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NOTICE OF THE
REGULAR SESSION OF
THE FOUNTAIN HILLS TOWN COUNCIL
TIME: 6:30 P.M. - REGULAR SESSION
WHEN: THURSDAY, DECEMBER 16, 2010
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
PROCEDURE FOR ADDRESSING THE COUNCIL
Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the
Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in
the Council Chamber Lobby and near the Clerk’s position on the dais.
Speakers will be called in the order in which the speaker cards were received either by the Clerk
or the Mayor. At that time, speakers should stand and approach the podium. Speakers are
asked to state their name prior to commenting and to direct their comments to the Presiding
Officer and not to individual Councilmembers. Speakers’ statements should not be
repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have
waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion
of their time for a later time or (ii) transfer any portion of their time to another speaker.
If there is a Public Hearing, please submit the speaker card to speak to that issue during
the Public Hearing.
Individual speakers will be allowed three contiguous minutes to address the Council. Time
limits may be waived by (i) discretion of the Town Manager upon request by the speaker not
less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the
Mayor either prior to or during a Meeting. Please be respectful when making your
comments. If you do not comply with these rules, you will be asked to leave.
Mayor Jay T. Schlum
Vice Mayor Dennis Brown Councilmember Tait D. Elkie
Councilmember Dennis Contino Councilmember Cassie Hansen
Councilmember Ginny Dickey Councilmember Henry Leger
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CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Jay T. Schlum
INVOCATION – Pastor David Felten, Fountain Hills United Methodist Church
ROLL CALL – Mayor Jay T. Schlum
MAYOR’S REPORT
i) None.
SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
i) Presentation by Sandi Thompson, Jerry Miles, Linda Kavanagh, and Jackie Miles
regarding the Fountain Hills Cultural and Civic Association’s art donations, the Art
Docents Program, and the Save Our Sculptures volunteers.
ii) Financial Presentation by Dennis Osuch, CPA, with the auditing firm of Larson
Allen LLP of the Town of Fountain Hills’ Comprehensive Annual Financial Report
(CAFR) for the fiscal year ending June 30, 2010.
CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any
such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner
restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the
matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual
Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a
future Council agenda.
CONSENT AGENDA
1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from
November 18, 30, and December 2, 2010.
2. CONSIDERATION of ACCEPTING the piece titled Waves and Windows, being
recommended by the Public Art Committee, to be placed on public display at Fountain Park.
3. CONSIDERATION of a SPECIAL EVENT APPLICATION for the Mountain to Fountain
Run presented by Banditos Running Club to be held March 12, 2011. Sections of Fountain
Hills Boulevard and Saguaro Boulevard will be closed for the event.
4. CONSIDERATION of a SPECIAL EVENT APPLICATION for the Ragnar Relay presented
by Sage Grossi to be held February 26, 2011.
5. CONSIDERATION of RESOLUTION 2010-43, an Intergovernmental Agreement with the
Maricopa Department of Transportation for Improvements to Shea Boulevard from Fountain
Hills Town Limits to Beeline Highway (SR87).
6. CONSIDERATION of a TEMPORARY USE PERMIT for the Plaza Fountainside, located at
12645 N. Saguaro Boulevard, for repeating outdoor retail sales events for 2011.
Case#TU2010-08
7. CONSIDERATION of a TEMPORARY USE PERMIT for “Art on the Avenue/Farmers'
Market”, repeating outdoor retail sales events for 2011. Case#TU2010-10.
8. CONSIDERATION of approving expenditure with Performance Paving in the amount of
$45,000 for the six month period July 1, 2010, through December 31, 2010.
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REGULAR AGENDA
9. PUBLIC HEARING regarding ORDINANCE 10-09, a text amendment to the Town of
Fountain Hills Zoning Ordinance, Chapter 6, Sign Regulations, Sections 6.08.B.13 and
6.08.D.3. The amendments extend the expiration date to December 31, 2011, for A-frame
signs and banners for special sales events. Case # Z2010-06
10. CONSIDERATION of ORDINANCE 10-09, a text amendment to the Town of Fountain
Hills Zoning Ordinance, Chapter 6, Sign Regulations, Sections 6.08.B.13 and 6.08.D.3. The
amendments extend the expiration date to December 31, 2011, for A-frame signs and banners
for special sales events. Case # Z2010-06
11. DISCUSSION AND CONSIDERATION of adopting DRAFT COUNCIL GOALS for FY2011/12.
12. COUNCIL DISCUSSION/DIRECTION to the Town Manager.
Items listed below are related only to the propriety of (i) placing such items on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council:
A. None.
13. SUMMARY of COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Town Manager.
14. ADJOURNMENT.
DATED this 9th day of December 2010.
Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100
(voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or
to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda
are available for review in the Clerk’s office.
NOTICE OF THE
REGULAR SESSION OF
THE FOUNTAIN HILLS TOWN COUNCIL
TIME: 6:30 P.M. - REGULAR SESSION
WHEN: THURSDAY, DECEMBER 16, 2010
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
PROCEDURE FOR ADDRESSING THE COUNCIL
Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the
Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in
the Council Chamber Lobby and near the Clerk’s position on the dais.
Speakers will be called in the order in which the speaker cards were received either by the Clerk
or the Mayor. At that time, speakers should stand and approach the podium. Speakers are
asked to state their name prior to commenting and to direct their comments to the Presiding
Officer and not to individual Councilmembers. Speakers’ statements should not be
repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have
waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion
of their time for a later time or (ii) transfer any portion of their time to another speaker.
If there is a Public Hearing, please submit the speaker card to speak to that issue during
the Public Hearing.
Individual speakers will be allowed three contiguous minutes to address the Council. Time
limits may be waived by (i) discretion of the Town Manager upon request by the speaker not
less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the
Mayor either prior to or during a Meeting. Please be respectful when making your
comments. If you do not comply with these rules, you will be asked to leave.
Mayor Jay T. Schlum
Vice Mayor Dennis Brown Councilmember Tait D. Elkie
Councilmember Dennis Contino Councilmember Cassie Hansen
Councilmember Ginny Dickey Councilmember Henry Leger
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CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Jay T. Schlum
INVOCATION – Pastor David Felten, Fountain Hills United Methodist Church
ROLL CALL – Mayor Jay T. Schlum
MAYOR’S REPORT
i) None.
SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
i) Presentation by Sandi Thompson, Jerry Miles, Linda Kavanagh, and Jackie Miles
regarding the Fountain Hills Cultural and Civic Association’s art donations, the Art
Docents Program, and the Save Our Sculptures volunteers.
ii) Financial Presentation by Dennis Osuch, CPA, with the auditing firm of Larson
Allen LLP of the Town of Fountain Hills’ Comprehensive Annual Financial Report
(CAFR) for the fiscal year ending June 30, 2010.
CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any
such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner
restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the
matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual
Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a
future Council agenda.
CONSENT AGENDA
1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from
November 18, 30, and December 2, 2010.
2. CONSIDERATION of ACCEPTING the piece titled Waves and Windows, being
recommended by the Public Art Committee, to be placed on public display at Fountain Park.
3. CONSIDERATION of a SPECIAL EVENT APPLICATION for the Mountain to Fountain
Run presented by Banditos Running Club to be held March 12, 2011. Sections of Fountain
Hills Boulevard and Saguaro Boulevard will be closed for the event.
4. CONSIDERATION of a SPECIAL EVENT APPLICATION for the Ragnar Relay presented
by Sage Grossi to be held February 26, 2011.
5. CONSIDERATION of RESOLUTION 2010-43, an Intergovernmental Agreement with the
Maricopa Department of Transportation for Improvements to Shea Boulevard from Fountain
Hills Town Limits to Beeline Highway (SR87).
6. CONSIDERATION of a TEMPORARY USE PERMIT for the Plaza Fountainside, located at
12645 N. Saguaro Boulevard, for repeating outdoor retail sales events for 2011.
Case#TU2010-08
7. CONSIDERATION of a TEMPORARY USE PERMIT for “Art on the Avenue/Farmers'
Market”, repeating outdoor retail sales events for 2011. Case#TU2010-10.
8. CONSIDERATION of approving expenditure with Performance Paving in the amount of
$45,000 for the six month period July 1, 2010, through December 31, 2010.
Z:\Council Packets\2010\R12-16-10\101216A.docx Last printed 12/9/2010 10:52 AM Page 3 of 3
REGULAR AGENDA
9. PUBLIC HEARING regarding ORDINANCE 10-09, a text amendment to the Town of
Fountain Hills Zoning Ordinance, Chapter 6, Sign Regulations, Sections 6.08.B.13 and
6.08.D.3. The amendments extend the expiration date to December 31, 2011, for A-frame
signs and banners for special sales events. Case # Z2010-06
10. CONSIDERATION of ORDINANCE 10-09, a text amendment to the Town of Fountain
Hills Zoning Ordinance, Chapter 6, Sign Regulations, Sections 6.08.B.13 and 6.08.D.3. The
amendments extend the expiration date to December 31, 2011, for A-frame signs and banners
for special sales events. Case # Z2010-06
11. DISCUSSION AND CONSIDERATION of adopting DRAFT COUNCIL GOALS for FY2011/12.
12. COUNCIL DISCUSSION/DIRECTION to the Town Manager.
Items listed below are related only to the propriety of (i) placing such items on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council:
A. None.
13. SUMMARY of COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Town Manager.
14. ADJOURNMENT.
DATED this 9th day of December 2010.
Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100
(voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or
to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda
are available for review in the Clerk’s office.
