City of Peoria, Arizona FY19 Comprehensive Annual Financial Report (CAFR) Fiscal Year Ended June 30, 2019 Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2019 City of Peoria, Arizona City Council: Cathy Carlat, Mayor Bridget Bisnbacher, Vice Mayor Vicki Hunt, Mayor Pro-Tem Denette Dunn Jon Edwards Michael Finn Bill Patena Administrative Staff: Jeff Tyne, City Manager Andrew Granger, Deputy City Manager Katie Gregory, Deputy City Manager Erik Strunk, Deputy City Manager Prepared By: Finance Department Sonia Andrews, Chief Financial Officer Sean Kindell, Deputy Finance Director Jessica Cupero, Accounting Supervisor City of Peoria Core Values P “The City of Peoria team members share a commitment to provide quality service for our community.” Professional E Demonstrates professional skills and knowledge needed to perform the job; keeps informed of developments in the professional field and applies this knowledge to the job; encourages and supports the development of subordinate personnel. Ethical O Maintains the highest standards of personal integrity, truthfulness, honesty, and fairness in carrying out public duties; avoids any improprieties; trustworthy, maintains confidentiality; never uses City position or power for personal gain. Open R Communicates effectively orally and in writing; involves appropriate individuals and keeps others informed; acts as a team member; participates and supports committees/boards/commissions/task forces; approachable; receptive to new ideas; supports diversity and treats others with respect; actively listens. Responsive I Consistently emphasizes and supports customer service; takes responsibility to respond to all customers in a prompt, efficient, friendly, and patient manner; represents the City in an exemplary manner with civic groups/organizations and the public. Innovative A Demonstrates original thinking, ingenuity, and creativity by introducing new ideas or courses of action; supports innovative problem-solving by identifying and implementing better methods and procedures; takes responsible risks; demonstrates initiative and “follows through” on development and completion of assignments. Accountable Accepts responsibility; committed to providing quality service to our community; plans, organizes, controls and delegates appropriately; work produced is consistent and completed within required timeframes; implements or recommends appropriate solutions to problems; acknowledges mistakes; manages human and financial resources appropriately. Introductory Section CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2019 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting City of Peoria Organizational Chart Principal Officials of the City City Council Pictures and District Map v xiii xiv xv xvi II. FINANCIAL SECTION Independent Auditors’ Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 5 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities 19 20 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet to the Statement of Net Position - Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances Of Governmental Funds to the Statement of Activities - Governmental Activities Budgetary Comparison Statements - General Fund and Major Special Revenue Funds: General Fund Half-Cent Sales Tax Fund Highway User Revenue Fund Transportation Sales Tax Fund Development Fee Fund 22 25 26 29 30 31 33 34 35 Proprietary Fund Financial Statements Statement of Net Position Statement of Revenues, Expenses, and Changes in Fund Net Position Statement of Cash Flows 36 38 40 Fiduciary Fund Financial Statements Statement of Net Position Statement of Changes in Fiduciary Net Position Notes to the Financial Statements 44 45 47 i CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2019 Page C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of the City’s Proportionate Share of the Net Pension/OPEB Liability Cost-Sharing Pension Plan Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Schedule of Changes in Net OPEB Liability and Related Ratios Schedule of Pension/OPEB Contributions Notes to Pension/OPEB Plan Schedules 83 84 86 88 89 D. SUPPLEMENTARY INFORMATION - COMBINING FUND FINANCIAL STATEMENTS AND BUDGETARY SCHEDULES Major Governmental Funds Other Than General Fund and Special Revenue Funds Budgetary Comparison Schedules – Major Debt Service Fund General Obligation Bonds Debt Service Fund 93 Non-Major Governmental Funds Combining Statements Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Budgetary Comparison Schedules Public Transit Fund Other Grants Fund Municipal Development Authority (MDA) Debt, Debt Service Fund Community Facilities District (CFD) Bonds Debt Service Fund Non-Bond Debt Service Fund Community Facilities District (CFD) Bonds Capital Projects Fund General Obligation Bonds Capital Projects Fund Non-Bond Capital Projects Fund 96 98 100 101 102 103 104 105 106 107 Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Combining Statement of Cash Flows 109 110 111 Fiduciary Funds Combining Statement of Fiduciary Net Position – Agency Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds ii 113 114 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2019 Table Page I II III IV V VI VII VIII IX X XI XII XIII XIV XV 117 118 120 121 122 123 124 125 126 127 128 129 130 131 134 XVI 135 XVII 136 XVIII 137 XIX XX 138 139 XXI XXII XXIII XXIV XXV XXVI 140 141 142 143 144 145 XXVII XXVIII XXIX 146 147 148 III. STATISTICAL SECTION - Unaudited Net Position By Component Changes in Net Position Fund Balances, Governmental Funds Changes in Fund Balances, Governmental Funds City Transaction Privilege Taxes By Category Direct and Overlapping Sales Tax Rates Sales Tax Payers - By Category Assessed Values By Property Classification Comparative Assessed Values Direct and Overlapping Property Tax Rates Direct and Overlapping Property Tax Levies Limited Property Value Top Ten Tax Payers Property Tax Levies and Collections Utility Statistical Data Outstanding Debt By Type Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita Direct and Overlapping General Obligation Bonded Debt – Current Fiscal Year Direct and Overlapping Governmental Activities Debt – Current Fiscal Year Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years Legal Debt Margin Pledged Revenue Coverage – Excise Tax and State Shared Revenue Debt Obligations - Governmental Portion Pledged Revenue Coverage – Water & Wastewater Revenue Bonds Pledged Revenue Coverage – Special Assessment Bonds Special Assessment Collections Demographic and Economic Statistics Major Employers Within the City Authorized Full-time Equivalent City Government Employees By Function Operating Indicators By Function/Program Capital Asset Statistics By Function/Program IV. CONTINUING DISCLOSURES Continuing Disclosures Annual Report 150 iii iv December 23, 2019 Honorable Mayor, City Council, City Manager and Citizens of Peoria, Arizona: We are pleased to submit to you the Comprehensive Annual Financial Report (CAFR) for the City of Peoria, Arizona (the City) for the fiscal year ended June 30, 2019. This report was prepared by the Financial Services Division of the Finance Department. The CAFR represents management’s report of the City’s complete financial results to its governing body, constituents, legislative and oversight bodies, investors, and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies that have expressed interest in the City’s financial matters. Copies of this financial report will also be placed in the City’s libraries, as well as on the City’s website, for use by the public. The Management’s Discussion and Analysis presented on pages 5-17 has a different focus and purpose than this transmittal letter and should be read in conjunction with this transmittal. THE FINANCIAL REPORTING ENTITY This CAFR includes financial statements on both a government-wide and fund basis for the City as the primary government, as well as its component units. Component units are separate legal entities included in the reporting entity due to the significance of their financial or operational relationship with the City. Criteria used by the City for inclusion of activities in preparing its financial statements are in conformity with GASB Statement No.14, The Financial Reporting Entity, as amended. Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. Accordingly, the financial reporting entity consists of the City and five blended component units, the City of Peoria Municipal Development Authority, Inc., the Vistancia Community Facilities District, the Vistancia West Community Facilities District, the City of Peoria Employee Benefits Trust and the City of Peoria Workers’ Compensation Trust as discussed further in Note 1.A of the notes to the financial statements. The City, chartered in 1954, has a Council-Manager form of government with the City Council consisting of the Mayor and six Council Members. Pursuant to an amendment to the City Charter approved by the voters in 1997, the Mayor is elected at-large for a four-year term. Council members are elected, by district, for four-year terms. The City Council is vested with policy and legislative authority and is responsible for passing ordinances; adopting the budget; appointing committee, commission, and board members; and appointing the positions of City Manager, City Attorney, and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City encompasses approximately 179 square miles in the northcentral portion of Maricopa County, and is one of several major cities comprising the greater Phoenix metropolitan area. Between the 2010 census and the most current Census Bureau estimate, Peoria’s population increased by 11.8%, from 154,065 in 2010 to 172,259 in 2018. Peoria is known for its high quality of life with safe, well-planned neighborhoods, a diversity of housing options, excellent school districts, extensive park system and v recreation programs. An expanded metropolitan freeway system allows Peoria residents to commute effectively to other cities in the Phoenix metropolitan area, giving residents access to the metropolitan area’s diverse array of employment opportunities. The City provides a full range of municipal services, including police, fire and emergency medical services, water, sewer and solid waste services, street construction and maintenance, recreational and cultural events, library services, public transportation, planning and zoning services, and general administrative services. In addition, the City offers a wide range of community facilities including two community centers, three swimming pools, two libraries, and 34 neighborhood parks encompassing 305 acres. The Peoria Sports Complex—operated by the City—was the nation’s first two-team baseball spring training facility and the spring training home of the Seattle Mariners and San Diego Padres. The City opened its first large community park, Rio Vista Community Park, in the southern part of the City in fiscal year 2004. This 52 acre facility has athletic fields, playgrounds, ramadas, an urban lake, skate park and other amenities for the citizens’ enjoyment. The City’s second community park, Pioneer Community Park was completed in fiscal year 2014 and includes ball fields, multipurpose fields, a dog park, fishing lake and other amenities. The City is in the construction phase of its third community park, Paloma Community Park which is expected to be completed in 2020. The City also has a performing arts center with a 250-seat main auditorium, 80-seat black box theater, and classroom and administrative space in the downtown area. Another attraction of the City is Lake Pleasant, in northern Peoria’s Lake Pleasant Regional Park. This 10,000 acre lake is the second largest lake in Arizona, providing residents and visitors with boating, fishing, camping and other outdoor recreation activities. LOCAL ECONOMIC CONDITION AND OUTLOOK In recent years, Peoria’s population growth has been extremely strong as Maricopa County leads the nation in population growth. People are moving to Arizona not just for the weather but also for the high quality of life and this trend is expected to continue. Peoria is part of the metro Phoenix West Valley, which includes Glendale, Goodyear, Surprise and Buckeye. Home sales in the West Valley have surpassed other metro Phoenix regions. The West Valley has the region’s newest freeway (Loop 303) and developments, such as Vistancia, a top selling master-planned community in north Peoria are bringing higher-end homes, golf courses and shopping amenities to attract homebuyers. Peoria also has a large amount of undeveloped land in the north to accommodate future growth. After 3 consecutive years of more than 1,500 new residential permit issues, the City issued 1,230 new residential building permits in fiscal year 2019. Per the Case Miller Home Price index, house prices have increased in the Phoenix metropolitan area by 5.8% over fiscal year 2019. The City’s total property full cash value, which lags the market, increased by 9.1% from $18.4 billion in 2018-19 to $20.1 billion in 2019-20. The unemployment rate in Peoria remains low at 4.3% as of June 2019 and continues to outperform the State which was at 5.3% (not seasonally adjusted). While wage increases have been offset by cost of living increases, consumer spending remained healthy. The City’s sales and use tax collections in fiscal year 2019 totaled $93.2 million, a 3.8% increase from the $89.8 million in the prior year. Economic Outlook Overall, the outlook for Peoria is positive. Arizona’s economy ranked 4th in the nation for real gross domestic product (GDP) growth according to the U.S. Bureau of Economic Analysis as the State experienced significant increases in tax collections towards the end of fiscal year 2018-19 and into fiscal year 2019-20. In Peoria, sales tax revenues grew by 3.8% this year and are expected to continuing growing in fiscal year 2019-20, with strong performance in retail (especially auto sales), restaurants and bars, and contracting categories. Moreover, as mentioned above, building activity continues to be strong and we expect the number of new building permits to remain at or above 1,200 next year. vi MAJOR PROJECTS AND INITIATIVES The Council utilizes a goal setting and strategic planning process to assist in the identification, prioritization, and management of capital projects, initiatives, service efforts and emerging strategic issues. Given the competing priorities for available resources, careful consideration is given to all projects and initiatives to ensure investments of public funds achieve Council objectives and provide a long-term sustainable benefit to the community. Listed below are the Council’s six livability initiatives that drive this decision making process seeking to improve the community’s quality of life.  Healthy Neighborhoods – To protect and enhance the health, safety, and general welfare of Peoria’s citizens, workers, and visitors by integrating health-promoting design and development practices at the building or project scale. Elevating the vitality of the people by promoting health and wellness in the built environment enhances both property and community values.  Arts, Culture, & Recreational Enrichment – To enhance the availability and accessibility of the arts for all residents, preserve important historic and cultural elements that make Peoria unique, activate the human spirit through social and physical connections, and provide educational opportunities for lifelong learning.  Economic Prosperity – To increase the wealth and quality of living for all with policies that support a diverse, innovative, competitive, entrepreneurial, and sustainable economy. Peoria recognizes that the economic health of the City influences the physical development and the overall health of the community, as well as determines its capacity to fund essential services.  Superior Public Services – To provide superior levels of public facilities and services in a responsible, reliable, safe, and compassionate manner. In order to sustain existing households and businesses and to accommodate future population and employment growth, public facilities and services will need to be strategically located, and regularly improved, expanded and maintained.  Smart Growth – To guide future growth and development into a sustainable citywide development pattern, while maintaining or enhancing quality of life in our communities. Growth should be at a desired scale and character that is consistent with the social, economic and aesthetic values of the City.  Integrated Transportation – To holistically create a seamless network of mobility choices, through acknowledgement and dedication to continuing to foster and grow the on-street roadways, offstreet shared use paths, transit options, and plan for advancing technologies. Transportation should be considered for all modes of travel and universal accessibility. Major Initiatives and Accomplishments in fiscal year 2019 Peoria on the Go (POGO) POGO, a new circulator bus route in north Peoria began operations on April 22, 2019. This free transportation service was launched to improve connectivity for the community. Locations along the route include the P83 entertainment district, Arrowhead Towne Center, Sunrise Mountain Library, Sunrise and Liberty High Schools, multiple grocery and drug stores, retail and restaurants, medical offices, multi and single-family residences and trailheads. General Plan Update During fiscal year 18-19, the City embarked on an update of its general plan which serves as a roadmap for the City’s growth and development for the next 10 to 20 years. All Arizona municipalities are required to have a general plan per Arizona state law, which must be maintained and adopted by public vote every 10 years. The City’s new general plan is designed around six themes, or livability goals and addresses a multitude of topics such as water resources, land use, housing, transportation and more. Various open houses were conducted vii between August and September 2019 to gather community input. The new plan was then reviewed and adopted by the Planning and Zoning Commission and approved by Council in November 2019. The new General Plan will be placed on the ballot for voter approval in the Fall of 2020. Paloma Community Park In April 2019, the City kicked off the construction of the Paloma Community Park located east of Lake Pleasant Parkway. The 85 acres park will include tournament grade baseball and soccer fields, multi-use open turf, a fishing lake, multi-generational inclusive playgrounds and splash pad, picnic ramadas, a dog park and lighted pickleball courts. The park will also include a trailhead for access to Peoria's Westwing Mountain trail system. Construction of phase one is set to be completed in Summer of 2020. Peoria Community Resource Center The City opened its first Community Assistance Resource Center in June 2019 in Old Town Peoria. Funded through the Community Development Block Grant Program and the City’s General Fund, the new resource center will house several non-profit organizations that can provide a wide range of assistance to Peoria residents. Nonprofits such as Child Crisis Arizona, Marc Community Resources, Stepping Up for Seniors, Benevilla, Arizona at Work, and Medicare Planning Solutions will have a presence at the center to provide residents with consultation and information for financial assistance, health care, child development, nutrition services and more. Partnership with ASU Entrepreneurship + Innovation During fiscal year 18-19, the City partnered with ASU Entrepreneurship + Innovation to bring various workshops and informational events to entrepreneurs and other stakeholders in the community. These events are to further the City’s goal of creating an entrepreneurship ecosystem in Peoria through engaging entrepreneurs, residents, students and all human capital in Peoria to elevate the City’s ventures, support innovation and create a sense of place within Peoria. Accreditations and Awards In September 2018, Peoria was ranked the No. 1 place to live in Arizona by Money Magazine. Money Magazine evaluated 583 cities around the country and ranked Peoria No. 29 overall and No. 1 in Arizona. In June 2019, Peoria was named one of the top 10 unique destinations to experience the outdoors by USA Today. USA Today selected Peoria, the only Arizona city on the list, for its proximity to Phoenix, the Sonoran Desert, and Lake Pleasant. This is the second time this year that USA Today has featured Peoria, naming 10 Peoria sights that “hit it out of the ballpark”. In April 2019, Peoria was named one of the 50 leading fleets representing the best in the industry by Government Fleet Magazine. The awards program recognizes operations that are performing at a high level, particularly in fleet leadership and criteria for the award include the efficiency, effectiveness, and modernity of the fleet operation, based on 20 key criteria. In September 2018, Peoria won the distinguished Emmy award for its short documentary video titled “Knitted Knockers.” The video highlights a group of women who formed a knitting club that makes yarn breast prosthetics for women who have had a mastectomy. In the region that Peoria competed, there were more than 1,000 entries from five western states. Peoria was the only city in the Valley to pick up the Emmy award, which was given by the Rocky Mountain Southwest Chapter of the National Academy of Television Arts and Sciences. BOND RATING During fiscal year 18-19 Moody Investors Services upgraded the City’s water and wastewater revenue bonds to Aa2 from Aa3. This upgrade reflects the systems’ strong financial profile, characterized by healthy debt service coverage and a strong liquidity position. viii Fitch Ratings also increased the City’s Vistancia Community Facility District’s bond rating to an A+ due to solid growth and financial resilience, and the healthy economic prospects and continued development in the district. FINANCIAL CONTROLS Internal Controls The management of the City of Peoria is responsible for establishing and maintaining a system of internal controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City’s financial statements. All internal control evaluations occur within the above framework. The City's internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary Controls The City, like all cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the City's legal budget capacity. At a general election held in March 2003, the citizens of Peoria approved a permanent adjustment of the expenditure base from the original 1979-80 base of $3,247,857 to a new base of $18,247,857. The permanent adjustment eliminated the need for voter approval every four years. After adjustment for inflation and population growth, the City’s expenditure limitation for fiscal year 2018-19 was $897,637,559. The City may utilize the additional expenditure authority for any local budgetary purposes. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated operating budget approved by the Mayor and Council. Activities of the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal year-end and are rebudgeted as needed in the next fiscal year. Financial Policies The City has an important responsibility to its citizens to carefully account for public funds, to manage its finances wisely, and to plan for the adequate funding of services desired by the public, including the provision and maintenance of public facilities. The City needs to ensure that it is capable of adequately funding and providing those government services desired by the community. Ultimately, the City’s reputation and success depends on the public’s awareness and acceptability of the management and delivery of these services. The City operates under a comprehensive set of financial policies adopted by Council. The Principles of Sound Financial Management establishes guidelines for the City’s overall fiscal planning and management. These principles are intended to foster and support the continued financial strength and ix stability of the City of Peoria as reflected in its financial goals. The City’s financial goals are broad, fairly timeless statements of the financial position the City seeks to attain:     To deliver quality services in an affordable, efficient and cost-effective basis providing full value for each tax dollar. To maintain an adequate financial base to sustain a sufficient level of municipal services, thereby preserving the quality of life in the City of Peoria. To have the ability to withstand local and regional economic fluctuations, to adjust to changes in the service requirements of our community, and to respond to changes in Federal and State priorities and funding as they affect the City's residents. To maintain a high bond credit rating to ensure the City’s access to the bond markets and to provide assurance to the City's taxpayers that the City government is well managed and financially sound. These policies establish minimum and recommended fund balance/net position and reserves, as well as establishing policies on the use of one-time revenues (to be used for one-time expenditures), fiscal planning and budgeting, expenditure control, capital improvement program, cash management, debt management, and economic development. Long Term Financial Planning The City annually updates a five‐year long‐range forecast, incorporating both projected revenues and expenditures for the City’s major operating funds. The five‐year revenue forecast only includes revenues that are anticipated to be sustainable over the five‐year period. Expenditure projections include anticipated operating impacts of the adopted capital improvement program. Additionally, the City maintains a 10-year Capital Improvement Program that the City Manager submits annually for review by the City Council. The program is updated annually and includes the cost of construction and operating expenditures. No capital improvement project will be authorized or awarded until the funding sources have been established to finance the project. When current revenues or resources are available for Capital Improvement Projects, consideration will be given first to those capital assets with the shortest useful life, and for assets whose nature make them comparatively more difficult to finance with bonds or lease financing. OTHER INFORMATION Responsibility for the accuracy of the presented data and the completeness and fairness of the presentations in this CAFR, including all disclosures, rests with the management of the City. The City has established and maintains a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to allow the compilation of sufficient reliable information for the preparation of financial statements. We believe the data, as presented in this report, is accurate in all material respects and is presented in a manner that fairly sets forth the financial position and results of operations of the City on both a government-wide and fund basis. Furthermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activity and financial stability have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). Independent Audit The basic financial statements and related notes have been audited by an independent firm of certified public accountants, CliftonLarsonAllen LLP., whose report is included herein. The audit satisfies Article VI, Section 7, of the City Charter, which requires an annual audit of all accounts of the City by an independent certified public accountant. As stated in the independent auditors’ report, the goal of the x independent audit was to provide reasonable assurance that the financial statements of the City of Peoria, Arizona, for the fiscal year ended June 30, 2019, are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the financial statements of the City for the fiscal year ended June 30, 2019, are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. Additionally, the City is required to have an independent audit (“Single Audit”) of federal financial assistance received by the City directly from federal agencies, or passed through to the City by the State of Arizona or other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the government’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. The results of the City’s single audit for the fiscal year ended June 30, 2019, found no instances of material weakness or significant deficiencies in the internal controls. The reports from CliftonLarsonAllen LLP are available in the City of Peoria, Arizona’s separately issued Single Audit Report. Award The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2018. This is the 34th consecutive year the City of Peoria has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. That report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for one year only. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement program's requirements. As such, we are submitting this report to the GFOA to determine its eligibility for a certificate. Acknowledgments The preparation of this Comprehensive Annual Financial Report could not have been accomplished without the efficient and dedicated services of the staff of the Finance Department, especially the Financial Services Division. We want to give special recognition to the City’s accounting team for their diligent efforts and superior contributions to this report. We also wish to thank the members of the City Council for their interest and support in planning and conducting the financial affairs of the City in a responsible and progressive manner. Sincerely, Sonia K. Andrews Chief Financial Officer xi xii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Text38: City of Peoria Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018 Executive Director/CEO xiii City of Peoria Organizational Chart Peoria Citizens Citizens Advisory Boards and Commissions Municipal Court Mayor and City Council City Manager City Attorney Assistant to the City Manager Human Resources Director Senior Policy Advisor for the Mayor Intergovernmental Affairs Director Strategic Support Officer Office of Communications Director Real Estate Development Office Deputy City Manager Police Chief Deputy City Manager Planning & Community Development Director Deputy City Manager Parks, Recreation and Community Facilities Director Fire Chief Information Technology Director Finance and Budget Director Economic Development Director Development and Engineering Director City Clerk xiv Neighborhood and Human Services Director Public Works Director Water Services Director City of Peoria Principal Officials of the City Fiscal Year 2019 Cathy Carlat Mayor Bridget Binsbacher Michael Finn Vicki Hunt Denette Dunn Vice Mayor Councilmember Councilmember Councilmember Jon Edwards Councilmember Bill Patena Councilmember Jeff Tyne City Manager Andrew Granger Deputy City Manager Katie Gregory Deputy City Manager Erik Strunk Deputy City Manager George Anagnost Thomas Adkins Kris Dalmolin Municipal Judge Governmental Affairs Director Information Technology Director Vanessa Hickman Bobby Ruiz Jennifer Stein City Attorney Fire Chief Director of Communications John Sefton Art Miller Kevin Burke Parks, Recreation and Community Facilities Director Police Chief Public Works Director Rhonda Geriminsky City Clerk Adina Lund Development and Engineering Director Rick Buss Economic Development Services Director Christine Nickel Chris Jacques Sonia Andrews Human Resources Director Planning and Community Development Director Finance and Budget Director Cape Powers Chris Hallett Water Services Director Neighborhood and Human Services Director xv City of Peoria Council Districts Lake Pleasant Mayor Cathy Carlat Vice Mayor Bridget Binsbacher Mesquite District Carefree Hwy 67th Ave. Mayor Pro-Tem Vicki Hunt Acacia District Pinnacle Peak Rd. Councilmember Bill Patena Ironwood District Councilmember Michael Finn Palo Verde District Councilmember Denette Dunn Pine District Bell Rd. Youth Council Liaison Ritika Ravindran XVI 115th Ave. Youth Council Liaison Brighton Greathouse Peoria Ave. Northern Ave. 67th Ave. Councilmember Jon Edwards Willow District Financial Section INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of City Council City of Peoria, Arizona Peoria, 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 Peoria, Arizona (City), as of and for the year ended June 30, 2019, 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. 1 The Honorable Mayor and Members of City Council City of Peoria, 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, the aggregate remaining fund information of the City of Peoria, Arizona as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison statements for the General Fund and major special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. 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 and other postemployment benefits plans (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 supplementary information - combining fund financial statements and budgetary schedules 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 supplementary information – combining fund financial statements and budgetary 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. 2 The Honorable Mayor and Members of City Council City of Peoria, Arizona Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2019, 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, 2019 3 4 Management’s Discussion & Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Peoria, Arizona (the City), we offer this narrative overview and analysis of the financial activities of the City of Peoria, Arizona for the fiscal year ended June 30, 2019. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the financial plan (the approved annual budget), and (5) identify individual fund issues or concerns. This discussion and analysis (MD&A) has a different focus and purpose than the transmittal letter presented on pages v-xi of this report. It is designed to be read in conjunction with the transmittal letter as well as the financial statements and the accompanying notes to the financial statements. The City also issues separate financial reports, including management’s discussion and analysis, for the Vistancia Community Facilities District, Vistancia West Community Facilities District, the Employee Benefit Trust, and the Workers’ Compensation Trust, which are blended component units of the City. Financial Highlights ♦ The City’s total net position increased $56.6 million, 3.9%, in fiscal year 2019, an increase of $39.6 million, 5.3%, in governmental activities and an increase of $17.0 million, 2.4%, in business-type activities. ♦ Total net position of the City is $1,504.7 million, of which $67.6 million is unrestricted with a deficit unrestricted balance in governmental activities as a result of the inclusion and presentation of net pension/OPEB liabilities. ♦ The governmental activities program revenues had a significant increase in fiscal year 2019 over the prior year, primarily due to an $11.5 million increase in capital grants and contributions. ♦ The business-type activities program revenues of $99.4 million were slightly higher than the total of $98.1 million in the prior year. ♦ At June 30, 2019, total fund balance of the governmental funds was $275.5 million, an increase of $36.6 million from the previous year. Of this, $58.2 million or 40.7% of General Fund expenditures for fiscal year 2019 was unassigned in the general fund and available for spending at the government’s discretion. ♦ General Fund revenues (on a budgetary basis) were higher than budgeted inflows by $7.1 million for fiscal year 2019. Budgetary basis expenditures of the General Fund were 90.4% ($16.2 million in savings) of the final budgeted expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS As pictured in the following illustration, the financial section of the Comprehensive Annual Financial Report (CAFR) for the City of Peoria, Arizona consists of this discussion and analysis, the basic financial statements, other required supplementary information and other non-required financial schedules. The basic financial statements include the government-wide financial statements, fund financial statements, including the budgetary statements for the general fund and major special revenue funds, and notes to the financial statements. Other required supplementary information includes the schedules and notes related to pension and OPEB requirements. The additional non-required information includes combining schedules and other supplementary schedules presented after the basic financial statements (Combining Statements and Statistical Sections of this report). 5 Required Components of the Annual Financial Report Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Governmentwide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail Government-wide Financial Statements The government-wide financial statements are designed to provide a broad overview of the City’s finances in a manner similar to those used by private businesses. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are broken into two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. • The governmental activities include the basic services of the City including general government (administration), culture and recreation, public safety, development services, highways and streets, public works, and human services. These activities are generally supported by taxes and general revenues. • The business-type activities include the private sector type activities such as the water, wastewater solid waste, and storm drain utilities, and the stadium. These activities are primarily supported through user charges or fees. The statement of net position presents information on all of the City’s assets and liabilities (excluding fiduciary funds), both current and long-term and deferred inflows/outflows of resources, with the difference reported as net position. The focus on net position is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net position may serve as a useful indicator of how the financial position of the City may be changing. Increases in net position may indicate an improved financial position; however, even decreases in net position may reflect a changing manner in which the City may have used previously accumulated funds (i.e. cash funding of capital projects). To assess the overall health of the City, other indicators, including non-financial indicators such as the City’s property tax base and condition of its infrastructure, should also be considered. The statement of activities presents information showing how the City’s net position changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net position are reported at the time the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the City, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenues for support. 