COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2020 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 Prepared by the: Budget and Finance Department This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTRODUCTORY SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 Mayor Jerry Weiers Councilmembers Ray Malnar – Vice Mayor, Sahuaro District Bart Turner - Barrel District Ian Hugh – Cactus District Lauren Tolmachoff – Cholla District Jamie Aldama - Ocotillo District Joyce Clark - Yucca District Management Staff Kevin Phelps - City Manager Vicki Rios- Assistant City Manager Jack Friedline - Assistant City Manager Prepared by Budget and Finance Department Lisette Camacho-Director i This page left blank intentionally. ii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Title Page ......................................................................................................................................... i Table of Contents ...........................................................................................................................iii Letter of Transmittal ....................................................................................................................... 1 GFOA Certificate of Achievement.................................................................................................. 5 Glendale, Arizona and Neighboring Communities ......................................................................... 6 Glendale City Officials ................................................................................................................... 7 Glendale Council District Boundaries ............................................................................................. 8 Organization Chart .......................................................................................................................... 9 II. FINANCIAL SECTION Independent Auditors’ Report .............................................................................................................. 10 A. MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) ............................................. 13 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position.............................................................................................................. 25 Statement of Activities .................................................................................................................. 26 Fund Financial Statements: Balance Sheet – Governmental Funds........................................................................................... 28 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ............................................................................................................................... 29 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds.................................................................................................................. 30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............................................. 31 Statement of Net Position – Proprietary Funds ............................................................................. 32 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ........ 33 Statement of Cash Flows – Proprietary Funds .............................................................................. 34 Notes to the Financial Statements ..................................................................................................... 36 C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of Net Pension/OPEB (Asset)/Liability ......................................................................... 91 iii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 TABLE OF CONTENTS Schedule of OPEB Liability – City Plan .................................................................................... 101 Schedule of Pension/OPEB Contributions .................................................................................. 103 Notes to Pension/OPEB Liability and Contributions .................................................................. 107 Budgetary Comparison Schedule – General Fund ...................................................................... 109 Budgetary Comparison Schedule – Transportation Special Revenue Fund ................................ 111 Notes to Required Supplementary Information ........................................................................... 112 D. COMBINING STATEMENTS AND SCHEDULES Budgetary Comparison Schedule – General Obligation Debt Service Fund ............................... 114 Budgetary Comparison Schedule – Municipal Property Corporation Debt Service Fund .......... 115 Non-Major Governmental Funds Combining Balance Sheet........................................................................................................ 118 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances................ 123 Budgetary Comparison Schedules Police and Fire Sales Tax Fund ............................................................................................ 128 Community Development Block Grants Fund ..................................................................... 129 Highway Users Gas Tax Fund ............................................................................................. 130 Other Special Revenue Fund................................................................................................ 131 Highway User Debt Service Fund........................................................................................ 132 Transportation Debt Service Fund ....................................................................................... 133 Excise Tax Revenue Debt Service Fund .............................................................................. 134 Streets Construction Fund .................................................................................................... 135 Fire and Police Construction Fund ....................................................................................... 136 Parks Bond Construction Fund ............................................................................................ 137 Other Construction Fund ...................................................................................................... 138 Development Impact Fees Fund........................................................................................... 139 Cemetery Perpetual Care Fund ............................................................................................ 140 Non-Major Proprietary Funds – Business-Type Activities Combining Statement of Net Position ..................................................................................... 142 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................ 143 Combining Statement of Cash Flows ...................................................................................... 144 iv City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 TABLE OF CONTENTS Internal Service Funds Combining Statement of Net Position ..................................................................................... 147 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................ 148 Combining Statement of Cash Flows ...................................................................................... 149 E. SUPPLEMENTARY INFORMATION Federal Financial Data Schedule .......................................................................................... 150 III. STATISTICAL SECTION Schedule Page Net Position by Component ............................................................................................... 1 ............. 157 Changes in Net Position ..................................................................................................... 2 ............. 159 Fund Balances – Governmental Funds ............................................................................... 3 ............. 162 Changes in Fund Balances – Governmental Funds ............................................................ 4 ............. 163 Assessed and Estimated Actual Value of Taxable Property ............................................... 5 ............. 165 Direct and Overlapping Governments Property Tax Rates ................................................ 6 ............. 166 Principal Property Taxpayers ............................................................................................. 7 ............. 167 Property Tax Levies and Collections ................................................................................. 8 ............. 168 City Transaction Privilege Taxes (Sales Tax) by Category................................................ 9 ............. 170 Ratio of Outstanding Debt by Type.................................................................................. 10 ............. 171 Ratios of Net General Bonded Debt Outstanding............................................................. 11 ............. 173 Net Direct and Overlapping Governmental Activities Debt ............................................. 12 ............. 174 Legal Debt Margin Information ....................................................................................... 13 ............. 175 Pledged-Revenue Coverage ............................................................................................. 14 ............. 177 Demographic and Economical Statistics .......................................................................... 15 ............. 179 Principal Employers ......................................................................................................... 16 ............. 180 Full-Time Equivalent City Government Employees by Function/Program ..................... 17 ............. 181 Operating Indicators by Function/Program ...................................................................... 18 ............. 182 Capital Asset Statistics by Function/Program .................................................................. 19 ............. 183 Miscellaneous Water and Sewer Rate Statistics ............................................................... 20 ............. 184 Miscellaneous Water and Sewer Statistics ....................................................................... 21 ............. 185 v This page left blank intentionally. December 23, 2020 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Glendale, Arizona: The Budget and Finance Department is pleased to submit the City of Glendale, Arizona’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2020. The CAFR includes a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP). The financial statements are audited by a firm of licensed certified public accountants in accordance with generally accepted auditing standards (GAAS). City Management assumes full responsibility for the accuracy and completeness of the data, including all disclosures presented in this report. To provide a reasonable basis for making these representations, Management has established a comprehensive internal control framework that is designed to both protect the government’s assets from loss, theft, or misuse; and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements are free of material misstatement. To the best of our knowledge and belief, this financial report is complete and reliable in all material respects and is designed to fairly represent the financial position of the operations of the various funds of the City. This letter of transmittal is best reviewed in conjunction with the Management’s Discussion and Analysis (MD&A) beginning on page 13. The MD&A provides a narrative introduction, overview, and analysis of the basic financial statements of the City. Independent Audit The City’s financial statements have been audited by CliftonLarsonAllen LLP, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2020, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The City’s independent auditors also perform the Single Audit of the City’s federal grant programs. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements involving the administration of federal awards. The Single Audit Reporting Package is issued separately from this financial report and is available upon request. Budgetary Controls The annual budget serves as the foundation for the City’s financial planning and control. City departments are required to submit requests for appropriation to the City Manager on or before the last week of December each year. Management uses these requests to develop a budget to propose to the City Council for review and adoption. The City Council is required to hold public hearings on the proposed budget and adopt the final budget by the first Monday in August. The City maintains budgetary controls that are designed to ensure compliance with budgetary and legal provisions contained in the annually appropriated operating and capital project budgets approved by the City Council. The legal level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the city-wide level consisting of the total operating budget and the total capital projects budget, as adopted by the City Council. For budget 1 administrative purposes, the City maintains budgetary controls at the fund and department level. Department Heads may request transfers of appropriations within the same fund for his/her department. However, transfers of appropriations between funds and departments require approval of the City Council and can only occur in the last quarter of the fiscal year. The City adopts an annual appropriated budget for its General Fund, Special Revenue Funds, Capital Projects Funds, Debt Service Funds, Permanent Fund, and Enterprise Funds. Budget-to-actual comparisons are provided in this report for each individual governmental fund to demonstrate compliance with this budget. Arizona state law and Glendale City financial policies require that each annual city budget be a balanced budget. A balanced budget means the total expenditures cannot exceed the budgeted period’s total financial resources available. The adopted FY19-20 budget complies with the balanced budget requirement in all City funds. Additionally, the State of Arizona sets a limit on the expenditures of local jurisdictions. Compliance with these expenditure limitations is required. The City submits an expenditure limitation report as defined by the Uniform Expenditure Reporting System (A.R.S. Section 41-1279.07) along with audited financial statements to the State Auditor General within the required timeframe. City of Glendale Profile The City of Glendale, Arizona is the seventh largest city in the state with a population of approximately 254,000 people. Located in the northwestern part of the metropolitan Phoenix area and occupying approximately 62 square miles of land, the City is home to the Arizona Cardinals and the Arizona Coyotes. The City is also the owner of Camelback Ranch, the spring training facility for the Los Angeles Dodgers and the Chicago White Sox. The City was incorporated in 1910 and has operated under the council-manager form of government since its incorporation. Policy-making and legislative authority are vested in the City Council which consists of the Mayor and six other members. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, Clerk, Attorney, Municipal Judge and City Auditor (Internal). The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, and for appointing the heads of the various departments. The Council is elected on a non-partisan basis. Council members serve four-year terms, with three Council members elected every two years. The Mayor is elected to serve a fouryear term. The City provides a full range of services including: police and fire services; water, sewer, and solid waste services; the construction and maintenance of highways, streets, public facilities, and other infrastructure; and recreational activities and cultural events. Certain housing services are provided by the City’s public housing authority, which functions, in essence, as a department of the City and therefore has been included as an integral part of the City’s financial statements. The City also is financially accountable for the Municipal Property Corporation, a legally separate entity, that is reported within the City’s financial statements. Economic Conditions and Strategies Before reviewing the presented financial statements, it is important to consider the local and global economic factors that have impacted the City’s financial position. Primary Revenue Sources The City relies on local and state shared sales tax as well as state shared income tax as primary revenue sources for the City’s operating budget. Since the shutdown of many local businesses and travel caused by COVID-19 did not occur until the last quarter of the fiscal year, the City still realized a year over year increase of 5.3% in local sales tax revenue for fiscal year 2020. The growth can be attributed to the robust economy prior to the pandemic, strong retail sales tax collections from online sales, and economic development activities which generated additional construction sales tax revenue. The City’s state shared sales tax revenues also increased 4.3% compared to last fiscal year. 2 Workforce and Unemployment Glendale’s unemployment rate for the month of June 2020 was 10.2% which is about the same as the statewide unemployment rate of 10.3%. Glendale’s workforce is concentrated in the following nonfarm sectors: health care services (15.43%), government and social advocacy services (15.39%), retail (15.61%), consumer services (11.62%), education (10.44%), construction (7.13%), finance, insurance and real estate (6.35%), business services (4.96%), and transportation and distribution (3.94%). Prior to the Coronavirus pandemic (COVID-19) the unemployment rate was as low as 3.8% in fiscal year 2020. Arizona’s nonfarm employment declined 6.4% over the last year. Economic Development Business attraction, business retention & expansion, redevelopment, business assistance (ombudsman) and Arts & Culture comprise the five pillars of Glendale’s economic development program. Economic development efforts have been focused on the recently annexed Loop 303 area which provides thousands of acres of developable land. Red Bull, in partnership with Ball Corporation and Rauch, announced the construction of their first manufacturing facility just over a year ago, with subsequent announcements of additional growth. The makers of White Claw and Mike’s Hard Lemonade also announced, built and opened their nearly 1 million square foot advanced brewing and manufacturing facility in 2020. The capital investments from these major corporations contributed to the growth in Glendale. The City’s Sports and Entertainment District continues to experience new major additions. YAM properties, the commercial real estate company owned by GoDaddy founder Bob Parson, purchased the Westgate Entertainment District for $133 Million Dollars in 2018. Since then, the District has seen new hotel additions with Marriot TownePlace, TRU by Hilton, Holiday Inn and Cambria joining the area line up of hotels. Adding to the expansion of hospitality and entertainment was the major announcement of Crystal Lagoons that will be located just south of State Farm Stadium along the Loop 101. The Crystal Lagoons Resort will include over 600 new hotel rooms, an 11-acre lagoon, retail, restaurant and mixed-use entertainment options. The sustained capital investment and increased ability to accommodate more visitors during events supports the City’s long-term vision. Education opportunities continue to expand in Glendale. Arizona Christian University recently took over the former Thunderbird School of Global Management campus where they are growing their programming and building new amenities for the student population. Midwestern University continues to expand their wellestablished campus and add new programs to their wide array of post-graduate medical school degrees. Banner Aspera is constructing a much-needed surgical center to North Glendale. Nexcore, the developer of this project, broke ground on the 130,000 square foot center with an investment of $152 million. Aspera is home to Banner Health medical center, Mountainside Fitness, a 120-unit senior housing complex, an assisted living and memory care complex, retail, local favorite restaurants including Matt’s Big Breakfast and Lou Malnati’s, and a luxury multifamily housing by P. B. Bell company. Downtown Glendale has continued to see the success of nationally recognized local spots La Piazza Al Forno and Haus Murphy’s while also continuing to welcome new local businesses including The Black Sheep Coffee+Tea+Smoothies, Don Juan’s Mexican Grill and The Village, a consortium of vegan retail and restaurant operators. Downtown Glendale also launched a new interactive art project this year, Take A Seat, Glendale, that repurposed wood benches in downtown with professionally painted murals that invite visitors and residents to take a seat and be part of the art. New commercial development across the entire city has also been an impetus for a boom in new residential projects with thousands of new apartments and homes recently built or under construction this year. Glendale truly is a diverse and major-league city that continues to attract high-quality development and amenities to the region to further support the growing West Valley. 3 Financial Strategy As part of the annual budget process, the city prepares a five-year financial forecast for each of the City’s major operating funds. The forecast provides a long-term view of current year budget decisions affecting the City and provides an estimate of fund balance and sensitivity to revenue and expenditure changes over the forecast period. Through sound financial planning and positive economic conditions, the City’s General Fund balance continues to improve. The general fund realized an increase in fund balance of $37.2 million in fiscal year 2020. This increase is primarily due to $20.1 million of eligible public safety salary and benefit expenditures that were transferred from the General Fund to Other Special Revenue Fund to record AZCares funding the City received from the Office of the Arizona Governor to help offset the negative economic impacts of COVID-19. Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2019. This was the thirty-second consecutive year the City has received this prestigious award, and the thirty-fourth year overall. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its fiscal year beginning July 1, 2019. This was the thirty-third consecutive year that the City has received the highest form of recognition in governmental budgeting. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Budget and Finance Department. I would like to express appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor, Council, and City Manager for their unfailing support in maintaining the highest standards of professionalism in the management of the City’s finances. Respectfully submitted, Lisette Camacho, CPA Budget and Finance Director 4 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Glendale Arizona For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Executive Director/CEO 5 Glendale, Arizona & Neighboring Communities To Flagstaff Cave Creek e fre re Ca 17 Scottsdale 60 Phoenix Glendale 51 El Mirage Peoria Sun City Surprise 303 Luke AFB Fountain Hills Paradise Valley 101 101 10 Goodyear 85 202 Sky Harbor Airport Mesa 89 60 Tempe Chandler 10 To Tucson 6 Gilbert GLENDALE CITY OFFICIALS Jerry P. Weiers Mayor Ray Malnar Vice Mayor Sahuaro District Lauren Tolmachoff Councilmember Cholla District Bart Turner Councilmember Barrel District Ian Hugh Councilmember Cactus District Joyce Clark Councilmember Yucca District Jamie Aldama Councilmember Ocotillo 7 Kevin Phelps City Manager Glendale Council District Boundaries Pinnacle Peak Rd. Deer Valley Rd. Cholla Beardsley Rd. Union Hills Dr. Bell Rd. Sahuaro Greenway Rd. Thunderbird Rd. Cactus Rd. Peoria Ave. Olive Ave. Barrel Cactus Yucca Yucca Northern Ave. Glendale Ave. Ocotillo Bethany Home Rd. 43rd Ave. 51st Ave. 59th Ave. 67th Ave. 75th Ave. 83rd Ave. 91st Ave. 99th Ave. 107th Ave. 115th Ave. El Mirage Rd. Dysart Rd. Litchfield Rd. Bullard Ave. Reems Rd. e. Av 8 nd ra G Sarival Ave. Camelback Rd. 9 Police Department Chris Briggs Police Chief Inspection Administration Traffic Engineering Transit Fleet Management Landfill Solid Waste Water Field Operations Water Plant Operations Land Development Construction Library Volunteer Services Human Services Community Services Department Jean Moreno Interim Director Assistant Assistant City City Manager Manager Vicki Vicki Rios Rios Risk Management Human Resources Arts Information Technology Special Events Procurement Finance Convention and Visitor’s Bureau/ Tourism Parks and Recreation Budget Civic Center Budget and Finance Department Lisette Camacho Director Audit Program Manager Emmanuel Ogutu Audit Committee Public Facilities, Recreation & Special Events Department Jim Burke Director Performance Management and Data Analytics Department of Organizational Performance Jean Moreno Director Innovation and Technology Department Arlene Chemello Interim Director Office of Economic Development Brian Friedman Director Human Resources Department Jim Brown Director City Clerk Julie Bower Presiding City Judge Elizabeth Finn COMMUNITY INTEGRITY EXCELLENCE INNOVATION LEARNING We improve the lives of the people we serve every day. Street Maintenance Design Planning Airport Facilities Management Environmental Resources Building Safety Engineering Department Vacant Field Operations Department Michelle Woytenko Director Transportation Department Trevor Ebersole Director Assistant Assistant City City Manager Manager Jack Jack Friedline Friedline City Manager Kevin R. Phelps Water Services Department Craig Johnson Director Special Projects Public Affairs Deputy City Manager Deputy City Manager Brent Stoddard Brent Stoddard City Attorney Michael D. Bailey Development Services Department Lisa Collins Interim Director Code Compliance Fire Department Terry Garrison Fire Chief Interim Deputy City Interim Deputy City Manager Manager Rick St. John Rick St. John Boards & Commissions City Council CITIZENS OF GLENDALE This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. INDEPENDENT AUDITORS’ REPORT The Honorable Mayor and Members of City Council City of Glendale, Arizona Glendale, Arizona Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Glendale, Arizona (City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 10 The Honorable Mayor and Members of City Council City of Glendale, Arizona Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Glendale, Arizona as of June 30, 2020, 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. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the required supplementary information for the City’s pension plans, other postemployment benefits, and budgetary comparison schedules for the general fund and major special revenue fund (as listed in the table of contents) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other 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 combining and individual nonmajor fund financial statements, supplementary information, and the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the supplementary information (the federal financial data schedules) are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. 11 The Honorable Mayor and Members of City Council City of Glendale, Arizona Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2020, on our consideration of the City’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 the City’s 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 the City’s internal control over financial reporting and compliance. a CliftonLarsonAllen LLP Phoenix, Arizona December 23, 2020 12 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ MANAGEMENT’S DISCUSSION & ANALYSIS (Required Supplementary Information) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Management’s Discussion and Analysis The following discussion and analysis is provided to readers of the City’s financial statements as a narrative overview of the financial activities of the City for the fiscal year ended June 30, 2020. This discussion and analysis is designed to assist the reader in focusing on significant financial highlights; provide an overview of the City’s financial activity; identify changes in the City’s financial position; identify material deviations from the financial plan (the approved annual budget); and identify individual fund issues or concerns. The Management’s Discussion and Analysis (MD&A) has a different focus and purpose than the letter of transmittal presented on pages 1-4. It is designed to be read in conjunction with the transmittal letter, the financial statements beginning on page 25, and the accompanying notes to the financial statements. Significant Financial Highlights The financial statements illustrate the following significant financial highlights for FY 2019-20:  The City’s total net position increased by $85,419 or 10.9%. The governmental net position increased by $56,572 or 14.7%, and the business-type net position increased by $28,847 or 7.2%.  The City’s total revenues increased by $75,990 or 15.9%. Program revenues in the form of charges for services, grants, and contributions increased by $46,564 or 22.9%. General revenues increased by $29,426 or 10.8%.  Program revenues from governmental activities increased $38,877 or 53.4%. Program revenues for business-type activities increased $7,687 or 5.9%.  Operating grants and contributions from governmental activities increased $20,093 or 65.0%. The primary reason for this increase was an increase of $20,081 in operating grants and contributions from the AZCares funding the City recognized in revenue to help offset the economic impacts of COVID-19.  Capital grants and contributions from governmental activities increased $20,842 or 163.7%. This increase was primarily due to an increase of $8,466 in contributed capital from the increase in development and to an increase of $4,153 of gain on assets sold for the Bank of America Building and the Hickman Properties received in fiscal year 2020. In addition, $8,994 in FAA grant reimbursement and $1,451 in ADOT grant reimbursement for the airport land purchase was received in fiscal year 2020.  General revenues from governmental activities increased $16,275 or 6.1%. The primary reason for this increase was an increase of $9,021 or 5.3% in sales tax revenues. In addition, state shared income tax increased $2,543 or 8.5% and state shared sales tax increased $1,061 or 4.3%. The increase in tax revenue reflects the positive fiscal environment the City was experiencing prior to the economic shutdown caused by COVID-19 in the last quarter of the fiscal year.  The total cost of all City programs decreased by $1,067 or .23%. The slight decrease in program costs is primarily due to remaining conservative with our expenses.  The General Fund, a major governmental fund, collected $254,003 in revenues which is an increase of $9,401 or 3.8% from the prior year. This increase was primarily due to an increase in taxes and licenses & permits. The total expenditures of the General Fund were $189,970, which is a decrease of $31,913 or 14.4%. The decrease in general government expenditures is due to a one time development agreement of $7,500 paid in fiscal year 2019 and in public safety expenditures totaling $20,081 that was transferred from the General Fund to the Other Special Revenue Fund where the AZCares funding was recorded. 13 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Overview of the 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 are comprised of three components: 1) government-wide financial statements 2) fund financial statements, and 3) notes to the financial statements. This report also contains required supplementary information intended to provide additional detail to support the basic financial statements. 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. The accrual basis of accounting is used for governmentwide financial statements. The Statement of Net Position presented on page 25, provides information on all the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Net position is categorized as net investment in capital assets, restricted by an outside 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 found on page 26, presents information that illustrates how the City’s net position changed during the 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 only result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused compensated absences. Both of the Government-Wide Financial Statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, community services, street maintenance, and interest on long-term debt. The business-type activities of the City include water and sewer services, landfill, solid waste, and housing. Fund Financial Statements The Fund Financial Statements found on page 28, provide more detailed information about the major funds within the City. 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, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All 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 government-wide financial statements, governmental fund financial statements use the modified accrual basis of accounting and focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’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 decisions. 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. 14 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) The City maintains 16 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 4 major funds. Data from the other 12 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. 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 and sewer, landfill, solid waste, 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 internal service funds to account for its fleet, technology, risk management, workers’ compensation and employee benefit activities. Because these services predominantly benefit governmental rather than business-type functions, they have 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 information for the water and sewer fund, while data from the other three enterprise funds is combined into a single, aggregated presentation. Individual fund data for each of the non-major enterprise funds is provided in the form of combining statements. Conversely, all five internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Additional Required Supplementary Information Following the basic financial statements is Required Supplementary Information (RSI) that further explains and supports the financial information in the financial statements. RSI presents the budgetary comparison schedules for the general fund and major special revenue funds, as well as other required supplementary information related to the City’s pensions and other post-employment benefits. Other The Combining Statements and Individual Fund Statements and Schedules section presents combining statements for non-major governmental funds, non-major enterprise funds, and internal service funds. This section also contains budget to actual comparisons on individual non-major governmental, major debt service, and major capital project funds. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a City’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $871,048 as of June 30, 2020. By far the largest portion of the City’s net position reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to 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. 15 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) The City’s financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. At the end of the current fiscal year, the City is able to report positive balances in the categories of net investment in capital assets and restricted net position. Unrestricted net position for the governmental activities increased by $21,733 or 10.1% over the prior year. The City is addressing the negative unrestricted net position for the governmental activities by holding the line on expenses and decreasing debt service payments as a result of bond refundings in fiscal years 2015, 2016, 2017, and 2018. The chart below is a comparison of the City’s net position for fiscal years 2020 and 2019: Condensed Statement of Net Position As of June 30, 2020, and 2019 (in thousands) Governmental Activit ies 2020 2019 Current and other assets Capital Assets: Non-depreciable Depreciable (net) Non-current OPEB assets Equity in joint venture $ 377,526 $ 353,513 T otal Primary Government 2020 2019 Business-T ype Activities 2020 2019 $ 95,607 $ 110,089 $ 473,133 $ 463,602 Total assets 134,374 955,847 1,656 2,861 1,472,264 144,761 962,468 1,292 2,952 1,464,986 89,009 471,814 55 42,534 699,019 84,491 443,338 75 44,451 682,444 223,383 1,427,661 1,711 45,395 2,171,283 229,252 1,405,806 1,367 47,403 2,147,430 Deferred Outflows of Resources 81,980 87,921 10,229 12,966 92,209 100,887 Total liabilities 85,532 1,002,783 1,088,315 85,249 1,056,596 1,141,845 39,504 236,388 275,892 34,865 254,383 289,248 125,036 1,239,171 1,364,207 120,114 1,310,979 1,431,093 Deferred Inflows of Resources 24,074 25,779 4,163 5,816 28,237 31,595 465,366 170,205 (193,716) 416,078 184,654 (215,449) 362,679 33,896 32,618 313,704 32,943 53,699 828,045 204,101 (161,098) 729,782 217,597 (161,750) 429,193 $ 400,346 Current liabilities Noncurrent liabilities Net position: Net investment in capital assets Restricted Unrestricted Total net position $ 441,855 $ 385,283 $ 16 $ 871,048 $ 785,629 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) The following presents a summary of the changes in net position compared to the prior year: Changes in Net Position As of June 30, 2020, and 2019 (in thousands) Governmental Activities 2020 2019 Revenue s: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions T otal program revenues $ 27,048 50,999 33,570 111,617 $ 29,106 30,906 12,728 72,740 T otal Primary Government 2020 2019 Business-T ype Activities 2020 2019 $ 121,623 10,866 5,816 138,305 $ 117,281 9,397 3,940 130,618 $ 148,671 61,865 39,386 249,922 $ 146,387 40,303 16,668 203,358 General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Miscellaneous T otal revenues 25,718 180,842 25,910 25,877 171,821 24,849 - - 25,718 180,842 25,910 25,877 171,821 24,849 32,419 10,643 5,931 2,978 396,058 29,876 10,647 1,919 3,177 340,906 1,277 17,216 156,798 1,628 3,714 135,960 32,419 10,643 7,208 20,194 552,856 29,876 10,647 3,547 6,891 476,866 Expe nses: General government Public safety Public works Community services Street maintenance Interest on long-term debt Water and sewer Landfill Solid Waste Housing Total e xpe nses Exce ss be fore transfe rs 45,972 165,030 31,211 28,378 43,436 24,133 338,160 57,898 56,530 158,883 30,232 28,010 44,992 26,181 344,828 (3,922) 87,212 10,051 18,351 13,663 129,277 27,521 83,603 9,921 17,242 12,910 123,676 12,284 45,972 165,030 31,211 28,378 43,436 24,133 87,212 10,051 18,351 13,663 467,437 85,419 56,530 158,883 30,232 28,010 44,992 26,181 83,603 9,921 17,242 12,910 468,504 8,362 (1,326) (1,320) 1,326 1,320 - - 56,572 385,283 $ 441,855 (5,242) 390,525 385,283 28,847 400,346 429,193 13,604 386,742 $ 400,346 85,419 785,629 871,048 8,362 777,267 785,629 Transfers in (out) Incre ase (decrease ) in net position Net position beginning Net position e nding $ 17 $ $ $ CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Changes in Net Position The net position of the governmental activities increased by $56,572 and business-type activities’ net position increased by $28,847. Net Position 441,855 Governmental Activities 385,283 429,193 Business-Type Activities 400,346 350,000 360,000 370,000 380,000 390,000 400,000 410,000 420,000 430,000 440,000 450,000 2020 2019 Revenues and Expenses The chart below shows the performance of the revenues in the governmental activities versus expenses: The City’s total revenues from governmental activities for the fiscal year ended June 30, 2020 increased $55,152 or 16.2%. The increase in revenues is due to $30,526 in grant revenue, an increase of $8,466 in contributed capital, an increase of $9,021 in local sales tax and $1,061 in state shared sales tax. The increases to tax revenue reflect the continuing economic growth the City and State of Arizona have experienced over the past several years leading up to the COVID-19 pandemic. 