Fountain Hills
Cultural and Civic Association
Presentations by:
Linda Kavanagh
Sandi Thompson and Jerry Miles
Jackie Miles
A Good Book
by Mark Lundeen
Precious Cargo
by Jason Napier
Power of Thought
by Victor Issa
Waves and Windows
by Brian Schader
Linda Kavanagh opens the
Art Walk Program
“Save our Sculptures” Volunteers cleaning
the sculptures
Issued By:
Finance Department
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL
YEAR ENDED JUNE 30, 2010
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2010
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL 1
LIST OF PRINCIPAL OFFICIALS 9
ORGANIZATIONAL CHART 10
GFOA CERTIFICATE OF ACHIEVEMENT 11
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 12
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT’S DISCUSSION AND ANALYSIS 14
BASIC FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS 27
STATEMENT OF ACTIVITIES 28
BALANCE SHEET – GOVERNMENTAL FUNDS 29
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET
ASSETS – GOVERNMENTAL FUNDS 31
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCES – GOVERNMENTAL FUNDS 32
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGE IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES –
GOVERNMENTAL FUNDS 34
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – GENERAL FUND 35
NOTES TO BASIC FINANCIAL STATEMENTS 36
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET 52
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGE IN FUND BALANCES 54
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – CAPITAL PROJECTS FUND 56
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – GENERAL OBLIGATION DEBT SERVICE
FUND 57
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS (CONTINUED)
YEAR ENDED JUNE 30, 2010
FINANCIAL SECTION (CONTINUED)
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – MUNICIPAL PROPERTY CORPORATION
DEBT SERVICE 58
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – HURF FUND 59
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – DEVELOPMENT FEES FUND 60
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – LOCAL COURT ENHANCEMENT FUND 61
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – GRANTS FUND 62
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – EXCISE TAX FUND 63
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – PUBLIC ART FUND 64
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – HURF DEBT SERVICE FUND 65
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – EAGLE MOUNTAIN DEBT SERVICE
FUND 66
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND
BALANCE – BUDGET AND ACTUAL – COTTONWOODS SPECIAL
ASSESSMENT FUND 67
STATISTICAL SECTION (UNAUDITED)
FINANCIAL TRENDS
NET ASSETS BY COMPONENT 68
CHANGES IN NET ASSETS 70
FUND BALANCES OF GOVERNMENTAL FUNDS 74
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 76
REVENUE CAPACITY
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE 78
TAXABLE SALES BY CATEGORY 79
DIRECT AND OVERLAPPING SALES TAX RATES 81
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE
PROPERTY 82
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS (CONTINUED)
YEAR ENDED JUNE 30, 2010
STATISTICAL SECTION (UNAUDITED) (CONTINUED)
PRINCIPAL PROPERTY TAXPAYERS 83
PROPERTY TAX LEVIES AND COLLECTIONS 84
DEBT CAPACITY
RATIOS OF OUTSTANDING DEBT BY TYPE 86
RATIOS OF GENERAL BONDED DEBT OUTSTANDING 87
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT 88
LEGAL DEBT MARGIN INFORMATION 89
CALCULATION OF LEGAL DEBT MARGIN 91
DEMOGRAPHIC AND ECONOMIC INFORMATION
DEMOGRAPHIC AND ECONOMIC STATISTICS 92
PRINCIPAL EMPLOYERS 93
OPERATING INFORMATION
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION 94
OPERATING INDICATORS BY FUNCTION 95
CAPITAL ASSETS STATISTICS BY FUNCTION 97
THIS PAGE BLANK
INTRODUCTORY SECTION
THIS PAGE BLANK
( ) 1
November 8, 2010
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
generally accepted accounting principles (GAAP) and audited in accordance with generally
accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that
requirement, we hereby issue the comprehensive annual financial report of the Town of
Fountain Hills for the fiscal year ended June 30, 2010.
This report consists of management’s representations concerning the finances of the Town of
Fountain Hills. 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 of Fountain Hills 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 GAAP.
Because the cost of internal controls should not outweigh their benefits, the Town of Fountain
Hills’ 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 of Fountain Hills’ financial statements have been audited by LarsonAllen LLP, a firm
of licensed certified public accountants. The goal of the independent audit was to provide
reasonable assurance that the financial statements of the Town of Fountain Hills for the fiscal
year ended June 30, 2010, are free of material misstatement. The independent audit involved
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statement; 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
unqualified opinion that the Town of Fountain Hills’ financial statements for the fiscal year ended
June 30, 2010, are fairly presented in conformity with GAAP. The independent auditors’ report is
presented as the first component of the financial section of this report.
GAAP 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.
( ) 2
Town of Fountain Hills Profile
The Town of Fountain Hills is a planned,
family-oriented 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. It
was purchased by Robert McCulloch in the
late 1960s and 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, and
bordering northeast Scottsdale, Fountain
Hills is surrounded by the 3,500-foot McDowell Mountains on the west, the Fort McDowell Indian
Reservation on the east, the Salt River Indian Reservation on the south and by the McDowell
Mountain Regional Park on the north. Elevation is 1,520 feet at the fountain, 3,000 feet on
Golden Eagle Boulevard, and is 500 feet above Phoenix.
Over the past twenty years Fountain Hills has grown from 10,190 residents to a town of
approximately 26,000 in 2010. The latest estimates for Fountain Hills indicate that the
population will continue to grow to near 34,324 by 2030. On June 5, 2006 the Town of Fountain
Hills became two square miles and about ten percent larger by annexing 1,300 acres of State
Trust Land. The process to annex the State Trust Land occurred over a two and one-half year
period and development of the land will occur over the next decade. Annexing this property into
the Town ensures that its future development will be of the highest quality under such Town’s
standards as the cut-and-fill ordinance and strict zoning regulations. Fountain Hills will have an
opportunity to demonstrate that it is truly the best place to live in the Valley.
The Town offers a range of living styles, from small community subdivisions to a number of
large custom homes. Fountain Hills also offers recreational, cultural and retirement programs
that address the needs and lifestyles of active families and adults. The community consists of
primarily residential property; of the total 20.32 square miles of land only 2.58% of the total is
zoned commercial and/or industrial, 31% is reserved as open space and the remainder is
residential.
The Town’s Mission Statement for the Organization
The Town of Fountain Hills’ purpose is to serve the best interests of the community by:
providing for its safety and well-being;
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 and respect, and provide trust and stewardship.
(3)
The Town of Fountain Hills is an Arizona Municipal Corporation, acting as a general law Town as
prescribed in the Arizona Revised statutes. The Town was incorporated on December 5, 1989 with the
governmental and administrative affairs of the Town operating under the Council-Manager form of
government. The Town Council is responsible, among other things, for the adoption of local ordinances,
budget adoption, the development of citizen advisory committees and hiring the Town Manager. The
Town Manager is responsible for implementation of the policies of the Town Council and administering
the Town’s operations through three department directors and approximately 61 FTE employees. The
Magistrate, 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, animal control,
building inspection); community development (code enforcement,
planning, zoning and engineering); the construction and
maintenance of streets and infrastructure, municipal court,
recreational activities, community center, senior center and
cultural events. The Town does not maintain utility or other
operations that require the establishment of enterprise funds.
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, Eagle Mountain
Community Facilities District and Fountain Hills Municipal Property Corporation are included in the
financial reports of the Town.
The annual budget serves as the foundation for the Town of Fountain Hills’ financial planning and
control. The Town Council formally adopts the budget and legally allocates, or appropriates, available
monies for the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Fund.
Therefore, these funds have appropriated budgets, and budget to actual information is presented. On
or before the second meeting in May the Town Manager submits to the Town Council a proposed
budget for the fiscal year commencing the following July 1. 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 no later than June 30, the close of the Town of
Fountain Hills’ fiscal year. The budget is legally enacted through passage of an ordinance and is
prepared by fund and department. The ordinance sets the limit for expenditures during the fiscal year.
The Town Manager may authorize transfers from and within personnel and from operating capital to
services or supplies within a department. Additional expenditures may be authorized for expenditures
directly necessitated by a natural or man-made disaster as prescribed in the State Constitution, Article
9, Section 20.
Fountain Hills Town Hall
( ) 4
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.
Local Economy. The decline in the global economy has impacted the Town’s local economy with a
sharp decrease in building activity. As such, similar to other Arizona municipalities, the Town is
dependent upon state shared revenues and local sales tax as a major source of operating revenue,
accounting for 89% of total General Fund revenue for fiscal year 2009-10. 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 0.05%). State shared income tax revenues decreased 12% during fiscal year 2009-10; this
revenue category is based on two years prior personal and corporate earnings, therefore, it is
anticipated that the Town will experience further declines for the next few years reflecting the economic
recession.
The Town of Fountain Hills’ local tax revenue base consists of two major tax categories, the most
significant being retail sales and transportation/communication/utilities (construction was a third
significant category in prior years). The chart below is a look at the past three years’ local sales tax
activity by sector including a projection for the upcoming fiscal year:
As can be seen in the above chart sales tax collections from construction activity have dropped
significantly (80% from FY07) while transportation/utilities continues to show signs of growth.
Construction sales tax is considered a one-time revenue source which is driven entirely by
development activity. As the Town approaches build-out construction related sales taxes and fees are
likely to dwindle; with a declining revenue base it will become a challenge for the Town to meet the
increasing demands of current service levels.
Other local activity has remained fairly level during the recessionary period due to the lack of major
retailers (the Town has three grocery stores and one major retailer). Fountain Hills is past the historic
period of rapid growth and the long-term economic outlook for the Town must recognize this fact. The
opportunity to further expand the retail tax base in Fountain Hills is limited by the lack of available
commercial land – 75% of the developable lots are already developed.