6 Fund Financial Statements Also presented are fund financial statements for governmental funds, proprietary funds and fiduciary funds. The fund financial statements focus on major funds of 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 conditions. Funds are used to ensure and demonstrate compliance with finance-related legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the City. Governmental funds – Governmental funds are used to account for most of the City’s basic services. These are essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmental activities column on the government-wide financial statements, these fund financial statements 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 determining what financial resources are available in the near future to finance the City’s programs. Since the governmental fund financial statements focus on near-term spendable resources, while the governmental activities on the government-wide financial statements have a longer-term focus, it may be 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 government’s near-term financing decisions. To facilitate this comparison, reconciliations of the differences between the two are provided immediately following the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances. The City maintains several individual governmental funds organized according to their type (special revenue, debt service, and capital projects). Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Highway User Revenue Fund, Transportation Sales Tax Fund, GO Bond Debt Service Fund, and Development Fee Fund which are considered to be major funds of the City. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements. Proprietary funds – Proprietary funds are used to account for services primarily supported by user fees. The proprietary fund financial statements are prepared with the same long-term focus as the governmentwide financial statements. The City maintains the following two types of proprietary funds. Enterprise funds are used for activities that primarily serve customers outside the governmental unit. The enterprise funds generally provide information similar to the business-type activities column of the government-wide financial statements, but provide more detail and additional information such as cash flows. Any reconciliation necessary between the enterprise funds and the business-type activities column of the government-wide financial statements is provided on the face of the fund statements. The City’s enterprise funds are the Water, Wastewater, Storm Drain and Solid Waste utilities, as well as the sports complex (Stadium Fund). All of the enterprise funds are considered to be major funds of the City. Internal service funds are used for activities where the primary customer is the City itself. Because the primary customers of the internal service funds are the governmental activities, the assets, liabilities, and deferred outflows/inflows of resources of those funds are included in the governmental activities column of the government-wide statement of net position. The costs of internal service funds are allocated to the various user functions on the government-wide statement of activities. The internal service funds are combined into a single column on the proprietary fund statements. Additional detail of the internal service funds is provided in combining statements. The internal service funds of the City include the Motor Pool, Self-Insurance, Facilities Maintenance, and Information Technology Funds. Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of others. Fiduciary funds are not included in the government-wide financial statements because the resources of 7 those funds are not available to support programs of the City. The fiduciary fund statements are prepared on the same basis as the government-wide and proprietary fund statements. 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 and should be read with the financial statements. Required supplementary information other than MD&A – Schedules for pension/OPEB plans have been provided as required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position for the City as a whole as of and for the year ended June 30, 2019, with comparative information for the previous year. Net Position Net position may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Position of the City for June 30, 2019, compared to the prior year. Statement of Net Position As of June 30 (in millions of dollars) Governmental Business-type Activities Activities 2019 2018 2019 2018 Current and other assets Capital assets Total assets $ 329.6 891.5 1,221.1 $ 295.9 872.7 1,168.6 $ 120.8 688.5 809.3 $ 120.9 681.5 802.4 Total Primary Government 2019 2018 $ 450.4 1,580.0 2,030.4 $ 416.8 1,554.2 1,971.0 Total deferred outflows of resources 47.0 54.3 8.0 5.0 55.0 59.3 Other liabilities Long-term liabilities outstanding Total liabilities 21.9 439.3 461.2 25.1 436.0 461.1 10.1 86.8 96.9 7.9 101.0 108.9 32.0 529.7 561.7 33.0 537.0 570.0 Total deferred inflows of resources 16.7 11.2 2.3 1.0 19.0 12.2 Net position: Net investment in capital assets Restricted Unrestricted Total net position 671.2 121.5 (2.5) 790.2 635.8 121.8 (7.0) $ 750.6 619.3 25.1 70.1 714.5 600.5 29.5 67.5 697.5 1,290.5 146.6 67.6 $ 1,504.7 1,236.3 151.3 60.5 $ 1,448.1 $ $ $ The net position of the City increased $56.6 million in fiscal year 2019. Net position of governmental activities increased $39.6 million due mainly to capital activity, while the business-type activities increased $17.0 million. The Water Utility Fund net position increased by $12.3 million and the Wastewater Utility Fund net position increased by $7.3 million. Net position consists of three components. The largest portion of net position, $1,290.5 million reflects the City’s investment in capital assets net of accumulated depreciation and any related outstanding debt used to acquire or construct those assets. The City uses these capital assets to provide services to its residents. Consequently, it is not the City’s intention to sell these assets, and they are therefore not available for future spending. Although the capital assets are 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 are not intended to be used to liquidate these liabilities. The $146.6 million restricted portion of the City’s net position represents resources that are subject to external restrictions on how they may be used. 8 The third portion consists of Unrestricted Net Position of $67.6 million. This category of net position may be used to meet the City’s ongoing obligations to residents and creditors. Unrestricted net position is the balance of net position remaining after calculating the other two categories discussed above. Changes in Net Position The following table compares the government-wide revenue and expenses for the current and previous fiscal year. Changes in Net Position (in millions of dollars) Governmental Business-type Activities Activities 2019 2018 2019 2018 REVENUES: Program revenues: Fees, fines & charges for services $ Operating grants and contributions Capital grants and contributions General revenues: Property taxes Sales and use taxes Franchise taxes State shared sales tax Urban revenue sharing Auto-in-lieu taxes Investment earnings Gain on sale of capital assets Miscellaneous Total revenues EXPENSES: Program activities: Governmental activities: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Interest expense on debt Business-type activities: Water utility Wastewater utility Solid Waste utility Stadium Storm Drain utility Total expenses Excess (deficit) before transfers Transfers and Special Items Increase (decrease) in net position Net position – beginning, as restated Net position - ending $ 37.9 15.4 31.9 $ 35.0 16.6 20.4 $ 84.4 15.0 $ 85.6 12.5 Total Primary Government 2019 2018 $ 122.3 15.4 46.9 $ 120.6 16.6 32.9 25.4 93.2 4.9 17.0 20.4 7.3 7.2 2.3 262.9 23.7 89.8 5.0 15.9 20.3 6.8 2.2 4.4 240.1 3.1 0.1 102.6 0.7 98.8 25.4 93.2 4.9 17.0 20.4 7.3 10.3 0.1 2.3 365.5 23.7 89.8 5.0 15.9 20.3 6.8 2.9 4.9 339.4 21.5 29.5 89.0 4.7 55.6 5.1 4.1 7.8 20.4 28.0 81.7 5.7 54.7 5.7 2.5 8.0 - - 21.5 29.5 89.0 4.7 55.6 5.1 4.1 7.8 20.4 28.0 81.7 5.7 54.7 5.7 2.5 8.0 217.3 45.6 (6.0) 39.6 750.6 790.2 206.7 33.4 (4.3) 29.1 721.5 750.6 42.0 24.5 13.7 7.9 3.5 91.6 11.0 6.0 17.0 697.5 714.5 40.8 25.7 13.0 7.7 3.3 90.5 8.3 4.8 13.1 684.4 697.5 42.0 24.5 13.7 7.9 3.5 308.9 56.6 56.6 1,448.1 $ 1,504.7 40.8 25.7 13.0 7.7 3.3 297.2 42.2 42.2 1,405.9 $ 1,448.1 $ $ $ For fiscal year 2019, total governmental activities revenues increased $22.8 million while total businesstype activities revenues increased $3.8 million. Expenses increased $10.6 million for the governmental activities and increased $1.1 million for the business-type activities. The increase in governmental activities was primarily due to an increase of $7.7 million in personnel costs. Water Utility, Solid Waste Utility, Stadium and Storm Drain Utility all had slight increases in expenses due primarily to inflationary factors. Wastewater Utility had a small decrease in expenses. The general revenues of governmental activities increased $9.6 million from the previous year as consumer confidence remained strong during the year. Investment earnings accounted for $5.0 million of the increase. Property Tax and both local and state shared sales taxes also continued to grow. Local sales and use taxes increased $3.4 million with retail accounting for $3.1 million of that total. 9 Program revenues of governmental activities increased by $13.2 million primarily due to an increase of $11.5 million in capital grants and contributions resulting from increased developer contributions of land and infrastructure. The program revenues of business-type activities increased by $1.3 million primarily due to higher developer capital contributions versus prior year offset by lower water revenues due to the unusually wet winter and cool spring. The following graph shows the functional revenues and expenses of governmental activities to demonstrate the extent to which the governmental functions produce direct revenues to offset the program costs. It should be noted that this is not intended to represent full cost allocation to these functions. Expenses not covered by direct program revenues are covered by general revenues of the City, primarily taxes and state shared revenues. In the governmental activities, the program revenues of $85.2 million are 39.2% of the governmental activities expenses for fiscal year 2019, up from 34.9% in fiscal year 2018. In the business-type activities, program revenues of $99.4 million are 108.5% of the business-type expenses for fiscal year 2019. This compares to $98.1 million and 108.4% in fiscal year 2018. Fiscal Year 2019 Governmental Activities Program Revenues & Expenses 100 (millions $) 80 60 40 20 0 Program revenues Expenses Governmental activities account for 71.9% of the total revenues of the City and 70.3% of the total expenses in fiscal year 2019. These percentages were 70.9% and 69.5% respectively in fiscal year 2018. As seen in the following graph, one of the largest financing sources for the City in fiscal year 2019 is charges for services (33.5%), primarily because this is the major funding source of the business-type activities (82.3% of business-type total revenues in fiscal year 2019). The major funding sources of the governmental activities are property, sales/use taxes, contributed capital and state shared revenues. 10 Government-Wide Revenue Sources Fiscal Year 2019 Investment earnings 2.8% Other grants & entitlements 4.2% Property taxes 7.0% Sales & use taxes 25.5% State shared revenues 12.2% Charges for services 33.5% Franchise taxes 1.3% Other 0.7% Contributed capital 12.8% Property taxes increased from fiscal year 2018 with an increase in assessed value. The total City (primary plus secondary) tax rate did not change in fiscal year 2019 compared to the previous year. Total government-wide expenses (not including transfers out) of the City increased $11.7 million in fiscal year 2019. Expenses of the governmental activities increased $10.6 million. As mentioned above, governmental expenses increased primarily due to increased personnel costs in fiscal year 2019 versus prior year. Business-type activity expenses increased $1.1 million versus prior year due mainly to inflationary cost increases. As shown in the following Government-Wide Functional Expenses graph, business-type activities account for 29.7% of the functional expenses of the City for fiscal year 2019, while governmental activities account for 70.3% of the functional expenses. For the governmental activities, the largest users of resources are public safety (28.8% of total expense, 41.0% of governmental expenses), highways and streets (18.0% of total expenses, 25.6% of governmental expenses), culture and recreation (9.6% of total expenses, 13.6% of governmental expenses), and general government (7.0% of total expenses, 9.9% of governmental expenses). Government-Wide Functional Expenses Fiscal Year 2019 Business-type activities 29.7% General government 7.0% Culture & recreation 9.6% Human Services 1.3% Public safety 28.8% Highways & streets 18.0% Interest 2.5% 11 Development services 1.5% Public works 1.6% FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental funds The focus of the governmental fund financial statements is to provide information on near-term inflows, outflows and balances of spendable resources. All major governmental funds are discretely presented on these financial statements, while the non-major funds are combined into a single column. Combining statements for the non-major funds may be found in the section of the CAFR immediately following the Required Supplementary Information. Although the Highway User Revenue Fund, Transportation Sales Tax Fund, and Development Fee Fund do not meet the GASB 34 quantitative criteria of a major fund, the City has chosen to present them as major funds due to local significance or outstanding debt. The fund balance of the governmental funds is $275.5, an increase of $36.6 million from the previous year. Of this, $144.6 million (an increase of $29.1 million from the previous year) is classified as Nonspendable or Restricted because it is not appropriable for expenditure or is legally segregated for a specific future use. The increase in restricted fund balance is primarily due to the issuance of $30.4 million in general obligation bonds in June with the proceeds restricted for the construction and acquisition of capital projects. An additional $72.7 million of the governmental fund balance (a decrease of $16.9 million from the previous year) has been committed or assigned for specific purposes by council or administrative action. These commitments include various stabilization reserves ($46.7 million), debt service reserves ($1.0 million), capital projects ($16.2 million) and arts capital and various other purposes ($8.8 million). The remaining $59.0 million of governmental fund balance is classified as Unassigned. This balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. By Council policy, these resources are used to fund one-time needs of the City including capital facilities and transportation improvements. The unassigned fund balance increased by $24.4 million compared to the prior year. For fiscal year 2019, the half-cent sales tax fund was reclassified from a special revenue fund to the general fund as the majority of the funds are no longer committed to a specific purpose. Therefore, the fund balance for that fund which is not committed ($17.3 million) is treated as unassigned. This accounts for the majority of the increase in unassigned fund balance and the decrease in committed and assigned fund balance for the governmental funds. Governmental Funds - Fund Balance $120 Millions $100 FY18 $80 FY19 $60 $40 $20 $0 * - Includes the Half-Cent Sales Tax Fund in FY19 ** - Includes the Half-Cent Sales Tax Fund in FY18 12 The General Fund is the chief operating fund of the City and accounts for many of the major functions of the government including public safety, parks and recreation, community development and general administrative services. General Fund revenues (including the half-cent sales tax) increased $7.2 million over the prior fiscal year driven mainly from an increase in overall sales tax of $3.2 million or 4.5%. Sales tax growth remains strong although it is slower than the prior fiscal year. Retail sales tax increased $2.6 million or 6.9%. Primary property taxes increased $1.6 million over the prior fiscal year reflecting the continued growth and increase in property values in the City. State shared revenues from auto licensing, state sales tax and state income tax accounted for another $1.6 million in increased revenue as the economy in Arizona remains strong. Total General Fund expenditures (including the half-cent sales tax) increased $12.2 million versus prior year. This includes an increase of $4.5 million in capital outlay expenditures. These expenditures are primarily one-time costs which intentionally use excess fund balance from prior years without increasing on-going requirements. Increases in Public Safety expenditures of $5.0 million and Culture and Recreation expenditures of $2.5 million, primarily due to increased personnel costs, make up the bulk of the remaining increase and reflect the City’s commitment to livability within the community. With the reclassification of the Half-Cent Sales Tax Fund to the General Fund, the unassigned fund balance of the General Fund increased to 40.7% of expenditures at June 30, 2019, compared to 26.6% at June 30, 2018. The Highway User Revenue Fund (HURF Fund) is required by state statute to track the receipt of the state allocation of gasoline taxes and other state revenues shared with local governments that are required to be used for transportation purposes. Also, there is a sales tax on utilities and property tax revenues from street light improvement districts included in this fund. Revenues increased by $1.0 million due primarily to an increase of $0.8 million in highway user revenues received from the State. Expenditures increased by $1.8 million in fiscal year 2019 primarily from increased amounts spent on street repairs. Fund balance decreased $3.3 million in fiscal year 2019. The Transportation Sales Tax Fund tracks the collection and expenditure of the 0.3% voter approved sales tax to address transportation issues. Revenues in this fund increased $1.2 million while expenditures increased $2.4 million primarily due to increased capital outlay for the street system. The increased revenues were due to improved sales tax revenue. The fund balance decreased $1.5 million in fiscal year 2019. All fund balance in this fund is restricted. Another major governmental fund of the City is the Development Fee Fund, which collects governmental impact fees for parks and recreational facilities, public safety, and streets and intersections. An increase in revenues of $2.1 million in fiscal year 2019 reflect increased development activity as well as higher investment earnings. Expenditures increased $0.5 million in fiscal year 2019 primarily due to an increase in development fee repayments versus prior year. Fund balance increased $4.1 million versus prior year. All fund balance in this fund is restricted. The GO Bond Debt Service Fund accounts for the payment of general obligation bonds and the related interest. Revenues in this fund increased slightly due to increased investment earnings. The property assessed value of the City increased 7.4% in fiscal year 2019 while the secondary tax rate decreased to $1.15 per $100 assessed from $1.25 per $100 assessed. After paying a $10.5 million G.O. Bond defeasance in fiscal year 2018, expenditures for fiscal year 2019 returned to historic levels. Fund balance increased $1.2 million in fiscal year 2019. All non-major governmental funds of the City are combined into one column on the governmental fund statements. Proprietary funds The proprietary fund financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements but provide additional detail since each major enterprise fund is shown discretely. Although the Solid Waste Fund, Stadium Fund, and Storm Drain 13 Utility Fund, do not meet the quantitative criteria of a major fund, the City has chosen to present these funds as major funds due to local significance. Total net position of the enterprise funds increased $17.0 million in fiscal year 2019. Net investment in capital assets increased $18.8 million primarily from the expansion of the water and wastewater systems. Net position restricted for capital projects decreased by $4.3 million and unrestricted net position increased by $2.5 million driven primarily by an increase in the Wastewater Utility fund of $5.8 million. In accordance with the City’s Principles of Sound Financial Management, the City continues to maintain appropriate levels of stabilization reserves. Operating revenues of the enterprise funds decreased $1.2 million in fiscal year 2019 due to a $2.9 million decrease in water revenues resulting from the unusually wet winter and cool spring. Operating expenses of the enterprise funds increased $1.4 million in fiscal year 2019. The increase of 1.6% is in line with inflationary expectations. The changes in operating revenues and expenses discussed above resulted in an enterprise funds operating loss of $5.2 million in fiscal year 2019 following an operating loss of $2.6 million in the prior year. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2019. Fiscal Year 2019 Enterprise Fund Operating Revenues and Expenses 45 40 35 Millions 30 Revenues 25 Expenses 20 15 10 5 0 BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. Budgetary comparison statements, required for the General Fund and all major special revenue funds, may be found on pages 30-35. These statements compare the original adopted budget, the budget as amended throughout the fiscal year, and the actual expenditures prepared on a budgetary basis. Budgetary schedules for the other governmental funds are also presented on page 93, and pages 100-107. General Fund revenues of $150.8 million, on a budgetary basis, exceeded budgeted revenues of $143.8 million by $7.0 million while budgetary basis expenditures of $151.7 million were 90.4% of final budgeted amounts. Revenues, on a budgetary basis, exceeded budgeted revenues in every category except urban revenue sharing and charges for services. There were no expenditure overages for any of the functional departmental categories. During the fiscal year, the original General Fund expenditures and contingencies budget of $190.3 million was amended by $1.8 million to the final expenditure and contingencies budget of $192.1 million. 14 Notable budgetary transfers during the year were as follows:     $8.0 million transfer from the Half Cent Fund to the General Fund for the purchase of public safety vehicles and public safety operating costs. $3.3 million transfer from the Transportation Sales Tax Fund to the Public Transit Fund in support of the transit system. $2.0 million transfer from the Half Cent Fund to the Stadium Fund as a subsidy in support of the Peoria Sports Complex. Various transfers to the debt service funds to meet debt service requirements. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2019, the City had $1.3 billion invested in various capital assets, net of accumulated depreciation and related debt, up 2.3% from the previous year. The capital assets of the City (net of depreciation, but not capital debt) are $1.6 billion. This is a net increase of $25.8 million from June 30, 2018. Net capital assets of business-type activities increased $7.0 million while governmental activities increased $18.8 million. Notable additions to capital assets during the fiscal year included the following:      The City invested $9.4 million into new construction and improvements to the street system infrastructure. The City invested $9.4 million into new construction and improvements to the water system infrastructure. The City invested $3.8 million into Paloma Community Park. This project will continue into fiscal year 2020 with an additional $33 million investment budgeted. Due to growth primarily in the northern part of the City, developers contributed a total of $21.1 million in land and public infrastructure. The following table provides a breakdown of the capital assets of the City at June 30, 2019, and 2018. Additional information on the City’s capital assets may be found in Note 6. Capital Assets at June 30 (Net of depreciation) Buildings and building improvements Equipment; Furniture Vehicles Surface water system Street system Park system Water system Water rights Wastewater system Land Work in progress Total (in millions) Governmental Business-type Activities Activities 2019 2018 2019 2018 $ 107.0 $ 110.7 $ 52.7 $ 55.0 6.9 4.8 6.2 6.5 12.1 11.3 11.8 10.5 64.7 61.8 260.1 273.2 65.6 65.1 236.1 226.7 9.8 11.4 258.5 263.8 408.1 384.3 18.2 17.5 31.7 23.3 30.5 28.3 $ 891.5 $ 872.7 $ 688.5 $ 681.5 Total Primary Government 2019 2018 $ 159.7 $ 165.7 13.1 11.3 23.9 21.8 64.7 61.8 260.1 273.2 65.6 65.1 236.1 226.7 9.8 11.4 258.5 263.8 426.3 401.8 62.2 51.6 $ 1,580.0 $ 1,554.2 The City has adopted a ten year capital improvement plan budgeted at $726.3 million, including $256.5 million in fiscal year 2020. Anticipated funding for this plan for fiscal year 2020 is through a combination of impact fees, utility revenue bonds, general obligation bonds, operating revenues, City and County transportation sales taxes and other outside funding sources. The estimated operating budget impact of the capital improvement program over the next five fiscal years is expected to be $14.0 million. The capital improvement plan is updated annually as part of the City’s budget process. 15 Long-term Debt The City’s outstanding non-current long-term debt, including bonds and loans, compensated absences, and deferred bond premiums was $299.7 million at June 30, 2019. Of this total, $239.2 million was in governmental activities and $60.5 million was in business-type activities. The City’s outstanding noncurrent debt (excluding claims and net pension liability) decreased by $3.5 million in fiscal year 2019. This decrease is related to scheduled debt service payments offset by the issuance of $30.4 million in new general obligation bonds. Of the total outstanding bonds and loans of $311.0 million, $146.2 million is general obligation bonds backed by the full faith and credit of the City. The outstanding debt also includes $31.3 million in Community Facilities District bonds where the City has no obligation for payment. All other outstanding debt is secured by pledges of specific revenue sources of the City. The State constitution imposes certain debt limitations on the City of six percent (6%) and twenty percent (20%) of the assessed valuation of the City. Additional information on the debt limitations and capacities may be found in Table XX in the statistical section of this report. The following schedule shows the outstanding debt of the City (both current and long-term, excluding premium, net pension liability and claims payable) as of June 30, 2019, and 2018. Further detail on the City’s outstanding debt may be found in Note 7. Information on the City’s net pension/OPEB liability may be found in the Required Supplementary Section of the report and in Note 9. Outstanding Debt (in millions) Governmental Activities 2019 2018 General obligation debt $ Municipal Development Authority debt Direct Purchase and Loan Obligations Special assessment debt Water/Sewer Revenue bonds and loans Community Facilities District bonds Compensated absences Total $ 146.2 32.1 30.8 31.3 13.9 254.3 $ $ Business-type Activities 2019 2018 127.1 34.1 36.5 34.3 13.8 245.8 $ $ 70.6 1.6 72.1 $ $ 82.6 1.5 84.1 Total Primary Government 2019 2018 $ $ 146.2 32.1 30.8 70.6 31.3 15.5 326.5 $ $ 127.1 34.1 36.5 82.6 34.3 15.3 329.9 The City currently maintains the following ratings on its general obligation debt: “AA+” from Standard & Poor’s, “Aa1” from Moody’s and “AAA“ from Fitch. For the water and sewer revenue bonds, the ratings are “AA” from Standard & Poor’s, “Aa2” from Moody’s and “AA” from Fitch. ECONOMIC FACTORS The City of Peoria continues to enjoy one of the lowest unemployment rates in the Phoenix metropolitan area while the City’s population continues to increase creating demand for housing. Steady job growth and meaningful wage growth is expected to boost consumer spending and business investments over the next several years. Consumer confidence remains strong and has resulted in higher sales tax revenues. Sales tax revenues are forecasted to increase by 0.7% in fiscal year 2020. New residential construction in Peoria is growing, while commercial construction has begun to show expansion and stability. Existing home valuations have continued to increase and the City’s limited assessed valuation in FY 2020 is estimated to increase 8.1% from the previous year’s valuation. This marks the sixth consecutive year of increases following the low collection point in FY 2014. Future valuations should continue to increase, resulting in sufficient tax collections in subsequent years. 16 The adopted fiscal year 2020 budget is $670 million, an increase of 1.52% from the fiscal year 2019 budget. The operating budget totals $413.5 million, which is an increase of 8.00% from 2019. The capital projects portion of the budget, $256.5 million, is divided in the following manner: $7.3 million for drainage projects, $16.5 million for operational facilities, $46.3 million for parks, trails, open space and libraries, $4.3 million for public safety projects, $57.1 million for streets and traffic control projects, $6.3 million for economic development projects, $21.7 million for wastewater projects, and $97.0 million for water projects. The General Fund operating budget is $163.9 million, up 6.1% from the prior year budget. With the modest economic recovery, resident needs for City services were balanced with a slowly increasing revenue base. The budget continues to focus on preserving the City’s excellent quality of life, while preserving our future financial viability. The City has maintained cash balances over the last few years, both for financial stability and in anticipation of the capital and ongoing operational needs of an ever-changing city. The City has maintained several stabilization reserves within the General Fund in accordance with the City’s adopted financial policies – The Principles of Sound Financial Management. The City also maintains working capital policy reserve, rate stabilization, and debt stabilization reserves in the Utility Funds. It should be noted that while these reserves are established to address immediate and dramatic fiscal difficulties, they are not intended to cover structural budget shortfalls. With this in mind, the fiscal year 2020 budget does not anticipate the use of reserves to address recurring expenses. FINANCIAL CONTACT This financial report is designed to provide a general overview of the City of Peoria, Arizona’s finances and to demonstrate accountability for the use of public funds. Questions about any of the information provided in this report, or requests for additional financial information should be addressed to the City’s Chief Financial Officer at the following address: City of Peoria, 8401 W. Monroe Street, Peoria, Arizona 85345. 17 18 Basic Financial Statements CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2019 Governmental Activities ASSETS Pooled cash and investments Accounts receivable, net Interest receivable Internal balances Due from other governments Prepaid items Supply inventories Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Investments in Joint Venture Agreements Net pension and other postemployment benefits asset Capital assets: Non-depreciable Depreciable (net) Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions and other postemployment benefits Deferred loss on bond refunding Excess consideration provided for acquisition Total deferred outflows of resources LIABILITIES Accounts payable Accrued payroll Interest payable Due to other governments Customer deposits Other liabilities Unearned revenue-other Non-current liabilities: Due within one year: Current portion of claims payable Current portion of compensated absences Current portion of bonds & loans payable Due in more than one year: Noncurrent portion of claims payable Noncurrent portion of compensated absences Noncurrent portion of bonds & loans payable Net pension and other postemployment benefits liablilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions and other postemployment benefits Total deferred inflow of resources NET POSITION Net investment in capital assets Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Facilities maintenance Trust purpose Unrestricted Total net position $ $ 277,709,735 14,930,070 835,320 (2,854,123) 4,752,036 891,335 374,653 7,553,313 14,751,200 8,559,055 1,900,540 162,875 Primary Government Business-type Activities $ $ 380,216,926 25,594,427 1,147,177 (0) 4,752,036 891,614 621,143 7,553,313 18,908,578 8,559,055 1,900,540 199,533 439,798,147 451,759,689 1,221,123,845 48,686,572 639,789,456 809,254,361 488,484,719 1,091,549,145 2,030,378,206 39,785,365 4,075,143 43,860,508 2,416,516 47,401 1,933,881 4,397,798 42,201,881 4,122,544 1,933,881 48,258,306 9,255,363 786,336 3,770,110 842,856 3,567 3,597,817 3,671,710 6,589,084 91,461 1,115,231 125,267 2,023,026 127,955 - 15,844,447 877,797 4,885,341 968,123 2,026,593 3,725,772 3,671,710 5,928,320 6,618,780 22,726,060 843,560 11,433,345 5,928,320 7,462,340 34,159,405 2,101,664 7,341,690 231,876,840 162,653,947 461,175,060 763,750 59,703,353 14,049,067 96,865,099 2,101,664 8,105,440 291,580,193 176,703,014 558,040,159 13,603,028 13,603,028 2,255,031 2,255,031 15,858,059 15,858,059 671,171,180 619,320,612 1,290,491,792 29,409,832 36,268,652 45,131,485 2,599,473 40,762 8,055,478 (2,470,597) 790,206,265 25,023,557 100,000 70,087,860 714,532,029 29,409,832 25,023,557 36,268,652 45,131,485 2,599,473 140,762 8,055,478 67,617,263 $ 1,504,738,294 $ The accompanying notes are an integral part of the financial statements 19 102,507,191 10,664,357 311,857 2,854,123 279 246,490 4,157,378 36,658 Total CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2019 Net (Expense) Revenue and Changes in Net Position Program Revenues Expenses Functions/Programs Governmental activities: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Interest on long-term debt $ Total governmental activities Business-type activities: Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Total business-type activities Total primary government $ 21,473,593 29,499,798 89,026,946 4,757,015 55,594,789 5,112,076 4,072,235 7,768,341 Fees, Fines & Charges for Services Operating Grants and Contributions $ $ 3,722,128 8,654,262 6,813,942 5,103,950 7,968,478 5,616,944 46,070 - 217,304,793 37,925,774 41,968,847 24,512,758 13,749,718 7,850,061 3,469,645 43,979,150 23,076,100 12,905,617 3,409,838 961,031 91,551,029 84,331,736 308,855,822 $ 122,257,510 18,126 2,004,065 1,061,329 820,680 11,489,892 - Capital Grants and Contributions $ 15,394,092 $ 31,886,362 - $ (132,098,565) General revenues: Taxes: Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise taxes Intergovernmental: State shared sales taxes- unrestricted Urban revenue sharing- unrestricted Auto in-lieu taxes- unrestricted Investment earnings Gain on sale of capital assets Miscellaneous Transfers in (out) 17,018,021 20,366,697 7,262,809 7,200,254 2,342,583 (5,997,632) Total general revenues and transfers 5,099,325 20,276,526 93,182,810 4,925,609 Change in net position Net position - beginning Net position - ending $ The accompanying notes are an integral part of the financial statements 20 $ (17,733,339) (18,841,471) (81,151,675) 1,167,615 (4,250,057) 504,868 (4,026,165) (7,768,341) (132,098,565) 7,682,724 4,101,713 (844,101) (4,440,223) 1,280,074 - 46,885,842 - Total - - 14,999,480 $ (17,733,339) (18,841,471) (81,151,675) 1,167,615 (4,250,057) 504,868 (4,026,165) (7,768,341) Business-type Activities (132,098,565) 5,672,421 5,538,371 3,788,688 $ 15,394,092 31,886,362 - Governmental Activities 7,682,724 4,101,713 (844,101) (4,440,223) 1,280,074 7,780,187 7,780,187 7,780,187 (124,318,378) - 5,099,325 20,276,526 93,182,810 4,925,609 3,107,572 138,375 5,997,632 17,018,021 20,366,697 7,262,809 10,307,826 138,375 2,342,583 - 171,677,002 9,243,579 180,920,581 39,578,437 17,023,766 56,602,203 750,628,324 697,508,263 1,448,136,587 790,206,761 $ 714,532,029 $ 1,504,738,790 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 Major Funds ASSETS Assets: Pooled cash and investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Prepaid items Supply inventories Restricted cash with fiscal agents Restricted investments Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other governments Customer deposits Other liabilities Unearned revenue-other Total liabilities Deferred Inflows of Resources: Unavailable revenue-property taxes Fund Balances: Nonspendable: Supply inventories Prepaid items Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance Committed to: Debt service Economic development Arts capital Operating reserve Emergency reserve Budget stabilization reserve Assigned to: Capital projects Municipal Complex reserve Unassigned Total fund balance Total liabilities, deferred inflows of resources & fund balance General Fund Highway User Revenue Fund Transportation Sales Tax Fund $ 104,493,012 12,301,276 280,242 295,177 2,625,552 826,135 113,831 $ 120,935,225 $ 14,940,017 709,090 57,213 1,040,608 60,828 $ 16,807,756 $ $ $ $ 2,562,485 690,269 842,856 3,567 3,129,276 819,614 8,048,067 1,202,383 22,856 1,225,239 $ 28,559,529 1,828,629 84,307 30,472,465 740,501 122,168 862,669 20,037 - - 113,831 826,135 60,828 - - 40,762 15,521,689 - 1,000,000 4,609,964 17,012,968 11,341,979 18,336,084 29,609,796 - - 1,363,728 58,221,670 112,867,121 $ 120,935,225 15,582,517 $ 16,807,756 - $ 29,609,796 30,472,465 (continued) The accompanying notes are an integral part of the financial statements 22 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 Major Funds ASSETS Assets: Pooled cash and investments Accounts receivable, net Interest receivable Due from other funds Due from other governments Prepaid items Supply inventories Restricted cash with fiscal agents Restricted investments Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other governments Customer deposits Other liabilities Unearned revenue-other Total liabilities Deferred Inflows of Resources: Unavailable revenue-property taxes Fund Balances: Nonspendable: Supply inventories Prepaid items Restricted for: Debt service Capital projects Development fees Transportation purposes Grant purposes Arts Center maintenance Committed to: Debt service Economic development Arts capital Operating reserve Emergency reserve Budget stabilization reserve Assigned to: Capital projects Municipal Complex reserve Unassigned Total fund balance Total liabilities, deferred inflows of resources & fund balance GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds Total Governmental Funds $ 12,250,003 18,476 25,691 166,827 4,652,678 $ 17,113,675 $ 37,971,773 112,176 $ 38,083,949 $ $ 57,005,580 14,335 117,537 919,049 10,098,522 26,244 68,181,267 $ 255,219,914 14,871,806 677,166 295,177 4,752,036 826,135 174,659 14,751,200 26,244 $ 291,594,337 $ $ $ 880,060 10,154 346,373 2,852,096 4,088,683 $ - 1,815,297 1,815,297 7,200,726 723,279 842,856 3,567 3,597,817 3,671,710 16,039,955 18,476 - - 38,513 - - - 174,659 826,135 17,095,199 - 36,268,652 - - - 17,095,199 $ 17,113,675 36,268,652 $ 38,083,949 $ 12,296,157 30,141,101 2,599,473 - 29,391,356 30,141,101 36,268,652 45,131,485 2,599,473 40,762 2,838,609 - 1,000,000 4,609,964 2,838,609 17,012,968 11,341,979 18,336,084 16,217,244 64,092,584 68,181,267 16,217,244 1,363,728 58,221,670 275,515,869 $ 291,594,337 The accompanying notes are an integral part of the financial statements 23 24 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL ACTIVITIES JUNE 30, 2019 Fund balances - total governmental funds $ 275,515,869 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets Less accumulated depreciation $ 1,521,717,158 (646,426,554) 875,290,604 Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Other post employment benefits asset Deferred loss on bond refunding 141,445 4,075,143 Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds. Governmental bonds payable Compensated absences (240,351,347) (12,770,260) (253,121,607) Equity in joint ventures are not financial resources and, therefore, are not reported in the funds. 