,451 (114,304,138) (113,274,687) 1,720,704 (111,636,267) (109,915,563) $ 8,104,652 $ 6,224,832 $ (4,971,759) $ 72 2,292,687 $ 2,505,261 $ 10,946,664 Valley Metro Regional Public Transportation Authority Sales Tax Revenues by Component Last Ten Fiscal Years (accrual basis of accounting) FY 2005/06 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 2006/07 FY 2007/08 FY 2008/09 3,938,570 51,146,136 55,084,706 $ 4,047,593 130,187,667 $ 134,235,260 $ 4,167,168 126,323,611 $ 130,490,779 $ - $ - $ - $ 3,938,570 51,146,136 55,084,706 $ 4,047,593 130,187,667 $ 134,235,260 $ 4,167,168 126,323,611 $ 130,490,779 $ 73 $ $ 4,277,292 109,020,404 $ 113,297,696 $ - 4,277,292 109,020,404 $ 113,297,696 FY 2009/10 FY 2010/11 $ FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 4,371,192 99,351,318 $ 103,722,510 $ 4,422,559 102,688,559 $ 107,111,118 $ 4,464,196 107,889,134 $ 112,353,330 $ 4,559,730 113,776,294 $ 118,336,024 $ 4,641,358 121,774,260 $ 126,415,618 $ $ - $ - $ - $ - $ - $ 4,371,192 99,351,318 $ 103,722,510 $ 4,422,559 102,688,559 $ 107,111,118 $ 4,464,196 107,889,134 $ 112,353,330 $ 4,559,730 113,776,294 $ 118,336,024 $ 4,641,358 121,774,260 $ 126,415,618 $ $ $ $ $ $ 74 $ 4,711,434 127,317,682 $ 132,029,116 $ - 4,711,434 127,317,682 $ 132,029,116 Valley Metro Regional Public Transportation Authority Maricopa County Transportation Excise Tax Revenue Distributions Last Ten Fiscal Years (in thousands) Regional area road funds Freeways Regional Public Transportation Authority / Maricopa Association of Governments (1) Arterial streets Total regional area road fund distributions FY 2005/06 (2) FY 2006/07 (2) $ $ Public transportation funds Total Maricopa County transportation excise tax revenue distributions $ 292,487 213,119 FY 2007/08 $ 205,576 FY 2008/09 $ 176,235 7,877 8,095 8,334 8,555 16,127 316,491 41,050 262,264 39,832 253,742 34,376 219,166 51,146 130,188 126,324 109,020 367,637 $ 392,452 $ 380,066 $ 328,186 Source: The Maricopa County Transportation Excise Tax Tables for FY 2014 provided 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. 75 FY 2009/10 $ $ 159,604 FY 2010/11 $ 165,321 FY 2011/12 $ 173,334 FY 2012/13 $ 182,806 FY 2013/14 $ 196,106 FY 2014/15 $ 205,305 8,742 8,845 8,928 9,119 9,283 9,423 31,327 199,673 32,379 206,545 34,019 216,281 35,875 227,800 38,397 243,786 40,145 254,873 99,351 102,689 107,889 113,776 121,774 127,318 299,024 $ 309,234 $ 324,170 $ 76 341,576 $ 365,560 $ 382,191 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 2005/06 (1) 2006/07 (1) 2007/08 (1) 2008/09 (1) 2009/10 (1) 2010/11 (1) 2011/12 (1) 2012/13 (1) 2013/14 (1) 2014/15 (1) 182,378 187,817 177,845 153,681 143,205 152,003 162,391 172,934 186,406 201,843 Contracting 64,822 73,864 66,046 46,865 28,953 28,012 30,513 32,660 37,243 36,624 Utilities 23,600 26,697 28,630 28,510 29,385 29,511 30,217 30,976 31,271 31,087 Restaurant and Bar 30,656 33,073 33,021 30,763 30,558 31,729 34,279 36,429 38,532 41,865 Rental Real Property Rental Personal Property 32,949 36,398 38,605 37,757 35,825 35,731 36,415 38,097 38,547 40,162 13,923 15,053 15,111 13,470 11,983 11,606 11,966 12,130 12,091 12,876 Other 19,309 19,550 20,808 17,140 19,115 20,643 18,389 18,349 21,470 3,353 Total 367,637 392,452 380,066 328,186 299,024 309,235 324,170 341,574 365,560 367,810 Source: The Maricopa County Transportation Excise Tax Tables for FY 2014 provided 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. 