City of Chandler Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021 “The Future’s in Sight” CITY OF CHANDLER, ARIZONA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 Prepared by Management Services Department Dawn Lang, Deputy City Manager|CFO Kristi Smith, Accounting Manager CITY OF CHANDLER, ARIZONA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ...................................................................................................................................... Elected and Appointed Officials .................................................................................................................. Organizational Chart...................................................................................................................................... Certificate of Achievement for Excellence in Financial Reporting ....................................................... 1 7 8 9 FINANCIAL SECTION Independent Auditor’s Report ..................................................................................................................... Management’s Discussion and Analysis (MD&A) .................................................................................... Basic Financial Statements: Government-wide Financial Statements Statement of Net Position ...................................................................................................................... Statement of Activities ............................................................................................................................ Fund Financial Statements: Balance Sheet - Governmental Funds ................................................................................................. Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position ...................................................................................................................... Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds .......................................................................................................................................................... Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statement of Activities ............................ Statement of Net Position - Proprietary Funds ................................................................................. Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds............. Statement of Cash Flows - Proprietary Funds ................................................................................... Notes to the Financial Statements ......................................................................................................... Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund ............................................................................................................................................ Schedule of the Proportionate Share of the Net Pension Liability - Arizona State Retirement System .................................................................................................................................. Schedule of Contributions - All Pension Plans .................................................................................. Schedule of Changes in the Net Pension Liability and Related Ratios - Public Safety Personnel Retirement System - Police ................................................................................................ Schedule of Changes in the Net Pension Liability and Related Ratios - Public Safety Personnel Retirement System - Fire .................................................................................................... Schedule of Changes in OPEB Liabilities and Related Ratios - Single Employer Plan .............. Notes to the Required Supplementary Information ........................................................................ i 11 17 30 32 34 35 36 37 38 41 42 44 91 92 94 96 98 100 101 CITY OF CHANDLER, ARIZONA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS, continued FINANCIAL SECTION, continued Other Financial Statements: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: General Obligation Bonds Debt Service ........................................................................................... Non-Major Governmental Funds: Combining Balance Sheet.................................................................................................................... Combining Statement of Revenues, Expenditures and Changes in Fund Balances .............. Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Highway User Special Revenue......................................................................................................... Local Transportation Assistance Special Revenue ....................................................................... Grants Special Revenue ...................................................................................................................... Community Development Special Revenue .................................................................................. Police Confiscated Property Special Revenue ............................................................................... Parks and Recreation Special Revenue ........................................................................................... Museum Special Revenue .................................................................................................................. Library Special Revenue ..................................................................................................................... Special Assessment Bonds ................................................................................................................ General Government Capital Projects ............................................................................................ Public Buildings Capital Projects ...................................................................................................... Grants Capital Projects ....................................................................................................................... Streets Capital Projects....................................................................................................................... Community Services Capital Projects .............................................................................................. Public Safety Buildings and Improvements Capital Projects ..................................................... Vehicle and Capital Equipment Replacement Capital Projects ................................................. Technology Replacement Capital Projects ..................................................................................... Municipal Arts Capital Projects ......................................................................................................... Non-Major Proprietary Funds: Combining Statement of Net Position .............................................................................................. Combining Statement of Revenues, Expenses and Changes in Net Position.......................... Combining Statement of Cash Flows ................................................................................................ 105 109 112 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 134 137 138 STATISTICAL SECTION Financial Trends Schedule 1, Net Position by Component ......................................................................................... Schedule 2a, Changes in Net Position .............................................................................................. Schedule 2b, Changes in Net Position .............................................................................................. Schedule 2c, Changes in Net Position............................................................................................... Schedule 3, Fund Balances of Governmental Funds ..................................................................... Schedule 4, Governmental Funds Revenues ................................................................................... Schedule 5, Governmental Funds Expenditures and Debt Service Ratio ................................. ii 142 144 146 148 150 152 154 CITY OF CHANDLER, ARIZONA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS, continued STATISTICAL SECTION, continued Schedule 6, Other Financing Sources and Uses and Net Changes in Fund Balance Governmental Funds ............................................................................................................................ Revenue Capacity Schedule 7, Taxable Revenue by Category ...................................................................................... Schedule 8, Direct and Overlapping Sales and Use Tax Rates .................................................... Schedule 9, Principal Sales and Use Taxpayers .............................................................................. Debt Capacity Schedule 10, Ratios of Outstanding Debt ........................................................................................ Schedule 11, Direct and Overlapping Governmental Activities Debt ........................................ Schedule 12, Legal Debt Margin Information ................................................................................. Schedule 13a, Pledged-Revenue Coverage ..................................................................................... Schedule 13b, Pledged-Revenue Coverage ..................................................................................... Schedule 14, Property Tax Assessment Ratios ............................................................................... Schedule 15, Property Taxes Levied and Collected ....................................................................... Schedule 16, Direct and Overlapping Assessed Valuations and Tax Rates Per $100 Assessed Valuation ............................................................................................................................... Schedule 17, Property Value by Property Classification ............................................................... Schedule 18, Net Assessed Limited Property Assessed Value of Major Taxpayers ............... Schedule 19, Estimated Net Full Cash Value and Assessed Values............................................ Schedule 20, Direct and Overlapping General Obligation Bonded Debt Ratios ..................... Schedule 21, Population Statistics ..................................................................................................... Schedule 22, Excise Tax Collections .................................................................................................. Schedule 23, Transaction Privilege (Sales) Tax Rates by Category ............................................. Schedule 24, State Sales Tax Taxable Activities, Tax Rates and Distribution Share ............... Schedule 25, Combined Schedule of Water and Sewer System Revenues, Expenses, Net Revenues and Debt Service Coverage .............................................................................................. Schedule 26, Utility Rate Increase History ....................................................................................... Schedule 27, Top 10 Water and Wastewater Customers ............................................................. Schedule 28, Number of Water and Wastewater Customers ..................................................... Schedule 29, Delinquencies on Payments for the Assessments ................................................ Schedule 30, Direct and Overlapping General Obligation Bonded Debt Outstanding.......... Demographic and Economic Information Schedule 31, Demographic and Economic Statistics ..................................................................... Schedule 32, Principal Employers ...................................................................................................... Operating Information Schedule 33, Employees by Function................................................................................................ Schedule 34, Operating Indicators by Function/Program ............................................................ Schedule 35, Capital Asset Statistics by Function/Program ......................................................... iii 156 158 160 161 162 163 164 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 184 185 186 187 188 190 192 Introductory Section “The Future’s in Sight” Chandler’s commitment to innovation, smart planning, and wise investments enables our community to receive quality services at some of the lowest tax and utility rates in the Valley. Introductory Section Letter of Transmittal Elected and Appointed Officials Organizational Chart Certificate of Achievement for Excellence in Financial Reporting Introductory Section December 10, 2021 Honorable Mayor, Members of the City Council, City Manager, and Citizens of the City of Chandler: The Annual Comprehensive Financial Report of the City of Chandler, Arizona (the City), for the year ended June 30, 2021, is hereby submitted in accordance with City Charter and State statutes. Both the City Charter and State statutes require that the City issue annually a report on its financial position and activity, and that this report be audited by an independent certified public accountant. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City’s management. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that fairly presents the financial position and results of operations of the various funds and component units of the City. Generally accepted accounting principles (GAAP) in the United States of America require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Chandler’s MD&A can be found immediately following the report of the independent auditors. The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1996 and U.S. Office of Management and Budget Uniform Guidance. Information related to this single audit, including a schedule of expenditures of federal awards, the independent auditors’ reports on the internal control structure and compliance with applicable laws and regulations, and a schedule of findings and questioned costs are included in a separately issued report. GOVERNMENTAL STRUCTURE, LOCAL ECONOMIC CONDITION AND OUTLOOK The City, incorporated on February 17, 1920, is located in the southeastern portion of Maricopa County, and encompasses approximately 65 square miles. The City has operated under a council-manager form of government since May 25, 1964, and is governed by the City Council, consisting of a mayor and a six member council. Councilmembers are elected at-large on a staggered basis; the mayor and councilmembers are elected for four-year terms and are limited to two consecutive terms in office. The City Council is vested with policy and legislative authority, and is responsible for passing ordinances, adopting the annual budget, appointing committees, commissions, and board members, and appointing the positions of City Manager, City Attorney, City Clerk, and City Magistrate. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. Chandler is the fourth largest city in Arizona and is one of several major cities comprising the greater Phoenix metropolitan area, which is the economic, political, and population center of the State of Arizona. The City’s population has experienced remarkable growth over the past 25 years, increasing by 114 percent, from an estimated 128,652 in 1995 to 275,987 in 2020, based on the 2020 census. The City’s manufacturing sector has been a major driver of economic growth during this time and includes high-tech industrial companies such as Intel Corporation, Northrop Grumman, Microchip Technology, and NXP Semiconductors. These four companies combine to employ over 17,000 people in the City. Another industry that has experienced strong growth is financial services with companies such as Wells Fargo, Bank of America, PayPal, GM Financial Services, Allstate, and Liberty Mutual Insurance establishing corporate offices in Chandler. These six companies combine to employ over 13,000 people in the City. Mailing Address Mail Stop 609 PO Box 4008 Chandler, AZ 85244-4008 Management Services Administration (480)782-2250 (480) 782-2253 Fax chandleraz.gov Location Third Floor 175 S. Arizona Ave. Chandler, AZ 85225 The City boasts a strong labor market serving the high technology field’s demand for skilled workers. Chandler’s median age is 36 years and the median household income is $89,732. In addition, more than 75 percent of the adult population has a college degree or some college education. Nearly 25 percent of jobs in Chandler are in high technology fields while the national average is about 10 percent, according to data from the Maricopa Association of Governments and Bureau of Labor Statistics. The City’s unemployment rate averaged 5.8 percent during fiscal year 2020-21 compared with 6.7 percent for Maricopa County and 7.1 percent for the State of Arizona. The City’s sales tax revenues, which comprise over 54 percent of its general fund, increased by 10.4 percent for fiscal year 2020-21 from the prior year actuals. The City continues to strengthen its financial position and has benefitted from one-time revenues created by increased retail spending during the COVID-19 pandemic and new development. With steady operating revenue growth anticipated, managing costs of services and maintaining existing infrastructure continues to be critical as the City emerges from the impacts of the COVID-19 pandemic. Consistently applying sound financial practices, achieving notable economic development successes, and having a structured plan to pay-down its Public Safety Personnel Retirement System (PSPRS) unfunded liability have helped the City continue its strong financial position while maintaining its AAA General Obligation Bond credit rating from all three ratings agencies. The City enters into tax abatement agreements as part of economic development programs. Long-term impacts from tax abatements are considered immaterial. Additional tax abatement details are included in Note 18. The City of Chandler’s continued goal is to provide the highest quality services to the community in the most cost-effective manner. These services include Public Safety: Police and Fire; Community Services: Park and Recreation and Libraries; Cultural Development: Center for the Arts and Museum; Public Works: Streets and Traffic; Utilities: Water, Wastewater, Reclaimed Water and Solid Waste; Neighborhood Resources; Development Services; Airport; Tax and Licensing and numerous internal services. The Council’s strategy to achieve these results is through goals to improve Chandler in a coordinated manner and to make fiscally responsible decisions that will continue to strengthen the City. The Chandler Industrial Development Authority and the Chandler Cultural Foundation are two legally separate entities, both of which are reported separately within the City's financial statements. Additional detail on these entities can be found in Note 1. The City Council’s strategic goals are: • Being the Most Connected City Connect our community using enhanced communication technologies to share information by increasing electronic availability of City information. Increase community connectivity through enhancing multimodal transportation. • Being a Leader in Trust and Transparency Provide timely and accurate data and reports to maintain accountability and provide support for effective decision making. Promote opportunities that encourage City engagement and input. • Maintaining Fiscal Sustainability Maximize the City’s diverse portfolio of revenue sources. Continue adherence to and improvement upon fiscal policies. Maintain strong bond ratings with all three ratings agencies for all types of debt. Manage expenditure growth through periodic review of programs and services. • Attracting a Range of Private Sector Businesses Position Chandler to be recognized by corporate real estate executives, site selectors, regional partners, and the development industry as a premiere location for new investment. Coordinate and facilitate the revitalization of Downtown Chandler. • Fostering a Contemporary Culture that Embraces Unity Promote Chandler as an inclusive community that values its rich diversity, history, and culture. Support diversity through City employment practices. Invest in employees, support systems, and innovation strategies that ensure Chandler remains a leader in the delivery of high quality services. 2 • Being Safe and Beautiful Promote a multifaceted approach to address the needs of neighborhoods from the physical, safety, and community perspectives. Construct and maintain sustainable public infrastructure. Ensure Chandler remains a safe community by employing best practices. 2020-2021 Accomplishments Under the guidance and leadership of the Mayor and Council, along with the expertise and dedication of City management and staff, a number of accomplishments were achieved this last fiscal year. Listed below are just a few of those accomplishments: • Maintained AAA General Obligation (GO) bond credit ratings with stable outlooks from all three rating agencies, making Chandler one of a select few municipalities in the U.S. with this distinction; • Advised the Citizen Bond Exploratory Committee and coordinated the efforts of the Finance Subcommittee towards a final recommendation of needed bond authorization that does not increase the City’s property tax rate; • Implemented a new online Business Portal for City registrations and licensing; • Promoted public participation in the 2020 Census by working with the City’s Complete Count Committee to educate residents about the importance of completing the census. Produced communication materials that explained the significance of the census; • Provided communication support throughout the City’s response to the COVID-19 pandemic by producing videos, broadcasting meetings, and creating digital content on the City’s websites and social medial platforms; creating graphics, signs, and printed materials to support the City’s response; monitoring and responding to constituent and employee inquiries; and producing FAQ materials; • Implemented City resolution to allow extended outside seating for liquor establishments in accordance with the Governor’s executive order relaxing regulations during the pandemic; • Updated the City Council Strategic Framework in print and digital formats as well created a campaign to promote the City Council vision, updated brand statement, and focus areas; • Initiated and monitored the implementation of three infrastructure improvement projects in support of Intel Corporation capital improvements under provision of State law; • Economic Development’s combined business attraction/retention efforts have supported projects that are anticipated to provide 984 jobs in Chandler within the next year and up to 1,543 jobs within three years. Key Economic Development-assisted business locate projects including Comtech, Honeywell, Local Motors, VIAVI, Airstream, Ranch Market, and Mechanical Keyboards; • Implemented the City’s Business Hiring and Retention Program, which disbursed $9.5 million in relief funds to more than 830 Chandler businesses in support of their efforts to keep workers on payroll during COVID-19, as well as the Industrial Development Authority (IDA) PPE grants and “I Choose Chandler” PPE Kit Program; • Successfully hosted nearly 500 virtual engagements with City patrons through the Chandler Library, providing safe social opportunities for the community during the pandemic; • The Chandler Arts Commission supported public art projects including vibrant utility boxes and the Chandler Center for the Arts (CCA) Donor Wall. The Public Safety Training Center project “Our Nature” was recognized by the American Institute of Architects Arizona Chapter with the Architectural Component Award; • The Vision Gallery hosted 60 free events that included opening receptions, Vision Kids classes, and special events with more than 4,000 attendees. The gallery was also recognized as one of the ten best art galleries in metro Phoenix; • Collaborated with the Downtown Chandler Community Partnership to keep downtown businesses aware of local, state, and federal executive orders affecting their business, recovery, and grant opportunities, as well as promotional initiatives to help businesses survive during the pandemic; 3 • Issued 4,220 building permits for over $1.13 billion in construction in calendar year 2020 and conducted 23,740 building inspections which is an increase of over 72% over the previous year; • Development Services partnered with Information Technology to design a multi-year Fiber Master Assessment and Master Plan study that developed plans to maintain and improve the City’s fiber system. Information Technology completed the City’s Fiber Assessment and delivered recommendations to City Management and the Information Technology Bond Subcommittee; • Expanded the Waitwhile online appointment capability for several City departments to reduce the number of people in City facilities and streamline/reduce the time it takes for citizens to visit City facilities, further enhanced employee’s ability to effectively and securely work remotely through the implementation of robust infrastructure and security solutions, and provided geographic representation of various City functions that enabled departments to effectively manage social distancing issues; • Neighborhood Programs was awarded 20 neighborhood grants totaling over $34,000 for cleanup events, common wall, and landscaping improvements, as well as received $25,000 from local businesses to create and enhance community programs; • Received and allocated over $13 million in Emergency Rental Assistance Program and Community Development Block Grant-Coronavirus funds to assist Chandler residents impacted by COVD-19 with rent and utility payments; • The Fire Department participated in the planning and design of the southeast COVID-19 Vaccination POD and provided medical standby staffing during the duration of its operation, and successfully vaccinated 720 Chandler employees and 68 Chandler seniors in the public housing program; • Treated and reclaimed 11.71 billion gallons of wastewater at the Airport, Lone Butte, and Ocotillo Water Reclamation Facilities, 10.3 billion gallons of which were reused for irrigation and cooling; • Pecos Treatment Plant treated and delivered 23 billion gallons of potable drinking water; • Completed ADA upgrades to 845 sidewalk/driveway locations and 980 corner ramps; • Field Operations Division received nine hybrid patrol vehicles, offering significant improvements in fuel economy and the reduction of carbon dioxide emissions; • Continued developing and maintaining community partnerships, which is the cornerstone of system of policing resulting in crime being down again in 2020, making it one of the safest years in Chandler’s history; and • Implemented the Thrive Resilience Program for Chandler teens, which includes training in all three public school districts in the City of Chandler, aimed at empowering students with resilience-based skills to enhance their positive mental health while aiding in successful social and emotional wellbeing of school communities. FINANCIAL INFORMATION Internal Control Structure Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with GAAP. The 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. As a recipient of federal, state, and county financial assistance, the City is also 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 various other City staff, as needed. 4 Single Audit As a part of the City’s single audit, described earlier, tests were made of the City’s internal control structure and of its compliance with applicable laws and regulations, including those related to federal financial assistance programs. Budgetary Controls The City maintains budgetary controls as an integral part of its overall system of internal controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, capital projects funds, enterprise funds, internal service funds, and fiduciary funds are included in the annual appropriated budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted (FY 2020-21, $1.06 billion). The City additionally exercises management control and oversight of the budget at the department level within each fund and maintains an encumbrance accounting system as another method of maintaining budgetary control. Encumbered amounts do not lapse at fiscal year-end and appropriation equal to the amount of year-end encumbrances are added to the current year budget in each cost center. Expenditures against those encumbrances are charged to the current year appropriation. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. OTHER INFORMATION Independent Audit City Charter and State statute require an annual audit by a firm of independent certified public accountants and the firm of Heinfeld, Meech & Co., P.C. has been selected by the City to uphold this requirement. In addition to meeting the requirements set forth in City Charter and State statutes, the audit was also designed to meet the requirements of the federal Single Audit Act of 1996 and the related U.S. Office of Management and Budget’s Uniform Guidance. Auditing standards generally accepted in the United States of America and the standards set forth in the General Accountability Office’s Government Auditing Standards were used by the auditors in conducting the engagement. The auditor’s report on the basic financial statements is included in the financial section of this report. The auditor’s reports on internal controls and compliance with applicable laws and regulations can be found in a separately issued single audit report. Financial Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Chandler, Arizona, for its Annual Comprehensive Financial Report for the year ended June 30, 2020, marking the thirty-ninth consecutive year the City has received the GFOA Certificate of Achievement. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of a municipal government financial report. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report whose contents conform to program standards. Such reports must satisfy both GAAP and applicable legal requirements. Additionally, the City of Chandler was also awarded the Distinguished Budget Presentation Award for the fiscal year beginning July 1, 2020 from the GFOA, marking the thirty-third consecutive year of receiving this award. The award reflects the commitment of staff to meeting the highest principles of governmental budgeting. In order to be awarded a Distinguished Budget Presentation Award, the City had to satisfy nationally recognized guidelines for effective budget presentation. The guidelines are designed to assess how well an entity’s budget serves as a policy document, financial plan, operational guide, and communications device. The City’s budget presentation receives an outstanding rating in many of the areas rated. 5 The Certificate of Achievement and Distinguished Budget Presentation Awards are valid for a period of one year only. We believe our current Certificate of Achievement report continues to conform to the Certificate of Achievement program requirements and we are submitting it to the GFOA. Acknowledgments I wish to express my sincere thanks to the entire staff of the Accounting Division; without whose assistance this report could not have been prepared. Special acknowledgment is made for the work of Kristi Smith, Accounting Manager; Tracy Schmidt, Accounting Supervisor; Robert Steele, Accounting Supervisor; Lina Alam, Senior Accountant; Debbie Motta, Senior Accountant; and Joanne Chang, Senior Accountant. Special thanks also go to Julie Buelt, Senior Financial Analyst, for assistance in reviewing the final document. Finally, I wish to thank the Mayor and Council, City Manager, Assistant City Manager, Directors, and City staff for their continued support in promoting sound financial policies and internal controls. Respectfully submitted, Dawn Lang Deputy City Manager | CFO 6 CITY OF CHANDLER, ARIZONA ELECTED AND APPOINTED OFFICIALS JUNE 30, 2021 Kevin Hartke, Mayor Mark Stewart Vice Mayor Christine Ellis, Councilmember OD Harris, Councilmember Rene’ Lopez, Councilmember Matt Orlando, Councilmember Terry Roe, Councilmember Executive Staff Joshua H. Wright, Acting City Manager Debra Stapleton, Assistant City Manager Department Heads and Directors Kelly Schwab, City Attorney Dana DeLong, City Clerk Alicia M. Skupin, Acting Presiding City Magistrate Matt Burdick, Communications and Public Affairs Director Andy Bass, Community Services Director Kim Moyers, Cultural Development Director Derek Horn, Development Services Director Micah Miranda, Economic Development Director Tom Dwiggins, Fire Chief Rae Lynn Nielsen, Human Resources Director Sandip Dholakia, Chief Information Officer Dawn Lang, Management Services Director Leah Powell, Neighborhood Resources Director Sean Duggan, Chief of Police John Knudson, Public Works & Utilities Director 7 • Maintenance & Infrastructure • Access/Key Control • Energy Management • Custodial Services • Fleet Services • Recreation/ Aquatics • Park Development • Park Maintenance • Libraries Community Services • Water/Wastewater • Transportation • Solid Waste Services • Capital Projects Public Works and Utilities • Information Security • Planning • Infrastructure Support • Recruitment & Selection • Tax & Licensing • Utility Services • Operations • Property & Evidence • Prevention & Training • Purchasing • Health & Medical • Forensic Science • Environmental Management • Central Supply • Field Operations • Administration • Budget Office • Accounting Management Services Sustainability/Performance • Workers’ Compensation • Safety • Organizational Development • Emergency Management • Criminal Investigations • Community Services Airport • Government Relations • ADA Coordinator • Multimodal Planning • Transportation Policy Police Fire • Labor Relations • Video Production • Classification & Compensation • Benefits & Wellness • Public Information Government Relations and Policy • HR Administration/HRMS • Print, Mail, Graphics Human Resources Acting Presiding City Magistrate • Mayor and Council Office • Communications • Telecommunication & Utility Franchise • GIS • Application Support • Building Safety • Engineering Information Technology Development Services City Attorney/Risk Mgr. Communications and Public Affairs Acting City Manager • Service Delivery Economic Development • Tourism • Center for the Arts • Vision Gallery • Museum • Downtown • Special Events Cultural Development • Neighborhood Programs • Housing & Redevelopment • Diversity Office • Community Development • Code Enforcement Neighborhood Resources City Clerk Mayor and City Council Citizens of Chandler City of Chandler Organizational Chart Assistant City Manager Advisory Boards and Commissions Facilities and Fleet 8 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Chandler Arizona For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 Executive Director/CEO 9 10 Financial Section Independent Auditor’s Report Management’s Discussion and Analysis (MD&A) Basic Financial Statements Required Supplementary Information Other Financial Statements Financial Section “The Future’s in Sight” The City of Chandler is a high quality service organization that maintains a lean workforce of 6.4 full-time employees per 1,000 residents. Financial Section Independent Auditor’s Report Honorable Mayor and Members of the City Council City of Chandler, Arizona Report on Audit of Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the City of Chandler, Arizona (the “City”), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. 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, each major fund, and the aggregate discretely presented component units and remaining fund information of the City of Chandler, Arizona, Arizona, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions 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. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City of Chandler, Arizona, Arizona, and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for one year beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter 11 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:      Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 City’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, budgetary comparison information, net pension liability information, and other postemployment benefit plan information, be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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. 