( ) 5
Development Activity over the past year:
Development Services has been involved with the following development activities during the ’09-’10
Fiscal Year:
Two Concept Plans were approved by the Planning & Zoning Commission during the period:
Cristensen Garage, 12005 Panorama Drive
Fountain Hills Fire Station #2, 15200 E. Shea Blvd
Two Special Use Permits were granted for Communication arrays:
Rooftop antennas Eagle Mountain Village Marketplace 14835
E. Shea Blvd
Telecommunications Facility 13770 N. Fountain Hills Blvd
Seven Temporary Use Permits were issued during the period:
Avenue of the Fountains Farmers' Market
Avenue of the Fountains Art on the Avenue
15813 E. Teepee Drive Day Care Facility w/over 5 children
Town Center Merchants Group Annual Events Permit
Plaza Fountainside Arts & Crafts Show
13733 N. Fountain Hills Blvd Safeway mini-carnival 10-24-2009
16810 E. Avenue of the Fountains Parking Lot usage
One new Commercial Building Permit was issued:
Cristensen Garage (650 sq feet) 12005 Panorama Drive
There were twenty commercial tenant improvements during the last fiscal year that indicate that
Fountain Hills is still a desirable place to locate a business. The following were issued permits for
Tennant Improvements:
El Encanto Restaurant (3,673 sq ft) 11044 Saguaro Blvd
F.H. Plaza shop (1,086 sq ft) 16605 Palisades Blvd #130
Beauty Salon (2,165 sq ft) 6715 Parkview Ave, Suites #2 & #3
Hair Salon (970 sq ft) 16719 Palisades Blvd
Fountain Hills Medical Center,
Cardiovascular, (2,225 sq ft) 16838 Palisades Blvd #107
MPG Restaurant (2,850 sq ft) 15225 Fountain Hills Blvd #104
Chiropractor clinic (1,767 sq ft) 16838 Palisades Blvd
Joy Christian Community Church
(5,300 sq ft) 13430 Saguaro Blvd
Hair Salon (628 sq ft) 16733 Palisades Blvd #104
Eyes on You Optical (1,720 sq ft) 16425 Palisades Blvd #102
F.H. Medical Center (4,089 sq ft) 13620 Saguaro Blvd
F.H. Medical Center, Sonoran Quest
Laboratory (1,490 sq ft) 13620 Saguaro Blvd #150
Palisades Plaza, Retail shop (557 sq ft) 13733 Fountain Hills Blvd #14
( ) 6
F.H. Rural Metro Ambulance
station (1,320 sq ft) 14825 Shea Blvd #107
Desert Foot & Ankle (2,493 sq ft) 16838 Palisades Blvd #105
Red Rock Business Center (1,800 sq ft) 9624 Monterey
Red Rock Business Center (2,410 sq ft) 17100 Shea Blvd #310 - #320
Chicago Bob’s Restaurant (935 sq ft) 16948 Shea Blvd
American Institute of
Interior Design (4,345 sq ft) 13014 Saguaro Blvd
No new Multi-Family Residential Building Permits were issued during this period. Nine new Single-
Family Residential Building Permits were issued.
Other activity of note:
The new 2009 General Plan was adopted in December 2009.
The Downtown Area Specific Plan was adopted on December 17, 2009.
The Town approved an amended Development/Parking Agreement with Plaza
Fountainside/Waterfront.
The Town hosted the Urban Land Institute (ULI) AzTAP review of the Town’s Downtown development
implementation strategies on September 1, 2010.
Long-term Financial Planning.
Fountain Hills’ financial policies are balanced on sound financial reserves and conservative revenue
growth forecasts for the foreseeable future. Potential for State legislative impacts to revenue-sharing or
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.
In early 2009, the Strategic Planning Advisory Commission 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. Subsequently, Strategic Plan 2010 is built upon the foundation of a clearly
defined vision statement and eight key values, with specific indicators to evaluate Council and staff
priorities. Based on citizen input, the Strategic Plan is designed to guide our future decisions grounded
on these common values:
1. Civility
2. Civic Responsibility
3. Environmental Stewardship
4. Economic Vitality
5. Education, Learning and Culture
6. Maintain and Improve Community Infrastructure
7. Public Safety, Health and Welfare
8. Recreational Opportunities and Amenities
These values guide the Town’s annual budget process.
( ) 7
The Fountain Hills Town Council maintains a fund balance policy that ensures adequate reserves that
will provide financial stability in the event of an unanticipated economic downturn. The policy was
amended in FY08-09 to include the establishment of a Rainy Day Fund beginning in FY09-10 – a
summary of the policy is below:
1. A contingency fund of no less than 30 days operating expenditures for the upcoming fiscal year
to be designated for unanticipated expenditure or loss of revenue (Rainy Day Fund) separate
from the General Fund
2. A designated unreserved fund balance of a minimum of ten percent (10%) of the average actual
revenues for the preceding five fiscal years designated for “pay-as-you-go” capital
3. A reserved fund balance of twenty percent (20%) of the average actual revenues for the
preceding five fiscal years which is unavailable for appropriation
These amounts will not be programmed for expenditure and are only available for use within the
confines of expenditure limitations imposed by the State. A Capital Projects Fund has been created and
is funded with proceeds from excess revenues collected over budget and any unexpended
appropriations not needed to meet fund balance requirements or re-appropriation. For the fiscal year
ending June 30, 2010 $100,000 of surplus revenues were transferred from the General Fund to the
Capital Projects Fund.
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 fiscal year 2009-10 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 did not anticipate the lack of
funding for capital projects and bond funding may be reconsidered. An investment policy was adopted
and was awarded to the Investment Policy Certification from the Association of Public Treasurers of
United States and Canada.
Major Initiatives
The Town of Fountain Hills’ adopted FY2010-11 budget reflects the continued recession in the local
economy, which is also mirrored at the national and state levels. Due to the challenging current
economic conditions, the Town had to make significant reductions in staff and service levels. This was
accomplished by a thorough assessment of all existing and proposed programs and workload; as a
result Town staffing was reduced from 81 to 61 FTE’s (full time equivalents).
Cash Management. State statutes permit municipalities in Arizona to invest in obligations of the U.S.
Treasury, commercial paper, corporate bonds, repurchase agreements, and the State Treasurer’s
Local Government Investment Pool (LGIP). The Town of Fountain Hills debt policy restricts investments
to securities that are 100% backed by the full faith and credit of the U.S. government. The Town of
Fountain Hills invests all idle cash in the State LGIP-GOV, which consists of government-backed
securities. The year-to-date yield on investments as of June 30, 2010 was less than 1%. Investment
income includes appreciation in the fair value of investments. Increases in fair value during the current
year, however, do not necessarily represent trends that will continue; nor is it always possible to realize
such amounts, especially in the case of temporary changes in the fair value of investments that the
government intends to hold to maturity.
Daily cash deposits are made with the local bank and are maintained for payroll and payables; these
accounts are fully collateralized to $1 million.
( ) 8
Risk Management. The Town of Fountain Hills is a member of the Arizona Municipal Risk Retention
Pool. Risk coverage includes general liability, workers compensation, errors and omissions, property
and automobile insurance. The policy insures up to $2,000,000 per incident occurrence plus any
excess liability of up to $13,000,000 per occurrence per year. Coverage is provided on a claims-made
basis.
Pension Plan and Other Postemployment Benefits. The Town of Fountain Hills provides two
deferred compensation plans through the International City/County Management Association (ICMA) in
accordance with Internal Revenue Code Sections 401A and 457. The 401A is funded by mandatory
employee wage deductions and matching Town contributions. The 457 is voluntary and funded 100%
through employee participation.
For further information on these plans please refer to Note 4.D. in the financial statements.
AWARDS AND ACKNOWLEDGEMENT
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 comprehensive annual
financial report (CAFR) for the fiscal year ended June 30, 2009. This was the thirteenth consecutive
year that the government has received this prestigious award. In order to be awarded a Certificate of
Achievement, the government published an easily readable and efficiently organized CAFR. This report
satisfied both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to
the GFOA to determine its eligibility for another certificate.
In addition, the government also received the GFOA’s Distinguished Budget Presentation Award for its
annual budget for the fiscal year ending June 30, 2010. 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 eighth consecutive year that the Town has received the award.
Acknowledgements. The preparation of this report would not have been possible without the efficient
and dedicated services of the entire team of the Finance and Administration Department. I would also
like to extend my appreciation to the Mayor and Council for their leadership and support. Each member
of the department has my sincere appreciation for the contributions made in the preparation of this
report.
Respectfully submitted,
Richard L. Davis, ICMA-CM
Town Manager
TOWN OF FOUNTAIN HILLS, ARIZONA
LIST OF PRINCIPAL OFFICIALS
JUNE 30, 2010
(9)
ELECTED OFFICIALS
Mayor Mr. Jay Schlum
Vice-Mayor Mr. Dennis Brown
Councilmember Ms. Dennis Contino
Councilmember Mr. Ginney Dickey
Councilmember Mr. Tait Elkie
Councilmember Ms. Cassie Hansen
Councilmember Mr. Henry Leger
DEPARTMENT DIRECTORS
Town Manager Richard L. Davis
Presiding Judge Mitchell S. Eisenberg
Finance Director Julie A. Ghetti, CPA
Community Center Director Mark Mayer
Development Services Director Paul Mood
Fire Chief Scott LaGreca
Rural Metro Corporation
District Commander Captain Joe Rodriquez
Maricopa County Sheriff’s Office
Town Prosecutor Iacovino & Kayler
Town Attorney AndrewMcGuire,
Gust Rosenfeld, P.L.C.
TOWN OF FOUNTAIN HILLS, ARIZONA ORGANIZATIONAL CHART JUNE 30, 2010 (10)
(11)
THIS PAGE BLANK
FINANCIAL SECTION
THIS PAGE BLANK
(12)
An independent member of Nexia International
INDEPENDENT AUDITORS’ REPORT
The Honorable Mayor and Members of the Town Council
Town of Fountain Hills, Arizona
Fountain Hills, Arizona
We have audited the accompanying financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information of the Town of Fountain Hills, Arizona (the Town),
as of and for the year ended June 30, 2010, which collectively comprise the Town’s basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the
Town’s management. Our responsibility is to express opinions on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinions.
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, 2010, and the
respective changes in financial position thereof and the budgetary comparison schedule for the General
Fund for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
Prior period adjustments were reported in Note 4.A. to correct errors in the previously issued financial
statements.
The management’s discussion and analysis on pages 14-26 is not a required part of the basic financial
statements but is supplementary information required by the Governmental Accounting Standards
Board. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
The Honorable Mayor and Members of the Town Council
Town of Fountain Hills, Arizona
(13)
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Town’s basic financial statements. The introductory section, combining and
individual fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The combining and
individual fund financial statements and schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole. The introductory and statistical
sections have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
LarsonAllen LLP
Mesa, Arizona
November 8, 2010
REQUIRED SUPPLEMENTARY INFORMATION
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(14)
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, 2010. 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 focuses on current year activities and operations and should be read in combination with
the transmittal letter and the financial statements that follow. We encourage readers to consider the
information presented here in conjunction with additional information that we have furnished in our letter
of transmittal, which can be found in the introductory section of this report.