77 (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 2005/06 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 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 49.9300% 5.0000% 0.5000% 47.8600% 5.0000% 0.5000% 46.8000% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 46.8300% 5.0000% 0.5000% 16.5200% 5.0000% 0.5000% 18.8200% 5.0000% 0.5000% 17.4000% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 14.2800% 5.0000% 0.5000% 9.2500% 1.8200% 0.5120% 9.2700% 1.8200% 0.5120% 10.1000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 11.5000% 1.8200% 0.5120% 8.5800% 5.0000% 0.5000% 8.4300% 5.0000% 0.5000% 8.7000% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 9.3700% 5.0000% 0.5000% 6.5700% 5.0000% 0.5000% 6.8000% 5.0000% 0.5000% 7.5000% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 8.6900% 5.0000% 0.5000% 3.9800% 5.0000% 0.5000% 3.8400% 5.0000% 0.5000% 4.0000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 4.1000% 5.0000% 0.5000% 3.2000% 5.0000% 0.5000% 2.9300% 5.0000% 0.5000% 3.3000% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 2.9900% 5.0000% 0.5000% 1.0500% 5.0000% 0.5000% 1.0600% 5.0000% 0.5000% 1.1000% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 1.1900% 5.0000% 0.5000% 0.6100% 5.0000% 0.5000% 0.5300% 5.0000% 0.5000% 0.5000% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.4900% 5.0000% 0.5000% 0.3100% 5.0000% 0.5000% 0.4600% 5.0000% 0.5000% 0.6000% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 0.5600% 5.0000% 0.5000% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% 0.0000% 3.1250% 0.3125% Source: The Maricopa County Transportation Excise Tax Tables for FY 2013 provided by the Arizona Department of Transportation, Financial Management Services, Office of Financial Planning. 78 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 49.1600% 5.0000% 0.5000% 50.1000% 5.0000% 0.5000% 50.6300% 5.0000% 0.5000% 50.9900% 5.0000% 0.5000% 52.8100% 5.0000% 0.5000% 9.0600% 5.0000% 0.5000% 9.4000% 5.0000% 0.5000% 9.5600% 5.0000% 0.5000% 10.1900% 5.0000% 0.5000% 9.5800% 5.0000% 0.5120% 11.5500% 1.8200% 0.5120% 11.2000% 1.8200% 0.5120% 11.1500% 1.8200% 0.5120% 10.5400% 1.8200% 0.5120% 10.5100% 1.8200% 0.5120% 10.2600% 5.0000% 0.5000% 10.6000% 5.0000% 0.5000% 10.6700% 5.0000% 0.5000% 10.5400% 5.0000% 0.5000% 10.9500% 5.0000% 0.5000% 9.5400% 5.0000% 0.5000% 9.3000% 5.0000% 0.5000% 9.0700% 5.0000% 0.5000% 8.5500% 5.0000% 0.5000% 8.1300% 5.0000% 0.5000% 3.7500% 5.0000% 0.5000% 3.7000% 5.0000% 0.5000% 3.5500% 5.0000% 0.5000% 3.3100% 5.0000% 0.5000% 3.3700% 5.0000% 0.5000% 3.2700% 5.0000% 0.5000% 3.1000% 5.0000% 0.5000% 2.9700% 5.0000% 0.5000% 2.6600% 5.0000% 0.5000% 2.1700% 5.0000% 0.5000% 1.1800% 5.0000% 0.5000% 1.2000% 5.0000% 0.5000% 1.1400% 5.0000% 0.5000% 1.0900% 5.0000% 0.5000% 1.2200% 5.0000% 0.5000% 0.5200% 5.0000% 0.5000% 0.4000% 5.0000% 0.5000% 0.4700% 5.0000% 0.5000% 0.3500% 5.0000% 0.5000% 0.3800% 5.0000% 0.5000% 1.7100% 5.0000% 0.5000% 1.0000% 5.0000% 0.5000% 0.7900% 5.0000% 0.5000% 1.7700% 5.0000% 0.5000% 0.8800% 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% 79 Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Bond Coverage Last Six Fiscal Years Fiscal Year 2010 2011 2012 2013 2014 2015 Principal $ 2,265,000 5,085,000 5,290,000 5,555,000 14,020,000 Interest $ 5,259,888 5,245,318 5,154,718 4,951,318 7,139,987 10,219,206 Pledged Revenue Total $ 5,259,888 7,510,318 10,239,718 10,241,318 12,694,987 24,239,206 $ 99,351,318 102,688,559 107,889,134 113,776,294 121,774,260 127,317,682 Coverage 18.89 13.67 10.54 11.89 9.59 5.25 Source: The source of this information is the Authority’s financial records. 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: On January 14, 2014, the Authority raised $115,000,000 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. 80 Valley Metro Regional Public Transportation Authority Outstanding Debt by Type Last Six Fiscal Years Business-type Activities Fiscal Year Ended June 30 2010 2011 2012 2013 2014 2015 Transportation Excise Tax Revenue Bonds (includes Premium) $ Percentage of Personal Income 100,075,000 105,048,942 102,369,446 96,869,951 226,571,621 220,602,125 0.07% 0.07% 0.07% 0.06% Per Capita $ (1) (1) Source: The source of this information is the Authority’s financial records. (1) Income and Per Capita estimates were not yet available for the fiscal years 2014 and 2015. 