HomeMy WebLinkAboutFY24 ACFR
Town of Fountain Hills, Arizona
Annual Comprehensive
Financial Report
For the Fiscal Year Ended June 30, 2024
Town of Fountain Hills, Arizona
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2024
Issued by:
Administration Department
Finance Division
Town of Fountain Hills, Arizona
Table of Contents
Introductory Section Page
Letter of Transmittal 1
List of Elected and Appointed Officials 11
GFOA Certificate of Achievement 12
Organizational Chart 13
Financial Section
Independent Auditor’s Report 17
Management’s Discussion and Analysis (MD&A) 23
Basic Financial Statements
Government-Wide Financial Statements:
Statement of Net Position 36
Statement of Activities 37
Fund Financial Statements:
Balance Sheet – Governmental Funds 40
Reconciliation of the Balance Sheet –
Governmental Funds to the Statement of Net Position 43
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 44
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances – Governmental Funds to the Statement of Activities 46
Statement of Net Position – Proprietary Funds 47
Statement of Revenues, Expenses, and Changes in Net Position –
Proprietary Funds 48
Statement of Cash Flows – Proprietary Funds 49
Notes to Financial Statements 50
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
General Fund 68
Highway User Revenue Fund 69
Grants Fund 70
Note to Required Supplementary Information 71
Combining and Individual Fund Financial Statements and Schedules
Governmental Funds:
Combining Balance Sheet – All Non-Major Governmental Funds – By Fund Type 78
Combining Statement of Revenues, Expenditures and Changes in Fund Balances –
All Non-Major Governmental Funds – By Fund Type 80
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Strategy 82
Economic Development 83
Tourism 84
Public Art 85
Town of Fountain Hills, Arizona
Table of Contents
Financial Section – continued Page
Combining and Individual Fund Financial Statements and Schedules
Governmental Funds:
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Local Court Enhancement 86
Environmental 87
Cottonwoods Maintenance 88
General Obligation Debt Service 89
Eagle Mountain Debt Service 90
Municipal Property Corporation Debt Service 91
Capital Projects 92
Development Fees 93
Internal Service Funds:
Combining Statement of Net Position 96
Combining Statement of Revenues, Expenses and Changes in Fund Net Position 97
Combining Statement of Cash Flows 98
Statistical Section
Financial Trends:
Net Position by Component 100
Changes in Net Position 102
Fund Balances – Governmental Funds 104
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 106
Revenue Capacity:
Governmental Activities – Tax Revenues by Source 108
Sales Tax Payers by Category 109
Taxable Sales by Category 110
Direct and Overlapping Sales Tax Rates 112
Debt Capacity:
Ratios of Outstanding Debt by Type 113
Ratios of General Bonded Debt Outstanding 114
Direct and Overlapping Governmental Activities Debt 115
Legal Debt Margin Information 116
Calculation of Legal Debt Margin 118
Revenue Bond Coverage 119
Demographic and Economic Information:
Demographic and Economic Statistics 120
Principal Employers 121
Operating Information:
Authorized Full‐Time Equivalent Government Employees by Function 122
Operating Indicators by Function 123
Capital Assets Statistics by Function 124
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Introductory Section
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www.fountainhillsaz.gov
October 31, 2024
To the Honorable Mayor, Members of the Town Council, and Citizens of the Town of Fountain Hills:
State law requires that all general‐purpose local governments publish, within six months of the close
of each fiscal year, a complete set of financial statements presented in conformity with accounting
principles generally accepted in the United States of America and audited in accordance with auditing
standards generally accepted in the United States by a certified public accounting firm licensed in the
State of Arizona. Pursuant to that requirement, we hereby issue the Annual Comprehensive Financial
Report (ACFR) of the Town of Fountain Hills (Town) for the fiscal year ended June 30, 2024.
This report consists of management’s representations concerning the finances of the Town.
Consequently, management assumes full responsibility for the completeness and reliability of all of
the information presented in this report. To provide a reasonable basis for making these
representations, management of the Town has established a comprehensive internal control
framework that is designed both to protect the government’s assets from loss, theft, or misuse and
to compile sufficient reliable information for the preparation of the Town of Fountain Hills’ financial
statements in conformity with accounting principles generally accepted in the United States of
America. Because the cost of internal controls should not outweigh their benefits, the Town’s
comprehensive framework of internal controls has been designed to provide reasonable rather than
absolute assurance that the financial statements will be free of material misstatement. As
management, we assert that, to the best of our knowledge and belief, this financial report is complete
and reliable in all material respects.
The Town’s financial statements have been audited by Heinfeld, Meech & Co., P.C., a certified public
accounting firm. The goal of the independent audit was to provide reasonable assurance that the
financial statements of the Town for the fiscal year ended June 30, 2024, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements; assessing the accounting principles used and
significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors concluded, based upon the audit, that there was a
reasonable basis for rendering an unmodified opinion that the Town’s financial statements for the
fiscal year ended June 30, 2024, are fairly presented in conformity with accounting principles
generally accepted in the United States of America. The independent auditor’s report is presented as
the first component of the financial section of this report.
TOWN OF FOUNTAIN HILLS
16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268
480.816.5100 | Fax: 480.837.3145
Page 1
Accounting principles generally accepted in the Unites States of America require that management
provide a narrative introduction, overview, and analysis to accompany the basic financial statements
in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed
to complement the MD&A and should be read in conjunction with it. The Town of Fountain Hills’
MD&A can be found immediately following the report of the independent auditors.
PROFILE OF THE GOVERNMENT
The Town of Fountain Hills overlooks the Verde River Valley and the east valley of the metro Phoenix
area. The Town 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 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 about 24,000
in 2023. On June 5, 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 a-half-year period, and development of the land may occur in the years to
come. Annexing this property into the Town ensures that its possible future development will be of
the highest quality under Town standards.
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, 24.7% is
preserved as open space and 48.5% is
residential.
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The Town’s Mission Statement
The Town of Fountain Hills’ purpose is to serve the best interests of the community by:
•providing for the safety and well-being of its residents and visitors;
•respecting its special, small-town character and quality of life;
•providing superior public services;
•sustaining the public trust through open and responsive government;
•and maintaining the stewardship and preservation of its financial and natural resources.
To serve, respect, and provide trust and stewardship.
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. Legislative authority is vested in a seven member Town Council. The Mayor is a
member of the Town Council who is directly elected by voters 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 department directors and approximately 105 full-time equivalent (FTE) employees.
The Presiding Judge, Town Attorney, and Town Prosecutor are under the direction of the Town
Council.
The Town provides or administers a full
range of services including public safety (law
enforcement, fire and emergency medical
services); 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
utility or other operations that require the
establishment of enterprise funds.
Fountain Hills Town Hall
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The financial reporting entity (the Town) includes all the funds of the primary government (i.e., the Town
of Fountain Hills as legally defined) as well as all of its component units. The component units consist of
legally separate entities for which the primary government is financially 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 financial report of the Town.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered
from the broader perspective of the specific environment within which the Town of Fountain Hills
operates.
Internal Controls
As earlier noted, the management of the Town of Fountain Hills is responsible for establishing and
maintaining a system of internal control. Internal accounting controls are designed to provide reasonable,
but not absolute, assurance regarding;
1) Safeguarding of assets against loss from unauthorized use or disposition, and
2) 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 Town’s financial statements. All
internal control evaluations occur within the above framework. The Town's internal accounting controls
are considered to adequately safeguard assets and provide reasonable assurance of proper recording of
financial transactions.
Budgetary Controls
The budget process is a cyclical process and begins each year with the preparation of the base budget by
each department head. Each budget is based on expenditures to date and the previous years’ experience.
The departments’ base budgets, along with any requests for new positions, programs or services are
reviewed by the Town Manager. The Town Manager then meets with department heads to review their
base budgets and requests for new services and/or programs. Once management has reviewed the
departments’ requests, a tentative budget is presented to the Town Council by the Town Manager.
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The Town Council formally adopts the budget and appropriates funding for the General Fund, Special
Revenue Funds, Debt Service Funds, Capital Projects Funds, and Internal Service Funds. Therefore, these
funds have appropriated budgets, and budget to actual information is presented. In April/May, the Town
Manager submits to the Town Council a proposed budget for the fiscal year commencing on July 1st. The
budget includes proposed expenditures and the means of financing them. The Town Council is then
required to hold public hearings on the proposed budget and to adopt a final budget by June 30, the close
of the Town of Fountain Hills’ fiscal year. Public hearings on the budget are held each year in accordance
with legal requirements to obtain comments from local residents. The budget is legally enacted through
passage of a resolution and is prepared by fund and department. The resolution sets the limit for
expenditures during the fiscal year. The Town Manager may authorize transfers between departments;
however, all inter‐fund transfers are approved by Town Council. Additional expenditures may be
authorized for expenditures directly necessitated by a natural or man‐made disaster as prescribed in the
State Constitution, Article IX, Section 20.
The Town is subject to the State of Arizona’s Expenditure Limitation Law for Towns and Cities. This law
limits the amount of local revenues (as defined in the State Constitution, Article IX, Section 20) the Town
may spend each year. The state adjusts the limitation each year for changes in population and inflation.
The limitation is applied to the total expenditures of local revenues of all funds. The law does not limit the
Town’s expenditures of revenues excluded from the State Constitution’s definition of local revenue.
To ensure compliance with the state‐imposed expenditure limitation, a uniform expenditure report must
be filed with the state’s Auditor General each year. This report reconciles total Town expenditures from
the audited financial statements to total expenditures for reporting in accordance with the state’s uniform
expenditure reporting system (ARS Section 41‐1279.07) and reduces total expenditures by expenditures
that are not subject to the expenditure limitation.
The appropriated budget is prepared by fund and department. Department heads may make transfers of
non‐personnel appropriations within their department and all appropriations lapse at year‐end. Transfers
of appropriations between departments require Town Manager approval, and all inter‐fund transfers
require Town Council approval. Budget‐to‐actual comparisons are provided in this report for each
individual governmental fund for which an appropriated annual budget has been adopted. Budget‐to‐
actual comparisons for the General Fund, Streets Fund, and Grants Fund are presented in the Required
Supplementary Information and all other funds are presented in Combining and Individual Fund Financial
Statements and Schedules.
Local Economy
The Town of Fountain Hills relies mostly on its Transaction Privilege Tax (Sales Tax) and State Shared
Revenue collections to fund nearly 90% of its
General Fund (Operating) expenditures.
During the past fiscal year, the Town’s
revenue collections from these sources
exceeded the budgeted expectations.
Sales tax revenues continued to grow or
remained stable during the fiscal year, and
state shared revenues were mostly in line
with expectations, with some slowdown in
certain categories of local sales taxes. With
Page 5
the possibility of a recession in the coming fiscal year, the Town will be closely monitoring these revenue
sources and make adjustments as needed.
The following chart is a look at the past five years’ local sales tax activity by category:
As shown in the chart, sales tax collections are beginning to show signs of slowing growth but have
maintained relative stability across most categories. Retail sales, the largest category of sales tax revenue,
experienced a 2% increase over the prior year. Restaurant/Bar and Services revenue showed slight
decreases of 4% and 3%, respectively, compared to FY23. These trends of decreasing revenues may be a
sign of a slowing local economy and will be monitored each year by Finance staff. Construction sales tax,
a one‐time revenue source, is driven entirely by development activity in the community and decreased by
7% from the prior year but maintained substantially higher revenues than previous fiscal years 2020
through 2022. These increased sustained revenue levels show that development and construction activity
may coincide with the State’s increased level of development activities. The
Transportation/Communication/Utility category also increased slightly during the year. Although Real
Estate increased by 7% from the prior year, about half of this category will no longer be collected once
the State of Arizona’s ban on long‐term residential rental taxes becomes effective during the next fiscal
year.
Construction activity provides revenue to the Town through sales taxes based on the value of the project,
50% of these proceeds are utilized for general operations and the other 50% for capital expenditures.
Since this funding source is rarely enough to meet capital project needs, the Town must find additional
funds to pay for necessary infrastructure projects.
State‐shared revenues are derived as a proportionate share of state sales, income and vehicle license
taxes which are distributed based on the Town’s population compared to all other incorporated cities and
towns in Arizona (currently 0.40%). State shared income tax revenue is based on personal and corporate
earnings from two years ago. Revenue from this category increased by 39.5% in fiscal year 2023‐24 due
to delayed tax collections from COVID. However, Town projections show that these revenues will stabilize
and decrease next fiscal year. State shared sales tax has increased over the past several years, and this
year continued the trend by increasing revenue by 1.8% compared to the prior year.
$‐
$2
$4
$6
$8
$10
$12
Construction Utilities Wholesale &
Retail
Restaurants &
Bars
Real Estate Services Misc
MI
L
L
I
O
N
S
Transaction Privilege Tax Revenues by Category
Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 Fiscal Year 2024
Page 6
Other local activity has remained fairly consistent during the period. The opportunity to further expand
the retail tax base in Fountain Hills is limited by the lack of available commercial land – over 81% of the
currently available commercial lots are already developed.
Development Activity
Town‐Wide Building Permits Issued
Page 7
Economic Outlook
Retail Sales – Not having a property tax, the Town of Fountain Hills relies heavily on transaction privilege
taxes (TPT), sometimes called a sales tax. Overall, Town TPT revenues provided almost 55% of the General
Fund revenues in FY2024. On November 1, 2019, the Town’s TPT rate went up 0.3% to the current rate of
2.9%. Hospitality-related collections are the most susceptible to changes in economic conditions.
Construction TPT is also highly tied to the health of the economy and is equally divided between the
General Fund and the Capital Projects Fund.
State Shared Revenues – The Town of Fountain Hills receives significant revenue allocations from the
State. These State shared revenues, include allocations of the state-collected income tax, sales tax, fuel
tax and vehicle license taxes. All but the fuel tax and 70% of the vehicle license taxes are placed in the
Town's General Fund, where it is used to sustain a large portion of the Town's day-to-day activities.
Ultimately, each of these revenue sources will be negatively affected by inflation, as well as the Federal
Reserve’s fight against it.
Streets Fund (HURF) – The Town receives a proportionate share of the fuel tax collected in Maricopa
County. These revenues are placed in the Streets Fund to be used specifically for street maintenance and
related activity. Although the State shared revenue formula generally allocates revenues based on official
census data, in recent years, the Town’s population has slightly decreased which has resulted in relatively-
flat shared revenues. Therefore, recent increased budgeted expenditures must be replaced by existing
fund balance and transfers from the General Fund, which increases pressure to maintain operations across
the Town.
Long-term Financial Planning
Fountain Hills’ Financial Policies are balanced on sound financial reserves and conservative revenue
growth forecasts for the foreseeable future. However, potential for State legislative impacts to revenue-
sharing, reductions in local revenues, and additional demands for essential Town services remain. The
Town’s Financial Policies set forth guidelines against which current budgetary performance can be
measured and proposals for future programs can be evaluated.
The Town’s Financial Policies have helped weather the uncertainty encountered during the pandemic and
the years that have followed. This policy continues to require the Town to retain an amount equal to 20%
of the average actual General Fund revenues for the preceding five fiscal years as part of its General Fund
balance. This amount is estimated to cover approximately 60 days of General Fund expenditures and is
considered a “Rainy Day” fund.
Additionally, a reserve of 20% of the average actual General Fund revenues for the preceding five fiscal
years will be maintained as Unassigned Fund Balance. This additional fund balance reserve will provide
increased flexibility in the event of unanticipated decreases in revenue collection.
The Council also adopted Financial Policies that include guidelines for the issuance of debt for capital
expenditures, community facility districts, financing alternatives, expenditure controls and financial
planning. The policy was amended during FY 09-10 to reduce the allocation of the local construction sales
tax to the Capital Projects Fund from 85% to 50%, reflecting the transition from one-time building activity
to ongoing redevelopment activity. The debt policy was prepared with a preference for “pay-as-you-go”
financing for capital spending. However, the policy does allow for bond financing of larger projects so that
the cost can be equitably distributed among the Town’s current and future residents.
Page 8
In 2020, the Strategic Planning Advisory Commission (SPAC) began the process of gathering public input
to update the Strategic Plan’s vision, confirm residents’ values, and create a fresh structure for the
Strategic Plan revision. However, the pandemic delayed this effort. Subsequently, Strategic Plan 2022 was
built upon the foundation of four Strategic Priorities, eleven Signature Strategies, and twenty‐three
Supporting Tasks. Based on citizen input, the Strategic Plan is designed to guide our future decisions
grounded on these common priorities:
1. Targeted Collaborative Economic Development
2. Promote the Long‐Term Financial Sustainability of Town Infrastructure, Environmental, and Social
Resources
3. Continue to Improve the Public Health, Well‐Being, and Safety of Our Town
4. Maintain Current Infrastructure While Preparing the Town for Emerging Trends that Increase
Public Safety and Quality of Life
MAJOR INITIATIVES, SERVICE EFFORTS AND ACCOMPLISHMENTS
The Town of Fountain Hills’ adopted budget for fiscal year 2023‐24 reflected a cautious approach to the
continued recovery from the pandemic and increasing inflation. Due to the uncertain economic conditions
ahead, the Town approached revenue projections cautiously and kept expenditure levels low as well.
Throughout FY22 and FY23, the American Rescue Plan Act (ARPA) provided resources to local
governments through the State of Arizona. These resources allowed the Town to save $8.4 million in the
General Fund that would have otherwise been spent to pay for public safety contracts with Maricopa
County Sheriff’s Office and Rural Metro.