FINANCIAL HIGHLIGHTS
The assets of the Town exceeded its liabilities at the close of fiscal year 2009-10 and fiscal year
2008-09 by $119.2 million and $120.2 million, respectively. Of these amounts, $12.3 million and
$13.8 million, respectively, may be used to meet the government’s ongoing obligations to
citizens and creditors.
Governmental activities program revenues increased by approximately $833,342 (29%) over the
previous year. This was due to an increase in operating grants/contributions for a major road
project. Charges for services decreased by $112,364 (8%) and capital grants decreased by
$720,792 (53%).
At June 30, 2010, total fund balance of the governmental funds was $22.8 million, up $.4 million
(1.9%) from the previous year. Of this, $3.8 million is unreserved in the General Fund, while the
remainder is reserved for specific purposes.
The major governmental funds which includes the General Fund, totaling $13.5M in revenues,
consisting primarily of local taxes, intergovernmental taxes, charges for services and licenses
and permits. The total expenditures of the General Fund were $12.8M and the fund balance
increased from $6.7M to $7.0M including the Rainy Day and Vehicle Replacement Funds. The
non-major governmental funds revenues were $2.8M with the majority from Intergovernmental
Highway User Revenue Funds (HURF). Expenditures for the non-major funds was $1.8M with
$1.0M from HURF
The Town’s total net assets of governmental activities decreased $1,019,825 (0.9%) from the
prior fiscal year; revenues declined 12% but reductions in expenditures were also made (11%).
General revenues accounted for $16.0 million in revenue, or 81% of all current fiscal year
revenues. Program specific revenues in the form of charges for services and grants and
contributions accounted for $3.7 million or 19% of total current fiscal year revenues.
The Town had approximately $20.7 million in expenses related to governmental activities, a
decrease of 11% from the prior fiscal year. The decline caused by a protracted economic
recession resulted in significant expenditure reductions in all activities with the exception of
projects related to Highways and Streets projects that were State funded.
Per local policy, residual undesignated General Fund revenues are transferred at year end to
the Capital Projects Fund ($15,193 for fiscal year 2009-10). Therefore, the General Fund
balance remains unchanged at $7.0 million (including a Rainy Day and Vehicle Replacement
Fund).
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(15)
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis are 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.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of
the Town’s finances, in a manner similar to a private sector business. The accrual basis of accounting
is used for the government-wide financial statements.
The statement of net assets presents information on all of the Town’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets
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 assets changed during the
most recent fiscal year. All changes in net assets 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., uncollected taxes and earned but unused compensated absences).
The government-wide financial statements outline functions of the Town that are principally supported
by taxes and intergovernmental revenues. The governmental activities of the Town include general
government, public safety, highways and streets, culture and recreation, community development, and
interest on long-term debt.
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 of the funds of the Town are
included in the governmental 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.
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(16)
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 balances 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 Fund, General
Obligation Debt Service Fund, Municipal Property Corporation Debt Service Fund, and Capital Projects
Fund, all of which are considered to be major funds. Data from the 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 Basic 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 basic financial statements can be
found immediately following the basic financial statements.
Other Information
Governments have the option of including the budgetary comparison statements for the General Fund
and major special revenue funds as either part of the fund financial statements within the basic financial
statements, or as required supplementary information following the notes to the basic financial
statements. The Town has chosen to present these budgetary statements as part of the basic financial
statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
While this document contains information about the funds used by the Town to provide services to our
citizens, the Statement of Net Assets 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.
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(17)
Analysis of Net Assets
Net assets may serve over time as a useful indicator of a government’s financial position. In the case of
the Town, assets exceeded liabilities by $119,184,715 million at the current fiscal year end. The
following table presents a summary of the Town’s net assets for the fiscal years ended June 30, 2010
and June 30, 2009.
2010
2009
(Restated)
Percent
Change
Assets
Current and Other Assets 27,897,140$ 27,432,899$ 1.69%
Capital Assets:
Non-depreciable 26,030,483 25,150,168 3.50%
Depreciable (net) 87,486,356 92,230,114 -5.14%
Total Assets 141,413,979 144,813,181 -2.35%
Liabilities
Other Liabilities 3,873,026 1,505,346 157.28%
Long-Term Liabilities:
Due Within One Year 2,155,612 2,284,921 -5.66%
Due in More Than One Year 16,200,626 20,818,374 -22.18%
Total Liabilities 22,229,264 24,608,641 -9.67%
Net Assets
Invested in Capital Assets, Net
of Related Debt 95,467,509 94,611,110 0.91%
Restricted 11,396,116 11,828,137 -3.65%
Unrestricted 12,321,090 13,765,293 -10.49%
Total Net Assets 119,184,715$ 120,204,540$ -0.85%
Town of Fountain Hills, Arizona
Statement of Net Assets
The largest portion of the Town’s net assets (80%) reflects its investment in capital assets (e.g., land,
infrastructure, buildings, improvements other than buildings, vehicles, machinery and equipment, and
artwork) less any related debt used to acquire those assets that is still outstanding. 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 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. In addition, a portion of
the Town’s net assets (10%) are for the specified purposes of debt service repayment, capital outlay
investment, and highways and streets.
At the end of the current fiscal year, the Town reported positive balances in all three categories of net
assets. The same situation held true for the prior fiscal year.
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.
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(18)
Analysis of Changes in Net Assets
The Town’s total net assets decreased by $1,019,825 during the FY09-10; the decrease is primarily a
result of the decline in depreciable assets as the protracted economy prevents investments in
infrastructure. Future investments in capital assets will be possible as the economy recovers and funds
are made available through the American Recovery and Reinvestment Act.
Total governmental revenues declined significantly over the prior year with a net decrease of
$2,732,253 (12%). The most significant decrease is a decline in state revenue sharing of $2,387,124
(32%) and investment earnings due to the low rate of return in the Local Government Investment Pool
($235,647 or 91%). The Town also incurred a decrease of $1,287,934 (14%) in sales tax revenues due
to a decline in sales taxes from state and local governments. The Town is going through the process of
updating the investment policy to allow for more diverse options for investing idle cash.
The Town’s total revenues for the current fiscal year were $19.7 million. The total cost of all programs
and services was $20.7 million. The following table presents a summary of the changes in net assets
for the fiscal years ended June 30, 2010 and June 30, 2009.
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TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(19)
2010
2009
(Restated)
Percent
Change
REVENUES
Program Revenues:
Fees, Fines and Charges for Services 1,375,680$ 1,488,044$ -7.55%
Operating Grants and Contributions 1,666,498 - 100.00%
Capital Grants and Contributions 632,617 1,353,409 -53.26%
General Revenues:
Sales Taxes 7,644,440 8,932,374 -14.42%
Property Taxes 1,928,028 1,531,770 25.87%
Franchise Taxes 285,881 321,964 -11.21%
State Shared Revenues 5,179,602 7,566,726 -31.55%
Auto Lieu Taxes 821,321 889,826 -7.70%
Investment Earnings 22,831 258,478 -91.17%
Miscellaneous 129,740 76,300 70.04%
Total Revenues 19,686,638 22,418,891 -12.19%
EXPENSES
General Government 3,720,236 4,231,529 -12.08%
Public Safety 6,293,323 7,312,415 -13.94%
Highways and Streets 5,202,285 5,051,294 2.99%
Culture and Recreation 2,927,848 3,336,616 -12.25%
Community Development 1,612,287 2,218,994 -27.34%
Interest on Long-Term Debt 950,484 1,033,536 -8.04%
Total Expenses 20,706,463 23,184,384 -10.69%
CHANGE IN NET ASSETS (1,019,825) (765,493) -33.22%
Net Assets - Beginning of Year, as
Restated 120,204,540 120,970,033 -0.63%
NET ASSETS - END OF YEAR 119,184,715$ 120,204,540$ -0.85%
Town of Fountain Hills, Arizona
Changes in Net Assets
General revenues such as property, business, and privilege taxes are not shown by program, but are
effectively used to support program activities town-wide. For governmental activities overall, without
regard to program, business taxes which includes Sales and Use Taxes and Franchise Taxes, are the
largest single source of funds (40%), followed by state shared revenues and auto lieu (30%), property
taxes (10%), charges for services (7%) and grants (12%).
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(20)
The charts below compare the governmental expenses from fiscal year 2008-09 and fiscal year 2009-
10.
General Government Public Safety Highways and Streets
Culture and Recreation Community Development Interest on long-term debt
The following are significant current year transactions that had an impact on the Statement of Net
Assets and Statement of Activities:
Overall revenues decreased by 12% compared to last year as the economic recession resulted
in less construction related revenues and sales tax; interest on investments also declined with
lower rates of return
Depreciable net assets declined 5% ($4.7 million) with the Town’s deferred investment in capital
infrastructure and improvements
A major road project, Shea Boulevard climbing lane, was funded through the American
Recovery and Reinvestment Act (ARRA) through Arizona Department of Transportation ($1.5
million). This was not a federal grant to the Town.
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(21)
State Shared revenues are determined by the prior two years of income tax returns in Arizona
and is shared with cities and towns based on population; the two year lag affected the current
fiscal year revenues and will for at least the next two years as the economy lags. Additionally,
as surrounding communities grow in population the Town may lose a proportionate share due to
fixed borders and lack of available developable land.
Sales tax revenues in Fountain Hills are derived primarily from retail, telecommunications,
restaurant/bars and construction activity. Construction activity saw the steepest declines from
$2.4 million in FY08 to less than $600 thousand in FY10; retail activity, however, decreased
slightly (less than 3%).
Overall expenses decreased 11% as the Town cuts expenses with available resources.
A major restructuring of the organization resulted in the elimination of 13 positions, consolidation
of three departments with a fiscal year savings of $800,000. The previous departments of
Planning & Zoning, Building Safety and Public Works have been combined into one department
– Development Services. The Community Center Department was consolidated into a new
Community Services Department which includes parks, recreation, Community Center and
Senior Services.
