City of Peoria, Arizona FY20 Comprehensive Annual Financial Report (CAFR) Fiscal Year Ended June 30, 2020 Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2020 City of Peoria, Arizona City Council Cathy Carlat, Mayor Michael Finn, Vice Mayor Jon Edwards, Mayor Pro-Tem Bridget Binsbacher, Councilmember Denette Dunn, Councilmember Vicki Hunt, Councilmember Bill Patena, Councilmember 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, 2020 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 xiv xv xvi xvii 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, 2020 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 89 90 92 94 95 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 Non-Bond Capital Projects Fund 99 100 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 104 106 108 109 110 111 112 113 114 Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Combining Statement of Cash Flows 116 117 118 Fiduciary Funds Combining Statement of Fiduciary Net Position – Agency Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds ii 120 121 CITY OF PEORIA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2020 Table Page I II III IV V VI VII VIII IX X XI XII XIII XIV XV 125 126 128 129 130 131 132 133 134 135 136 137 138 139 142 XVI 143 XVII 144 XVIII 145 XIX XX 146 147 XXI XXII XXIII XXIV XXV XXVI 148 149 150 151 152 153 XXVII XXVIII XXIX 154 155 156 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 158 iii iv December 14, 2020 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, 2020. 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 14.2%, from 154,065 in 2010 to 175,961 in 2019. 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 initial 85 acres of the planned 120 acre third community park, Paloma Community Park opened in October, 2020. Similar to the Rio Vista and Pioneer parks, the Paloma Community Park offers residents a wide range of recreational activities including a huge fishing lake, large multipurpose fields, pickleball courts and other amenities. 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 Peoria’s population growth continues to be strong with Maricopa County in the top ten counties with the largest population gains since 2010. The leading catalysts for moving to Arizona last year, according to people who made the switch, were retirement attractiveness, job opportunities and lifestyle changes Peoria is part of the Phoenix Metropolitan Area which has seen strong job growth in recent years. The City issued 1,372 new residential building permits in fiscal year 2020, an increase of 11.5% over the prior year. Per the Case-Schiller Home Price index, house prices have increased in the Phoenix metropolitan area by 9.0% during fiscal year 2020. The City’s total property full cash value, which lags the market, increased by 10.6% from $20.1 billion in 2019-20 to $22.2 billion in 2020-21. Although Peoria, like most other communities, has been negatively impacted by the COVID-19 pandemic, Peoria has fared better than both Arizona as a whole and the nation. The unemployment rate in Peoria rose to 9.3% for June 2020 which is below Arizona at 10.0% and the U.S. at 11.2%. The City’s sales and use tax collections in fiscal year 2020 totaled $99.7 million, a 7.0% increase from the $93.2 million in the prior year. Economic Outlook Despite the COVID-19 pandemic, the City made critical strides this year in furthering its economic development goals and enhancing Peoria’s economic outlook. The Council approved a Memorandum of Understanding in June 2020 with Seattle based American Life, Inc. as the next step in the vision for Stadium Point at P83, a transformative mixed use vertical development that is central to providing more class A office spaces in the core of Peoria. Also in June, Taronis Fuels, a global producer of renewable fuel products announced its new headquarter and advanced manufacturing site in Peoria. Taronis Fuels is expected to create more than 500 jobs in the City. In September 2020, Desert Harbor Medical Commons announced a new 44,000 square foot medical center to begin in 2021 and the City also worked with First Medical Services LLC on acquiring a piece of land for development into a new state-of-the-art medical campus. vi Peoria’s housing market remained robust through the pandemic as low inventory levels and historically low interest rates fueled demand. The long-term outlook for Peoria continues to be very strong with the expectation that Arizona will continue to outpace the nation in growth and income related metrics. 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 2020 Response to COVID-19 Pandemic – With the economic fallout cause by the global pandemic, the City took immediately steps to support its residents and businesses in ensuring the continuation of core services without interruptions, establishing a helpline for residents, suspending water shutoffs and delinquency fees and reaching out to small businesses to provide support such as making “Open for Take Out” signs for restaurants. The City also allocated $5 million in CARES Act funds for various community and business needs, including a small business grant program for businesses who were severely impacted. As the pandemic continued through the year, the City worked on vii making its signature community events virtual and operated city facilities with limited capacity and safety measures to continue providing services to residents. Paloma Community Park In October 2020, the City opened its first phase of the Paloma Community Park located east of Lake Pleasant Parkway. The 85 acre first phase includes 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 also includes a trailhead for access to Peoria's Westwing Mountain trail system. Construction of the next phase will be in the works soon. Happy Valley Parkway Widening The Happy Valley Parkway project began in September 2019 and is expected to be completed by fall 2020. The project includes new curb and gutter; extension and connection of all existing sidewalks and multi-use trails along Happy Valley Parkway; traffic signal improvements at 115th Avenue and 100th Lane; includes a connection to Lake Pleasant Pavilion Shopping Center; landscape improvements, and pavement microseal and restriping for six lanes of traffic. In addition, the Agua Fria Bridge widening includes accommodation of six lanes of traffic, median barrier, and a 12-foot multi-use path behind separation barriers for pedestrians and bicyclists. Stadium Point at P83 Stadium Point @ P83 is a 17 acre mixed-use development ideally located in the P83 Entertainment District, on a city-owned site adjacent to the Peoria Sports Complex. In response to the high demand for Class A office space and mixed use developments, the City issued a request for proposal for a Master Developer for the site in October 2019 and selected American Life, Inc. a Seattle based developer specializing in such developments. The project will be in four phases. The first is design of the master plan and relocation of a well on the property. The second phase will feature construction of some Class A office, parking, retail and dining. The third phase is construction of the hotel, residential, retail, dining and entertainment. The fourth phase is construction of more Class A office, parking and residential. The total project is expected to be built out in no later than 10 years. In June 2020, City Council approved a Memorandum of Understanding with American Life, Inc. to begin negotiation for a development agreement. General Plan Update During fiscal year 2019-20, the City continued its efforts to update its General Plan. The City’s General Plan 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 during the year to gather community input. The new plan was then reviewed and adopted by the Planning and Zoning Commission, approved by Council in November 2019 and approved by voters in the November 2020 ballot. Partnership with ASU Entrepreneurship + Innovation During fiscal year 2019-20, the City continued its partnership 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 October 2019 the City’s Economic Development Team won the Gold Award from the International Economic Development Council for the Economic Development Agreement Monitoring System which viii tracks and manages the City’s economic development contracts to ensure successful achievement of economic development objectives. In November 2019, the City won the Excellence in Innovation Award for the Peoria Business Concierge Program at WESTMARC’s Best of the West award event. The City launched this new program to provide a support for businesses. The concierge's goal is to strengthen the City’s business partnership, build rapport, connect businesses with services and community support programs, navigate planning, zoning, signage, code enforcement and other areas within the city. In August 2020, Peoria ranked among the Top 20 by Rent.com as one of the best cities in the US for open space. Three Arizona cities are among the top 20, with Peoria ranking the highest at No. 7. Peoria is known for its scenic Sonoran desert and recreation opportunities, including 740 acres of public open spaces and parks and 27 miles of trails. BOND RATING During fiscal year 2019-20 Standard and Poor’s (S&P) rating service upgraded the City’s Municipal Development Authority revenue bonds to AAA from AA+. The raised rating reflects the application of S&P’s "Priority-Lien Tax Revenue Debt" criteria, published Oct. 22, 2018, on RatingsDirect, which factors in both the strength and stability of the pledged revenue, as well as the general credit quality of the obligor. In September 2020, Fitch Ratings affirmed the City’s AA rating for Water and Sewer Revenue Bonds. 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 2019-20 was $943,393,020. The City may utilize the additional expenditure authority for any local budgetary purposes. ix 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 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. x 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 independent audit was to provide reasonable assurance that the financial statements of the City of Peoria, Arizona, for the fiscal year ended June 30, 2020, 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, 2020, 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. There were no instances of material weakness or significant deficiencies reported related to the financial statement audit. Management does not expect any significant findings in the Single Audit Report. However, the results of the City’s single audit for the fiscal year ended June 30, 2020 are not yet available due to a delay in the issuance of the addendum to the OMB Compliance Supplement by the federal government. The reports from CliftonLarsonAllen LLP will be issued separately in the City of Peoria, Arizona’s 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, 2019. This is the 35th 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. xi 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 xii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Peoria Arizona For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Executive Director/CEO xiv 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 City Clerk Economic Development Director Development and Engineering Director xv Neighborhood and Human Services Director Public Works Director Water Services Director City of Peoria Principal Officials of the City Fiscal Year 202 Cathy Carlat Mayor Michael Finn Jon Edwards Vicki Hunt Denette Dunn Vice Mayor Bridget Binsbacher Mayor Pro Tem Councilmember Councilmember Councilmember Bill Patena Councilmember Jeff Tyne City Manager Erik Strunk Katie Gregory Andrew Granger Deputy City Manager 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 Deputy City Manager John Sefton Art Miller Kevin Burke Parks, Recreation & Community Facilities Director Police Chief Public Works Director Adina Lund Rhonda Geriminsky Rick Buss City Clerk Economic Development Services Director Development and Engineering Director Christine Nickel Sonia Andrews Chris Hallett Human Resources Director Chief Financial Officer Neighborhood & Human Services Director Chris Jacques Cape Powers Planning and Community Development Director Acting Water Services Director xvi City of Peoria Council Districts Lake Pleasant Mayor Cathy Carlat Carefree Hwy Vice Mayor Michael Finn Palo Verde District 67th Ave. Pinnacle Peak Rd. Mayor Pro-Tem Jon Edwards Willow District Councilmember Vicki Hunt Acacia District Bell Rd. Councilmember Bill Patena Ironwood District Councilmember Denette Dunn Pine District xvii 115th Ave. Councilmember Bridget Binsbacher Mesquite District Northern Ave. 67th Ave. Peoria Ave. 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, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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, and the aggregate remaining fund information of the City of Peoria, Arizona as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison statements for the General Fund, Highway User Revenue Fund, Transportation Sales Tax Fund and Development Fees Fund 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 (as listed in the table of contents) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the 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 14, 2020, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. a CliftonLarsonAllen LLP Phoenix, Arizona December 14, 2020 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, 2020. 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-xii 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 $43.7 million, 2.9%, in fiscal year 2020, an increase of $35.0 million, 4.4%, in governmental activities and an increase of $8.7 million, 1.2%, in business-type activities.  Total net position of the City is $1,548.4 million, of which $112.2 million is unrestricted.  The governmental activities program revenues decreased 3.7% in fiscal year 2020, primarily due to lower activity in the fourth quarter of the fiscal year because of the pandemic.  The business-type activities program revenues increased 3.6% due to growth and rate increases in Water and Wastewater which offset decreased revenues in the Stadium fund.  At June 30, 2020, total fund balance of the governmental funds was $259.5 million, a decrease of $16.0 million from the previous year. Of this, $80.3 million or 62.2% of General Fund expenditures for fiscal year 2020 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 $1.8 million for fiscal year 2020. Budgetary basis expenditures of the General Fund were 84.0% ($26.8 million in savings) of the final budgeted expenditures as the City implemented cost saving processes due to the pandemic and uncertainty about future revenues. 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, Development Fee Fund and Non-Bond Capital Project 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. 7 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 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, 2020, 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, 2020, compared to the prior year. Statement of Net Position As of June 30 (in millions of dollars) Governmental Business-type Activities Activities 2020 2019 2020 2019 Current and other assets Capital assets Total assets $ 335.3 917.8 1,253.1 $ 329.6 891.5 1,221.1 $ 123.6 697.5 821.1 $ 120.8 688.5 809.3 Total Primary Government 2020 2019 $ 458.9 1,615.3 2,074.2 $ 450.4 1,580.0 2,030.4 Total deferred outflows of resources 42.7 47.0 3.4 4.4 46.1 51.4 Other liabilities Long-term liabilities outstanding Total liabilities 35.9 424.9 460.8 21.9 439.3 461.2 18.9 80.9 99.8 10.1 86.8 96.9 54.8 505.8 560.6 32.0 526.1 558.1 Total deferred inflows of resources 9.8 16.7 1.5 2.3 11.3 19.0 Net position: Net investment in capital assets Restricted Unrestricted Total net position 687.9 112.1 25.2 825.2 671.2 121.5 (2.5) $ 790.2 622.5 13.7 87.0 723.2 619.3 25.1 70.1 714.5 1,310.4 125.8 112.2 $ 1,548.4 1,290.5 146.6 67.6 $ 1,504.7 $ $ $ The net position of the City increased $43.7 million in fiscal year 2020. Net position of governmental activities increased $35.0 million, while the business-type activities increased $8.7 million. The Water Utility Fund was responsible for the majority of the business-type activities increase with an increase in net position of $8.3 million. Net position consists of three components. The largest portion of net position, $1,310.4 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 $125.8 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 $112.2 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 For the Year Ended June 30 (in millions of dollars) Governmental Business-type Activities Activities 2020 2019 2020 2019 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 $ 34.1 30.4 17.5 $ 37.9 15.4 31.9 $ 87.9 15.1 $ 84.4 15.0 Total Primary Government 2020 2019 $ 122.0 30.4 32.6 $ 122.3 15.4 46.9 27.8 99.7 4.8 17.1 22.3 7.3 7.8 1.1 269.9 25.4 93.2 4.9 17.0 20.4 7.3 7.2 2.3 262.9 2.8 105.8 3.1 0.1 102.6 27.8 99.7 4.8 17.1 22.3 7.3 10.6 1.1 375.7 25.4 93.2 4.9 17.0 20.4 7.3 10.3 0.1 2.3 365.5 25.6 31.6 91.0 4.8 60.2 6.7 4.7 7.9 21.5 29.5 89.0 4.7 55.6 5.1 4.1 7.8 - - 25.6 31.6 91.0 4.8 60.2 6.7 4.7 7.9 21.5 29.5 89.0 4.7 55.6 5.1 4.1 7.8 232.5 37.4 (2.4) 35.0 790.2 825.2 217.3 45.6 (6.0) 39.6 750.6 790.2 44.8 30.0 14.1 6.9 3.7 99.5 6.3 2.4 8.7 714.5 723.2 42.0 24.5 13.7 7.9 3.5 91.6 11.0 6.0 17.0 697.5 714.5 44.8 30.0 14.1 6.9 3.7 332.0 43.7 43.7 1,504.7 $ 1,548.4 42.0 24.5 13.7 7.9 3.5 308.9 56.6 56.6 1,448.1 $ 1,504.7 $ $ $ For fiscal year 2020, total governmental activities revenues increased $7.0 million while total businesstype activities revenues increased $3.2 million. Expenses increased $15.2 million for the governmental activities and increased $7.9 million for the business-type activities. The approximately 8% increases in expenses for both governmental and business-type activities were due to increased personnel costs and inflationary level increases in contract services, materials and supplies. The general revenues of governmental activities increased $10.2 million from the previous year primarily due to local sales and use taxes, property taxes, and state shared income tax. Property taxes and state 9 shared income taxes were not greatly affected by the pandemic, and Peoria local sales tax collections stayed fairly strong through the fourth quarter. However state shared sales taxes dipped significantly due to the pandemic shut-down. Program revenues of governmental activities decreased by $3.2 million primarily due to a decrease of in fees, fines and charges for services resulting from the closure of City activities due to the pandemic. The program revenues of business-type activities increased by $3.6 million primarily due to an increase in water and wastewater revenues following a rate increase in July 2019. 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 $82.0 million are 35.3% of the governmental activities expenses for fiscal year 2020, down from 39.2% in fiscal year 2019. In the business-type activities, program revenues of $103.0 million are 103.5% of the business-type expenses for fiscal year 2020. This compares to $99.4 million and 108.5% in fiscal year 2019. Fiscal Year 2020 Governmental Activities Program Revenues & Expenses 100 (millions $) 80 60 40 20 0 Program revenues Expenses Governmental activities account for 71.8% of the total revenues of the City and 70.0% of the total expenses in fiscal year 2020. These percentages were 71.9% and 70.3% respectively in fiscal year 2019. As seen in the following graph, one of the largest financing sources for the City in fiscal year 2020 is charges for services (32.5%), primarily because this is the major funding source of the business-type activities (83.1% of business-type total revenues in fiscal year 2020). 