As Pavement Management has been a priority for many years, Council approved transfers of $8.4 million
from the General Fund to the Streets Fund related to General Fund savings. Council also approved another
$2.0 million of transfers from the General Fund into the Streets Fund in FY24 through the FY25 budget
process that will be processed early next fiscal year. Although these infusions will not resolve all the
pavement issues in Town, it will provide available fund balances for future expenditures while other
options are researched and implemented.
For the Year
The following list depicts the continued commitment of the Town of Fountain Hills to make the community
a better place to live. Fiscal year 2023‐24 goals attained are summarized within this list of
accomplishments:
Transitioned a contracted vendor into a fully operational in‐house Fire Department
Completed over 8.98 miles of paved roadways within the Town
Applied 8,800 linear feet of crack seal, 6,640 square yards of asphalt repair, and 353,130
square yards of preservative treatment to improve streets
Installed 1,500 linear feet of new sidewalk
Secured grant funding from the Arizona Office of Tourism ‐ Proposition 302
Secured grant funding from Salt River Pima‐Maricopa Indian Community ‐ Proposition 202
Adopted the 2023‐2026 Community Economic Development Strategy
Community Services awarded Best Event (Spooky Blast) and Outstanding Facility (Fountain
Park Playground) by the Arizona Parks and Recreation Association
Page 9
•Added new parks improvements such as outdoor fitness equipment at Desert Vista Park and
a 3,000 square foot picnic area at Fountain Park
•Delivered almost 6,000 meals provided through the Home Delivered Meal program
•Provided 376 rides to residents through Give a Lift program for medical appointments
AWARDS AND ACKNOWLEDGEMENTS
Awards
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence
in Financial Reporting to the Town of Fountain Hills for its Annual Comprehensive Financial Report (ACFR)
for the fiscal year ended June 30, 2023. This was the twenty-eighth consecutive year that the Town has
received this prestigious award. In order to be awarded a Certificate of Achievement, the Town published
an easily readable and efficiently organized ACFR. This report satisfied both accounting principles
generally accepted in the United States of America (GAAP) and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current ACFR
continues to meet the Certificate of Achievement program’s requirements, and we will be submitting it
to the GFOA to determine its eligibility for the fiscal year ended 2024 Certificate.
In addition, the government received the GFOA’s Distinguished Budget Presentation Award for its annual
budget for the fiscal year beginning July 1, 2023. In order to qualify for the Distinguished Budget
Presentation Award, the government’s budget document was judged to be proficient in several
categories, including as a policy document, a financial plan, an operations guide, and a communications
device. This is the twenty-second consecutive year that the Town has received the award.
Acknowledgments
The preparation of this Annual Comprehensive Financial Report could not have been accomplished
without the efficient and dedicated services of the entire Finance Division. I also wish to extend my
appreciation to the Mayor and members of Town Council for their leadership and support in planning and
conducting the financial affairs of the Town in a responsible and progressive manner. Each employee of
the Town has my sincere appreciation for the contributions made in the preparation of this report.
Respectfully submitted,
Rachael Goodwin
Town Manager
Page 10
Town of Fountain Hills, Arizona
List of Principal Officials
June 30, 2024
Elected Officials
Ginny Dickey, Mayor
Brenda Kalivianakis, Vice‐Mayor
Gerry Friedel, Councilmember
Sharron Grzybowski, Councilmember
Peggy McMahon, Councilmember
Allen Skillicorn, Councilmember
Hannah Toth, Councilmember
Town Manager & Directors
Rachael Goodwin, Town Manager
David Trimble, Deputy Town Manager/Administrative Services Director
Linda Mendenhall, Town Clerk
Kevin Snipes, Community Services Director
John Wesley, Development Services Director
Amanda Jacobs, Economic Development Director
Dave Ott, Fire Chief
Paul Soldinger, Chief Financial Officer
Justin Weldy, Public Works Director
Aaron Arnson, Pierce Coleman PLLC, Town Attorney
Mark Iacovino, The Law Office of Mark Iacovino, Town Prosecutor
Captain Larry Kratzer, Maricopa County Sheriff’s Office, District Commander
Robert Melton, Presiding Judge
Page 11
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Fountain Hills
Arizona
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
Page 12
Citizens of Fountain HillsCitizens of Fountain Hills
Presiding Judge
Town of Fountain Hills Organization
Fire / EMS AdministrationAdministration Law
Enforcement
Town Manager Town AttorneyTown Prosecutor
Appointed
by Council
Contracted
Mayor and Town CouncilMayor and Town Council
Development
Services
Recreation
Community
Services
Community
Center
Code
Enforcement
Building Safety
Senior
Services
Parks
Volunteer
Program
GIS
Planning
Engineering
Streets
Facilities
Public Works
Inspection
Finance Finance
Town ClerkTown Clerk
Administrative
Services
Administrative
Services
Economic
Development /
Tourism
Economic
Development /
Tourism
Community
Relations
Community
Relations
FY 2024 Page 13
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Financial Section
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Independent Auditor’s Report
Honorable Mayor and Members of the Town Council
Town of Fountain Hills, Arizona
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund,
and the aggregate remaining fund information of Town of Fountain Hills, Arizona (Town), as of and for the
year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise
the Town’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of the Town of Fountain Hills, Arizona, as of June 30, 2024, and the respective changes
in financial position and, where applicable, cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Basis for Opinions
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. Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of Town of Fountain Hills, Arizona, and to meet our other ethical
responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue
as a going concern for one year beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements. In performing an audit in accordance with generally accepted auditing standards and
Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
Obtain an understanding of internal control relevant to the audit 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 Town’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Town’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, and budgetary comparison information, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, 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.
Page 18
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The Combining and Individual Fund Financial Statements
and Schedules are presented for purposes of additional analysis and are not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and
relates 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 Combining and Individual Fund Financial Statements and Schedules information is fairly stated in all
material respects in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the Introductory Section and Statistical Section but does not include the basic financial
statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover
the other information and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on other work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
October 31, 2024, on our consideration of Town of Fountain Hills, Arizona’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 Town of Fountain Hills, Arizona’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 Town of Fountain Hills, Arizona’s internal control over
financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 31, 2024
Page 19
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Page 20
Management’s Discussion and Analysis (MD&A)
(Required Supplementary Information)
Page 21
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Page 22
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
As management of the Town of Fountain Hills, Arizona (Town), we offer readers of the Town’s
financial statements this narrative overview and analysis of the financial activities of the Town for
the fiscal year ended June 30, 2024. This discussion and analysis is intended to be an easily readable
breakdown of the Town of Fountain Hills’ financial activities based on currently known facts,
decisions and conditions. This analysis will focus on current year activities and operations and should
be read in combination with the transmittal letter and the financial statements that follow. The
management’s discussion and analysis is presented as required supplementary information to
supplement the basic financial statements.
Financial Highlights
The Town’s total net position of governmental activities increased $6.9 million to $150.3 million,
representing a 4.8 percent increase of the total net position.
General revenues from governmental activities accounted for $34.6 million in revenue, or 86
percent of all revenues from governmental activities. Program specific revenues in the form of
charges for services and grants and contributions accounted for $5.6 million or 14 percent of
total governmental activities revenues.
The Town had $33.3 million in expenses related to governmental activities, an increase of 5.0
percent from the prior fiscal year, primarily due to increased payroll and contractual costs.
Among the major governmental funds, the General Fund had $30.8 million in current fiscal year
revenues, which consisted primarily of transaction privilege (sales) tax and intergovernmental
revenues. The total expenditures of the General Fund were $21.7 million. The General Fund’s
fund balance increased $1.9 million to $17.6 million at the end of the current fiscal year.
Overview of Financial Statements
This discussion and analysis is intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: 1) government‐wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other supplementary information in addition to the basic financial statements
themselves.
Page 23
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Overview of Financial Statements – continued
Government‐wide financial statements. The government‐wide financial statements provide readers
with a broad overview of the Town’s finances, in a manner similar to a private‐sector business. These
statements are prepared using the accrual basis of accounting.
The Statement of Net Position presents information on all of the Town’s assets, liabilities, and
deferred inflows/outflows of resources with the difference reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial position
of the Town is improving or deteriorating.
The Statement of Activities presents information showing how the Town’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., earned but unused compensated absences).
The government‐wide financial statements distinguish functions of the Town that are principally
supported by taxes and intergovernmental revenues (governmental activities). The governmental
activities of the Town include administration, development services, public safety, public works, and
culture and recreation.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Town uses fund
accounting to ensure and demonstrate compliance with finance‐related legal requirements. All Town
funds are included in the governmental fund classification, except for two internal service funds that
are classified as proprietary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government‐wide financial statements. However,
unlike the government‐wide financial statements, governmental fund financial statements use
the modified accrual basis of accounting and focus on near‐term inflows of spendable resources,
as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating the Town’s near‐term financing requirements.
Internal service funds. These types of funds are classified as proprietary funds, and are used to
report activity in the Technology Replacement Fund and the Vehicle and Equipment Replacement
Fund. These funds provide goods and services to other funds and departments on a cost‐
reimbursement basis. The activity is intended to operate on an essentially “break‐even” basis
over time.
Page 24
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Overview of Financial Statements – continued
Because the focus of governmental funds is narrower than that of the government‐wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government‐wide financial statements. By
doing so, readers may better understand the long‐term impact of the Town’s near‐term financing
decision. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
Information is presented separately in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures and changes in fund balances for the General, Highway
User Revenue (HURF), Grants, and Capital Projects Funds, all of which are considered major funds.
Data from other governmental funds are combined into a single, aggregated presentation. Individual
fund data for each of these non‐major governmental funds is provided in the form of combining
statements and schedules.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government‐wide and fund financial statements. The notes
to the financial statements can be found immediately following the basic financial statements.
Other information. In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the Town’s budget process.
The Town adopts an annual budget for all funds. A schedule of revenues, expenditures and changes
in fund balances ‐ budget and actual has been provided for the General, Highway User Revenue and
Grant funds as required supplementary information.
Government‐Wide Financial Analysis
While this document contains information about the funds used by the Town to provide services to
its citizens, the Statement of Net Position and the Statement of Activities serve to provide an answer
to the question of how the Town, as a whole, did financially throughout the year. These statements
include all assets and liabilities using the accrual basis of accounting, similar to the accounting used
by the private sector. The basis for this accounting takes into account all of the current year’s
revenues and expenses regardless of when the cash is received or paid.
These two statements report the Town’s assets and the changes in those assets. The change in assets
is important because it tells the reader whether the financial position of the Town as a whole has
improved or diminished. However, in evaluating the overall position of the Town, non‐financial
information such as changes in the Town’s tax base and the condition of the Town’s capital assets
will also need to be evaluated.
Page 25
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Government‐Wide Financial Analysis – continued
Analysis of Net Position. Over time, net position may serve as a useful indicator of a government’s
financial position. In the case of the Town, assets related to governmental activities exceeded
liabilities by $150.3 million at the end of the fiscal year.
The largest portion of the Town’s governmental activities net position reflects its investment in
capital assets (e.g., land, infrastructure, buildings and improvements, vehicles, machinery and
equipment and construction in progress); less any related outstanding debt used to acquire those
assets. The Town uses these capital assets to provide services to its citizens; consequently, these
assets are not available for future spending. Although the Town’s investment in its capital assets is
reported net of related outstanding debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the capital assets themselves cannot be used to
liquidate these liabilities. As the Town does not currently have any outstanding debt, the reported
amount represents the total invested in capital assets. In addition, a portion of the Town’s net
position represents resources that are subject to external restrictions on how they may be used. The
remaining balance is unrestricted and may be used to meet the Town’s ongoing obligations to its
citizens and creditors.
The following table presents a summary of the Town’s net position for the fiscal years ended
June 30, 2024 and June 30, 2023.
Governmental Activities
As of As of
June 30, 2024 June 30, 2023
Current and other assets $ 53,009,050 $ 46,708,494
Capital assets, net 101,990,127 101,838,463
Total assets 154,999,177 148,546,957
Current and other liabilities 2,838,171 3,087,313
Long‐term liabilities 553,757 284,016
Total liabilities 3,391,928 3,371,329
Deferred inflows 1,274,470 1,734,697
Net position
Net investment in capital assets 101,990,127 101,838,463
Restricted 9,474,160 9,646,597
Unrestricted 38,868,492 31,955,871
Total net position $ 150,332,779 $ 143,440,931
At the end of the current fiscal year the Town reported positive balances in all three categories of net
position for governmental activities. The Town also reported positive balances in all net position
categories in the prior fiscal year.
Page 26
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Government-Wide Financial Analysis – continued
The Town’s financial position is the product of several financial transactions including the net results
of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and
the depreciation of capital assets.
Changes in net position. The Town’s total revenues for the current fiscal year were $40.2 million. The
total cost of all programs and services was $33.3 million. The following table presents a summary of
the changes in net position for the fiscal years ended June 30, 2024 and June 30, 2023.
Governmental Activities
Fiscal
Year Ended
June 30, 2024
Fiscal
Year Ended
June 30, 2023
Revenues
Program revenues:
Charges for services $ 2,717,731 $ 2,415,721
Operating grants and contributions 2,383,786 6,729,883
Capital grants and contributions 520,867 259,266
General revenues
Property taxes 9,854
Sales taxes 20,559,928 20,586,294
Franchise taxes 351,118 382,948
State-sales and income tax revenue 9,888,965 8,039,448
Vehicle License taxes 1,242,636 1,182,243
Investment earnings 2,345,106 1,099,525
Miscellaneous 191,629 226,049
Total revenues $ 40,201,766 $ 40,931,231
Expenses
General government $ 5,106,646 $ 4,890,912
Development services 1,324,892 1,206,991
Public safety 11,746,913 9,930,356
Public works 10,455,071 10,792,078
Culture and recreation 4,676,396 4,776,903
Total expenses 33,309,918 31,597,240
Changes in net position 6,891,848 9,333,991
Net position, beginning 143,440,931 134,106,940
Net position, ending $150,332,779 $143,440,931
Page 27
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Government‐Wide Financial Analysis – continued
The charts below compare the governmental expenses from fiscal years 2023‐24 and 2022‐23.
Sales taxes, 52%State shared
revenue, 25%
Vehicle
license
taxes, 3%
Charges for
services, 6%
Operating grants
and contributions,
6%Other, 8%
Governmental Activities Revenues
Fiscal Year 2023‐24
Public
safety, 31%
Public
works, 34%
Culture
and
recreation,
15%
General
government,
15%
Development
services, 4%
Fiscal Year 2022‐23 Expenses
Public
safety, 35%
Public
works, 31%
Culture
and
recreation,
14%
General
government,
15%
Development
services, 4%
Fiscal Year 2023‐24 Expenses
Page 28
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Government-Wide Financial Analysis – continued
The following items are significant current year transactions that have had an impact on the change
of net position.
• Revenues from state-shared revenues increased substantially for the fiscal year and
accounted for approximately $1.8 million more than the prior fiscal year. The Town received
its final American Rescue Plan Act (ARPA) payment during the prior fiscal year, which resulted
in a significant decrease in operating grants and contributions from the prior year.
• Expenses were up five percent across all prior year governmental functions, with the highest
percentage increase seen within the Public Safety function. This was a result of the Town's
transition from a contracted vendor to an in-house Fire Department.
• Investment income increased $1.2 million as a result of increases to short-term investment
rates within the State Treasurer's local government investment pool 7.
The following table presents the cost of the Town’s major functional activities. The table also shows
each function’s net cost (total cost less charges for services generated by the activities and
intergovernmental aid provided for specific programs). The net cost shows the financial burden that
was placed on the Town by each of these functions.
Year Ended June 30, 2024 Year Ended June 30, 2023
Total
Expenses
Net (Expense)/
Revenue
Total
Expenses
Net (Expense)/
Revenue
Governmental Activities
General government $ 5,106,646 $ (4,131,998) $ 4,890,912 $ (3,751,754)
Development services 1,324,892 (630,242) 1,206,991 (444,062)
Public safety 11,746,913 (11,546,893) 9,930,356 (5,523,668)
Public works 10,455,071 (7,481,840) 10,792,078 (8,504,075)
Culture and recreation 4,676,396 (3,896,561) 4,776,903 (3,968,811)
Total expenses $ 33,309,918 $ (27,687,534) $ 31,597,240 $ (22,192,370)
• The cost of all governmental activities this year was $33.3 million.
• Federal, State, county, and tribal governments and charges for services subsidized certain
governmental programs with revenues of $5.6 million.
• The net cost of the Town’s governmental activities was $27.7 million, which was funded
primarily by general revenues. General revenues consisted primarily of $20.6 million in sales
taxes and $11.1 million in State-shared revenues.
Page 29
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Financial Analysis of the Town’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental funds. The focus of the Town’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing
the Town’s financing requirements. In particular, unassigned fund balance may serve as a useful
measure of the Town’s net resources available for spending at the end of the fiscal year.
The financial performance of the Town as a whole is reflected in its governmental funds. As the Town
completed the year, its governmental funds reported an increase of $6.5 million in the combined
fund balance from $39.8 million to $46.3 million.
The General Fund comprises 38.0 percent of the total fund balance. Approximately $13.1 million, or
74.4 percent, of the General Fund’s fund balance is unassigned.