1,900,540 Bond premiums are recognized at the time of issuance in the governmental funds, but recognized over the life of the bonds for government-wide reporting (14,251,553) Property tax revenue earned but not received within 60 days of year-end is a deferred inflow of resources for the governmental statements, but is recognized as revenue for the government-wide statements 38,513 Interest payable on long-term debt is not reported in the governmental funds. (3,770,110) Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are reported with the governmental activities. 32,740,507 Long-term liabilities, such as net pension and OPEB liabilities are not due and payable in the current period and, therefore, are not reported as a liability in the funds. (154,441,019) Deferred outflows and inflows of resources related to pensions/OPEB are applicable to future reporting periods and, therefore, are not reported in the funds. Deferred outflows related to pension/OPEB Deferred inflows related to pension/OPEB 38,372,696 (12,284,763) Total net position of governmental activities 26,087,933 $ The accompanying notes are an integral part of the financial statements 25 790,206,265 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Major Funds General Fund REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 84,591,380 44,840,210 16,676,648 5,720,889 2,241,580 980,732 2,710,472 971,564 158,733,475 Highway User Revenue Fund Transportation Sales Tax Fund $ $ 4,477,680 11,489,891 204,880 580,574 209,020 16,962,045 14,162,491 864,339 176,184 15,203,014 17,966,467 25,715,988 83,260,752 4,561,929 5,527,046 - 19,364,923 - 2,820,451 - 6,044,868 143,077,050 856,636 20,221,559 6,990,085 9,810,536 15,656,425 (3,259,514) 5,392,478 25,763,110 (6,576,044) 19,187,066 (2,817) (2,817) (6,847,374) (6,847,374) 34,843,491 (3,262,331) (1,454,896) 78,023,630 18,844,848 31,064,692 112,867,121 $ 15,582,517 $ 29,609,796 (continued) The accompanying notes are an integral part of the financial statements 26 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Major Funds REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Total revenues GO Bond Debt Service Fund Development Fee Fund Non-Major Governmental Funds Total Governmental Funds $ $ $ $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Premium on bonds issued Transfers in Transfers out Total other financing sources and uses 10,670,987 1,096,448 11,767,435 Fund balances - beginning $ 3,598,953 4,724,298 536,602 149,064 795,259 1,692,759 11,496,935 123,645,058 61,054,399 28,089,117 5,720,889 2,390,644 980,732 6,364,506 3,049,527 231,294,872 3,200 - 801 34,015 149,226 2,771,583 - 411,404 881,488 1,104,291 273,615 2,357,734 8,681 4,020,781 18,381,872 26,631,491 84,514,269 4,835,544 27,314,691 5,535,727 4,020,781 11,295,000 4,625,763 15,923,963 4,738,224 7,693,849 10,727,957 4,150,075 9,209,215 33,145,241 22,022,957 8,775,838 27,839,028 229,872,198 1,208,005 4,073,586 (21,648,306) 1,422,674 30,420,000 3,146,339 10,849,514 (21,574,070) 22,841,783 30,420,000 3,146,339 36,612,624 (35,000,305) 35,178,658 - Net change in fund balances Fund balances - ending 16,814,554 317,414 17,131,968 - 1,208,005 4,073,586 1,193,477 36,601,332 15,887,194 32,195,066 62,899,107 238,914,537 17,095,199 $ 36,268,652 $ 64,092,584 The accompanying notes are an integral part of the financial statements 27 $ 275,515,869 28 CITY OF PEORIA, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2019 Net change in fund balances - total governmental funds $ 36,601,332 Amounts reported for governmental activities in the statement of activities are different because: Some expenses 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. 1,764,129 Certain revenues are advances in the governmental funds because they do not provide current financial resources, but are considered revenue on the statement of activities. (160,783) Interest expense in the statement of activities differs from the amount reported in governmental funds because accrued interest was calculated for bonds and notes payable for the statement of activities, but is expensed when due for the governmental fund statements. 350,438 Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays ($27,839,028), plus other capital $0, is exceeded by depreciation ($39,534,442) in the current period. (11,663,091) In the statement of activities, only the gain on the sale of capital assets is reported, whereas in the governmental funds, the proceeds from the sale of capital assets increase financial resources Thus, the change in net position differs from the change in fund balance by the cost of the assets sold or disposed of. Also gains/losses on sales of capital assets are not shown in the governmental funds, but are revenues or expenses on the statement of activities. 104,650 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 31,108,854 The issuance of long-term debt provides current financial resources in the governmental funds, but creates a long-term liability in the statement of activities. (30,420,000) Repayment of bonds principal is an expenditure in the governmental funds, but reduces long-term liabilities in the statement of net position. 22,022,957 Bond premiums or discounts and gains or losses on bond refunding are sources or uses of current financial resources for governmental fund reporting but are deferred outflows or inflows of resources for government-wide reporting. (2,489,280) The contribution of governmental capital assets to Proprietary Funds is not shown in the governmental fund statements but is a transfer in in the statement of activities. (5,308,876) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 1,626,184 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. (3,958,573) Change in net position of governmental activities $ The accompanying notes are an integral part of the financial statements 29 39,577,941 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Total revenues $ 59,083,436 43,958,218 33,598,340 3,676,567 1,543,495 717,439 620,000 992,730 144,190,225 $ 59,083,436 43,958,218 33,171,228 3,676,567 1,543,495 717,439 620,000 992,730 143,763,113 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 61,390,304 44,840,210 32,465,516 5,720,889 2,241,580 980,732 2,236,327 961,564 150,837,122 $ 2,306,868 881,992 (705,712) 2,044,322 698,085 263,293 1,616,327 (31,166) 7,074,009 EXPENDITURES: Current: General government: Mayor and council City manager Human resources Attorney City clerk Court Economic development Finance Non-departmental Culture and recreation Public safety: Police Fire 797,530 5,477,769 3,511,978 3,369,069 1,162,564 2,125,190 1,564,038 10,892,172 4,806,771 26,405,064 797,530 5,753,127 3,626,663 3,441,378 1,162,464 2,125,190 1,583,000 10,786,279 4,320,053 28,431,768 750,803 5,190,027 3,502,538 3,314,821 1,018,141 2,086,606 1,416,241 9,971,219 3,269,358 25,715,988 (46,727) (563,100) (124,125) (126,557) (144,323) (38,584) (166,759) (815,060) (1,050,695) (2,715,780) 49,389,649 36,402,598 48,320,901 36,996,366 48,085,332 35,165,420 (235,569) (1,830,946) Development services Public works Capital outlay Total expenditures 8,925,252 5,880,325 5,492,618 166,202,587 7,518,502 5,846,210 7,171,440 167,880,871 4,561,929 5,527,046 2,116,454 151,691,924 (2,956,573) (319,164) (5,054,986) (16,188,947) (22,012,362) (24,117,758) (854,802) 23,262,956 (24,100,000) 12,477,179 (1,030,815) (12,653,636) (24,259,307) 12,477,179 (1,030,815) (12,812,943) 12,477,416 (1,031,052) 11,446,364 24,259,307 237 (237) 24,259,307 (34,665,998) (36,930,701) 10,591,562 47,522,263 63,937,464 63,937,464 78,023,630 14,086,166 Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 29,271,466 $ 27,006,763 $ The accompanying notes are an integral part of the financial statements 30 88,615,192 $ 61,608,429 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Debt service: Principal payments Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 22,353,392 150,000 22,503,392 $ 22,353,392 150,000 22,503,392 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 23,201,076 474,145 10,000 23,685,221 $ 847,684 324,145 10,000 1,181,829 3,668,544 3,788,954 3,235,580 (553,374) 50,000 2,300,575 6,019,119 50,000 5,294,391 9,133,345 3,928,414 7,163,994 (50,000) (1,365,977) (1,969,351) 16,484,273 13,370,047 16,521,227 3,151,180 (8,000,000) (13,622,408) (21,622,408) (3,765,095) (13,622,408) (17,387,503) (8,067,416) (5,554,992) (13,622,408) 3,765,095 (8,067,416) 8,067,416 3,765,095 (5,138,135) (4,017,456) 2,898,819 6,916,275 19,709,368 19,709,368 21,353,110 1,643,742 14,571,233 $ 15,691,912 $ 24,251,929 NOTE: Although included with the General Fund for GAAP presentation, the Half-Cent Sales Tax Fund is budgeted separately. The accompanying notes are an integral part of the financial statements 31 $ 8,560,017 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2019 Explanation of differences between budgetary basis and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "Total revenues" from the General Fund budgetary comparison statement Actual amounts (budgetary basis) "Total revenues" from the Half-Cent Sales Tax Fund budgetary comparison statement Differences - budget to GAAP: Interdepartmental service charges are revenue on a budgetary basis, but are eliminated from the financial statements under GASB34's allocation rules Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds Uses/outflows of resources: Actual amounts (budgetary basis) "Total expenditures" from the General Fund budgetary comparison statement Actual amounts (budgetary basis) "Total expenditures" from the Half-Cent Sales Tax Fund budgetary comparison statement Differences - budget to GAAP: Certain interdepartmental service charges are recognized as expenditures for budgetary purposes but are eliminated from the financial statements under GASB34's allocation rules Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds The accompanying notes are an integral part of the financial statements 32 $ 150,837,122 23,685,221 (15,788,868) $ 158,733,475 $ 151,701,924 7,163,994 (15,788,868) $ 143,077,050 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Taxes Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 4,743,855 10,757,419 87,000 130,050 15,718,324 $ 4,743,855 10,757,419 87,000 130,050 15,718,324 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 4,477,680 11,489,891 204,880 580,574 209,020 16,962,045 $ (266,175) 732,472 117,880 450,524 209,020 1,243,721 12,329,431.00 15,377,909.00 27,707,340 12,431,135.00 11,785,832.00 24,216,967 19,364,923 856,636 20,221,559 6,933,788 (10,929,196) (3,995,408) (11,989,016) (8,498,643) (3,259,514) 5,239,129 (500,000.00) 793,155.00 (795,972.00) (502,817) (202,737.00) 793,155.00 (795,972.00) (205,554) (2,817) (2,817) 202,737 (793,155) 793,155 202,737 (12,491,833) (8,704,197) (3,262,331) 5,441,866 22,290,996 22,290,996 18,844,848 (3,446,148) 9,799,163 $ 13,586,799 $ 15,582,517 The accompanying notes are an integral part of the financial statements 33 $ 1,995,718 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 13,468,300 150,000 13,618,300 $ 13,468,300 150,000 13,618,300 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 14,162,491 864,339 176,184 15,203,014 $ 694,191 714,339 176,184 1,584,714 512,009 32,887,628 33,399,637 672,225 29,788,683 30,460,908 2,820,451 6,990,085 9,810,536 2,148,226 (22,798,598) (20,650,372) (19,781,337) (16,842,608) 5,392,478 22,235,086 (500,000) (6,847,374) (7,347,374) 320,806 (6,847,374) (6,526,568) (6,847,374) (6,847,374) (320,806) (320,806) (27,128,711) (23,369,176) (1,454,896) 21,914,280 31,876,951 31,876,951 31,064,692 (812,259) 4,748,240 $ 8,507,775 $ The accompanying notes are an integral part of the financial statements 34 29,609,796 $ 21,102,021 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Charges for services Investment earnings Total revenues $ EXPENDITURES: Current: Culture and recreation Public safety Development services Highways and streets Non-Departmental Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 12,925,000 238,288 13,163,288 $ 12,925,000 238,288 13,163,288 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 10,670,987 1,096,448 11,767,435 $ (2,254,013) 858,160 (1,395,853) 722,483 18,000 5,615,800 15,685,976 22,042,259 726,875 30,233 514 5,569,423 20,193,805 26,520,850 34,015 149,226 2,771,583 801 4,738,224 7,693,849 (692,860) 118,993 (514) (2,797,840) 801 (15,455,581) (18,827,001) (8,878,971) (13,357,562) 4,073,586 17,431,148 (475,000) (475,000) (475,000) (475,000) - 475,000 475,000 (9,353,971) (13,832,562) 4,073,586 17,906,148 30,454,800 30,454,800 32,195,066 1,740,266 21,100,829 $ 16,622,238 $ 36,268,652 The accompanying notes are an integral part of the financial statements 35 $ 19,646,414 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2019 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund ASSETS Current assets: Pooled cash and investments Restricted pooled cash and investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Cash with fiscal agents Investments Net restricted assets Capital assets: Buildings and improvements Distribution and collection systems Water rights Equipment & furniture Vehicles Less accumulated depreciation and amortization Land and improvements Construction in progress Capital assets, net Net other postemployment benefits asset Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions and other postemployment benefits Deferred loss on bond refunding Excess consideration provided for acquisition Total deferred outflows of resources $ LIABILITIES Current liabilities: Accounts payable Accrued payroll Interest payable Due to other funds Due to other governments Customer deposits Other liabilities Current portion of claims payable Current portion of compensated absences Current portion of bonds & loans payable Total current liabilities Non-current liabilities: Long-term portion of claims payable Long-term portion of compensated absences Long-term portion of bonds & loans payable Net pension and other postemployment benefits liablilities Total non-current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions and other postemployment benefits Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted: Capital projects Facilities maintenance Trust purpose Unrestricted Total net position $ 54,466,720 5,895,499 168,389 279 224,045 60,754,932 $ 34,225,306 2,581,588 91,770 36,898,664 12,541,562 1,677,281 43,688 22,445 14,284,976 3,489,872 3,489,872 667,506 667,506 1,662,522 402,013,452 12,889,809 16,074,127 1,669,859 (181,885,634) 6,867,999 21,931,269 281,223,403 14,440 345,482,647 7,612,045 406,696,137 2,320,486 1,278,207 (153,407,258) 3,878,001 6,747,063 275,124,681 7,166 312,698,017 211,038 15,830,023 (5,531,621) 10,509,440 10,103 24,804,519 951,919 43,887 1,933,881 2,929,687 472,386 3,514 475,900 665,987 665,987 4,880,856 35,139 321,179 124,251 2,023,026 127,955 354,520 6,048,667 13,915,593 881,066 16,044 794,052 149,220 5,384,678 7,225,060 265,732 25,412 190,130 481,274 291,520 15,585,453 5,534,235 21,411,208 35,326,801 134,940 44,117,900 2,746,344 46,999,184 54,224,244 143,020 3,871,893 4,014,913 4,496,187 888,306 888,306 440,820 440,820 621,481 621,481 261,567,051 225,625,617 10,509,440 14,247,138 36,383,038 312,197,227 6,943,818 25,939,418 $ 258,508,853 3,328,818 6,514,580 20,352,838 (continued) The accompanying notes are an integral part of the financial statements 36 $ - $ CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2019 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund ASSETS Current assets: Pooled cash and investments Restricted pooled cash and investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Cash with fiscal agents Investments Net restricted assets Capital assets: Buildings and improvements Distribution and collection systems Water rights Equipment & furniture Vehicles Less accumulated depreciation and amortization Land and improvements Construction in progress Capital assets, net Net other postemployment benefits asset Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions and other postemployment benefits Deferred loss on bond refunding Excess consideration provided for acquisition Total deferred outflows of resources $ 1,273,603 372,378 6,504 1,652,485 - 137,611 1,506 139,117 $ - 102,507,191 10,664,357 311,857 279 246,490 113,730,174 $ 22,489,821 7,553,313 58,264 158,154 65,200 199,994 30,524,746 4,157,378 4,157,378 8,532,811 8,532,811 70,823,207 2,024,870 138,245 (25,356,700) 6,703,349 54,332,971 4,221 55,989,677 103,332,733 (38,606,091) 789,777 1,769,114 67,285,533 728 67,425,378 80,097,774 912,042,322 12,889,809 20,630,521 18,916,334 (404,787,304) 18,239,126 30,447,446 688,476,028 36,658 806,400,238 148,102 38,794,309 30,288,981 (53,539,989) 575,829 16,267,232 21,430 55,346,219 278,244 278,244 47,980 47,980 2,416,516 47,401 1,933,881 4,397,798 1,412,669 1,412,669 152,073 12,868 1,016 131,780 297,737 409,357 1,998 295,177 17,910 724,442 6,589,084 91,461 1,115,231 295,177 125,267 2,023,026 127,955 843,560 11,433,345 22,644,106 2,054,637 63,057 5,928,320 654,320 8,700,334 164,460 1,617,653 1,782,113 2,079,850 29,810 278,942 308,752 1,033,194 763,750 59,703,353 14,049,067 74,516,170 97,160,276 2,101,664 535,890 8,212,928 10,850,482 19,550,816 259,650 259,650 44,774 44,774 2,255,031 2,255,031 1,318,265 1,318,265 54,332,971 67,285,533 619,320,612 16,267,232 503,783 100,000 (1,008,333) $ 53,928,421 (890,143) 66,395,390 25,023,557 100,000 66,938,560 711,382,729 8,055,478 11,567,097 $ 35,889,807 LIABILITIES Current liabilities: Accounts payable Accrued payroll Interest payable Due to other funds Due to other governments Customer deposits Other liabilities Current portion of claims payable Current portion of compensated absences Current portion of bonds & loans payable Total current liabilities Non-current liabilities: Long-term portion of claims payable Long-term portion of compensated absences Long-term portion of bonds & loans payable Net pension and other postemployment benefits liablilities Total non-current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions and other postemployment benefits Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted: Capital projects Facilities maintenance Trust purpose Unrestricted Total net position $ Total Governmental Activities Internal Service Funds $ Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time. $ The accompanying notes are an integral part of the financial statements 37 3,149,300 714,532,029 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund OPERATING REVENUES Charges for services Rents Miscellaneous Total operating revenues $ 42,341,104 1,638,046 43,979,150 $ 23,058,122 17,978 23,076,100 $ 12,879,587 26,030 12,905,617 6,082,320 21,818,734 13,630,536 41,531,590 2,447,560 2,762,130 8,953,682 11,247,584 22,963,396 112,704 3,991,076 8,808,540 953,514 13,753,130 (847,513) 1,708,342 (474,638) 1,233,704 918,497 (1,527,036) 4,817 (603,722) 431,160 133,427 564,587 3,681,264 (491,018) (282,926) Capital contributions Transfers in Transfers out Change in net position 10,981,297 1,132,864 (3,530,980) 12,264,445 5,538,371 2,579,259 (357,169) 7,269,443 (1,042) (283,968) Total net position - beginning 299,932,782 251,239,410 20,636,806 Total net position - ending $ 312,197,227 $ 258,508,853 $ 20,352,838 (continued) OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Investment income Interest expense Gain on sale of capital assets Total non-operating revenues (expenses) Income (loss) before capital contributions and transfers The accompanying notes are an integral part of the financial statements 38 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund OPERATING REVENUES Charges for services Rents Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) 1,282,463 2,117,149 10,226 3,409,838 $ 961,031 961,031 $ Total Governmental Activities Internal Service Funds 80,522,307 2,117,149 1,692,280 84,331,736 $ 46,655,420 1,491,456 48,146,876 1,885,432 3,620,819 2,351,608 7,857,859 (4,448,021) 314,378 671,971 2,482,950 3,469,299 (2,508,268) 15,035,336 43,873,746 30,666,192 89,575,274 (5,243,538) 7,900,275 14,528,859 24,882,386 2,694,616 50,006,136 (1,859,260) NON-OPERATING REVENUES (EXPENSES) Investment income Interest expense Gain on sale of capital assets Total non-operating revenues (expenses) Income (loss) before capital contributions and transfers 40,255 131 40,386 9,318 9,318 3,107,572 (2,001,674) 138,375 1,244,273 835,748 57,399 893,147 (4,407,635) (2,498,950) (3,999,265) (966,113) Capital contributions Transfers in Transfers out Change in net position 2,000,000 (1,003) (2,408,638) 3,788,688 (1,133,173) 156,565 20,308,356 5,712,123 (5,023,367) 16,997,847 2,329,324 1,878,971 (4,180,046) (937,864) Total net position - beginning 56,337,059 66,238,825 694,384,882 36,827,671 $ 53,928,421 $ 66,395,390 711,382,729 $ 35,889,807 Total net position - ending Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds. 25,919 $ Change in net position of business-type activities 17,023,766 The accompanying notes are an integral part of the financial statements 39 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Payments to internal service funds Net cash provided (used) by operating activities $ 44,960,221 (16,302,702) (6,039,291) (2,435,129) 20,183,099 $ 23,336,379 (8,340,352) (3,005,738) (1,158,113) 10,832,176 $ 12,774,559 (3,536,490) (4,322,984) (5,249,537) (334,452) 1,132,864 (3,530,980) (2,398,116) 2,579,259 (357,169) 2,222,090 (1,042) (1,042) (18,599,841) 5,105,573 455,948 (7,151,296) (731,332) (2,381,003) 4,817 1,424,243 (5,279,847) (1,674,850) (2,329,580) 133,427 - (20,920,948) (7,906,640) (2,196,153) 1,664,812 1,664,812 887,944 887,944 426,143 426,143 (1,471,153) 59,427,745 $ 57,956,592 6,035,570 28,857,242 $ 34,892,812 (2,105,504) 14,647,066 $ 12,541,562 (continued) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund loans payable Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from disposal of capital assets Capital contributions Proceeds from loans Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year The accompanying notes are an integral part of the financial statements 40 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Payments to internal service funds Net cash provided (used) by operating activities $ CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund loans payable Net cash provided (used) by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from disposal of capital assets Capital contributions Proceeds from loans Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities 3,434,834 (2,996,320) (1,997,150) (614,747) (2,173,383) $ 938,687 (107,137) (309,209) (207,259) 315,082 $ 85,444,680 (31,283,001) (15,674,372) (9,664,785) 28,822,522 $ 48,097,653 (15,582,209) (8,917,343) (22,810,984) 787,117 2,000,000 (1,003) 1,998,997 (1,133,173) 295,177 (837,996) 5,712,123 (5,023,367) 295,177 983,933 1,878,971 (4,180,046) (2,301,075) (301,168) 131 - (1,312) - (23,612,904) 138,375 6,529,816 455,948 (12,431,143) (2,406,182) (2,393,496) 57,399 - (301,037) (1,312) (31,326,090) (2,336,097) 38,863 38,863 9,012 9,012 3,026,774 3,026,774 (782,301) 796,413 14,112 (436,560) 1,710,163 1,273,603 (515,214) 515,214 - 1,507,139 105,157,430 $ 106,664,569 (3,835,943) 33,879,077 $ 30,043,134 (continued) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ Total Governmental Activities Internal Service Funds $ The accompanying notes are an integral part of the financial statements 41 CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business-type Activities Major Enterprise Funds Water Utility Wastewater Solid Waste Fund Utility Fund Utility Fund 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 by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets/deferred outflows: Accounts receivable Prepaid items Supplies inventory Other assets Net other postemployment benefits asset Deferred outflows - pension and other postemployment benefits Increase (decrease) in liabilities/deferred inflows: Accounts payable Accrued payroll Due to other governments Other liabilities Deposits payable Claims payable Unearned revenue - other Compensated absences Net pension and other post employment benefit liability Deferred inflows - pension and other postemployment benefits Total adjustments Net cash provided (used) by operating activities Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers and City governmental funds Change in fair market value of investments Amortization of bond premium Amortization of deferred loss on refunding Total non-cash investing, capital and financing activities 2,447,560 $ 112,704 $ (847,513) 13,630,536 11,247,584 953,514 1,005,433 (100) 55,183 84,212 6,564 260,279 4,416 (131,058) 160,169 6,247 51,348 80,828 114,937 3,028,855 (102,991) (138,245) 50,998 (24,362) 3,870 (422,426) (544,783) (36,797) 15,800 (538,233) (137,656) (61,169) 48,310 (764,653) 506,664 17,735,539 230,378 10,719,472 324,420 513,061 $ 20,183,099 $ 10,832,176 $ $ $ $ $ 5,875,724 664,240 213,304 (45,078) 6,708,190 $ 4,114,128 350,505 63,486 (2,323) 4,525,796 The accompanying notes are an integral part of the financial statements 42 (334,452) 160,763 $ 160,763 (continued) CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund Total Governmental Activities Internal Service Funds (5,243,538) $ (1,859,260) Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ (4,448,021) $ (2,508,268) 2,351,608 2,482,950 30,666,192 2,694,616 75,651 2,500 (22,344) 332 1,187,961 (100) 215,352 84,212 20,059 (49,223) (16,016) 14,226 42,767 2,662 292,542 290,488 34,136 (31,513) (24,385) (50,654) 25,270 (288,280) 357,575 (3,558) 1,950 (21,727) 2,738,127 (236,028) (162,630) 50,998 (24,362) (50,654) 95,200 (2,035,319) (1,037,334) (134,000) 2,071,402 40,980 (1,899,152) 137,538 2,274,638 25,510 2,823,350 1,224,510 34,066,060 670,390 2,646,377 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets/deferred outflows: Accounts receivable Prepaid items Supplies inventory Other assets Net other postemployment benefits asset Deferred outflows - pension and other postemployment benefits Increase (decrease) in liabilities/deferred inflows: Accounts payable Accrued payroll Due to other governments Other liabilities Deposits payable Claims payable Unearned revenue - other Compensated absences Net pension and other post employment benefit liability Deferred inflows - pension and other postemployment benefits Total adjustments Net cash provided (used) by operating activities Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers and City governmental funds Change in fair market value of investments Amortization of bond premium Amortization of deferred loss on refunding Total non-cash investing, capital and financing activities $ $ (2,173,383) $ 315,082 $ 28,822,522 $ $ $ 3,788,688 3,788,688 $ 13,778,540 1,175,508 276,790 (47,401) 15,183,437 $ - $ $ $ The accompanying notes are an integral part of the financial statements 43 787,117 2,329,324 111,831 $ 2,441,155 (concluded) CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2019 Firemen's Pension Fund ASSETS Pooled cash and investments Due from other governments Interest receivable Total assets $ LIABILITIES Accounts payable Other liabilities Total liabilities 4,608 37 4,645 Agency Funds $ - NET POSITION Net position restricted for pensions $ 4,645 The accompanying notes are an integral part of the financial statements 44 99,748 5,460 209 105,417 225 105,192 105,417 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Firemen's Pension Fund ADDITIONS Contributions: Employer contribution State insurance premium tax rebate Total contributions Investment earnings: Total interest and investment income $ 10,000 463 10,463 232 Total additions 10,695 DEDUCTIONS Retirement payments Total deductions 17,425 17,425 Change in net position (6,730) Net position - beginning of the year Net position - end of the year $ 11,375 4,645 The accompanying notes are an integral part of the financial statements 45 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. Note Page 1 Summary of Significant Accounting Policies 47 2 Deposits and Investments 57 3 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 59 4 Accounts Receivable and Allowance for Doubtful Accounts 60 5 Due from Other Governments 60 6 Capital Assets 61 7 Long-term Debt 62 8 Risk Financing Activities 67 9 Pensions and Other Postemployment Benefits 68 10 Deferred Compensation Plan 78 11 Contingencies, Commitments and Other Claims 79 12 Interfund Transactions, Receivable and Payable Balances 79 13 Stabilization Arrangements 80 14 Segment Information for Enterprise Funds 81 15 Subsequent Events 81 46 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements of the City of Peoria, Arizona (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) applicable to governmental units adopted by the Governmental Accounting Standards Board (GASB). A summary of the City’s more significant policies follows. A. Financial Reporting Entity The City of Peoria was incorporated in 1954 under the Arizona Revised Statutes. The current City charter provides for the Council - Manager form of government and provides such services as authorized by the charter as limited by the constitution of the State of Arizona. The City's major operations include police protection and fire and medical services, parks and recreation, development services, public works, certain social services and general administrative services. In addition, the City owns and operates enterprise funds, which include water, wastewater, solid waste and storm drain operations, and a baseball stadium complex. The financial reporting entity presented in these financial statements consists of the City and its blended component units for which the City is financially accountable. The blended component units are, in substance, part of the primary government’s operations, even though they are legally separate entities. These component units are governed by boards, wholly or substantially, comprised of the government’s elected council. Individual Component Units - Blended City of Peoria Municipal Development Authority, Inc. City of Peoria Municipal Development Authority, Inc. (Authority), an Arizona not-for-profit corporation, was organized for the purpose of financing the construction of municipal facilities within the City through the issuance of bonds. Concurrent with these bond issues, the City entered into contracts with the Authority whereby the City will pay, to the Authority, amounts sufficient to retire the Authority's bonds and related interest. The outstanding Municipal Development Authority, Inc. bonds are reported as a debt service fund in the City’s financial statements. All of the outstanding debt of the Authority will be repaid by revenues of the City. No separate financial statements are prepared for the Municipal Development Authority, Inc. Vistancia Community Facilities District The Vistancia Community Facilities District (Vistancia) was formed by petition to the City Council in 2002. Vistancia’s purpose is to acquire or construct public infrastructure in a specified area of the City. As a special purpose district and separate political subdivision under the Arizona Constitution, Vistancia can levy taxes and issue bonds independently of the City. Property owned in the designated areas is assessed for Vistancia’s property taxes, and thus for the costs of operating the district. The City Council serves as the Board of Directors of Vistancia and City management has operational responsibility for Vistancia. The City has no liability for the district’s debt. For reporting purposes, the transactions of Vistancia are included as governmental funds as if they were part of the City’s operations. 47 Vistancia West Community Facilities District The Vistancia West Community Facilities District (Vistancia West) was formed by petition to the City Council in 2014. Vistancia West’s purpose is to acquire or construct public infrastructure in a specified area of the City. As a special purpose district and separate political subdivision under the Arizona Constitution, Vistancia West can levy taxes and issue bonds independently of the City. Property owned in the designated areas is assessed for Vistancia West’s property taxes, and thus for the costs of operating the district. The City Council serves as the Board of Directors of Vistancia West and City management has operational responsibility for Vistancia West. The City has no liability for the district’s debt. For reporting purposes, the transactions of Vistancia West are included as governmental funds as if they were part of the City’s operations. City of Peoria Employee Benefit Trust The City of Peoria Employee Benefit Trust (the Trust) was formed by petition to the City Council on January 1, 2010. The Trust’s purpose is to fund health, welfare and related benefit programs by the City in accordance with the provisions of Arizona law. Plan premiums are paid by Participants and the City. The City Council Sub Committee on Boards and Commissions nominate individuals to serve as Trustees overseeing the management and administration of the Trust. For financial reporting purposes, the transactions of the Trust are included as part of the Self-Insurance Fund, an internal service fund in the City’s financial statements. City of Peoria Workers’ Compensation Trust The City of Peoria Workers’ Compensation Trust (the Trust) was formed by petition to the City Council in 2009. The Trust’s purpose is to fund workers’ compensation benefit programs by the City in accordance with the provisions of Arizona law. Plan premiums are paid by the City. The City Council Sub Committee on Boards and Commissions nominate individuals to serve as Trustees overseeing the management and administration of the Trust. For financial reporting purposes, the transactions of the Trust are included as part of the Self-Insurance Fund, an internal service fund in the City’s financial statements. Stand-alone financial statements are prepared for Vistancia, Vistancia West and the two trusts above. The accounting records of these are maintained by the City and the financial statements are available by contacting the City’s Finance Department, 8401 West Monroe Street, Peoria, AZ 85345. B. Basis of Presentation – Government-wide and Fund Financial Statements The government-wide financial statements (i.e. the statement of net position and the statement of activities) report financial information on all of the non-fiduciary activities of the primary government and its component units. Governmental activities which are normally supported by taxes and intergovernmental revenues are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses for a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operation or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. 48 The City does not currently employ an indirect cost allocation system. The General Fund and certain other funds charge administrative service fees to other operating funds to support general services used by the other operating funds (like purchasing, accounting and administration). These administrative fees are eliminated from the financial statements at both the government-wide and fund level like a reimbursement, by reducing revenues and expenditures/expenses in the allocating fund. Separate financial statements are provided for governmental funds (general fund, special revenue funds, debt service funds and capital projects funds), proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund and is used to account for and report all financial resources not accounted for and reported in another fund. The Highway User Revenue Fund, a special revenue fund, is required by state statute to track receipts of specific state shared revenues and the expenditure of those funds. The Transportation Sales Tax Fund, a special revenue fund, accounts for the revenues generated from a sales tax increase designated by public vote for use in funding transportation needs throughout the City. The Development Fee Fund, a special revenue fund, accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities as governed by state statutes. The GO Bond Debt Service Fund accounts for the principal and interest requirements of the City’s general obligation bonds, with revenues generated from the general property tax levy sufficient to meet the debt service. The City reports the following major proprietary funds: The Water Utility, Wastewater Utility, Solid Waste Utility and Storm Drain Utility Funds all account for the revenues from charges to the customers of these services and the costs of these services. The Stadium Fund accounts for the revenues generated by and the costs of operation of a sports complex owned by the City. This facility is used for spring training by two major league baseball teams as well as multiple other uses throughout the year. Additionally, the City reports the following fund types: The Internal Service Funds account for (1) Motor Pool, (2) Facilities Maintenance, (3) Self-Insurance which includes workers’ compensation and health insurance programs, and (4) Information Technology which includes a computer replacement program. The Firemen’s Pension Fund, a trust fund, is used to account for assets held in a trustee capacity for the volunteer firemen’s retirement plan. Trust funds can be expended for the trusts’ intended purposes. The Agency Funds are purely custodial (assets equal liabilities) and do not involve measurement of operations. The City currently maintains 2 agency funds. One fund, PLAY Peoria, accounts for monies held on behalf of separate not-for-profit agencies for which the City operates as an administrator. Another fund accounts for monies held on behalf of Westside Fire Training IGA, a consortium of area fire departments that pool monies for training activities, for which the City acts as the administrator. For the most part, the effect of the interfund activity has been removed from these statements. Quasiexternal transactions, like the sale of utility services from the Enterprise Funds to the other funds, are not eliminated for the financial statements as elimination of these charges would distort the direct costs and program revenue reported for the various functions. 49 Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges for customer services including: water, sewer, solid waste, storm drain, vehicle purchase/maintenance, computer replacement and risk management charges. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for specified expenditures, generally, the City would first apply restricted resources when an expense is incurred. C. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and trust financial statements. Agency funds do not have a measurement focus. 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 earned and available to pay liabilities of the current period (generally these revenues are earned by June 30 and are expected to be collected within six months after year-end, except for property taxes). For property taxes, the City uses a 60 day collection period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting, except expenditures related to debt service, compensated absences and claims and judgments, which are recorded only when payment is due. Entitlements, other taxes and shared revenues are all considered to be susceptible to accrual and revenue recognition in the current fiscal period. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. For the governmental fund statements, grant revenue earned but not expected to be received within six months of year end is a deferred inflow of resources. Changes in fair value of investments are recognized in investment income at the end of the year. All other revenue items are considered to be measurable and available only when the City receives cash. Because different measurement focuses and bases of accounting are used in the government-wide statement of net position and in governmental fund balance sheets, amounts reported as restricted fund balances in governmental funds may be different from amounts reported as restricted net position in the statement of net position. D. Budgets and Budgetary Accounting The City prepares its annual budget on a basis consistent with generally accepted accounting principles with such exceptions as eliminating compensated absences. The City uses the following procedures in establishing the budgetary data reflected in the accompanying financial statements: • According to the laws of the State of Arizona, all operating budgets must be approved by their governing board on or before the second Monday in August to allow sufficient time for legal announcements and hearings required for the adoption of the property tax levy on the third Monday in August. 50 • In April, the proposed budget for the following fiscal year is presented by the City Manager to the City Council. The budget includes proposed expenditures and the means of financing them. Public meetings are held to obtain citizen comment. • Prior to June 30, the City Council legally enacts the budget, through the passage of a resolution. The resolution sets the limit for expenditures for the year, within the voter mandated state expenditure limitation. Additional expenditures may be authorized if directly necessitated by a natural or man-made disaster as prescribed in the state constitution. • The maximum legal expenditure permitted for the year is the total budget as adopted. The expenditure appropriations in the adopted budget are maintained in the City’s financial system by department within individual funds. Departmental appropriations may be amended during the year, within administrative guidelines and adopted Council policies. • The initial budget for the fiscal year may be amended during the year in a legally permissible manner. • The City Manager is generally authorized to transfer budgeted amounts within any specific fund’s expenditure appropriation. Any budget revisions requiring a transfer between funds must be approved by the City Council. Additionally, budget revisions involving the use of contingency budgets must be approved by the City Council. • All unencumbered expenditure appropriations expire at the end of the fiscal year. • Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office staff. Budgetary carry forwards are approved by the City Council. • All funds of the City, except the agency funds, have legally adopted budgets. Formal integration of these budgets into the City’s financial systems is employed as a management control device during the year for all funds. E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance I. Deposits and Investments Cash Equivalents The City considers short-term investments (including restricted assets) in the State of Arizona investment pool, mutual fund money market, U.S. Treasury bills and notes with maturities of three months or less at acquisition date to be cash equivalents. Investments The City’s funds are invested in accordance with the City’s investment policy and Arizona Revised Statutes. The City's policy is to invest in obligations of the U.S. Government or any of its agencies and instrumentalities, certificates of deposit, bankers’ acceptances, commercial paper, money market funds, repurchase agreements, corporate securities, the State of Arizona local government investment pool and State of Arizona debt including counties, incorporated cities, towns or duly organized school districts. Funds held by trustees related to the issuance of bonds and certain loan programs are invested in accordance with contractual agreements and trust documents. The City generally reports investments at fair value in the balance sheet and recognizes the corresponding change in the fair value of investments in the year in which the change occurred. The fair value of participants’ position in the Local Government Investment Pool approximates the value of the pool shares. Other non-pooled investments are also generally carried at fair value. The fair value of non-pooled investments is determined annually and is based on current market prices. The fair value of investments in open-end mutual funds is determined based on the funds’ current share price. 51 Except for certain specific investments, generally those held in trust for a specific purpose, the City maintains pooled cash and investments, and allocates interest income based on a fund’s proportionate cash balance. Investment income related to certain special revenue funds is allocated to the General Fund. Non-pooled investment income is recorded in the fund that held the specific investments. II. Receivables All receivables are shown net of an allowance for uncollectible accounts. For trade accounts receivable (miscellaneous receivables and utility billing receivables), amounts outstanding in excess of 90 days are included in the allowance. III. Inventory and Prepaid Items Inventories are valued at cost and the City uses the first-in, first-out (FIFO) flow assumption in determining cost and consist of expendable supplies. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. IV. 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. V. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $100,000 for Buildings and Improvements, Water and Sewer Systems, Storm Drainage Systems and Infrastructure systems (streets, etc.) and $25,000 for all other asset categories (except land) and an estimated useful life of greater than one year. Capital assets are recorded at the 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 assets lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives: Assets Water rights Buildings and improvements Water and sewer systems Storm drainage systems Park facilities and landscape Street system Streetlights and traffic control devices Equipment, furniture and fixtures Vehicles Computers/software Useful life (Years) 50 20-40 5-40 40 40 20 10 7 3-15 3 52 Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) or net realizable value, if lower, as of the date of the transfer. VI. Compensated Absences The liability for compensated absences reported in the government-wide and proprietary statements consists of unpaid, accumulated leave balances. Annual leave, based on a graduated scale of years of employment, is credited to each employee as it accrues. The maximum annual leave accrual for permanent employees is 360 hours while Fire department employees accrue at a maximum rate of 544 hours. Upon employment termination, payment is made to the employee for the unused leave. City employees are granted 8 hours of sick leave per month. The maximum an employee may accumulate varies according to union status. Upon resignation, employees who have at least five years of employment with the City and accumulated 200 hours or more of sick leave are entitled to a 50% payout. Additionally upon retirement, employees who have accumulated 200 hours or more of sick leave are entitled to a 50% payout. Any sick time accrued above the maximum allowed to be carried is paid out annually in December or May at a rate of 25%, or 50%, according to union or employment status, and the corresponding employees’ sick leave is reduced to the allowable maximum. For the governmental fund financial statements, compensated absences are accrued only when due. For the government-wide financial statements, as well as the proprietary fund financial statements, all of the outstanding vacation, compensatory time and benefits, as well as an estimate of the retirement sick-time payout for eligible employees, are recorded as a liability. Compensated absences are liquidated when mature by the various operating funds. VII. 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 amortized over the life of the bonds using 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 in the period in which the bonds are issued. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. The long-term debt of the City is serviced by various debt service funds, according to the type of debt and the funds benefiting from that debt. VIII. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future periods(s) and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The City reports deferred outflows related to pensions and other postemployment benefits (OPEB), deferred outflows related to bond refunding and excess consideration provided for acquisitions. In addition to liabilities, the statement of net position and the balance sheet of governmental funds will sometimes 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 City reports deferred inflows related to pensions and OPEB in the statement of net position and unavailable revenue reported from property taxes in the balance sheet of governmental funds. 53 IX. Pension and Other 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 plans’ fiduciary net position and additions to or deductions from the plans’ 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. X. Net Position In the government-wide and proprietary fund financial statements, net position is reported in three categories: net investment in capital assets, restricted, and unrestricted. The net investment in capital assets balances are separately reported because capital assets make up a significant portion of net position. Restricted balances account for the portion of net position restricted by external resource providers or through enabling legislation. Unrestricted balances are the remaining balances not included in the previous two categories. XI. Fund Balance policies In the fund financial statements, governmental funds distinguish between nonspendable and spendable fund balances. Nonspendable balances include amounts that cannot be spent because they are not in a spendable form, such as inventory or prepaid items, or because resources legally or contractually must remain intact. Spendable balances are further classified as restricted, committed, assigned and unassigned based on the relative strength of the constraints that control how specific amounts can be spent. Restricted fund balances include amounts that can be spent only for the specific purposes stipulated by external resource providers (creditors, grantors, etc.) or through enabling legislation. Committed fund balances includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. Such commitments are created by legislative action of the City Council, the City’s highest level of decision making authority, by resolution or ordinance and would require the same legislative action to reverse. Ordinances and resolutions both require public votes of the Council and, although the uses may differ, they are both considered to be of the highest level of decision making authority for the City. Commitment must be made or removed prior to June 30 in order to be reported in or removed from the financial statements. Much of the authority to commit fund balance is established in the City’s Council adopted Principals of Sound Financial Management. Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. The authority to make assignments has been delegated by the City Council to the Chief Financial Officer. Unassigned fund balances represent the residual net resources in excess of the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance and any governmental fund can report a negative unassigned fund balance. As previously noted above, generally, the City would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available. The order in which the City would apply resources when multiple categories of unrestricted fund balance are available is as follows: committed, assigned and unassigned. 54 XII. Stabilization arrangements The City has set aside funds for various stabilization arrangements. It is the City’s intent that situations allowing for the use of stabilization resources will be for non-routine situations. The authority for the stabilization arrangements is in the Council adopted Principles of Sound Financial Management. The governmental fund stabilization arrangements are shown as committed fund balance on the governmental fund financial statements. The City has the following stabilization arrangements at June 30, 2019: • Budget stabilization reserve – Maintained in the General Fund (10% of the average general fund revenues for the preceding five years) and the Half-Cent Sales Tax Fund (35% of the average fund revenues for the preceding five years). These reserves may be used to provide funding to deal with fluctuations in fiscal cycles and operating requirements that exceed $500,000. Any use of these reserves must be formally approved by the City Council and include a repayment plan to restore the reserve within the three fiscal years following the year in which the event occurred. Funding in excess of the stabilization reserve may be assigned by management for other purposes as approved by City Council, including debt service, capital, economic development, community promotions or other specific city operational expenditures. • Emergency reserve – Maintained in the General Fund (10% of the average general fund revenues for the preceding five years) and is for unexpected, large-scale events where damage in excess of $250,000 is incurred and immediate remedial action must be taken to protect the health and safety of residents (e.g. floods, fires, storm damage). Usage of the emergency reserve must be approved by City Council, but the City Manager may utilize these funds when immediate action must be taken to protect the health and safety of residents. The City Manager must then provide a summary report to the City Council as soon as practical on the usage of these funds. The City shall strive to restore the Emergency Reserve to the 10% level within the next fiscal year following the fiscal year in which the event occurred. • Operating Reserve - Maintained in the General Fund (15% of the average general fund revenues for the preceding five years) and is for unexpected events whose impact exceeds $500,000, such as failure of the State to remit shared revenues, unexpected mandates, unexpected loss of State Shared revenues, continuance of critical city services due to unanticipated events, or to offset unexpected loss of a significant funding source for the remainder of the fiscal year. Any use of these reserves must be formally approved by the City Council and include a repayment plan to restore the reserve within the two fiscal years following the year in which the event occurred. • Enterprise Operating Fund Working Capital Reserve – Maintained in the Water Utility Fund (25% of the operating expenditures of the fund for the fiscal year), the Wastewater Utility Fund (25% of the operating expenditures of the fund for the fiscal year), and the Solid Waste Utility Fund (20% of the operating expenditures of the fund for the fiscal year). These reserves are to provide the City with a comfortable margin of safety to address emergencies and unexpected declines in revenue without borrowing. • Rate Stabilization Reserve – In the Water and Wastewater Utility Funds (5% of the average fund revenues for the preceding three fiscal years). These funds may be used to moderate significant rate increases. In the event these funds are used, the City shall strive to restore the reserve to the 5% level within the next three fiscal years following the year in which the funds were used. • Debt Stabilization Reserve – In the Water and Wastewater Utility Funds (50% of the maximum annual debt service payment of the fund in the next five fiscal years) and the Half-Cent Sales Tax fund ($1,000,000). The Debt Stabilization Reserve is intended to provide additional security to insure the City’s ability to meet debt service obligations. In the event the Debt Stabilization Reserve is used, the City shall strive to restore the fund to the defined level within the three fiscal years following the year in which the funds were used. 55 • Asset Maintenance Reserve - In the Water and Wastewater Utility Funds (2% of the enterprise fund infrastructure assets). The Asset Maintenance Reserve may be used to provide funding for the repair and maintenance of critical enterprise infrastructure. In the event the Asset Maintenance Reserve is used, the City shall strive to restore the fund to the defined level within the three fiscal years following the year in which the funds were used. • Capital Equipment Replacement Reserves – The City maintains various capital equipment replacement reserves to fund future replacement of certain capital equipment, primarily vehicles and computers. The annual internal charges to the operating funds are determined as part of the annual budget process. F. Property taxes The City Council adopts the annual tax levy each year on or before the third Monday in August as determined by the Maricopa County Assessor. For locally assessed property, the value is determined as of January 1 of the preceding year, known as the valuation year. For utilities and other centrally valued properties, the value is determined as of January 1 of the tax year. The City has an enforceable claim on the property when the property tax is levied. Levies are due and payable in two installments, on October 1 and March 1, and become delinquent on November 1 and May 1, respectively. Delinquent amounts bear interest at the rate of 16 percent. A lien is placed on the property at the time the tax bill is sold. Maricopa County, at no charge to the taxing entities, bills and collects all property taxes. Public auctions for sale of delinquent real estate taxes are held in February following the May 1 date upon which the second half taxes become delinquent. G. Tax Abatements The City has entered into tax abatement agreements as defined by GASB Statement 77. The tax abatements include sales tax reimbursement incentives and the activation of a Foreign Trade Zone which reduces the property tax assessment ratio on commercial property from 18% to 5%. It’s the City’s policy to review each agreement individually and in the aggregate annually. For the fiscal year ended June 30, 2019, each agreement and all agreements in the aggregate are deemed immaterial for financial reporting purposes. H. Joint Ventures The City participates in the Regional Wireless Cooperative (RWC), an association of municipalities formed in 2008 to oversee the administration, operation, management, and maintenance of an expanding regional communications network. The RWC was formed through a governance structure founded on the principles of cooperation for the mutual benefit of all members and has expanded to serve a still-growing list of cities, towns, and fire districts, along with many other area entities who serve public safety needs. A regional radio communications network was built to seamlessly serve the interoperable communication needs of first responders and other municipal radio users in and around the Phoenix Metropolitan Region. Financial responsibilities are shared by all members based on their relative size and is measured by the number of subscriber units (radios) on the network. The City records its share of contributions to the RWC, third party contributions paid to the RWC for the benefit of the City, and equity in the joint venture in the City’s governmentwide financial statements. The City’s equity balance as of June 30, 2019 was $1,900,540 or 2.68 percent. The RWC Comprehensive Annual Financial Statement is available from the Regional Wireless Cooperative, 200 West Washington Street, 12th Floor, Phoenix, Arizona, 85003-1611. I. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of net position/balance sheet and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates. 56 J. New Accounting Principles For the year ended June 30 2019, the City implemented the provisions of the following GASB Statements: • GASB Statement No. 83, Certain Asset Retirement Obligations. GASB Statement No. 83 established standards for accounting and financial reporting for certain asset retirement obligations (ARO). For fiscal year 2019, the City did not have any reportable ARO’s. • GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, improved the information that is disclosed in notes to government financial statements related debt, including direct borrowings and direct placements. The City has already been reporting substantially in accordance with the requirements of GASB Statement No. 88, so there is minimal impact to the financial statements for fiscal year 2019. • GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, simplified the accounting for interest cost incurred before the end of a construction period. The City early-implemented this statement and no longer calculates capitalized interest. GASB has issued the following pronouncements that may effect future financial position, results of operations, cash flows, or financial presentation of the City upon implementation. The City has not fully determined the effect these pronouncements will have on the City’s financial statements. GASB Statement No. 84 87 90 91 GASB Accounting Standards Fiduciary Activities Leases Majority Equity Interests - an amendment of GASB Statements No. 14 and No. 61 Conduit Debt Obligations Effective Fiscal Year 2020 2021 2020 2022 2. DEPOSITS AND INVESTMENTS A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Certain restricted funds are not part of the City’s pool, but rather are maintained with trustees as required by contractual commitments. At June 30, 2019, the carrying amount of the City's deposits was $64,456,153 and the bank balance was $67,853,347. The entire bank balance was covered by federal depository insurance or collateralized by the City’s agent in the City’s name or in the Municipal Development Authority, Inc.'s name. The difference between the City’s carrying amount and the bank balance of $3,397,194 represents deposits in transit, outstanding checks and other reconciling items. The City maintains cash on hand balances in the form of petty cash and change funds. At June 30, 2019, the total amount of these balances was $6,760. In addition, the City has deposited $529,279 in a developer trust account with a fiscal agent in accordance with developer agreements for the construction and acquisition of water projects. 57 B. Investments The City invests in obligations that fall within the authorization of State of Arizona laws, the City’s regulations and investment policy and applicable legal and contractual commitments. Interest rate risk: In order to limit interest and market rate risk, State law and the City’s investment policy sets a maximum maturity on any investment of five years with a minimum of 35% invested for a period of one year or less and no more than 20% of the City’s portfolio be invested for a period greater than three years. At June 30, 2019, 60.8% of the City’s investments have a maturity of less than one year and 0.6% of investments have a maturity of greater than three years. The City’s investment policy also sets a maximum weighted average maturity (WAM) not to exceed three years. The WAM at June 30, 2019 was 496 days. Credit risk: State law and the City’s investment policy limits the purchase of Commercial Paper to those securities rated A-1/P-1 or the equivalent by two nationally recognized statistical rating agencies. The City’s investment policy limits the purchase of Corporate Bonds or Notes to those securities rated AA-/Aa3 and Aa or better at the time of purchase by a nationally recognized rating agency and with a maximum maturity of two years. The City’s investment policy also limits the purchase of Banker’s Acceptances to those securities rated AA-/Aa3 and Aa or better at the time of purchase by two nationally recognized rating agencies and with a maximum maturity of 180 days. At June 30, 2019, the City’s investments include $35.8 million in Commercial Paper, $48.7 million in Corporate Notes and $0.5 million in Banker’s Acceptance securities. State law and the City’s investment policy also restricts investments in certificates of deposit (CD) to fully collateralized or insured from eligible Arizona depositories limited on a statewide basis by their capital structure on a quarterly basis. Such CDs are further collateralized to 110% with pledged securities held by an independent custodian approved by the City. City policy requires that securities underlying repurchase agreements must have a collateralization level of at least 102 percent of the market value of principal and accrued interest. Investment Type Agency coupon securities Commercial Paper Corporate Bonds S&P Ratings range AA+ A-1 to A-1+ A- to AAA The City’s investment in the State of Arizona local government investment pool is limited to a pool (Pool 7) that invests only in government securities. Pool 7 is not rated. Concentration of credit risk: The City’s investment policy sets diversification limits on both security types and length of maturity. As of June 30, 2019, the City’s investments include 28.1% in Money Market investments, 26.0% in U.S. Treasury Notes, 20.9% in U.S. Agency Coupon securities, 14.3% in Corporate securities, 10.5% in Commercial Paper, and 0.2% in Banker’s Acceptance securities. Investments in any one issuer, excluding U.S. governments that represent 5% or more of total City investments are as follows: Issuer Federal National Mortgage Corporation Federal Home Loan Bank Fair Value $ 30,920,900 24,883,939 Custodial credit risk: To control custodial credit risk, State law and 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 safekeeping statements. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments 58 classified as Level 2 inputs are valued using a matrix pricing model. The City has the following recurring fair value measurements as of June 30, 2019: • • • • All U.S. Treasury securities are valued using quoted prices in active markets (Level 1) All agency coupon securities are valued using other observable inputs (Level 2) All commercial paper is valued using other observable inputs (Level 2) All corporate bonds are valued using other observable inputs (Level 2) The City's cash and investments are combined with the State's pooled investments, and therefore, do not represent specific identifiable investments. The State categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles as described above. The City's investment in the State of Arizona's local government investment pool and the money market funds are stated at fair value, which also approximates the value of the investment upon withdrawal. At June 30, 2019, the City’s total investments of $350,350,037 included the following: Investment Maturities in Years 1-2 2-3 Over 3 5,151,328 24,194,836 57,238,310 2,159,658 Agency coupon securities 30,399,897 21,235,182 19,615,086 Commercial paper 35,761,206 Corporate notes 36,328,290 Less than 1 Fair Value Investments: U.S Treasury notes Banker's Acceptance securities $ - 12,342,253 - 71,250,165 - 35,761,206 - - 48,670,543 549,040 549,040 95,918,211 - - - State of Arizona LGIP 9,456,740 - - - $ 213,015,672 58,321,311 88,744,132 - Mutual fund-money market Total Investments $ 76,853,396 2,159,658 95,918,211 9,456,740 $ 350,350,037 3. DEFICITS IN FUND EQUITY/EXCESS OF EXPENDITURES OVER APPROPRIATIONS At June 30, 2019, the following fund reported a deficit in net position. • Internal Service Fund: Facilities Maintenance Fund The Facilities Maintenance Fund deficit resulted from the implementation of accounting guidance related to reporting for pensions and OPEB which requires liabilities to be presented on the face of financial statements. For the year ended June 30, 2019, expenditures, including capital outlay and transfers, did not exceed budget at the fund level (i.e. the level of budgetary control) in any funds. 59 4. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded in the various funds and displayed in the financial statements net of an allowance for uncollectible accounts as follows at June 30, 2019. Fund Governmental activities: General Fund Receivables $ 13,649,956 Allowance $ 1,348,680 Net $ 12,301,276 Highway User Revenue Fund 709,090 - 709,090 Transportation Sales Tax Fund 1,828,629 - 1,828,629 GO Bond Debt Service Fund 187,017 168,541 18,476 Other Governmental Funds 26,492 12,157 14,335 Total governmental funds $ 16,401,184 $ $ 58,264 $ $ 6,526,597 $ Internal Service Funds 1,529,378 - $ 14,871,806 $ 58,264 $ 5,895,499 Business-type activities: Water Utility Fund 631,098 Wastewater Utility Fund 3,037,142 455,554 2,581,588 Solid Waste Utility Fund 1,967,429 290,148 1,677,281 Stadium Fund 372,378 - 372,378 Storm Drain Utility Fund 164,894 27,283 137,611 Total enterprise funds 12,068,440 1,404,083 10,664,357 Grand totals $ 28,527,888 $ 2,933,461 $ 25,594,427 5. DUE FROM OTHER GOVERNMENTS The City has due from other government receivables from various governments, including the Federal, State and County government. At June 30, 2019, significant receivables due to the City included $2,010,677 from the State of Arizona for State Shared Sales Tax revenues, $294,330 for Auto Tax In-Lieu revenues recorded in the General fund, $1,035,141 Highway User Revenue Fees revenues recorded in the Highway User Revenue Fund, $353,570 under Intergovernmental agreements recorded in the Non-Bond Fund, and $432,994 from federal agencies for housing, transit and security related grant revenues. Most other receivables are comprised of taxes or various grants due from other governments and agencies. 60 6. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2019, follows: Land 384,344,931 23,744,882 - 408,089,813 Total Non-Depreciable Assets 407,685,111 39,545,774 (7,432,738) 439,798,147 Depreciable assets: Buildings & Improvements Equipment; Furniture Vehicles 187,180,737 54,801,154 28,157,459 1,484,618 3,551,071 2,925,349 (793,726) 188,665,355 58,352,225 30,289,082 Street System 759,944,847 15,087,601 - 775,032,448 Park System 96,154,648 3,232,474 - 99,387,122 Total Depreciable Assets at Historical Cost 1,126,238,845 26,281,113 (793,726) 1,151,726,232 Less Accum. Depreciation: Buildings & Improvements Equipment; Furniture Vehicles Street System Park System (76,529,198) (50,027,618) (16,852,716) (486,705,143) (31,111,152) (5,087,337) (1,420,447) (2,090,868) (28,287,075) (2,648,715) 793,726 - (81,616,535) (51,448,065) (18,149,858) (514,992,218) (33,759,867) Total Accum. Depreciation (661,225,827) (39,534,442) 793,726 (699,966,543) Total Depreciable Assets, Net Governmental Activities Capital Assets, Net Business-type Activities: Non-depreciable assets: Work in Progress Land 465,013,018 (13,253,329) - 451,759,689 $ 872,698,129 26,292,445 (7,432,738) 891,557,836 $ 28,347,800 17,449,349 (13,296,899) $ - 30,447,446 18,239,126 $ 15,396,545 789,777 $ Total Non-Depreciable Assets 45,797,149 16,186,322 (13,296,899) 48,686,572 Depreciable assets: Buildings & Improvements Equipment; Furniture Vehicles 80,097,774 18,795,140 17,667,710 1,940,654 2,449,631 (105,272) (1,201,006) 80,097,774 20,630,522 Surface Water System Water Rights Water System Wastewater System 97,942,012 14,301,442 381,439,796 401,137,140 5,390,722 20,573,657 5,558,998 (1,411,637) - 18,916,335 103,332,734 12,889,805 402,013,453 406,696,138 Total Depreciable Assets at Historical Cost 1,011,381,014 35,913,661 (2,717,915) 1,044,576,760 Less Accum. Depreciation: Buildings & Improvements Equipment; Furniture Vehicles Surface Water System Water Rights* Water System Wastewater System (25,062,146) (12,300,889) (7,172,200) (36,123,141) (2,865,166) (154,785,837) (137,333,585) (2,345,125) (2,261,442) (1,160,077) (2,482,950) (228,387) (11,094,947) (10,877,690) 105,272 1,201,006 - (27,407,271) (14,457,059) (7,131,271) (38,606,091) (3,093,553) (165,880,784) (148,211,275) Total Accum. Depreciation (375,642,964) (30,450,618) 1,306,278 (404,787,304) Total Depreciable Assets, Net 635,738,050 5,463,043 (1,411,637) 639,789,456 (14,708,536) $ 688,476,028 Business-Type Activities Capital Assets, Net $ 681,535,199 $ 21,649,365 $ *The City’s agreement with the Gila River Indian Community provides water rights to 7,000 acre-feet of water each year through 2057. 61 Depreciation expense was charged to governmental and business-type functions in the government-wide financial statements as follows: General government Culture and recreation Public safety Development services Highways and streets Public works Human services $ Total depreciation expense $ 3,106,082 4,663,901 2,429,435 101,897 28,896,784 241,969 94,374 Water utility Wastewater utility Solid waste utility Stadium Storm drain utility $ 13,414,962 11,247,584 953,514 2,351,608 2,482,950 Total depreciation expense $ 30,450,618 39,534,442 7. LONG-TERM DEBT A. General obligation bonds General: General obligation (GO) bonds are issued, after approval of the City of Peoria voters at an authorized bond election, to finance the purchase or construction of major capital facilities. GO bonds are backed by the “full faith and credit” of the City and are repaid through the City’s levying of property (ad valorem) taxes. There is no legal limit on the secondary property tax used for debt service on GO bonds. Statutory Debt Limitation: Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for combined water, sewer, light, (after January 1, 1974) parks and open space, and (after December 7, 2006) public safety and transportation purposes may not exceed 20 percent of a City's net limited assessed valuation. Also, outstanding general obligation bonded debt for all other purposes may not exceed 6 percent of a City's net limited assessed valuation. In June 2019, the City issued $30,420,000 of General Obligation Bonds. The Bonds will constitute a portion of the bonds authorized by the voters at special bond elections held in the City on September 12, 2000, May 17, 2005, and November 4, 2008, and will be used for Parks, Recreation, Trails and Open Space; Public Safety, Technology and Municipal Operations; Streets, Bridges, Traffic Control and Transportation; and Drainage. After the sale of these bonds, the City has $60,392,624, $170,796,711 and $352,744,314 remaining unissued general obligation bond authorization from the elections held in 2000, 2005 and 2008 respectively. B. Revenue bonds Water and Sewer Revenue Bonds: Water and Wastewater Revenue Bonds are issued, pursuant to voter authorization, for the construction, acquisition, and equipping of water and wastewater facilities and related systems and infrastructure. The bonds are backed by the revenues of the water and wastewater utilities. C. Municipal Development Authority debt obligations Municipal Development Authority (MDA) debt obligations are issued by a non-profit corporation created by the City for the purpose of financing certain capital construction projects. The MDA issues its own debt obligations, which are repaid through a lease purchase agreement with the City equal to the debt service requirements. The City can utilize the City’s excise tax, state shared revenues and other unrestricted revenues for lease payments. D. Special assessment bonds with governmental commitment Special Assessment Bonds are used to construct projects within special assessment districts created by the City after property owners within these districts agree to be assessed for the costs of debt service on these bonds. Payments made by the assessed property owners within the districts are pledged to pay the debt service on the bonds. In the event of default by a property owner, the lien created by the assessment is sold 62 at public auction, and the proceeds are used to offset the defaulted assessment. If there is no purchase at the public auction, the City is required to buy the property, and pay off the assessment, with funds appropriated from the General Fund. As trustee for improvement districts, the City is responsible for collection of assessments levied against the owners of property within the improvement districts and for disbursement of these amounts for retirement of the respective bonds issued to finance the improvements. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. At June 30, 2019, all outstanding amounts related to special assessments receivable were paid and the outstanding special assessment bonds were fully redeemed. E. Community Facilities District bonds Community Facilities Districts (CFD’s), are special purpose districts created specifically to acquire or construct public infrastructure within specified areas of the City. CFD’s are authorized under state law to issue general obligation (GO) or revenue bonds to be repaid by property (ad valorem) taxes levied on property within the district (for GO debt), or by specified revenues generated within the districts (revenue bonds). CFD’s are created by petition to the City Council by property owners within the area to be covered by the district, and debt may be issued in accordance with relevant state laws and regulations. Operation and maintenance expenditures, bonds and the repayment of bonds issued by these separate legal entities is the responsibility of the district, not the City. As the administrator for the district, the City collects the property taxes and makes the debt payments on behalf of the district. The City Council formed the Vistancia Community Facilities District (VCFD) in October 2002. VCFD was subsequently authorized, by the voters of the district in November 2002, to issue up to $100,000,000 in general obligation bonds to construct public infrastructure within VCFD. VCFD issued general obligation bonds of $21,250,000, $23,550,000 and $22,760,000 in fiscal years 2003, 2005, and 2007, respectively, against this authorization. The VCFD refunded all these obligations during fiscal year 2016 through the issuance of $36,985,000 in general obligation bonds. The City Council formed the Vistancia West Community Facilities District (VWCFD) in August 2014. In December 2014, the VWCFD was authorized through an election to issue up to $9,000,000 of general obligation bonds to construct public infrastructure within the district. VWCFD issued taxable general obligation bonds of $35,000 in fiscal year 2015 and $3,000,000 in fiscal year 2017. F. Pledged revenues The City has pledged certain future revenues to repay specific bonded debt as follows: The City has pledged future water utility and wastewater utility revenues, net of specific operating expenses, to repay $15,780,000 in Revenue Refunding Bonds issued in 2010, $23,280,000 in Revenue Refunding Bonds issued in 2012 and $110,931,833 in Water Infrastructure Financing Authority loans issued between 2002-2017. The various bonds and loans were issued for the purchase or construction of various water or wastewater infrastructure including wells, treatment plants, pumping stations, a water utility and water and wastewater distribution or collection lines. At June 30, 2019, $72,192,295 in bonds and loans remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2019, the pledged revenues, net of operating expenses available for service of this debt were $36,595,039. The debt principal and interest paid on this debt in fiscal year 2019 was $14,432,218. The City has pledged certain revenues for the repayment of $43,430,000 and $3,220,000 in Municipal Development Authority (MDA) Bonds issued in 2011 and 2012 and the Pledged Excise 2018 refunding obligations, respectively. Pledged revenues for these obligations include excise taxes and state shared revenues not specifically reserved by law or other regulation to be expended for other purposes. At June 30, 2019, $2,945,000 of the Pledged Excise 2018 obligation and $32,070,000 of the MDA bonds remained outstanding to be repaid by these future revenues. The obligations were issued to construct various City 63 operational facilities and refund prior MDA bonds. For the fiscal year ended June 30, 2019, the pledged revenues, net of operating expenses available to service this debt were $148,172,862. The debt principal and interest paid on this debt in fiscal year 2019 was $3,497,635. The City has pledged certain revenues for the repayment of $25,755,000 of the Pledged Transportation 2018 refunding obligations. The obligations were issued to refund prior MDA bonds originally issued to construct transportation infrastructure. Pledged revenues for this obligation include transportation sales tax, excise taxes and state shared revenues. At June 30, 2019, $22,740,000 of the Pledged Transportation 2018 obligations remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2019, the pledged revenues, net of operating expenses available to service this debt were $158,921,153. The debt principal and interest paid on this debt in fiscal year 2018 was $3,522,374. G. Direct Purchase and Loan Obligations In September 2017, the City entered into a New Clean Renewable Energy Bond (NCREB) agreement to provide financing for solar renewable energy projects at several locations throughout the City. The City borrowed $5,199,304 for a term of 20 years, at a rate of 4.23%. The majority of the debt service payments will be funded from expected savings on the City’s electricity bills. In the event of default, the Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under this Agreement or the Escrow Agreement or as a secured party in any or all of the Equipment or the Escrow Account or the Delivery Costs Account. H. Tables The following schedule summarizes the City’s long-term liability activity for the year ended June 30, 2019: Beginning Balance Governmental activities: Bonds payable: General obligation bonds MDA debt obligations Direct purchase and loan obligations CFD bonds Total bonds payable $ Net pension and other postemployment benefits liability Compensated absences Deferred bond premium Governmental activities totals Business-type activities: Bonds and loans payable: Revenue bonds WIFA loans Net pension and other postemployment benefits liability Compensated absences Deferred bond premium Business-type activities totals 127,055,000 34,060,000 Additions $ 30,420,000 - Reductions $ 11,295,000 1,990,000 Ending Balance Due Within One Year $ $ 146,180,000 32,070,000 13,815,000 2,080,000 36,514,304 34,325,000 231,954,304 30,420,000 5,752,957 2,985,000 22,022,957 30,761,347 31,340,000 240,351,347 3,631,060 3,200,000 22,726,060 171,841,371 13,783,080 12,483,508 1,678,853 11,104,464 3,146,339 10,866,277 10,927,074 1,378,294 162,653,947 13,960,470 14,251,553 6,618,780 - $ 430,062,263 $ 46,349,656 $ 45,194,602 $ 431,217,317 $ 29,344,840 $ 12,600,000 70,004,830 $ 455,950 $ 4,695,000 7,736,144 $ 7,905,000 62,724,636 $ 3,470,000 7,963,345 $ 16,084,386 1,512,110 783,854 100,985,180 $ 15,689 1,379,746 1,851,385 64 $ 2,051,008 1,284,546 276,792 16,043,490 $ 14,049,067 1,607,310 507,062 86,793,075 $ 843,560 12,276,905 Bonds and loans payable at June 30, 2019 are comprised of the following: Governmental Activities Debt General Obligation Bonds Maturity Dates Series 2007B 7/1/07-20 Series 2010 7/1/10-30 Series 2012A 7/1/12-32 Series 2012B 7/1/12-22 Series 2015A 7/15/16-35 Series 2015B 7/15/16-28 Series 2019 7/15/19-39 Total General Obligation Bonds Outstanding June 30, 2019 Net Interest Rate Issue Amount 4 4.03 3.32 1.75 2.98 2.29 2.65 $ 18,365,000 29,170,000 14,715,000 13,690,000 30,325,000 66,425,000 30,420,000 $203,110,000 $ $ 7,920,000 35,510,000 $ 43,430,000 $ 4.23 2.01 $ $ 1.97 25,755,000 $ 34,174,304 $ 895,000 8,955,000 11,075,000 5,900,000 27,325,000 61,610,000 30,420,000 146,180,000 Municipal Development Authority Debt Obligations Series 2011 7/1/12-26 3.9 Series 2012 7/1/13-32 3.3 Total Municipal Development Authority Debt Obligations $ 4,750,000 27,320,000 32,070,000 Direct Purchase and Loan Obligations Taxable NCREBs 9/1/1937 Pledged Excise 2018 7/15/2025 Pledged Transportation 1/15/2026 2018 Total Direct Purchase and Loan Obligations 5,199,304 3,220,000 $ 5,076,347 2,945,000 22,740,000 30,761,347 Community Facility District Bonds VCFD – Series 2015 7/15/16-26 VWCFD – Series 2016 7/15/18-29 Total Community Facility District Bonds 3.47 4.15 65 $ 36,985,000 3,000,000 $ 39,985,000 $ $ 28,460,000 2,880,000 31,340,000 Business-Type Activities Debt Revenue Bonds Maturity Dates Net Interest Rate WWW Series 2010 7/1/11-20 3.21 WWW Series 2012 7/1/12-21 1.6 Issue Amount Outstanding June 30, 2019 $ $ 15,780,000 2,710,000 23,280,000 Total Revenue Bonds 5,195,000 $ 39,060,000 $ 7,905,000 $ 1,964,789 $ 522,738 WIFA Loans WIFA Series 2002 7/1/03-22 3.94 WIFA Series 2006 7/1/08-26 3.06 27,183,342 13,911,775 WIFA Series 2008 7/1/09-27 3.3 42,741,541 23,520,626 WIFA Series 2008 7/1/10-28 3.48 8,575,253 5,198,103 WIFA Series 2009 7/1/10-28 3.48 727,612 432,389 WIFA Series 2009 7/1/10-29 2 8,030,340 4,750,916 WIFA Series 2009 7/1/10-28 2 3,733,794 2,119,762 WIFA Series 2009 7/1/10-29 3.27 4,371,597 2,681,611 WIFA Series 2009 7/1/10-29 3.23 757,624 460,819 WIFA Series 2015 7/15/16-35 2.4 12,389,991 10,688,556 WIFA Series 2017 7/15/18-36 2.65 455,950 (1,562,659) Total WIFA loans $ 110,931,833 $ 62,724,636 The following table discloses the bond debt service requirements as of June 30, 2019, segregating principal and interest, for the next five years and in five-year increments thereafter. Governmental Activities Notes from Direct Borrowings and Direct Placements Bonds Fiscal year Principal 2020 2021 2022 2023 2024 2025-2029 2030-2034 2035-2039 2040 Totals $ 19,095,000 16,065,000 16,665,000 17,310,000 16,770,000 75,645,000 33,225,000 12,890,000 1,925,000 $209,590,000 Business-type Activities* Interest Principal Interest Principal Interest $ 7,479,045 7,275,502 6,638,009 5,931,916 5,157,340 14,787,406 4,801,783 1,099,120 28,875 $53,198,996 $ 3,631,060 3,714,912 3,794,051 3,873,485 3,948,221 8,868,326 1,492,185 1,439,107 $30,761,347 $ 716,130 640,381 562,822 483,444 402,279 982,787 483,371 136,125 $4,407,339 $ 11,433,344 11,832,361 9,238,403 8,686,684 8,798,621 40,792,586 18,856,223 9,549,200 $119,187,422 $ 3,287,546 2,907,917 2,574,555 2,306,543 2,049,789 6,339,157 2,469,911 380,399 $22,315,817 *Includes required principal and estimated interest payments for an approved WIFA loan for the Pyramid Peak Water Treatment Plant expansion. Although the loan only has minimal draws as of 6/30/19, the principal payments are contractual and the loan is expected to draw in FY2020. Long-term compensated absences and net pension and OPEB liabilities of governmental activities are expected to be liquidated by the operating funds (primarily the General Fund, Highway User Revenue Fund, Transit Fund and utility funds) as they come due. 66 8. RISK FINANCING ACTIVITIES The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters; workers’ compensation; and health insurance. The City maintains a Risk Management Fund, an Employee Benefits Trust Fund and a Workers’ Compensation Trust Fund (presented in the Self-Insurance Fund of the Internal Service Funds) to account for and finance its uninsured risks of loss. Premiums are paid into the internal service funds by the other operating funds and are available to pay claims, claim reserves and administrative costs of the program. These interfund premiums are used to fund claim expenses reported in the internal service funds. The City uses third party administrators to monitor the workers’ compensation and health insurance claims programs. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. Risk management The City is self-insured for public liability up to $1,000,000 with excess coverage insurance policies purchased through commercial insurance carriers covering individual claims in excess of these amounts up to $25,000,000. Also, the City is self-insured for damage to City vehicles valued up to $100,000. Vehicles with a value in excess of $100,000 have a $5,000 deductible. City property is insured through commercial insurance carriers with a $50,000 deductible. The operating funds of the City pay monthly premiums to the risk management fund based upon a model taking into consideration multiple factors including prior loss experience, staffing, liability exposures, and operating budget. Premium payments to insurance carriers are made directly from the risk management 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. Workers’ compensation On July 1, 2009, the City established a workers’ compensation trust fund for work-related injuries to employees. For workers’ compensation insurance, the City is self-insured up to $1,250,000 per claim on public safety employees and $1,250,000 for all other employees up to an aggregate stop loss of $5,228,838 for fiscal year 2019. Commercial insurance is purchased to cover claims above the self-insurance amounts. Operating funds with employees covered under the workers’ compensation insurance program pay monthly premiums to the workers’ compensation fund based upon staffing levels. Premium payments to insurance carriers, as well as third party administrator costs are made directly from the workers’ compensation trust fund. Employee wages while off work for workers’ compensation injuries (2/3rds of weekly wages) are also paid from this fund. There have been no settlements paid in excess of insurance in the last three years, nor has insurance coverage been significantly reduced in recent years. Health insurance On January 1, 2010, the City established a health insurance trust fund for health insurance coverage for City employees and dependents. The City is self-insured for employee health claims up to $200,000 per claimant. Commercial insurance is purchased for claims in excess of those limits. Premiums are collected through contributions from employee paychecks and department budgets. COBRA participants contribute 100% of the premiums for their insurance coverage. Premiums for the medical, vision, dental, and life insurance plans are determined prior to each renewal period by estimating the costs of claims and administration of the plan based on a number of factors including: the demographics of the group, previous claims history, plan design changes and any new mandated benefits. Premium payments to insurance carriers, as well as third party administrator costs are made directly from the health insurance trust fund. There have been no settlements in excess of insurance in the past three years, nor has insurance coverage been significantly reduced in recent years. 67 Estimated liability – The total claims liability of $8,029,984 reported in the Self-Insurance Fund at June 30, 2019, is based on the requirements of Governmental Accounting Standards Board Statement #10, which requires that liabilities be reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. The claims liability consists of $1,094,321 for liability/property claims, $5,395,039 for workers’ compensation claims and $1,540,624 for health insurance claims. The claims liability includes an estimated amount for claims that have been incurred but not reported (IBNR). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends, including frequency and amount of payouts, and other economic and social factors. Non-incremental claims adjustment expenses are not included in the calculation. Changes in the Self-Insurance Fund’s claims liability amount (claims only, exclusive of other insurance expenses) during the last two fiscal years are as follows: Fiscal Year 2018: Risk management Workers' comp Health insurance Beginning of Fiscal Year Liability $ 1,113,384 2,520,841 1,286,884 $ 4,921,109 Changes in Estimates $ 9,035 939,818 88,620 $ 1,037,473 Current Year Claims $ 424,960 1,382,139 16,500,272 $ 18,307,371 Claims Payments $ (424,960) (1,382,139) (16,500,272) $(18,307,371) Balance at Fiscal Year-end $ 1,122,419 3,460,659 1,375,504 $ 5,958,582 Beginning of Fiscal Year Liability $ 1,122,419 3,460,659 1,375,504 $ 5,958,582 Changes in Estimates $ (28,098) 1,934,380 165,120 $ 2,071,402 Current Year Claims $ 1,258,775 2,441,415 16,572,571 $ 20,272,761 Claims Payments $ (1,258,775) (2,441,415) (16,572,571) $(20,272,761) Balance at Fiscal Year-end $ 1,094,321 5,395,039 1,540,624 $ 8,029,984 Fiscal Year 2019: Risk management Workers' comp Health insurance 9. PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS The City of Peoria contributes to the pension plans described below. The City of Peoria contributes to the Elected Officials Retirement Plan; however the plan is not described below because of its relative insignificance to the financial statements. The plans are component units of the State of Arizona. A summary of pension and other postemployment benefit related items as of and for the year ended June 30, 2019, is presented below: Plan ASRS Governmental Activities Business-Type Activities PSPRS - Police PSPRS - Fire Net Pension and Other Postemployment Benefits Liability Other Postemployment Benefits Asset $ $ $ 62,419,380 14,049,067 64,875,025 35,359,542 176,703,014 $ 162,875 36,658 199,533 68 Deferred Outflows of Resources $ $ 10,736,823 2,416,516 16,286,083 12,762,459 42,201,881 Deferred Inflows of Resources Pension and Other Postemployment Expense $ $ $ 10,019,330 2,255,031 2,094,710 1,488,988 15,858,059 $ 1,751,091 695,907 12,275,014 6,727,611 21,449,623 The City of Peoria reported $17,033,184 of pension and OPEB contributions as expenditures in the governmental funds related to all plans to which it contributes. A. Arizona State Retirement System Plan Description. City of Peoria employees not covered by the other pension plans described after this section participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing 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 the ASRS website at www.azasrs.gov. Benefits Provided. The ASRS provides retirement, health insurance premium supplement, long-term disability, and survivor benefits. State statute establishes benefit terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: Years of service and age required to receive benefit Retirement Initial Membership Date: Before July 1, 2011 On or After July 1, 2011 Sum of years and age equals 80 30 years, age 55 10 years, age 62 25 years, age 60 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 months of last 120 months Highest 60 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 members’ death. For retired members, the retirement benefit option chosen determines the survivor benefit. 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. 69 Contributions. In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. For the current fiscal year, statute required active ASRS members to contribute at the actuarially determined rate of 11.80 percent (11.64 percent for retirement & health insurance benefits and 0.16 percent for long-term disability) of the members’ annual covered payroll, and the City of Peoria was required by statute to contribute at the actuarially determined rate of 11.80 percent (11.18 percent for retirement, 0.46 percent for health insurance premium benefit, and 0.16 percent for longterm disability) of the members’ annual covered payroll. These percentages led to City’s contributions for the year ended June 30, 2019 of $6,307,495, $259,521, and $90,268 to the pension, health insurance premium benefit, and long-term disability plans, respectively. In addition, the City of Peoria was required by statute to contribute at the actuarially determined rate of 10.53 percent (10.41 percent for retirement, 0.06 percent for health insurance premium benefit, and 0.06 percent for long-term disability) of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to ASRS. Liability. At June 30, 2019, the City of Peoria reported the following asset and liabilities for its proportionate share of the ASRS’ net/pension/OPEB asset or liability. The net asset and net liabilities were measured as of June 30, 2018. The total liability used to calculate the net asset or liability was determined using update procedures to roll forward the total liability from an actuarial valuation as of June 30, 2017, to the measurement date of June 30, 2018. The total pension liability as of June 30, 2018, reflects changes in actuarial assumptions listed on the results of an actuarial experience study for the 5-year period ended June 30, 2016, including decreasing the discount rate from 8% to 7.5%, changing the projected salary from 3%-6.75% to 2.7%-7.2%, decreasing the inflation rate from 3% to 2.3%, and changing the mortality rate. ASRS Pension Health insurance premium benefit Long-term disability Net pension/OPEB (asset) liability $ 76,182,651 (199,533) 287,858 The City of Peoria’s proportion of the net asset or liability was based on a projection of the City’s actual contributions to the plan relative to the total of all participating employers contribution for the year ended June 30, 2018. The City of Peoria’s proportions measured as of June 30, 2018 and the change from its proportions measured as of June 30, 2017 were: ASRS Proportion Calc Pension Health insurance premium LTD Proportion June 30, 2018 % 0.54625 0.55412 0.55092 70 Increase (decrease) from June 30, 2017 (0.025) (0.024) (0.018) Pension/OPEB Expense and Deferred Outflows/Inflows of Resources. For the year ended June 30, 2019, the City of Peoria recognized the following pension and OPEB expense for ASRS. ASRS Pension/OPEB expense Pension Health insurance premium benefit Long-term disability $ 2,144,928 199,428 102,642 Liability. At June 30, 2019, the City of Peoria reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB from the following sources: Health insurance premium benefit Pension Deferred Deferred Deferred Deferred Deferred outflows of inflows of outflows of inflows of outflows of inflows of resources resources resources resources resources resources $ $ Differences between expected and actual $ 2,098,770 experience Changes of assumptions or 2,015,932 other inputs Difference between projected and actual earnings on plan investments Changes in proportion and differences between City contributions and 1,926,840 proportionate share of contributions City contributions subsequent to the 6,307,495 measurement date Total Long-term disability Deferred $ 12,349,037 $ 419,982 $ - 6,754,638 384,802 1,832,012 - 2,648,275 $ 11,654,907 $ $ 184,161 7,362 - 62,349 - 398,598 - 27,882 - 1,909 - 6,904 259,521 - 90,268 - 644,323 $ 584,668 $ 159,979 $ 34,786 The deferred outflows of resources related to ASRS pensions and OPEB resulting from contributions subsequent to the measurement date as reported in the table above will be recognized as an increase of the net asset or a reduction of the net liability in the year ended June 30, 2020. 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: Health insurance Long-term Year ending June 30 Pension premium benefit disability 2020 $ 912,088 $ (77,688) $ (116) 2021 (2,924,838) (77,688) (115) 2022 (2,779,028) (77,689) (115) 2023 (821,587) 7,238 7,353 2024 25,961 8,722 Thereafter 19,196 71 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 Discount rate Projected salary increases Inflation Permanent base increases Mortality rates Recovery Rates Healthcare cost trend rate June 30, 2017 June 30, 2018 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 2012 GLDT Not applicable The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2016. The long-term expected rate of return on ASRS pension plan investments was determined to be 5.07 percent (excluding any expected inflation) 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 weighting the expected future real rates of return by the target asset allocation percentage, excluding any expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class of ASRS are summarized in the following table: Asset Class Equity Fixed income Real estate Total Target Allocation 50% 30% 20% 100% Long-Term Contribution to Expected Real Rate of Return 2.75% 1.15% 1.17% 5.07% Discount Rate. The discount rate used to measure the ASRS total pension/OPEB liability was 7.50 percent, which is more than the long-term expected rate of return of 5.07 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statute. Based on those assumptions, the 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. Sensitivity of the Proportionate Share of the Net Pension/OPEB (Asset) Liability to Changes in the Discount Rate. The following table presents the City of Peoria’s proportionate share of the net pension/OPEB (asset) liability calculated using the discount rate of 7.50 percent, as well as what the 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 or 1-percentage-point higher than the current rate: Net pension liability Net insurance premium benefit liability (asset) Net long-term disability liability 1% Decrease (6.50%) $108,600,122 706,944 326,223 72 Current Discount Rate (7.50%) $76,182,651 (199,533) 287,858 1% Increase (8.50%) $49,098,378 (971,714) 250,633 Plan Fiduciary Net Position. Detailed information about the plans’ fiduciary net position is available in the separately issued ASRS financial report. The report is available on the ASRS website at www.azasrs.gov. B. Public Safety Personnel Retirement System Plan Descriptions. City of Peoria public safety employees who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS). The PSPRS administers agent and cost-sharing multiple-employer defined benefit pension plans and 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. The PSPRS issues a publicly available financial report that includes their financial statements and required supplementary information. The report is available on the PSPRS website at www.psprs.com. Benefits Provided. The PSPRS provides retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefits terms. Certain retirement and disability benefits are calculated on the basis of age, average monthly compensation, and service credit as follows. See the publicly available PSPRS financial report for additional benefits information. Years of service and age required to receive benefit Final average salary is based on Normal retirement Accidental disability retirement Survivor benefit: Retired members Active members Retirement Initial Membership Date: On or After January 1, 2012 and Before January 1, 2012 before July 1, 2017 20 years of service and any age or 25 years of service or 15 years of 15 years of service and age 62 credited service, and age 52.5 Highest 36 months of last 20 years Highest 60 months of last 20 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% 50% or normal retirement, whichever is greater 80% to 100% of retired member’s pension benefit 80% to 100% of accidental disability retirement benefit or 100% of average monthly compensation if death was the result of injuries received on the job Retirement and survivor benefits are subject to automatic cost-of-living adjustments. The adjustments are based on inflation for PSPRS. In addition, the Legislature may enact permanent one-time benefit increases after a Joint Legislative Budget committee analysis of the increase’s effect on the plan. 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 $150 per month to $260 per month depending on the age of the member and dependents. 73 Employees Covered by Benefit Terms. At June 30, 2019, the following employees were covered by the agent pension plan’s benefit terms: PSPRS - POLICE Pension Health PSPRS - FIRE Pension Health Inactive employees or beneficiaries currently receiving benefits 93 93 37 37 Inactive employees entitled to but not yet receiving benefits 34 8 20 18 Active employees 165 165 149 149 Total 292 266 206 204 Contributions and Annual OPEB Cost. 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. Contributions rates for the year ended June 30, 2019, are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members - pension City of Peoria Pension Health Insurance PSPRS Police PSPRS Fire 11.65% 11.65% 44.01% 0.39% 34.11% 0.28% In addition, the City of Peoria was required by statute to contribute at the actuarially determined rate of 29.21 percent for the PSPRS Police, and 18.26 percent for the PSPRS Fire, of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to the PSPRS. For the agent plans, the contributions to the pension plan and contributions for the health insurance premium benefit for the year ended were: PSPRS Police PSPRS Fire $7,436,675 $4,714,745 65,900 38,702 Pension: Contributions made Health insurance premium benefit: Contributions made Liability. At June 30, 2019, the City of Peoria reported the following assets and liabilities. PSPRS - Police PSPRS – Fire Net pensionliability Net OPEB liability $64,643,144 35,298,399 $231,881 61,143 74 The net assets and net liabilities were measured as of June 30, 2018, and the total liability used to calculate the net asset or liability was determined by an actuarial valuation as of that date. Actuarial Assumptions. The significant actuarial assumptions used to measure the total pension/OPEB liability are as follows: Actuarial Valuation Date Actuarial Cost Method Discount Rate Asset Valuation Method Payroll Growth Inflation Salary Increases Mortality Health Care Trend Rates June 30, 2018 Entry Age Normal 7.40% Fair Value of Assets 3.50% for pensions/not applicable for OPEB 2.50% for pensions/not applicable for OPEB 3.50%-7.50%, including inflation, for pensions/not applicable for OPEB RP-2014 mortality tables projected backwards 1 year to 2013 with MP-2014 (110% of female healthy annuitant mortality table). Future mortality improvements are assumed each year using 75% of scale MP-2016. None Actuarial assumptions used in the June 30, 2018, valuation were based on the results of an actuarial experience study of the period July 1, 2011 to June 30, 2016. The long-term expected rate of return on PSPRS pension plan investments was determined to be 7.40 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: Long-Term Expected Target Geometric Real Allocation Rate of Return* Asset Class 16% 7.60% U.S. Equity 14% 8.70% Non-U.S. Equity 12% 5.83% Private Equity 5% 1.25% Fixed Income 16% 6.75% Private Credit 12% 3.96% GTS 9% 4.52% Real Assets 10% 3.75% Real Estate 4% 5.00% Risk Parity 2% .25% Short Term Inv 100% Total * Geometric Real Rate of Return. Based on inflation assumption of 2.75%. Discount Rates. At June 30 2018, the discount rate used to measure the PSPRS total pension/OPEB liabilities was 7.40 percent for Tier 1/2 members and 7.00 percent for Tier 3 members. The projection of cash flows used to determine the PSPRS discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, PSPRS 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. 75 Changes in the Net Pension/OPEB Liability Pension Increase (decrease) Plan Total Pension Fiduciary Net Liability Position PSPRS - POLICE Balances at June 30, 2018 Changes for the year: Service cost Interest on the total liability Changes of benefit terms Differences between expected and actual experience in the measurement of the liability Changes of assumptions or other inputs Contributions – employer Contributions – employee Net investment income Benefit payments, including refunds of employee contributions Hall/Parker Settlement Administrative expense Other changes Net changes Balances at June 30, 2019 $ 125,416,338 3,437,849 9,195,638 - $ 62,148,414 - $ 63,267,924 3,437,849 9,195,638 - $ 2,238,925 $ 1,950,259 $ 288,666 45,757 164,184 - - 45,757 164,184 - (1,331,798) - 6,622,615 1,379,152 4,232,822 (1,331,798) (6,622,615) (1,379,152) (4,232,822) (103,677) - 31,038 134,052 (103,677) (31,038) (134,052) (5,739,761) 5,561,928 $ 130,978,266 (5,739,761) (2,283,693) (65,122) 40,695 4,186,708 $ 66,335,122 2,283,693 65,122 (40,695) 1,375,220 $ 64,643,144 (86,192) 20,072 $ 2,258,997 (86,192) (2,040) (1) 76,857 $ 2,027,116 2,040 1 (56,785) 231,881 Net Pension Liability Health insurance premium benefit Increase (decrease) Plan Net OPEB Total OPEB Fiduciary Net (asset) Liability Position Liability Pension Increase (decrease) Plan Total Pension Fiduciary Net Liability Position PSPRS - FIRE Balances at June 30, 2018 Changes for the year: Service cost Interest on the total liability Changes of benefit terms Differences between expected and actual experience in the measurement of the liability Changes of assumptions or other inputs Contributions – employer Contributions – employee Net investment income Benefit payments, including refunds of employee contributions Hall/Parker Settlement Administrative expense Other changes Net changes Balances at June 30, 2019 Net Pension Liability Health insurance premium benefit Increase (decrease) Plan Net OPEB Total OPEB Fiduciary Net (asset) Liability Position Liability $ 95,899,139 3,070,924 7,066,051 - $ 60,838,547 - $ 1,660,580 $ $ 35,060,592 3,070,924 7,066,051 - $ 1,740,482 $ 79,902 35,268 128,515 - - 35,268 128,515 - (1,450,577) - 4,749,672 1,439,943 4,205,458 (1,450,577) (4,749,672) (1,439,943) (4,205,458) (49,429) - 19,805 115,059 (49,429) (19,805) (115,059) (3,894,840) 4,791,558 $ 100,690,697 (3,894,840) (1,926,795) (64,663) 44,976 4,553,751 $ 65,392,298 1,926,795 64,663 (44,976) 237,807 $ 35,298,399 (42,867) 71,487 $ 1,811,969 (42,867) (1,751) 90,246 $ 1,750,826 1,751 (18,759) 61,143 76 $ Sensitivity of the Net Pension/OPEB (Asset) Liability to Changes in the Discount Rate. The following table presents City of Peoria’s net pension/OPEB (assets) liabilities calculated using the discount rates noted above, as well as what the 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: 1% Decrease Current Discount Rate 1% Increase PSPRS – Police Rate Net pension (asset) liability Net OPEB (asset) liability 6.40% $ 84,225,604 519,791 7.40% $ 64,643,144 231,881 8.40% $ 48,845,355 (6,579) PSPRS – Fire Rate Net pension (asset) liability Net OPEB (asset) liability 6.40% $ 50,513,791 302,124 7.40% $ 35,298,399 61,143 8.40% $ 23,004,887 (137,722) Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in the separately issued PSPRS financial report. The report is available on the PSPRS website at www.psprs.com. Expense. For the year ended June 30, 2019, the City of Peoria recognized the following pension and OPEB expense: Pension Expense $ 12,209,293 6,681,317 PSPRS - Police PSPRS - Fire OPEB Expense $ 65,721 46,294 Deferred Outflows/Inflows of Resources. At June 30, 2019, the City of Peoria reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB from the following sources: Health Insurance Benefit Premium Pension Deferred Outflows of Resources PSPRS – Police Differences between expected and actual experience $ Changes of assumptions or other inputs Net difference between projected and actual earnings on plan investments Contributions subsequent to the measurement date Total $ Deferred Inflows of Resources Deferred Outflows of Resources Deferred Inflows of Resources 3,364,635 $ 1,861,751 $ $ 4,788,429 - - 105,597 617,403 - - 38,923 7,436,675 - 65,900 - 16,207,142 $ 1,861,751 77 $ 13,041 78,941 $ 88,439 232,959 Health Insurance Benefit Premium Pension Deferred Outflows of Resources PSPRS – Fire Differences between expected and actual experience $ Changes of assumptions or other inputs Deferred Inflows of Resources Deferred Outflows of Resources Deferred Inflows of Resources 2,195,699 $ 1,302,112 $ $ 5,044,063 - - 109,642 631,794 - - 32,791 4,714,745 - 38,702 - 12,586,301 $ 1,302,112 Net difference between projected and actual earnings on plan investments Contributions subsequent to the measurement date Total $ $ 137,456 176,158 $ 44,443 186,876 The amounts reported as deferred outflows of resources related to pension and OPEB resulting from 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, 2020. 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: OPEB Pension Year ending June 30: 2020 2021 2022 2023 2024 Thereafter PSPRS - Police $ 3,568,576 2,025,509 1,058,043 503,366 (217,004) (29,774) PSPRS - Fire $ 1,950,182 1,561,431 832,698 1,185,564 696,586 342,983 PSPRS - Police $ (52,172) (52,172) (52,172) (35,945) (15,238) (12,249) PSPRS - Fire $ (12,518) (12,518) (12,518) 255 (1,127) (10,994) 10. DEFERRED COMPENSATION PLAN The City offers deferred compensation plans to its employees and management employees, created in accordance with Internal Revenue Code Section 457 and Section 401a. The plans permit participants to defer contributions into the plan until future years. The deferred compensation is not available to employees, under either plan, until termination, retirement, death or unforeseeable emergency. The City’s fiduciary responsibility is that of exercising “due care” in selecting a third-party administrator. Federal legislation requires that Section 457 and 401a plan assets be held in trust for employees. This means that employee assets held in Section 457 and 401a plans are not the property of the City and are not subject to claims of the City’s general creditors. Also, the City exercises no administrative control nor makes investment decisions. Therefore, the deferred compensation assets are not included in the City’s Basic Financial Statements. 78 11. CONTINGENCIES, COMMITMENTS AND OTHER CLAIMS The City is involved in litigation arising in the ordinary course of its operations. The City believes that its ultimate liability, if any, in connection with these matters will not have a material adverse effect on the City's financial position, changes in financial position, or liquidity. The City is self-insured for the first $1,000,000 of any occurrence and then has additional coverage up to $25.0 million. 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 has development agreements where, in return for developers constructing public infrastructure, the City agreed to reimburse the developer for the cost of such infrastructure at some future time contingent on the collection of impact fees and sales tax revenues. The City had the following significant commitments as of June 30, 2019: • • • • • • • $6,608,402 in the Water utility fund for drainage improvements, the construction of recharge wells, and construction of new a booster pump station. $1,719,082 in the Wastewater Utility fund for pipeline rehabilitation. $1,358,208 in the Highway User Revenue Fund for the LED street light conversion project. $1,797,327 in the Transportation Sales Tax fund for streets improvements. $17,261,809 in the GO Bond fund for construction of the Northern Community Park. $4,061,199 in the Development Fee fund for construction of the Northern Community Park. $9,400,000 in the Non-Bond fund for construction of the Northern Community Park. 12. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES At June 30, 2019, there was an interfund loan from the General Fund to the Storm Drain Utility Fund to cover a deficit cash balance in that fund. The loan is expected to be repaid in the following year. The interfund transfers generally fall within one of the following categories: 1) debt service payments made from a debt service fund but funded from an operating fund; 2) subsidy transfers; 3) transfers to fund internal service equipment replacement funds; or 4) capital assets purchased or constructed in one fund, but capitalized in another. There were no significant transfers during fiscal year 2019 that were either nonroutine in nature or inconsistent with the activities of the fund making the transfer. 79 The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2019: Fund Governmental funds: General Fund Highway User Revenue Fund Transportation Sales Tax Fund Non-Major Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Storm Drain Utility Fund Total enterprise funds Internal Service funds Grand totals $ $ Transfers out Transfers in 6,576,044 2,817 6,847,374 21,574,070 35,000,305 $ 25,763,110 10,849,514 36,612,624 3,530,980 357,169 1,042 1,003 1,133,173 5,023,367 4,180,046 1,132,864 2,579,259 2,000,000 5,712,123 1,878,971 44,203,718 $ 44,203,718 13. STABILIZATION ARRANGEMENTS The committed and assigned fund balances of the governmental funds are shown on the fund financial statements. The following table presents the City’s stabilization reserves included in the proprietary fund financial statements at June 30, 2019: Water Utility Fund: Working capital policy reserve Rate stabilization Debt stabilization System asset maintenance Capital equipment replacement $ Wastewater Utility Fund: Working capital policy reserve Rate stabilization Debt stabilization System asset maintenance Capital equipment replacement 6,975,264 2,134,805 5,161,644 8,893,673 1,066,924 24,232,310 2,928,953 1,066,748 2,124,896 8,519,459 880,932 15,520,988 Solid Waste Utility Fund: Working capital policy reserve Capital equipment replacement 2,559,923 1,555,108 4,115,031 Stadium Fund: Capital equipment replacement Total enterprise funds $ Internal Service Funds: Capital equipment replacement Risk management purpose Total internal service funds $ $ 80 431,292 44,299,621 12,087,041 5,617,328 17,704,369 14. SEGMENT INFORMATION FOR ENTERPRISE FUNDS Both the Water Utility Fund and the Wastewater Utility Fund have revenue streams pledged in support of outstanding revenue bonds but since both segments are discretely presented in the proprietary fund financial statements, all required segment information is presented on the face of those statements. 