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 2020 Investment earnings 2.8% Other grants & entitlements 8.1% Property taxes 7.4% Sales & use taxes 26.5% State shared revenues 12.4% Franchise taxes 1.3% Charges for services 32.5% Other 0.4% Contributed capital 8.6% Property taxes increased from fiscal year 2019 with an increase in assessed value. The total City (primary plus secondary) tax rate did not change in fiscal year 2020 compared to the previous year. Total government-wide expenses (not including transfers out) of the City increased $23.1 million in fiscal year 2020. Expenses of the governmental activities increased $15.2 million. Business-type activity expenses increased $7.9 million versus prior year. As mentioned above, expenses increased due to increased personnel costs and inflationary increases in contract services, materials and supplies. As shown in the following Government-Wide Functional Expenses graph, business-type activities account for 30.0% of the functional expenses of the City for fiscal year 2020, while governmental activities account for 70.0% of the functional expenses. For the governmental activities, the largest users of resources are public safety (27.4% of total expense, 39.1% of governmental expenses), highways and streets (18.1% of total expenses, 25.9% of governmental expenses), culture and recreation (9.5% of total expenses, 13.6% of governmental expenses), and general government (7.7% of total expenses, 11.0% of governmental expenses). Government-Wide Functional Expenses Fiscal Year 2020 Business-type activities 30.0% General government 7.7% Culture & recreation 9.5% Human Services 1.4% Public safety 27.4% Highways & streets 18.1% Interest 2.4% 11 Development services 1.5% Public works 2.0% 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 $259.5, a decrease of $16.0 million from the previous year. Of this, $110.9 million (a decrease of $33.7 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 decrease in restricted fund balance is primarily due to the usage of bond funds and restricted transportation funds for capital projects. An additional $68.3 million of the governmental fund balance (a decrease of $4.4 million from the previous year) has been committed or assigned for specific purposes by council or administrative action. These commitments include various stabilization reserves ($51.1 million), debt service reserves ($1.0 million), capital projects ($9.3 million) and arts capital and various other purposes ($6.9 million). The remaining $80.3 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 $21.3 million compared to the prior year. The increase in unassigned fund balance is primarily due to the receipt of AZ Cares grant funds from the State of Arizona. These funds were used to pay first responder salaries and employee related expenses which produced savings of general fund monies to be used for COVID response or as the City Council determines. This grant was received late in the fiscal year, so the majority of the savings remain unassigned in the General Fund. Governmental Funds ‐ Fund Balance $160 $140 FY19 $120 Millions FY20 $100 $80 $60 $40 $20 $0 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 increased $4.4 million over the prior fiscal year driven mainly from an increase in local sales tax of $5.4 million or 7.2%. General fund sales tax growth exceeded the prior fiscal year. Retail sales tax accounted for 54.3% of general fund local sales tax revenues in fiscal year 2020 and increased $3.8 million or 9.5% over the prior year. Primary property taxes increased $249 thousand or 6.0% over the prior fiscal year reflecting the continued growth and increased property values in the City. Charges for services, licenses and permits, fines and forfeitures, and rents all saw decreases from the prior year due to the impact of the pandemic shutdown. Total General Fund expenditures decreased $14.1 million versus prior year. The decrease is primarily due to the use of AZ Cares grant funding to pay regular wages and employee related expenses for police and fire. This resulted in an $11.4 million reduction in general fund public safety expenditures. 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 streetlight improvement districts included in this fund. Revenues decreased by $110 thousand due to the impact of the pandemic. Expenditures increased by $1.8 million in fiscal year 2020 primarily from increased amounts spent on street repairs. Fund balance decreased $4.3 million in fiscal year 2020. 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 $878 thousand while expenditures increased $3.5 million primarily due to increased maintenance costs for the street system. The increased revenues were due to improved sales tax revenue. The fund balance decreased $4.2 million in fiscal year 2020. All fund balance in this fund is restricted. The Development Fee Fund, which collects governmental impact fees for parks and recreational facilities, public safety, and streets and intersections had a slight decrease in revenues of in fiscal year 2020 as development activity stayed relatively level. Expenditures increased $5.5 million in fiscal year 2020 primarily due to an increase in capital outlay expenditures versus prior year. Fund balance decreased $1.7 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 by $886 thousand due to increased property valuations and growth. The Non-Bond Capital Project Fund qualified as a major fund under the GASB requirements for fiscal year 2020. Revenues in this fund are primarily from reimbursements for shared projects with other governments and expenditures are for mostly streety related capital projects. 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 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 $8.3 million in fiscal year 2020. Net investment in capital assets increased $3.1 million primarily from the expansion of the water system. Net position restricted for capital projects decreased by $11.4 million primarily due to activity in Water. Unrestricted 13 net position increased by $16.6 million with increases in Water, Wastewater and Solid Waste utilities. 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 increased $3.6 million in fiscal year 2020 due to rate increases in Water and Wastewater that offset a decrease in Stadium revenues resulting from the pandemic shutdown. Operating expenses of the enterprise funds increased $8.6 million in fiscal year 2020. The increase of primarily due to increased expenses on wastewater system repair and maintenance. The changes in operating revenues and expenses discussed above resulted in an enterprise funds operating loss of $10.2 million in fiscal year 2020 following an operating loss of $5.2 million in the prior year. The following graph shows the operating revenues and expenses for the enterprise funds for fiscal year 2020. Fiscal Year 2020 Enterprise Fund Operating Revenues and Expenses 50 Millions 40 Revenues 30 Expenses 20 10 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 pages 99-100, and pages 108-114. General Fund revenues of $152.9 million, on a budgetary basis, exceeded budgeted revenues of $151.1 million by $1.8 million while budgetary basis expenditures of $141.0 million were 84.0% of final budgeted amounts. Revenues, on a budgetary basis, were less than budgeted revenues in charges for services, fines and forfeitures, rents, and miscellaneous due primarily to the impact of the COVID-19 pandemic. 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 $200.9 million was reduced by $24.1 million to the final expenditure and contingencies budget of $176.8 million. 14 Notable budgetary transfers during the year were as follows:     $7.8 million transfer from the Half Cent Fund to the General Fund for the purchase of public safety vehicles and public safety operating costs. $3.8 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, 2020, the City had $1.3 billion invested in various capital assets, net of accumulated depreciation and related debt. The capital assets of the City (net of depreciation, but not capital debt) are $1.6 billion. This is a net increase of $35.3 million from June 30, 2019. Net capital assets of businesstype activities increased $9.0 million while governmental activities increased $26.3 million. Notable additions to capital assets during the fiscal year included the following:      The City invested $16.8 million into new construction and improvements to the street system infrastructure. The City invested $14.9 million into new construction and improvements to the water system infrastructure. Construction continued on Paloma Community Park which was the primary driver of an increase of $37.3 million in governmental work in progress. Construction continued on the Pyramid Peak Water Treatment Plant expansion driving an increase of $16.2 million in business-type activity work in progress. The following table provides a breakdown of the capital assets of the City at June 30, 2020, and 2019. 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 2020 2019 2020 2019 $ 108.6 $ 107.0 $ 50.3 $ 52.7 6.0 6.9 4.6 6.2 12.6 12.1 12.8 11.8 63.8 64.7 248.8 260.1 63.5 65.6 239.1 236.1 9.6 9.8 252.2 258.5 409.3 408.1 18.4 18.2 69.0 31.7 46.7 30.5 $ 917.8 $ 891.5 $ 697.5 $ 688.5 Total Primary Government 2020 2019 $ 158.9 $ 159.7 10.6 13.1 25.4 23.9 63.8 64.7 248.8 260.1 63.5 65.6 239.1 236.1 9.6 9.8 252.2 258.5 427.7 426.3 115.7 62.2 $ 1,615.3 $ 1,580.0 The City has adopted a ten year capital improvement plan budgeted at $783.2 million, including $233.7 million in fiscal year 2021. Anticipated funding for this plan for fiscal year 2021 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 $15.3 million. The capital improvement plan is updated annually as part of the City’s budget process. 15 Long-term Debt The City’s outstanding long-term debt (due in more than one year), including bonds and loans, compensated absences, and deferred bond premiums was $270.9 million at June 30, 2020. Of this total, $217.3 million was in governmental activities and $53.6 million was in business-type activities. The City’s outstanding debt (due in more than one year and excluding claims and net pension liability) decreased by $28.8 million in fiscal year 2020. This decrease is related to scheduled debt service payments offset by draws on WIFA loans. Of the total outstanding bonds and loans of $284.9 million, $135.4 million is general obligation bonds or loans backed by the full faith and credit of the City. The outstanding debt also includes $30.7 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, 2020, and 2019. 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 2020 2019 General obligation debt $ Municipal Development Authority debt Direct Purchase and Loan Obligations Water/Sewer Revenue bonds and loans Community Facilities District bonds Compensated absences Total $ 132.4 30.0 27.1 30.7 12.9 233.1 $ $ Business-type Activities 2020 2019 146.2 32.1 30.8 31.3 13.9 254.3 $ $ 3.0 61.8 1.4 66.2 $ $ 70.6 1.6 72.2 Total Primary Government 2020 2019 $ $ 135.4 30.0 27.1 61.8 30.7 14.3 299.3 $ $ 146.2 32.1 30.8 70.6 31.3 15.5 326.5 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 impact of the COVID-19 pandemic has been felt throughout the Phoenix metropolitan area as well as the nation. Although the City of Peoria saw an increase in unemployment, the unemployment rate for Peoria continues to be lower than both the state and the nation. Through fiscal year 2020, local sales tax revenues remained fairly strong ending the year with growth over the prior year. However, city management is closely monitoring consumer confidence and sales tax returns in light of the pandemic and adjusted the approved budget to provide flexibility in uncertain times. Peoria’s housing market remained robust through the pandemic as low inventory levels and historically low interest rates fueled demand. The long-term outlook for Peoria continues to be very strong with the expectation that Arizona will continue to outpace the nation in growth and income related metrics. 16 The adopted fiscal year 2021 budget is $665 million, a decrease of 0.75% from the fiscal year 2020 budget. The operating budget totals $431.3 million, which is an increase of 4.3% from 2020. The capital projects portion of the budget, $233.7 million, is divided in the following manner: $10.1 million for drainage projects, $16.6 million for operational facilities, $30.5 million for parks, trails, open space and libraries, $3.3 million for public safety projects, $37.1 million for streets and traffic control projects, $10.4 million for economic development projects, $26.0 million for wastewater projects, and $99.7 million for water projects. The General Fund operating budget is $165.8 million, up 1.2% from the prior year budget. With the uncertainty surrounding the impact of the COVID-19 pandemic, 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 2021 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, 2020 Governmental Activities ASSETS Pooled cash and investments Cash with fiscal agents 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 $ $ 273,763,342 19,022 14,107,608 701,794 (3,036,002) 4,016,258 2,242,817 423,590 11,753,883 10,842,880 18,253,589 1,889,222 313,956 Primary Government Business-type Activities $ $ 377,541,108 19,022 25,235,848 915,657 4,016,258 3,363,500 705,865 11,753,883 14,843,786 18,253,589 1,889,222 341,781 478,250,294 439,581,711 1,253,123,964 65,096,581 632,362,275 821,046,416 543,346,875 1,071,943,986 2,074,170,380 39,330,801 3,353,908 42,684,709 1,741,522 1,701,815 3,443,337 41,072,323 3,353,908 1,701,815 46,128,046 15,376,013 1,467,936 3,872,544 799,125 4,857,574 9,546,762 14,544,765 172,332 957,571 169,767 2,001,431 282,502 774,243 29,920,778 1,640,268 4,830,115 968,892 2,001,431 5,140,076 10,321,005 5,368,849 7,255,400 21,569,912 789,390 12,058,762 5,368,849 8,044,790 33,628,674 1,662,402 5,678,500 211,646,085 171,690,751 460,791,853 657,440 52,927,436 14,473,235 99,808,874 1,662,402 6,335,940 264,573,521 186,163,986 560,600,727 9,790,365 9,790,365 1,471,871 1,471,871 11,262,236 11,262,236 687,881,892 622,466,137 1,310,348,029 24,992,090 34,586,779 36,620,917 2,388,992 30,639 13,454,787 25,270,359 825,226,455 13,619,271 100,000 87,023,600 723,209,008 24,992,090 13,619,271 34,586,779 36,620,917 2,388,992 130,639 13,454,787 112,293,959 $ 1,548,435,463 $ The accompanying notes are an integral part of the financial statements 19 103,777,766 11,128,240 213,863 3,036,002 1,120,683 282,275 4,000,906 27,825 Total CITY OF PEORIA, ARIZONA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020 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 $ 25,559,396 31,614,048 90,943,804 4,825,318 60,214,083 6,731,383 4,691,770 7,903,847 Fees, Fines & Charges for Services Operating Grants and Contributions $ $ 2,556,337 6,917,851 7,096,545 4,717,698 7,695,978 5,088,411 57,292 - 232,483,649 34,130,112 44,813,959 30,007,409 14,059,601 6,868,271 3,747,753 47,257,041 23,141,752 13,736,194 2,566,786 1,186,238 99,496,993 87,888,011 331,980,642 $ 122,018,123 20,515 2,000,224 16,139,304 764,889 11,455,659 - Capital Grants and Contributions $ 30,380,591 $ 17,490,699 - $ (150,482,247) 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) 5,928,720 21,829,330 99,747,911 4,776,257 Change in net position Net position - beginning Net position - ending $ The accompanying notes are an integral part of the financial statements 20 (22,982,544) (22,695,973) (67,707,955) 657,269 (23,571,747) (1,642,972) (4,634,478) (7,903,847) (150,482,247) 9,936,627 (1,943,452) (323,407) (4,301,485) 76,129 3,444,412 3,444,412 3,444,412 (147,037,835) - 17,079,368 22,275,583 7,313,007 7,800,410 1,138,662 (2,387,307) Total general revenues and transfers $ 9,936,627 (1,943,452) (323,407) (4,301,485) 76,129 - 32,544,093 - Total - - 15,053,394 $ (22,982,544) (22,695,973) (67,707,955) 657,269 (23,571,747) (1,642,972) (4,634,478) (7,903,847) Business-type Activities (150,482,247) 7,493,545 4,922,205 2,637,644 $ 30,380,591 17,490,699 - Governmental Activities 5,928,720 21,829,330 99,747,911 4,776,257 2,854,480 (9,220) 2,387,307 17,079,368 22,275,583 7,313,007 10,654,890 (9,220) 1,138,662 - 185,501,941 5,232,567 190,734,508 35,019,694 8,676,979 43,696,673 790,206,761 714,532,029 1,504,738,790 825,226,455 $ 723,209,008 $ 1,548,435,463 21 CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2020 Major Funds ASSETS Assets: Pooled cash and investments Cash with fiscal agents 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 funds Due to other governments Other liabilities Unearned revenue-other Total liabilities Deferred Inflows of Resources: Unavailable revenue-property taxes Unavailable revenue-other Total deferred inflows of resources 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 GO Bond Debt Service Fund 130,330,878 19,022 11,311,780 275,377 2,400,499 2,106,896 2,171,617 151,695 148,767,764 $ 12,532,211 485,633 35,757 891,240 69,986 $ 14,014,827 $ $ 26,960,356 1,718,922 51,397 56,449 28,787,124 $ 12,151,073 219,186 14,669 58,965 4,151,403 $ 16,595,296 $ $ 1,998,899 1,378,797 3,377,696 $ 3,156,263 1,311,901 770,774 3,260,169 735,058 9,234,165 - 63,184 235,494 298,678 - - 219,186 219,186 151,695 2,171,617 69,986 - - - 30,639 11,211,489 - 1,000,000 4,560,277 18,053,212 12,035,474 19,437,762 $ 2,688,279 45,073 2,733,352 1,528,073 80,266,172 139,234,921 148,767,764 25,409,428 - 11,281,475 $ 14,014,827 - $ 25,409,428 28,787,124 The accompanying notes are an integral part of the financial statements 22 16,376,110 16,376,110 $ 16,595,296 (continued) CITY OF PEORIA, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2020 Major Funds ASSETS Assets: Pooled cash and investments Cash with fiscal agents 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 funds Due to other governments Other liabilities Unearned revenue-other Total liabilities Deferred Inflows of Resources: Unavailable revenue-property taxes Unavailable revenue-other Total deferred inflows of resources 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 Development Fee Fund Non-Bond Capital Project Fund Non-Major Governmental Funds Total Governmental Funds $ 34,932,314 81,904 $ 35,014,218 $ 16,338,621 46,028 256,909 29,459 $ 16,671,017 $ $ 14,427,279 339,755 64,067 645,799 6,000 6,662,018 9,428,571 31,573,489 $ 247,672,732 19,022 14,075,276 569,199 2,400,499 4,016,258 2,177,617 221,681 10,842,880 9,428,571 $ 291,423,735 $ $ $ 1,550,030 13,820 1,937,909 28,351 159,065 4,500,767 8,189,942 $ 427,439 427,439 3,020,448 59,543 4,310,937 7,390,928 12,841,358 1,370,794 1,937,909 799,125 4,857,574 9,546,762 31,353,522 - - 18,452 18,452 300,822 235,494 536,316 - - - 221,681 2,171,617 34,586,779 34,586,779 $ 35,014,218 - 12,250,886 6,295,440 2,388,992 - 28,626,996 6,295,440 34,586,779 36,620,917 2,388,992 30,639 - 2,429,777 - 1,000,000 4,560,277 2,429,777 18,053,212 12,035,474 19,437,762 23,365,095 31,573,489 9,280,089 1,528,073 80,266,172 259,533,897 $ 291,423,735 9,280,089 9,280,089 $ 16,671,017 $ 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, 2020 Fund balances - total governmental funds $ 259,533,897 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 $ 1,584,618,100 (682,575,331) 902,042,769 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 298,502 3,353,908 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 (220,215,287) (11,894,640) (232,109,927) Equity in joint ventures are not financial resources and, therefore, are not reported in the funds. 1,889,222 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 (13,000,710) 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 536,316 Interest payable on long-term debt is not reported in the governmental funds. (3,872,544) 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. 40,816,685 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. (163,652,332) 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 38,363,562 (8,972,893) Total net position of governmental activities 29,390,669 $ The accompanying notes are an integral part of the financial statements 25 825,226,455 CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 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 $ 90,069,454 47,093,048 15,699,269 4,929,081 1,249,763 721,181 3,140,356 256,277 163,158,429 Highway User Revenue Fund Transportation Sales Tax Fund GO Bond Debt Service Fund $ $ $ 4,768,317 11,455,659 198,657 427,012 2,256 16,851,901 15,318,022 705,696 57,169 16,080,887 17,773,266 245,077 18,018,343 18,696,576 27,166,930 71,819,617 4,464,227 5,372,237 - 21,871,903 - 6,315,850 - 1,456,457 128,976,044 172,550 22,044,453 7,003,901 13,319,751 13,815,000 4,922,432 18,737,432 34,182,385 (5,192,552) 2,761,136 (719,089) 360,000 (8,174,585) (7,814,585) 1,000,000 (108,490) 891,510 1,324,153 (8,285,657) (6,961,504) - 26,367,800 (4,301,042) (4,200,368) (719,089) 112,867,121 15,582,517 29,609,796 17,095,199 139,234,921 $ 11,281,475 $ 25,409,428 The accompanying notes are an integral part of the financial statements 26 - $ 16,376,110 (continued) CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 Major Funds REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Total revenues Development Fee Fund Non-Bond Capital Project 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 Fund balances - beginning $ 8,193,709 407,363 8,601,072 3,855,354 18,596,128 963,563 133,090 918,270 942,881 25,409,286 131,784,413 85,338,544 27,299,388 4,929,081 1,382,853 721,181 6,881,841 1,258,583 259,595,884 66,027 32,238 3,248,513 - 1,728 280,913 1,192,655 905,274 408,625 - 430,965 1,854,110 17,095,745 403,259 148,616 1,146,384 4,690,171 19,129,269 29,367,980 90,140,255 4,867,486 32,490,156 6,927,246 4,690,171 9,833,740 13,180,518 12,749,032 15,538,227 8,911,060 3,700,728 24,213,882 62,594,920 22,726,060 8,623,160 55,429,562 274,391,345 (1,704,552) (6,937,155) (37,185,634) (14,795,461) 2,590,000 292,139 11,342,515 (1,549,265) 12,675,389 2,590,000 292,139 14,049,347 (18,117,997) (1,186,511) 22,679 22,679 Net change in fund balances Fund balances - ending 10,437,899 1,038,067 11,475,966 - (1,681,873) (6,937,155) (24,510,245) (15,981,972) 36,268,652 16,217,244 47,875,340 275,515,869 34,586,779 $ 9,280,089 $ 23,365,095 The accompanying notes are an integral part of the financial statements 27 $ 259,533,897 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, 2020 Net change in fund balances - total governmental funds $ (15,981,972) 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. 