81 26.35 27.52 26.35 24.63 57.43 55.03 Valley Metro Regional Public Transportation Authority Transportation Excise Tax Revenue Bonds Debt Service Revenue and Cost Per Capita Last Six Fiscal Years Fiscal Year 2010 2011 2012 2013 2014 2015 Principal Interest Total Cost 2,265,000 5,085,000 5,290,000 5,555,000 14,020,000 $ 5,259,888 5,245,318 5,154,718 4,951,318 7,139,987 10,219,206 $ 5,259,888 7,510,318 10,239,718 10,241,318 12,694,987 24,239,206 $ Revenue $ 99,351,318 102,688,559 107,889,134 113,776,294 121,774,260 127,317,682 Maricopa County Population (1) 4,023,132 3,817,117 3,884,705 3,933,712 3,944,859 4,008,651 Cost Per Capita Revenue Per Capita $ $ 1 2 3 3 3 6 (1) Source: Authority’s Financial Records and Maricopa Association of Governments, Resident Population Estimates Documentation (2) Population and Per Capita estimates were not yet available for the fiscal year 2015. 82 25 27 28 29 31 32 (This page intentionally left blank) Valley Metro Regional Public Transportation Authority Regional Population Statistics Last Ten Fiscal Years FY 2004/05 Maricopa County Avondale Buckeye Chandler El Mirage Gilbert Glendale Goodyear (2) Mesa Peoria Phoenix Queen Creek (2) Scottsdale Surprise (2) Tempe Tolleson (2) 3,638,481 60,490 N/A 221,555 28,420 165,325 234,225 N/A 448,845 132,805 1,421,450 N/A 221,980 64,210 161,420 N/A FY 2005/06 3,792,675 66,110 N/A 231,785 29,630 178,000 236,030 N/A 452,355 137,285 1,452,825 N/A 223,835 78,265 160,735 N/A FY 2006/07 3,907,492 72,210 N/A 235,450 32,605 185,030 243,540 49,720 451,360 145,135 1,505,265 18,690 237,120 98,140 165,890 N/A FY 2007/08 3,987,942 75,256 N/A 241,205 33,583 203,656 246,076 55,954 456,344 151,541 1,538,568 21,363 240,126 104,895 167,871 N/A FY 2008/09 4,115,811 76,648 50,143 244,376 33,647 214,820 248,435 59,436 459,682 155,557 1,561,485 23,329 242,337 108,761 172,641 N/A (1) Source: Maricopa Association of Governments, Resident Population Estimates Documentation (2) Data for fiscal years prior to membership of the Authority was not available. The Regional Public Transportation Authority (“Authority”) was established in 1985 to develop a regional transit plan and to develop and operate a regional transit system in Maricopa County, Arizona. The Authority is governed by a sixteen-member Board of Directors consisting of a member of the Maricopa County Board of Supervisors, and the mayors (or their designees) of the cities of Avondale, Buckeye, Chandler, El Mirage, Glendale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tolleson and the towns of 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 Arizona Lottery funds to local public transportation. 83 FY 2009/10 4,023,132 76,900 52,764 245,087 33,610 217,521 249,197 61,916 461,102 158,709 1,575,423 24,926 243,501 109,482 174,833 6,923 FY 2010/11 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 6,573 FY 2011/12 FY 2012/13 3,884,705 76,870 54,102 241,214 32,067 219,666 229,008 69,018 444,856 157,653 1,464,727 27,249 219,713 119,530 164,659 6,579 3,933,712 77,511 56,460 246,197 32,472 227,603 231,109 72,275 450,310 160,552 1,485,751 29,510 222,213 121,629 165,158 6,632 84 FY 2013/14 3,944,859 79,646 59,470 254,276 33,532 239,277 237,517 75,664 464,704 166,934 1,537,058 32,236 230,512 126,275 172,816 6,929 Valley Metro Regional Public Transportation Authority Top Ten Employers for Maricopa County For the Year 2014 and Nine Years Ago Employer Employees State of Arizona Wal-Mart Stores, Inc. Banner Health Systems City of Phoenix Wells Fargo & Company Maricopa County Arizona