12 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Other Financial Statements, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates 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 Financial Statements, are fairly stated in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on other work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 10, 2021, on our consideration of City of Chandler, Arizona’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 solely 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 effectiveness of 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 City of Chandler, Arizona’s internal control over financial reporting and compliance. Heinfeld, Meech & Co., P.C. Scottsdale, Arizona December 10, 2021 13 14 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information) 15 16 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 As management of the City of Chandler (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal beginning on page one and the accompanying notes to the financial statements. FINANCIAL HIGHLIGHTS The financial statements, which follow the Management’s Discussion and Analysis, provide these significant, key financial highlights for fiscal year 2021 as follows: • • • • • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $1.53 billion (net position). This represents an increase of $25.7 million from the prior year primarily due to increases in equity in pooled cash and investments due to increases in grant funding, sales taxes and state shared revenues and an increase in deferred outflows of OPEB and pension plan items. Of this amount, $293.0 million (unrestricted net position) may be used to meet the City’s obligations to citizens and creditors. However, $74.0 million is invested in a joint venture with the Town of Gilbert, which decreased $4.6 million from the prior year, and is not available for obligations. At June 30, 2021, the City’s governmental funds reported combined ending fund balances of $423.1 million, an increase of $7.8 million in comparison with the prior year primarily due to American Rescue Plan Act of 2021 (ARPA) funding, increases in sales taxes and state shared revenues. Approximately 55.0 percent of the total amount, $232.6 million, is available for spending at the City’s discretion (assigned or unassigned). At June 30, 2021, total fund balance for the general fund was $242.6 million which represents an increase of $9.7 million from the prior year; this is primarily due to ARPA funding and increases in sales taxes and state shared revenues. General revenues from governmental activities accounted for $301.1 million, or 74.7 percent of all revenues from governmental activities as opposed to 70.2 percent in the prior year. Program specific revenues in the form of charges for services and grants and contributions accounted for $102.1 million or 25.3 percent of total governmental activity revenues, as opposed to 29.8 percent in the prior year. The City had $162.7 million of program revenues ($156.4 million in the prior year) and $3.0 million in general revenues and transfers ($13.8 million in the prior year) related to business-type activities. At June 30, 2021, the City’s proprietary funds reported combined total net position of $790.5 million as compared to $778.1 million in the prior year; an increase for the current year of $12.4 million. This increase is primarily due to an increase in water service fee revenues, increased interest revenue, reduced wastewater expenses and a reduction in long-term liabilities. This results in a total unrestricted net position of $299.8 million, of which $152.0 million of the unrestricted net position is in the water fund. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to a private-sector business. 17 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 The Statement of Net Position presents information on all of the City’s assets, liabilities, and deferred inflows/ outflows of resources with the difference reported as net position. Net position is categorized as capital assets less related debt, restricted by an outside third party and unrestricted. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). In the government-wide financial statements the City’s activities are presented in the following categories: • • • Governmental activities - Most of the City’s basic services are included here, such as general government, public safety, transportation and development and community services. Sales taxes, state shared revenues and charges for services finance most of these activities. Business-type activities - The services provided by the City included here are water, wastewater, reclaimed water, solid waste, airport services and housing services. The services are financed through user fees and charges. Component units - The discretely presented component units are the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmentwide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 20 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the general fund and general obligation bonds debt service fund, which are considered to be major funds. Data from the other 18 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules in the financial section of this report. 18 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 The City adopts an annual appropriated budget for the general, special revenue, general obligation and highway user revenue debt service, capital projects and proprietary funds. Budgetary comparison statements have been provided in the basic financial statements for the general, general government capital projects and general obligation bonds debt service funds to demonstrate compliance with the budget. Budgetary comparison schedules for other non-major special revenue and non-major capital projects funds are also included in the financial section. Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, wastewater, reclaimed water, solid waste, airport and housing services. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses an internal service fund to account for its self-insurance funds. Because self-insurance funds are funded predominantly by governmental functions rather than business-type functions, it has been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and wastewater funds, which are considered to be major funds of the City. Data from the other three enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major enterprise funds are provided in the form of combining statements and schedules in the financial section of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found immediately following the basic financial statements in this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budget process. The City adopts an annual budget for all governmental and enterprise funds. A budgetary comparison schedule has been provided for the General Fund as required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $1.53 billion as of June 30, 2021. This reflects continued strong operations in governmental activities, reduced expenses in governmental activities and decreases in long-term liabilities within governmental and businesstype activities. A significant portion of the City’s net position (66.3 percent) reflects its investment in capital assets (e.g., land and improvements, buildings and improvements, improvements other than buildings, vehicles, machinery and equipment, water rights and construction in progress), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s net position (14.5 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position (19.2 percent) includes $74.0 million which is invested in a joint venture with the Town of Gilbert that may not be used to meet the City’s obligations to citizens and creditors. 19 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position: net investment in capital assets, restricted and unrestricted. The same situation held true for the prior fiscal year. The following table presents a condensed statement of the City's net position for the fiscal years ended June 30, 2021 and 2020. Governmental Activities Current assets Business-type Activities Total (Primary Govt.) 2021 2020 2021 2020 2021 2020 $ 542,856,043 $ 513,542,103 $ 318,881,326 $ 295,098,831 $ 861,737,369 $ 808,640,934 Capital assets, net 742,145,317 755,678,611 759,679,559 787,509,917 1,501,824,876 1,543,188,528 Long-term assets — — 74,142,431 78,760,749 74,142,431 78,760,749 1,285,001,360 1,269,220,714 1,152,703,316 1,161,369,497 2,437,704,676 2,430,590,211 112,346,305 93,134,294 11,193,113 9,443,309 123,539,418 102,577,603 1,397,347,665 1,362,355,008 1,163,896,429 1,170,812,806 2,561,244,094 2,533,167,814 Total assets Total deferred outflows of resources Total assets and deferred outflows of resources Current liabilities 83,422,091 55,896,207 40,175,076 39,535,670 123,597,167 95,431,877 Long-term liabilities 559,698,199 548,432,242 331,393,867 349,437,685 891,092,066 897,869,927 Total liabilities 643,120,290 604,328,449 371,568,943 388,973,355 1,014,689,233 993,301,804 16,667,670 27,331,136 1,801,034 3,754,051 18,468,704 31,085,187 659,787,960 631,659,585 373,369,977 392,727,406 1,033,157,937 1,024,386,991 Net investment in capital assets 555,107,220 547,511,826 458,616,595 477,329,239 1,013,723,815 1,024,841,065 Restricted 189,214,016 191,839,529 32,154,205 33,750,526 221,368,221 225,590,055 Unrestricted (6,761,531) (8,655,932) 299,755,652 267,005,635 292,994,121 258,349,703 $ 737,559,705 $ 730,695,423 $ 790,526,452 $ 778,085,400 Total deferred inflows of resources Total liabilities and deferred inflows of resources Net position: Total net position $1,528,086,157 $1,508,780,823 Total assets and deferred outflows of resources Total liabilities and deferred inflows of resources Total net position $0 $500 $1,000 $1,500 $2,000 $ (Millions) Governmental Activities 20 Business-type Activities $2,500 $3,000 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 Changes in net position. The City’s total revenues for the fiscal year ended June 30, 2021 were $569.0 million. The total cost of all programs and services was $543.3 million, which results in an increase in net position of $25.7 million. The following table presents a summary of the changes in net position for the fiscal years ended June 30, 2021 and 2020. Governmental Activities Business-type Activities Total (Primary Govt.) 2021 2020 2021 2020 2021 2020 Revenues: Program revenues Charges for services $ 66,789,357 $ 71,760,315 $ 140,364,223 $ 135,080,838 $ 207,153,580 $ 206,841,153 Operating grants and contributions 18,694,567 31,052,185 7,965,078 7,137,950 26,659,645 38,190,135 Capital grants and contributions 16,573,341 18,714,457 14,355,873 14,190,016 30,929,214 32,904,473 General revenues Property taxes 36,371,978 34,419,182 — — 36,371,978 34,419,182 Sales taxes 157,513,686 140,644,918 16,516 15,521 157,530,202 140,660,439 Highway user taxes 18,108,310 16,996,911 — — 18,108,310 16,996,911 Other taxes 2,226,568 1,153,237 — — 2,226,568 1,153,237 Franchise Fees 3,823,524 3,441,225 — — 3,823,524 3,441,225 State shared revenues 80,699,253 70,769,943 — — 80,699,253 70,769,943 26,925,430 Investment income 584,026 16,951,295 249,448 9,974,135 833,474 1,820,520 2,085,020 2,833,025 2,962,466 4,653,545 5,047,486 403,205,130 407,988,688 165,784,163 169,360,926 568,989,293 577,349,614 General government 162,849,542 138,850,297 — — 162,849,542 138,850,297 Public safety 122,146,366 109,544,169 — — 122,146,366 109,544,169 Transportation and development 58,847,053 59,777,330 — — 58,847,053 59,777,330 Community services 39,565,719 38,195,563 — — 39,565,719 38,195,563 Interest and fiscal charges Miscellaneous Total revenues Expenses: 6,653,197 6,885,184 — — 6,653,197 6,885,184 Water — — 62,049,102 60,330,758 62,049,102 60,330,758 Wastewater — — 62,753,454 66,788,084 62,753,454 66,788,084 Solid waste — — 17,040,309 16,522,728 17,040,309 16,522,728 Airport — — 2,186,724 2,382,288 2,186,724 2,382,288 — — 9,207,531 8,710,570 9,207,531 8,710,570 Total expenses Housing authority 390,061,877 353,252,543 153,237,120 154,734,428 543,298,997 507,986,971 Excess (deficiency) before transfers 13,143,253 54,736,145 12,547,043 14,626,498 25,690,296 69,362,643 105,991 (891,991) (105,991) 891,991 — — 13,249,244 53,844,154 12,441,052 15,518,489 25,690,296 69,362,643 Transfers in (out) Change in net position Beginning net position Ending net position 724,310,461 676,851,269 778,085,400 762,566,911 1,502,395,861 1,439,418,180 $ 737,559,705 $ 730,695,423 $ 790,526,452 $ 778,085,400 $ 1,528,086,157 $ 1,508,780,823 21 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 Revenue Sources - Fiscal Year 2021 State shared revenues 14.18% Investment income 0.15% Other taxes 0.39% Miscellaneous 0.82% Franchise Fees 0.67% Highway user fees 3.18% Charges for services 36.41% Sales taxes 27.69% Operating grants and contributions 4.68% Property taxes 6.39% Capital grants and contributions 5.44% Functional Expenses - Fiscal Year 2021 Wastewater 11.55% Water 11.42% Solid waste 3.14% Airport 0.40% Interest and fiscal charges 1.23% Housing authority 1.70% Community services 7.28% General government 29.97% Transportation and development 10.83% Public safety 22.48% 22 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 As evidenced in the previous graph, the largest financing source for the City is charges for services at 36.41 percent, associated with the user fees and charges for services. Sales taxes and state shared revenues also comprise a significant portion of the City’s revenues at 27.69 percent and 14.18 percent, respectively, of the total revenues with property taxes accounting for an additional 6.39 percent of the City’s total revenues. The City as a whole uses the largest amount of resources for general government functions at 29.97 percent of the total functional expenses of the City. The next largest users of resources are public safety and wastewater at 22.48 percent and 11.55 percent, respectively, with water accounting for 11.42 percent of the City’s total expenses. Governmental activities. The increase in governmental net position totaled $13.2 million for the year ended June 30, 2021 compared with an increase of $53.8 million in the prior year. The increase is primarily due to ARPA grant funding and increases in sales taxes and state shared revenues. Business-type activities. The increase in business-type net position totaled $12.4 million for the year ended June 30, 2021 compared with an increase of $15.5 million in the prior year. This increase is primarily due to increases in water service fee revenues, increased interest revenue and a reduction in long-term liabilities. FINANCIAL ANALYSIS OF THE CITY’S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. Fund balances are reported on a hierarchy of five classifications based on spending constraints in order to provide better consistency and clarification. These classifications include nonspendable, restricted, committed, assigned and unassigned. The spendable balances are the restricted, committed, assigned and unassigned fund balances. Additional information on fund balances and their classifications can be found in Note 9 of the financial statements. The financial performance of the City as a whole is reflected in its governmental funds. As the City completed the year, its governmental funds reported a combined fund balance of $423.1 million, an increase of $7.8 million in comparison with the prior year increase of $49.5 million. Approximately $232.6 million (55.0 percent) of this amount is combined assigned and unassigned balances, all which may be spent at the City’s discretion. The total compared to the prior years’ assigned and unassigned balances of $222.5 million represents an increase of $10.1 million. The remainder of the fund balance comprising of nonspendable and restricted balances amounts to $190.5 million (45.0 percent of the total fund balance). The nonspendable balance consists of inventories and prepaid amounts. The restricted balance is constrained for specific purposes imposed by external parties or enabling legislation. The total compared to the prior years’ nonspendable and restricted balances of $192.8 million represents a decrease of $2.3 million. This decrease is primarily due to the continued spending of bond proceeds in the community services and streets capital projects funds. 23 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 The general fund is the chief operating fund of the City. At the end of the current fiscal year, assigned and unassigned fund balance of the general fund was $239.8 million, while total fund balance reached $242.6 million. As a measure of the general fund’s liquidity, it may be useful to compare both assigned and unassigned fund balance and total fund balance to total fund expenditures. Assigned and unassigned fund balance represents 1.04 coverage of total annual general fund expenditures. The amount of fund balance is well above the City’s contingency reserve financial policy, allowing the funding of other reserves (e.g., economic development, capital projects and compensated absences). The City’s general fund balance increased by $9.7 million during the current fiscal year primarily due to ARPA grant funding and increases in sales taxes and state shared revenues. The general obligation bonds debt service fund accounts for the accumulation of resources for and payments of general obligation bonded debt. The fund balance restricted for general obligation debt service payments increased by $1.1 million during the current fiscal year. The increase is due to reduced expenditures for the year ended June 30, 2021. Proprietary funds. The City’s proprietary funds, which include enterprise and internal service funds, provide the same type of information found in the government-wide financial statements, but in more detail. Net position for the enterprise funds and the internal service funds at the end of the fiscal year amounted to $790.5 million and $33.4 million, respectively, compared to $778.1 million and $44.9 million in the prior fiscal year. The enterprise funds increase is primarily due to an increases in water and wastewater service fee revenues and investment revenues and a reduction in long-term liabilities. The enterprise funds net position is 37.9 percent unrestricted compared to 34.3 percent in the prior fiscal year. Unrestricted net position of the water fund at the end of the year amounted to $152.0 million, and those for the wastewater fund amounted to $127.6 million, compared to $139.8 million and $108.2 million in the prior fiscal year. BUDGETARY HIGHLIGHTS For the 2020-21 budget year, the City of Chandler continued to engage in fiscally responsible budgeting practices, adhered to financial policies, and used conservative budgeting as economic impacts of the COVID-19 pandemic and potential State legislative actions were unknown. With this conservative mindset, the City Council adopted a balanced budget for 2020-21 that incorporated $20 million in revenue and expenditure reductions from the pre-pandemic forecast, in anticipation of COVID-19 impacts. Overall planned capital expenditures increased slightly as additional projects were added to address our aging infrastructure and one-time revenues were applied to select capital projects and planned Public Safety Personnel Retirement System (PSPRS) unfunded liability pay down. The City’s major sources of General Fund revenues include Local Sales Tax (Transaction Privilege Tax), Voter Approved Local Revenue (formerly called State Shared Revenue) and Urban Revenue Sharing (State Shared Income Tax). Reductions made in anticipation of COVID-19 impacted revenue losses and the corresponding expenditure reductions slightly decreased the General Fund budget by 0.6 percent from the previous year, while the total City budget increased slightly by 0.46 percent from 2019-20. As has been the City’s practice, the budget and revenue forecast distinguished between ongoing and one-time revenues and ensured related spending was also aligned. The City’s 2020-21 budget included various salary adjustments based on agreements between bargaining units and the City, and merits for general employees. Other ongoing costs, such as maintenance, utilities and supplies were managed closely to ensure they could be covered with ongoing revenues. 24 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 The actual COVID-19 impacts on revenue negatively impacted some specific Transaction Privilege Tax categories, such as restaurants and bars, hotel/motels, and amusements, but the City saw shifts in that spending which increased retail and other categories. Overall, the $20 million reduction in revenues did not come to fruition, as revenues came in $41 million above budget. With vacant positions on hold for part of the year and expenditure reduction measures in place, General Fund spending came in lower than anticipated, resulting in an increase to the General Fund balance. The FY 2020-21 budget continued to emphasize adherence to strong financial policies allowing the City Council to maintain the General Fund contingency reserve at 15 percent of anticipated annual General Fund operating revenue. And finally, the City Council continued the designated Budget Stabilization Reserve in the amount of $10 million to provide the opportunity to utilize the reserve to balance the General Fund budget in the future for no more than three consecutive years, should state legislation, operational changes in tax collections, unexpected decreases in property values, or other economic conditions cause revenues to suddenly decrease. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital assets. As of June 30, 2021, the City had invested $1.0 billion in capital assets net of related debt, including buildings, facilities, vehicles, computers, equipment, water rights and infrastructure assets. Total depreciation expense for the year was $102.6 million. During fiscal year 2020-21, there were $42.9 million in water rights purchases recognized as a new asset from construction in progress. These water rights grant the City 99 years worth of water usage per the purchase agreement with the Gila River Indian Community. The purchase helps to diversify the City's water options to ensure residents can have reliable and sustainable water options into the future. In addition, there were $4.3 million in updates to wastewater lines around the Price Road technology corridor that was completed during the fiscal year. The City also completed several street projects on Queen Creek, Chandler Heights and Ocotillo Roads adding an additional $29.9 million in governmental fund infrastructure assets. The Chandler Fire Department added $5.3 million in new fire engines and emergency response vehicles to replace older models to continue to provide the best public safety and emergency services possible to Chandler residents. The following table presents capital asset balances net of accumulated depreciation for the fiscal years, ended June 30, 2021 and 2020: Governmental Activities 2021 Land $ Land improvements Infrastructure System improvements Buildings and improvements Business-type Activities 2020 92,528,517 $ 2021 92,528,517 $ Total (Primary Govt.) 2020 57,189,731 $ 2021 51,669,315 $ 149,718,248 2020 $ 144,197,832 — — 317,087 198,852 317,087 198,852 341,516,567 336,308,826 — — 341,516,567 336,308,826 — — 630,911,926 665,926,957 630,911,926 665,926,957 176,774,747 189,978,030 8,049,845 8,931,001 184,824,592 198,909,031 25,315,499 23,332,690 2,541,320 3,218,082 27,856,819 26,550,772 — — 42,645,949 — 42,645,949 — Vehicles, machinery and equipment Water rights Construction in progress Total 106,009,987 $ 742,145,317 113,530,548 $ 755,678,611 18,023,701 $ 759,679,559 $ 57,565,710 124,033,688 171,096,258 787,509,917 $ 1,501,824,876 $ 1,543,188,528 Additional information on the City’s capital assets can be found in Note 4 of the financial statements. 25 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 Long-term debt. At the end of the current fiscal year, the City of Chandler had total bonded debt outstanding of $493.1 million in long-term debt outstanding with $40.2 million due within one year. The following table presents a summary of the City’s outstanding long-term obligations for the fiscal years ended June 30, 2021 and 2020. Governmental Business-type Total Activities Activities (Primary Govt.) 2021 2020 $ 195,164,000 $ 215,939,000 Revenue bonds — — Excise tax revenue obligations — — General obligation bonds 2021 $ 2021 2020 86,261,000 2020 $ 272,100,000 $ 302,200,000 — 2,340,000 — 2,340,000 219,780,000 228,985,000 219,780,000 228,985,000 76,936,000 $ Special assessment bonds 1,245,000 1,830,000 — — 1,245,000 1,830,000 Issuance premiums 17,548,988 19,789,672 22,960,376 25,623,807 40,509,364 45,413,479 $ 213,957,988 $ 237,558,672 $ 319,676,376 $ 343,209,807 $ 533,634,364 $ 580,768,479 18,885,862 13,643,256 — — 18,885,862 13,643,256 Total bonds & obligations payable Claims payable (as restated) Landfill closure/post closure — — 4,340,000 4,340,000 4,340,000 4,340,000 Compensated absences 13,679,502 13,811,004 1,408,776 1,388,807 15,088,278 15,199,811 Net pension liability 293,981,374 275,257,904 22,238,502 18,637,376 316,219,876 293,895,280 Post employment benefits 56,105,261 47,361,614 6,898,722 5,751,113 63,003,983 53,112,727 Total long term liabilities $ 596,609,987 $ 587,632,450 $ 354,562,376 $ 373,327,103 $ 951,172,363 $ 960,959,553 The City of Chandler’s total long term liabilities decreased by $9.8 million during the current fiscal year, as there was no new bonded debt issued and principal payments occurred as scheduled. The City reported an increase in pension liability of $22.3 million, post employment benefits of $9.9 million and principal repayments of $42.2 million. State statutes currently limit the amount of general obligation debt a city may issue to 20 percent of its total assessed valuation for water, sewer, artificial lighting, open space, parks, public safety and emergency services, streets, transportation and recreational facilities. The current debt limitation for the City is $936.5 million. The City has $277.1 million of outstanding general obligation debt for these purposes. State statutes also currently limit the amount of general obligation debt a city may issue to 6 percent of its total assessed valuation for all other purposes. The current debt limitation for the City is $281.0 million. The City has $6.8 million of outstanding general obligation debt for this purpose. As of year-end, the City’s current bond ratings on general obligation bonds were Aaa from Moody’s Investor Services, AAA from Standard & Poor’s, and AAA from Fitch Ratings. Excise tax revenue obligation bonds were rated Aa1 from Moody’s Investor Services, AAA from Standard & Poor’s and AAA from Fitch. Additional information on the City’s long-term debt can be found in Note 5 of the financial statements. 26 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2021 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET Adopting a balanced budget for the next fiscal year (2021-22) required the combined efforts of citizens, the City Council, Executive Leadership team, and staff members throughout the organization. As the financial impacts anticipated during the FY 2019-20 budget year did not come to fruition, considerable thought and measured change was incorporated into the Fiscal Year 2021-22 budget. The budget contains a variety of increases to revenues and expenditures to roll-back the mitigation strategies used during the pandemic, and allows for a continued focus on providing high service levels and quality infrastructure in a cost effective way. This year again included diligent monitoring of legislative bills that could impact our ongoing revenues, as well as focused review of expenditure impacts that could potentially cause higher costs if not contained. This included the Public Safety Personnel Retirement System (PSPRS) rates and its unfunded liability, minimum wage increases, retirement vacancies causing overtime in public safety, additional staff or contract needs, workers’ compensation self-insurance claims, fleet and equipment sustainability, aging infrastructure, and addressing various capital needs under a higher construction cost environment. Even though general economic conditions are anticipated to continue to show recovery, and even increase during the budget year, the City is still conservative in its approach and continues to look for efficiencies to manage expenditure growth. The budget increased from $931.3 million in 2020-21 to $1.058 billion (an increase of 13.6 percent) in 2021-22, due to appropriation added for grant funding received at the end of FY 2020-21 through ARPA of $34.6 million in appropriation, as well as adding back in the reductions made in the prior year due to COVID-19. With the addition of appropriation, the total operating budget is increasing from $387 million to $412 million. The total new capital appropriation is decreasing from $151 million to $113 million, but still shows that the City continues a healthy capital improvement program to ensure existing infrastructure is well maintained and the needs of residents can be met. With a 6.8 percent increase in Limited Property Values (including new growth), the City Council chose to reduce the primary property tax rate from $0.2501 to $0.2426, and keep the secondary property tax rate at $0.87 per $100 of assessed valuation. This planned rate reduction will help minimize the impact of higher values on property owner’s tax payment. The 2021-22 Budget includes anticipated bond sales as well as GO and ETRO refunding opportunities for outstanding bonds. There is also a bond election in November 2021 to ensure bond authorization is sufficient to meet capital needs as we continue our focus on ensuring strong debt management practices. Additionally, the City Council maintained the General Fund operating contingency at 15 percent of General Fund operating revenues to provide a buffer for emergencies or to support new opportunities such as unanticipated grants or development agreements. Chandler continues maintaining and adhering to strong financial policies, has updated the Pension Funding Policy to ensure ongoing focus on managing pension costs, and remains in a solid financial position to continue its tradition of strong fiscal management as reflected by its AAA GO bond ratings with all three rating agencies. CONTACTING THE CITY’S FINANCE OFFICE This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional information, contact the Management Services Department, City of Chandler, P.O. Box 4008, MS 609, Chandler, AZ 85244-4008 or by calling (480) 782-2333. 27 28 BASIC FINANCIAL STATEMENTS 29 City of Chandler Statement of Net Position June 30, 2021 ASSETS Current assets: Equity in pooled cash and investments Cash and investments Accounts receivable Privilege license tax receivable Property taxes receivable Due from other governments Inventories Prepaid items Accrued interest receivable Special assessments receivable Notes receivable Other receivables Total current assets Long-term assets: Cash and investments - restricted Notes receivable Investment in joint venture Capital assets: Non-depreciable Depreciable, net Total capital assets Total long-term assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of OPEB and pension plan items Deferred amounts on refundings Total deferred outflows of resources Governmental Activities $ Total Primary Government Business-Type Activities 505,734,514 — 1,829,428 17,530,447 454,706 10,445,890 1,045,705 5,933 972,409 1,130,456 448,503 3,258,052 542,856,043 $ 298,156,657 — 17,954,944 — — 83,056 127,276 — 541,673 — — 2,017,720 318,881,326 $ 803,891,171 — 19,784,372 17,530,447 454,706 10,528,946 1,172,981 5,933 1,514,082 1,130,456 448,503 5,275,772 861,737,369 Component Units Chandler Industrial Chandler Development Cultural Authority Foundation $ — 897,088 2,000 — — — — — — — — — 899,088 $ — 2,970,516 593 — — — — 87,729 7,325 — — — 3,066,163 — — — — 154,750 73,987,681 — 154,750 73,987,681 — — — 1,425,008 — — 198,538,504 543,606,813 742,145,317 742,145,317 1,285,001,360 75,213,432 684,466,127 759,679,559 833,821,990 1,152,703,316 273,751,936 1,228,072,940 1,501,824,876 1,575,967,307 2,437,704,676 — — — — 899,088 — 17,152 17,152 1,442,160 4,508,323 104,821,414 7,524,891 112,346,305 5,487,123 5,705,990 11,193,113 110,308,537 13,230,881 123,539,418 — — — — — — 30 LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Accrued interest Unearned revenue Customer advances Compensated absences payable Bonds payable Landfill closure and postclosure liability Claims and judgements payable Total current liabilities Long-term liabilities: Compensated absences payable Bonds payable Net pension liability OPEB liability Landfill closure and postclosure liability Claims and judgements payable Total long-term liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows of OPEB and pension plan items NET POSITION Net investment in capital assets Restricted for: Transportation and development Capital improvements Community services Community development Debt service Legal restrictions Total restricted Unrestricted Total net position $ 14,051,894 5,696,153 4,515,703 3,895,093 18,351,460 — 2,482,184 22,245,684 — 12,183,920 83,422,091 4,458,675 713,435 4,837,829 6,214,637 — 781,991 255,626 22,818,437 94,446 — 40,175,076 18,510,569 6,409,588 9,353,532 10,109,730 18,351,460 781,991 2,737,810 45,064,121 94,446 12,183,920 123,597,167 — — — — — — — — — — — 11,197,318 191,712,304 293,981,374 56,105,261 — 6,701,942 559,698,199 643,120,290 1,153,150 296,857,939 22,238,502 6,898,722 4,245,554 — 331,393,867 371,568,943 12,350,468 488,570,243 316,219,876 63,003,983 4,245,554 6,701,942 891,092,066 1,014,689,233 — — — — — — — — 14,100 — — — 665,775 — — — — — 679,875 — — — — — — — — 679,875 16,667,670 1,801,034 18,468,704 — — 555,107,220 458,616,595 1,013,723,815 — 17,152 122,816,807 14,657,494 43,801,030 686,088 5,798,057 1,454,540 189,214,016 (6,761,531) 737,559,705 $ — — — — 32,154,205 — 32,154,205 299,755,652 790,526,452 122,816,807 14,657,494 43,801,030 686,088 37,952,262 1,454,540 221,368,221 292,994,121 1,528,086,157 — — — — — — — 899,088 899,088 — — — — — 1,425,008 1,425,008 2,386,288 3,828,448 See accompanying Notes to the Financial Statements. 31 $ $ $ City of Chandler Statement of Activities For the year ended June 30, 2021 Program Revenues Function/Programs Expenses Charges for Services Operating Capital Grants and Grants and Contributions Contributions Total Primary government: Governmental activities: General government Public safety Transportation and development Community services Interest on long-term debt Total governmental activities Business-type activities: Water Wastewater Solid waste Airport Chandler housing authority Total business-type activities Total primary government Component units Chandler Industrial Development Authority Chandler Cultural Foundation Total component units $162,849,542 $ 42,011,670 122,146,366 5,073,984 58,847,053 14,266,302 39,565,719 5,437,401 6,653,197 — 390,061,877 66,789,357 5,447,340 — 11,126,001 — — 16,573,341 $ 56,791,525 11,805,378 26,828,295 6,632,067 — 102,057,265 62,049,102 58,755,999 — 62,753,454 61,971,940 — 17,040,309 17,480,050 — 2,186,724 893,268 — 9,207,531 1,262,966 7,965,078 153,237,120 140,364,223 7,965,078 $543,298,997 $207,153,580 $ 26,659,645 5,755,850 8,600,023 — — — 14,355,873 $ 30,929,214 64,511,849 70,571,963 17,480,050 893,268 9,228,044 162,685,174 $264,742,439 $ $ $ $ 118,159 465,309 583,468 $ $ 101,039 87,730 188,769 $ $ $ 9,332,515 6,731,394 1,435,992 1,194,666 — 18,694,567 — 423,631 423,631 $ $ — — — $ General revenues and transfers: General revenues: Property taxes, levied for general purposes Sales taxes Highway user taxes Other taxes Franchise fees State shared revenues (unrestricted) Investment income Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - beginning of year, as restated Net position - end of year See accompanying Notes to the Financial Statements. 