The General Fund is the principal operating fund of the Town. The fund balance increased by $1.9
million to $17.6 million as of fiscal year end. General Fund revenues increased $2.5 million primarily
due the increase in state-shared revenues and investment earnings discussed earlier. General Fund
expenditures increased by $6.3 million primarily due to the Town's transition from a contracted
vendor to an in-house Fire Department and the impact from moving grant-funded public safety
expenditures back to the General Fund in the current fiscal year.
The Highway User Revenue Fund comprises 20.7 percent of total fund balance. The fund balance
increased $2.6 million from the prior year due to transfers from the General Fund discussed earlier
and will continue to be used to fund the pavement management program in the next fiscal year.
Fund balance of the Grants Fund increased $6,435 due to collection of opioid settlement revenues in
excess of opioid abatement expenditures.
The Capital Projects Fund comprises 30.6 percent of the total fund balance. All of the fund balance is
assigned to capital projects. The fund balance increased $1.7 million due to transfers from the
General Fund and decreased capital outlay expenditures.
The Technology Replacement Fund and Vehicle and Equipment Replacement Fund are the Town’s
proprietary funds. Unrestricted net position of these funds at the end of the fiscal year amounted to
$2.7 million. This was an increase of $514,107 that was due to the Town charging funds in excess of
actual vehicle and technology replacement expenditures and significantly higher investment
earnings.
Page 30
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Budgetary Highlights
A majority of the budget transfers for the fiscal year moved budget authority between departments
within the General Fund; however, the final budget for the General Fund did decrease $2.6 million as
a result of a large transfer of General Fund contingency to the Capital Projects Fund for a streets
widening project. However, the project was delayed to a subsequent year.
A schedule showing the budget amounts compared to the Town’s actual financial activity for the
General Fund is provided in this report as required supplementary information. The significant
variances are summarized as follows:
• The favorable variance of $5.2 million in overall revenues is primarily due to strong actual
revenues performance compared to conservative internal revenue projections.
• The favorable total expenditures variance of $1.3 million is due primarily to lower than
expected expenditures throughout all departments.
Capital Assets and Debt Administration
Capital Assets. As of the end of the current fiscal year, the Town had invested $102.0 million in capital
assets, including buildings, facilities, vehicles, computers, equipment, infrastructure and artwork. This
amount represents a net increase, prior to depreciation, of $3.4 million from the prior fiscal year. The
increase was primarily due to various capital improvement projects, including community center
improvements, upgrades to park amenities, and a sidewalk infill project. Total depreciation expense
for the current fiscal year was $3.3 million.
The following schedule presents a summary of capital asset balances for the fiscal years ended
June 30, 2024 and June 30, 2023.
Governmental Activities
As of
June 30, 2024
As of
June 30, 2023
Capital assets – non-depreciable $ 34,761,936 $ 36,231,449
Capital assets – depreciable, net 67,228,191 65,607,014
Total $ 101,990,127 $ 101,838,463
The estimated construction commitments amount is $136,575.
Additional information on the Town’s capital assets can be found in Note 5.
Page 31
Town of Fountain Hills, Arizona
Management’s Discussion and Analysis (MD&A)
Year Ended June 30, 2024
Capital Assets and Debt Administration – continued
Debt Administration. The Town does not currently have any outstanding debt. Therefore, there were
not any town-wide taxes levied in fiscal year 2024.
State statutes currently limit the amount of general obligation debt a Town may issue to a percentage
of its total assessed valuation for water, sewer, artificial lighting, parks, open space, recreational
facility improvements, public safety, law enforcement, fire and emergency facilities and street and
transportation facilities. The current 20 percent debt limitation for the Town is $166.3 million. State
statutes also currently limit the amount of general obligation debt a Town may issue to a percentage
of its total assessed valuation for all other purposes. The current 6 percent debt limitation for the
Town is $49.9 million.
Additional information on the Town’s long-term liabilities can be found in Note 6 in the notes to the
financial statements.
Contacting the Town’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors
with a general overview of the Town’s finances and to demonstrate the Town’s accountability for the
resources it receives. If you have questions about this report or need additional information, contact
the Finance Division, Town of Fountain Hills, 16705 East Avenue of the Fountains, Fountain Hills,
Arizona 85268 or visit our website at www.fountainhillsaz.gov.
Page 32
Basic Financial Statements
Page 33
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Page 34
Government-Wide Financial Statements
Page 35
Governmental
Activities
Assets
Current assets:
Cash and investments 49,708,197$
Accounts receivable 147,676
Intergovernmental receivable 1,679,102
Leases receivable 1,313,858
Interest receivable 107,078
Inventory, at cost 5,099
Prepaid items 48,040
Total current assets 53,009,050
Noncurrent assets:
Capital assets not being depreciated 34,761,936
Capital assets, net of accumulated depreciation 67,228,191
Total noncurrent assets 101,990,127
Total assets 154,999,177
Liabilities
Current liabilities:
Accounts payable 1,683,533
Accrued wages and benefits 420,311
Other liabilities 2,777
Customer deposits 54,892
Compensated absences payable 445,406
Unearned revenues 231,252
Total current liabilities 2,838,171
Noncurrent liabilities:
Non‐current portion of long‐term obligations 553,757
Total noncurrent liabilities 553,757
Total liabilities 3,391,928
Deferred inflows of resources
Leases 1,274,470
Total deferred inflows of resources 1,274,470
Net position
Net investment in capital assets 101,990,127
Restricted for:
Public works 6,237,208
Local court enhancement 439,487
Opioid abatement 390,988
Capital outlay 2,348,186
Debt service 58,291
Unrestricted 38,868,492
Total net position 150,332,779$
Town of Fountain Hills, Arizona
Statement of Net Position
June 30, 2024
The notes to the basic financial statements are an integral part of this statement.Page 36
Functions/Programs Expenses
Charges for
Services
Operating Grants
and
Contributions
Capital Grants
and
Contributions
Governmental
Activities
Governmental activities
General government 5,106,646$ 548,921$ 409,931$ 15,796$ (4,131,998)$
Development services 1,324,892 694,650 (630,242)
Public safety 11,746,913 108,633 91,387 (11,546,893)
Public works 10,455,071 736,967 1,850,986 385,278 (7,481,840)
Culture and recreation 4,676,396 628,560 31,482 119,793 (3,896,561)
Total governmental activities 33,309,918$ 2,717,731$ 2,383,786$ 520,867$ (27,687,534)
General revenues
Taxes:
Sales taxes 20,559,928
Franchise taxes 351,118
State sales & income tax revenue sharing ‐ unrestricted 9,888,965
Vehicle license tax revenue sharing ‐ unrestricted 1,242,636
Investment earnings 2,345,106
Miscellaneous 191,629
Total general revenues 34,579,382
Changes in net position 6,891,848
Net position, beginning of year 143,440,931
Net position, end of year 150,332,779$
Program Revenue Net (Expense)
Town of Fountain Hills, Arizona
For the Year Ended June 30, 2024
Statement of Activities
The notes to the basic financial statements are an integral part of this statement.Page 37
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Page 38
Fund Financial Statements
Page 39
General
Highway User
Revenue Grants Capital Projects
Assets
Cash and investments 17,425,328$ 9,411,340$ 290,388$ 14,760,917$
Accounts receivable 122,260 25,416
Intergovernmental receivable 954,380 285,500 390,988 15,796
Leases receivable 1,313,858
Interest receivable 35,229 16,062 54,074
Inventory, at cost 5,099
Prepaid items 33,080 13,500
Total assets 19,889,234 9,738,318 694,876 14,830,787
Liabilities
Accounts payable 548,647 131,147 318 660,396
Accrued wages and benefits 391,451 22,754
Other liabilities 752 174 15 1,730
Customer deposits 54,892
Unearned revenues 22,099 209,153
Total liabilities 1,017,841 154,075 209,486 662,126
Deferred inflows of resources
Unavailable revenues ‐ intergovernmental 364,358
Unavailable revenues ‐ other 2,856 24,614 15,796
Leases 1,292,985
Total deferred inflows of resources 1,295,841 24,614 364,358 15,796
Fund balances
Nonspendable 38,179 13,500
Restricted 6,223,708 26,630
Committed 4,466,782
Assigned 3,335,921 80,902 14,152,865
Unassigned 13,070,591
Total fund balances 17,575,552 9,559,629 121,032 14,152,865
Total liabilities, deferred inflows of resources
and fund balances 19,889,234$ 9,738,318$ 694,876$ 14,830,787$
Town of Fountain Hills, Arizona
Balance Sheet
Governmental Funds
June 30, 2024
The notes to the basic financial statements are an integral part of this statement.Page 40
Non‐Major
Governmental
Funds
Total
Governmental
Funds
5,177,221$ 47,065,194$
147,676
32,438 1,679,102
1,313,858
1,713 107,078
5,099
1,460 48,040
5,212,832 50,366,047
338,556 1,679,064
6,106 420,311
2,671
54,892
231,252
344,662 2,388,190
364,358
43,266
1,292,985
1,700,609
1,460 53,139
2,845,964 9,096,302
4,466,782
2,020,746 19,590,434
13,070,591
4,868,170 46,277,248
5,212,832$ 50,366,047$
Page 41
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Page 42
Total fund balances ‐ governmental funds 46,277,248$
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds.
Governmental capital assets 243,271,396$
Less accumulated depreciation (141,366,722)
101,904,674
Some receivables are not available to pay for current period expenditures
and, therefore, are reported as unavailable in the funds.
Leases 18,515
Intergovernmental 364,358
Other 43,266
426,139
The Internal Service Fund is used by management to charge the cost of technology,
vehicle and equipment replacement to the individual funds. The assets and liabilities
of the Internal Service Fund are included in the Statement of Net Position.
Capital assets 85,453
Net positions of other remaining balance 2,638,428
2,723,881
Long‐term liabilities (compensated absences payable) are not due and payable
in the current period and, therefore, are not reported in the funds.(999,163)
Net position of governmental activities 150,332,779$
Town of Fountain Hills, Arizona
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2024
Amounts reported for governmental activities in the Statement of Net Position
are different because:
The notes to the basic financial statements are an integral part of this statement.Page 43
General
Highway User
Revenue Grants Capital Projects
Revenues
Property taxes $ $ $ $
Sales taxes 16,834,517 1,417,926 1,598,522
Franchise taxes 351,118
Licenses and permits 1,411,600
Leases and rents 359,479
Intergovernmental 10,349,568 2,720,831 267,283 376,783
Charges for services 242,182 120
Other 270,109 47,261 12,000
Fines and forfeitures 227,192
Investment earnings 728,524 558,549 15,288 671,774
Total revenues 30,774,289 4,744,687 282,571 2,659,079
Expenditures
Current:
General government 3,942,569 265,136 506
Development services 1,275,320
Public safety 11,330,144
Public works 1,554,076 6,192,221 594,473
Culture and recreation 3,426,968 25,158
Capital outlay 189,436 115,695 11,000 3,070,047
Debt service:
Fiscal charges
Total expenditures 21,718,513 6,307,916 276,136 3,690,184
Excess (deficiency) of revenues over expenditures 9,055,776 (1,563,229) 6,435 (1,031,105)
Other financing sources (uses)
Transfers in 245,884 4,200,000 6,907,884
Transfers out (7,407,884) (4,200,000)
Total other financing sources (uses)(7,162,000) 4,200,000 2,707,884
Changes in fund balances 1,893,776 2,636,771 6,435 1,676,779
Fund balances, beginning of year, previously reported 17,385,544 7,333,267 114,597 12,476,086
Adjustments to beginning fund balances (1,703,768) (410,409)
Fund balances, beginning of year, as restated 15,681,776 6,922,858 114,597 12,476,086
Fund balances, end of year 17,575,552$ 9,559,629$ 121,032$ 14,152,865$
Town of Fountain Hills, Arizona
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2024
The notes to the basic financial statements are an integral part of this statement.Page 44
Non‐Major
Governmental
Funds
Total
Governmental
Funds
9,841$ 9,841$
708,963 20,559,928
351,118
325,441 1,737,041
359,479
119,793 13,834,258
5,000 247,302
3,642 333,012
28,651 255,843
244,814 2,218,949
1,446,145 39,906,771
788,366 4,996,577
1,275,320
11,330,144
433,919 8,774,689
31,464 3,483,590
137,399 3,523,577
208 208
1,391,356 33,384,105
54,789 6,522,666
594,253 11,948,021
(340,137) (11,948,021)
254,116
308,905 6,522,666
4,494,681 41,804,175
64,584 (2,049,593)
4,559,265 39,754,582
4,868,170$ 46,277,248$
Page 45
Changes in fund balances ‐ total governmental funds 6,522,666$
Amounts reported for governmental activities in the Statement of Activities are different
because:
Governmental funds report the portion of capital outlay for capitalized assets as expenditures.
However, in the Statement of Activities, the costs of those assets are allocated over their
estimated useful lives and reported as depreciation expense.
Expenditures for capitalized assets 3,523,573$
Less current year depreciation (3,317,963)
205,610
Some revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.
Leases 18,515
Intergovernmental 140,648
Other 15,284
174,447
Collections of property tax revenue in the governmental funds exceeded revenues
reported in the Statement of Activities.(26,334)
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.
Loss on disposal of assets (139,399)
Compensated absences (359,249)
(498,648)
The Internal Service Fund is used by management to charge the cost of technology, vehicle
and equipment replacement to the individual funds. The changes in net position of the
Internal Service Fund is reported with governmental activities in the Statement of Activities.514,107
Changes in net position in governmental activities 6,891,848$
Reconciliation of the Statement of Revenues, Expenditures and
For the Year Ended June 30, 2024
Town of Fountain Hills, Arizona
Changes in Fund Balances of Governmental Funds to the Statement of Activities
The notes to the basic financial statements are an integral part of this statement.Page 46
Governmental
Activities
Internal Service
Funds
Assets
Current assets:
Cash and investments 2,643,003$
Total current assets 2,643,003
Noncurrent assets:
Capital assets, net of accumulated depreciation 85,453
Total noncurrent assets 85,453
Total assets 2,728,456
Liabilities
Current liabilities:
Accounts payable 4,469
Other liabilities 106
Total current liabilities 4,575
Net position
Net investment in capital assets 85,453
Unrestricted 2,638,428
Total net position 2,723,881$
Town of Fountain Hills, Arizona
Statement of Net Position
Proprietary Funds
June 30, 2024
The notes to the basic financial statements are an integral part of this statement.Page 47
Governmental
Activities
Internal Service
Funds
Operating revenues
Charges for services 419,994$
Total operating revenues 419,994
Operating expenses
Costs of services 45,000
Depreciation 7,769
Total operating expenses 52,769
Operating income (loss)367,225
Nonoperating revenues (expenses)
Investment earnings 126,157
Gain on sale of capital assets 20,725
Total nonoperating revenue (expenses)146,882
Changes in net position 514,107
Net position, beginning of year, previously reported 160,181
Adjustments to beginning net position 2,049,593
Net position, beginning of year, as restated 2,209,774
Net position, end of year 2,723,881$
Town of Fountain Hills, Arizona
Statement of Revenues, Expenses, and Changes in Fund Net Position
For the Year Ended June 30, 2024
Proprietary Funds
The notes to the basic financial statements are an integral part of this statement.Page 48
Governmental
Activities
Internal Service
Funds
Increase/Decrease in Cash and Cash Equivalents
Cash flows from operating activities
Cash received from charges for services $ 419,994
Cash payments to suppliers for goods and services (40,425)
Net cash provided by/used for operating activities 379,569
Cash flows from capital activities
Purchase of property and equipment (93,222)
Proceeds from sale of capital assets 31,173
Net cash provided by/used for capital activities (62,049)
Cash flows from investing activities
Investment income 126,157
Net cash provided by/used for investing activities 126,157
Net increase/decrease in cash and cash equivalents 443,677
Cash and cash equivalents, beginning of year, as restated 2,199,326
Cash and cash equivalents, end of year $ 2,643,003
Reconciliation of Operating Income/Loss to Net Cash Provided by/Used for Operating Activities
Operating income/loss $ 367,225
Adjustments to reconcile operating income/loss
to net cash provided by/used for operating activities:
Depreciation 7,769
Changes in assets and liabilities:
Increase/decrease in accounts payable 4,469
Increase/decrease in other liabilities 106
Total adjustments 12,344
Net cash provided by/used for operating activities $ 379,569
Town of Fountain Hills, Arizona
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
The notes to the basic financial statements are an integral part of this statement.Page 49
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
The financial statements of the Town of Fountain Hills, Arizona (Town) have been prepared in
conformity with accounting principles generally accepted in the United States of America as
applied to government units. The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial reporting
principles.
The more significant of the Town’s accounting policies are described below.
A. Reporting Entity
The Town’s major operations include development services, culture and recreation, public works,
public safety and general administrative services.
The Town is a municipal corporation governed by an elected Mayor and Council. The financial
reporting entity consists of a primary government and its component units. A component unit is
a legally separate entity that must be included in the reporting entity in conformity with generally
accepted accounting principles. The Town is a primary government that has a separately elected
governing body, is legally separate, and is fiscally independent of other state or local
governments. Furthermore, the component units combined with the Town for financial
statement presentation purposes and the Town are not included in any other governmental
reporting entity. Consequently, the Town’s financial statements include only the funds of those
organizational entities for which its elected governing body is financially accountable.
Eagle Mountain Community Facilities District and the Cottonwoods Maintenance District. As
special purpose districts and separate political subdivisions under the Arizona Constitution, the
Districts can levy taxes and issue bonds independently of the Town. Property owners in the
designated areas are assessed taxes for the costs of operating the Districts. The Town Council
serves as the Board of Directors; however, the Town has no liability for the Districts’ debt, the
Districts are responsible for the debt; the debt is therefore not subject to the Town’s debt limit.