18 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) The cost of programs and services for governmental activities decreased $6,668 or 1.9%. The decrease is primarily due to an amendment to a development agreement that required the city to make a one-time payment of $7,500 during fiscal year 2019. The chart below shows the performance of the expenses and revenues in the business-type activities: $120,000 Expenses and Program Revenues Business-Type Activities $100,000 $80,000 $60,000 $40,000 $20,000 $Water and sewer Landfill expenses Solid Waste Housing program revenues The City’s total revenues from business-type activities for the fiscal year ended June 30, 2020 increased $20,838 or 15.3%. This increase is primarily due to an increase of $13,820 of reimbursement of the shared project between the City of Glendale and the City of Peoria to increase the capacity at the Pyramid Peak Water Treatment Plant, the project is paid by the City of Glendale and then invoices to seek reimbursement on Peoria’s capacity is billed as work is completed. In addition, an increase of contributed capital of $1,876 is related to development growth. The cost of programs and services from business-type activities for the fiscal year ended June 30, 2020 increased $5,601 or 4.5%. Solid Waste expenses increased $1,109 or 6.4%, water and sewer expenses increased $3,609 or 4.3% and landfill expenses increased $130 or 1.3%. The increase in cost of programs and services for business-type activities is mainly contributable to increased maintenance costs. 19 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) City Revenue Categories REVENUES BY SOURCE FISCAL YEAR 2019-20 Urban revenue sharing (state shared income tax) 5.9% Auto in-lieu taxes 1.9% Miscellaneous 4.9% State shared sales tax 4.7% Charges for services 26.9% Grants and contributions 18.3% Sales taxes 32.7% Property taxes 4.7% The pie chart above shows the different types of revenue the City receives and the proportion of each. The majority (59.6%) of the total revenue the City receives comes from charges for services and local sales tax. The second most significant source is grants and contributions (18.3%). City Expense Categories EXPENSES BY FUNCTION FISCAL YEAR 2019-20 Solid Waste 3.9% Water and sewer 18.7% Landfill 2.2% Housing 2.9% General government 9.7% Public safety 35.3% Interest on longterm debt 5.2% Street maintenance 9.3% Public works 6.7% Community services 6.1% The majority of the City’s expenses (54.0%) are incurred in the public safety and water and sewer categories. Public safety expenses include those related to police and fire protection services provided to the community and are funded by the general fund. Water and sewer expenses are paid by the enterprise fund which is funded primarily through user paid fees for services. 20 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) 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 As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $210,025, an increase of $23,958 or 12.9% in comparison with the prior year. The City implemented Governmental Accounting Standards Board Statement (GASB) 54 during the 2011 fiscal year which impacted the presentation of fund balance components by more accurately classifying the fund balances into five categories: non-spendable, restricted, committed, assigned and unassigned; Note K in the summary of significant accounting policies addresses this in greater detail. In fiscal year 2020 and 2019, $49,146 and $43,523 respectively, of the total fund balance constituted unassigned fund balance. Revenues for governmental functions overall totaled $376,149 in fiscal year 2020, an increase of $44,660 or 13.5% from the previous years’ total of $331,489. The increase is primarily due to an increase in intergovernmental revenue of $33,756 or 35.3%, an increase of $2,832 or 17.3% in licenses and permits, and an increase in taxes and special assessments revenue of $8,803 or 4.4%. These revenues are all indicators of the continued healthy economy experiences by the City and nationally leading up to the COVID-19 pandemic. Expenditures for governmental functions totaled $360,853 in fiscal year 2020, an increase of $3,550 or 1.1% from the previous year total of $357,303. The increase is primarily due to an increase in debt service payments of $19,771 or 28.5%, which if offset by a decrease in general government expenditures of $13,441 or 30.8% from the prior fiscal year. The increase in debt service payments is due to paying the outstanding principal balance on the Series 2009 General Obligation bonds to avoid future interest expenditures. The decrease in general government expenditures is due to an amendment to a development agreement that required the City to remit back one-half of all General Fund sales tax paid by the other party up to $10.5 Million, less costs incurred by the City on the project spanning into future fiscal years. The amendment eliminated all future monetary obligations under the original agreement and required the city to make a one-time payment of $7.5M during fiscal year 2019. The General Fund is the main operating fund of the City. The General Fund balance increased $37,220 or 64.5%. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $49,648 while total fund balance was $94,965. The General Fund has $5,621 of its fund balance as non-spendable; $5,374 as restricted; and $34,322 assigned. Per the City’s adopted financial policies, 10% of the general fund operating revenue which totals $25,400 has been earmarked as the Budget Stabilization Reserve and $24,248 has been earmarked as the Operating Reserve. Consistent with the requirements of GASB Statement No. 54, formal Council action was not taken prior to June 30, 2020 to commit these funds; therefore, the funds are reported as unassigned. Overall, the General Fund’s performance resulted in revenues over expenditures of $64,033 in fiscal year 2020. In the prior year, revenues exceeded expenditures by $22,719. This increase in fund balance is due to $20,081 of expenditures being transferred in public safety salaries from the General Fund to the Other Special Revenue Fund to record AZCares funding the City received for COVID related public safety expenditures that were not previously budgeted. In addition, revenues increased by $9,401 over the prior fiscal year. The increase is primarily due to an increase in intergovernmental revenue of $3,549 or 5.4%, an increase of $1,185 or 9.3% in licenses and permits, and an increase in taxes and special assessments revenue of $7,207 or 4.8%. These revenues are all indicators of the continued healthy economy experiences by the City and nationally leading up to the COVID-19 pandemic. The Transportation Special Revenue Fund is used to account for the accumulation of resources for, and the payment of, the City’s public transit program and transportation improvement project costs. This fund was in the Non-Major Governmental Funds during the previous fiscal year. The fund had a balance of $63,354 at the end of the fiscal year, an increase of $13,038 from the previous fiscal year. The increase in fund balance was primarily due the increase in intergovernmental revenue of $1,765 or 103.2% and a decrease of $8,096 or 48.6 % in transfers out to the Streets Construction Fund due to the reduction of construction projects expended during fiscal year 2020. 21 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) The General Obligation Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general obligation debt principal, interest, and related costs. The fund had a balance of $1,545 at the end of the fiscal year, a decrease of $27,048 from the previous fiscal year. The decrease in fund balance was primarily due to the debt service payment to pay the outstanding principal balance on the Series 2009 General Obligation bonds to avoid future interest expenditures. The Municipal Property Corporation (MPC) debt service fund was established to account for the debt service payments on the bonds that were issued to finance the construction of a new municipal office complex, hockey arena, public safety training center, parking garage, media center, and convention center. The fund had a balance of $2,857 at the end of the fiscal year. Other Non-Major Governmental Funds had a balance of $47,304 at the end of the fiscal year, which was a decrease of $51,085 from the previous fiscal year. This is mainly due to the Transportation Special Revenue Fund no longer being combined with the Other Non-Major Governmental Funds. Proprietary Funds Net position of the enterprise funds increased $28,490 or 7.1%. The enterprise funds’ total net position was $33,896 restricted, $32,422 unrestricted, and $362,679 invested in capital assets. The water and sewer fund accounts for operations, maintenance and construction projects of city-owned water and sewer systems. The fund saw an increase in net position of $26,515 or 6.8% for the fiscal year ended June 30, 2020. The internal service funds account for fleet, technology, risk management, workers’ compensation, and employee benefits provided to other departments. The funds saw an increase in fund balance of $3,587 for the fiscal year ended June 30, 2020. The City’s policy is to fund the worker’s compensation and risk management funds at a 55% confidence level based on the most recent actuarial valuations. General Fund Budgetary Highlights  The City’s budgeted revenues exceeded expectations and were $5,629 higher than the final budgeted amounts. Positive economic trends resulted in taxes and licenses and permits that were $2,500 and $1,741 greater than the final budget, respectively. Charges for services were $3,109 lower than the final budget. Miscellaneous revenues were $3,340 lower than the final budget.  General Fund expenditures were lower than the final budget by $34,021. The most significant budget variances were in public safety which was $22,783 lower than the final budgeted amount due to $20,081 of expenditures being transferred in public safety salaries from the General Fund to the Other Special Revenue Fund to record AZCares funding the City received to fund COVID related public safety expenditures that were not previously budgeted and in capital outlay which was $6,529 lower than the budgeted amount due to capital project expenditures that did not occur during the fiscal year.  General Fund budgetary fund balance increased by $33,627 or 63.6%. This increase is due to tax revenues, intergovernmental revenues, and proceeds from sale of land being higher than originally expected. This increase is also related to expenditures being lower than expected, mainly in the public safety and capital outlay categories. Capital Asset and Debt Administration Capital Assets The City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2020, for its governmentaltype activities was $1,090,221 and for the business-type activities was $560,823. The investment in governmental and business-type capital assets consisted of land, buildings, machinery and equipment, and infrastructure for streets, parks, airport and street lighting, water, and wastewater treatment plants. 22 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Major capital asset projects capitalized during the current fiscal year included the following:      Arrowhead WRF Improvements $17,802 Ballpark Boulevard $9,709 Landfill Phase Construction (North) $5,625 Heroes Regional Park Library $4,392 Camelback Road Construction $4.333 The following table is a summary of capital assets reflected in the June 30, 2020 financial statements as compared to last year’s financial statements. Capital Assets at Year End (Net of depreciation) (in thousands) Governmental Activities 2020 2019 Const ruction in progress $ 13,951 $ 22,848 Land 117,784 119,498 Water storage right s Artwork 2,639 2,415 Buildings 227,650 232,086 Improvements other than buildings 112,045 120,992 Infrastructure-streets 472,390 461,864 Infrastructure-parks 39,737 42,009 Infrastructure-flood/st orm drains 65,793 65,558 Infrastructure-airport 9,885 10,363 Water lines Sewer lines Water treatment plant Sewer treat ment plant Meters and services Fire hydrants Machinery and equipment 8,593 10,259 Computer equipment 393 981 System Purchase Software 2,467 2,060 Aut omotive equipment 16,894 16,296 T otal $ 1,090,221 $ 1,107,229 T otal Primary Government 2020 2019 $ 86,890 $ 91,269 133,854 135,568 6,687 6,865 2,639 2,415 233,485 237,966 160,246 165,347 472,390 461,864 39,737 42,009 65,793 65,558 9,885 10,363 91,233 81,209 75,711 72,814 137,953 123,921 75,931 80,000 16,288 15,260 2,418 2,264 10,167 11,140 693 1,178 82 191 2,467 2,060 26,495 25,797 $ 1,651,044 $ 1,635,058 Business-T ype Activities 2020 2019 $ 72,939 $ 68,421 16,070 16,070 6,687 6,865 5,835 5,880 48,201 44,355 91,233 81,209 75,711 72,814 137,953 123,921 75,931 80,000 16,288 15,260 2,418 2,264 1,574 881 300 197 82 191 9,601 9,501 $ 560,823 $ 527,829 The construction commitments at June 30, 2020 were $29,573. Additional information on capital assets can be found in Note V of the financial statements. Long-Term Debt At the end of the current fiscal year, the City had total debt outstanding of $718,445 compared to $799,330 last year, a 10.12% net decrease. Governmental Activities General obligation Transportation revenue bond Excise tax revenue bonds Municipal Property Corporation revenue bonds Settlement obligation Water and sewer revenue bonds/obligations Total $ 2020 100,445 62,570 197,955 $ 190,225 - $ 551,195 2019 143,460 66,710 205,055 $ Business-Type Activities 2020 2019 $ - 197,420 3,000 $ 615,645 167,250 167,250 $ 23 Total Primary Government - $ - $ 183,685 183,685 2020 100,445 62,570 197,955 $ 190,225 - $ 167,250 718,445 2019 143,460 66,710 205,055 197,420 3,000 $ 183,685 799,330 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) The City received a “AA-” underlying rating from Standard & Poor’s, an “A1” underlying rating from Moody’s Investor Services, and an “AAA” underlying rating from Fitch Ratings for its general obligation debt. The senior excise tax bonds are rated “AA” by Standard and Poor’s and an “A1” by Moody’s. The subordinate excise tax bonds are rated “AA” by Standard and Poor’s and an “A1” by Moody’s. The subordinate lien water and sewer revenue bonds are rated “A1” by Moody’s and “AA-” by Standard & Poor’s. Transportation bonds were assigned an underlying rating of “AA” by Standard & Poor’s and “A2” by Moody’s. The Arizona Constitution provides that the general obligation bonded indebtedness for a city for general municipal purposes, libraries, economic development, historic preservation, and cultural facilities may not exceed 6% of the total limited property value of the taxable property in that city. Cities may also issue general obligation bonds up to 20% of the total limited property value for supplying water, sewer, artificial light, public safety, law enforcement, fire and emergency services, streets and transportation facilities, and for the acquisition and development of land for open space preserves, parks, playgrounds and recreational facilities. The City’s current unused 6% and 20% debt limitation on June 30, 2020, were $79,658 and $205,795, respectively. Additional information on long-term debt can be found in Note X of the financial statements. Next Year’s Budget and Economic Factors The City of Glendale is continuing its efforts to make sound financial decisions that focus on prudent long-range planning in order to maintain adequate levels of fund balance to mitigate current and future risks and to ensure stable tax rates. The overall goals underlying the city’s financial policies include fiscal responsibility, flexibility, and adherence to the highest accounting and management practices. The adopted fiscal year 2020-21 budget is $747,000 an increase of 1.5% from 2019-20. The increase is mainly attributable to an increase in debt service payments and Public Safety Personnel Retirement contribution costs. Overall, the goal of the FY20-21 budget is to continue to improve the city’s financial position while maintaining a high quality of service delivery, improving public safety, encouraging development, maintaining neighborhoods and continuing progress toward the development of a strategic plan to ensure service delivery and resource allocation is aligned with City Council policy throughout the entire organization. Total revenues for fiscal year 2020-21 are projected at $667,922. The major sources of revenue for the City continue to be sales tax, property taxes, and state shared revenues with projected revenues of $113,619, $5,937, and $71,908 respectively. For fiscal year 2020-21, City sales tax is expected to decline by 3.6% due to the COVID-19 pandemic. This expectation is based on the continued expansion of Glendale’s sports, entertainment, office and retail destination area, continued attraction of diverse job growth industries to the city, and modest but sustainable economic recovery. Request for information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Budget & Finance, 5850 West Glendale Avenue, Suite 302, Glendale, Arizona 85301. 24 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. City of Glendale, Arizona Statement of Net Position June 30, 2020 (amounts expressed in thousands) Primary Government Business-type Activities Governmental Activities Total ASSETS Equity in pooled cash and investments Receivables (net of allowance for uncollectibles) Property taxes Accounts Note Accrued interest Intergovernmental Internal balances Inventories and prepaid items Restricted deposits Restricted cash and investments Non-depreciable Depreciable (net) Non current OPEB assets Equity in joint venture Total assets $ 247,249 $ 43,984 $ 291,233 821 11,711 49,100 610 27,295 (188) 5,860 35,068 134,374 955,847 1,656 2,861 1,472,264 25,274 4,782 188 4,392 3,817 13,170 89,009 471,814 55 42,534 699,019 821 36,985 49,100 610 32,077 10,252 3,817 48,238 223,383 1,427,661 1,711 45,395 2,171,283 68,330 13,650 81,980 4,162 6,067 10,229 72,492 19,717 92,209 16,688 192 156 34,090 13,479 456 3,226 17,245 8,288 35 2,545 16,435 4,323 396 7,340 142 24,976 227 2,701 50,525 17,802 852 10,566 17,387 73,155 929,628 1,088,315 20,986 215,402 275,892 94,141 1,145,030 1,364,207 24,074 24,074 4,163 4,163 28,237 28,237 465,366 362,679 828,045 28,129 DEFERRED OUTFLOW OF RESOURCES Debit amounts related to pensions and OPEB Debit amounts resulting from refunded debt Total deferred outflow of resources LIABILITIES Vouchers payable Accounts payable Retainage payable Matured bonds payable Accrued interest payable Intergovernmental payable Deposits payable Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities DEFERRED INFLOW OF RESOURCES Credit amounts related to pensions and OPEB Total deferred inflow of resources NET POSITION Net investment in capital assets Restricted for: Capital projects 28,129 - Debt service 55,161 16,435 71,596 Transportation 63,364 - 63,364 Highway and streets 6,762 - 6,762 - 9,941 9,941 Perpetual care - nonexpendable 6,100 - 6,100 Police and fire 5,374 - 5,374 OPEB benefits 1,656 55 1,711 Other purposes 3,659 7,465 11,124 Revenue bond retirement, replacement and extension Unrestricted Total net position $ The notes to financial statements are an integral part of this statement. 25 (193,716) 441,855 $ 32,618 429,193 $ (161,098) 871,048 City of Glendale, Arizona Statement of Activities For the Year Ended June 30, 2020 (amounts expressed in thousands) Functions/Programs Expenses Charges for Services Program Revenues Operating Grants and Contributions Capital Grants and Contributions $ $ $ Primary government: Governmental activities: General government Public safety Public works Community services Street maintenance Interest on long term debt Total governmental activities Business-type activities: Water and sewer Landfill Solid waste Housing Total business-type activities Total primary government $ $ 45,972 165,030 31,211 28,378 43,436 24,133 338,160 87,212 10,051 18,351 13,663 129,277 467,437 $ 15,648 3,803 4,478 2,995 124 27,048 89,208 10,383 19,048 2,984 121,623 148,671 General revenues: Property tax for general purposes Property tax for debt service Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - beginning Net position - ending The notes to financial statements are an integral part of this statement. 26 $ 3,010 23,913 129 3,917 20,030 50,999 563 10,303 10,866 61,865 $ 7,337 21 1,049 25,163 33,570 5,733 83 5,816 39,386 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-type Activities Activities Total $ $ (19,977) (137,314) (26,583) (20,417) 1,881 (24,133) (226,543) $ - $ (19,977) (137,314) (26,583) (20,417) 1,881 (24,133) (226,543) (226,543) 8,292 332 697 (293) 9,028 9,028 8,292 332 697 (293) 9,028 (217,515) 5,729 19,989 180,842 25,910 32,419 10,643 5,931 2,978 (1,326) 283,115 56,572 385,283 441,855 1,277 17,216 1,326 19,819 28,847 400,346 429,193 5,729 19,989 180,842 25,910 32,419 10,643 7,208 20,194 302,934 85,419 785,629 871,048 $ $ 27 City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2020 (amounts expressed in thousands) Major Funds General Transportation Special Revenue General Obligation Debt Service Municipal Property Corporation Debt Service Other NonMajor Governmental Funds Total Governmental Funds $ $ $ $ $ ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts Property tax Accounts Note Accrued interest Intergovernmental Due from other funds Inventories and prepaid items Restricted cash and investments Total assets $ 79,023 61,642 1,377 2,570 71,855 216,467 181 6,696 610 22,629 378 5,621 61 115,199 43 2,022 133 63,840 640 17,910 19,927 49,100 12,359 64,029 4,804 2,622 3 3,163 82,447 821 11,543 49,100 610 27,273 378 5,757 33,493 345,442 9,867 82 9 1,199 455 3,159 3,974 18,745 427 34 15 476 2,255 15,655 17,910 4,877 7,195 12,072 3,434 52 147 42 1 370 67 13,256 6,347 11,240 34,956 13,728 134 156 1,275 456 370 3,226 17,245 13,479 34,090 84,159 1,489 10 472 49,100 187 51,258 5,621 5,374 34,322 49,648 94,965 133 63,221 63,354 1,545 1,545 2,857 2,857 6,038 39,465 1,734 569 (502) 47,304 11,792 112,462 1,734 34,891 49,146 210,025 LIABILITIES Vouchers payable Accounts payable Retainage payable Compensated absences - current Intergovernmental payable Due to other funds Deposits Unearned revenue Matured interest payable Matured bonds payable Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources-Unavailable Revenue FUND BALANCES Fund balance: Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances $ 115,199 $ The notes to financial statements are an integral part of this statement. 28 63,840 $ 19,927 $ 64,029 $ 82,447 $ 345,442 City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2020 (amounts expressed in thousands) Amounts reported for governmental activities in the statement of net position are different because: Fund balances - total governmental funds balance sheet $ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental capital assets Less accumulated depreciation $ 210,025 1,964,302 (878,616) 1,085,686 Net OPEB asset 1,644 Adjustment to reflect the government joint venture 2,861 Deferred outflow of resouces related to pensions and OPEB 66,864 Deferred outflow reacquisition price of refunding outstanding debt 13,650 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds and shown as an internal balance item. (196) Internal service funds are used by management to charge the costs of workers' compensation, risk management, employee benefits, fleet services and IT projects to individual funds. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the statement of net position. Long-term liabilities, including bonds payable are not due and payable in the current period and, therefore, are not reported in the funds. Bonds payable Net pension & OPEB liabilities Developer payable obligations Compensated absences Bond discount Unamortized premium on debt issuance 13,507 (551,195) (348,173) (4,693) (28,063) 452 (48,823) (980,495) Deferred inflows of resources related pensions and OPEB (22,949) Deferred inflows of resources is unavailable revenue that is measurable but not yet available for governmental fund activities is recognized as revenue for governmental-wide activities 51,258 Net position of governmental activities $ 29 441,855 City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2020 (amounts expressed in thousands) Major Funds General Transportation Special Revenue General Obligation Debt Service Municipal Property Corporation Debt Service Other NonMajor Governmental Funds Total Governmental Funds $ $ $ $ $ REVENUES Taxes and special assessments Licenses and permits Intergovernmental Local Charges for services Fines and forfeitures Investment Income Miscellaneous Total revenues $ 155,900 13,861 69,288 85 7,155 2,146 3,360 2,208 254,003 30,989 3,476 686 1,064 107 36,322 19,926 238 1,034 8 21,206 2,207 93 1 2,301 5,321 54,120 88 673 280 512 1,323 62,317 206,815 19,182 129,329 173 8,514 2,426 6,063 3,647 376,149 EXPENDITURES Current: General government Public safety Public works Community services Street maintenance Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 29,024 123,048 14,566 19,490 698 13,332 7 - 9 - 1,134 23,525 1,598 4,024 17,742 30,174 146,573 16,164 23,514 31,772 3,144 189,970 64,033 1,388 14,720 21,602 43,015 5,232 48,254 (27,048) 7,195 9,755 16,959 (14,658) 11,240 12,694 18,993 90,950 (28,633) 61,450 27,681 23,525 360,853 15,296 Proceeds from equipment disposal Proceeds from land sale Transfer in Transfer out Total other financing sources (uses) 217 9,693 (36,723) (26,813) 2 (8,566) (8,564) - 16,175 16,175 76 33,834 (6,046) 27,864 295 9,693 50,009 (51,335) 8,662 Net change in fund balances Fund balances - beginning Fund balances - ending 37,220 57,745 94,965 13,038 50,316 63,354 (27,048) 28,593 1,545 1,517 1,340 2,857 (769) 48,073 47,304 23,958 186,067 210,025 OTHER FINANCING SOURCES (USES) $ $ The notes to financial statements are an integral part of this statement. 30 $ $ $ $ City of Glendale, Arizona Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Amounts for governmental activities in the statement of net position are different because: Net change in fund balances - total governmental funds $ Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives as depreciation expense. Expenditures for capitalized assets Less current year depreciation $ 23,958 23,530 (51,884) (28,354) The net effect of various transactions involving capital is to increase net position. Capital contributions Gain (loss) on disposals 12,577 (4,431) 8,146 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. The net effect of long-term obligations and the related transactions is to increase net assets. Net bond premium and discount amortized Principal paid on bonds, notes, and leases 1,628 4,915 61,450 66,365 Compensated absences reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (580) Governmental funds report pension/OPEB contributions as expenditures. However, in the Statement of Activities, pension/OPEB service costs, interest on the pension liability, current year benefit changes, member contributions, expected earnings on plan investments, administrative expenses and recognition of deferred outflows and inflows from pension and OPEB is reported as pension/OPEB expense. (15,564) Internal service funds are used by management to charge the costs of workers' compensation, risk management, employee benefits, fleet services, and technology projects to individual funds. 3,232 Expenses on the statement of activities differ from governmental funds because of the portion not accrued on the governmental funds. (2,259) Change in net position of governmental activities $ The notes to the financial statements are an integral part of this statement. 31 56,572 City of Glendale, Arizona Statement of Net Position Proprietary Funds June 30, 2020 (amounts expressed in thousands) Water and Sewer Business-Type Activities Total Non-Major Funds Governmental Activities Internal Service Funds Total Enterprise Funds ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Intergovernmental Inventories and prepaid items Total current assets Noncurrent assets: Restricted deposits Restricted cash and investments OPEB assets Capital assets: Capital assets Accumulated depreciation Capital assets, net Equity in joint venture Total noncurrent assets Total assets $ 34,050 $ 9,934 $ 43,984 $ 30,782 24,953 (2,566) 4,445 4,375 65,257 3,467 (580) 337 17 13,175 28,420 (3,146) 4,782 4,392 78,432 168 22 103 31,075 3,817 13,170 36 19 3,817 13,170 55 1,575 12 937,345 (409,410) 527,935 42,534 587,492 652,749 71,952 (39,064) 32,888 32,907 46,082 1,009,297 (448,474) 560,823 42,534 620,399 698,831 9,222 (4,687) 4,535 6,122 37,197 6,067 2,726 8,793 1,436 1,436 6,067 4,162 10,229 1,466 1,466 7,197 2,545 1,565 16,435 396 5,928 18,835 4,323 57,224 1,091 35 586 8 1,412 142 3,274 8,288 35 2,545 2,151 8 16,435 396 7,340 142 18,835 4,323 60,498 2,960 58 497 16,691 20,206 1,367 166,396 19,736 187,499 244,723 643 11,185 56 16,019 27,903 31,177 2,010 166,396 30,921 56 16,019 215,402 275,900 517 3,308 3,825 24,031 2,680 1,483 4,163 1,125 329,791 32,888 362,679 4,535 DEFERRED OUTFLOWS OF RESOURCES Debit amounts resulting from refunded debt Debit amounts related to pensions and OPEB Total deferred outflows of resources LIABILITIES Current liabilities: Vouchers payable Accounts payable Retainage payable Compensated absences Due to other funds Matured bonds payable Intergovernmental payable Deposits Unearned revenue Estimated claims payable Bonds payable current Interest payable Total current liabilities Noncurrent liabilities: Compensated absences Bonds payable Net pension & OPEB liabilities Other long term debt Estimated closure and post closure costs Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Credit amounts related to pensions and OPEB NET POSITION Net investment in capital assets Restricted for: Debt service 16,435 - 16,435 - Revenue bond retirement, replacement and extension 9,941 - 9,941 - 7,465 36 50,471 414,139 19 (18,049) 14,858 $ 7,465 55 32,422 428,997 12 8,960 13,507 $ 196 429,193 Other purposes OPEB benefits Unrestricted Total net position $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net position of business type activities The notes to financial statements are an integral part of this statement. 32 $ $ City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the Year Ended June 30, 2020 (amounts expressed in thousands) Water and Sewer Total Enterprise Funds Governmental Activities Internal Service Funds $ $ Business-Type Activities Total Non-Major Funds OPERATING REVENUES Intergovernmental Metered water sales Sewer service charges Container service Curb service Landfill user fees Self insurance premium Charges for services Recycling sales Other fees Total operating revenues $ 540 52,738 36,140 18,830 108,248 $ 10,303 4,212 14,786 9,860 517 3,004 42,682 10,843 52,738 36,140 4,212 14,786 9,860 517 21,834 150,930 37,173 22,011 219 59,403 OPERATING EXPENSES Water Sewer Landfill Housing Closure/post-closure care adjustment Solid Waste Administrative and general Insurance claims and premiums Amortization and depreciation Total operating expenses Operating income (loss) 26,152 13,196 16,228 24,573 80,149 28,099 8,656 13,409 241 16,944 2,901 42,151 531 26,152 13,196 8,656 13,409 241 16,944 16,228 27,474 122,300 28,630 22,047 33,808 510 56,365 3,038 2,489 1,114 (7,329) (3,788) 3 (7,511) 20,588 5,733 422 (228) 26,515 387,624 414,139 174 55 229 760 83 1,164 (32) 1,975 12,883 14,858 2,489 1,288 (7,329) (3,788) 58 (7,282) 21,348 5,816 1,586 (260) 28,490 551 (2) 549 3,587 3,587 9,920 13,507 NONOPERATING REVENUES (EXPENSES) Impact fees Investment income Interest expense Net loss from joint venture Gain/(loss) on disposal of assets Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfer in Transfer out Change in net position Total net position - beginning Total net position - ending $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net position of business-type activities The notes to financial statements are an integral part of this statement. $ $ $ 33 357 28,847 City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Business-Type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Funds Total Cash flows from operating activities: Cash received from customers Cash received from federal operating grants Cash paid to suppliers: Internal city departments External vendors Cash paid for insurance and in settlement of claims Cash paid to employees for services Net cash provided by operating activities $ 99,079 - $ 33,727 10,067 $ Governmental Activities Internal Service Funds 132,806 10,067 $ 59,222 - (9,336) (29,116) (11,737) (16,510) (21,073) (45,626) (362) (12,372) (20,326) 40,301 (10,187) 5,360 (30,513) 45,661 (34,626) (6,361) 5,501 422 (228) - 1,164 (32) (721) 1,586 (260) (721) - 194 411 605 - (16,050) (48,326) 2,489 (9,022) 50 (4,932) - 50 (16,050) (53,258) 2,489 (9,022) (3,287) - (70,909) (4,882) (75,791) (3,287) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 1,114 1,114 174 174 1,288 1,288 551 551 Net increase (decrease) in cash and cash equivalents during fiscal year (29,300) 1,063 (28,237) 2,765 Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 76,520 47,220 8,871 9,934 85,391 57,154 28,017 30,782 Cash flows from noncapital financing activities: Transfers in Transfers out Advances to/due from other funds Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Proceeds from sale of capital assets Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Net cash used by capital and related financing activities $ The notes to the financial statements are an integral part of this statement. 34 $ $ $ Business-Type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Funds Total 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 operations: Amortization and depreciation Changes in assets and liabilities: Accounts receivable Intergovernmental receivable Net OPEB asset Net pension and OPEB liability Deferred outflows related to pensions and OPEB Deferred inflows related to pensions and OPEB Inventories and prepaid items Restricted deposits Joint venture Vouchers and accounts payable Intergovernmental payable Other long term liabilities Deposits Unearned rent Compensated absences Claims payable Estimated closure and post-closure costs Net cash provided (used) by operating activities Reconciliation of statement of net position cash and investments to the statement of cash flows: Per combined statement of net position: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents Noncash investing, capital, and financing activities: Contributions of capital assets Loss on joint venture Amortization of bond premium/discount Amortization of debit amounts resulting from refunded debt $ $ $ $ $ 28,099 $ 531 $ Governmental Activities Internal Service Funds 28,630 $ 3,038 24,573 2,901 27,474 510 (9,078) (2,988) 13 150 84 (236) 7 74 (8,994) (3,224) 20 224 (168) (13) 4 53 1,194 609 1,803 373 (1,086) (80) (380) (1,871) 1,175 113 289 178 - (567) 1 403 20 1,127 137 28 - (1,653) (79) (380) (1,871) 1,578 113 20 1,416 137 206 - (317) 16 325 (11) 1,691 40,301 241 5,360 241 45,661 5,501 $ 34,050 13,170 47,220 $ 5,733 (3,788) 2,251 $ 934 35 $ $ 9,934 9,934 $ 83 - $ - $ $ 43,984 13,170 57,154 $ 5,816 (3,788) 2,251 $ 934 $ 30,782 30,782 - CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Notes to the Financial Statements The Notes to the Basic Financial Statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying financial statements. Index Note Page Summary of Significant Accounting Policies ............................................................................. I ............................. 37 Compliance – Excess of Expenditures Over Appropriations/Deficits in Fund Equity ............. II ............................. 48 Deposits and Investments ........................................................................................................ III ............................. 48 Note Receivable ....................................................................................................................... IV ............................. 50 Capital Assets ........................................................................................................................... V ............................. 51 Construction Commitments ..................................................................................................... VI ............................. 53 Internal Service Funds ............................................................................................................VII ............................. 53 Leases ................................................................................................................................... VIII ............................. 56 Short-Term Debt ...................................................................................................................... IX ............................. 56 Long-Term Debt ....................................................................................................................... X ............................. 56 Landfill Obligations................................................................................................................. XI ............................. 