32 101,039 511,361 612,400 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Activities $ $ Business-Type Activities (106,058,017) $ (110,340,988) (32,018,758) (32,933,652) (6,653,197) (288,004,612) — — — — — — Component Units Chandler Industrial Chandler Development Cultural Authority Foundation Total $ (106,058,017) $ (110,340,988) (32,018,758) (32,933,652) (6,653,197) (288,004,612) — — — — — — $ — — — — — — — — — — — — (288,004,612) 2,462,747 7,818,509 439,741 (1,293,456) 20,513 9,448,054 9,448,054 2,462,747 7,818,509 439,741 (1,293,456) 20,513 9,448,054 (278,556,558) — — — — — — — — — — — — — — — — — — — — — — — (17,120) — (17,120) — 46,052 46,052 — — — — — — 1,446 — — 1,446 (15,674) 914,762 899,088 $ — — — — — — 9,798 — — 9,798 55,850 3,772,598 3,828,448 36,371,978 157,513,686 18,108,310 2,226,568 3,823,524 80,699,253 584,026 1,820,520 105,991 301,253,856 13,249,244 724,310,461 737,559,705 $ — 16,516 — — — — 249,448 2,833,025 (105,991) 2,992,998 12,441,052 778,085,400 790,526,452 $ 36,371,978 157,530,202 18,108,310 2,226,568 3,823,524 80,699,253 833,474 4,653,545 — 304,246,854 25,690,296 1,502,395,861 1,528,086,157 $ 33 City of Chandler Balance Sheet Governmental Funds June 30, 2021 Major Funds General Obligation Bonds Other Governmental General Debt Service Funds Total $220,381,553 1,712,821 $ 28,903,431 — $ 203,997,258 24,118 $ 453,282,242 1,736,939 Privilege license tax receivable Property taxes receivable 17,530,447 108,354 — 346,352 — — 17,530,447 454,706 Advances to other funds Due from other funds 8,310,859 2,163,778 — — — — 8,310,859 2,163,778 Due from other governments 2,045,391 — 8,400,499 10,445,890 Inventories Prepaid items 1,045,705 5,933 — — — — 1,045,705 5,933 411,048 — 33,146 — 435,648 1,130,456 879,842 1,130,456 — 3,247,723 — — 448,503 10,329 448,503 3,258,052 $256,963,612 $ 29,282,929 $ 214,446,811 $ 500,693,352 $ $ ASSETS Equity in pooled cash and investments Accounts receivable Accrued interest receivable Special assessments receivable Notes receivable Other receivables Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Accrued interest Due to other funds Advances from other funds Unearned revenue Bonds payable Total liabilities Deferred inflows of resources Unavailable revenues - special assessments Unavailable revenues - property taxes Total deferred inflows of resources Fund balances: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows and fund balances See accompanying Notes to the Financial Statements. 34 3,465,504 — $ 10,457,315 $ 13,922,819 5,465,927 4,202,064 — — 176,607 313,639 5,642,534 4,515,703 — — 3,870,193 — 24,900 2,163,778 3,895,093 2,163,778 — 1,154,492 — — 8,310,859 17,094,751 8,310,859 18,249,243 — 14,287,987 19,395,000 23,265,193 — 38,541,849 19,395,000 76,095,029 — 83,226 83,226 — 259,343 259,343 1,130,456 — 1,130,456 1,130,456 342,569 1,473,025 1,051,638 1,711,242 143,763,585 96,065,934 242,592,399 $256,963,612 — 5,758,393 — — 5,758,393 $ 29,282,929 — 1,051,638 182,001,083 189,470,718 — 143,763,585 (7,226,577) 88,839,357 174,774,506 423,125,298 $ 214,446,811 $ 500,693,352 City of Chandler Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position June 30, 2021 Total Fund Balances - Total Governmental Funds $ 423,125,298 Amounts reported for governmental activities in the Statement of Net Position were reported differently because: Capital assets used in governmental activities are not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Non-depreciable Depreciable buildings, property, equipment and infrastructure, net Total capital assets $ 198,538,504 543,606,813 742,145,317 Certain revenues are not available to pay for current period expenditures and, therefore, are unavailable in the funds. 1,473,025 Deferred amounts on refundings are not financial resources and, therefore, are not reported in the funds. 7,524,891 Deferred outflows related to pensions and OPEB are not financial resources and, therefore, are not reported in the funds. 104,821,414 Deferred inflows related to pensions and OPEB represent a future acquisition of net position that is not reported in the funds. (16,667,670) The internal service fund is used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Government-wide Statement of Net Position. 33,352,911 Long-term liabilities are not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds amounts of $18,999,506 which are included above, the long-term liabilities were adjusted as follows: Bonds payable (194,562,988) Net pension liability OPEB liability Compensated absences Total long-term liabilities Net Position of Governmental Activities (293,981,374) (56,105,261) (13,565,858) (558,215,481) $ 737,559,705 See accompanying Notes to the Financial Statements. 35 City of Chandler Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2021 Major Funds General Other Obligation Bonds Governmental Debt Service Funds General Total REVENUES: Property taxes $ 8,127,805 $ 28,281,540 $ — $ 36,409,345 157,513,686 — — 157,513,686 Highway user taxes — — 18,108,310 18,108,310 Regional transportation taxes — — 2,226,568 2,226,568 Franchise fees 3,823,524 — — 3,823,524 State shared 80,699,253 — — 80,699,253 Grants and entitlements 7,716,927 — 21,700,101 29,417,028 System development fees 8,207,728 Sales taxes 143,436 — 8,064,292 Special assessments — — 587,020 587,020 Licenses and permits 6,656,737 — — 6,656,737 Charges for services 19,138,480 — 492,909 19,631,389 Fines and forfeitures 2,853,783 — 66,390 2,920,173 174,766 — — 174,766 5,201,737 Rentals — — 5,201,737 Interest revenue (81,690) (80,955) 696,028 533,383 Miscellaneous 588,941 — 516,129 1,105,070 287,355,648 28,200,585 57,659,484 373,215,717 General government 64,203,179 — 29,279,663 93,482,842 Public safety 117,609,757 — 1,748,002 119,357,759 Transportation and development 17,493,321 — 14,147,245 31,640,566 Community services 28,237,838 — 846,243 29,084,081 3,036,932 — 58,870,192 61,907,124 Principal — 19,395,000 585,000 19,980,000 Interest and fiscal charges — 7,740,385 61,500 7,801,885 230,581,027 27,135,385 105,537,845 363,254,257 56,774,621 1,065,200 (47,878,361) 9,961,460 1,876 — 223,205 225,081 — — 44,961,787 44,961,787 (47,094,820) — (270,061) (47,364,881) (47,092,944) — 44,914,931 (2,178,013) 9,681,677 1,065,200 (2,963,430) 7,783,447 Contributions Total revenues EXPENDITURES: Current: Capital outlay Debt service: Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) NET CHANGE IN FUND BALANCE FUND BALANCES: 232,910,722 Beginning of year End of year $ 242,592,399 See accompanying Notes to the Financial Statements. 36 4,693,193 $ 5,758,393 177,737,936 $ 174,774,506 415,341,851 $ 423,125,298 City of Chandler Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statement of Activities For the year ended June 30, 2021 Net Change in Fund Balances - Total Governmental Funds Governmental activities in the Statement of Activities were reported differently because: $ 7,783,447 Governmental funds report capital outlay as expenditures. However, in the Government-wide Statement of Net Position and Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount of capital assets recorded and transferred in the current period. 39,931,139 Depreciation expense on capital assets is reported in the Government-wide Statement of Net Position and Statement of Activities, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as an expenditure in the governmental funds. (54,104,070) Some items reported in the governmental funds are sources and uses of current financial resources and therefore are not reported as revenues or expenses in the Statement of Activities. These items include: Principal payments on debt Pension related items Other post employment benefits obligation 19,980,000 4,097,710 (597,354) 23,480,356 Accrued interest payable related to long-term debt is recognized as an expense in the Statement of Activities, however, it is not recognized in the governmental funds because it is not payable from current financial resources. Certain revenues in the Statement of Activities do not provide current financial resources and therefore are not reported as revenues in the governmental funds. 1,148,688 (209,500) Compensated absence expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. 146,587 Certain revenues in the governmental funds that provide current financial resources are not included in the Statement of Activities because they were recognized in a prior period. However, other revenues that are unavailable in the governmental funds because they do not provide current financial resources due to unavailability are recognized in the Statement of Activities. (568,545) Capital assets contributed by developers to the City are not recorded in the governmental funds as they do not provide current financial resources but are recognized in the Statement of Activities as program revenues. 849,143 The internal service fund is used by management to charge the costs of certain activities, such as insurance, to individual funds. The change in financial position of the internal service fund is reported with governmental activities. (5,208,001) Change in Net Position of Governmental Activities $13,249,244 See accompanying Notes to the Financial Statements. 37 City of Chandler Statement of Net Position Proprietary Funds June 30, 2021 Major Funds Water Wastewater Other Governmental Proprietary Activities: Internal Funds Total Service Fund ASSETS Current assets: Equity in pooled cash and investments Accounts receivable $ 107,638,853 $ 160,552,608 $ 29,965,196 $ 298,156,657 $ 52,452,272 8,269,969 7,277,489 2,407,486 17,954,944 92,489 — — 83,056 83,056 — Inventories 90,668 — 36,608 127,276 — Accrued interest receivable 192,923 290,782 57,968 541,673 92,567 — 2,017,687 33 2,017,720 — 116,192,413 170,138,566 32,550,347 318,881,326 52,637,328 — — 154,750 154,750 — Advances to other funds 3,900,000 — — 3,900,000 — Investment in joint venture 73,987,681 — — 73,987,681 — Non-depreciable 15,232,052 32,514,332 27,467,048 75,213,432 — Depreciable, net 221,486,104 436,145,250 26,834,773 684,466,127 — Total capital assets 236,718,156 468,659,582 54,301,821 759,679,559 — Total long-term assets 314,605,837 468,659,582 54,456,571 837,721,990 — Total assets 430,798,250 638,798,148 87,006,918 1,156,603,316 52,637,328 Deferred outflows of OPEB and pension plan items 2,603,529 1,642,064 1,241,530 5,487,123 — Deferred amounts on refundings 3,010,093 2,695,897 — 5,705,990 — 5,613,622 4,337,961 1,241,530 11,193,113 — Due from other governments Other receivables Total current assets Long-term assets: Notes receivable Capital assets: DEFERRED OUTFLOWS OF RESOURCES Total deferred outflow of resources 38 LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Accrued interest Unearned revenue Customer advances Compensated absences payable Bonds payable Landfill closure and postclosure liability Claims and judgements payable Total current liabilities Long-term liabilities: Compensated absences payable Advances from other funds Bonds payable Net pension liability OPEB liability Landfill closure and postclosure liability Claims and judgements payable Total long-term liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows of OPEB and pension plan items NET POSITION Net investment in capital assets Restricted for: Debt service Unrestricted Total net position $ 1,627,197 286,908 4,013,493 2,382,293 — 237,534 129,614 10,305,054 — — 18,982,093 1,471,537 303,644 148,703 3,832,344 — 221,699 82,456 12,513,383 — — 18,573,766 1,359,941 122,883 675,633 — — 322,758 43,556 — 94,446 — 2,619,217 4,458,675 713,435 4,837,829 6,214,637 — 781,991 255,626 22,818,437 94,446 — 40,175,076 129,075 53,619 — — 102,217 — 20,622 — — 12,183,920 12,489,453 584,707 — 111,044,483 11,045,216 3,169,028 — — 125,843,434 144,825,527 371,965 3,900,000 185,813,456 6,209,485 2,448,942 — — 198,743,848 217,317,614 196,478 — — 4,983,801 1,280,752 4,245,554 — 10,706,585 13,325,802 1,153,150 3,900,000 296,857,939 22,238,502 6,898,722 4,245,554 — 335,293,867 375,468,943 93,022 — — — — — 6,701,942 6,794,964 19,284,417 916,611 431,590 452,833 1,801,034 — 124,969,472 279,345,301 54,301,821 458,616,594 — 13,689,846 152,010,416 290,669,734 18,464,359 127,577,245 425,386,905 — 20,167,992 74,469,813 32,154,205 299,755,653 790,526,452 — 33,352,911 33,352,911 $ See accompanying Notes to the Financial Statements. 39 $ $ $ 40 City of Chandler Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the year ended June 30, 2021 Major Funds Water Wastewater Other Governmental Proprietary Activities: Internal Funds Total Service Fund OPERATING REVENUES: Service fees 61,971,940 $ 18,373,518 $ 139,101,457 Grants and entitlements $ — — 7,965,078 7,965,078 — Rentals — — 1,262,766 1,262,766 — Sales taxes — — 16,516 16,516 — Self insurance premiums — — — — 28,842,445 Miscellaneous 58,755,999 $ $ 100,277 34,423 1,150 134,021 169,594 715,450 58,790,422 61,973,090 27,751,899 148,515,411 29,658,172 General and administrative 3,470,121 3,040,261 1,135,651 7,646,033 551 Personnel services 9,953,735 7,969,420 4,066,147 21,989,302 2,361,299 Contractual services 9,382,064 4,956,193 13,840,045 28,178,302 2,659,801 Commodities 12,282,520 9,574,895 1,636,368 23,493,783 2,161,939 Claims expense — — — — 30,333,824 Housing assistance payments — — 5,475,829 5,475,829 — Depreciation and amortization expense 17,095,917 29,089,066 2,280,524 48,465,507 — Total operating expenses 52,184,357 54,629,835 28,434,564 135,248,756 37,517,414 6,606,065 7,343,255 (682,665) 13,266,655 (7,859,242) 124,740 139,818 (15,110) 249,448 50,644 Interest and fiscal charges (5,246,427) (8,101,619) — (13,348,046) — Accretion of bond premiums 1,193,550 1,469,881 — 2,663,431 — — (22,000) — (22,000) — (4,618,318) — — (4,618,318) — (8,546,455) (6,513,920) (15,110) (15,075,485) 50,644 (1,940,390) 829,335 (697,775) (1,808,830) (7,808,598) 5,755,850 8,600,023 91,512 14,447,385 — — — 547,006 547,006 2,630,890 Total operating revenues OPERATING EXPENSES: OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES): Interest revenue Gain (loss) on disposal of capital assets Equity interest in joint venture Total Nonoperating revenues (expenses) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS CAPITAL CONTRIBUTIONS AND TRANSFERS: Capital contributions Transfers in Transfers out (349,859) (260,273) (134,377) (744,509) (30,293) Total capital contributions and transfers 5,405,991 8,339,750 504,141 14,249,882 2,600,597 CHANGE IN NET POSITION 3,465,601 9,169,085 (193,634) 12,441,052 (5,208,001) 287,204,133 416,217,820 74,663,447 778,085,400 38,560,912 $ 290,669,734 $ 425,386,905 $ 74,469,813 $ 790,526,452 NET POSITION: Beginning of year, as restated End of year See accompanying Notes to the Financial Statements. 41 $ 33,352,911 City of Chandler Statement of Cash Flows Proprietary Funds For the year ended June 30, 2021 Other Proprietary Funds Major Funds Water Wastewater CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers Cash received from grantors Cash payments to suppliers Cash payments to employees for services Net cash provided (used) by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in Transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Principal paid on bond maturities Interest paid on bonds Cash received from capital contributions Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Investment income Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of year End of year $ Governmental Activities: Internal Service Fund Total 59,955,848 $ 63,244,318 $ 20,015,595 $ 143,215,761 $ — — 7,947,264 7,947,264 (24,796,550) (17,039,453) (21,921,919) (63,757,922) (9,883,349) (7,822,558) (4,002,576) (21,708,483) 25,275,949 38,382,307 2,038,364 65,696,620 29,731,651 — (29,874,300) (2,344,317) (2,486,966) — (349,859) (349,859) — (260,273) (260,273) 547,006 (134,377) 412,629 547,006 (744,509) (197,503) 2,630,890 (30,293) 2,600,597 (5,502,226) (9,345,660) (5,452,481) 5,160,606 (15,139,761) (12,142,703) (10,605,569) (8,346,816) 7,146,259 (23,948,829) (871,700) — — — (871,700) (18,516,629) (19,951,229) (13,799,297) 12,306,865 (39,960,290) — — — — — 192,966 192,966 9,979,295 269,990 269,990 14,443,195 23,474 23,474 1,602,767 486,430 486,430 26,025,257 152,500 152,500 266,131 97,659,558 $ 107,638,853 146,109,413 $ 160,552,608 28,362,429 29,965,196 272,131,400 $ 298,156,657 42 $ $ 52,186,141 52,452,272 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Changes in assets, liabilities and deferred items: (Increase) decrease in receivables (Increase) decrease in due from other governments (Increase) decrease in inventories (Increase) decrease in other assets Increase (decrease) in payables Increase (decrease) in accrued payroll and compensated absences Increase (decrease) in deposits Increase (decrease) in claims payable Increase (decrease) in unearned revenue Increase (decrease) in customer advances Increase (decrease) in net pension and OPEB items Increase (decrease) in OPEB liability Total adjustments Net cash provided (used) by operating activities NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of capital assets from developers Contributions of capital assets from city government Gain (loss) on disposal of capital assets Accretion of bond premiums $ $ $ 6,606,065 $ 7,343,255 $ (682,665) $ 13,266,655 $ (7,859,242) 17,095,917 29,089,066 2,280,524 48,465,507 750,288 — 9,968 — 328,187 12,946 391,950 — — 23,188 (462,312) 519,752 18,669,884 25,275,949 $ 1,268,318 — — — 531,896 101,465 (18,733) — — 21,643 (369,382) 414,779 31,039,052 38,382,307 $ 39,924 (33,600) (29,118) (150,855) 195,092 39,265 52,475 — — 152,161 (37,917) 213,078 2,721,029 2,038,364 $ 2,058,530 (33,600) (19,150) (150,855) 1,055,175 153,676 425,692 — — 196,992 (869,611) 1,147,609 52,429,965 65,696,620 $ (13,133) — — — 39,209 16,982 — 5,242,606 86,612 — — — 5,372,276 (2,486,966) 595,244 — — 1,193,550 1,453,764 $ — (22,000) 1,469,881 — 91,512 — — 2,049,008 $ 91,512 (22,000) 2,663,431 — — — — See accompanying Notes to the Financial Statements. 43 $ $ — CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 The City of Chandler (City) was incorporated on February 17, 1920. On May 25, 1964, voters ratified a City charter providing for a Council-Manager form of government. The government of the City is operated by authority of its charter, as limited by the state legislature. A seven-member council, including a separately elected mayor, governs the City. The following notes to the financial statements are an integral part of the City’s financial statements. NOTE 1 - Summary of Significant Accounting Policies The accounting policies and procedures of the City conform to accounting principles generally accepted in the United States of America (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below. A. Reporting Entity As required by GAAP, these financial statements present the City and its component units, i.e., entities for which the City is considered to be financially accountable and/or exercise significant influence over operations. Blended component units, although legally separate entities, are in substance part of the City’s operations, and therefore data from these units are combined with data of the City. The City’s discretely presented component units, on the other hand, are reported in a separate column in the basic financial statements, to emphasize that they are legally separate from the City. The component units discussed below are included in the City’s reporting entity because of the significance of their operational and/or financial relationships with the City. Each component unit has a June 30 year-end. 1. Blended Component Unit The City of Chandler Municipal Property Corporation (Corporation) is a nonprofit corporation which exists solely for the purpose of constructing or otherwise acquiring or equipping buildings, structures, or improvements on land owned by the City for the benefit, common good, and general welfare of the City and its citizens. The Chandler City Council appoints the five members of the Board, who are responsible for approving the Corporation’s bond sales. Additionally, all bond sales must be submitted to and approved by the City Council. All financial activities are reported within the enterprise funds of the City. Unaudited financial statements for the Corporation are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 2. Discretely Presented Component Units The component unit columns in the basic financial statements include the financial data of the Chandler Industrial Development Authority (Authority) and the Chandler Cultural Foundation (Foundation). The Authority is responsible for the issuance of tax-exempt bonds for qualified projects approved by the Authority and the City Council. The Authority has a seven-member board of directors appointed by the City Council. The City is able to impose its will on the Authority inasmuch as the City Council must vote to ratify the actions of the Authority with regard to the issuance of bonds. The accounting records of the Authority are maintained by the City and are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 44 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued The Foundation oversees the operations of the Chandler Center for the Arts for the selection and scheduling of performances, other facility use, and general policy setting activities. The City is able to significantly influence its operations. Specifically, the Foundation’s budget is annually reviewed and approved by the City Council and the Foundation’s nine-member Board is appointed by the City Council. Financial statements for the Foundation are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. B. Government-Wide and Fund Financial Statements The government-wide financial statements (e.g., the Statement of Net Position and the Statement of Activities) present financial information about the City as a whole. The reported information includes all of the nonfiduciary activities of the City and its component units. For the most part, the effect of interfund activity has been removed from these statements. These statements are to distinguish between the governmental and business-type activities of the City. Governmental activities normally are supported by taxes and intergovernmental revenues, and are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment 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 applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given 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, state shared revenues, investment income, and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided 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. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments where the amounts are reasonably equivalent in value to the interfund services provided, and other charges. Elimination of these charges would distort the direct costs and program revenues reported. C. Measurement Focus, Basis of Accounting and Basis of Presentation Government-wide Financial Statements - 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. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements; the exception is any interfund activity between governmental and business-type activities, such as transfers. Interfund services provided and used are not eliminated. 45 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued Fund Financial Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service resources are provided during the current year for payment of long-term debt principal and interest due early in the following year (not to exceed one month) and, therefore, the expenditures and related liabilities have been recognized. Compensated absences and claims and judgments are recorded only when payment is due. Property taxes, sales taxes, franchise fees, licenses and permits, charges for services, special assessments and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash. Grants and similar awards received before the eligibility requirements are met are recorded as unearned revenue. Cash receipts received in advance of being billed have also been reported as unearned revenue on the governmental fund financial statements. Special assessments and delinquent property taxes have been recorded as deferred inflows of resources. Grant and similar awards received more than 60 days after the end of the current fiscal period have been recorded as deferred inflows of resources. The City reports the following major governmental funds: General Fund - This fund accounts for all financial resources of the City, except those required to be accounted for in other funds. General Obligation Bonds Debt Service Fund - This fund accumulates monies for the payment of principal and interest requirements of the City’s tax supported general obligation bonds. Revenues for repayment are generated from secondary property taxes. The City reports the following major proprietary funds: Water Fund - This fund is used to account for the provision of water services to the residents of the City and certain county residents within the City’s municipal boundaries. All activities necessary to provide such service are accounted for in this fund. Wastewater Fund - This fund is used to account for the provision of wastewater services to the residents of the City and certain county residents within the City’s municipal boundaries. All activities necessary to provide such service are accounted for in this fund. Additionally, the City reports the following fund type: Internal Service Fund - Internal Service Funds are established to account for financing of goods and services provided by one department or agency to other departments or agencies of the City on a cost reimbursement basis. The Internal Service Fund consists of Self Insurance Funds that administer the City’s self-insured property, liability, health, dental, short-term disability and workers’ compensation insurance programs. 46 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued Proprietary funds distinguish operating 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. The principal operating revenues of the City’s internal service fund are interfund transfers from the general fund for property and liability insurance and charges to user departments for premiums related to health, dental, workers’ compensation and shortterm disability self-insurance. The principal operating revenues of the City’s enterprise funds are user fees and charges to customers for water, wastewater, solid waste, airport services and public housing grants. Operating expenses for these funds include the cost of sales and services, administrative expenses, depreciation, claims and premiums. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first where allowable and then unrestricted resources as they are needed. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. Internal service funds are combined and the totals are presented in a single column on the face of the proprietary fund statements. D. Budgeting and Budgetary Control The City Council formally adopts an annual operating budget for the general, special revenue, debt service, capital projects, enterprise and internal service funds, excluding the special assessment bonds debt service fund. The level of control at which expenditures may not exceed budget is by department. Upon written request by the City Manager, the City Council has the authority to transfer part or all of any unencumbered appropriation balance from one department to another per City Charter requirement. The City Manager and department heads have the authority to transfer appropriations between divisions and expenditure categories within departments. Appropriations totaling $61,519,903 were transferred from the contingency reserves within the general, special revenue, capital project and internal service funds. All appropriations expire at the end of the fiscal year except for encumbered and capital improvements carryforward appropriations. Encumbrance accounting, under which purchase orders, contracts and other commitments for the future expenditure of funds are recorded in order to reserve that portion of the related fund balance, is employed in the governmental and proprietary fund types. Encumbrances outstanding at year-end are reported as part of restricted fund balance for governmental and proprietary funds (excluding the general fund) unless a negative fund balance is reported. If negative, encumbrances are reported as part of unassigned fund balance. Carryforwards for capital improvement projects are reported as part of assigned fund balance at year-end and encumbrances in the general fund are reported as part of unassigned fund balance. Significant encumbrances for the general fund are $10,677,781, for water enterprise fund are $18,016,446, for wastewater enterprise fund are $16,212,607, and for non-major governmental funds are $53,618,803. The budgets are adopted on a basis differing from generally accepted accounting principles in that for budgetary purposes: (1) current year encumbrances are treated as expenditures; (2) bond proceeds for proprietary funds are considered revenue; (3) capital outlays for enterprise funds are treated as expenditures; (4) debt service principal payments are treated as expenditures for enterprise funds; (5) accrued compensated absences are not recognized as expenditures; (6) depreciation and amortization are not recognized as expenditures; (7) estimated landfill closure and post closure costs are not recognized as expenditures until incurred; (8) sales tax collected by merchants but not yet required to be remitted at the end of the fiscal year is not recorded as revenue; and (9) investments are recorded at cost. 47 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued On June 3, 1980, the voters of Arizona approved an expenditure limitation for all local governments. This limitation restricts the growth of expenditures to a percentage determined by population and inflation, with certain expenditures excluded from the limitation. Through a Home Rule option, any city can adopt its own alternative expenditure limitation if a majority of the qualified electors vote in favor of the issue at a regular election. On August 28, 2018, the City of Chandler voters approved to continue under Home Rule for the next four years. E. Pooled Cash and Investments City Charter, Ordinance, and Trust Agreements authorize the City to invest in obligations guaranteed by the full faith and credit of the United States of America, government sponsored enterprises, government bonds with minimum credit ratings of Aa or AA, commercial paper with a minimum short-term rating of P1 or A1, negotiable certificates of deposit, corporate bonds carrying a minimum credit rating of A, repurchase agreements and the Local Government Investment Pool. The City of Chandler Municipal Property Corporation is additionally authorized to invest in banker’s acceptances, U.S. Corporate obligations rated Aa3 and AA or better, full faith and credit general obligations or special revenue bonds of any state or political subdivision rated AAA and Aaa, Refcorp interest strips and money market funds. Nonparticipating interest-earning investment contracts are stated at cost. Money market investments and participating interest investment contracts with a remaining maturity of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Cash resources of the City are combined to form a pool of cash and investments. Excluded from this pool are the cash and investments of the Chandler Health Care Benefits Trust, Workers’ Compensation and Employer Liability Trust, Chandler Industrial Development Authority and the Chandler Cultural Foundation. Interest earned on the pooled cash and investments is distributed each month on the basis of average monthly equity in the pool. F. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). The water, wastewater and solid waste enterprise funds use the direct write-off method for bad debts and therefore do not have an allowance for uncollectible accounts. All other funds’ trade receivables are shown net of an allowance for uncollectible accounts. Trade accounts receivable in excess of 90 days comprise the trade accounts receivable allowance for uncollectible accounts. Amounts due from other governments include receivables from other governmental entities including, but not limited to federal, state, or county entities. At year-end the receivables included $4,896,741 due from the federal government for grants and $4,223,132 due from the State of Arizona for shared revenues and grants, $43,502 due from Maricopa County for grants and $1,365,571 due from other governmental agencies. 48 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued G. Inventories Inventories are stated at average cost using the first-in/first-out (FIFO) method. Inventories are recorded as expenses/expenditures when consumed in the government-wide financial statements and governmental and proprietary fund financial statements, respectively. H. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items under the purchases method. I. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $10,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The City defines general government infrastructure capital assets included in capital improvement projects completed at year’s end in excess of $100,000. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are completed. Estimated useful lives for capital assets were determined based on the City’s historical experience and various industry standards. Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 20-40 Building improvements 20 Infrastructure 12-50 Machinery and equipment 5-15 System improvements 25 Vehicles 4-7 Water rights 1-99 J. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position includes a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category: the deferred charge on refunding reported in the government-wide statement of net position and deferred amounts related to pension and OPEB. The deferred charge on refunding resulted from the difference between the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The deferred amounts related to pension and OPEB relate differences between estimated and actual investment earnings, changes in actuarial assumptions and other pension and OPEB related changes. 49 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued In addition to liabilities, the statement of financial position includes a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net assets that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting in this category. Unavailable revenue is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. In the government-wide financial statement the City reports deferred amounts related to pension and OPEB. K. Compensated Absences Vacation leave vests with the employee as it is earned dependent on accumulated time and the individual’s vacation benefits associated with their rank within the City. All employees may carryforward only the amount of vacation benefits equal to the maximum allowable earned credits for the preceding calendar year. Upon termination or retirement, an employee will be compensated for accumulated vacation leave dependent on accumulated time and the individual's vacation benefits associated with their rank within the City. Payment will be based on the individual's rate of pay at termination or retirement. Upon death, the same benefits shall be paid to the employee's beneficiary. The amount, including related benefits, for accumulated vacation leave is reported on the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee leave, resignations or retirements. Generally, resources from the general fund are used to pay for compensated absences. Sick leave benefits provided for ordinary sick pay are not vested with the employee. Upon retirement, an employee will be compensated for 50 percent of accumulated sick leave. Payment will be based on the monthly compensation paid to the employee at the time of retirement and paid into a Retirement Health Savings Plan. Upon death, the same benefits shall be paid to the employee's beneficiary. L. Long-Term Obligations In the government-wide financial statements and proprietary fund statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental or business-type activities and proprietary fund Statement of Net Position. Bond related items, such as premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are expensed in the current period. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. The debt service funds are specifically established to account for and service the long-term obligations for the governmental funds and special assessment debt. Each enterprise fund individually accounts for and services the applicable bonds and lease purchase obligations which benefit these funds. Long-term obligations are recognized as a liability of a governmental fund when due or when resources have been accumulated for payment early in the following year. For other long-term obligations, only the portion that is expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. 50 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, continued M. Fund Equity In the fund financial statements, governmental funds report fund balances as nonspendable, restricted, committed, assigned and unassigned. Nonspendable, restricted and committed classifications represent “reserved” fund balances whereas assigned and unassigned classifications represent “unreserved” fund balances (see Note 9). N. Capital Contributions Capital contributions, as shown in the enterprise funds, represent federal and state grants received, subdividers’ costs of installing water mains, water service connections installed at the customers’ expense and transfers of equipment from governmental funds. Capital contributions are shown as an inflow of resources in both the government-wide and fund financial statements (see Note 8). O. 