The Districts cannot be part of another reporting entity. The Districts’ governing bodies are
substantially the same as the Town and the Town’s management oversees operations, resulting
in the Town having the ability to exercise control. As a result, for financial reporting purposes,
transactions of the Districts are combined together and included as if they were part of the
Town’s operations.
Town of Fountain Hills, Arizona Municipal Property Corporation. The Town of Fountain Hills,
Arizona Municipal Property Corporation’s (MPC) Board of Directors consists of three members
which are appointed by the Fountain Hills Town Council. The MPC, which is a nonprofit
corporation incorporated under the laws of the State of Arizona, was formed for the sole purpose
of assisting the Town in obtaining financing for various projects of the Town. The Town has a
“moral obligation” for the repayment of the MPC’s bonds. The MPC cannot be part of another
reporting entity. The MPC provides services exclusively to the Town. As a result, for financial
reporting purposes, transactions of the MPC are combined together and included as if they were
part of the Town’s operations.
Page 50
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) present financial information about the Town as a whole. The reported information
includes all of the Town's component units. For the most part, the effect of internal activity has
been removed from these statements. Interfund services provided and used, such as interfund
transfers, are not eliminated in the process of consolidation. Governmental activities normally
are supported by taxes and intergovernmental revenues. The Town does not have any fiduciary
or business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes,
unrestricted state shared revenues, investment income and other items not included among
program revenues are reported instead as general revenues.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide Financial Statements – The government-wide financial statements are
reported using the economic resources measurement focus and the accrual basis of accounting.
Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of related cash flows. Grants and similar items are recognized as revenue
as soon as all eligibility requirements imposed by the grantor or provider have been met. As a
general rule, the effect of internal activity has been eliminated from the government-wide
financial statements; however, the effects of interfund services provided and used between
functions are reported as expenses and program revenues at amounts approximating their
external exchange value.
Fund Financial Statements – Governmental fund financial statements are reported using the
current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues
to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences,
and claims and judgments, are recorded only when payment is due.
Page 51
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
Property taxes, sales taxes, franchise taxes, state shared revenues, licenses and permits, charges
for services, and investment earnings associated with the current fiscal period are all considered
to be susceptible to accrual and have been recognized as revenues of the current fiscal period.
Grants and similar awards are recognized as revenue as soon as all eligibility requirements
imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible to
accrual because generally they are not measurable until received in cash. Unearned revenues
arise when resources are received by the Town before it has legal claim to them, as when grant
monies are received prior to meeting all eligibility requirements imposed by the provider.
The focus of governmental fund financial statements is on major funds rather than reporting
funds by type. Each major fund is presented in a separate column.
The Town reports the following major governmental funds.
General Fund – The General Fund is the Town’s primary operating fund. This fund accounts
for all financial resources of the Town, except those required to be accounted for in other
funds.
Highway User Revenue Fund (HURF) – This fund accounts for the Town’s share of motor
vehicle fuel tax revenues and sales tax.
Grants Fund – This fund accounts for the activities of various restricted grants and
contributions received by the Town.
Capital Projects Fund – This fund accounts for the capital improvements to various projects
and equipment purchases of the Town.
Additionally, the Town reports the following fund type:
Proprietary Fund – The Proprietary Fund is comprised of two Internal Service Funds that
account for the operation of technology, vehicle, and equipment replacement services to
other Town departments on a cost reimbursement basis.
The Proprietary Fund financial statements are reported using the economic resources
measurement focus and accrual basis of accounting and are presented in a single column.
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 Town’s internal service fund are charges to Town
departments for technology, vehicle, and equipment replacement. Operating expenses for the
internal service fund include the cost of goods and services. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
Page 52
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
D. Cash and Investments
For purposes of the Statement of Cash Flows, the Town considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. Cash and cash
equivalents at year end was cash and investments in the State Treasurer’s Local Government
Investment Pool.
Cash and investments at year end were cash on hand, cash in bank, restricted cash, cash and
investments held by the State Treasurer, and investments in the State Treasurer’s Local
Government Investment Pool.
Cash and investments are pooled, except for investments that are restricted under provisions of
bond indentures or other restrictions that are required to be reported in the individual funds.
Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer’s local
government investment pools, the County Treasurer’s investment pool, obligations of the U.S.
Government and its agencies, obligations of the state and certain local government subdivisions,
interest-bearing savings accounts and certificates of deposit, collateralized repurchase
agreements, certain obligations of U.S. corporations, and certain other securities. Investments
are stated at fair value.
Statutes do not include any requirements for credit risk, custodial credit risk, concentration of
credit risk, interest rate risk, or foreign currency risk for the Town’s investments.
Arizona statute requires a pooled collateral program for public deposits and a Statewide
Collateral Pool Administrator (Administrator) in the State Treasurer’s Office. The purpose of the
pooled collateral program is to ensure that governmental entities’ public deposits placed in
participating depositories are secured with collateral of 102 percent of the public deposits, less
any applicable federal depository insurance.
An eligible depository may not retain or accept any public deposit unless it has deposited the
required collateral with a qualified escrow agent or the Administrator. The Administrator
manages the pooled collateral program, including reporting on each depository’s compliance
with the program.
E. Investment Earnings
Investment earnings is composed of interest, dividends, and net changes in the fair value of
applicable investments. Investment earnings is a component of revenue in the governmental
funds financial statements and is reported in nonoperating revenue in the proprietary fund
financial statements.
Page 53
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
F. Receivables and Payables
Activity between funds that is representative of lending/borrowing arrangements outstanding at
the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current
portion of interfund loans) or “advances to/from other funds” (i.e., the non‐current portion of
interfund loans). Interfund balances between governmental funds are eliminated on the
statement of net position.
G. Inventory
All inventories are valued at average cost using the first‐in/first‐out (FIFO) method. Inventories
consist of expendable supplies held for consumption. The cost of such inventories is recorded as
expenditures/expenses when consumed rather than when purchased.
H. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both the government‐wide and fund financial statements. The cost
of prepaid items is recorded as expenditures/expenses when consumed rather than when
purchased.
I. Capital Assets
Capital assets, which include land and improvements, artwork, buildings and improvements,
vehicles, machinery, and equipment, construction in progress, infrastructure assets, and
intangible right‐to‐use assets are reported in the government‐wide financial statements.
Capital assets are defined by the Town as assets with an initial, individual cost in excess of $10,000
and an estimated useful life in excess of one year. Capital assets are recorded at historical cost, if
purchased or constructed. Donated capital assets are recorded at the acquisition value.
The costs of normal maintenance and repairs that do not add to the value of the assets or
materially extend the life of the asset are not capitalized.
Page 54
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
Capital assets of the Town are depreciated using the straight‐line method over the following
estimated useful lives:
Buildings and building improvements 20 ‐ 50 years
Improvements other than buildings 20 years
Infrastructure 15 ‐ 50 years
Vehicles, machinery and equipment 5 ‐ 20 years
J. Compensated Absences
The Town’s employee vacation and sick leave policies generally provide for granting vacation and
sick leave with pay. Sick leave and vacation benefits accrue as pay periods are completed at the
current rate of pay.
The current and long‐term liabilities, including related benefits, for accumulated vacation and sick
leave are reported on the government‐wide financial statements. A liability for these amounts is
reported in governmental funds only if they have matured, for example, as a result of employee
termination, resignations and retirements. Generally, resources from the General Fund are used
to pay for compensated absences.
K. Interfund Activity
Flows of cash from one fund to another without a requirement for repayment are reported as
interfund transfers. Interfund transfers between governmental funds are eliminated in the
statement of activities. Interfund transfers in the fund financial statements are reported as other
financing sources/uses in governmental funds.
L. Net Position Flow Assumption
In the government‐wide financial statements the Town generally applies restricted resources first
when outlays are incurred for purposes for which either restricted or unrestricted amounts are
available. However, the Town may apply unrestricted resources before restricted resources when
necessary to ensure compliance with the State of Arizona's Expenditure Limitation Law for Towns
and Cities.
Page 55
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 1 – Summary of Significant Accounting Policies
M. Leases
As lessor, the Town recognizes lease receivables with an initial, individual value of $50,000 or
more. If there is no stated rate in the lease contract (or if the stated rate is not the rate the Town
charges the lessee) and the implicit rate cannot be determined, the Town uses its own estimated
incremental borrowing rate as the discount rate to measure lease receivables. The Town’s
estimated incremental borrowing rate was determined based on the prevailing federal funds rate
at the beginning of the lease term, since the Town does not have outstanding debt. This rate
reflects the low risk of renting these facilities over a long lease period with multiple renewals.
Note 2 – Fund Balance Classifications
Fund balances of the governmental funds are reported separately within classifications based on
a hierarchy of the constraints placed on the use of those resources. The classifications are based
on the relative strength of the constraints that control how the specific amounts can be spent.
The classifications are nonspendable, restricted, committed, assigned, and unassigned fund
balance classifications.
Nonspendable. The nonspendable fund balance classification includes amounts that cannot be
spent because they are not in spendable form, or legally or contractually required to be
maintained intact.
Restricted. Fund balance is reported as restricted when constraints placed on the use of resources
are either externally imposed by creditors (such as through debt covenants), grantors,
contributors, or laws or regulations of other governments or is imposed by law through
constitutional provisions or enabling legislation.
Committed. The committed fund balance classification includes amounts that can be used only
for the specific purposes imposed by formal action of the Town Council, the Town’s highest level
of decision making authority, by ordinance. Those committed amounts cannot be used for any
other purpose unless the Town Council removes or changes the specified use by taking the same
type of action it employed to previously commit those amounts.
Assigned. Amounts in the assigned fund balance classification are intended to be used by the
Town for specific purposes but do not meet the criteria to be classified as restricted or committed.
In governmental funds other than the General Fund, assigned fund balance represents the
remaining amount that is not restricted or committed. In the General Fund, assigned amounts
represent intended uses established by the Town Council or a management official delegated
that authority by formal Town Council action. The authority to make assignments has been
delegated by the Town Council to the Chief Financial Officer.
Page 56
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 2 – Fund Balance Classifications
Unassigned. Unassigned fund balance is the residual classification for the General Fund and
includes all spendable amounts not contained in the other classifications. In other governmental
funds, the unassigned classification is used only to report a deficit balance resulting from
overspending for specific purposes for which amounts had been restricted, committed, or
assigned.
The Town generally applies restricted resources first when outlays are incurred for purposes for
which either restricted or unrestricted (committed, assigned, and unassigned) amounts are
available. Similarly, within unrestricted fund balance, committed amounts are generally reduced
first followed by assigned, and then unassigned amounts when expenditures are incurred for
purposes for which amounts in any of the unrestricted fund balance classifications could be used.
However, the Town may apply unrestricted resources first before restricted resources when
necessary to ensure compliance with the State of Arizona’s Expenditure Limitation Law for Towns
and Cities.
The Town has established a fund balance policy which states that the combined General Fund
operating fund balance should be at least 20 percent of the average actual General Fund revenues
for the preceding five fiscal years.
The Town has established a stabilization fund (Rainy Day fund) in the Town’s fund balance policy.
The Rainy Day fund had a balance of $4,466,782, reported as a committed fund balance at
June 30, 2024. The Rainy Day fund may only be used for the following: 1) to replace the loss of
more than 20 percent of the Town’s local share of state shared revenues, 2) for any event that
threatens the health, safety or welfare of the Town’s citizens, 3) for any event that threatens the
fiscal stability of the Town, and lastly 4) to address any matter declared as an emergency by the
governor of the State of Arizona or the Mayor of the Town. All withdrawals from the Rainy Day
fund shall be subject to the following rules: 1) any appropriation shall require the approval by at
least 2/3 vote by the Town Council, and 2) the maximum amount of Rainy Day withdrawal in any
fiscal year shall not exceed one-half of the total balance in the fund. Replenishment of the Rainy
Day fund when spent by the Town should not exceed a period of more than five years, and should
be repaid in annual installments of not less than one percent of the previous fiscal year General
Fund balance. Repayments shall be appropriated as part of the annual budget adoption.
Page 57
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 2 – Fund Balance Classifications
The table below provides detail of the major components of the Town’s fund balance
classifications at year end.
General
Fund
Highway
User
Revenue
Fund
Grants
Fund
Capital
Projects
Fund
Non‐Major
Governmental
Funds Total
Fund Balances:
Nonspendable:
Inventory $ 5,099 $ $ $ $ $ 5,099
Prepaid items 33,080 13,500 1,460 48,040
Restricted:
Capital Projects 18,507 18,507
Debt Service 58,291 58,291
Public works 6,223,708 6,223,708
Local Court Enhancement 439,487 439,487
Opioid abatement 26,630 26,630
Development Fees 2,329,679 2,329,679
Committed:
Rainy Day 4,466,782 4,466,782
Assigned:
Capital Projects 14,152,865 14,152,865
Downtown Strategy 691,503 691,503
Economic Development 887,648 887,648
Tourism 37,527 37,527
Public Art 41,023 41,023
Environmental 363,045 363,045
Public works 3,335,921 80,902 3,416,823
Unassigned: 13,070,591 13,070,591
Total fund balances $ 17,575,552 $ 9,559,629 $ 121,032 $ 14,152,865 $ 4,868,170 $ 46,277,248
Note 3 – Cash and Investments
Custodial Credit Risk – Deposits. Custodial credit risk is the risk that in the event of bank failure
the Town’s deposits may not be returned to the Town. The Town does not have a deposit policy
for custodial credit risk. At year end, the carrying amount of the Town’s deposits was $1,785,969
and the bank balance was $3,109,891.
Page 58
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 3 – Cash and Investments
Fair Value Measurements. The Town 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
Valuation Techniques. Equity securities classified in Level 1 of the fair value hierarchy are valued
using prices quoted in active markets for those securities. Debt securities classified in Level 2 of
the fair value hierarchy are valued using matrix pricing techniques. Matrix pricing is used to value
securities based on the securities’ relationship to benchmark quoted prices.
The State Treasurer’s pools are external investment pools, the Local Government Investment Pool
(Pool 5) and Local Government Investment Pool‐Government (Pool 7), with no regulatory
oversight. The activity and performance of the pools are reviewed monthly by the State Board of
Investment. The fair value of each participant’s position in the State Treasurer investment pools
approximates the value of the participant’s shares in the pool and the participants’ shares are not
identified with specific investments. Participants in the pool are not required to categorize the
value of shares in accordance with the fair value hierarchy.
All investments in which the fair value hierarchy is applicable are measured at fair value on a
recurring basis. At year end, cash and investments as of June 30, 2024, are classified in the
accompanying financial statements as follows:
Carrying amount of investments $ 47,921,528
Carrying amount of cash deposits 1,785,969
Cash on hand 700
Total cash and investments $ 49,708,197
Page 59
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 3 – Cash and Investments
At year end, the Town’s investments consisted of the following:
Investment Maturities
(in Years)
Credit Rating
Investment Type Category Fair Value Less than 1 1‐5 S&P Moody’s
U.S. Government and Agency Notes Level 1 $ 9,227,193 $ 3,890,514 $ 5,336,679 n/a N/A, Aaa
Supra‐National Notes Level 1 321,506 143,378 178,128 AAA Aaa
Federal Agency Notes Level 1 249,506 249,506 AA+ Aaa
Corporate and Foreign Bonds Level 2 2,652,460 936,483 1,715,977 BBB+ to AA Baa1 to A1
Asset Backed Securities Level 2 565,489 565,489 N/A, AAA N/A, Aaa
Certificates of Deposit Level 2 472,663 472,663 n/a n/a
US Bank Money Market Funds Level 1 182,192 182,192 n/a n/a
$ 5,402,073 $ 8,268,936
State Treasurer’s Investment Pool 7 Not applicable 34,250,519 33 days average maturities
Total $ 47,921,528
Interest Rate Risk. Interest rate risk is the risk that changes in interest rates may reduce the
market value of Town investments. In accordance with its investment policy, the Town manages
its exposure to declines in fair values by the following:
Structuring the investment portfolio so that securities mature concurrent with the
anticipated cash requirements for ongoing operations, thereby avoiding, as much as
possible, the need to sell securities into an adverse market environment prior to maturity.
Investing funds primarily in shorter‐term securities or similar investment pools and
limiting the average maturity of the portfolio in accordance with the needs of the Town.
With respect to any firm or individual given responsibility for investments utilizing
external research and advice regarding the current interest rate outlook and global
economic condition to optimize portfolio duration strategy.
Credit Risk. Credit risk is the risk of default of debt by an issuer or counterparty to an investment.
The Town will limit credit risk by limiting investments in the Town’s portfolio to the asset classes
designated as acceptable in ARS §35‐323. When possible, analysis of the credit worthiness of all
individual debt issuers held in the portfolio should be conducted on an annual basis in an effort
to guard against investing in a weak or deteriorating credit situation. Additionally, the Town will
pre‐qualify financial institutions, brokers/dealers, and investment advisers with which the Town
will do business. The State Treasurer’s Local Government Investment Pool 7 was rated AAA by
Moody’s at year end.