Public Safety costs include contracts for police and fire; those contracts are multi-year with
automatic increases
Other significant expense reductions were deferral of replacement equipment and vehicles until
the economy shows signs of recovery
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 resources that are available for spending. Such information is
useful in assessing the Town’s financing requirements. In particular, unreserved fund balance may
serve as a useful measure of a government’s net resources available for spending at the end of the
fiscal year. Types of Major Governmental Funds reported by the Town include the General Fund,
Capital Projects Fund, General Obligation Debt Service Fund, and the Municipal Property Corporation
Debt Service Fund.
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 a combined fund balance of $22.8 million, an
increase of $0.4 million due primarily due to increased sales tax collections for the government as a
whole, offset by the use of reserves for planned capital projects in the Capital Projects Fund.
Increase
(Decrease)
Fund Balance From 2008-09
General Fund * 6,988,406$ 323,257$
Capital Projects Fund 10,020,336 (226,059)
General Obligation Debt Service Fund 110,830 107,067
Municipal Property Corporation Debt Service Fund 1,041,354 (164,048)
Nonmajor Governmental Funds 4,688,657 384,449
* Including Rainy Day and Vehicle Replacement Funds
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(22)
The General Fund is the chief operating fund of the Town of Fountain Hills, Arizona. At the end of the
current fiscal year, the fund balance of the General Fund was $6,988,406, while total fund balance of
the funds reached $22.8 million. As a measure of the General Fund’s liquidity, it may be useful to
compare both General Fund balance and total fund balance to total fund expenditures. General Fund
balance represents 55 percent of total General Fund expenditures, while total fund balance represents
123 percent of total expenditures. The fund balance of the Town of Fountain Hills, Arizona’s General
Fund increased by $323,257 during the current fiscal year. Expenditures within the General Fund
decreased 10% over the prior year – the savings were partially realized with consolidation of Town
departments as well as deferral of maintenance and equipment/vehicle replacement.
The General Fund comprises 30.6 percent of the total fund balance. Approximately $3.2 million, or 46
percent of the General Fund’s fund balance constitutes unreserved fund balance. The remaining fund
balance is reserved to indicate that it is not available for spending because it has already been
committed as follows:
$9,133 for inventory
$3,740 for prepaids
$333,796 for vehicles replacement
$1.3M for rainy day funds
$1.9M reserved for other purposes
The General Fund is the principal operating fund of the Town; overall the General Fund’s performance
resulted in revenues over expenditures for FY10 in an amount of $323,257. The fund balance of $7.0
million in the General Fund as of June 30, 2010 has remained consistent over the past three years.
The fund balance of the Capital Project’s Fund decreased $(226,059) during the current fiscal year. The
original budget anticipated a drawdown of capital funds by $2.1 million however, the projects have been
carried over to fiscal year 2010-11.
The fund balance of the General Obligation Debt Service Fund increased $107,067 during the current
fiscal year. The increase was largely due to property tax collections higher than anticipated; the result is
a decreased levy for the upcoming year.
The fund balance of the Municipal Property Corporation (MPC) Debt Service Fund decreased
$(164,048) during the current fiscal year. Revenues for the MPC are derived from local sales tax
collections which have declined over the past four years, however, the annual debt payment committed
for the MPC is fixed but there are sufficient reserves to pay annual debt service.
All nonmajor governmental funds of the Town are combined into one column on the governmental fund
statements. The nonmajor governmental funds reported a $384,449 increase in fund balance mainly
due to the collection of restricted revenues that were not expended during the year (specifically,
downtown development and impact fees).
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(23)
BUDGETARY HIGHLIGHTS
A schedule showing the original and final budget amounts compared to the Town’s actual financial
activity for the General Fund is provided in this report as part of the basic financial statements. The
significant variances are summarized as follows:
The unfavorable revenue variance of $238,097 in intergovernmental revenues was a result of the
State’s projection of State sales and vehicle license taxes being more than actual collections which
affects the distribution to cities and towns.
The unfavorable revenue variance of $129,246 in licenses and permits reflects the continued economic
recession, particularly in construction related activities. Building permit revenues continue to decline as
well as business license renewals and applications.
The unfavorable revenue variance of $117,613 in investment income was a result of decreased rate of
return on Town investments on deposit with the Arizona State Treasurers Local Government
Investment Pool where the Town’s idle funds are maintained in a pool of government securities.
The favorable revenue variance of $25,071 in fines and forfeiture reflects increased court activity
related to increased traffic enforcement within Town borders.
The favorable expenditure variance of $1,111,155 includes all departments. With declining resources,
all departments and divisions reduced their budgets early in the fiscal year by eliminating staff
positions, decreased maintenance of parks, open space, facilities and deferred projects. Additionally,
three department directors retired early due to consolidation of departments.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2010, the Town had invested $189.9 million in capital assets, including buildings,
vehicles, computers, equipment, infrastructure and artwork. This amount represents a net increase
prior to depreciation of $0.6 million from the prior fiscal year, primarily due to a major road improvement
project on Shea Boulevard that is under construction. Total depreciation expense for the current fiscal
year was $5.0 million.
The following schedule presents a summary of capital asset balances for the fiscal years ended
June 30, 2010 and June 30, 2009.
2010 2009
Percent
Change
Land 23,571,668$ 23,571,668$ 0.00%
Artwork 1,578,500 1,578,500 0.00%
Construction in Progress 880,315 - 100.00%
Infrastructure 61,746,350 65,197,553 -5.29%
Buildings 15,314,231 15,560,953 -1.59%
Improvements other than Buildings 9,432,563 10,183,683 -7.38%
Vehicles, Machinery and Equipment 993,212 1,287,925 -22.88%
Total Capital Assets 113,516,839$ 117,380,282$ -3.29%
Town of Fountain Hills, Arizona
Capital Assets
(Net of Accumulated Depreciation)
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(24)
Additional information on the Town’s capital assets can be found in Note 3.A.3.
Long-Term Debt
At year-end, the Town had $18,049,330 million in bonds outstanding, $2,124,921 million due within one
year; this represents a net decrease of $2,469,921 million. The chart below is a summary of the Town’s
outstanding debt as of year end:
2010 2009
General Obligation Debt 9,045,000$ 10,390,000$
Revenue Bonds 8,920,000 10,035,000
Premium on Debt Service 84,330 94,251
Total Outstanding Debt 18,049,330$ 20,519,251$
Town of Fountain Hills, Arizona
Oustanding Long-term Bonds
The Town’s general obligation bonds are subject to two limits; the Constitutional debt limit (total debt
limit) on all general obligation bonds (up to 20% of the total secondary assessed valuation) and the
statutory debt limit on general municipal purpose bonds (up to 6% of the total secondary assessed
valuation). The current total debt limitation for the Town is $109.9 million, which is more than the
Town’s outstanding general obligation debt.
Additional information on the Town’s long-term debt can be found in Notes 3.C.
ECONOMIC FACTORS
The Town continues to maintain strong reserves for unforeseen circumstances, whether of a financial
nature or a natural (or other) disaster. The Town’s reserves, in combination with our consistent
adherence to adopted financial policies and management practices, proved big factors in the credit
rating awarded to Fountain Hills by the major credit rating companies.
The housing market has cooled significantly (both nationally and regionally), indicating that the overall
economy may continue to experience slow growth in the year ahead. The Town’s local housing
economy provides building permit and construction sales tax revenue, which have declined over the
past three fiscal years. With a limited inventory of available lots the Town will have to adjust to the new
economy, one that is less dependent upon building activity as a source of reliable revenue. There is an
area of almost 1,300 acres that was annexed in 2006 that is planned to be developed but the first
building permit is not scheduled to be pulled until 2015.
The Town’s local sales tax collections, which represent the largest Town revenue source is made up of
primarily construction, retail, telecommunications and restaurant bar activity. Construction related sales
tax are projected to continue declining for the foreseeable future; retail collections, however, are
projected to remain steady due to the fact that the existing retail base is not significantly affected by the
recession (major retail activity consists of three grocery stores and one shopping center with a major
retailer).
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(25)
The Town is heavily dependent upon State Shared Revenues for General Fund operations (43%);
State-shared income tax revenues are anticipated to decline for the second year in a row in fiscal year
2011-12 due to a two year lag between actual individual and business revenues and State collections
with a total General Fund decline of 22% over the past four years. The Town is aggressively pursuing
economic vitality and redevelopment opportunities, specifically a proposed development in the
downtown center. The Town recently partnered with the Fountain Hills Chamber of Commerce to
commission a vision for the downtown core including the world renowned fountain lake area. The plan
was presented to the public late summer of 2009 and will be a useful tool for Economic Development to
attract developers.
As of June 30, 2010 the Town had set aside $9.9 million in the capital improvement fund but the
majority of capital projects will be deferred until the economy improves. The Town has been successful
in obtaining stimulus funding for a major road improvement along Shea Boulevard that was completed
in FY10. The Town expects to begin construction on another major road improvement on Shea
Boulevard with further stimulus funding in FY11.
NEXT YEAR’S BUDGETS AND RATES
Current economic conditions will force the Town to evaluate core services and, in some cases, to
reduce existing service levels. Prudent long-term fiscal planning dictates that we remain conservative,
focus on the highest Council and citizen priorities, and fund only those enhancements we can sustain
financially.
The FY11 operating budget is $17.4 million representing a 12% decrease from fiscal year 2009-10. The
operating budget is comprised of the costs to continue operations from year to year without any capital
expenditures. It encompasses all the basic services provided to Fountain Hills’ residents: police and fire
protection; parks, recreation, streets maintenance; planning and zoning; building inspection; economic
development and administrative services. The capital budget is set at $6.4 million, a 49% decrease
over fiscal year 2009-10. It includes projects that qualify for Federal stimulus funding under the
American Recovery and Reinvestment Act (ARRA) of 2009; qualified projects include widening of Shea
Boulevard from two to three lanes. Shea Boulevard is a major thoroughfare that connects the east
valley with Fountain Hills through Scottsdale. There are some projects in the five-year plan that are
considered affordable within current revenue sources, others will require other sources of revenue for
funding such as bonds, grants, etc. Capital budgets tend to rise and fall each year depending on the
timing of projects – especially if a Town, such as Fountain Hills, strives to achieve a “pay-as-you-go”
program.
