HomeMy WebLinkAboutFY22 PAFRTown of Fountain Hills
Fiscal Year 2022 Popular Annual Financial
Report
Town of Fountain Hills | Visit fountainhillsaz.gov Page 1
TABLE OF CONTENTS
Community Information 3
CFO Message 4
Town Government 5
Budget Schedule 7
Financial and Related Policies 8
Community Profile 9
Demographics 10
Financial Information 14
Year-in-Review 15
Net Position 19
Fund Accounting 20
Property Taxes 21
Capital Investments 22
Awards 23
Additional Information 26
Contact Information 27
Acronyms 28
Glossary 30
Town of Fountain Hills | Visit fountainhillsaz.gov Page 2
COMMUNITY INFORMATION
Town of Fountain Hills | Visit fountainhillsaz.gov Page 3
CFO Message
David Pock, Chief Financial Of cer
The Town of Fountain Hills is pleased to present its Popular Annual Financial Report for the scal year ended
June 30, 2022. This report is intended to present an accessible overview of the Town’s nancial position and
policies, and its commitment to providing responsive services and programs in a scally responsible manner.
We share with you details of how the Town’s revenue is generated, where the dollars are spent, and how the
local economy impacts Fountain Hills’ overall nancial status. Above all, our goal is to provide you with an
opportunity to better understand the many nancial aspects that affect your local government.
The nancial information provided here is drawn from detailed information found within the scal year 2021-
2022 Annual Comprehensive Financial Report (ACFR). The nancial statements were prepared in
conformance with generally accepted accounting principles in the United States of America (GAAP) and
audited by an independent accounting rm, receiving an unmodi ed (or clean) opinion. The numbers
contained within the ACFR were obtained by employing the basis of accounting as prescribed by the
Governmental Accounting Standards Board (GASB).
While the numbers in this Popular Annual Financial Report come from an audited source, they are
presented in an abridged, unaudited, non-GAAP format. Citizens who wish to review audited GAAP-basis
nancial statements can refer to the Town’s 2021-2022 ACFR, which is available on the Financial Reports &
Budgets page of the Town’s website at fountainhillsaz.gov .
Members of the Finance Division, and staff across the organization, are proud to serve this ne community.
We hope that the 2021-2022 Popular Annual Financial Report serves its purpose and helps assure you that
every effort is made to manage the community’s resources wisely and for the bene t of all.
Respectfully,
David J. Pock, CPA, CGFM
Chief Financial Of cer
Town of Fountain Hills | Visit fountainhillsaz.gov Page 4
Mayor & Town Council
The Town of Fountain Hills is an Arizona Municipal Corporation, acting as a general law town as prescribed in the
Arizona Revised Statutes. The Town was incorporated on December 5, 1989, with the governmental and
administrative affairs of the Town operating under the Council-Manager form of government. The Mayor is a
member of the Town Council who is directly elected by the voters for a two-year term and chairs the Town
Council meetings. The members of the Council are elected at large and serve four-year overlapping terms. The
Town Council is responsible for the adoption of local ordinances, budget adoption, appointment of residents to
citizen advisory committees, and hiring the Town Manager. The Town Manager is responsible for
implementation of the policies of the Town Council and overall management of the Town through
approximately 65 FTE employees. The Presiding Judge, Town Attorney, and Town Prosecutor are under the
direction of the Town Council.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 5
Town Government
The Town provides or administers a full range of services including public safety (law enforcement, re, animal
control); development services (code enforcement, planning and zoning); public works (including construction
and maintenance of streets and infrastructure); municipal court; recreational activities; community center;
senior services and cultural events. The Town does not maintain or operate any utilities or other operations that
would require the establishment of enterprise funds.
The nancial reporting entity (the Town) includes all the funds of the primary government (i.e. the Town of
Fountain Hills as legally de ned) as well as all of its component units. The component units consist of legally
separate entities for which the primary government is nancially accountable. 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 Cottonwoods Maintenance District, the Eagle
Mountain Community Facilities District, and the Fountain Hills Municipal Property Corporation are included in
the nancial report of the Town.
The annual budget serves as the foundation for the Town of Fountain Hills’ nancial planning and control. The
Town Council formally adopts the budget and appropriates funding for the General Fund, Excise Tax Funds,
Special Revenue Funds, Debt Service Funds, and Capital Projects Funds. Therefore, these funds have
appropriated budgets.
On or before the second Town Council meeting in April, the Town Manager submits to the Town Council a
proposed budget for the scal year commencing the following July 1st. The budget includes proposed
expenditures and the means of nancing them. The Town Council is then required to hold public hearings on
the proposed budget and to adopt a nal budget by June 30, the close of the Town’s scal year. The budget is
legally enacted through passage of a resolution and is prepared by fund and department.
The resolution sets the limit for total expenditures during the scal year. The Town Manager may authorize
transfers within a department, including those within personnel and from operating capital to services or
supplies. Additional expenditures may be authorized for expenditures directly necessitated by a natural or
man-made disaster as prescribed in the State Constitution, Article 9, Section 20.
More information may be found at fountainhillsaz.gov .
Town of Fountain Hills | Visit fountainhillsaz.gov Page 6
Summary Budget Schedule
Each year, the Town of Fountain Hills budget is developed by the Finance Division based on the Town
Council’s priorities, departmental requests, and the Town Manager's recommendations. Meetings with each
department, the Town Manager and the Finance Division are held early in the calendar year. After these
meetings are completed, a balanced proposed Town-wide budget is prepared for review by the Town
Council and public in April. Any suggested changes from that meeting are incorporated into the Tentative
Budget that is adopted by Council in May with the Final budget approved in June.
Nov 18, 2021
Budget Kick-Off Meeting with Staff
Jan 18, 2022
Beginning of Departmental Budget Meetings with Town Manager
Jan 25, 2022
Mayor's State of the Town Address (Public Welcome)
Feb 22, 2022
Town Council Retreat (Public Welcome)
Mar 22, 2022
Town Council Special Session to review Proposed Capital Projects (Public Welcome)
Apr 12, 2022
Town Council Special Session to Review Proposed Budget (Public Welcome)
May 3, 2022
Town Council & Special District Meetings to Adopt Tentative Budgets (Public Welcome)
Jun 7, 2022
Town Council & Special District Meetings to Hold Public Hearings and Adopt Final
Budgets (Public Welcome)
Jun 21, 2022
Town Council and Special District Meeting(s) to Adopt Tax Levy, if necessary (Public
Welcome)
Town of Fountain Hills | Visit fountainhillsaz.gov Page 7
Financial and Related Policies
Financial policies are established and updated by resolutions passed and adopted by the Town Council, as necessary, to
ensure the Town’s nancial security. The following policies provide a foundation of sound nancial principles and
internal controls for the safeguarding of the Town’s nancial resources. For the full resolution and associated policy, click
on the blue hyperlinks below. Visit fountainhillsaz.gov for more Town information, historical budgets, and annual
nancial reports.