Page 60
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 3 – Cash and Investments
Custodial Credit Risk – Investments. For an investment, custodial credit risk is the risk that, in the
event of the counterparty’s failure, the Town will not be able to recover the value of its
investments or collateral securities that are in an outside party’s possession. The Town does not
have an investment policy for custodial credit risk. The Town’s investment in the State Treasurer’s
investment pool represents a proportionate interest in the pool’s portfolio; however, the Town’s
portion is not identified with specific investments and is not subject to custodial credit risk.
Concentration of Credit Risk. Concentration of credit risk is the risk of loss from over concentration
of investments. In accordance with its investment policy, the Town diversifies its investment
portfolio to minimize the risk of loss resulting from over concentration of assets in a specific
maturity, specific issuer, or specific class of securities. With the exception of U.S. Treasury notes
and securities and authorized pools, the investment policy establishes a maximum percentage of
30 percent in insured or collateralized certificates of deposit; 20 percent in certificates of deposit
registry services; 30 percent in commercial paper; and 30 percent in bonds, debentures, or notes.
Investment Type Fair Value
Percent of Town
Investments
U.S. Government and Agency Notes $ 9,227,193 19.3%
Supra-National Notes 321,506 0.7%
Federal Agency Notes 249,506 0.5%
Corporate and Foreign Bonds 2,652,460 5.5%
Asset Backed Securities 565,489 1.2%
Certificates of Deposit 472,663 1.0%
US Bank Money Market Funds 182,192 0.4%
State Treasurer’s investment pool 7 34,250,519 71.4%
$ 47,921,528
Note 4 – Receivables
Intergovernmental receivables consist of sales taxes and shared revenues of $1,271,764
receivable from the State, opioid seƩlement agreement revenues of $390,988 receivable through
Maricopa County, and grant receivables of $16,350.
Leases receivable of $1,313,858 consist of revenues from four cell tower land use agreements.
Payments under these agreements of $140,492 were recognized as leases and rents revenues in
the current year.
Opioid seƩlement agreement revenues of $364,358 and lease revenues of $1,188,619 are not
scheduled to be collected in the subsequent year.
Page 61
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 5 – Capital Assets
A summary of capital asset activity at year end is as follows:
Governmental Activities
Beginning
Balance
Increase
Decrease
Ending
Balance
Capital assets, not being depreciated:
Land $ 29,690,368 $ $ $ 29,690,368
Artwork 2,608,900 10,000 2,598,900
Construction in progress 3,932,181 3,077,709 4,537,222 2,472,668
Total capital assets, not being depreciated 36,231,449 3,077,709 4,547,222 34,761,936
Capital assets, being depreciated:
Infrastructure 155,656,694 1,922,122 157,578,806
Buildings and building improvements 23,434,482 391,120 23,825,602
Improvements other than buildings 19,604,847 2,132,578 21,737,425
Vehicles, machinery and equipment 5,023,940 501,099 64,190 5,460,849
Total capital assets being depreciated 203,719,963 4,946,909 64,190 208,602,682
Less accumulated depreciation for:
Infrastructure (114,553,212) (1,681,192)(116,234,404)
Buildings and building improvements (7,964,931) (500,313)(8,465,244)
Improvements other than buildings (13,151,247) (703,592)(13,854,839)
Vehicles, machinery and equipment (2,443,559) (440,635) (64,190) (2,820,004)
Total accumulated depreciation (138,112,949) (3,325,732) (64,190) (141,374,491)
Total capital assets, being depreciated, net 65,607,014 1,621,177 67,228,191
Governmental activities capital assets, net $ 101,838,463 $ 4,698,886 $ 4,547,222 $ 101,990,127
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government $ 224,616
Development services 19,954
Public safety 337,301
Streets and highways 1,645,098
Culture and recreation 1,098,763
Total depreciation expense $ 3,325,732
Page 62
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 5 – Capital Assets
Construction Commitments – At June 30, 2024, the Town has the following active construction
commitments. The resources for these commitments have been accumulated in the Capital
Projects Fund.
Governmental Activities
Project
Spent‐to‐Date
Remaining
Commitment
Golden Eagle Impoundment Drainage $ 339,320 $ 97,975
Shea Blvd Widening ‐ Palisades to Technology 330,307 15,266
Town‐wide Guardrail Replacement 26,105 23,334
Total commitments $ 695,732 $ 136,575
Note 6 – Changes in Long‐Term Liabilities
Long‐term liability activity for the current fiscal year was as follows:
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Governmental activities:
Compensated absences payable $ 639,914 $ 794,382 $ 435,133 $ 999,163 $ 445,406
Governmental activity long‐term
Liabilities $ 639,914 $ 794,382 $ 435,133 $ 999,163 $ 445,406
Note 7 – Interfund Transfers
Interfund transfers for the year ended June 30, 2024 were as follows:
Interfund transfers:
Transfers out
Transfers in
General
Fund
Capital
Projects
Non‐Major
Governmental
Funds Total
General Fund $ $ $ 245,884 $ 245,884
Highway User Revenue Fund 4,200,000 4,200,000
Capital Projects Fund 6,907,884 6,907,884
Non‐Major Governmental Funds 500,000 94,253 594,253
Total $ 7,407,884 $ 4,200,000 $ 340,137 $ 11,948,021
Page 63
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 7 – Interfund Transfers
The General Fund transferred $6,907,884 to the Capital Projects Fund for future projects and
$500,000 to the Environmental Fund for continued storm drain and wash maintenance. The
Economic Development Fund transferred $94,253 to the Tourism Fund to provide funding for
operating costs of the tourism program. The Development Fee Fund transferred $245,884 to the
General Fund for fire department dispatch telecommunications equipment. The Capital Projects
Fund transferred $4,200,000 to Highway User Revenue Fund for additional pavement
maintenance projects.
Note 8 – Contingent Liabilities
Compliance – Amounts received or receivable from grantor agencies are subject to audit and
adjustment by grantor agencies, principally the state government. Any disallowed claims,
including amounts already collected, may constitute a liability of the applicable funds. The
amount, if any, of expenditures/expenses that may be disallowed by the grantor cannot be
determined at this time, although the Town expects such amounts, if any, to be immaterial.
Lawsuits – The Town is a party to a number of various types of lawsuits, many of which normally
occur in governmental operations. The ultimate outcome of the actions is not determinable;
however, Town management believes that the outcome of these proceedings, either individually
or in the aggregate, will not have a materially adverse effect on the accompanying financial
statements.
Note 9 – Risk Management
The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; and natural disasters. The Town’s insurance protection is
provided by the Arizona Municipal Risk Retention Pool (Pool). The Pool is made up of various
towns and cities within Arizona that operate a common risk management and insurance program.
The Pool is structured such that member premiums are based on an actuarial review that will
provide adequate reserves to allow the Pool to meet its expected financial obligations. The Pool
has the authority to assess its’ members additional premiums should reserves and annual
premiums be insufficient to meet the Pool’s obligations.
The Town joined the Arizona Municipal Workers’ Compensation Pool (Pool) together with other
governments in the state for risks of loss related to workers’ compensation claims. The Pool is a
public entity risk pool currently operating as a common risk management and insurance program
for towns and cities in the State. The Town is responsible for paying a premium, based on an
experience rating formula that allocates pool expenditures and liabilities among members.
Page 64
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 9 – Risk Management
The Town continues to carry commercial insurance for all other risks of loss, including employee
health, dental, and vision insurance. There were no settlements that exceeded insurance
coverage in any of the past three years.
Note 10 – Retirement Plans
Defined Contribution Pension Plan
All full‐time Town employees participate in a defined contribution pension plan administered by
MissionSquare Retirement. The Town Council established and may amend the pension plan’s
benefit terms, including contribution requirements. The Town and the employee are each
required to contribute 11 percent of the employee’s gross pay. For the year ended June 30, 2024,
the Town recognized pension expense of $682,701.
Employees are immediately vested in their own contributions and earnings on those
contributions and become vested in Town contributions and earnings on Town contributions on
a pro rata basis over five years. Nonvested Town contributions are forfeited upon termination of
employment. Such forfeitures are used to reduce the Town’s future contributions to the pension
plan. For the year ended June 30, 2024, forfeitures reduced the Town’s pension expense by
$53,305.
Note 11 – Restatements of Beginning Balances
Change within the Financial Reporting Entity – In fiscal year 2023‐24, Town management re‐
evaluated the presentation and classifications of funds on the financial statements. They
considered current use of funds, future use of funds, and reader understandibility. In doing so,
management made the decision to present the Public Art Fund as its own special revenue fund.
Its fund activity was previously reported in the General Fund. Furthermore, management made
the decision to present the Vehicle and Equipment Replacement Fund as an internal service fund.
Its fund activity was previously reported in the General Fund and Highway User Revenue Fund.
Page 65
Town of Fountain Hills, Arizona
Notes to Financial Statements
June 30, 2024
Note 11 – Restatements of Beginning Balances
The effect of the matters noted above resulted in adjustments to and restatements of beginning
fund balance and fund net position, as follows:
June 30, 2023,
As Previously
Reported
Change within
the Financial
Reporting Entity
June 30, 2023,
As Restated
Governmental Funds
Major Funds:
General Fund 17,385,544$ (1,703,768)$ 15,681,776$
Highway User Revenue Fund 7,333,267 (410,409) 6,922,858
Nonmajor Fund
Public Art Fund 64,584 64,584
Proprietary Funds
Internal Service Funds
Vehicle and Equipment
Replacement Fund 2,049,593 2,049,593
Page 66
Required Supplementary Information
Page 67
Original Final Actual
Variance with
Final Budget
Revenues
Sales taxes 13,154,799$ 13,154,799$ 16,834,517$ 3,679,718$
Franchise taxes 390,000 390,000 351,118 (38,882)
Licenses and permits 770,208 770,208 1,411,600 641,392
Leases and rents 277,278 277,278 359,479 82,201
Intergovernmental 10,387,730 10,387,730 10,349,568 (38,162)
Charges for services 244,215 244,215 242,182 (2,033)
Other revenue 141,575 141,575 270,109 128,534
Fines and forfeitures 200,000 200,000 227,192 27,192
Investment earnings 20,000 20,000 728,524 708,524
Total revenues 25,585,805 25,585,805 30,774,289 5,188,484
Expenditures
Current:
General government
Mayor and council 65,494 75,494 68,215 7,279
Administration 2,948,360 2,948,360 2,741,118 207,242
Non departmental 3,238,088 730,588 640,311 90,277
Municipal court 495,409 495,409 492,925 2,484
Total general government 6,747,351 4,249,851 3,942,569 307,282
Development services 1,318,663 1,318,663 1,275,320 43,343
Public safety
Fire and emergency 5,589,825 5,402,252 5,104,358 297,894
Law enforcement 6,388,595 6,388,595 6,225,786 162,809
Total public safety 11,978,420 11,790,847 11,330,144 460,703
Public works 1,642,802 1,692,802 1,554,076 138,726
Culture and recreation 3,882,569 3,882,569 3,426,968 455,601
Capital outlay 16,000 66,000 189,436 (123,436)
Total expenditures 25,585,805 23,000,732 21,718,513 1,282,219
Excess (deficiency) of revenues over expenditures 2,585,073 9,055,776 3,906,265
Other financing sources (uses)
Transfers in 245,884 245,884
Transfers out (1,000,000) (1,000,000) (7,407,884) (6,407,884)
Total other financing sources (uses)(1,000,000) (1,000,000) (7,162,000) (6,162,000)
Changes in fund balances (1,000,000) 1,585,073 1,893,776 (2,255,735)
Fund balances, beginning of year, previously reported 17,385,544 17,385,544 17,385,544
Adjustments to beginning fund balances (1,703,768) (1,703,768) (1,703,768)
Fund balances, beginning of year, as restated 15,681,776 15,681,776 15,681,776
Fund balances, end of year 14,681,776$ 17,266,849$ 17,575,552$ (2,255,735)$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
General
For the Year Ended June 30, 2024
Budget
See accompanying notes to this schedule.Page 68
Original Final Actual
Variance with
Final Budget
Revenues
Sales taxes 1,064,618$ 1,064,618$ 1,417,926$ 353,308$
Intergovernmental 2,703,580 2,703,580 2,720,831 17,251
Charges for services 100,000 100,000 120 (99,880)
Other revenue 31,000 31,000 47,261 16,261
Investment earnings 10,000 10,000 558,549 548,549
Total revenues 3,909,198 3,909,198 4,744,687 835,489
Expenditures
Current ‐
Public works 7,048,280 6,998,280 6,192,221 806,059
Capital outlay 50,000 115,695 (65,695)
Total expenditures 7,048,280 7,048,280 6,307,916 740,364
Excess (deficiency) of revenues over expenditures (3,139,082) (3,139,082) (1,563,229) 1,575,853
Other financing sources (uses)
Transfers in 4,200,000 4,200,000 4,200,000
Total other financing sources (uses)4,200,000 4,200,000 4,200,000
Changes in fund balances 1,060,918 1,060,918 2,636,771 1,575,853
Fund balances, beginning of year, previously reported 7,333,267 7,333,267 7,333,267
Adjustments to beginning fund balances (410,409) (410,409) (410,409)
Fund balances, beginning of year, as restated 6,922,858 6,922,858 6,922,858
Fund balances, end of year 7,983,776$ 7,983,776$ 9,559,629$ 1,575,853$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Highway User Revenue
For the Year Ended June 30, 2024
Budget
See accompanying notes to this schedule.Page 69
Original Final Actual
Variance with
Final Budget
Revenues
Intergovernmental 1,190,000$ 1,190,000$ 267,283$ (922,717)$
Investment earnings 15,288 15,288
Total revenues 1,190,000 1,190,000 282,571 (907,429)
Expenditures
Current ‐
General government 1,190,000 650,208 265,136 385,072
Capital outlay 511,000 11,000 500,000
Total expenditures 1,190,000 1,161,208 276,136 885,072
Excess (deficiency) of revenues over expenditures 28,792 6,435 (22,357)
Changes in fund balances 28,792 6,435 (22,357)
Fund balances, beginning of year 114,597 114,597 114,597
Fund balances, end of year 114,597$ 143,389$ 121,032$ (22,357)$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Grants
For the Year Ended June 30, 2024
Budget
See accompanying notes to this schedule.Page 70
Town of Fountain Hills, Arizona
Note to Required Supplementary Information
June 30, 2024
Note 1 – Budgetary Basis of Accounting
The Town budget is prepared on a basis consistent with accounting principles generally accepted
in the United States of America. The Town Council follows these procedures in establishing the
budgetary data reflected in the financial statements:
1. In accordance with Arizona Revised Statutes, the Town Manager submits a proposed budget
for the fiscal year commencing the following July 1 to the Town Council. The operating budget
includes proposed expenditures and the means of financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comment.
3. Prior to the third Monday in August, the budget for the Town is legally enacted through
passage of a resolution. To ensure compliance with the expenditure limitation, a uniform
expenditure report must be filed with the State each year. This report, issued under a
separate cover, reconciles total Town expenditures from the audited basic financial
statements to total expenditures for reporting in accordance with the State’s uniform
expenditure reporting system (A.R.S 41‐1279.07).
4. Expenditures may not legally exceed the expenditure limitation described below for all fund
types as a whole. For management purposes, the Town adopts a budget by department for
the General Fund and in total by fund for other funds. The Town Manager, subject to Town
Council approval, may at any time transfer any unencumbered appropriation balance or
portion thereof between departments. The adopted budget cannot be amended in any way
without Town Council approval.
5. Formal budgetary integration is employed as a management control device during the year
for all governmental funds on essentially the same modified accrual basis of accounting used
to record actual revenues and expenditures.
The Town is subject to the State of Arizona’s Expenditure Limitation Law for Towns and Cities.
This law limits the amount of local revenues (as defined in the State Constitution, Article IX,
Section 20) the Town may spend each year. The state adjusts the limitation each year for changes
in population and inflation. The limitation is applied to the total expenditures of local revenues
of all funds. The law does not limit the Town’s expenditures of revenues excluded from the State
Constitution’s definition of local revenue. The Town complied with the law during the year.
Page 71
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Page 72
Combining and Individual
Fund Financial Statements and Schedules
Page 73
(This page intentionally left blank)
Page 74
Governmental Funds
Page 75
(This page intentionally left blank)
Page 76
Non‐Major Governmental Funds
Special Revenue Funds
Downtown Strategy Fund – accounts for the portion of Town sales tax for the development of the
downtown area.
Economic Development Fund – accounts for the portion of Town sales tax for economic development
and tourism.
Tourism Fund – accounts for the portion of Town sales tax and grants received for tourism activities.
Public Art Fund – accounts for developer in‐lieu contributions for maintenance of art and for the
installation of art throughout the community.
Local Court Enhancement Fund – accounts for a local court surcharge for court enhancement.
Environmental Fund – accounts for all monies received from collection of the environmental fee.
Cottonwoods Maintenance Fund – accounts for all monies received to pay for maintenance of the
Cottonwoods Maintenance District.
Debt Service Funds
General Obligation Debt Service Fund – accounts for the Town’s property tax revenues received to
pay the debt service of the Town’s general obligation bonds.
Eagle Mountain Debt Service Fund – accounts for the property tax revenues restricted to pay the
debt service of the Eagle Mountain Community Facilities District.
Municipal Property Corporation Debt Service Fund – accounts for the revenues received to pay the
debt service on MPC revenue bonds.
Capital Projects Fund
Development Fees Fund – accounts for restricted development fees collected from building permits.