15. SUBSEQUENT EVENTS On September 5, 2019, the Vistancia West Community Facilities District issued $2,590,000 of General Obligation Bonds, Series 2019. On September 13, 2019, the City entered into a loan agreement with the Arizona Water Infrastructure Finance Authority for $6,288,130. The loan will be used for the Section 12 local drainage improvements and carries an overall interest rate of 1.602% and will be repaid using ad valorem property tax collections of the City. 81 82 Required Supplementary Information CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE NET PENSION/OPEB LIABILITY COST-SHARING PLANS JUNE 30, 2019 ASRS-Pension 2019 (2018) Proportion of the net pension liability Proportionate share of the net pension liability Covered payroll Proportionate share of the net pension liability as a percentage of its employee payroll Plan fiduciary net position as a percentage of the total pension liability $ $ 0.546250% 76,182,651 54,343,055 2018 (2017) $ $ 140.19% 73.40% 0.571460% 89,022,329 53,419,833 Reporting Fiscal Year (Measurement Date) 2017 (2016) $ $ 0.542460% 87,558,493 50,820,065 166.65% 69.92% 172.29% 67.06% 2016 (2015) $ $ 0.526670% 82,036,552 47,561,194 0.520455% $ 77,009,675 $ 46,266,286 172.49% 68.35% 166.45% 69.49% NOTE: The pension schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. Reporting Fiscal Year (Measurement Date) 2018 (2017) 2019 (2018) ASRS-Health insurance premium benefit Proportion of the net OPEB (assset) Proportionate share of the net OPEB (asset) Covered payroll Proportionate share of the net OPEB (asset) as a percentage of its employee payroll Plan fiduciary net position as a percentage of the total OPEB liability $ $ 0.554120% (199,533) 54,343,055 $ $ -0.37% 102.20% 0.577940% (314,630) 53,419,833 -0.59% 103.57% NOTE: The health insurance premium benefit schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. Reporting Fiscal Year (Measurement Date) 2019 (2018) 2018 (2017) ASRS-Long-term disability Proportion of the net OPEB liability Proportionate share of the net OPEB liability Covered payroll Proportionate share of the net OPEB liability as a percentage of its employee payroll Plan fiduciary net position as a percentage of the total OPEB liability $ $ 0.550920% 287,858 54,343,055 $ $ 0.53% 77.83% 0.569260% 206,344 53,419,833 0.39% 84.44% NOTE: The long-term disability benefit schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. See accompanying notes to pension/OPEB plan schedules 83 2015 (2014) CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AGENT PLANS JUNE 30, 2019 Public Safety Personnel Retirement System 2019 (2018) Peoria Police Department Total pension liability Service cost Interest on the total pension liability Changes in 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 Hall/Parker Settlement Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ $ $ $ Net pension liability - ending (a)-(b) Plan fiduciary net position as a percentage of the total pension liability Covered payroll Net pension liability as a percentage of covered payroll $ 3,437,849 9,195,638 - 2018 (2017) $ 3,497,564 8,207,737 1,019,089 Reporting Fiscal Year (Measurement Date) 2017 (2016) $ 2,658,484 7,450,121 6,569,592 2016 (2015) $ 2,557,053 7,075,581 - 2015 (2014) $ 2,556,976 6,074,980 1,228,208 (1,331,798) - 5,141,159 2,469,996 (1,372,059) 4,270,128 341,776 - (672,105) 8,103,978 (5,739,761) 5,561,928 125,416,338 130,978,266 (5,213,832) 15,121,713 110,294,625 125,416,338 (5,716,802) 13,859,464 96,435,161 110,294,625 (4,791,028) 5,183,382 91,251,779 96,435,161 (4,300,112) 12,991,925 78,259,854 91,251,779 6,622,615 1,379,152 4,232,822 (5,739,761) (2,283,693) (65,122) 40,695 4,186,708 62,148,414 66,335,122 $ $ $ 5,122,411 2,723,948 6,734,348 (5,213,832) (59,988) (21,848) 9,285,039 52,863,375 62,148,414 $ $ $ 4,729,872 1,732,502 320,234 (5,716,802) (46,480) 37,100 1,056,426 51,806,949 52,863,375 $ $ $ 3,254,563 1,689,030 1,821,818 (4,791,028) (44,835) (56,762) 1,872,786 49,934,163 51,806,949 $ $ $ 2,907,800 1,491,406 5,954,387 (4,300,112) (1,313,936) 4,739,545 45,194,618 49,934,163 64,643,144 63,267,924 57,431,250 44,628,212 41,317,616 50.65% 49.55% 47.93% 53.72% 54.72% 16,153,506 $ 400.18% 15,387,963 $ 13,992,947 411.15% 410.43% $ 13,449,859 331.81% NOTE: The pension schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. See accompanying notes to pension/OPEB plan schedules 84 $ 13,035,510 316.96% CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABIILTY AND RELATED RATIOS AGENT PLANS JUNE 30, 2019 Public Safety Personnel Retirement System 2019 (2018) Peoria Fire Department Total pension liability Service cost Interest on the total pension liability Changes in 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 Hall/Parker Settlement Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ $ $ $ Net pension liability - ending (a)-(b) Net pension liability as a percentage of covered payroll $ $ 2,379,652 5,434,649 6,700,272 $ 2,056,517 4,952,998 - 2015 (2014) $ 2,013,025 4,197,224 453,523 1,834,916 1,708,934 86,478 3,273,059 809,490 - 660,641 3,815,327 (3,894,840) 4,791,558 95,899,139 100,690,697 (2,663,473) 10,853,610 85,045,529 95,899,139 (1,739,905) 16,134,205 68,911,324 85,045,529 (1,949,881) 5,869,124 63,042,200 68,911,324 (1,117,704) 10,022,036 53,020,164 63,042,200 4,749,672 1,439,943 4,205,458 (3,894,840) (1,926,795) (64,663) 44,976 4,553,751 60,838,547 65,392,298 $ $ $ 12,085,624 3,596,394 1,593,634 6,425,067 (2,663,473) (57,251) 671 8,895,042 51,943,505 60,838,547 $ $ $ 35,060,592 64.94% $ 3,111,892 6,395,230 466,111 2016 (2015) (1,450,577) - 35,298,399 Plan fiduciary net position as a percentage of the total pension liability Covered payroll 3,070,924 7,066,051 - 2018 (2017) Reporting Fiscal Year (Measurement Date) 2017 (2016) 3,162,518 1,375,202 298,901 (1,739,905) (43,410) 87,273 3,140,579 48,802,926 51,943,505 292.07% 11,543,146 $ $ 33,102,024 63.44% $ $ 11,796,929 303.74% 280.60% (1,949,881) (42,126) (35,356) 2,788,235 46,014,691 48,802,926 85 $ 11,068,029 181.68% 1,885,422 1,168,186 5,369,649 (1,117,704) (1,063,021) 6,242,532 39,772,159 46,014,691 17,027,509 70.82% $ NOTE: The pension schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. See accompanying notes to pension/OPEB plan schedules $ 20,108,398 61.08% $ 1,866,365 1,238,541 1,710,692 $ 72.99% $ 10,934,868 155.72% CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS AGENT PLANS JUNE 30, 2019 Reporting Fiscal Year (Measurement Date) 2019 (2018) 2018 (2017) Public Safety Personnel Retirement System Peoria Police Department Total OPEB liability Service cost Interest on the total OPEB liability Changes in 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, including refunds of employee contributions Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ $ $ $ 45,757 164,184 - $ 50,779 167,590 6,476 (103,677) - 19,591 (159,009) (86,192) 20,072 2,238,925 2,258,997 (111,290) (25,863) 2,264,788 2,238,925 31,038 134,052 (86,192) (2,040) (1) 76,857 1,950,259 2,027,116 $ $ $ 66,083 208,162 (111,290) (1,842) 161,113 1,789,146 1,950,259 Net OPEB liability - ending (a)-(b) 231,881 288,666 Plan fiduciary net position as a percentage of the total OPEB liability 89.74% 87.11% Covered payroll $ Net OPEB liability as a percentage of covered payroll 16,153,506 1.44% $ 15,387,963 1.88% NOTE: The OPEB schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. See accompanying notes to pension/OPEB plan schedules 86 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS AGENT PLANS JUNE 30, 2019 Reporting Fiscal Year (Measurement Date) 2019 (2018) 2018 (2017) Public Safety Personnel Retirement System Peoria Fire Department Total OPEB liability Service cost Interest on the total OPEB liability Changes in 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, including refunds of employee contributions Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ $ $ $ 35,268 128,515 - $ 39,357 119,494 5,572 (49,429) - 175,598 (140,066) (42,867) 71,487 1,740,482 1,811,969 (66,108) 133,847 1,606,635 1,740,482 19,805 115,059 (42,867) (1,751) 90,246 1,660,580 1,750,826 $ $ $ 31,072 176,536 (66,108) (1,563) 139,937 1,520,643 1,660,580 Net OPEB liability - ending (a)-(b) 61,143 79,902 Plan fiduciary net position as a percentage of the total OPEB liability 96.63% 95.41% Covered payroll $ Net OPEB liability/(asset) as a percentage of covered payroll 12,085,624 0.51% $ 11,543,146 0.69% NOTE: The OPEB schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. See accompanying notes to pension/OPEB plan schedules 87 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION/OPEB CONTRIBUTIONS JUNE 30, 2019 2019 Reporting Fiscal Year 2017 2016 2018 2015 2014 Arizona State Retirement System - Pension Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll $ 6,307,495 $ 5,923,393 $ 5,758,658 $ 5,513,977 $ 5,458,945 $ $ $ 6,307,495 56,417,665 $ $ 5,923,393 54,343,055 $ $ 5,758,658 53,419,833 5,513,977 $ $ 50,820,065 $ $ 5,458,945 47,561,194 5,019,946 $ $ 46,266,286 10.78% 10.85% 11.48% 10.85% 11.18% 10.90% 5,019,946 Arizona State Retirement System - Health Insurance Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll $ 259,521 $ 239,109 $ $ 259,521 56,417,665 $ $ 239,109 54,343,055 0.46% 0.44% Arizona State Retirement System - Long-term disability Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll $ 90,268 $ 86,949 $ $ 90,268 56,417,665 $ $ 86,949 54,343,055 0.16% 0.16% Public Safety Personnel Retirement System - Pension Peoria Police Department Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll Peoria Fire Department Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll $ 7,436,675 $ 8,917,938 $ 5,039,558 $ 4,406,379 $ 3,235,398 $ $ $ 7,436,675 16,897,694 $ $ 6,634,245 2,283,693 16,153,506 $ $ 5,039,558 15,387,963 4,696,546 $ (290,167) $ 13,992,947 $ $ 3,235,398 13,449,859 2,907,800 $ $ 13,035,510 32.75% 33.56% 24.06% 22.31% 44.01% 41.07% $ 4,714,745 $ 5,721,681 $ 2,711,485 $ 2,568,191 $ 1,842,016 $ $ $ 4,714,745 13,822,178 $ $ 3,794,886 1,926,795 12,085,624 $ $ 2,976,968 (265,483) 11,543,146 2,747,609 $ (179,418) $ 11,796,929 $ $ 1,842,016 11,068,029 1,885,422 $ $ 10,934,868 25.79% 23.29% 16.64% 17.24% 34.11% 31.40% Public Safety Personnel Retirement System - OPEB Peoria Police Department Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll Peoria Fire Department Statutorily required contribution Actual contributions in relation to the statutorily required contribution Contribution deficiency (excess) Covered payroll Actual contribution as a percentage of covered payroll 2,907,800 $ 65,900 $ 79,152 $ $ 65,900 16,897,694 $ $ 79,152 16,153,506 0.39% 0.49% $ 38,702 $ 35,048 $ $ 38,702 13,822,178 $ $ 35,048 12,085,624 0.28% 0.29% NOTE: The pension/OPEB schedules in the required supplementary information are intended to show information for ten years and additional information will be displayed as it becomes available. See accompanying notes to pension plan schedules 88 1,885,422 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO PENSION/OPEB PLAN SCHEDULES JUNE 30, 2019 Note 1 – 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: Actuarial cost method Entry age method Amortization method Level Percentage of Payroll, Closed Remaining amortization period 20 years, if the actuarial value of assets exceeded the actuarial accrued liability, the excess was amortized over an open period of 20 years and applied as a credit to reduce the normal cost which otherwise would be payable. Asset valuation method 7-year smoothed market; 20% corridor Actuarial assumptions: Investment rate of return 7.5%, net of investments and administrative expenses Projected salary increases 4.0%-8.0% including inflation Wage growth 4.0%-8.0% 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 to June 30, 2011 Mortality RP-2000 mortality table (adjusted by 105% for both males and females) 89 90 Combining Statements & Budgetary Schedules Combining Fund Financial Statements and Budgetary Schedules This section contains the combining financial statements for non-major governmental funds, internal service funds and fiduciary funds as well as the budget schedules other than those for the general fund and major special revenue funds (which may be found immediately following the governmental fund financial statements). Page Major Governmental Funds Other than General Fund & Special Revenue Funds Budgetary Comparison Schedules General Obligation Bonds Debt Service Fund 93 Non-Major Governmental Funds Combining Statements Combining Balance Sheet 96 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 98 Budgetary Comparison Schedules Public Transit Fund 100 Other Grants Fund 101 Municipal Development Authority (MDA) Debt, Debt Service Fund 102 Community Facilities District (CFD) Bonds Debt Service Fund 103 Non-Bond Debt Service Fund 104 Community Facilities District (CFD) Bonds Capital Projects Fund 105 General Obligation Bonds Capital Projects Fund 106 Non-Bond Capital Projects Fund 107 Internal Service Funds Combining Statements Combining Statement of Net Position 108 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 109 Combining Statement of Cash Flows 110 Fiduciary Funds Combining Statement of Fiduciary Net Position – Agency Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds 91 113 114 MAJOR GOVERNMENTAL FUNDS OTHER THAN GENERAL FUND & SPECIAL REVENUE FUNDS Budgetary Comparison Schedules Debt Service Funds Debt service funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest payments on debt. This includes financial resources that are being accumulated for principal and interest maturing in future years. Principal payments are due annually. Interest is due semiannually. General Obligation (GO) Bonds Debt Service Fund This fund accounts for the principal and interest requirements of the City's general obligation bonds. Provisions are made in the City's general property tax levy for funds sufficient to meet the general obligation debt service. 92 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Total revenues $ EXPENDITURES: Current: General Government Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 16,803,075 67,095 16,870,170 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 16,803,075 67,095 16,870,170 $ 16,814,554 317,414 17,131,968 $ 11,479 250,319 261,798 - - 3,200 3,200 11,295,000 5,764,516 17,059,516 11,295,000 5,764,516 17,059,516 11,295,000 4,625,763 15,923,963 (1,138,753) (1,135,553) (189,346) (189,346) 1,208,005 1,397,351 (500,000) (500,000) (395,000) (395,000) - 395,000 395,000 (689,346) (584,346) 1,208,005 1,792,351 14,987,765 14,987,765 15,887,194 899,429 14,298,419 93 $ 14,403,419 $ 17,095,199 $ 2,691,780 NON-MAJOR GOVERNMENTAL FUNDS OTHER GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Public Transit Fund This fund receives and expends the City's allocation of Federal Transit Authority grant money as well as the City's allocation of the Local Transportation Assistance Fund money. The amount of Federal Transportation Authority funds available to each city is based on the total funding available and the total requests for funds. The amount of Local Transportation Assistance funds available to each city is allocated on a population basis, which is determined by the latest federal census. Expenditures are for the administration and operating costs of the public transit system. Other Grants Fund This fund receives and expends much of the City's grant fund money. The amount of grants received is generally based upon application to granting agencies by the City and availability of funding by grantors. Grant money may be used only for the purpose of the approved budget and is subject to grantor expenditure guidelines. Debt Service Funds Debt service funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest payments on debt. This includes financial resources that are being accumulated for principal and interest maturing in future years. Principal payments are due annually. Interest is due semiannually. Municipal Development Authority (MDA) Bonds Debt Service Fund This fund accounts for the principal and interest requirements of the Municipal Development Authority's bonds. Provisions are made in the City's transaction privilege tax for funds sufficient to meet the Municipal Development Authority's debt service. Community Facilities District (CFD) Bonds Debt Service Fund This fund accounts for the principal and interest requirements of the Vistancia Communities Facilities District and Vistancia West Communities Facilities District (blended component units) general obligation bonds. Provisions are made in the District's general property tax levy for funds sufficient to meet the general obligation debt service. Non-Bond Debt Service Fund This fund accounts for all non-general obligation bond debt service payments of the City. 94 Capital Projects Funds A capital project fund is established to account for the acquisition and construction of major capital facilities other than those financed by Special Revenue Fund and Enterprise Fund resources. A capital project fund enhances reporting to ensure that requirements regarding the use of the revenue were fully satisfied. Community Facilities District (CFD) Bonds Capital Projects Fund This fund accounts for the expenditure of Vistancia Community Facilities District and Vistancia West Community Facilities District bond proceeds for the construction of capital assets for the District. Once the capital assets are completed, they are turned over to the City for operation and maintenance. General Obligation (GO) Bond Capital Projects Fund This fund accounts for the receipt of proceeds from General Obligation bonds and the expenditure of those funds to purchase or construct capital assets for the City. Non-Bond Capital Projects Fund This fund accounts for the purchase or construction of capital assets with funds other than bond proceeds. This includes monies received from outside sources, i.e. developers or other governments, and also City pay-as-you-go monies. 95 CITY OF PEORIA, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Public Transit Fund ASSETS Pooled cash and investments Accounts receivable, net Interest receivable Due from other governments Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Total assets LIABILITIES & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Other liabilities Unearned revenue-other Total liabilities Fund balances: Restricted for: Debt service Capital projects Grant purposes Committed for: Arts capital Assigned to: Capital projects Total fund balance Total liabilities & fund balance $ $ $ $ Other Grants Fund 881,183 9,814 85,558 976,555 $ 275,647 4,197 279,844 $ $ $ 96,430 5,957 1,143 103,530 $ 1,902,762 - 2,838,609 696,711 976,555 4,741,371 4,844,901 96 Municipal Development Authority Debt 3,785,546 12,000 310,706 736,649 4,844,901 696,711 $ Debt Service Funds $ 5,271,757 25,006 2,643,455 7,940,218 - CFD Bonds $ $ $ 7,940,218 - $ 96,703 4,535 31,268 3,928,571 4,061,077 - $ $ $ 4,061,077 - 7,940,218 7,940,218 Non-Bond $ - 294,862 - 4,061,077 4,061,077 289,075 5,787 294,862 - $ 294,862 294,862 (continued) CITY OF PEORIA, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 CFD Bonds ASSETS Pooled cash and investments Accounts receivable, net Interest receivable Due from other governments Restricted pooled cash and investments Restricted cash with fiscal agents Restricted investments Total assets LIABILITIES & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Other liabilities Unearned revenue-other Total liabilities Fund balances: Restricted for: Debt service Capital projects Grant purposes Committed for: Arts capital Assigned to: Capital projects Total fund balance Total liabilities & fund balance $ $ $ - - Capital Project Funds Total GO Bond Capital Projects Fund Non-Major Governmental Funds $ $ 30,531,390 20 - 26,244 30,557,654 $ - 416,553 416,553 $ $ $ $ 30,141,101 - - Non-Bond - $ 30,141,101 30,557,654 97 $ 16,149,926 14,335 60,375 491,517 2,789,847 19,506,000 91,430 346,373 2,850,953 3,288,756 $ $ $ 57,005,580 14,335 117,537 919,049 10,098,522 26,244 68,181,267 880,060 10,154 346,373 2,852,096 4,088,683 - 12,296,157 30,141,101 2,599,473 - 2,838,609 16,217,244 16,217,244 19,506,000 $ 16,217,244 64,092,584 68,181,267 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Public Transit Fund REVENUES: Taxes Intergovernmental Charges for service Fines and forfeitures Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures 674,316 46,070 60,740 240,600 1,021,726 $ - 4,003,725 Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending Special Revenue Funds Half-Cent Other Sales Tax Grants Fund Fund $ $ 3,112,554 490,532 149,064 93,302 238,673 4,084,125 Debt Service Funds Municipal Development CFD Authority Debt Bonds Non-Bond $ 155,234 155,234 - $ 3,598,953 $ - 28,070 991,679 4,618,702 35,817 207,472 243,289 27,919 - - 367,910 881,488 1,104,291 273,615 8,681 17,056 1,020,646 5,024,371 - 819,802 3,472,843 1,990,000 1,175,676 3,165,676 2,985,000 1,608,413 4,621,332 3,412,461 906,169 4,318,630 (4,002,645) - 611,282 (3,010,442) (2,630) (4,075,341) 3,325,000 (2,298) 3,322,702 (21,353,110) (21,353,110) (218,556) (218,556) 3,166,176 3,166,176 106 106 4,358,232 4,358,232 (679,943) (21,353,110) 392,726 155,734 (2,524) 282,891 1,376,654 21,353,110 4,348,645 7,784,484 4,063,601 11,971 $ 4,741,371 $ 7,940,218 $ 4,061,077 696,711 $ - 98 $ 294,862 (continued) CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Capital Project Funds GO Bond Capital Projects Fund CFD Bonds REVENUES: Taxes Intergovernmental Charges for service Fines and forfeitures Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Highways and streets Public works Human services Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Premium on bonds issued Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 106 106 $ 48,314 48,314 Non-Bond $ 937,428 373,676 14,335 1,325,439 Total Non-Major Governmental Funds $ 3,598,953 4,724,298 536,602 149,064 795,259 1,692,759 11,496,935 - 1,357,604 - 15,575 1,000,130 - 411,404 881,488 1,104,291 273,615 2,357,734 8,681 4,020,781 - 411,693 4,520,338 6,289,635 2,340,000 48,620 2,848,429 6,252,754 10,727,461 4,150,571 9,209,215 33,145,241 106 (6,241,321) (4,927,315) (21,648,306) (106) (106) 30,420,000 3,146,339 33,566,339 - 27,325,018 (4,927,315) 1,193,477 - 2,816,083 21,144,559 62,899,107 - $ 30,141,101 $ 16,217,244 99 30,420,000 3,146,339 10,849,514 (21,574,070) 22,841,783 - $ 64,092,584 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Intergovernmental Charges for services Investment earnings Miscellaneous Total inflows $ EXPENDITURES: Current: Human services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 466,725 241,000 10,000 20,000 737,725 $ 466,725 241,000 10,000 20,000 737,725 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 674,316 46,070 60,740 240,600 1,021,726 $ 207,591 (194,930) 50,740 220,600 284,001 4,937,253 78,500 5,015,753 4,083,547 1,409,466 5,493,013 4,003,725 1,020,646 5,024,371 (79,822) (388,820) (468,642) (4,278,028) (4,755,288) (4,002,645) 752,643 (50,000) 3,325,000 (2,298) 3,272,702 (50,000) 3,325,000 (2,298) 3,272,702 3,325,000 (2,298) 3,322,702 50,000 50,000 (1,005,326) (1,482,586) (679,943) 802,643 1,073,599 1,073,599 1,376,654 303,055 68,273 100 $ (408,987) $ 696,711 $ 1,105,698 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Intergovernmental Charges for services Fines and forfeitures Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and recreation Public safety Development services Public works Human Services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 6,421,839 500,000 80,000 46,000 18,900 7,066,739 $ 6,848,951 500,000 80,000 46,000 18,900 7,493,851 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 3,112,554 490,532 149,064 93,302 238,673 4,084,125 $ (3,736,397) (9,468) 69,064 47,302 219,773 (3,409,726) 318,139 870,243 530,397 1,210,664 349,993 1,933,780 5,213,216 871,633 973,993 1,599,848 1,225,651 369,738 1,729,207 6,770,070 367,910 881,488 1,104,291 273,615 8,681 17,056 819,802 3,472,844 (503,723) (92,505) (495,557) (952,036) 8,681 (352,682) (909,405) (3,297,227) 1,853,523 723,781 611,282 (112,499) (3,200,000) (218,556) (3,418,556) (1,273,088) (218,556) (1,491,644) (218,556) (218,556) 1,273,088 1,273,088 (1,565,033) (767,863) 392,726 1,160,589 4,135,408 4,135,408 4,348,645 213,237 2,570,375 101 $ 3,367,545 $ 4,741,371 $ 1,373,826 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) DEBT, DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 30,000 30,000 $ 30,000 30,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 155,234 155,234 $ 125,234 125,234 1,990,000 1,894,551 3,884,551 1,990,000 1,894,551 3,884,551 1,990,000 1,175,676 3,165,676 (718,875) (718,875) (3,854,551) (3,854,551) (3,010,442) 844,109 (200,000) 3,166,176 2,966,176 (200,000) 3,166,176 2,966,176 3,166,176 3,166,176 200,000 200,000 (888,375) (888,375) 155,734 1,044,109 7,115,363 7,115,363 7,784,484 669,121 6,226,988 102 $ 6,226,988 $ 7,940,218 $ 1,713,230 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Transfers in Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 3,561,492 1,693,921 5,255,413 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 3,561,492 1,693,921 5,255,413 $ 3,598,953 28,070 991,679 4,618,702 $ 37,461 28,070 (702,242) (636,711) 570,000 570,000 27,919 (542,081) 3,085,000 1,595,413 5,250,413 3,085,000 1,595,413 5,250,413 2,985,000 1,608,413 4,621,332 (100,000) 13,000 (629,081) 5,000 5,000 (2,630) (7,630) (5,000) (5,000) (5,000) (5,000) 106 106 5,000 106 5,106 - - (2,524) (2,524) - - 4,063,601 4,063,601 - $ 103 - $ 4,061,077 $ 4,061,077 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Debt service: Principal payments Interest and other charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Transfers in Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 226,590 226,590 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 226,590 226,590 $ 35,817 207,472 243,289 $ 45,000 45,000 3,412,957 901,169 4,359,126 3,412,957 905,469 4,363,426 3,412,461 906,169 4,318,630 (496) 700 (44,796) (4,132,536) (4,136,836) (4,075,341) 61,495 4,358,232 4,358,232 4,358,232 4,358,232 4,358,232 4,358,232 - 225,696 221,396 282,891 61,495 - - 11,971 11,971 225,696 104 $ 221,396 - 35,817 (19,118) 16,699 $ 294,862 (45,000) $ 73,466 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Current: Debt service: Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ - $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) - $ 106 106 $ 106 106 400,000 2,726,000 3,126,000 400,000 2,726,000 3,126,000 - (400,000) (2,726,000) (3,126,000) (3,126,000) (3,126,000) 106 3,126,106 3,126,000 3,126,000 3,126,000 3,126,000 (106) (106) (3,126,000) (106) (3,126,106) - - - - - - - - - 105 $ - $ - $ - CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Current: Highways and streets Debt service: Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Discount on bonds issued Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 27,150 27,150 $ 27,150 27,150 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 48,314 48,314 $ 21,164 21,164 1,415,977 724,801 1,357,604 632,803 44,890,179 46,306,156 37,004,525 37,729,326 411,693 4,520,338 6,289,635 411,693 (32,484,187) (31,439,691) (46,279,006) (37,702,176) (6,241,322) 31,460,854 44,092,223 44,092,223 44,092,223 44,092,223 30,420,000 3,146,339 33,566,339 (13,672,223) 3,146,339 (10,525,884) (2,186,783) 6,390,047 27,325,018 20,934,971 3,402,663 3,402,663 2,816,083 (586,580) 1,215,880 106 $ 9,792,710 $ 30,141,101 $ 20,348,391 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2019 Budgeted Amounts Original Final REVENUES: Intergovernmental revenue Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Highways and streets Debt service: Principal payments Interest and other charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Contingencies Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 91,000 16,848,530 16,939,530 $ 91,000 16,848,530 16,939,530 Actual Amounts (budgetary basis) Variance with Final Budget Over (Under) $ $ 937,428 373,676 14,335 1,325,439 937,428 282,676 (16,834,195) (15,614,091) 163,538 167,324 15,575 1,000,130 15,575 832,806 33,985,511 34,149,049 35,753,635 35,920,959 2,340,000 48,620 2,848,429 6,252,754 2,340,000 48,620 (32,905,206) (29,668,205) (17,209,519) (18,981,429) (4,927,315) 14,054,114 942,962 (500,000) 442,962 942,962 (335,000) 607,962 (16,766,557) (18,373,467) (4,927,315) 13,446,152 19,989,053 19,989,053 21,144,559 1,155,506 3,222,496 107 $ 1,615,586 - $ 16,217,244 (942,962) 335,000 (607,962) $ 14,601,658 INTERNAL SERVICE FUNDS Motor Pool Fund The Motor Pool Fund is responsible for the maintenance and operation of the City’s fleet of vehicles and various other equipment. Self-Insurance Fund The Self-Insurance Fund is responsible for the administration of the self-insurance programs, including liability and property damage, workers’ compensation insurance, and employee health insurance. This fund provides the excess insurance coverage for claims over the self-insurance limits; claims under the limits are charged directly to the SelfInsurance Fund. Facilities Maintenance Fund The Facilities Maintenance Fund is responsible for the maintenance and operations of the City's buildings and grounds. Information Technology Fund The Information Technology Fund is responsible for the maintenance and operations of the City's computer hardware and software systems. 108 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2019 ASSETS Current assets: Pooled cash and investments Restricted pooled cash and investments Accounts receivable, net Interest receivable Prepaid items Supplies inventory Total current assets Non-current assets: Restricted assets: Investments Total restricted assets Capital assets: Buildings and improvements Equipment & furniture Vehicles Less accumulated depreciation Construction in progress Total capital assets, net Net other postemployment benefits asset Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable Accrued payroll Current portion of claims payable Current portion of compensated absences Total current liabilities Non-current liabilities: Long-term portion of claims payable Compensated absences Net pension and other postemployment benefits liability Total non-current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted - trust purpose Unrestricted Total net position Motor Pool Fund SelfInsurance Fund Facilities Maintenance Fund Information Technology Fund Total $ 10,307,862 24,310 31,047 199,994 10,563,213 $ 7,086,546 7,553,313 27,771 112,257 65,200 14,845,087 $ $ 5,035,198 6,183 14,120 5,055,501 $ 22,489,821 7,553,313 58,264 158,154 65,200 199,994 30,524,746 598,089 30,288,981 (18,156,197) 575,829 13,306,702 2,516 23,872,431 165,867 165,867 60,215 730 60,945 8,532,811 8,532,811 - 23,377,898 7,161 68,106 148,102 38,196,220 (35,383,792) 2,960,530 11,753 8,027,784 148,102 38,794,309 30,288,981 (53,539,989) 575,829 16,267,232 21,430 55,346,219 472,036 472,036 774,766 774,766 1,412,669 1,412,669 - - 8,532,811 8,532,811 116,356 9,816 67,470 193,642 1,640,521 997 5,928,320 17,680 7,587,518 36,982 19,435 223,260 279,677 260,778 32,809 345,910 639,497 2,054,637 63,057 5,928,320 654,320 8,700,334 60,410 2,101,664 15,910 225,950 233,620 2,101,664 535,890 964,306 1,024,716 1,218,358 2,117,574 9,705,092 2,744,309 2,970,259 3,249,936 4,504,313 4,737,933 5,377,430 8,212,928 10,850,482 19,550,816 440,492 440,492 722,992 722,992 1,318,265 1,318,265 (3,150,286) $ (3,150,286) 2,960,530 (258,402) $ 2,702,128 16,267,232 8,055,478 11,567,097 $ 35,889,807 154,781 154,781 13,306,702 9,358,457 $ 22,665,159 109 - 8,055,478 5,617,328 $ 13,672,806 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Motor Pool Fund OPERATING REVENUES Charges for services Miscellaneous Total operating revenues $ OPERATING EXPENSES Salaries, wages and employee benefits Contractual services, materials and supplies Insurance claims and expenses Depreciation and amortization Total operating expenses Operating income (loss) NON-OPERATING REVENUES (EXPENSES) Investment income Gain (Loss) on sale of capital assets Total non-operating revenues Income (loss) before capital contributions and transfers Capital contributions Transfers in Transfers out Change in net position Total net position - beginning Total net position - ending $ 7,578,297 36,064 7,614,361 $ SelfInsurance Fund Facilities Maintenance Fund Information Technology Fund 22,863,700 1,434,006 24,297,706 $ $ 6,105,741 6,105,741 10,107,682 21,386 10,129,068 Total $ 46,655,420 1,491,456 48,146,876 991,329 4,278,743 2,097,207 7,367,279 247,082 276,607 977,146 24,882,386 26,136,139 (1,838,433) 2,657,372 3,353,426 6,010,798 94,943 3,974,967 5,919,544 597,409 10,491,920 (362,852) 7,900,275 14,528,859 24,882,386 2,694,616 50,006,136 (1,859,260) 192,158 57,399 249,557 551,676 551,676 4,518 4,518 87,396 87,396 835,748 57,399 893,147 496,639 (1,286,757) 99,461 (275,456) (966,113) 1,484,738 396,904 (144,810) 2,233,471 (4,000,077) (5,286,834) (35,159) 64,302 844,586 1,482,067 2,051,197 2,329,324 1,878,971 (4,180,046) (937,864) 20,431,688 22,665,159 $ 18,959,640 13,672,806 110 $ (3,214,588) (3,150,286) $ 650,931 2,702,128 $ 36,827,671 35,889,807 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 SelfInsurance Fund Motor Pool Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Self-insurance costs Net cash provided (used) by operating activities $ Facilities Maintenance Fund Information Technology Fund Total $ 6,105,741 (3,375,231) (2,950,526) (220,016) $ 10,131,829 (5,707,513) (4,613,206) (188,890) $ 48,097,653 (15,582,209) (8,917,343) (22,810,984) 787,117 (35,159) (35,159) 1,482,067 1,482,067 1,878,971 (4,180,046) (2,301,075) 7,590,051 (4,272,129) (1,082,477) 2,235,445 $ 24,270,032 (2,227,336) (271,134) (22,810,984) (1,039,422) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 396,904 (144,810) 252,094 (4,000,077) (4,000,077) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from disposal of capital assets Net cash flows used by capital and related financing activities (2,016,339) 57,399 (1,958,940) - - (377,157) (377,157) (2,393,496) 57,399 (2,336,097) 182,593 182,593 (782,301) 527,979 (254,322) 4,638 4,638 81,203 81,203 (782,301) 796,413 14,112 711,192 9,596,670 $ 10,307,862 (5,293,821) 19,933,680 $ 14,639,859 $ (250,537) 310,752 60,215 $ 997,223 4,037,975 5,035,198 (3,835,943) 33,879,077 $ 30,043,134 $ $ $ 94,943 $ (362,852) $ (1,859,260) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Interest received on investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 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 by (used in) operating activities: Depreciation and amortization (Increase) decrease in assets/deferred outflows: Accounts receivable Supplies inventory Net other postemployment benefits asset Deferred outflows - pension and other postemployment benefits Increase (decrease) in liabilities/deferred inflows: Accounts payable Accrued payroll Claims payable Compensated absences Net pension and other post employment benefit liability Deferred inflows - pension and other postemployment benefits Total adjustments 247,082 (1,838,433) 2,097,207 - - 597,409 2,694,616 (24,310) (16,016) 1,560 28,819 (27,674) - 4,618 90,605 2,761 8,048 171,064 (49,223) (16,016) 14,226 290,488 22,630 (12,237) 1,580 (191,593) 80,723 1,988,363 (1,250,190) (2,127) 2,071,402 7,600 799,011 (21,805) (39,865) 21,260 (596,238) 226,466 (314,959) 212,031 (79,771) 10,540 (1,111,321) 363,201 173,962 (1,037,334) (134,000) 2,071,402 40,980 (1,899,152) 670,390 2,646,377 Net cash provided (used) by operating activities $ 2,235,445 $ (1,039,422) $ (220,016) $ (188,890) $ Non-cash investing, capital and financing activities: Capital assets acquired through contributions from developers and City governmental funds Change in fair market value of investments Total non-cash investing, capital and financing activities $ 1,484,738 1,484,738 $ 111,831 111,831 $ - $ 844,586 844,586 $ 2,329,324 111,831 $ 2,441,155 $ 111 $ $ $ 787,117 FIDUCIARY FUNDS Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others and therefore are not available to support City programs. The reporting focus is upon net position and changes in net position and employs accounting principles similar to proprietary funds. Fiduciary funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. Agency Funds Account for assets the City holds as an agent for individuals, private organizations, other governments or other funds in a temporary custodial capacity. PLAY Peoria NFP Fund Accounts for monies held on behalf of PLAY Peoria, a separate not-for profit agency for which the City operates as the administrator. PLAY Peoria was formed for the purpose of accepting charitable donations and seeking grants that require a not-for-profit status, for the benefit of recreation programs and participants. Westside Fire Training IGA Fund Accounts for monies on behalf of the Westside Fire Training, a consortium of west valley fire departments for which the City operates as the administrator. This consortium was formed through an intergovernmental agreement to fund joint training opportunities for the member fire departments. 112 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS JUNE 30, 2019 Westside Fire Training IGA Fund PLAY Peoria NFP Fund ASSETS Pooled cash and investments Due from other governments Interest receivable Total assets LIABILITIES Accounts payable Other liabilities Total liabilities $ $ $ $ 71,446 107 71,553 $ $ 225 71,328 71,553 $ $ 113 28,302 5,460 102 33,864 33,864 33,864 Total $ $ $ $ 99,748 5,460 209 105,417 225 105,192 105,417 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Balance June 30, 2018 PLAY Peoria NFP Fund - 8155 Assets: Pooled cash and investments Interest receivable Total Assets Liabilities: Accounts payable Other liabilities Total Liabilities Westside Fire Training IGA Fund - 8159 Assets: Pooled cash and investments Due from other governments Interest receivable Total Assets Liabilities: Accounts payable Other liabilities Total Liabilities $ $ $ $ $ $ $ $ Deductions Balance June 30, 2019 40,234 107 40,341 $ 2,768 60 2,828 $ 1,091 75,718 76,809 $ 866 38,430 39,296 $ 17,037 17,037 $ 14,858 5,877 20,735 $ 19,805 60 19,865 $ Additions 33,980 60 34,040 $ 34,040 34,040 $ $ $ 39,394 39,394 $ 39,394 39,394 $ 73,374 60 73,434 $ $ $ $ $ 5,945 5,460 102 11,507 $ 14,858 347 15,205 $ 46,179 5,460 209 51,848 $ $ $ $ $ $ $ 71,446 107 71,553 225 71,328 71,553 28,302 5,460 102 33,864 33,864 33,864 Totals - All Agency Funds Assets: Pooled cash and investments Due from other governments Interest receivable Total Assets Liabilities: Accounts payable Other liabilities Total Liabilities $ $ $ $ 73,434 73,434 114 $ $ $ 15,949 76,065 92,014 $ $ $ 15,724 44,307 60,031 $ $ $ 99,748 5,460 209 105,417 225 105,192 105,417 Statistical Section Statistical Section The Statistical Section presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplemental information says about the government’s overall financial health. Statistical information is different from financial statements in that the statistics usually cover more than one fiscal year and may present non-accounting information. The following tables present financial trends, information about the fiscal capacity of the government, and social and economic information, as necessary for complete disclosure and understanding of the City’s financial activity. The information presented in these tables is not required for fair presentation in conformity with accounting principles generally accepted in the United States of America and is therefore not covered by the auditor’s opinion. Contents 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. Revenue Capacity These schedules contain information to help the reader assess the City’s most significant local revenue sources - sales and use taxes, property taxes and utility user fees. 