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. P. Post-Employment Health Care and Life Insurance Benefits In addition to providing pension benefits, the City allows for continuance of certain health care and life insurance benefits for retired employees. Substantially all of the City's employees may become eligible for those benefits if they are eligible to receive a retirement pension when leaving employment with the City. The cost of retiree health care and life insurance premiums is borne both by the retiree and the specific retirement plan under which they participated. There is no direct cost paid by the City. Q. Statements of Cash Flows The City considers all highly liquid investments (including restricted assets) with an original maturity of three months or less to be cash equivalents. In the statements of cash flows, cash receipts and payments are classified according to whether they stem from operating, noncapital financing, capital and related financing or investing activities. R. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund transfers in the fund statements are reported as other financing sources/uses in governmental funds and after non-operating revenues/expenses in proprietary funds. S. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount 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. 51 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 1 - Summary of Significant Accounting Policies, concluded T. Implementation of New Accounting Standards During the year ended June 30, 2021, the City implemented the provisions of Governmental Accounting Standards Board Statements No. 84 Fiduciary Activities and No. 90, Majority Equity Interests - an amendment of GASB Statements No. 14 and No. 61 and early implemented the provision of Statement No. 98, The Annual Comprehensive Financial Report. GASB 84 improves guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. GASB 90 improves the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of the financial statement information for certain component units. GASB 98 established the term annual comprehensive financial report and its acronym ACFR and replaces comprehensive annual financial report and its acronym. NOTE 2 - Cash and Investments The City maintains a cash and investment pool that is available for use by all funds, except for the Chandler Industrial Development Authority, the Chandler Cultural Foundation and the Chandler Health Care Benefits Trust. Each fund’s portion of this pool is displayed on the financial statements as Equity in Pooled Cash and Investments. Pooled cash and investments are stated at fair value with accrued interest shown separately. Restricted cash and investments are amounts held separately by trustees and amounts segregated due to their source and future intent. In addition, the Industrial Development Authority, the Chandler Cultural Foundation, the Chandler Health Care Benefits Trust and the Chandler Workers’ Compensation Employer Liability Trust separately hold investments. Deposits At year-end, cash on hand was $46,865, the carrying amount of the City deposits was $31,267,782, and the bank balance was $37,085,141. Of the bank balance, $250,000 was covered by federal depository insurance and $36,835,141 was covered by collateral held in the pledging bank’s trust department in the City’s name. In addition, at June 30, 2021, the City had $76,322,643 of restricted cash held by paying agent consisting of $49,659,730 in July 1, 2021 debt service payments, $14,743,727 in unspent bond proceeds from the 2017 and 2019 Excise Tax Revenue Obligation issuances, and $11,919,186 from the 2017 and 2019 General Obligation Bond issuances. The cash held by paying agent is in money market funds invested primarily in short-term U.S. Treasury securities. Fair Value Measurements. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. • • • Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs 52 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 2 - Cash and Investments, continued At June 30, 2021, the City had the following investments and maturities: Investment Maturities (in Years) Less than 1 Year $ 40,864,941 1-5 Years $ 267,906,652 Concentration of Credit Risk % 44.37 % S&P/Moody/ Fitch Credit Rating Investment Type U.S. Treasuries U.S. Agencies: Fannie Mae Federal Farm Credit Banks Federal Home Loan Bank Freddie Mac Commercial Paper: Category Level 1 Fair Value $ 308,771,593 Level 2 Level 2 Level 2 Level 2 56,224,596 13,159,907 9,645,742 81,933,956 — — — — — 56,224,596 13,159,907 9,645,742 81,933,956 8.08 1.89 1.39 11.77 AA+/Aaa/AAA AA+/Aaa/AAA AA+/Aaa/AAA AA+/Aaa/AAA Albion Cap Corp/LLC Corporate Bonds: Adobe Inc Corp Amazon.com Inc Corp American Honda Finance Corp Apple Inc Corp Bank of America Corp Bank of New York Mellon Corp Caterpillar Finl Service Charles Schwab Corp Exxon Mobil Corp Hershey Company John Deere Capital JPMorgan Chase Bank Mastercard Inc Corp Metropolitan Life Global Funding I Level 2 5,028,637 5,028,637 — 0.72 A-1/P-1 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 715,245 4,239,458 2,091,364 7,895,920 6,438,245 8,365,156 4,795,432 3,720,931 4,233,788 263,258 4,671,829 8,164,019 3,295,842 4,531,082 — — 229,216 3,116,795 — — 1,510,422 — — — 1,016,994 — — — 715,245 4,239,458 1,862,148 4,779,125 6,438,245 8,365,156 3,285,010 3,720,931 4,233,788 263,258 3,654,835 8,164,019 3,295,842 4,531,082 0.10 0.61 0.30 1.13 0.92 1.20 0.69 0.53 0.61 0.04 0.67 1.17 0.47 0.65 A/A2 AA/A1 A-/A3 AA+/Aa1/NA A-/A2/AAA/A1/AAA/A2/A A/A2/A AA-/Aa2/NA A/A1 A/A2/A A-/A2/AAA+/A1 AA-/Aa3/AA- Level 2 Level 2 Level 2 2,988,510 4,437,567 2,660,289 — — — 2,988,510 4,437,567 2,660,289 0.43 0.64 0.38 A-/A2/A AA+/Aaa/AAA A+/A2/A+ Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 3,369,597 1,476,237 2,156,917 5,147,125 295,102 2,711,606 4,283,904 3,131,445 2,256,501 172,556 3,369,597 — — — — 2,711,606 — 3,131,445 — — — 1,476,237 2,156,917 5,147,125 295,102 — 4,283,904 — 2,256,501 172,556 0.48 0.21 0.31 0.74 0.04 0.39 0.62 0.45 0.32 0.02 A+/A1/NA A/A2/A+ A+/A1 A-/A3/A A+/A1 A-/A2 A+/A1/A+ A+/A1 AA/Aa2 BBB+/A2 Level 2 Level 2 1,584,898 1,631,823 — — 1,584,898 1,631,823 0.23 0.23 AA+/Aa1 AAA/Aaa National Rural Utilities Cooperative Finance Corp New York Life Global Funding Northern Trust Corp Paccar Financial Corp PNC Bank Na Toyota Motor Credit Corp Truist Financial Corp Unilever Capital Corp United Parcel Service US Bank Na US Bankcorp Wal Mart Stores Inc Walt Disney Company Municipal Bonds: AZ Tran Board TXBL REV Bonds Scottsdale, AZ TXBL GO Bonds 53 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 2 - Cash and Investments, continued Investment Maturities (in Years) Investment Type Asset Backed: Allya 2019-3 A3 Amxca 2019-2 A Bmwot 2019-A A3 Carmx 2019-2 A3 Carmx 2020-1 A3 Carmx 2021-1 A3 Carmx 2021-2 A3 CNH2001-A A3 Comet 2019-2 A Copar 2019-1 A3 Fordo 2019-A A3 Harot 2019-1 A3 Harot 2019-2 A3 Harot 2021-1 A3 Hart 2018-A A3 Hart 2020-A A3 Hart 2021-A A3 Hyundai Auto Receivables trust Mbart 2018-1 A3 Narot 2018-B A3 Narot 2019-A A3 Narot 2019-B A3 Narot 2021-A A3 Sdart 2021-2 A3 Taot 2020-A A3 Taot 2020-C A3 Taot 2021-A A3 Woart 2019-B A3 Money Market - Certificates of Deposit Money Market Fund Cash and cash equivalents Total Category Fair Value Less than 1 Year 1-5 Years Concentration of Credit Risk % S&P/Moody/ Fitch Credit Rating Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 2,097,050 2,019,326 2,523,078 676,194 871,824 484,423 996,317 834,328 2,034,430 2,608,974 1,781,539 364,255 960,757 829,227 3,149 5,072,097 639,829 579,285 478,295 398,921 936,480 1,073,232 5,493,963 3,249,580 1,808,964 1,503,692 2,298,181 — 2,019,326 — — — — — — — — — — — — — — — — — — — — — — — — — 2,097,050 — 2,523,078 676,194 871,824 484,423 996,317 834,328 2,034,430 2,608,974 1,781,539 364,255 960,757 829,227 3,149 5,072,097 639,829 579,285 478,295 398,921 936,480 1,073,232 5,493,963 3,249,580 1,808,964 1,503,692 2,298,181 0.30 0.29 0.36 0.10 0.13 0.07 0.14 0.12 0.29 0.37 0.26 0.05 0.14 0.12 — 0.73 0.09 0.08 0.07 0.06 0.13 0.15 0.79 0.47 0.26 0.22 0.33 AAA/Aaa/NA NA/Aaa/AAA AAA/NA/AAA AAA/NR AAA/NR AAA/NR AAA/NR AAA/NR AAA/NA/AAA AAA/Aaa/AAA NA/Aaa/AAA AAA/NR NR/Aaa NR/Aaa AAA/Aaa AAA/NA/AAA AAA/NR AAA/NR AAA/Aaa/NA AAA/Aaa NR/Aaa NR/Aaa AAA/Aaa/NA NA/Aaa/AAA AAA/Aaa AAA/Aaa/NA NA/Aaa/AAA Level 2 Level 2 Level 1 Level 1 3,673,077 18,300,664 55,019,398 153,275 — 3,649,819 55,019,398 153,275 3,673,077 14,650,845 — — 0.53 2.63 7.90 0.02 AAA/NA/AAA A-1/P-1 AAAm/NR AAA/Aaa/AAA $ 696,253,881 $ 121,821,471 $ 574,432,410 100.00 % Investment Valuation Techniques. U.S. treasuries, agencies, money market, and equity securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for identical securities. Governmental bonds, corporate bonds, other fixed income instruments, and international bonds classified in Level 2 of the fair value hierarchy are valued based on significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatility, prepayment speeds, loss severity, credit risks and default rates) or other market corroborated inputs. Interest Rate Risk. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the maturities of its investment portfolio to five years. 54 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 2 - Cash and Investments, concluded Credit Risk. The City’s investment policy allows for investments in obligations guaranteed by the full faith and credit of the United States of America, government sponsored enterprises, government bonds with minimum credit ratings of AA+ or Aaa, commercial paper with a minimum short-term rating of A-1 or P-1, negotiable certificates of deposit, corporate bonds carrying a minimum credit rating of A-, repurchase agreements and the Local Government Investment Pool. The City’s investment in U.S. Agencies, Corporate Bonds and Money Market Funds were rated no lower than AAA, BBB+ and AAAm by Standard & Poor’s, respectively, as of June 30, 2021. Custodial Credit Risk - Investments. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. To limit its exposure, the City's investment policy requires all security transactions that are exposed to custodial credit risk to be processed on a delivery versus payment (DVP) basis with the underlying investments held by a third party acting as the City's agent separate from where the investment was purchased or by the trust department of the bank where purchased, in the City's name. Concentration of Credit Risk. The City’s investment policy does not allow for an investment in any one issuer that is in excess of five percent of the City’s total investments. Securities issued by the United States of America or its agencies are exempt from this provision. More than 5 percent of the City’s investments are in U.S. Agencies, U.S. Treasuries and Money Market Funds. See percentages in table on preceding pages. NOTE 3 - Property Taxes The City’s property tax is levied and collected by the Maricopa County Treasurer. Property taxes are levied on or before the third Monday in August. The levy is based upon the January 1 limited property tax value of property as determined by the Maricopa County Assessor. Under Arizona Revised Statutes (A.R.S.), two assessed valuations are used. One is for primary taxes (used to fund operating expenditures) and the other is for secondary taxes (used to meet general obligation debt service requirements). Taxes are due in two equal installments on October 1 and March 1 following the levy date and are delinquent on the first day of November and May, respectively. Delinquent amounts bear interest at the rate of 16 percent. The City also levies various personal property taxes during the year, which are due the second Monday of the month following receipt of the tax notice, and become delinquent 30 days thereafter. Pursuant to A.R.S. a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. The State Constitution and State law specify a property tax levy limitation system. The system consists of two levies, a limited levy known as the primary property tax levy and an unlimited levy referred to as the secondary levy, which may only be used to retire bonded indebtedness. There is also a control on the assessed value of property for primary tax purposes. The base year for the tax system is fiscal year 1979-80. From this base year, two assessed values evolve. The primary assessed values are allowed to increase by no more than 5 percent a year. The dollar amount of the secondary property tax levy is "unlimited" and the actual limited property value of property is used in determining the tax rate. 55 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 3 - Property Taxes, concluded The primary tax levy is limited to an increase of 2 percent over the previous year's maximum allowable primary levy, plus an increased dollar amount because of a net gain in property not taxed the previous year. Also, the primary property tax from all taxing jurisdictions for homeowners may not exceed 1 percent of the market value of their homes. If the combined primary property tax (for the City, County, School District, etc.) exceeds 1 percent of the market value of the homes, the school districts will reduce their rate until the homeowners' aggregate rate is equal to or less than the allowable 1 percent. The State will then subsidize the school districts for the reduced revenue. This 1 percent limitation applies to primary property taxes only and does not affect the secondary property tax levy. In fiscal year 2020-21, current property tax collections were $36,040,967 or 99 percent of the tax levy, and were recognized as revenue when received. At fiscal year end, the delinquent property tax expected to be collected within 60 days is recognized as revenue and recorded as a receivable. Property taxes levied in August 2021 are not available for fiscal year 2020-21; accordingly, such taxes will not be recognized as revenue until fiscal year 2021-22. NOTE 4 - Capital Assets A summary of changes in capital assets for governmental activities is as follows: Balance Governmental Activities Capital assets, not being depreciated: Land Construction in progress Total capital assets not being depreciated Balance June 30, 2020 $ 92,528,517 113,530,548 206,059,065 Additions $ — 36,018,096 36,018,096 Retirements $ June 30, 2021 — $ (43,538,657) (43,538,657) 92,528,517 106,009,987 198,538,504 Capital assets, being depreciated: Infrastructure Building and improvements Machinery and equipment Total capital assets being depreciated 743,147,645 410,009,123 96,956,739 1,250,113,507 32,799,025 5,427,208 10,075,340 48,301,573 — — (5,956,668) (5,956,668) 775,946,670 415,436,331 101,075,411 1,292,458,412 Less accumulated depreciation for: Infrastructure Building and improvements Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net (406,838,819) (220,031,093) (73,624,049) (700,493,961) 549,619,546 (27,591,284) (18,630,491) (7,882,295) (54,104,070) (5,802,497) — — 5,746,432 5,746,432 (210,236) (434,430,103) (238,661,584) (75,759,912) (748,851,599) 543,606,813 (43,748,893) $ 742,145,317 Governmental activities capital assets, net $ 755,678,611 56 $ 30,215,599 $ CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 4 - Capital Assets, continued Construction in progress in the governmental activities capital assets is comprised of the following: Expended to June 30, 2021 Streets $ 43,178,596 Remaining Commitments $ 18,110,647 Parks and recreation 8,837,804 1,679,519 Buildings and related improvements 53,993,587 10,482,847 Total $ 106,009,987 $ 30,273,013 A summary of changes in capital assets for business-type activities is as follows: Balance Business-Type Activities Balance June 30, 2020 Additions Retirements June 30, 2021 Capital assets, not being depreciated: Land $ Construction in progress Total capital assets not being depreciated 51,669,315 $ 5,520,416 $ — $ 57,189,731 57,565,710 13,616,690 (53,158,699) 18,023,701 109,235,025 19,137,106 (53,158,699) 75,213,432 Capital assets, being depreciated: System improvements 1,389,863,970 11,206,434 — 1,401,070,404 Building and improvements 26,345,403 93,136 — 26,438,539 Vehicles, machinery and equipment 20,224,800 346,217 (83,290) 20,487,727 Water rights — 42,860,250 — 42,860,250 2,495,534 172,703 — 2,668,237 1,438,929,707 54,678,740 (83,290) 1,493,525,157 System improvements (723,937,013) (46,221,465) — (770,158,478) Buildings and improvements (17,414,402) (974,292) — (18,388,694) Vehicles, machinery and equipment (17,006,718) (1,000,979) 61,290 (17,946,407) — (214,301) — (214,301) Land improvements Total capital assets being depreciated Less accumulated depreciation for: Water rights Land improvements Total accumulated depreciation Total capital assets, being depreciated, net Business-type activities capital assets, net $ (2,296,682) (54,468) — (2,351,150) (760,654,815) (48,465,505) 61,290 (809,059,030) 678,274,892 6,213,235 (22,000) 684,466,127 (53,180,699) $ 759,679,559 787,509,917 57 $ 25,350,341 $ CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 4 - Capital Assets, concluded Construction in progress in the business-type activities capital assets is comprised of the following: Expended to Remaining 2021 Commitments June 30, Sewer system improvements $ 7,863,976 $ 15,384,893 12,299,108 Water system improvements 9,730,210 215,095 Solid waste system improvements 64,543 214,420 Airport improvements 359,552 Total $ 28,108,096 $ 18,023,701 Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Community services Transportation and development Total depreciation expense - governmental activities Business-type activities: Water Wastewater Solid waste Airport Chandler housing authority Total depreciation expense - business-type activities $ $ $ $ 8,397,075 7,272,663 10,491,842 27,942,490 54,104,070 17,095,915 29,089,066 611,341 1,071,710 597,473 48,465,505 Projects are reported as construction in progress when initially identified. Throughout the life of the project, it may be determined that the project does not meet the requirements for capitalization. Once a project is determined to not meet the requirements for capitalization it is removed from construction in progress. As a result, deletions and transfers out from construction in progress may be more than what is reported as additions and transfers in to depreciable capital assets. 58 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 5 - Long-Term Liabilities A. General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. Bonds issued for business-type activities are reported in the enterprise funds as they are to be repaid from enterprise revenues. In addition, general obligation bonds have been issued to refund other general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds are generally issued as 10 to 15 year serial bonds, except for refunding issues, with varying amounts of principal maturing each year. The City has pledged future ad valorem tax revenues and net enterprise revenues to repay a total of $321,869,128 in outstanding general obligation bonds and are payable through July 1, 2035. Proceeds of the bonds were used for governmental and business-type activities. Governmental Activities General Obligation Bonds Annual principal and interest payments on the government activities bonds were approximately 79 percent of total ad valorem taxes. The total principal and interest remaining to be paid on the governmental activities portion of the bonds is $231,642,858. Principal and interest paid for the current year and total ad valorem property taxes were $28,943,382 and $36,409,345 respectively. General obligation bonds outstanding as reported in governmental and business-type activities at June 30, 2021 were as follows: Outstanding Governmental Activities General Obligation Bonds: $214,540,000 Refunding Bonds, Series 2014, due in annual installments of $10,370,000 to $16,210,000 through 7/1/28; interest at 3 percent to 5 percent. $39,050,000 Refunding Bonds, Series 2016, due in annual installments of $4,980,000 to $15,465,000 beginning 7/1/25 through 7/1/27; interest at 3 percent to 5 percent. $58,740,000 Capital Improvement Bonds, Series 2017, due in annual installments of $3,075,000 to $4,160,000 through 7/1/32; interest at 2.3 percent to 4 percent. $30,400,000 Capital Improvement Bonds, Series 2019, due in annual installments of $1,000,000 to $2,325,000 through 7/1/35; interest at 2.3 percent to 4 percent. Total Governmental Activities General Obligation Bonds 59 June 30, 2021 $ 96,099,000 25,500,000 43,165,000 30,400,000 $ 195,164,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 5 - Long-Term Liabilities, continued Business-Type Activity General Obligation Bonds Annual principal and interest payments on the business-type activities bonds were approximately 21 percent of net water and wastewater system revenues. The total principal and interest remaining to be paid on the business-type activities portion of the general obligation bonds is $90,226,270. Principal and interest paid for the current year and total net water system, wastewater system revenues were $12,764,575 and $59,876,984 respectively. Business-Type Activities General Obligation Bonds: $214,540,000 Refunding Bonds, Series 2014, due in annual installments of $6,895,000 to $11,036,000 through 7/1/28; interest at 3 percent to 5 percent. $39,050,000 Refunding Bonds, Series 2016, due in annual installments of $2,395,000 to $8,650,000 beginning 7/1/25 through 7/1/27; interest at 3 percent to 5 percent. Total Business-Type Activities General Obligation Bonds Outstanding June 30, 2021 $ 63,386,000 13,550,000 $ 76,936,000 B. Excise Tax Revenue Obligations Excise tax revenue obligations are issued to provide funds to acquire and construct certain improvements to the water and sewer systems of the City and to pay the costs incurred in connection with the issuance of the obligations. The City has collateralized the obligations by the pledge of all unrestricted excise taxes (transaction privilege tax, franchise fees, state-shared sales and income taxes and fees for licenses and permits) including all fines and forfeitures, which the City presently or in the future imposes or receives from other entities and which are not earmarked by the contributor for a contrary or inconsistent purpose. The City agrees that, so long as any of the obligations remain outstanding and their principal and interest are unpaid, it will not further encumber the excise taxes unless the excise taxes received by the City in the immediately preceding fiscal year are at least three times the highest combined debt service for the current or any succeeding fiscal year for all outstanding parity obligations, including the additional parity obligations proposed be secured by a pledge of the same excise taxes. The City does have the right to incur additional parity obligations payable from and secured by the excise taxes on parity with the obligations. Annual principal and interest payments on the obligations are being repaid from net water and wastewater system revenues and were less than 31% percent of net system revenues. The total principal and interest to be paid on the obligations is $287,436,188. Principal and interest paid for the current year and net water and wastewater system revenues were $18,599,151 and $60,098,730 respectively. Total excise tax revenues during the fiscal year were $251,546,983. Principal and interest payments were approximately 7 percent of total excise tax revenues. 60 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 5 - Long-Term Liabilities, continued Outstanding June 30, 2021 Business-Type Activities Excise Tax Revenue Obligations: $15,000,000 Water & Sewer Excise Tax Revenue Obligations, Series 2011, due in annual installments of $835,000 to $905,000 through 7/1/22; interest at 3 percent to 4 percent. $ 1,775,000 $104,500,000 Water & Sewer Excise Tax Revenue Obligations, Series 2013, due in annual installments of $3,100,000 to $12,000,000 through 7/1/33; interest at 4 percent to 5 percent. 94,300,000 $66,660,000 Water & Sewer Excise Tax Revenue Obligations, Series 2015, due in annual installments of $2,635,000 to $5,620,000 through 7/1/35; interest at 3 percent to 5 percent. 58,610,000 $19,510,000 Water & Sewer Excise Tax Revenue Refunding Obligations, Series 2016, due in annual installments of $1,180,000 to $3,050,000 7/1/20 through 7/1/28; interest at 4 percent to 5 percent. 18,330,000 $36,220,000 Water & Sewer Excise Tax Revenue Obligations, Series 2017, due in annual installments of $775,000 to $4,045,000 through 7/1/37; interest at 3 percent to 5 percent. 34,445,000 $13,000,000 Water & Sewer Excise Tax Revenue Obligations, Series 2019, due in annual installments of $1,270,000 to $1,765,000 through 7/1/28; interest at 5 percent. 12,320,000 Total Business-Type Activities Excise Tax Revenue Obligations $ 219,780,000 C. Special Assessment Bonds with Governmental Commitment As trustee for improvement districts, the City is responsible for collection of assessments levied against the owners of property within the improvement districts and for disbursement of these amounts for retirement of the respective bonds issued to finance the improvements. At June 30, 2021, the special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, are adequate for the scheduled maturities of the bonds payable and related interest. Special assessment bonds are collateralized by properties within the districts. In the event of default by the property owner, the City may enforce an auction sale to satisfy the debt service requirements of the bonds. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. Special assessment bonds payable with governmental commitment outstanding as reported in governmental activities at June 30, 2021 were as follows: Outstanding June 30, 2021 Special Assessment Bonds with Governmental Commitment: $7,370,000 Spectrum Improvement District Bonds, due in annual installments of $585,000 to $635,000 through 1/1/23; interest at 4 percent. Total Special Assessment Bonds with Governmental Commitment 61 $ 1,245,000 $ 1,245,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 5 - Long-Term Liabilities, continued Changes in Long-Term Liabilities Governmental Activities: Compensated absences Bonds payable: General obligation bonds Special assessment bonds Issuance premiums Total bonds payable Claims payable (as restated) Net pension liability OPEB liability Totals Balance June 30, 2020 $ 13,811,004 Additions $ 1,727,342 Balance Reductions June 30, 2021 $ (1,858,844) $ 13,679,502 Due within One Year $ 2,482,184 215,939,000 1,830,000 19,789,672 237,558,672 — — — — (20,775,000) (585,000) (2,240,684) (23,600,684) 195,164,000 1,245,000 17,548,988 213,957,988 19,395,000 610,000 2,240,684 22,245,684 13,643,256 275,257,904 47,361,614 32,993,787 18,723,470 8,743,647 (27,751,181) — — 18,885,862 293,981,374 56,105,261 12,183,920 — — $ 587,632,450 $ 62,188,246 $ (53,210,709) $ 596,609,987 $ Balance June 30, 2020 $ 1,388,807 Additions $ 211,401 Balance Reductions June 30, 2021 $ (191,432) $ 1,408,776 Due Within One Year $ 255,626 86,261,000 2,340,000 228,985,000 25,623,807 — — — — (9,325,000) (2,340,000) (9,205,000) (2,663,431) 76,936,000 — 219,780,000 22,960,376 9,525,000 — 10,630,000 2,663,437 Total bonds & obligations payable 343,209,807 — (23,533,431) 319,676,376 22,818,437 Net pension liability OPEB liability Landfill closure/post closure Totals 18,637,376 5,751,113 4,340,000 $ 373,327,103 3,601,126 1,147,609 — 4,960,136 — 22,238,502 — 6,898,722 — 4,340,000 $ (23,724,863) $ 354,562,376 — — 94,446 23,168,509 Business-Type Activities: Compensated absences Bonds & obligations payable: General obligation bonds Revenue bonds Excise tax revenue obligations Issuance premiums $ $ 36,911,788 Compensated Absences The City’s policy relating to compensated absences is described in Note 1. The long-term portion of this debt is expected to be paid in future years from future resources. Compensated absences for governmental activities have been liquidated primarily by the general fund. Statutory Debt Limitation In the absence of more restrictive bond authorization ballot limitations, the City is subject to state limitations on the amount of net bonded debt (exclusive of revenue bonds, excise tax revenue obligations, and improvement district bonds) it may have outstanding. The statutory debt limitation is 20 percent of the full cash property assessed valuation for purposes of water, wastewater, artificial light, acquisition and development of land for open space preserves, recreation facilities, public safety and emergency services, streets and transportation and 6 percent of the full cash property assessed valuation for all other purposes (e.g., library, museum, center for the arts). At June 30, 2021, the 6 percent debt limitation was $280,953,536, providing a debt margin of $274,194,030 and the 20 percent debt limitation was $936,511,789, providing a debt margin of $659,438,047. 62 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 5 - Long-Term Liabilities, continued Bond Covenants Pursuant to certain bond indenture agreements, the City is obligated to various limitations and restrictions on annual debt service requirements, maintenance and flow of monies through various restricted accounts, minimum amounts to be maintained in various sinking funds, and minimum revenue bond coverages. The City is in compliance with all such significant limitations and restrictions in the opinion of City’s management. Arbitrage Arbitrage is the ability to obtain tax-exempt bond proceeds and invest the funds in higher yielding taxable securities, resulting in a profit. The City monitors compliance with federal arbitrage regulations. Arbitrage liability as of June 30, 2021 is $0. Debt Service Requirements to Maturity The following is a summary of debt service requirements to maturity for all bonds payable as of June 30, 2021: GOVERNMENTAL ACTIVITIES General Improvement Obligation Districts Interest Principal Years Ended June 30 General Obligation Principal 2022 $ 19,395,000 2023 20,060,000 6,598,475 2024 20,860,000 5,702,900 2025 21,610,000 2026 7,370,030 $ $ 27,424,830 635,000 25,400 27,318,875 — — 26,562,900 4,695,275 — — 26,305,275 20,820,000 3,790,525 — — 24,610,525 2027-2031 73,934,000 7,465,438 — — 81,399,438 2032-2036 18,485,000 856,215 — — 19,341,215 $ 195,164,000 $ 36,478,858 75,200 $ 232,963,058 $ 63 610,000 1,245,000 $ Total 49,800 Total $ Improvement Districts Interest $ CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 5 - Long-Term Liabilities, concluded Years Ended June 30 2022 BUSINESS-TYPE ACTIVITIES General Obligation Excise Tax Interest Principal General Obligation Principal $ 9,525,000 $ 3,120,630 $ 10,630,000 Excise Tax Interest $ Total 8,878,476 $ 32,154,106 2023 9,650,000 2,748,560 11,375,000 8,353,925 32,127,485 2024 9,555,000 2,316,685 11,940,000 7,781,975 31,593,660 2025 9,475,000 1,840,935 12,865,000 7,161,850 31,342,785 2026 9,290,000 1,430,235 13,515,000 6,502,350 30,737,585 2027-2031 29,441,000 1,833,225 78,505,000 22,609,375 132,388,600 2032-2036 — — 75,110,000 6,184,487 81,294,487 2037-2041 — — 5,840,000 183,750 6,023,750 $ 76,936,000 $ 13,290,270 $ 219,780,000 $ 67,656,188 $ 377,662,458 Total NOTE 6 - Defeased Debt Prior Year Defeasance In prior years, the City defeased certain excise tax revenue obligations by placing the proceeds of new bonds and obligations in an irrevocable trust to provide for all future debt service payments on the old bonds or obligations. Accordingly, the trust account assets and the liability for the defeased bonds and obligations are not included in the City’s financial statements. Bonds and obligations that have been advance refunded (defeased) as of June 30, 2021: Refunded Debt Outstanding Amount Excise Tax Revenue Obligations, Series 2011 (Final Redemption 7/1/21) $ 6,450,000 NOTE 7 - Landfill Closure and Postclosure Costs State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. In addition to operating expenses related to landfill activities through its closure date (October 1, 2005), an expense provision and related liability has been recognized based on the future closure and postclosure care costs to be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. As of June 30, 2021, the City estimates total costs related to landfill closure and postclosure care is $16,333,635 and has recognized that entire amount since the landfill no longer accepts waste. To date, $11,993,635 has been paid. The remaining balance of $4,340,000 consists of a current liability of $94,446 and $4,245,554 recorded as a long-term liability on the City’s financial statements. 64 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 7 - Landfill Closure and Postclosure Costs, concluded The estimated total current cost of the landfill closure and postclosure, $16,333,635, is based on the amount that would be paid if all equipment, facilities and services required to care, monitor and maintain the landfill were acquired as of June 30, 2021. However, the actual cost of closure and postclosure care may differ due to inflation, deflation, changes in technology or changes in landfill laws and regulations. The City is required by state and federal regulations to comply with local government financial test requirements that assure the City can meet the costs of landfill closure, postclosure care and, if necessary, corrective action when needed. The City complied with all local government financial test requirements for the year ended June 30, 2020. It is anticipated that future inflation costs will be financed in part from earnings on investments. The remaining portion of anticipated future inflation costs and any additional costs that might arise from changes in postclosure requirements, i.e., due to changes in technology or more rigorous environmental regulations, may need to be covered by additional charges to future taxpayers. NOTE 8 - Capital Contributions Capital contributions in the Water, Wastewater, Solid Waste, Airport, and Non-Major Governmental funds are the result of system development fees, developer contributions and government contributions. Total capital contributions amounted to the following: Water Wastewater Airport System Development Fees $ 5,160,606 7,146,259 — Developer Contributions $ 595,244 1,453,764 — Government Contributions $ — — 91,512 $ Total $ $ $ $ 14,447,385 12,306,865 2,049,008 91,512 Total 5,755,850 8,600,023 91,512 NOTE 9 - Fund Equity In the fund financial statements, fund balances are reported in five classifications that comprise a hierarchy based on spending constraints placed on the purposes for which resources can be used for better consistency and clarification. The classifications of fund balance are explained below: Nonspendable fund balance includes amounts that cannot be spent because either 1) it is not in a spendable form, such as inventory or prepaid items or 2) it is legally or contractually required to be maintained intact. Restricted fund balance includes amounts constrained to specific purposes by their providers which are either imposed 1) by external parties (grantors, bondholders and higher levels of government), 2) by law through constitutional provisions or 3) by enabling legislation legally enforceable by external parties. Committed fund balance includes amounts with self-imposed limitations to be used only for a specific purpose pursuant to constraints by formal action of the highest level of decision making authority, namely Mayor and Council. Mayor and Council approval is required to commit resources and amounts cannot be used for any other purpose unless Mayor and Council take the same formal action to remove or change the commitment. 