State University Intel Corp. JPMorgan Chase & Co. Bank of America Honeywell International Inc. U.S. Postal Services Basha's Family of Stores 49,278 32,169 25,270 14,983 14,713 12,698 12,222 11,900 11,042 11,000 Total for Principal Employers 195,275 Total Employment in Maricopa Cty 2014 Rank % of Total 1 2 3 4 5 6 7 8 9 10 2.72% 1.77% 1.39% 0.83% 0.81% 0.70% 0.67% 0.66% 0.61% 0.61% 10.77% 1,813,869 2005 Rank % of Total 49,147 19,510 14,447 13,617 11,000 15,218 10,530 1 2 4 5 8 3 9 2.85% 1.13% 0.84% 0.79% 0.64% 0.88% 0.61% 12,000 11,406 9,646 6 7 10 0.70% 0.66% 0.56% Employees 166,521 1,723,600 Source: Greater Phoenix Economic Council at www.gpec.org for major employers Workforce Informer Arizona at www.workforce.az.gov for total employed in Maricopa County Note: The information for FY 2015 was not available at the time the CAFR was drafted. 85 9.71% (This page intentionally left blank) Valley Metro Regional Public Transportation Authority Arizona Lottery Funds Last Ten Fiscal Years FY 2005/2006 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 Maricopa County (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 Wickenburg (1) Local transportation assistance funds received Minimum local expenditures required Percentage required 299,299 99,667 33.3% FY 2006/2007 317,127 105,603 33.3% N/A N/A N/A 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% 1,096,287 365,064 33.3% 1,111,863 370,250 33.3% 1,080,826 359,915 33.3% 1,019,970 339,650 33.3% 590,108 196,506 33.3% 0.0% 140,622 105,467 75.0% 142,134 106,600 75.0% 149,672 112,254 75.0% 142,011 106,508 75.0% 81,249 60,937 75.0% 0.0% 818,025 272,402 33.3% 853,858 284,335 33.3% 849,374 282,842 33.3% 861,189 286,776 33.3% 518,737 172,739 33.3% 0.0% 1,158,998 385,946 33.3% 1,132,226 377,031 33.3% 1,117,962 372,281 33.3% 1,040,568 346,509 33.3% 599,909 199,770 33.3% 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% NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 2,220,987 2,220,987 100.0% 2,169,928 2,169,928 100.0% 2,071,953 2,071,953 100.0% 1,929,717 1,929,717 100.0% 1,110,018 1,110,018 100.0% 0.0% 657,162 218,835 33.3% 658,598 219,313 33.3% 666,237 221,857 33.3% 640,826 213,395 33.3% 375,639 125,088 33.3% 0.0% 7,033,839 7,033,839 100.0% 6,969,140 6,969,140 100.0% 6,909,870 6,909,870 100.0% 6,506,059 6,506,059 100.0% 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% 1,098,399 365,767 33.3% 1,073,727 357,551 33.3% 1,088,492 362,468 33.3% 1,015,408 338,131 33.3% 585,184 194,866 33.3% 0.0% 317,703 105,795 33.3% 375,434 125,019 33.3% 450,508 150,019 33.3% 443,564 147,707 33.3% 262,631 87,456 33.3% 0.0% 798,826 266,009 33.3% 771,039 256,756 33.3% 761,513 253,584 33.3% 709,867 236,386 33.3% 416,885 138,823 33.3% 0.0% 16,500 12,375 75.0% 0.0% NA NA NA 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 Source: State of Arizona, Office of the Treasurer and Authority’s financial records (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 FY 2005. Former State legislation designated 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. 86 FY 2011/2012 (4) FY 2012/2013 FY 2013/2014 FY 2014/2015 223,694 224,189 224,944 228,575 149,278 149,608 150,112 152,535 692,821 694,355 696,693 707,939 93,297 93,504 93,819 95,333 611,633 612,987 615,051 624,979 665,234 666,707 668,952 679,750 191,527 191,951 192,597 195,706 834,483 284,404 839,148 852,695 1,288,213 1,291,065 1,295,413 1,316,324 452,030 453,030 454,556 461,893 4,241,702 4,251,096 4,265,412 4,334,263 76,030 - 76,455 77,689 637,841 639,253 641,406 651,759 344,813 345,576 346,740 352,337 474,508 475,559 477,160 484,863 19,204 19,247 19,311 19,623 N/A 6,363 18,774 19,077 (3) In the seventh special session of the 49th Arizona Legislature (2010), a bill was passed and signed into law that repealed the LTAF program and eliminated the distribution all together. (4) In September, 2011, due to a lawsuit filed by claimants against ADEQ, a court order reestablished the funding in Maricopa County because the repeal of the law violated provisions of the Federal Environmental SIP in areas of non-attainment. Distribution methodology reverted to the original statutory language where the Maricopa County RPTA is the direct recipient of funds. The remaining areas of the state where not identified as part of the SIP remain without LTAF II support. 