Financial Policies
Resolution 2020-16 (https://www.fh.az.gov/DocumentCenter/View/3109/Financial-Policies-PDF) adopted by Town Council
on May 5, 2020
The Mayor and Town Council of the Town of Fountain Hills understands that principles of sound nancial management
establish the framework for overall scal planning and management. The principles set forth guidelines for both current
activities and long range planning. Following these principles will enhance the Town’s nancial health as well as its
image and credibility with its citizens, the public in general, bond rating agencies and investors. The policies will be
reviewed periodically to assure the highest standards of scal management. Policy changes will be needed as the Town
continues to grow and becomes more diverse and complex in the services it provides, as well as the organization under
which it operates, to provide these services to its citizens.
Capital Asset Policy
Resolution 2015-41 (https://www.fh.az.gov/DocumentCenter/View/1527/Capital-Asset-Policy-PDF) adopted by Town
Council on August 6, 2015
The purpose of this Capital Asset Policy is to establish policies and procedures for the Town of Fountain Hills, Arizona
regarding the treatment of all long-lived tangible resources, whether capitalized or expensed. This Policy enumerates
speci c types of long-lived resources and particular activities that may affect, or may be required for, all types of long-
lived tangible resources. This Policy attempts to reconcile modern, professional accounting standards with practical
scal management considerations.
Procurement Policy
Resolution 2016-36 (https://www.fh.az.gov/DocumentCenter/View/1532/Procurement-Policy-PDF) adopted by Town
Council on December 1, 2016
It is the policy of the Town of Fountain Hills to promote and facilitate economical and timely acquisitions from sources of
supplies, equipment and services necessary for Town Departments to accomplish their assigned responsibilities, while
ensuring a fair and open process that maximizes competition. It is the policy of the Town that the acquisition process is
carried out in compliance with the Town Procurement Code, which is set forth in Article 3-3 of the Fountain Hills Town
Code (the “Procurement Code”) and ordinances and the administrative policies and procedures set forth herein (the
Procurement Policy”).
Grant Administration Policy
Resolution 2016-19 (https://www.fh.az.gov/DocumentCenter/View/1531/Grant-Administration-Policy-PDF) adopted by
Town Council on August 18, 2016
The purpose of this grant administration policy is to establish uniform policies and procedures throughout the Town of
Fountain Hills to be used when applying for, accepting and administering federal, state, county, private foundation and
corporate grants, sponsorships and donations. This document describes the grant administration process and identi es
the roles and responsibilities of the Department Directors, Risk Management, Information Technology, Finance and the
Grant Project Manager. De nitions of certain terms can be found in Section III.
Issuance and Post-Issuance Compliance
Resolution 2014-03 (https://www.fh.az.gov/DocumentCenter/View/1529/Issuance-and-Post-Issuance-Compliance-PDF)
adopted by Town Council on March 20, 2014
Many conditions, restrictions and requirements must be complied with to permit and preserve the tax-exempt, tax
credit or direct federal subsidy treatment of general obligation bonds, revenue bonds, lease-purchase agreements, and
other tax-exempt nancings by the Town of Fountain Hills, Arizona (the "Town"). Prior to issuance, the Town and its bond
counsel will review the facts and the reasonable expectations to determine if the issue will comply with these
conditions, restrictions and requirements at the time of issuance.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 8
Community Pro le
The Town of Fountain Hills is a master planned community established in 1970 by McCulloch Properties (now
MCO Properties, Inc.). Prior to 1970, the area was a cattle ranch and was part of one of the largest land and cattle
holdings in Arizona. The land was purchased by Robert McCulloch in the late 1960s, and the community was
designed by Charles Wood, Jr. (designer of Disneyland in southern California). The centerpiece of Fountain Hills
is one of the world's tallest man-made fountains, a focal point that attracts thousands of visitors each year.
Located on 13,006 acres of land, Fountain Hills is surrounded by the McDowell Mountains and Scottsdale on the
west, the Fort McDowell Yavapai Nation on the east, the Salt River Pima-Maricopa Indian Community on the
south, and by the McDowell Mountain Regional Park on the north. The elevation is 1,520 feet at the fountain,
2,460 feet at the Adero Canyon Trailhead, and is approximately 500 feet above Phoenix.
Over the past thirty years, Fountain Hills has grown from 10,030 residents to a town of 23,820 in 2020. In 2006,
the Town of Fountain Hills became twenty square miles and about ten percent larger by annexing 1,300 acres
of State Trust Land. The process to annex the State Trust Land occurred over a two and one-half year period
and will be developed in the years to come. Annexing this property into the Town ensures that its future
development will be of the highest quality under Town standards, such as the cut-and- ll ordinance and strict
zoning regulations.
The Town offers a wide range of living accommodations, from small condominium complexes to large custom
homes. Fountain Hills also offers recreational and cultural programs and services that contribute to a high
quality of life for its residents. The community consists of primarily residential property and open space. Of the
total 20.32 square miles of land, only 2.5% of the total is zoned commercial and/or industrial, 23.3% is preserved
as open space, and 51.0% is residential.
One of the many features that make the Town of Fountain Hills so unique is the vast municipally-owned public
art collection. More than 150 pieces of art comprise the collection that is located throughout the Town for all to
enjoy. The collection includes sculptures, bronzes, murals, paintings, photography, and more. The Fountain Hills
Cultural and Civic Association offers regularly scheduled art walks to introduce the collection to residents and
visitors.
Fountain Hills has dedicated itself to providing award-winning community service programs for residents of all
ages. With numerous parks, elds, courts, meeting rooms, and conference facilities, everyone is sure to nd an
activity that is right for them. The Town also hosts various special events throughout the year, including
celebrations for St. Patrick’s Day, the Fourth of July, Thanksgiving, and Christmas.
The Town of Fountain Hills encourages involvement in government through volunteerism. Many community
members volunteer their time and efforts to the Town of Fountain Hills and thereby enrich the community
every day. Volunteers work within the Town to reduce the cost of delivering services to its residents all while
having fun, meeting others and enjoying new challenges. Annually, Volunteers are recognized at the Volunteer
of the Year Awards Ceremony. Visit fountainhillsaz.gov for more information about the community.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 9
Population Overview
TOTAL POPULATION
23,820 3.7%
vs. 2019
GROWTH RANK
67 out of 91
Municipalities in Arizona
DAYTIME POPULATION
21,841
Daytime population represents the effect of persons coming into or
leaving a community for work, entertainment, shopping, etc. during the
typical workday. An increased daytime population puts greater demand
on host community services which directly impacts operational costs.
