WILLIAMS GATEWAY AIRPORT AUTHORITY ANNUAL FINANCIAL REPORT FOR TFIE FISCAL YEARS ENDED JLINE 3O,2AO4 AND Ahlt; 2OO3 r- 'r - ritr. JUI'I 0 1 2006 jAS* *iilri'.--.lt f WILLIAMS GATEWAY AIRPORT AUTHORIW TABLE OF CONTENTS Fiscal Years Ended June 30, 2004 and 2003 Page Report Management's Discussion and Analysis lndependent Audito/s 1 3 Basic Financial Statements Statement of Net Assets - Proprietary Fund 10 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Fund 11 Statement of Cash Flows - Proprietary Fund Notes to the Basic Financial Statements 12 15 Supplementary lnformation Budgetary Basis Statement of Revenues and Expenses 29 CRONSTROM CERTIFIED PUBLIC & TRBOVICH ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT To the Members of the Board of Directors Williams Gateway Airport Authority statements of the business-type activities of (Authority) as of and for the years ended June 30, 2004 and Williams Gateway Airport Authority 2003, as listed in the table of contents. These financial statements are the responsibility of William Gateway Airport Authority's management. Our responsibility is to express an opinion on these financial statements based on our audit. We have audited the accompanying financial We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial reports 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 basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-t1pe activities of the Williams Gateway Airport Authority, as of June 30, 2004 and 2003, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America The management's discussion and analysis on pages 3-8 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. In addition, the budgetary information presented on page 29 is not are part of the basic financial statements, but is presented as supplementary information. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. I 8706 EASTMANZANTIA DRIVE, SUIE lOO I SCOTTSDALE, ARIZONA 85258 T (48O) 348.1 I02 I FAX (480) 34A-11O4 A PROIESSIONAL CORPORATION ln accordance with Government Auditing Standards, we have also issued a report dated October 1, 2004 on our consideration of William Gateway Airport Authority's internal control over financial reporting and our tests of its compliance with cefiain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in coqjunction with this report in considering 'l the results of our audit. Cronstrom & Trbovich, P.C. October 1,2004 r-l i{ tl llri il l_i iit.: i I i. -: ii liil WILLIAMS GATEWAY AIRPORT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Years Ended June 30,2004 and 2003 The management of Williams Gateway Airport Authority (WGAA) offers readers this overview and analysis of WGM's financial statements and activities for the flscal years ended June 30, 2004 and 2003. ln the following discussion, references to "WGAA" relate to Williams Gateway Airport Authority and references to "the Airport" relate to Williams Gateway Airport, which WGM manages and operates. Financial Highlights r . r \A/Q,M's assets exceeded its liabilities at the end of the fiscalyear by $136,552,404 (net assets). Total net assets includes $130,486,395 in capital assets net of related debt, $1,935,366 of the total net assets are restricted for specific uses, and $4,130,643 in unrestricted net assets. Total liabilities (including member loans) increased by $3,608,651 (7 .7Yo) to $50,466,930, g/Qfi,{'s operations produced a loss of $10,028,149 for the fiscal year. Although much of this loss can be attributable to noncash depreciation expense on assets that were contributed by the federal government or acquired with the aid of grants, WGAA still relies on its member governments to supplement the revenues it earns from providing airport services. During the year, member government loans to WGAA increased by $3,390,000 to $40,863,976 and accrued interest relating to that debt increased by $1,260,311 to $5,796,699. (The notes are due in the . . year 2Q2Q.) During the year, total net assets decreased by $8,653,513. Sales in WGAA's fueling operation were up 60% to $9,936,502. Overview of the Financial Statements: This discussion and analysis serves to introduce WGM's basic flnancial statements. WGM's basic financial statements have two components, 1) fund financial statements, and 2) notes to the financial statements. Separate government-wide financial statements are not presented since WGAA has only one fund, Fund financial statements. grouping of related accounts used A fund is a to maintain control over resources that have been segregated foi specific activities or objectives. Like other state and local governments, WGM uses fund accouhting to ensure and demonstrate compliance with finance-related legal requirements. Unlike most other governments, which have multiple funds, all of WGM's activities are business-type activities and are accounted for in a single proprietary fund. Proprietary funds, WGAA maintains its accounting records in a single enterprise fund. An enterprise fund is a type of proprietary fund used to report business-type activities. The proprjetary fund financial statements can be found on pages 10 -13 of this report. The sfafement of net assefs presents information on WGM's assets and liabilities, with the difference between the two reported as nel assefs. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of WGM is improving or deteriorating. The sfafement of revenues, expenses and changes in fund nef assefs presents information on how WGAA's net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, iev-enues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods. Notes to Financial Statements The notes provide additional information that is essential to a full understanding of ihe data provided in the fund financial statements. The notes to the financial statements can be found on pages 15 - 26 of this report. WILLIAMS GATEWAY AIRPORT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Years Ended June 30, 2004 and 2003 Financial Analysis Net assets may serve as a useful indicator of a government's financial position. At the end of the fiscal year, WGM's assets exceeded liabilities by $136,552,404. Airports are capital-intensive enterprises. Over 95% of WGAA's net assets are invested in capital assets, less any related debt used to acquire those assets that is still outstanding. WGAA uses these assets to provide aviation access and services to the flying public and the surrounding community; consequently, these assets are not available for future spending. Although WGM's investment in its capital assets is reported net of related debt, the resources needed to pay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Williams Gateway Airport Authority's Net Assets 2003 2004 Current