87 Valley Metro Regional Public Transportation Authority Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Population (1,6) Income (1,6) (in thousands) Per Capita Income (1,6) 3,638,481 3,792,675 3,907,492 3,987,942 4,115,811 4,023,132 3,817,117 3,884,705 3,933,712 3,944,859 120,716,738 134,339,487 139,665,253 145,880,680 146,898,132 140,351,646 147,724,392 156,763,179 160,497,824 (5) 33,178 35,421 35,743 36,580 35,691 34,886 38,701 40,354 40,801 (5) Median Age (3) School Enrollment (4) Unemployment Rate (2,6) 652,333 689,411 707,771 732,146 683,966 684,510 684,028 693,276 713,323 723,452 4.1% 3.6% 2.9% 4.3% 8.0% 9.6% 8.9% 7.5% 7.1% 6.4% 33.0 33.0 33.4 33.7 33.3 34.1 34.4 34.6 35.0 35.3 (1) Source: Workforce Informer Arizona at www.workforce.az.gov for Maricopa County (2) Source: U.S. Department of Commerce Bureau of Economic Analysis (3) Source: U.S. Census Bureau, by calendar year. Data was adjusted for fiscal years 2009 through 2013 for Median age to be consistent with U.S. Census Bureau. (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) Income and Per Capita estimates were not yet available for the fiscal year 2014. (6) Data was adjusted for fiscal years 2005 through 2013 for Population and Income to be consistent with Workforce Informer Arizona for Maricopa County. Data was adjusted for fiscal years 2005 through 2013 for Unemployment Rate to be consistent with U.S. Department of Commerce Bureau of Economic Analysis. 88 Valley Metro Regional Public Transportation Authority Full-time Equivalent Employees (FTE) by Function/Program Last Ten Fiscal Years 2006 2007 2008 2009 2010 2011 2013 2014 2015 7.9 8.5 73.3 19.5 109.2 7.1 7.3 78.2 15.5 108.1 8.1 7.3 68.2 31.6 115.2 8.9 7.2 66.8 32.4 115.3 10.1 84.0 94.1 10.4 88.5 98.9 11.9 153.0 164.9 11.8 161.0 172.8 15.8 165.2 181.0 204.1 208.1 273.0 288.0 296.3 Function/Program Governmental activities: Regional planning Transportation demand management Regional customer services Administration Total governmental activities FTE 7.9 10.3 4.2 14.8 37.2 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 22.2 118.4 8.1 10.0 78.3 22.2 118.6 7.7 9.0 72.9 20.4 110.0 Business-type activities: Transit service operations Light rail transit (1) Total business-type activities FTE 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 89.1 170.0 182.0 218.9 223.0 Total primary government FTE 2012 Source: Adopted Valley Metro RPTA and Valley Metro Rail, Inc. Operating Budgets for the applicable years. (1) Light rail transit staff report to the Valley Metro Rail, Inc. Board of Directors. 89 Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Fixed Route System Last Ten Fiscal Years FY 2004/2005 FY 2006/2007 FY 2007/2008 FY 2008/2009 44,182,683 17,166,702 1,166,967 93,058,555 2.11 26.6% 44,101,320 18,412,020 1,166,986 $ 108,350,712 $ 2.46 27.0% 42,670,621 18,826,324 998,142 $ 117,350,016 $ 2.75 27.5% 44,642,019 18,238,826 1,172,816 $ 109,867,153 $ 2.46 32.1% 6,484,886 4,956,352 389,349 19,613,325 3.02 20.7% 6,772,065 5,521,319 381,620 22,493,215 3.32 20.2% 7,908,819 6,218,876 377,267 30,076,788 3.80 18.1% 8,390,453 6,548,640 372,580 34,853,186 4.15 15.5% FY 2005/2006 Fixed Route System (1) City of Phoenix Transit System Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Regional