Page 77
Downtown
Strategy
Economic
Development Tourism Public Art
Local Court
Enhancement
Assets
Cash and investments 687,956$ 872,256$ 42,969$ 41,023$ 438,933$
Intergovernmental receivable 6,377 25,507 554
Interest receivable 1,713
Prepaid items 675 785
Total assets 696,046 898,438 43,754 41,023 439,487
Liabilities
Accounts payable 4,543 4,009 5,442
Accrued wages and benefits 6,106
Total liabilities 4,543 10,115 5,442
Fund balances
Nonspendable 675 785
Restricted 439,487
Assigned 691,503 887,648 37,527 41,023
Total fund balances 691,503 888,323 38,312 41,023 439,487
Total liabilities, deferred inflows of resources
and fund balances 696,046$ 898,438$ 43,754$ 41,023$ 439,487$
Special Revenue Funds
Town of Fountain Hills, Arizona
Combining Balance Sheet
Non‐Major Governmental Funds
June 30, 2024
Page 78
Capital Projects
Fund
Environmental
Cottonwoods
Maintenance
General
Obligation Debt
Service
Eagle Mountain
Debt Service
Municipal
Property
Corporation Debt
Service
Development
Fees
Total Non‐Major
Governmental
Funds
548,588$ 19,755$ 163,809$ 20,208$ 12,045$ 2,329,679$ 5,177,221$
32,438
1,713
1,460
548,588 19,755 163,809 20,208 12,045 2,329,679 5,212,832
185,543 1,248 137,573 198 338,556
6,106
185,543 1,248 137,573 198 344,662
1,460
18,507 26,236 20,010 12,045 2,329,679 2,845,964
363,045 2,020,746
363,045 18,507 26,236 20,010 12,045 2,329,679 4,868,170
548,588$ 19,755$ 163,809$ 20,208$ 12,045$ 2,329,679$ 5,212,832$
Debt Service FundsSpecial Revenue Funds
Page 79
Downtown
Strategy
Economic
Development Tourism Public Art
Local Court
Enhancement
Revenues
Property taxes $ $ $ $ $
Sales taxes 141,793 567,170
Licenses and permits
Intergovernmental 119,793
Charges for services 5,000
Other revenue 2,534 1,108
Fines and forfeitures 28,651
Investment earnings 33,698 38,133 6,626 2,903 158
Total revenues 175,491 607,837 127,527 7,903 28,809
Expenditures
Current:
General government 109,910 218,203 317,680 5,000
Public works
Culture and recreation 31,464
Capital outlay
Debt service:
Fiscal charges
Total expenditures 109,910 218,203 317,680 31,464 5,000
Excess (deficiency) of revenues over expenditures 65,581 389,634 (190,153) (23,561) 23,809
Other financing sources (uses)
Transfers in 94,253
Transfers out (94,253)
Total other financing sources (uses) (94,253) 94,253
Changes in fund balances 65,581 295,381 (95,900) (23,561) 23,809
Fund balances, beginning of year, previously reported 625,922 592,942 134,212 415,678
Adjustments to beginning fund balances 64,584
Fund balances, beginning of year, as restated 625,922 592,942 134,212 64,584 415,678
Fund balances, end of year 691,503$ 888,323$ 38,312$ 41,023$ 439,487$
Special Revenue Funds
Town of Fountain Hills, Arizona
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Non‐Major Governmental Funds
For the Year Ended June 30, 2024
Page 80
Capital Projects
Fund
Environmental
Cottonwoods
Maintenance
General
Obligation Debt
Service
Eagle Mountain
Debt Service
Municipal
Property
Corporation
Development
Fees
Total Non‐Major
Governmental
Funds
$ 9,815$ 26$ $ $ $ 9,841$
708,963
1,692 323,749 325,441
119,793
5,000
3,642
28,651
30,492 915 8,509 1,062 628 121,690 244,814
32,184 10,730 8,535 1,062 628 445,439 1,446,145
137,573 788,366
426,358 7,561 433,919
31,464
137,399 137,399
198 10 208
563,757 7,561 137,573 198 10 1,391,356
(531,573) 3,169 (129,038) 864 618 445,439 54,789
500,000 594,253
(245,884) (340,137)
500,000 (245,884) 254,116
(31,573) 3,169 (129,038) 864 618 199,555 308,905
394,618 15,338 155,274 19,146 11,427 2,130,124 4,494,681
64,584
394,618 15,338 155,274 19,146 11,427 2,130,124 4,559,265
363,045$ 18,507$ 26,236$ 20,010$ 12,045$ 2,329,679$ 4,868,170$
Debt Service FundsSpecial Revenue Funds
Page 81
Original Final Actual
Variance with
Final Budget
Revenues
Sales taxes 106,462$ 106,462$ 141,793$ 35,331$
Investment earnings 600 600 33,698 33,098
Total revenues 107,062 107,062 175,491 68,429
Expenditures
Current ‐
General government 85,200 135,200 109,910 25,290
Total expenditures 85,200 135,200 109,910 25,290
Excess (deficiency) of revenues over expenditures 21,862 (28,138) 65,581 93,719
Other financing sources (uses)
Transfers out (35,000) (35,000) 35,000
Total other financing sources (uses)(35,000) (35,000) 35,000
Changes in fund balances (13,138) (63,138) 65,581 128,719
Fund balances, beginning of year 625,922 625,922 625,922
Fund balances, end of year 612,784$ 562,784$ 691,503$ 128,719$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Downtown Strategy
For the Year Ended June 30, 2024
Budget
Page 82
Original and Final Actual
Variance with
Final Budget
Revenues
Sales taxes 425,847$ 567,170$ 141,323$
Other 2,534 2,534
Investment earnings 240 38,133 37,893
Total revenues 426,087 607,837 181,750
Expenditures
Current ‐
General government 229,630 218,203 11,427
Total expenditures 229,630 218,203 11,427
Excess (deficiency) of revenues over expenditures 196,457 389,634 193,177
Other financing sources (uses)
Transfers out (94,253) (94,253)
Total other financing sources (uses)(94,253) (94,253)
Changes in fund balances 102,204 295,381 193,177
Fund balances, beginning of year 592,942 592,942
Fund balances, end of year 695,146$ 888,323$ 193,177$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Economic Development
For the Year Ended June 30, 2024
Budget
Page 83
Original Final Actual
Variance with
Final Budget
Revenues
Intergovernmental 65,000$ 65,000$ 119,793$ 54,793$
Other 1,108 1,108
Investment earnings 180 180 6,626 6,446
Total revenues 65,180 65,180 127,527 62,347
Expenditures
Current ‐
General government 354,029 382,821 317,680 65,141
Total expenditures 354,029 382,821 317,680 65,141
Excess (deficiency) of revenues over expenditures (288,849) (317,641) (190,153) 127,488
Other financing sources (uses)
Transfers in 94,253 94,253 94,253
Total other financing sources (uses)94,253 94,253 94,253
Changes in fund balances (194,596) (223,388) (95,900) 127,488
Fund balances, beginning of year 134,212 134,212 134,212
Fund balances, end of year (60,384)$ (89,176)$ 38,312$ 127,488$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Tourism
For the Year Ended June 30, 2024
Budget
Page 84
Original and Final Actual
Variance with
Final Budget
Revenues
Charges for services 100,000$ 5,000$ (95,000)$
Investment earnings 240 2,903 2,663
Total revenues 100,240 7,903 (92,337)
Expenditures
Current ‐
Culture and recreation 41,761 31,464 10,297
Total expenditures 41,761 31,464 10,297
Excess (deficiency) of revenues over expenditures 58,479 (23,561) (82,040)
Changes in fund balances 58,479 (23,561) (82,040)
Fund balances, beginning of year, previously reported
Adjustments to beginning fund balances 64,584 64,584
Fund balances, beginning of year, as restated 64,584 64,584
Fund balances, end of year 123,063$ 41,023$ (82,040)$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Public Art
For the Year Ended June 30, 2024
Budget
Page 85
Original and Final Actual
Variance with
Final Budget
Revenues
Fines and forfeitures 33,000$ 28,651$ (4,349)$
Investment earnings 300 158 (142)
Total revenues 33,300 28,809 (4,491)
Expenditures
Current ‐
General government 54,600 5,000 49,600
Total expenditures 54,600 5,000 49,600
Excess (deficiency) of revenues over expenditures (21,300) 23,809 45,109
Changes in fund balances (21,300) 23,809 45,109
Fund balances, beginning of year 415,678 415,678
Fund balances, end of year 394,378$ 439,487$ 45,109$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Local Court Enhancement
For the Year Ended June 30, 2024
Budget
Page 86
Original and Final Actual
Variance with
Final Budget
Revenues
Licenses and permits $ 1,692$ 1,692$
Investment earnings 2,400 30,492 28,092
Total revenues 2,400 32,184 29,784
Expenditures
Current ‐
Public works 627,024 426,358 200,666
Capital outlay 137,399 (137,399)
Total expenditures 627,024 563,757 63,267
Excess (deficiency) of revenues over expenditures (624,624) (531,573) 93,051
Other financing sources (uses)
Transfers in 500,000 500,000
Total other financing sources (uses)500,000 500,000
Changes in fund balances (124,624) (31,573) 93,051
Fund balances, beginning of year 394,618 394,618
Fund balances, end of year 269,994$ 363,045$ 93,051$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Environmental
For the Year Ended June 30, 2024
Budget
Page 87
Original and Final Actual
Variance with
Final Budget
Revenues
Property taxes 9,768$ 9,815$ 47$
Investment earnings 72 915 843
Total revenues 9,840 10,730 890
Expenditures
Current ‐
Public works 13,488 7,561 5,927
Total expenditures 13,488 7,561 5,927
Excess (deficiency) of revenues over expenditures (3,648) 3,169 6,817
Changes in fund balances (3,648) 3,169 6,817
Fund balances, beginning of year 15,338 15,338
Fund balances, end of year 11,690$ 18,507$ 6,817$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Cottonwoods Maintenance
For the Year Ended June 30, 2024
Budget
Page 88
Original Final Actual
Variance with
Final Budget
Revenues
Property taxes $ $ 26$ 26$
Investment earnings 600 600 8,509 7,909
Total revenues 600 600 8,535 7,935
Expenditures
Current ‐
General government 350 137,923 137,573 350
Total expenditures 350 137,923 137,573 350
Excess (deficiency) of revenues over expenditures 250 (137,323) (129,038) 8,285
Changes in fund balances 250 (137,323) (129,038) 8,285
Fund balances, beginning of year 155,274 155,274 155,274
Fund balances, end of year 155,524$ 17,951$ 26,236$ 8,285$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
General Obligation Debt Service
For the Year Ended June 30, 2024
Budget
Page 89
Original and Final Actual
Variance with
Final Budget
Revenues
Investment earnings 100$ 1,062$ 962$
Total revenues 100 1,062 962
Expenditures
Debt service ‐
Fiscal charges 18,900 198 18,702
Total expenditures 18,900 198 18,702
Excess (deficiency) of revenues over expenditures (18,800) 864 19,664
Changes in fund balances (18,800) 864 19,664
Fund balances, beginning of year 19,146 19,146
Fund balances, end of year 346$ 20,010$ 19,664$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Eagle Mountain Debt Service
For the Year Ended June 30, 2024
Budget
Page 90
Original and Final Actual
Variance with
Final Budget
Revenues
Investment earnings 300$ 628$ 328$
Total revenues 300 628 328
Expenditures
Debt service ‐
Fiscal charges 510 10 500
Total expenditures 510 10 500
Excess (deficiency) of revenues over expenditures (210) 618 828
Changes in fund balances (210) 618 828
Fund balances, beginning of year 11,427 11,427
Fund balances, end of year 11,217$ 12,045$ 828$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Municipal Property Corporation Debt Service
For the Year Ended June 30, 2024
Budget
Page 91
Original Final Actual
Variance with
Final Budget
Revenues
Sales taxes 685,240$ 685,240$ 1,598,522$ 913,282$
Intergovernmental 3,768,079 3,768,079 376,783 (3,391,296)
Other 12,000 12,000
Investment earnings 11,000 11,000 671,774 660,774
Total revenues 4,464,319 4,464,319 2,659,079 (1,805,240)
Expenditures
Current ‐
General government 289,600 239,600 506 239,094
Public works 550,000 550,000 594,473 (44,473)
Culture and recreation 25,158 (25,158)
Capital outlay 6,628,931 9,076,431 3,070,047 6,006,384
Total expenditures 7,468,531 9,866,031 3,690,184 6,175,847
Excess (deficiency) of revenues over expenditures (3,004,212) (5,401,712) (1,031,105) 4,370,607
Other financing sources (uses)
Transfers in 535,000 535,000 6,907,884 6,372,884
Transfers out (4,200,000) (4,200,000) (4,200,000)
Total other financing sources (uses)(3,665,000) (3,665,000) 2,707,884 6,372,884
Changes in fund balances (6,669,212) (9,066,712) 1,676,779 10,743,491
Fund balances, beginning of year 12,476,086 12,476,086 12,476,086
Fund balances, end of year 5,806,874$ 3,409,374$ 14,152,865$ 10,743,491$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Capital Projects
For the Year Ended June 30, 2024
Budget
Page 92
Original and Final Actual
Variance with
Final Budget
Revenues
Licenses and permits 379,550$ 323,749$ (55,801)$
Investment earnings 3,000 121,690 118,690
Total revenues 382,550 445,439 62,889
Excess (deficiency) of revenues over expenditures 382,550 445,439 62,889
Other financing sources (uses)
Transfers out (245,884) (245,884)
Total other financing sources (uses) (245,884) (245,884)
Changes in fund balances 382,550 199,555 (182,995)
Fund balances, beginning of year 2,130,124 2,130,124
Fund balances, end of year 2,512,674$ 2,329,679$ (182,995)$
Town of Fountain Hills, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual
Development Fees
For the Year Ended June 30, 2024
Budget
Page 93
(This page intentionally left blank)
Page 94
Internal Service Funds
Technology Replacement Fund – accounts for the operation of technology replacement services to
other Town departments on a cost reimbursement basis.
Vehicle and Equipment Replacement Fund – accounts for the operation of vehicle and equipment
replacement costs to other Town departments on a cost reimbursement basis.
Page 95
Technology
Replacement
Vehicle and
Equipment
Replacement
Total Internal
Service Funds
Assets
Current assets:
Cash and investments 190,409$ 2,452,594$ 2,643,003$
Total current assets 190,409 2,452,594 2,643,003
Noncurrent assets:
Capital assets, net of accumulated depreciation 85,453 85,453
Total noncurrent assets 85,453 85,453
Total assets 190,409 2,538,047 2,728,456
Liabilities
Current liabilities:
Accounts payable 4,469 4,469
Other liabilities 106 106
Total current liabilities 4,575 4,575
Net position
Net investment in capital assets 85,453 85,453
Unrestricted 185,834 2,452,594 2,638,428
Total net position 185,834$ 2,538,047$ 2,723,881$
Town of Fountain Hills, Arizona
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
Page 96
Technology
Replacement
Vehicle and
Equipment
Replacement
Total Internal
Service Funds
Operating revenues
Charges for services 62,000$ 357,994$ 419,994$
Total operating revenues 62,000 357,994 419,994
Operating expenses
Cost of services 45,000 45,000
Depreciation 7,769 7,769
Total operating expenses 45,000 7,769 52,769
Operating income (loss)17,000 350,225 367,225
Nonoperating revenues (expenses)
Investment earnings 8,653 117,504 126,157
Gain on sale of capital assets 20,725 20,725
Total nonoperating revenue (expenses)8,653 138,229 146,882
Changes in net position 25,653 488,454 514,107
Net position, beginning of year, previously reported 160,181 160,181
Adjustments to beginning net position 2,049,593 2,049,593
Net position, beginning of year, as restated 160,181 2,049,593 2,209,774
Net position, end of year 185,834$ 2,538,047$ 2,723,881$
Town of Fountain Hills, Arizona
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Internal Service Funds
For the Year Ended June 30, 2024
Page 97
Technology
Replacement
Vehicle and
Equipment
Replacement
Total Internal
Service Funds
Increase/Decrease in Cash and Cash Equivalents
Cash flows from operating activities
Cash received from charges for services $ 62,000 $ 357,994 $ 419,994
Cash payments to suppliers for goods and services (40,425) (40,425)
Net cash provided by/used for operating activities 21,575 357,994 379,569
Cash flows from capital activities
Purchase of property and equipment (93,222) (93,222)
Proceeds from sale of capital assets 31,173 31,173
Net cash provided by/used for capital activities (62,049) (62,049)
Cash flows from investing activities
Investment income 8,653 117,504 126,157
Net cash provided by/used for investing activities 8,653 117,504 126,157
Net increase/decrease in cash and cash equivalents 30,228 413,449 443,677
Cash and cash equivalents, beginning of year, as restated 160,181 2,039,145 2,199,326
Cash and cash equivalents, end of year $ 190,409 $ 2,452,594 $ 2,643,003
Reconciliation of Operating Income/Loss to Net Cash Provided by/Used for Operating Activities
Operating income/loss $ 17,000 $ 350,225 $ 367,225
Adjustments to reconcile operating income/loss
to net cash provided by/used for operating activities:
Depreciation 7,769 7,769
Changes in assets and liabilities:
Increase/decrease in accounts payable 4,469 4,469
Increase/decrease in other liabilities 106 106
Total adjustments 4,575 7,769 12,344
Net cash provided by/used for operating activities $ 21,575 $ 357,994 $ 379,569
Town of Fountain Hills, Arizona
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2024
The notes to the basic financial statements are an integral part of this statement.Page 98
Statistical Section
The statistical section presents financial statement trends as well as detailed financial and operational
information not available elsewhere in the report. The statistical section is intended to enhance the
reader’s understanding of the information presented in the financial statements, notes to the
financial statements, and other supplementary information presented in this report. The statistical
section is comprised of the five categories of statistical information presented below.
