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Home My WebLink AboutAELR FY24Town of Fountain Hills, Arizona Annual Expenditure Limitation Report Year Ended June 30, 2024 Town of Fountain Hills, Arizona Annual Expenditure Limitation Report Year Ended June 30, 2024 Contents Page Independent Accountant’s Report 1 Annual Expenditure Limitation Report ‐ Part I 2 Annual Expenditure Limitation Report ‐ Part II 3 Annual Expenditure Limitation Report ‐ Reconciliation 4 Notes to Annual Expenditure Limitation Report 5 Independent Accountant’s Report The Auditor General of the State of Arizona The Honorable Mayor and Town Council of the Town of Fountain Hills, Arizona We have examined the accompanying Annual Expenditure Limitation Report of the Town of Fountain Hills, Arizona for the year ended June 30, 2024, and the related notes to the report. The Town’s management is responsible for presenting this report in accordance with the Uniform Expenditure Reporting System as described in Note 1. Our responsibility is to express an opinion on this report based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether this report is presented in accordance with the Uniform Expenditure Reporting System, in all material respects. An examination involves performing procedures to obtain evidence about the amounts and disclosures in the report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of the report, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. We are required to be independent and meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the engagement. In our opinion, the Annual Expenditure Limitation Report referred to above is presented, in all material respects, in accordance with the Uniform Expenditure Reporting System as described in Note 1. Heinfeld, Meech & Co., P.C. Scottsdale, Arizona October 30, 2024 Town of Fountain Hills, Arizona Annual Expenditure Limitation Report – Part I Year Ended June 30, 2024 1. Economic Estimates Commission expenditure limitation $ 34,364,380 2. Amount subject to the expenditure limitation (total amount from Part II, Line C) 32,901,348 3. Amount under the expenditure limitation $ 1,463,032 I hereby certify, to the best of my knowledge and belief, that the information contained in this report is accurate and in accordance with the requirements of the Uniform Expenditure Reporting System. Signature of Chief Fiscal Officer Name and Title: Paul Soldinger, Chief Financial Officer Telephone Number: 480-816-5160 Date: October 30, 2024 See accompanying notes to report. Internal Governmental Service Funds Funds Total A. Amounts reported on the Reconciliation, Line D $ 33,178,280 $ 138,222 $ 33,316,502 B. Less exclusions claimed: 1 Grants, aid, contributions, or gifts from a private agency, organization, or individual, except amounts received in lieu of taxes 137,027 137,027 2 Amounts received from the State of Arizona 226,389 226,389 3 Refunds, reimbursements, and other recoveries 51,738 51,738 4 Total exclusions claimed 415,154 ‐ 415,154 C.Amounts subject to expenditure limitation $ 32,763,126 $ 138,222 $ 32,901,348 Town of Fountain Hills, Arizona Annual Expenditure Limitation Report ‐ Part II Year Ended June 30, 2024 Description See accompanying notes to report. Page 3 Internal Governmental Service Description Funds Funds Total A. $ 33,384,105 $ 52,769 $ 33,436,874 B. Subtractions: 1.Items not requiring the use of current financial resources: Depreciation 7,769 7,769 2. 