Public Transportation Authority (2) Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Tempe Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio City of Glendale - Luke Link Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Total fixed route system Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio $ $ $ $ $ $ $ $ 42,909,890 17,420,722 1,146,819 89,543,836 2.09 27.0% 6,203,696 4,379,307 276,517 16,445,778 2.65 23.1% 4,805,598 3,797,053 311,852 15,738,112 3.27 17.3% 93,024 139,789 7,962 218,243 2.35 26.8% 54,012,208 25,736,871 1,743,150 $ 121,945,969 $ 2.26 25.2% $ $ $ $ $ $ $ $ 5,063,284 3,868,790 297,027 16,738,459 3.31 17.9% 101,444 142,109 8,121 232,802 2.29 27.5% 55,832,297 26,133,953 1,861,464 $ 129,643,141 $ 2.32 24.6% $ $ $ $ 6,808,547 4,497,200 364,249 19,496,217 2.86 16.2% $ $ $ $ 4,896,103 4,372,291 326,640 19,947,661 4.07 16.6% $ $ $ $ 5,846,385 4,752,561 371,445 27,191,179 4.65 11.8% 227,702 252,413 19,455 435,099 1.91 22.7% NA NA NA NA NA NA NA NA NA NA NA NA 57,909,634 28,682,952 1,932,310 $ 150,775,243 2.60 $ 22.5% 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% $ $ 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. (5) In FY12, operating costs were reported under a new accounting standard to be consistent with the National Transit Database-NTD. The NTD reporting standard includes additional costs such as regional customer services and planning. (6) Commencing FY14, Fixed Route Transit services operated by City of Tempe were united with fixed route services operated by RPTA. NR Not reported Note: Information for fiscal year 2015 was not available at the time the CAFR was drafted. 90 FY 2009/2010 FY 2010/2011 FY 2011/2012 (5) FY 2012/2013 FY 2013/2014 (6) 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% 37,122,975 16,013,826 1,225,077 $ 138,046,662 $ 3.72 25.1% 37,713,203 15,306,424 1,110,556 $ 137,800,189 $ 3.65 24.4% 36,218,582 15,807,220 1,288,260 $ 137,009,877 $ 3.78 24.8% 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% 8,803,900 5,738,650 433,301 40,845,490 4.64 19.4% 9,326,130 5,954,546 439,516 43,378,047 4.65 22.2% 14,660,186 9,831,917 719,979 63,991,098 4.36 22.6% $ $ $ $ $ $ 5,217,425 4,889,470 370,738 28,676,837 5.50 17.2% 116,952 101,154 37,006 820,392 7.01 3.1% 48,418,004 29,075,828 2,042,232 $ 176,489,781 $ 3.65 26.6% $ $ $ $ 8,313,058 5,678,666 498,944 24,851,193 2.99 19.3% $ $ $ $ 5,435,181 3,803,757 285,591 24,989,805 4.60 20.0% $ $ $ $ $ $ 5,814,968 3,753,634 233,981 25,892,432 4.45 22.6% NA NA NA NA NA NA 110,913 99,773 8,713 786,101 7.09 3.1% NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 53,916,143 28,596,791 1,989,384 $ 190,377,745 $ 3.53 23.9% 51,362,056 25,556,233 1,943,969 $ 203,881,957 $ 3.97 23.3% 52,854,301 25,014,604 1,784,053 $ 207,070,668 $ 3.92 23.8% 50,878,768 25,639,137 2,008,239 $ 201,000,975 $ 3.95 24.1% $ $ 91 Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Dial-a-Ride System Last Ten Fiscal Years FY 2004/2005 FY 2005/2006 FY 2006/2007 FY 2007/2008 FY 2008/2009 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 $ $ $ $ 393,053 4,084,991 274,099 12,375,324 31.49 4.0% $ $ 152,631 518,616 47,282 2,853,105 18.69 2.7% 415,733 4,276,365 285,137 12,452,214 29.95 5.0% $ $ NR NR NR NR NR NR 410,838 NA 287,882 13,655,624 33.24 4.7% $ $ NR NR NR NR NR NR 391,420 4,806,031 292,601 14,759,075 37.71 4.1% $ $ NR NR NR NR NR NR 396,474 4,064,584 295,057 14,991,465 37.81 4.2% NR NR NR NR NR NR Phoenix Taxi 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 $ $ $ $ $ $ 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% $ $ $ $ $ $ 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% $ $ $ $ $ $ 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% $ $ $ $ $ $ 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% $ $ $ $ $ $ 262,364 2,090,445 137,604 9,760,107 37.20 4.1% 35,488 362,525 24,641 256,574 7.23 0.0% 27,652 109,741 13,081 610,581 22.08 17.4% Valley Metro Northwest Dial-a-Ride (2) Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio 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) (2) NR 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. In FY12, operating costs were reported under a new accounting standard to be consistent with the National Transit Database-NTD. The NTD reporting standard includes additional costs such as regional customer services and planning. Not reported Note: Information for fiscal year 2015 was not available at the time the CAFR was drafted. 92 FY 2009/2010 $ $ 353,674 3,675,478 283,686 14,749,818 41.70 7.3% FY 2010/2011 $ $ NR NR NR NR NR NR 328,502 3,464,880 257,874 15,519,920 47.24 6.3% FY 2011/2012 (2) $ $ NR NR NR NR NR NR 337,182 3,485,711 308,915 16,848,817 49.97 5.8% FY 2012/2013 $ $ NR NR NR NR NR NR $ $ $ $ NR NR NR NR NR NR $ $ 30,509 120,305 30,509 558,965 18.32 18.6% 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% $ $ 215,536 1,299,371 117,381 12,339,120 57.25 4.5% 328,170 3,710,650 263,459 $ 17,330,044 $ 52.81 5.7% NR NR NR NR NR NR $ $ 248,462 2,123,274 129,168 9,322,558 37.52 4.9% 336,318 3,467,247 255,835 17,299,362 51.44 5.3% FY 2013/2014 $ $ 18,821 101,096 NR 844,264 44.86 17.9% 279,597 2,141,137 79,573 10,973,348 39.25 7.1% NR NR NR NR NR NR $ $ 37,892 125,513 NR 852,299 22.49 20.4% 316,618 2,530,142 89,164 $ 11,035,889 $ 34.86 9.3% NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR NR 33,058 263,092 8,841 792,405 23.97 6.2% $ $ 59,260 451,977 12,373 1,817,524 30.67 4.1% 93 $ $ 81,761 589,846 17,979 2,353,161 28.78 4.30% Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Dial-a-Ride System (Continued) Last Ten Fiscal Years FY 2004/2005 FY 2005/2006 FY 2006/2007 FY 2007/2008 FY 2008/2009 Dial-a-Ride System (1) Valley Metro Ridechoice Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio Scottsdale Taxi Total boardings Revenue miles Revenue hours Operating cost Operating cost per boarding Farebox recovery ratio 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 $ $ $ $ $ $ $ $ $ $ 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% $ $ $ $ $ $ $ $ $ $ 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% $ $ $ $ $ $ $ $ $ $ 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% $ $ $ $ 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% $ $ $ $ $ $ $ $ $ $ 92,381 408,986 30,594 2,431,098 26.32 4.4% 38,978 212,812 14,567 1,239,982 31.81 3.1% 1,459 NA 1,680 102,139 70.01 2.9% 19,336 79,989 7,918 644,740 33.34 3.0% 872,673 7,329,082 525,142 30,036,686 34.42 4.3% 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. (2) In FY12, operating costs were reported under a new accounting standard to be consistent with the National Transit Database-NTD. The NTD reporting standard includes additional costs such as regional customer services and planning. NR Not reported Note: Information for fiscal year 2015 was not available at the time the CAFR was drafted. 94 FY 2009/2010 FY 2010/2011 FY 2011/2012 (2) $ $ $ $ $ $ $ $ 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% $ $ $ $ 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% 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% 65,168 NR NR 1,521,274 23.34 8.4% 53,476 NR NR 431,037 8.06 20.0% 96,683 404,838 29,957 2,620,334 27.10 4.0% 30,943 141,596 7,652 903,468 29.20 3.0% FY 2012/2013 $ $ $ $ $ $ $ $ NR NR NR NR NR NR $ $ $ $ 24,301 84,636 8,955 661,287 27.21 3.7% 856,347 5,679,244 481,701 36,117,742 42.18 5.4% 144,299 NR NR 2,374,019 16.45 5.1% 54,538 NR NR 460,760 8.45 0.0% 93,305 388,368 28,975 2,622,120 28.10 1.7% 24,201 98,999 6,935 955,554 39.48 2.7% NR NR NR