65 Inter-fund Transactions...........................................................................................................XII ............................. 66 Encumbrances....................................................................................................................... XIII ............................. 68 Equity in Joint Venture ......................................................................................................... XIV ............................. 68 Jointly Governed Organizations ............................................................................................ XV ............................. 70 Governmental Fund Balance Components and Fund Type Definitions ............................... XVI ............................. 70 Pensions and Other Postemployment Benefits .................................................................... XVII ............................. 72 Contingent Liabilities and Commitments .......................................................................... XVIII ............................. 87 Tax Abatement ..................................................................................................................... XIX ............................. 88 Implementation of New Accounting Principles..................................................................... XX ............................. 89 Subsequent Events ................................................................................................................ XXI ............................. 89 36 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) I. Summary of significant accounting policies A. Reporting entity The City of Glendale, Arizona (City) was incorporated June 18, 1910, under the provisions of Article 13, Sections 1 through 6 of the Constitution of Arizona and Title 9 of the Arizona Revised Statutes. It is governed by a Mayor elected at large, and six district council members. The City operates under a Council-Manager form of government. The major operations of the City include providing police, fire, water, and sewer services to citizens. As required by GAAP, these financial statements present the government and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of a government’s operations, so data from these units are combined with data of the primary government. A discretely presented component unit, on the other hand, is reported in a separate column in combined financial statements to emphasize that it is legally separate from the government. The City has no discretely presented component units. Blended component units City of Glendale, Arizona, Municipal Property Corporation (MPC) is a non-profit corporation organized under the laws of the State of Arizona to assist the City in the acquisition and financing of municipal projects and facilities. The MPC is governed by a board of directors who are responsible for approving the corporation’s bond sales. Bond sales must also be approved by the City Council. Although it is legally separate from the City, MPC is reported as if it is part of the primary government because its sole purpose is to finance and construct public facilities for the City. The total debt outstanding, including leases, of the MPC is expected to be repaid entirely or almost entirely with the resources of the primary government. MPC does not issue separate audited financial statements. However, it does file a tax return with the Internal Revenue Service. Copies of the tax return are available from the City’s Budget and Finance Department. B. Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. There are several types of transactions that are reported in the financial statements as inter-fund items. Transactions that would be treated as revenue, expenditures or expenses if they involved organizations external to the governmental unit, like the sale of water from the water & sewer fund to various functions of the general fund, are accounted for as revenue & expenditures or expenses in the funds involved. These revenue & expense transactions are reflected in the appropriate functional activity on the government-wide statement of activities and are not eliminated in consolidation. Transactions that constitute reimbursement to a fund for expenditures or expenses initially made from that fund, which are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is being reimbursed. Governmental Accounting Standards Board (GASB) Statement 34 also requires that administrative service fees charged to other operating funds to support general services used by the other operating funds (like purchasing, accounting & administration) should be treated as reimbursement transactions and the revenue & expenditures/expenses reduced in the allocating fund. The costs of these services are reflected in the appropriate functional activity within the government-wide statement of activities and the revenues & expenses are eliminated from the government-wide financial statements to avoid any doubling up effect of these revenues & expenses. Transfers between funds are included in the results of both governmental & proprietary funds (as other financing sources/uses in governmental funds). 37 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds.” Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. These transactions include transfers between funds and interdepartmental service charges. All internal balances in the statement of net position have been eliminated, with the exception of those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total governmental column. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is 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 and other items not properly 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. The internal service funds are eliminated on an entity-wide basis as per GASB Statement 34. C. Form of presentation – fund financial statements The City reports the following major governmental funds: The general fund is the City’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The transportation special revenue fund accounts for the City’s public transit system and transportation improvement projects. The general obligation debt service fund accounts for the debt service payments for the bonds that were issued to finance government infrastructure such as government facilities, parks, libraries, flood control, economic development and open space/trails. The municipal property corporation debt service fund (MPC) accounts for the debt service payments for the bonds that were issued to finance the construction of a new municipal office complex, hockey arena, public safety training center, parking garage, media center and convention center. The City reports the following major proprietary fund: The water and sewer fund accounts for operations, maintenance and construction projects of the Cityowned water and sewer systems. Additionally, the City reports internal service funds. Internal service funds account for risk management, workers’ compensation, employee benefits, fleet and technology services provided to other departments. 38 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures/expenses, as appropriate. Government resources are allocated to, and accounted for, in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The following funds are presented in the accompanying financial statements: Governmental funds Governmental funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City’s expendable financial resources and related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is based upon determination of financial position and changes in financial position rather than upon the determination of net income. The following governmental funds are presented in the accompanying financial statements. General fund: The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special revenue funds: Special revenue funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Debt service funds: Debt service funds are used to account for the accumulation of financial resources for the payment of long-term debt principal, interest, and related costs, except the debt service accounted for in the enterprise funds. Debt service funds also include the debt payable from highway user’s gas tax revenues and unrestricted excise tax revenues as well as debt funded by property taxes levied by the City on property located within the City. Capital projects funds: Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Permanent fund: Permanent fund is used to account for financial resources to be used by the cemetery fund. Proprietary funds Proprietary funds are used to account for the City’s ongoing operations and activities, which are similar to those found in the private sector. The measurement focus is based upon the determination of net income. Enterprise funds: Enterprise funds are used to account for operations, including debt service, 1) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or 2) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The enterprise funds, which the City currently maintains, are the water and sewer, landfill, solid waste, and housing funds. Internal service funds: Internal service funds are used to account for the financing of self-insurance and fleet and technology services provided by one City department to other City departments on a costreimbursement basis. 39 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) D. Measurement focus and basis of accounting The City-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. 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 provider have been met. 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 except as described below in relation to grants. Revenues are considered to be available when they are collected 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, principal and interest on long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the related debt service fund for payments to be made shortly after fiscal year-end. Revenues susceptible to accrual because of their availability include property tax, sales tax, highway user’s tax, state shared sales tax, vehicle license tax, and interest earned on investments. Licenses and permits, charges for services, fines and forfeitures, and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. In applying the susceptible to accrual concept to intergovernmental revenues, the decision to accrue depends on the terms of the arrangement or agreement. Generally, these resources are reflected as revenue at the time of receipt or earlier if they meet the available criterion. Certain grant revenues are recognized based on expenditures recorded. Resources that have been received before time requirements are met but after all other eligibility requirements have been met are recorded as a deferred inflow. However, resources transmitted before time requirements are met but after eligibility requirements have been met are recorded as deferred outflows. This practice is defined and supported by GASB Statement 63, as it pertains to Financial reporting of deferred outflows of resources, deferred inflows of resources and net position. E. Statement of cash flows The City considers short-term investments (including restricted assets) in the State of Arizona Local Government Investment Pool (LGIP), mutual fund-money market, U.S. Treasury bills and notes with original maturities of three months or less at acquisition date to be cash equivalents. F. Inter-fund transactions Inter-fund transactions, consisting of services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as a reimbursement reducing expenditures in the fund performing the services, except for sales of water to other City departments, which are recorded as revenue in the Water Enterprise funds. In addition, operating transfers are made between funds to shift resources from a fund legally authorized to receive revenue to a fund authorized to expend the revenue. Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is classified as due to/from other funds (current portion of inter-fund advances) and advances to/from other funds (noncurrent portion of inter-fund advances). Any residual balances 40 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. G. Inventories and prepaid items Inventories of the governmental and enterprise funds consist primarily of expendable supplies held for consumption. These inventories are maintained on a perpetual system verified through cyclical physical counts and are valued using a weighted average cost. Generally, expenditures are recorded at the time inventories are used (i.e., the consumption method) for both GAAP reporting and budgetary purposes. However, the City postage inventory is recorded as expenditure at time of purchase (i.e., the purchase method) for budgetary purposes. At June 30, 2020, the postage portion of the general fund supplies inventory was $3. Certain expenditures are recorded for financial reporting purposes as prepaid items. Special reporting treatment is applied to governmental fund inventories and prepaid items to indicate that they represent amounts that are not in spendable form, even though they are a component of current assets. Such amounts are presented as a component of non-spendable fund balance. H. Restricted assets Certain proceeds of the City’s bonds, as well as certain resources set aside for their repayment, are classified as restricted on the balance sheet, or statement of net position, because they are maintained in separate bank accounts and their use is limited by applicable debt covenants and the escrow agreement. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. Restricted assets also include cash held at the Maricopa County Treasurer for the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO funds are limited by state and federal law to qualified expenses related to fighting and preventing drug use and organized crime. I. Capital assets The City has chosen not to apply the modified approach to any networks or subsystems of infrastructure assets. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are defined as assets with an initial, individual cost of more than $5 and an estimated useful life greater than three years. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the assets’ lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. The remainder of this page left blank intentionally. 41 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Capital assets are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Improvements other than buildings Infrastructure Machinery and equipment Automotive equipment Software Computer equipment Useful Life (Years) 30 10-20 10-100 5-8 6-8 3 3-5 Capital assets transferred between funds are transferred at their carrying value (cost less accumulated depreciation) as of the date of the transfer. J. Water rights The City has entered into a lease agreement with Salt River Pima-Maricopa Indian Community (SRPMIC) for the rights to 1,814 acre-feet of water each year through 2099. These rights, costing $2,693, are being amortized over 40 years on a straight-line basis starting January 1, 2000. Current year amortization was $66. The net book value of water rights as of June 30, 2020, is $1,313. In addition, the City will be responsible for paying for the cost of water delivered each year. The City participates in the Plan Six cost sharing agreement to construct the Waddell Dam on the Agua Fria River and modify the Roosevelt and Stewart Mountain Dams on the Salt River. The parties to this agreement include the United States government, State of Arizona, Central Arizona Water Conservation District, Salt River Project, and the cities of Phoenix, Chandler, Glendale, Mesa, Scottsdale, Tempe and Tucson. The federal government has determined that this agreement does not constitute a joint venture. As of June 30, 2020, the City has capitalized payment of $4,463 for these water rights. Current year amortization was $112. The net book value of these water rights as of June 30, 2020, is $3,347. The City purchased Central Arizona Project water rights as part of the Salt River Pima-Maricopa Indian Community Water Rights Settlement in November 2007. These rights, as of June 30, 2020, costing $2,027, are a permanent right and are considered to have an indefinite useful life. As such, they are not amortized; therefore, cost and net book value are equal to $2,027. K. Governmental fund balance components The components of governmental fund balance consist of the following: Non-spendable amounts are the portion of net resources that cannot be spent because of their form such as inventories and prepaid items. Also included is the portion of net resources that cannot be spent because they must be maintained intact pursuant to legal and contractual requirements such as the cemetery permanent fund. Restricted are amounts that are subject to externally enforceable legal restrictions imposed by parties outside the government such as creditors, grantors, contributors, and other governments through laws and regulations. Examples of restricted fund balance are amounts held to pay for bonded construction projects, debt service, and excise tax revenues collected for voter approved transportation expenditures. Committed are amounts that are constrained by limitations imposed by the highest level of decision making authority, namely Mayor and Council and require approval by the same level of authority 42 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) through an ordinance to remove. Amounts must be committed prior to the fiscal year end. An example of committed fund balance is amounts for artwork. Assigned are amounts that are constrained by limitations imposed by management based on the intended use of the funds. The city manager has been given authority to assign funds as needed through the financial policies adopted in the annual Budget Book approved by Mayor and Council. An example of assigned fund balance are amounts for equipment replacement or general government capital projects. Unassigned are amounts for any other purpose. If resources were not assigned, they could not be properly reported in a fund other than the general fund. Therefore, only the general fund can report a positive amount of unassigned fund balance. Any governmental fund in a deficit position could report a negative amount of unassigned fund balance. When both restricted and unrestricted resources are available for specific expenditures, restricted resources are considered spent before unrestricted resources. Within unrestricted resources, committed and assigned are considered spent (if available) before unassigned amounts. On the government-wide financial statements, only restrictions imposed by external sources are shown as restricted net position. L. Net position The government-wide and proprietary fund financial statements use a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted. Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt and other liabilities that are attributable to the acquisition, construction, or improvement of these assets reduce the balance in this category. Restricted Net Position – This category represents net position that has external restrictions imposed by creditors, grantors, contributors, laws or regulations of other governments, and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Position – This category represents net position of the City not restricted for any project or other purpose. M. Property tax The City levies taxes on real and personal property located within its boundaries. Property values are assessed by the Maricopa County Tax Assessor. The tax levy is then approved by the State of Arizona Property Tax Oversight Commission. The County Treasurer bills and collects property taxes and remits them to the City monthly. City property tax revenues are recognized when levied to the extent that they are received within the current period, or soon enough thereafter (within 30 days of year-end), to pay liabilities of the current period. Remaining collectible taxes are accrued and reflected as deferred inflows of resources. The remainder of this page left blank intentionally. 43 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Property Tax Calendar Lien date Levy (assessment) date (third Monday in August) Due dates: First half of assessment Second half of assessment Penalties and interest added (collection dates): First half of assessment Second half of assessment January 2, 2019 August 19, 2019 October 1, 2019 March 1, 2020 November 1, 2019 May 1, 2020 The City currently levies less than the maximum allowed by State Statutes for primary property taxes. The City is permitted to levy an increase of two percent over the previous year’s maximum allowable primary levy plus an increased dollar amount due to a net gain in property not taxed the previous year. The secondary property tax levy is made for the purpose of retiring the principal, interest and servicing fees on bonded indebtedness. The City may levy the amount deemed necessary to meet its bonded debt service requirements. The debt service fund balance cannot exceed 10% of the next year’s debt service payment. Assessed values are established by the Maricopa County Tax Assessor each year on a uniform basis ratio to full cash value of each property class as required by State Statutes. The distribution of the City’s levy (tax rate per $100 assessed value) to its funds for the year ended June 30, 2020, is as follows: Fund General fund General obligation debt service fund Total Rate 0.42 1.44 $ 1.86 $ N. Compensated absences Vacation time is accumulated up to a maximum of 10 workweeks and compensatory time is earned in lieu of cash payment for overtime. Both vacation and compensatory time can either be taken as time off from work, within certain limitations, or may be payable to employees upon termination or retirement. Employees who have ten or more years of service will receive upon retirement 100% of up to 160 hours of vacation accrued. Any remaining vacation time above 160 hours will be 100% contributed to a mandatory Retiree Health Savings plan for the employee. Employees separating from the City receive 100% of accrued vacation time. Sick leave is accumulated without limit and can be used in the event of an illness of the employee or their immediate family. Accumulated sick leave can be converted to a cash benefit on a biannual basis for employees based on one-third of the average hourly rate the last 36 months. Employees must maintain a minimum sick leave balance on the books. Employees who retire and have ten or more years of service will have 50% of their accrued sick time contributed to a mandatory Retiree Health Savings plan based on their average hourly wage over the last 36 months. Employees who separate from service and have five or more years of service will receive one-third of their sick leave balance based on their average hourly wage over the last 36 months in a cash payout. Represented Fire and Police MOU employees who retire and have ten or more years of service will have 50% of their accrued sick time contributed to a mandatory Retiree Health Savings plan based on their average hourly wage over the last 36 months. Represented Fire and Police MOU employees who retire are paid 100% of accrued vacation time. The current portion of the liability for compensated absences recorded in the governmental fund is equal to: 1) vacation and compensatory time taken and paid during the thirty days following the year ended 44 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) June 30, 2020, and 2) sick leave, taken and paid for illness during that period, paid to terminating employees or paid under the optional annual declaration. Long-term liabilities of governmental funds are not shown on the fund financial statements. All of the outstanding vacation, compensatory time, and sick leave are recorded as a liability on the government-wide financial statements, and the proprietary fund financial statements, according to payment policy. O. Deferred outflow and deferred inflow of resources In addition to assets, the statement of net position will report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflow of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government only has two items that qualify for reporting in this category. It is the deferred charge on refunded debt and deferred outflows related to pensions and OPEB reported in the government-wide statement of net position. In addition to liabilities, the statement of net position will report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government only has two items that qualify for reporting in this category. It is unavailable revenue, which arises only under a modified accrual basis of accounting, and the deferred inflow related to pensions and other post-employment benefits. Amounts that are reported as deferred outflows are shown as a separate balance sheet section following the assets. Similarly, amounts shown as deferred inflows are shown in a separate balance sheet section following liabilities. P. Long-term obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are reported as a long-term liability and amortized over the life of the bonds using the straight-line method, which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Q. Operating revenues and expenses Proprietary funds distinguish operating revenues and expenses from non-operating 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 enterprise funds and the City’s internal service funds are charges to customers for sales and services, or housing operational grants from a federal agency. Housing operational grants provide decent, safe, and affordable housing to eligible, low-income families and individuals by providing a voucher to rent a qualifying unit in the City of Glendale. The water and sewer fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal 45 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. R. Postemployment benefits For purposes of measuring the net pension and other postemployment benefits (OPEB) assets and liabilities, deferred outflows of resources and deferred inflows of resources related to pensions and OPEB, and pension and OPEB expense, information about the 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 plans. 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. S. Deferred compensation The Voluntary Deferred Compensation Plan for Employees of the City of Glendale, State of Arizona; Restated Plan Document (the “Plan document”) was adopted by the Mayor and City Council on November 10, 1998, and amended on January 8, 2002 to incorporate the Federal Economic Growth and Tax Relief Reconciliation Act of 2001. In addition, the Mayor and City Council adopted a defined contribution deferred compensation plan document on April 9, 2002, under the Internal Revenue Code Section 401(a). On February 12, 2013 the adoption of a new contract was approved by the Mayor and City Council which allowed the plan to be administered solely by the third-party administrator Empower Retirement (Empower) a division of Great West Life & Annuity Insurance Co (Great West). Through the Plan document, the City offers its employees a deferred compensation plan that permits them to defer a portion of their current salary until future years. Any contributions made to the deferred compensation plan, in compliance with Section 457 and 401(a) of the Internal Revenue Code, are not available to employees until termination of employment, retirement, death or an unforeseen emergency. The plan assets are in custodial or trust accounts for the exclusive benefit of the plans’ participants and beneficiaries. The City provides neither administrative services nor investment advice to the plans; therefore, no fiduciary relationship exists between the City and the deferred compensation pension plan. In addition, the plan assets are not included as a fund of the City. The Retiree Health Savings (RHS) Plan was originally adopted on July 1, 2008, and amended and restated on February 12, 2013, by Mayor and Council. The purpose of the Plan is to provide certain Employees with an opportunity to receive reimbursement for certain Health Care Expenses as provided in this Plan. It is the intention of the Adopting Employer that the benefits payable under this Plan be eligible for exclusion from the gross income of Participants as provided by Sections 105(b) and 106 of the Code. In addition, it is the intention of the Adopting Employer that the Plan qualify as a Health Reimbursement Arrangement (HRA) under IRS Revenue Ruling 202-41 (June 26, 2002) and IRS Notice 2002-45 (June 26, 2002). The provider for this RHS plan is Educator Benefit Consultants (EBC). The contributions to this Plan are detailed in the Compensated Absences (N) section on this document. T. Elected Officials’ Defined Contribution Retirement System (EODCRS) HB 2608 signed in July of 2013 closed the Elected Officials’ Retirement Plan (EORP) to new members and established the new Elected Officials’ Defined Contribution Retirement System (EODCRS) effective January 1, 2014 (A.R.S. Title 38, Chapter 5, Article 3.1). In addition to this new plan, the EODCRS Disability Program was also established (A.R.S. Title 38, Chapter 5, Article 3.2). EODCRS is a nonERISA 401(a) plan type. If a person is elected, appointed, or hired on or after January 1, 2014, does not have money on account with EORP, does not have money on account with ASRS or does not timely opt 46 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) out of the EODCRS to return to ASRS, if applicable, the elected official must be automatically enrolled in the EODCRS. This includes any elected official who has already retired from EORP and/or ASRS. The investment options available to EODCRS members will be administered by Nationwide Retirement Solutions (NRS). The elected official will also contribute to and participate in the EODCRS Disability Program administered by PSPRS. As prescribed in ARS § 38‐727, if a person is appointed, elected, or hired on or after January 1, 2014 and does not have money on account with the EORP, but has money on account with the ASRS, that person has the option to return to the ASRS. The member has the option to participate in either the EODCRS or the ASRS Plan with each term. That decision is irrevocable during the term in which that election was made. Additionally, the elected official will contribute to and participate in the Long‐Term Disability Program administered by ASRS. To choose the ASRS, the person must fill out a form provided by PSPRS opting out of the EODCRS. This election must be made within 30 days after that person’s term begins and returned to PSPRS. The City was required by statute to contribution 49.86 percent of elected officials participating as an ASRS members’ annual covered payroll to the ASRS Legacy As of January 1, 2014, the employer rate for all employers contributing on behalf of their elected officials vary based on the path the employee is eligible for. Pursuant to ARS § 38‐810, subsection C, and as described above, that rate may be split a number of ways depending on which plan (or path) your elected official will belong to. Employee rates will vary, also dependent upon the path your elected official is on, and all are pre‐tax contributions. The rates for the respective disability programs are separate from the 61.43% employer rate and are contributed on an after‐tax basis. The 61.43% employer rate is set by statute; however, the Board of Trustees of PSPRS is required to monitor this rate to inform the Legislature annually of its continued ability to pay the unfunded liability of the EORP legacy costs, so there is the possibility of this rate changing from time‐to‐time. Additionally, the rate for the disability program will also be reviewed and revised annually to meet its actuarially determined costs. For the year ended June 30, 2020 active EODCRS members were required by statue to contribute at the rate of 8.125 percent (8 percent to the DC plan and .125 percent for the disability program) of the members’ annual covered payroll. The City was required by statue to contribute at the rate 6.125 percent (6 percent to the DC plan and .125 percent for the disability program) of the active members’ annual covered payroll. The maximum annual contribution limits are in accordance with the IRS regulation for defined contribution plans. Employee and employer contributions are immediately vested. In addition, the City was required by statute to contribution 55.43 percent of the EODC members’ annual covered payroll to the EORP Legacy. The Elected Officials Retirement Plan is not reported in the financial statements because of its relative insignificance to the financial statements. U. Investments The City uses the following methods and assumptions to account for its investments: 1. 2. 3. Aside from investments clearly identified as belonging to a specific fund, any unrealized gain/loss resulting from the valuation is recognized within the general fund as investment revenue. Investments are recorded at fair value, which is based on quoted market prices as of the valuation date. Pooled investment income is allocated to various funds monthly based on the average equity balances maintained during the month. Arizona Revised Statutes require the City to deposit certain crime-related forfeitures with the County Treasurer. The County Treasurer determines the fair value of those pooled investments. The structure of the pool does not provide for shares and the County has not provided or obtained any legally binding guarantees to support the value of the participants’ investments. The County Treasurer is not subject to custodial credit risk. 47 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) The City’s investment in LGIP represents shares of the pool’s portfolio. The fair value of each share in the LGIP is one dollar. These shares are not identified with specific investments and are not subject to custodial credit risk. Neither the County nor LGIP are registered with the Securities and Exchange Commission as investment companies. The State Board of Deposits provides oversight, and the Local Government Investment Pool Advisory Committee provides consultation and advice to the LGIP. There is no regulatory oversight of the County Treasurer’s operations. The net decrease in the fair value of total investments during the fiscal year ended June 30, 2020, was $2,713. II. Compliance - Excess of expenditures over appropriations/deficits in fund equity The City ended the fiscal year June 30, 2020, with a deficit fund balance of $402 in the fire and police construction fund and $100 in the parks construction fund. These deficits will be funded by future bond sales. There was a deficit net position of $3,046 in the fleet services and $7 in the workers comp self insurance internal service fund. These deficits will be funded by increases in user premium charges in the next fiscal year. The expenditures in the other special revenue fund exceed appropriations by $5,903 due to expenditures related to the AZCares funding the City received to help offset the economic impacts of COVID-19. The excess was funded by additional intergovernmental revenues received during the fiscal year. III. Deposits and investments The City maintains a cash management pool for its cash and cash equivalents in which each fund and/or account or sub-account of a fund participates on a dollar equivalent basis. Deposits At year-end, the carrying amount of the City’s deposits was $40,414 and the bank balances were $46,073. The difference of $5,659 represents deposits in transit, outstanding checks, and other reconciling items. At year-end, all of the City's deposits were covered by Federal depository insurance and collateral held in the City’s name. Uncollateralized City deposits held at June 30, 2020, were $117,584. Investments State Statutes and the City’s investment policy authorize the City to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, repurchase agreements, commercial paper (A-1/P-1 rated), interest-earning money market accounts, certificates of deposit, and the State of Arizona Local Government Investment Pool (LGIP). Investments may not exceed five years to maturity from the date of purchase. The City’s investment in the LGIP is valued using net asset value (NAV) per share (or its equivalent), which approximates the fair value of the holdings provided by the Arizona State Treasurer’s Office at June 30, 2020. Unlike more traditional investments, the City’s holdings in the LGIP, measured at a NAV approximately $1 per share (or equivalent) are not individually identifiable. The remainder of this page left blank intentionally. 48 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) As of June 30, 2020, the City had the following investments: Investment Type Commercial paper Corporate Bonds U.S. Agencies U.S. Treasury Arizona LGIP-State Pool Grand total investments Cash deposits Cash with fiscal agents Total deposits and investments 0-1 $ 1,625 4,564 15,814 48,375 35,146 $ 105,524 Investment Maturities (in years) 1-2 2-3 Over 3 $ $ $ 2,059 10,154 4,854 11,407 4,491 8,727 10,068 11,862 25,563 $ 23,534 $ 26,507 $ 39,144 Fair Value $ 1,625 21,631 40,439 95,868 35,146 $ 194,709 40,414 108,165 $ 343,288 Investment Fair Value Level: Investments using fair value measurement guidelines established by generally accepted accounting principles recognize a three-tiered fair value hierarchy as follows:    Level 1 – Quoted prices for identical investments in active markets, Level 2 – Observable inputs other than quoted market prices, and Level 3 – Unobservable inputs Debt securities classified in Level 2 are valued using quoted prices for similar securities in active markets. The City’s investments are classified as follows: Fair Value Measurements Using Levels Investment at fair value level Level 1 Commercial Paper $ Corporate Bonds U.S. Agencies 8,290 U.S. Treasury 95,868 Total Investments at fair value level $ 104,158 Level 2 $ 1,625 21,631 32,149 $ 55,405 Level 3 $ $ External Investment Pools Measured at Fair Value State Treauser's Investment Pool Total Investments - $ Totals 1,625 21,631 40,439 95,868 159,563 35,146 $ 194,709 Interest rate risk: As a means of limiting its exposure to interest rate risk the City’s investment policy requires all securities to mature in no more than five years. The City also purchases securities to be laddered with staggered maturity dates. The remainder of this page left blank intentionally. 