* Data Source: American Community Survey 5-year estimates
POPULATION BY AGE GROUP
Aging affects the needs and lifestyle choices of residents. Municipalities must adjust and plan services accordingly.
* Data Source: American Community Survey 5-year estimates
* Data Source: U.S. Census Bureau American Community Survey 5-year Data and the 2020, 2010, 2000, and 1990 Decennial Censuses
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
10k
12.5k
15k
17.5k
20k
22.5k
25k
<5 5-9 10-14 15-19 20-24 25-34 35-44 45-54 55-59 60-64 65-74 75-84 >85
Town of Fountain Hills | Visit fountainhillsaz.gov Page 10
Household Analysis
TOTAL HOUSEHOLDS
11,408
Municipalities must consider the dynamics of household types to plan for and
provide services effectively. Household type also has a general correlation to income
levels which affect the municipal tax base.
* Data Source: American Community Survey 5-year estimates
28%
higher than state average
Family Households
61%
24%
higher than state average
Married Couples
59%
9%
higher than state average
Singles
30%
16%
higher than state average
Senior Living Alone
17%
Town of Fountain Hills | Visit fountainhillsaz.gov Page 11
Economic Analysis
Household income is a key data point in evaluating a community’s wealth and
spending power. Pay levels and earnings typically vary by geographic regions and
should be looked at in context of the overall cost of living.
HOUSEHOLD INCOME
Above $200,000
15%
129%
higher than state average
Median Income
87,080
42%
higher than state average
Below $25,000
10%
43%
lower than state average
* Data Source: American Community Survey 5-year estimates
Over $200,000
$150,000 to $200,000
$125,000 to $150,000
$100,000 to $125,000
$75,000 to $100,000
$50,000 to $75,000
$25,000 to $50,000
Below $25,000
Town of Fountain Hills | Visit fountainhillsaz.gov Page 12
Housing Overview
2020 MEDIAN HOME VALUE
408,600
* Data Source: 2020 US Census Bureau
(http://www.census.gov/data/developers/data-sets.html), American Community
Survey. Home value data includes all types of owner-occupied housing.
HOME VALUE DISTRIBUTION
* Data Source: 2020 US Census Bureau
(http://www.census.gov/data/developers/data-sets.html), American Community
Survey. Home value data includes all types of owner-occupied housing.
HOME OWNERS VS RENTERS
Fountain Hills
19%
Rent
81%
Own
State Avg.
35%
Rent
65%
Own
* Data Source: 2020 US Census Bureau
(http://www.census.gov/data/developers/data-
sets.html), American Community Survey. Home value
data includes all types of owner-occupied housing.
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
300k
350k
400k
450k
500k
>$1,000,000
$750,000 to $999,999
$500,000 to $749,999
$400,000 to $499,999
$300,000 to $399,999
$250,000 to $299,999
$200,000 to $249,999
$150,000 to $199,999
$100,000 to $149,999
$50,000 to $99,999
<$49,999
Town of Fountain Hills | Visit fountainhillsaz.gov Page 13
FINANCIAL INFORMATION
Town of Fountain Hills | Visit fountainhillsaz.gov Page 14
Summary of Revenues and Expenditures
In this section, we present an overview of revenues in and expenditures out for the Town of Fountain Hills for
the scal year ended June 30, 2022.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 15
Revenues
As a governmental entity, the Town uses fund
accounting that is segregated for speci c activities.
Governmental funds are used to account for tax-
supported activities, and the Town receives the
funding it needs to provide services to the
community from a variety of sources. The table to the
right presents a summary of governmental revenues
by primary type for the past three scal years.
Transaction Privilege Tax, commonly referred to as
sales tax, revenue and intergovernmental revenues
contributed to an overall increase in revenues of $3.5
million, or 11.1%, compared to 2021.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 16
Expenditures
The three-year comparison, shown in the table to the
right, includes the Town’s operational expenditures
by function. Overall, 2022 total Governmental Fund
expenditures were less than those of 2021 by
$660,390, or -2.4%. The Town contracts for law
enforcement and re and emergency medical
services. These contracts include negotiated
increases which are re ected in the Public Safety
category and make up 34% of total Governmental
Funds. The second largest expenditure by function
for the scal year was Public Works. This department
is responsible for maintaining streets and facilities, a
primary focus of the Mayor and Town Council. Debt
Service includes the annual principal and interest
payment for outstanding bonds; however, the Town
did not have any outstanding debt in scal year 2022.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 17
General Fund Expenditures
Budget-to-Actual comparisons for the past ve years are presented below for the Town's main operating fund.
Even though budgeted amounts have risen during this time period, actual expenditures have declined. The
primary reason for this was the receipt of American Rescue Plan Act (ARPA) funding from the federal
government. The Town received $4.2 million in FY22, which was used to partially pay for the Town's Law
Enforcement and Fire Services contracts. These expenditures are normally made from the General Fund;
however, they were paid using the ARPA revenues from the Special Revenue (Grants) Fund. This resulted in a
savings in the General Fund of $4.2 million. Town Council authorized a transfer of these savings to the Streets
Fund for pavement maintenance.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 18
Statement of Net Position
The Statement of Net Position presents information on all of the Town’s assets and liabilities, with the
difference between the two reported as net position. Over time, increases and decreases in net position may
serve as a useful indicator of whether the nancial position of the Town is improving or deteriorating. Net
position is broken-down into three categories: Net Investment in Capital Assets, Restricted, and Unrestricted.
These categories focus on the accessibility of the underlying assets.
ASSETS represent what the Town owns. Current and other assets include cash, investments, and receivables
(money due to the Town). Capital assets are land, buildings, infrastructure, vehicles, machinery, and equipment.
Capital assets are either non-depreciable (land, art, and construction in progress) or depreciable (all other
capital assets). These assets are shown net of accumulated depreciation.
LIABILITIES represent what the Town owes. Current and other liabilities consist of payables (money due from
the Town) that are due within one year. Long-term liabilities represent debt that the Town must pay back over
multiple years. If any portion of long-term debt is due within one year, that portion is reported in current
liabilities.