65 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 9 - Fund Equity, continued Assigned fund balance includes amounts intended to be used for a specific purpose. For the general fund, the assigned fund balance must be for a specific purpose and for all other governmental funds the assigned fund balance represents the residual balance of the fund. Fund balance assignments are approved through the Annual Budget Fund Policies section by Mayor and Council. Unlike committed fund balances, assigned fund balance amounts can be changed without formal action by the City Manager. Unassigned fund balance includes amounts available for any purpose; these amounts are reported only in the general fund. In addition, other governmental funds that result in a negative fund balance are presented in this classification. Generally, the City would first apply restricted resources, then committed, assigned and unassigned resources when an expense is incurred for purposes for which more than one classification of fund balance is available. As of June 30, 2021 the constraints placed on fund balance for the major governmental funds and other non-major governmental funds are presented in the following table: 66 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 9 - Fund Equity, concluded General Obligation Bonds Debt Service General Other Governmental Total Nonspendable: Inventories $ 1,045,705 Prepaid items $ — $ — $ 1,045,705 5,933 — — 5,933 1,051,638 — — 1,051,638 Court enhancement 754,513 — — 754,513 Judicial enhancement 487,896 — — 487,896 Weapons proceeds 178,742 — — 178,742 Citing agency 33,389 — — 33,389 Smart and Safe AZ 256,702 — — 256,702 Transportation and development — — 122,816,807 122,816,807 Debt service reserve — 5,758,393 39,664 5,798,057 Community development — — 686,088 686,088 Community services — — 43,801,030 43,801,030 Other capital projects — — 14,657,494 14,657,494 Total restricted 1,711,242 5,758,393 182,001,083 189,470,718 Domestic violence prevention 31,265 — — 31,265 Total nonspendable Restricted for: Assigned to: Self-insurance purposes 1,396,555 — — 1,396,555 Traffic safety reserve 181,495 — — 181,495 PSPRS contribution 27,500,000 — — 27,500,000 Capital improvement projects 104,237,344 — — 104,237,344 Economic development projects 5,552,400 — — 5,552,400 ARPA related projects 4,864,526 — — 4,864,526 Total assigned 143,763,585 — — 143,763,585 96,065,934 — (7,226,577) 88,839,357 96,065,934 — (7,226,577) 88,839,357 Unassigned Total unassigned Total fund balances $ 242,592,399 $ 5,758,393 $ 174,774,506 $ 423,125,298 The City’s General Fund Reserve Policy requires an amount equal to 15 percent of adopted General Fund operating revenues, excluding one-time transfers in, for fiscal year 2020-21. This amounts to $38,826,300 and is included in unassigned above. 67 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans The City of Chandler contributes to the pension plans described below. The City of Chandler also contributes to the Elected Officials Retirement Plan and Other Post Employment Benefit (OPEB) plans; however the plans are not described below because of its relative insignificance to the financial statements. The plans are component units of the State of Arizona. At June 30, 2021, the City of Chandler reported the following aggregate amounts related to pensions and other postemployment benefits (OPEB) for all plans to which it contributes. Net pension liability Pension deferred outflows of resources Pension deferred inflows of resources Pension expense Net OPEB liability OPEB deferred outflows of resources OPEB deferred inflows of resources OPEB expense Governmental Activities $ 293,981,374 Pensions Plans Business-type Activities Total $ 22,238,502 $ 316,219,876 94,539,170 5,233,543 32,857,654 4,163,399 422,807 8,214,414 98,702,569 5,656,350 41,072,068 Governmental Activities $ 56,105,261 10,282,244 11,434,127 2,810,662 OPEB Plans Business-type Activities $ 6,898,722 1,323,724 1,378,227 368,901 Total 63,003,983 11,605,968 12,812,354 3,179,563 $ The City of Chandler reported $43,087,452 and $1,853,451 of pension expenditures in its governmental and enterprise funds, respectively, related to all pension plans to which it contributed in the current fiscal year. Arizona State Retirement System A. Plan Description The City of Chandler employees not covered by the other pension plans described after this section participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing multipleemployer defined benefit pension plan, a cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plan and a cost-sharing multiple-employer defined benefit long-term disability (OPEB) plan. For governmental activities OPEB and pension liabilities are generally liquidated by the general fund. 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. 68 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued B. 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: Retirement Initial Membership Date: Before July 1, 2011 Years of service and age required to receive benefit On or After July 1, 2011 Sum of years and age equals 80 10 years, age 62 5 years, age 50* 30 years, age 55 25 years, age 60 10 years, age 62 Any years, age 65 5 years, age 50* Any years, age 65 Final average salary is based on Highest 36 months of last 120 Benefit percent per year of Highest 60 months of last 120 months months 2.1% to 2.3% 2.1% to 2.3% service *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 members’ 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. C. 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 12.22 percent (12.04 percent for retirement and 0.18 percent for long-term disability) of the members’ annual covered payroll, and the City of Chandler was required by statute to contribute at the actuarially determined rate of 12.22 percent (11.65 percent for retirement, 0.39 percent for health insurance premium benefit, and 0.18 percent for long-term disability) of the active members’ annual covered payroll. In addition, the City of Chandler was required by statute to contribute at the actuarially determined rate of 10.21 percent of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to the ASRS. The required contribution rate for the fiscal year ended June 30, 2021, was actuarially determined to yield contribution amounts sufficient to finance costs earned by employees during the year and to amortize the Plan’s unfunded actuarially accrued liability over the period specified in the statutes. The City of Chandler’s contributions for the year ended June 30, 2021, were $9,267,255. The City of Chandler’s pension contributions are paid by the same funds as the employee’s salary, with the largest component coming from the general fund. 69 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued D. Pension Liability At June 30, 2021, the City of Chandler reported a liability of $122,547,011 for its proportionate share of the net pension liability of the ASRS. The net pension liability was measured as of June 30, 2020. 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, 2019, to the measurement date of June 30, 2020. The City of Chandler’s proportion of the net pension liability was based on a projection of the City of Chandler’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2020, the City of Chandler’s proportion was 0.71 percent, which was a decrease of 0.01 percent from its proportion measured as of June 30, 2019. E. Pension Expense and Deferred Outflows/Inflows of Resources For the year ended June 30, 2021, the City of Chandler recognized pension expense for ASRS of $9,510,959 and reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience 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 Deferred Outflows Deferred Inflows of Resources of Resources $ 1,108,650 $ — $ 11,819,803 — — 9,267,255 22,195,708 3,178,431 — 3,178,431 $ 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, 2022. 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: 2021 $(1,274,403) 2022 3,093,273 2023 4,275,349 2024 3,655,803 70 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued F. 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 Discount rate Projected salary increases Inflation Permanent base increases Mortality rates June 30, 2019 June 30, 2020 Entry age normal 7.5% 2.7 - 7.2% 2.3% Included 2017 SRA Scale U-MP The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2016. 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, 2017, 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 5.48 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. The target allocation and best estimates of geometric real rates of return for each major asset class of the ASRS are summarized in the following table: Asset Class Equity Fixed Income - Credit Fixed Income - Interest Rate Sensitive Real estate Total Target Allocation 50% 20% 10% 20% 100% Real Rate of Return 6.39% 5.44% 0.22% 5.85% G. Discount Rate The discount rate used to measure the ASRS total pension liability was 7.5 percent, which was not changed from the discount rate used as of June 30, 2019. 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. 71 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued H. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City of Chandler’s proportionate share of the net pension liability calculated using the discount rate of 7.5 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-percentage-point lower or 1-percentage-point higher than the current rate: City of Chandler's proportionate share of the net pension liability I. 1% Decrease (6.5%) Current Discount Rate (7.5%) $ 167,581,375 $122,547,011 $ 84,900,596 1% Increase (8.5%) 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. Public Safety Personnel Retirement System A. Plan Description City of Chandler public safety employees who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS). The PSPRS administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) plan. For governmental activities OPEB and pension liabilities are generally liquidated by the general fund. A seven-member board known as the Board of Trustees and the participating local boards govern the PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The PSPRS issues a publicly available financial report that includes their financial statements and required supplementary information. The report is available on the PSPRS website at www.psprs.com. 72 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued B. Benefits Provided The PSPRS provides retirement, health insurance premium supplement, disability and survivor benefits. State statute establishes benefits terms. Certain retirement and disability benefits are calculated on the basis of age, average monthly compensation and service credit as follows. See the publicly available PSPRS financial report for additional benefits information. Retirement Initial Membership Date: Years of service and age required to receive benefit Final average salary is based on Normal retirement Before January 1, 2012 On or After January 1, 2012 On or After July 1, 2017 20 years, any age 15 years and age 52.5 15 years and age 55 Highest 36 months of Highest 60 months of last Highest 60 months of last 20 years 20 years last 15 years 50% less 4.0% for each year 1.5% to 2.5% per year of 1.5% to 2.5% per year of of credited service less than credited service, not to credited service, not to 20 years or plus 2.0% to exceed 80% exceed 80% 15 years age 62 2.5% for each year of credited service over 20 years, not to exceed 80% Accidental disability retirement 50% or normal retirement, whichever is greater Survivor benefit: Retired members 80% of retired member’s pension benefit Active members 80% to 100% of accidental disability retirement benefit or 100% of average monthly compensation if death was the result of injuries received on the job Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess investment earnings. The PSPRS also provides temporary disability benefits of 50 percent of the member's compensation for up to 12 months. C. Employees Covered by Benefit Terms At June 30, 2021, the following employees were covered by the agent pension plan’s benefit terms: Inactive employees or beneficiaries currently receiving benefits Inactive employees entitled to but not yet receiving benefits Active employees Total 73 PSPRS - Police PSPRS - Fire 188 75 57 277 522 34 180 289 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued D. Contributions State statutes establish the pension contribution requirements for active PSPRS employees. In accordance with state statutes, annual actuarial valuations determine employer contribution requirements for PSPRS pension benefits. The combined active member and employer contribution rates are expected to finance the cost of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2021, are indicated below. Rates are a percentage of active members’ annual covered payroll. PSPRS - Police Active members - pension Tier 1 Tier 2 Tier 3 DB Tier 3 DC Employer rates - pension Tier 1 Tier 2 Tier 3 DB Tier 3 DC PSPRS - Fire 7.65 % 7.65 % 10.12 % 7.65 % 7.65 % 10.76 % 10.41 % 10.41 % 49.12 % 49.12 % 44.22 % 44.51 % 43.84 % 43.84 % 38.25 % 37.90 % In addition, the City of Chandler was required by statute to contribute at the actuarially determined rate of 34.10 percent for police and 27.49 percent for fire for the PSPRS of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to the PSPRS. For the agent plans, the contributions to the pension plan for the year ended were: PSPRS - Police PSPRS - Fire Pension: Contributions made $ 22,619,456 $ 13,054,192 E. Pension Liability At June 30, 2021, the City of Chandler reported $128,231,920 in net pension liability for police and $65,440,945 in net pension liability for fire. The net pension liabilities were measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2020, reflects changes of benefit terms and actuarial assumptions for a court ruling for funding permanent benefit increases and a decrease in the wage growth assumption. 74 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued F. Actuarial Assumptions The significant actuarial assumptions used to measure the total pension liability are as follows: Actuarial valuation date Actuarial cost method Investment rate of return Tier 1/2 Investment rate of return Tier 3 Price inflation Wage inflation Projected salary increases June 30, 2020 Entry age normal 7.3% 7.0% 2.5% 3.5% including inflation Cost of living adjustment 3.5% - 7.5% 1.75% PubS-2010 tables Mortality rates The long-term expected rate of return on PSPRS pension plan investments was determined to be 7.30 percent for Tiers 1 and 2 and 7.0 percent for Tier 3 using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Core Bonds International Public Equity Other Assets (Capital Appreciation) Cash - Mellon Diversifying Strategies Global Private Equity Private Credit U.S. Public Equity Total 75 Target Allocation 2% 15% 7% 1% 12% 18% 22% 23% 100% Long-Term Expected Real Rate of Return 0.22% 6.09% 5.61% -0.6% 3.22% 8.42% 5.31% 4.93% CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued G. Pension Discount Rates The discount rate of 7.30 percent was used to measure the total pension liability for Tier 1/2 members and 7.00 percent for Tier 3 members. The projection of cash flows used to determine the PSPRS discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. 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 for these plans to determine the total pension liability. Total Pension Liability PSPRS - Police Balances at June 30, 2020 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balances at June 30, 2021 $ $ 76 281,437,368 Increase/(Decrease) Plan Fiduciary Net Position $ 158,412,254 Net Pension Liability $ 123,025,114 5,696,125 20,504,731 — — — — 5,696,125 20,504,731 — 12,866,840 — — — — — — 28,799,919 2,909,915 2,344,516 12,866,840 — (28,799,919) (2,909,915) (2,344,516) (12,493,545) — — 26,574,151 308,011,519 $ (12,493,545) (191,143) (2,317) 21,367,345 179,779,599 $ — 191,143 2,317 5,206,806 128,231,920 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued PSPRS - Fire Balances at June 30, 2020 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balances at June 30, 2021 Increase/(Decrease) Total Pension Plan Fiduciary Liability Net Position $ 169,704,177 $ $ 103,375,390 Net Pension Liability $ 66,328,787 4,025,473 12,453,112 — — — — 4,025,473 12,453,112 — 1,086,650 — — — — — — 15,654,338 1,432,043 1,488,011 1,086,650 — (15,654,338) (1,432,043) (1,488,011) (6,278,162) — — 11,287,0731 180,991,250 $ (6,278,162) (121,320) 5 12,174,915 115,550,305 $ — 121,320 (5) (887,842) 65,440,945 H. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City of Chandler’s net pension liability calculated using the discount rates noted above, as well as what the net pension liability would be if it were calculated using a discount rate that is 1percentage-point lower or 1-percentage-point higher than the current rate: I. Tier 1-2/Tier 3 1% Decrease Current Discount Rate Tier 1-2/Tier 3 1% Increase PSPRS - Police: Rate Net pension liability 6.30 $ 172,228,649 7.30 $ 128,231,920 $ 8.30 92,590,527 PSPRS - Fire: Rate Net pension liability $ 7.30 65,440,945 $ 8.30 44,505,679 6.30 91,078,273 $ Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued PSPRS financial report. The report is available on the PSPRS website at www.psprs.com. 77 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, continued J. Pension Expense For the year ended June 30, 2021, the City of Chandler recognized the following as pension expense: Pension Expense $ 19,710,554 11,843,010 PSPRS - Police PSPRS - Fire K. Pension Deferred Outflows/Inflows of Resources At June 30, 2021, the City of Chandler reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PSPRS - Police Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total PSPRS - Fire Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total 78 Deferred Outflows of Resources $ 11,740,236 7,425,936 Deferred Inflows of Resources $ 2,131,896 — 8,506,052 22,619,456 50,291,680 — — 2,131,896 $ $ Deferred Outflows of Resources $ 1,999,033 5,535,245 Deferred Inflows of Resources $ 346,023 — 5,626,711 13,054,192 26,215,181 — — 346,023 $ $ CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 10 - Retirement and Pension Plans, concluded The amounts reported as deferred outflows of resources related to pension are resulting from contributions made subsequent to the measurement date but before the end of the City's fiscal year and will be recognized as a reduction of the net pension liability in the subsequent year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ending June 30: PSPRS - Police 2022 $ 5,652,156 2023 5,766,416 2024 5,639,701 2025 5,214,009 2026 3,268,046 Thereafter — PSPRS - Fire $ 3,071,791 3,505,881 3,029,992 2,007,329 559,457 640,516 NOTE 11 - Post-Employment Benefits Other Than Pensions - Single Employer Plan The cost of postemployment healthcare benefits, from an accrual accounting perspective, should be associated with the periods in which the future costs are earned rather than in the future years when they will be paid (similar to the cost of pension benefits). GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions requires the City to recognize the entire OPEB liability and a comprehensive measure of OPEB expense. The comprehensive measure of OPEB expense includes immediate recognition in OPEB expense of the effects of changes of benefit terms, as well as the incorporation of the amortization of deferred inflows of resources and deferred outflows of resources related to OPEB over a defined, closed period. A. Plan Description The City provides post-employment health care (OPEB) for retired employees through a single employer defined benefit health plan. The plan provides health benefits for eligible retirees, their spouses and dependents though the City’s group health insurance plans, which covers active and retired members. The benefits, benefit levels, and contribution rates are determined annually by the City’s Human Resources Department and approved by the City Council. The plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan and no assets are accumulated. The plan does not issue a separate financial report. Generally, resources from the general fund are used to pay for post-employment benefits. The City also provides a Retirement Health Savings Plan (RHSP) for active employees that may be used upon separation from City employment. The City funds $15 per pay period during the term of employment. The plan provides health expense reimbursements eligible under Internal Revenue Code Section 213, other than direct long-term care expenses. The plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The plan does not issue a separate financial report. Generally, resources from the general fund are used to pay for post-employment benefits. 79 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 11 - Post-Employment Benefits Other Than Pensions - Single Employer Plan, continued B. Benefits Provided The City provides post-employment health care benefits to its retirees. To be eligible for benefits, an employee must qualify for retirement under one of the state retirement plans for public employees and be covered under the City’s health plan during their active status. Upon retirement, the City deposits a one-time payment of $800 per year of City service in the retiree’s RHSP account. The retiree must have a minimum of five years of City service to receive this contribution. C. Contributions The plan premium rates are determined annually by the City’s Human Resources Department in collaboration with an outside consulting firm, reviewed, and recommended by a five member Health Care Benefits Trust Board, and approved by the City Council. The retiree’s contribution is 100 percent of the actuarially determined blended premium rate. The City makes no contribution to the retirees’ premiums other than allowing them to participate through the City’s pooled benefits. By providing retirees with access to the City’s healthcare plans based on the same rates it charges to active employees, the City is in effect providing a subsidy to retirees. This implied subsidy exists because, on average, retiree healthcare costs are higher than active employee healthcare costs. The City contributes 0 percent of these premiums for employees. By not contributing anything toward this plan in advance, the City employs a pay-as-you-go method through paying the higher rate for active employees each year. A separate financial report is not issued for the plan. D. Employees Covered by Benefit Terms The following employees were covered as of the effective date of the OPEB valuation: Inactive employees or beneficiaries currently receiving benefits Active members Total 607 1,631 2,238 E. Total OPEB Liability The City’s total OPEB liability of $63,003,983 was measured as of June 30, 2020 and was determined by an actuarial valuation as of that date. F. Actuarial Assumptions and Other Inputs Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit cost between the employer and plan members to that point. The total OPEB liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: 80 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 11 - Post-Employment Benefits Other Than Pensions - Single Employer Plan, continued Measurement date Actuarial valuation date Discount Rate Inflation rate Projected salary increases Health care cost trend rates Medical and prescription drug Retiree contribution increase June 30, 2020 June 30, 2019 2.21% 2.5% - 2.7% Vary depending on retirement plan and years of service from 2.7% - 7.5% 0% in 2020/21, then 7.5% graded down to an ultimate rate of 4.5% over 12 years Consistent with medical/drug trends. 100% share of benefit related costs The discount rate is based on the index rate for a 20 year tax exempt general obligation municipal bond with an average rating of AA/Aa or higher. Mortality rates were based on the 2017 State Retirees of Arizona Mortality Table for current retirees and the RP-2014 Disabled Mortality Table for disabled retirees. G. Changes in the Total OPEB Liability Total OPEB liability - beginning of year Changes for the year: Service cost Interest Changes in assumptions or other inputs Estimated benefit payments Net changes Total OPEB liability - end of year $ 53,112,727 2,940,955 1,921,296 7,368,121 (2,339,116) 9,891,256 $ 63,003,983 Changes in assumptions reflect the following: 1. The discount rate decreased from 3.50% to 2.21% based on the changes in the Bond Buyer 20 GO index municipal bond rate from June 30, 2019 to June 30, 2020. 2. The 2020-21 trend on per capita health costs were updated to reflect actual premium renewals for calendar year 2021. 3. The General disability and pre-retirement mortality assumptions were revised to use the headcount weighted versions of the mortality tables assumed for the companion pension plans. 81 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 11 - Post-Employment Benefits Other Than Pensions - Single Employer Plan, continued H. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate: 1% Decrease (1.21%) Total OPEB liability $ I. Current Discount Rate (2.21%) 72,982,091 $ 63,003,983 1% Increase (3.21%) $ 55,291,158 Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentagepoint higher than the current rate: Current Healthcare Cost Trend Rates (7.50%) 1% Decrease (6.50%) Total OPEB liability $ J. 59,155,748 $ 63,003,983 1% Increase (8.50%) $ 67,568,634 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2021, the City recognized OPEB expense of $3,179,563. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Differences between expected and actual experience Changes of assumptions or other inputs Contributions subsequent to measurement date Total $ $ — 9,102,062 2,503,806 11,605,868 Deferred Inflows of Resources $ 8,029,752 4,782,602 — $ 12,812,354 The deferred outflows of resources resulting from contributions subsequent to the measurement date as reported in the previous table will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: 82 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 11 - Post-Employment Benefits Other Than Pensions - Single Employer Plan, concluded Year Ending June 30: 2022 $ 2023 2024 2025 2026 Thereafter (1,682,688) (1,682,688) (1,682,688) (327,569) 965,300 700,141 NOTE 12 - Commitments and Contingencies The City is subject to a number of lawsuits, investigations, and other claims (some of which involve alleged damages in substantial amounts) that are incidental to the ordinary course of its operations, including those related to property damage and personal injury matters as well as alleged civil rights violations. All cases are being vigorously defended by the City of Chandler both as to liability as well as the amount of damages claimed. Although the City Attorney cannot reasonably estimate the actual results upon disposition of the outstanding cases, some could be significant to the City’s operations, which is why the City not only selfinsures with a $1,750,000 liability retention, but carries an additional $30,000,000 in liability insurance policies which are in excess of its self-insured retention. While the ultimate resolution of such lawsuits, investigations and claims cannot be determined at this time, in the opinion of City management (based on the advice of the City Attorney), the resolution of these matters will not have a material adverse effect on the City’s financial position. NOTE 13 - Risk Management The City is exposed to various risks of loss related to litigation, claims and torts; theft of, damage to and destruction of assets; errors and omissions; employee health claims; and natural disasters (for which the City carries commercial insurance). The City established a Self-Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. This fund is broken down into the following areas: workers’ compensation insurance, property and liability insurance, health insurance, dental insurance and short-term disability insurance. Premiums are paid into the Internal Service Fund by all other funds with personnel services for workers’ compensation insurance and by the general fund for property and liability insurance. The premiums are available to pay claims, fund claim reserves and pay administrative costs of the program. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. Interfund premiums are used to reduce the amount of claim expenditures reported in the Internal Service Fund. In the opinion of City management, based on the advice of the City Attorney, the outcome of such litigation and claims will not have materially adverse effect on the City’s financial position. In fiscal year 2020-21, the Self-Insurance Fund provided coverage for up to a maximum of $50,000 for each property damage claim and $1,750,000 per occurrence for general liability claims. Coverage is also provided for claims up to $2,250,000 in Public Safety and up to $750,000 in all other classifications of workers’ compensation. The City purchases commercial insurance for claims in excess of coverage provided by the Self-Insurance Fund and for all other risks of loss. During fiscal year 2020-21, there were no significant reductions in the amounts of excess coverage purchased, nor has the City experienced any settlements in excess of insurance coverage over the past three fiscal years. 83 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 13 - Risk Management, concluded The City also has commercial stop loss insurance that provides specific (by individual member) coverage for health insurance claims incurred in excess of $350,000 within the plan year, and aggregate (plan wide) coverage for health insurance claims incurred above 125 percent of total plan wide claims for the plan year. Liabilities include an amount for claims that have been incurred but not reported (IBNR). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. The claims liability of $18,885,862 reported as claims payable in the Self-Insurance Fund at June 30, 2021, is based on the requirements of GASB Statement No. 10, which requires that liabilities be reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. This includes known future payments made for insurance as well as estimated IBNR calculations. Changes in the Funds' claims liability amount in fiscal years 2020 and 2021 were: Year Ended June 30, Risk of Loss 2020 Workers' compensation Property and liability Health Dental Beginning of Fiscal Year Balance Current Year Claims and Changes in Estimates $ $ $ 2,812,690 1,307,955 2,445,449 152,132 6,718,226 2,049,391 211,609 18,731,377 1,770,276 $ 22,762,653 Claim Payments $ (1,922,409) $ (229,171) (18,304,860) (1,766,145) $ (22,222,585) $ Balance at Fiscal Year End 2,939,672 1,290,393 2,871,966 156,263 7,258,294 Beginning of Current Year Year Fiscal Year Claims and Ended Balance Changes in Claim Fiscal Year as Restated Estimates Payments End June 30, Risk of Loss 2021 Workers' compensation Property and liability Health Dental $ 8,798,989 1,816,038 2,871,966 156,263 $ 13,643,256 $ 3,530,748 1,845,747 25,772,727 1,844,565 $ 32,993,787 Balance at $ (1,836,434) $ 10,493,303 (1,546,932) 2,114,853 (22,556,474) 6,088,219 (1,811,341) 189,487 $ (27,751,181) $ 18,885,862 Workers' compensation and property and liability beginning of fiscal year balance as restated for the year ended June 30, 2021 were restated to include the liability for case reserves (see Note 19). 84 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 14 - Interfund Transfers Interfund transfers are made from the General Fund and Non-Major Governmental Funds to fund costs including property and liability insurance, technology replacement and vehicle and equipment replacement, $9,609,477. The General Fund provides funding for various capital projects, $8,228,285, as well as annual subsidies for the Airport and Public Housing Authority, $318,465. In addition, the General Fund transferred $29,983,456 to Non-Major Governmental Funds for the purposes of assisting in the City's COVID-19 response. The interfund transfers in and out at June 30, 2021 are as follows: Transfers In: Non-Major Governmental Funds Transfers out: General Fund $ 44,010,913 Non-Major Enterprise Funds Internal Service Fund $ $ 547,006 2,536,901 Total $ 47,094,820 Non-Major Governmental Funds 176,072 — 93,989 270,061 Water Enterprise Fund 349,859 — — 349,859 Wastewater Enterprise Fund 260,273 — — 260,273 Non-Major Enterprise Funds 134,377 — — 134,377 Internal Service Fund 30,293 — — 30,293 Total $ 44,961,787 $ 547,006 $ 2,630,890 $ 48,139,683 In addition to the cash transfers, the City had capital contributions from the government-type activities into the business type activities in the amount of $91,512 (see Note 8). NOTE 15 - Interfund Receivables and Payables A. Interfund Advances To/Advances From Advances to other funds Advances from other funds Total Governmental funds: General Enterprise funds: Water Capital projects - public safety buildings and improvements Capital projects - public buildings Total governmental funds Enterprise - wastewater Total all funds $ 6,296,432 2,014,427 8,310,859 3,900,000 $ 12,210,859 Interfund advances were made from governmental funds to capital projects funds to cover expenditures in impact fee funds until impact fees are received. $700,000 of the public safety buildings and improvements capital projects fund advances and $200,000 of the public buildings capital projects fund advance will be repaid within one year. 85 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 15 - Interfund Receivables and Payables (concluded) An interfund advance was made from the water enterprise fund to the wastewater system development fees fund of the wastewater enterprise to cover expenditures until system development fees are collected. $3,900,000 will be repaid within one year. B. Interfund Due To/Due From Due from other funds General Due to other funds Total Capital projects - general government $ 755,677 Capital projects - grants 1,183,748 Special revenue - community development 224,353 Total general fund $ 2,163,778 Interfund balances at June 30, 2021 are short-term loans used to cover temporary cash deficits in various funds and are expected to be repaid within one year. NOTE 16 - Joint Venture The City and the Town of Gilbert entered into an Intergovernmental Agreement (Agreement) for the design, construction and operation of a Joint Water Treatment Plant. Under the Agreement, the real property, plant infrastructure and raw water pipelines will be jointly owned with each party entitled to 50 percent of the plant capacity and each party paying 50 percent of the construction costs. The Town of Gilbert acts as the Lead Agent, overseeing construction activities and operating the plant. The City’s investment in the joint venture is reflected as a separate line item in the proprietary funds financial statements. Separate financial statements for the joint venture are not prepared. Total investment in joint venture as of June 30, 2021, is: City of Chandler's Share Town of Gilbert's Share $ 73,987,681 80,612,880 $ 154,600,561 NOTE 17 - Deficit in Fund Balances The police confiscated property special revenue fund had a deficit fund balance of $35,305. The deficit will be covered by future revenues. The general government capital project fund had a deficit fund balance of $370,036. The deficit will be covered by future revenues. The public buildings capital projects fund had deficit fund balance of $1,918,169. The funds were financed by advances of interfund loans and will be paid back by future impact fee revenues. The public safety buildings and improvement capital projects fund had deficit fund balance of $4,903,067. The deficit will be covered by future impact fee revenues. 86 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2021 NOTE 18 - Tax Abatements The City has made commitments as part of our economic development programs to reimburse certain public improvement costs through transaction privilege taxes generated out of the respective development area. The total amount rebated in the fiscal year 2020-21 is $651,565. Detailed information on such commitments is prohibited from disclosure under Arizona Revised Statute 42-2002, Disclosure of Confidential Information Prohibited, and City of Chandler Code, 62-510 Divulging of Information Prohibited. In addition, the City enters into property tax abatement agreements under Arizona Revised Statute 42-6201 through 42-6210, Government Property Lease Excise Tax (GPLET) to enhance the economic viability of the City. The recipients of the GPLET commit to conveying the property to the City upon the project completion and the City will lease it back to the recipient for an agreed upon amount. State law imposes an excise tax on buildings that are owned by the City, leased by a private party and occupied/used for commercial, residential rental or industrial purposes. The City is allowed to abate the full tax for a period of eight years for both existing and new projects within redevelopment area that are part of a single central business district. After the abatement period the projects pay an excise tax in which the City receives a 7 percent distribution. For the fiscal year ended June 30, 2021, the City abated property taxes totaling $194,003 under this program, including the following tax abatement agreement that exceeds $100,000: Property Tax GPLET to a residential rental development for constructing a multi-family residential complex. The GPLET amounted to $126,900 of property tax abated. NOTE 19 - Prior Period Adjustment Prior year financial statements did not report the liability for case reserves. As a result of the restatement of beginning balances, the following reconciles the previously reported July 1, 2020 balances. Net Position July 1, 2020 as previously reported Internal Service Fund $ 44,945,874 Inclusion of case reserves in claims liability Net Position July 1, 2020 as Restated $ $ 6,384,962 38,560,912 NOTE 20 - Subsequent Events On December 1, 2021, the City issued General Obligation Refunding Bonds, Taxable Series 2021 in the amount of $48,025,000, maturing on July 1, 2028 with an average interest rate of 1.68 percent. The Bonds are being issued for the purpose of refunding and redeeming, in advance of their respective maturities the General Obligation Refunding Bonds, Series 2014 maturing July 1, 2026 through July 1, 2028, and paying the costs of issuance of the Series 2021 Refunding Obligations. On December 1, 2021, the City issued Excise Tax Revenue Refunding Bonds, Taxable Series 2021 in the amount of $85,460,000, maturing on July 1, 2033 with an average interest rate of 2.06 percent. The Bonds are being issued for the purpose of refunding and redeeming, in advance of their respective maturities the Water and Sewer Excise Tax Revenue Obligations, Series 2013 maturing July 1, 2025 through July 1, 2033, and paying the costs of issuance of the Series 2021 Refunding Obligations. 