49 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Credit risk: The City’s investment policy requires commercial paper to have a rating of at least A-1 by Standard and Poor’s, P-1 by Moody’s, or F1 by Fitch. Corporate bonds must have a rating of at least A or better by Standard and Poor’s, A2 by Moody’s, or A by Fitch. As of June 30, 2020, the City’s investments were rated by Moody’s Investor Service and Standard & Poor’s as follows: Investment Type U.S. Treasury Arizona LGIP U.S. Agencies U.S. Treasury U.S. Agencies Corporate Corporate Corporate Corporate Corporate Commercial Paper Corporate Corporate S&P Rating AA+ NR AA+ A-1+ A-1+ AA A+ AA+ AAA AA A-1+ AAA- Moody's Rating Aaa NR Aaa P1 P1 Aa2 A1 Aa1 Aaa Aa1 P-1 A2 Aa3 % of Total Investments 42.48% 18.05% 16.51% 6.76% 4.26% 3.34% 2.15% 1.72% 1.66% 1.08% 0.83% 0.62% 0.54% Weighted Average Maturity (Years) 1.05 0.00 0.42 0.05 0.04 0.07 0.03 0.06 0.06 0.03 0.01 0.01 0.02 Concentration of credit risk: The investment policy of the City contains no limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of the total investments are as follows: Issuer United States Treasury Total Arizona LGIP Total Federal Home Loan Banks Total Investment Type U.S. Treasury Arizona LGIP U.S. Agencies $ Amount 95,868 35,146 23,429 Custodial credit risk: To control custodial credit risk, the City’s investment policy requires all securities and collateral to be held by an independent third-party custodian in the City’s name. The custodian provides the City with monthly market values along with original safekeeping receipts. IV. Note receivable On October 22, 2008, the Western Loop 101 Public Facilities Corporation (PFC), a blended component of the City dissolved in fiscal year 2016, issued $199,750 in third lien excise tax revenue bonds to construct a baseball spring training facility. On October 1, 2009, the City finalized an Intergovernmental Agreement with the Arizona Sports and Tourism Authority (AZSTA) for the Glendale Spring Training Facility Project. The AZSTA agreed to contribute to the City $60,000 for the construction costs plus interest at 4.13% per annum payable semi-annually. A note receivable for the agreed upon contribution amount plus accrued interest on the note in the amount of $96,114 less an allowance for doubtful accounts in the amount of $47,014 has been recorded at June 30, 2020. In the year 2020, the AZSTA began making payments to the City. A payment of $2,207 has been received by the City on the note as of June 30, 2020. On December 27, 2012, the City of Glendale Municipal Property Corporation (MPC), a blended component unit of the City, issued subordinate excise tax revenue bonds to refund the $199,750 third lien excise tax revenue bonds that were previously issued by the Western Loop 101 Public Facilities Corporation (PFC). The issuance of $183,405 in tax-exempt bonds and $16,850 in taxable bonds achieved debt service savings and lowered the next five fiscal years’ annual rental payments under the Lease Agreement. In fiscal year 2016, the AZSTA receivable was recorded in the MPC debt service fund. 50 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) V. Capital assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2020, is as follows: Balances June 30, 2019 Governmental activities Non-depreciable assets: Construction in progress Land Artwork Total non-depreciable assets $ 22,848 119,498 2,415 144,761 Increase $ 21,819 224 22,043 Balances June 30, 2020 Decrease $ (30,716) (1,714) (32,430) $ 13,951 117,784 2,639 134,374 Depreciable assets: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total depreciable assets 387,332 288,029 816,605 91,329 78,954 21,339 55,991 5,582 6,134 50,369 1,801,664 6,796 899 32,224 829 1,358 2 700 7 1,013 4,021 47,849 (5,333) (1,094) (1,457) (195) (19) (2,265) (10,363) 388,795 287,834 848,829 92,158 80,312 21,341 55,234 5,394 7,128 52,125 1,839,150 Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total accumulated depreciation (155,246) (167,037) (354,741) (49,320) (13,396) (10,976) (45,732) (4,601) (4,074) (34,073) (839,196) (9,469) (9,617) (21,698) (3,101) (1,123) (480) (2,353) (595) (587) (3,371) (52,394) 3,570 865 1,444 195 2,213 8,287 (161,145) (175,789) (376,439) (52,421) (14,519) (11,456) (46,641) (5,001) (4,661) (35,231) (883,303) Total depreciable assets, net 962,468 (4,545) (2,076) 955,847 Governmental activities capital assets, net $ 1,107,229 51 $ 17,498 $ (34,506) $ 1,090,221 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Balances June 30, 2019 Increase Decrease Balances June 30, 2020 Business-Type activities: Non-depreciable assets: Construction in progress - water and sewer $ Construction in progress - landfill Construction in progress - housing authority Land Total non-depreciable assets 64,709 3,381 331 16,070 84,491 Depreciable assets: Buildings Water rights Improvements other than buildings Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment System Purchase Automotive equipment Total depreciable assets 17,381 9,183 83,103 137,735 146,114 257,636 142,450 32,755 5,187 4,243 1,165 1,163 27,058 865,173 339 7,340 13,226 6,359 23,027 127 2,047 253 1,060 127 2,057 55,962 (12) (835) (847) 17,720 9,183 90,443 150,961 152,473 280,663 142,577 34,802 5,440 5,291 1,292 1,163 28,280 920,288 Less accumulated depreciation for: Buildings Water rights Improvements other than buildings Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment System Purchase Automotive equipment Total accumulated depreciation (11,501) (2,318) (38,748) (56,526) (73,300) (133,715) (62,450) (17,495) (2,923) (3,362) (968) (972) (17,557) (421,835) (384) (178) (3,494) (3,202) (3,462) (8,995) (4,196) (1,019) (99) (355) (24) (109) (1,957) (27,474) 835 835 (11,885) (2,496) (42,242) (59,728) (76,762) (142,710) (66,646) (18,514) (3,022) (3,717) (992) (1,081) (18,679) (448,474) Total depreciable assets, net 443,338 28,488 (12) 471,814 Business-Type activities capital assets, net $ 527,829 52 $ $ 43,129 3,263 77 46,469 74,957 $ $ (35,277) (6,516) (158) (41,951) (41,963) $ $ 72,561 128 250 16,070 89,009 560,823 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Depreciation was charged to functions/programs as follows: Governmental activities: General Public safety Public works Street maintenance Community services Total depreciation expense $ $ Business-Type activities: Water and sewer Landfill Solid Waste Housing Total depreciation expense $ $ 15,604 5,527 14,903 11,670 4,690 52,394 24,573 1,190 1,437 274 27,474 Included in the water and sewer depreciation amount is $178 amortization of water storage rights. VI. Construction commitments The City has active construction projects as of June 30, 2020. The projects include street construction, park facilities, and the construction of additional water and sewer facilities. At year-end, the government’s commitments with contractors are as follows: Project General government Community services Community environment Public works Street maintenance Water and sewer facilities Landfill Housing ISF Total primary government Spent-to-Date $ 10 1,193 233 9,657 72,561 128 250 2,857 $ 86,889 Construction Commitment $ 45 149 324 236 1,150 26,554 1,115 $ 29,573 VII. Internal service funds The City is exposed to various risks of loss. Certain of these risks are accounted for within the internal service fund type. A. Risk management On January 1, 1987, the City established a risk management fund for torts, and loss and destruction of assets. The City’s risk management fund purchases excess or commercial insurance as follows: automobile and general liability, errors and omissions, employment practices liability, employee benefit liability, employee benefits wrongful acts, and products completed operations hazards with limits up to $50,000. The risk management fund was fully self-insured through June 30, 1998, for tort liability 53 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) losses. Effective July 1, 1998, the City purchased excess insurance. Currently the excess insurance liability coverage has a $1,000 self-insured retention. The fund also purchased commercial insurance for airport owners and operators’ liability with limits up to $20 and no deductible, crime coverage with limits up to $10,000 with a $50 deductible, fiduciary liability covering the Deferred Compensation Committee with limits up to $5,000 and no deductible, and public employees blanket bond covering the Risk Management and Workers’ Compensation Trust Fund Board with limits up to $10. Property coverage for damage or destruction of city assets is up to $1,000,000 with varying deductibles from $25 up to $500. The property coverage includes builder’s risk, automobile physical damage, boiler and machinery, pollution and cyber (with a $2,000 liability limit). Two excess cyber liability policies were also purchased with limits up to $8,000 and a $25 deductible or 100 notified individuals. Funds receiving insurance coverage pay monthly premiums to the risk management fund based upon a budget model taking into consideration actuarial analysis and projections, prior loss experience, staffing, and operating budget. Premium payments to insurance carriers, loss control, and risk management expenses are made directly from the risk management fund. Insurance coverage has not been significantly reduced in recent years and settled claims have not exceeded insurance in any of the last three years. B. Workers’ compensation On July 1, 1994, the City established a workers’ compensation fund for work-related injuries to employees. The workers’ compensation fund provides statutory coverage for each injured workers’ compensation claim with an $1,000 self-insured retention and employers’ liability with a limit of $2,000 per occurrence. Funds receiving insurance coverage pay monthly premiums to the workers’ compensation fund based upon a budget model taking into consideration actuarial analysis and projections prior loss experience, staffing level, operating budget and the National Council on Compensation Insurance workers’ compensation manual rates. Premium payments to insurance carriers and loss control and workers’ compensation expenses are made directly from the workers’ compensation fund. There have been no settlements paid in excess of insurance in any of the past three years. C. Employee benefits On July 1, 2000, the City established an employee benefits fund to meet future cost increases for healthrelated insurance. For active employees’ premiums are collected through contributions from employee paychecks and department budgets. Retirees contribute 100% of the premiums, COBRA participants contribute 100% of premiums plus 2% administration fee for their insurance benefit coverage. Premiums for the medical, vision, dental, and life insurance plans are determined prior to each renewal period based on the actuarial valuation of the costs of claims, administration of the plan, demographics of the group, plan design changes and any new mandated benefits. The City is self-insured on the medical plan with an aggregate stop-loss of 125% and a specific stop-loss of $200. If claims exceed the stop-loss amounts the policy will reimburse the plan for the claims in excess of that amount. Premiums for the self-insured medical plan are set prior to the beginning of each plan year equal to 125% of the expected claims liability. 54 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Premium payments to insurance carriers are made directly from the fund. There have been no settlements paid in excess of insurance in any of the past three years nor has insurance coverage been significantly reduced in recent years. D. Estimated liability Based on information provided by the actuary, liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported, the effects of specific, incremental claim adjustment expenses, and other allocated claim adjustment expenses and recoveries for salvage and subrogation. The City’s workers’ compensation self-insurance program liability includes recoveries related to subrogation. Salvage and subrogation are immaterial to employee benefits selfinsurance programs and are not incorporated into the liability. The risk management trust fund and workers’ compensation self-insurance programs do include a provision for unallocated claim adjustment expenses. The workers’ compensation fund includes payment of Industrial Commission taxes and fees. The City claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payout and other economic and societal factors. The risk management fund and the workers’ compensation fund are funded to meet a 55% confidence level of the most recent actuarial report. The City reports the estimated liability in net present value dollars using a future investment yield assumption of .51%. These liabilities are reported in the internal service funds at their actuarial determined liability of $16,691 as of June 30, 2020. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2020 2019 Workers' Compensation 2020 2019 Unpaid claims, beginning of fiscal year $ 4,404 Current year claims and changes in estimate 2,075 Claims payments (2,021) $ 4,043 $ 6,852 $ 6,331 3,232 (2,871) 3,347 (2,657) 2,358 (1,837) Balance at fiscal year end $ 4,404 $ 7,542 $ 6,852 $ 4,458 Employee Benefits 2020 2019 $ 3,744 $ 28,386 (27,439) $ 4,691 3,541 28,648 (28,445) $ 3,744 E. Fleet Services The Fleet Services Fund was established to track income and expenses of the internal services provided to city departments. The Fleet Services Fund specifically covers vehicle maintenance needs and fuel purchased for city vehicles. F. Technology The Technology Fund and the Technology Projects Fund are used to track income and expenses of the internal services provided to city departments for telephone services, information technology services, and support. The Technology Fund specifically supports all the city’s computers, hardware, and software. The Technology Fund is designed to balance, with the rates (revenues) set to recover the actual expenses each year. The Technology Projects Fund may accrue a fund balance in anticipation of future upgrades and potential carry over of project funding. 55 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) VIII. Leases A. Operating lease revenue The City leases various City-owned properties and buildings under cancelable and non-cancelable longterm lease agreements through fiscal year 2020 and beyond. The carrying value of leased assets is $257,732 (cost of $497,780 less accumulated depreciation of $240,048). The leased properties and buildings are included as capital assets in the government-wide financial statements. Certain leases contain provisions for future increased revenues based upon changes in the Consumer Price Index. Scheduled minimum revenues for non-cancelable leases for succeeding fiscal years ending June 30 are as follows: Total Revenues $ 1,820 1,469 1,369 1,315 1,297 29,865 $ 37,135 Fiscal Year 2021 2022 2023 2024 2025 2026 and beyond Total IX. Short-term debt The City did not issue short-term debt for the year ended June 30, 2020. X. Long-term debt A. General obligation bonds (GO) 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. General obligation bonds are direct obligations and pledge the full faith and credit of the City and are repaid through the City’s levying of property taxes. Retirement of the general obligation bonds in the business-type activities are intended to be paid back by the revenues of the business-type activities. B. Revenue bonds The transportation revenue bonds are special revenue obligations of the City and are used to construct various transportation projects such as roadway widening, intersection improvements, and right-of-way acquisitions. The $62,570 in bonds outstanding is secured by the City’s pledge of a 0.50% transportation excise tax approved by voters on November 6, 2001. The debt service payments are also secured by the same excise tax. The total remaining principal and interest to be paid to a trustee under a trust agreement is $80,903. The current year revenues of $30,989 collected in the transportation special revenue fund paid the current year principal and interest amounts of $4,140 and $2,893 respectively. For transportation revenue bonds, the pledged revenue coverage covenants in the purchase agreements require the transportation excise taxes received must be equal to or at least one and one-half times the total interest and principal payment required in the current fiscal year. The Excise Tax Revenue Refunding bonds are special obligations of the City and are not a general obligation of the City. Under a purchase agreement the City makes monthly payments to a trustee. The payments are secured by a senior claim and pledge by the City of all of the City’s unrestricted excise tax 56 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) revenues which comprise of all excise tax, transaction privilege, franchise and income tax which it collects or is apportioned by the State or political subdivision of the State. The $197,955 in bonds outstanding was issued to refund senior and subordinate excise tax revenue bonds issued by the MPC. The total principal and interest remaining on the bonds to be paid is $266,326. The current year principal and interest amount of $7,100 and $9,801 were funded with a transfer from the General fund. The $167,250 in water and sewer revenue bonds/obligations outstanding has been issued for the construction, acquisition, and equipping of water and sewer facilities and related systems and infrastructure. These are special revenue obligations and are pledged and secured solely by the net revenues of the system. The net revenues of the system consist of revenues collected from customers including development impact fees and interest income less such necessary expenses of operation, maintenance, and repair of the system excluding depreciation, amortization and debt service. The total principal and interest remaining to be paid is $208,781. The current year principal and interest on the bonds were $25,081 and net revenues of the system were $56,278. For water and sewer revenue bond senior obligations, the pledged revenue coverage covenants in the purchase agreements require the revenues received must be equal to or at least one hundred twenty percent of the combined debt service on all outstanding senior obligations. For water and sewer revenue bond subordinate obligations, the pledged revenue coverage covenants in the purchase agreements require the revenues received must be equal to or at least one hundred twenty percent of the combined debt service on all outstanding senior obligations and subordinate obligations. C. Municipal Property Corporation (MPC) bonds In 1982, 2002, 2003, 2006 and 2008 the MPC, a non-profit corporation, issued bonds to finance the construction of a new municipal office complex, hockey arena, public safety training center, parking garage, media center, convention center and city infrastructure, respectively. On October 19, 1982, July 31, 2002, May 1, 2003, and June 1, 2006, the City entered into a lease purchase agreement with MPC, whereby, the City purchased the constructed municipal office complex, hockey arena, public safety training center, parking garage, media center, convention center and city infrastructure, respectively, from MPC. In addition, on April 1, 2004, the City entered into a lease agreement with the MPC to issue bonds to finance an escrow account to refund certain outstanding City improvement district bonds. In June 2008, the City entered into a lease agreement with the MPC to issue bonds to refund outstanding 2006B bonds. In February 2012, the City entered into a lease agreement with the MPC to issue bonds to partially refund outstanding maturities of the bond series 2003, 2004, and 2006. In December 2012, the City entered into a lease agreement with the MPC to issue bonds to partially refund outstanding maturities of the bond series 2003 and 2004, and to fully refund outstanding maturities of the Western Loop 101 Public Facilities Corporation bond series 2008. In March 2015, senior excise tax revenue bonds were issued to refund MPC bonds series 2002B, 2003B, 2006A, and series 2012D, respectively. In April 2016, senior excise tax revenue bonds were issued to refund MPC bond series 2003 D in full as well as several maturities of the MPC bond series 2008A. An amount equal to the MPC debt service and related miscellaneous fees, is payable to the MPC in monthly installments by the City. Under the provisions of the purchase agreement, the City has pledged for the payment of the purchase price: 1) all net revenues derived from the municipal office complex and arena, and 2) all excise, transaction, privilege and franchise taxes which the City currently collects, may collect or are allocated to the City by any other governmental unit or municipal corporation, except the City’s share of such amounts which by state law, rule or regulation must be expended for other purposes. However, under no circumstances shall such pledge constitute a general obligation of the City nor will the purchase price be payable from the proceeds of ad valorem taxes. The total principal and interest remaining to be paid is $304,781. Excise tax revenues pledged for repayment of MPC was $179,289. The current year principal and interest paid was $16,959. 57 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) For senior liens, the pledged revenue coverage covenants in the lien agreements require the unrestricted excise taxes received must be equal to or at least three times the senior excise tax obligation payment required in any current fiscal year. The requirement for subordinate liens is the unrestricted excise taxes received must be equal to at least two times the combined total payment on senior excise tax obligations and subordinate lien excise tax obligations in any current fiscal year. D. Changes in long-term liabilities The following is a summary of changes in long-term liabilities reported in the governmental activities financial statements for the year ended June 30, 2020: June 30, 2019 General obligation (GO) bonds General obligation (GO) bondsDirect borrowing Revenue bonds: Excise Tax Revenue bonds Transportation bonds Transportation bonds-Direct borrowing M unicipal Property Corporation Total bonds payable $ Other long-term obligations: Net pensions and OPEB liabilities Settlement obligations Compensated absences Claims and judgments Unamortized premium on debt issuance Discount on debt issuance Developer payable obligations Total other long-term obligations Total $ Increases 116,905 $ June 30, 2020 Decreases - $ (41,000) $ 75,905 Amounts Due Within One Year $ 13,800 26,555 - (2,015) 24,540 2,115 205,055 55,340 - (7,100) - 197,955 55,340 10,815 3,900 11,370 197,420 612,645 - (4,140) (7,195) (61,450) 7,230 190,225 551,195 15 5,375 36,020 338,308 3,000 29,981 15,000 14,610 13,326 33,808 (1,437) (3,000) (12,955) (32,117) 351,481 30,352 16,691 15,503 16,691 53,764 - (4,941) 48,823 4,941 (478) 4,376 443,951 317 62,061 26 (54,424) (452) 4,693 451,588 37,135 (115,874) $ 1,002,783 1,056,596 $ 62,061 $ $ 73,155 General, transportation, and police and fire sales tax special revenue funds typically have been used to liquidate compensated absences in prior years, since most employees engaged in governmental activities are paid from those funds. Paychecks include payment for leave taken during the current pay period. Of the $1,002,783 in the total liabilities, $604,259 is related to net position for the City’s net investment in capital assets. Other obligations not included in the calculation of net position for the City’s net investment in capital assets are pension and OPEB obligations, settlement obligations, compensated absences, and claims and judgments. No governmental funds cash has been used to fund the City of Glendale post-employment healthcare plan post-employment benefit obligation (OPEB). The net annual City of Glendale post-employment healthcare OPEB cost for the current fiscal year was funded by the employee benefits internal service fund. This fund receives money from employee contributions as well as general and water and sewer fund contributions. 58 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) The following is a summary of changes in long-term liabilities reported in the business-type activities financial statements for the year ended June 30, 2020: June 30, 2019 Water and sewer revenue/obligation bonds $ Other long-term obligations: Estimated closure and post-closure costs Unamortized premium on debt issuance Net pensions and OPEB liabilities Compensated absences Housing noncurrent liabilities Total other long-term obligations Total $ 183,685 Additions $ - Reductions June 30, 2020 Amounts Due Within One Year (16,435) $ 167,250 $ 16,585 $ 15,778 241 - 16,019 - 20,232 30,697 3,955 36 70,698 347 1,892 20 2,500 (2,251) (123) (1,686) (4,060) 17,981 30,921 4,161 56 69,138 2,250 2,151 4,401 (20,495) $ 236,388 $ 20,986 254,383 $ 2,500 $ Of the $236,388 in total liabilities, $185,231 (including matured bonds payable) is included in the calculation of net position for the City’s net investment in capital assets. Other obligations not included in the calculation of net position for the City’s net investment in capital assets are estimated landfill closure and post-closure costs, pension and OPEB liabilities, compensated absences, and housing noncurrent liabilities. E. Current and advance refunded bonds The City has no current or advance refunded bonds outstanding as of June 30, 2020. The remainder of this page left blank intentionally. 59 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) F. Bonds payable Bonds payable at June 30, 2020, are comprised of the following: Classified in governmental activities on the government-wide financial statements: Purpose Interest Rate Issued Fiscal Year Ending June 30 Year Series M atures GO bonds payable from secondary assessed property taxes Refunding Tax-Exempt 4.00-5.00 2011 Refunding Tax-Exempt 2.00-5.00 2015 Various Tax-Exemp t(A), Taxable(B) 1.54-4.00 2016 Various Tax-Exemp t 2018 5.00 2018 Various Taxable 2019 3.00-5.00 2019 Total Amount of Original Issue Bonds Outstanding June 30, 2020 2022 2022 2036 2037 2038 38,300 39,490 27,285 15,240 15,385 6,580 17,550 25,780 11,020 14,975 75,905 GO bonds payable from secondary assessed property taxes-direct borrowing Refunding Taxable BAB 2017 3.16 2018 2030 Total 26,555 24,540 24,540 Revenue bonds pay able from the 0.5% transportation sales tax Refunding Tax-Exempt Excise Tax Rev 2.00-5.00 2015 Total 2032 55,635 55,340 55,340 Revenue bonds pay able from the 0.5% transportation sales tax-direct borrowing Refunding Tax-Exempt Excise Tax Rev 2.62 2017 2032 Total 19,330 7,230 7,230 2031 2033 2033 2032 100,430 13,700 33,830 65,385 88,590 13,700 30,755 64,910 197,955 M unicipal Property Corporation payable from general fund lease pay ments M PC Taxable excise tax 2003B 1.46-5.58 2003 2033 M PC Taxable excise tax 2008B 5.45-6.16 2008 2033 M PC Tax-Exempt refunding 2012A 3.00-5.00 2012 2021 M PC Tax-Exempt refunding 2012B 5.00 2013 2033 M PC Tax-Exempt refunding 2012C 5.00 2013 2038 Total 105,260 52,780 8,665 39,620 183,405 1,480 39,585 1,295 39,620 108,245 190,225 Excise Tax bonds payable from general fund sales tax Refunding Tax-Exempt 2015A 5.00 Refunding Taxable 2015B 3.93-4.03 Refunding Tax-Exempt 2016 3.00-5.00 Sub Refunding Tax-Exemp t 2017 5.00 Total 2015 2015 2016 2018 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 60 $ 551,195 (36,020) 515,175 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Classified in business-type activities on the government-wide financial statements: Issued Fiscal Year Ending June 30 Year Series Matures Amount of Original Issue Revenue bonds/obligations payable from water and sewer fund Various 6.20-6.55 2011 2030 Various refunding 2.00-5.00 2012 2028 Various refunding 2.50-5.00 2015 2028 Total 25,685 77,635 121,245 Purpose Interest Rate Bonds Outstanding June 30, 2020 25,685 47,770 93,795 167,250 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities $ 167,250 (16,585) 150,665 G. Legal debt margin The Arizona Constitution provides that the general obligation bonded indebtedness for a city for general municipal purposes may not exceed 6% of the limited assessed valuation of the taxable property in that city. In addition to the 6% limitation for general municipal purpose bonds, cities may issue general obligation bonds up to 20% of the limited assessed valuation for supplying such city with water, sewer, artificial light, public safety, law enforcement, fire and emergency services, streets and transportation facilities, and for the acquisition and development of land for open space preserves, parks, playgrounds and recreational facilities. The City’s unused bonded debt borrowing capacity as of June 30, 2020, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 88,697 (9,039) 79,658 20% $ $ 295,656 (89,861) 205,795 The various bond indentures contain significant limitations and restrictions on annual debt service requirements, maintenance and flow of monies through various restricted accounts, and minimum revenue and bond coverage. The City is in compliance with all such significant limitations and restrictions. The remainder of this page left blank intentionally. 61 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) H. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of June 30, 2020, are shown below: GO bonds Authorized Amount Issued through June 30, 2020 Authorized but Unissued Voter authorized October 20, 1981 Operations center $ $ $ 6,750 Voter authorized March 10, 1987 Library 550 6,200 9,698 8,000 1,698 18,215 50,500 4,780 28,453 13,435 22,047 40,910 17,165 23,745 17,000 15,398 53,700 64,801 1,460 3,241 64,801 15,540 15,398 50,459 - 6,935 185 6,750 20,554 16,155 102,638 79,065 502,319 10,847 1,823 4,578 53,600 199,483 9,707 14,332 98,060 25,465 302,836 Voter authorized November 2, 1999 (1) Cultural facility Economic development Governmental facilities Landfill development Library Open spaces Public safety Transit (1) (1) (1) Voter authorized May 15, 2007 Flood control Parks and recreation Public safety Streets and parking Total GO bonds $ $ $ Revenue bonds Voter authorized November 2, 1999 (1) Water and sewer Total revenue bonds $ 10,000 10,000 $ - $ 10,000 10,000 Total bonds $ 512,319 $ 199,483 $ 312,836 (1) Certain general obligation bonds or revenue bonds can be issued as general obligation bonds, revenue bonds or a combination thereof. 62 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) I. Other debt (developer, notes, long-term) Classified in the governmental activities in the government-wide financial statements: Developer Payable Obligation - On December 1, 2005, the City entered into a development and ground lease agreement with Cabela’s whereby Cabela’s has the option to purchase the City owned property 90 days after the expiration of the 20-year ground lease (option date). In addition, the City entered into a site improvement management agreement on July 1, 2006, whereby Cabela’s accrues a management compensation amount for their actual costs of operation, maintenance, and repair of site improvements. The management compensation amount accrues annually with interest. At the option date Cabela’s can purchase the property at Fair Market Value and receive a credit against the purchase price for the accrued management compensation amount. The remainder of this page left blank intentionally. 63 $ 4,693 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) J. Future year debt service requirements Fiscal Year Ending Transportation Bonds Transportation Bonds Direct Borrowing 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Total $ $ 6,495 6,495 6,490 6,496 6,495 6,493 6,494 6,493 6,494 6,491 6,494 71,430 Less interest 16,090 Principal $ 55,340 $ 205 204 204 203 208 207 207 206 205 205 205 7,214 9,473 $ MPC Bonds Excise Tax Bonds 14,844 14,476 13,150 13,134 13,096 13,092 13,090 13,074 13,836 13,799 13,793 14,915 27,821 22,533 22,533 22,531 22,532 22,532 304,781 $ 20,292 20,658 21,987 22,000 22,033 22,049 22,041 22,059 21,300 21,338 21,342 20,224 9,004 266,327 2,243 114,556 68,372 7,230 $ 190,225 $ 197,955 G.O. Bonds $ 16,898 15,631 4,430 4,434 4,432 4,439 4,438 4,439 4,618 4,431 4,429 4,438 4,443 4,432 4,429 4,425 2,277 1,270 98,333 G.O. Bonds Direct Borrowing Water and Sewer Revenue Bonds/ Obligations $ $ 29,004 22,428 $ 75,905 2,890 2,893 2,899 2,898 2,899 2,903 2,905 2,904 2,905 2,908 $ 4,464 41,531 24,540 $ 167,250 The remainder of this page left blank intentionally. 64 24,408 24,079 25,290 25,288 25,285 25,289 24,162 20,302 7,411 7,267 208,781 Total $ 86,032 84,436 74,450 74,453 74,448 74,472 73,337 69,477 56,769 56,439 46,263 46,791 41,268 26,965 26,962 26,956 24,809 23,802 988,129 $ 718,445 269,684 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) The following table discloses the debt service requirements as of June 30, 2020, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2021 2022 2023 2024 2025 2026-2030 2031-2035 2036-2038 Total Principal 52,605 53,475 46,035 47,935 50,000 244,905 154,060 69,430 $ 718,445 Interest 33,427 30,961 28,415 26,518 24,448 85,589 34,189 6,137 $ 269,684 $ Total 86,032 84,436 74,450 74,453 74,448 330,494 188,249 75,567 988,129 K. New bonds No new bonds were issued in FY 2020. XI. Landfill obligations The City operates a municipal sanitary landfill under an Aquifer Protection Permit and Solid Waste Facility Plan approval issued by the Arizona Department of Environmental Quality requiring future closure work and post-closure monitoring. The permit meets federal and state regulations. These 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 30 years after closure. Although closure and postclosure care costs will not be paid until near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and post-closure costs as an operating expense in each period based on landfill capacity used. The landfill closure and post-closure care liability at June 30, 2020, calculated below, represents the cumulative amount reported to date based on the use of estimated capacity of the landfill. North Cell South Cell 29,598 - 24,638 21,976 89% Capacity (cubic yards) Capacity used to date Percentage of capacity used Total closure and post-closure costs in present dollars: as of June 30, 2020 as of June 30, 2019 $ $ 19,124 18,979 $ $ 17,959 17,823 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2020 $ 19,124 $ 1,940 Liability recognized as of June 30, 2020 $ - $ 16,019 These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2019-20. The estimated costs are subject to changes due to inflation, deflation, new technology, and applicable laws and regulations. Assets are not restricted to fund the obligations. The estimated remaining life of the landfill is approximately 42 years. 65 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) According to state and federal laws and regulations, the City must comply with the local government financial test requirements that assure the City can meet the cost of landfill closure, post-closure, and corrective action when needed. The City is in compliance with these requirements. XII. Inter-fund transactions Inter-fund balances at June 30, 2020, consisted of the following: A. Due to/due from Due to general fund from: Other non-major governmental funds Fire and police construction capital project Parks bond construction capital project Other proprietary fund Housing Total due to general fund $ $ 332 38 8 378 The inter-fund balances at June 30, 2020, include short-term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to bond sales or grant reimbursements. All inter-fund balances outstanding at June 30, 2020, are expected to be repaid within one year. The remainder of this page left blank intentionally. 66 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) B. Inter-fund transfers Inter-fund transfers for the year ended June 30, 2020, consisted of the following: Transfers to municipal property corporation debt service fund from: General fund 16,175 Total transfers to municipal property corporation debt service fund 16,175 Transfers to non-major special revenue fund from: General fund 2,071 Street construction fund 118 Fire and police construction fund 13 Water and sewer 228 Non-major proprietary funds 32 Total transfers to non-major special revenue fund 2,462 Transfers to non-major debt service funds from: General fund 16,916 Transportation special revenue fund 7,043 Total transfers to non-major debt service funds 23,959 Transfers to non-major capital projects fund from: Highway user gas tax fund 5,890 Transportation special revenue fund 1,523 Total transfers to non-major capital projects fund 7,413 Transfers to Water and sewer proprietary fund from: General fund 397 Non-major capitol projects 25 Total transfers to water and sewer proprietary fund 422 Transfers to non-major proprietary funds from: General fund 1,164 Total transfers to other non-major proprietary fund 1,164 Grand total all transfers $ 67 51,595 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Transfers are used to: 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them; 2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due; and 3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. The inter-fund transfers are all classified as transfers and are included in the results of operations of both governmental and proprietary funds. XIII. Encumbrances The Arizona Revised Statutes allow cities to encumber unused appropriations for up to sixty days after the end of the fiscal year. However, effective July 1, 1987, the City adopted a policy of not recognizing encumbrances at year-end. All appropriations lapse on the last day of the fiscal year. Any outstanding commitments that the City intends to honor are budgeted in the new fiscal year. At June 30, 2020, the City intended to honor $4,621 of outstanding encumbrances in the new fiscal year. Fund Major: Water and sewer Non-Major: Highway Users Gas Tax Other special revenue Streets capital Other capital Landfill Sanitation Total XIV. $ 1,474 $ 189 46 798 886 571 657 4,621 Equity in joint ventures A. Sub-Regional Operating Group (SROG) The City, along with the cities of Phoenix, Mesa, Scottsdale and Tempe participates in the Sub-Regional Operating Group (SROG), a joint venture. SROG constructs, operates and maintains jointly used facilities including the 91st Avenue Waste Water Treatment Plant (Plant) and certain sewage transportation facilities. The City of Phoenix acts as lead agency, and as such, is responsible for the planning, budgeting, construction, operation and maintenance of the Plant. In addition, the City of Phoenix provides all management personnel and financing arrangements and accepts federal grants on behalf of the participants. Each participant pays for its costs of operation and maintenance based on relative sewage flows and strengths and for purchased capacity in the plant and related transportation facilities based on ownership. The latest available audited financial information on the joint venture is as of and for the fiscal year ended June 30, 2019. The City accounts for its approximate 6.5% investment using the equity method in the water and sewer fund. For the year ended June 30, 2020, the City recognized a loss in the joint venture of $3,788. The City has financed its share of construction costs through the issuance of revenue bonds, development fees and grants. The bonds are collateralized by a pledge of water revenues and are reflected in the financial statements of the water and sewer fund. The joint venture itself has not issued any debt. 68 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) A summary of the audited financial information on the joint venture as of and for the fiscal year ended June 30, 2019, is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets Liabilities Net position $ $ Total revenues Total expenses Decrease in net position $ $ 57,392 640,429 697,821 41,687 656,134 66,519 (94,211) (27,692) Copies of separate financial statements of the joint venture can be obtained from Arizona Municipal Water Users Association, 4041 North Central Avenue, Phoenix, Arizona 85012. B. Regional Wireless Cooperative (RWC) The City currently participates with twenty Arizona cities and districts in the Regional Wireless Cooperative agreement for the construction, operation and maintenance of a regional communications network, a joint venture. The City of Phoenix is both the Network and the Administrative Managing Member. As the Network Managing Member, Phoenix operates and maintains the network. As the Administrative Managing Member, Phoenix is responsible for accounting, budgeting, procurement and contracting for the RWC. The City has an ongoing financial responsibility as a result of the agreement to participate in the cost to construct, operate and maintain the network. The city’s share of costs is determined based on the proportionate number of subscriber units in use at the time of assessment. The latest available audited financial information on the joint venture is as of and for the fiscal year ended June 30, 2019. The equity interest for the City at June 30, 2019, was $2,861. The City accounts for its approximate 4.0% investment using the equity method in the Public Safety fund. For the year ended June 30, 2020, the City recognized a loss in the joint venture of $719. The remainder of this page left blank intentionally. 