NET POSITION is the residual amount remaining after liabilities are subtracted from assets. The changes
reported in net position may be used to evaluate the Town’s nancial condition; however, attention should be
paid to the movement within categories as well. The Town’s largest category (76%) re ects investment in
capital assets (land, buildings, infrastructure, vehicles, machinery and equipment), less any outstanding related
debt used to acquire those assets. The restricted category (4%) of the Town’s net position represents resources
that must be used for speci c purposes. These legal restrictions are imposed by outside entities such as federal
or state governments. An example of such a restriction is the State’s requirement that revenues from the
gasoline tax be used only for expenditure on street projects. Portions of net assets are also restricted to pay
debt service and fund capital projects. The remaining 20% is unrestricted as to how it may be used.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 19
Fund Accounting
Fund Balance
State and local governments, such as the Town, employ a system called fund accounting. This system groups
assets and liabilities according to the purpose for which they are to be used. Each grouping, or fund, operates
as a separate self-balancing set of accounts. The General Fund is the chief operating fund of the Town and
accounts for 45% of the total fund balance. The Streets Fund is used exclusively for those governmental
activities related to street repair and maintenance and makes up 12% of the total fund balance. Capital project
funds account for the acquisition or construction of major capital facilities, as well as facilities replacement.
These funds contain 31% of all fund balances, with the remaining 12% in other non-major funds. Status of other
governmental fund purposes can be determined by reviewing the fund balances of the other individual funds.
The fund balance is an important component of scal planning and factors into the Town’s debt rating. The
Town’s most recent debt rating (Aa2 as rated by Moody’s) was maintained due to the Town Council’s
commitment to fund on-going services with on-going revenues. The Town does not currently have any
outstanding debt issued and, as a result, does not have a current debt rating.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 20
Property Taxes
One of the biggest bills residents face each year is tied to the property they own. Property tax in Fountain Hills
is collected by the Maricopa County Treasurer, and is based on the property’s value (ad valorem) as
determined by the Maricopa County Assessor. As the charts indicate, the Town government did not receive
any property taxes paid in FY 2021-22 since there were no outstanding town-wide bonds for the scal year.
Property taxes collected by the County Treasurer went to support Maricopa County and other separate
entities within the Town, including Fountain Hills Uni ed School District and Fountain Hills Sanitary District.
Property taxes are calculated by Maricopa County using the assessed value of all property located within the
Town. For residential property, the tax is calculated using 10% of the assessed valuation of the real property,
dividing by 100 and then multiplying by the total tax rate. The total tax rate was $6.2704 for tax year 2021. For
example, a residential property with an assessed value of $400,000 would have paid approximately $2,508 in
taxes for 2021 ($400,000 times 10% divided by 100 times $6.2704).
Town of Fountain Hills | Visit fountainhillsaz.gov Page 21
Capital Investments & Debt
How Capital Investments are Funded
The Town’s capital outlay consists of investments in our roads, equipment, public facilities, and parks. Every
year, the Town prepares and adopts an on-going Five-Year Capital Improvement Plan that provides for an
annual amount of infrastructure improvement projects. Town Council and staff review and update the plan
each year as part of the budget process. The projects are funded using a combination of grants, existing funds
and, if required, bonded debt or short-term loans.
Debt Policy
The Town’s Financial Policies provide a set of criteria to help determine when it is best to fund capital projects
using existing revenues, issuing bonds and/or seeking short-term loans. The Town had an Aa2 bond rating from
Moody’s Investors Service for its last issue of general obligation bonds. This rating allows the Town to receive
very competitive interest rates when issuing debt. In scal year 2022, the Town did not have any outstanding
debt.
Repayment of Outstanding Debt
The repayment of debt is funded using either secondary property taxes (General Obligation Bonds), pledged
revenue sources (Revenue Bonds), or from operating revenues (Short-Term Loans). The Town did not charge a
secondary property tax for FY 2021-2022 since there was not any outstanding debt.
Debt Margin
The State imposes certain debt limitations of 20% and 6% of the net assessed secondary valuation of the Town.
For projects involving water, sewer, arti cial lighting, parks, open space, recreation facility improvements, public
safety, law enforcement, re and emergency facilities, and street and transportation facilities, the Town can
issue General Obligation (GO) bonds up to 20% of that valuation. For any other general purpose improvements,
the Town may issue bonds up to the 6% limit.
Town of Fountain Hills, Arizona
Calculation of Legal Debt Margin
as of June 30, 2022
Net full cash assessed valuation $630,012,994
Water, Sewer, Arti cial Lighting, Parks, Open Space,
Recreational Facility Improvements, Public Safety, Law
Enforcement, Fire and Emergency Facilities, Street and
Transportation Facilities
Debt limit - 20% of net full cash assessed valuation $126,002,599
Net debt applicable to limit $ 0
20% legal debt margin $126,002,599
All Other General Obligation Bonds
Debt limit - 6% of net full cash assessed valuation $ 37,800,780
Net debt applicable to limit $ 0
6% legal debt margin $ 37,800,780
Total legal debt margin $ 163,803,379
Town of Fountain Hills | Visit fountainhillsaz.gov Page 22
Annual Comprehensive Financial Report (FY21)
The Government Finance Of cers Association (GFOA) awarded a Certi cate of Achievement for Excellence in
Financial Reporting to the Town of Fountain Hills for its Annual Comprehensive Financial Report (ACFR) for the
scal year ended June 30, 2021.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 23
Popular Annual Financial Report (FY21)
In addition, the GFOA recognized the Town for its Popular Annual Financial Report (PAFR) for the scal year
ending June 30, 2021. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a
prestigious national award recognizing conformance with the highest standards for preparation of state and
local government popular reports. The requirements are based on an evaluation of creativity, presentation,
understandability, and reader appeal.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 24
Adopted Budget (FY22)
Finally, the Town also received the GFOA’s Distinguished Budget Presentation Award for its annual budget for
the scal year beginning July 1, 2021. In order to qualify for the Distinguished Budget Presentation Award, the
government’s budget document was judged to be pro cient in several categories, including as a policy
document, a nancial plan, an operations guide, and a communications device.