863,704 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. 497,803 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. (102,434) 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 ($55,429,562), plus other capital $0, is exceeded by depreciation ($39,280,319) in the current period. 16,171,744 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. 61,497 Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 9,388,965 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. (2,590,000) Repayment of bonds principal is an expenditure in the governmental funds, but reduces long-term liabilities in the statement of net position. 22,726,060 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. 529,608 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. (1,939,985) 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. 11,146,224 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. (5,751,520) Change in net position of governmental activities $ The accompanying notes are an integral part of the financial statements 29 35,019,694 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final REVENUES: Taxes Intergovernmental Charges for services Licenses and permits Fines and forfeitures Rents Investment earnings Miscellaneous Total revenues $ 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 Development services Public works Debt service: Principal payments Interest and other charges 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 $ 60,871,168 46,925,425 34,012,129 4,576,294 1,611,855 1,191,013 775,000 683,000 150,645,884 $ 60,871,168 46,935,085 34,420,910 4,586,054 1,611,855 1,209,396 775,000 683,000 151,092,468 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 64,956,447 47,093,048 31,253,181 4,929,082 1,249,763 721,181 2,490,909 246,277 152,939,887 $ 4,085,279 157,963 (3,167,729) 343,028 (362,092) (488,215) 1,715,909 (436,723) 1,847,419 813,602 5,702,317 3,737,998 3,504,728 968,293 2,236,090 1,810,082 11,005,838 3,574,205 32,101,910 813,602 6,036,864 3,751,298 3,504,728 1,095,828 2,236,090 1,740,082 11,210,618 9,520,698 32,462,323 739,233 5,686,410 3,390,666 3,488,055 1,000,658 2,139,960 1,496,728 10,058,153 3,170,531 27,166,930 (74,369) (350,454) (360,632) (16,673) (95,170) (96,130) (243,354) (1,152,465) (6,350,167) (5,295,393) 50,527,481 38,268,170 41,356,660 31,479,150 40,799,781 31,019,836 (556,879) (459,314) 8,118,179 6,030,287 7,795,144 6,030,287 4,464,227 5,372,237 (3,330,917) (658,050) 8,712,055 177,111,235 8,781,011 167,814,383 980,125 140,973,529 (7,800,886) (26,840,854) (26,465,351) (16,721,915) 11,966,357 28,688,273 (23,750,000) 9,666,827 (3,753,789) (17,836,962) (8,999,063) 9,666,827 (3,753,789) (3,086,025) 9,667,862 (3,740,785) 5,927,077 8,999,063 1,035 13,004 9,013,102 (44,302,313) (19,807,940) 17,893,434 37,701,374 74,115,330 74,115,330 88,615,192 14,499,862 29,813,017 $ 54,307,390 $ The accompanying notes are an integral part of the financial statements 30 106,508,626 $ 52,201,236 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HALF-CENT SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government 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 $ 21,995,000 150,000 22,145,000 $ 21,995,000 150,000 22,145,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 25,113,008 649,447 10,000 25,772,455 $ 3,118,008 499,447 10,000 3,627,455 3,806,523 1,806,863 5,613,386 4,173,987 1,487,042 5,661,029 3,080,096 476,332 3,556,428 (1,093,891) (1,010,710) (2,104,601) 16,531,614 16,483,971 22,216,027 5,732,056 (18,100,000) (13,741,662) (31,841,662) (17,991,645) (13,741,662) (31,733,307) (9,307,862) (4,433,800) (13,741,662) 17,991,645 (9,307,862) 9,307,862 17,991,645 (15,310,048) (15,249,336) 8,474,365 23,723,701 23,722,859 23,722,859 24,251,929 529,070 8,412,811 $ 8,473,523 $ 32,726,294 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 $ 24,252,771 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2020 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 $ 152,939,887 25,772,455 (15,553,913) $ 163,158,429 $ 140,973,529 3,556,428 (15,553,913) $ 128,976,044 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT HIGHWAY USER REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2020 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 $ 5,121,538 11,668,765 115,000 350,000 17,255,303 $ 5,121,538 11,668,765 115,000 350,000 17,255,303 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 4,768,317 11,455,659 198,657 427,012 2,256 16,851,901 $ (353,221) (213,106) 83,657 77,012 2,256 (403,402) 11,934,978.00 10,458,967.00 22,393,945 12,269,192.00 12,617,236.00 24,886,428 21,871,903 172,550 22,044,453 9,602,711 (12,444,686) (2,841,975) (5,138,642) (7,631,125) (5,192,552) 2,438,573 (500,000.00) 2,065,538.00 (1,174,028.00) 391,510 (500,000.00) 2,065,538.00 (1,174,028.00) 391,510 1,000,000 (108,490) 891,510 500,000 (1,065,538) 1,065,538 500,000 (4,747,132) (7,239,615) (4,301,042) 2,938,573 11,757,487 11,757,487 15,582,517 3,825,030 7,010,355 $ 4,517,872 $ 11,281,475 The accompanying notes are an integral part of the financial statements 33 $ 6,763,603 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT TRANSPORTATION SALES TAX FUND FOR THE YEAR ENDED JUNE 30, 2020 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 in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 13,265,800 200,000 13,465,800 $ 13,265,800 200,000 13,465,800 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 15,318,022 705,696 57,169 16,080,887 $ 2,052,222 505,696 57,169 2,615,087 561,655 22,664,400 23,226,055 567,749 24,964,191 25,531,940 6,315,850 7,003,901 13,319,751 5,748,101 (17,960,290) (12,212,189) (9,760,255) (12,066,140) 2,761,136 14,827,276 (2,600,000) (8,262,978) (10,862,978) (8,262,978) (8,262,978) 1,324,153 (8,285,657) (6,961,504) 1,324,153 (22,679) 1,301,474 (20,623,233) (20,329,118) (4,200,368) 16,128,750 25,625,684 25,625,684 29,609,796 3,984,112 5,002,451 $ 5,296,566 $ The accompanying notes are an integral part of the financial statements 34 25,409,428 $ 20,112,862 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON STATEMENT DEVELOPMENT FEE FUND FOR THE YEAR ENDED JUNE 30, 2020 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 Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 11,146,646 287,817 11,434,463 $ 11,146,646 287,817 11,434,463 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 10,437,899 1,038,067 11,475,966 $ (708,747) 750,250 41,503 49,013 800 4,449,411 18,353,677 22,852,901 59,021 1,077 4,455,486 17,117,663 21,633,247 66,027 32,238 3,248,513 9,833,740 13,180,518 7,006 31,162 (1,206,973) (7,283,923) (8,452,729) (11,418,438) (10,198,784) (1,704,552) 8,494,232 (575,000) (575,000) (578,975) (578,975) 22,679 22,679 578,975 22,679 601,654 (11,993,438) (10,777,759) (1,681,873) 9,095,886 32,864,320 32,864,320 36,268,652 3,404,332 20,870,882 $ 22,086,561 $ 34,586,779 The accompanying notes are an integral part of the financial statements 35 $ 12,500,218 CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2020 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 Restricted cash with fiscal agents 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 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 Unearned revenue-other 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 $ 53,139,005 6,492,876 111,777 279 281,955 60,025,892 $ 37,569,775 2,591,241 72,584 40,233,600 11,081,431 1,562,171 24,805 1,120,404 320 13,789,131 3,319,631 3,319,631 681,275 681,275 1,662,522 416,893,946 12,889,805 16,469,568 1,957,260 (195,885,514) 6,867,999 33,607,917 294,463,503 10,992 357,820,018 7,612,045 411,498,108 2,320,486 1,443,734 (164,784,697) 3,878,001 7,328,634 269,296,311 5,531 310,216,717 211,038 17,366,484 (6,352,249) 11,225,273 7,719 25,022,123 687,933 1,701,815 2,389,748 346,186 346,186 483,123 483,123 12,216,305 66,064 250,490 168,339 2,001,431 190,991 331,420 6,270,047 21,495,087 1,239,235 33,943 705,746 145,000 5,562,314 7,686,238 674,910 52,038 182,210 909,158 283,880 11,661,736 5,717,192 17,662,808 39,157,895 87,000 38,492,101 2,877,042 41,456,143 49,142,381 108,060 4,015,076 4,123,136 5,032,294 581,415 581,415 292,584 292,584 408,318 408,318 267,283,084 225,051,366 10,907,869 3,154,576 50,032,796 320,470,456 8,590,467 27,486,105 $ 261,127,938 1,256,783 7,899,982 20,064,634 (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, 2020 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund ASSETS Current assets: Pooled cash and investments Restricted pooled cash and investments Restricted cash with fiscal agents 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 Excess consideration provided for acquisition Total deferred outflows of resources $ 1,987,555 347,126 3,528 2,338,209 - 134,826 1,169 135,995 $ - 103,777,766 11,128,240 213,863 1,120,683 282,275 116,522,827 $ 26,090,610 11,478,882 275,001 32,332 132,595 65,200 201,909 38,276,529 4,000,906 4,000,906 8,825,018 8,825,018 70,823,207 1,995,409 138,245 (27,689,216) 6,703,349 51,970,994 3,030 54,312,233 105,017,401 (41,225,307) 984,432 5,726,249 70,502,775 553 70,639,323 80,097,774 933,409,455 12,889,805 20,996,501 20,905,723 (435,936,983) 18,433,781 46,662,800 697,458,856 27,825 818,010,414 148,102 39,260,012 32,640,177 (56,259,055) 15,789,236 15,454 62,906,237 189,640 189,640 34,640 34,640 1,741,522 1,701,815 3,443,337 967,239 967,239 125,042 17,392 1,428 113,250 774,243 1,031,355 289,273 2,895 1,335 462,590 91,511 17,510 226,401 1,091,515 14,544,765 172,332 957,571 462,590 169,767 2,001,431 282,502 789,390 12,058,762 774,243 32,213,353 2,534,655 97,142 5,368,849 557,450 8,558,096 152,880 1,576,031 1,728,911 2,760,266 25,620 2,773,599 287,894 3,087,113 4,178,628 657,440 52,927,436 14,473,235 68,058,111 100,271,464 1,662,402 481,810 8,038,419 10,182,631 18,740,727 160,275 160,275 29,279 29,279 1,471,871 1,471,871 817,472 817,472 51,970,994 67,252,824 622,466,137 15,744,502 617,445 100,000 (1,107,107) 51,581,332 (786,768) 66,466,056 13,619,271 100,000 83,525,008 719,710,416 13,454,787 15,115,988 44,315,277 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 Unearned revenue-other 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 3,498,592 723,209,008 $ CITY OF PEORIA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 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 $ 45,653,432 1,603,609 47,257,041 $ 23,123,511 18,241 23,141,752 $ 13,735,923 271 13,736,194 6,222,951 24,187,922 14,261,820 44,672,693 2,584,348 3,213,777 14,177,606 11,379,195 28,770,578 (5,628,826) 4,566,588 8,363,688 1,081,380 14,011,656 (275,462) 1,480,072 (332,575) 2,388 1,149,885 1,013,587 (1,351,709) (21,724) (359,846) 319,254 11,700 330,954 3,734,233 (5,988,672) 55,492 Capital contributions Transfers in Transfers out Change in net position 9,433,530 96,058 (4,990,592) 8,273,229 4,922,205 4,038,577 (353,025) 2,619,085 (343,696) (288,204) Total net position - beginning 312,197,227 258,508,853 20,352,838 Total net position - ending $ 320,470,456 $ 261,127,938 $ 20,064,634 (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, 2020 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) 740,579 1,535,851 290,356 2,566,786 $ 1,186,238 1,186,238 $ Total Governmental Activities Internal Service Funds 84,439,683 1,535,851 1,912,477 87,888,011 $ 49,832,119 406,556 50,238,675 1,848,624 2,735,368 2,359,522 6,943,514 (4,376,728) 319,297 798,711 2,619,216 3,737,224 (2,550,986) 16,171,237 50,263,295 31,701,133 98,135,665 (10,247,654) 8,424,534 15,964,066 19,132,696 3,131,542 46,652,838 3,585,837 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 31,223 (1,584) 29,639 10,343 (26,335) (15,992) 2,854,479 (1,710,619) (9,220) 1,134,640 918,570 28,168 946,738 (4,347,089) (2,566,978) (9,113,014) 4,532,575 Capital contributions Transfers in Transfers out Change in net position 2,000,000 (2,347,089) 2,637,644 70,666 16,993,379 6,134,635 (5,687,313) 8,327,687 271,567 3,858,644 (237,316) 8,425,470 Total net position - beginning 53,928,421 66,395,390 711,382,729 35,889,807 $ 51,581,332 $ 66,466,056 719,710,416 $ 44,315,277 Total net position - ending Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds. 349,291 $ Change in net position of business-type activities 8,676,978 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, 2020 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 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund loans payable Special Item Net cash provided (used) by non-capital financing activities $ 46,638,069 (24,610,063) (6,079,266) (2,524,861) 13,423,879 $ 23,132,099 (12,442,866) (3,137,741) (1,325,876) 6,225,616 $ 13,851,304 (3,457,352) (4,467,574) (5,912,841) 13,537 96,058 (4,990,592) - 4,038,577 (353,025) - (343,696) - (4,894,534) 3,685,552 (343,696) (12,606,055) 2,388 5,101,396 (2,513,554) 2,100 1,810,415 (1,479,809) 11,700 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from disposal of capital assets Capital contributions Contribution from County for debt Proceeds from loans Proceeds (reduction) from contracts payable Premium/(Loss) on bonds Forgiveness of debt Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities (6,048,665) (572,681) (5,384,678) (1,499,986) (11,563,985) (7,585,703) (1,468,109) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities 1,536,684 1,536,684 1,032,773 1,032,773 338,137 338,137 (1,497,956) 57,956,592 $ 56,458,636 3,358,238 34,892,812 $ 38,251,050 (1,460,131) 12,541,562 $ 11,081,431 (continued) 2,559,632 - 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, 2020 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 Total Governmental Activities Internal Service Funds $ 3,366,281 (2,088,963) (1,925,412) (647,348) (1,295,442) $ 1,189,023 (860,245) (316,018) (216,990) (204,230) $ 88,176,776 (43,459,489) (15,926,011) (10,627,916) 18,163,360 2,000,000 - 167,413 - 6,134,635 (5,687,313) 167,413 - 3,858,644 (237,316) - 2,000,000 167,413 614,735 3,621,328 (25,676) 871 - (2,948,863) - - 3,000,000 - (19,573,957) 17,059 6,911,811 5,559,632 - CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund loans payable Special Item Net cash provided (used) by non-capital financing activities $ 50,264,607 (15,511,646) (8,765,295) (20,131,429) 5,856,237 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from disposal of capital assets Capital contributions Contribution from County for debt Proceeds from loans Proceeds (reduction) from contracts payable Premium/(Loss) on bonds Forgiveness of debt Principal payments on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities - (25,000) (11,433,343) (2,097,667) (2,360,619) 32,491 - (24,805) 26,137 (20,616,465) (2,328,128) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received on investments Net cash provided (used) by investing activities 34,199 34,199 10,680 10,680 2,952,473 2,952,473 (292,207) 944,129 651,922 1,114,103 106,664,569 $ 107,778,672 7,801,359 30,043,134 37,844,493 (continued) Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 713,952 1,273,603 $ 1,987,555 $ - 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, 2020 Business-type Activities Major Enterprise Funds Wastewater Solid Waste Water Utility 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 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 2,584,348 $ (5,628,826) 14,261,820 11,379,195 1,081,380 (597,377) (57,910) 3,448 (9,653) 1,635 115,110 (1,120,404) 22,125 2,384 263,986 126,200 182,864 (2,996,216) 30,925 44,088 63,036 (21,595) (30,740) 182,957 408,864 17,899 (52,160) 130,698 91,774 26,626 (42,880) 143,183 (306,891) 10,839,531 (148,236) 11,854,442 (213,163) 288,999 $ 13,423,879 $ 6,225,616 $ $ $ 3,111,790 371,187 63,485 (3,514) 3,542,948 $ $ 4,332,134 490,355 213,304 (43,887) 4,991,906 $ The accompanying notes are an integral part of the financial statements 42 $ (275,462) 13,537 99,720 $ 99,720 (continued) CITY OF PEORIA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 Business-type Activities Major Enterprise Funds Stadium Storm Drain Fund Utility Fund Total Governmental Activities Internal Service Funds Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ (4,376,728) $ (2,550,986) $ (10,247,654) 2,359,522 2,619,216 31,701,133 3,131,542 25,252 1,191 2,785 175 (463,883) (1,120,404) (35,785) 8,833 25,932 (1,915) 5,976 88,604 13,340 674,994 445,430 (1,355) 4,524 412 774,243 (30,110) (41,622) (370,035) 897 91,511 (4,590) 8,952 (2,866,968) 80,871 44,500 154,547 (21,595) 774,243 (160,480) 424,168 454,335 34,085 (998,733) (150,950) (174,509) (99,375) 3,081,286 (15,495) 2,346,756 (783,160) 28,411,014 (500,793) 2,270,400 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 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 $ 3,585,837 $ (1,295,442) $ (204,230) $ 18,163,360 $ 5,856,237 $ $ 2,637,644 $ 2,637,644 $ 10,081,568 961,262 276,789 (47,401) $ 11,272,218 $ 271,567 102,027 373,594 (concluded) $ - The accompanying notes are an integral part of the financial statements 43 $ CITY OF PEORIA, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2020 Firemen's Pension Fund ASSETS Pooled cash and investments Interest receivable Total assets $ LIABILITIES Accounts payable Other liabilities Total liabilities 10,662 40 10,702 Agency Funds $ - NET POSITION Net position restricted for pensions $ 10,702 The accompanying notes are an integral part of the financial statements 44 129,782 240 130,022 535 129,487 130,022 CITY OF PEORIA, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 Firemen's Pension Fund ADDITIONS Contributions: Employer contribution Total contributions Investment earnings: Total interest and investment income $ 21,000 21,000 357 Total additions 21,357 DEDUCTIONS Retirement payments Total deductions 15,300 15,300 Change in net position 6,057 Net position - beginning of the year Net position - end of the year $ 4,645 10,702 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 58 3 Deficits in Fund Equity/Excess of Expenditures Over Appropriations 60 4 Accounts Receivable and Allowance for Doubtful Accounts 61 5 Due from Other Governments 61 6 Capital Assets 62 7 Long-term Debt 63 8 Risk Financing Activities 68 9 Pensions and Other Postemployment Benefits 70 10 Deferred Compensation Plan 84 11 Contingencies, Commitments and Other Claims 84 12 Interfund Transactions, Receivable and Payable Balances 85 13 Stabilization Arrangements 86 14 Segment Information for Enterprise Funds 87 15 Subsequent Events 87 46 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 48 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 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 Non-Bond Capital Projects 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. 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. 49 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 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. 50 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 basis 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. • 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. 51 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 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. 52 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 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, in FY2020 the City granted 60 to 112 hours of temporary paid emergency leave for COVID-19 related situations. Temporary paid emergency leave that is not used by December 31, 2020 will be converted to sick leave. 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. 53 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 54 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 55 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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, 2020:  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 expenses of the fund for the fiscal year), the Wastewater Utility Fund (25% of the operating expenses of the fund for the fiscal year), and the Solid Waste Utility Fund (20% of the operating expenses 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.  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 56 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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, 2020, 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, 2020 was $1,889,222 or 2.75 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. 57 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 J. New Accounting Principles 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. GASB Accounting Standards Effective Dates 84 Fiduciary Activities 87 Leases The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends December 31, 2020. The requirements of this Statement will take effect for financial statements starting with the June 30, 2022. 