69 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) A summary of the audited financial information on the joint venture as of and for the fiscal year ended June 30, 2019, is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets Liabilities and Deferred Inflows of Resources Net position Total revenues Total expenses Decrease in net position $ $ $ $ 5,521 69,091 74,612 3,714 70,898 13,790 (18,104) (4,314) Copies of separate financial statements of the joint venture can be obtained from RWC Director’s Office, 200 W. Washington Street, 12th Floor, Phoenix, Arizona 85003 XV. Jointly governed organizations The Regional Public Transit Authority (RPTA) is a voluntary association of local governments, including Glendale, Phoenix, Mesa, Tempe, Scottsdale, and Maricopa County. Its purpose is to ensure that a viable public transportation system is provided as an alternative for regional mobility and to ease the traffic congestion and air pollution caused by over-reliance on the single occupant vehicle. The Board of Directors consists of the mayors of those cities and a member of the County Board of Supervisors. Arizona Municipal Water Users Association (AMWUA) is a non-profit corporation established and funded by cities in Maricopa County for the development of an urban water policy and to represent the cities' interests before the Arizona legislature. In addition, AMWUA contracts with the cities jointly using the 91st Avenue Waste Water Treatment Plant to perform certain accounting, administrative and support services. XVI. Governmental fund balance components and fund type definitions The City has a formally adopted minimum fund balance policy for the general fund. This policy was adopted though the annual budget process. The policy states that the general fund should maintain a minimum total unassigned fund balance of 25% of the projected annual ongoing revenues. The City’s general fund, unassigned fund balance at June 30, 2020 is $49,648. Per the City’s adopted financial policies, 10% of the general fund operating revenue which totals $25,400 has been earmarked as the Budget Stabilization Reserve and $24,248 has been earmarked as the Operating Reserve. Consistent with the requirements of GASB Statement No. 54, formal Council action was not taken prior to June 30, 2020 to commit these funds; therefore, the funds are reported as unassigned. 70 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) General Nonspendable Inventories and prepaid items Public transit Cemetery perpetual care Total Nonspendable Restricted Public transit State drug enforcement U.S. drug enforcement Debt service Court security Court time payments Court computer upgrade HOM E program Highway user gas tax Police activities Fire activities Other grants Development impact fees Streets construction Economic development Open space/trails Cultural and historical projects Government facilities Library construction Garden for visually impaired Neighborhood stabilization Total restricted Committed Artwork Pool/park repair Other Total committed Assigned Equipment replacement General government capital projects Bed tax/tourism Public safety training facility TPT revenue stabilization Other Total assigned Unassigned fund balance $ $ 5,621 5,621 Transportation General Obligation Debt Service M unicipal Property Corporation Debt Service $ $ $ 133 133 - - Other Non-M ajor Governmental Funds $ 6,038 6,038 Total Governmental Funds $ 5,621 133 6,038 11,792 4,132 1,242 5,374 63,221 63,221 1,545 1,545 2,857 2,857 1,334 162 1,187 97 29 127 341 6,762 1,002 14,856 11,361 1,008 254 385 65 51 35 409 39,465 63,221 1,334 162 5,589 97 29 127 341 6,762 4,132 1,242 1,002 14,856 11,361 1,008 254 385 65 51 35 409 112,462 - - - - 1,499 185 50 1,734 1,499 185 50 1,734 2,412 63,354 1,545 2,857 569 569 (502) 47,304 2,412 21,800 2,110 5,000 3,000 34,322 49,648 94,965 $ 71 $ $ $ $ 21,800 2,110 569 5,000 3,000 34,891 49,146 210,025 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Enterprise Fund Type Water and sewer fund Restricted for debt service $ 16,435 Restricted for revenue bond retirement/replacement and extension Two percent of net water revenues must be, by bond ordinance, reserved for the replacement and extension of the City’s water distribution system, or for the retirement of water revenue bonds. The reservation is only required to the extent that the reserve equals two percent of the value of net capital assets of the water and sewer fund. 9,941 Restricted for OPEB benefits 36 Restricted for other purposes 7,465 Total restricted for water and sewer 33,877 Other enterprise funds Restricted for OPEB benefits 19 19 Total restricted for other enteprise funds $ Total restricted for enterprise fund types XVII. 33,896 Pensions and other postemployment benefits The City contributes to the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) for police officers and fire fighters. The plans are component units of the State of Arizona. At June 30, 2020, the City reported the following aggregate amounts related to pensions and other postemployment benefits (OPEB) for all plans to which it contributes: Statement of net position and statement of activities OPEB asset Net pension and OPEB liabilities Deferred outflows of resources related to pensions and OPEB Governmental activities $ 1,656 351,481 Business-type activities $ 55 30,921 68,330 4,162 72,492 24,074 4,163 28,237 49,004 3,079 52,083 Deferred inflows of resources related to pensions and OPEB Pension and OPEB expense 72 Total $ 1,711 382,402 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) A. Arizona State Retirement System (ASRS) Plan Description - City employees not covered by the other pension plans described on the following pages participate in the Arizona State Retirement System (ASRS). The ASRS administers a costsharing multiple-employer 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. 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 its Web site at www.azasrs.gov. Benefits Provided - The ASRS provides retirement, disability, health insurance premium supplemental benefits, and survivor benefits. State statute establishes benefits terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and total credited service as follows: Years of service and age required to receive benefit Retirement initial membership date: Before July 1, 2011 On or after July 1, 2011 Sum of years, age equals 80 30 years, age 55 10 years, age 62 25 years, age 60 5 years, age 50* 10 years, age 62 any years, age 65 5 years, age 50* any years, age 65 Final average salary is based on Highest 36 consecutive months of last 120 months Highest 60 consecutive months of last 120 months Benefit percent per year of service 2.1% to 2.3% 2.1% to 2.3% *With actuarially reduced benefits Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic cost-of-living adjustments based on excess investment earnings. Members with a membership date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are payable upon a member’s death. For retired members, the survivor benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to the member’s account balance that includes the member’s contributions and employer’s contributions, plus interest earned. Health insurance premium benefits are available to retired or disabled members with 5 years of credited service. The benefits are payable only with respect to allowable health insurance premiums for which the member is responsible. For members with 10 or more years of service, benefits range from $100 per month to $260 per month depending on the age of the member and dependents. For members with 5 to 9 years of service, the benefits are the same dollar amounts as above multiplied by a vesting fraction based on completed years of service. Active members are eligible for a monthly long-term disability benefit equal to two-thirds of monthly earnings. Members receiving benefits continue to earn service credit up to their normal retirement dates. Members with long-term disability commencement dates after June 30, 1999, are limited to 30 years of service or the service on record as of the effective disability date if their service is greater than 30 years. Contributions - In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer 73 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) 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 year ended June 30, 2020, active ASRS members were required by statute to contribute at the actuarially determined rate of 12.11 percent (11.94 percent for retirement and 0.17 percent for long-term disability) of the members’ annual covered payroll. The City was required by statute to contribute at the actuarially determined rate of 12.11 percent (11.45 percent for retirement, 0.49 percent for health insurance premium benefit, and 0.17 percent for long-term disability) of the active members’ annual covered payroll. In addition, the City was required by statute to contribute at the actuarially determined rate of 10.41 percent (10.29 percent for retirement, 0.05 percent for health insurance premium benefit and 0.07 percent for longterm disability) of annual covered payroll of retired members who worked for the City in positions that would typically be filled by an employee who contributes to the ASRS. The City’s contributions to the pension, health insurance premium benefit, and long-term disability plans for the year ended June 30, 2020, were $8,377, $345, and $120, respectively. During fiscal year 2020, the City paid for ASRS pension and OPEB contributions as follows: 63% from the governmental funds and 37% from the enterprise funds. Liability – At June 30, 2020, the City reported the following asset and liabilities for its proportionate share of the ASRS’ net pension/OPEB asset or liability: Net pension/OPEB (asset) liability ASRS Pension Health insurance premium benefit Long-term disability 97,547 (187) 439 The net asset and net liabilities were measured as of June 30, 2019. The total liability used to calculate the net asset or net liability was determined using update procedures to roll forward the total liability from an actuarial valuation as of June 30, 2018, to the measurement date of June 30, 2019. The City’s proportionate share of the net asset or net liability was based on the City’s actual contributions to the plan relative to the total of all participating employers’ contributions for the year ended June 30, 2019. The City’s proportions measured as of June 30, 2019, and the change from its proportions measured as of June 30, 2018 were: Proportion June 30, 2019 ASRS Pension Health insurance premium benefit Long-term disability Decrease from June 30, 2018 0.67307% 0.67599% 0.67335% (0.02086) (0.01853) (0.01883) Expense - For the year ended June 30, 2020, the City recognized the following pension and OPEB expense: ASRS Pension/OPEB expense Pension Health insurance premium benefit Long-term disability $ 74 12,134 242 149 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Deferred outflows/inflows of resources - At June 30, 2020 the City reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB from the following sources: Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between City contributions and proportionate share of contributions City contributions subsequent to the measurement date Total Pension Deferred Deferred outflows inflows of resources of resources Health insurance premium benefit Deferred Deferred outflows inflows of resources of resources Long-term disability Deferred Deferred outflows inflows of resources of resources $ $ $ $ 1,762 $ 18 - $ 223 412 3,884 368 - - 2,193 - 243 1,595 2,038 8,377 12,146 $ 8,133 1 $ 345 714 52 66 - - - $ $ 9 8 466 120 246 $ 8 $ 17 The amounts reported as deferred outflows of resources related to ASRS pensions and OPEB resulting from city contributions subsequent to the measurement date will be recognized as an increase of the net asset or a reduction of the net liability in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pensions and OPEB will be recognized as expenses as follows: Year Ended June 30, 2021 2022 2023 2024 2025 Thereafter Health insurance premium benefit Pension (965) (3,564) (421) 586 - Long-term disability (80) (80) 23 45 (5) - The remainder of this page left blank intentionally. 75 11 11 20 22 18 27 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Actuarial Assumptions –The significant actuarial assumptions used to measure the total pension/OPEB liability are as follows: Actuarial valuation date Actuarial roll forward date Actuarial cost method Investment rate of return Projected salary increases Inflation Permanent benefit increase Mortality rates Recovery rates Healthcare cost trend rate June 30, 2018 June 30, 2019 Entry age normal 7.5% 2.7-7.2% for pensions/not applicable for OPEB 2.3% Included for pensions/not applicable for OPEB 2017 SRA Scale U-MP for pensions and health insurance premium benefit 2012 GLDT for long-term disability Not applicable Actuarial assumptions used in the June 30, 2018, valuation were based on results of an actuarial experience study for the five-year period ending June 30, 2016. The long-term expected rate of return on ASRS plan investments was determined to be 7.5% using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of 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 weighing 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 are summarized in the following table: Asset Class Equity Real estate Credit Interest rate sensitive bonds Total Target Allocation 50% 20% 20% 10% 100% Long-term expected geometric real rate of return 6.09% 5.85% 5.36% 1.62% Discount Rate - At June 30, 2019, the discount rate used to measure the ASRS total pension/OPEB liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statutes. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the longterm expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension/OPEB liability. The remainder of this page left blank intentionally. 76 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Sensitivity of the City’s proportionate share of the ASRS net pension/OPEB (asset) liability to changes in the discount rate - The following table presents the City’s proportionate share of the net pension/OPEB (asset) liability calculated using the discount rate of 7.5 percent, as well as what the City’s proportionate share of the net pension/OPEB (asset) liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.5 percent) or 1 percentage point higher (8.5 percent) than the current rate. ASRS City's proportionate share of the Net pension liability Net insurance premium benefit liability (asset) Net long-term disability liability 1% Decrease (6.5%) Current Discount Rate (7.5%) 1% Increase (8.5%) $ $ $ 138,831 946 485 97,547 (187) 439 63,043 (1,152) 393 Plan Fiduciary Net Position - Detailed information about the plan’s fiduciary net position is available in the separately issued ASRS financial report. B. Public Safety Personnel Retirement System (PSPRS) Plan Description - City public safety personnel who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS) or employees who became members on or after July 1, 2017, may participate in the Public Safety Personnel Defined Contribution Retirement Plan (PSPDCRP). The PSPRS administers an agent and cost sharing multiple-employer defined benefit pension plans and an agent and cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plans. A nine-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. City public safety personnel who were PSPRS members before July 1, 2017, participate in the agent plans, and those who became PSPRS members on or after July 1, 2017, participate in the PSPRS Tier 3 plans, which are not further disclosed because of their relative insignificance to the City’s financial statements. The PSPRS issues a publicly available financial report that includes their financial statements and required supplementary information. The reports are available on the PSPRS website at www.psprs.com. The remainder of this page left blank intentionally. 77 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Benefits Provided - The PSPRS provides retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefit terms. Retirement, disability, and survivor benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: Retirement and Disability Years of service and age required to receive benefit Final average salary is based on Benefit percentage Normal Retirement Before January 1, 2012 20 years of service, any age 15 years of service, age 62 Initial Membership Date On or after January 1, 2012 and before July 1, 2017 25 years of service or 15 years of credited service, and age 52.5 On or after July 1, 2017 15 years of credited service, age 52.5* 15 or more years of service, age 55 Highest 36 consecutive months of last 20 years Highest 60 consecutive months of last 20 years Highest 60 consecutive months of last 15 years 50% less 2.0% for each year of credited service less than 20 years OR plus 2.0% to 2.5% for each year of credited service over 20 years, not to exceed 80% 1.5% to 2.5% per year of credited service, not to exceed 80% Accidental Disability Retirement 50% or normal retirement, whichever is greater Catastrophic Disability Retirement 90% for the first 60 months then reduced to either 62.5% or normal retirement, whichever is greater Ordinary Disability Retirement Normal retirement calculated with actual years of credited service or 20 years of credited service, whichever is greater, multiplied by years of credited service (not to exceed 20 years) divided by 20 Survivor Benefit Retired Members 80% to 100% 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 *With actuarially reduced benefits Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on inflation. PSPRS also provides temporary disability benefits of 50 percent of the member’s compensation for up to 12 months. Health insurance premium benefits are available to retired or disabled members with 5 years of credited service. The benefits are payable only with respect to allowable health insurance premiums for which the member is responsible. Benefits range from $100 per month to $260 per month depending on the age of the member and dependents. The remainder of this page left blank intentionally. 78 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Employees Covered by Benefit Terms - At June 30, 2020, the following employees were covered by the agent plans’ benefit terms: PSPRS PSPRS Police Firefighters Pension Health Pension Health Inactive employees or beneficiaries currently receiving benefits 220 220 100 100 Inactive employees entitled to but not yet receiving benefits 73 41 37 30 Active employees 378 378 204 204 Total 671 639 341 334 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 and health insurance premium benefits. 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. Contribution rates for the year ended June 30, 2020, are indicated below. Rates are a percentage of active members’ annual covered payroll. PSPRS Police PSPRS Firefighters Active memberpension 7.65%-9.91% 7.65%-10.42% Active memberhealth insurance premium benefit 0%-0.20% 0%-0.18% City-pension 45.06%-50.31% 41.07%-46.35% City-health insurance premium benefit 0.46%-0.54% 0.0%-0.18% The City’s contributions to the plans for the year ended June 30, 2020, were: PSPRS-Police PSPRS-Fire Pension $ 17,500 9,451 Health insurance premium benefit $ 187 1 During fiscal year 2020, the City paid for PSPRS pension and OPEB contributions 100 percent from the General Fund. Liability - At June 30, 2020, the City reported the following assets and liabilities: PSPRS Police PSPRS Firefighters Net pension (asset) liability $ 188,129 93,600 Net OPEB (asset) liability $ 526 (1,524) The net assets and net liabilities were measured as of June 30, 2019, and the total liability used to calculate the net asset or liability was determined by an actuarial valuation as of that date. 79 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Actuarial Assumptions - The significant actuarial assumptions used to measure the total pension/OPEB liability are as follows: Actuarial valuation date Actuarial cost method Investment rate of return Wage inflation Price inflation Cost-of-living adjustment Mortality rates Healthcare cost trend rate June 30, 2019 Entry age normal 7.3% 3.5% for pensions/not applicable for OPEB 2.5% for pensions/not applicable for OPEB 1.75% for pensions/not applicable for OPEB Pub-S-2010 tables Not applicable Actuarial assumptions used in the June 30, 2019, valuation was based on the results of an actuarial experience study for the 5-year period ended June 30, 2016. The long-term expected rate of return on PSPRS plan investments was determined to be 7.3 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of 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 Short term investments Risk parity Fixed income Real assets Real estate GTS Private equity Non-U.S. equity U.S. equity Private credit Total Target allocation 2% 4% 5% 9% 10% 12% 12% 14% 16% 16% 100% Long-term expected geometric real rate of return 0.25% 4.01% 3.00% 6.75% 4.50% 4.01% 8.40% 5.00% 4.75% 5.36% Discount Rate – At June 30, 2019, the discount rate used to measure the PSPRS total pension/OPEB liability was 7.3 percent for Tier 1/2 members, which was a decrease of .1 from the discount rate used as of June 30, 2018. The discount rate used to measure the PSPRS total pension/OPEB liability was 7.0 percent for Tier 3 members. The projection of cash flows used to determine the discount rate 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 rate and the member rate. Based on those assumptions, the plans’ 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 plan investments was applied to all periods of projected benefit payments to determine the total pension/OPEB liability. 80 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Changes in the net pension/OPEB liability - The following tables present changes in the City’s net pension/OPEB liability for the PSPRS pension plans (Police and Firefighters): Pension Health insurance premium benefit Increase (decrease) Total Plan Net pension fiduciary pension liability net liability (asset) position (asset) (a) (b) (a) - (b) $ 328,483 $ 152,491 $ 175,992 Increase (decrease) Total Plan Net OPEB fiduciary OPEB liability net liability (asset) position (asset) (a) (b) (a) - (b) $ 6,548 $ 5,150 $ 1,398 PSPRS - Police Balance at June 30, 2019 Changes for the year: Service cost 8,355 - 8,355 106 - 106 Interest on the total liability Differences between expected and actual experience in the measurement of the liability Changes of assumptions or other inputs 24,443 - 24,443 481 - 481 661 - 661 (950) - (950) 7,193 - 7,193 76 - 76 Contributions - employer - 16,942 (16,942) - 179 (179) Contributions - employee - 2,880 (2,880) - 5 (5) Net investment income Benefit payments, including refunds of employee contributions - 8,990 (8,990) - 276 (276) (13,051) (13,051) - (296) (296) - Administrative expenses - (157) 157 - (5) Other changes - (10) 10 - - - (130) 15,464 $ 167,955 130 12,137 $ 188,129 (583) $ 5,965 130 289 $ 5,439 (130) (872) 526 Adjustment to beginning of year Net changes Balance as of June 30, 2020 27,601 $ 356,084 The remainder of this page left blank intentionally. 81 5 $ CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Pension Health insurance premium benefit Increase (decrease) Total Plan Net pension fiduciary pension liability net liability (asset) position (asset) $ 206,190 $ 114,265 $ 91,925 Increase (decrease) Total Plan Net OPEB fiduciary OPEB liability net liability (asset) position (asset) $ 3,399 $ 4,516 $ (1,117) PSPRS - Firefighters Balance at June 30, 2019 Changes for the year: Service cost Interest on the total liability Differences between expected and actual experience in the measurement of the liability Changes of assumptions or other inputs 4,831 - 4,831 52 - 52 15,287 - 15,287 251 - 251 (4,945) - (4,945) (503) - (503) 3,704 - 3,704 31 - 31 Contributions - employer - 9,335 (9,335) - - - Contributions - employee - 1,504 (1,504) - - - Net investment income - 6,476 (6,476) - 242 (242) Benefit payments, including refunds of employee contributions (8,883) (8,883) - (120) (120) - Administrative expenses - (113) 113 - (4) 4 8,319 $ 122,584 1,675 $ 93,600 118 4,634 (407) $ (1,524) Other changes Net changes Balance as of June 30, 2020 9,994 $ 216,184 $ (289) 3,110 $ Sensitivity of the City’s net pension/OPEB (asset) liability to changes in the discount rate - The following table presents the City’s net pension/OPEB (assets) liabilities calculated using the discount rate of 7.3 percent for Tier 1/2 members and the discount rate of 7.0 percent for Tier 3 members, as well as what the City’s net pension/OPEB (asset) 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: PSPRS Police Net pension liability Net OPEB liability (asset) PSPRS Firefighters Net pension liability Net OPEB asset 1% Decrease (6.30%/6.00%) Current discount rate (7.30%/7.00%) 1% Increase (8.30%/8.00%) $ $ $ 238,925 1,203 123,652 (1,174) 188,129 526 93,600 (1,524) 146,851 (45) 69,028 (1,822) Plan fiduciary net position - Detailed information about the plans’ fiduciary net position is available in the separately issued PSPRS financial report. 82 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Expense - For the year ended June 30, 2020, the City recognized the following pension and OPEB expense: Pension OPEB Expense Expense (Income) PSPRS Police $ 28,889 $ (98) PSPRS Firefighters 14,633 (130) Deferred outflows/inflows of resources - At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB 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 plan investments City contributions subsequent to the measurement date Total Health insurance premium Pension Deferred Deferred outflow inflows of resources of resources benefit Deferred Deferred outflow inflows of resources of resources $ $ 3,791 3,818 Changes of assumptions or other inputs Net difference between projected and actual earnings on plan investments City contributions subsequent to the measurement date Total $ 903 65 167 1,680 - 14 - $ 3,818 PSPRS - Firefighters Differences between expected and actual experience 98 - 17,500 35,781 $ $ 12,810 $ 187 364 $ 1,070 Health insurance premium Pension Deferred Deferred outflow inflows of resources of resources Deferred outflow of resources Deferred inflows of resources $ $ $ 755 83 6,358 - 477 11,454 - 27 92 1,541 - 12 - 9,451 23,201 $ $ benefit $ 6,358 $ 1 40 $ 569 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) The amounts reported as deferred outflows of resources related to pensions and OPEB resulting from City contributions subsequent to the measurement date will be recognized as an increase in the net asset or a reduction of the net liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions and OPEB will be recognized as expenses as follows: PSPRS Police Pension Health Year Ending June 30, 2021 2022 2023 2024 2025 Thereafter 5,732 3,458 2,199 973 979 1,122 (186) (186) (136) (125) (135) (125) PSPRS Firefighters Pension Health 3,338 975 1,388 1,325 522 (156) (107) (107) (73) (76) (94) (73) C. City of Glendale post-employment healthcare plan The City of Glendale post-employment healthcare plan is a single-employer defined benefit plan administered by the City of Glendale. The plan provides medical, dental, and vision coverage for eligible retirees and their dependents through the City’s group health insurance plans. By continuing to provide eligible 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 blended rate to eligible retirees. This blended rate or implicit rate exists because on average retiree healthcare costs are higher than active employee healthcare costs. Retirees can also continue their basic life insurance benefit. Retirees contribute 100% of the premiums. In order for employees to be eligible for this benefit, they need 5 years of service if they were hired prior to July 1, 2005, and 10 years of service if they were hired after July 1, 2005. Effective July 1, 2018 the plan is closed to new retirees. Only those who retired prior to July 1, 2018 are eligible to continue coverage under the City of Glendale OPEB plan. The Mayor and Council have authority each budget year to establish, eliminate, or amend benefit provisions through the annual budget process. A separate report is not provided as the plan financial information is included in the governmental-wide basis and proprietary funds as part of the City of Glendale reporting entity. Funding policy and employees covered The City pays for and reports retiree health care benefits on a pay-as-you-go basis, which is the practice of paying for these benefits as they become due each year. Contributions to the plan by retirees are established at the beginning of each fiscal year through the annual budget process. The City makes no contribution to the retirees’ premiums other than allowing them to participate through the City’s pooled benefits. For the fiscal year ending June 30, 2020, the number of employees covered by the plan totaled 580. Inactive employees or beneficiaries currently receiving benefits Active employees Total 580 580 Actuarial methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in 84 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) actuarial accrued liabilities and actuarial value of assets, consistent with the long-term perspective of the calculations. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Healthcare costs were derived from age-neutral premiums, trended to the valuation date and adjusted for the risk characteristics of the group. Medical healthcare trends were projected at 4.0% decreasing down to an ultimate rate of 5.0%. Effective July 1, 2018, the city discontinued benefits for any future retirees. Only those already retired as of June 30, 2018 are eligible for OPEB benefits. In 2020, amounts reflect updated mortality improvement assumptions with Scale MP-2019. For June 30, 2020, the actuarial cost method used is the entry age normal method. A 2.45% pay as you go discount/investment rate was used. 2016 2017 2018 2019 2020 Discount rate 2.85% 3.43% 3.62% 3.13% 2.45% No actuarial valuation of assets was done as there were no assets at the valuation date and the plan does not have a trust established to hold assets. The amortization method is level percent of payroll amortized over 30 years and the period is open. Measurement Date Actuarial valuation date Inflation Salary Increases Discount rate Mortality rates Pre-retirement June 30, 2020 June 30, 2019 2.4% 3.5% including inflation 2.45% Not applicable since plan is closed to new retirees PubG.H-2010 and PubS.H-2010 heathy annuitant mortality table, generational with projection scale MP-2019 Post-retirement Health care cost trend rates 4.0%-7.25% The remainder of this page left blank intentionally. 85 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) Change in total OPEB liability A change in the net OPEB liability was determined by an actuarial valuation as of June 30, 2019. The following table shows the changes in OPEB liability as of June 30, 2020. Total OPEB liability balance at June 30, 2019 $ Changes for the Year Interest Differences betweeen expected and actual experience Changes in assumptions or other inputs Change in benefit terms Benefit payments Net Changes Total OPEB liability balance at June 30, 2020 2,927 71 (239) (582) 15 (31) (766) $ 2,161 Multi-year schedule of changes in the net OPEB liability is available in the Required Supplementary Information. Discount rate sensitivity The discount rate of 2.45% was used to measure the total OPEB liability. This discount rate is the Fidelity General Obligation AA 20 Year Yield as of June 30, 2020. The following table presents the City’s net OPEB liability calculated using the discount rate noted above, as well as what the City’s 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 Discount rate Total OPEB liability 1.45% 2,881 $ Current Discount Rate $ 2.45% 2,161 1% Increase $ 3.45% 2,757 Healthcare cost trend rate sensitivity The following table presents the total OPEB liability of the City, as well as the City’s total OPEB liability if it were calculated using healthcare cost trend rates that are 1 percentage point lower or higher than current rates. 3.00% Total OPEB Liability $ Healthcare Cost Trend Rates 4.00% 5.00% 2,786 86 $ 2,161 $ 2,853 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) OPEB expense The following table shows the components of the City’s annual OPEB expense for the year. Interest Difference between Actual and Expected Experience Changes in Assumptions/Inputs Change in Benefit Terms Total FY20 OPEB Expense $ $ 71 (2,878) (944) 15 (3,736) Deferred outflows/inflows of resources At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB as shown in the following table. Differences between expected and actual experience Changes of assumptions or other inputs Total Deferred Outflows of Resources $ $ - Deferred Inflows of Resources $ 6,097 1,709 $ 7,806 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: OPEB Expense Year Ending June 30, 2021 2022 2023 2024 2025 Thereafter $ $ XVIII. (3,001) (3,001) (602) (601) (601) (7,806) Contingent liabilities and commitments Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the city expects such amounts, if any, to be immaterial. The City is subject to claims and litigation, which arise in the ordinary course of its operations. In the opinion of City management, based on the advice of the City attorney, the resolution of such claims and litigation are believed to either have no material adverse effect on the financial position or the future operations of the City or likelihood of a negative outcome to the City is not determinable. The City, under the memorandum of agreement with the Arizona Sports and Tourism Authority (AZSTA) and B & B Holdings (DBA Arizona Cardinals), irrevocably assigns, transfers, and pledges unrestricted excise taxes collected at the Multipurpose Facility site (Stadium) to AZSTA. In consideration for the pledge of unrestricted excise tax revenues, the AZSTA issued bonds to improve the stadium infrastructure. The City’s obligation is to make monthly payments to the AZSTA for sales tax payments collected from the site only. The AZSTA bonds do not constitute a legal debt of the City. 87 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) XIX. Tax Abatement The City implemented GASB Statement No. 77. This statement requires government’s that enter into tax abatement agreements to disclose information about the agreements. The tax abatement is listed by program for the year ended June 30, 2020. Primary Government City of Glendale, AZ Purpose of Program Economic Development Tax being abated Sales tax reimbursements The City is authorized pursuant to Article 1, Section3 of its Charter and ARS 9-500.05 and 9-500.11, ARS 11-952 to Authority under which the abatement enter into economic development agreements with businesses located in the City and to appropriate and agreement is entered spend public monies for and in conjunction with economic development activities. Criteria to be eligible to receive abatement Mechanism by which the taxes are abated How amount of abatement is determined Types of commitments made by the City other than to reduce taxes The City analyses the economic development benefits and determines that such public benefits support and justify the economic development incentives provided by each agreement. The public benefits anticipated are indirect economic and non-economic benefits such as increasing City's residents access to goods and services, enhancing public infrastructure, increasing the City's employment base, increasing the City's assessed property valuation and increasing the City's general tax revenues. The City shall make periodic payments based on a percentage of transaction privilege taxes received by the City for a certain length of time as entered into the agreement after occupancy. Based on a percentage of transaction privilege taxes received by the City for a certain length of time as entered into the agreement or capped at a certain dollar amount. City will abandon real property adjacent to the property for right of way , modifying and rezoning use permit of property. Amount of sales tax reimbursements for the fiscal year ended June 30, 2020 $2,097 88 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2020 (amounts expressed in thousands) XX. Implementation of new accounting principles The City adopted the provisions of GASB Statement No. 84, Fiduciary Activities. This statement established criteria for identifying fiduciary activities of all state and local governments to include whether the government is controlling the assets of the fiduciary activity, and the beneficiaries with whom a fiduciary relationship exists. This pronouncement did not impact the preparation of these financial statements as the City does not report any fiduciary funds. The City adopted the provisions of GASB Statement No. 90, Majority Equity Interests. The statement improves consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. This pronouncement did not impact the preparation of these financial statements. XXI. Subsequent events On September 22, 2020 the Glendale City Council approved development agreements to support the mixed-use development with ECL Glendale, LLC in the Westgate Sports & Entertainment District in Glendale. This mixed used development project has planned a 11 acre public access lagoon, seven islands, each with their own theme, retail spaces, Fly and 4-D theatres, venue spaces, restaurants, a family entertainment center, amusement rides, office space, and a 600 plus room hotel. On December 17, 2020 the City of Glendale refunded $25,685 in water and sewer series 2010 debt by issuing $20,250 in subordinate water and sewer revenue refunding series 2020 debt. The new bonds are special obligations of the city and are secured and payable solely from the pledge of net revenues of the system. On December 4, 2020 the City received $6,500 from the sale of Glen Lakes Golf course property. The developer plans to build single family housing units on the property. The remainder of this page left blank intentionally. 