The Capital Improvement Program (CIP) is the Town’s financial plan for supporting large capital
projects. The five-year CIP addresses the growing needs of the community and enhances the quality of
life through major public investment, and is an essential ingredient in the Town’s service delivery plan.
The CIP is closely aligned with the General Plan, and integrates a number of specialized facility and
infrastructure master plans. Looking ahead, the five-year CIP totals $70.3 million; with the Capital
Budget for fiscal year 2010-11 totaling $6.4 million (which includes carryover funds for some large
projects currently underway). In fiscal year 2010-11, the CIP places major emphasis on major road
improvements and maintenance. Due to the economy there are no recreational or non essential
projects proposed.
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30, 2010
(26)
CONTACTING THE TOWN’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, and investors and creditors with a
general overview of the Town’s finances and to demonstrate the Town’s accountability for the
resources it receives. If you have questions about this report or need additional information, contact the
Finance Department, Town of Fountain Hills, 16705 East Avenue of the Fountains, Fountain Hills,
Arizona 85268.
THIS PAGE BLANK
BASIC FINANCIAL STATEMENTS
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF NET ASSETS
JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(27)
Governmental
Activities
ASSETS
Cash and Investments 22,607,750$
Cash with Paying Agent 2,874,668
Receivables, Net:
Accounts Receivable 223,516
Intergovernmental Receivables 958,691
Property Taxes Receivable 90,363
Prepaid Items 3,740
Deferred Charges 1,129,279
Inventory, at cost 9,133
Capital Assets:
Non-Depreciable 26,030,483
Depreciable (Net) 87,486,356
Total Assets 141,413,979
LIABILITIES
Accounts Payable 826,944
Accrued Wages and Benefits 134,469
Interest Payable 414,668
Matured Debt Principal Payable 2,460,000
Unearned Revenue 36,945
Noncurrent Liabilities:
Due Within One Year 2,155,612
Due in More Than One Year 16,200,626
Total Liabilities 22,229,264
NET ASSETS
Invested in Capital Assets, Net of Related Debt 95,467,509
Restricted for:
Highways and Streets 318,570
Culture and Recreation 1,521
Debt Service 1,183,222
Capital Outlay 9,892,803
Unrestricted 12,321,090
Total Net Assets 119,184,715$
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(28)
Net (Expense)
Revenue
Fees, Fines and Operating Capital
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Activities
Governmental Activities:
General Government 3,720,236$ 1,340,457$ -$ 4,616$ (2,375,163)$
Public Safety 6,293,323 32,667 127,647 - (6,133,009)
Highways and Streets 5,202,285 2,556 1,538,851 628,001 (3,032,877)
Culture and Recreation 2,927,848 - - - (2,927,848)
Community Development 1,612,287 - - - (1,612,287)
Interest on Long-Term Debt 950,484 - - - (950,484)
Total Governmental Activities $ 20,706,463 $ 1,375,680 $ 1,666,498 $ 632,617 (17,031,668)
General Revenues:
Taxes:
Sales Taxes 7,644,440
Property Taxes 1,928,028
Franchise Taxes 285,881
State Sales Tax Revenue Sharing - Unrestricted 5,179,602
Auto Lieu Tax Revenue Sharing - Unrestricted 821,321
Investment Earnings 22,831
Miscellaneous 129,740
Total General Revenues 16,011,843
Change in Net Assets (1,019,825)
Net Assets - Beginning, As Restated 120,204,540
Net Assets - Ending 119,184,715$
Program Revenues
and Changes
in Net Assets
TOWN OF FOUNTAIN HILLS, ARIZONA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(29)
Municipal
General Property
Capital Obligation Corporation
General Projects Debt Service Debt Service
ASSETS
Cash and Investments 6,358,006$ 10,597,233$ 71,791$ 973,920$
Cash with Paying Agent - - 1,240,769 1,193,443
Accounts Receivable 223,516 - - -
Intergovernmental Receivable 740,569 - - 67,434
Taxes Receivable - - 81,008 -
Due from Other Funds 388 - - -
Inventory, at cost 9,133 - - -
Prepaid Items 3,740 - - -
Total Assets 7,335,352$ 10,597,233$ 1,393,568$ 2,234,797$
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts Payable 193,133$ 576,897$ -$ -$
Accrued Wages and Benefits 121,868 - - -
Due to Other Funds - - - -
Interest Payable - - 125,769 208,443
Deferred Revenue 31,945 - 41,969 -
Matured Debt Principal Payable - - 1,115,000 985,000
Total Liabilities 346,946 576,897 1,282,738 1,193,443
Fund Balances:
Reserved for:
Inventory 9,133 - - -
Prepaid Items 3,740 - - -
Other Purposes 3,222,938 - - -
Unreserved, Designated
Vehicle Replacement 333,796 - - -
Unreserved, Undesignated 3,418,799 10,020,336 110,830 1,041,354
Unreserved, Reporting in Nonmajor:
Special Revenue Funds - - - -
Debt Service Funds - - - -
Total Fund Balance 6,988,406 10,020,336 110,830 1,041,354
Total Liabilities and Fund Balance 7,335,352$ 10,597,233$ 1,393,568$ 2,234,797$
(30)
Nonmajor Total
Governmental Governmental
Funds Funds
4,606,800$ 22,607,750$
440,456 2,874,668
150,688 374,204
- 808,003
9,355 90,363
- 388
- 9,133
- 3,740
5,207,299$ 26,768,249$
56,914$ 826,944$
12,601 134,469
388 388
80,456 414,668
8,283 82,197
360,000 2,460,000
518,642 3,918,666
- 9,133
- 3,740
- 3,222,938
159,484 493,280
- 14,591,319
4,498,523 4,498,523
30,650 30,650
4,688,657 22,849,583
5,207,299$ 26,768,249$
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(31)
Total Fund Balances for Governmental Funds 22,849,583$
Governmental Capital Assets 189,927,026
Less Accumulated Depreciation (76,410,187)
Capital Assets Used in Governmental Activities 113,516,839
Property Taxes 45,252
1,129,279
General Obligation Bonds (9,045,000)
Revenue Bonds Payable (8,920,000)
Deferred Amount on Premium (84,330)
Compensated Absences (306,908)
Total Net Assets of Governmental Activities 119,184,715$
Long term liabilities, including bonds payable, are not due and payable in the current
period and therefore are not reported in the governmental funds.
Capital assets used in governmental activities are not financial resources and therefore
are not reported in the governmental funds.
Amounts reported for governmental activities in the statement of activities are different
Some revenues are not available to pay for current period expenditures and, therefore,
are deferred in the funds.
Bond issuance costs are reported as expenditures in the governmental funds and shown
net of accumulated amortization in the statement of net assets.
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(32)
Municipal
General Property
Capital Obligation Corporation
General Projects Debt Service Debt Service
REVENUES
Taxes:
Sales Taxes 6,044,684$ 457,767$ -$ 856,492$
Property Taxes - - 1,475,213 -
Franchise Taxes 285,881 - - -
Intergovernmental 5,908,498 - - -
Fines and Forfeitures 264,363 - - -
Licenses and Permits 399,094 - - -
Charges for Services 217,949 - - -
Rents and Royalties 215,520 - - -
Investment Earnings 7,387 9,817 - 1,998
Other 110,402 - - -
Total Revenues 13,453,778 467,584 1,475,213 858,490
EXPENDITURES
Current:
General Government 2,893,489 - - -
Public Safety 6,200,227 - - -
Highways and Streets - - - -
Culture and Recreation 1,988,912 - - -
Community Development 1,669,449 - - -
Debt Service:
Principal Retirement - - 1,115,000 985,000
Interest on Long-Term Debt - - 253,146 424,538
Capital Outlay - 1,249,607 - -
Total Expenditures 12,752,077 1,249,607 1,368,146 1,409,538
Excess (Deficiency) of Revenues Over
Expenditures 701,701 (782,023) 107,067 (551,048)
OTHER FINANCING SOURCES (USES)
Transfers In 36,074 555,964 - 387,000
Transfers Out (414,518) - - -
Total Other Financing Sources (Uses) (378,444) 555,964 - 387,000
Net Change in Fund Balance 323,257 (226,059) 107,067 (164,048)
FUND BALANCE
Beginning of Year, As Restated 6,665,149 10,246,395 3,763 1,205,402
End of Year 6,988,406$ 10,020,336$ 110,830$ 1,041,354$
(33)
Nonmajor Total
Governmental Governmental
Funds Funds
285,497$ 7,644,440$
413,451 1,888,664
- 285,881
1,763,539 7,672,037
32,667 297,030
- 399,094
246,087 464,036
- 215,520
3,629 22,831
19,338 129,740
2,764,208 19,019,273
292,879 3,186,368
- 6,200,227
973,746 973,746
18,825 2,007,737
- 1,669,449
360,000 2,460,000
165,173 842,857
4,616 1,254,223
1,815,239 18,594,607
948,969 424,666
148,738 1,127,776
(713,258) (1,127,776)
(564,520) -
384,449 424,666
4,304,208 22,424,917
4,688,657$ 22,849,583$
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGE IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(34)
Net Change in Fund Balances of Governmental Funds 424,666$
Expenditures for Capital Assets 532,461
Less Current Year Depreciation (5,019,359)
Excess Depreciation Over Capital Expenditures (4,486,898)
(4,546)
Property Taxes 39,364
Principal Payments on General Obligation Bonds 1,345,000
Principal Payments on Revenue Bonds 1,115,000
Amortization of Deferred Amount on Bond Premium 9,921
Amortization of Deferred Charges (117,548)
Capital Contributions 628,001
Net Decrease in Compensated Absences 27,215
Change in Net Assets of Governmental Activities (1,019,825)$
Amounts reported for governmental activities in the statement of activities are different
because:
Governmental funds report capital outlays as expenditures. However, in the statement of
activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense.
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 the governmental
Some revenues reported in the statement of activities do not provide current financial
resources and therefore are not reported as revenues in governmental funds.