and other assets Capital assets, net of accumulated depreciation $ Totalassets 8,652,456 178,366,878 187,019,334 47,664,262 2,802,667 50,466,930 Long-term liabilities Other liabilities Total liabilities Net assets: lnvested in capital assets, net of related debt Restricted Unrestricted Total net assets 130,486,395 1,935,366 4,130,643 $ ii 12,506,501 179,557,695 192,064,196 43,230,559 3,627,720 46,858.279 135,973,351 l,1 iiiJ lj ii 4,658,013 _g__Eq,552191_ 1.4% of WGAA's net assets represent resources that are subject to external restrictions on how they may be used. Restricted assets are mostly deposits and grant funds received that have not yet been spent for the intended purposes. The unrestricted net assets number represents funds available for WGM's on- going operations. The remaining net assets are invested in capital assets. This reflects the capital assets net of member governments' investments in both the operations and infrastructure of the airport. ir llji l i1 Member loans and accrued interest are payable June 30, 2020. At the end of the fiscal year, like the previous year, all three categories of net assets had positive balances. Net assets decreased by $8,653,513, or 6.0% from the previous fiscalyear-end. This was primarily due to depreciation expense and the use of another year's loans from our member governments for operating expenses. Member loans increased in the fiscal year 2003-04 by $3,390,000, compared to $4,565,000 in fiscal year 2002-03. Current and other assets declined, mostly due to spending of restricted funds on the capital assets they were designated to purchase. tl ii tl : I li J i i The decrease in capital assets, net of related debt was primarily due to depreciation. New investments in capital assets (less asset dispositions) were $1,190,817 less than the yea/s depreciation expense on capital assets. The $2,722,647 decrease in restricted assets was primarily due to spending of grant funds on the capital assets designated by the granting agency, Business-type activities All of WGM's activities are classified as business-type activities. Except for a substantial increase in fuel sales, in general, the financial operations of WGM did not change significantly during the year. The ,.' I .'.,f, WILLIAMS GATEWAY AIRPORT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Years Ended June 30, 2004 and 2003 $8,653,513decreaseinnetassetswas3.1%lessthanthereductioninnetassetslastyear. Thechange came about as indicated below by the following elements of the revenues and expenses: Williams Gateway Airport Authority's Changes in Net Assets 2004 Revenues: Charges for sales and services (gross) Lease income Capital grants and conhibutions Operating grants and contributions Other Total revenues 2003 $ 10,255,728 2,469,647 2,489,081 82,234 117.554 15,014,244 Expenses Cost of sales Depreciation Other operating expenses lnterest expense on loans from member governments Other non-operating expenses Total expenses lncrease (decrease) in net assets Net assets at prior year-end Net assets at year-end $ 6,570,257 2,033,298 3,244,8Q8 w 202,878 6,936,862 7,301,957 4,138,051 7,911,306 8,114,704 7,373,716 1,260,311 53,e23 23,667,757 1,090,642 467,480 20,981,195 (8,653,513) 145,205,917 136,552,404 _ $ (8,929,954) 154,135,871 145,205,917 Revenues: Charges for sales and services increased by $3,685,471 (56%), primarily due to increased fuel sales, which were up both in volume and prices. Lease income was up 2%. Capital grants and contributions were down by $755,727 (23%). This is within normal variations in grant funding and spending. The $82,234 in new activity under operating grants represents the spending during the fiscal year under the marketing grant contributed by City of Phoenix Aviation Department. Other revenues dropped by $85,323 mostly as a result of reduced investment income. The reduced investment income, in turn, was due to lower interest rates during the year and spending down of investments to support capital projects. Revenues @l Charges for sales and services (gross) E Lease income tr Capital grants and contributions tr Operating grants and contributions E Other WILLIAMS GATEWAY AIRPORT AUTHORIry MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Years Ended June 30,2004 and 2003 Expenses: of sales increased by $2,798,811 (68%), reflecting the cost of the increased fuel sales. Depreciation expense dropped by $609,349. The reduction in depreciation expense is primarily due to three pavement items that reached the end of their depreciable lives during the 2002-03 fiscal year, resulting in no depreciation for those items in 2003-04. Other operating expenses increased by $740,989 (10%). $451,472 of that represented increased personnel costs, while $299,318 was due to increased professional services. lnterest expense on loans from member governments increased by 169,669 , reflecting the accumulation of accrued interest and the additional interest relating to annual additions to Cost these loans from the member governments. lt Expenses 0.2Y0 @ Cost of sales 34.3% ! Depreciation tr Other operating expenses ll tr I 1; lnterest expense on loans from member governments ii Other non-operating expenses ll IJ Budget WGAA staff prepares a budget annually. li goes to the Board of Directors for approval during the spring of each year. The budget is used as a management tool; it is not a legally binding document. The budget and monthly comparisons of actual activity to budget are prepared on a budgetary basis of accounting. There were no significant changes to the budget during the year. Although the budget is not legally adopted, it is an important management tool used throughout the fiscal year. See page 29 for a presentation of the budget as supplementary information. rl lltl Capital Assets and Debt Administration ri Capital assets (net of depreciation) WGAA's capital assets totaled $178,366,878 (net of accumulated depreciation). The capital assets tt include land; runways, taxiways, and apron areas; buildings; improvements; machinery and equipment. A large majority of these assets were contributed to the airport directly or vuere purchased with the aid of federal and state grants. Total capital assets, net decreased by less than 1% during the fiscal year. ii ll I li I Capital assets (net of depreciation) Land and land improvements Buildings and improvements Machinery and equipment Construction in Progress Total capital assets, net $ 2004 81,979,080 88,600,690 2,110,589 5,676,519 _$l_zffggfzg_ $ 2003 81,966,448 87,070,976 'iri ir 2,387,134 8,1 33,1 37 _$_119,552€99_ ii li WILLIAMS GATEWAY AIRPORT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Years Ended June 30, 2004 and 2003 Major capital asset events during