89 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. REQUIRED SUPPLEMENTARY INFORMATION SECTION This part of the City of Glendale’s comprehensive annual financial report presents detailed information for pension plans, OPEB plans, and the general fund budgetary schedule as a context for understanding the information presented in the financial statements and note disclosures. Contents Pages Schedule of the City’s Proportionate Share of the Net Pension/OPEB (Asset)/Liability Cost-Sharing Plans 91-92 Schedule of Changes in the City’s Net Pension/OPEB (Asset)/Liability and Related Ratios Agent Plans 93-100 Schedule of OPEB Liability-City Plan 101-102 Schedule of City Pension/OPEB Contributions 103-106 Notes to Pension/OPEB Plan Schedules 107-108 Budgetary Comparison Schedule-General Fund 109-110 Budgetary Comparison Schedule-Transportation Special Revenue Fund Notes to Budgetary Comparison Schedule-General Fund 90 111 112-113 CITY OF GLENDALE, ARIZONA Schedule of the City's proportionate share of the net pension/OPEB (asset)/liability Cost-sharing plans June 30, 2020 (amounts expressed in thousands) Reporting fiscal (measurement d ASRS-Pension City's proportion of the net pension liability City's proportionate share of the net pension liability City's covered payroll City's proportionate share of the net pension liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total pension liability ASRS-Health insurance premium benefit City's proportion of the net OPEB (asset) City's proportionate share of the net OPEB (asset) City's covered payroll City's proportionate share of the net OPEB (asset) as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total OPEB liability ASRS-Long-term disability City's proportion of the net OPEB liability City's proportionate share of the net OPEB liability City's covered payroll City's proportionate share of the net OPEB liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total OPEB liability 2020 (2019) 0.670370% $ 97,547 $ 69,407 2019 (2018) 0.691230% $ 96,402 $ 67,340 2018 (2017) 0.666400% $ 103,812 $ 64,059 140.54% 143.16% 162.06% 73.24% 73.40% 69.92% 2020 (2019) 0.67599% $ (187) $ 69,407 Reporting fiscal year (measurement date) 2019 2018 (2018) (2017) 0.69452% 0.67058% $ (250) $ (365) $ 67,340 $ 64,059 (0.27%) (0.37%) (0.57%) 101.62% 102.20% 103.57% 2020 (2019) 0.67335% $ 439 $ 69,407 Reporting fiscal year (measurement date) 2019 2018 (2018) (2017) 0.69218% 0.66674% $ 361 $ 242 $ 67,340 $ 64,059 0.63% 0.54% 0.38% 72.85% 77.83% 84.44% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 91 Reporting fiscal year (measurement date) 2017 2016 (2016) (2015) 0.637060% 0.605260% $ 102,830 $ 94,278 $ 58,301 $ 54,853 2015 (2014) 0.619749% $ 91,702 $ 54,523 2014 (2013) 0.656524% $ 109,143 $ 57,475 176.38% 171.87% 168.19% 189.90% 67.06% 68.35% 69.49% N/A year ate) 2017 - 2011 (2016 - 2010) Information Not Available year ate) 2017 - 2011 (2016 - 2010) Information Not Available 92 2013 - 2011 (2012 - 2010) Information Not Available CITY OF GLENDALE, ARIZONA Schedule of changes in the City's net pension/OPEB (assets)/liability and related ratios Agent plans June 30, 2020 (amounts expressed in thousands) Public Safety Personnel Retirement System - Police: Pension Reporting fiscal y (measurement dat Total pension liability: 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 Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) 2020 (2019) $ 8,355 24,443 - 2019 (2018) $ 8,012 23,135 - 2018 (2017) $ 8,582 20,971 2,583 661 7,193 (4,084) - 6,973 8,114 (13,051) 27,601 328,483 356,084 (14,430) 12,633 315,850 328,483 (13,390) 33,833 282,017 315,850 $ Plan fiduciary net position: Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expenses Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Adjustment to Beginning of year Plan fiduciary net position - ending (b) $ $ 16,942 2,880 8,990 (13,051) (157) (10) 15,594 152,491 (130) 167,955 $ $ $ 10,982 3,351 9,921 (14,430) (152) 192 9,864 142,627 152,491 $ $ $ 13,678 4,549 15,468 (13,390) (137) 50 20,218 122,409 142,627 City's net pension liability (asset) - ending (a) - (b) 188,129 175,992 173,223 Plan fiduciary net position as a percentage of the total pension liability 47.17% 46.42% 45.16% Covered payroll 36,383 36,201 37,234 City's net pension liability (asset) as a percentage of covered payroll 517.08% 486.15% 465.22% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 93 Reporting fiscal year (measurement date) 2017 2016 (2016) (2015) $ 6,644 $ 6,083 18,964 17,857 16,926 - $ $ $ 2015 (2014) $ 5,483 14,973 3,331 (3,593) 10,446 1,067 - 2,845 19,686 (11,246) 38,139 243,876 282,015 (11,143) 13,864 230,012 243,876 (8,616) 37,702 192,310 230,012 13,527 4,299 729 (11,246) (105) (2) 7,202 115,207 122,409 $ $ $ 9,691 4,009 4,023 (11,143) (99) (6) 6,475 108,732 115,207 $ $ $ 2014 - 2011 (2013 - 2010) Information not available 8,221 3,432 12,960 (8,616) (104) (124) 15,769 92,963 108,732 159,606 128,669 121,280 43.40% 47.24% 47.27% 34,196 33,350 31,815 466.74% 385.81% 381.20% played 94 CITY OF GLENDALE, ARIZONA Schedule of changes in the City's net pension/OPEB (assets)/liability and related ratios Agent plans June 30, 2020 (amounts expressed in thousands) Public Safety Personnel Retirement System - Police: OPEB Total OPEB Liability: 2020 (2019) $ 106 481 - Service cost Interest on the total OPEB liability Changes of benefit terms Differences between expected and actual experience in the measurement of the OPEB liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total OPEB liability Total OPEB liability - beginning Total OPEB liability - ending (a) $ Plan fiduciary net position: Contributions - employer Contributions - employee Net investment income Benefit payments Administrative expenses Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Adjustment to beginning of year Plan fiduciary net position - ending (b) $ $ City's net OPEB liability (asset) - ending (a) - (b) Reporting fiscal year (measurement date) 2019 2018 (2018) (2017) $ 102 $ 119 467 464 11 (950) 76 (127) - 211 (359) (296) (583) 6,548 5,965 (293) 149 6,399 6,548 (359) 87 6,312 6,399 179 5 276 (296) (5) 159 5,150 130 5,439 $ $ $ 75 1 343 (293) (5) 1 122 5,028 5,150 $ $ $ 2017 - 2011 (2016 - 2010) Information not available 202 541 (359) (5) 379 4,649 5,028 526 1,398 1,371 Plan fiduciary net position as a percentage of the total OPEB liability 91.18% 78.65% 78.58% Covered payroll 36,383 36,201 37,234 City's net OPEB liability (asset) as a percentage of covered payroll 1.45% 3.86% 3.68% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 95 This page left blank intentionally. 96 CITY OF GLENDALE, ARIZONA Schedule of changes in the City's net pension/OPEB (asset)/liability and related ratios Agent plans June 30, 2020 (amounts expressed in thousands) Public Safety Personnel Retirement System - Fire: Pension Total pension liability: 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 Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) Plan fiduciary net position: Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expenses Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) 2020 (2019) $ 4,831 15,287 - 2019 (2018) $ 4,963 14,302 - 2018 (2017) $ 5,062 13,114 1,055 (4,945) 3,704 (536) - 787 5,437 (8,883) 9,994 206,190 216,184 (6,668) 12,061 194,129 206,190 (7,304) 18,151 175,978 194,129 $ $ $ 9,335 1,504 6,476 (8,883) (113) 8,319 114,265 122,584 $ $ $ 6,023 2,050 7,405 (6,668) (113) 54 8,751 105,514 114,265 $ $ $ 6,578 2,604 11,234 (7,304) (100) 1 13,013 92,501 105,514 City's net pension liability (asset) - ending (a) - (b) 93,600 91,925 88,615 Plan fiduciary net position as a percentage of the total pension liability 56.70% 55.42% 54.35% Covered payroll 22,868 21,360 20,840 City's net pension liability (asset) as a percentage of covered payroll 409.31% 430.36% 425.22% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 97 Reporting fiscal year (measurement date) 2017 2016 (2016) (2015) $ 4,065 $ 3,858 11,801 11,230 12,497 - $ $ $ 2015 (2014) $ 3,805 9,672 1,658 (2,923) 6,345 (823) - 1,452 9,623 (8,199) 23,586 152,392 175,978 (5,996) 8,269 144,123 152,392 (6,800) 19,410 124,713 144,123 7,339 2,649 547 (8,199) (79) (232) 2,025 90,476 92,501 $ $ $ 4,942 2,380 3,189 (5,996) (78) (389) 4,048 86,428 90,476 $ $ $ 2014 - 2011 (2013 - 2010) Information not available 4,630 2,265 10,457 (6,800) (84) 10,468 75,960 86,428 83,477 61,916 57,695 52.56% 59.37% 59.97% 20,296 20,570 19,291 411.30% 301.00% 299.08% 98 CITY OF GLENDALE, ARIZONA Schedule of changes in the City's net pension/OPEB (asset)/liability and related ratios Agent plans June 30, 2020 (amounts expressed in thousands) Public Safety Personnel Retirement System - Fire: OPEB Total OPEB liability: Service cost Interest on the total OPEB liability Changes of benefit terms Differences between expected and actual experience in the measurement of the OPEB liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total OPEB liability Total OPEB liability - beginning Total OPEB liability - ending (a) Plan fiduciary net position: Contributions - employer Contributions - employee Net investment income Benefit payments Administrative expenses Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) 2020 (2019) $ 52 251 - $ $ (503) 31 (29) - (39) (145) (120) (289) 3,399 3,110 (113) 149 3,250 3,399 (153) (35) 3,285 3,250 242 (120) (4) 118 4,516 4,634 $ Reporting fiscal year (measurement date) 2019 2018 (2018) (2017) $ 53 $ 56 238 243 3 $ $ $ 300 (113) (4) (1) 182 4,334 4,516 $ $ $ 2017 - 2011 (2016 - 2010) Information not available 465 (153) (4) 308 4,026 4,334 City's net OPEB liability (asset) - ending (a) - (b) (1,524) (1,117) (1,084) Plan fiduciary net position as a percentage of the total OPEB liability 149.05% 132.86% 133.36% Covered payroll 22,868 21,360 20,840 City's net OPEB liability (asset) as a percentage of covered payroll -6.66% -5.23% -5.20% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 99 This page left blank intentionally. 100 CITY OF GLENDALE, ARIZONA Schedule of OPEB Liability-City Plan June 30, 2020 (amounts expressed in thousands) Total OPEB Liability-City Plan June 30, 2020 June 30, 2019 June 30, 2018 Service Cost Interest Changes of benefit terms Differences betweeen expected and actual experience Changes in assumptions or other inputs Benefit payments Net Changes $ 71 15 (239) (582) (31) (766) $ 225 (3,204) (175) (296) (3,450) $ 3,083 2,183 (47,511) (11,823) (174) (6) (54,248) Total OPEB Liability balance at June 30, 2019 $ 2,927 $ 6,377 $ 60,625 Total OPEB Liability balance at June 30, 2020 $ 2,161 $ 2,927 $ 6,377 Covered Employee Payroll $ - $ - $ - Total OPEB Liability as a percentage of covered employee payroll Discount Rate N\A N\A N\A 2.45% 3.13% 3.62% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 101 June 30, 2017 June 30, 2016 2015 - 2011 Information Not Available $ 3,494 2,311 (3,580) (2,463) (2,952) (237) (3,427) $ 3,376 1,792 (620) 4,548 $ 64,052 $ 59,504 $ 60,625 $ 64,052 $ 113,677 $ 93,944 53.3% 68.2% 3.43% 2.85% 102 CITY OF GLENDALE, ARIZONA Schedule of city pension/OPEB contributions June 30, 2020 (amounts expressed in thousands) ASRS-Pension: Statutorily required contribution City's contribution in relation to the statutorily required contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of coveredpayroll $ 2020 8,377 $ 2019 8,111 $ 2018 7,414 $ $ 8,377 70,766 $ $ 8,111 69,407 $ $ 7,414 67,340 11.84% 2020 $ 345 ASRS-Health insurance premium benefit: Statutorily required contribution City's contribution in relation to the statutorily required contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of coveredpayroll $ $ 345 70,766 11.69% Reporting fiscal year 2019 2018 $ 327 $ 385 $ $ 0.49% ASRS-Long-term disability: Statutorily required contribution City's contribution in relation to the statutorily required contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of coveredpayroll 327 69,407 $ $ 0.47% 385 67,340 0.57% $ 2020 120 Reporting fiscal year 2019 2018 $ 119 $ 96 $ $ 120 70,766 $ $ 0.17% 119 69,407 0.17% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 103 11.01% $ $ 96 67,340 0.14% 2017 $ 7,007 $ $ 7,007 64,059 Reporting fiscal year 2016 2015 $ 6,472 $ 6,071 $ $ 6,472 58,301 10.94% 11.10% $ 2017 361 2016-2011 Information not available $ $ 361 64,059 $ $ 6,071 54,853 11.07% $ 2014 5,978 $ 2013 5,971 $ 2012 5,743 $ 2011 5,685 $ $ 5,978 54,523 $ $ 5,971 57,475 $ $ 5,743 65,443 $ $ 5,685 65,143 10.96% 0.56% 2017 $ 91 $ $ 91 64,059 2016-2011 Information not available 0.14% 104 10.39% 8.77% 8.73% CITY OF GLENDALE, ARIZONA Schedule of city pension/OPEB contributions June 30, 2020 (amounts expressed in thousands) PSPRS Police-Pension: Actuarially determined contribution City's contribution in relation to the actuarially determined contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll $ 2020 17,500 $ 2019 16,942 $ 2018 10,982 $ $ 17,500 35,635 $ $ 17,306 (364) 36,383 $ $ 10,828 154 36,201 49.11% 2020 $ 187 PSPRS Police-OPEB: Actuarially determined contribution City's contribution in relation to the actuarially determined contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll $ $ 187 35,635 47.57% Reporting fiscal year 2019 2018 $ 179 $ 75 $ $ 0.52% PSPRS Fire-Pension: Actuarially determined contribution City's contribution in relation to the actuarially determined contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll 183 (4) 36,383 135 (60) 36,201 0.37% $ 2020 9,451 $ 2019 9,335 $ 2018 6,023 $ $ 9,451 20,122 $ $ 9,435 (100) 22,868 $ $ 5,607 416 21,360 2020 $ 1 $ $ 1 20,122 0.00% 41.26% 26.25% Reporting fiscal year 2019 2018 $ $ $ $ 22,868 0.00% The notes to pension/OPEB plan schedules are an integral part of this schedule. Note: This schedule is intended to show information for ten years. Additional years' information will be displayed as it becomes available. 105 $ $ 0.50% 46.97% PSPRS Fire-OPEB: Actuarially determined contribution City's contribution in relation to the actuarially determined contribution City's contribution deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll 29.91% $ $ - 21,360 0.00% 2017 $ 13,678 $ $ 13,678 37,234 Reporting fiscal year 2016 2015 $ 13,527 $ 9,691 $ $ 13,527 34,196 36.74% 39.56% $ 2017 202 2016-2011 Information not available $ $ 202 37,234 $ $ 9,691 33,350 $ 2014 8,221 $ 2013 6,787 $ 2012 5,907 $ 2011 5,248 $ $ 8,221 31,815 $ $ 6,787 28,336 $ $ 5,907 29,356 $ $ 5,248 27,576 29.06% 25.84% 23.95% 20.12% 19.03% 0.54% $ 2017 6,578 Reporting fiscal year 2016 2015 $ 7,339 $ 4,942 $ $ 6,578 20,840 $ $ 31.56% 2017 $ - $ $ 20,840 7,339 20,296 36.16% $ $ 4,942 20,570 24.03% $ 2014 4,630 $ 2013 3,454 $ 2012 2,828 $ 2011 2,546 $ $ 4,630 19,291 $ $ 3,454 18,547 $ $ 2,828 18,406 $ $ 2,546 16,811 24.00% 2016-2011 Information not available 0.00% 106 18.62% 15.36% 15.14% CITY OF GLENDALE, ARIZONA Notes to pension/OPEB (assets)/liability and contributions June 30, 2020 (amounts expressed in thousands) I. Actuarially determined contribution rates Actuarial determined contribution rates for PSPRS are calculated as of June 30 two years prior to the end of the fiscal year in which contributions are made. The actuarial methods and assumptions used to establish the contribution requirements are as follows: PSPRS Actuarial Methods and Assumptions: Actuarial Cost Method Entry age normal Amortization Level Members with initial membership date before July 1, 2017: Level percent-of-pay, closed Members with initial membership on or after July 1, 2017: Level dollar closed Remaining Amortization Period as of the 2018 Actuarial Valuation Members with initial membership date before July 1, 2017: 18 years for unfunded actuarial accrued liability, 20 years for excess Members with initial membership on or after July 1, 2017: 10 years Asset Valuation Method Members with initial membership date before July 1, 2017: 7-year smoothed market value; 80%/120% market corridor Members with initial membership on or after July 1, 2017: 5-year smoothed market value; 80%120% market corridor Actuarial Assumptions: Investment Rate of Return Members with initial membership date before July 1, 2017: In the 2017 actuarial valuation, the investment rate of return was decreased from 7.50% to 7.40%. In the 2016 actuarial valuation, the investment rate of return was decreased from 7.85% to 7.50%. In the 2013 actuarial valuation, the investment rate of return was decreased from 8.00% to 7.85%. Members with initial membership on or after July 1, 2017: 7% Projected Salary Increases In the 2017 actuarial valuation, projected salary increases were decreased from 4.0%-8.0% to 3.5%-7.5%. In the 2014 actuarial valuation, projected salary increases were decreased from 4.5%–8.5% to 4.0%–8.0%. In the 2013 actuarial valuation, projected salary increases were decreased from 5.0%–9.0% to 4.5%–8.5%. Wage Growth In the 2017 actuarial valuation, wage growth was decreased from 4.0% to 3.5%. In the 2014 actuarial valuation, wage growth was decreased from 4.5% to 4.0%. In the 2013 actuarial valuation, wage growth was decreased from 5.0% to 4.5%. Retirement Age Experience-based table of rates that is specific to the type of eligibility condition. Last updated for the 2012 valuation pursuant to an experience study of the period July 1, 2006 - June 30, 2011 Mortality In the 2017 actuarial valuation, changed to RP-2014 tables, with 75% of MP2016 fully generational projection scales. RP-2000 mortality table (adjusted by 105% for both males and females) 107 CITY OF GLENDALE, ARIZONA Notes to pension/OPEB (assets)/liability and contributions June 30, 2020 (amounts expressed in thousands) II. Factors that affect trends Arizona courts have ruled that provisions of a 2011 law that changed the mechanism for funding permanent pension benefit increases and increased employee pension contribution rates were unconstitutional or a breach of contract because those provisions apply to individuals who were members as of the law’s effective date. As a result, the PSPRS changed benefit terms to reflect the prior mechanism for funding permanent benefit increases for those members and revised actuarial assumptions to explicitly value future permanent benefit increases. PSPRS also reduced those members’ employee contribution rates. These changes are reflected in the plans’ pension liabilities for fiscal year 2015 (measurement date 2014) for members who were retired as of the law’s effective date and fiscal year 2018 (measurement date 2017) for members who retired or will retire after the law’s effective date. These changes also increased the PSPRS-required pension contributions beginning in fiscal year 2016 for members who were retired as of the law’s effective date. These changes increased the PSPRS-required contributions beginning in fiscal year 2019 for members who retired or will retire after the law’s effective date. Also, the City refunded excess employee contributions to PSPRS members. PSPRS allowed the City to reduce its actual employer contributions for the refund amounts. As a result, the City’s pension contributions were less than the actuarially or statutorily determined contributions for 2018 and 2019. The remainder of this page left blank intentionally. 108 City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 48,297 $ 48,297 52,851 Variance with Final Budget $ 4,554 Actual $ RESOURCES (INFLOWS): Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment Income Proceeds from equipment disposal Proceeds from land sale Local revenue Miscellaneous Total revenues Transfer in Transfer out Amounts available for appropriation 125,053 12,120 69,968 19,427 3,130 374 250 5,631 235,953 28,576 (36,764) 276,062 125,053 12,120 69,968 19,427 3,130 374 250 5,631 235,953 28,576 (36,764) 276,062 127,553 13,861 69,288 16,318 2,146 544 112 9,384 85 2,291 241,582 28,576 (36,723) 286,286 2,500 1,741 (680) (3,109) (984) 170 (138) 9,384 85 (3,340) 5,629 41 10,224 36,325 144,187 16,083 21,742 873 2,000 8,977 230,187 38,090 145,925 15,992 21,742 873 1,554 9,653 233,829 35,354 123,142 18,005 19,485 698 3,124 199,808 2,736 22,783 (2,013) 2,257 175 1,554 6,529 34,021 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Public Safety Public Works Community Services Street Maintenance Contingency Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ 45,875 109 $ 42,233 $ 86,478 $ 44,245 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Interest earned on restricted investments not available for appropriation Indirect cost allocation Proceeds from disposal of assets. Revenue reported on a GAAP basis. Police and fire sales tax revenue. Less: transfers in. Add: transfers out. Total revenues as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Noncash exchange for capital outlay. Capital outlay funded by long-term debt. Salaries payable. Change in prepaid assets or inventory. Internal charges for services provided. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 110 $ 286,286 (52,851) 2,713 (10,000) (9,475) 837 28,346 (28,576) 36,723 $ 254,003 $ 199,808 309 (327) 174 6 (10,000) $ 189,970 City of Glendale, Arizona Budgetary Comparison Schedule Transportation Special Revenue Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 35,363 $ 35,363 50,227 Variance with Final Budget $ 14,864 Actual $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investment income Miscellaneous Total revenues Transfer out Amounts available for appropriation 30,309 2,700 124 160 33,293 (14,921) 53,735 30,309 2,700 124 160 33,293 (14,921) 53,735 30,989 3,476 686 1,064 107 36,322 (8,566) 77,983 680 776 562 904 107 3,029 6,355 24,248 16,565 325 16,890 14,715 2,275 16,990 13,334 1,388 14,722 1,381 887 2,268 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Street maintenance Capital outlay Total charges to appropriations Budgetary fund balances, June 30 $ 36,845 $ 36,745 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Add: Transfers out. Total revenues as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 111 63,261 $ 26,516 $ 77,983 (50,227) 8,566 $ 36,322 $ 14,722 (2) $ 14,720 CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2020 (amounts expressed in thousands) I. Basis of accounting The City prepares its annual budget on a basis which differs from the GAAP basis. A budgetary comparison schedule for the general fund and major special revenue fund is included as required supplementary information to provide a meaningful comparison of actual results to budget on a budget basis. Budgetary comparison schedules for all other governmental funds are presented as other supplemental information after the combining statements. The intent of preparing the Budgetary Comparison Schedule is to provide the reader with a more complete understanding and appreciation for the difference between budgetary revenues and other financing sources and expenditures and other financing uses presented in the Budgetary Comparison Statements and the revenues, expenditures, and other financing sources (uses) reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances, which is prepared in accordance with GAAP. The major areas of difference are as follows: 1. 2. 3. 4. 5. 6. Under the budgetary basis, the revenues and expenses relating to police and fire sales tax is not included in the general fund. The police and fire sales tax is included in the general fund for the GAAP financial statements. Under the budgetary basis, investment income is recognized on an amortized cost basis. In accordance with GASB Statement No. 31, “Accounting and Financial Reporting for Certain Investments and for External Investment Pools" (GASB Statement No. 31), all investment income, including changes in fair value (gains/losses) of investments, are recognized as investment income. Under the budgetary basis, revenues are normally recorded when earned. For GAAP basis, in accordance with GASB Statement No. 33, “Accounting and Financial Reporting for Nonexchange Transactions” (GASB Statement No. 33), and GASB Statement No. 65, all nonexchange transactions, such as government-mandated nonexchange transactions and voluntary nonexchange transactions, can be accrued only if they are measurable and “available”. “Available” has been defined by GASB Statement No. 33 as “collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period.” The City has established the availability period as 60 days after the end of the fiscal year. In order to ensure all transactions for the current fiscal year meet this criterion, the City analyzes revenue receipts through August 31 and records adjustments to deferred inflows of resources for transactions that are not collected. Under the budgetary basis, intrafund transfers are recognized as other financing sources (uses). For the GAAP financial statements, intrafund transfers are eliminated to minimize the “grossing-up” of intrafund transfers. Under the budgetary basis, interfund reimbursements or repayments from funds responsible for particular expenditures or expenses to the funds that initially paid for them are recorded as revenues in the payer fund. In accordance with GASB Statement No. 34, an adjustment to eliminate interfund reimbursements is recorded for the GAAP financial statements. In accordance with GAAP, the City has established guidelines for recording expenditure accruals. In order to reasonably ensure that accruals for current fiscal year transactions are materially accurate, the City performs an analysis to identify expenditure accruals for the GAAP financial statements. 112 CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2020 (amounts expressed in thousands) II. Budgetary information The City utilizes the following procedures in establishing the budgetary data reflected in the financial statements. 1. 2. 3. 4. 5. 6. III. Prior to the first of June of each year, the City Manager submits to the Mayor and Council a proposed operating budget for the fiscal year commencing the following July 1. The budget includes proposed operating, capital and debt service expenditures and the means of financing them. The projected beginning budgeted fund balances for each fund are based on preliminary estimates of the June 30th ending actual budget basis fund balances rather than the June 30th ending budgeted fund balances. These two amounts will differ because of differences in actual results for the year versus planned results and by unused contingency appropriations. The legal level of budgetary control is the total budget as adopted. This is the level at which expenditures cannot legally exceed the appropriated amount. Prior to July 1, after receiving comments in a public hearing, a tentative budget is adopted by the City Council, which sets an upper-dollar limit for all funds combined, beyond which the City may not increase appropriations. After two weeks of legal advertising, the City Council legally adopts a final budget ordinance, which sets appropriations for each fund. Budget basis expenditures may not exceed appropriations for each fund, except in conjunction with the transfer of contingency funds and/or unused appropriation authority from another fund that is backed by additional revenue or fund balance in the fund receiving the appropriation. Contingency funds are appropriated for several funds as identified in the budget basis schedules and may only be transferred with City Council approval. The City Council may reallocate appropriations through budget amendments, but may not increase total appropriations above the total budget, which was legally adopted for the fiscal year. The City Council may authorize a transfer of unencumbered appropriation balanced within an individual city office, department or agency at any time during the fiscal year. During the last three months of the fiscal year, the City Council may approve transfers among city offices, departments, and agencies as necessary. Interfund transfers (i.e., transfers between funds) must be specifically approved by City Council. Procedures for requesting City Council approval of appropriation transfers and delegation of budget responsibility will be set by the City Manager. Budgetary authorization and spending management controls are employed during the year for all funds. Contingency appropriation The principal purpose of a contingency appropriation is to cover any unforeseen expenditure, which may arise after the budget is adopted. It is impossible to estimate revenues exactly or to determine in a prior year the exact expenditures of each program or activity for the ensuing year. Thus, a contingency is essential for budgetary purposes. Contingency appropriation is re-established each fiscal year based on available fund balance and balancing needs of the budget year. The unused balances of contingency appropriations are reflected in the budget basis financial statements. 113 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS AND SCHEDULES ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 1,998 $ 1,998 Variance with Final Budget Actual $ 2,024 $ 26 RESOURCES (INFLOWS): Taxes Intergovernmental Investment income Miscellaneous Total revenues Amounts available for appropriation 20,409 237 20,646 22,644 20,409 237 20,646 22,644 19,926 238 1 8 20,173 22,197 (483) 1 1 8 (473) (447) 204 204 7 197 15,655 4,990 20,849 15,655 4,990 20,849 15,655 4,990 20,652 197 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General government Debt service: Principal Interest Total charges to appropriations Budgetary fund balances, June 30 $ 1,795 114 $ 1,795 $ 1,545 $ (250) City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 3,607 $ Actual 3,607 $ 1,340 $ Variance with Final Budget (2,267) RESOURCES (INFLOWS): Intergovernmental Investment Income Miscellaneous Total revenues Transfer in Amounts available for appropriation 16,175 19,782 16,175 19,782 2,207 93 1 2,301 16,175 19,816 2,207 93 1 2,301 34 25 25 9 16 7,195 9,755 16,975 7,195 9,755 16,975 7,195 9,755 16,959 16 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Debt service: Principal Interest Total charges to appropriations Budgetary fund balances, June 30 $ 2,807 115 $ 2,807 $ 2,857 $ 50 This page left blank intentionally. NON-MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for revenues from specific taxes or other earmarked revenue sources, which by law are designated to finance particular functions or activities of government and which, therefore, cannot be diverted to other uses. Community Development Block Grants Fund This fund accounts for a series of ongoing entitlements received directly from the U. S. Department of Housing and Urban Development (HUD). This fund also includes the HUD Rental Rehabilitation and HOME programs. Highway User Gas Tax Fund This fund accounts for capital outlay and maintenance of municipal streets and highways, as mandated by the Arizona Revised Statutes. Financing for this fund is provided by state-shared fuel taxes. Other Special Revenue Fund This fund accounts for various activities, including the airport, miscellaneous grants, and other recreation programs. Debt Service Funds Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Highway User Debt Service Fund This fund accumulates monies for payment of all street and highway revenue bonds of the City. Highway user fuel taxes are transferred from other funds to fund this debt. Transportation Debt Service Fund This fund accumulates monies for payment of the transportation revenue bonds. Transportation excise taxes are transferred from a special revenue fund to fund this debt. Excise Tax Revenue Debt Service Fund This fund accounts for the debt that was issued to refund the senior and subordinate excise tax revenue bonds issued by the Municipal Property Corporation. 116 Capital Projects Funds Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Streets Construction Fund This fund accounts for the construction of streets, sidewalks, streetlights, traffic signals, and street landscaping funded through GO and revenue bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. In addition, this fund accounts for transportation projects funded by transportation excise tax revenue bonds issued on October 27, 2007. Fire and Police Construction Fund This fund accounts for the construction of fire and police department facilities. Funding is provided through GO bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Parks Bond Construction Fund This fund accounts for the construction of parks and recreation improvements. Other Construction Fund This fund accounts for the construction of various City projects. Funding is provided through GO bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999, and the Federal Aviation Administration.        Flood control facilities Library Transit projects Economic development Open space/trails Government facilities Cultural facilities Development Impact Fees Fund This fund accounts for fees covered by Chapter 28, Article VI of the Municipal Code and is restricted in use by ARS 9-463.05. The fees are used exclusively to provide the necessary public facilities and services for development. Residential development impact fees may be spent only in the district (residential development district, not political district) in which they are collected Permanent Fund Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting City’s programs. Cemetery Perpetual Care Fund This fund is used to account for the revenues received by the City from the sale of cemetery lots and other related services. 