89 Accounting for Interest Cost Incurred before the End of a Construction Period The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends December 31, 2021. 90 Majority Equity Interests—an amendment of GASB Statements No. 14 and No. 61 The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends December 31, 2020. 91 Conduit Debt Obligations The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends December 31, 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, 2020, the carrying amount of the City's deposits was $58,209,393 and the bank balance was $58,728,420. 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 $519,027 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, 2020, the total amount of these balances was $7,450. In addition, the City has deposited $277,206 in a developer trust account with a fiscal agent in accordance with developer agreements for the construction and acquisition of water projects. 58 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 20% invested for a period of one year or less. At June 30, 2020, 57.5% of the City’s investments have a maturity of less than one year. 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 three 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, 2020, the City’s investments include $59.0 million in Commercial Paper, $39.9 million in Corporate Notes and $1.1 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 A-1+ to AA+ A-1 A to AA+ 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, 2020, the City’s investments include 40.3% in U.S. Treasury Notes, 16.2% in Commercial Paper, 14.3% in Money Market investments, 11.0% in Corporate securities, 10.2% in U.S. Agency Coupon securities, and 0.3% 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 Fair Value $ 20,071,162 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. 59 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 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, 2020:     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, 2020, the City’s total investments of $363,762,718 included the following: Investment Maturities in Years Less than 1 1-2 2-3 Over 3 Fair Value Investments: U.S Treasury notes 40,492,007 64,331,966 41,938,377 - Agency coupon securities $ 8,470,042 17,056,232 22,445,448 - 47,971,723 Commercial paper 59,006,134 - - 59,006,134 Corporate notes 31,038,221 - - 39,944,702 - - 51,968,853 8,906,481 Banker's Acceptance securities 1,116,143 - Mutual fund-money market 51,968,853 - State of Arizona LGIP Total Investments 16,992,814 $ 209,084,214 1,116,143 90,294,679 $ 146,762,350 64,383,825 - 16,992,814 - $ 363,762,718 3. DEFICITS IN FUND EQUITY/EXCESS OF EXPENDITURES OVER APPROPRIATIONS At June 30, 2020, 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, 2020, expenditures, including capital outlay and transfers, did not exceed budget at the fund level (i.e. the level of budgetary control) in any funds. 60 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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, 2020. Fund Governmental activities: General Fund Receivables $ 13,334,669 Highway User Revenue Fund 485,633 Transportation Sales Tax Fund GO Bond Debt Service Fund Other Governmental Funds Total governmental funds Internal Service Funds Allowance $ 2,022,889 Net $ 11,311,780 - 485,633 1,718,922 - 1,718,922 368,169 148,983 219,186 359,820 20,065 339,755 $ 16,267,213 $ 2,191,937 $ 14,075,276 $ 32,332 $ - $ 32,332 $ 7,159,647 $ $ 6,492,876 Business-type activities: Water Utility Fund 666,771 Wastewater Utility Fund 3,062,174 470,933 2,591,241 Solid Waste Utility Fund 1,864,869 302,698 1,562,171 Stadium Fund 347,126 - 347,126 Storm Drain Utility Fund 163,555 28,729 134,826 Total enterprise funds 12,597,371 1,469,131 11,128,240 Grand totals $ 28,896,916 $ 3,661,068 $ 25,235,848 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, 2020, significant receivables due to the City included $1,656,260 from the State of Arizona for State Shared Sales Tax revenues, $350,330 for Auto Tax In-Lieu revenues recorded in the General fund, $887,706 Highway User Revenue Fees revenues recorded in the Highway User Revenue Fund, $256,909 under Intergovernmental agreements recorded in the Non-Bond Fund, and $596,815 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. 61 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 6. CAPITAL ASSETS A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2020, follows: Balances June 30, 2019 Governmental Activities: Non-Depreciable Assets: Work in Progress Land Total Non-Depreciable Assets $ 31,708,334 408,089,813 439,798,147 Additions/ Transfers In $ 51,686,716 1,185,645 52,872,361 Disposals/ Transfers Out $ Balances June 30, 2020 (14,420,214) $ (14,420,214) 68,974,836 409,275,458 478,250,294 Depreciable assets: Buildings & Improvements Equipment; Furniture Vehicles Street System Park System 188,665,355 58,352,225 30,289,082 775,032,448 99,387,122 6,010,356 909,616 2,768,003 16,779,380 639,309 (416,798) 194,675,711 59,261,841 32,640,287 791,811,828 100,026,431 Total Depreciable Assets at Historical Cost 1,151,726,232 27,106,664 (416,798) 1,178,416,098 Less Accum. Depreciation: Buildings & Improvements Equipment; Furniture Vehicles Street System Park System (81,616,535) (51,448,065) (18,149,858) (514,992,218) (33,759,867) (4,475,096) (1,769,584) (2,278,448) (28,036,165) (2,721,026) 412,475 (86,091,631) (53,217,649) (20,015,831) (543,028,383) (36,480,893) Total Accum. Depreciation (699,966,543) (39,280,319) 412,475 (738,834,387) Total Depreciable Assets, Net 451,759,689 (12,173,655) (4,323) 439,581,711 891,557,836 40,698,706 (14,424,537) 917,832,005 Business-type Activities: Non-depreciable assets: Work in Progress Land 30,447,446 18,239,126 23,245,712 194,655 (7,030,358) 46,662,800 18,433,781 Total Non-Depreciable Assets 48,686,572 23,440,367 (7,030,358) 65,096,581 Depreciable assets: Buildings & Improvements Equipment; Furniture Vehicles Surface Water System Water Rights Water System Wastewater System 80,097,774 20,630,522 18,916,335 103,332,734 12,889,805 402,013,453 406,696,138 395,441 2,305,596 1,684,667 (29,462) (316,208) 14,880,493 4,801,970 Total Depreciable Assets at Historical Cost 1,044,576,761 24,068,167 Less Accum. Depreciation: Buildings & Improvements Equipment; Furniture Vehicles Surface Water System Water Rights* Water System Wastewater System (27,407,271) (14,457,059) (7,131,271) (38,606,091) (3,093,553) (165,880,784) (148,211,275) (2,345,125) (1,950,283) (1,309,756) (2,619,216) (257,796) (11,932,847) (11,054,044) Total Accum. Depreciation (404,787,304) (31,469,067) 319,388 (435,936,983) Total Depreciable Assets, Net Business-Type Activities Capital Assets, Net 639,789,457 (7,400,900) (26,282) 632,362,275 688,476,029 16,039,467 (7,056,640) 697,458,856 (345,670) 27,005 292,383 *The City’s agreement with the Gila River Indian Community provides water rights to 7,000 acre-feet of water each year through 2057. 62 80,097,774 20,996,501 20,905,723 105,017,401 12,889,805 416,893,946 411,498,108 1,068,299,258 (29,752,396) (16,380,337) (8,148,644) (41,225,307) (3,351,349) (177,813,631) (159,265,319) CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Depreciation expense was charged to governmental and business-type functions in the government-wide financial statements as follows: Governmental activities: Business-type activities: General government Culture and recreation Public Safety Development services Highway and streets Public works Human services 2,935,279 4,740,913 2,519,628 103,611 28,643,037 257,488 80,363 Water utility * Wastewater utility Storm drain utility Stadium Solid Waste 14,029,754 11,379,195 2,619,216 2,359,522 1,081,380 Total Depreciation expense 39,280,319 Total Depreciation expense 31,469,067 * Excludes amoritization of goodw ill of $232,056. 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. 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. 63 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 D. 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, $3,000,000 in fiscal year 2017, and $2,590,000 in fiscal year 2020. E. 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 $159,945,566 in Water Infrastructure Financing Authority loans issued between 2002-2017. This amount includes a $49,013,733 loan for expansion of the Pyramid Peak Water Treatment Plant. As of June 30, 2020 the principal paid on this loan exceeds the amount drawn on the loan, so the loan is not reflected in liability or in the amount outstanding shown below. 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, 2020, $61,755,925 in bonds and loans remain outstanding to be repaid by future water and wastewater revenues. For the fiscal year ended June 30, 2020, the pledged revenues, net of operating expenses available for service of this debt were $32,002,009. The debt principal and interest paid on this debt in fiscal year 2019 was $13,116,428. 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, 2020, $2,550,000 of the Pledged Excise 2018 obligation and $29,990,000 of the MDA bonds remained outstanding to be repaid by these future revenues. The obligations were issued to construct various City operational facilities and refund prior MDA bonds. For the fiscal year ended June 30, 2020, the pledged revenues, net of operating expenses available to service this debt were $155,184,949. The debt principal and interest paid on this debt in fiscal year 2020 was $3,632,476. 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, 64 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 excise taxes and state shared revenues. At June 30, 2020, $19,675,000 of the Pledged Transportation 2018 obligations remained outstanding to be repaid by future revenues. For the fiscal year ended June 30, 2020, the pledged revenues, net of operating expenses available to service this debt were $167,633,360. The debt principal and interest paid on this debt in fiscal year 2020 was $3,512,978. F. 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. G. Tables The following schedule summarizes the City’s long-term liability activity for the year ended June 30, 2020: 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 Claims payable Deferred bond premium Governmental activities totals Business-type activities: Bonds and loans payable: Revenue bonds General Obligation WIFA Loan WIFA loans Net pension and other postemployment benefits liability Compensated absences Deferred bond premium Business-type activities totals $ $ $ $ 146,180,000 32,070,000 30,761,347 31,340,000 240,351,347 162,653,947 13,960,470 8,029,984 14,251,553 439,247,301 7,905,000 62,724,636 14,049,067 1,607,310 507,062 86,793,075 Additions $ $ $ $ 2,590,000 2,590,000 9,509,612 9,168,057 16,308,574 292,139 37,868,382 3,000,000 2,559,632 424,168 993,319 6,977,119 65 Reductions $ $ $ $ 13,815,000 2,080,000 3,631,060 3,200,000 22,726,060 472,808 10,194,627 17,307,307 1,542,982 52,243,784 3,470,000 7,963,343 1,153,799 276,789 12,863,931 Ending Balance Due Within One Year $ $ $ $ $ 132,365,000 29,990,000 27,130,287 30,730,000 220,215,287 171,690,751 12,933,900 7,031,251 13,000,710 424,871,899 4,435,000 3,000,000 57,320,925 14,473,235 1,446,830 230,273 80,906,263 $ $ $ $ 12,180,000 2,130,000 3,714,912 3,545,000 21,569,912 7,255,400 5,368,849 34,194,161 3,635,000 226,401 8,197,361 789,390 12,848,152 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Bonds and loans payable at June 30, 2020 are comprised of the following: Governmental Activities Debt General Obligation Bonds Maturity Dates Net Interest Rate 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 4.03 3.32 1.75 2.98 2.29 2.65 Issue Amount Outstanding June 30, 2020 $ 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 $ 5,199,304 3,220,000 $ $ $ 7,755,000 10,410,000 4,480,000 26,105,000 55,560,000 28,055,000 132,365,000 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 $ $ $ 4,230,000 25,760,000 29,990,000 Direct Purchase and Loan Obligations Taxable NCREBs 9/1/2037 Pledged Excise 2018 7/15/2025 Pledged Transportation 1/15/2026 2018 Total Direct Purchase and Loan Obligations 4.23 2.01 $ 1.97 $ 25,755,000 34,174,304 $ 4,905,287 2,550,000 19,675,000 27,130,287 Community Facility District Bonds VCFD – Series 2015 7/15/16-26 VWCFD – Series 2016 7/15/18-29 VWCFD – Series 2019 7/15/20-29 Total Community Facility District Bonds 3.47 4.15 4.00 $ $ 66 36,985,000 3,000,000 2,590,000 39,985,000 $ $ 25,480,000 2,660,000 2,590,000 30,730,000 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 Total Revenue Bonds Issue Amount Outstanding June 30, 2020 $ $ 15,780,000 1,395,000 23,280,000 3,040,000 $ 39,060,000 $ 4,435,000 General Obligation WIFA Loan WIFA Series 2019 7/1/20-39 1.60 $ 3,000,000 $ 3,000,000 WIFA Series 2002 7/1/03-22 3.94 $ 1,964,789 $ 399,528 WIFA Series 2006 7/1/08-26 3.06 27,183,342 12,350,857 WIFA Series 2008 7/1/09-27 3.30 42,741,541 21,233,179 WIFA Series 2008 7/1/10-28 3.48 8,575,253 4,754,600 WIFA Series 2009 7/1/10-28 3.48 727,612 394,354 WIFA Series 2009 7/1/10-29 2.00 8,030,340 4,360,496 WIFA Series 2009 7/1/10-28 2.00 3,733,794 1,922,035 WIFA Series 2009 7/1/10-29 3.27 4,371,597 2,461,797 WIFA Series 2009 7/1/10-29 3.23 757,624 425,118 WIFA Series 2015 7/15/16-35 2.40 12,389,991 10,094,007 WIFA Series 2017 7/15/18-36 2.65 455,950 (1,075,046) WIFA Loans Total WIFA loans $ 110,931,833 $ 57,320,925 The following table discloses the bond debt service requirements as of June 30, 2020, segregating principal and interest, for the next five years and in five-year increments thereafter. Governmental Activities Business-type Activities* Notes from Direct Borrowings and Direct Placements Bonds Fiscal year Principal Interest Principal 2021** 2022 2023 2024 2025 2026-2030 2031-2035 2036-2040 $ 17,855,000 16,890,000 17,545,000 17,015,000 17,825,000 66,075,000 28,730,000 11,150,000 $ 6,835,689 6,659,509 5,944,215 5,160,039 4,033,132 11,835,706 3,695,541 730,838 $ 3,714,912 3,794,051 3,873,485 3,948,221 4,028,267 5,113,531 1,556,554 1,101,266 Totals $193,085,000 $44,894,668 $27,130,288 Interest Principal Interest $ 640,381 562,822 483,444 402,279 319,415 784,486 419,574 78,811 $ 12,058,762 9,468,431 8,920,397 9,036,078 9,297,648 37,166,635 19,233,901 7,860,355 $ 2,990,820 2,653,802 2,382,075 2,121,547 1,856,095 5,517,458 2,168,328 230,003 $3,691,210 $113,042,206 $19,920,127 *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 6/30/20, the principal payments are contractual and the loan is expected to draw in FY2021. **Includes early redemption of $1,600,000 Governmental Activities Bonds paid 7/1/2020. 67 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 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 $1,000,000 per claim on public safety employees and $1,250,000 for all other employees up to an aggregate stop loss of $4,472,289 for fiscal year 2020. 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. 68 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. Estimated liability – The total claims liability of $7,031,251 reported in the Self-Insurance Fund at June 30, 2020, 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 $1,283,566 for liability/property claims, $4,200,067 for workers’ compensation claims and $1,547,618 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 2019: Risk management Beginning of Fiscal Year Liability Current Year Claims and Changes in Estimates $ $ (1,258,775) $ 1,094,321 3,460,659 4,375,795 (2,441,415) 5,395,039 Health insurance 1,375,504 16,737,691 (16,572,571) 1,540,624 22,344,163 $ (20,272,761) $ 8,029,984 5,958,582 $ 1,230,677 $ Balance at Fiscal Year-end Workers' comp $ 1,122,419 Claims Payments Fiscal Year 2020: Risk management Beginning of Fiscal Year Liability Current Year Claims and Changes in Estimates $ $ Workers' comp 1,094,321 825,153 5,395,039 Health insurance 307,108 1,540,624 $ 8,029,984 $ Claims Payments $ Balance at Fiscal Year-end (635,908) $ (1,502,080) 1,283,566 4,200,067 15,176,312 (15,169,318) 1,547,618 16,308,574 $ (17,307,307) $ 7,031,251 69 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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, 2020, 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 $ $ $ 63,344,609 14,473,235 68,428,541 39,917,601 186,163,986 121,785 27,825 96,020 96,151 341,781 $ Deferred Outflows of Resources $ $ 7,622,058 1,741,522 15,964,740 15,744,003 41,072,323 Deferred Inflows of Resources Pension and Other Postemployment Expense $ $ $ 6,441,860 1,471,871 1,886,659 1,461,846 11,262,236 $ 6,162,676 1,618,308 11,276,643 7,386,336 26,443,963 The City of Peoria reported $18,661,655 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 is a component unit of the State of Arizona. 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 70 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. 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 12.11 percent (11.94 percent for retirement & health insurance benefits and 0.17 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 12.11 percent (11.45 percent for retirement, 0.49 percent for health insurance premium benefit, and 0.17 percent for longterm disability) of the members’ annual covered payroll. These percentages led to City’s contributions for the year ended June 30, 2020 of $6,575,540, $281,400, and $97,627 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 10.41 percent (10.29 percent for retirement, 0.05 percent for health insurance premium benefit, and 0.07 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. 71 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Liability. The net asset and net liabilities were measured as of June 30, 2019. 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, 2018, to the measurement date of June 30, 2019. The City's proportion of the net assets or net liability was based on the City's actual contributions to the plan relative to the total of all participating employers' contributions for the year ended June 30, 2019, and the change from its proportion measured as of June 30, 2018. At June 30, 2020, the City of Peoria reported the following asset and liabilities for its proportionate share of the ASRS’ net/pension/OPEB asset or liability. In addition, the City's proportion for each plan measured as of June 30, 2019, and the change from its proportion measured as of June 30, 2018 was: Net pension/OPEB (asset) liability ASRS Pension Health insurance premium benefit Long-term disability $ 77,467,484 (149,610) 350,360 Proportion June 30, 2019 % Increase (decrease) from June 30, 2018 0.53238 0.54137 0.53782 (0.014) (0.013) (0.013) Pension/OPEB Expense. 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 $ 7,478,068 190,400 112,516 72 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Deferred outflows/inflows of resources. At June 30, 2020, 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 Differences between expected and actual $ experience Changes of assumptions or other inputs Difference between projected and actual earnings on plan investments Changes in proportion and differences between City contributions and proportionate share of contributions City contributions subsequent to the measurement date Total $ Long-term disability Deferred Deferred Deferred Deferred Deferred Deferred outflows of inflows of outflows of inflows of outflows of inflows of resources resources resources resources resources resources 1,399,471 $ 14,565 $ - $ 178,841 $ 41,393 $ - 327,457 3,084,907 294,220 - 52,413 - - 1,741,201 - 194,558 - 7,474 294,059 2,679,419 - 1,643 - 11,153 6,575,540 - 281,400 - 97,627 - 8,596,527 $ 7,520,092 $ 575,620 $ 375,042 $ 191,433 $ 18,627 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, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pensions and OPEB will be recognized as expenses as follows: Year ending June 30 2021 2022 2023 2024 2025 Thereafter Pension $ (2,925,415) (2,705,647) (334,384) 466,341 - 73 Health insurance premium benefit $ (65,206) (65,205) 17,768 36,065 (4,244) Long-term disability $ 6,809 6,810 14,100 15,437 12,657 19,366 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Actuarial Assumptions. The significant actuarial assumptions used to measure the total pension/OPEB liability are as follows: The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2016. Actuarial valuation date June 30, 2018 Actuarial roll forward date June 30, 2019 Actuarial cost method Entry Age Normal Investment rate of return 7.5% Projected salary increases 2.7-7.2% for pensions/not applicable to OPEB Inflation 2.3% Permanent benefit increase Mortality rates Included for pensions/not applicable for OPEB 2017 SRA Scale U-MP for pensions and health insurance premium benefit Recovery rates 2012 GLDT for long-tem disability Healthcare cost trend rate Not applicable Actuarial assumptions used in the June 30, 2018, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2016. The long-term expected rate of return on ASRS pension plan investments was determined to be 7.50 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: Target Allocation Long-Term expected geometric real rate of return Equity 50% 6.06% Credit Interest rate sensitive bonds 20% 5.36% 10% 1.62% Real estate 20% 5.85% Total 100% Asset Class 74 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Discount Rate. The discount rate used to measure the ASRS total pension/OPEB liability was 7.50 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%) $ 110,254,174 757,844 387,753 Current Discount Rate (7.50%) $ 77,467,484 (149,610) 350,360 1% Increase (8.50%) $ 50,066,250 (922,805) 314,101 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. 