the current fiscal year included the following: ' A $13 million multi-year project to construct a cargo ramp and associated taxiways was completed. . Most of the work on our Taxiway B storm water drainage project was completed. At year-end $1,152,748 has been spent on this project. . Almost all of Phases lll and lV of the Sossaman Road project were completed, providing arterial road access through the airport, at a cost of $2,261,945, which remains in construction-inprogress at year-end, Similarly, development of Velocity Way into our industrial area was almost completed. Spending on WGAA's portion of this shared project was $870,699. Like other road . . ' projects, after finalcompletion, these improvements will be transferred to City of Mesa, which will be responsible for future maintenance. Design for an airport fuel farm was completed. Construction in progress on this project at the close of the fiscal year was $669,710. Work began on remodeling the interior of a building for use as a new general aviation terminal. Construction in progress at the end of the fiscal year was $96,583. Design was completed at a cost of $142,764 for a new taxiway to serve the north general aviation area of the airport. Long-term debt. At the end of the current fiscal year, WGM had total debt outstanding of $47,880,483. $46,660,675 (97o/o) of that is principal and interest (at 3% rate) on loans made by member governments to help cover operating expenses and airport improvements. These loans are not due until June 2020 or such time as the WGM Board of Directors determines that WGM has sufficient funds for repayments. WGAA reduced.its capital lease obligations by $353,772 (22%) bV making regularly scheduled principal and interest payments. During the current fiscal year, WGAA did not incur any new capital lease obligations. Williams Gateway Airport Authority's Outstanding Debt 2004 Loans from Member Governments (including accrued interest) Capital Lease Obligations Totaloutstanding debt . . -$-a6F6d'Fr $ 2403 $ 42,010,364 1,219,808 $ 43,583,9214 47,880,483 1,573,580, During the current fiscal year, WGAA refinanced one of its capital leases to take advantage of favorable interest rates. Loans from member governments (principal) increased by $3,390,000 (9%) during the fiscal year, $1,175,000 less than the $4,565,000 increase in loans during the previous year. The accrued interest component of member government loans increased by $1,260,311 compared to $'1,090,642 in the previous Year. Additional information on WGM's long{erm debt can be found in note 3.E. on page 22. Economic Factors The percentage of expenses provided by operating revenues has been increasing each year, but WGAA still depends on annual loans from its member governments to cover a portion of its operating costs. This makes WGAA indirectly susceptible to downturns in the economy affecting member governments' abilities to provide this annual funding, however member government support of this kind has been consistent over the last several years. With our largest fueling customer being the federal government, a signiflcant portion of our fueling revenue depends on continuation of military training and other activities that bring government aircraft to the airport. WGAA also depends on capital grants, which have mostly been from the Federal Aviation Administration (FM) and the Arizona Department of Transportation (ADOT), to r WLLIAMS GATEWAY AIRPORT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Years Ended June 30,2004 and 2003 continue its capital improvement and renewal programs. The recent restoration of the Arizona Aviation Trust Fund has sharply increased the availability of grant funds from ADOT. Requests for lnformation This financial report is designed to provide a general overview of WGAA's finances for all those who are interested, Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, Williams Gateway Airport Authority, 5835 S. Sossaman Road, Mesa, M 85212. 1i L*i i t, ) il L..i BASIC FINANCIAL STATEMENTS WILLIAMS GATEWAY AIRPORT AUTHORIW STATEMENT OF NET ASSETS PROPRIETARY FUND June 30, 2004 and 2003 Business-type Activities Enterprise Fund 2004 Assets Current assets: Cash and cash equivalents Accounts receivable, net Due from other governments Prepaid costs Inventories $ 3,642,384 $ 244,023 2,509,708 114,305 115,274 6,625,694 Total current assets Noncurrent assets: Restricted assets Capital assets: Nondepreciable Depreciable ,131,703 7,558,622 2,026,762 4,947,879 87,582,127 90,038,745 89,518,950 184,505,574 187,019,334 192,064,196 Total noncurrent assets Total assets 4,348,808 208,949 2,799,006 70,156 Liabilities Current liabilities: Accounts payable 1,628,679 247,739 Accrued liabilities Vacation benefits payable Capital lease obligations payable Retirement sick leave payable 2,297,155 355,183 332,126 353,385 344,667 348,401 12,016 129.769 2.711.271 Unearned revenue Total current liabilities Current liabilities payable from restricted assets: Tenant deposits 63,406 3/0125e 226,461 91 Noncurrent liabilities: Loans payable to member governments Accrued interest payable to member governments Capital leases Retirement sick leave payable 40,863,976 5,796,699 871,407 132,181 37,473,976 4,536,388 1,220,195 Total noncurrent liabilities 47,664,263 43,230,559 Total liabilitles 50,466,930 46,858,279 Net assets lnvested in capital assets, net of related debt Restricted net assets Unrestricted net assets Total net assets 130,486,395 1,935,366 4,130,643 136,552,404 135,973,351 4,658,013 4,574,553 $ 145,205,917 The accompanying notes to the basic financialsfafemenfs are an integral paft of this statement. 10 l WILLIAMS GATEWAY AIRPORT AUTHORITY STATEMENT OF REVENUES, EXPENSES AND CH.ANGES IN FUND NET ASSETS PROPRIETARY FUND FOR THE FISCAL YEARS ENDED JUNE 30, 2OO4 AND 2OO3 Business-type Activities Entemrise Fund 2004 Operating revenues Fueling operations Lease income Maintenance services Airport usage fees $ Total operating revenues Operating expenses Personnel costs Professional services Cost of goods sold - fueling operations Costs of maintenance services sold Repair and maintenance Utilities lnsurance Other expense Depreciation Total operating expenses 9,936,502 2,069,647 119,429 199,797 12,325,375 $ 6,206,267 2,033,298 155,487 208,503 8,603,555 4,769,755 5,221,227 1,108,133 6,910,027 26,835 808,814 4,096,924 41,127 469,917 4M,462 284,424 Operating income (loss) 239,122 264,976 200,492 797,337 7,301,957 859,762 7,91'1,306 22,353,V4 19,42q,073 (1 Nonoperating revenues (expenses) Operating grants from other governments lnvestment income lnvestment loss Other income Gain/(loss) on disposition of assets lnterest expense - notes payable to member governments lnterest expense - other Total nonoperating revenues (expenses) lncome before contributions and transfers (10,819,518) 0,028,1 49) 82,234 112,690 183,783 (212,848) 4,865 (1 19,095 (178,855) (1,090,642) ,260,31 1) (53,923) (1,114,445) (75,777\ (1,355,244\ - (12,174,762) (11,142,594) Capital contributions 2,489,081 3,2!4,808 Change in net assets (8,653,513) (8,e2e,e54) Net assets, beginning ofyear 145,205,917 Net assets, end ofyear _$___1Q9i9ad91_ 154,135,871 $ 145,205,917 The accompanying notes to the basic financial statements are an integral pad of this statement. 