117 City of Glendale, Arizona Combining Governmental Balance Sheet Non-Major Governmental Funds Summary by Fund Type June 30, 2020 (amounts expressed in thousands) Special Revenue Funds Debt Service Funds Capital Projects Funds $ $ Total Non-Major Governmental Funds Permanent Fund ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Total assets $ 18,395 17,142 30,280 $ 6,038 $ 71,855 4,678 2,622 3 1,531 27,229 1,632 18,774 64 30,344 62 6,100 4,804 2,622 3 3,163 82,447 1,109 52 42 1 67 13,234 14,505 6,347 11,240 17,587 2,325 147 370 22 2,864 - 3,434 52 147 42 1 370 67 13,256 6,347 11,240 34,956 125 - - 62 187 10,296 1,734 569 12,599 1,187 1,187 27,982 (502) 27,480 6,038 - 6,038 39,465 1,734 569 (502) 47,304 LIABILITIES Vouchers payable Accounts payable Retainage payable Compensated Absences - current Intergovernmental payable Due to other funds Deposits Unearned revenue Matured interest payable Matured bonds payable Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources-Unavailable Revenue FUND BALANCES Fund balances: Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities, deferred outflows of resources and fund balances $ 27,229 $ 118 18,774 $ 30,344 6,038 $ 6,100 $ 82,447 City of Glendale, Arizona Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2020 (amounts expressed in thousands) Community Development Block Grants Highway User Gas Tax $ $ Total Non-Major Special Revenue Funds Other ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Total assets 190 5,963 $ 12,242 $ 18,395 4,448 847 5,485 1,273 7,236 230 502 3 1,531 14,508 4,678 2,622 3 1,531 27,229 236 50 1 4,448 4,735 452 22 474 421 2 19 1 67 8,786 9,296 1,109 52 42 1 67 13,234 14,505 - - 125 125 750 750 6,762 6,762 2,784 1,734 569 5,087 10,296 1,734 569 12,599 LIABILITIES Vouchers payable Accounts payable Compensated absences - current Intergovernmental payable Deposits Unearned revenue Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources-unavailable revenue FUND BALANCES Fund balances: Restricted Committed Assigned Total fund balances (deficits) Total liabilities,deferred inflows of resources and fund balances $ 5,485 119 $ 7,236 $ 14,508 $ 27,229 City of Glendale, Arizona Combining Balance Sheet Non-Major Debt Dervice Funds June 30, 2020 (amounts expressed in thousands) Highway User Transportation Excise Tax Revenue Total Non-Major Debt Service Funds $ $ ASSETS Equity in pooled cash and investments Restricted cash and investments Total assets $ 43 43 $ 6,438 6,438 10,661 1,632 12,293 17,142 1,632 18,774 LIABILITIES Matured interest payable Matured bonds payable Total liabilities - 1,447 4,140 5,587 4,900 7,100 12,000 6,347 11,240 17,587 43 43 851 851 293 293 1,187 1,187 FUND BALANCES Fund balances: Restricted Total fund balances Total liabilities,deferred inflows of resources and fund balances $ 43 120 $ 6,438 $ 12,293 $ 18,774 City of Glendale, Arizona Combining Balance Sheet Non-Major Capital Projects Funds June 30, 2020 (amounts expressed in thousands) Fire and Police Construction Streets Construction Parks Bond Construction Other Construction Development Impact Fees Total Non-Major Capital Projects Funds ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Total assets $ 13,535 $ - $ - $ 1,778 $ 14,967 $ 30,280 64 13,599 - - 1,778 14,967 64 30,344 2,069 147 22 2,238 70 332 402 62 38 100 13 13 111 111 2,325 147 370 22 2,864 11,361 (402) (402) (100) (100) 1,765 14,856 1,765 14,856 27,982 (502) 27,480 LIABILITIES Vouchers payable Retainage payable Due to other funds Unearned revenue Total liabilities FUND BALANCES Fund balances: Restricted Unassigned Total fund balances Total liabilities,deferred inflows of resources and fund balances 11,361 $ 13,599 $ - 121 $ - $ 1,778 $ 14,967 $ 30,344 City of Glendale, Arizona Combining Balance Sheet Non-Major Permanent Fund June 30, 2020 (amounts expressed in thousands) Cemetery ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Total assets $ 6,038 62 6,100 DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources-Unavailable Revenue 62 FUND BALANCES Fund balances: Nonspendable Total fund balances (deficits) Total liabilities,deferred inflows of resources and fund balances 6,038 6,038 $ 122 6,100 City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds Summary by Fund Type For the Year Ended June 30, 2020 (amounts expressed in thousands) Special Revenue Funds Debt Service Funds Capital Projects Funds Permanent Funds Total Non-Major Governmental Funds $ $ $ $ $ REVENUES Licenses and permits Intergovernmental Local Charges for services Fines and forfeitures Investment Income Miscellaneous Total revenues 738 43,675 88 673 280 57 596 46,107 81 81 4,583 10,445 256 727 16,011 118 118 5,321 54,120 88 673 280 512 1,323 62,317 EXPENDITURES Current: General Government Public Works Public Safety Community Services Street Maintenance Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 1,003 1,559 23,469 3,521 12,127 7 - 124 39 56 503 5,615 - 1,134 1,598 23,525 4,024 17,742 1,217 42,896 3,211 11,240 12,694 23,941 (23,860) 17,776 24,113 (8,102) 118 11,240 12,694 18,993 90,950 (28,633) Proceeds from equipment disposal Transfer in Transfer out Total other financing sources (uses) 76 2,462 (5,890) (3,352) 23,959 23,959 7,413 (156) 7,257 - 76 33,834 (6,046) 27,864 Net change in fund balances Fund balances - beginning Fund balances - ending (141) 12,740 12,599 99 1,088 1,187 (845) 28,325 27,480 118 5,920 6,038 (769) 48,073 47,304 OTHER FINANCING SOURCES (USES) $ $ 123 $ $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Special Revenue Funds For the Year Ended June 30, 2020 (amounts expressed in thousands) Community Development Block Grants Highway User Gas Tax $ $ Total Non-Major Special Revenue Funds Other REVENUES Licenses and permits Intergovernmental Local Charges for services Fines and forfeitures Investment Income Miscellaneous Total revenues 1,790 349 2,139 729 16,564 28 35 17,356 $ 9 25,321 88 673 252 57 212 26,612 $ 738 43,675 88 673 280 57 596 46,107 EXPENDITURES Current: General Government Public Safety Public Works Community Services Street Maintenance Debt service: Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 1,859 4 11,417 1,003 23,469 1,559 1,662 706 1,003 23,469 1,559 3,521 12,127 1,863 276 11,417 5,939 1,217 29,616 (3,004) 1,217 42,896 3,211 - (5,890) (5,890) 76 2,462 2,538 76 2,462 (5,890) (3,352) 276 474 750 49 6,713 6,762 (466) 5,553 5,087 (141) 12,740 12,599 OTHER FINANCING SOURCES (USES) Proceeds from equipment disposal Transfer in Transfer out Total other financing sources (uses) Net change in fund balances Fund balances - beginning Fund balances - ending $ 124 $ $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Debt service funds For the Year Ended June 30, 2020 (amounts expressed in thousands) Highway User Transportation Excise Tax Revenue Total Non-Major Debt Service Funds $ $ REVENUES Taxes and special assessments Investment Income Total revenues $ - $ 6 6 75 75 81 81 EXPENDITURES Current: General Government Debt service: Principal Interest Total expenditures Excess (deficiency) of revenues over expenditures - 3 4 7 - 4,140 2,893 7,036 (7,030) 7,100 9,801 16,905 (16,830) 11,240 12,694 23,941 (23,860) Transfer in Total other financing sources (uses) - 7,043 7,043 16,916 16,916 23,959 23,959 Net change in fund balances Fund balances - beginning Fund balances - ending 43 43 13 838 851 86 207 293 99 1,088 1,187 OTHER FINANCING SOURCES (USES) $ 125 $ $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Capital Projects Funds For the Year Ended June 30, 2020 (amounts expressed in thousands) Streets Construction Fire and Police Construction $ $ Parks Bond Construction Other Construction Development Impact Fees Total Non-Major Capital Projects Funds $ $ REVENUES Licenses and permits Intergovernmental Investment income Miscellaneous Total revenues 10,445 727 11,172 - $ - $ - 4,583 256 4,839 4,583 10,445 256 727 16,011 EXPENDITURES Current: General government Public safety Public works Community services Street maintenance Debt service: Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 5,615 56 - 230 - 109 39 15 - 15 258 - 124 56 39 503 5,615 13,519 19,134 (7,962) 979 1,035 (1,035) 134 364 (364) 31 194 (194) 3,113 3,386 1,453 17,776 24,113 (8,102) Transfer in Transfer out Total other financing sources (uses) 7,413 (118) 7,295 (13) (13) - - (25) (25) 7,413 (156) 7,257 Net change in fund balances Fund balances - beginning Fund balances - ending (667) 12,028 11,361 (1,048) 646 (402) (364) 264 (100) (194) 1,959 1,765 1,428 13,428 14,856 (845) 28,325 27,480 OTHER FINANCING SOURCES (USES) $ $ 126 $ $ $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Permanent Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Cemetery REVENUES Investment income Total revenues Excess (deficiency) of revenues over expenditures Net change in fund balances Fund balances - beginning Fund balances - ending $ $ 127 118 118 118 118 5,920 6,038 City of Glendale, Arizona Budgetary Comparison Schedule Police and Fire Sales Tax Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 4,781 $ Variance with Final Budget Actual 4,781 $ 5,494 $ 713 RESOURCES (INFLOWS): Taxes Total revenues Transfer in Transfer out Amounts available for appropriation Budgetary fund balances, June 30 27,206 27,206 (28,576) 3,411 $ 3,411 128 27,206 27,206 (28,576) 3,411 $ 3,411 28,346 28,346 (28,576) 5,264 $ 5,264 1,140 1,140 1,853 $ 1,853 City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 492 $ Variance with Final Budget Actual 492 $ 477 $ (15) RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Transfer in Amounts available for appropriation 6,265 142 6,407 6,899 6,265 142 6,407 6,899 1,790 349 2,139 2,616 (4,475) 207 (4,268) (4,283) 2,231 4,070 2,231 4,070 1,859 4 372 4,066 3 1 6,305 3 1 6,305 1,863 3 1 4,442 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Community Services Street Maintenance Debt service: Principal Interest Total charges to appropriations Budgetary fund balances, June 30 $ 594 $ 129 594 $ 753 $ 159 City of Glendale, Arizona Budgetary Comparison Schedule Highway User Gas Tax Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 6,450 $ Variance with Final Budget Actual 6,450 $ 6,794 $ 344 RESOURCES (INFLOWS): Licenses and permits Intergovernmental Fines and forfeitures Miscellaneous Total revenues Transfer in Transfer out Amounts available for appropriation 200 16,724 16,924 (5,890) 17,484 200 16,724 16,924 (5,890) 17,484 729 16,564 28 35 17,356 (5,890) 18,260 529 (160) 28 35 432 776 12,994 12,994 12,994 12,994 11,424 11,424 1,570 1,570 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Street Maintenance Total charges to appropriations Budgetary fund balances, June 30 $ 4,490 130 $ 4,490 $ 6,836 $ 2,346 City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 5,363 $ Actual 5,363 $ 4,655 $ Variance with Final Budget (708) RESOURCES (INFLOWS): Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment Income Local revenue Miscellaneous Total revenues Transfer in Amounts available for appropriation 6 4,732 570 417 2 50 15,731 21,508 2,594 29,465 6 4,732 570 417 2 50 15,731 21,508 2,594 29,465 9 25,472 628 252 57 99 200 26,717 2,462 33,834 3 20,740 58 (165) 55 49 (15,531) 5,209 (132) 4,369 1,784 8,420 1,810 1,682 344 9,240 2,807 26,087 2,235 10,706 1,535 2,265 344 2,628 3,932 23,645 1,026 24,110 1,559 1,712 1,141 29,548 1,209 (13,404) (24) 553 344 2,628 2,791 (5,903) CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Public Safety Public Works Community Services Street Maintenance Contingency Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ 3,378 $ 131 5,820 $ 4,286 $ (1,534) City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 43 $ Variance with Final Budget Actual 43 $ 43 $ - RESOURCES (INFLOWS): Total revenues Transfer in Amounts available for appropriation 43 43 43 - - - - - CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Debt service: Total charges to appropriations Budgetary fund balances, June 30 $ 43 132 $ 43 $ 43 $ - City of Glendale, Arizona Budgetary Comparison Schedule Transportation Debt Service Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 724 $ Variance with Final Budget Actual 724 $ 838 $ 114 RESOURCES (INFLOWS): Investment Income Total revenues Transfer in Amounts available for appropriation 7,043 7,767 7,043 7,767 6 6 7,043 7,887 6 6 120 10 10 3 7 4,140 2,893 7,043 4,140 2,893 7,043 4,140 2,893 7,036 7 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Debt service: Principal Interest Total charges to appropriations Budgetary fund balances, June 30 $ 724 133 $ 724 $ 851 $ 127 City of Glendale, Arizona Budgetary Comparison Schedule Excise Tax Revenue Debt Service Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 93 $ Variance with Final Budget Actual 93 $ 207 $ 114 RESOURCES (INFLOWS): Investment Income Total revenues Transfer in Amounts available for appropriation 16,916 17,009 16,916 17,009 75 75 16,916 17,198 75 75 189 15 15 4 11 7,100 9,801 16,916 7,100 9,801 16,916 7,100 9,801 16,905 11 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Debt service: Principal Interest Total charges to appropriations Budgetary fund balances, June 30 $ 93 134 $ 93 $ 293 $ 200 City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 17,623 $ 17,623 11,968 Variance with Final Budget $ (5,655) Actual $ RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Transfer in Transfer out Amounts available for appropriation 13,768 31,391 13,768 (13) 31,378 10,445 726 11,171 7,413 (118) 30,434 10,445 726 11,171 (6,355) (105) (944) 31,391 31,391 31,558 31,558 5,615 13,519 19,134 (5,615) 18,039 12,424 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Street Maintenance Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ - 135 $ (180) $ 11,300 $ 11,480 City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 2,650 $ Actual 2,650 $ 646 $ Variance with Final Budget (2,004) RESOURCES (INFLOWS): Transfer out Amounts available for appropriation 2,650 (6) 2,644 (13) 633 (7) (2,011) 897 1,753 2,650 897 1,921 2,818 56 979 1,035 (56) 897 942 1,783 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Public Safety Contingency Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ - 136 $ (174) $ (402) $ (228) City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 545 $ Actual 545 $ 264 $ Variance with Final Budget (281) RESOURCES (INFLOWS): Amounts available for appropriation 545 545 264 (281) 208 337 545 208 637 845 230 134 364 (230) 208 503 481 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Community Services Contingency Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ - 137 $ (300) $ (100) $ 200 City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 3,437 $ 1,959 Variance with Final Budget $ (1,478) Actual 3,437 $ RESOURCES (INFLOWS): Total revenues Transfer in Amounts available for appropriation 3,437 3,437 1,959 (1,478) 1,690 1,747 3,437 1,690 1,893 3,583 109 39 15 31 194 (109) (39) (15) 1,690 1,862 3,389 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Public Works Community Services Contingency Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ - 138 $ (146) $ 1,765 $ 1,911 City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 17,825 $ 17,825 Actual $ 13,428 $ Variance with Final Budget (4,397) RESOURCES (INFLOWS): Licenses and permits Investment Income Total revenues Transfer in Transfer out Amounts available for appropriation 1,304 68 1,372 19,197 1,304 68 1,372 19,197 4,583 256 4,839 385 (410) 18,242 3,279 188 3,467 385 (410) (955) 12,251 6,946 19,197 4 471 11,366 7,415 19,256 15 258 3,113 3,386 (11) 213 11,366 4,302 15,870 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: General Government Community Services Contingency Capital Outlay Total charges to appropriations Budgetary fund balances, June 30 $ - 139 $ (59) $ 14,856 $ 14,915 City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Fund For the Year Ended June 30, 2020 (amounts expressed in thousands) Budgetary fund balance, July 1 $ Budgeted Amounts Original Final 5,810 $ Variance with Final Budget Actual 5,810 $ 5,920 $ 110 RESOURCES (INFLOWS): Investment Income Total revenues Transfer in Amounts available for appropriation 26 26 5,836 26 26 5,836 118 118 6,038 92 92 202 5,815 5,815 5,815 5,815 - 5,815 5,815 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current: Contingency Total charges to appropriations Budgetary fund balances, June 30 $ 21 140 $ 21 $ 6,038 $ 6,017 NON-MAJOR PROPRIETARY FUNDS – BUSINESS-TYPE ACTIVITIES Proprietary funds are used to account for City operations that are run like a business. These funds are responsible for providing enough operational revenue to cover all expenses. Landfill This fund accounts for the operation of the City owned landfill and recycling operations. Fees charged for the use of the landfill are used to maintain and improve the landfill operations as well as fund future closure costs. Solid Waste This fund accounts for the City’s trash collection services including curb, roll-off, bulk, and front-load services to individuals and businesses. Revenues collected are used to keep the City clean. Housing This fund accounts for operations to provide affordable housing to those who cannot afford it in the private market. This is done through administration of Federal Section 8 Housing Choice and Conventional Public Housing programs. 141 City of Glendale, Arizona Combining Statement of Net Position Non-Major Proprietary Fund-Business Type Activities June 30, 2020 (amounts expressed in thousands) Landfill Solid Waste Total Non-Major Enterprise Funds Housing ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Intergovernmental Inventories and prepaid items Total current assets Noncurrent assets: OPEB assets Capital assets: Capital Assets Accumulated Depreciation Capital assets, net Total noncurrent assets Total assets $ 6,628 $ 493 $ 2,813 $ 9,934 830 (9) 7,449 2,636 (571) 2,558 1 0 337 17 3,168 3,467 (580) 337 17 13,175 6 10 3 19 39,814 (17,094) 22,720 22,726 30,175 17,054 (10,821) 6,233 6,243 8,801 15,084 (11,149) 3,935 3,938 7,106 71,952 (39,064) 32,888 32,907 46,082 497 497 716 716 223 223 1,436 1,436 592 276 1,260 2,128 499 289 103 891 35 21 8 49 142 255 1,091 35 586 8 1,412 142 3,274 265 3,705 16,019 19,989 22,117 188 5,705 5,893 6,784 190 1,775 56 2,021 2,276 643 11,185 56 16,019 27,903 31,177 437 801 245 1,483 22,720 6,233 3,935 32,888 6 (14,608) 8,118 10 (4,311) 1,932 3 870 4,808 19 (18,049) 14,858 DEFERRED OUTFLOWS OF RESOURCES Debit amounts related to pensions and OPEB Total deferred outflows of resources LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Due to other funds Intergovernmental payable Deposits Unearned revenue Total current liabilities Noncurrent liabilities: Compensated absences Net pension & OPEB liabilities Other long term debt Estimated closure and post closure costs Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Credit amounts related to pensions and OPEB NET POSITION Net investment in capital assets Restricted for: OPEB benefits Unrestricted Total net position $ 142 $ $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Net Position Non-Major Proprietary Fund-Business Type Activities For the Year Ended June 30, 2020 (amounts expressed in thousands) Landfill Solid Waste Total Non-Major Enterprise Funds Housing OPERATING REVENUES Intergovernmental Container service Curb service landfill user fees Recycling sales Other fees Total operating revenues $ 9,860 517 29 10,406 $ 4,212 14,786 1 18,999 $ 10,303 2,974 13,277 $ 10,303 4,212 14,786 9,860 517 3,004 42,682 OPERATING EXPENSES Landfill Housing Closure/post-closure care adjustment Solid Waste Amortization and depreciation Total operating expenses Operating income (loss) 8,656 241 1,190 10,087 319 16,944 1,437 18,381 618 13,409 274 13,683 (406) 8,656 13,409 241 16,944 2,901 42,151 531 139 5 144 463 653 (32) 1,084 7,034 8,118 24 50 74 692 124 816 1,116 1,932 11 11 (395) 83 387 75 4,733 4,808 174 55 229 760 83 1,164 (32) 1,975 12,883 14,858 NONOPERATING REVENUES (EXPENSES) Investment Income Gain/(loss) on disposal of assets Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfer in Transfer out Change in net position Total net position - beginning Total net position - ending $ 143 $ $ $ City of Glendale, Arizona Combining Statement of Cash Flows Non-Major Proprietary Funds - Business-Type Activities For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Landfill Solid Waste $ 11,471 - $ 19,140 - (1,876) (3,252) (3,181) 3,162 (9,861) (1,295) (5,633) 2,351 (11,963) (1,373) (153) (11,737) (16,510) (10,187) 5,360 653 (32) - 124 (729) 387 8 1,164 (32) (721) 621 (605) 395 411 (3,605) 50 (1,327) - 50 (4,932) (3,605) (1,277) - (4,882) Cash flows from investing activities: Interest received from investments Net cash provided by investing activities 139 139 24 24 11 11 174 174 Net increase (decrease) in cash and cash equivalents during fiscal year 317 493 253 1,063 6,311 6,628 493 2,560 2,813 8,871 9,934 Cash flows from operating activities: Cash received from customers Cash received from federal operating grants Cash paid to suppliers: Internal city departments External vendors Cash paid to employees for services Net cash provided (used) by operating activities Cash flows from noncapital financing activities: Transfers in Transfers out Due to / from other funds Net cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities: Proceeds from sale of capital assets Acquisition of capital assets and rights Net cash used by capital and related financing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 144 $ Housing $ $ 3,116 10,067 Total $ $ 33,727 10,067 Landfill 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 operations: Amortization and depreciation Changes in assets and liabilities: Accounts receivable Intergovernmental receivable OPEB asset Pension and OPEB liability Deferred outflows related to pensions and OPEB Deferred inflows related to pensions and OPEB Inventories and prepaid items Vouchers and accounts payable Other long term liabilities Deposits Unearned rent Compensated absences Estimated closure and post-closure costs Net cash provided by (used) operating activities $ 319 Solid Waste $ 618 Housing $ (406) Total $ 531 1,190 1,437 274 2,901 (57) 2 26 137 4 38 4 (236) 1 10 84 (236) 7 74 190 324 95 609 $ (163) 334 1,122 (42) 241 3,162 $ (310) 58 4 41 2,351 $ (94) 1 11 20 1 137 29 (153) $ (567) 1 403 20 1,127 137 28 241 5,360 Reconciliation of statement of net position cash and investments to the statement of cash flows: Per combining statement of net position: Equity in pooled cash and investments Total cash and cash equivalents $ $ 6,628 6,628 $ $ 493 493 $ $ 2,813 2,813 $ $ 9,934 9,934 Noncash investing, capital, and financing activities: Contributions of capital assets $ - $ - $ 83 $ 83 145 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTERNAL SERVICE FUNDS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. INTERNAL SERVICE FUNDS Risk Management Fund This fund accounts for potential torts, and loss and destruction of assets. The City’s risk management fund purchases excess and commercial insurance. Workers’ Compensation Fund This fund accounts for work-related injuries to employees. The workers’ compensation fund provides statutory coverage for each injured workers’ compensation claim. Employee Benefits Trust Fund This fund accounts for reserves to meet future cost increases for health-related insurance. Fleet Services Fund This fund is used to track income and expenses of the internal services provided to city departments. The fund specifically covers vehicle maintenance needs and fuel purchased for city vehicles. Technology Fund This fund accounts for the support all the city’s computers and hardware and software needs, including both the everyday operations and the replacement of equipment. 146 City of Glendale, Arizona Combining Statement of Net Position Internal Service Funds June 30, 2020 (amounts expressed in thousands) Workers' Compensation Risk Management Employee Benefits Fleet Services Total Internal Service Funds Technology ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Intergovernmental receivable Inventories and prepaid items Total current assets Noncurrent assets: Restricted Deposits OPEB assets Capital assets: Capital Assets Accumulated Depreciation Capital assets, net Total noncurrent assets Total assets $ 5,410 $ 7,561 $ 9,498 $ 206 $ 8,107 $ 30,782 16 5,426 7,561 168 46 9,712 22 41 269 8,107 168 22 103 31,075 - 150 - 1,425 - 5 7 1,575 12 5,426 150 7,711 1,425 11,137 765 (713) 52 57 326 8,457 (3,974) 4,483 4,490 12,597 9,222 (4,687) 4,535 6,122 37,197 45 45 16 16 - 794 794 611 611 1,466 1,466 42 29 4,458 4,529 121 25 7,542 7,688 1,943 4,691 6,634 189 192 381 665 58 251 974 2,960 58 497 16,691 20,206 19 45 64 4,593 27 10 37 7,725 6,634 212 2,783 2,995 3,376 259 470 729 1,703 517 3,308 3,825 24,031 20 9 - 790 306 1,125 - - - 52 4,483 4,535 858 858 (7) (7) 4,503 4,503 5 (3,103) (3,046) 7 6,709 11,199 12 8,960 13,507 DEFERRED OUTFLOWS OF RESOURCES Debit amounts related to pensions and OPEB Total deferred outflows of resources LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Estimated claims payable Total current liabilities Noncurrent liabilities: Compensated absences Net pension & OPEB liabilities Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Credit amounts related to pensions and OPEB NET POSITION Net investment in capital assets Restricted for: OPEB benefits Unrestricted Total net position $ $ 147 $ $ $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Net Position Internal Service Funds For the Year Ended June 30, 2020 (amounts expressed in thousands) Workers' Compensation Risk Management Employee Benefits Fleet Services Total Internal Service Funds Technology OPERATING REVENUES Intergovernmental Self insurance premium Charges for services Other fees Total operating revenues $ 4,271 162 4,433 $ 3,369 4 3,373 $ 29,533 33 29,566 $ 9,663 2 9,665 $ 12,348 18 12,366 $ 37,173 22,011 219 59,403 OPERATING EXPENSES Administrative and general Insurance claims and premiums Amortization and depreciation Total operating expenses Operating income (loss) 1,908 2,075 3,983 450 761 3,347 4,108 (735) 184 28,386 28,570 996 9,731 14 9,745 (80) 9,463 496 9,959 2,407 22,047 33,808 510 56,365 3,038 132 132 582 582 276 858 167 167 (568) (568) 561 (7) 191 191 1,187 1,187 3,316 4,503 (80) (80) (2,966) (3,046) 61 (2) 59 2,466 2,466 8,733 11,199 551 (2) 549 3,587 3,587 9,920 13,507 NONOPERATING REVENUES (EXPENSES) Investment Income Gain/(loss) on disposal of assets Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Change in net position Total net position - beginning Total net position - ending $ $ 148 $ $ $ $ City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2020 (amounts expressed in thousands) Risk Management Cash flows from operating activities: Cash received from customers Cash paid to suppliers: Internal city departments External vendors Cash paid for insurance and in settlement of claims and related expenses Cash paid to employees for services $ Workers' Compensation 4,433 $ Employee Benefits 3,373 $ Fleet Services 29,398 $ Total Internal Service Funds Technology 9,652 $ 12,366 $ 59,222 - - - (299) (6,801) (63) (5,571) (362) (12,372) (3,725) (307) (3,117) (300) (27,784) - (2,562) (3,192) (34,626) (6,361) 401 (44) 1,614 (10) 3,540 5,501 - - - - (3,287) (3,287) Cash flows from investing activities: Interest received from investments 132 167 191 - 61 551 Net increase (decrease) in cash during fiscal year 533 123 1,805 (10) 314 2,765 Net cash provided by (used for) operating activities Cash flows from capital and related financing activities: Acquisition of capital assets and rights Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operations: Amortization and depreciation Changes in assets and liabilities: Change in accounts receivable Change in intergovernmental receivable Change in OPEB asset Change in pension and OPEB liability Change in deferred outflows related to pensions and OPEB Change in deferred inflows related to pensions and OPEB Change in inventories and prepaid items Change in vouchers payable Change in compensated absences Change in claims payable Net cash provided by (used for) operating activities Reconciliation of statement of net position cash and investments to the statement of cash flows: Per combined statement of net position: Equity in pooled cash and investments Total cash and cash equivalents $ 4,877 5,410 $ 7,438 7,561 $ 7,693 9,498 $ 216 206 $ 7,793 8,107 $ 28,017 30,782 $ 450 $ (735) $ 996 $ (80) $ 2,407 $ 3,038 - - - 14 496 510 1 4 2 (168) - (13) 1 19 2 28 (168) (13) 4 53 20 12 - 151 190 373 (14) (10) - (136) (157) (317) (6) (113) 5 54 (6) 3 690 (161) 947 22 3 9 - 602 (28) - 16 325 (11) 1,691 (44) $ 1,614 $ (10) $ 3,540 $ 5,501 9,498 9,498 $ $ 206 206 8,107 8,107 $ $ 30,782 30,782 $ 401 $ $ $ 5,410 5,410 $ $ 7,561 7,561 149 $ $ $ $ City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2020 (rounded to nearest dollar) 1 of 6 The following is the schedule of Federal Financial Data as required by the United States Department of Housing and Urban Development under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H. Balance Sheet Line Item No. 111 112 113 114 115 100 Account Description ASSETS: Current assets: Cash: Cash - unrestricted Cash - restricted - modernization and development Cash - other restricted Cash - tenant security deposits Cash - restricted for payment of current liability Total cash Project Total Housing Choice Vouchers HCV CARES Act Funding Eliminations $ $ $ $ 1,168,352 48,641 1,216,993 1,050,252 410,257 1,460,509 135,968 135,968 - Total $ 2,218,604 546,225 48,641 2,813,470 121 122 124 125 126 126.1 126.2 127 128 128.1 129 120 Accounts receivables: Accounts receivable - PHA projects Accounts receivable - HUD other projects Accounts receivable - other government Accounts receivable - miscellaneous Accounts receivable - tenants Allowance for doubtful accounts - tenants Allowance for doubtful accounts - other Notes, loans, & mortgages receivable - current Fraud recovery Allowance for doubtful accounts - fraud Accrued interest receivable Total receivables, net of allowances for doubtful accounts 18,810 3,900 3,912 (3,099) 2,176 (2,176) 23,523 302,141 2,209 (2,209) 302,141 - - 302,141 18,810 3,900 6,121 (5,308) 2,176 (2,176) 325,664 131 132 135 142 143 143.1 144 145 150 Current investments: Investments - unrestricted Investments - restricted Investments - restricted for payment of current liability Prepaid expenses and other assets Inventories Allowance for obsolete inventories Inter program - due from Assets held for sale Total current assets 18,112 (906) 12,184 1,269,906 1,762,650 135,968 - 18,112 (906) 12,184 3,168,524 161 162 163 164 165 166 167 168 160 Non-current assets: Capital assets: Land Buildings Furniture, equipment & machinery - dwellings Furniture, equipment & machinery - administration Leasehold improvements Accumulated depreciation Construction in progress Infrastructure Total capital assets, net of accumulated depreciation 135,533 11,281,189 582,900 203,309 2,377,945 (10,957,578) 250,163 3,873,461 149,998 102,908 (191,172) 61,734 - - 135,533 11,431,187 582,900 306,217 2,377,945 (11,148,750) 250,163 3,935,195 1,409 3,874,870 5,144,776 108,554 5,253,330 1,490 63,224 1,825,874 114,854 1,940,728 135,968 $ 135,968 - 2,899 3,938,094 7,106,618 223,408 7,330,026 171 172 173 174 176 180 190 200 290 Notes, loans, & mortgages receivable - non-current Notes, loans, & mortgages receivable - non-current - past due Grants receivable - non-current Other assets Investment in joint venture Total non-current assets Total assets Deferred outflow of resources Total assets and deferred outflow of resources $ $ $ $ (continued) 150 City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2020 (rounded to nearest dollar) 2 of 6 (continued) Balance Sheet Line Item No. Account Description 311 312 313 321 322 324 325 331 332 333 341 342 343 344 345 346 347 348 310 LIABILITIES AND EQUITY-NET ASSETS/POSITION: LIABILITIES: Current liabilities: Bank Overdraft Accounts payable <= 90 days Accounts payable > 90 days past due Accrued wage/payroll taxes payable Accrued compensated absences - current portion Accrued contingency liability Accrued interest payable Accounts payable - HUD PHA Programs Accounts payable - PHA projects Accounts payable - other government Tenant security deposits Unearned revenues Total current portion of L/T debt - capital projects/mortgage revenue Current portion of L/T debt - operating borrowings Other current liabilities Accrued liabilities - other Inter program - due to Loan liability - current Total current liabilities 351 352 353 354 355 356 357 350 300 Noncurrent liabilities: Long-term debt, net of current - capital projects/mortgage revenue Long-term debt, net of current - operating borrowings Noncurrent liabilities - other Accrued compensated absences - noncurrent Loan liability - noncurrent FASB 5 liabilities Accrued pension and OPEB liabilities Total noncurrent liabilities Total liabilities 400 Deferred inflow of resources 508.4 511.4 512.4 513 600 EQUITY - NET ASSETS/POSITION: Net investment in capital assets Restricted net position Unrestricted net position Total equity - net assets/position Total liabilities, deferred inflow of resources and equity - net assets/position Project Total Housing Choice Vouchers HCV CARES Act Funding Eliminations $ $ $ $ $ 18,886 9,865 48,641 6,361 83,753 24,736 11,277 36,013 135,968 135,968 - Total $ 43,622 21,142 48,641 142,329 255,734 88,783 862,590 951,373 1,035,126 55,749 101,496 912,651 1,069,896 1,105,909 135,968 - 55,749 190,279 1,775,241 2,021,269 2,277,003 119,199 126,117 - - 245,316 3,873,461 225,544 4,099,005 5,253,330 61,734 354,508 292,460 708,702 1,940,728 $ 135,968 - 3,935,195 354,508 518,004 4,807,707 7,330,026 $ $ $ (continued) 151 City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2020 (rounded to nearest dollar) 3 of 6 (continued) Income Statement Line Item No. Account Description 70300 70400 70500 REVENUE: Net tenant rental revenue Tenant revenue - other Total tenant revenue 70600 70610 HUD PHA operating grants Capital grants 70710 70720 70730 70740 70750 70700 Management fee Asset management fee Bookkeeping fee Front line service fee Other fees Total fee revenue 70800 71100 71200 71300 71310 71400 71500 71600 72000 70000 Other government grants Investment income - unrestricted Mortgage interest income Proceeds from disposition of assets held for sale Cost of sale of assets Fraud recovery Other revenue Gain or loss on sale of capital assets Investment income - restricted Total revenue Project Total Housing Choice Vouchers HCV CARES Act Funding Eliminations $ $ $ $ $ 413,201 10,022 423,223 - - - Total $ 413,201 10,022 423,223 643,625 83,089 9,659,490 - - - 10,303,115 83,089 - - - - - 5,278 21,905 1,177,120 5,667 1,676 2,526,083 $ 12,192,916 - - 10,945 1,676 2,547,988 $ 13,370,036 $ $ (continued) 152 City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2020 (rounded to nearest dollar) 4 of 6 (continued) Income Statement Line Item No. Account Description 91100 91200 91300 91310 91400 91500 91600 91700 91800 91810 91900 91000 EXPENSES: Administrative salaries Auditing fees Management fee Bookkeeping fee Advertising and marketing Employee benefit contributions - administrative Office expenses Legal expense Travel Allocated overhead Other Total operating - administrative 92000 92100 92200 92300 92400 92500 Asset management fee Tenant services - salaries Relocation costs Employee benefit contributions - tenant services Tenant services - other Total Tenant services 93100 93200 93300 93400 93500 93600 93700 93800 93000 94100 94200 94300 94500 94000 Project Total Housing Choice Vouchers HCV CARES Act Funding Eliminations $ $ $ $ 323,544 4,053 103,063 22,408 311 90,973 544,352 567,493 286,528 33,345 450 101,016 988,832 - - Total $ 891,037 4,053 389,591 55,753 761 191,989 1,533,184 - - - - - Water Electricity Gas Fuel Labor Sewer Employee benefit contributions - utilities Other utilities expense Total utilities 80,432 15,587 1,080 35,198 132,297 - - - 80,432 15,587 1,080 35,198 132,297 Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials & other Ordinary maintenance and operations - contract costs Employee benefit contributions - ordinary maintenance Total maintenance 299,530 89,851 197,428 84,609 671,418 851 851 - - 299,530 90,702 197,428 84,609 672,269 $ $ $ $ $ (continued) 153 City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2020 (rounded to nearest dollar) 5 of 6 (continued) Income Statement Line Item No. Account Description 95100 95200 95300 95500 95000 Protective services - labor Protective services - other contract costs Protective services - other Employee benefit contributions - protective services Total protective services 96110 96120 96130 96140 96100 Property insurance Liability insurance Workmen's compensation All other insurance Total insurance premiums 96200 96210 96300 96400 96500 96600 96800 96000 Other general expenses Compensated absences Payments in lieu of taxes Bad debt - tenant rents Bad debt - mortgages Bad debt - other Severance expense Total other general expenses 96710 96720 96730 96700 Interest on mortgage (or bonds) payable Interest on notes payable (short and long term) Amortization of bond issue costs Total Interest expense and amortization cost 96900 Total operating expenses 97000 - HCV CARES Act Funding $ - 7,050 7,050 4,700 4,700 - - 11,750 11,750 10,044 10,044 5,748 5,748 - - 5,748 10,044 15,792 - - - - - 1,365,161 1,000,131 - - 2,365,292 (188,041) 11,192,785 - - 11,004,744 Project Total Housing Choice Vouchers $ $ Excess of operating revenue over operating expenses - Eliminations $ - Total $ - 97100 97200 Extraordinary maintenance Casualty losses - non-capitalized - - - - - 97300 Housing assistance payments - 8,648,894 - - 8,648,894 269,715 1,634,876 2,394,080 4,061 $ 12,047,166 - - 2,394,080 273,776 $ 13,682,042 97350 97400 97500 97600 97700 97800 90000 HAP Portability-in Depreciation expense Fraud losses Capital outlays - governmental funds Debt principal payment - governmental funds Dwelling units rent expense Total expenses $ $ $ (continued) 154 City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2020 (rounded to nearest dollar) 6 of 6 (continued) Income Statement Line Item No. Account Description 10010 10020 OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out 10030 10040 10050 10060 10070 10080 10091 10092 10093 10094 10100 10000 Operating transfers from/to primary government Operating transfers from/to component unit Proceeds from notes, loans and bonds Proceeds from property sales Extraordinary items, net gain/loss Special items, net gain/loss Inter project excess cash transfer in Inter project excess cash transfer out Transfers between program and project - in Transfers between program and project - out Total other financing sources (uses) Excess (deficiency) of total revenues over (under) total expenses Project Total Housing Choice Vouchers HCV CARES Act Funding Eliminations $ $ $ $ 20,193 (20,193) $ 296,563 296,563 (161,193) $ - - $ 90,000 90,000 235,750 $ - - $ - $ - (20,193) 20,193 Total $ $ - $ 386,563 386,563 74,557 $ - $ - MEMO ACCOUNT INFORMATION 11020 Required annual debt principal payments 11030 Beginning equity 4,260,198 472,952 - - 4,733,150 11040 11050 11060 11070 11080 11090 11100 11170 11180 11190 11210 11270 Prior period adjustments, equity transfers & correction of errors Changes in compensated absence balance Changes in contingent liability balance Changes in unrecognized pension transition liability Changes in special term/severance benefits liability Changes in allowance for doubtful accounts - dwelling rents Changes in allowance for doubtful accounts - other Administrative fee equity Housing assistance payments equity Unit months available Unit months leased Excess cash 1,847 1,837 1,050,652 370,866 354,508 12,648 12,153 - - - 370,866 354,508 14,495 13,990 1,050,652 11610 11620 11630 11640 11650 11660 13510 13901 Land purchases Building purchases Furniture & equipment - dwelling purchases Furniture & equipment - administrative purchases Leasehold improvements purchases Infrastructure purchases CFFP debt service payments Replacement housing factor funds 64,116 5,788 13,185 - - - - 64,116 5,788 13,185 - 155 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This page left blank intentionally. STATISTICAL SECTION This part of the City of Glendale’s comprehensive annual 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 Pages Financial Trends These schedules contain trend information to help the reader understand how the city’s financial performance and well-being have changed over time. 157-164 Revenue Capacity These schedules contain information to help the reader assess the city’s local revenue source, the property tax and sales tax. 165-170 Debt Capacity These schedules 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. 171-178 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the city’s financial activities take place. 179-181 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the city’s financial report relates to the services the city provides and the activities it performs. 