87 88 REQUIRED SUPPLEMENTARY INFORMATION 89 90 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original REVENUES: Property taxes Sales taxes Franchise fees State shared Grants and entitlements System development fees Licenses and permits Charges for services Fines and forfeitures Rentals Contributions Interest revenue Miscellaneous $ 2,629,000 275,200 (81,674) 588,941 239,871,828 239,871,828 287,352,351 47,480,523 926,189 4,684,074 16,864,709 2,585,755 26,635,790 3,632,045 9,046,078 38,097,872 11,784,758 3,884,306 104,732,292 1,019,324 3,518,657 76,537,609 10,083,511 950,107 4,663,063 17,630,076 3,060,922 28,024,040 3,899,162 9,427,885 41,144,169 13,485,847 3,981,221 34,340,895 1,022,547 3,998,991 80,518,870 11,618,697 923,681 4,557,833 15,509,399 2,414,165 26,661,370 3,681,021 8,693,879 40,743,812 12,390,794 3,955,805 24,912,918 942,925 3,379,383 78,786,463 10,972,729 26,426 105,230 2,120,677 646,757 1,362,670 218,141 734,006 400,357 1,095,053 25,416 9,427,977 79,622 619,608 1,732,407 645,968 314,032,969 257,766,492 238,526,177 19,240,315 REVENUES OVER (UNDER) EXPENDITURES (74,161,141) (17,894,664) 48,826,174 66,720,838 OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Transfers in Transfers out — 9,073,586 (61,740,561) — 9,073,586 (61,728,954) 1,876 — (47,094,820) 1,876 (9,073,586) 14,634,134 Total other financing sources (uses) (52,666,975) (52,655,368) (47,092,944) 5,562,424 Total expenditures 8,161,829 123,562,552 3,583,200 70,770,000 169,500 — 6,646,000 20,285,439 3,683,108 106,000 $ (Under) Final Budget 2,629,000 275,200 EXPENDITURES: City clerk City magistrate City manager Communications and public affairs Community services Cultural development Development services Fire Information technology Law Management services Mayor and council Neighborhood resources Police Public works $ Actual Amounts (34,024) 33,951,134 240,324 9,929,253 7,547,427 143,436 10,737 (1,146,959) (832,638) 68,766 — (2,710,674) 313,741 Total Revenues 8,161,829 123,562,552 3,583,200 70,770,000 169,500 — 6,646,000 20,285,439 3,683,108 106,000 Final Over 8,127,805 157,513,686 3,823,524 80,699,253 7,716,927 143,436 6,656,737 19,138,480 2,850,470 174,766 $ Net change in fund balance (126,828,116) (70,550,032) 1,733,230 72,283,262 Fund balance, July 1, 2020 232,910,722 232,910,722 232,910,722 — Fund balance, June 30, 2021 $ 106,082,606 See accompanying notes to this schedule. 91 $ 162,360,690 $ 234,643,952 $ 72,283,262 City of Chandler Schedule of the Proportionate Share of the Net Pension Liability Arizona State Retirement System June 30, 2021 2021 City's proportion of the net pension liability (asset) 2020 0.71 % 0.72 % 2019 0.76 % 2018 0.74 % City's proportionate share of the net pension liability (asset) $122,547,011 $104,541,379 $106,413,043 $115,691,952 City's covered payroll $ 76,880,601 $ 75,407,689 $ 75,579,140 $ 72,284,183 City's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 159.40 % 138.63 % 140.80 % 160.05 % Plan fiduciary net position as a percentage of the total pension liability 69.33 % 73.24 % 73.00 % 69.92 % Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 92 2017 0.75 % 2016 0.73 % 2015 0.71 % $ 121,549,835 $ 113,885,153 $ 105,661,552 $ 70,362,938 $ 67,230,465 $ 64,263,236 172.75 % 169.40 % 164.42 % 67.06 % 68.35 % 69.49 % 93 City of Chandler Schedule of Contributions All Pension Plans June 30, 2021 2021 2020 2019 2018 Arizona State Retirement System: Actuarially determined contribution $ 9,267,255 $ 8,844,068 $ 8,470,741 $ 8,268,029 Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) 9,267,255 $ — 8,844,068 $ — 8,470,741 $ — 8,268,029 $ — $ 79,544,042 $ 76,880,601 $ 75,407,689 $ 75,579,140 City's covered payroll Contributions as a percentage of covered payroll 11.65 % 11.50 % 11.23 % 10.94 % Public Safety Personnel Retirement System - Police: Actuarially determined contribution Contributions in relation to the 1 actuarially determined contribution Contribution deficiency (excess) $ 19,026,392 $ 15,572,686 $ 12,267,559 $ 10,950,501 22,619,456 $ (3,593,064) 28,715,343 $ (13,142,657) 15,398,196 $ (3,130,637) 14,300,501 $ (3,350,000) City's covered payroll Contributions as a percentage of covered payroll $ 26,480,082 $ 28,589,014 $ 28,848,732 $ 28,294,661 Public Safety Personnel Retirement System - Fire: Actuarially determined contribution Contributions in relation to the 1 actuarially determined contribution Contribution deficiency (excess) City's covered payroll Contributions as a percentage of covered payroll 85.42 % 100.44 % 53.38 % 50.54 % $ 10,427,865 $ 8,004,060 $ 7,021,133 $ 6,392,313 13,054,192 $ (2,626,327) 15,566,324 $ (7,562,264) 8,670,333 $ (1,649,200) 8,042,313 $ (1,650,000) $ 18,187,540 $ 19,154,805 $ 19,025,780 $ 18,200,175 71.78 % 81.27 % 45.57 % 44.19 % Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 1 Additional contributions above the actuarially determined contributions were made beginning with fiscal year 2016-17 and continue. 94 2017 2016 2015 $ 7,793,041 $ 7,634,805 $ 7,323,872 7,793,041 $ — 7,634,805 $ — 7,323,872 $ — $ 72,284,183 $ 67,230,465 $ 67,230,465 10.78 % 11.36 % 10.89 % $ 8,470,411 $ 8,561,143 $ 6,083,333 10,145,411 $ (1,675,000) 8,561,143 $ — 6,083,333 $ — $ 27,058,086 $ 27,946,237 $ 26,187,641 37.49 % $ 4,616,587 $ 5,441,587 (825,000) $ 17,275,940 31.50 % 30.63 % $ 4,438,495 $ 4,438,495 — $ 16,874,362 26.30 % 23.23 % $ 3,193,139 $ 3,193,139 — $ 15,671,133 20.38 % 95 City of Chandler Schedule of Changes in the Net Pension Liability and Related Ratios Public Safety Personnel Retirement System - Police June 30, 2021 2021 2020 2019 2018 Total pension liability Service cost $ Interest 5,696,125 $ 6,149,336 $ 5,737,868 $ 6,092,332 20,504,731 19,203,025 17,999,842 17,064,596 — — — 1,501,042 12,866,840 1,302,509 (671,252) (6,211,672) — 6,562,499 — 6,528,203 Benefit payments, including refunds (12,493,545) (10,261,998) (9,913,263) (8,254,947) Net change in total pension liability 26,574,151 22,955,371 13,153,195 16,719,554 Changes of benefit terms Differences between expected and actual experience Changes of assumptions Total pension liability - beginning Total pension liability - ending 281,437,368 258,481,997 245,328,802 228,609,248 $ 308,011,519 $ 281,437,368 $ 258,481,997 $ 245,328,802 $ $ $ $ Plan fiduciary net position Contributions - employer 28,799,919 15,572,686 10,296,409 10,247,877 Contributions - employee 2,909,915 2,206,379 2,765,932 3,244,412 Net investment income 2,344,516 8,365,394 9,301,979 14,017,325 (12,493,545) (10,261,998) (9,913,263) (8,254,947) (191,143) (146,042) (142,274) (124,430) (2,317) (102,911) 24,215 (167,280) 21,367,345 15,633,508 12,332,998 18,962,957 Benefit payments, including refunds Administrative expense Other Net change in plan fiduciary net position Plan fiduciary net position - beginning 158,412,254 142,778,746 130,445,748 111,482,791 Plan fiduciary net position - ending $ 179,779,599 $ 158,412,254 $ 142,778,746 $ 130,445,748 Net pension liability - ending $ 128,231,920 $ 123,025,114 $ 115,703,251 $ 114,883,054 Plan fiduciary net position as a percentage of the total pension liability Covered payroll Net pension liability as a percentage of covered payroll 58.37 % $ 25,916,774 494.78 % 56.29 % $ 28,848,732 426.45 % 55.24 % $ 28,294,661 408.92 % 53.17 % $ 27,058,086 424.58 % Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 96 2017 $ 5,337,103 2016 $ 2015 4,583,770 $ 4,602,603 14,964,498 13,839,509 11,841,118 17,456,919 — 1,741,535 858,761 4,879,849 567,380 8,537,784 — 13,082,165 (13,015,625) (5,681,836) (7,054,499) 34,139,440 17,621,292 24,780,302 194,469,808 176,848,516 152,068,214 $ 228,609,248 $ 194,469,808 $ 176,848,516 $ $ $ 8,728,082 6,155,142 5,465,059 3,633,359 3,308,265 2,675,724 677,501 3,873,466 12,329,319 (13,015,625) (5,681,836) (7,054,499) (97,889) (94,891) — 238,667 (70,777) (2,733,237) 164,095 7,489,369 10,682,366 111,318,696 103,829,327 93,146,961 $ 111,482,791 $ 111,318,696 $ 103,829,327 $ 117,126,457 $ $ 48.77 % $ 27,946,237 419.11 % 83,151,112 57.24 % $ 26,187,641 317.52 % 73,019,189 58.71 % $ 24,290,497 300.61 % 97 City of Chandler Schedule of Changes in the Net Pension Liability and Related Ratios Public Safety Personnel Retirement System - Fire June 30, 2021 2021 2020 2019 2018 Total pension liability Service cost $ Interest 4,025,473 $ 4,353,346 $ 4,014,526 $ 3,863,571 12,453,112 11,689,082 10,794,299 9,983,423 — — — 753,382 1,086,650 (171,678) 1,014,752 941,823 — 3,122,509 — 2,845,297 Benefit payments, including refunds (6,278,162) (5,792,594) (6,363,418) (5,049,317) Net change in total pension liability 11,287,073 13,200,665 9,460,159 13,338,179 Changes of benefit terms Differences between expected and actual experience Changes of assumptions Total pension liability - beginning Total pension liability - ending 169,704,177 156,503,512 147,043,353 133,705,174 $ 180,991,250 $ 169,704,177 $ 156,503,512 $ 147,043,353 $ $ $ $ Plan fiduciary net position Contributions - employer 15,654,338 8,004,060 5,956,704 5,514,825 Contributions - employee 1,432,043 1,462,348 1,633,743 2,312,753 Net investment income 1,488,011 5,389,738 6,174,093 9,228,731 Benefit payments, including refunds (6,278,162) (5,792,594) (6,363,418) (5,049,317) (121,320) (94,355) (94,669) (82,059) 5 (42,251) 1,035 50,502 Net change in plan fiduciary net position 12,174,915 8,926,946 7,307,488 11,975,435 Plan fiduciary net position - beginning 103,375,390 94,448,444 87,140,956 75,165,521 Plan fiduciary net position - ending $ 115,550,305 $ 103,375,390 $ 94,448,444 $ 87,140,956 Net pension liability - ending $ $ $ 62,055,068 $ 59,902,397 Administrative expense Other Plan fiduciary net position as a percentage of the total pension liability Covered payroll Net pension liability as a percentage of covered payroll 65,440,945 63.84 % $ 19,025,780 343.96 % 66,328,787 60.92 % $ 19,025,780 348.63 % 60.35 % $ 18,200,175 340.96 % 59.26 % $ 17,275,940 346.74 % Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 98 2017 $ 3,174,665 2016 $ 2015 2,915,603 $ 2,949,507 8,707,808 8,264,915 7,191,487 10,272,193 — 930,663 96,063 (1,037,307) (409,426) 4,937,927 — 6,465,545 (5,647,270) (3,614,319) (3,258,846) 21,541,386 6,528,892 13,868,930 112,163,788 105,634,896 91,765,966 $ 133,705,174 $ 112,163,788 $ 105,634,896 $ $ $ (63,746) 3,222,291 1,837,291 2,568,880 (3,614,319) (63,063) 38,948 (55,142) (1,798,718) 1,580,369 3,895,938 8,088,281 73,585,152 69,689,214 61,600,933 4,672,177 2,140,037 440,223 (5,647,270) 3,152,694 1,775,319 8,217,832 (3,258,846) — $ 75,165,521 $ 73,585,152 $ 69,689,214 $ 58,539,653 $ 38,578,636 $ 35,945,682 56.22 % $ 16,874,362 346.91 % 65.61 % $ 15,671,133 246.18 % 65.97 % $ 15,691,213 229.08 % 99 City of Chandler Schedule of Changes in OPEB Liabilities and Related Ratios Single Employer Plan June 30, 2021 2021 2020 2019 2018 6/30/2020 $ 53,112,727 6/30/2019 $ 51,751,856 6/30/2018 $ 52,838,811 6/30/2017 $ 66,519,700 Service cost 2,940,955 2,585,397 3,020,484 3,962,284 Interest 1,921,296 2,059,914 1,939,376 1,967,447 — (5,086,575) (883,708) (8,539,064) 7,368,121 4,021,143 (1,789,527) (8,174,073) Benefit payments Net changes Total OPEB liability - end of year (2,339,116) 9,891,256 $ 63,003,983 (2,219,008) 1,360,871 $ 53,112,727 (3,373,580) (1,086,955) $ 51,751,856 (2,897,483) (13,680,889) $ 52,838,811 Total covered employee payroll $116,931,839 $113,713,741 $108,862,317 $106,207,139 Measurement date Total OPEB liability - beginning of year Changes for the year Differences between expected and actual experience Changes in assumptions or other inputs Total OPEB liability as percentage of covered employee payroll 53.88 % 46.71 % 47.54 % 49.75 % The City implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, for the fiscal year ended June 30, 2018. Information for the prior years is not available. Notes: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 100 CITY OF CHANDLER, ARIZONA Notes to the Required Supplementary Information June 30, 2021 NOTE 1 - Budgetary Basis of Accounting The adopted budget of the City is prepared on a basis consistent with accounting principles generally accepted in the United States of America with the following exception: reserved encumbrances at year end are recognized as expenditures. Consequently, the following adjustment is necessary to present the change in fund balance for the general fund on a budgetary basis in order to provide a meaningful comparison. Changes in Fund Balances Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 9,681,677 Reserved encumbrances at June 30, 2021 recognized as budgetary expenditures in fiscal year ended June 30, 2021 Budgetary Comparison Schedule for the General Fund (7,948,447) $ 1,733,230 NOTE 2 - Pension Plan Schedules Actuarial Assumptions for Valuations Performed The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated, which is the most recent actuarial valuation. The actuarial assumptions used are disclosed in the notes to the financial statements. Factors that Affect Trends - Arizona State Retirement System (ASRS) The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2016. 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, 2017 actuarial valuation. The study did not include an analysis of the assumed investment rate of return. Factors that Affect Trends - Public Safety Personnel Retirement System (PSPRS) The actuarial assumptions used in the June 30, 2020 valuation for PSPRS were based on the results of an actuarial experience study for the 5-year period ended June 30, 2016. The total pension liability used to calculate the net pension liability for PSPRS was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2020 reflects changes of benefit terms and actuarial assumptions for funding assumed future permanent benefit increases. 101 CITY OF CHANDLER, ARIZONA Notes to the Required Supplementary Information June 30, 2021 NOTE 3 - Other Post Retirement Employment Benefit (OPEB) Plan Schedules The City of Chandler does not have assets invested or accumulated in a qualified OPEB trust and funds the plan on a pay-as-you-go basis. Actuarial Assumptions for Valuations Performed The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated, which is the most recent actuarial valuation. The actuarial assumptions used are disclosed in the notes to the financial statements. Factors that Affect Trends The actuarial assumptions used in the June 30, 2020 valuation were made for the purposes of fulfilling plan accounting requirements. Factors such as retiree group program experience, changes in assumptions and changes in retiree group benefits program provisions or applicable law may differ from future actuarial measurements. 102 OTHER FINANCIAL STATEMENTS 103 104 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Obligation Bonds Debt Service For the year ended June 30, 2021 Budgeted Amounts Original Final Non-GAAP Over Actual (Under) Amounts Final Budget REVENUES: Property taxes $ 28,367,900 $ 28,367,900 $ 28,281,540 $ (86,360) Interest revenue 185,000 185,000 (80,954) (265,954) Total revenues 28,552,900 28,552,900 28,200,586 (352,314) General government 1,835,030 1,835,030 — (1,835,030) Principal 19,395,000 19,395,000 19,395,000 — Interest and fiscal charges 7,740,385 7,740,385 7,740,385 — Total expenditures 28,970,415 28,970,415 27,135,385 (1,835,030) Net change in fund balance (417,515) (417,515) 1,065,201 1,482,716 Fund balance, July 1, 2020 4,693,193 4,693,193 4,693,193 — EXPENDITURES: Fund balance, June 30, 2021 $ 4,275,678 105 $ 4,275,678 $ 5,758,394 $ 1,482,716 City of Chandler Non-Major Governmental Funds NON-MAJOR SPECIAL REVENUE FUNDS A Special Revenue Fund is used to finance particular activities and is created out of receipts of specific taxes or other earmarked revenues. Such funds are authorized by statutory or charter provisions to pay for certain activities with some special form of continuing revenues. Highway User Used to account for the receipt and expenditure of the City’s allocation of State highway user taxes. State law restricts the use of these monies to maintenance, construction and reconstruction of streets and repayment of transportation-related debt. Local Transportation Assistance Used to account for the receipt and expenditure of the City’s allocation of State lottery monies. State law restricts the use of these monies to street and highway projects in the public right-of-way and to mass transportation purposes. Grants Used to account for the receipt and expenditure of miscellaneous federal, state and local grants awarded to the City for various specific operational purposes. Community Development Used to account for monies received from the U.S. Department of Housing and Urban Development and Maricopa County for affordable housing activities including housing rehabilitation and redevelopment activities. Police Confiscated Property Used to account for monies confiscated by the Police Department and monies received from the sale of confiscated property. Parks and Recreation Used to account for donations for park improvements and programs restricted pursuant to donor covenants. Museum Used to account for donations for museum improvements and programs restricted pursuant to donor covenants. Library Used to account for donations for library improvements and programs restricted pursuant to donor covenants. 106 City of Chandler Non-Major Governmental Funds NON-MAJOR DEBT SERVICE FUNDS Special Assessment Bonds Accumulates monies for the payment of principal and interest on Special Assessment Bonds that were issued to finance costs of improvements applicable to benefiting properties within certain improvement districts. NON-MAJOR CAPITAL PROJECTS FUNDS General Government Used to account for the acquisition, construction and improvements of general government projects. Public Buildings Used to account for bond proceeds used for the acquisition, construction, reconstruction, improvement and renovation of City buildings. Grants Used to account for the receipt and expenditure of miscellaneous federal, state and local grants awarded to the City for various specific capital purposes. Streets Used to account for the acquisition, construction and improvements of City streets projects. Community Services Used to account for the acquisition of land and equipment, development, construction and improvement of community parks and projects. Public Safety Buildings and Improvements Used to account for public safety, e.g., Police and Fire Departments, building construction, renovation, improvements and equipment purchases. Vehicle and Capital Equipment Replacement Used to account for the purchase and/or replacement of general equipment-type assets, e.g., vehicles, furniture and office equipment. Technology Replacement Used to account for the purchase and/or replacement of technology assets. Municipal Arts Used to account for amounts earmarked for the acquisition of art for public spaces. 107 108 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2021 Special Revenue Local Police Highway Transportation User Assistance Grants Community Confiscated Parks and Development Property Recreation Museum ASSETS Equity in pooled cash and investments $ 32,641,580 $ 5,152,402 $35,849,600 $ — $ 277,782 $ 298,913 $ 48,814 Receivables (net of allowance for uncollectible): Accounts — — — — — — — Special assessments — — — — — — — Notes — — — 448,503 — — — 63,536 10,072 81,239 — 547 584 95 — — — — — — — 1,642,169 — 378,865 770,391 — — — $36,309,704 $ 1,218,894 $ 286,040 $ Accrued interest Other Due from other governments Total assets $ 34,347,285 $ $ $ 5,162,474 278,329 $ — $ 299,497 $ — $ 48,909 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable — $ 2,961,722 131,145 — 10,382 22,413 — — — Trust liabilities and deposits — — — — 313,634 — — Accrued interest — — — — — — — Due to other funds — — — 224,353 — — — Advances from other funds — — — — — — — Unearned revenue — — 17,081,877 — — — — 343,362 — 20,053,981 532,806 313,634 — — — — — — — — — — — — — — — — 34,003,923 5,162,474 16,255,723 686,088 — 299,497 48,909 — — — — (35,305) — — 34,003,923 5,162,474 16,255,723 686,088 (35,305) 299,497 48,909 5,162,474 $36,309,704 $ Accrued payroll Total liabilities 212,217 $ — Deferred inflows of resources: Unavailable revenues - special assessments Total deferred inflows of resources Fund balances (deficits): Restricted Unassigned Total fund balances (deficits) Total liabilities, deferred inflows and fund balances $ 34,347,285 $ 1,218,894 $ 278,329 $ 299,497 $ 48,909 (Continued) 109 City of Chandler Combining Balance Sheet Non-Major Governmental Funds June 30, 2021 Special Revenue Debt Service Special Library Capital Projects Assessment General Public Bonds Government Buildings Grants ASSETS Equity in pooled cash and investments $ 62,412 $ 64,564 $ — $ 95,649 $ — Receivables (net of allowance for uncollectible): Accounts — — 11,244 — 12,874 Special assessments — 1,130,456 — — — Notes — — — — — 127 — — 609 — — — 10,329 — — — — 1,161,251 — 4,447,823 Accrued interest Other Due from other governments Total assets $ 62,539 $ $ 480 $ 1,195,020 $ 1,182,824 $ — $ 797,183 $ 96,258 $ 4,460,697 — $ 3,099,586 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll — — — — 2,856 Trust liabilities and deposits — — — — — Accrued interest — 24,900 — — — Due to other funds — — 755,677 — 1,183,748 Advances from other funds — — — 2,014,427 — Unearned revenue — — — — 12,874 480 24,900 1,552,860 2,014,427 4,299,064 — 1,130,456 — — — — 1,130,456 — — — 62,059 39,664 — — 161,633 — — (370,036) (1,918,169) — 62,059 39,664 (370,036) (1,918,169) 161,633 Total liabilities Deferred inflows of resources: Unavailable revenues - special assessments Total deferred inflows of resources Fund balances (deficits): Restricted Unassigned Total fund balances (deficits) Total liabilities, deferred inflows and fund balances $ 62,539 110 $ 1,195,020 $ 1,182,824 $ 96,258 $ 4,460,697 Capital Projects Public Safety Vehicle and Community Buildings and Capital Equipment Technology Municipal Governmental Streets Services Improvements Replacement Replacement Arts Funds $ 69,109,208 $ 43,627,625 4,978,143 $ 708,740 $ 203,997,258 — — — — — — 24,118 — — — — — — 1,130,456 — — — — — — 448,503 149,438 96,821 2,268 19,143 9,784 1,385 435,648 — — — — — — 10,329 — — — — — — 8,400,499 $ 69,258,646 $ 43,724,446 $ $ 710,125 $ 214,446,811 $ 1,854,674 $ 1,043,375 $ $ 100 $ 10,457,315 9,280 531 — — — — 176,607 313,639 $ 1,391,097 $ Total Other 9,690,729 $ 1,393,365 $ 9,709,872 $ 4,987,927 — $ 197,870 $ 4,068 5 — — — — — — — — — — — 24,900 — — — — — — 2,163,778 — — 6,296,432 — — — 8,310,859 — — — — — — 17,094,751 1,863,959 1,043,906 6,296,432 197,870 4,068 100 38,541,849 — — — — — — 1,130,456 — — — — — — 1,130,456 67,394,687 42,680,540 — 9,512,002 4,983,859 710,025 182,001,083 — — (4,903,067) — — — (7,226,577) 67,394,687 42,680,540 (4,903,067) 9,512,002 4,983,859 710,025 174,774,506 $ 69,258,646 $ 43,724,446 4,987,927 $ 710,125 $ 214,446,811 $ 1,393,365 $ 9,709,872 $ (Concluded) 111 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2021 Special Revenue Local Police Highway Transportation User Assistance Grants Community Confiscated Parks and Development Property Recreation Museum REVENUES: Highway user taxes $ 18,108,310 $ — $ — $ — $ — $ — $ — Regional transportation taxes — — — — — — — Grants and entitlements — 809,091 7,786,935 2,490,263 — 53,773 5,429 System development fees — — — — — — — Special assessments — — — — — — — Charges for services — 186,198 — — — — — Fines and forfeitures — — — — 66,390 — — Contributions — — — — — — — 63,531 10,085 624,408 1 — (127) 18 Interest revenue Miscellaneous Total revenues 63,902 176,830 254,078 — — — — 18,235,743 1,182,204 8,665,421 2,490,264 66,390 53,646 5,447 — — 21,258,861 2,349,891 — — — EXPENDITURES: Current: General government Public safety — — 1,521,963 — 24,159 — — 7,459,636 339,199 207,041 — — — — — — 147,506 — — 40,373 — 7,791,745 88,151 1,824,662 — 41,220 — — Principal — — — — — — — Interest and fiscal charges — — — — — — — 15,251,381 427,350 24,960,033 2,349,891 65,379 40,373 — 2,984,362 754,854 (16,294,612) 140,373 1,011 13,273 5,447 2,326 — — — — — — — — 29,983,456 — — — — (265,849) (4,212) — — — — — Total other financing sources (uses) (263,523) (4,212) 29,983,456 — — — — NET CHANGE IN FUND BALANCE 2,720,839 750,642 13,688,844 140,373 1,011 13,273 5,447 4,411,832 2,566,879 545,715 (36,316) 286,224 5,162,474 $16,255,723 $ 686,088 (35,305) $ 299,497 Transportation and development Community services Capital outlay Debt service: Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Transfers in Transfers out FUND BALANCES (DEFICITS): Beginning of year End of year 31,283,084 $ 34,003,923 $ 112 $ 43,462 $ 48,909 Special Revenue Debt Service Capital Projects Special Library $ — $ General Public Bonds Government Buildings — $ — — — — 32,149 — — — — — $ Community Grants — $ Streets — $ Services — $ 2,226,568 — — — — — 10,522,461 — — — 193,846 — 4,882,337 2,369,341 587,020 — — — — — — — — 249,256 — — — — — — — — — — — 5,201,737 — — — 226 — 4 2,349 5 (21,403) — (17,386) — — — — — — — 32,375 587,020 5,201,741 196,195 10,771,722 7,087,502 2,351,955 — — 1,880,081 1,200 23,708 1,200 2,400 — — 201,880 — — — — — — 883,587 — 1,880,748 3,377,034 — 19,627 — 478,511 — 1 — 146,213 — — 10,129,129 — 11,259,901 18,013,413 3,714,326 — 585,000 — — — — — — 61,500 — — — — — 19,627 646,500 13,573,188 1,200 13,164,358 21,391,647 3,862,939 12,748 (59,480) (8,371,447) 194,995 (2,392,636) (14,304,145) (1,510,984) — — — — — — — — — 7,999,744 — — — — — — — — — — — — — 7,999,744 — — — — 12,748 (59,480) (371,703) 194,995 (2,392,636) (14,304,145) (1,510,984) 1,667 (2,113,164) 2,554,269 49,311 $ Assessment 62,059 99,144 $ 39,664 $ (370,036) $ (1,918,169) $ 161,633 81,698,832 $ 67,394,687 44,191,524 $ 42,680,540 (Continued) 113 City of Chandler Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2021 Capital Projects Public Safety Vehicle and Buildings and Capital Equipment Technology Municipal Governmental Total Other Improvements Replacement Replacement Arts Funds REVENUES: Highway user taxes $ — $ — $ — $ — $ 18,108,310 Regional transportation taxes — — — — 2,226,568 Grants and entitlements — — — — 21,700,101 System development fees 618,768 — — — 8,064,292 Special assessments — — — — 587,020 Charges for services — — — 57,455 492,909 Fines and forfeitures — — — — 66,390 Contributions — — — — 5,201,737 46,918 (18,712) 5,854 257 696,028 Interest revenue Miscellaneous — 21,319 — — 516,129 665,686 2,607 5,854 57,712 57,659,484 2,400 — 3,759,922 — 29,279,663 Public safety — — — — 1,748,002 Transportation and development — — — — 14,147,245 Total revenues EXPENDITURES: Current: General government Community services — — — 14,012 846,243 18,041 5,393,528 596,076 — 58,870,192 Principal — — — — 585,000 Interest and fiscal charges — — — — 61,500 20,441 5,393,528 4,355,998 14,012 105,537,845 645,245 (5,390,921) (4,350,144) 43,700 (47,878,361) Capital outlay Debt service: Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets — 220,879 — — 223,205 Transfers in — 3,316,983 3,661,604 — 44,961,787 Transfers out — — — — (270,061) — 3,537,862 3,661,604 — 44,914,931 645,245 (1,853,059) (688,540) 43,700 (2,963,430) (5,548,312) 11,365,061 (4,903,067) $ 9,512,002 Total other financing sources (uses) NET CHANGE IN FUND BALANCE FUND BALANCES (DEFICITS): Beginning of year End of year $ 5,672,399 $ 4,983,859 $ 666,325 177,737,936 710,025 $ 174,774,506 (Concluded) 114 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Highway User Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Highway user taxes $ Interest revenue 16,500,000 $ 16,500,000 $ 18,108,310 $ 1,608,310 372,000 372,000 63,532 (308,468) — — 63,902 63,902 16,872,000 16,872,000 18,235,744 1,363,744 General government 3,986,700 3,037,803 — 3,037,803 Transportation and development 12,074,436 8,787,500 7,893,720 893,780 Capital outlay 5,853,569 9,889,296 9,543,570 345,726 Total expenditures 21,914,705 21,714,599 17,437,290 4,277,309 (5,042,705) (4,842,599) 798,454 5,641,053 Miscellaneous Total revenues EXPENDITURES: Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Proceeds from sale of capital assets — — 2,326 2,326 Transfers out (287,841) (287,841) (265,849) 21,992 Total other financing sources (uses) (287,841) (287,841) (263,523) 24,318 Net change in fund balance (5,330,546) (5,130,440) 534,931 5,665,371 Fund balance, July 1, 2020 31,283,084 31,283,084 31,283,084 — Fund balance, June 30, 2021 $ 25,952,538 115 $ 26,152,644 $ 31,818,015 $ 5,665,371 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Local Transportation Assistance Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Grants and entitlements $ 700,000 $ 700,000 $ 809,091 $ 109,091 Charges for services 180,000 180,000 186,198 6,198 Interest revenue 75,000 75,000 10,086 (64,914) — — 176,830 176,830 955,000 955,000 1,182,205 227,205 General government 1,015,200 1,000,450 — 1,000,450 Transportation and development 1,743,918 1,289,571 363,235 926,336 392,000 881,322 171,700 709,622 3,151,118 3,171,343 534,935 2,636,408 (2,196,118) (2,216,343) 647,270 2,863,613 (4,409) (4,409) (4,212) 197 (4,409) (4,409) (4,212) 197 Net change in fund balance (2,200,527) (2,220,752) 643,058 2,863,810 Fund balance, July 1, 2020 4,411,832 4,411,832 4,411,832 — Miscellaneous Total revenues EXPENDITURES: Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Fund balance, June 30, 2021 $ 2,211,305 116 $ 2,191,080 $ 5,054,890 $ 2,863,810 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Grants Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Grants and entitlements $ 5,000,000 Interest revenue $ 5,000,000 $ 7,786,935 $ 2,786,935 43,000 43,000 624,398 581,398 — — 254,078 254,078 5,043,000 5,043,000 8,665,411 3,622,411 5,000,000 40,597,376 26,107,763 14,489,613 54,257 3,170,548 1,562,553 1,607,995 Transportation and development — 207,044 207,041 3 Community services — 349,382 147,506 201,876 Miscellaneous Total revenues EXPENDITURES: General government Public safety Capital outlay — 384,455 1,939,471 (1,555,016) 5,054,257 44,708,805 29,964,334 14,744,471 (11,257) (39,665,805) (21,298,923) 18,366,882 — — 29,983,456 (29,983,456) — — 29,983,456 (29,983,456) Net change in fund balance (11,257) (39,665,805) 8,684,533 (11,616,574) Fund balance, July 1, 2020 2,566,879 2,566,879 2,566,879 — 2,555,622 $ (37,098,926) $ 11,251,412 $ (11,616,574) Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Total other financing sources (uses) Fund balance (deficit), June 30, 2021 $ 117 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Development Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Grants and entitlements $ Total revenues 2,805,950 $ 2,805,950 $ 2,490,263 $ (315,687) 2,805,950 2,805,950 2,490,263 (315,687) General government 3,297,014 3,329,455 2,598,240 731,215 Total expenditures 3,297,014 3,329,455 2,598,240 731,215 Net change in fund balance (491,064) (523,505) (107,977) 415,528 Fund balance, July 1, 2020 545,715 545,715 545,715 — EXPENDITURES: Fund balance, June 30, 2021 $ 54,651 118 $ 22,210 $ 437,738 $ 415,528 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Police Confiscated Property Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Fines and forfeitures $ 750,000 Total revenues $ 750,000 $ 66,390 $ (683,610) 750,000 750,000 66,390 (683,610) General government 29,000 29,000 — 29,000 Public safety 645,000 645,000 24,159 620,841 Capital outlay 105,000 105,000 41,220 63,780 Total expenditures 779,000 779,000 65,379 713,621 Net change in fund balance (29,000) (29,000) 1,011 30,011 Fund balance (deficit), July 1, 2020 (36,316) (36,316) (36,316) — (65,316) $ (65,316) $ (35,305) $ EXPENDITURES: Fund balance (deficit), June 30, 2021 $ 119 30,011 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Parks and Recreation Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Grants and entitlements $ 93,900 Interest revenue $ 93,900 $ 53,773 $ (40,127) 5,000 5,000 (126) (5,126) 98,900 98,900 53,647 (45,253) General government 15,000 15,000 — 15,000 Community services 103,559 103,559 40,373 63,186 Total expenditures 118,559 118,559 40,373 78,186 Net change in fund balance (19,659) (19,659) 13,274 32,933 Fund balance, July 1, 2020 286,224 286,224 286,224 — Total revenues EXPENDITURES: Fund balance, June 30, 2021 $ 266,565 120 $ 266,565 $ 299,498 $ 32,933 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Museum Special Revenue For the year ended June 30, 2021 Budgeted Amounts Original Final Non-GAAP Over Actual (Under) Amounts Final Budget REVENUES: Grants and entitlements $ Interest revenue 200 $ 200 $ 5,429 $ 5,229 1,000 1,000 18 (982) 1,200 1,200 5,447 4,247 General government 4,000 4,000 — 4,000 Community services 31,410 31,410 — 31,410 Total expenditures 35,410 35,410 — 35,410 Net change in fund balance (34,210) (34,210) 5,447 39,657 Fund balance, July 1, 2020 43,462 43,462 43,462 — Total revenues EXPENDITURES: Fund balance, June 30, 2021 $ 121 9,252 $ 9,252 $ 48,909 $ 39,657 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Library Special Revenue For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Grants and entitlements $ Interest revenue Total revenues 80,000 $ 80,000 $ 32,149 $ (47,851) 1,000 1,000 225 (775) 81,000 81,000 32,374 (48,626) EXPENDITURES: General government 1,197 1,197 — 1,197 Community services 79,803 79,803 19,627 60,176 Total expenditures 81,000 81,000 19,627 61,373 — — 12,747 12,747 49,311 49,311 49,311 — Net change in fund balance Fund balance, July 1, 2020 Fund balance, June 30, 2021 $ 122 49,311 $ 49,311 $ 62,058 $ 12,747 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Special Assessment Bonds For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Special assessments $ Total revenues — $ — $ 587,020 $ 587,020 — — 587,020 587,020 Principal — — 585,000 (585,000) Interest and fiscal charges — — 61,500 (61,500) Total expenditures — — 646,500 (646,500) — — (59,480) (59,480) 99,144 99,144 99,144 — EXPENDITURES: Net change in fund balance Fund balance, July 1, 2020 Fund balance, June 30, 2021 $ 123 99,144 $ 99,144 $ 39,664 $ (59,480) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Government Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Contributions $ — $ — $ 5,201,737 $ 5,201,737 Miscellaneous 250,000 250,000 — (250,000) Total revenues 250,000 250,000 5,201,737 4,951,737 General government 16,401,391 6,556,146 2,909,100 3,647,046 Public safety 5,210,950 1,479,612 740,626 738,986 Transportation and development 14,459,906 2,239,815 939,071 1,300,744 Community services 3,324,565 1,106,329 545,380 560,949 Capital outlay 11,777,485 39,803,043 21,150,445 18,652,598 Total expenditures 51,174,297 51,184,945 26,284,622 24,900,323 (50,924,297) (50,934,945) (21,082,885) 29,852,060 Transfers in 50,924,297 50,924,297 7,999,744 (42,924,553) Total other financing sources (uses) 50,924,297 50,924,297 7,999,744 (42,924,553) — (10,648) (13,083,141) (13,072,493) 1,667 1,667 1,667 — EXPENDITURES: Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Net change in fund balance Fund balance, July 1, 2020 Fund balance (deficit), June 30, 2021 $ 124 1,667 $ (8,981) $ (13,081,474) $ (13,072,493) City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Buildings Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: System development fees $ 145,000 Interest revenue $ 145,000 $ 193,846 $ 48,846 1,500 1,500 2,350 850 146,500 146,500 196,196 49,696 General government 42,000 42,000 1,500 40,500 Total expenditures 42,000 42,000 1,500 40,500 104,500 104,500 194,696 90,196 Transfers out (175,000) (175,000) — 175,000 Total other financing sources (uses) (175,000) (175,000) — 175,000 (70,500) (70,500) 194,696 265,196 (2,113,164) (2,113,164) (2,113,164) — (2,183,664) $ (2,183,664) $ (1,918,468) $ Total revenues EXPENDITURES: Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Net change in fund balance Fund balance (deficit), July 1, 2020 Fund balance (deficit), June 30, 2021 $ 125 265,196 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Grants Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Over Actual (Under) Original Final Amounts Final Budget REVENUES: Grants and entitlements $ 27,673,134 $ 27,673,134 $ 10,522,461 $ (17,150,673) Charges for services 270,718 270,718 249,256 (21,462) Total revenues 