11 WILLIAMS GATEWAY AIRPORT AUTHORITY STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE FISCAL YEARS ENDED JUNE 30, 2OO4 AND 2OO3 Business-type Activities Enterprise Funds 2004 2003 Cash flows from operating activities Receipts from customers Payments to employees Payments to suppliers Customer deposits Net cash flows from operating activities $ 11,764,163 (5,171,934) (11,224,362) $ 8,548,602 (4,755,021) (4,e72,228) (135,065) Cash flows from non-capital financing activities Loans from member governments Operating grants from other governments Net cash flows from non-capital financing activities 65,810 (4,767,198) (1,112,837) 3,390,000 4,541,850 100,000 Cash flows from capital and financing activities Acquisition of capital assets (net) Principal paid on capital leases lnterest paid on capital leases Capital grants received Net cash flows from capital and financing activities Cash flows from investing activities lnvestment income 3,490,000 4,541,850 (5,413,317) (353,772) (53,923) 3,353,114 (2,467,898) (11,185,217) (442,485) (16,181) 7,229,653 (4,414,230\ 188,490 112,690 (212,848) lnvestment loss Other income/expense Net cash flows from investing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of year $ Cash and cash equivalents, end of year 4,865 117,555 (40,502) (64,860) (3,627,541) (1,050,077) 9,296,687 10,346,764 5,669,146 $ 9,296,687 $ 4,348,808 4,947,879 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE BALANCE SHEET $ $ Cash and cash equivalents Restricted assets Total 3,642,384 2,026,762 5,669,146 $ __9,296,687* (Continued) The accompanying notes to the basic financialstafemenfs are an integral part of this statement. 12 il il l WILLIAMS GATEWAY AIRPORT AUTHORITY STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE FISCAL YEARS ENDED JUNE 30, 2OO4 AND 2OO3 Business-type Activities Enterprise Funds 2004 2003 (Concluded) Reconciliation of operating income (loss) to net cash provided by operating activities $ (10,028,149) I Operating income (loss) (10,819,518) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 7,301,957 Change in assets/liabilities: Accounts receivable Prepaid costs lnventories Accounts payable and accrued liabilities Unearned revenue Customer deposits Compensated absences payable Net cash provided (used) by operating 7,911,306 (673,215) (44,149) 16,429 (1,473,747) 1 12,003 (135,065) (54,953) 14,714 25,643 1,736,503 65,810 156,738 activities $___SJgZJgqL 7,658 $ ___l!Lj2,837) NON-CASH INVESTING, CAPITAL AND FINANCING ACTIVITIES The Authority recognized $1,260,311 and $1,090 ,642 of interest payable on loans from member govemments during the fiscal years 2004 and 2003, respectively. The accompanying notes to the basic flnancial sfalemenfs are an integml part of this statement. 13 THIS PAGE BLANK 14 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30,2004 and 2003 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements of Williams Gateway Airport Authority (WGM) have been prepared in conformity with U.S. generally accepted accounting principles applicable to governmental units adopted by the Governmental Accounting Standards Board (GASB). A. Reporting entity Williams Gateway Airport Authority was established on May 19, 1994 as a joint powers airport authority pursuant to Arizona Revised Statutes Title 28, Chapter 25, Article 8. lt operates 3,020 acres as Williams Gateway Airport ("the Airport'). WGAA is overseen by a four-person board of directors, which is comprised of a representative fromeachofthemembergovernments, ThemembersofWGMaretheGilaRiverlndianCommunity;Townof Gilbert, Arizona; City of Mesa, Arizona; and Town of Queen Creek, Arizona. ln addition to WGAA's board of directors, a variety of federal, state and local laws, agreements and regulations govern the operations at the airport. The Federal Aviation Administration (FAA) has jurisdiction over aircraft operations, including aircraft, personnel, facilities and many technical issues, including noise limits and reasonableness of fees. Under federal law and the FAA's regulations and grant agreements, WGAA cannot legally transfer revenues to its member governments except in exchange for fair value received, WGAA is legally separate from other state and local governments. There are no component units combined WGM for financial statement presentation purposes and WGM is not included in any other governmental reporting entity. These financial statements present only the financial position and activities of WGAA for which its governing board is financially accountable. with WGAA earns revenue from leases of land and airport facilities. Fees received for use of the airport include landing fees, tie down fees and fuel flowage and fixed base operator (FBO) fees. WGAA also operates a fueling operation at the airport and contracts with various tenants and users of the facilities within the airport area to provide maintenance services. Major expenses include salaries and fringe benefits, professional services for fire protection, legal and development consulting, maintenance and utilities. B. Government-wide and fund financial statements Government-wide financial statements are not presented, as WGM only engages in business-type activities. WGAA has only one fund, an enterprise fund, Accordingly, the statement of net assets, the statement of revenues, expenses and changes in net assets and the statement of cash flows report information for that single enterprise fund only. C. Measurement focus, basis of accounting, and financial statement presentation The statement of net assets and statement of revenues, expenses and changes in fund net assets are reported using the economic resources measuremenf focus and the accrual basis of accounfing. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Such revenue is subject to review by the funding agency, which may result in disallowance in subsequent periods. All of WGAA's activities are accounted for in a single proprietary or business-type fund, Private-sector standards of accounting and financial reporting issued prior to December 1, 1989 generally are followed in the proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments have the option of 15 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 following subsequent private-sector guidance for the business-$pe activities, subject to this same limitation. WGAA has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operafrng revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. Assets, liabilities, and net assets or equity 1. Deposits and investments WGM's cash and cash equivalents are comprised of cash on hand, demand deposits, cash and investments held by the State Treasurer, and highly liquid investments with maturities of three months or less from the date of acquisition. Arizona Revised Statutes authorize WGAA to invest public monies in the State and County Treasurer's investment pools; U.S. Treasury obligations; specified state and local government bonds; and interest-earning investment contracts such as savings accounts, certificates of deposit, and repurchase agreements in eligible depositories. 2. Receivables All trade receivables are shown net of an allowance for uncollectible receivables. WGAA annually reviews the balance in the reserve account during ihe budget process to determine if, based on past history, the account is adequate to cover current trade receivables. lf judged to be inadequate, an additional amount is budgeted and recorded over the course of the year. Receivables from governments are assumed to be entirely collectible and are not included in this analysis. Over the last two years, this allowance has ranged from 13% to 18% of accounts receivable. 3. lnventories and prepaid items Supply inventories are valued at cost using the firstin/first-out (FIFO) method. The cost of inventory is reported as an expense at the time the individual items are consumed. Fuel inventories are valued at cost using the moving average method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. 4. Capitalassets Capital assets include properly, plant, equipment, and infrastructure assets. Capital assets are defined by WGAA as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year, Property, plant, equipment and infrastructure assets purchased or acquired are carried at historical cost or estimated historical cost. Contributed assets are recorded at fair market value as of the date received. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. lnterest incurred during construction of capital assets is included as part of the capitalized value of the assets constructed. Other costs incurred for repairs and maintenance are expensed as incurred. 16 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 Depreciation on all assets is provided on a straight-line basis over the following estimated useful lives: improvements buildings equipment Buildings and lmprovements other than Machinery and 20 5 8 * - - 30 years 30 years 10 years Amortization of leased capital assets is provided using the straight-line method based on the estimated useful lives of the leased assets. Such amortization is added to accumulated depreciation and depreciation expense for reporting purposes. When assets are retired or sold, the costs of those assets and the related accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is charged to income or expense, 5. Gompensatedabsences The liability for compensated absences reported in the statement of net assets consists of unpaid, accumulated leave balances. The liability has been calculated using the vesting method, in which leave amounts are included for employees who currently are eligible to receive termination payments. 6. Net assets ln the statement of net assets, net assets are reported in three categories: net assets invested in capitalassets, net of related debt; restricted net assets; and unrestricted net assets. Net assets invested in capital assets, net of related debt is reported separately because it makes up a significant portion of total net assets. Restricted net assets are the portion of net assets restricted by parties outside WGM, Unrestricted net assets are the remaining net assets not included in the previous two categories. 7. lncome Taxes WGAA is exempt from federal and state income taxes as a political subdivision under Section 115 of the lnternal Revenue Code. Accordingly, no provision for income taxes has been recorded. 8. ln-kind contributed services Granting agencies sometimes allow contributed services provided by local governments to be used to match federal funding on various grants. Where applicable, the amounts of such services are recorded in the financial statements at their estimated fair values at date of receipt. Such contributed services are recognized as expense and equivalent amounts recorded as revenue, For the years ended June 30, 2004 and 2003, no contributed services were used to match grant funding, 9. Use of estimates The preparation of financialstatements in conformitywith U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 17 WILLIAMS GATEWAY AIRPORT AUTH ORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 NOTE A. 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Budgetaryinformation WGAA uses a budget process that culminates in the adoption of a formal annual budget by the board of directors. The budget is a planning and control device; it is not legally binding in the sense of appropriations commonly required in municipal governiTents. NOTE3.DETAILEDNOTES A. Ghange in accounting policy WGM implemented GASB 34 for the fiscal year ended June 30, 2004 and therefore certain balances for June 30, 2003 were restated for comparison purposes: however, net assets were not affected. B. Assets 1. Deposits and investments Deposits and investments at June 30, 2004 and 2003 consist of the following: 2004 Deposits Cash on hand Cash in bank lnvestments Money Market Mutual Fund State Treasurer's lnvestment Pool Cash on deposit with trustee Total deposits and investments Less: restricted assets Total cash and equivalents $ 1,225 9,830 2003 $ 1,225 4,024 106,311 2,982 4,458,279 7,751,996 1,536,560 9,296,687 1,093,501 5,669,146 (2,026,762) $ 3,642,384 $ (4,947,879\ 4,348,808 Deposits - WGAA's deposits at June 30, 2004, were entirely covered by federal depository insurance or by collateral held by WGAA's custodial bank in WGM's name. WGAA's bank accounts are covered up to $100,000 by federal depository insurance. ln addition, WGM's bank has pledged collateral having a market value at June 30, 2004 of $3,935,351 to cover deposits in excess of the federal depository insurance coverage. Deposits at the bank have not exceeded the federal depository insurance coverage and the collateral pledged by the bank during the fiscal years reported. lnvestments - The State Board of Deposit provides oversight for the State Treasureds pools, and the Local Government lnvestment