7,769 7,769 3.Required fees paid to the Industrial Commission of Arizona 60,483 60,483 4.Involuntary court judgments 137,573 137,573 5.Total subtractions 205,825 7,769 213,594 C. Additions: 1.Capital asset acquisitions 93,222 93,222 2.Total additions ‐ 93,222 93,222 D. Amounts reported on Part II, Line A $ 33,178,280 $ 138,222 $ 33,316,502 See accompanying notes to report. Town of Fountain Hills, Arizona Annual Expenditure Limitation Report ‐ Reconciliation Year Ended June 30, 2024 Total expenditures/expenses/deductions and applicable other financing uses, special items, and extraordinary items reported within the fund financial statements Expenditures of separate legal entities established under Arizona Revised Statutes Page 4 Town of Fountain Hills, Arizona Notes to Annual Expenditure Limitation Report Year Ended June 30, 2024 Note 1 – Summary of Significant Accounting Policies The Annual Expenditure Limitation Report (AELR) is presented as prescribed by the Uniform Expenditure Reporting System (UERS), as required by Arizona Revised Statutes §41‐1279.07. The AELR excludes expenditures, expenses, or deductions of certain revenues specified in the Arizona Constitution, Article IX, §20, from the total expenditures, expenses, or deductions reported in the fund financial statements. In accordance with the UERS, a note to the AELR is presented below for any exclusion claimed on Part II and each subtraction or addition in the Reconciliation that cannot be traced directly to an amount reported in the fund financial statements. All references to financial statement amounts in the following notes refer to the Statement of Revenues, Expenditures, and Changes in Fund Balances for the Governmental Funds; Statement of Revenues, Expenses, and Changes in Fund Net Position for the Internal Service Funds; Statement of Cash Flows for the Internal Service Funds. Note 2 – The subtraction for expenditures of separate legal entities established under Arizona Revised Statutes in the Governmental Funds consists of expenditures from the Cottonwoods Maintenance Special Revenue Fund, Municipal Property Corporation Debt Service Fund and the Eagle Mountain Debt Service Fund. Governmental Cottonwoods Maintenance Special Revenue Fund $ 7,561 Municipal Property Corporation Debt Service Fund 10 Eagle Mountain Debt Service Fund 198 $ 7,769 Note 3 – The subtraction of $60,483 for required fees paid to the Industrial Commission of Arizona was for deposit into the State’s Municipal Firefighter Cancer Reimbursement Fund as required by Arizona Revised Statutes §23‐1703. Note 4 – The subtraction of $137,573 for involuntary court judgments is related to the Qasimyar class action judgment for all taxing districts within Maricopa County. Note 5 – Investment earnings excludable as dividends, interest, and gains on the sale or redemption of investment securities in the Governmental and Internal Service Funds were unspent and carried forward as follows: Governmental Internal Service Carryforward exclusions as of 6/30/23 $ 1,213,835 $ 5,596 Investment earnings 2,218,949 126,157 Carryforward exclusions as of 6/30/24 $ 3,432,784 $ 131,753 Page 5 Town of Fountain Hills, Arizona Notes to Annual Expenditure Limitation Report Year Ended June 30, 2024 Note 6 – Grant revenues, contributions and sponsorships from private organizations are claimed as exclusions in the year the expenditure occurs and any unused amounts are carried forward for future years. The current year grant exclusion consists of expenditures of the following revenues: Proposition 202 $ 85,778 Contributions 20,049 Sponsorships 31,200 Current year exclusion utilized $ 137,027 Note 7 – State grant revenues are claimed as exclusions in the year the expenditure occurs and any unused amounts are carried forward for future years. The current year state grant exclusion consists of expenditures of the following revenues: Proposition 302 $ 74,229 LTAF II 120,309 Arizona Office of Tourism 31,851 Current year exclusion utilized $ 226,389 Note 8 – Charges for services revenue in the Internal Service Funds relates to fees paid by the Governmental Funds to the Internal Service Funds for future technology, vehicle, and equipment replacement. Current year charges for services of $419,994 were unspent and carried forward for future years. Note 9 – The highway user revenue (HURF) earned in excess of the amounts received in fiscal year 1979‐80 is as follows: HURF Fund Intergovernmental Revenue $ 2,720,831 Less: Vehicle License Tax Revenues (869,845) Excludable revenue 1,850,986 Carryforward HURF funds as of 6/30/23, as restated 4,372,723 HURF Fund