NR NR NR $ $ $ $ 5,926 17,880 1,976 127,252 24.03 3.8% 997,444 6,565,608 385,667 36,629,939 36.72 5.9% 95 FY 2013/2014 $ $ $ $ $ $ $ $ 48,834 NR NR 1,148,091 23.51 15.3% 63,113 NR NR 568,054 9.00 0.0% 85,649 389,372 35,216 2,427,706 28.34 3.1% 25,281 101,211 7,912 1,104,216 43.68 2.6% NR NR NR NR NR NR NR NR NR NR NR NR 987,318 7,446,734 413,730 $ 36,819,460 $ 37.29 7.0% Valley Metro Regional Public Transportation Authority Operating Indicators by Program – Shuttle / Circulator System Last Ten Fiscal Years FY 2004/2005 FY 2005/2006 FY 2006/2007 FY 2007/2008 FY 2008/2009 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% 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% 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 (3) (4) 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: $ $ 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% 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 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2,969,448 1,235,147 94,455 4,914,905 1.66 N/A 3,023,025 1,237,806 107,711 4,879,358 1.61 N/A 2,725,312 1,282,479 122,917 5,868,834 2.15 N/A $ $ $ $ $ $ $ $ $ $ $ $ $ $ 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% 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 2008 included only Dash and Alex. (2) City of Tempe - FLASH, Orbit-Earth, Jupiter, Mars, Mercury & Venus; prior to FY 2008 included only FLASH, Neighborhood FLASH. (3) City of Scottsdale - Neighborhood Trolley, Miller Road Trolley, and Downtown Trolley; prior to FY 2008 included only Roundup. (4) City of Scottsdale did not track revenue miles for FY 2008. (5) City of Glendale - GUS (6) RPTA- Mesa BUZZ (7) In FY12, operating costs were reported under a new accounting standard to be consistent with the National Transit Database-NTD. The NTD reporting standard includes additional costs such as regional customer services and planning. (8) Commencing in FY14 Circulator transit services operated by City of Tempe were unified with RPTA circulator transit services. Note: Information for FY 2015 was not available at the time the CAFR was drafted. 96 FY 2009/2010 FY 2010/2011 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% $ $ 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 $ $ $ $ 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% FY 2011/2012 (7) $ $ $ $ $ $ $ $ $ $ $ $ 1,325,435 518,763 39,210 3,849,920 2.90 0.0% FY 2012/2013 $ $ 1,876,635 671,245 48,686 5,337,126 2.84 0.0% 3,490,934 1,506,444 168,166 9,404,570 2.69 0.0% 3,081,111 1,449,887 145,472 $ 10,001,270 $ 3.25 0.0% 969,718 480,480 60,857 2,645,244 2.73 0.0% 897,167 552,033 171,339 2,581,006 2.88 0.0% 120,642 98,668 8,713 812,589 6.74 3.3% 204,176 279,762 22,045 1,533,426 7.51 2.9% 6,110,905 2,884,117 298,991 18,245,749 2.99 0.4% $ $ $ $ $ $ 120,885 95,244 8,498 812,589 6.72 3.3% 293,613 369,149 28,723 1,920,057 6.54 4.2% 6,269,411 3,137,558 402,718 $ 20,652,048 $ 3.29 0.4% 97 FY 2013/2014 (8) $ $ 2,679,891 786,672 71,356 6,228,762 2.32 0.0% NR NR NR NR NR NR $ $ $ $ $ $ $ $ 955,627 629,453 57,547 2,687,328 2.81 0.00% 119,248 93,981 8,562 802,959 6.73 3.30% 3,172,246 1,814,134 180,374 10,913,672 3.44 0.7% 6,927,012 3,324,240 317,839 20,632,721 2.98 0.5% Valley Metro Regional Public Transportation Authority Capital Asset Statistics by Function/Program Revenue Vehicles for Transit Service Operations Last Ten Fiscal Years Fiscal Year Local and Express Bus Paratransit / Dial-a-Ride Vanpool 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 181 172 192 257 251 242 205 207 225 223 57 75 76 76 111 80 58 25 2 1 303 308 347 421 376 376 400 419 433 431 Source: National Transit Data Base (NTD) (1999/00-2007/08) FAS GOV 100 Asset Accounting (2008/09-current) 98 101 North First Avenue | Suite 1300 | Phoenix, AZ 85003 | valleymetro.org