PoolAdvisory Committee provides consultation and advice to the Treasurer. AtJune 30,2004, according to the Arizona State Treasurer's Office, the fair market value of the underlying securities in its Local Government lnvestment Pool was $1.00 per $1.00 of carrying value in the Pool. The shares are not identified with specific investments and are not subject to custodial credit risk. The investment in the State Treasurer's Local Government lnvestment Pool (LGIP) are not insured or collateralized. All other investments of WGM are uninsured and unregistered with the securities held by the counter party's trust department or agent in WGM's name. 18 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 lnvestments are categorized into three categories of credit risk: (1) lnsured or registered, or securities held by the government or its agent in the government's name. (2) Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the government's name. (3) Uninsuredandunregistered,withsecuritiesheldbythecounterparty,orbyitstrustdepartmentoragent, but not in the government's nafie, At year-end, the credit risks relating to WGM's investment balances were as follows: Repurchase agreements $ Category Reported Amount 2 & Fair Value lnvestments not subject to categorization: State Treasure/s investment Pool Total investments 2, $ 1,093,501 106,311 1,199,812 4,458,279 T=ffi Restricted assets Certain assets of WGAA are classified as restricted net assets because their use is restricted by grant or contractual agreements. Restricted assets include the following: 2004 2003 $ $ 226,461 63,405 3,121,453 1,536,560 91,396 Customer Deposits grants Deferred 841,865 State appropriation and related interest purchase 1,093,501 of equipment for in escrow Cash held $2,026,762 Total restricted assets 3. $ 4,947,879 Receivables Total accounts receivable has been reduced by an allowance for uncollectible accounts: 2004 $ Trade Receivables Grants Receivable Total due from other governments 1,126,377 -r-ffio6,- 2003 $ 1,383,331 Total Accounts Receivables Less Allowance for Uncollectible Accounts Accounts receivable, net '19 $ -w 488,236 2,310,770 T-2,;T;006- 279,164 $ (35,141) 254,729 (45,780) T-70s-p-4-s- a WI LLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30,2004 and 2003 4. Capital assets Capital asset activity for the year ended June 30, 2004 was as follows: Beginning Balance 6/30/03 lncreases Decreases $ $ Ending Balance 6/30/04 Capital assets not being depreciated $ Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated Land improvements Buildings and improvements Machinery and equipment Total capital assets being depreciated $ 81,905,608 8,133,137 90,038,745 5,676,519 $ 6,111,140 $(8,567,758) $ 87,582,127 6 $129,406,589 8,403,494 145,522 $ 8,567,758 4,413,692 81,905,608 (8,567,758) $ 80,229 124,912,668 $ 6,111j40 18,742 $ i $ 98,971 133,316,162 $ (17,638) (17,638) 4,541,576 $137,956,709 I ! t I I I i Less accumulated depreciation for: Land improvements Buildings and improvements Machinery and equipment Total accumulated depreciation $ 1e,389 $ 37,841,692 $ 39,887,639 I $ 6,1 10 6,873,780 422,067 $ 7,301 ,957 $ (17,638) Totalcapitalassets being depreciated, net-[-$$!l$!Q $ 1,265,801 Business-type activities capital assets, net-llzg;[gzrQgg $ 7,376,941 C. (17,638) $ 25,499 44,715,472 $ 47,1 71,958 2,430,987 $ 90'784'751 .${,9,1967,758) --$11U9sr94 PurchaseCommitments As of June 30, 2004, WGAA had entered into various contracts and commitments for purchases of goods and consulting and construction/renovation services, both on its own account and under grant programs. June 30 2004 June 30,2003 Open purchase commitments (net of cost of goods and services received against these commitments) $1,970,000 $ 1,850,000 Portion of above funded by grants $1 ,410,000 $ 1,020,000 WGAA had 20 active design or construction projects at June 30, 2004. These projects are expected to cost a total of $10.3 million, of which $5.1 million has been committed and $3.2 million has been spent. Some of those commitments have been fulfilled and closed. At fiscal year end, WGAA's open commitments with contractors relating to these projects were as follows: 2A i WILLIAMS GATEWAY A]RPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30,2004 and 2003 $ Airport Fuel Farm Design & Construct Taxiway F Taxiway B Drainage Other $ 450,617 $ 380,962 '1,305,034 65,709 '!34,684 289,700 723,490 Total D. Remaining Contract Spent-to{ate Project $ 1,463,807 1,936,38e Obligations under leases Operating lease WGM has leased land to a tenant who constructed a building on the property and in 2000 leased the building to WGM for 15 years. The total rent due from WGM over the remaining life of the lease is $2,134,080 plus agreed escalation factors. WGAA subleases the space in the building to other airport tenants. The long-term lease agreement is classified as an operating lease. Future rents will include adjustments based on the Consumer Price lndex (which are not projected in the following schedules). Total rent expenses for operating leases for the years ended June 30, 2004 and 2003 were $196,992 and $180,576, respectively. The future minimum operating lease payments as of June 30, 2004 and June 30, 2003 were payable as follows: -s- 2004 Year endinq June 30, 2004 196,992 196,992 196,992 196,992 196,992 2005 2006 2007 2008 2009 2010-2014 2015-2019 984,960 Minimum operating lease payments 2003 T--136F2196,992 196,992 196,992 196,992 196,992 984,960 164,160 164,160 $ 2,134,080 $ 2,331,072 Capital leases WGAA has entered into lease agreements as lessee for financing the acquisition of various equipment items. These lease agreements qualify as capital leases for accounting purposes. The leased assets have been recorded at cost. The assets acquired through capital leases are as follows: 21 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FTNANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 2003 2004 Asset type: Machinery and equipment Less: Accumulated depreciation $ Total _$ 1,375,709 $ 967,723 (201,430) 1,1?4,2?e_ (1p3,780) _9___313843 t: Capital leases result in purchases of capital assets, which are funded by outside entities. Such assets are pledged as collateral against the full payment of the lease obligations. Not all of these assets have been purchased, so the assets do notyet equal the gross lease amount. As ofJune 30, 2004 and June 30, 2003, the future minimum capital lease obligations and the net present value of these minimum lease payments were payable as follows: $ 386,621 386,621 388,522 361,327 2007 362,436 162,957 162,957 2008 Total minimum lease payments 1,297,526 1 _9._1?19€99_ ,710,607 (137,027) (77,718) Less: amounts representing interest Present value of minimum