Town of Fountain Hills | Visit fountainhillsaz.gov Page 25
ADDITIONAL INFORMATION
Town of Fountain Hills | Visit fountainhillsaz.gov Page 26
Contact Information
Town Hall
16705 E. Avenue of the Fountains
Fountain Hills, Arizona 85268
Telephone: 480-816-5100
Website: www.fountainhillsaz.gov
Facebook: facebook.com/townoffountainhills
Twitter:twitter.com/fhazgov
LinkedIn:linkedin.com/company/town-of-fountain-hills
Mayor & Town Council
(as of publication)
Mayor Ginny Dickey
Vice Mayor Peggy McMahon
Councilmember Gerry Friedel
Councilmember Sharron Grzybowski
Councilmember Brenda Kalivianakis
Councilmember Allen Skillicorn
Councilmember Hannah Toth
Town Manager
Grady E. Miller
Deputy Town Managers
Rachael Goodwin
David Trimble
Department Directors
Administrative Services David Trimble
Community Relations Bo Larsen
Community Services Rachael Goodwin
Development Services John Wesley
Economic Development Amanda Jacobs
Finance David Pock
Fire Chief David Ott
MCSO District Commander Larry Kratzer
Presiding Judge Robert Melton
Public Works Justin Weldy
Town Attorney Aaron Arnson
Town Clerk Linda Mendenhall
Town Prosecutor Mark Iacovino
Town of Fountain Hills | Visit fountainhillsaz.gov Page 27
Acronyms
ABC-American Base Course
AC-Asphaltic Concrete
ACA-Arizona Commerce Authority
ACMA-Arizona City Manager’s Association
ADA-Americans with Disabilities Act
ADEQ-Arizona Department of Environmental Quality
ADOG-Association of Dog Owners Group
ADOT-Arizona Department of Transportation
ADWR-Arizona Department of Water Resources
AGIC-Arizona Geographic Information Council
AICP-American Institute of Certi ed Planners
AOC-Administrative Of ce of the Courts
APA-American Planning Association
APRA-American Parks & Recreation Association
APWA-American Public Works Association
ARRA-American Recovery and Reinvestment Act of 2009
ARS-Arizona Revised Statutes
ASCE-American Society of Civil Engineers
AZBO-Arizona Building Of cials
AZDOR-Arizona Department of Revenue
AZDOT-Arizona Department of Transportation
AZ POST-Arizona Peace Of cer Standards and Training
Board
BGC-Boys and Girls Club
BRE-Business Retention and Expansion
BVAC-Business Vitality Advisory Council
CAD-Computer-Aided Design
CAFR-Comprehensive Annual Financial Report
CARE-Crisis Activated Response Effort
CCEF-Court Collection Enhancement fund
GFOA-Government Finance Of cers Association
GIS-Geographical Information System
GO-General Obligation
GPEC-Greater Phoenix Economic Council
HDM-Home Delivered Meals
HPE-Hillside Protection Easement
HURF-Highway User Revenue Fund
HVAC-Heating, Cooling, and Air Conditioning
ICMA-International City/County Management Association
ICSC-International Council of Shopping Centers
ID-Improvement District
IFEA-International Festivals & Events Association
IGA-Intergovernmental Agreement
IIP-Infrastructure Improvement Plan
ISO-International Standards Organization
IT-Information Technology
ITS-Intelligent Transportation System
JCEF-Judicial Court Enhancement Fund
ln. ft.-Lineal (Linear) Feet
LTAP-Local Technical Assistance Program
LTAF-Local Transportation Assistance Fund
MAG-Maricopa Association of Governments
MCFCD-Maricopa County Flood Control District
MCSO-Maricopa County Sheriff’s Of ce
MH-Manhole
MHz-Megahertz
MPC-Municipal Property Corporation
MSRB-Municipal Securities Rulemaking Board
NACSLB-National Advisory Council on State and Local
Budgeting
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CELA-Code Enforcement League of Arizona
CFD-Community Facilities District
CIP-Capital Improvement Program
CMAQ-Congestion Mitigation and Air Quality
cu. yd.-Cubic Yard
EMCFD-Eagle Mountain Community Facilities District
EMMA-Electronic Municipal Market Access
EOC-Emergency Operations Center
EPIC-TBI-Excellence in Prehospital Care-Traumatic Brain
Injury
FEMA-Federal Emergency Management Administration
FHUSD-Fountain Hills Uni ed School District
FIT-Fountain Hills Integrated Trails
FTE-Full Time Equivalent
FY-Fiscal Year
GAAP-Generally Accepted Accounting Principles
GADA-Greater Arizona Development Authority
GASB-Governmental Accounting Standards Board
NRPA-National Recreation and Park Association
PC-Portland Cement
PUD-Planned Unit Developments
PTO-Parent Teacher Organization
RFP-Request for Proposal
RFQ-Request for Quotation
RPM-Re ective Pavement Marker
RPTA-Regional Public Transit Agency
SEC-Securities and Exchange Commission
sq. ft.-Square Feet
sq. yd.-Square Yard
SR-State Route
STORM-Stormwater Outreach for Regional Municipalities
SWOT-Strengths, Weaknesses, Opportunities, Threats
V-Volt
VHF-Very High Frequency
VOIP-Voice Over Internet Protocol
VRF-Vehicle Replacement Fund
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Glossary
Account
A separate nancial reporting unit for budgeting, management or accounting purposes. All budgetary transactions,
whether revenue or expenditure, are recorded in accounts. Several related accounts may be grouped together in a
fund. A list of accounts is called a chart of accounts.
Accounting Standards
The generally accepted accounting principles (GAAP) promulgated by the Governmental Accounting Standards Board
(GASB) that guide the recording and reporting of nancial information by state and local governments.
Accrual Basis of Accounting
The basis of accounting under which transactions are recognized at the time they are incurred, as opposed to when
cash is received or sent. Expenses are recorded at the time liabilities are incurred and revenues are recorded when
earned. Unbilled services are recorded as receivables at year end.
Actual vs. Budgeted
Difference between the amounts projected (budgeted) in revenues or expenditures at the beginning of the scal year
and the actual receipts or expenses, which are incurred by the end of the scal year.
Adopted Budget
Used in fund summaries and department and division summaries within the budget document.Represents the annual
budget as approved by formal action of the Town Council,which sets the spending limits for the fiscal year.
Adoption
Formal action by the Town Council, which sets the spending limits for the scal year.
Ad Valorem Taxes
Commonly referred to as property taxes. The charges levied on all real, and certain personal property, according to the
property’s assessed value and the tax rate. Used as a source of monies to pay general obligation debt and to support the
General Fund.
Allocation
A part of a lump sum appropriation which is designated for expenditure by specific organization units and/or for special
purposes,activities,or subjects.
Appropriation
Speci c amount of monies authorized by the Town Council for the purpose of incurring obligations and acquiring goods
and services. An appropriation is limited in amount and time when it may be used unless it is for capital projects such
as constructing roads and buildings.
Arbitrage
The ability to use tax exempt proceeds and, by investing those funds in higher yielding taxable securities, generate a
pro t to the issuer.
Assessed Valuation
A value that is established for real and personal property for use as a basis for levying property taxes. Property values are
established by the County Assessor and the State as a basis for levying taxes.
Asset
Resources and property of the Town that can be used or applied to cover liabilities. Alternatively, any owned physical
object (tangible) or right (intangible) having a monetary value or an item or source of wealth expressed in terms of any
cost bene tting a future period.
Attrition
A method of achieving a reduction in personnel by not re lling the positions vacated through resignation,
reassignment, transfer, or retirement.
Audit Report
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The report prepared by an auditor covering the audit or investigation of an entity’s nancial position for a given period
of time, usually a year. As a general rule, the report should include: 1) a statement of the scope of the audit; 2)
explanatory comments concerning exceptions from generally accepted auditing standards; 3) opinions; 4) explanatory
comments concerning veri cation procedures; 5) nancial statements and schedules; and 6) statistical tables,
supplementary comments and recommendations. The auditors signature follows 3). The Town is required to have an
annual audit conducted by quali ed certi ed public accountants.