Financial Trends
These schedules contain information on financial trends to help the reader understand how the
Town’s financial position and financial activities have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the Town’s
ability to generate revenue.
Debt Capacity
These schedules present information to help the reader evaluate the Town’s current levels of
outstanding debt as well as assess the Town’s ability to make debt payments and/or issue
additional debt in the future.
Demographic and Economic Information
These schedules present various demographic and economic indicators to help the reader
understand the environment in which the Town’s financial activities take place and to help
make comparisons with other cities.
Operating Information
These schedules contain information about the Town’s operations and various resources to
help the reader draw conclusions as to how the Town’s financial information relates to the
services provided by the Town.
Page 99
2015 2016 2017 2018
Governmental activities:
Net investment in capital assets 95,325,824$ 95,647,990$ 94,909,703$ 96,777,854$
Restricted 6,310,810 4,530,239 4,471,661 4,589,526
Unrestricted 15,180,582 17,232,506 17,578,068 16,244,169
Total governmental activities net position 116,817,216$ 117,410,735$ 116,959,432$ 117,611,549$
Source: The source of this information is the Town's financial records.
Fiscal Year ended June 30
Town of Fountain Hills, Arizona
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Page 100
2019 2020 2021 2022 2023 2024
104,781,328$ 104,004,331$ 103,822,185$ 102,346,737$ 101,838,463$ 101,990,127$
3,646,449 2,766,041 2,610,178 5,749,726 9,646,597 9,474,160
15,258,797 17,388,168 21,318,351 26,010,477 31,955,871 38,868,492
123,686,574$ 124,158,540$ 127,750,714$ 134,106,940$ 143,440,931$ 150,332,779$
Fiscal Year ended June 30
Page 101
2015 2016 2017 2018
Expenses
Governmental activities:
General government 2,479,365$ 2,516,966$ 3,142,722$ 3,431,752$
Development services 2,074,611 2,253,208 1,364,378 1,460,967
Public safety 6,816,152 7,178,890 7,563,898 7,567,012
Public works 4,963,979 6,476,688 7,904,577 7,380,663
Culture and recreation 2,822,954 3,124,523 3,375,414 3,311,648
Interest on long‐term debt 698,542 241,694 178,749 118,552
Total governmental activities expenses 19,855,603 21,791,969 23,529,738 23,270,594
Program Revenues
Governmental activities:
Fines, fees and charges for services:
General government 337,655 298,737 837,163 295,716
Development services 693,670 1,257,492 1,062,094 1,314,915
Public safety 86,641 90,345 155,454 155,973
Public works 236,706 48,688 216,724 52,465
Culture and recreation 339,158 321,189 393,028 497,914
Operating grants and contributions 1,431,017 1,615,973 1,699,931 1,737,958
Capital grants and contributions 2,874,796 381,011 494,328 304,951
Total governmental activities program revenues 5,999,643 4,013,435 4,858,722 4,359,892
Net (Expenses)/Revenues (13,855,960) (17,778,534) (18,671,016) (18,910,702)
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes:
Property taxes 904,660 2,569,504 2,296,199 2,263,623
Sales taxes 8,983,049 9,395,667 9,415,151 10,311,577
Franchise taxes 352,673 360,320 367,119 421,682
State shared revenues 5,713,235 5,813,678 6,057,278 6,396,667
Investment earnings 150,358 219,058 55,127 158,860
Miscellaneous 188,251 13,826 28,839 10,410
Special item ‐ Donation of capital assets ‐ ‐ ‐ ‐
Total governmental activities 16,292,226 18,372,053 18,219,713 19,562,819
Changes in Net Position
Governmental activities 2,436,266$ 593,519$ (451,303)$ 652,117$
Source: The source of this information is the Town's financial records.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Page 102
2019 2020 2021 2022 2023 2024
3,318,477$ 3,470,936$ 6,687,041$ 4,333,863$ 4,890,912$ 5,106,646$
867,725 825,884 968,808 1,068,260 1,206,991 1,324,892
8,142,069 9,003,452 6,321,489 9,487,150 9,930,356 11,746,913
10,263,244 9,961,306 10,175,540 9,780,920 10,792,078 10,455,071
3,767,996 3,490,447 3,601,870 3,999,178 4,776,903 4,676,396
57,054 881 7,544 ‐ ‐ ‐
26,416,565 26,752,906 27,762,292 28,669,371 31,597,240 33,309,918
280,312 533,189 310,411 498,242 516,373 548,921
1,143,871 608,892 693,161 947,431 762,929 694,650
90,774 100,444 104,726 89,140 136,082 108,633
10,214 131,750 355,619 654,434 359,972 736,967
1,151,500 409,651 435,432 641,269 640,365 628,560
1,850,676 2,007,841 4,733,757 6,381,580 6,729,883 2,383,786
181,939 91,245 135,525 161,751 259,266 520,867
4,709,286 3,883,012 6,768,631 9,373,847 9,404,870 5,622,384
(21,707,279) (22,869,894) (20,993,661) (19,295,524) (22,192,370) (27,687,534)
2,476,546 2,077,368 402,481 9,728 9,854 ‐
11,491,123 13,172,390 15,657,292 17,660,758 20,586,294 20,559,928
423,947 434,896 426,260 399,007 382,948 351,118
6,514,470 6,874,771 7,787,184 7,721,123 9,221,691 11,131,601
554,549 545,983 49,665 (419,006) 1,099,525 2,345,106
202,969 236,452 262,953 280,140 226,049 191,629
6,118,700 ‐ ‐ ‐ ‐ ‐
27,782,304 23,341,860 24,585,835 25,651,750 31,526,361 34,579,382
6,075,025$ 471,966$ 3,592,174$ 6,356,226$ 9,333,991$ 6,891,848$
Fiscal Year Ended June 30
Page 103
2015 2016 2017 2018
General fund
Nonspendable
Inventory 6,975$ 9,272$ 5,872$ 13,490$
Prepaid items 10,655 4,123 16,868 21,945
Committed 2,634,923 2,652,357 2,714,135 2,893,850
Assigned 1,872,492 1,701,086 1,743,768 2,101,574
Unassigned 4,369,457 5,853,806 2,696,999 2,140,434
Total general fund 8,894,502$ 10,220,644$ 7,177,642$ 7,171,293$
All other governmental funds
Nonspendable
Cash with escrow agent 1,645,000$ ‐$ ‐$ ‐$
Prepaid items 656 5,055 474 ‐
Restricted 10,066,786 4,500,044 4,432,710 4,571,263
Committed 1,079,780 1,366,081 8,576,250 7,248,890
Assigned 5,444,124 5,943,364 1,784,761 2,340,683
Unassigned ‐ ‐ ‐ ‐
Total all other governmental funds 18,236,346$ 11,814,544$ 14,794,195$ 14,160,836$
Source: The source of this information is the Town's financial records.
Fiscal Year ended June 30
Town of Fountain Hills, Arizona
Fund Balances — Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 104
2019 2020 2021 2022 2023 2024
5,168$ 8,982$ 7,117$ 14,845$ 12,923$ 5,099$
17,311 2,418 20,170 36,464 44,542 33,080
3,027,804 3,249,354 3,387,433 3,664,240 4,044,890 4,466,782
2,380,653 622,641 1,085,667 1,278,191 1,639,184 ‐
1,863,722 5,535,499 10,958,643 9,466,833 11,644,005 13,070,591
7,294,658$ 9,418,894$ 15,459,030$ 14,460,573$ 17,385,544$ 17,575,552$
‐$ ‐$ ‐$ ‐$ ‐$ ‐$
‐ ‐ ‐ 4,253 2,326 14,960
3,579,891 2,708,883 2,541,894 5,701,067 9,368,764 9,096,302
5,868,386 6,068,810 4,430,491 5,511,281 7,458,457 ‐
2,592,343 2,402,244 1,845,901 6,541,572 7,589,084 19,590,434
‐ (66,361) ‐ ‐ ‐ ‐
12,040,620$ 11,113,576$ 8,818,286$ 17,758,173$ 24,418,631$ 28,701,696$
Fiscal Year ended June 30
Page 105
2015 2016 2017 2018
Revenues
Taxes 10,240,382$ 12,299,285$ 12,069,714$ 13,019,341$
Licenses and permits 1,043,382 1,372,045 1,310,973 2,004,386
Leases and rents 269,753 258,165 284,090 282,531
Intergovernmental 9,770,048 7,559,436 7,917,651 8,266,028
Charges for services 176,541 197,109 351,476 254,122
Other 188,251 147,662 153,438 207,697
Fines and forfeitures 186,456 209,380 257,727 182,997
Investment earnings 150,358 219,058 55,127 158,860
Total revenues 22,025,171 22,262,140 22,400,196 24,375,962
Expenditures
Current:
General government 2,275,124 2,324,026 2,713,548 3,195,936
Development services 2,073,990 2,217,814 1,275,147 1,397,249
Public safety 6,675,874 7,034,887 7,420,032 7,402,227
Public works 1,275,779 2,498,714 3,954,450 3,420,317
Culture and recreation 1,962,585 2,240,865 2,484,940 2,375,758
Capital outlay 8,799,068 6,471,382 1,693,265 4,317,214
Debt service:
Principal 1,850,000 4,260,000 2,675,000 2,720,000
Interest 454,957 308,106 244,986 185,164
Other debt service 243,585 2,005 2,180 1,805
Total expenditures 25,610,962 27,357,799 22,463,548 25,015,670
Excess (deficiency) of revenues
over (under) expenditures (3,585,791) (5,095,659) (63,352) (639,708)
Other Financing Sources (Uses)
Transfers in 2,519,774 562,044 5,194,138 4,543,728
Transfers out (2,519,774) (562,044) (5,194,138) (4,543,728)
Proceeds from sale of capital assets ‐ ‐ ‐ ‐
Issuance of refunding bonds 4,180,000 ‐ ‐ ‐
Issuance of long‐term debt 7,565,000 ‐ ‐ ‐
Bond Premium 342,086 ‐ ‐ ‐
Payment to refunded bonds escrow agent (4,085,000) ‐ ‐ ‐
Total other financing sources (uses)8,002,086 ‐ ‐ ‐
Net change in fund balances 4,416,295$ (5,095,659)$ (63,352)$ (639,708)$
Expenditures for capitalized assets 9,067,254$ 6,394,346$ 1,696,612$ 4,293,214$
Debt service as a percentage of noncapital expenditures 15.4% 21.8% 14.1% 14.0%
Source: The source of this information is the Town's financial records.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Statement of Revenues, Expenditures and Changes in Fund Balances
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 106
2019 2020 2021 2022 2023 2024
14,342,801$ 15,694,054$ 16,510,939$ 18,071,247$ 20,978,020$ 20,920,887$
2,040,622 835,731 1,293,172 2,039,349 1,524,278 1,737,041
280,801 286,391 264,621 333,946 355,607 359,479
8,401,676 8,920,296 12,713,449 14,124,324 15,919,459 13,834,258
181,105 222,947 99,090 171,157 216,438 247,302
347,141 387,225 320,291 431,838 403,305 333,012
130,483 281,704 239,191 223,964 240,844 255,843
554,549 545,983 49,654 (419,224) 1,094,158 2,218,949
26,279,178 27,174,331 31,490,407 34,976,601 40,732,109 39,906,771
3,147,063 3,280,191 6,513,419 4,105,257 4,697,681 4,996,577
858,957 797,513 954,667 1,041,531 1,210,967 1,275,320
6,295,989 8,566,058 8,906,428 9,180,108 9,612,993 11,330,144
7,880,668 6,046,298 6,321,814 5,712,452 7,542,736 8,774,689
2,845,027 2,609,842 2,726,748 3,166,526 3,583,471 3,483,590
4,487,854 2,716,523 4,758,067 3,828,699 4,498,734 3,523,577
2,635,000 2,310,000 400,000 ‐ ‐ ‐
123,871 67,301 7,044 ‐ ‐ ‐
1,600 1,998 500 598 98 208
28,276,029 26,395,724 30,588,687 27,035,171 31,146,680 33,384,105
(1,996,851) 778,607 901,720 7,941,430 9,585,429 6,522,666
3,672,532 1,928,978 3,086,628 11,962,153 10,247,867 11,948,021
(3,672,532) (1,928,978) (3,136,628) (11,962,153) (10,247,867) (11,948,021)
‐ 418,585 ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
‐ 418,585 (50,000) ‐ ‐ ‐
(1,996,851)$ 1,197,192$ 851,720$ 7,941,430$ 9,585,429$ 6,522,666$
4,465,837$ 2,689,270$ 4,758,055$ 3,890,700$ 4,497,424$ 3,616,795$
11.6% 10.0% 1.8% 0.0% 0.0% 0.0%
Fiscal Year Ended June 30
Page 107
Fiscal Year
Ended June 30 Property Tax Sales Tax Franchise Tax Total
2015 904,660 8,983,050 352,673 10,240,383
2016 2,543,298 9,391,267 360,320 12,294,885
2017 2,287,444 9,419,551 367,119 12,074,114
2018 2,286,081 10,311,578 421,682 13,019,341
2019 2,427,730 11,491,124 423,947 14,342,801
2020 2,086,769 13,172,389 434,896 15,694,054
2021 427,387 15,657,292 426,260 16,510,939
2022 11,482 17,660,758 399,007 18,071,247
2023 8,778 20,586,294 382,948 20,978,020
2024 9,841 20,559,928 351,118 20,920,887
Source: The source of this information is the Town's financial records.
Town of Fountain Hills, Arizona
Governmental Activities ‐ Tax Revenues by Source
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 108
Number of
Filers
Percentage
of Total Tax Liability
Percentage
of Total
Number of
Filers
Percentage
of Total Tax Liability
Percentage
of Total
Sales category:
Construction 474 3.22% 3,197,045$ 15.55%N/A N/A 935,694$ 10.42%
Transportation/utilities 151 1.03% 1,661,398 8.08%N/A N/A 1,405,768 15.65%
Wholesale/retail 10,769 73.12% 10,689,793 52.00% N/A N/A 4,214,119 46.91%
Restaurants/bars 108 0.73% 1,452,328 7.06% N/A N/A 682,180 7.59%
Real estate, rental & leasing 1,071 7.27% 1,351,156 6.57%N/A N/A 617,348 6.87%
Services 681 4.62% 2,206,542 10.73% N/A N/A 604,618 6.73%
Other 1,474 10.01%1,666 0.01%N/A N/A 523,323 5.83%
Total 14,728 100.00%20,559,928$ 100.00%N/A N/A 8,983,050$ 100.00%
Note: Other includes all state and local sales tax audit adjustments.
Source: The source of this information is the Arizona Department of Revenue.
Fiscal Year Ended June 30, 2015
Note: Because of confidentiality statutes, the names of the 10 largest revenue payers cannot be disclosed. The categories presented are intended to
provide alternative information regarding the sources of the Town's revenue. The Number of Filers was unavailable for the year ended June 30, 2015.
Fiscal Year Ended June 30, 2024
Town of Fountain Hills, Arizona
Sales Tax Payers by Category
June 30, 2024 and June 30, 2015
Page 109
2015 2016 2017 2018
Sales category:
Construction 935,694$ 918,717$ 730,164$ 1,408,332$
Transportation/utilities 1,405,768 1,327,441 1,288,153 1,309,928
Wholesale/retail 4,214,119 4,815,582 4,982,218 5,235,992
Restaurants/bars 682,180 742,540 811,985 829,857
Real estate, rental & leasing 617,348 552,856 636,834 745,171
Services 604,618 779,753 852,675 747,834
Other 523,323 254,378 117,523 34,464
Total 8,983,050$ 9,391,267$ 9,419,552$ 10,311,578$
Note: Other includes all state and local sales tax audit adjustments.
Source: The source of this information is the Town's financial records.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Taxable Sales by Category
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 110
2019 2020 2021 2022 2023 2024
1,932,716$ 1,910,021$ 1,990,383$ 1,780,123$ 3,449,250$ 3,197,045$
1,290,585 1,405,005 1,529,268 1,501,600 1,576,570 1,661,398
5,464,247 7,031,474 8,956,208 9,834,924 10,500,903 10,689,793
893,595 892,210 1,062,172 1,446,971 1,517,063 1,452,328
842,233 965,124 993,228 1,103,241 1,258,009 1,351,156
1,025,548 916,769 1,125,753 1,992,955 2,278,723 2,206,542
42,200 51,786 280 946 5,776 1,666
11,491,124$ 13,172,389$ 15,657,292$ 17,660,760$ 20,586,294$ 20,559,928$
Fiscal Year Ended June 30
Page 111
Fiscal
Year
Ended Town Maricopa State Total
June 30 Rate County Rate Tax Rate
2015 2.60% 0.70% 5.60% 8.90%
2016 2.60% 0.70% 5.60% 8.90%
2017 2.60% 0.70% 5.60% 8.90%
2018 2.60% 0.70% 5.60% 8.90%
2019 2.60% 0.70% 5.60% 8.90%
2020* 2.90% 0.70% 5.60% 9.20%
2021 2.90% 0.70% 5.60% 9.20%
2022 2.90% 0.70% 5.60% 9.20%
2023 2.90% 0.70% 5.60% 9.20%
2024 2.90% 0.70% 5.60% 9.20%
* 0.3% Town rate increase effective 11/1/2019
Source: The source of this information is the Arizona Department of Revenue.