lease payments E" 2003 408,170 388,522 2004 Year endinq June 30, 2044 2005 2006 $ 1,573,580 Long-term obligations has longterm loans payable from its member governments to provide funds for its shortfall in operating revenues and for capital improvements. Changes in long-term obligations forthe year ended June 30, 2004 are as follows: Due WGM Within June 30, Loans payable Principal on member loans Accrued lnterest on member loans Member loans payable Other Liabilities Capital Leases Payable Compensated absences Business-type longterm liabilities 2003 $37,473,976 4,536,388 lncreases $3,390,000 1,260,311 Decreases June 1,573,580 2004 One Year $40,863,976 $ 5,796,699 - 46;660Frr -T650-ff @ 30, (353,772) 1,2'19,808 332,126 504,836 (348,098) 488,864 $43,916,070 $5,155,147 $(701,870) $48,369,347 348,401 356,683 $705,084 Debt service requirements on long-term loans payable to member governments at June 30, 2004, including future interest based on current repayment schedules, are as follows: 22 t I WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30,2004 and 2003 Year Ending June 30 2005 2006 lnterest Pringipal $- 20Q7 2008 2009 2010-2014 2015-2019 2020 Total 40,863,976 34,012,709 $ 34,012,709 $40,863,976 r::- Loans from Member Governments: Member governments have by agreement provided annual funding for operations and capital expenditures as follows: For Year Ended June 30, 2003 For Year Ended City of Mesa Gila River lndian CommunitY Town of Gilbert Town of Queen Creek June 30, 2004 73.7% 78.0% 13.3o/o 10.0o/o 10.3% 10.0% 2.0% 2.70k l_000% 100,0% Based on the Joint Powers Airport Authority Agreement entered into by the members of WGAA, all payments made to WGAA by the members are considered loans to be repaid to the members, The intent of the members in providing fundi to WGAA is to invest in the operation and development of the airport for the benefit of the citizens of their communities. The Federal Aviagon Administration has established a "six year rule" limiting retroactive reimbursement of contributions unless appropriate documented agreements are in place. ln order to maintain WGAA's right to eventually repay contributions made by its members, WGAA and its member governments have drawn up formal pr6mds6ry notes stating that previous and future payments are to be repaid in the year 2020 or at such later time as WGM's board of directors deems appropriate, with 3% interest (compounded annually). Loans payable to member governments increased by $3,390,000 in principaland $1,260,31 year 2OO4 and by $4,565,000 in principal and $1,090,642 in interest in fiscal year 2003: 1 in interest in fiscal Amounts due each member government at year-end (including accrued interest) were: w 2004 City of Mesa Gila River lndian CommunitY Town of Gilbert Town of Queen Creek Loans Payable to member governments at June 30 @ 2003 3,863,881 4,429,797 4,576,377 924,574 4,103,278 810,266 $ 46,660,675 $ 42,010,364 ln addition to the above investments by the member governments, representatives from the City of Mesa, Gila River lndian Community and Towns bt CitUert and Queen Creek provide time to WGM to consult with its management, attend meetings and provide other services. 23 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 F. Operating lease revenue WGAA leases out various facilities on the airport. Leases are primarily for office buildings and hangars, but also inciude ground leases for tenant development. occasionally WGM's lease agreements provide for rents based on the 6nants' operating revenues or other criteria. Lease income revenue included $55 and $0 of such contingent rents in the fiscal years ending June 30, 2004 and 2003, respectively. The following schedule shows contracted future revenue from noncancelable lease agreements in place at June 30, 2004 and June 30, 2003: Fiscal Years Ending June 30: 2004 2005 2006 2007 2008 2009 2010 and thereafter Totals $ 2004 $ 2003 1,191,916 846,048 1,408,967 525,787 720,455 279,892 465,553 231,218 300,38'1 168,018 296,283 5.197.154 2,138,763 :-$ 8,388,793 $ 5,381,642 With few exceptions, WGAA's leases include escalation clauses, which will result in increases in future rents. The escalation clauses typically provide for annual rent increases of 5 percent or the change in the Consumer Price Index. Such increases are not included in the above figures. NOTE A. 4. OTHER INFORMATION Risk management ln addition to safety etforts, WGM's risk management activities include purchase of commercial insurance for all significant risks. Risks retained by WGM include normal deductibles and the small risk of losses in excess of iniurance coverage. The amounts of settlements have not exceeded insurance coverage for the past three years. There have-been no significant reductions in insurance coverage. The financial statements do not include any liability for claims at June 30, 2004 and 2003. Losses arising from claims and judgments are expensed when (1) it is probable that an asset has been impaired or a liability hls been incurred at the date of the financial statements, and (2) the amount of the loss can be reasonably estimated. B. Contingencies 1. Air Force prime lease and deed property ln April i 998, the United States Air Force conveyed to WGMa quitclaim deed for 2,931 acres of real property been deeded to have portions leased of the then public Since airport. for tire purpose of developing a 2*year (39)acres underthe remain Thirty-nine been completed. have environmentalilearances the airportas lease, which WGM entered in January 1996. Together, the deed and long-term lease encompass approximateiy 3,020 acres of land, which includes the three runways, and 120 buildings or facilities (such as navigationat iids;. The real property conveyed in the deed was booked at estimated fair market value at the date of the transfer. 