75 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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. Initial Membership Date: Years of service and age required to receive benefit Final average salary is based on Benefit percent Normal retirement Before January 1, 2012 20 years of service and any age or 15 years of service and age 62 On or After January 1, 2012 and before July 1, 2017 25 years of service or 15 years of credited service, and age 52.5 On or after July 1, 2017 15 years of credited service, age 52.5* 15 or more years of service, age 55 Highest 36 consecutive months of last 20 years Highest 60 consecutive months of last 20 years Highest 60 consecutive months of last 15 years 50% less 2.0% for each year of credited service less than 20 years or plus 2.0% to 2.5% for each year of credited service over 20 years, not to exceed 80% 1.5 to 2.5% per year of credited service, not to exceed 80% Accidental disability retirement 50% or normal retirement, whichever is greater Catastrophic disability retirement 90% for the first 60 months reduced to either 62.5% or normal retirement, whichever is greater Survivor benefit Retired members Active members 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 benefits for employees who became a member on or after July 1, 2017, (Tier 3 members) are contingent upon which retirement plan is chosen by a member. This group of members has an irrevocable choice of enrolling in either the defined benefit plan (police employees) or a hybrid plan, which has elements of both a defined benefit and defined contribution plan (fire employees), or a defined contribution plan in lieu of the respective choices listed above (both police and fire employees). If enrolling in the defined benefit plan or hybrid plan, benefits (defined benefit portion only for the hybrid plan) commence the first day of the month following termination of employment and are based upon the following:  Age 55 with 15 or more years of credited service: average monthly benefit compensation times a multiplier that varies by years of service, from 1.5 percent to 2.5 percent per year of service, times the number of years of service - up to a maximum of 80 percent of the average monthly benefit compensation.  An individual who became a member on or after July 1, 2017, and reaches age 52.5 with at least 15 years of credited service may take an early retirement; however, the amount of his or her retirement benefit is actuarially reduced. 76 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 $100 per month to $260 per month depending on the age of the member and dependents. Employees Covered by Benefit Terms. At June 30, 2020, 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 97 97 41 41 Inactive employees entitled to but not yet receiving benefits 29 9 22 20 Active employees 160 160 146 146 Total 286 266 209 207 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, 2020, are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members - pension City of Peoria Pension Health Insurance PSPRS Police 11.65% PSPRS Fire 11.65% 44.86% 0.35% 35.51% 0.32% 77 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 In addition, the City of Peoria was required by statute to contribute at the actuarially determined rate of 29.61 percent for the PSPRS Police, and 19.25 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 $7,646,229 $5,881,182 59,656 51,931 Pension: Contributions made Health insurance premium benefit: Contributions made Asset and Liability. At June 30, 2020, the City of Peoria reported the following assets and liabilities. PSPRS - Police PSPRS – Fire Net pensionliability $68,428,541 39,917,601 Net OPEB asset $96,020 96,151 The net assets and net liabilities were measured as of June 30, 2019, and the total liability used to calculate the net asset or liability was determined by an actuarial valuation as of that date. 78 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Actuarial Assumptions. The significant actuarial assumptions used to measure the total pension/OPEB liability are as follows: Actuarial Valuation Date June 30, 2018 Actuarial Roll Forward Date June 30, 2019 Actuarial Cost Method Entry Age Normal Inflation Salary Increases 2.50% for pensions/not applicable for OPEB 3.50%-7.50%, including inflation, for pensions/not applicable for OPEB Tier 1/2 Investment Rate of Return 7.30% Tier 3 Investment Rate of Return Mortality Rates 7.00% Active Lives: PubS-2010 Employee mortality, loaded 110% for males and females, projected with future mortality improvements reflected generationally using 75% of scale MP-2018. 100% of active deaths are assumed to be in the line of duty. Inactive Lives: PubS-2010 Healthy Retiree mortality, loaded 110% for males and females, projected with future mortality improvements reflected generationally using 75% of scale MP2018. Beneficiaries: PubS-2010 Survivor mortality, projected with future mortality improvements reflected generationally using 75% of scale MP2018. Disabled Lives: PubS-2010 Disabled mortality, projected with future mortality improvements reflected generationally using 75% of scale MP2018. The mortality assumptions sufficiently accommodate anticipated future mortality improvements. Actuarial assumptions used in the June 30, 2019, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2016. 79 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 The long-term expected rate of return on PSPRS plan investments was determined to be 7.30 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: Target Allocation Asset Class Long-Term Expected Geometric Real Rate of Return* Short-Term Investments 2% 0.25% Risk Parity 4% 4.01% Fixed Income 5% 3.00% Real Assets 9% 6.75% GTS 12% 4.01% Private Credit 16% 5.36% Real Estate 10% 4.50% Private Equity 12% 8.40% Non-U.S. Equity 14% 5.00% U.S. Equity 16% 4.75% Total 100% Discount Rates. At June 30 2019, the discount rate used to measure the PSPRS total pension/OPEB liabilities was 7.30 percent, which was a decrease of 0.1 from the discount rate used as of June 30, 2018. 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. 80 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Changes in the Net Pension/OPEB Liability Pension Increase (decrease) Plan Total Pension Fiduciary Net Liability Position PSPRS - POLICE Balances at June 30, 2019 Changes for the year: Service cost Interest on the total liability Differences between expected and actual experience in the measurement of the liability Changes of assumptions or other inputs Contributions – employer Contributions – employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other Adjustments to beginning of year Net changes Balances at June 30, 2020 PSPRS - FIRE Balances at June 30, 2019 Changes for the year: Service cost Interest on the total liability Differences between expected and actual experience in the measurement of the liability Changes of assumptions or other inputs Contributions – employer Contributions – employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Adjustments to beginning of year Net changes Balances at June 30, 2020 $ 130,978,266 $66,335,122 3,517,607 9,742,131 - Net Pension Liability Health insurance premium benefit Increase (decrease) Plan Total OPEB Fiduciary Net Net OPEB Liability Position Asset $64,643,144 3,517,607 9,742,131 $ 2,258,997 $ 2,027,116 $ 231,881 44,231 167,216 - 44,231 167,216 (152,876) 3,131,115 - 7,419,726 1,254,178 3,898,429 (152,876) 3,131,115 (7,419,726) (1,254,178) (3,898,429) (351,117) 25,181 - 59,304 109,070 (351,117) 25,181 (59,304) (109,070) (5,690,900) 10,547,077 $ 141,525,343 (5,690,900) (68,704) (4,128) (46,921) 6,761,680 $73,096,802 68,704 4,128 46,921 3,785,397 $68,428,541 (87,095) - (87,095) (1,883) (201,584) $ 2,057,413 46,921 126,317 $ 2,153,433 1,883 (46,921) (327,901) $ (96,020) Pension Increase (decrease) Plan Total Pension Fiduciary Net Liability Position Net Pension Liability Health insurance premium benefit Increase (decrease) Plan Total OPEB Fiduciary Net Net OPEB Liability Position Asset $ 100,690,697 $35,298,399 $ 1,811,969 3,230,796 7,557,042 35,268 134,427 - 35,268 134,427 $65,392,298 3,230,796 7,557,042 - $ 1,750,826 $ 61,143 1,198,203 2,087,419 - 4,632,927 1,165,663 3,740,932 1,198,203 2,087,419 (4,632,927) (1,165,663) (3,740,932) (193,678) 16,414 - 37,857 94,227 (193,678) 16,414 (37,857) (94,227) (3,598,608) 10,474,852 $ 111,165,549 (3,598,608) (65,997) (19,267) 5,855,650 $71,247,948 65,997 19,267 4,619,202 $39,917,601 (61,324) (68,893) $ 1,743,076 (61,324) (1,627) 19,268 88,401 $ 1,839,227 1,627 (19,268) (157,294) $ (96,151) 81 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 6.30% Net pension (asset) liability $ 89,621,749 Net OPEB (asset) liability 149,415 7.30% $ 68,428,541 (96,020) 8.30% $ 51,311,571 (301,923) PSPRS – Fire Rate 6.30% Net pension (asset) liability $ 56,713,494 Net OPEB (asset) liability 114,477 7.30% $ 39,917,601 (96,151) 8.30% $ 26,329,407 (272,872) 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, 2020, the City of Peoria recognized the following pension and OPEB expense: PSPRS - Police PSPRS - Fire Pension Expense $ 11,343,310 7,385,427 82 OPEB Expense $ ( 66,667) 909 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Deferred Outflows/Inflows of Resources. At June 30, 2020, 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 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 $ 2,364,680 Deferred Inflows of Resources $ 1,433,607 Premium Deferred Deferred Outflows of Inflows of Resources Resources $ 9,721 $ 374,161 5,057,647 - 21,582 78,891 798,758 - 6,467 - 7,646,229 - 59,656 - 15,867,314 $ 1,433,607 $ 97,426 $ 453,052 Health Insurance Benefit Pension Deferred Outflows of Resources PSPRS – Fire 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 $ 2,890,253 Deferred Inflows of Resources $ 1,153,647 Premium Deferred Deferred Outflows of Inflows of Resources Resources $ 118,385 $ 213,769 5,899,963 - 14,769 94,430 881,394 - 6,124 - 5,881,182 - 51,931 - 15,552,792 $ 1,153,647 83 $ 191,209 $ 308,199 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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: Pension Year ending June 30: 2021 2022 2023 2024 2025 Thereafter PSPRS - Police $ 2,674,612 1,707,146 1,152,469 432,099 395,689 425,463 OPEB PSPRS - Fire $ 2,125,404 1,396,671 1,749,537 1,260,559 664,513 1,321,280 PSPRS - Police $ (90,767) (90,767) (74,540) (53,833) (58,812) (46,563) PSPRS - Fire $ (23,364) (23,364) (10,591) (11,973) (18,854) (80,775) 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. 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. 84 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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, 2020:      $1,433,004 in the Water utility fund for Desert Harbor-Arrowhead Shores water sources well mixing. $604,775 in the WIFA loan fund for neighborhood drainage improvements. $520,127 in the Go Bond fund for street maintenance. $5,465,805 in the Transportation Sales Tax fund for streets improvements. $5,006,609 in the Non-Bond fund for construction of the Northern Community Park. 12. INTERFUND TRANSACTIONS, RECEIVABLE AND PAYABLE BALANCES At June 30, 2020, there was an interfund loan from the General Fund to the Storm Drain Utility Fund and from the General Fund to the GO Bond Capital Projects Fund to cover a deficit cash balance in that fund. The loans are 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 2020 that were either nonroutine in nature or inconsistent with the activities of the fund making the transfer. The following interfund transfers are reflected in the fund financial statements for the year ended June 30, 2020: Fund Governmental funds: General Fund Highway User Revenue Fund Transportation Sales Tax Fund Development Fee Fund Non-Major Governmental Funds Total governmental funds Enterprise funds: Water Utility Fund Wastewater Utility Fund Solid Waste Utility Fund Stadium Fund Total enterprise funds Internal Service funds Transfers out $ 8,174,585 108,490 8,285,657 1,549,265 18,117,997 Transfers in $ 4,990,592 353,025 343,696 5,687,313 237,316 $ Grand totals 85 24,042,626 360,000 1,000,000 1,324,153 22,679 11,342,515 14,049,347 96,058 4,038,577 2,000,000 6,134,635 3,858,644 $ 24,042,626 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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, 2020: 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 7,593,046 2,219,811 5,150,043 9,431,785 1,093,371 25,488,056 4,347,846 1,108,102 2,123,485 8,623,181 804,669 17,007,283 Solid Waste Utility Fund: Working capital policy reserve Capital equipment replacement 2,586,055 2,203,808 4,789,863 Stadium Fund: Capital equipment replacement Total enterprise funds $ Internal Service Funds: Capital equipment replacement Risk management purpose Total internal service funds $ $ 86 560,337 47,845,539 14,506,137 6,139,698 20,645,835 CITY OF PEORIA, ARIZONA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 1, 2020, the Vistancia Community Facilities District issued $22,725,000 of General Obligation Bonds, Series 2020 to refund the existing Series 2015 bonds and provide an addition of $2,071,504 for construction costs. On October 20, 2020, the City entered Arizona Water and Wastewater Revenue Refunding Obligations, Series 2020A with a par value of $35,190,000 and net purchase price of $40,915,525. The refunding obligation will be used to refinance the following outstanding Water Infrastructure Financing Authority (WIFA) loans: Outstanding Loan Balance 2006 Butler WWTRP Ph 1 $ 10,742,111.00 2008 Butler WWTRP Ph 2 18,870,337.00 2008 Butler WWTRP Ph 3 4,295,663.00 2009 Sect A Sewer Rehab 354,998.00 2009 Sewer Facilities 1,720,354.00 2009 Water Facilities 3,962,267.00 2009 Pinnacle Peak Waterline Total 388,263.00 $ 40,333,993.00 The objective of the refunding is to realize interest rate savings in today's low interest rate environment; the outstanding WIFA loans have an interest cost ranging from 2% to 3.48%. The proposed Series 2020A Revenue Refunding Obligations are estimated to have an interest cost of less than 1.0%, generating a net present value savings of approximately $3.4 million or 7.4% of refunded debt service. The savings will allow for a reduction in the annual debt service payments ranging from $31,000 to $467,000. 88 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, 2020 ASRS-Pension 2020 (2019) 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 0.532380% $ 77,467,484 $ 56,417,665 Reporting Fiscal Year (Measurement Date) 2018 (2017) 2017 (2016) 2019 (2018) $ $ 137.31% 73.24% 0.546250% 76,182,651 54,343,055 $ $ 140.19% 73.40% 0.571460% 89,022,329 53,419,833 166.65% 69.92% $ $ 0.542460% 87,558,493 50,820,065 172.29% 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. 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 2020 (2019) Reporting Fiscal Year (Measurement Date) 2019 (2018) 0.541370% $ (149,610) $ 56,417,665 $ $ -0.27% 101.62% 0.554120% (199,533) 54,343,055 2018 (2017) $ $ -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. 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 2020 (2019) Reporting Fiscal Year (Measurement Date) 2019 (2018) 0.537820% $ 350,360 $ 56,417,665 0.550920% 287,858 54,343,055 0.62% 72.85% $ $ 0.53% 77.83% 2018 (2017) $ $ 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 89 2015 (2014) CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AGENT PLANS JUNE 30, 2020 Public Safety Personnel Retirement System 2020 (2019) 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 Adjustment to beginning of year 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 $ 3,517,607 9,742,131 - Reporting Fiscal Year (Measurement Date) 2018 (2017) 2017 (2016) 2019 (2018) $ 3,437,849 9,195,638 - $ 3,497,564 8,207,737 1,019,089 $ 2016 (2015) 2015 (2014) 2,658,484 7,450,121 6,569,592 $ 2,557,053 7,075,581 - $ 2,556,976 6,074,980 1,228,208 (152,876) 3,131,115 (1,331,798) - 5,141,159 2,469,996 (1,372,059) 4,270,128 341,776 - (672,105) 8,103,978 (5,690,900) 10,547,077 130,978,266 $ 141,525,343 (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 $ $ $ $ 4,729,872 1,732,502 320,234 $ 3,254,563 1,689,030 1,821,818 $ 2,907,800 1,491,406 5,954,387 7,419,726 1,254,178 3,898,429 6,622,615 1,379,152 4,232,822 5,122,411 2,723,948 6,734,348 (5,690,900) (68,704) (4,128) 6,808,601 66,335,122 (46,921) $ 73,096,802 (5,739,761) (2,283,693) (65,122) 40,695 4,186,708 62,148,414 $ 66,335,122 (5,213,832) (59,988) (21,848) 9,285,039 52,863,375 $ 62,148,414 (5,716,802) (46,480) 37,100 1,056,426 51,806,949 $ 52,863,375 (4,791,028) (44,835) (56,762) 1,872,786 49,934,163 $ 51,806,949 (4,300,112) (1,313,936) 4,739,545 45,194,618 $ 49,934,163 68,428,541 64,643,144 63,267,924 57,431,250 44,628,212 41,317,616 51.65% 50.65% 49.55% 47.93% 53.72% 54.72% $ 16,897,694 $ 16,153,506 $ 15,387,963 $ 13,992,947 $ 13,449,859 $ 13,035,510 404.96% 400.18% 411.15% 410.43% 331.81% 316.96% 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 90 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABIILTY AND RELATED RATIOS AGENT PLANS JUNE 30, 2020 Public Safety Personnel Retirement System 2020 (2019) 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 Adjustment to beginning of year 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 $ 3,230,796 7,557,042 - Reporting Fiscal Year (Measurement Date) 2018 (2017) 2017 (2016) 2019 (2018) $ 3,070,924 7,066,051 - $ 3,111,892 6,395,230 466,111 $ 2016 (2015) 2015 (2014) 2,379,652 5,434,649 6,700,272 $ 2,056,517 4,952,998 - $ 2,013,025 4,197,224 453,523 1,198,203 2,087,419 (1,450,577) - 1,834,916 1,708,934 86,478 3,273,059 809,490 - 660,641 3,815,327 (3,598,608) 10,474,852 100,690,697 $ 111,165,549 (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 $ $ $ $ 3,162,518 1,375,202 298,901 $ 1,866,365 1,238,541 1,710,692 $ 1,885,422 1,168,186 5,369,649 4,632,927 1,165,663 3,740,932 4,749,672 1,439,943 4,205,458 3,596,394 1,593,634 6,425,067 (3,598,608) (65,997) 5,874,917 65,392,298 (19,267) $ 71,247,948 (3,894,840) (1,926,795) (64,663) 44,976 4,553,751 60,838,547 $ 65,392,298 (2,663,473) (57,251) 671 8,895,042 51,943,505 $ 60,838,547 (1,739,905) (43,410) 87,273 3,140,579 48,802,926 $ 51,943,505 (1,949,881) (42,126) (35,356) 2,788,235 46,014,691 $ 48,802,926 (1,117,704) (1,063,021) 6,242,532 39,772,159 $ 46,014,691 39,917,601 35,298,399 35,060,592 33,102,024 20,108,398 17,027,509 64.09% 64.94% 63.44% 61.08% 70.82% 72.99% $ 13,822,178 $ 12,085,624 $ 11,543,146 $ 11,796,929 $ 11,068,029 $ 10,934,868 288.79% 292.07% 303.74% 280.60% 181.68% 155.72% 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 91 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS AGENT PLANS JUNE 30, 2020 Reporting Fiscal Year (Measurement Date) 2020 (2019) 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 Adjustment to beginning of year Plan fiduciary net position - ending (b) $ $ $ $ 44,231 167,216 - $ 45,757 164,184 - $ 50,779 167,590 6,476 (351,117) 25,181 (103,677) - 19,591 (159,009) (87,095) (201,584) 2,258,997 2,057,413 (86,192) 20,072 2,238,925 2,258,997 (111,290) (25,863) 2,264,788 2,238,925 59,304 109,070 (87,095) (1,883) 79,396 2,027,116 46,921 2,153,433 $ $ $ 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) (96,020) 231,881 288,666 Plan fiduciary net position as a percentage of the total OPEB liability 104.67% 89.74% 87.11% $ 16,897,694 $ 16,153,506 $ 15,387,963 -0.57% 1.44% 1.88% Covered payroll Net OPEB liability as a percentage of covered payroll 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 92 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS AGENT PLANS JUNE 30, 2020 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 Adjustment to beginning of year Plan fiduciary net position - ending (b) Reporting Fiscal Year (Measurement Date) 2020 (2019) 2019 (2018) 2018 (2017) $ $ $ $ 35,268 134,427 - $ 35,268 128,515 - $ 39,357 119,494 5,572 (193,678) 16,414 (49,429) - 175,598 (140,066) (61,324) (68,893) 1,811,969 1,743,076 (42,867) 71,487 1,740,482 1,811,969 (66,108) 133,847 1,606,635 1,740,482 37,857 94,227 (61,324) (1,627) 69,133 1,750,826 19,268 1,839,227 $ $ 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) (96,151) 61,143 79,902 Plan fiduciary net position as a percentage of the total OPEB liability 105.52% 96.63% 95.41% $ 13,822,178 $ 12,085,624 $ 11,543,146 -0.70% 0.51% 0.69% Covered payroll Net OPEB liability/(asset) as a percentage of covered payroll 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 93 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION/OPEB CONTRIBUTIONS JUNE 30, 2020 2020 2019 2018 Reporting Fiscal Year 2017 2016 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 $ 6,575,540 $ 5,758,658 $ 5,513,977 6,575,540 $ $57,428,297 6,307,495 $ $ 56,417,665 6,307,495 $ 5,923,393 5,923,393 $ $ 54,343,055 $ 5,758,658 $ $ 53,419,833 5,513,977 $ $ 50,820,065 11.45% 11.18% 10.90% 10.78% 10.85% $ 5,458,945 $ 5,019,946 $ $ 5,458,945 47,561,194 5,019,946 $ $ 46,266,286 11.48% 10.85% $ 3,235,398 $ 2,907,800 $ $ 3,235,398 13,449,859 2,907,800 $ $ 13,035,510 24.06% 22.31% $ 1,842,016 $ 1,885,422 $ $ 1,842,016 11,068,029 1,885,422 $ $ 10,934,868 16.64% 17.24% 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 $ 281,400 $ 259,521 $ 239,109 281,400 $ $57,428,297 259,521 $ $ 56,417,665 239,109 $ $ 54,343,055 0.49% 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 $ 97,627 $ 90,268 $ 86,949 97,627 $ $57,428,297 90,268 $ $ 56,417,665 86,949 $ $ 54,343,055 0.17% 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 $ 7,646,229 $ 5,039,558 $ 4,406,379 7,646,229 $ $17,044,648 7,436,675 $ $ 16,897,694 7,436,675 6,634,245 $ 2,283,693 $ 16,153,506 5,039,558 $ $ 15,387,963 4,696,546 $ (290,167) $ 13,992,947 44.86% 44.01% 41.07% 32.75% 33.56% 4,714,745 $ $ 8,917,938 5,721,681 $ $ 5,881,182 $ 2,711,485 $ 2,568,191 5,881,182 $ $16,562,044 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 35.51% 34.11% 31.40% 25.79% 23.29% 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 $ 59,656 $ 65,900 $ 79,152 59,656 $ $17,044,648 65,900 $ $ 16,897,694 79,152 $ $ 16,153,506 0.35% 0.39% 0.49% $ 51,931 $ 38,702 $ 35,048 51,931 $ $16,562,044 38,702 $ $ 13,822,178 35,048 $ $ 12,085,624 0.31% 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 94 CITY OF PEORIA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO PENSION/OPEB PLAN SCHEDULES JUNE 30, 2020 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 are disclosed in the notes to the financial statements. Note 2- Factors that Affect Trends Arizona State Retirement System (ASRS) The actuarial assumptions used in the June 30, 2019, valuation for ASRS were based on the results of an actuarial experience study for the five-year period ended June 30, 2016. The ASRS Board adopted the experience study recommended changes which were applied to the June 30, 2017 actuarial valuation. Public Safety Personnel Retirement System (PSPRS) The actuarial assumptions used in the June 30, 2019, valuation for PSPRS were based on the results of an actuarial experience study for the 5-year period ended June 30, 2016. Several actuarial assumptions were adjusted based on the study. Adjustments included:  Decreasing wage inflation from 4.0% to 3.5%.  