expenditures 6,307,916 Less: expenditures of vehicle license tax (869,845) Less: expenditures of non‐excludable revenue (1,465,307) Less: expenditures of non‐excludable fund balance (2,346,112) Less: amounts transferred from the General Fund (1,626,652) Carryforward HURF funds as of 6/30/24 $ 6,223,709 Page 6 Town of Fountain Hills, Arizona Notes to Annual Expenditure Limitation Report Year Ended June 30, 2024 Note 10 – Refunds, reimbursements, and other recoveries are claimed as exclusions in the year the refund, reimbursement, or other recovery is spent and any unused amounts are carried forward for future years. Current year refunds, reimbursements, and other recoveries of $51,738 were spent and claimed as an exclusion. Remaining refunds, reimbursements, and other recoveries of $424,411 were unspent and carried forward for future years. Note 11 – Revenues that are constitutionally excludable that were not spent in the year of receipt may be accumulated and excluded in future years when spent. A summary of the revenue sources and the changes in those balances is shown in the table below: Description Balance June 30, 2023 Increase Decrease Balance June 30, 2024 Dividends, interest, and gains on the sale or redemption of investment securities $ 1,219,431 $ 2,345,106 $ $ 3,564,537 Highway user revenues in excess of those received in fiscal year 1979‐80, as restated 4,372,723 1,850,986 6,223,709 Quasi‐external interfund transactions 419,994 419,994 Refunds, reimbursements, and other recoveries 424,411 424,411 Total carryforward $ 5,592,154 $ 5,040,497 $ $ 10,632,651 Note 12 – During the 2021, 2022, and 2023 fiscal years, the Town excluded $252,186, $1,125,640, and $2,549,388, respectively, of HURF monies that should have been carried forward. As a result, the Town is restating its HURF exclusions for fiscal years 2021, 2022, and 2023 and carrying forward the remaining amounts of $252,186, $1,125,640, and $2,549,388, respectively, to future years as follows. Fiscal Year 2021 2022 2023 Economic Estimates Commission expenditure limitation $ 30,646,564 $31,747,291 $31,896,371 Amount subject to the expenditure limitation, as previously reported 21,454,429 21,206,563 23,486,547 Plus: adjustment to HURF exclusion previously reported 252,186 1,125,640 2,549,388 Amount subject to the expenditure limitation, as restated 21,706,615 22,332,203 26,035,935 Amount under the expenditure limitation, as restated $ 8,939,949 $ 9,415,088 $ 5,860,436 The following presents the restatement to the exclusion claimed for HURF: Fiscal Year 2021 2022 2023 HURF exclusion claimed, as previously reported $ 2,478,045 $ 1,125,640 $ 2,549,388 Less: HURF revenues carried forward to future years, as restated (252,186) (1,125,640) (2,549,388) HURF exclusion claimed, as restated $ 2,225,859 $ $ Page 7 Town of Fountain Hills, Arizona Notes to Annual Expenditure Limitation Report Year Ended June 30, 2024 The following presents the calculation of the restated exclusion claimed for HURF: Fiscal Year 2021 2022 2023 HURF Fund Intergovernmental Revenue $ 2,584,538 $ 2,681,119 $ 2,606,929 Less: vehicle license tax revenues (837,338) (826,070) (827,570) Excludable revenue 1,747,200 1,855,049 $ 1,779,359 Carryforward HURF monies beginning of year $ 1,216,974 $ 738,315 $ 2,593,364 HURF Fund expenditures 4,356,971 3,207,526 5,014,025 Less: expenditures of vehicle license tax (837,338) (826,070) (827,570) Less: expenditures of non‐excludable revenue (1,098,118) (1,249,597) (1,439,263) Less: expenditures of investment earnings (734) Less: amounts transferred from the Capital Projects Fund (200,000) Plus: amounts transferred to the Capital Projects Fund 5,078 Less: expenditures of non‐excludable fund balance (86,260) (893,304) Less: amounts transferred from the General Fund (1,045,599) (1,853,888) HURF eligible expenditures in current year 2,225,859 Less: current year HURF monies utilized (1,747,200) Less: prior year HURF monies utilized (478,659) Carryforward HURF monies end of year $ 738,315 $ 2,593,364 $4,372,723 Page 8