The statement of activities reports losses arising from the disposal of existing capital
assets. Conversely, governmental funds do not report any gain or loss on disposals of
capital assets.
The issuance of long term debt (e.g. bonds) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net assets. The issuance of long-term debt increases long-term liabilities on the
statement of net assets and the repayment of principal on long-term debt reduces long-
term debt on the statement of net assets. Also, governmental funds report the effect of
issuance costs, premiums, and similar items when the debt is first issued, whereas these
items are deferred and amortized over the term of the long term debt in the statement of
activities.
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
GENERAL FUND
YEAR ENDED JUNE 30, 2010
See accompanying Notes to Basic Financial Statements.
(35)
Variance with
Final Budget Actual Final Budget
REVENUES
Taxes:
Sales Taxes 6,628,911$ 6,044,684$ (584,227)$
Franchise Taxes 363,731 285,881 (77,850)
Intergovernmental 6,146,595 5,908,498 (238,097)
Fines and Forfeitures 239,292 264,363 25,071
Licenses and Permits 528,340 399,094 (129,246)
Charges for Services 427,048 217,949 (209,099)
Contributions and Donations - 215,520 215,520
Investment Earnings 125,000 7,387 (117,613)
Other 128,462 110,402 (18,060)
Total Revenues 14,587,379 13,453,778 (1,133,601)
EXPENDITURES
Current:
General Government:
Mayor and Council 85,640 67,821 17,819
Magistrate Court 397,528 406,769 (9,241)
General and Administrative 2,951,824 2,418,899 532,925
Total General Government 3,434,992 2,893,489 541,503
Public Safety:
Building Safety 578,890 467,702 111,188
Law Enforcement 2,844,877 2,811,426 33,451
Fire Department 2,944,868 2,921,099 23,769
Total Public Safety 6,368,635 6,200,227 168,408
Culture and Recreation:
Park and Recreation 310,447 296,386 14,061
Civic Center 1,651,571 1,468,495 183,076
Senior Services 260,127 224,031 36,096
Total Culture and Recreation 2,222,145 1,988,912 233,233
Community Development
Public Works 1,363,021 1,218,044 144,977
Planning and Zoning 474,439 451,405 23,034
Total Community Development 1,837,460 1,669,449 168,011
Total Expenditures 13,863,232 12,752,077 1,111,155
Excess (Deficiency) of Revenues Over
Expenditures 724,147 701,701 (22,446)
OTHER FINANCING SOURCES (USES)
Transfers In 108,850 36,074 (72,776)
Transfers Out (662,422) (414,518) 247,904
Total Other Financing Sources (Uses) (553,572) (378,444) 175,128
Net Change in Fund Balance 170,575 323,257 152,682
FUND BALANCE
Beginning of Year, As Restated - 6,665,149 6,665,149
End of Year 170,575$ 6,988,406$ 6,817,831$
Original and
THIS PAGE BLANK
NOTES TO BASIC FINANCIAL STATEMENTS
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(36)
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 is a municipal entity governed by an elected Mayor and council. As required
by accounting principles generally accepted in the United States of America, these
financial statements present the Town and its component units, entities for which the
Town is considered to be financially accountable. Blended component units, although
legally separate entities, are, in substance, part of the Town’s operations and so data
from these units are combined with data of the Town, the primary government.
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,
component units combined with the Town for financial statement presentation purposes
and the Town is 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 Town and the Cottonwoods Improvement Town.
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 for Town taxes, and thus 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. For financial reporting
purposes, transactions of the Towns 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. For financial reporting purposes, transactions of the MPC are combined together
and included as if they were part of the Town’s operations.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(37)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the
statement of activities) present financial information about the Town as a whole. For the
most part, the effect of internal activity has been removed from these statements. These
statements are to distinguish between the governmental and business-type activities of
the Town. Governmental activities normally are supported by taxes and
intergovernmental revenues. The Town does not have any business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment and
2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes, state shared revenues,
investment income and other items not included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary
funds. Major individual governmental funds are reported as separate columns in the
fund financial statements.
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. Property taxes are recognized as revenues in the year for which
they are levied. Grants and similar items are recognized as revenue as soon as all
eligibility requirements imposed by the 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.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(38)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service resources are provided during the current year for
payment of long-term debt principal and interest due early in the following year (not to
exceed one month) and therefore the expenditures and related liabilities have been
recognized. Compensated absences are recorded only when payment is due.
Property taxes, sales taxes, franchise taxes, licenses and permits, charges for services,
special assessments and investment income 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. Grants and similar awards are recognized as
revenue as soon as all eligibility requirements imposed by the grantor or provider have
been met. Deferred 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.
Delinquent property taxes have been recorded as deferred revenue. Receivables that
will not be collected within the available period have also been reported as deferred
revenue on the governmental fund financial statements.
When both restricted and unrestricted resources are available for use, it is the Town’s
policy to use restricted resources first, then unrestricted resources as they are needed.
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. Non-major
funds are aggregated and presented in a single column. The internal service fund is
presented in a single column on the face of the proprietary fund statements.
The Town reports the following major governmental funds.
Major Governmental Funds
General Fund
This fund is the Town’s primary operating fund. It accounts for all financial resources of
the Town, except those required to be accounted for in other funds.
Capital Projects Fund
This fund accounts for the capital improvements to various projects of the Town.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(39)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
General Obligation Debt Service Fund
This fund accounts for the Town’s property tax revenues received to pay the debt
service of the Town’s general obligation bonds.
Municipal Property Corporation Debt Service Fund
This fund accounts for the revenues received to pay the debt service on MPC revenue
bonds.
D. Assets, Liabilities, and Net Assets or Equity
1. Deposits and Investments
The Town’s cash and cash equivalents are considered to be cash on hand, demand
deposits, cash and investments held by the State Treasurer, and highly liquid
investments with maturities of three months or less from the date of acquisition.
Cash and investments are pooled except for funds required to be held by fiscal agents
or restricted under provisions of bond indentures. Interest earned from investments
purchased with such pooled monies is allocated to each of the funds based on the
average daily cash balances. State statutes authorize the Town to invest in obligations
of the U.S. Treasury and U.S. agencies, certificates of deposit in eligible depositories,
repurchase agreements, obligations of the State of Arizona or any of its counties or
incorporated cities, towns or duly organized school districts, improvement districts in
this state and the State Treasurer’s Local Government Investment Pool. Investments
are stated at fair value.
2. 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). All other outstanding balances between funds
are reported as “due to/from other funds.”
All trade and property tax receivables are shown net of an allowance for uncollectibles.
Property taxes are levied by the Town and collected by the Maricopa County Treasurer.
Property taxes are levied no later than the third Monday in August and are payable in
two installments due October 1 of the current year and March 1 of the subsequent year.
Taxes become delinquent after the first business day of November and May,
respectively. Interest attaches on installments after the delinquency date.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(40)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. Receivables and Payables (Continued)
Pursuant to A.R.S. a lien against assessed real and personal property attaches on the
first day of January preceding assessment and levy; however according to case law, an
enforceable legal claim to the asset does not arise. The State Constitution and State
law specify a property tax levy limitation system. The system consists of two levies, a
limited levy known as the primary property tax levy and an unlimited levy referred to as
the secondary levy, which may only be used to retire bonded indebtedness.
The primary tax levy is limited to an increase of 2% over the previous year’s maximum
allowable primary levy, plus an increased dollar amount because of a net gain in
property not taxed the previous year. Also, the primary property tax from all taxing
jurisdictions for homeowners may not exceed 1% of the market value of their homes. If
the combined primary property tax (for the Town, County, School Town, etc.) exceeds
1% of the market value of the homes, the school districts will reduce their rate until the
homeowners’ aggregate rate is equal to or less than the allowable 1%. The State will
then subsidize the school districts for the reduced revenue. This 1% limitation applies to
primary property taxes only and does not affect the secondary property tax levy.
There is also a control on the assessed value of property for primary tax purposes. The
base year for the new tax system is fiscal year 1978-79. From this base year, two
assessed values evolve. The primary assessed values are allowed to increase by no
more than 10% a year. The dollar amount of the secondary property tax levy is
“unlimited” and the actual full cash value of property is used in determining the tax rate.
3. Inventory
Inventories are stated at average cost using the first-in/first-out (FIFO) method.
Inventories consist of expendable supplies held for consumption. Inventories are
recorded as expenses when consumed in the government-wide financial statements,
and as expenditures when consumed on the fund financial statements.
4. 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.
5. Capital Assets
Capital assets, which include land, artwork, buildings, improvements other than
buildings, vehicles, machinery, and equipment, construction in progress, and
infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in
the governmental activities column in the government-wide financial statements. Capital
assets are defined by the Town as assets with an initial, individual cost of $5,000 or
more and an estimated useful life of more than one year. The capital assets include all
infrastructure assets acquired by the Town since incorporation.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(41)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
5. Capital Assets (Continued)
Such assets are recorded at historical cost or estimated historical cost if actual historical
cost is not available. Donated capital assets are recorded at estimated fair market value
at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset
or materially extend the life of the asset are not capitalized. Major outlays for capital
assets and improvements are capitalized as projects are constructed.
Capital assets of the Town are depreciated using the straight-line method over the
following estimated useful lives:
Assets Years
Infrastructure 15-50
Buildings 50
Improvements other than buildings 20
Vehicles, machinery and equipment 5-15
6. 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 vest after 30 days at
the employee’s 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 leave, resignations and retirements. Generally,
resources from the General Fund are used to pay for compensated absences.
7. Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities on the statement of net assets. Bond premiums and discounts, as well as
issuance costs and the difference between the reacquisition price and the net carrying
amount of the old debt, are deferred and amortized over the life of the bonds using the
straight-line method over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums
and discounts, as well as bond issuance costs, during the current period. The face
amount of debt issued is reported as other financing sources. Premiums received on
debt issuances are reported as other financing sources while discounts of debt
issuances are reported as other financing uses. Issuance costs, whether or not withheld
from the actual debt proceeds received, are reported as debt service expenditures.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(42)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
8. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for expenditures or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance represent tentative
management plans that are subject to change.