Authorized Positions
Employee positions which are authorized in the adopted budget.
Available (Unassigned) Fund Balance
Funds remaining from the prior year which are available for appropriation and expenditure in the current year.
Balanced Budget
Arizona law (Title 42-Arizona Revised Statutes) requires the Town Council to annually adopt a balanced budget by
purpose of public expense. State law de nes this balanced budget as “the primary property tax levy, when added
together with all other available resources, must equal these expenditures.” The total of proposed expenditures will not
exceed the total of estimated revenues and fund balances.
Base Budget
The ongoing expense for personnel, contractual services, commodities, and the replacement of equipment to maintain
service levels previously established by the Town Council.
Basis of Accounting
Defined by the Government Accounting Standards Board by Fund type as the method of accounting for various
activities.The basis is determined when a transaction or event is recognized in the fund’s operating statement..
Beginning Balance
The residual funds brought forward from the previous fiscal year (ending balance).
Bond
A written promise to pay a speci ed sum of money (called the face value or principal amount) at a speci ed date or
dates in the future (called the maturity dates), and carrying interest at a speci ed rate, usually paid periodically. The
difference between a bond and a note is that a bond is issued for a longer period and requires greater legal formality.
Bonds are primarily used to nance capital projects. The most common types of bonds are:
General Obligation (GO) Bond: This type of bond is secured by the full faith, credit, and taxing power of the
municipality
Revenue Bond: This type of bond is secured by the revenues from a speci c source such as gas taxes or water
revenues.
Bond Rating
The measure of the quality and safety of a bond. The rating indicates the likelihood that a debt issuer will be able to
meet scheduled repayments and dictates the interest rate paid.
Bond Re nancing
The payoff and re-issuance of bonds to obtain better interest rates and/or bond conditions.
Budget
A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed
means of financing them.This official public document reflects decisions,assesses service needs,establishes allocation
of resources,and is the monetary plan for achieving Town goals and objectives.
Budget Amendment
A change of budget appropriation between expenditure accounts that is different from the original adopted budget.
Budget amendments do not change the legal spending limit adopted by the Town Council.
Budget Calendar
The schedule of key dates which a government follows in the preparation and adoption of the budget.
Budget Document
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The instrument used by the budget-making authority to present a comprehensive financial program to the Town
Council.
Budget Message
The opening section of the budget document which provides the Town Council and the public with a general summary
of the most important aspects of the budget, changes from the previous fiscal year, and recommendations regarding
the financial policy for the upcoming period.
Budgetary Basis of Accounting
The basis of accounting used to estimate nancing sources and uses in the budget. The method used to determine
when revenues and expenditures are recognized for budgetary purposes. This basis generally takes one of three forms:
GAAP, cash, or modi ed accrual.
Budgetary Control
The control or management of a government in accordance with the approved budget for the purpose of keeping
expenditures within the limitations of available appropriations and resources.
Capital Assets
Assets of signi cant value and having a useful life of several years. Capital assets are also called xed assets.
Capital Budget
A spending plan for improvements to, or acquisition of, land, facilities and infrastructure that balances revenues and
expenditures, speci es the sources of revenues, and lists each project or acquisition. Normally a capital budget must be
approved by the legislative body. The capital budget and accompanying appropriation ordinance may be included in a
consolidated budget document that has a section devoted to capital expenditures and another to operating
expenditures. Alternatively, two separate documents may be prepared – one for the capital budget and one for the
operating budget.
Capital Expenditure
A capital expenditure is made when purchasing a xed asset having a value of $10,000 or more and a useful life of more
than one year.
Capital Improvement Program
The Capital Improvement Plan (CIP)is a comprehensive projection of capital investment projects,which identifies
priorities as to need,method of financing,and project costs and revenues that will result during a five-year period. The
plan is a guide for identifying current and future fiscal year requirements and becomes the basis for determining the
annual capital budget. The capital plan for the ensuing year must be formally adopted during the budget process.
Capital Improvement Project
Expenditures for the construction, purchase or renovation of Town facilities or property that have a value greater than
$50,000.
Capital Outlay
Expenditures resulting in the acquisition of or addition to the Town’s xed assets with a value of $10,000 or more and a
useful economic lifetime of more than one year.
Capital Project Carryover
An approved Capital Project that was not completed in the scal year and, therefore, was budgeted again in the
current scal year in order to nish the project.
Capital Projects Funds
Capital project funds are used to account for and report nancial resources that are restricted, committed, or assigned
to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Capital projects funds exclude those types of capital related out ows nanced by proprietary funds or for assets that will
be held in trust for individuals, private organizations, or other governments.
Cash Basis of Accounting
The basis of accounting in which transactions are recognized only when cash amounts are increased or decreased.
Cash-in-lieu
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Funding for capital projects the Town requires from developers in lieu of them constructing necessary off- site
improvements related to their development project.
Community Facilities District (CFD)
A separate legal entity established by the Town which allows for nancing of public improvements and services.
Comprehensive Annual Financial Report (CAFR)
The of cial annual nancial report of the Town. The CAFR represents management’s report to the Town Council,
constituents, investors and creditors.
Contingency/Reserve
An amount, a budgetary reserve/contingency, set aside as available, with Town Council approval, to cover unforeseen
expenditures, emergency expenditures, or revenue shortfalls.
Contractual Services
Services such as rentals,insurance,maintenance,etc.that are purchased by the Town.
Debt Limit
Statutory or constitutional limit on the principal amount of debt that an issuer may incur (or that it may have
outstanding at any one time).
Debt Ratio
Total debt divided by total assets.
Debt Service
The cost of paying principal and interest payments on outstanding bonds according to a predetermined payment
schedule.
Debt Service Fund
One or more funds established to account for revenues used to repay the principal and interest on debt.
De cit
The excess of an entity’s liabilities over its assets or the excess of expenditures or expenses over revenues during a single
accounting period.
Department
A major administrative portion of the Town which indicates overall management responsibility for an operation or a
group of related operations.
Depreciation
An accounting transaction which spreads the acquisition value of an asset across its useful life. Alternatively, expiration
in the service life of capital assets attributable to wear and tear, deterioration, action of the physical elements,
inadequacy or obsolescence.
Development Fees
Those fees and charges generated by building, development, and growth in the Town.
Disbursement
The expenditure of money from an account.
Distinguished Budget Presentation Awards Program
A voluntary awards program administered by the Government Finance Of cers Association of the United States and
Canada to encourage governments to prepare effective budget documents.
Division
A grouping of related activities within a particular Department (example, Senior Services is a Division of Community
Services).