Town of Fountain Hills, Arizona
Direct and Overlapping Sales Tax Rates
Last Ten Fiscal Years
Page 112
Community Municipal Highway
Fiscal Year General Facilities Property User Special Total Debt
Ended Obligation District Corporation Revenue Assessment Outstanding Per
June 30 Bonds*Bonds**Bonds*Bonds Bonds Debt Capita
2015 9,517,086 2,300,000 3,525,000 ‐ ‐ 15,342,086 651
2016 7,678,669 1,935,000 1,400,000 ‐ ‐ 11,013,669 467
2017 5,680,252 1,560,000 1,030,000 ‐ ‐ 8,270,252 351
2018 3,631,835 1,180,000 670,000 ‐ ‐ 5,481,835 233
2019 1,683,417 795,000 300,000 ‐ ‐ 2,778,417 118
2020 ‐ 400,000 ‐ ‐ ‐ 400,000 17
2021 ‐ ‐ ‐ ‐ ‐ ‐ ‐
2022 ‐ ‐ ‐ ‐ ‐ ‐ ‐
2023 ‐ ‐ ‐ ‐ ‐ ‐ ‐
2024 ‐ ‐ ‐ ‐ ‐ ‐ ‐
Source: The source of this information is the Town's financial records and the U.S. Bureau of Economic Analysis.
* All bond amounts presented include amortization of original issuance discounts and premiums.
** All bond amounts presented include amoritization of original issuance discounts and premiums.
The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general obligation bonds.
Population data can be found in the Schedule of Demographic and Economic Statistics.
Governmental Activities
Town of Fountain Hills, Arizona
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Page 113
Fiscal
Year
General
Obligation
Bonds*
Less: Amounts
Restricted for
Principal
Net General
Obligation
Bonds
Estimated Actual
Taxable Value of
Property
Percentage of
Estimated Actual
Taxable Value of
Property
Net General
Obligation
Bonded Debt
per Capita
Net General
Obligation Bonded
Debt per Net Limited
Assessed Valuation
Municipal
Property
Corporation
Bonds*
Net Municipal
Property
Corporation Debt
per Capita
Total Revenues‐
All Sources
2015 11,817,086 420,782 11,396,304 3,722,794,676 0.31% 483 2.83% 1,764,338 75 22,161,316
2016 9,613,669 576,281 9,037,388 3,744,585,506 0.24% 378 2.25% 1,088,117 46 22,262,139
2017 7,240,252 343,697 6,896,555 3,965,824,715 0.17% 282 1.63% 860,437 35 22,400,196
2018 4,811,835 83,185 4,728,650 4,166,589,970 0.11% 192 1.06% 664,484 27 24,375,962
2019 2,478,417 146,100 2,332,317 4,381,287,279 0.05% 93 0.50% 287,694 12 26,279,178
2020 400,000 171,807 228,193 4,657,015,387 0.01% 9 0.05%‐ ‐ 27,586,011
2021 ‐ 191,594 ‐ 4,909,183,626 ‐ ‐ ‐ 31,354,466
2022 ‐ 194,344 ‐ 5,435,983,541 ‐ ‐ ‐ ‐ 35,025,597
2023 ‐ 200,754 ‐ 5,721,274,077 ‐ ‐ ‐ ‐ ‐ 40,931,231
2024 ‐ 46,427 ‐ 6,057,936,533 ‐ ‐ ‐ ‐ ‐ 40,071,615
Source: The source of this information is the Department of Revenue and the Town's financial records.
* All bond amounts presented are net of original issuance discounts and premiums. The Town is not obligated
for repayment of the Eagle Mountain Community Facilities District general obligation bonds.
Population data can be found in the Schedule of Demographic and Economic Statistics.
Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal
Year 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash assessed value is used for
determining the Town’s bonding capacity and as the ceiling for net limited assessed value.
Town of Fountain Hills, Arizona
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Page 114
Estimated
Estimated Share of
Percentage Overlapping
Outstanding Debt Applicable Debt
Overlapping:
Maricopa County Special Healthcare District 574,205,000$ 1.11% 6,373,676$
Maricopa County Community College District 135,585,000 1.11% 1,504,994
East Valley Institute of Technology ‐ 2.27%‐
Fountain Hills Unified School District $4,535,000 96.49% 4,375,822
Total Overlapping Debt 12,254,492
Direct:
Town of Fountain Hills, Arizona*
General Obligation Bonds ‐
Revenue Bonds ‐
Eagle Mountain Community Facilities District**‐
Total Direct Debt ‐
Total direct and overlapping debt 12,254,492$
Source: The source of this information is the Town's records, the State and County Abstract of the
Assessment Roll, the Arizona Department of Revenue Report of Indebtedness and the applicable
governmental unit. The Report of Indebtedness is from the most recent fiscal year which is available,
which typically will be one year earlier than the current fiscal year.
* All bond amounts include amortization of original issuance discounts and premiums.
** The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general
obligation bonds.
Note: The estimated percentage of debt outstanding applicable to the Town is calculated based on the Town's
net limited assessed valuation as a percentage of the net limited assessed valuation of the overlapping
jurisdiction.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Tow
of Fountain Hills. This schedule further estimates the portion of outstanding debt of those overlapping
governments that is borne by residents and businesses of the Town. This process recognizes that, when
considering a town's ability to issue and repay long‐term debt, the entire debt burden borne by residents
should be taken into account. However, this fact does not imply that every taxpayer is a resident, and,
therefore, responsible for repaying the debt of each overlapping government.
Town of Fountain Hills, Arizona
Direct and Overlapping Governmental Activities Debt
as of June 30, 2024
Governmental Unit
Page 115
2015 2016 2017 2018
6% Debt Limit
Debt limit 24,199,829$ 28,325,296$ 30,651,126$ 31,459,192$
Total net debt applicable to limit ‐ ‐ ‐ ‐
Legal debt margin 24,199,829$ 28,325,296$ 30,651,126$ 31,459,192$
Total debt applicable to the limit
as a percentage of debt limit ‐‐‐ ‐
20% Debt Limit
Debt limit 80,666,095$ 94,417,653$ 102,170,422$ 104,863,974$
Total net debt applicable to limit 9,175,000 7,405,000 5,475,000 3,495,000
Legal debt margin 71,491,095$ 87,012,653$ 96,695,422$ 101,368,974$
Total debt applicable to the limit
as a percentage of debt limit 11%8%5%3%
Source: The source of this information is the Town's financial records.
Note: All amounts presented are net of original issuance discounts and premiums.
Note: On November 6, 2012, voters approved Proposition 117, an amendment to the
Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and
secondary taxes are levied against the net limited assessed value. The net full cash assessed
value is used for determining the Town’s bonding capacity and as the ceiling for net limited
assessed value.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Legal Debt Margin Information
Last Ten Fiscal Years
Page 116
2019 2020 2021 2022 2023 2024
32,400,042$ 33,907,227$ 35,603,580$ 37,800,780$ 40,238,671$ 49,892,806$
‐ ‐ ‐ ‐ ‐ ‐
32,400,042$ 33,907,227$ 35,603,580$ 37,800,780$ 40,238,671$ 49,892,806$
‐‐‐‐‐‐
108,000,140$ 113,024,089$ 118,678,601$ 126,002,599$ 134,128,903$ 166,309,355$
1,615,000 ‐ ‐ ‐ ‐ ‐
106,385,140$ 113,024,089$ 118,678,601$ 126,002,599$ 134,128,903$ 166,309,355$
1%‐‐‐‐
Fiscal Year Ended June 30
Page 117
Net full cash assessed valuation 831,546,774
Water, Sewer, Artificial 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 166,309,355$
Net debt applicable to limit ‐
20% legal debt margin 166,309,355
All Other General Obligation Bonds
Debt limit ‐ 6% of net full cash assessed valuation 49,892,806
Net debt applicable to limit ‐
6% legal debt margin 49,892,806
Total legal debt margin 216,202,161$
Source: The source of this information is the Maricopa County Assessor's Office and the
Town's financial records.
Town of Fountain Hills, Arizona
Calculation of Legal Debt Margin
as of June 30, 2024
Page 118
Fiscal
Year
Ended Pledged
June 30 Principal Interest Total Revenues Coverage
2015 2,545,000 184,500 2,729,500 15,583,484 5.7
2016 480,000 32,740 512,740 16,250,673 31.7
2017 370,000 22,680 392,680 16,815,224 42.8
2018 360,000 16,686 376,686 18,194,833 48.3
2019 370,000 10,854 380,854 19,765,936 51.9
2020 300,000 4,860 304,860 20,862,372 68.4
2021 ‐ ‐ ‐ 24,001,082 100.0
2022 ‐ ‐ ‐ 26,453,550 100.0
2023 ‐ ‐ ‐ 30,620,545 100.0
2024 ‐ ‐ ‐ 33,200,920 100.0
Source: The source of this information is the Town's financial records.
Town of Fountain Hills
Revenue Bond Coverage
Last Ten Fiscal Years
Municipal Facilities Corporation Revenue Bonds
Page 119
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023*
Population 23,573 23,899 24,482 24,583 24,987 25,200 23,820 23,906 23,785 23,820
Per capita personal income 46,619$ 48,240$ 50,162$ 60,531$ 54,936$ 57,468$ 59,791$ 57,550$ 60,707$ 66,756$
Median age 53.7 53.8 53.7 53.5 57.5 58.8 59.4 58.6 62.0 60.2
Public school enrollment 1,692 1,619 1,506 1,444 1,380 1,338 1,314 1,267 1,192 1,133
Town of Fountain Hills
unemployment rate 5.4% 2.4% 1.9% 1.6% 3.9% 8.7% 4.9% 4.4% 2.8% 2.7%
Land use
Total acres 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7
Total square miles 20.32 20.32 20.32 20.32 20.32 20.32 20.32 20.32 20.32 20.32
Vacant lots 1,165 1,247 1,209 1,175 1,172 1,052 1,158 1,158 1,030 966
Number of units
Housing 12,981 13,002 13,130 13,176 13,558 13,749 13,875 13,876 14,101 14,330
Lodging 4 4 4 4 4 4 4 4 4 4
Restaurants 43 46 50 52 54 55 55 57 57 55
Shopping centers 20 20 20 20 20 20 20 20 20 20
Schools
Public 3 3 3 3 3 3 3 3 3 4
Preschool 7 7 7 7 5 5 5 5 5 4
Charter 1 1 1 1 1 1 1 ‐ ‐ ‐
Vocational ‐ ‐ ‐ 1 1 2 2 1 1 ‐
Note: N/A indicates the information is not available.
* Information obtained is based on calendar years; therefore, the latest information obtained was
from 2023.
Sources: The sources of the "Per Capita Personal Income", "Median Age" and "Unemployment Rate" information are
Sites USA (2009‐2017), U.S. Census Bureau and Arizona Office of Economic Opportunity (beginning in 2018). The
source of the "Population" is the U.S. Census Bureau July 1, 2023 estimate. The source of School Enrollment is the
Fountain Hills Unified School District No. 98. Other information is from the Town's records.
Town of Fountain Hills, Arizona
Demographic and Economic Statistics
Last Ten Calendar Years
Calendar Year
Page 120
Percentage
Number of of Total Town Number of
Employer Employees Rank Employment Employees Rank
Fountain Hills Unified School District No. 98 280 1 4.6% 327 1
Fountain View Village 140 2 2.3% 150 2
Safeway Stores 130 3 2.1%88 4
Rural Metro Corporation 110 4 1.8% N/A N/A
Firerock Country Club 100 5 1.6%68 7
Fry's Food Stores 80 6 1.3%90 3
Target Stores 80 6 1.3%84 5
Eagle Mountain Golf Club 70 7 1.1%70 6
Fountain Hills Family Practice PC 70 7 1.1% N/A N/A
Fountain Hills Medical Center 70 7 1.1% N/A N/A
Town of Fountain Hills 70 7 1.1%41 12
Golf International Inc 60 8 1.0% N/A N/A
Quotemedia Inc 60 8 1.0% N/A N/A
Sunridge Canyon Golf Course 60 8 1.0%59 10
United States Postal Service 60 8 1.0%64 9
Bashas 60 8 1.0%67 8
Totals 1,500 24.4% 1,108
Total Town employment 6,120 4,655
Source: The source of this information is the Maricopa Association of Governments and Town records.
Note: MAG data includes employers with 5+ employees and is rounded to nearest 10.
* Data for 2023 was not available.
2022*
Town of Fountain Hills, Arizona
Principal Employers
Prior Fiscal Year and Nine Years Ago
2013
Page 121
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Municipal court 3.63 3.63 3.63 3.63 3.63 3.63 3.63 3.63 4.63 4.63
Administration 11.33 11.63 12.25 13.45 13.70 15.20 15.00 16.00 16.24 17.50
Public works n/a n/a 9.80 9.80 10.80 12.43 12.43 12.00 13.00 13.00
Development services 16.30 16.30 7.50 8.50 7.50 9.00 9.00 9.00 10.00 10.00
Community services 21.06 20.76 20.76 20.56 20.56 20.56 22.01 24.02 24.52 25.38
Fire Department ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 34.00
Total 52.32 52.32 53.94 55.94 56.19 60.82 62.07 64.65 68.39 104.51
Source: The source of this information is the Town's financial records.
Town of Fountain Hills, Arizona
Authorized Full‐time Equivalent Government Employees by Function
Last Ten Fiscal Years
Fiscal Year Ended June 30
Page 122
Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Municipal Court
Cases filed 1,738 1,593 2,014 1,277 891 2,237 1,324 1,586 1,823 1,862
Hearings/Trials held 1,585 1,564 1,844 676 801 568 1,430 1,378 1,216 1,163
Administration
FTEs per 1,000 residents 2.2 2.2 2.2 2.3 2.2 2.4 2.6 2.7 2.9 4.4
Registered voters ‐ general election 16,213 none 16,387 none 16,775 none 18,415 none 18,423 none
Voter turnout ‐ general election 40% none 40% none 50% none 90% none 80% none
Development Services
Building permits issued 443 410 509 468 576 547 575 620 730 742
Building inspections conducted 2,448 2,129 2,704 3,707 4,795 4,069 3,652 1,911 5,460 4,947
Number of code violation cases 752 713 669 654 655 690 497 586 656 299
Number of zoning cases 65 72 50 41 11 7 21 73 95 114
Community Services
Number of Community Center bookings/permits* 3,439 3,124 3,764 4,395 3,857 3,169 1,675 1033* 316** 258
Number of participants in recreational programs 2,249 2,910 3,773 3,794 3,489 1,830 2,892 4,110 5,244 7,093
Number of Senior Services members 1,273 1,326 1,335 1,220 1,313 1,265 1,360 1,175 1,290 1,518
Number of home delivered meals 4,035 3,497 3,920 3,093 3,562 5,215 4,402 4,581 5,449 5,899
Law Enforcement (contracted)
Physical arrests 445 220 220 214 67 86 56 49 67 55
Traffic violations 1,539 1,215 1,803 1,053 1,248 2,618 2,745 2,568 3,349 2,536
Fire & Emergency Medical (contracted)
Total incident responses 3,166 3,191 3,425 3,659 4,073 3,896 4,215 4,268 4,709 4,140***
Average response time (in minutes)3:37 3:57 3:25 3:33 3:32 3:51 4:50 4:38 4:44 5:00***
Source: The source of this information is the Town's financial records.
Note: N/A indicates that the information is not available.
**Beginning in 2023, individual bookings were replaced by single day and recurring permits only.
***The Town Fire Department transitioned from a contracted to an in‐house Department in
January 2024 and did not have full Fiscal Year 2024 records available. 2024 Fire Department
Figures are estimated based on half‐year activity.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Operating Indicators by Function
Last Ten Fiscal years
*The Community Center was closed from 7/1/22 until 10/3/22 for renovations.
Page 123
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Public safety
Number of fire stations 2 2 2 2 2 2 2 2 2 2
Public works
Streets (centerline miles) 178.9 178.9 178.9 180.0 180.0 180.0 180.0 180.0 180.0 180.0
Streets (lane miles)390 391 390.5 391.5 391.5 391.5 391.5 391.5 391.5 391.5
Pedestrian lighting 85 91 91 91 91 91 91 95 95 95
Traffic signals 13 13 13 13 13 13 13 13 13 13
Parks and recreation
Acreage‐developed parks 119 119 119 119 119 119 119 119 119 119
Playgrounds 7 7 7 7 9 9 9 9 9 9
Baseball/softball diamonds 6 6 6 6 6 6 6 6 6 6
Soccer/football fields 7 7 7 7 7 7 7 7 7 7
Community centers 1 1 1 1 1 1 1 1 1 1
Preserve acreage 807 807.2 807.2 807.2 889.2 913.2 913.2 913.2 913.2 913.2
Miles of trails 15.80 15.8 18.5 18.5 18.5 18.5 18.5 23.0 23.0 24.5
Source: The source of this information is the Town's facilities records.
Note: N/A indicates the information is not available.
Town of Fountain Hills, Arizona
Capital Assets Statistics by Function
Last Ten Fiscal Years
Fiscal Year Ended June 30
Function/Program
Page 124
Town of Fountain Hills 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 480-816-5100www.fountainhillsaz.gov- f acebook.com/TownotFountainHillsr.J -twitter.com/fbazgov