27,943,852 27,943,852 10,771,717 (17,172,135) General government 1,663,604 1,338,589 96,546 1,242,043 Transportation and development 27,187,322 1,872,687 2,298,752 635,187 660,097 47,393 1 47,392 Capital outlay 25,037,296 55,864,436 24,257,485 31,606,951 Total expenditures 54,548,319 59,123,105 26,652,784 33,531,573 (26,604,467) (31,179,253) (15,881,067) 16,359,438 Transfers out — (120,000) — 120,000 Total other financing sources (uses) — (120,000) — 120,000 Net change in fund balance (26,604,467) (31,299,253) (15,881,067) 16,479,438 Fund balance, July 1, 2020 2,554,269 2,554,269 2,554,269 — EXPENDITURES: Community services Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Fund balance (deficit), June 30, 2021 $ (24,050,198) $ (28,744,984) $ (13,326,798) $ 16,479,438 126 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Streets Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Regional transportation taxes $ — $ — $ 2,226,568 $ 2,226,568 System development fees 4,133,600 4,133,600 4,882,337 748,737 Interest revenue 1,023,000 1,023,000 (21,408) (1,044,408) 5,156,600 5,156,600 7,087,497 1,930,897 General government 2,501,500 6,427,392 1,500 6,425,892 Transportation and development 35,841,038 3,075,802 4,119,777 (1,043,975) Capital outlay 31,797,681 59,440,321 32,333,991 27,106,330 Total expenditures 70,140,219 68,943,515 36,455,268 32,488,247 Net change in fund balance (64,983,619) (63,786,915) (29,367,771) 34,419,144 Fund balance, July 1, 2020 81,698,832 81,698,832 81,698,832 — $ 16,715,213 $ 17,911,917 $ 52,331,061 $ 34,419,144 Total revenues EXPENDITURES: Fund balance, June 30, 2021 127 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Services Capital Projects For the year ended June 30, 2021 Budgeted Amounts Original Final Non-GAAP Over Actual (Under) Amounts Final Budget REVENUES: System development fees $ 1,994,200 Interest revenue $ 1,994,200 $ 2,369,341 $ 375,141 610,200 610,200 (17,387) (627,587) 2,604,400 2,604,400 2,351,954 (252,446) General government 5,624,800 6,027,446 3,000 6,024,446 Community services 11,851,649 2,096,729 163,284 1,933,445 Capital outlay 6,191,868 14,402,988 7,866,725 6,536,263 Total expenditures 23,668,317 22,527,163 8,033,009 14,494,154 Net change in fund balance (21,063,917) (19,922,763) (5,681,055) 14,241,708 Fund balance, July 1, 2020 44,191,524 44,191,524 44,191,524 — $ 23,127,607 $ 24,268,761 $ 38,510,469 $ 14,241,708 Total revenues EXPENDITURES: Fund balance, June 30, 2021 128 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Safety Buildings and Improvements Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: System development fees $ 792,000 Interest revenue $ 792,000 $ 618,768 $ (173,232) 27,000 27,000 46,917 19,917 819,000 819,000 665,685 (153,315) General government 283,000 416,135 3,000 413,135 Public safety 163,970 13,566 — 13,566 Capital outlay — 17,269 19,944 (2,675) 446,970 446,970 22,944 424,026 372,030 372,030 642,741 270,711 Transfers out (1,350,000) (1,350,000) — 1,350,000 Total other financing sources (uses) (1,350,000) (1,350,000) — 1,350,000 (977,970) (977,970) 642,741 1,620,711 (5,548,312) (5,548,312) (5,548,312) — (6,526,282) $ (6,526,282) $ (4,905,571) $ Total revenues EXPENDITURES: Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Net change in fund balance Fund balance (deficit), July 1, 2020 Fund balance (deficit), June 30, 2021 $ 129 1,620,711 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Vehicle and Capital Equipment Replacement Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Interest revenue $ 239,000 (18,712) $ (257,712) — — 21,319 21,319 239,000 239,000 2,607 (236,393) General government 2,744,000 3,829,796 — 3,829,796 Public safety 5,325,735 — 432,516 (432,516) Capital outlay 1,717,280 6,244,609 5,470,986 773,623 Total expenditures 9,787,015 10,074,405 5,903,502 4,170,903 (9,548,015) (9,835,405) (5,900,895) 3,934,510 300,000 300,000 220,879 (79,121) Transfers in 3,316,983 3,316,983 3,316,983 — Total other financing sources (uses) 3,616,983 3,616,983 3,537,862 (79,121) Net change in fund balance (5,931,032) (6,218,422) (2,363,033) 3,855,389 Fund balance, July 1, 2020 11,365,061 11,365,061 11,365,061 — Miscellaneous Total revenues $ 239,000 $ EXPENDITURES: Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Proceeds from disposal of capital assets Fund balance, June 30, 2021 $ 130 5,434,029 $ 5,146,639 $ 9,002,028 $ 3,855,389 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Technology Replacement Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Interest revenue $ 178,000 Total revenues $ 178,000 $ 5,854 $ (172,146) 178,000 178,000 5,854 (172,146) General government 2,017,000 1,261,379 3,859,370 (2,597,991) Capital outlay 4,306,271 4,386,210 622,957 3,763,253 Total expenditures 6,323,271 5,647,589 4,482,327 1,165,262 (6,145,271) (5,469,589) (4,476,473) 993,116 Transfers in 3,638,571 3,638,571 3,661,604 23,033 Total other financing sources (uses) 3,638,571 3,638,571 3,661,604 23,033 Net change in fund balance (2,506,700) (1,831,018) (814,869) 1,016,149 Fund balance, July 1, 2020 5,672,399 5,672,399 5,672,399 — EXPENDITURES: Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Fund balance, June 30, 2021 $ 131 3,165,699 $ 3,841,381 $ 4,857,530 $ 1,016,149 City of Chandler Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Municipal Arts Capital Projects For the year ended June 30, 2021 Non-GAAP Budgeted Amounts Original Final Over Actual (Under) Amounts Final Budget REVENUES: Charges for services $ Interest revenue 57,400 $ 57,400 $ 57,455 $ 55 9,300 9,300 257 (9,043) 66,700 66,700 57,712 (8,988) General government 23,000 23,000 — 23,000 Community services 512,385 512,385 14,012 498,373 Total expenditures 535,385 535,385 14,012 521,373 Net change in fund balance (468,685) (468,685) 43,700 512,385 Fund balance, July 1, 2020 666,325 666,325 666,325 — Total revenues EXPENDITURES: Fund balance, June 30, 2021 $ 132 197,640 $ 197,640 $ 710,025 $ 512,385 City of Chandler Non-Major Proprietary Funds Solid Waste Used to account for the provision of solid waste (refuse) services to the residential customers of the City. All activities necessary to provide such service are accounted for in this fund. Airport Used to account for the provision of airport services at the City's municipal airport. All activities necessary to provide such service are accounted for in this fund, including but not limited to administration, operation, maintenance, financing and related debt service, billing and collection. Chandler Housing Authority Used to account for expenditures of the City's housing assistance programs which consist of housing owned and operated by the City and rent subsidy payments to private sector owners of dwelling units. Financing for this fund is derived from tenants and the United States Department of Housing and Urban Development. 133 City of Chandler Combining Statement of Net Position Non-Major Proprietary Funds June 30, 2021 Chandler Housing Authority Total Other Proprietary Funds 29,744 388 33,600 36,608 — — 100,340 $ 8,242,401 41,322 49,456 — 15,879 — 8,349,058 $29,965,196 2,407,486 83,056 36,608 57,968 33 32,550,347 — — 154,750 154,750 6,622,659 7,054,942 13,677,601 13,677,601 37,778,550 19,092,852 12,744,676 31,837,528 31,837,528 31,937,868 1,751,537 7,035,155 8,786,692 8,941,442 17,290,500 27,467,048 26,834,773 54,301,821 54,456,571 87,006,918 411,989 272,820 556,721 1,241,530 Solid Waste Airport ASSETS Current assets: Equity in pooled cash and investments Accounts receivable Due from other governments Inventories Accrued interest receivable Other receivables Total current assets $21,693,051 2,365,776 — — 42,089 33 24,100,949 Long-term assets: Notes receivable Capital assets: Non-depreciable Depreciable, net Total capital assets Total long-term assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of OPEB and pension plan items 134 $ LIABILITIES Current liabilities: Accounts payable Accrued payroll Trust liabilities and deposits Customer advances Compensated absences payable Landfill closure and postclosure liability Total current liabilities 1,256,784 55,651 — 81,021 17,536 94,446 1,505,438 53,213 18,194 57,530 26,640 6,485 — 162,062 49,944 49,038 618,103 215,097 19,535 — 951,717 1,359,941 122,883 675,633 322,758 43,556 94,446 2,619,217 Long-term liabilities: Compensated absences payable Net pension liability OPEB liability Landfill closure and postclosure liability Total long-term liabilities Total liabilities 79,104 1,349,904 516,026 4,245,554 6,190,588 7,696,026 29,256 1,274,519 181,563 — 1,485,338 1,647,400 88,118 2,359,378 583,163 — 3,030,659 3,982,376 196,478 4,983,801 1,280,752 4,245,554 10,706,585 13,325,802 67,858 54,301 330,674 452,833 31,837,528 8,786,692 (1,328,541) 4,747,479 $30,508,987 $13,534,171 54,301,821 20,167,992 $74,469,813 DEFERRED INFLOWS OF RESOURCES Deferred inflows of OPEB and pension plan items NET POSITION Net investment in capital assets Unrestricted Total net position 13,677,601 16,749,054 $30,426,655 135 136 City of Chandler Combining Statement of Revenues, Expenses and Changes in Net Position Non-Major Proprietary Funds For the year ended June 30, 2021 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds OPERATING REVENUES: Service fees $ 17,480,050 200 $ 18,373,518 — 7,965,078 7,965,078 — — 1,262,766 1,262,766 — 16,516 — 16,516 Grants and entitlements — Rentals Sales taxes Miscellaneous $ 893,268 $ — 71,839 62,182 134,021 17,480,050 981,623 9,290,226 27,751,899 General and administrative 1,033,310 102,341 — 1,135,651 Personnel services 1,821,489 599,585 1,645,073 4,066,147 Contractual services 12,724,981 60,184 1,054,880 13,840,045 849,188 352,904 434,276 1,636,368 — — 5,475,829 5,475,829 Total operating revenues OPERATING EXPENSES: Commodities Housing assistance payments Depreciation and amortization expense 611,341 1,071,710 597,473 2,280,524 Total operating expenses 17,040,309 2,186,724 9,207,531 28,434,564 OPERATING INCOME (LOSS) 439,741 (1,205,101) 82,695 (682,665) (18,732) 2 3,620 (15,110) (18,732) 2 3,620 (15,110) 421,009 (1,205,099) 86,315 (697,775) — 91,512 — 91,512 NONOPERATING REVENUES (EXPENSES): Interest revenue Total nonoperating revenues (expenses) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS CAPITAL CONTRIBUTION AND TRANSFERS: Capital contributions Transfers in — 262,006 285,000 547,006 (105,421) (28,956) — (134,377) Total capital contributions and transfers (105,421) 324,562 285,000 504,141 CHANGE IN NET POSITION 315,588 (880,537) 371,315 (193,634) Transfers out NET POSITION Beginning of year End of year 137 30,111,067 31,389,524 13,162,856 74,663,447 $ 30,426,655 $ 30,508,987 $ 13,534,171 $ 74,469,813 City of Chandler Combining Statement of Cash Flows Non-Major Proprietary Funds For the year ended June 30, 2021 Solid Waste Airport Chandler Total Other Housing Proprietary Authority Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 17,535,604 $ 988,652 $ 1,491,339 $ 20,015,595 Cash received from grantors — (33,600) 7,980,864 7,947,264 Cash payments to suppliers (14,425,205) (520,538) (6,976,176) (21,921,919) Cash payments to employees for services (1,793,702) (582,018) (1,626,856) (4,002,576) 1,316,697 (147,504) 869,171 2,038,364 — 262,006 285,000 547,006 (105,421) (28,956) — (134,377) (105,421) 233,050 285,000 412,629 (518,441) (154,273) (198,986) (871,700) (518,441) (154,273) (198,986) (871,700) Net cash provided (used) by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in Transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Investment income 10,849 2 12,623 23,474 Net cash provided (used) by investing activities 10,849 2 12,623 23,474 Net increase (decrease) in cash and cash equivalents 703,684 (68,725) 967,808 1,602,767 20,989,367 98,469 7,274,593 28,362,429 CASH AND CASH EQUIVALENTS: Beginning of year End of year $ 138 21,693,051 $ 29,744 $ 8,242,401 $ 29,965,196 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) $ 439,741 $ (1,205,101) $ 82,695 $ (682,665) 611,341 1,071,710 597,473 2,280,524 48,855 352 (9,283) 39,924 (Increase) decrease in due from other governments — (33,600) — (33,600) (Increase) decrease in inventories — (29,118) — (29,118) (Increase) decrease in other assets — — (150,855) (150,855) Increase (decrease) in payables 182,274 24,009 (11,191) 195,092 Increase (decrease) in accrued payroll and compensated absences 16,501 12,923 9,841 39,265 — 9,770 42,705 52,475 Increase (decrease) in customer advances 6,699 (3,093) 148,555 152,161 Increase (decrease) in net pension items (82,565) (27,654) 72,302 (37,917) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Changes in assets, liabilities and deferred items: (Increase) decrease in receivables Increase (decrease) in deposits Increase (decrease) in OPEB liability Total adjustments Net cash provided (used) by operating activities 93,851 32,298 86,929 213,078 876,956 1,057,597 786,476 2,721,029 869,171 $ 2,038,364 — $ 91,512 $ 1,316,697 $ (147,504) $ $ — $ 91,512 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of capital assets from city government 139 $ 140 Statistical Section Financial Trends Revenue Capacity Debt Capacity Demographic and Economic Information Operating Information Chandler’s employees are passionate about serving the community and businesses. This team of professionals bring innovation and quality to the customer service experience. Statistical Section “The Future’s in Sight” Statistical Section CITY OF CHANDLER, ARIZONA Statistical Section This part of the City of Chandler’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. Contents Page Financial Trends m Schedules e 1-6 contain information to help the reader understand how the City’s financial . performance and well-being have changed over time. 142 Revenue Capacity a Schedules x 7-9 contain information to help the reader assess the factors affecting the City's . ability to generate its sales and use tax. 158 Debt Capacity 162 Schedules 10-13b present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Schedules 14-30 provide additional information for continuing disclosure purposes. Demographic and Economic Information 186 Schedules 31-32 offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. Operating Information 188 Schedules 33-35 contain information about the City’s operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 141 CITY OF CHANDLER, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2012 Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position $ 2013 545,926,100 44,047,942 259,783,598 $ 558,279,485 112,307,412 179,518,042 2014 $ 563,033,503 105,723,768 183,088,676 2015 $ 567,041,560 108,965,994 7,709,550 849,757,640 850,104,939 851,845,947 683,717,104 280,440,445 355,015,004 388,837,444 380,427,606 — 179,339,498 — 176,961,822 — 206,284,498 119,075 217,824,645 459,779,943 531,976,826 595,121,942 598,371,326 Primary government Net investment in capital assets Restricted Unrestricted 826,366,545 44,047,942 439,123,096 913,294,489 112,307,412 356,479,864 951,870,947 105,723,768 389,373,174 947,469,166 109,085,069 225,534,195 Total primary government net position $ 1,309,537,583 $ 1,382,081,765 $ 1,446,967,889 $ 1,282,088,430 Business-type activities Net investment in capital assets Restricted Unrestricted Total business-type activities net position 142 Schedule 1 Fiscal Year 2016 $ 579,591,241 121,767,847 (5,872,464) 2017 $ 587,213,640 122,006,140 (36,358,845) 2018 $ 2019 536,086,249 168,510,855 (65,575,548) $ 575,953,033 173,490,725 (72,592,489) 2020 $ 547,511,826 191,839,529 (8,655,932) 2021 $ 555,107,220 189,214,016 (6,761,531) 695,486,624 672,860,935 639,021,556 676,851,269 730,695,423 737,559,705 342,252,306 31,365,801 258,806,679 439,823,546 32,977,926 176,390,803 467,799,036 33,447,434 243,735,547 481,911,949 31,523,149 249,131,813 477,329,239 33,750,526 267,005,635 458,616,595 32,154,205 299,755,652 632,424,786 649,192,275 744,982,017 762,566,911 778,085,400 790,526,452 921,843,547 153,133,648 252,934,215 1,027,037,186 155,184,734 139,831,290 1,003,885,285 201,958,289 178,159,999 1,057,864,982 205,013,874 176,539,324 1,024,841,065 225,590,055 258,349,703 1,013,723,815 221,368,221 292,994,121 $ 1,327,911,410 $ 1,322,053,210 $ 1,384,003,573 $ 1,439,418,180 $ 1,508,780,823 $ 1,528,086,157 143 CITY OF CHANDLER, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2012 Expenses Governmental activities: General government Public safety Transportation and development Community services Interest and fiscal charges $ 2013 88,876,901 89,141,559 52,111,019 28,966,271 12,425,819 $ 90,143,339 95,974,126 55,846,316 30,979,208 11,777,701 2014 $ 99,231,501 94,738,371 52,183,052 32,331,286 10,044,363 2015 $ 104,456,315 102,050,425 51,714,085 31,784,321 6,986,490 Total governmental activities expenses 271,521,569 284,720,690 288,528,573 296,991,636 Business-type activities: Water Wastewater Solid waste Airport Chandler housing authority 56,277,327 38,804,360 13,756,352 1,941,752 7,642,503 55,440,712 40,401,849 13,974,858 1,960,788 7,473,891 55,877,774 41,969,764 14,131,202 1,980,706 7,616,301 55,470,724 50,823,497 14,087,780 1,860,057 7,433,284 Total business-type activities expenses Total primary government expenses 118,422,294 389,943,863 119,252,098 403,972,788 121,575,747 410,104,320 129,675,342 426,666,978 $ 144 $ $ $ Schedule 2a Fiscal Year 2016 $ $ 112,514,903 111,568,323 55,012,081 31,441,019 7,884,146 2017 $ 104,998,802 149,366,614 56,752,197 32,599,549 6,623,830 2018 $ 2019 113,587,478 112,371,723 55,287,494 36,824,102 6,716,119 $ 114,373,302 124,906,187 53,806,473 36,990,853 7,046,655 2020 $ 138,850,297 109,544,169 59,777,330 38,195,563 6,885,184 2021 $ 162,849,542 122,146,366 58,847,053 39,565,719 6,653,197 318,420,472 350,340,992 324,786,916 337,123,470 353,252,543 390,061,877 54,075,742 51,034,921 13,925,017 2,011,880 7,267,806 63,236,746 58,112,931 14,380,178 1,893,830 7,728,876 61,513,990 60,605,779 14,531,558 1,841,718 8,109,635 58,297,769 61,218,775 15,221,985 2,038,417 8,478,235 60,330,758 66,788,084 16,522,728 2,382,288 8,710,570 62,049,102 62,753,454 17,040,309 2,186,724 9,207,531 128,315,366 446,735,838 $ 145,352,561 495,693,553 $ 146,602,680 471,389,596 $ 145 145,255,181 482,378,651 $ 154,734,428 507,986,971 $ 153,237,120 543,298,997 CITY OF CHANDLER, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2013 2014 2012 Program Revenues Governmental activities: Charges for services: General government Public safety Transportation and development Community services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues $ 31,381,062 5,794,329 27,905,311 4,136,285 6,162,320 11,016,136 $ 35,898,378 7,375,050 10,150,102 8,240,732 3,999,536 9,116,635 $ 38,832,217 5,861,044 16,145,692 7,744,507 4,744,636 10,170,236 2015 $ 39,207,061 6,469,215 14,438,138 7,551,166 3,514,714 13,133,637 86,395,443 74,780,433 83,498,332 84,313,931 Business-type activities: Charges for services: Water Wastewater Solid waste Airport Chandler housing authority Operating grants and contributions Capital grants and contributions Total business-type activities program revenues 49,565,071 35,907,085 13,890,957 996,605 466,556 6,341,087 19,118,567 48,258,282 37,690,400 13,836,363 976,102 637,329 5,785,335 81,572,568 49,588,376 40,509,289 14,034,894 961,067 806,540 5,457,991 72,176,582 48,045,103 45,666,777 14,140,246 1,010,288 877,380 5,862,477 35,357,741 126,285,928 188,756,379 183,534,739 150,960,012 Total primary government program revenues $ 212,681,371 $ 263,536,812 $ 267,033,071 $ 235,273,943 Net (expense)/revenue Governmental activities Business-type activities Total primary government net (expense) $ (185,126,126) 7,863,634 $ (177,262,492) $ (209,940,257) $ (205,030,041) $ (212,677,705) 69,504,281 61,958,992 21,284,670 $ (140,435,976) $ (143,071,049) $ (191,393,035) 146 Schedule 2b Fiscal Year 2016 $ $ 42,021,638 7,471,344 16,538,175 10,792,114 5,188,787 16,725,462 2017 $ 41,400,079 6,561,052 16,333,273 10,732,351 4,481,750 9,702,683 2018 $ 2019 43,089,930 6,100,584 17,145,894 9,180,276 3,988,629 9,340,818 $ 43,622,807 4,998,779 14,869,670 7,583,513 4,522,345 10,510,464 2020 $ 43,203,865 6,512,002 16,420,652 5,623,796 31,052,185 18,714,457 2021 $ 42,011,670 5,073,984 14,266,302 5,437,401 18,694,567 16,573,341 98,737,520 89,211,188 88,846,131 86,107,578 121,526,957 102,057,265 50,483,097 51,321,346 14,940,591 946,419 946,408 5,784,021 32,690,364 53,251,020 53,563,934 15,648,992 950,294 954,070 6,198,797 27,645,932 54,031,592 56,367,650 16,307,409 963,827 1,085,013 6,350,858 22,360,158 52,459,720 56,055,131 16,107,922 906,557 1,155,430 7,224,669 18,335,155 54,722,296 61,531,949 16,757,829 880,194 1,188,570 7,137,950 14,190,016 58,755,999 61,971,940 17,480,050 893,268 1,262,966 7,965,078 14,355,873 157,112,246 158,213,039 157,466,507 152,244,584 156,408,804 162,685,174 255,849,766 $ (219,682,952) 28,796,880 $ (190,886,072) $ 247,424,227 $ (261,129,804) 12,860,478 $ (248,269,326) $ 246,312,638 $ (235,940,785) 10,863,827 $ (225,076,958) $ 238,352,162 $ (251,015,892) 6,989,403 $ (244,026,489) 147 $ 277,935,761 $ (231,725,586) 1,674,376 $ (230,051,210) $ 264,742,439 $ (288,004,612) 9,448,054 $ (278,556,558) CITY OF CHANDLER, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2012 Governmental Revenues and Other Changes in Net Position Governmental activities: Property taxes Sales taxes Highway user taxes Other taxes Franchise fees State shared $ 2013 31,877,716 97,485,387 11,823,280 5,979,715 2,988,456 45,958,627 $ 29,656,415 102,200,517 12,929,504 6,295,212 2,936,533 51,347,206 2014 $ 28,348,952 103,880,801 13,352,622 3,243,937 3,145,449 55,423,759 2015 $ 28,708,033 108,657,130 14,633,470 10,106,891 3,300,129 59,236,588 Investment income Miscellaneous Transfers in (out) Total governmental activities 1,221,923 1,116,832 (74,075) 198,377,861 2,843,417 2,181,627 (102,875) 210,287,556 1,869,128 819,766 (132,082) 209,952,332 1,763,585 1,197,215 (123,350) 227,479,691 Business-type activities: Sales taxes Investment income Miscellaneous Transfers in (out) Total business-type activities: — 389,446 1,351,829 74,075 1,815,350 — 1,180,290 1,409,437 102,875 2,692,602 70,065 788,025 1,683,332 132,082 2,673,504 10,865 819,556 2,475,760 123,350 3,429,531 Total primary government Change in Net Position Governmental activities Business-type activities Total primary government $ 200,193,211 $ 212,980,158 $ 212,625,836 $ 230,909,222 $ 13,251,735 9,678,984 22,930,719 $ 347,299 72,196,883 72,544,182 $ 4,922,291 64,632,496 69,554,787 $ 14,801,986 24,714,201 39,516,187 $ $ 148 $ $ Schedule 2c Fiscal Year 2016 $ 29,214,103 112,250,883 15,303,635 6,100,475 3,344,817 60,712,442 3,834,840 1,124,559 (433,282) 231,452,472 2017 $ 10,391 2,180,447 2,632,460 433,282 5,256,580 29,837,763 120,189,651 16,683,743 664,616 3,285,267 65,924,228 1,063,997 1,014,665 (159,815) 238,504,115 2018 $ 10,682 938,491 2,798,023 159,815 3,907,011 2019 30,816,495 127,584,410 16,135,949 940,203 3,571,744 64,723,211 1,531,766 1,502,418 (4,175,579) 242,630,617 $ 13,769 854,848 14,923,212 4,175,579 19,967,408 32,550,250 139,851,355 17,301,902 866,267 3,567,184 67,156,430 14,822,135 1,261,279 (90,680) 277,286,122 2020 $ 17,347 7,742,589 2,842,825 90,680 10,693,441 34,419,182 140,644,918 16,996,911 1,153,237 3,441,225 70,769,943 16,951,295 2,085,020 (891,991) 285,569,740 2021 $ 15,521 9,974,135 2,962,466 891,991 13,844,113 36,371,978 157,513,686 18,108,310 2,226,568 3,823,524 80,699,253 584,026 1,820,520 105,991 301,253,856 16,516 249,448 2,833,025 (105,991) 2,992,998 $ 236,709,052 $ 242,411,126 $ 262,598,025 $ 287,979,563 $ 299,413,853 $ 304,246,854 $ 11,769,520 34,053,460 45,822,980 $ (22,625,689) 16,767,489 (5,858,200) $ 6,689,832 30,831,235 37,521,067 $ 26,270,230 17,682,844 43,953,074 $ 53,844,154 15,518,489 69,362,643 $ 13,249,244 12,441,052 25,690,296 $ $ $ $ 149 $ $ CITY OF CHANDLER, ARIZONA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2012 General fund Nonspendable Restricted Assigned Unassigned Total general fund $ $ All other governmental funds Nonspendable Restricted Unassigned Total all other governmental funds $ 2013 947,804 939,867 102,635,587 69,223,074 173,746,332 $ $ 2014 938,549 939,867 101,115,766 66,077,714 169,071,896 $ $ 2015 892,533 1,166,105 95,185,696 82,453,462 179,697,796 $ $ 941,359 1,792,180 102,222,466 80,152,269 185,108,274 — — — — 111,378,788 (12,798,348) 111,367,545 (13,646,428) 104,557,663 (11,034,021) 107,173,814 (15,322,260) 98,580,440 150 $ 97,721,117 $ 93,523,642 $ 91,851,554 Schedule 3 Fiscal Year 2016 $ 2017 907,594 1,566,618 109,958,162 68,567,835 181,000,209 $ $ — 120,201,229 (11,877,159) $ 108,324,070 $ 2018 979,446 1,451,061 101,620,277 87,492,981 191,543,765 $ $ 7,422 120,640,190 (11,350,383) $ 109,297,229 $ 2019 813,143 1,980,807 116,359,633 65,182,337 184,335,920 $ $ — 166,570,330 (2,555,420) $ 164,014,910 $ 2020 866,239 2,179,767 131,214,214 66,035,760 200,295,980 $ $ — 171,310,958 (5,758,986) $ 165,551,972 $ 151 2021 985,396 1,710,608 139,326,860 90,887,858 232,910,722 $ $ — 190,128,921 (7,697,792) $ — 187,759,476 (7,226,577) $ 182,431,129 $ 180,532,899 $ $ 1,051,638 1,711,242 143,763,585 96,065,934 242,592,399 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS REVENUES LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year Property taxes Sales taxes Highway user taxes Other taxes Franchise fees State shared revenues Grants and entitlements System development fees Special assessments $ Licenses and permits Charges for services Fines and forfeitures Rentals Contributions Interest revenue Miscellaneous Total revenues 2012 32,329,560 97,485,387 11,823,280 5,979,715 2,988,456 45,958,627 13,826,606 11,724,823 678,027 $ 6,955,605 19,938,566 4,700,430 455,842 100,000 1,034,895 1,392,691 $ 257,372,510 2013 29,841,739 102,200,517 12,929,504 6,295,212 2,936,533 51,347,206 9,480,090 7,781,083 676,127 $ 4,887,466 19,786,513 5,825,098 570,638 100,000 2,529,078 1,384,123 $ 152 258,570,927 2014 28,442,823 103,880,801 13,352,622 3,243,937 3,145,449 55,423,759 10,187,895 11,846,275 678,843 $ 5,479,384 20,269,976 4,622,215 732,807 100,000 1,623,973 650,117 $ 263,680,876 2015 28,899,684 108,657,130 14,633,470 10,106,891 3,300,129 59,236,588 10,638,831 10,585,623 573,438 5,146,556 20,110,036 4,601,501 751,163 150,000 1,562,241 572,252 $ 279,525,533 Schedule 4 Fiscal Year $ $ 2016 29,237,607 112,250,883 15,303,635 6,100,475 3,344,817 60,712,442 16,159,064 16,217,004 606,757 6,634,161 19,705,786 4,828,174 974,192 200,000 3,409,065 897,102 296,581,164 $ $ 2017 29,692,846 120,189,651 16,683,743 664,616 3,285,267 65,924,228 12,677,860 14,683,327 607,191 7,075,996 20,869,517 3,908,387 678,387 200,000 921,195 494,984 298,557,195 $ $ 2018 30,819,812 127,584,410 16,135,949 940,203 3,571,744 64,723,211 12,111,857 13,982,674 611,499 6,394,322 21,827,375 4,865,783 127,575 200,000 1,398,729 974,107 306,269,250 $ $ 153 2019 32,526,357 139,851,355 17,301,902 866,267 3,567,184 67,156,430 11,911,639 9,023,678 610,501 7,268,592 21,512,737 4,234,286 127,206 200,000 13,268,020 923,369 330,349,523 $ $ 2020 34,334,216 140,644,918 16,996,911 1,153,237 3,441,225 70,769,943 49,719,415 8,730,973 508,485 7,760,403 20,355,702 5,571,322 213,345 596,153 15,017,352 1,471,977 377,285,577 $ $ 2021 36,409,345 157,513,686 18,108,310 2,226,568 3,823,524 80,699,253 29,417,028 8,207,728 587,020 6,656,737 19,631,389 2,920,173 174,766 5,201,737 533,383 1,105,070 373,215,717 CITY OF CHANDLER, ARIZONA GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2012 48,894,811 82,820,106 25,532,739 23,255,568 29,787,069 26,870,000 11,908,025 — 15,955,000 10,682,206 145,970 21,490,000 7,737,974 722,293 Total expenditures $ 238,810,616 $ 263,033,922 $ 256,506,506 $ 276,496,631 16.4 % $ 2015 46,895,106 93,773,306 24,769,553 24,569,283 56,539,116 15,970,000 12,550,323 — 13.5 % $ 2014 46,807,747 90,068,218 23,418,175 23,771,925 45,657,265 $ Debt service as a percentage of noncapital expenditures $ 2013 44,512,533 89,587,613 24,807,578 23,554,854 41,793,319 General government Public safety Transportation and development Community services Capital improvements Debt service: Principal retirement Interest and fiscal charges Bond issuance costs 11.6 % (1) In FY 2017, the City called the remaining payments for the 2007 GO Refunding issuance totaling $8,110,000. 154 11.7 % Schedule 5 Fiscal Year 2016 $ 52,138,384 104,605,663 25,471,154 24,988,844 50,009,243 2017 $ 50,892,490 103,167,906 28,294,221 26,605,279 44,712,255 17,465,000 8,635,631 — 25,240,000 7,689,305 249,838 $ 283,313,919 $ 286,851,294 10.2 % 12.9 % (1) 2018 $ 55,706,708 109,736,277 27,750,365 27,088,640 71,268,257 2019 $ 58,070,201 111,496,663 25,871,080 27,712,871 69,006,722 2020 $ 79,624,174 113,166,600 30,117,735 28,344,665 77,024,413 2021 $ 93,482,842 119,357,759 20,264,000 7,918,081 252,611 22,820,000 8,270,161 — 21,340,000 8,073,320 319,631 19,980,000 7,801,885 — $ 319,984,939 $ 323,247,698 $ 358,010,538 $ 363,254,257 10.4 % 155 11.3 % 9.5 % 31,640,566 29,084,081 61,907,124 8.0 % CITY OF CHANDLER, ARIZONA OTHER FINANCING SOURCES AND USES AND NET CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2012 Other Financing Sources (Uses) Bond premium Face amount of bonds issued $ 2013 — — $ 2014 — — $ 562,052 8,660,000 2015 $ 17,045,635 128,254,000 Proceeds from disposal of capital assets Payment to escrow agent Transfers in Transfers out 89,007 — 20,576,188 (22,685,504) 76,381 — 32,849,979 (33,997,394) 161,126 (9,061,800) 24,586,418 (25,653,741) 103,964 (143,635,520) 28,717,990 (29,776,581) Total other financing sources (uses) (2,020,309) (1,071,034) (745,945) 709,488 (5,533,759) $ 6,428,425 Net change in fund balance $ 16,541,585 156 $ $ 3,738,390 Schedule 6 Fiscal Year 2016 $ $ 2017 — — $ 6,339,230 25,500,000 2018 $ 2019 3,609,365 58,740,000 $ 2020 — — $ 2,927,904 30,400,000 2021 $ — — 463,709 — 27,885,557 (29,252,060) 652,882 (31,589,392) 28,116,369 (29,208,275) 213,829 — 46,032,351 (47,370,020) 1,356,796 — 45,484,505 (48,005,487) 396,924 — 39,282,296 (42,788,264) 225,081 — 44,961,787 (47,364,881) (902,794) (189,186) 61,225,525 (1,164,186) 30,218,860 (2,178,013) 12,364,451 $ 11,516,715 $ 47,509,836 $ 157 5,937,639 $ 49,493,899 $ 7,783,447 CITY OF CHANDLER, ARIZONA TAXABLE REVENUE BY CATEGORY LAST TEN FISCAL YEARS Amusements Contracting General Retail Hotel/Motel Miscellaneous Related Revenue (1) Publishing Rentals - Personal Property Rentals - Real Property Restaurant/Bar Telecommunications Use Tax Proposition 207 Utilities $ Total Sales and Use Taxes $ City Direct Sales Tax Rate (2) 2012 714,641 10,869,566 42,844,871 2,255,786 2,334,179 352,550 2,606,371 10,025,726 8,670,199 3,628,007 1,054,968 — 12,128,475 97,485,339 $ $ 1.76% Fiscal Year 2013 2014 717,442 $ 728,110 10,408,518 9,780,645 45,331,307 47,454,682 2,288,989 2,472,754 2,937,426 2,660,201 334,981 258,547 2,884,618 2,949,421 10,817,611 11,058,203 9,069,109 9,542,714 3,731,350 3,533,636 1,315,599 1,090,428 — — 12,363,565 12,421,526 102,200,515 1.75% $ 103,950,867 $ $ 1.75% 2015 895,730 8,870,092 49,740,000 2,892,470 2,815,040 260,712 3,261,716 11,967,509 10,188,718 3,435,949 1,145,534 — 13,194,526 108,667,996 1.76% Source: City of Chandler, Management Services Department (1) Includes license application fees, annual license fees, audit assessments, penalties and interest. (2) The direct tax rate was calculated using a weighted average of the actual revenues collected for each category. Tax rates vary by category, currently ranging from 1.5% to 4.4%. (3) In Fiscal Year 2018-19, the City did a restatement to record prior year privilege tax receivables not previously accrued; prior years have not been restated. 158 Schedule 7 $ 2016 1,019,939 8,855,057 51,191,162 2,957,685 2,745,130 248,433 3,125,459 13,217,561 10,752,479 3,234,369 1,127,257 — 13,786,741 $ 2017 1,019,938 11,496,791 53,137,169 3,424,279 2,527,981 186,862 3,611,180 13,647,156 11,341,714 2,796,065 3,619,340 — 13,391,857 $ Fiscal Year 2018 2019 (3) 1,083,161 $ 1,318,195 $ 12,388,978 17,228,786 56,605,561 60,029,293 3,712,085 4,099,450 2,328,030 1,757,235 182,820 207,462 3,676,196 4,076,298 15,134,275 16,506,671 11,872,941 12,773,198 2,395,673 2,191,747 4,394,129 5,461,771 — — 13,824,331 14,218,596 2020 972,105 12,824,214 64,911,529 3,560,787 1,710,004 177,542 4,282,451 18,184,361 11,978,625 2,337,375 5,335,557 — 14,385,889 $ 2021 789,411 14,446,470 75,590,425 3,215,504 2,152,443 197,578 3,760,815 19,214,217 13,099,159 1,751,284 7,636,473 256,702 15,419,721 $ 112,261,272 $ 120,200,332 $ 127,598,180 $ 139,868,702 $ 140,660,439 $ 157,530,202 1.76% 1.75% 1.74% 1.74% 1.73% 1.70% 159 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING SALES AND USE TAX RATES LAST TEN FISCAL YEARS Schedule 8 Overlapping Rates Fiscal Year City Direct Tax Rate (1) Maricopa County Tax Rate (2) State of Arizona Tax Rate (3) Tourism & Sports Authority Tax Rate (4) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1.76% 1.75% 1.75% 1.76% 1.76% 1.75% 1.74% 1.74% 1.73% 1.70% 0.67% 0.67% 0.67% 0.67% 0.67% 0.66% 0.65% 0.65% 0.65% 0.64% 5.90% 5.80% 4.99% 4.96% 4.92% 4.95% 4.92% 4.93% 4.86% 4.90% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.02% Source: City of Chandler, Management Services Department (1) The City's direct tax rate was calculated using a weighted average of the actual revenues collected for each category. Tax rates vary by category, currently ranging from 1.5% to 4.4%. City tax rates were last increased effective May 1, 1994. (2) The overlapping County tax rate was calculated using a weighted average of the actual revenues the City collected for each category. Tax rates vary by category, currently ranging from 0.5% to 0.77%. No rate changes have occurred in the past ten fiscal years. (3) The overlapping State tax rate was calculated using a weighted average of the actual revenues the City collected for each category. Tax rates vary by category, currently ranging from 5.5% to 5.6%. State tax rate increases during the past ten fiscal years: 1.0% effective June 1, 2011 through May 31, 2013. (4) The Tourism & Sports Authority (TSA) was authorized by Maricopa County voters on November 7, 2000. An additional tax rate of 1.0% is to be levied from March 1, 2001 through February 28, 2031. The only category the overlapping tax rate applies to is the Hotel/Motel category. The overlapping tax rate is calculated using a weighted average of the actual revenues the City collected for this category. 160 CITY OF CHANDLER, ARIZONA PRINCIPAL SALES AND USE TAXPAYERS CURRENT YEAR AND TEN YEARS AGO Schedule 9 Fiscal Year 2021 Taxpayer Business Type Taxpayer A Utility Taxpayer B Sales and Use Tax Payments Fiscal Year 2012 Percentage of Total Sales and Use Tax Rank Payments Rank Percentage of Total Sales and Use Tax Payments 9,698,254 1 9.95% Sales and Use Tax Payments $ 12,051,030 1 7.66% $ Department Store 5,012,264 2 3.19% 2,783,551 3 2.86% Taxpayer C Grocery Store 3,504,521 3 2.23% 2,259,487 4 2.32% Taxpayer D Department Store 3,195,811 4 2.03% 1,675,623 5 1.72% Taxpayer E Retailer 3,050,251 5 1.94% Taxpayer F Retailer 2,705,069 6 1.72% 1,307,482 6 1.34% Taxpayer G Retailer 2,397,065 7 1.52% Taxpayer H Vehicle Dealer 2,164,678 8 1.38% Taxpayer I Commercial Leasing 1,749,006 9 1.11% Taxpayer J Utility 1,591,028 10 1.01% 1,272,878 8 1.31% Taxpayer K Construction 3,823,373 2 3.92% Taxpayer L Telecommunications 1,306,045 7 1.34% Taxpayer M Department Store 1,255,294 9 1.29% Taxpayer N 1,157,789 10 1.19% Department Store $ 37,420,723 23.79% $ 26,539,776 27.22% Source: City of Chandler, Management Services Department Note: The identities of the ten largest revenue payers are prohibited from disclosure per state statute. Alternatively, the business type of the top ten taxpayers for each period has been disclosed along with the appropriate data. 161 CITY OF CHANDLER, ARIZONA RATIOS OF OUTSTANDING DEBT LAST TEN FISCAL YEARS Schedule 10 Governmental Activities Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General Obligation Bonds $ 268,148,000 256,288,000 233,678,000 222,143,000 205,088,000 186,873,000 223,288,000 205,764,000 215,939,000 195,164,000 Revenue Bonds $ 25,745,000 22,045,000 18,000,000 14,025,000 10,055,000 6,685,000 4,270,000 2,050,000 — — Special Assessment Bonds $ 5,780,000 5,350,000 4,905,000 4,440,000 3,960,000 3,460,000 2,940,000 2,395,000 1,830,000 1,245,000 General Obligation Bond Issuance Premiums $ — — 3,539,600 17,244,108 15,663,687 19,829,438 21,269,309 19,097,787 19,756,588 17,526,932 Special Assessment Bonds Issuance Premiums Revenue Bonds Issuance Premiums $ — — 707,337 565,869 424,402 282,935 141,468 — — — $ — — 99,258 88,230 77,201 66,172 55,140 44,112 33,084 22,056 Business-type Activities Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General Obligation Bonds $ 170,987,000 161,567,000 150,972,000 140,072,000 127,782,000 115,722,000 105,707,000 95,901,000 86,261,000 76,936,000 General Bonded Debt $ 439,135,000 417,855,000 390,410,407 391,026,194 359,163,743 334,688,362 361,290,196 330,661,357 330,729,798 297,274,782 Revenue Bonds $ 52,670,000 44,740,000 36,095,000 31,610,000 24,850,000 9,595,000 7,845,000 4,685,000 2,340,000 — Less Amount Available in Debt Service Fund $ 19,258,684 16,419,386 16,186,172 14,910,017 15,281,782 8,981,699 7,451,989 4,586,562 4,693,193 5,758,393 Excise Tax Revenue Obligations $ 47,440,000 45,695,000 148,380,000 142,200,000 204,090,000 198,520,000 230,635,000 222,575,000 228,985,000 219,780,000 Net General Bonded Debt Outstanding $ 419,876,316 401,435,614 374,224,235 376,116,177 343,881,961 325,706,663 353,838,207 326,074,795 326,036,605 291,516,389 General Obligation Bond Issuance Premiums $ — — 2,220,807 11,567,086 10,630,056 12,263,924 11,025,887 9,898,570 8,773,210 7,647,850 Estimated Actual Taxable Value of Property $21,102,582,630 21,502,506,694 23,588,561,444 29,230,173,658 31,514,093,091 32,319,847,780 33,265,569,654 36,899,750,596 40,890,232,930 44,808,678,880 Excise Tax Revenue Obligations Issuance Premiums Revenue Bonds Issuance Premiums $ Percentage of Estimated Actual Taxable Value of Property 1.99% 1.87% 1.59% 1.29% 1.09% 1.01% 1.06% 0.88% 0.80% 0.65% — — 1,705,732 1,324,131 832,855 624,642 416,428 202,401 — — $ Total Primary Government (1) $ 570,770,000 535,685,000 608,805,370 593,320,112 614,901,176 568,997,296 624,864,531 578,592,636 580,768,479 533,634,364 — — 8,502,636 8,040,688 11,447,974 15,075,185 17,271,299 15,979,766 16,850,597 15,312,526 Percentage of Personal Income (2) 7.84% 6.71% 7.76% 7.15% 7.35% 6.20% 6.24% 5.73% 5.45% 4.56% Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements. (1) Includes general bonded debt, other governmental activities debt and business-type activities debt. (2) Population and personal income data can be found in Schedule 31. 