24 WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 lncluded in Property and Equipment are donated assets (referred to in this note as "the Property")received from the U.S. Air Force (Federal government) totaling $131,659,650 (net of accumulated depreciation) that are subject to certain restrictions contained in an indenture between the United States of America and WGM. Under the terms of the deed, this property cannot be sold or transferred and the property must be operated as a public airport. Noncompliance with the terms of the indenture could, at the option of the Federal government, result in the Property reverting back to the United States of America 2. Arizona Department of Transpodation Property and Equipment includes $32,848,117 (net of accumulated depreciation) in improvements to real property that were paid for (in part) with funds from the Arizona Department of Transportation (ADOT), Such improvements or any real property necessarily connected or used in conjunction therewith cannot be relocated, soid, transferred, exchanged, mortgaged or encumbered in any way without the prior written permission of ADOT, 3. Economic Dependence WGAA is dependent upon its members to fund its current shortfall in operating activities. Continuation of construction and improvement activities is dependent upon continued support from the federal government and other governmental entities. C. Related pa*y transactions WGAA has earned revenues, incurred expenses and made other payments involving some of its member governments. Following is a summary of these transactions: WGAA Fiscal Year ended June 30, 2004 WGAA WGAA Revenues Expenses 7,402 City of Mesa Town of Gilbert Town of Queen Creek Fiscal Year ended June 30, 2003 City of Mesa Town of Gilberi Town of Queen Creek $ 619,628 Capital Projects Sales Taxes Collected/ Remitted $2,729,197 $ $5,789,513 $ 1 13,981 1,851 1,257 $ 4,514 $ 530,492 90,393 7,494 2,492 WGAA revenues above consist of real property leases, utilities billings and minor maintenance work. WGM expenses include airport rescue and fire fighting protection and permits. The construction of Sossaman Road and Velocity Way on the airport has been a joint effort of the City of Mesa and WGAA. Each party has paid their agreed share of these projects. On completion, the roads have been or will be transferred to City of Mesa, which is then responsible for maintaining them. ln fiscal year 2003, WGAA recorded a transfer of the first two phases of the Ray/Sossaman Road improvements to City of Mesa. The book value of the transferred assets (which were consiructed with grant funds) was $5,787,923. Fiscal year 2004's portion of these capital projects remain in Construction ln Progress, since they were not yet completed at year-end. tr, WILLIAMS GATEWAY AIRPORT AUTHORITY NOTES TO THE BASIG FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2004 and 2003 D. Retirement plans Arizona State Retirement System - Plan Description WGAA contributes to a cost-sharing multiple-employerdefined benefit pension plan administered bytheArizona State Retirement System. Benefits are established by state statute and generally provide retirement, death, longterm disability, survivor, and health insurance premium benefits. The system is governed by theArizona State Retirement System Board, according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The System issues a comprehensive annual financial report that includes financial statements and required supplementary information. The most recent report may be obtained bywriting the System, 3300 North Central Avenue, P.O. Box 33910, Phoenix, AZ 85067-39'10 or by calling (602) 240-2000 or (800) 621-3778. Funding Policy - The Arizona State Legislature establishes and may amend active plan members'and WGM's contribution rate. For the year ended June 30, 2004, active plan members and WGAA were each required by statute to contribute at the actuarially determined rate of 5.70 percent (5.20 percent retirement and 0.50 percent long-term disabilig) of the members' annual covered payroll. WGM's contributions to the System for the years ended June 30,2A04,2003, and 2002 were $228,083, $98,461, and $90,167, respectively, which were equal to the required contributions for the year. Deferred Gompensation Plans WGAA offers its employees a deferred compensation plan created in accordance with lnternal Revenue Code Section 457. The plan is available to all WGM employees and permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. Trust agreements are in place, making these funds available only to employees and their beneficiaries. Accordingly, these funds are not reflected in WGAA financial statements. WGAA provides its employees the opportunity to participate in two plans: one administered by ING lnsurance & Annuity Company and the other by the lnternational City Management Association. 26 SUPPLEMENTARY INFORMATION 27 f THIS PAGE BLANK 28 Wlliams Gateway Airport Authority Statement of Revenues and Expenses Unaudited (Budget Basis) June 30, 2004 AIRPORT . All Operations (Excludes capital/grant costs and funding) Fiscal 2004 Revised 2004 Budget Budget YTD Actual YTD INCOME Fueling Sales Landing Fees Lease lncome Misc. Services Tie Down / Hangaring lncome Total Airport Revenues Local Member Contributions Direct Total Local Contributions Grant lncome Other lncome lnterest lncome Sale of Publications, Other Total Other lncome Gross lncome 7,376,252 1 16,336 2,190,981 129,244 93,960 9,906,773 7,376,252 1 16,336 2,190,981 129,244 93,960 -m6'l?r Budget = 82,140 -nmw@ 87% 2,944,332 2,944,332 70,000 70,000 100,000 71,000 7,800 72,193 4,865 ,000 7,80.0 78,800 2,999,905 78,800 12,999,905 YTD Actual Ove(Under) Ann'l Budget 100.0 9,890,017 1340/o 117,657 101Y0 2,069,647 94To 165,914 1280/o 2,944,332 2,944,332 71 1 %of 2,513,765 1,321 (121,334) 36,670 (1 1 820) 2,418,602 *----d-0 --Tm66-- 143% 30,000 1Q2o/o 1 ,193 (2,935) 62To --08%', -3m-@ (1,742) 2,446,860 Cost of Goods Sold Cost of Goods Sold re Service Work Cost of Fueling Sales Total Cost of Sales Gross Margin EXPENSES Advertising Equipment - Office Equipment - Operating Equipment - Rent Fringo Benefits Fuel lnsurance Lease Expense (Real Estate) Ofiice Supplies Operating Supplies Other Postage & Shipping Printing Professional Services Repair & Maintenance Salaries Telephone/Radio Training Travel Utilities Total Expenses lncome Over/(Under) Expenditures 25,200 25,200 4,941,766 .4,890,750 4,966,966 4,915,950 --EF52F's-e- -a3'&F5- 48,320 43,820 14,545 24,345 29,300 23,000 553,094 553,094 1,302,308 1,302,308 43,602 43,602 254,392 254,392 196,992 196,992 49,375 46,275 53,380 53,380 38,289 BB,40s 17,144 17,144 36,050 36,050 1,048,073 1,054,573 41 ,s80 41 1,580 3,826,789 3,826,789 127 ,388 127 ,3BB 84,959 83,459 69,705 69,705 291,652 291,652 8,496,935 8,547,951 1 TTgE (463,996) 26,835 106% 6,910,027 141%.. 6,936,862 141To 8,509,903 *10M- 1,414,539 109a/o 196,992 10Qo/o 55,124 1260/o 239,122 94% 40,953 88% 68,318 128% 82,265 93Yo 6,579 38% 21,719 60% 90,317 63,816 35,632 284,424 8,441,358 68,545 2,1 58 (5,344) (83,e61) 112,231 11,522 (15,270) 0 (5,322) 990/o 71% (37,071) 76% (19,643) (34,073) 94% 510/a 98% 99% -15T0 This budget-basis report is designed to show results of operations compared lo our annual operating budget. lt is not intended to represent financial position or results of operations under Generally Accepted Accounljng Principles. 29 (15,779) 14,938 (6,140) (10,565) (14,331) 53,560 (26,176) (20,100) 105% 385,404 3,806,688 2,020,912 -aZE,s4-8- 28,041 64''/o 26,503 109% 17,656 77o/o 469,133 BSTo 1,108,133 1,635 2,019,277 (7,228) (1 06 593) FQ' EA 1 THIS PAGE BLANK 30