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. Economic and Demographic Information These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place. 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. 115 Statistical Section Table Page Financial Trends I Net Position By Component II Changes in Net Position III Fund Balances, Governmental Funds IV Changes in Fund Balances, Governmental Funds 115 116 118 119 Revenue Capacity V City Transaction Privilege Taxes By Category VI Direct and Overlapping Sales Tax Rates VII Sales Tax Payers - By Category VIII Assessed Values By Property Classification IX Comparative Assessed Values X Direct and Overlapping Property Tax Rates XI Direct and Overlapping Property Tax Levies XII Limited Property Value Top Ten Tax Payers XIII Property Tax Levies and Collections XIV Utility Statistical Data 120 121 122 123 124 125 126 127 128 129 Debt Capacity XV Outstanding Debt By Type XVI Ratio of Net General Bonded Debt to Full Cash Value and Net Bonded Debt Per Capita XVII Direct and Overlapping General Obligation Bonded Debt – Current Fiscal Year XVIII Direct and Overlapping Governmental Activities Debt – Current Fiscal Year XIX Direct and Overlapping Governmental Activities Debt – Last Ten Fiscal Years XX Legal Debt Margin XXI Pledged Revenue Coverage – Excise Tax and State Shared Revenue Debt Obligations - Governmental Portion XXII Pledged Revenue Coverage – Water and Wastewater Revenue Bonds XXIII Pledged Revenue Coverage – Special Assessment Bonds XXIV Special Assessment Collections 132 133 134 135 136 137 138 139 140 141 Economic and Demographic Information XXV Demographic and Economic Statistics XXVI Major Employers Within the City 142 143 Operating Information XXVII Authorized Full-time Equivalent City Government Employees By Function XXVIII Operating Indicators By Function/Program XXIX Capital Asset Statistics By Function/Program 144 145 146 116 CITY OF PEORIA, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Table I Fiscal Year 2010 Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business-type Activities Net investment in capital assets Restricted Unrestricted Total business-type activities net position Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net position $ 2012 2011 816,149,271 118,105,425 111,579,103 $ 1,045,833,799 829,001,871 131,550,563 149,159,571 $ 1,109,712,005 855,286,264 151,624,692 84,211,745 $ 1,091,122,701 $ $ $ $ $ $ $ $ $ 1,252,059,372 57,123,435 245,701,059 $ 1,554,883,866 $ $ 1,282,066,150 141,115,975 164,342,264 $ 1,587,524,389 $ 478,738,661 24,912,356 61,033,753 564,684,770 $ 1,294,887,932 143,017,781 172,612,856 $ 1,610,518,569 $ $ 493,788,885 21,575,445 71,130,874 586,495,204 $ 1,322,790,756 153,126,008 220,290,445 $ 1,696,207,209 $ $ 803,835,704 118,382,244 109,550,684 $ 1,031,768,632 478,230,446 22,733,731 54,791,580 555,755,757 $ 2015 (1) 2014 782,205,232 37,649,086 192,278,995 $ 1,012,133,313 469,854,140 19,474,349 53,422,064 542,750,553 $ 2013 $ 533,623,141 23,153,024 68,382,971 625,159,136 $ 1,388,909,405 174,777,716 152,594,716 $ 1,716,281,837 $ Statement of Net Position City financial records and reports 117 $ 885,716,419 139,143,949 (29,002,988) 995,857,380 899,648,174 162,959,546 (32,938,378) $ 1,029,669,342 $ 568,223,130 23,830,354 54,351,770 646,405,254 $ $ $ 1,453,939,549 162,974,303 25,348,782 $ 1,642,262,634 (1) Decrease in unrestricted net position is due to the implementation of GASB Statement No. 68. (2) Beginning net position was restated due to implementation of GASB Statement No. 75 and adjustments to capital assets and restricted cash with fiscal agents. Source: $ $ 589,629,061 31,926,587 49,023,256 670,578,904 $ 1,489,277,235 194,886,133 16,084,878 $ 1,700,248,246 2018 (2) 2017 2016 $ 747,243,866 149,717,064 (41,146,402) 855,814,528 597,736,728 27,590,003 59,376,481 684,703,212 $ 1,344,980,594 177,307,067 18,230,079 $ 1,540,517,740 $ $ $ $ 635,872,778 121,796,554 (7,041,008) 750,628,324 600,474,983 29,456,418 67,576,862 697,508,263 $ 1,236,347,761 151,252,972 60,535,854 $ 1,448,136,587 2019 $ $ $ $ 671,171,180 121,505,682 (2,470,597) 790,206,265 619,320,612 25,123,557 70,087,860 714,532,029 $ 1,290,491,792 146,629,239 67,617,263 $ 1,504,738,294 Table II CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year 2010 Expenses Governmental Activities General Government Culture & Recreation Public Safety* Development Services Highways & Streets Public Works Human Services Interest on long-term debt Unallocated Depreciation Total governmental activities expenses Business-type Activities Water Utility Wastewater Utility Solid Waste Utility Stadium Storm Drain Utility Housing Total business-type activities expenses Total primary government expenses Program Revenues Governmental Activities Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type Activities Charges for services Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense)/Revenue Governmental Activities Business-type Activities Total primary government net expense $ $ $ $ $ $ 2011 24,518,718 21,167,750 56,118,123 6,539,886 22,414,044 9,642,355 2,188,730 12,571,503 574,550 155,735,659 $ 29,715,038 30,212,381 9,985,889 5,186,732 368,007 75,468,047 231,203,706 29,582,708 19,891,729 9,773,553 5,019,605 367,644 64,635,239 $ 225,365,493 $ 17,489,464 13,096,036 55,978,635 86,564,135 $ $ 62,457,821 177,710 50,899,343 113,534,874 200,099,009 60,595,686 209,878 5,408,859 66,214,423 $ 132,579,869 (69,171,524) 38,066,827 (31,104,697) $ $ 27,523,428 21,066,722 56,780,852 6,135,184 25,598,067 8,441,912 1,992,977 12,616,562 574,550 160,730,254 2012 17,722,889 13,709,669 34,932,888 66,365,446 (94,364,808) 1,579,184 (92,785,624) $ $ 20,935,141 23,499,906 58,218,954 5,437,784 31,778,203 7,416,026 1,655,935 12,595,752 574,550 162,112,251 30,777,765 21,923,061 10,859,872 5,284,940 802,246 400,405 70,048,289 232,160,540 17,331,656 11,071,988 30,063,998 58,467,642 66,048,140 140,461 8,418,314 74,606,915 133,074,557 $ (103,644,609) 4,558,626 $ (99,085,983) 2013 $ $ $ $ 2014 19,175,790 22,434,968 56,757,540 8,374,619 29,967,207 6,989,988 2,196,801 12,739,029 574,557 159,210,499 29,094,123 20,342,376 10,503,928 5,140,500 806,658 273,528 66,161,113 225,371,612 18,745,123 12,440,760 21,485,029 52,670,912 67,197,303 67,915 7,323,482 74,588,700 127,259,612 $ (106,539,587) 8,427,587 $ (98,112,000) $ $ $ $ 20,038,112 25,559,518 60,213,181 9,193,743 31,411,752 7,015,316 1,629,118 12,009,243 574,550 167,644,533 30,836,235 21,083,666 10,806,101 5,176,689 823,780 68,726,471 236,371,004 19,221,921 12,693,535 11,703,447 43,618,903 69,499,963 9,325,636 78,825,599 122,444,502 $ (124,025,630) 10,099,128 $ (113,926,502) * Beginning in fiscal year 2015, the Police and Fire line items have been combined and are being presented in the Public Safety line item. 118 2015 $ $ $ $ 21,210,452 25,982,440 64,261,923 9,544,919 33,658,672 7,259,675 1,177,275 11,373,755 174,469,111 34,566,373 21,737,995 10,939,896 6,372,954 813,636 74,430,854 248,899,965 25,696,523 13,485,788 22,908,863 62,091,174 68,417,721 29,760,720 98,178,441 160,269,615 $ (112,377,937) 23,747,587 $ (88,630,350) 2016 $ $ $ $ 22,250,673 26,447,013 70,342,389 7,123,106 34,620,944 7,507,311 1,788,130 11,549,457 181,629,023 33,221,797 22,001,744 11,137,739 6,742,573 1,052,977 74,156,830 255,785,853 29,321,181 14,329,168 27,259,727 70,910,076 76,106,994 17,518,669 93,625,663 164,535,739 $ (110,718,947) 19,468,833 $ (91,250,114) 2017 $ $ $ $ 21,623,532 28,371,539 97,665,783 6,630,945 44,979,242 6,705,095 1,283,420 8,451,596 215,711,152 39,316,668 24,075,245 11,867,773 7,579,975 3,497,956 86,337,617 302,048,769 32,311,277 14,666,090 25,638,030 72,615,397 80,152,247 20,698,020 100,850,267 173,465,664 $ (143,095,755) 14,512,650 $ (128,583,105) 2018 $ $ $ $ 20,343,398 28,003,374 81,720,528 5,731,857 54,647,432 5,694,902 2,527,213 8,011,112 206,679,816 40,780,450 25,715,392 13,008,905 7,736,745 3,301,070 90,542,562 297,222,378 34,954,574 16,640,349 20,441,205 72,036,128 85,557,374 12,517,749 98,075,123 170,111,251 $ (134,643,688) 7,532,561 $ (127,111,127) 2019 $ $ $ $ 21,473,593 29,499,798 89,026,946 4,757,015 55,594,789 5,112,076 4,072,235 7,768,837 217,305,289 41,968,847 24,512,758 13,749,718 7,850,061 3,469,645 91,551,029 308,856,318 37,925,774 15,394,092 31,886,362 85,206,228 84,331,736 14,999,480 99,331,216 184,537,444 $ (132,099,061) 7,780,187 $ (124,318,874) CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) Table II Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes, levied for general purposes $ Property taxes, levied for debt service Sales and use taxes Franchise taxes Intergovernmental State shared sales taxes - unrestricted Urban revenue sharing - unrestricted Auto in-lieu taxes - unrestricted Investment Earnings Gain on sale of capital assets Elimination of development agreement debt Miscellaneous Special Item: Close out of Section 8 Housing Special Item: Defeasance of G.O. debt Transfers in (out) Total governmental activities 10,137,682 17,469,936 4,634,263 2,199,984 102,409 5,885,847 - 11,649,489 13,408,996 4,548,154 1,354,607 76,640 801,394 5,124,916 - 12,087,651 13,231,006 4,944,181 959,479 50,192 3,965,187 (464,390) 12,665,191 14,425,958 5,155,206 599,263 66,465 630,104 4,397,616 - 13,431,637 17,172,500 5,495,225 878,164 111,342 3,920,109 - 14,139,128 18,650,521 5,886,971 843,648 3,216,595 - 14,760,029 18,549,406 6,385,294 1,693,475 2,732,726 - 15,631,512 20,949,613 6,728,814 1,667,892 4,120,882 - (3,029,412) 127,692,042 (11,119,348) 114,000,127 (3,335,912) 118,459,824 (9,394,454) 118,108,913 (28,205,646) 105,436,326 (11,931,172) 129,454,727 (3,994,967) 144,530,909 Business-type Activities Investment Earnings Gain on sale of capital assets Forgiveness of debt Special Item: Close out of Public Housing Transfers in (out) Total business-type activities Total primary government 444,698 1,379,738 3,029,412 4,853,848 132,545,890 306,672 11,119,348 11,426,020 $ 125,426,147 $ 284,427 3,335,912 3,620,339 122,080,163 176,176 (2,101,809) 9,394,454 7,468,821 125,577,734 359,158 28,205,646 28,564,804 134,001,130 348,717 11,931,172 12,279,889 141,734,616 709,850 3,994,967 4,704,817 149,235,726 33,327,234 6,433,032 39,760,266 $ $ Change in Net Position Governmental Activities Business-type Activities Total primary government Source: $ $ $ 3,833,445 26,225,535 56,276,937 3,955,416 $ $ 3,628,286 22,406,879 58,082,217 4,037,897 10,355,518 15,984,646 26,340,164 $ $ 3,187,679 19,030,940 60,719,648 4,084,163 11,920,237 12,047,926 23,968,163 $ $ $ $ 2,848,691 16,628,634 65,950,235 4,136,004 11,569,326 15,896,408 27,465,734 Statement of Activities City financial records and reports 119 $ $ $ $ 2,744,900 15,479,771 70,213,953 4,194,371 (18,589,304) 38,663,932 20,074,628 $ $ $ $ 2,889,150 16,891,026 74,556,024 4,312,836 17,076,790 36,027,476 53,104,266 $ $ $ $ 2,994,905 17,537,813 79,410,364 4,461,864 33,811,962 24,173,650 57,985,612 $ $ $ $ 3,207,433 18,532,683 84,236,770 4,501,681 2018 $ 3,522,321 20,152,280 89,781,248 5,035,331 2019 $ 5,099,325 20,276,526 93,182,810 4,925,609 (6,346,374) 153,230,906 15,894,140 20,334,388 6,799,997 2,172,236 5,383,459 (450,797) (4,803,295) 163,821,308 17,018,021 20,366,697 7,262,809 7,200,254 2,342,583 (5,997,632) 171,677,002 519,774 109,744 6,346,374 6,975,892 160,206,798 700,909 13,305 4,803,295 5,517,509 169,338,817 3,107,572 138,375 5,997,632 9,243,579 180,920,581 10,135,151 21,488,542 31,623,693 $ $ $ 29,177,620 13,050,070 42,227,690 $ $ $ 39,577,941 17,023,766 56,601,707 Table III CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2011 * 2010 General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Nonspendable Restricted Committed Assigned Unassigned $ 241,678 60,238,418 60,480,096 $ $ 147,974,858 $ $ $ 2013 2012 537,000 30,671 34,288,769 3,891,174 13,429,595 52,177,209 - $ $ $ 1,163,721 70,016 33,590,254 3,705,809 12,878,675 51,408,475 - $ $ 2014 259,643 108,517 33,229,466 3,330,705 13,996,657 50,924,988 $ - $ $ $ 2015 262,852 54,193 37,028,922 3,340,512 17,308,306 57,994,785 - $ $ $ 2016 163,703 67,084 36,911,493 3,056,458 21,584,005 61,782,743 - $ $ $ 2017 115,042 388,375 38,464,678 2,859,523 20,816,526 62,644,144 - $ $ $ 2018 113,859 354,566 40,221,571 2,618,447 25,684,922 68,993,365 - $ $ $ 2019 123,939 40,488 42,249,268 1,760,838 33,849,097 78,023,630 - $ 113,831 40,762 52,300,995 1,363,728 59,047,805 $ 112,867,121 $ - 55,546,744 22,203,699 - 108,919 169,837,817 11,040,682 30,055,251 - 95,828 168,127,814 10,064,814 40,566,996 (84,673) 98,819 188,434,944 10,004,379 25,988,041 - 131,641 145,352,432 10,300,556 23,410,508 - 70,579 127,294,490 10,572,297 22,821,310 (6,638,667) 67,986 150,498,066 10,885,668 30,353,689 - 69,711 137,842,918 11,315,062 27,978,550 - 78,068 115,222,701 10,663,895 34,926,243 - 60,828 143,532,067 2,838,609 16,217,244 - Total All Other Governmental Funds $ 225,725,301 $ 211,042,669 $ 218,770,779 $ 224,526,183 $ 179,195,137 $ 154,120,009 $ 191,805,409 $ 177,206,241 $ 160,890,907 $ 162,648,748 * The City implemented GASB Statement 54 - Fund Balance Reporting and Governmental Fund Type Definitions in 2011. Previous years have not been restated to the new required format. Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds Balance Sheet - Governmental Funds City financial records and reports 120 CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Table IV Fiscal Year 2010 Revenues Taxes Intergovernmental Charges for Services Licenses and Permits Fines and Forfeitures Rents Investment Earnings Special Assessments Miscellaneous $ Total Revenues 90,783,641 45,621,921 18,137,718 1,599,957 2,755,104 421,289 1,992,817 2,214,167 8,485,570 2012 2011 $ 88,244,772 43,917,343 16,356,566 1,672,072 3,068,861 403,321 1,238,174 2,201,463 18,441,696 $ 87,203,131 54,562,371 18,359,757 2,106,545 2,757,022 486,932 859,146 2,069,613 4,588,218 2013 $ 89,948,724 49,831,144 21,405,623 2,564,075 2,257,477 1,101,082 537,732 1,217,271 5,880,511 2014 $ 93,731,980 50,132,922 17,684,357 2,800,894 2,128,289 731,901 757,747 1,137,018 5,060,343 2015 $ 98,629,880 55,289,472 19,355,378 3,132,178 1,856,640 889,053 725,208 381,761 3,536,024 $ 104,369,837 65,237,794 21,812,733 4,080,210 1,747,528 915,846 1,462,408 381,950 3,278,730 2018 2017 2016 $ 110,535,434 60,096,580 24,367,635 4,778,632 1,571,788 908,678 1,320,578 2,171,319 4,411,440 $ 118,352,843 61,643,624 26,637,159 5,509,240 1,815,644 1,002,948 1,709,765 5,307,423 2019 $ 123,645,058 61,054,399 28,089,117 5,720,889 2,390,644 980,732 6,364,506 3,049,527 172,012,184 175,544,268 172,992,735 174,743,639 174,165,451 183,795,594 203,287,036 210,162,084 221,978,646 231,294,872 16,330,159 19,475,634 53,876,911 6,529,594 13,070,648 7,955,394 2,145,702 60,269,181 15,818,173 18,784,735 53,390,368 6,051,667 13,891,078 6,748,102 1,952,861 29,176,335 14,470,822 18,396,187 54,390,977 5,328,403 14,754,432 4,884,713 1,586,315 26,336,595 15,094,866 19,668,598 56,702,266 8,568,013 16,355,505 4,914,720 2,213,374 39,612,698 15,866,612 21,762,725 58,976,873 9,311,964 17,098,590 5,110,924 1,604,288 17,728,188 17,085,501 22,181,064 60,840,413 9,714,954 19,400,893 5,261,842 1,147,341 26,491,974 19,424,865 21,797,069 68,151,428 7,129,814 19,086,404 5,325,264 1,725,328 12,332,241 18,216,483 23,862,880 73,087,082 6,291,295 21,610,293 6,384,151 1,184,926 29,367,979 17,493,779 24,200,927 79,514,160 5,935,127 25,666,063 5,415,791 2,447,943 25,896,002 18,381,872 26,631,491 84,514,269 4,835,544 27,314,691 5,535,727 4,020,781 27,839,028 13,166,242 44,700,092 - 12,658,032 34,309,287 - 13,098,263 25,566,028 - 12,534,039 20,120,163 - 12,543,974 21,937,761 - 11,933,264 17,305,000 - 10,606,558 18,010,000 6,707,216 11,336,938 19,867,000 - 9,705,255 19,483,000 13,604,681 8,776,334 22,022,461 - Total Expenditures 237,519,557 192,780,638 178,812,735 195,784,242 181,941,899 191,362,246 190,296,187 211,209,027 229,362,728 229,872,198 Excess of Revenues over (under) Expenditures (65,507,373) (17,236,370) (5,820,000) (21,040,603) (7,776,448) (7,566,652) 12,990,849 (1,046,943) (7,384,082) 1,422,674 Other Financing Sources (Uses) Refunding bonds issued Issuance of debt Premium on bonds issued Payments to bond refunding escrow agent Special Item: Close out Section 8 Housing Transfers In Transfers Out 29,170,000 495,890 23,567,886 (20,963,066) 7,920,000 16,960 28,388,910 (42,075,019) 13,690,000 14,715,000 645,188 (13,690,000) (464,390) 16,740,587 (18,106,961) 35,510,000 1,039,481 16,968,105 (27,205,066) 112,000 20,159,941 (48,650,688) 35,000 16,357,492 (30,113,010) 103,410,000 30,325,000 14,096,688 (114,802,841) 12,890,960 (20,363,855) 3,000,000 108,061 17,925,171 (28,236,236) 28,975,000 5,199,304 (28,814,053) 17,684,545 (19,786,126) 30,420,000 3,146,339 36,612,624 (35,000,305) Total Other Financing Sources (Uses) 32,270,710 (5,749,149) 13,529,424 26,312,520 (28,378,747) (13,720,518) 25,555,952 (7,203,004) 3,258,670 35,178,658 Expenditures General Government Culture & Recreation Public Safety (1) Development Services Highways & Streets Public Works Human Services Capital Outlay Debt Service Interest Principal Payment to bond escrow agent Net Change in Fund Balance Debt Service as a percentage of noncapital expenditures (1) $ (33,236,663) 32.65% $ (22,985,519) 28.71% $ 7,709,424 $ 25.36% 5,271,917 $ 20.91% (36,155,195) 21.00% Beginning in Fiscal Year 2015, Police and Fire expenditures were combined into the Public Safety category. Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds City financial records and reports 121 $ (21,287,170) 17.73% $ 38,546,801 19.85% $ (8,249,947) 17.16% $ (4,125,412) 21.03% $ 36,601,332 15.24% CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS Table V Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 26,857,263 4,550,512 6,927,724 6,906,904 1,405,352 7,114,625 814,694 374,659 1,325,204 $ 29,247,900 3,611,614 6,980,633 6,917,391 1,294,565 7,469,189 856,274 426,017 1,278,634 $ 31,483,859 3,305,409 7,414,803 7,232,286 1,304,092 7,776,190 896,320 566,453 740,236 $ 34,115,601 4,716,985 7,918,121 7,343,965 1,258,991 8,168,064 992,752 474,842 960,914 $ 36,878,825 6,301,005 7,214,392 7,388,831 1,262,651 8,505,082 960,332 624,795 2,101,228 $ 38,908,327 6,257,112 7,522,177 7,498,115 1,217,583 9,284,232 1,036,941 718,931 2,112,606 $ 41,216,781 7,394,036 8,123,884 7,904,665 1,151,941 9,833,912 1,034,959 740,179 2,010,007 $ 43,666,206 8,587,978 8,383,946 8,022,722 942,239 10,335,218 1,021,968 1,243,655 2,032,838 $ 45,112,750 10,219,772 8,823,620 8,911,107 816,179 11,388,465 979,386 1,707,181 1,822,787 $ 48,201,653 9,108,314 8,983,145 8,115,617 697,849 11,661,217 1,246,039 2,248,575 2,920,401 Total $ 56,276,937 $ 58,082,217 $ 60,719,648 $ 65,950,235 $ 71,237,141 $ 74,556,024 $ 79,410,364 $ 84,236,770 $ 89,781,247 $ 93,182,810 % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other 0.6% -35.1% -2.5% 1.0% -2.2% 1.3% 12.1% -37.5% -15.2% 8.9% -20.6% 0.8% 0.2% -7.9% 5.0% 5.1% 13.7% -3.5% 7.6% -8.5% 6.2% 4.6% 0.7% 4.1% 4.7% 33.0% -42.1% 8.4% 42.7% 6.8% 1.5% -3.5% 5.0% 10.8% -16.2% 29.8% 8.1% 33.6% -8.9% 0.6% 0.3% 4.1% -3.3% 31.6% 118.7% 5.5% -0.7% 4.3% 1.5% -3.6% 9.2% 8.0% 15.1% 0.5% 5.9% 18.2% 8.0% 5.4% -5.4% 5.9% -0.2% 3.0% -4.9% 5.9% 16.1% 3.2% 1.5% -18.2% 5.1% -1.3% 68.0% 1.1% 3.3% 19.0% 5.2% 11.1% -13.4% 10.2% -4.2% 37.3% -10.3% 6.8% -10.9% 1.8% -8.9% -14.5% 2.4% 27.2% 31.7% 60.2% Total -4.6% 3.2% 4.5% 8.6% 8.0% 4.7% 6.5% 6.1% 6.6% 3.79% Note: Includes all governmental fund types Source: City financial records and reports 122 2019 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS Table VI 2010 2011 Year Taxes Are Payable 2012 2013 2014 2015 City Direct Rates (1): Retail Sales (excluding groceries) Groceries Contracting Rentals Hotel/Transient Lodging Utilities Telecommunications Restaurant/Bar Amusement All Others 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.80% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.60% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.60% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.60% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.60% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% 1.80% 1.60% 1.80% 1.80% 5.60% 3.30% 1.80% 2.80% 2.80% 1.80% County Rates: Retail Sales (excluding groceries) Groceries Hotel/Transient Lodging Mining - Nonmetal All Others 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% 0.70% 0.70% 1.77% 0.44% 0.70% State Rates (2): Retail Sales (excluding groceries) Hotel/Transient Lodging Mining - Nonmetal Mining - Severance All Others 6.60% 6.50% 3.13% 2.50% 6.60% 6.60% 6.50% 3.13% 2.50% 6.60% 6.60% 6.50% 3.13% 2.50% 6.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 5.60% 5.50% 3.13% 2.50% 5.60% 2016 2017 2018 2019 Notes: (1) Pursuant to City Charter, increases in the City transaction privilege (sales) tax rates are subject to voter approval. Prior to January 2017, the City collected its own sales tax. In January 2017, the state began collecting and remitting the sales tax to the City. The City has earmarked 0.8% of its sales tax for payment of Excise Tax and State Shared Revenue Obligations. (2) The State transaction privilege (sales) tax is levied against the same categories of business activity as the City's sale tax with the exception of groceries and prescription drugs, which the State exempts from tax. The State collects and distributes a portion of its sales tax revenues to all cities and towns based on the city or town's population relative to the aggregate population of all cities and towns as shown by the latest census. Source: ADOR Transaction Privilege And Other Tax Rate Tables 123 CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND NINE YEARS AGO Table VII 2019 Category # of Payers Percentage of Total Payers 2010 Sales Tax Paid Percentage of Total City Sales Tax Revenue # of Payers Percentage of Total Payers Sales Tax Paid Percentage of Total City Sales Tax Revenue Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others 3,982 2,664 497 6,863 15 161 950 63 115 26.0% 17.4% 3.2% 44.8% 0.1% 1.1% 6.2% 0.4% 0.8% $ 48,201,653 9,108,314 11,661,217 8,983,145 8,115,617 697,849 2,248,575 1,246,039 2,920,401 51.70% 9.80% 12.50% 9.70% 8.70% 0.80% 2.40% 1.30% 3.10% 3,245 3,951 330 5,023 12 144 1,282 61 77 23.00% 28.00% 2.30% 35.60% 0.10% 1.00% 9.10% 0.40% 0.50% $ 26,857,263 4,550,512 6,927,724 6,906,904 1,405,352 7,114,625 814,694 374,659 1,325,204 47.70% 8.10% 12.30% 12.30% 2.50% 12.60% 1.40% 0.70% 2.40% Total 15,310 100.00% $ 93,182,810 100.00% 14,125 100.00% $ 56,276,937 100.00% Source: City Sales Tax system City financial records 124 CITY OF PEORIA, ARIZONA ASSESSED VALUES BY PROPERTY CLASSIFICATION LAST TEN FISCAL YEARS 2011 2010 1,048,710,389 155,720,660 $ Fiscal Year 2013 2012 687,456,278 122,978,913 $ 546,593,560 161,107,937 $ 1,609,972,512 -15.0% $ 1,276,335,862 -20.7% $ 1,137,434,740 -10.9% $ 1,057,413,204 -7.0% $ 1,155,587,438 9.3% $ 1,178,016,995 1.9% $ 1,244,679,295 5.7% $ 1,340,068,217 7.7% $ 1,439,812,989 7.4% Net Assessed Value Per Capita Population $ 12,301 154,065 $ 10,384 155,050 $ 8,216 155,352 $ 7,274 156,371 $ 6,702 157,780 $ 7,203 160,432 $ 7,174 164,212 $ 7,400 168,192 $ 7,632 172,259 $ 8,008 179,800 304,844,019 43,659,181 1,118,206 83,177 7,124 614,234,433 199,613,372 $ 298,078,633 42,347,136 1,205,775 59,907 48,182 626,696,840 214,086,717 $ 291,761,032 44,305,284 1,137,482 24,540 5,100 674,378,782 230,466,048 $ 2019 1,895,163,851 -5.0% 341,042,160 54,523,204 1,399,678 103,122 7,964 $ 2018 $ 378,992,788 85,330,391 1,429,130 140,493 7,869 620,970,965 119,387,647 2017 Net Assessed Value % Growth 495,318,990 147,216,152 1,563,689 53,641 - $ 2016(b) $ Total Direct Secondary Tax Rate $ 2015 Residential (Owner occupied) Residential (Renter occupied) Commercial, Industrial, Mining & Utilities Agriculture & Vacant Railroad Historic & Environmental Public Property Improvements 495,336,050 193,685,182 1,647,040 64,530 - 818,535,888 147,284,152 2014 Table VIII 297,883,403 40,513,630 1,040,707 396,725 - 740,037,974 243,816,250 $ 310,764,850 44,053,047 1,065,441 305,265 25,390 813,110,830 259,614,712 328,762,027 36,731,719 1,015,986 577,715 - 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.15 Full Cash Value % Growth $ 17,162,776,025 -6.1% $ 14,588,623,722 -15.0% $ 11,862,384,776 -18.7% $ 10,635,350,631 -10.3% $ 10,057,364,678 -5.4% $ 11,162,489,178 11.0% $ 13,968,351,523 25.1% $ 15,264,587,035 9.3% $ 16,607,545,225 8.8% $ 18,374,791,035 10.6% Full Cash Value Per Capita $ $ $ $ $ $ $ $ $ $ Net Assessed Value as a Percentage of Full Cash Value 111,400 11.0% 94,090 11.0% 76,358 10.8% 68,014 10.7% 63,743 10.5% 69,578 10.4% 85,063 8.4% Note: All property, both real and personal, is assigned a classification to determine its assessed valuation for tax purposes. Each classification is defined by property use and has an assessment ratio that is multiplied by the taxable value of the property to obtain the assessed valuation. The assessment ratios for the major classes of property are as follows: Property Tax Assessment Ratios (a) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Commercial, Industrial, Mining & Utilities 22.0% 21.0% 20.0% 20.0% 19.5% 19.0% 18.5% 18.0% 18.0% 18.0% Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Agriculture and Vacant Land 16% 16% 16% 16% 16% 16% 16% 15% 15% 15% Railroad 18% 17% 15% 15% 15% 16% 15% 14% 15% 14% (a) Several additional classes of property exist, but seldom amount to a significant portion of an entity's total valuation. (b) Prior to FY2015-16, Primary or Limited Property Values were used for primary ad valorem taxes which are levied for operations of the city and Secondary Assessed Values were used for secondary ad valorem taxes which are levied for debt service. Beginning in FY2015-16, with a voter approved constitutional amendment, both primary and secondary ad valorem taxes are now levied on the Limited Property Values. Because FY2015-16 is the first year for implementation of the constitutional amendment and use of Limited Property Values, there is no comparative data from prior years and accordingly the Net Assessed Values presented for years prior to FY2015-16 represent Secondary Assessed Values based on the then-applicable but now replaced valuation rules. Source: Arizona Department of Revenue - Property Tax Division-Abstract of the Assessment Roll City Financial Records 125 90,757 8.2% 96,410 8.1% 102,196 7.8% CITY OF PEORIA, ARIZONA COMPARATIVE ASSESSED VALUES LAST TEN FISCAL YEARS Table IX Fiscal Year 2010 2011 2012 2013 2014 2015 2016 (a) 2017 2018 2019 $ 1,895,163,851 $ 1,609,972,512 $ 1,276,335,862 $ 1,137,434,740 $ 1,057,413,204 $ 1,155,587,438 $ 1,178,016,995 $ 1,244,679,295 $ 1,340,068,217 $ 1,439,812,989 Peoria Unified School District No. 11 2,393,720,410 2,030,314,508 1,581,371,147 1,460,442,551 1,350,310,615 1,471,213,352 1,475,721,803 1,549,607,885 1,649,351,547 1,780,118,947 Maricopa County 57,984,051,727 49,662,543,618 38,760,296,498 34,400,455,712 32,229,006,810 35,079,646,593 34,623,670,323 36,135,494,474 38,251,891,249 40,423,232,421 State of Arizona 86,525,272,506 75,664,423,588 61,764,402,437 56,283,023,907 52,598,341,678 55,349,948,120 54,840,074,052 56,573,588,295 59,404,007,785 62,328,357,186 City of Peoria (a) Prior to FY2015-16, Primary or Limited Property Values were used for primary ad valorem taxes which are levied for operations of the city and Secondary Assessed Values were used for secondary ad valorem taxes which are levied for debt service. Beginning in FY2015-16, with a voter approved constitutional amendment, both primary and secondary ad valorem taxes are now levied on the Limited Property Values. Because FY2015-16 is the first year for implementation of the constitutional amendment and use of Limited Property Values, there is no comparative data from prior years and accordingly the Net Assessed Values presented for years prior to FY2015-16 represent Secondary Assessed Values based on the then-applicable but now replaced valuation rules. Source: Arizona Department of Revenue - Property Tax Division Abstract of the Assessment Roll City financial records 126 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) Total Direct City Primary Secondary Total Table X 2010 2011 2012 Fiscal Year 2013 2014 2015 2016 2017 2018 2019 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.19 1.25 1.44 $ 0.29 1.15 1.44 2.99 2.46 5.45 3.24 2.09 5.33 3.71 1.68 5.39 4.01 3.02 7.03 4.18 3.35 7.53 4.43 2.84 7.27 4.93 2.84 7.77 4.78 3.26 8.04 4.51 3.03 7.54 4.00 3.02 7.02 2.05 0.59 2.64 2.20 0.64 2.84 2.68 0.54 3.22 2.87 0.78 3.65 3.08 0.79 3.87 3.11 0.86 3.98 3.13 0.97 4.10 3.14 1.01 4.15 3.09 1.07 4.16 3.05 1.03 4.08 5.23 4.30 $ 9.53 5.63 3.98 $ 9.61 6.58 3.47 $ 10.05 7.07 5.05 $ 12.12 7.45 5.39 $ 12.84 7.73 4.95 $ 12.69 8.25 5.06 $ 13.31 8.11 5.52 $ 13.63 7.79 5.35 $ 13.14 7.34 5.20 $ 12.54 Peoria Unified School District No. 11 (1) Primary Secondary Total Maricopa County (2) Primary Secondary Total Total Primary Secondary Total (1) Peoria Unified School District serves the majority of the City of Peoria. Other areas of the City are served by the Deer Valley Unified School District whose most recent rates are as follows: Primary Secondary Deer Valley Unified School District $ 4.07 $ 2.56 (2) The Maricopa County rates includes the rates for the County, State Education Equalization Assistance and other county districts and special districts as follows: Maricopa County State Education Equalization Assistance Maricopa County Community College District Maricopa County Flood Control District Maricopa County Fire District Assistance Maricopa County Library District Maricopa County Special Health Care District West Maricopa Education Center Central Arizona Water Conservation District Fiscal Year 2018 Tax Rate Primary $ 1.40 0.47 1.17 $ 3.05 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates Publication Secondary $ 0.20 0.18 0.01 0.06 0.29 0.15 0.14 $ 1.03 127 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 2011 2010 Total Direct City Primary Secondary Total Peoria Unified School District No. 11 (1) Primary Secondary Maricopa County (2) Primary Secondary $ 3,202,665 23,689,548 26,892,213 $ 2,901,540 20,124,656 23,026,196 Tax Levy Fiscal Year 2013 2014 2012 $ 2,411,739 15,954,198 18,365,937 $ 2,154,484 14,217,934 16,372,418 $ 1,998,305 13,217,665 15,215,970 Table XI 2015 $ 2,115,212 14,444,843 16,560,055 2016 $ 2,238,232 14,725,212 16,963,444 2017 $ 2,364,891 15,558,491 17,923,382 2018 $ 2,546,130 16,750,853 19,296,983 2019 $ 4,175,458 16,557,849 20,733,307 63,259,063 58,903,282 63,956,114 43,487,879 60,801,278 27,635,770 58,370,644 44,104,877 56,069,720 45,266,377 62,749,751 41,807,627 72,782,246 41,966,017 74,140,908 50,494,525 74,370,911 50,046,959 71,186,957 53,764,234 1,016,398,826 312,960,824 1,030,448,332 295,233,122 1,031,164,830 264,170,408 982,926,843 249,995,761 986,315,014 251,345,124 1,043,203,072 274,744,408 1,083,409,268 234,978,404 1,134,787,546 337,146,316 1,179,611,336 356,706,002 1,231,523,511 373,658,155 1,082,860,554 395,553,654 $ 1,478,414,208 1,097,305,986 358,845,657 $ 1,456,151,643 1,094,377,847 307,760,376 $ 1,402,138,223 1,043,451,971 308,318,572 $ 1,351,770,543 1,044,383,039 309,829,166 $ 1,354,212,205 1,108,068,035 330,996,878 $ 1,439,064,913 1,158,429,746 291,669,633 $ 1,450,099,379 1,211,293,345 403,199,332 $ 1,614,492,677 1,256,528,377 423,503,814 $ 1,680,032,191 1,306,885,926 443,980,238 $ 1,750,866,164 Total Primary Secondary Total (1) The Peoria Unified School District serves the majority of the City of Peoria. Other areas of the City are served by Deer Valley Unified School District, whose most recent tax levies are as follows: Deer Valley Unified School District $ Primary 104,866,238 $ Secondary 65,988,461 (2) The tax levies for Maricopa County include those for the County, State Education Equalization, and other county and special districts whose most recent tax levies are as follows: Maricopa County State Education Equalization Assistance Maricopa County Community College District Maricopa County Flood Control District Maricopa County Fire District Assistance Maricopa County Library District Maricopa County Special Health Care District West Maricopa Education Center Central Arizona Water Conservation District Fiscal Year 2018 Tax Levy Source: Primary 566,289,063 191,959,243 473,275,205 $ 1,231,523,511 $ Secondary 82,713,190 66,310,571 4,319,354 22,475,317 119,074,911 22,079,948 56,684,864 $ 373,658,155 $ Maricopa County Assessor - Tax Rates and Levies publication 128 CITY OF PEORIA, ARIZONA LIMITED PROPERTY VALUE TOP TEN TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Table XII 2010 2019 (a) Taxpayer Arizona Public Service Vestar LPTC LLC Park West Retail I LLC Southwest Gas Corporation Miller Family Real Estate LLC DDRA Arrowhead Crossing LLC Freedom Plaza Limited Partnership Lease Peoria Center Apartments South LLC First Industrial LP Arizona State Land Department Sprint Wireless Inland Western Glendale LLC Plaza III Limited Partnership BCC Development Inc Lake Pleasant Pavilion LLC Qwest Corporation Type of Business Gas & Electric Utility Property Development Shopping Center Gas Utility Shopping Center Shopping Center Retirement Housing Multi-family Housing Property Development Government Telecommunications Shopping Center Nursing Home/Apartments Property Development Shopping Center Telecommunications Total Limited Property Assessed Value $ 27,903,016 9,372,756 5,984,967 5,218,535 4,855,938 4,624,806 3,848,711 3,677,682 3,658,409 3,347,370 $ 72,492,190 Rank 1 2 3 4 5 6 7 8 9 10 % of Limited Property Assessed Value 1.94% 0.65% 0.42% 0.36% 0.34% 0.32% 0.27% 0.26% 0.25% Taxable Secondary Assessed Value $ 20,681,227 11,508,473 10,376,085 8,520,286 8,205,460 129 4 0.45% 0.43% 5 - $ 91,957,274 (a) Prior to FY2015-16, Primary or Limited Property Values were used for primary ad valorem taxes which are levied for operations of the city and Secondary Assessed Values were used for secondary ad valorem taxes which are levied for debt service. Beginning in FY2015-16, with a voter approved constitutional amendment, both primary and secondary ad valorem taxes are now levied on the Limited Property Values Because FY2015-16 is the first year for implementation of the constitutional amendment and use of Limited Property Values, there is no comparative data from prior years and accordingly the Net Assessed Values presented for years prior to FY2015-16 represent Secondary Assessed Values based on the then-applicable but now replaced valuation rules. Source - Maricopa County Treasurer's or Assessor's Office 0.39% - 7,009,682 6,229,965 6,049,153 5,918,160 Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For fiscal year 2019, the assessed value of Salt River Project property within the City of Peoria is $18,596,721. 