162 Per Capita (2) 2,383 2,213 2,521 2,397 2,465 2,128 2,267 2,215 2,192 1,905 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30, 2021 Debt Outstanding Governmental Unit Schedule 11 Estimated Percentage Applicable Estimated Share of Overlapping Debt Debt repaid with property taxes State of Arizona Maricopa County Maricopa County Community College District Maricopa County Special Healthcare District Chandler Unified School District No. 80 Kyrene Elementary School District No. 28 Mesa Unified School District No. 4 Gilbert Unified School District No. 41 East Valley Institute of Technology $ None None 184,715,000 640,269,000 385,946,000 182,955,000 275,525,000 112,360,000 None 4.64 % 7.10 7.10 $ 7.10 27.82 4.27 2.60 69.92 15.90 Subtotal, overlapping debt None None 13,108,223 45,436,424 50,905,198 11,773,993 2,925,713 269,859,611 None 394,009,162 City direct debt 213,957,988 Total direct and overlapping debt 100.00 213,957,988 $ 607,967,150 Source: Piper Sandler Companies Note: The applicable percentage of overlap for each type of debt was computed on the net limited property assessed valuation as calculated for fiscal year 2020-21 for the overlapping jurisdiction to the amount of such valuation which lies within the City of Chandler. 163 CITY OF CHANDLER, ARIZONA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 2012 2013 2014 2015 $ 135,310,758 $ 130,522,600 $ 142,895,404 $ 142,827,478 11,840,000 10,869,000 10,198,000 9,848,400 $ 123,470,758 $ 119,653,600 $ 132,697,404 $ 132,979,078 8.75% 8.33% 7.14% 6.90% $ 451,035,860 $ 435,075,335 $ 476,318,016 $ 476,091,596 427,295,000 406,986,000 374,452,000 352,366,600 $ 23,740,860 $ 28,089,335 $ 101,866,016 $ 123,724,996 94.74% 93.54% 78.61% 74.01% 6% General Obligation Bond Limitation Debt limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of the debt limit 20% General Obligation Bond Limitation Debt limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of the debt limit Fiscal Year 2010-11 through Fiscal Year 2018-19: Piper Jaffray Inc. Fiscal Year 2019-20 through Fiscal Year 2020-21: Piper Sandler Companies Note: Under Arizona law, cities may issue general obligation bonds for purposes of water, wastewater, artificial light, open space preserves, parks, public safety and emergency services, streets, transportation, playgrounds and recreational facilities up to an amount not to exceed 20 percent of secondary assessed valuation. Cities may issue general obligation bonds for any other purpose up to an amount not to exceed 6 percent of secondary assessed valuation. Prior to Fiscal Year 2016, the Assessed Valuation was based on the Net Assessed Secondary Value. Due to a change in the legislation (Proposition 117), in Fiscal Year 2016, the City is required to use the Limited Property Value. The net (or excess) premium reflected was utilized for project fund purposes and is being amortized according to Arizona Revised Statutes, Title 35, Chapter 3, Article 3, 35-457 (E). 164 Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2021 Full Cash Assessed Valuation as of June 30, 2021 $ 4,682,558,944 Debt limit (6% of assessed value) 280,953,536 Debt applicable to limit: 6% general obligation bonds 6,519,850 Excess premium on bonds outstanding 239,656 Legal 6% debt margin $ 274,194,030 Debt limit (20% of assessed value) Debt applicable to limit: 20% general obligation bonds $ 936,511,789 265,580,150 Excess premium on bonds outstanding Legal 20% debt margin 11,493,592 659,438,047 $ Fiscal Year 2016 $ 190,024,847 2017 $ 9,427,250 $ 180,597,597 633,416,159 $ 309,973,409 51.06% 189,480,245 $ 661,442,986 $ 360,850,336 45.44% 209,370,282 $ 194,395,932 $ $ $ 219,747,369 697,900,943 $ 373,734,315 774,195,564 $ 46.45% 475,314,362 38.61% 165 $ 248,732,453 $ 861,683,439 $ 557,727,307 35.27% 274,194,030 2.41% $ 303,956,132 $ 280,953,536 6,759,506 3.78% 298,881,202 $ 258,505,031 2021 9,772,578 5.39% 324,166,628 $ 232,258,669 2020 12,511,300 7.15% 300,592,650 $ 2019 14,974,350 4.51% 323,442,750 $ $ 8,952,650 4.96% $ 198,432,895 2018 936,511,789 277,073,742 $ 659,438,047 29.59% CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13a Street & Highway Revenue Bonds Less: Highway User Fiscal Year Operating Taxes 2012 $ 11,823,280 Net Available Expenses $ Debt Service Revenue 7,895,663 $ 3,927,617 Principal $ Interest 3,700,000 $ Coverage 936,975 0.85 2013 12,929,504 10,893,216 2,036,288 3,830,000 833,475 0.44 2014 13,352,622 10,547,032 2,805,590 3,975,000 515,175 0.62 2015 14,633,470 8,257,078 6,376,392 3,970,000 462,047 1.44 2016 15,303,635 11,951,019 3,352,616 3,370,000 375,650 0.90 2017 16,683,743 10,887,942 5,795,801 2,415,000 256,438 2.17 2018 16,135,949 12,073,072 4,062,877 2,220,000 163,988 1.70 2019 17,301,902 10,724,907 6,576,995 2,050,000 79,200 3.09 16,996,911 7,500,788 9,496,123 — — — 2020 (1) Water Revenue Bonds Less: Fiscal Utility Service Operating Net Available Year Charges Expenses Revenue 2012 $ 1,641,612 2.85 26,890,219 21,368,063 6,062,435 1,375,854 2.87 2014 49,588,376 27,840,478 21,747,898 3,300,000 869,064 5.22 2015 48,045,103 27,645,076 20,400,027 3,205,000 730,854 5.18 2016 50,483,097 26,907,780 23,575,317 8,408,500 566,680 2.63 2017 53,251,020 34,188,323 19,062,697 1,750,000 307,160 9.27 2018 54,031,592 35,833,361 18,198,231 2,212,000 219,660 7.48 2019 52,459,720 32,395,325 20,064,395 1,641,500 131,180 11.32 54,722,296 33,556,507 21,165,789 1,638,000 65,520 12.42 58,755,999 35,088,440 23,667,559 — — (2) 26,351,735 $ 23,205,096 $ 6,498,090 $ Coverage 48,258,282 2021 $ Interest 2013 2020 49,556,831 Debt Service Principal — Excise Tax Revenue Obligations Less: Fiscal Excise Tax Operating Net Available Year Collections Expenses Revenue 2012 $ 148,885,867 $ — $ 148,885,867 Debt Service Principal $ 1,745,000 Interest $ Coverage 1,703,358 43.18 2013 156,621,139 — 156,621,139 1,815,000 1,584,863 46.07 2014 162,664,325 — 162,664,325 6,180,000 4,483,662 15.25 2015 170,432,597 — 170,432,597 4,770,000 6,044,175 15.76 2016 175,820,443 — 175,820,443 2,805,000 7,193,019 17.59 2017 188,910,693 — 188,910,693 4,105,000 8,097,704 15.48 2018 195,500,184 — 195,500,184 6,640,000 8,879,859 12.60 2019 209,259,874 — 209,259,874 6,590,000 9,248,264 13.21 2020 214,706,260 — 214,706,260 9,205,000 9,274,665 11.62 2021 236,712,500 — 236,712,500 10,630,000 9,129,575 11.98 Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements. Operating expenses do not include interest, depreciation or amortization expenses. (1) Street and highway revenue bonds matured on 7/1/2019. (2) Water and sewer revenue bonds matured on 7/1/2020. 166 CITY OF CHANDLER, ARIZONA PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS Schedule 13b Wastewater Revenue Bonds Less: Fiscal Utility Service Operating Net Available Year Charges Expenses Revenue 2012 $ 16,752,467 $ 19,154,618 $ 1,431,910 $ Coverage 874,363 8.31 37,690,400 18,879,022 18,811,378 2,197,565 809,286 6.26 2014 40,509,289 18,780,034 21,729,255 1,185,000 585,029 12.28 2015 45,666,777 22,907,111 22,759,666 3,555,000 548,545 5.55 2016 51,321,346 23,054,518 28,266,828 6,846,500 368,470 3.92 2017 53,563,934 23,470,067 30,093,867 — 94,140 319.67 2018 56,367,650 28,967,201 27,400,449 948,000 94,140 26.29 2019 56,055,131 26,507,090 29,548,041 703,500 56,220 38.89 2020 61,531,949 29,092,865 32,439,084 702,000 28,020 44.44 61,971,940 25,540,769 36,431,171 — — (1) 35,907,085 Interest 2013 2021 $ Debt Service Principal — Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements. Operating expenses do not include interest, depreciation or amortization expenses. (1) Water and sewer revenue bonds matured on 7/1/2020. 167 CITY OF CHANDLER, ARIZONA PROPERTY TAX ASSESSMENT RATIOS LAST FIVE FISCAL YEARS Property Classification Schedule 14 Tax Year Tax Year Tax Year Tax Year Tax Year 2017 2018 2019 2020 2021 Mining, Utility, Commercial, and Industrial 18.00 % 18.00 % 18.00 % 18.00 % 18.00 % Agriculture and Vacant Land 15.00 15.00 15.00 15.00 15.00 Owner-Occupied Residential 10.00 10.00 10.00 10.00 10.00 Leased or Rented Residential 10.00 10.00 10.00 10.00 10.00 15.00 14.00 15.00 15.00 15.00 Railroad, Private Car, and Airline Flight Property Tax Year 2017 through 2019 Source: Piper Jaffray Inc. as compiled from State and County Abstract of the Assessment Roll (Arizona Department of Revenue). Tax Year 2020 through 2021 Source: Piper Sandler Companies as compiled from State and County Abstract of the Assessment Roll (Arizona Department of Revenue). 168 CITY OF CHANDLER, ARIZONA PROPERTY TAXES LEVIED AND COLLECTED LAST FIVE FISCAL YEARS FY 2020-21 FY 2019-20 FY 2018-19 FY 2017-18 FY 2016-17 $ Schedule 15 Tax Rate 1.1201 1.1281 1.1386 1.1400 1.1600 $ Adjusted to 30 June of Initial Fiscal Year Tax Levy Collections % of Levy 36,379,535 $ 36,041,018 99.07 % 34,039,034 33,597,309 98.70 31,655,843 31,714,236 100.00 30,612,579 30,321,360 99.05 29,626,073 29,272,301 98.81 Fiscal Year 2016-17 through 2018-19 Source: Piper Jaffray Inc. as compiled from County Department of Finance. Fiscal Year 2019-20 through 2020-21 Source: Piper Sandler Companies as compiled from County Department of Finance. 169 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING ASSESSED VALUATIONS AND TAX RATES PER $100 ASSESSED VALUATION JUNE 30, 2021 Schedule 16 State of Arizona (1) Maricopa County Maricopa County Community College District Maricopa County Library District Maricopa County Flood Control District Maricopa County Fire District Maricopa County Special Health Care District Central Arizona Water Conservation District East Valley Institute of Technology District No. 401 (2) Chandler Unified School District No. 80 Tempe Union High School District No. 213 Kyrene Elementary School District No. 28 Mesa Unified School District No. 4 Gilbert Unified School District No. 41 City of Chandler FY 2020-21 Net Limited Property Assessed Valuation $ 69,914,507,682 45,704,969,813 45,704,969,813 45,704,969,813 42,084,633,673 45,704,969,813 45,704,969,813 45,704,969,813 FY 2020-21 Total Tax Rate per $100 Assessed Valuation $ — 1.8435 1.2881 0.0556 0.1792 0.0090 0.3046 0.1400 20,400,195,945 3,243,434,243 3,965,462,859 2,303,922,342 3,358,470,654 2,201,483,124 3,243,434,243 0.5000 6.4111 2.4991 3.7820 7.3696 6.2580 1.1201 Source: Piper Sandler Companies as compiled from Property Tax Rates and Assessed Values, Arizona Tax Research Foundation, Maricopa County Levy, and Maricopa County, State and County Abstract of the Assessment Roll (Arizona Department of Revenue). (1) Includes the State Equalization Assistance Property Tax. This rate has been set at $0.4566 for fiscal year 2019-20 and is adjusted annually pursuant to Arizona Revised Statute, Section 41-1276. (2) Includes Net Limited Property Assessed Value for the East Valley Institute of Technology District No. 401 within Pinal County. 170 CITY OF CHANDLER, ARIZONA PROPERTY VALUE BY PROPERTY CLASSIFICATION LAST FIVE FISCAL YEARS Schedule 17 FY 2016-17 Net Full Cash Assessed Valuation FY 2017-18 Net Full Cash Assessed Valuation FY 2018-19 Net Full Cash Assessed Valuation FY 2019-20 Net Full Cash Assessed Valuation FY 2020-21 Net Full Cash Assessed Valuation FY 2020-21 Annual Percentage Change $ 929,870,699 $ 1,027,345,765 $ 1,102,515,089 $ 1,246,170,328 $ 1,412,928,374 11.80% Agriculture and Vacant Land 80,660,011 74,055,978 75,266,539 78,888,739 77,850,859 (1.33)% Owner-Occupied Residential 1,424,368,802 1,472,336,280 1,574,405,659 1,681,112,768 1,837,472,779 8.51% Leased or Rented Residential 537,827,158 574,699,602 646,538,541 738,411,405 847,104,454 12.83% Railroad, Private Car, and Airline Flight Property 1,782,690 1,910,025 1,782,690 1,910,025 2,011,500 5.04% Historical Property 192,089,070 156,435,042 88,612,464 124,084,500 130,572,188 4.97% 482,365 432,241 383,733 400,055 477,042 16.14% $ 3,167,080,795 $ 3,307,214,933 $ 3,489,504,715 $ 3,870,977,820 $ 4,308,417,196 11.30% Mining, Utility, Commercial, and Industrial Commercial Historic Property TOTAL Fiscal Year 2016-17 through 2018-19 Source: Piper Jaffray Inc. as compiled from State and County Abstract of the Assessment Roll (Arizona Department of Revenue). Fiscal Year 2019-20 through 2020-21 Source: Piper Sandler Companies as compiled from State and County Abstract of the Assessment Roll (Arizona Department of Revenue). 171 CITY OF CHANDLER, ARIZONA NET ASSESSED LIMITED PROPERTY ASSESSED VALUE OF MAJOR TAXPAYERS JUNE 30, 2021 Taxpayer Intel Corporation CyrusOne LLC Wells Fargo Bank NA Microchip Technology Incorporated Bank of America NA Description Manufacturing Plant Data Center Financial Services Manufacturing Plant Financial Services NXP USA, Inc. Southwest Gas Corporation (T&D) CAZ 1 DE LLC Digital 2121 South Price LLC Manufacturing Plant Utilities Commercial Rental Property Data Center SWVP Continuum Office LLC Corporation Service Company FY 2020-21 Net Limited Property Assessed Value $ 125,568,010 34,049,244 24,695,824 13,734,297 13,284,211 $ Total City Net Limited Property Assessed Valuation Schedule 18 As % of Total FY 2020-21 Net Limited Property Assessed Value 3.87% 1.05 0.76 0.42 0.41 12,567,436 11,487,974 11,284,973 9,750,410 0.39 0.35 0.35 0.30 9,164,060 265,586,439 0.28 8.18% $ 3,243,434,243 Source: County Treasurer's Office. Neither the City nor the Financial Advisor have made an independent determination of the financial position of any of the major taxpayers listed above. 172 CITY OF CHANDLER, ARIZONA ESTIMATED NET FULL CASH VALUE AND ASSESSED VALUES LAST FIVE FISCAL YEARS Schedule 19 Estimated Net Full Cash Value Fiscal Year City of Chandler 2020-21 $36,949,424,457 2019-20 33,312,389,044 2018-19 29,847,787,490 2017-18 28,994,768,811 2016-17 28,297,114,500 Fiscal Year 2016-17 through 2018-19 Source: Piper Jaffray Inc. as compiled from Property Tax Rates and Assessed Values, Arizona Tax Research Foundation, and the State and County Abstract of the Assessment Roll (Arizona Department of Revenue). Fiscal Year 2019-20 through 2020-21 Source: Piper Sandler Companies as compiled from Property Tax Rates and Assessed Values, Arizona Tax Research Foundation, and the State and County Abstract of the Assessment Roll (Arizona Department of Revenue). Comparative Net Limited Property Assessed Value History Fiscal Year FY 2020-21 FY 2019-20 FY 2018-19 FY 2017-18 FY 2016-17 City of Chandler Maricopa County State of Arizona $ 3,243,434,243 $ 45,704,969,813 $ 69,914,521,042 3,011,152,689 43,194,326,395 66,154,632,834 2,783,830,922 40,423,232,423 62,328,439,592 2,675,480,112 38,251,891,249 59,404,007,785 2,553,971,787 36,135,494,474 56,564,116,707 Comparative Net Full Cash Assessed Value History Fiscal Year FY 2020-21 FY 2019-20 FY 2018-19 FY 2017-18 FY 2016-17 $ City of Chandler Maricopa County State of Arizona 4,308,417,196 $ 61,824,712,434 $ 90,007,317,461 3,870,977,820 56,588,192,576 82,730,928,616 3,489,504,715 51,944,549,119 76,437,036,352 3,307,214,933 48,351,864,363 71,673,967,461 3,167,080,795 44,850,741,762 67,262,138,649 Fiscal Year 2016-17 through 2018-19 Source: Piper Jaffray Inc. as compiled from State and County Abstract of the Assessment Roll (Arizona Department of Revenue) and Arizona Tax Research Association. Fiscal Year 2019-20 through 2020-21 Source: Piper Sandler Companies as compiled from State and County Abstract of the Assessment Roll (Arizona Department of Revenue) and Arizona Tax Research Association. 173 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT RATIOS JUNE 30, 2021 Per Capital As % of City's Bonded Debt 2020-21 Population Net Full Cash Estimates @ Assessed 280,178 (1) Value Direct General Obligation Bond Debt Schedule 20 As % of City's 2020-21 Estimated Net Full Cash Value $ 272,100,000 $ 971.17 6.32 0.74 Direct Overlapping General Obligation Bond Debt $ 688,117,247 $ 2,456.00 15.97 1.86 Source: (1) City of Chandler, Development Services Department 174 CITY OF CHANDLER, ARIZONA POPULATION STATISTICS Schedule 21 Year 2021 estimate 2020 Census 2019 estimate 2018 estimate 2017 estimate 2016 estimate 2015 mid-decade 2014 estimate 2013 estimate 2010 Census 2005 Special Census 2000 Census 1990 Census 1980 Census City of Chandler Maricopa County 280,178 (1) 4,506,505 (2) 275,987 (3) 4,420,568 (3) 261,173 (1) 4,367,835 (2) 257,853 (1) 4,294,460 (2) 254,239 (1) 4,221,684 (2) 248,332 (1) 4,155,302 (2) 243,679 (3) 4,175,049 (3) 241,264 (1) 4,008,651 (2) 240,364 (1) 3,944,859 (2) 236,479 (3) 3,825,191 (3) 230,845 (3) 3,700,516 (3) 174,061 (3) 2,930,153 (3) 91,149 (3) 2,132,249 (3) 29,673 (1) 1,521,597 (3) Sources: (1) City of Chandler, Development Services Department (2) Arizona Office of Economic Opportunity (3) U.S. Census Bureau 175 State of Arizona 7,387,800 (2) 7,151,502 (3) 7,187,990 (2) 7,076,199 (2) 6,965,897 (2) 6,866,195 (2) 6,833,596 (3) 6,662,486 (2) 6,581,054 (2) 6,407,774 (3) 5,924,476 (2) 4,882,966 (3) 3,679,118 (3) 2,735,840 (3) CITY OF CHANDLER, ARIZONA EXCISE TAX COLLECTIONS Schedule 22 2017-18 (1) 2018-19 (1) 2019-20 (1) 2020-21 (1) Adopted 2021-22 120,189,651 $ 127,584,410 $ 138,888,825 $ 140,798,389 $ 155,638,444 $ 148,370,000 State Shared Sales Tax 23,768,564 23,821,248 25,525,595 26,597,361 30,982,818 28,790,000 State Shared Income Tax 31,910,426 30,652,381 30,693,731 33,255,159 37,324,127 33,500,000 Franchise Fees 3,272,104 3,560,770 3,556,211 3,432,995 3,615,294 2,980,000 Licenses and Permits 7,209,693 6,512,930 7,398,669 7,908,291 6,835,817 6,299,000 Fines and Forfeitures 2,560,255 3,368,445 3,196,843 2,714,065 2,316,000 2,939,100 188,910,693 $ 195,500,184 $ 209,259,874 $ 214,706,260 $ 236,712,500 $ 222,878,100 2016-17 (1) Transaction Privilege Tax Totals $ $ Note: Includes City transaction privilege sales tax, privilege audit assessments, privilege license fees and privilege tax interest. Excludes excise tax refunds from GPLET program. (1) Amounts are actual collections provided by the City of Chandler, Management Services Department (cash basis). 176 CITY OF CHANDLER, ARIZONA TRANSACTION PRIVILEGE (SALES) TAX RATES BY CATEGORY JUNE 30, 2021 Taxable Activities Advertising Amusements Contracting Construction Contracting (non MRRA) (1) Jet Fuel Sales (and Use) Job Printing Manufactured Housing Timber & Extraction Mining Publishing Hotel/Motel (≤ 30 Days) Hotel/Motel (> 30 Days) Rentals - Real Property Residential Commercial Tangible Personal Property Rentals Restaurants/Bars Retail Sales Telecommunications Transportation for Hire Utilities Use Tax Source: City of Chandler, Management Services Department (1) MMRA - maintenance, repair, replacement and alteration 177 Schedule 23 Chandler Tax Rate 1.50 % 1.50 % 1.50 % 1.50% of 65% of gross $0.02300/gallon 1.50 % 1.50 % 1.50 % 0.10 % 1.50 % 4.40% (1.50% + 2.90%) 1.50 % 1.50 % 1.50 % 1.50 % 1.80 % 1.50 % 2.75 % 1.50 % 2.75 % 1.50 % CITY OF CHANDLER, ARIZONA STATE SALES TAX TAXABLE ACTIVITIES, TAX RATES AND DISTRIBUTION SHARE JUNE 30, 2021 Schedule 24 State Transaction Privilege (Sales) Tax Rates Taxable Activities Transporting Utilities Telecommunications Pipeline Private Car Line Publication Job Printing Prime Contracting Owner Builder Sales Amusement Restaurant Personal Property Rental Retail (excluding food sales) Transient Lodging Mining - non-metal, oil/gas Commercial Lease Severance - Metalliferous Mining Use Tax Utilities Jet Fuel Use Tax State Tax Rate 5.600 % 5.600 5.600 5.600 5.600 5.600 5.600 5.600 5.600 5.600 5.600 5.600 5.600 5.500 3.125 — 2.500 5.600 (2) Education Tax Rate (1) 0.600 % 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 N/A N/A N/A N/A 0.600 N/A Distribution Share 20.000 % 20.000 20.000 20.000 20.000 20.000 20.000 20.000 20.000 40.000 40.000 40.000 40.000 50.000 32.000 53.330 80.000 20.000 40.000 Source: Arizona Department of Revenue (1) Represents that State transaction privilege (sales) tax rate approved by voters of the State in November 2000 (the "Education Tax") on certain of the categories of business activity at six-tenths of one percent (0.6%). The Education Tax collections are dedicated exclusively to education and are not distribued to the City or pledged to the payment of debt service. The effective dates for the Education Tax are June 1, 2001 through June 30, 2041. (2) Does not include the $0.0305 per gallon state tax on the retail sale of jet fuel, which tax is only levied on the first ten million gallons sold to each purchaser in each calendar year. 178 CITY OF CHANDLER, ARIZONA COMBINED SCHEDULE OF WATER AND SEWER SYSTEM REVENUES, EXPENSES, NET REVENUES AND DEBT SERVICE COVERAGE LAST FIVE FISCAL YEARS Schedule 25 2016-17 2017-18 2018-19 2019-20 2020-21 System Revenues: Service Fees Miscellaneous Interest Income Total System Revenues $106,814,954 $110,399,242 $108,514,851 $116,254,245 $120,727,939 63,411 953,964 130,001 97,652 35,573 875,983 780,250 6,817,699 8,772,310 264,558 $107,754,348 $112,133,456 $115,462,551 $125,124,207 $121,028,070 System Expenditures: General and Administration Personnel Services $ 6,065,965 15,489,373 $ 6,219,983 16,343,098 $ 6,400,086 16,548,508 $ 6,511,083 17,613,794 $ Contractual Services Commodities Total System Expenditures 17,153,121 18,949,931 $ 57,658,390 11,774,018 30,463,463 $ 64,800,562 12,919,313 23,034,508 $ 58,902,415 13,240,678 25,283,817 $ 62,649,372 14,338,257 21,857,415 $ 60,629,209 Net Income Available for Debt Service $ 50,095,958 $ 47,332,894 $ 56,560,136 $ 62,474,835 $ 60,398,861 Water and Sewer Revenues Bond (Senior Obligation) Debt Service $ 2,151,300 $ 3,473,800 $ 2,532,400 $ 2,433,600 $ Approximate Debt Service Coverage for Senior Obligations 23.29x 13.63x 22.33x 20.39x 179 6,510,382 17,923,155 — N/A CITY OF CHANDLER, ARIZONA UTILITY RATE INCREASE HISTORY Schedule 26 Effective Date 09/01/80 04/25/83 11/30/83 07/01/84 11/01/80 08/01/85 01/01/89 01/01/90 01/01/91 04/01/92 02/15/93 10/01/94 10/01/07 10/01/09 10/01/13 10/01/15 10/01/17 Water (10,000 gal) (Single Family) 8.40 % 33.80 % —% —% 10.53 % —% 8.33 % 7.69 % 4.28 % 8.05 % 7.75 % 11.55 % (9.00)% (1) 23.64 % (2) —% — % (4) 0.70 % (5) Wastewater (Single Family) 16.67 % —% 41.43 % 41.47 % 13.70 % 7.57 % 3.95 % 5.04 % 3.96 % 3.97 % 3.97 % 6.98 % 23.90 % 13.02 % 9.00 % (3) 9.00 % (3) 3.70 % (5) Source: City of Chandler, Management Services Department (1) The water rate structure was changed in the October 1, 2007 rate increase to separate each customer class and move a higher portion of costs from the base charge to the volume charge in a tiered structure. (2) The water rate structure was changed in the October 1, 2009 rate increase to move 20,000 gallons of consumption from tier 4 to tier 3, as well as move a portion of costs back to the base charge from the volume charge. (3) The wastewater rates were increased October 1, 2013 and October 1, 2015 to cover additional debt service costs tied to new construction and expansion of facilities. (4) Effective October 1, 2015 the water seasonal rates (winter/summer) were eliminated and replaced with a year-round rate, but the annual cost to rate payers remained unchanged. (5) In 2016, a Cost of Service Study was completed water consumption rates were not changed, however, effective October 1, 2017 the water base rate increased 0.70% and the wastewater rates were increased by 3.70% to cover debt service costs tied to new construction and expansion of facilities. 180 CITY OF CHANDLER, ARIZONA TOP 10 WATER AND WASTEWATER CUSTOMERS JUNE 30, 2021 Water Customer name Schedule 27 INTEL CORP NXP USA INC. CHANDLER UNIFIED SCHOOL AIR PRODUCTS & CHEMICAL DIGITAL 2121 SOUTH PRICE, LLC TOWNSQUARE APARTMENTS CHANDLER REGIONAL HOSPITAL GLEIBERMAN PROPERTY INC KYRENE SCHOOL DISTRICT #28 Amount $ 9,727,843 1,110,766 586,060 362,509 161,705 137,551 116,640 103,796 92,404 BMF IV AZ LAGUNA VILLAGE LLC 90,754 Wastewater Customer name INTEL CORP NXP USA INC. DIGITAL 2121 SOUTH PRICE, LLC CHANDLER UNIFIED SCHOOL GILA RIVER INDIAN COMMUNITY (LONE BUTTE) AIR PRODUCTS & CHEMICAL CHANDLER REGIONAL HOSPITAL MICROCHIP TECHNOLOGY INC BMF IV AZ LAGUNA VILLAGE LLC ERGON ASPHALT AND EMULSION Source: City of Chandler, Management Services Department 181 Amount $ 15,654,785 1,579,924 259,985 177,836 149,033 142,934 140,011 94,694 89,597 78,640 CITY OF CHANDLER, ARIZONA NUMBER OF WATER AND WASTEWATER CUSTOMERS LAST TEN FISCAL YEARS 2012 2013 2014 2015 WATER Residential Commercial Multi-Unit Industrial Other 72,867 4,387 988 49 206 73,551 4,406 991 50 226 74,319 4,158 1,032 56 1,317 75,035 4,243 1,043 58 1,536 WASTEWATER Residential Commercial 71,508 2,312 72,067 2,358 72,862 2,012 73,363 2,033 811 38 239 811 39 252 878 37 470 887 37 477 Multi-Unit Industrial Other Source: City of Chandler, Management Services Department 182 Schedule 28 2016 2017 2018 2019 2020 2021 75,883 4,309 1,087 61 1,640 77,062 4,535 1,107 63 2,034 77,674 4,550 1,128 66 2,116 78,244 4,927 1,134 67 2,389 78,928 2,546 1,115 63 647 79,961 2,577 1,124 63 647 74,346 75,761 76,517 77,089 77,797 2,201 920 34 475 2,138 915 38 590 2,329 952 48 592 2,371 956 48 598 2,420 965 48 603 78,794 2,450 974 48 603 183 CITY OF CHANDLER, ARIZONA DELINQUENCIES ON PAYMENTS FOR THE ASSESSMENTS JUNE 30, 2021 There were no delinquencies on payments for the assessment. 184 Schedule 29 CITY OF CHANDLER, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT OUTSTANDING JUNE 30, 2021 Schedule 30 2020-21 Overlapping General Obligation Bonded Debt Overlapping Jurisdiction State of Arizona Maricopa County Maricopa County Community College District Maricopa County Special Healthcare District Chandler Unified School District No. 80 Kyrene Elementary School District No. 28 Mesa Unified School District No. 4 Net Debt Amount None None 184,715,000 640,269,000 385,946,000 182,955,000 275,525,000 4.639 % 7.096 7.096 $ 7.096 27.824 4.273 2.604 None None 13,108,223 45,436,424 50,905,198 11,773,993 2,925,713 112,360,000 69.922 269,859,611 7,675,500,000 15.977 12,263,084 None 281,845,000 15.899 100.000 None 281,845,000 $ Gilbert Unified School District No. 41 Tempe Union High School District No. 213 East Valley Institute of Technology District No. 401 City of Chandler 2020-21 Proportion Applicable to City of Chandler Approximate Percent Total Direct and Overlapping General Obligation Bonded Debt Outstanding $ 688,117,246 Direct and Overlapping Tax Rates Per $100 Assessed Valuation Inside the City, East Valley Institute of Technology and Inside Gilbert Unified School District No. 41 Inside Mesa Unified School District No. 4 $ $ 11.6981 11.6896 Inside Tempe Union High School District No. 213 and Kyrene Elementary School District No. 28 Inside Chandler Unified School District No. 80 $ $ 11.7212 11.8512 Source: Piper Sandler Companies Note: The applicable percentage of overlap for each type of debt was computed on the net limited property assessed valuation as calculated for fiscal year 2020-21 for the overlapping jurisdiction to the amount of such valuation which lies within the City of Chandler. 185 CITY OF CHANDLER, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Fiscal Year Population (1) 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 238,040 240,364 241,264 243,679 248,332 254,239 257,853 2018-19 2019-20 2020-21 261,173 275,987 280,178 Total Personal Income (2) Schedule 31 Median Age (2) Unemployment Rate (3) Per Capita Personal Income (2) $7,233,559,520 7,925,281,808 7,840,356,208 (4) 8,168,120,080 8,324,088,640 8,731,329,977 9,360,321,753 32.4 34.9 35.0 34.9 34.9 35.2 35.3 6.1% 6.0 5.5 4.7 4.5 3.9 3.6 $30,388 32,972 32,497 33,520 33,520 34,343 36,301 10,101,649,294 11,088,605,686 (4) 11,693,509,008 36.0 36.0 36.0 4.0 8.7 5.6 38,678 40,178 41,736 Sources: (1) City of Chandler, Development Services Department (2) City of Chandler, Economic Development Division (3) Arizona Office of Employment and Population Statistics (4) U.S. Census Bureau Notes: Total personal income is composed of earned income, dividends, interest and rents and government transfer payments. Per capita personal income is calculated by dividing total personal income by population; amounts may not be exact due to rounding. 186 CITY OF CHANDLER, ARIZONA PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO Schedule 32 2021 Employer Intel Corporation Wells Fargo Bank Chandler Unified School District Employees 12,000 5,500 4,900 Rank 1 2 3 Percentage of Total City Employment 8.01% 3.67% 3.27% 3,800 2,500 2,150 1,700 4 5 6 7 2.54% 1.67% 1.44% 1.14% 1,700 1,586 1,500 1,400 37,336 7 8 9 10 1.14% 1.06% 1.00% 0.94% 24.94% Bank of America Chandler Regional Medical Center/Dignity Health Northrop Grumman NXP Paypal City of Chandler Microchip Technology - HQ Verizon Wireless Total 2012 Employer Intel Corporation Bank of America Chandler Unified School District Wells Fargo Ocotillo Corporate Campus Chandler Regional Medical Center Ebay/Paypal Verizon Wireless City of Chandler Microchip Technology Freescale Semiconductor Total Employees 10,300 3,600 3,000 2,600 2,100 2,000 1,695 1,567 1,540 1,450 29,852 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Total City Employment 8.32% 2.91% 2.42% 2.10% 1.70% 1.62% 1.37% 1.27% 1.24% 1.17% 24.12% Source: City of Chandler, Economic Development Division, City of Chandler Human Resources Department and Arizona Office of Employment and Population Statistics. 187 CITY OF CHANDLER, ARIZONA EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Full Time Equivalent Personnel Mayor and council City clerk City manager Communications/public affairs City magistrate Law Management services Total General Government Total Transportation and Development Total Community Services Police Fire Total Public Safety Municipal utilities administration Water Wastewater Solid waste Total Municipal Utilities Municipal utilities administration Water Wastewater Solid waste Public works administration Streets Total Public Works and Utilities Total Primary Government 2011-12 2012-13 2013-14 2014-15 6 4 124 14 38 30 72 288 170 231 467 238 705 5 89 42 19 155 — — — — — — — 1,549 4 5 178 19 39 29 72 346 163 192 468 234 702 4 85 46 18 153 — — — — — — — 1,556 4 6 174 13 35 29 66 327 159 199 467 224 691 5 87 46 16 154 — — — — — — — 1,530 4 6 176 13 37 31 69 336 165 198 483 237 720 5 87 62 20 174 — — — — — — — 1,593 Source: City of Chandler, Human Resources Department (1) The significant changes between 2015 and 2016 are a result of Library, Museum and Center for the Arts moving from Community Services to City Manager Department. (2) The significant changes between 2016 and 2017 are a result of Library, Museum and Center for the Arts moving from City Manager Department to Community Services. (3) The significant changes between 2018 and 2019 are a result of the Streets Division and Municipal Utilities consolidating into the Public Works and Utilities Department. Note: The calculation of full time equivalent personnel includes full time and part time regular employees as of the last pay period of the fiscal year. 188 Schedule 33 2015-16 4 6 240 15 39 31 67 402 150 156 490 240 730 8 87 65 21 181 — — — — — — — 1,619 (1) 2016-17 (1) 11 7 206 15 38 31 64 372 152 199 491 222 713 7 89 69 20 185 — — — — — — — 1,621 (2) 2017-18 2018-19 (2) 4 6 199 15 40 30 67 361 160 202 501 233 734 7 90 74 18 189 — — — — — — — 1,646 5 6 193 14 37 32 68 355 84 195 485 233 718 — — — — — 6 90 66 19 1 70 252 1,604 189 (3) 2019-20 2020-21 (3) 5 6 194 15 40 32 67 359 77 199 488 229 717 — — — — — 6 90 68 21 2 78 265 1,617 5 6 198 14 33 31 66 353 76 194 477 228 705 — — — — — 7 89 71 21 2 79 269 1,597 CITY OF CHANDLER, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program General Government Privilege tax licenses Meeting notices posted City council actions and agenda items prepared Grant awards received Inventory turnover ratio 2011-12 2012-13 2013-14 2014-15 25,726 599 27,387 584 27,467 564 28,224 544 908 26 2.07 834 43 1.89 780 53 2.10 867 51 1.57 5,462 3,785 5,490 5,170 2,489,741 1,000 2,395,192 1,003 2,332,758 938 2,163,076 939 Public Safety Crime rate (per 1,000 population) Total calls for police services (estimated) Total calls for fire services Fire inspections Fire investigations 33 137,170 17,950 5,188 34 28 137,485 18,474 5,029 22 27 145,400 18,865 5,442 16 23 139,177 22,785 4,692 27 Municipal Utilities Water connections Operating wells Daily pumping capacity - wells (gallons) Daily pumping capacity - plants (gallons) Sewer connections Sanitary sewer (miles) Solid waste customers served Solid waste refuse collected (tons) Solid waste refuse recycled (tons) 77,626 28 61,920,000 72,000,000 73,712 868 70,179 85,257 21,096 79,278 26 64,790,000 72,000,000 74,606 869 70,667 86,557 20,680 79,766 27 64,710,000 72,000,000 75,564 890 71,269 83,950 21,046 80,401 28 64,400,000 72,000,000 76,492 911 71,860 84,209 22,442 Transportation & Development Building permits issued Community Services Library circulation Center for the Arts events & exhibits Source: City of Chandler Departments 190 Schedule 34 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 29,582 565 28,321 535 28,046 681 37,404 666 41,290 542 45,590 395 844 46 1.74 860 43 1.81 838 27 1.79 789 24 2.04 739 33 2.40 460 40 1.73 5,142 4,635 3,944 4,011 4,091 4,601 2,101,421 985 2,059,429 1,048 2,041,574 1,177 1,801,237 825 1,415,291 537 1,356,695 389 26 145,466 23,966 5,814 30 26 156,186 25,072 4,635 27 25 159,301 25,185 5,135 41 22 154,736 26,818 6,698 18 23 146,859 26,371 6,641 23 19 139,236 26,676 3,257 17 83,089 28 66,300,000 72,000,000 78,144 917 73,162 81,653 22,102 84,670 31 74,400,000 72,000,000 78,972 928 73,288 80,069 22,305 84,338 32 74,100,000 84,000,000 79,841 933 75,018 83,004 22,101 85,416 31 71,300,000 84,000,000 81,033 935 75,675 84,500 22,887 86,098 31 71,800,000 84,000,000 81,796 941 76,773 86,950 21,800 87,251 30 71,800,000 84,000,000 82,895 945 77,297 94,218 22,775 191 CITY OF CHANDLER, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program Community Services Developed parks Developed acres Undeveloped acres Swimming pools Lighted fields Library bookstock Transportation and Development Total miles streets (center line) Street lights Signalized intersections Public Safety Police stations Fire stations General Government Based aircraft Municipal Utilities Water mains (miles) Fire hydrants Average daily treatment (mgd) 2011-12 2012-13 2013-14 2014-15 61 1,196 338 6 34 555,924 61 1,198 336 6 39 550,857 62 1,208 325 6 39 595,969 64 1,232 309 6 41 396,773 (1) 829 26,600 831 26,900 838 27,100 841 27,700 212 216 216 218 3 10 3 10 3 10 3 10 399 388 415 425 1,227 10,877 24 1,227 12,553 26 1,227 12,717 26 1,278 13,118 28 Source: City of Chandler Departments (1) The 2014-15 decrease in library bookstock is due to less demand from the increase usage of digital materials and removal of damaged, outdated and obsolete material no longer being circulated. (2) Beginning in 2015-16, City staff is updating the Geographic Information System through a review of over 700 As-builts, so a revised figure is reflected. The revised figure consists of active and City owned utilities. 192 Schedule 35 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 65 1,236 302 6 41 341,073 65 1,244 299 6 43 360,618 65 1,244 299 6 43 359,445 67 1,281 231 6 41 310,888 67 1,281 231 6 43 310,812 67 1,301 219 6 50 294,276 855 855 857 857 858 858 27,700 218 27,800 218 27,199 220 29,500 225 29,500 226 29,731 232 3 10 3 10 3 11 3 11 3 11 3 11 427 455 457 523 440 448 1,196 (2) 13,207 29 1,283 15,708 29 1,212 15,970 28 1,218 16,159 54 1,228 16,296 31 1,232 16,492 31 193 194 Phone (480) 782-2333 chandleraz.gov/Accounting Mailing Address Mail Stop 702 P.O. Box 4008 Chandler, Arizona 85244-4008 Accounting Division Fourth Floor 175 S Arizona Avenue Chandler, Arizona 85225