Decreasing the investment rate of return from 7.4 percent to 7.3 percent.  Updating mortality rates. Arizona courts have ruled that provisions of a 2011 law that changed the mechanism for funding permanent pension benefit increases and increased employee pension contribution rates were unconstitutional or a breach of contract because those provisions apply to individuals who were members as of the law’s effective date. As a result, the PSPRS changed benefit terms to reflect the prior mechanism for funding permanent benefit increases for those members and revised actuarial assumptions to explicitly value future permanent benefit increases. PSPRS also reduced those members’ employee contribution rates. These changes are reflected in the plans’ pension liabilities for fiscal year 2015 (measurement date 2014) for members who were retired as of the law’s effective date and fiscal year 2018 (measurement date 2017) for members who retired or will retire after the law’s effective date. These changes also increased the PSPRS-required pension contributions beginning in fiscal year 2016 for members who were retired as of the law’s effective date. These changes increased the PSPRS-required contributions beginning in fiscal year 2019 for members who retired or will retire after the law’s effective date. 95 96 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 99 Non-Bond Capital Projects Fund 100 Non-Major Governmental Funds Combining Statements Combining Balance Sheet 104 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 106 Budgetary Comparison Schedules Public Transit Fund 108 Other Grants Fund 109 Municipal Development Authority (MDA) Debt, Debt Service Fund 110 Community Facilities District (CFD) Bonds Debt Service Fund 111 Non-Bond Debt Service Fund 112 Community Facilities District (CFD) Bonds Capital Projects Fund 113 General Obligation Bonds Capital Projects Fund 114 Internal Service Funds Combining Statements Combining Statement of Net Position 116 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 117 Combining Statement of Cash Flows 118 Fiduciary Funds Combining Statement of Fiduciary Net Position – Agency Funds Combining Statement of Changes in Assets and Liabilities – Agency Funds 97 120 121 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. 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. 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. 98 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final REVENUES: Taxes 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 Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 18,147,602 60,000 18,207,602 $ 18,147,602 60,000 18,207,602 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 17,773,266 245,077 18,018,343 $ (374,336) 185,077 (189,259) 14,587,523 5,371,539 19,959,062 14,587,523 5,371,539 19,959,062 13,815,000 4,922,432 18,737,432 (772,523) (449,107) (1,221,630) (1,751,460) (1,751,460) (719,089) 1,032,371 (500,000) (500,000) (500,000) (500,000) - 500,000 500,000 (2,251,460) (2,251,460) (719,089) 1,532,371 16,416,225 16,416,225 17,095,199 678,974 14,164,765 99 $ 14,164,765 $ 16,376,110 $ 2,211,345 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final REVENUES: Intergovernmental revenue Investment earnings Miscellaneous Total revenues $ EXPENDITURES: Current: General government Culture and Recreation Public Safety Highways and streets Public Works Debt service: Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Contingencies Total other financing sources and uses $ Fund balances - beginning $ 219,000 165,000 384,000 Variance with Final Budget Over (Under) $ $ 8,193,709 407,363 8,601,072 8,193,709 188,363 (165,000) 8,217,072 349,274 - 8,710 426,439 - 1,728 280,913 1,192,655 905,274 408,625 (6,982) 280,913 1,192,655 478,835 408,625 24,488,024 24,837,298 26,021,108 26,456,257 12,749,032 15,538,227 (13,272,076) (10,918,030) (24,453,298) (26,072,257) (6,937,155) 19,135,102 (300,000) (300,000) Net change in fund balances Fund balances - ending 219,000 165,000 384,000 Actual Amounts (budgetary basis) - - - (24,753,298) (26,072,257) (6,937,155) 19,135,102 26,250,809 26,250,809 16,217,244 (10,033,565) 1,497,511 100 $ 178,552 $ 9,280,089 $ 9,101,537 101 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. 102 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) Bonds 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. 103 CITY OF PEORIA, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue Funds Public Transit Fund ASSETS Pooled cash and investments Accounts receivable, net Interest receivable Due from other governments Prepaid items Restricted cash with fiscal agents Restricted investments Total assets LIABILITIES & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Due to other governments Other liabilities Unearned revenue-other Total liabilities Deferred inflows of resources: Unavailable revenue-property taxes Total deferred inflows of resources Fund balances: Restricted for: Debt service Capital projects Grant purposes Committed for: Arts capital Total fund balance Total liabilities & fund balance $ $ $ Other Grants Fund 794,748 252,248 6,066 7,218 1,060,280 $ 133,945 6,777 140,722 $ $ - $ Debt Service Funds Municipal Development Authority Debt 7,463,818 69,055 8,171 638,581 6,000 577,507 8,763,132 $ 356,111 7,043 4,500,767 4,863,921 $ $ - 5,412,007 18,218 2,669,730 8,099,955 - CFD Bonds $ $ $ - Non-Bond 246,715 18,452 2,492 3,414,781 3,682,440 $ 28,351 28,351 $ $ 509,991 5,303 515,294 - 18,452 18,452 - 919,558 1,469,434 8,099,955 - 3,635,637 - 515,294 - 919,558 1,060,280 2,429,777 3,899,211 8,763,132 8,099,955 8,099,955 3,635,637 3,682,440 515,294 515,294 (continued) $ 104 $ $ $ CITY OF PEORIA, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Capital Project Funds CFD Bonds ASSETS Pooled cash and investments Accounts receivable, net Interest receivable Due from other governments Prepaid items Restricted cash with fiscal agents Restricted investments Total assets LIABILITIES & FUND BALANCES Liabilities: Accounts payable Accrued payroll Due to other funds Due to other governments Other liabilities Unearned revenue-other Total liabilities Deferred inflows of resources: Unavailable revenue-property taxes Total deferred inflows of resources Fund balances: Restricted for: Debt service Capital projects Grant purposes Committed for: Arts capital Total fund balance Total liabilities & fund balance $ $ $ 2,514,966 2,514,966 - GO Bond Capital Projects Fund Non-Major Governmental Funds $ $ 23,817 6,913,605 6,937,422 $ $ 1,059,974 1,937,909 159,065 3,156,948 - $ Total $ $ - 14,427,279 339,755 64,067 645,799 6,000 6,662,018 9,428,571 31,573,489 1,550,030 13,820 1,937,909 28,351 159,065 4,500,767 8,189,942 18,452 18,452 2,514,966 - 3,780,474 - 12,250,886 6,295,440 2,388,992 2,514,966 2,514,966 3,780,474 6,937,422 2,429,777 23,365,095 31,573,489 $ 105 $ CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 Special Revenue Funds Public Other Transit Grants Fund 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 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 $ 627,704 57,292 53,687 247,100 985,783 $ 17,968,424 806,271 133,090 83,618 226,598 19,218,001 4,356,508 397,744 1,398,848 16,882,705 403,259 333,663 156,428 4,512,936 425,791 19,842,010 (3,527,153) Debt Service Funds Municipal Development CFD Authority Debt Bonds Non-Bond $ 161,237 161,237 $ 46,931 136,388 183,319 33,221 - 7,750 - 2,080,000 1,109,251 3,189,251 3,200,000 1,502,424 4,735,645 3,631,060 721,880 4,360,690 (624,009) (3,028,014) (425,440) (4,177,371) 3,750,000 3,750,000 6,961 (225,112) (218,151) 3,187,751 3,187,751 - 4,397,803 4,397,803 222,847 (842,160) 159,737 (425,440) 220,432 696,711 4,741,371 7,940,218 4,061,077 294,862 919,558 $ 3,899,211 $ 8,099,955 $ 3,635,637 106 - $ 3,855,354 100,000 22,056 332,795 4,310,205 $ 515,294 (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, 2020 Capital Project Funds GO Bond CFD Capital Projects Bonds 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 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 $ $ 550,741 550,741 $ 3,855,354 18,596,128 963,563 133,090 918,270 942,881 25,409,286 - 455,262 213,040 148,616 1,138,634 - 430,965 1,854,110 17,095,745 403,259 148,616 1,146,384 4,690,171 367,173 367,173 23,631,663 25,587,215 8,911,060 3,700,728 24,213,882 62,594,920 (367,173) (25,036,474) (37,185,634) 2,590,000 292,139 2,882,139 (1,324,153) (1,324,153) 2,590,000 292,139 11,342,515 (1,549,265) 12,675,389 2,514,966 (26,360,627) (24,510,245) 30,141,101 47,875,340 - Fund balances - beginning Fund balances - ending - Total Non-Major Governmental Funds 2,514,966 $ 3,780,474 107 $ 23,365,095 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE PUBLIC TRANSIT FUND FOR THE YEAR ENDED JUNE 30, 2020 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 $ 566,000 33,000 10,000 200,000 809,000 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 566,000 33,000 10,000 200,000 809,000 $ 627,704 57,292 53,687 247,100 985,783 $ 61,704 24,292 43,687 47,100 176,783 4,736,291 166,000 4,902,291 4,814,791 166,000 4,980,791 4,356,508 156,428 4,512,936 (458,283) (9,572) (467,855) (4,093,291) (4,171,791) (3,527,153) 644,638 (450,000) 3,750,000 3,300,000 (371,500) 3,750,000 3,378,500 3,750,000 3,750,000 371,500 371,500 (793,291) (793,291) 222,847 1,016,138 800,573 800,573 696,711 (103,862) 7,282 108 $ 7,282 $ 919,558 $ 912,276 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE OTHER GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2020 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 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 $ 6,172,598 450,000 115,000 63,761 16,500 6,817,859 $ 5,726,014 450,000 115,000 63,761 16,500 6,371,275 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 17,968,424 806,271 133,090 83,618 226,598 19,218,001 $ 12,242,410 356,271 18,090 19,857 210,098 12,846,726 370,663 1,047,342 482,585 1,483,470 501,627 1,075,013 4,960,700 656,490 1,404,738 17,482,509 1,483,470 501,627 1,636,544 23,165,378 397,744 1,398,848 16,882,705 403,259 333,663 425,791 19,842,010 (258,746) (5,890) (599,804) (1,080,211) (167,964) (1,210,753) (3,323,368) 1,857,159 (16,794,103) (624,009) 16,170,094 (3,425,000) (225,112) (3,650,112) (855,002) (225,112) (1,080,114) 6,961 (225,112) (218,151) 855,002 6,961 861,963 (1,792,953) (17,874,217) (842,160) 17,032,057 3,730,167 3,730,167 4,741,371 1,011,204 1,937,214 109 $ (14,144,050) $ 3,899,211 $ 18,043,261 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE MUNICIPAL DEVELOPMENT AUTHORITY (MDA) DEBT, DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2020 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 $ 50,000 50,000 $ 50,000 50,000 Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) $ 161,237 161,237 $ 111,237 111,237 2,080,000 1,826,126 3,906,126 2,080,000 1,826,126 3,906,126 2,080,000 1,109,251 3,189,251 (716,875) (716,875) (3,856,126) (3,856,126) (3,028,014) 828,112 (200,000) 3,187,751 2,987,751 (20,000) 3,187,751 3,167,751 3,187,751 3,187,751 20,000 20,000 (868,375) (688,375) 159,737 848,112 8,185,930 8,185,930 7,940,218 (245,712) 7,317,555 110 $ 7,497,555 $ 8,099,955 $ 602,400 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final REVENUES: Taxes Charges For Service 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 Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending 3,976,910 1,356,602 5,333,512 $ 3,976,910 1,356,602 5,333,512 $ 3,855,354 100,000 22,056 332,795 4,310,205 $ (121,556) 100,000 22,056 (1,023,807) (1,023,307) 1,140,000 570,000 33,221 (536,779) 3,640,000 1,788,738 6,568,738 3,200,000 1,558,512 5,328,512 3,200,000 1,502,424 4,735,645 (56,088) (592,867) (1,235,226) 5,000 (425,440) (430,440) (10,000) (10,000) (5,000) (5,000) - 5,000 5,000 (1,245,226) - (425,440) (425,440) - 4,061,077 4,061,077 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) (1,245,226) $ 111 - $ 3,635,637 $ 3,635,637 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE NON-BOND DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2020 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 $ 135,592 135,592 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 135,592 135,592 $ 46,931 136,388 183,319 $ 46,931 796 47,727 45,000 45,000 7,750 (37,250) 3,631,060 722,631 4,398,691 3,631,060 722,631 4,398,691 3,631,060 721,880 4,360,690 (751) (38,001) (4,263,099) (4,263,099) (4,177,371) 85,728 4,397,803 4,397,803 4,397,803 4,397,803 4,397,803 4,397,803 - 134,704 134,704 220,432 85,728 - - 294,862 294,862 134,704 112 $ 134,704 $ 515,294 $ 380,590 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES DISTRICT (CFD) BONDS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final 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 Premium on bonds issued Total other financing sources and uses Net change in fund balances Fund balances - beginning Fund balances - ending $ 300,000 2,900,000 3,200,000 $ Variance with Final Budget Over (Under) Actual Amounts (budgetary basis) 300,000 2,900,000 3,200,000 $ 367,173 367,173 $ 67,173 (2,900,000) (2,832,827) (3,200,000) (3,200,000) (367,173) 2,832,827 3,200,000 3,200,000 3,200,000 3,200,000 2,590,000 292,139 2,882,139 (610,000) 292,139 (317,861) 2,514,966 2,514,966 - - - - - 113 $ - $ 2,514,966 $ 2,514,966 CITY OF PEORIA, ARIZONA BUDGETARY COMPARISON SCHEDULE GENERAL OBLIGATION (GO) BOND CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final REVENUES: Investment earnings Total revenues $ EXPENDITURES: Current: Culture and recreation Public safety Highways and streets Public works Debt service: Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Issuance of debt Contingencies 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) - $ - - 550,741 550,741 428,008 - 441,795 - 455,262 213,040 148,616 1,138,634 455,262 213,040 (293,179) 1,138,634 32,908,000 33,336,008 37,502,017 37,943,812 23,631,663 25,587,215 (13,870,354) (12,356,597) (33,336,008) (37,943,812) (25,036,474) 12,907,338 7,417,090 (400,000) 7,017,090 7,417,090 (2) 7,417,088 (1,324,153) (1,324,153) (7,417,090) 2 (1,324,153) (8,741,241) (26,318,918) (30,526,724) (26,360,627) 4,166,097 27,204,666 27,204,666 30,141,101 2,936,435 885,748 114 $ (3,322,058) $ 3,780,474 $ $ 550,741 550,741 7,102,532 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. 115 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2020 ASSETS Current assets: Pooled cash and investments Restricted pooled cash and investments Restricted cash with fiscal agents 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 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 $ 12,372,070 8,300 25,865 201,909 12,608,144 $ 7,485,819 11,478,882 275,001 14,003 94,362 65,200 19,413,267 $ $ 5,591,835 10,029 11,586 5,613,450 $ 26,090,610 11,478,882 275,001 32,332 132,595 65,200 201,909 38,276,529 598,089 32,640,177 (19,961,538) 13,276,728 1,813 25,886,685 113,478 113,478 640,886 782 641,668 8,825,018 8,825,018 - 28,238,285 5,227 646,895 148,102 38,661,923 (36,297,517) 2,512,508 8,414 8,134,372 148,102 39,260,012 32,640,177 (56,259,055) 15,789,236 15,454 62,906,237 327,130 327,130 526,631 526,631 967,239 967,239 - - 8,825,018 8,825,018 203,427 15,370 45,530 264,327 1,572,781 1,998 5,368,849 17,750 6,961,378 164,048 30,208 186,040 380,296 594,399 49,566 308,130 952,095 2,534,655 97,142 5,368,849 557,450 8,558,096 34,240 1,662,402 20,020 156,240 271,310 1,662,402 481,810 943,076 977,316 1,241,643 1,682,422 8,643,800 2,718,684 2,874,924 3,255,220 4,376,659 4,647,969 5,600,064 8,038,419 10,182,631 18,740,727 276,477 276,477 445,087 445,087 817,472 817,472 (2,557,672) $ (2,557,672) 2,512,508 103,344 $ 2,615,852 15,744,503 13,454,787 15,115,987 $ 44,315,277 95,908 95,908 13,231,995 11,430,617 $ 24,662,612 116 - 13,454,787 6,139,698 $ 19,594,485 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 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 $ 7,902,400 14,341 7,916,741 $ SelfInsurance Fund Facilities Maintenance Fund Information Technology Fund 24,909,728 352,093 25,261,821 $ $ 6,855,941 4,375 6,860,316 10,164,050 35,747 10,199,797 Total $ 49,832,119 406,556 50,238,675 984,274 4,426,059 2,217,817 7,628,150 288,591 299,179 1,101,139 19,132,696 20,533,014 4,728,807 2,816,080 3,458,546 6,274,626 585,690 4,325,001 6,978,322 913,725 12,217,048 (2,017,251) 8,424,534 15,964,066 19,132,696 3,131,542 46,652,838 3,585,837 228,917 28,168 257,085 580,188 580,188 6,924 6,924 102,541 102,541 918,570 28,168 946,738 545,676 5,308,995 592,614 (1,914,710) 4,532,575 271,567 1,280,210 (100,000) 1,997,453 750,000 (137,316) 5,921,679 592,614 1,828,434 (86,276) 271,567 3,858,644 (237,316) 8,425,470 22,665,159 24,662,612 $ 13,672,806 19,594,485 117 $ (3,150,286) (2,557,672) $ 2,702,128 2,615,852 $ 35,889,807 44,315,277 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 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 $ $ 10,195,951 (6,644,701) (4,462,419) (911,169) $ 50,264,607 (15,511,646) (8,765,295) (20,131,429) 5,856,237 7,932,751 (4,366,586) (1,053,841) 2,512,324 $ 25,275,589 (1,168,879) (293,998) (20,131,429) 3,681,283 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in Transfers out Net cash provided (used) by non-capital financing activities 1,280,210 (100,000) 1,180,210 750,000 (137,316) 612,684 - 1,828,434 1,828,434 3,858,644 (237,316) 3,621,328 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 (1,894,916) 32,491 (1,862,425) - - (465,703) (465,703) (2,360,619) 32,491 (2,328,128) 234,099 234,099 (292,207) 598,083 305,876 6,872 6,872 105,075 105,075 (292,207) 944,129 651,922 2,064,208 10,307,862 $ 12,372,070 4,599,843 14,639,859 $ 19,239,702 $ 580,671 60,215 640,886 $ 556,637 5,035,198 5,591,835 7,801,359 30,043,134 $ 37,844,493 $ $ $ 585,690 $ (2,017,251) $ 3,585,837 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 6,860,316 (3,331,480) (2,955,037) 573,799 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 288,591 2,217,817 4,728,807 - - 913,725 3,131,542 16,010 (1,915) 703 52,389 13,768 - 1,934 144,906 (3,846) 3,339 248,135 25,932 (1,915) 5,976 445,430 61,388 5,554 (48,110) (21,230) (58,873) 2,223,733 (67,740) 1,001 (998,733) 4,180 (1,047,524) 127,066 10,773 (106,930) (25,625) (164,015) (11,891) 333,621 16,757 (90) (127,654) (277,905) 1,106,082 454,335 34,085 (998,733) (150,950) (174,509) (500,793) 2,270,400 $ 5,856,237 Net cash provided (used) by operating activities $ 2,512,324 $ 3,681,283 $ 573,799 $ (911,169) 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 $ 271,567 271,567 $ 102,027 102,027 $ - $ - $ 118 $ $ $ $ $ 271,567 102,027 373,594 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. 