6 7,458,783 0.23% 5.03% Rank 1 2 3 % of Taxable Secondary Assessed Value 1.09% 0.61% 0.55% 7 8 9 10 0.37% 0.33% 0.32% 0.31% 4.85% CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Year Ended June 30, Taxes Levied for the Fiscal Year (1) 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Notes: $ (1) (2) Source: 20,733,307 19,296,983 17,923,382 16,963,444 16,560,055 15,215,970 16,372,418 18,365,937 23,026,196 26,892,213 Collected with the Fiscal Year of the Levy (2) Percentage Amount of Levy $ 20,589,725 18,955,264 17,596,843 16,695,651 16,290,571 14,882,168 15,962,490 17,628,300 21,884,397 25,561,505 99.31% 98.23% 98.18% 98.42% 98.37% 97.81% 97.50% 95.98% 95.04% 95.05% Table XIII Collections in Subsequent Years (2) $ 171,818 198,917 157,477 179,916 231,470 247,298 373,949 544,846 789,112 Levy figures obtained from Maricopa County Tax Levy Books-February Publication. Collection amount obtained from Maricopa County Treasurer's Secured Levy Report at 6/30/2019. Maricopa County Treasurer's Office Maricopa County Assessor's Office City financial records and reports 130 Total Collections To Date Percentage Amount of Levy $ 20,589,725 19,127,082 17,795,760 16,853,127 16,470,487 15,113,637 16,209,788 18,002,249 22,429,243 26,350,617 99.31% 99.12% 99.29% 99.35% 99.46% 99.33% 99.01% 98.02% 97.41% 97.99% CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS Average Utility Bill Amounts Last Ten Fiscal Years 2012 2013 2014 2010 2011 $35.46 -3.46% $34.36 -3.10% $38.00 10.59% $37.41 -1.55% $21.45 0.42% $20.45 -4.66% $21.49 5.09% $15.36 1.19% $15.35 -0.07% $15.40 0.33% Table XIV 2015 2016 (c) 2017 2018 2019 $37.31 -0.27% $35.54 -4.74% $37.53 5.60% $39.13 4.26% $41.44 5.90% $42.15 1.71% $24.16 12.42% $23.36 -3.31% $23.99 2.70% $24.64 2.71% $25.22 2.35% $25.26 0.16% $26.60 5.30% $13.38 -13.12% $13.38 0.00% $13.35 -0.22% $13.44 0.67% $13.39 -0.37% $14.23 6.27% $14.42 1.34% Utility Service Connections Last Ten Fiscal Years 2012 2013 2014 2015 2016 (c) 2017 2018 2019 Water Average bill % Increase Wastewater Average bill % Increase Residential Solid Waste Average bill % Increase Water # of Accounts % Increase Wastewater # of Accounts % Increase Residential Solid Waste # of Accounts % Increase 2010 2011 47,606 1.50% 47,793 0.39% 48,509 1.50% 49,416 1.87% 50,399 1.99% 51,405 2.00% 55,558 8.08% 57,011 2.62% 58,061 1.84% 59,185 1.94% 50,383 0.92% 50,715 0.66% 51,527 1.60% 52,674 2.23% 53,548 1.66% 54,599 1.96% 56,235 3.00% 57,909 2.98% 59,499 2.75% 60,913 2.38% 48,382 0.78% 48,752 0.76% 49,506 1.55% 50,727 2.47% 51,609 1.74% 52,640 2.00% 54,262 3.08% 55,828 2.89% 57,452 2.91% 58,816 2.37% Charges for Wastewater Services Base Minimum Monthly Bill As of June 30, 2019 Charges for Water Services Base Minimum Monthly Bill As of June 30, 2019 Resid., Commerc. & Landscape Customers Multi Family Customers Base Charge per Meter $8.39 Charge per Dwelling Unit $4.64 Meter Size 5/8"-3/4" 1" 1 1/2" 2" 3" 4" 6" 8" Charge $ 16.09 19.64 31.74 45.16 81.01 121.30 233.15 367.42 Resid., Commerc. & Landscape Customers Multi Family Customers Base Charge per Meter $3.90 Charge per Dwelling Unit $3.54 Meter Size 5/8"-3/4" 1" 1 1/2" 2" 3" 4" 6" 8" Charge $ 9.79 9.79 23.51 35.29 66.75 102.09 200.22 318.03 (a) Base service charge is based on each bill rendered. (b) For residential & multi-plex users, volume is measured as the rate per 1,000 gallons of a four-month winter average (December - March). For commercial customers, the volume charge is based on actual monthly usage. (c) Water account total includes the acquisition of New River System. These accounts were excluded from the FY16 average water bill calculation, but included beginning in FY17. Source: City customer service and billing records 131 (continued) Table XIV CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA Volume Consumption (gallons) 0 - 4,000 4,001 - 10,000 10,001 - 20,000 10,001 - 25,000 Volume Charges for Water Services Usage Per Month As of June 30, 2019 Residential Multiplex (per 1,000 gallons) (per 1,000 gallons) $ 1.18 $ 3.11 4.41 4.87 - Commercial (per 1,000 gallons) $ - 1,000+ - 3.11 - 0 - 10,000 10,001 - 50,000 50,001+ - - 1.18 3.11 4.41 Water Meter Permit Charges As of June 30, 2019 Meter Size Charge 317 3/4" $ 493 1 1/2" 629 - 1,033 2" 3" 1,751 - 2,662 4" 2,231 - 3,172 6" 3,781 - 5,086 Hydrant meter 1,280 Commercial accounts By meter size Charges for Residential Solid Waste As of June 30, 2019 Monthly fee Single container & recycling $ 15.29 Additional container 12.53 Charges for Storm Water As of June 30, 2019 Monthly All Customers $ 1.25 X (a) Base service charge is based on each bill rendered. (b) For residential & multiplex users, volume is measured as the rate per 1,000 gallons of a three-month winter average (December - February). For commercial customers, the volume charge is based on actual monthly usage. Source: City customer service and billing records (continued) 132 CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND TEN YEARS AGO Table XIV 2010 2019 Entity City of Peoria Padre's Pump Station Desert Harbor Lake Trilogy at Vistancia Desert Harbor Landscape Sun Garden Park II HOA Ventana Lakes N. of Beardsley Lake Sun Garden Mobile Home Park Equity Lifestyle Prop Inc - Casa Del Sol East Centennial High School Polynesian Village Freedom Plaza Care Center 5 Star Quality Care - Desert Harbor Type of User Sports Complex Homeowner's Association Commercial Landscape Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association Multi-Family Residential Public School Homeowner's Association Healthcare Facility Healthcare Facility Water usage measured in thousands of gallons Source: City customer service and billing records (concluded) 133 Avg Monthly Water Usage Rank 5,581 1 2,442 2 2,247 3 1,942 4 1,924 5 1,659 6 1,438 7 1,386 8 1,367 9 1,216 10 Monthly Water Usage 0.70% 0.30% 0.28% 0.24% 0.24% 0.21% 0.18% 0.17% 0.17% 0.15% Avg Monthly Water Usage Rank 5,912 2 7,118 1 2,699 3 Monthly Water Usage 0.86% 1.04% 0.39% 2,014 1,610 1,337 4 5 7 0.29% 0.24% 0.20% 1,320 1,312 1,443 1,307 8 9 6 10 0.19% 0.19% 0.21% 0.19% CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Table XV Fiscal Year 2011 2010 Governmental Activities General Obligation Bonds Municipal Development Authority Debt Obligations Highway User Revenue Bonds Direct Purchase and Loan Obligations Special Assessment Bonds Community Facilities District Bonds $ Business-type Activities Water and Sewer Revenue Bonds WIFA Loans Municipal Development Authority Debt Obligations Municipal Sports Complex Bonds Long-Term Loan Payable 184,960,000 55,943,338 8,042,321 60,890,000 $ 15,780,000 130,298,508 861,662 6,883,276 2012 167,580,000 58,365,965 6,155,000 58,615,000 $ 15,780,000 121,975,538 449,034 - 2013 170,960,000 52,480,000 4,660,000 56,230,000 $ 38,480,000 89,803,906 - 2014 162,375,000 85,230,000 3,520,000 53,725,000 $ 37,295,000 82,212,652 - 2015 152,820,000 81,035,000 3,195,000 51,095,000 $ 32,720,000 77,780,535 - 2016 145,088,146 77,797,482 2,865,416 48,409,540 $ 29,669,224 73,235,496 - 2017 170,995,550 73,257,994 2,508,814 40,575,685 $ 24,622,433 78,549,337 - 2018 158,031,697 68,529,573 2,137,211 40,400,804 $ 19,095,643 74,229,903 - 2019 135,863,947 34,792,700 36,514,304 37,266,862 $ 13,383,853 70,004,831 - - 157,167,099 32,753,534 30,761,347 33,920,919 8,412,062 62,724,636 - - - Total Primary Government $ 463,659,105 $ 428,920,537 $ 412,613,906 $ 424,357,652 $ 398,645,535 $ 377,065,304 $ 390,509,813 $ 362,424,831 $ 327,826,497 $ 325,739,598 Total Debt Per Capita $ 3,009.50 $ 2,764.59 $ 2,631.80 $ 2,643.91 $ 2,429.22 $ 2,238.44 $ 2,280.52 $ 2,092.43 $ 1,867.05 $ 1,811.68 Total Debt as a % of Personal Income 8.5% 7.8% 7.4% 7.1% Source: City financial records. Debt schedule exhibits and Long-term liability activity footnote 134 6.4% 5.8% 5.7% 5.1% 4.4% 4.1% CITY OF PEORIA, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO FULL CASH VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Table XVI Fiscal Year 2011 2010 Bonded Debt (1) Less: Debt Service Reserves (2) $ 184,960,000 Net Bonded Debt $ 149,607,858 Percentage of Net Bonded Debt to Full Cash Value 2012 $ 167,580,000 $ 135,730,531 35,352,142 $ 170,960,000 $ 140,177,497 31,849,469 0.9% 2013 2014 $ 162,375,000 $ 131,549,434 30,782,503 2015 $ 152,820,000 $ 123,895,463 30,825,566 2016 $ 145,088,146 $ 119,229,075 28,924,537 2017 $ 170,995,550 $ 144,412,048 25,859,071 2018 $ 158,031,697 $ 132,501,730 26,583,502 $ 135,863,947 $ 119,976,753 25,529,967 0.9% 1.2% 1.2% 1.2% 1.1% 1.0% 0.9% 2019 $ 157,167,099 $ 140,071,900 15,887,194 0.7% 17,095,199 0.8% Percentage of Net Bonded Debt to Assessed Value (3) 7.9% 8.4% 11.0% 11.6% 11.7% 10.3% 12.3% 10.6% 9.0% 9.7% Net Bonded Debt Per Capita $971 $875 $894 $820 $755 $708 $843 $765 $683 $779 Net Bonded Debt as a % of Personal Income 2.74% 2.47% 2.53% 2.20% 1.99% 1.83% 2.12% 1.87% 1.62% 1.77% (1) Represents face value of general obligation debt outstanding plus deferred bond premiums (2) Fund balance of GO Bond Debt Service Fund per the fund financial statements (3) Prior to FY2015-16, Primary or Limited Property Values were used for primary ad valorem taxes which are levied for operations of the city and Secondary Assessed Values were used for secondary ad valorem taxes which are levied for debt service. Beginning in FY2015-16, with a voter approved constitutional amendment, both primary and secondary ad valorem taxes are now levied on the Limited Property Values. Because FY2015-16 is the first year for implementation of the constitutional amendment and use of Limited Property Values, there is no comparative data from prior years and accordingly the Net Assessed Values presented for years prior to FY2015-16 represent Secondary Assessed Values based on the then-applicable but now replaced valuation rules. Note: Personal income and population information may be found on Table XXV Full cash value information may be found on Table VIII Sources - City debt service schedules & Long-term liability footnote. 135 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2019 Limited Assessed Valuation Governmental Unit Overlapping: State of Arizona Maricopa County Maricopa County Community College District Maricopa County Flood Control District Maricopa County Library District Maricopa County Fire District Assistance Maricopa County Special Health Care District Central AZ Water Conservation West MEC Vocational District Sub-total - City-wide overlapping Total City-wide debt levies (3) $ 62,328,357,186 40,423,232,423 40,423,232,423 37,003,666,851 40,423,232,423 40,423,232,423 40,489,188,615 40,489,188,615 14,779,081,648 General Obligation Bonds Outstanding (2) $ Unified School Districts: Peoria No. 11 1,249,220,588 Deer Valley No. 97 196,188,735 Nadaburg No. 81 1,468,243 Sub-total - Unified school district overlapping Total overlapping Percentage Applicable to City of Peoria (1) Table XVII Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 380,740,000 497,125,000 126,600,000 2.31% 3.56% 3.56% 3.89% 3.56% 3.56% 3.56% 3.56% 9.74% $ 13,561,370 17,677,979 12,333,671 43,573,020 200,740,119 231,560,000 186,015,000 365,000 69.85% 7.58% 2.34% 161,744,660 14,099,937 8,541 175,853,138 219,426,158 157,167,099 100.00% 157,167,099 $ 0.20 0.18 0.06 0.01 0.29 0.14 0.15 3.02 2.56 0.32 Direct: City of Peoria $ 1,439,812,989 Total direct and overlapping debt $ $ 376,593,257 Notes: Overlapping governments are those that coincide, at least in part, with the geographical boundaries of the city. This table estimates the portion of outstanding debt of those overlapping governments that is borne by the residents and businesses in the city. This process recognizes that, when considering the city's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Does not include debt amount of Vistancia Community Facilities District ($30,957,795) or Vistancia West Community Facilities District ($2,963,124). (1) Percentage applicable to the City is computed on the ratio of secondary assessed valuation. (2) Includes total stated principal amount of general obligation bonds outstanding. Does not include certificates of participation, revenue obligations or loan obligations outstanding for the jurisdictions listed. (3) Total City-wide debt levies are County debt plus City debt. Sources: - City of Peoria financial records - Maricopa County Treasurer - Individual jurisdictions' CAFRs and official statements - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 136 $ 1.15 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2019 Governmental Unit Overlapping: State of Arizona Maricopa County Maricopa County Community College District Maricopa County Flood Control District Maricopa County Library District Maricopa County Fire District Assistance Maricopa County Special Health Care District Central AZ Water Conservation West MEC Vocational District Sub-total - City-wide overlapping Total City-wide debt levies (3) Limited Assessed Valuation $ 62,328,357,186 40,423,232,423 40,423,232,423 37,003,666,851 40,423,232,423 40,423,232,423 40,489,188,615 40,489,188,615 14,779,081,648 Debt Outstanding (2) $ Unified School Districts: Peoria No. 11 1,249,220,588 Deer Valley No. 97 196,188,735 Nadaburg No. 81 1,468,243 Sub-total - Unified school district overlapping Total overlapping Direct: City of Peoria $ 1,439,812,989 $ Total direct and overlapping debt Percentage Applicable to City of Peoria (1) Table XVIII Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria 380,740,000 126,600,000 2.31% 3.56% 3.56% 3.89% 3.56% 3.56% 3.56% 3.56% 9.74% $ 231,560,000 186,015,000 365,000 69.85% 7.58% 2.34% 161,744,660 14,099,937 8,541 175,853,138 201,748,179 254,602,900 100.00% 254,602,900 $ 13,561,370 12,333,671 25,895,041 280,497,941 $ 3.02 2.56 0.32 $ 456,351,079 Notes: Overlapping governments are those that coincide, at least in part, with the geographical boundaries of the city. This table estimates the portion of outstanding debt of those overlapping governments that is borne by the residents and businesses in the city. This process recognizes that, when considering the city's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) Percentage applicable to the City is computed on the ratio of secondary assessed valuation. (2) Includes total stated principal amount of general obligation bonds outstanding. Does not include certificates of participation, revenue obligations or loan obligations outstanding for the jurisdictions listed. (3) Total City-wide debt levies are County debt plus City debt. Sources: - City of Peoria financial records - Maricopa County Treasurer - Individual jurisdictions' CAFRs and official statements - Maricopa County Assessor - State of Arizona, Department of Revenue, Abstract of the Assessment Roll 137 0.20 0.18 0.06 0.01 0.29 0.14 0.15 1.15 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit 2010 Overlapping: State of Arizona Maricopa County Community College District County Flood Control District County Free Library Fire District Assistance Education Equalization West MEC Vocational District Central AZ Water Conservation Sub-total - City-wide overlapping Total City-wide levies (1) Unified School Districts: Peoria No. 11 Deer Valley No. 97 Nadaburg No. 81 Sub-total - Unified school district overlapping $ 21,354,408 21,354,408 405,549,288 2011 $ 23,908,932 23,908,932 384,534,551 2012 $ 22,084,125 22,084,125 371,967,077 Fiscal Year 2014 2013 $ 25,357,414 3,241,000 28,598,414 394,056,576 $ 23,384,382 3,198,843 26,583,225 317,946,402 2015 $ 21,550,210 3,025,964 24,576,174 298,736,758 Table XIX 2016 $ 20,203,810 6,722,916 26,926,726 314,264,769 2017 $ 17,547,206 13,247,434 30,794,640 188,826,337 2018 $ 15,609,534 13,266,411 28,875,945 236,046,896 2019 $ 13,561,370 12,333,671 25,895,041 246,577,021 166,217,415 26,201,313 - 196,735,864 24,618,198 7,800 177,729,492 25,445,126 4,524 163,033,794 25,160,995 284,900 208,200,535 27,264,686 2,286 180,916,246 25,506,618 1,212 219,811,259 26,927,344 789 186,654,480 30,347,141 579 160,934,200 16,287,234 12,519 161,744,660 14,099,937 8,541 192,418,728 221,361,862 203,179,142 188,479,689 235,467,507 206,424,076 246,739,392 217,002,200 177,233,953 175,853,138 Total overlapping 213,773,136 245,270,794 225,263,267 217,078,103 262,050,732 231,000,250 273,666,118 247,796,840 206,109,898 201,748,179 Direct (2): City of Peoria 384,194,880 360,625,619 349,882,952 365,458,162 291,363,177 274,160,584 287,338,043 158,031,697 207,170,951 220,681,980 $ 597,968,016 $ 605,896,413 $ 575,146,219 $ 582,536,265 $ 553,413,909 $ 505,160,834 $ 561,004,161 $ 405,828,537 $ 413,280,849 $ 422,430,159 Total direct and overlapping debt (1) - Total City-wide debt levies are County debt plus City debt. (2) - Due to a recommended change in accounting principle, the contracts payable category is no longer being used to calculate direct governmental activities debt. Sources: City Financial Records Individual jurisdictions' CAFRs and official statements for debt of other entities 138 CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS Table XX Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Property Assessed Value (1) $ 1,895,163,851 $ 1,609,972,512 $ 1,276,335,862 $ 1,137,434,740 $ 1,057,413,204 $ 1,155,587,438 $ 1,178,016,995 $ 1,244,679,295 $ 1,340,068,217 $ 1,439,812,989 6% Limitation Debt limit $ $ 96,598,351 $ 76,580,152 $ 68,246,084 $ 63,444,792 $ 69,335,246 $ 70,681,020 $ 74,680,758 $ 80,404,093 $ 86,388,779 113,709,831 Total net debt applicable to limit Legal 6% Debt Margin 5,565,000 $ 108,144,831 Total net debt applicable to the limit as a percentage of debt limit 20% Limitation Debt limit $ 4.9% $ Total net debt applicable to limit Legal 20% Debt Margin 4,570,000 379,032,770 199,637,770 Total net debt applicable to the limit as a percentage of debt limit 47.3% $ 4.7% $ 179,395,000 $ 92,028,351 2,735,000 321,994,502 158,984,502 50.6% $ 3.6% $ 163,010,000 $ 73,845,152 1,665,000 255,267,172 87,042,172 65.9% $ 2.4% $ 168,225,000 $ 66,581,084 350,000 227,486,948 66,776,948 $ 0.6% $ 160,710,000 $ 63,094,792 - 211,482,641 70.6% 59,012,641 72.1% $ 0.0% $ 152,470,000 $ 69,335,246 4,814,727 231,117,488 88,192,488 61.8% $ 235,603,399 $ 80,258,126 65.9% 139 70,531,031 2,999,727 $ 5.6% $ 155,345,273 (1) Prior to FY2015-16, Primary or Limited Property Values were used for primary ad valorem taxes which are levied for operations of the city and Secondary Assessed Values were used for secondary ad valorem taxes which are levied for debt service. Beginning in FY2015-16, with a voter approved constitutional amendment, both primary and secondary ad valorem taxes are now levied on the Limited Property Values. Because FY2015-16 is the first year for implementation of the constitutional amendment and use of Limited Property Values, there is no comparative data from prior years and accordingly the Net Assessed Values presented for years prior to FY2015-16 represent Secondary Assessed Values based on the then-applicable but now replaced valuation rules. Source: Maricopa County Assessor and City records $ 6.8% 142,925,000 $ 65,866,293 4,149,727 248,935,859 104,845,586 57.9% $ 3.7% $ 144,090,273 $ 77,404,366 4,526,273 268,013,643 5.2% $ 124,055,273 $ 143,958,370 46.3% 81,862,506 287,962,598 141,653,727 $ 146,308,871 49.2% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - EXCISE TAX AND STATE SHARED REVENUE DEBT OBLIGATIONS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS Table XXI Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 (6) 2019 Senior Lien Excise Tax and State Shared Revenue Debt Obligations Pledged Revenues Sales and use taxes (1) State-shared sales tax Urban revenue sharing Franchise taxes License and permits Fines and forfeitures User fees and charges Miscellaneous Total Pledged Revenues $ Senior Lien Debt Service Requirements Principal (2) Interest (2) Total Senior Lien Debt Service Requirements $ Estimated Coverage 47,957,886 10,137,682 17,469,936 3,955,416 1,599,957 2,525,753 10,185,728 1,674,775 95,507,133 3,575,000 670,386 4,245,386 $ $ 22.50 49,541,810 11,649,489 13,408,996 4,037,897 1,672,072 2,813,535 10,502,078 2,692,430 96,318,307 3,990,000 482,594 4,472,594 $ 51,737,833 12,087,651 13,231,006 4,084,163 2,106,545 2,521,407 10,895,825 1,656,235 98,320,665 1,569,999 505,827 2,075,826 $ 21.54 $ $ 56,145,066 12,665,191 14,425,958 4,136,004 2,564,075 2,058,925 11,889,776 2,534,262 106,419,257 665,000 1,065,571 1,730,571 $ 60,587,446 13,431,637 17,172,500 4,194,371 2,800,894 1,933,142 12,535,479 1,379,952 114,035,421 $ 2,010,000 1,708,383 3,718,383 $ $ 63,331,915 14,139,128 18,650,521 4,312,836 3,132,178 1,699,818 12,703,987 2,146,784 120,117,167 2,020,000 1,642,083 3,662,083 $ $ 67,425,794 14,760,029 18,549,406 4,461,864 4,080,210 1,601,014 11,998,841 2,341,988 125,219,146 2,085,000 1,567,808 3,652,808 $ $ 71,476,726 15,631,512 20,949,613 4,501,681 4,778,632 1,433,868 14,376,186 2,980,499 136,128,717 2,165,000 1,483,533 3,648,533 $ $ 76,168,326 15,894,140 20,334,388 5,035,331 5,509,240 1,728,303 16,758,517 4,696,224 146,124,469 2,361,806 1,385,086 3,746,892 $ $ 79,020,319 17,018,021 20,366,698 4,925,609 5,720,889 2,241,580 16,881,528 5,452,362 151,627,006 2,265,000 1,232,635 3,497,635 47.36 61.49 30.67 32.80 34.28 37.31 39.00 43.35 96,244,839 9,088,210 105,333,049 $ 104,688,686 9,927,436 114,616,122 $ 110,317,038 10,861,145 121,178,183 $ 116,455,084 11,334,889 127,789,973 $ 121,566,339 12,231,059 133,797,398 $ 132,480,184 12,939,338 145,419,522 $ 142,377,577 13,977,877 156,355,454 $ 148,129,371 15,203,014 163,332,385 2,005,000 1,873,763 3,878,763 2,095,000 1,803,588 3,898,588 2,185,000 1,730,263 3,915,263 2,285,000 1,648,325 3,933,325 2,385,000 1,545,500 3,930,500 2,490,000 1,438,175 3,928,175 2,665,000 1,114,408 3,779,408 3,015,000 507,374 3,522,374 Other Excise Tax and State Shared Revenue Debt Obligations (3) Net Pledged Revenues from above (4) Additional Pledged Revenues (5) Total Debt Service Requirements Principal Interest Total Annual Requirements Estimated Coverage Note: $ $ 91,261,747 8,491,097 99,752,844 1,835,000 2,005,188 3,840,188 25.98 $ $ 91,845,713 8,682,846 100,528,559 1,920,000 1,940,963 3,860,963 $ $ 26.04 27.16 $ $ 29.40 $ 30.95 32.49 (1) Excludes the 0.3% Transportation Sales Tax approved by voters in September 2005. (2) Although the pledged revenues for all Senior Lien Debt Obligations are excise taxes and state shared revenues (excluding the 0.3% Transportation Sales Tax), some debt service payments, including the 2011 MDA Debt Obligation, are funded by Enterprise Funds. (3) Other Excise Tax and State Shared Revenue Debt Obligations are backed by a senior lien on the .03% transaction privilege tax approved by voters in 2005 and a subordinated lien on the Excise Taxes and State Shared revenues listed above. (4) Pledged revenues on the Senior Lien Debt Obligations, less the debt requirements for the Senior Lien Debt Obligations (5) Revenues of the Transportation Sales Tax Fund, primarily consisting of the 0.3% transaction privilege tax in Note (1). (6) During FY2018, the 2006 and 2008 MDA debt obligations were refunded using direct purchase obligations. As part of the refunding the City deposited $3,128,884, which was available for upcoming debt service payments for the debt being refunded, with the bond escrow agent. This amount is included in debt principal and interest listed above. Source: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Debt service schedules, City financial records 140 $ 34.04 $ 37.02 $ 41.37 $ 46.37 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - WATER AND WASTEWATER REVENUE BONDS LAST TEN FISCAL YEARS Table XXII Fiscal Year 2010 Gross Revenue (1) Operating and Maintenance Expenses (2) Net Revenue Available for Debt Service $ 2012 2011 48,087,688 28,067,908 20,019,780 $ 46,141,098 28,610,625 17,530,473 $ (6) 50,720,705 28,823,261 21,897,444 2013 $ 2014 52,680,761 28,974,990 23,705,771 $ 2015 54,515,296 30,942,736 23,572,560 $ 2016 52,770,260 35,326,061 17,444,199 $ 2017 60,010,324 33,060,448 26,949,876 $ 2018 64,032,933 35,787,927 28,245,006 $ 2019 69,512,706 38,664,295 30,848,411 $ 69,682,089 39,616,866 30,065,223 Development Fee Revenue Total Net Revenue 1,616,718 21,636,498 1,899,935 19,430,408 2,820,416 24,717,860 3,205,623 26,911,394 4,311,153 27,883,713 4,418,565 21,862,764 5,116,972 32,066,848 6,268,689 34,513,695 6,034,425 36,882,836 6,529,816 36,595,039 Debt Service Requirements Principal (3) Interest (4) Total Debt Service Requirements 7,362,889 4,332,089 11,694,978 7,025,129 4,501,266 11,526,395 7,941,123 4,242,754 12,183,877 8,776,254 3,579,904 12,356,158 9,007,117 3,343,413 12,350,530 9,210,038 3,097,542 12,307,580 9,456,159 3,026,940 12,483,099 10,635,513 2,621,761 13,257,274 10,983,985 2,567,632 13,551,617 12,431,144 2,001,074 14,432,218 $ $ $ $ $ $ $ $ $ $ Ratio of Total Net Revenue/ Total Bond Expense 1.85 1.69 2.03 2.18 2.26 1.78 2.57 2.60 2.72 2.54 Ratio of Net Available/ Total Bond Expense (5) 1.71 1.52 1.80 1.92 1.91 1.42 2.16 2.13 2.28 2.08 (1) Includes total operating revenues and investment income of the Water Utility and Wastewater Utility Enterprise Funds. (2) Includes total operating expenses of the Water Utility and Wastewater Utility Enterprise Funds, less depreciation amortization. For FY09 also excludes a one-time insurance claim ($7,930,000) and a one-time charge from Central Arizona Project for back billed water capital recovery charges ($3,670,364). (3) Includes principal for Water and Sewer Revenue bonds and Water Infrastructure Finance Authority loans. Although some MDA bonds are financed by the Utility Funds, the pledged revenue is excise tax therefore the debt is included in the MDA Bond debt coverage calculations on Table XXI. (4) Bond interest payments only. Does not include amortization of loss on refunding, capitalized interest, agent fees or amortization of bond issuance costs that are included in interest expense on the statement of revenues, expenses, and changes in net position. (5) Excludes Development Fee Revenue. (6) In FY2012 $24,810,509 in principal and $405,829 in interest were defeased. These additional debt payments have been removed from the FY12 debt service requirements so as not to distort the ratios. Source: Statement of Revenues, Expenses, and Changes in Fund Net Position Repayment schedules for debt serviced by Water and Wastewater Utility Enterprise funds 141 Table XXIII CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS 2010 2011 2012 2013 Fiscal Year 2014 2015 2016 2017 2018 Pledged Revenues (1) $ 3,402,865 $ 2,645,451 $ 2,262,112 $ 1,484,283 $ 1,259,303 $ 1,168,526 $ 1,078,196 $ 2,787,558 $ 2,130,000 Debt Service Requirements Principal Interest (2) Total Annual Requirements 2,360,492 559,205 $ 2,919,697 1,887,322 432,302 $ 2,319,624 1,495,000 316,720 $ 1,811,720 1,140,000 222,820 $ 1,362,820 325,000 149,600 474,600 340,000 135,788 475,788 355,000 121,338 476,338 370,000 106,250 476,250 2,130,000 90,825 $ 2,220,825 1.17 1.14 1.25 1.09 5.85 0.96 Estimated Coverage $ 2.65 $ 2.46 $ 2.26 $ (1) - Pledged revenues equals Special Assessment Debt Service Fund current year fund balance plus current year principal & interest payments. (2) - Bond interest payments only. Does not include agent fees included in interest expense on the Statement of Revenues, Expenditures and Changes in Fund Balance. Source: City financial records Governmental Fund Financial Statements 142 2019 $ - $ - CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due 2010 $ 2,211,609 2011 $ 2,171,435 2012 $ 1,849,026 2013 $ 1,213,646 Fiscal Year 2014 (3) $ 455,116 Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) 2,211,599 38,301 $ 2,249,900 2,171,435 $ 2,171,435 1,848,788 205,901 $ 2,054,689 1,213,646 $ 1,213,646 455,116 675,958 $ 1,131,074 100.0% 100.0% 100.0% 100.0% 100.0% $ 8,141,515 $ 6,328,423 $ 4,551,324 $ 3,520,000 $ 2,603,127 Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) $ 2015 (4) 381,761 $ 381,761 381,761 Table XXIV $ 2016 (5) 381,950 2017 (6) $344,741 $ 381,950 381,950 344,741 1,809,173 $2,153,914 100.0% 100.0% 100.0% $ 2,326,112 $ 2,036,876 (1) Does not include penalties or administrative fees which are included in special assessment revenues on the Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds. (2) Principal only. Assessments Receivable on Balance Sheet-Governmental Funds may include delinquent administrative charges, interest and penalties. (3) These Special Assessments relate to Improvement District 0601 which includes three lots. The tax rolls of Maricopa County Assessor's Office indicate that the current full cash value of the Assessed Property is approximately $25,957,000 for Lot No. 1, $17,577,500 for Lot No. 2 and $669,500 for Lot No. 3. There are no overlapping Assessment Districts and all lots are current in their assessment payments. (4) These Special Assessments relate to Improvement District 0601 which includes three lots. The tax rolls of Maricopa County Assessor's Office indicate that the current full cash value of the Assessed Property is approximately $25,957,000 for Lot No. 1, $23,400,000 for Lot No. 2 and $669,500 for Lot No. 3. There are no overlapping Assessment Districts and all lots are current in their assessment payments. (5) These Special Assessments relate to Improvement District 0601 which includes three lots. The tax rolls of Maricopa County Assessor's Office indicate that the current full cash value of the Assessed Property is approximately $30,000,000 for Lot No. 1, $21,066,600 for Lot No. 2 and $770,300 for Lot No. 3. There are no overlapping Assessment Districts and all lots are current in their assessment payments. (6) These Special Assessments relate to Improvement District 0601 which includes three lots. The tax rolls of Maricopa County Assessor's Office indicate that the current full cash value of the Assessed Property is approximately $30,000,000 for Lot No. 1, $25,285,800 for Lot No. 2 and $733,200 for Lot No. 3. There are no overlapping Assessment Districts and all lots are current in their assessment payments. Source: City financial records and reports 143 $0.00 2018 2019 $ - $ - $ - $ - N/A N/A $0.00 $0.00 Table XXV CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Population (1) 154,065 155,050 155,352 156,371 157,780 160,432 164,212 168,192 172,259 179,800 Personal Income (in thousands) (2) $ 5,802,550 5,497,453 5,774,589 5,943,036 6,113,186 6,392,573 6,701,656 7,100,730 7,595,933 7,928,461 Per Capita Personal Income (3) $ 37,663 35,456 37,171 38,006 38,745 39,846 40,811 42,218 44,096 NA Median Age (4) 35.5 38.4 39.4 38.3 40.2 40.5 36.9 41.6 41.0 39.5 Public School Enrollment (5) 35,978 35,334 35,095 35,231 34,952 34,897 34,966 34,912 35,388 35,490 (1) City population for the most current year based on Maricopa Association of Government estimates and prior year data is from the U.S. Census. (2) Peoria personal income calculated by multiplying Phoenix Metropolitan Statistical Area (MSA) per capita income times Peoria population divided by 1,000. Current year calculated by multiplying current year population by prior year per capital personal income. (3) Bureau of Economic Analysis - Phoenix Metropolitan Statista Area (MSA) (4) US Census Bureau - American Community Surveys (5) Arizona Department of Education (6) US Bureau of Labor Statistics 144 Unemployment Rate (6) 7.0% 8.7% 7.1% 6.8% 6.0% 5.0% 4.9% 4.2% 4.0% 4.3% CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND TEN YEARS AGO Table XXVI 2019 Employer Peoria Unified School District City of Peoria Fry's Food Stores (Multiple Locations) Walmart (Multiple Locations) Target Stores Inc (Multiple Locations) Immanuel Campus of Care Oak Craft Inc McDonalds (Multiple Locations) Hope Depot (Multiple Locations) The Terminix International Company, L.P The Antigua Group Inc Plaza Del Rio Campus/Freedom Plaza & Care Center Good Shepherd Care Center Lowes (Multiple Locations) # of Employees 4,173 1,249 723 392 374 330 318 315 314 300 Total 8,488 Total City Employment 89,540 2010 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Total City Employment 4.7% 1.4% 0.8% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.3% 9.5% # of Employees 3,864 1,174 600 535 435 360 240 650 250 239 8,347 72,495 Sources: City of Peoria Economic Development Department & Maricopa Association of Governments Employer Database Arizona Unemployment Statistics Program Special Employment Report www.azstats.gov 145 Rank 1 2 4 5 6 7 9 3 8 10 Percentage of Total City Employment 5.3% 1.6% 0.8% 0.7% 0.6% 0.5% 0.0% 0.0% 0.0% 0.0% 0.3% 0.9% 0.3% 0.3% 11.5% Table XXVII CITY OF PEORIA, ARIZONA AUTHORIZED FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Full-time Equivalent Employees as of June 30, 2019 General Government Mayor & Council City Manager Office of Communications Human Resources Attorney City Clerk Court Economic Development*** Finance & Budget Culture & Recreation Police Fire Community Development Development and Engineering*** Highways & Streets Public Works Human Services Water Utility Wastewater Utility Solid Waste Utility Information Technology Stadium Total FTE** Note: 2010 2011 * 2012 2013 2014 2015 2016 2017 2018 2019 6.00 10.00 8.50 19.00 26.00 9.00 22.00 13.30 89.75 125.47 271.00 167.00 51.00 39.75 41.00 63.75 11.75 60.75 29.25 45.00 46.00 19.00 15.00 8.00 18.00 26.00 9.00 21.00 27.80 86.75 115.97 287.00 164.00 15.50 39.75 44.00 56.75 10.00 57.75 29.25 43.25 41.60 15.50 15.00 7.00 17.00 26.00 8.00 20.90 26.00 80.75 113.57 289.00 162.00 12.50 33.25 38.80 57.95 7.50 56.50 29.50 45.00 39.00 15.50 16.00 8.00 17.50 26.00 7.00 20.90 26.00 80.75 111.97 288.00 167.50 12.50 33.25 38.80 57.95 7.50 55.50 29.50 45.00 39.00 16.50 16.00 8.00 17.50 26.00 7.00 20.90 28.00 80.00 115.97 292.00 168.50 13.50 33.25 38.80 57.95 7.50 55.50 29.50 45.50 40.00 17.50 16.00 8.00 17.50 26.00 7.00 20.90 30.50 80.00 115.97 292.00 168.50 14.00 33.25 38.80 57.95 7.50 55.50 29.50 45.50 40.00 17.50 16.00 9.00 19.00 26.00 7.00 20.90 31.50 79.00 119.22 295.00 175.50 15.00 33.25 38.80 57.95 7.50 55.50 31.50 49.50 41.00 17.50 18.00 9.00 19.00 26.00 7.00 20.90 8.00 79.00 121.47 299.00 194.50 16.00 65.00 38.80 57.95 7.50 58.50 32.50 53.25 42.00 18.50 18.00 9.00 20.00 26.00 7.00 20.90 8.00 80.00 121.20 306.00 194.50 16.00 65.00 38.80 57.95 7.50 58.50 32.50 56.25 42.00 18.50 18.00 9.00 20.50 26.00 7.00 20.90 7.00 79.00 145.78 303.00 212.00 12.92 67.25 38.80 58.95 9.50 61.50 33.50 58.25 42.00 18.50 1,174.27 1,131.87 1,100.72 1,105.12 1,118.87 1,121.87 1,145.62 1,191.87 1,203.60 1,249.35 Counts do include part-time non-seasonal benefitted employees. * Interdepartmental reorganization is reflected in FY2011 numbers. This will explain some of the significant changes in departments such as Mayor and Council, City Manager, Economic Development and Community Development. **The Total FTE presentation for years 2008-2013 was updated to reflect a calculation correction. ***The presentation was updated in fiscal year 2017 to reflect the renaming of departments. Source: City budget office 146 Governmental Activities: General Government Registered Voters in City Voter Participation (last election) Culture & Recreation Recreation Participants New Recreation Accounts Special Event Participants Police Calls for Service Avg Response Time (minutes) Fire Number of Incidents Avg Response Time (minutes) Development Services Building Permits Issued Value of Building Permits (millions $) Highways & Streets Asphalt Used (in tons) Centerline Miles Swept Miles Inspected Public Works Number of Vehicle Work Orders Human Services Number of Dial-a-Ride users Number of Annual Trips Business-type Activities Water Utility (E) Annual Consumption (000's gal) Wastewater Utility Wastewater Treated (billion gal) Solid Waste Utility Residential Tonnage Processed Commercial Tonnage Processed Recycle Tonnage Processed Stadium Spring Training Attendance Sporting Rentals Days Non-Sporting Rentals Days CITY OF PEORIA, ARIZONA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year 2012 2013 2014 2015 2010 2011 82,578 29.2% 86,803 29.2% 85,592 23.7% 87,432 23.7% 89,604 24.9% 132,391 5,903 46,578 134,661 5,968 60,715 136,200 6,106 65,347 134,045 5,396 73,800 56,683 5.65 56,764 5.87 57,184 6.01 14,874 5.02 15,403 5.19 1,497 $131.8 Table XXVIII 2016 2017 2018 2019 87,541 31.3%(F) 93,916 N/A 101,881 76.7% 102,460 N/A 109,073 36.48% 122,318 5,533 74,950 120,232 5,483 79,550 104,544 5,166 71,300 109,220 5,396 102,938 112,802 5,029 95,822 116,696 4,344 88,348 54,159 4.52 (C) 52,193 4.39 (C) 47,612 4.55 (C) 53,256 5.13 (C) 55,136 5.40 (C) 53,574 5.33 (C) 51,127 5.28 17,717 5.08 18,719 5.14 19,312 5.30 20,873 5.24 23,824 5.38 23,726 5:16(A) 24,932 5:24(A) 23,752 5:25(A) 1,401 $63.8 2,371 $111.2 3,625(D) $169.0 3,993(D) $188.3 4,534(D) $221.1 5,818(D) $311.9 6,336(D) $393.3 6,231(D) $355.0 5,701 (D) $382.1 2,832 5,935 422 2,677 6,159 85 (B) 2,038 6,202 163 3,122 6,143 187 2,227 5,660 205 2,302 4,968 211 1,289 4,118 296 1,930 6,199 1,551(G) 1,566 5,052 0(G) 1,394 6,405 0(G) 5,697 5,856 5,608 5,899 5,464 5,493 5,558 5,732 5,416 5,592 899 31,568 747 27,440 759 31,082 830 32,101 836 33,308 850 30,212 749 30,756 585 27,241 599 28,033 599 22,954 8,212,711 8,003,947 8,448,795 8,405,929 8,662,507 8,090,136 8,650,664 9,488,059 9,950,302 9,630,290 3.70 3.50 3.61 3.64 3.69 3.74 3.78 3.87 3.98 4.13 47,540 21,981 15,516 47,989 20,340 16,277 46,299 19,700 15,715 47,717 20,561 15,184 47,987 21,176 15,155 51,666 25,227 16,077 52,593 23,309 16,447 54,967 20,895 16,698 55,757 20,974 17,109 59,819 16,748 16,859 200,029 208 74 188,244 336 108 190,643 350 134 196,881 290 143 192,513 322 146 238,847 297 151 240,111 339 204 227,646 333 210 201,272 335 196 180,190 340 182 Notes: * Information is not available for these fiscal years. (A) Decrease in Fire Average Response time reflects change in calculation. Beginning in FY17, average response time is calculated 1st unit on scene and only includes code 3 (emergency calls). (B) Changed from lane miles to center line miles in FY11 to be consistent with other (C) Decrease in Police Average Response time reflects calculation change. New Calculation=Dispatch to Arrival. Previous calculation=Call for Service to Arrival. (D) Beginning FY13, this number includes all permits issued including tenant improvements, C of O permits, and spec (E) Beginning in FY15, Average Gallons/Household/Year is no longer being presented. (F) Percentage reflects voter participation in March 2015 Special General Election for Mesquite District Council. Eligible registered voters (G) Starting In FY17 an electronic survey of every road is completed every third year. Source: Various City Departments 147 CITY OF PEORIA, ARIZONA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Governmental Activities: General Government Annexed Area (square miles) Culture & Recreation # of Neighborhood Parks Total Neighborhood Park Acreage # of Community Parks Total Community Park Acreage Public Safety Police Stations Marked Patrol Vehicles (units) Fire Stations (full-time / part-time) (B) Number of Fire Engines Number of Ladder Trucks Highways & Streets Streets (miles maintained) Crack Seal Application (linear feet) Surface Treatments (lane miles) Public Works Street Lights Vehicles in Fleet Water Services Number of Pump Stations Number of Lift Stations Number of Wells Number of Reservoirs Human Services Dial-a-Ride Buses Business-type Activities Water Utility Number of Water Accounts Storage Capacity (million gal) Wastewater Utility Number of Wastewater Accounts Treatment Capacity (billion gal) Solid Waste Utility Number of Solid Waste Accounts Stadium Number of Practice Fields Number of Clubhouses (C) Total Complex Acreage Table XXIX 2010 2011 2012 Fiscal Year 2013 2014 2015 2016 2017 2018 2019 179.0 179.1 179.1 179.1 179.1 179.1 179.1 179.1 179.1 179.1 28 322 1 52 28 322 1 52 32 285 1 52 33 294 1 52 33 294 2 139 34 305 2 139 34 301 2 139 34 301 2 139 34 301 2 139 34 301 2 139 2 86 2 86 2 86 2 86 2 88 2 88 2 90 2 91 2 92 2 98 7/1 9 2 7/1 7 2 7/1 7 2 7/1 7 2 7/1 7 2 7/1 7 2 8/0 7 2 8/0 7 2 8/0 7 2 8/0 7 2 622 (A) * * * * * * 1452 1,165,460 88 (A) * * 1505 1,156,722 96 1,534 2,144,476 60 1,551 2,007,173 99 1,559 3,381,554 153 1,579 2,447,248 17 13,901 670 14,093 673 14,333 687 15,006 714 14,786 738 14,945 732 15,565 778 15,722 795 15,973 840 16,152 842 * * * * * * * * * * * * * * * * 25 15 38 30 25 14 40 30 30 13 46 33 30 13 47 33 30 13 47 33 27 11 24 22 554 584 590 9 7 7 7 6 5 5 5 5 6 47,606 42.0 47,793 42.0 48,509 42.0 49,516 42.0 50,399 42.0 51,405 42.0 55,558 42.0 57,011 42.0 58,061 42.0 59,185 42.0 50,383 16.25 50,715 16.25 51,527 16.25 52,674 16.25 53,548 16.25 54,599 16.25 56,235 16.25 57,909 16.25 59,499 16.00 60,913 16.00 43,382 48,752 49,506 50,727 51,609 52,640 54,262 55,828 57,452 58,816 13 3 125 13 3 125 13 3 125 13 3 125 13 3 125 13 3 125 13 3 125 13 3 125 13 3 125 13 3 125 Notes: * Information not tracked during this fiscal year. (A) Measurement changed from centerlane miles to lane miles in FY14. (B) Number of fire engines reported in FY13, FY14, FY15 and FY16 was restated to exclude a bush truck previously reported as a fire engine. (C) Number updated in FY17 for all years presented to reflect land owned by the City which was used to construct office space, and thus not part of Stadium complex acreage. Source: Various City Departments 148 Continuing Disclosures Continuing Disclosure Section SEC Rule 15c2-12, as amended, requires the City to provide Continuing Disclosure Annual Reports that include audited financial statements and other financial information for the benefit of owners and holders of bond obligations issued by the City. The Continuing Disclosure Annual Report shall contain or incorporate by reference certain information as set forth in the Continuing Disclosure Agreements and Undertakings executed by the City with the issuance of its municipal bond obligations. Information in this section is provided solely pursuant to the requirements of SEC Rule 15c2-12 and Continuing Disclosure Agreements and Undertakings and include financial information that is not required for fair presentation in conformity with accounting principles generally accepted in the United States of America and is therefore unaudited and not covered by the auditor’s opinion. Annual continuing disclosure information is filed with the Municipal Securities Rulemaking Board (MSRB) for public access via their Electronic Municipal Market Access (EMMA) system at www.emma.msrb.org. 149 Continuing Disclosures Annual Report For the Year Ended June 30, 2019 Audited Financial Statements The City’s Comprehensive Annual Financial Report for fiscal year ended June 30, 2019, is included as part of this submittal. Other Financial Information Information concerning the outstanding debt by type of bond can be found in the Notes to the Financial Statements, Note 7 Long Term Debt. Other financial information required per the City’s Continuing Disclosure Agreements and Undertakings for each type of bond obligation is incorporated by reference as follows: Statistical Section Page General Obligation Bonds (CUSIP 712838) Assessed values by property classification Table VIII 125 Comparison of assessed value to full cash value Table VIII 125 Comparative assessed values Table IX 126 Direct and overlapping assessed values Direct and overlapping tax rates Table XVII Table X 136 127 Property tax levies and collections Table XIII 130 Direct and overlapping general obligation bonds Direct general obligation debt ratios Table XVII Table XVI 136 135 Legal debt margin and unused borrowing capacity Table XX 139 Net revenues and debt service coverage Table XXII 141 Number of utility service connections Table XIVa 131 Ten largest water users Table XIVc 133 Municipal Development Authority Bonds (CUSIP 71284R and 71285A) Excise tax and state shared revenues and debt service coverage Table XXI 140 Privilege and use tax rates by category Table VI 123 Annual debt service requirements Table XXI 140 Legal debt margin and unused borrowing capacity Table XX 139 Assessed values by property classification Table VIII 125 Property tax levies and collections Table XIII 130 Special assessment collections Table XXIV 143 Water and Wastewater Revenue Bonds (CUSIP 712851) Improvement District Bonds (CUSIP 712844) 150 City of Peoria FINANCE AND BUDGET DEPARTMENT 8401 West Monroe Street Peoria, Arizona 85345 www.peoriaaz.gov