182-186 156 City of Glendale, Arizona Net Position by Component Last Ten Fiscal Years (amounts expressed in thousands) 2020 Government activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position $ 465,366 170,205 (193,716) 2019 $ 416,078 184,654 (215,449) 2018 $ 451,826 185,396 (246,697) 2017 $ 471,979 157,251 (278,767) 441,855 385,283 390,525 350,463 Business-type activities Net investment in capital assets Restricted Unrestricted Total business-type activities net position 362,679 33,896 32,618 313,704 32,943 53,699 280,920 27,550 78,272 267,111 22,897 83,920 429,193 400,346 386,742 373,928 Primary government Net investment in capital assets Restricted Unrestricted Total primary government net position 828,045 204,101 (161,098) 729,782 217,597 (161,750) 732,746 212,946 (168,425) 739,090 180,148 (194,847) $ 871,048 $ 157 785,629 $ 777,267 $ 724,391 Schedule 1 2016 $ $ 456,001 163,592 (239,670) 2015 $ 456,897 168,714 (240,749) 2014 $ 2013 448,083 161,027 (277,093) $ 438,366 186,106 (59,797) 2012 $ 460,639 183,829 (73,375) 2011 $ 463,961 204,645 (22,532) 379,923 384,862 332,017 564,675 571,093 646,074 256,488 21,576 96,300 253,134 24,090 92,357 256,164 22,300 123,699 251,765 12,264 161,999 262,554 12,921 139,934 271,708 29,988 112,323 374,364 369,581 402,163 426,028 415,409 414,019 712,489 185,168 (143,370) 710,031 192,804 (148,392) 704,247 183,327 (153,394) 690,131 198,370 102,202 723,193 196,750 66,559 735,669 234,633 89,791 986,502 $ 1,060,093 754,287 $ 754,443 $ 734,180 158 $ 990,703 $ $ $ 2,995 Community services Total governmental activities program revenues Capital grants and contributions Operating grants and contributions Street maintenance 72,740 12,728 111,617 33,570 207 - 4,318 3,883 4,126 16,572 30,906 $ 123,676 468,504 50,999 124 - 4,478 Public works Community environment 3,803 15,648 Public safety General government Charges for services: Governmental activities: Program revenues $ 12,910 129,277 467,437 13,663 Total business-type activities expenses Total primary government expenses Housing 17,242 18,351 Solid Waste 9,921 Landfill 83,603 87,212 10,051 Water and sewer Business-type activities: 26,181 344,828 24,133 338,160 Interest on long-term debt Total governmental activities expenses 44,992 43,436 Street maintenance Community environment 30,232 28,010 31,211 28,378 56,530 Public works $ Community services 45,972 2019 158,883 $ 2020 165,030 Public safety General government Governmental activities: Expenses City of Glendale, Arizona Changes in Net Position Last Ten Fiscal Years (amounts expressed in thousands) 159 $ $ $ 71,588 12,382 26,523 662 338 10,890 651 2,295 17,847 119,411 402,442 12,498 15,150 9,852 81,911 283,031 24,916 20,976 3,290 30,885 25,072 134,977 42,915 2018 $ $ $ 69,351 6,669 27,519 357 308 13,490 536 5,445 15,027 123,144 463,432 12,644 15,698 11,302 83,500 340,288 27,827 21,848 3,930 33,752 24,768 166,790 61,373 2017 $ $ $ 66,154 6,603 26,225 193 305 9,649 650 6,148 16,381 117,170 424,964 12,730 15,016 9,049 80,375 307,794 27,932 21,219 4,262 32,796 24,859 132,498 64,228 2016 $ $ $ 74,319 11,403 25,665 25 309 11,704 631 6,084 18,498 110,752 408,171 13,159 15,059 7,727 74,807 297,419 32,106 19,180 4,980 31,311 21,482 127,870 60,490 2015 $ $ $ 71,563 10,748 25,168 - - 10,486 1,126 6,369 17,666 112,356 419,293 13,088 14,471 7,554 77,243 306,937 34,808 25,207 5,895 30,796 20,524 116,070 73,637 2014 $ $ $ 63,510 7,904 25,156 - - 11,003 1,149 5,778 12,520 111,105 385,375 14,037 16,122 7,486 73,460 274,270 42,413 20,000 5,655 33,831 19,230 115,694 37,447 2013 $ $ $ 69,290 5,274 27,636 - - 17,910 512 5,624 12,334 116,783 392,133 14,827 15,437 7,602 78,917 275,350 41,913 20,045 6,828 39,478 18,435 112,689 35,962 2012 $ $ $ 139,833 70,552 27,137 - - 11,733 495 5,094 24,822 116,225 405,659 14,687 14,814 7,280 79,444 289,434 41,967 21,721 7,061 41,136 20,099 111,217 46,233 2011 Schedule 2 $ $ 249,922 Total primary government program revenues Transfers $ $ Governmental activities Business-type activities Total primary government Changes in net position Total business-type activities Total primary government $ 56,572 28,847 85,419 $ $ 13,604 8,362 (5,242) 6,662 273,508 1,320 1,326 19,819 302,934 3,714 - - 1,628 266,846 - (1,320) 3,177 - 1,919 10,647 29,876 24,849 171,821 25,877 6,942 (265,146) (272,088) 203,358 130,618 3,940 9,397 17,216 - Loss on joint venture Miscellaneous - 1,277 283,115 Gain (loss) on disposal of capital assets Investment earnings Business-type activities: Total governmental activities - (1,326) Special item Transfers - 5,931 10,643 32,419 25,910 2,978 $ 25,718 180,842 Miscellaneous Gain (loss) on disposal of capital assets Investment earnings Auto in-lieu taxes (state shared income tax) Unrestricted urban revenue sharing Unrestricted state shared sales tax Sales taxes Property taxes Taxes: Governmental activities: $ 9,028 (217,515) Business-type activities Total primary government net expense General revenues and other changes in net position (226,543) Governmental activities Net (expense)/revenue 138,305 Total business-type activities program revenues 5,816 Capital grants and contributions $ 3,527 2,984 10,866 Operating grants and contributions Housing 18,080 19,048 Solid Waste 9,670 89,208 10,383 86,004 2019 Landfill 2020 Water and sewer Charges for services: Business-type activities: 160 $ $ $ $ $ 12,814 52,876 40,062 5,354 256,859 1,358 2,628 - - 1,368 251,505 - (1,358) 1,490 - (694) 10,166 30,456 23,627 162,299 25,519 7,460 (203,983) (211,443) 198,459 126,871 2,054 9,682 3,355 16,048 9,444 86,288 2018 $ $ $ $ $ (436) (29,896) (29,460) 2,261 243,738 1,264 114 - - 883 241,477 - (1,264) 1,400 - (253) 9,458 29,378 22,024 155,779 24,955 (2,697) (273,634) (270,937) 189,798 120,447 2,815 10,230 2,876 14,856 9,451 80,219 2017 $ $ $ $ $ 4,782 (157) (4,939) 1,480 238,181 803 63 - - 614 236,701 - (803) 3,417 - 1,225 9,351 27,297 21,482 150,201 24,531 3,302 (238,338) (241,640) 186,626 120,472 815 9,809 2,980 15,181 9,858 81,829 2016 $ $ $ $ $ (34,499) 10,362 44,861 (41,671) 226,290 (39,198) 86 (3,329) 127 643 267,961 - 39,198 520 (688) 1,070 8,664 27,446 20,695 147,175 23,881 7,172 (215,928) (223,100) 192,243 117,924 2,562 8,855 3,265 14,944 9,757 78,541 2015 $ $ $ $ $ 8,748 8,066 (682) 761 210,839 64 67 - 167 463 210,078 - (64) 687 78 726 8,086 25,271 19,734 131,983 23,577 7,987 (202,773) (210,760) 191,394 119,831 2,423 9,357 3,504 14,836 8,646 81,065 2014 $ $ $ $ $ 10,619 4,201 (6,418) 2,632 206,974 641 70 - 43 1,878 204,342 - (641) 367 353 716 7,586 23,159 18,558 132,872 21,372 7,987 (202,773) (210,760) 182,602 119,092 831 9,376 4,137 14,791 7,994 81,963 2013 $ $ $ $ $ 4,173 (63,863) (68,036) 1,465 139,489 307 72 - (40) 1,126 138,024 (25,000) (307) 489 56 975 7,277 19,135 17,716 97,451 20,232 2,708 (203,352) (206,060) 188,781 119,491 705 9,423 4,886 14,562 7,185 82,730 2012 $ $ $ $ $ 3,512 3,729 217 1,138 150,956 317 70 - 137 614 149,818 (25,000) (317) 3,936 (677) 1,482 7,917 23,590 18,438 93,260 27,189 2,374 (147,227) (149,601) 258,432 118,599 1,155 9,342 4,829 14,733 8,027 80,513 2011 This page left blank intentionally. 161 162 All other governmental funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds General fund Nonspendable Restricted Committed Assigned Unassigned Total general fund $ $ $ $ 6,171 107,088 1,734 569 (502) 115,060 5,621 5,374 34,322 49,648 94,965 2020 City of Glendale, Arizona Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) $ $ $ $ 6,020 119,994 1,571 737 128,322 2,933 5,604 5,685 43,523 57,745 2019 $ $ $ $ 5,810 118,991 2,548 430 (653) 127,126 2,919 6,274 12,678 43,474 65,345 2018 $ $ $ $ 5,861 91,908 2,295 170 (3,770) 96,464 2,934 7,443 10,647 40,559 61,583 2017 $ $ $ $ 5,818 97,170 1,273 319 104,580 2,940 8,495 12,483 35,226 59,144 2016 $ $ $ $ 5,768 99,970 1,945 107,683 216 10,313 1,114 8,563 26,033 46,239 2015 $ $ $ $ 5,801 102,241 123 202 108,367 600 688 1,554 (4,835) (1,993) 2014 $ $ $ $ 5,774 103,772 115 144 109,805 650 311 1,676 (14,438) (11,801) 2013 $ $ $ $ 5,829 117,964 129 82 124,004 197 368 2,351 (29,565) (26,649) 2012 $ $ $ $ 5,822 129,635 11,464 199 147,120 463 5,403 1,965 9,253 (5,414) 11,670 2011 Schedule 3 163 Total expenditures Excess of revenues over (under) expenditures General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Capital outlay Debt service: Principal Interest Expenditures Total revenues Taxes and special assessments Licenses and permits Intergovernmental Local revenues Charges for services Fines and forfeitures Investment income (loss) Miscellaneous Revenues $ 357,303 (25,814) 360,853 15,296 39,706 29,654 61,450 27,681 331,489 198,012 16,350 95,573 177 10,744 2,982 3,276 4,375 43,615 146,166 15,674 23,772 34,053 24,663 $ 2019 30,174 146,573 16,164 23,514 31,772 23,525 376,149 206,815 19,182 129,329 173 8,514 2,426 6,063 3,647 2020 City of Glendale, Arizona Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) $ (12,853) 328,395 29,359 28,300 30,961 139,287 11,400 31,954 3,621 10,861 42,652 315,542 188,553 12,534 94,191 58 10,250 3,337 129 6,490 2018 $ (26,134) 332,637 46,456 30,704 29,531 131,576 9,484 30,659 3,979 11,195 39,053 306,503 181,576 12,403 89,684 300 13,486 3,699 276 5,079 2017 $ (39,285) 338,852 35,650 30,382 34,671 126,498 9,429 28,461 4,285 10,260 27 59,189 299,567 176,489 11,951 86,273 17 12,613 3,857 1,517 6,850 2016 $ 4,535 292,478 37,251 32,870 33,494 114,143 8,673 26,379 4,977 7,951 5,791 20,949 297,013 170,605 10,610 87,112 525 17,685 3,556 1,258 5,662 2015 $ 8,252 267,896 30,043 35,628 29,666 108,397 7,463 25,536 5,826 8,352 2,323 14,662 276,148 159,328 11,522 81,364 18 14,781 3,735 900 4,500 2014 $ (852) 257,435 26,441 43,038 16,065 103,610 7,859 27,966 5,554 8,305 4,617 13,980 256,583 149,705 10,373 76,520 36 11,896 3,469 762 3,822 2013 $ (33,947) 263,713 24,947 42,515 18,147 100,368 7,709 33,597 6,703 8,311 1,782 19,634 229,766 118,218 10,798 73,009 11,487 3,374 1,180 11,700 2012 $ (23,215) 271,478 31,640 42,593 19,668 95,270 8,859 33,887 6,853 9,038 1,577 22,093 248,263 120,974 9,367 79,760 10,461 3,806 1,841 22,054 2011 Schedule 4 164 26.42% 20.85% $ 20.18% 34,424 47,277 91,940 15,686 2,910 15,240 (77,139) 61,927 (63,287) - 2018 $ 26.28% (5,677) $ 23.61% 9,802 49,087 (30,470) 84,460 (85,263) - 48,450 (49,714) 20,457 27,285 33,830 4,948 329 6,615 7,353 2016 19,330 2,391 - 2017 $ 25.82% 48,256 43,721 (131,966) (110,145) (1,022) 240,694 (201,496) - 209,255 35,751 2,650 - 2015 $ 25.93% 8,370 118 48,704 (48,768) - 174 8 2014 $ 28.54% 649 1,501 (256,054) 52,136 (53,267) - (1,557) 239,875 19,779 589 - 2013 $ 27.64% (34,100) (153) (9,320) 32,977 (33,919) (25,000) 8,665 898 546 - 2012 $ 29.77% (34,138) (10,923) (41,251) 38,728 (39,045) (25,000) 11,503 38,300 (11,355) 3,369 331 - 2011 Note: The debt service percentage of noncapital expenditures does not include other financing sources/uses. The percentage equals the total principal and interest expenditures divided by the total expenditures less capital outlay. Debt service as a percentage of noncapital expenditures (6,404) 23,958 Net change in fund balances $ 19,410 8,662 $ 15,385 1,983 238 3,125 56,739 (58,060) - 2019 295 9,693 50,009 (51,335) - 2020 Refunding lease issued Discount on long-term debt Long-term debt issued Refunding bonds issued Payment to redeem lease Premium on long-term debt issued Proceeds from equipment disposal Proceeds from land sale Capital lease proceeds Proceeds from loans Payment to redeem/refunded bonds escrow agent Current bond refunding principal Current bond refunding interest Transfers in Transfers out Special item Total other financing sources (uses) Other financing sources (uses) 165 535,252 565,975 645,653 2017-18 2018-19 2019-20 2,100,805 1,924,149 1,771,647 1,635,370 1,546,186 1,451,325 47,258 48,588 49,605 37,350 40,431 40,191 41,750 45,507 49,391 59,049 Personal (3) 60,722 59,594 60,918 60,892 59,918 55,687 53,581 53,158 53,746 56,217 Utilities Rails and Wires 673,484 590,661 596,446 579,745 529,361 518,191 477,258 485,894 473,388 609,782 Less: Tax Exempt Property 2,180,954 2,007,645 1,820,976 1,653,175 1,520,229 1,408,099 1,148,108 1,047,273 1,149,524 1,753,570 Net Assessed Value (1) 1.86 1.98 2.07 2.14 2.20 2.15 2.29 1.90 1.59 1.59 Total Direct Tax Rate 23,159,054 21,072,143 19,526,518 13,617,839 13,046,428 12,452,875 12,489,163 11,471,039 12,040,482 17,333,074 Estimated Actual Value(1) 12.325 12.331 12.380 16.397 15.708 15.469 13.014 13.366 13.479 13.635 % Assessed Value as a Percentage of Actual Value(2) Schedule 5 Source: Maricopa County Assessor's Office and Maricopa County's Department of Finance Notes: (1) Assessed values are established each year by the County. The tax rate is $100 per assessed value (reference note I. L). (2) The assessed value as a percentage of actual value does not include tax exempt property. (3) The Assessor's Office no longer breaks down the secured and unsecured personal property as of 2013. All prior years secured and unsecured have been combined. 499,308 379,087 2014-15 2016-17 316,206 2013-14 403,055 1,130,460 304,041 2012-13 2015-16 1,189,718 330,057 2011-12 1,213,829 1,593,536 Improvements 654,550 Real Estate 2010-11 Fiscal Year Major Components City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) 166 0.44 0.42 2018-19 2019-20 1.44 1.54 1.61 1.67 1.71 1.66 1.79 1.68 1.37 1.37 1.86 1.98 2.07 2.15 2.20 2.15 2.29 1.90 1.59 1.59 City of Glendale 22.13 22.17 23.61 23.29 22.54 23.58 25.06 22.93 20.69 16.35 Glendale Elementary and High School Districts 18.47 18.96 20.02 20.82 20.66 19.64 19.82 18.08 15.54 14.13 Peoria Unified School Districts Overlapping Rates* * Overlapping rates are those of local and county governments that apply to property owners within the City of Glendale. Not all overlapping rates apply to all City of Glendale property owners (e.g., the rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district). Source: Maricopa County 2019 Tax Rates Note: The City rounds the rates to two digits from the four presented by the county. 0.46 0.49 2014-15 2017-18 0.50 2013-14 0.48 0.22 2012-13 2016-17 0.22 2011-12 0.49 0.22 2010-11 2015-16 Basic Rate Fiscal Year General Obligation Debt Service City of Glendale, Arizona Direct and Overlapping Governments Property Tax Rates Last Ten Fiscal Years Per $100 Assessed Valuation 18.17 18.63 19.10 19.16 18.86 18.85 18.91 17.75 16.47 14.18 Deer Valley Unified School Districts Schedule 6 167 Rank 1 2 3 4 5 6 7 8 9 10 $ $ 121,910 Assessed Valuation 24,394 18,544 14,894 12,863 10,203 9,493 8,949 7,889 7,551 7,130 5.60 % Percentage of Total City Taxable Assessed Value 1.12 % 0.85 0.68 0.59 0.47 0.44 0.41 0.36 0.35 0.33 Tax Year 2020 12,400 11,936 7,625 6,363 5,652 4,957 3 4 7 8 9 10 98,656 8,934 6 $ 9,388 5 17,525 13,876 $ 2 1 Rank Assessed Valuation Schedule 7 5.63 % 0.71 0.68 0.44 0.36 0.32 0.28 0.51 0.54 0.79 1.00 % Percentage of Total City Taxable Assessed Value Tax Year 2011 Notes: The Salt River Project Agriculture Improvement and Power District assessed valuation is not reflected in the total assessed valuation of the City of Glendale. The Project is subject to "voluntary contribution" in lieu of ad valorem taxation. The percentage of Total City Taxable Assessed Value is based on the Net Assessed Value. Source: Maricopa County Treasurer's Office Total principal taxpayers Taxpayer Yam Westgate LLC Arizona Public Service Company VHS of Arrowhead, Inc. Arrowhead Towne Center LLC Outlets At Westgate LLC Wal-Mart Stores, Inc. American Furniture Warehouse Co JQH-Glendale Az Development LLC Arizona Christian University B H 19019 North 59th Avenue LLC Entertainment Center Development LLC New River Associates Qwest Corporation RCFC Zanero Coyote Center Development LLC Stadium Development LLC City of Glendale, Arizona Principal Property Taxpayers Current Year and Nine Years Ago June 30, 2020 (amounts expressed in thousands) 168 24,850 25,253 25,592 25,953 25,831 2015-16 2016-17 2017-18 2018-19 2019-20 (1) Total levy includes only secured property. (2) Includes collections and resolutions. Source: Maricopa County Treasurer's Office 24,429 2014-15 21,841 2012-13 23,943 20,787 2011-12 2013-14 $ 27,534 2010-11 Tax Levy Year (1) Total Fiscal City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) 25,300 25,521 25,202 24,638 24,255 23,729 23,490 21,268 20,090 26,469 Amount 97.94 98.34 98.48 97.56 97.61 98.11 97.38 97.38 96.65 96.13 % Levy Percent of Collected within the Fiscal Year of Levy $ Years 65 40 - 306 315 387 236 237 141 (10) (2) in Subsequent Collections 25,300 25,827 25,517 25,025 24,491 23,966 23,631 20,194 20,155 $ 26,509 Amount 97.94 99.51 99.71 99.10 98.56 98.10 98.70 92.46 96.96 96.28 % Levy Percent of Total Collections to Date Schedule 8 This page left blank intentionally. 169 170 $ Total 5.3 % 5.8 % 94.0 3.9 (3.0) 0.8 (6.3) (42.4) (1.6) 180,754 100,561 13,988 21,407 8,629 3,029 20,883 2,893 9,364 $ $ 6.2 % 5.9 % 7.9 10.6 (1.1) (13.8) 8.7 2.1 11.0 171,578 95,042 7,212 20,598 8,898 3,006 22,280 5,023 9,519 2019 $ $ 4.2 % 1.1 % 20.2 7.1 2.5 (1.1) 2.1 36.1 16.7 161,548 89,762 6,684 18,629 8,995 3,486 20,498 4,920 8,574 2018 $ $ 3.0 % 4.8 % 15.6 4.9 2.7 (17.0) 6.9 (13.4) (16.5) 155,087 88,804 5,559 17,394 8,775 3,523 20,070 3,615 7,347 2017 $ $ 3.8 % 7.1 % (25.5) 2.7 (1.5) (11.1) 6.3 (26.4) 31.6 150,634 84,710 4,810 16,581 8,544 4,244 18,767 4,176 8,802 2016 $ $ 8.4 % 7.0 % (18.8) 11.3 (0.6) (5.9) 11.4 168.9 15.1 145,126 79,062 6,457 16,146 8,678 4,773 17,651 5,673 6,686 2015 $ $ 8.9 % 10.1 % 38.9 2.3 8.8 (8.4) 10.9 (2.0) (1.8) 133,938 73,924 7,948 14,502 8,732 5,072 15,842 2,110 5,808 2014 $ $ 27.3 % 3.3 % (23.3) (2.6) (0.9) (15.6) 6.9 55.7 (31.5) 122,986 67,157 5,724 14,182 8,028 5,540 14,284 2,154 5,917 2013 $ $ (1.3) % (2.0) % 51.0 (7.0) (6.0) (1.0) 4.0 (50.0) 39.0 96,630 49,686 5,170 11,550 6,393 5,144 11,975 2,896 3,816 2012 Note: The 2012 and prior years tax rate for City activities is 2.2% except for telecommunications which is 5.4%, restaurant bars 3.2%, hotel/motel 5.6%, and retail sales food for home consumption 1.8%. The 2013 and later years tax rate for City activities is 2.9% except for telecommunications which is 6.1%, restaurant/bars 3.9%, hotel/motel 7.9%, retail sales food for home consumption 2.5%, and retail sales of individual items over $5,000 2.2%. The amounts represent sales tax dollars collected for the fiscal year presented. Total % Growth by year Retail sales Contracting Rentals Utilities Telecom/cable TV Restaurant/bar Amusement Other $ Retail sales Contracting Rentals Utilities Telecom/cable TV Restaurant/bar Amusement Other 2020 City of Glendale, Arizona City Transaction Privilege Taxes (Sales Tax) by Category Last Ten Fiscal Years (amounts expressed in thousands) $ $ (0.1) % (2.1) % 51.2 (6.9) (5.6) (1.0) 3.9 (49.7) 38.6 97,862 48,089 6,742 11,854 6,449 6,093 11,207 1,860 5,568 2011 Schedule 9 171 16,290 (4) 12,250 (4) 8,055 (4) 3,736 (4) (5) 1,912 (4) (5) - (4) (5) - (4) (5) - (4) (5) - (4) (5) - (4) (5) 194,270 (4) 179,010 (4) 163,130 (4) 151,206 (4) (5) 133,168 (4) (5) 141,553 (4) (5) 125,384 (4) (5) 154,834 (4) (5) 152,066 (4) (5) 107,678 (4) (5) 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 General Obligation Bonds Street and Highway Revenue Bonds 2010-11 Fiscal Year City of Glendale, Arizona Ratio of Outstanding Debt by Type(1) Last Ten Fiscal Years (amounts expressed in thousands) 422,679 (4) (5) 439,912 (4) (5) 455,495 (4) (5) 468,431 (4) (5) 475,918 (4) (5) 477,747 (4) (5) 477,736 (4) (5) 468,875 474,840 481,705 Excise Tax Revenue Bonds 69,209 (4) (5) 73,952 (4) (5) 78,590 (4) (5) 83,119 (4) (5) 87,031 (4) (5) 91,047 (4) (5) 89,317 (4) (5) 91,140 97,035 99,815 Transportation Bonds Government Activities - - 2,278 4,484 6,620 57 10,361 11,094 11,667 11,833 Capital Leases - - - - - - - 1,839 3,677 5,515 Notes Payable Schedule 10 172 - 6,485 5,515 (4) - (4) - - - - - - 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 - 260,967 (4) (5) 249,302 (4) (5) 237,247 (4) (5) 222,217 (4) (5) 203,917 (4) (5) 185,231 (4) (5) - 708 11,901 267,254 (4) (5) 273,080 282,625 289,175 Notes Payable - - - - - - - - - 151 Capital Leases 784,797 (5) 869,847 (5) 915,253 (5) 922,342 (5) 965,939 (5) 964,898 (5) 999,610 (5) 3,090 3,466 3,814 3,875 4,255 4,141 4,327 4,471 4,694 1,064,620 (1) 1,020,889 (1) 4,901 Total Debt per Capita(3) 1,113,440 (1) Total Primary Government 6.48 8.07 9.18 9.14 10.81 10.18 11.52 12.21 13.27 14.12 Percentage of Personal Income(2) (1) Does not include other long-term obligations such as compensated absences, unamortized premiums, claims/judgments, arbitrage, post-closure costs, etc. (2) Calculate by dividing Glendale population with Maricopa County population and multiplying by total personal income to arrive at Glendale personal income (data from Schedule 15). Then divide total primary government amount by Glendale personal income to arrive at percentage of personal income. (3) Numbers not expressed in thousands. (4) Amounts outstanding less July 1. (5) Includes unamortized premiums of debt issuance and discount on debt issuance. - - - - - - - 8,300 2010-11 Landfill G.O. Bonds Water Sewer G.O. Bonds Fiscal Year Business Activities Water Sewer Revenue Bonds City of Glendale, Arizona Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year Schedule 11 Less: Amounts Available in Debt Service General Obligation Bonds Funds Percentage of Net Assessed Total Per (6) Value of Property Capita(3) 2010-11 201,680 (1) 21,250 (2) 180,430 10.29 794.09 2011-12 185,495 (1) (4) 16,765 (2) 168,730 14.68 744.22 2012-13 168,645 (1) (4) 12,641 (2) 156,004 14.90 681.22 2013-14 147,810 (4) 9,310 (2) 138,500 12.06 599.28 2014-15 126,305 (4) 8,270 (2) 118,035 10.43 (5) 507.29 2015-16 135,130 (4) 4,511 (2) 130,619 11.12 (5) 556.38 2016-17 120,000 (4) 3,657 (2) 116,343 7.04 (5) 488.84 2017-18 146,985 (4) 31,750 (2) 115,235 8.82 (5) 480.43 2018-19 143,460 (4) 28,593 (2) 114,867 8.13 (5) 458.18 (7) 2019-20 100,445 (4) 1,545 (2) 98,900 6.69 (5) 389.24 (7) Source: Maricopa County - Abstract by tax authority and class ADOA Office of Employment and Population Statistics - Population estimates for July 1, 2018 Notes: (1) Includes general obligation water and sewer bonds. (2) Includes the general obligation debt service fund balance at June 30. (3) Per capita is in actual dollars. Population estimates per ADOA. (4) Includes the July 1 payment. (5) Beginning with FY 2015, based on limited assessed value instead of secondary full cash value. (6) Beginning with FY 2017, calculation uses Feb State Abstract instead of Aug State Abstract. (7) FY2019 calculation uses projected population figure from Annual Budget Book Fiscal Year 2019-2020 instead of ADOA estimates. 173 City of Glendale, Arizona Net Direct and Overlapping Governmental Activities Debt June 30, 2020 (amounts expressed in thousands) Schedule 12 Net Debt Percentage Applicable Amount Applicable Outstanding to Glendale to Glendale (2) $ 212,545 23.3931 % $ Glendale Elementary School District No. 40 32,885 99.1239 32,597 Deer Valley Unified School District No. 97 198,200 18.6553 36,975 Alhambra Elementary School District No. 68 14,265 18.8481 2,689 Glendale Union High School District No. 205 102,970 23.0249 23,709 - 3.5276 - Maricopa County Community College District 380,740 3.5276 13,431 Phoenix Union High School District No. 210 389,120 1.2588 4,898 Pendergast Elementary School District No. 92 48,755 25.7605 12,560 Tolleson Union High School District No. 214 129,179 7.3671 9,517 Washington Elementary School District No. 6 84,624 3.1272 2,646 Dysart Unified School District No. 89 126,583 0.1750 222 Agua Fria Union High School District No. 216 87,815 0.1698 149 Litchfield Elementary School District No. 79 46,335 0.2562 119 Cartwright Elementary School District No. 83 20,535 - Jurisdiction Peoria Unified School District No. 11 Maricopa County 49,721 - Total Overlapping Debt 1,874,551 189,233 City of Glendale Debt(1) 598,670 598,670 Total $ 2,473,221 $ 787,903 Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness. (1) The City of Glendale debt includes total General Obligation (GO) and governmental revenue bonds debt outstanding, capital leases, notes payable, settlement obligation, bond premiums and discounts, less debt service fund balances for current year. (2) Calculation based on Net Debt Outstanding multiplied by Percentage Applicable to Glendale, which is determined by dividing the tax area code net secondary assessed value by the tax authority net secondary assessed value. (3) The Net Debt Outstanding source is Arizona Open Book's Report of Outstanding Indebtedness for the most recent fiscal year 174 175 69.29% 70.99% $ 60,760 148,695 $ 209,455 (1) 2013 11.63% $ 55,527 7,309 $ 62,836 (1) 2013 59.26% $ 93,537 136,085 $ 229,622 (1) 2014 3.51% $ 66,471 2,415 $ 68,886 (1) 2014 15.01% $ 59,916 10,580 $ 70,496 (1)(2)(4) 2016 Note: FY 2018 Total net debt applicable to limit amount updated. $ $ 14.37% 63,053 10,580 73,633 (1)(2)(3)(4) 2017 $ $ 10.17% 70,439 7,978 78,417 (1)(2)(3)(4) 2018 $ $ 52.24% $ 108,057 118,200 $ 226,257 (1) (2) 2015 51.08% $ 114,947 120,039 $ 234,986 (1)(2)(4) 2016 $ $ 43.09% 139,681 105,763 245,444 (1)(2)(3)(4) 2017 $ $ 41.03% 154,132 107,257 261,389 (1)(2)(3)(4) 2018 $ $ 37.53% 176,586 106,065 282,651 2019 (1)(2)(3)(4) 10.38% 75,993 8,802 84,795 (1)(2)(3)(4) 2019 Assessed value Debt limit (20% of assessed value) Debt applicable to limit: General obligation bonds Less: Amount set aside for repayment of general obligation debt Total net debt applicable to limit Legal debt margin -0.24% $ 68,042 (165) $ 67,877 (1) (2) 2015 Schedule 13 $ $ 10.19% 79,658 9,039 88,697 30.39% 205,795 89,861 295,656 (1)(2)(3)(4) 1,478,280 295,656 91,370 (1,509) 89,861 205,795 2020 $ $ $ $ (1)(2)(3)(4) 1,478,280 88,697 9,075 (36) 9,039 79,658 2020 $ $ Legal Debt Margin Calculation for Fiscal Year 2020 Assessed value Debt limit (6% of assessed value) Debt applicable to limit: General obligation bonds Less: Amount set aside for repayment of general obligation debt Total net debt applicable to limit Legal debt margin (1) Debt applicable to limit: General obligation bonds net of July 1 payment made prior to June 30. (2) Beginning in FY 2015, based on limited assessed value instead of secondary full cash value. (3) Beginning in FY 2017, the assessed value is from Maricopa County Assessor's Office February State Abstract report (4) In FY 2020, adjusted debt applicable to limit by moving the General Obligation Bond 2016B from 20% to 6% 47.34% $ 184,683 Legal debt margin Total net debt applicable to the limit as a percentage of debt limit 159,306 166,031 $ 70,599 $ 229,905 (1) 2012 16.61% $ 350,714 (1) 2011 13.69% $ 57,516 11,455 14,399 $ 90,815 $ 68,971 (1) 2012 $ 105,214 (1) 2011 Debt limit Total net debt applicable to limit 20% Type Bonds Total net debt applicable to the limit as a percentage of debt limit Legal debt margin Debt limit Total net debt applicable to limit 6% Type Bonds City of Glendale, Arizona Legal Debt Margin Information Last Ten Fiscal Years (amounts expressed in thousands) This page left blank intentionally. 176 177 Utility Service Charges(1) 81,127 83,496 83,454 81,733 79,325 83,088 83,442 90,844 96,012 111,854 Fiscal Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 City of Glendale, Arizona Pledged-Revenue Coverage Last Ten Fiscal Years (amounts expressed in thousands) 55,576 52,151 50,962 49,005 45,431 41,712 42,544 39,203 41,555 41,550 Less: Operating Expenses(2) 56,278 43,861 39,882 34,437 37,657 37,613 39,189 44,251 41,941 39,577 16,435 16,050 12,780 9,805 9,415 13,170 10,210 8,646 9,398 9,860 10,321 10,719 10,918 12,706 13,152 13,306 (3) 9,545 (5) 9,755 13,598 (3) 11,107 (3) Water and Sewer Revenue Bonds Net Available Debt Service Revenue Principal Interest 2.24 1.72 1.76 1.71 1.87 1.56 1.71 1.93 1.84 1.60 Coverage Schedule 14 178 20,665 21,691 23,112 24,690 25,566 26,362 27,571 29,231 30,989 2011-12 2012-13 2014-15 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 4,140 4,035 3,925 3,550 3,380 3,545 3,125 3,005 2,890 2,780 2,893 2,999 3,114 3,594 3,763 3,597 4,201 4,321 4,437 4,548 Debt Service Principal Interest 4.41 4.16 3.92 3.69 3.58 3.46 3.15 2.96 2.82 2.66 Coverage 179,289 169,868 170,484 160,534 156,210 151,963 141,674 131,931 100,081 102,962 Excise Tax Revenue 2,590 2,790 6,500 2,585 10,025 5,075 6,580 12,645 14,295 (6) (6) (6) (6) (6) (6) (6) (6) (6) 6,585 30,713 (5) 19,556 20,104 19,542 21,033 20,984 21,175 22,951 27,279 (5) 27,612 Debt Service Principal Interest Excise Tax Revenue Bonds (4) (7) Source: City of Glendale Finance Department Notes: (1) Operating revenues and nonoperating revenues excluding non-cash contributions, gains and losses and opeb income/(loss). (2) Excluding depreciation. (3) Principal and interest amounts include debt service on the note payable to the Water Infrastructure Financing Authority of Arizona for the 00-01 loan and the 09-10 loan for fiscal years through 2011-12. (4) Excise tax revenue bonds include the Municipal Property Corporation and the Western Loop 101 Public Facilities Corporation (FY 2009-10 to FY 2012-13). (5) Excluding reductions to principal by refunded bonds - 2011-12 Water & Sewer Revenue Bond $74,050 and Excise Tax Revenue Bonds $8,945; and 2012-13 Excise Tax Revenue Bonds $243,250. (6) Excise tax revenue amounts include state shared revenues. (7) Includes interest expense from refunding the Western Loop 101 Public Facilities Bonds in December 2012. 19,486 Transportation Sales Tax 2010-11 Fiscal Year Transportation Bonds 5.30 5.19 6.53 6.15 5.04 6.40 4.81 3.94 3.35 3.01 Coverage City of Glendale, Arizona Demographic and Economical Statistics Last Ten Fiscal Years (amounts expressed in thousands) Schedule 15 Fiscal City of Glendale Maricopa County Year Population(2) Population(6) Personal Income 2010-11 227 3,817 147,724,392 38,701 9.2 2011-12 229 (5) 3,885 156,763,179 40,350 8.6 2012-13 231 (5) 3,934 160,497,824 40,798 7.6 2013-14 233 (5) 3,945 167,439,604 42,443 6.6 2014-15 233 (5) 4,064 175,437,829 43,169 5.6 2015-16 227 4,153 185,111,698 44,573 5.6 2016-17 238 4,233 193,307,100 (3)(10) 45,667 4.9 (8) 2017-18 240 (7) 4,316 205,848,000 (3)(10) 47,694 4.3 (8) 2018-19 251 (9) 4,367 208,280,000 (3)(10) 47,694 (3) 4.8 (8) 2019-20 254 (9) 4,367 208,280,000 (3)(10) 47,694 (3) 10.2 (8) (3) (1) Per Capita Personal Unemployment Income(1)(4) Rate (5) Note: (1) Personal Income and Per Capita Income figures are for Maricopa County. City of Glendale is one of several Valley cities that comprise Maricopa County, including Phoenix, Mesa and Scottsdale. (2) Estimate provided by City of Glendale Planning Department. (3) The previous fiscal year Maricopa County CAFR provides the most current number. (4) Calculation based on personal income divided by Maricopa County population. (5) Estimate provided by Arizona Department of Administration, Office of Employment and Population Statistics website for the prior fiscal year. (6) Maricopa County population extracted from Maricopa County CAFR statistical section. (7) Estimate from the Arizona Office of Economic Opportunity website, Arizona population estimates, for the fiscal year as of July 1. (8) Unemployment rate from the Arizona Office of Economic Opportunity website, LAUS data. (9) Estimate from the City of Glendale Annual Budget Book for the following fiscal year. (10) Personal Income is calculated based on most current information available from the Maricopa County CAFR. 179 % City of Glendale, Arizona Principal Employers Current Year and Nine Years Ago Schedule 16 2011 2020 Employees 6,900 3,000 Rank 1 2 Percentage of Total City Employment 5.30 % 2.30 Arrowhead Towne Center 2,480 3 1.90 Glendale Community College 1,999 4 1.53 Glendale Union High School District Westgate City of Glendale Walmart 1,915 1,755 1,752 1,591 5 6 7 8 1.47 1.35 1.34 1.22 Employer Luke Air Force Base Banner Thunderbird Health System Tanger Outlets 1,562 9 1.20 Glendale Elementary School District 1,500 10 1.15 Deer Valley Unified School District CSAA/AAA Arrowhead Community Hospital Total 24,454 18.76 % Source: City of Glendale Economic Development Department Department of Economic Security, Research Administration City of Glendale Human Resources Department 180 Rank 1 2 Percentage of Total City Employment 4.66 % 2.25 1,220 8 0.95 2,008 4 1.56 1,835 2,100 5 3 1.43 1.63 1,684 6 1.31 1,432 1,175 959 7 9 10 1.11 0.91 0.74 Employees 6,000 2,900 21,313 16.55 % 181 26.00 61.00 11.00 22.00 75.00 71.00 563.00 283.00 68.00 53.00 36.00 168.00 31.00 85.00 199.00 1,752.00 General government Management services Finance Planning Building Legal Other Police Fire Community service Parks and recreation Library Public works Engineering Transportation Utilities Total 22.00 56.00 10.00 24.00 71.00 72.00 551.00 278.00 59.00 51.00 37.00 156.00 29.00 77.00 195.00 1,688.00 2019 27.00 57.00 12.00 24.00 73.00 70.00 529.00 276.00 53.00 68.00 35.00 188.00 26.00 60.00 185.00 1,683.00 2018 Note: Adjusted FY 2019 Finance and Planning department totals Sources: City of Glendale Human Resources Department and Munis HCM system 2020 Function/Program City of Glendale, Arizona Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years 29.00 55.00 14.00 22.00 71.00 68.00 530.00 282.00 54.00 73.00 35.00 183.00 24.00 59.00 186.00 1,685.00 28.00 53.00 13.00 22.00 67.00 68.00 522.00 262.00 55.00 66.00 34.00 184.00 18.00 57.00 184.00 1,633.00 24.00 56.00 11.00 22.00 69.00 66.00 517.00 259.00 57.00 58.00 31.00 180.00 19.00 56.00 185.00 1,610.00 31.00 49.00 10.00 21.00 69.00 63.00 534.00 253.00 48.00 59.00 32.00 173.00 17.00 57.00 176.00 1,592.00 Full-Time Equivalent Employees as of June 30 2017 2016 2015 2014 34.00 54.00 13.00 21.00 67.00 73.00 505.00 260.00 56.00 75.00 32.00 165.00 18.00 60.00 172.00 1,605.00 2013 36.00 57.00 14.00 24.00 66.00 77.00 534.00 269.00 60.00 92.00 48.00 179.00 19.00 65.00 185.00 1,725.00 2012 45.00 59.00 15.00 26.00 70.00 90.00 544.00 270.00 72.00 123.00 56.00 203.00 26.00 69.00 167.00 1,835.00 2011 Schedule 17 182 62,105 12,826 57,804 6,025 49,479 40,791 89,614 6,217 494,325 66,174 58,114 6,295 52,903 40,114 90,953 7,171 499,106 47,273 35,939 3,395 36,695 3,948 62,440 13,398 185,857 10,056 35,867 2019 179,469 6,310 29,306 2020 69,934 498,092 5,804 86,187 46,338 39,744 57,206 6,045 61,463 13,755 35,482 3,661 192,877 11,037 30,146 (3) 2018 Note: Water and sewer statistics are contained in Schedule 20 and 21. (1) Departures/arrivals are based on fiscal year. (2) Includes all formats: books, magazines, CD's, DVD's and electronic/downloadable collection. (3) FY2018 criminal offense reports figure same as FY2017 due to PD rebuilding data views. (4) Water and sewer numbers updated to exclude duplicate account number. (5) Refuse collection excludes bulk and Phoenix reciprocal trash. Source: Various city departments and FAA ATADS report Water (4) Number of billed accounts Water produced (million gallons) Sewer (4) Number of billed accounts Treated influent (million gallons) Refuse collection (5) Residential curb service (tons per year) Commercial container service (tons per year) Airport Departures/arrivals (1) General government Building permits Library Volumes in collection (2) Transit Dial-A-Ride passengers Police Calls for service Bookings Criminal offense reports Fire EMS calls Fire calls Function/Program City of Glendale, Arizona Operating Indicators by Function/Program Last Ten Fiscal Years 71,912 514,197 6,234 75,561 48,346 41,026 57,037 6,289 61,270 13,672 31,502 3,093 187,645 9,030 30,146 2017 74,256 568,653 5,488 78,977 48,971 46,086 56,700 6,229 60,921 13,864 34,518 3,371 190,074 8,445 32,732 77,318 528,835 5,449 74,217 48,993 45,693 56,491 6,117 60,679 12,057 32,250 3,467 174,535 17,871 31,873 Fiscal Year 2016 2015 78,271 408,516 4,799 70,679 45,942 41,879 56,313 6,244 60,436 13,768 30,262 3,461 146,538 18,939 31,481 2014 85,798 415,695 6,383 76,390 46,833 40,272 55,980 6,065 60,062 13,667 30,082 3,478 127,333 8,588 34,995 2013 90,577 446,010 5,304 80,416 48,187 39,722 55,528 5,970 59,633 14,064 29,321 3,495 127,829 7,083 33,938 2012 92,134 529,113 5,619 80,291 49,784 40,451 54,805 5,998 58,889 13,569 27,751 3,573 129,161 9,902 27,304 2011 Schedule 18 183 Source: Various city departments Note: Landfill capacity in thousands Police Stations Patrol vehicles Fire stations General government City square miles Water Treatment capacity (millions gallons per day) Storage capacity (millions gallons) Miles of water mains Sewer Treatment capacity (millions gallons per day) Miles of sewer lines Landfill Landfill capacity - south cell Landfill capacity used - south cell Other public works Streets (miles) Parks and recreation Number of parks/retention basins/facilities Acres of parks Transit Dial-A-Ride minibuses Function/Program City of Glendale, Arizona Capital Asset Statistics by Function/Program Last Ten Fiscal Years 748 102 2,192 21 748 102 2192 21 24,215 21,436 29.2 707 29.2 707 24,638 21,976 104.1 67 994 60 62 104.1 67 994 3 217 9 2019 3 218 9 2020 22 102 2,192 748 24,234 20,983 29.2 707 104.1 67 994 60 3 194 9 2018 22 102 2,192 748 24,215 20,575 29.2 707 104.1 67 994 60 3 183 9 2017 20 101 2,192 718 24,215 20,137 29.2 707 104.1 67 994 60 3 193 9 22 100 2,189 718 22,429 19,687 29.2 707 104.1 67 994 59 3 178 9 Fiscal Year 2016 2015 20 100 2,189 718 21,493 19,220 29.2 707 104.1 67 994 59 3 176 9 2014 21 100 2,189 718 21,218 18,849 29.2 707 104.1 67 994 59 3 139 9 2013 21 100 2,189 717 22,065 19,257 29.2 700 104.1 67 994 59 3 154 9 2012 21 100 2,189 802 21,912 18,444 29.2 690 104.1 67 994 59 3 174 9 2011 Schedule 19 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2020 Schedule 20 WATER RATES PER METER SIZE Meter Size (inch) Commercial and Residential Monthly Base Charge Outside Inside City City 5/8" 3/4" 3/4" 1" 1 1/2" 2" 3" 4" 6" 8" 10" 12" 11.40 14.40 20.40 41.40 73.80 125.00 222.00 441.00 653.00 1051.00 1555.00 14.82 18.72 26.52 53.82 95.94 162.50 288.60 573.30 848.90 1336.30 2021.50 Residential Commercial 3/4 inch Meter Size Meter Size and Greater (1) Gallons per Month All Year Inside Outside City City All Year Inside Outside City City Summer Excess Rate Inside Outside City City 0 - 6,000 6,001 - 15,000 15,001 - 30,000 over 30,000 $ 2.52 3.15 4.42 6.26 $ 2.75 2.75 2.75 2.75 $ 3.43 3.43 3.43 3.43 $ 3.28 4.10 5.75 8.14 $ 3.58 3.58 3.58 3.58 SEWER SERVICE RATES Type of Service Inside City Outside City Single Family Dwelling Unit Office Building Apartment - Average 5 units Apartment - Average 35 units Retail/Wholesale 34.99 62.35 84.59 582.71 71.47 22.37 N/A 108.66 162.81 N/A (1) Per 1,000 gallons SOURCE: City of Glendale Finance as of May 2020 184 $ 4.46 4.46 4.46 4.46 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2020 Schedule 21 HISTORICAL AVERAGE NUMBER OF WATER CONNECTIONS (1) Fiscal Year Ending June 30 2011 (2) 2012 (3) 2013 (2) 2014 (2)(4) 2015 (2) 2016 (2) 2017 (2) 2018 2019 2020 Residential 53,663 53,858 54,056 53,914 54,126 54,266 54,448 54,686 54,881 55,161 Multi-Family 1,674 1,673 1,680 1,799 1,800 1,800 1,799 1,790 1,790 1,790 Commercial 4,264 4,281 4,296 4,264 4,379 4,492 4,632 4,390 4,425 4,450 Sprinkler 1,655 1,666 1,669 1,819 1,862 1,885 1,910 1,863 1,955 1,974 Total 61,256 61,478 61,701 61,796 62,167 62,443 62,789 62,729 63,051 63,375 (1) In comparison to the number of billed accounts, total connections includes inactive "vacant" properties. (2) As of October following the fiscal year ended. (3) As of August 2012. (4) Review determined 269 residential connections should be classified as multi-family or sprinklers. Source: City of Glendale Water Services Department WATER DELIVERIES Acre Feet Calendar Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Residential (1) 27,537 27,409 27,695 26,921 26,946 26,595 27,193 27,150 27,303 26,251 Commercial 8,130 8,459 8,630 8,221 8,176 8,704 8,748 8,834 9,257 8,793 Other (2) 1,305 1,634 2,647 3,050 2,467 2,092 2,743 2,365 1,891 2,405 (1) Residential includes both Single and Multi-family deliveries. (2) Other include unbilled water and recovered effluent groundwater. (3) Starting in 2010, Sprinkler is broken out from Commercial. (4) Sprinkler Column added per water department. Source: FY report to Arizona Department of Water Resources 185 Sprinkler (3)(4) 2,352 2,684 2,648 2,413 2,411 2,327 2,581 2,564 2,536 1,691 Total 39,324 40,186 41,620 40,605 40,000 39,718 41,265 40,913 40,987 39,140 SEWERAGE CONNECTIONS BILLED AND SEWAGE TREATED Fiscal Year Ending June 30 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 No. of Connections 56,868 57,087 57,300 57,385 57,588 57,758 57,953 58,155 58,454 58,764 91st Ave WWTP (2) (MGD) Actual 8.3 7.9 7.3 8.4 6.9 7.5 7.4 6.7 7.0 6.6 Arrowhead WRF (MGD) 2.3 2.3 2.5 2.7 2.7 2.7 2.7 2.6 2.7 2.6 West Area WRF (MGD) 5.4 4.4 5.8 6.0 7.2 6.9 7.2 7.2 7.0 8.0 Total Treated 16.0 14.6 15.6 17.1 16.8 17.1 17.3 16.5 16.7 17.2 (1) In comparison to the number of billed accounts, total connections includes inactive "vacant" properties. (2) The 91st Avenue Wastewater Treatment Plant is a regional plant servicing five cities. Previously listed as "Multi-City Plant" (SROG) SOURCE: City of Glendale Water Services Department 186 This page left blank intentionally. City of Glendale Finance Division 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480