Employee (or Fringe) Bene ts
Contributions made by a government to meet commitments or obligations for employee-related expenses.Included is
the Town’s share of costs for social security, pension plans,medical and life insurance plans.
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Encumbrance
The formal accounting recognition of appropriated or committed funds to be set aside for a future expenditure. To
encumber funds means to set aside or commit funds for a speci ed future expenditure. For budgetary purposes,
encumbrances are considered expenditures.
Ending Balance
The residual funds that are spendable or available for appropriation at the end of the fiscal year.
Estimated Revenue
The amount of projected revenue to be collected during the scal year.
Expenditure
A net decrease in nancial resources. Expenditures include operating expenses which require the use of current assets.
If accounts are kept on the accrual basis, this term designates total charges incurred, whether paid or unpaid. If they are
kept on the cash basis, the term covers only actual disbursements for these purposes.
Expenditure Limitation
An amendment to the Arizona State Constitution that limits annual expenditures of all municipalities. The Economic
Estimates Commission, based on population growth and in ation, sets the limit. All municipalities have the option of
Home Rule where the voters approve a four-year expenditure limit based on revenues received.
Expenses
Charges incurred (whether paid immediately or unpaid) for operations, maintenance, interest or other costs.
Fees
Charges for specific services.
Financial Plan
A summary by fund of planned revenues, expenditures, operating transfers, reserves, and fund balances.
Fiscal Policy
A government’s policies with respect to revenues, spending, and debt management as these relate to government
services, programs and capital investment. Fiscal policy provides an agreed-upon set of principles for the planning and
programming of government budgets and their funding.
Fiscal Year
Any period of twelve consecutive months establishing the beginning and the ending of nancial transactions. For the
Town of Fountain Hills, this period begins July 1 and ends June 30.
Fixed Assets
Assets of a long-term character which are intended to continue to be in use or kept for more than one year and of a
monetary value greater than $10,000.
Franchise Fees
Annual fees paid by utilities (e.g. cable TV)for use of Town public rights-of-way.Franchise fees are typically a set
percentage of gross revenue within the Town.
Full Faith and Credit
A pledge of a government’s taxing power to repay debt obligations.
Full-Time Equivalent Position (FTE)
A position converted to the decimal equivalent of a full-time position based on 2,080 hours per year. For example, a
part-time typist working for 20 hours per week would be equivalent to a 0.5 FTE.
Fund
An independent scal and accounting entity with a self-balancing set of accounts recording cash and other nancial
resources, together with all related liabilities and changes in these assets and liabilities.
Fund Balance
Difference between assets and liabilities reported in a government fund.
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Non-spendable –Portions of fund balance that include amounts that cannot be spent because they are either (a)not in
spendable form or (b) legally or contractually required to be maintained intact.
Restricted –Portion of fund balance that re ects constraints placed on the use of resources that are either (a) externally
imposed by creditors,grantors, contributors, or laws or regulations of other governments or (b) imposed by law through
constitutional provisions or enabling legislation.
Committed –Amounts that can be used only for speci c purposes pursuant to constraints imposed by formal action of
the government’s highest level of decision-making authority. In the case of the Town, this would be the Council and
Mayor.
Assigned –Amounts that are constrained by the government’s intent to be used for specific purposes,but that are
neither restricted nor committed.
Unassigned –Residual classification for the General Fund.This classi cation represents fund balance that has not been
assigned to other funds and that has not been restricted,committed, or assigned to speci c purposes within the
general fund.The General Fund should be the only fund that reports a positive unassigned fund balance amount.
General Fund
The major fund in most governmental entities. While other funds tend to be restricted to a single purpose, the General
Fund is a catch-all for general government purposes. The General Fund contains the activities commonly associated
with municipal government, such as police and re protection, parks and recreation.
General Obligation Bonds
This type of bond is backed by the full faith, credit and taxing power of the government. Bonds that nance a variety of
public projects. The repayment of these bonds is usually made from secondary property tax revenues.
General Plan
A plan approved by the Town Council that provides the fundamental policy direction and guidance on development
decisions in the Town.
Generally Accepted Accounting Principles (GAAP)
Uniform minimum standards for financial accounting and recording, encompassing the conventions,rules,and
procedures that define accepted accounting principles.
Goal
The end toward which effort is directed. A goal is general and timeless.
Governmental Funds
Governmental Funds are those through which most governmental functions of the Town are recorded. Revenues are
recognized as soon as they are both measurable and available. Expenditures generally are recorded when a liability is
incurred except for unmatured interest on debt and certain similar obligations, which should be recognized when due.
Grants
A contribution by a government or other organization to support a particular function. Grants may be classi ed as either
operational or capital, depending upon the grantee.
Highway User Revenue Fund (HURF)
A fund with revenues consisting of state taxes collected on gasoline,vehicle licenses and other transportation related
fees.These funds must be used for street and highway purposes.
Indirect Cost
A cost necessary for the functioning of the organization as a whole, but which cannot be directly assigned to one service.
Infrastructure
The physical assets of a government (e.g. streets, public buildings, parks, etc.).
Interfund Transfers
The movement of monies between funds of the same governmental entity.
Intergovernmental
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Refers to transactions between different levels of government, e.g. city, county, state and federal.
Intergovernmental Agreement
A contract between governmental entities as authorized by State law.
Intergovernmental Revenue
Funds received from federal, state, and other local government sources in the form of grants, shared revenues, and
payments in lieu of taxes.
Journal Entry
An entry into the nancial system that transfers actual amounts from one account,department,or fund to another.
Lapsing Appropriation
An appropriation made for a certain period of time, generally for the budget year. At the end of the speci ed period, any
unexpended or unencumbered balance lapses or ends, unless otherwise provided by law.
Levy
The total amount to be raised by general property taxes for purposes speci ed in the property tax levy motion.
Levy Rate
The amount of tax levied for each $100 of assessed valuation.
Liability
Indebtedness of a governmental entity, such as amounts owed to vendors for services rendered or goods received, and
principal and interest owed to bondholders. These amounts are debts or legal obligations which must be paid at some
future date.
Line-item Budget
A budget prepared along departmental lines that focuses on what is to be bought.
Local Transportation Assistance Fund (LTAF)
Revenues are generated by the State Lottery. Distribution of these funds is based on population.Funds must be used
for public transit or streets,but a small portion may be used for cultural purposes.
Long-term Debt
Debt with a maturity of more than one year after the date of issuance.
Modi ed Accrual Basis of Accounting
The basis of accounting used by governmental-type funds. Under this basis, revenues are recognized when they
become both “measurable” and “available” to nance expenditures of the current period.