119 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS JUNE 30, 2020 Westside Fire Training IGA Fund PLAY Peoria NFP Fund ASSETS Pooled cash and investments Interest receivable Total assets LIABILITIES Accounts payable Other liabilities Total liabilities $ $ $ $ 99,746 166 99,912 $ $ 535 99,377 99,912 $ $ 120 30,036 74 30,110 30,110 30,110 Total $ $ $ $ 129,782 240 130,022 535 129,487 130,022 CITY OF PEORIA, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 Balance June 30, 2019 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, 2020 55,052 166 55,218 $ 26,752 107 26,859 $ 760 79,042 79,802 $ 450 50,993 51,443 $ 8,374 5,460 102 13,936 $ 7,943 3,754 11,697 $ Additions 71,446 107 71,553 $ 225 71,328 71,553 $ $ $ 28,302 5,460 102 33,864 $ 33,864 33,864 $ $ $ $ $ 10,108 74 10,182 $ 7,943 7,943 $ $ $ $ $ $ $ 99,746 166 99,912 535 99,377 99,912 30,036 74 30,110 30,110 30,110 Totals - All Agency Funds Assets: Pooled cash and investments Due from other governments Interest receivable Total Assets Liabilities: Accounts payable Other liabilities Total Liabilities $ $ $ $ 99,748 5,460 209 105,417 225 105,192 105,417 121 $ $ $ $ 65,160 240 65,400 8,703 79,042 87,745 $ $ $ $ 35,126 5,460 209 40,795 8,393 54,747 63,140 $ $ $ $ 129,782 240 130,022 535 129,487 130,022 122 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. 123 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 125 126 128 129 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 130 131 132 133 134 135 136 137 138 139 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 148 149 150 151 Economic and Demographic Information XXV Demographic and Economic Statistics XXVI Major Employers Within the City 152 153 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 154 155 156 124 142 143 144 145 146 147 CITY OF PEORIA, ARIZONA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Table I Fiscal Year 2012 2011 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 $ $ $ $ $ $ 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 1,282,066,150 141,115,975 164,342,264 1,587,524,389 $ $ $ $ $ $ 2013 816,149,271 118,105,425 111,579,103 1,045,833,799 $ 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 $ $ $ $ 829,001,871 131,550,563 149,159,571 1,109,712,005 $ 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 2015 2014 $ $ $ $ 855,286,264 151,624,692 84,211,745 1,091,122,701 $ 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 $ $ (1) 2016 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 $ 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 (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: Statement of Net Position City financial records and reports 125 2018 2017 $ $ 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 $ $ (2) 2019 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 $ $ $ $ 2020 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 $ $ 687,881,892 112,074,204 25,270,359 825,226,455 622,466,137 13,719,271 87,023,600 723,209,008 $ 1,310,348,029 125,793,475 112,293,959 $ 1,548,435,463 Table II CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2011 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 $ 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 $ 29,582,708 19,891,729 9,773,553 5,019,605 367,644 64,635,239 $ 225,365,493 $ $ $ 17,722,889 13,709,669 34,932,888 66,365,446 60,595,686 209,878 5,408,859 66,214,423 $ 132,579,869 $ $ (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) Fiscal Year 2014 2013 $ $ $ $ 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) 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) * Beginning in fiscal year 2015, the Police and Fire line items have been combined and are being presented in the Public Safety line item. 126 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 7,768,341 217,304,793 41,968,847 24,512,758 13,749,718 7,850,061 3,469,645 91,551,029 308,855,822 37,925,774 15,394,092 31,886,362 85,206,228 84,331,736 14,999,480 99,331,216 184,537,444 $ (132,098,565) 7,780,187 $ (124,318,378) 2020 $ $ $ $ 25,559,396 31,614,048 90,943,804 4,825,318 60,214,083 6,731,383 4,691,770 7,903,847 232,483,649 44,813,959 30,007,409 14,059,601 6,868,271 3,747,753 99,496,993 331,980,642 34,130,112 30,380,591 17,490,699 82,001,402 87,888,011 15,053,394 102,941,405 184,942,807 $ (150,482,247) 3,444,412 $ (147,037,835) CITY OF PEORIA, ARIZONA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2011 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes, levied for general purposes $ 3,628,286 Property taxes, levied for debt service 22,406,879 Sales and use taxes 58,082,217 Franchise taxes 4,037,897 Intergovernmental State shared sales taxes - unrestricted 11,649,489 Urban revenue sharing - unrestricted 13,408,996 Auto in-lieu taxes - unrestricted 4,548,154 Investment Earnings 1,354,607 Gain on sale of capital assets 76,640 Elimination of development agreement debt 801,394 Miscellaneous 5,124,916 Special Item: Close out of Section 8 Housing Special Item: Defeasance of G.O. debt Transfers in (out) (11,119,348) Total governmental activities 114,000,127 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 Change in Net Position Governmental Activities Business-type Activities Total primary government Source: 2012 $ 306,672 11,119,348 11,426,020 $ 125,426,147 $ $ $ $ 10,355,518 15,984,646 26,340,164 $ 3,187,679 19,030,940 60,719,648 4,084,163 Fiscal Year 2014 2013 $ 2,848,691 16,628,634 65,950,235 4,136,004 $ 2,744,900 15,479,771 70,213,953 4,194,371 Table II 2015 $ 2,889,150 16,891,026 74,556,024 4,312,836 2016 $ 2,994,905 17,537,813 79,410,364 4,461,864 2017 $ 3,207,433 18,532,683 84,236,770 4,501,681 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 - (3,335,912) 118,459,824 (9,394,454) 118,108,913 (28,205,646) 105,436,326 (11,931,172) 129,454,727 (3,994,967) 144,530,909 284,427 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 11,920,237 12,047,926 23,968,163 $ $ $ 11,569,326 15,896,408 27,465,734 $ $ $ (18,589,304) 38,663,932 20,074,628 Statement of Activities City financial records and reports 127 $ $ $ 17,076,790 36,027,476 53,104,266 $ $ $ 33,811,962 24,173,650 57,985,612 $ $ $ 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 2020 $ 5,928,720 21,829,330 99,747,911 4,776,257 (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 17,079,368 22,275,583 7,313,007 7,800,410 1,138,662 (2,387,307) 185,501,941 519,774 109,744 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 2,854,480 (9,220) 2,387,307 5,232,567 190,734,508 10,135,151 21,488,542 31,623,693 $ $ $ 29,177,620 13,050,070 42,227,690 $ $ $ 39,578,437 17,023,766 56,602,203 $ $ $ 35,019,694 8,676,979 43,696,673 CITY OF PEORIA, ARIZONA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Table III Fiscal Year 2011 General Fund Nonspendable Restricted Committed Assigned Unassigned Total General Fund All Other Governmental Funds Nonspendable Restricted Committed Assigned Unassigned Total All Other Governmental Funds $ $ $ 2012 537,000 30,671 34,288,769 3,891,174 13,429,595 52,177,209 $ 108,919 169,837,817 11,040,682 30,055,251 - $ $ 211,042,669 $ 2013 1,163,721 70,016 33,590,254 3,705,809 12,878,675 51,408,475 $ 95,828 168,127,814 10,064,814 40,566,996 (84,673) $ $ 218,770,779 $ 2014 259,643 108,517 33,229,466 3,330,705 13,996,657 50,924,988 $ 98,819 188,434,944 10,004,379 25,988,041 - $ $ 224,526,183 $ 2015 262,852 54,193 37,028,922 3,340,512 17,308,306 57,994,785 $ 131,641 145,352,432 10,300,556 23,410,508 - $ $ 179,195,137 2016 163,703 67,084 36,911,493 3,056,458 21,584,005 61,782,743 $ 70,579 127,294,490 10,572,297 22,821,310 (6,638,667) $ $ $ 154,120,009 Source: Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds Balance Sheet - Governmental Funds City financial records and reports 128 $ 2017 115,042 388,375 38,464,678 2,859,523 20,816,526 62,644,144 $ 67,986 150,498,066 10,885,668 30,353,689 - $ $ 191,805,409 $ 2018 113,859 354,566 40,221,571 2,618,447 25,684,922 68,993,365 $ 69,711 137,842,918 11,315,062 27,978,550 - $ $ 177,206,241 2019 939,966 40,762 52,300,995 1,363,728 58,221,670 112,867,121 2,323,312 30,639 55,086,725 1,528,073 80,266,172 $ 139,234,921 $ 60,828 143,532,067 2,838,609 16,217,244 - $ 69,986 87,583,806 9,280,089 - $ 162,648,748 $ 96,933,881 123,939 40,488 42,249,268 1,760,838 33,849,097 78,023,630 $ 78,068 115,222,701 10,663,895 34,926,243 - $ 160,890,907 $ 2020 $ $ CITY OF PEORIA, ARIZONA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2011 Revenues Taxes Intergovernmental Charges for Services Licenses and Permits Fines and Forfeitures Rents Investment Earnings Special Assessments Miscellaneous $ Total Revenues 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 2012 $ 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 Fiscal Year 2014 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 $ 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 Table IV 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 2016 $ 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 2017 $ 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 2018 $ 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 2020 $ 127,929,059 66,742,416 26,335,825 4,929,081 1,249,763 721,181 5,963,571 315,702 175,544,268 172,992,735 174,743,639 174,165,451 183,795,594 203,287,036 210,162,084 221,978,646 231,294,872 234,186,598 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 18,698,304 27,513,870 73,044,510 4,464,227 32,341,540 5,780,862 31,215,680 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 - 4,922,432 13,815,000 - Total Expenditures 192,780,638 178,812,735 195,784,242 181,941,899 191,362,246 190,296,187 211,209,027 229,362,728 229,872,198 211,796,425 Excess of Revenues over (under) Expenditures (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 22,390,173 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 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) 2,706,832 (16,568,732) 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 Total Other Financing Sources (Uses) Net Change in Fund Balance Debt Service as a percentage of noncapital expenditures (1) (5,749,149) $ (22,985,519) 28.71% 13,529,424 $ 7,709,424 25.36% 26,312,520 $ 5,271,917 (28,378,747) $ 20.91% (36,155,195) (13,720,518) $ 21.00% (21,287,170) 17.73% 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 129 25,555,952 $ 38,546,801 19.85% (7,203,004) $ (8,249,947) 17.16% 3,258,670 $ (4,125,412) 21.03% 35,178,658 $ 36,601,332 15.24% (13,861,900) $ 8,528,273 10.38% CITY OF PEORIA, ARIZONA CITY TRANSACTION PRIVILEGE TAXES BY CATEGORY LAST TEN FISCAL YEARS Table V Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other $ 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 $ 52,794,953 11,472,743 10,684,541 8,303,764 725,389 11,597,024 971,024 2,334,003 864,471 Total $ 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 $ 99,747,911 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% 9.5% 26.0% 18.9% 2.3% 3.9% -0.6% -22.1% 3.8% -70.4% Total 3.2% 4.5% 8.6% 8.0% 4.7% 6.5% 6.1% 6.6% 3.79% 7.05% Note: Includes all governmental fund types % Growth by Year Retail Sales Contracting Rentals Utilities Telecom/Cable TV Restaurant/Bar Amusement Use Other Source: City financial records and reports 130 2019 2020 Table VI CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS 2011 2012 Year Taxes Are Payable 2013 2014 2015 2016 2017 2018 2019 2020 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% 1.60% 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% 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% 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% 5.60% 5.50% 3.13% 2.50% 5.60% 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 131 CITY OF PEORIA, ARIZONA SALES TAX PAYERS - BY CATEGORY CURRENT YEAR AND NINE YEARS AGO Table VII 2020 Category # of Payers Percentage of Total Payers Retail Sales Contracting Restaurant/Bar Rental Utilities Telecom/Cable TV Use Amusement Others 6,625 783 339 4,055 13 198 1,789 38 1,509 43.2% 5.1% 2.2% 26.4% 0.1% 1.3% 11.7% 0.2% 9.8% Total 15,349 100.00% 2011 Sales Tax Paid $ Percentage of Total City Sales Tax Revenue # of Payers Percentage of Total Payers 52,794,953 11,472,743 11,597,024 10,684,541 8,303,764 725,389 2,334,003 971,024 864,471 52.90% 11.50% 11.60% 10.80% 8.30% 0.80% 2.30% 1.00% 0.90% 3,157 3,855 336 5,441 12 137 602 51 88 23.08% 28.18% 2.46% 39.78% 0.09% 1.00% 4.40% 0.37% 0.64% 99,747,911 100.10% 13,679 100.00% Source: City Sales Tax system City financial records 132 Sales Tax Paid $ Percentage of Total City Sales Tax Revenue 29,247,900 3,611,614 7,469,189 6,980,633 6,917,391 1,294,565 426,017 856,274 1,278,634 50.40% 6.20% 12.90% 12.00% 11.90% 2.20% 0.70% 1.50% 2.20% 58,082,217 100.00% CITY OF PEORIA, ARIZONA ASSESSED VALUES BY PROPERTY CLASSIFICATION LAST TEN FISCAL YEARS Table VIII Fiscal Year 2011 2012 818,535,888 147,284,152 $ 2013 $ $ $ $ 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% $ 1,556,721,002 8.1% Net Assessed Value Per Capita Population $ 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 $ 8,641 180,161 291,761,032 44,305,284 1,137,482 24,540 5,100 674,378,782 230,466,048 $ 297,883,403 40,513,630 1,040,707 396,725 - 740,037,974 243,816,250 $ 2020 $ 298,078,633 42,347,136 1,205,775 59,907 48,182 626,696,840 214,086,717 2019 1,609,972,512 -15.0% 304,844,019 43,659,181 1,118,206 83,177 7,124 614,234,433 199,613,372 2018 $ 341,042,160 54,523,204 1,399,678 103,122 7,964 546,593,560 161,107,937 2017 Net Assessed Value % Growth 378,992,788 85,330,391 1,429,130 140,493 7,869 620,970,965 119,387,647 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 495,318,990 147,216,152 1,563,689 53,641 - 687,456,278 122,978,913 2014 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 - 875,459,952 290,792,306 352,052,608 36,824,728 1,040,771 502,515 48,122 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.15 1.15 Full Cash Value % Growth $ 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% $ 20,055,499,784 9.1% Full Cash Value Per Capita $ $ $ $ $ $ $ $ $ $ Net Assessed Value as a Percentage of Full Cash Value 94,090 11.0% 76,358 68,014 10.8% 10.7% 63,743 10.5% 69,578 10.4% 85,063 8.4% 90,757 8.2% 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Commercial, Industrial, Mining & Utilities 21% 20% 20% 20% 19% 19% 18% 18% 18% 18% Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Agriculture and Vacant Land 16% 16% 16% 16% 16% 16% 15% 15% 15% 15% Railroad 17% 15% 15% 15% 16% 15% 14% 15% 14% 15% (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 133 96,410 8.1% 102,196 7.8% 111,320 7.8% CITY OF PEORIA, ARIZONA COMPARATIVE ASSESSED VALUES LAST TEN FISCAL YEARS Table IX Fiscal Year 2011 City of Peoria $ 1,609,972,512 2012 $ 1,276,335,862 2013 $ 1,137,434,740 2014 $ 1,057,413,204 2015 $ 1,155,587,438 2016 (a) $ 1,178,016,995 2017 $ 1,244,679,295 2018 $ 1,340,068,217 2019 $ 1,439,812,989 2020 $ 1,556,721,002 Peoria Unified School District No. 11 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 1,934,677,253 Maricopa County 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 43,194,326,395 State of Arizona 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 66,158,541,837 (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 134 Table X CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 assessed value) 2011 Total Direct City Primary Secondary Total $ Peoria Unified School District No. 11 (1) Primary Secondary Total Maricopa County (2) Primary Secondary Total 0.19 1.25 1.44 2012 $ 0.19 1.25 1.44 2013 $ 0.19 1.25 1.44 Fiscal Year 2014 $ 0.19 1.25 1.44 2015 $ 0.19 1.25 1.44 2016 $ 0.19 1.25 1.44 2017 $ 0.19 1.25 1.44 2018 $ 0.19 1.25 1.44 2019 $ 0.29 1.15 1.44 2020 $ 0.29 1.15 1.44 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 3.86 2.94 6.80 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 3.01 1.05 4.07 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 7.16 5.15 12.31 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 $ 3.93 $ 2.51 (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 0.46 1.16 $ 3.01 Secondary $ 0.17 0.18 0.01 0.06 0.33 0.16 0.14 $ 1.05 Note: All rates rounded to two decimal places from the four shown by the County Source: Maricopa County Assessor - Tax Rates Publication 135 $ CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING PROPERTY TAX LEVIES LAST TEN FISCAL YEARS 2011 Total Direct City Primary Secondary Total $ Peoria Unified School District No. 11 (1) Primary Secondary Maricopa County (2) Primary Secondary 2,901,540 20,124,656 23,026,196 2012 $ 2,411,739 15,954,198 18,365,937 2013 $ 2,154,484 14,217,934 16,372,418 Tax Levy Fiscal Year 2014 $ 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 2020 $ 4,514,491 17,902,292 22,416,783 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 74,661,130 56,922,243 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 1,300,978,643 402,738,173 Total Primary Secondary Total $ 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) 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 108,576,388 $ Secondary 69,236,831 (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 2019-2020 Tax Levy Source: $ $ Primary 605,109,318 196,326,940 499,542,385 1,300,978,643 Secondary $ $ 74,279,486 70,887,943 4,082,918 24,016,045 143,303,020 25,972,152 60,196,609 402,738,173 Maricopa County Assessor - Tax Rates and Levies publication 136 $ 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 $ 1,380,154,264 477,562,708 1,857,716,972 Table XII CITY OF PEORIA, ARIZONA LIMITED PROPERTY VALUE TOP TEN TAX PAYERS CURRENT YEAR AND NINE YEARS AGO 2020(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 BCC Development Inc. Freedom Plaza Limited Partnership Lease Peoria Center Apartments South LLC First Industrial LP Arizona State Land Department Qwest Corporation Sprint Nextel Wireless LP Lake Pleasant Pavilion LLC Plaza III Limited Partnership Target Corporation Total Type of Business Gas & Electric Utility Property Development Shopping Center Gas Utility Shopping Center Shopping Center Property Development Retirement Housing Multi-family Housing Property Development Government Telecommunications Telecommunications Shopping Center Nursing Home/Apartments Shopping Center Limited Property Assessed Value $ 28,821,599 9,841,004 6,284,217 6,026,993 5,098,735 4,856,047 4,073,580 4,041,147 3,861,566 3,841,330 $ 76,746,218 Rank 1 2 3 4 5 6 7 8 9 10 2011 % of Limited Property Assessed Value 1.85% 0.63% 0.40% 0.39% 0.33% 0.31% 0.26% 0.26% 0.25% 0.25% 4.93% $ (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. Note - As a quasi-governmental entity, Salt River Project pays in-Lieu taxes, rather than property taxes. For fiscal year 2020, the assessed value of Salt River Project property within the City of Peoria is $18,562,514. Source - Maricopa County Treasurer's or Assessor's Office 137 Rank 1 2 4 % of Taxable Secondary Assessed Value 1.25% 0.60% 0.44% 5,584,572 5 0.35% 8,176,674 5,501,789 5,296,805 5,015,130 4,722,783 4,708,405 75,955,339 3 6 7 8 9 10 0.51% 0.34% 0.33% 0.31% 0.29% 0.29% 4.72% Taxable Secondary Assessed Value $ 20,192,566 9,680,258 7,076,357 Table XIII CITY OF PEORIA, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Year Ended June 30, 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Notes: $ (1) (2) Source: Collected with the Fiscal Year of the Levy (2) Percentage Amount of Levy Taxes Levied for the Fiscal Year (1) 22,416,783 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 $ 21,914,662 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 97.76% 99.31% 98.23% 98.18% 98.42% 98.37% 97.81% 97.50% 95.98% 95.04% Collections in Subsequent Years (2) 190,134 172,428 203,936 157,379 179,684 231,196 247,300 373,965 544,870 Levy figures obtained from Maricopa County Tax Levy Books-February Publication. Collection amount obtained from Maricopa County Treasurer's Secured Levy Report at 6/30/2020 Maricopa County Treasurer's Office Maricopa County Assessor's Office City financial records and reports 138 Total Collections To Date Percentage Amount of Levy 21,914,662 20,779,859 19,127,692 17,800,779 16,853,030 16,470,255 15,113,364 16,209,790 18,002,265 22,429,267 97.76% 100.22% 99.12% 99.32% 99.35% 99.46% 99.33% 99.01% 98.02% 97.41% Table XIV CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA LAST TEN FISCAL YEARS Average Utility Bill Amounts Last Ten Fiscal Years 2013 2014 2011 2012 2015 2016 (c) 2017 2018 2019 2020 $34.36 -3.10% $38.00 10.59% $37.41 -1.55% $37.31 -0.27% $35.54 -4.74% $37.53 5.60% $39.13 4.26% $41.44 5.90% $42.15 1.71% $43.02 2.06% $20.45 -4.66% $21.49 5.09% $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% $26.91 1.17% $15.35 -0.07% $15.40 0.33% $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% $15.29 6.03% 2015 2016 (c) 2017 2018 2019 2020 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 Utility Service Connections Last Ten Fiscal Years 2013 2014 2011 2012 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% 60,705 2.57% 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% 62,617 2.80% 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% 60,123 2.22% Charges for Water Services Base Minimum Monthly Bill As of June 30, 2020 Charges for Wastewater Services Base Minimum Monthly Bill As of June 30, 2020 Resid., Landscape 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" Resid., Landscape Charge $ 16.09 19.64 31.74 45.16 81.01 121.30 233.15 367.42 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 139 (continued) Table XIV CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA Volume Consumption (gallons) 0 - 4,000 4,001 - 10,000 10,001 - 20,000 20,000+ Volume Charges for Water Services Usage Per Month As of June 30, 2020 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 50,000+ - - 1.18 3.11 4.41 Water Meter Permit Charges As of June 30, 2020 Meter Size Charge 317 3/4" $ 1 1/2" 495-781 2" 629 - 1,033 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, 2020 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 (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) 140 X CITY OF PEORIA, ARIZONA UTILITY STATISTICAL DATA TEN LARGEST WATER USERS CURRENT YEAR AND NINE YEARS AGO Table XIV 2011 2020 Entity Trilogy at Vistancia Blue Star Golf Blackstone Country Club Desert Harbor Lake Vistancia Village Association City of Peoria Padre's Pump Station City of Peoria - Pioneer Park Ventana Lakes N. of Beardsley Lake Westwing Mountain Christ's Church of the Valley Sun Garden Park II HOA Casa Del Sol East Sun Garden Mobile Home Park Freedom Plaza LTD Partnership Centennial High School Polynesian Village Avg Monthly Water Usage 17,823 15,265 15,069 7,612 7,174 6,041 5,421 5,334 4,680 3,898 Type of User Commercial Landscape Golf Course Golf Course Homeowner's Association Homeowner's Association Sports Complex City Park Homeowner's Association Homeowner's Association Church Homeowner's Association Multi-Family Residential Homeowner's Association Health Care Facility Public School Homeowner's Association Water usage measured in thousands of gallons Source: City customer service and billing records (concluded) 141 Rank 1 2 3 4 5 6 7 8 9 10 % Avg Monthly Water Usage 2.21% 1.90% 1.87% 0.95% 0.89% 0.75% 0.67% 0.66% 0.58% 0.48% Avg Monthly Water Usage 3,112 Rank 3 % Avg Monthly Water Usage 0.47% 8,299 1 1.24% 5,980 2 0.90% 2,418 4 0.36% 2,148 2,037 1,448 1,443 1,328 1,327 5 6 7 8 9 10 0.32% 0.31% 0.22% 0.22% 0.20% 0.20% CITY OF PEORIA, ARIZONA OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2012 2011 Governmental Activities General Obligation Bonds Municipal Development Authority Debt Obligations Direct Purchase and Loan Obligations Special Assessment Bonds Community Facilities District Bonds $ Business-type Activities Water and Sewer Revenue Bonds WIFA Loans General Obligation WIFA Loans 167,580,000 58,365,965 6,155,000 58,615,000 $ 15,780,000 121,975,538 449,034 Fiscal Year 2014 2013 170,960,000 52,480,000 4,660,000 56,230,000 $ 38,480,000 89,803,906 - 162,375,000 85,230,000 3,520,000 53,725,000 $ 37,295,000 82,212,652 - 152,820,000 81,035,000 3,195,000 51,095,000 Table XV 2015 $ 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 $ 157,167,099 32,753,534 30,761,347 33,920,919 13,383,853 70,004,831 - 8,412,062 62,724,636 $ 325,739,598 $ 298,202,194 $ $ 1,655.20 Total Primary Government $ 428,920,537 $ 412,613,906 $ 424,357,652 $ 398,645,535 $ 377,065,304 $ 390,509,813 $ 362,424,831 $ 327,826,497 Total Debt Per Capita $ 2,766.98 $ 2,656.44 $ 2,714.08 $ 2,565.75 $ 2,350.33 $ 2,378.08 $ 2,154.83 $ 1,903.06 Total Debt as a % of Personal Income 7.8% 7.4% 7.1% 6.4% Source: City financial records. Debt schedule exhibits and Long-term liability activity footnote 142 5.8% 5.7% 5.1% 2020 4.4% 1,851.20 4.1% $ 142,247,708 30,620,436 27,130,287 33,217,566 4,665,273 57,320,925 3,000,000 3.8% 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 2012 2011 Bonded Debt (1) Less: $ 167,580,000 $ 135,730,531 Debt Service Reserves (2) Net Bonded Debt 2013 $ 170,960,000 $ 140,177,497 31,849,469 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 2019 2020 $ 135,863,947 15,887,194 17,095,199 $ 119,976,753 $ 140,071,900 25,529,967 $ 157,167,099 $ 142,247,708 $ 125,871,598 16,376,110 Percentage of Net Bonded Debt to Full Cash Value 0.9% 1.2% 1.2% 1.2% 1.1% 1.0% 0.9% 0.7% 0.8% 0.6% Percentage of Net Bonded Debt to Assessed Value (3) 8.4% 11.0% 11.6% 11.7% 10.3% 12.3% 10.6% 9.0% 9.7% 8.1% Net Bonded Debt Per Capita $876 $902 $841 $785 $743 $879 $788 $696 $796 $699 Net Bonded Debt as a % of Personal Income 2.47% 2.53% 2.20% 1.99% 1.83% 2.12% 1.87% 1.62% 1.77% 1.51% (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. 143 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2020 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 $ 66,158,541,837 43,194,326,395 43,194,326,395 39,558,003,840 43,194,326,395 43,194,326,395 42,997,577,641 42,997,577,641 15,894,829,755 General Obligation Bonds Outstanding (2) $ Unified School Districts: Peoria No. 11 1,117,597,681 Deer Valley No. 97 213,570,069 Nadaburg No. 81 2,336,443 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 312,450,000 500,541,763 116,510,000 2.35% 3.60% 3.60% 3.94% 3.60% 3.60% 3.62% 3.62% 9.79% $ 11,260,680 18,122,041 11,410,853 40,793,574 188,329,412 194,090,000 198,220,000 185,000 70.02% 7.78% 3.30% 135,901,818 15,421,516 6,105 151,329,439 192,123,013 100.00% 147,535,838 $ 0.17 0.18 0.06 0.01 0.33 0.14 0.16 2.94 2.51 0.32 Direct: City of Peoria $ 1,556,721,002 $ 147,535,838 (4) Total direct and overlapping debt $ 339,658,851 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. (4) GO WIFA Loan is included in the total General Obligation Bonds Since it was paid for through secondary property taxes. The GO WIFA loan is presented in the Businness-type activity totals in the City's long term liabilities. 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 144 $ 1.15 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT - CURRENT FISCAL YEAR AS OF JUNE 30, 2020 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) $ 66,158,541,837 43,194,326,395 43,194,326,395 39,558,003,840 43,194,326,395 43,194,326,395 42,997,577,641 42,997,577,641 15,894,829,755 Debt Outstanding (2) $ Unified School Districts: Peoria No. 11 1,117,597,681 Deer Valley No. 97 213,570,069 Nadaburg No. 81 2,336,443 Sub-total - Unified school district overlapping Total overlapping Direct: City of Peoria $ 1,556,721,002 Percentage Applicable to City of Peoria (1) $ Table XVIII 312,450,000 116,510,000 2.35% 3.60% 3.60% 3.94% 3.60% 3.60% 3.62% 3.62% 9.79% 194,090,000 198,220,000 185,000 70.02% 7.78% 3.30% 135,901,818 15,421,516 6,105 151,329,439 174,000,972 100.00% 238,504,126 238,504,126 (4) Total direct and overlapping debt $ $ 11,260,680 11,410,853 22,671,533 261,175,659 412,505,098 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. (4) GO WIFA Loan is included in the total debt Since it was paid for through secondary property taxes. The GO WIFA loan is presented in the Businness-type activity totals in the City's long term liabilities. 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 145 Secondary Tax Rate per $100 Assessed Amount Applicable to City of Peoria $ 0.17 0.18 0.06 0.01 0.33 0.14 0.16 2.94 2.51 0.32 $ 1.15 CITY OF PEORIA, ARIZONA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT LAST TEN FISCAL YEARS Governmental Unit Fiscal Year 2011 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 Table XIX $ 23,908,932 23,908,932 384,534,551 2012 $ 22,084,125 22,084,125 371,967,077 2013 $ 25,357,414 3,241,000 28,598,414 394,056,576 2014 $ 2015 23,384,382 3,198,843 26,583,225 317,946,402 $ 21,550,210 3,025,964 24,576,174 298,736,758 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 25,895,041 280,497,941 2020 $ 11,260,680 11,410,853 22,671,533 261,175,659 196,735,864 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 8,541 135,901,818 15,421,516 6,105 221,361,862 203,179,142 188,479,689 235,467,507 206,424,076 246,739,392 217,002,200 177,233,953 175,853,138 151,329,439 Total overlapping 245,270,794 225,263,267 217,078,103 262,050,732 231,000,250 273,666,118 247,796,840 206,109,898 201,748,179 174,000,972 Direct (2): City of Peoria 360,625,619 349,882,952 365,458,162 291,363,177 274,160,584 287,338,043 158,031,697 207,170,951 254,602,900 238,504,126 $ 605,896,413 $ 575,146,219 $ 582,536,265 $ 553,413,909 $ 505,160,834 $ 561,004,161 $ 405,828,537 $ 413,280,849 456,351,079 $ 412,505,098 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 146 $ CITY OF PEORIA, ARIZONA LEGAL DEBT MARGIN LAST TEN FISCAL YEARS 2011 2012 Table XX Fiscal Year 2014 2013 2015 2016 2017 2018 2019 2020 Property Assessed Value (1) $ 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 $ 1,556,721,002 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 $ 93,403,260 Total net debt applicable to limit Legal 6% Debt Margin 4,570,000 $ 92,028,351 Total net debt applicable to the limit as a percentage of debt limit 20% Limitation Debt limit $ 4.7% $ Total net debt applicable to limit Legal 20% Debt Margin 2,735,000 321,994,502 158,984,502 Total net debt applicable to the limit as a percentage of debt limit 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 70.6% $ 0.6% $ 160,710,000 $ 63,094,792 - 211,482,641 59,012,641 $ 0.0% $ 152,470,000 $ 69,335,246 4,814,727 231,117,488 72.1% 88,192,488 61.8% $ 6.8% $ 142,925,000 $ 65,866,293 4,149,727 235,603,399 80,258,126 65.9% $ 248,935,859 $ 104,845,586 57.9% 147 77,404,366 4,526,273 $ 3.7% $ 144,090,273 (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 $ 5.6% 155,345,273 $ 70,531,031 2,999,727 268,013,643 143,958,370 46.3% $ 5.2% $ 124,055,273 $ 81,862,506 941,273 287,962,598 1.0% $ 141,653,727 $ 146,308,871 49.2% 92,461,987 311,344,200 136,711,857 $ 174,632,343 43.9% CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - EXCISE TAX AND STATE SHARED REVENUE DEBT OBLIGATIONS GOVERNMENTAL PORTION LAST TEN FISCAL YEARS 2012 2011 Fiscal Year 2014 2013 2015 2016 Table XXI 2017 2018 (6) 2019 2020 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 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 $ $ 21.54 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 $ 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 $ 47.36 $ $ 61.49 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 $ 30.67 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 $ 32.80 $ $ 34.28 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 $ $ 37.31 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 $ $ 39.00 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 $ $ 43.35 84,429,889 17,079,368 22,275,583 4,776,257 4,929,081 1,249,763 15,897,926 4,547,082 155,184,949 2,475,000 1,157,476 3,632,476 42.72 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: $ $ 91,845,713 8,682,846 100,528,559 1,920,000 1,940,963 3,860,963 26.04 $ $ 96,244,839 9,088,210 105,333,049 2,005,000 1,873,763 3,878,763 $ 104,688,686 9,927,436 114,616,122 $ 2,095,000 1,803,588 3,898,588 27.16 29.40 $ $ 110,317,038 10,861,145 121,178,183 2,185,000 1,730,263 3,915,263 $ $ 30.95 116,455,084 11,334,889 127,789,973 2,285,000 1,648,325 3,933,325 $ 121,566,339 12,231,059 133,797,398 $ 2,385,000 1,545,500 3,930,500 32.49 34.04 (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 148 $ $ 132,480,184 12,939,338 145,419,522 2,490,000 1,438,175 3,928,175 37.02 $ $ 142,377,577 13,977,877 156,355,454 2,665,000 1,114,408 3,779,408 41.37 $ $ 148,129,371 15,203,014 163,332,385 3,015,000 507,374 3,522,374 46.37 $ $ 151,552,473 16,080,887 167,633,360 3,065,000 447,978 3,512,978 47.72 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - WATER AND WASTEWATER REVENUE BONDS LAST TEN FISCAL YEARS Table XXII Fiscal Year 2012 (6) 2011 Gross Revenue (1) Operating and Maintenance Expenses (2) Net Revenue Available for Debt Service $ 46,141,098 28,610,625 17,530,473 $ 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 $ 2020 69,682,089 39,616,866 30,065,223 $ 72,892,452 47,802,256 25,090,196 Development Fee Revenue Total Net Revenue 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 6,911,813 32,002,009 Debt Service Requirements Principal (3) Interest (4) Total Debt Service Requirements 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 11,433,344 1,683,084 13,116,428 $ $ $ $ $ $ $ $ $ $ Ratio of Total Net Revenue/ Total Bond Expense 1.69 2.03 2.18 2.26 1.78 2.57 2.60 2.72 2.54 2.44 Ratio of Net Available/ Total Bond Expense (5) 1.52 1.80 1.92 1.91 1.42 2.16 2.13 2.28 2.08 1.91 (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 149 CITY OF PEORIA, ARIZONA PLEDGED REVENUE COVERAGE - SPECIAL ASSESSMENT BONDS LAST TEN FISCAL YEARS Table XXIII 2011 Fiscal Year 2012 2013 2014 2015 2016 2017 2018 Pledged Revenues (1) $ 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 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 1.14 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 150 2019 2020 $ - $ - $ - $ - CITY OF PEORIA, ARIZONA SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS Current Assessments Due 2011 $ 2,171,435 2012 $ 1,849,026 Fiscal Year 2013 2014 (3) $ 1,213,646 $ 455,116 Assessments Collected Prepaid Assessments Collected Total Assessments Collected (1) 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% $ 6,328,423 $ 4,551,324 $ 3,520,000 $ 2,603,127 Ratio of Current Collections to Amount Due Outstanding Assessment Principal (2) Table XXIV $ 2015 (4) 381,761 $ 2016 (5) 381,950 2017 (6) $344,741 $ 381,761 381,761 $ 381,950 381,950 344,741 1,809,173 $2,153,914 100.0% 100.0% 100.0% $ 2,326,112 $ 2,036,876 $0.00 (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 151 2018 2019 $ - $ - 2020 $ - $ - $ - $ - N/A N/A N/A $0.00 $0.00 $0.00 CITY OF PEORIA, ARIZONA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Population (1) 155,014 155,326 156,354 157,770 160,431 164,212 168,192 172,263 175,961 180,161 Personal Income (in thousands) (2) $ 5,496,176 5,773,623 5,942,390 6,112,799 6,392,534 6,701,656 7,100,730 7,596,109 7,759,176 8,309,926 Per Capita Personal Income (3) $ 35,456 37,171 38,006 38,745 39,846 40,811 42,218 44,096 46,125 NA Table XXV Median Age (4) 38.4 39.4 38.3 40.2 40.5 36.9 41.6 41.0 39.5 38.2 Public School Enrollment (5) 35,334 35,095 35,231 34,952 34,897 34,966 34,912 35,388 35,490 35,784 Unemployment Rate (6) 8.7% 7.1% 6.8% 6.0% 5.0% 4.9% 4.2% 4.0% 4.3% 9.3% (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 152 CITY OF PEORIA, ARIZONA MAJOR EMPLOYERS WITHIN THE CITY CURRENT YEAR AND NINE YEARS AGO Table XXVI 2020 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 Brookdale Senior Living Hope Depot (Multiple Locations) McDonalds (Multiple Locations) Safeway (4 Locations) The Younger Brothers Group Inc The Antigua Group Inc Plaza Del Rio Campus/Freedom Plaza & Care Center Good Shepherd Care Center # of Employees 4,507 1,278 879 804 399 340 323 323 315 305 Total 9,473 Total City Employment 83,423 2011 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Total City Employment 5.4% 1.5% 1.1% 1.0% 0.5% 0.4% 0.4% 0.4% 0.4% 0.4% 11.4% # of Employees 3,412 1,132 600 535 435 360 550 240 650 250 8,164 72,031 Sources: City of Peoria Economic Development Department & Maricopa Association of Governments Employer Database Arizona Unemployment Statistics Program Special Employment Report www.azstats.gov 153 Rank 1 2 4 6 7 8 5 10 3 9 Percentage of Total City Employment 4.7% 1.6% 0.8% 0.7% 0.6% 0.5% 0.0% 0.0% 0.0% 0.0% 0.8% 0.3% 0.9% 0.3% 11.3% 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, 2020 General Government 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: 2011 2012 2013 2014 2015 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 19.00 10.00 21.50 26.00 7.00 20.90 7.00 78.00 155.80 304.00 220.00 13.00 67.00 39.80 58.95 9.50 63.50 34.50 61.00 43.00 18.50 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 1,277.95 Counts do include part-time non-seasonal benefitted employees. *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 154 2016 2017 2018 2019 2020 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 (E) Water Utility 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 2013 2014 2015 2016 2011 2012 86,803 29.2% 85,592 23.7% 87,432 23.7% 89,604 24.9% 87,541 (F) 31.3% 134,661 5,968 60,715 136,200 6,106 65,347 134,045 5,396 73,800 122,318 5,533 74,950 56,764 5.87 57,184 6.01 54,159 (C) 4.52 15,403 5.19 17,717 5.08 1,401 $63.8 2017 2018 2019 2020 93,916 N/A 101,881 76.7% 102,460 N/A 109,073 36.48% 113,282 41.33% 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 64,170 2,255 107,120 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 51,081 5.23 18,719 5.14 19,312 5.30 20,873 5.24 23,824 5.38 23,726 (A) 5:16 24,932 5:24(A) 23,752 5:25(A) 25,066 5:47A) 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 5,795 (D) $307.7 2,677 6,159 (B) 85 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) 2,189 7,205 (G) 867 5,856 5,608 5,899 5,464 5,493 5,558 5,732 5,416 5,592 5,385 747 27,440 759 31,082 830 32,101 836 33,308 850 30,212 749 30,756 585 27,241 599 28,033 599 22,954 387 22,257 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 9,660,709 3.50 3.61 3.64 3.69 3.74 3.78 3.87 3.98 4.13 4.21 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 64,283 19,165 16,047 188,244 336 108 190,643 350 134 196,881 290 143 192,513 322 146 238,847 297 151 240,111 339 204 227,646 333 210 201,272 335 196 180,190 340 182 93,932 245 133 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 highway measurements (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 suite permits. (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. (G) Starting In FY17 an electronic survey of every road is completed every third year. (H) FY2020 number of participants are considerably lower than prior fiscal years because COVID-19 caused programmatic changes and event cancellations. Source: Various City Departments Table XXVIII 155 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 2011 2012 2013 2014 Fiscal Year 2015 2016 2017 2018 2019 2020 179.1 179.1 179.1 179.1 179.1 179.1 179.1 179.1 179.1 179.1 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 34 301 2 139 2 86 2 86 2 86 2 88 2 88 2 90 2 91 2 92 2 98 2 105 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 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 (D) 136 1,596 3,670,620 119 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 16,493 878 * * * * * * * * * * * * 25 15 38 30 25 14 40 30 30 13 46 33 30 13 47 33 30 13 47 33 27 11 24 22 30 13 47 33 584 590 7 7 7 6 5 5 5 5 6 4 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 60,705 42.0 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 62,617 16.00 48,752 49,506 50,727 51,609 52,640 54,262 55,828 57,452 58,816 60,123 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. (D) Number of Surface treatments for FY19 wasrestated due to query error in FY19 that was corrected in FY20. Source: Various City Departments 156 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. 157 Continuing Disclosures Annual Report For the Year Ended June 30, 2020 Audited Financial Statements The City’s Comprehensive Annual Financial Report for fiscal year ended June 30, 2020, 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 133 Comparison of assessed value to full cash value Table VIII 133 Comparative assessed values Table IX 134 Direct and overlapping assessed values Direct and overlapping tax rates Table XVII Table X 144 135 Property tax levies and collections Table XIII 138 Direct and overlapping general obligation bonds Direct general obligation debt ratios Table XVII Table XVI 144 143 Legal debt margin and unused borrowing capacity Table XX 147 Net revenues and debt service coverage Table XXII 149 Number of utility service connections Table XIVa 139 Ten largest water users Table XIVc 141 Municipal Development Authority Bonds (CUSIP 71284R and 71285A) Excise tax and state shared revenues and debt service coverage Table XXI 148 Privilege and use tax rates by category Table VI 131 Annual debt service requirements Table XXI 148 Legal debt margin and unused borrowing capacity Table XX 147 Assessed values by property classification Table VIII 133 Property tax levies and collections Table XIII 138 Special assessment collections Table XXIV 151 Water and Wastewater Revenue Bonds (CUSIP 712851) Improvement District Bonds (CUSIP 712844) 158 City of Peoria FINANCE AND BUDGET DEPARTMENT 8401 West Monroe Street Peoria, Arizona 85345 www.peoriaaz.gov