Municipal Property Corporation (MPC) Bond
Bonds that are backed by the excise taxes of the Town including local sales tax, franchise tax, State-shared sales tax, and
motor vehicle in-lieu tax. The MPC is a non-pro t corporation established for the purpose of issuing debt to purchase
municipal facilities, which it leases to the Town.
Object Detail
An expenditure classi cation, referring to the lowest and most detailed level of classi cation, such as electricity, of ce
supplies, asphalt, and furniture.
Objectives
Something to be accomplished in speci c, well-de ned, and measurable terms and that is achievable within a speci c
time frame. The achievement of the objective advances an organization toward a corresponding goal.
Obligations
Amounts which a government may be legally required to meet out of its resources. They include not only actual
liabilities, but also encumbrances not yet paid.
Operating Budget
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Plans of current expenditures and the proposed means of nancing them. The annual operating budget is the primary
means by which most of the nancing of acquisitions, spending, and service delivery activities of the Town are
controlled.
Operating Expenses
The cost for personnel, materials, and equipment required for a department to function.
Operating Impacts
Operating impacts are the additional, incremental revenues or costs associated with the project—any new cost or
revenue streams resulting from the project less existing expenditures and revenues where applicable. These impacts
include maintenance expenses, utility and personnel expenses, revenues from project-speci c construction spending
and operating revenues.
Operating Revenue
Funds that the government receives as income to pay for ongoing operations. The revenue includes such items as taxes,
fees from speci c services, interest earnings, and grant revenues. Operating revenues are used to pay for day-to-day
services.
Ordinance
A formal legislative enactment by the governing body of a municipality.If the ordinance is not in conflict with any
higher form of law,such as a state statute or a constitutional provision,it has the full force and effect of law within the
boundaries of the municipality to which it applies.
Pay-as-you-go Basis
A term used to describe a nancial policy by which capital outlays are nanced from current revenues rather than
through borrowing.
Per Capita
A unit of measure that indicates the amount of some quantity per person in the Town.
Performance Based Budget
The Performance Based Budget is a customer based, performance driven, results oriented budget system based on
Outcome Management. Outcome Management is a management approach that focuses on the results achieved when
providing a service.
Performance Indicators
Speci c quantitative and qualitative measures of work performed as an objective of speci c departments or programs.
Measurement of service performance indicators that re ect the amount of money spent on services and the resulting
outcomes at a speci c level of services provided.
Performance Measurement
Statistical indicators that permit program evaluation to be conducted in a budgetary context.
Performance Target
Percentage or number for each program performance measure that will be the desired level of performance for the
upcoming budget period.
Personal Services
The classification of all salaries,wages,and fringe benefits expenditures. Fringe benefits include FICA, retirement
contributions,medical insurance,life insurance, and workers’compensation. In some cases,benefits may also include
clothing allowances and education assistance.
Policy
A plan,course of action,or guiding principle,designed to set parameters for decisions and actions.A policy could also be
a more precise statement of a desired course of action.
Program
A group of related activities performed by one or more divisions or departments of the Town for the purpose of
accomplishing a service the Town is responsible for delivering.
Property Tax
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Total property tax levied by a municipality on the assessed value of a property within Town limits.In Arizona, the
property tax system is divided into primary and secondary.
Primary Property Tax –A limited tax levy used for operations based on primary assessed valuation and primary tax rate.
The tax rate is restricted to a 2%annual increase. Municipalities may use this tax for any purpose.
Secondary Property Tax –An unlimited tax levy restricted to voter-approved budget overrides.The tax is based on the
secondary assessed valuation and secondary tax rate.
Reserve
An account used to segregate a portion of a fund balance to indicate that it is not available for expenditure, or it is
legally set aside for a speci c future use.
Resolution
A special or temporary order of the Town Council. Requires less formality than an ordinance or statute.
Resources
Total amounts available for appropriation including estimated revenues, bond/loan proceeds, fund transfers, and
beginning fund balances.
Revenue
Amounts received by government from sources including taxes, nes, fees, grants, or charges for services, which can be
used to nance government operations or capital assets. These amounts increase the net assets of the government. For
those revenues which are recorded on an accrual basis, this term designates additions to assets which (a) do not
increase any liability, (b) do not represent recovery of an expenditure, and (c) do not represent the cancellation of
certain liabilities without a corresponding increase in other liabilities or a decrease in assets.
Revenue Bonds
Bonds whose principal and interest are payable exclusively from earnings of a revenue generating fund.
Secondary Property Tax Rate
Arizona statute does not limit the secondary tax levy amount and municipalities may only use this levy to retire the
principal and interest or redemption charges on bonded debt.
Service Level
Services or products which comprise actual or expected output of a given program. Focus is on results, not measures of
workload.
Sinking Fund
A means of repaying funds that were borrowed through a bond issue. The issuer makes periodic payments to a trustee
who retires part of the issue by purchasing the bonds in the open market.
Special Revenue Fund
Created out of receipts of specific taxes or other earmarked revenues. Such funds are authorized by statutory or charter
provisions to pay for specific activities with a special form of continuing revenues.
State-shared Revenue
Includes the Town’s portion of State sales tax revenues, State income tax receipts, and motor vehicle in-lieu taxes.
Strategic Plan
The Strategic Plan de nes the Town’s strategy (http://en.wikipedia.org/wiki/Strategy), or direction, and assists Town
management in making decisions on the allocation of personnel and resources.
Supplemental Appropriation
An additional appropriation made by the governing body after the budget year has started.
Tax Levy
The total amount of the general property taxes collected for purposes speci ed in the Tax Levy Ordinance.
Tax Rate
The amount of tax levied for each $100 of assessed valuation.
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Taxes
Compulsory charges levied by a government for the purpose of nancing services performed for the common bene t of
the people. This term does not include speci c charges made against particular persons or property for current or
permanent bene t, such as special assessments.
Transfer
Movement of resources between two funds. Example: An interfund transfer would include the transfer of operating
resources from the General Fund to the Streets Fund.
Unassigned Fund Balance
The portion of a fund’s balance that is not restricted or committed for a speci c purpose and is available for general
appropriation.
Unencumbered Balance
The amount of an appropriation that is neither expended nor encumbered; essentially the amount of money still
available for future purposes.
Unreserved Fund Balance
The portion of a fund’s balance that is not restricted for a specific purpose and is available for general appropriation.
User Fees
The fee charged for the direct receipt of a public service to the party or parties who bene t from the service.
Valley
The area represented by the Greater Phoenix Metropolitan area. Phoenix is also know as the Valley of the Sun.
Variance
Comparison of actual expenditure and revenues from one year to the next and comparison of budget-to-actual in
current scal year.
Working Capital
A nancial metric which represents the amount of day-to-day operating liquidity available. Also known as operating
capital, it is calculated as current assets minus current liabilities.
Working Cash
The excess of readily available assets over current liabilities.
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