9. 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 statements are
reported as other financing sources/uses in governmental funds and after non-operating
revenues/expenses in proprietary funds.
10. Estimates
The preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results may differ from those estimates.
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Excess of Expenditures Over Appropriations
Expenditures exceeded appropriations in the following funds:
Amount of
Overexpenditure
General Fund
Magistrate Court 9,241$
General Obligation Debt Service Fund 27,782
Municipal Property Corporation Debt Service Fund 652
Nonmajor Governmental Funds
Grants Fund 33,998
Public Art Fund 16,325
Cash was available to cover the over expenditures listed above.
B. Deficit Fund Balances
A deficit fund balance in the amount of $388 was reported in the HURF Debt Service
Nonmajor Governmental Fund at June 30, 2010. The Town expects to recover the
deficit through transfers in the next fiscal year.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(43)
NOTE 3 DETAILED NOTES ON ALL FUNDS
A. Assets
1. Deposits and Investments
Deposits and investments at June 30, 2010 consist of the following:
Deposits:
Cash on Hand 1,000$
Cash in Bank 522,602
Cash on Deposit with Paying Agent 2,874,668
Investments
State Treasurer's Investment Pool 22,084,148
25,482,418
Less Cash with Paying Agent (2,874,668)
Total Cash and Investments 22,607,750$
Deposits
The Town’s deposits at June 30, 2010 had a carrying value of $522,602 and a bank
balance of $618,249. Of the bank balance, $250,000 was covered by federal
depository insurance and $368,249 was covered by collateral held by the Town’s
custodial bank in the Town’s name. Therefore, the Town’s deposits were not
exposed to any custodial credit risk.
Investments
The State Board of Deposit provides oversight for the State Treasurer’s pools, and
the Local Government Investment Pool Advisory Committee provides consultations
and advice to the Treasurer. The fair value of a participant’s position in the pool
approximates the value of that participant’s pool shares. The shares are not
identified with specific investments and are not subject to custodial credit risk.
Interest Rate Risk – In accordance with its investment policy, the Town manages its
exposure to declines in fair value by limiting the average maturity of its investments
to six months or less.
Credit Risk – The Town does not have a policy relating to credit risk. As of year end,
for investments in the State Treasurer’s Investment Pool did not receive a quality
credit rating from a national credit rating agency.
Custodial Credit Risk – The Town’s investment policy does not address
concentration of credit risk. The Town currently only invests in the State Treasurer’s
Investment Pool.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(44)
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
A. Assets (Continued)
2. Receivables
Governmental funds report deferred revenue in connection with receivables for
revenues that are not considered to be available to liquidate liabilities of the current
period. Governmental funds also defer revenue recognition in connection with
resources that have been received, but not yet earned. At the end of the current
fiscal year, the various components of deferred revenue reported in the
governmental funds were as follows:
Unavailable Unearned
General Fund
Miscellaneous -$ 31,945$
General Obligation Debt Service Fund
Property Taxes 41,969 -
Nonmajor Governmental Funds
Miscellaneous - 5,000
Property taxes 3,283 -
Total Deferred Revenue for Governmental Funds 45,252$ 36,945$
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TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(45)
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
A. Assets (Continued)
3. Capital Assets
Capital assets for the year ended June 30, 2010 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, Not Being Depreciated:
Land 23,571,668$ -$ -$ 23,571,668$
Artwork 1,578,500 - - 1,578,500
Construction in Progress - 880,315 - 880,315
Total Capital Assets, Not Being
Depreciated 25,150,168 880,315 - 26,030,483
Capital Assets, Being Depreciated:
Infrastructure 126,550,472 112,504 - 126,662,976
Buildings 17,939,545 114,999 - 18,054,544
Improvements Other Than Buildings 15,022,357 - - 15,022,357
Vehicles, Machinery and Equipment 4,700,211 52,644 (596,189) 4,156,666
Total Capital Assets, Being
Depreciated 164,212,585 280,147 (596,189) 163,896,543
Accumulated Depreciation for:
Infrastructure (61,352,919) (3,563,707) - (64,916,626)
Buildings (2,378,592) (361,721) - (2,740,313)
Improvements Other Than Buildings (4,838,674) (751,120) - (5,589,794)
Vehicles, Machinery and Equipment (3,412,286) (342,811) 591,643 (3,163,454)
Total Accumulated Depreciation (71,982,471) (5,019,359) 591,643 (76,410,187)
Total Capital Assets, Being
Depreciated, Net 92,230,114 (4,739,212) (4,546) 87,486,356
Governmental Activities Capital
Assets, Net 117,380,282$ (3,858,897)$ (4,546)$ 113,516,839$
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General Government 274,250$
Public Safety 101,121
Highways and Streets 3,724,505
Culture and Recreation 919,483
Total Depreciation Expense 5,019,359$
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(46)
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
A. Assets (Continued)
4. Construction Commitments
The Town has active construction projects at June 30, 2010. At fiscal year end the
Town’s commitments with contractors were as follows:
Remaining
Project Spent-to-date Commitment
Shea Boulevard Improvements 880,315$ 1,066,856$
Governmental Activities
B. Interfund Receivables/Payables and Transfers
As of June 30, 2010, interfund receivable and payables were as follows:
Nonmajor
Governmental
Due to Fund
General Fund 388$
Due From
The above interfund receivable and payable is recorded to eliminate deficit cash at
year-end. The deficit in the Nonmajor Governmental Funds was recovered in the
subsequent fiscal upon receipt of development fees. The Town will monitor spending
and rates to recover the deficit in the next fiscal year.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(47)
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
B. Interfund Receivables/Payables and Transfers (Continued)
Interfund transfers for the year ended June 30, 2010 consisted of the following:
Municipal
Property
Capital Corporation Nonmajor
General Projects Debt Service Governmental
Transfers Out Fund Fund Fund Fund Total
General Fund -$ 15,193$ 387,000$ 12,325$ 414,518$
Nonmajor Governmental
Funds 36,074 540,771 - 136,413 713,258
Total 36,074$ 555,964$ 387,000$ 148,738$ 1,127,776$
Transfers In
The General Fund transferred $387,000 to pay for debt service costs on the Municipal
Property Corporations outstanding bonds. The General Fund transferred $15,193 to the
Capital Projects Fund to fund capital purchases. The General Fund also transferred
$12,325 to the Nonmajor Governmental Funds to supplement the Town’s Public Art
Fund. The Nonmajor Governmental Funds transferred $36,074 to the General Fund to
provide the matching portion of a transportation grant the Town received. The Nonmajor
Governmental Funds also transferred $540,771 to the Capital Projects Fund to
subsidize street improvement projects. Additionally, the Nonmajor Governmental Funds
transferred $136,413 to other Nonmajor Governmental Funds to pay for debt service
costs.
(The remainder of this page intentionally left blank)
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(48)
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
C. Long-Term Obligations
Bonds payable at year end, consisted of the following general obligation, municipal
property corporation and community facilities district bonds. The bonds are both callable
and noncallable with the interest payable semiannually. Property taxes from the
General Obligation Bond Debt Service Fund and Eagle Mountain Debt Service Fund
are used to pay general obligation and community facilities district bonds. State shared
revenues from the HURF Fund are used to pay street and highway user bonds. Tax
revenues from the General Fund and Excise Tax Fund are used to pay municipal
facilities bonds.
Interest Maturity Original Outstanding
Purpose Rates Date Amount Amount
Governmental Activities:
General Obligation Bonds:
General Obligation Bonds, Project
of 1997, Series 2001 4.25-4.4 07/09/10-11 $ 6,000,000 $ 300,000
General Obligation Refunding
Bonds, Series 2005 3.5-4.0 07/01/10-19 7,225,000 5,115,000
Eagle Mountain Community
Facilities District, General
Obligation Refunding Bonds, Series
2005 3.5-4.125 7/1/2010-21 4,555,000 3,630,000
Total General Obligation Bonds $ 17,780,000 $ 9,045,000
Revenue Bonds:
Municipal Facilities Revenue
Bonds, Series 2000 5.0-5.25 7/01/10-12 $ 4,680,000 $ 455,000
Municipal Facilities Revenue
Bonds, Series 2001 4.0-4.5 7/01/10-13 7,750,000 1,135,000
Municipal Facilities Revenue
Bonds, Series 2004 3.5-4.5 7/01/10-19 3,645,000 2,635,000
Municipal Facilities Revenue
Refunding Bonds, Series 2005 3.5-4.5 7/01/10-20 5,330,000 4,695,000
Total Revenue Bonds $ 21,405,000 $ 8,920,000
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(49)
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
C. Long-Term Obligations (Continued)
The Town has pledged future excise taxes to repay a total of $8,920,000 in outstanding
municipal facilities revenue and refunding bonds. For fiscal year ended June 30, 2010,
the net revenues available to service this debt were $7,644,440 million. The debt
principal and interest paid on this debt in fiscal year 2009-10 was $1,115,000 and
$425,000, respectively (20% of available pledged revenues).
Changes in long-term obligations for the year ended June 30, 2010 are as follows:
Due Within
July 1, 2009 Increases Decreases June 30, 2010 One Year
Governmental Activities
Bonds
General Obligation Bonds 10,390,000$ -$ (1,345,000)$ 9,045,000$ 1,080,000$
Revenue Bonds 10,035,000 - (1,115,000) 8,920,000 1,035,000
20,425,000 - (2,460,000) 17,965,000 2,115,000
Deferred Amounts:
Premium 94,251 - (9,921) 84,330 9,921
Total Bonds 20,519,251 - (2,469,921) 18,049,330 2,124,921
Other Liabilities:
Compensated Absences 334,123 292,649 (319,864) 306,908 30,691
Governmental Activities
Long-Term Liabilities 20,853,374$ 292,649$ (2,789,785)$ 18,356,238$ 2,155,612$
Debt service requirements on long-term debt at June 30, 2010 are as follows:
Principal Interest
2011 2,115,000$ 739,999$
2012 2,205,000 654,681
2013 2,295,000 565,506
2014 2,430,000 470,731
2015 1,990,000 375,106
2016 - 2020 6,530,000 864,195
2021 400,000 16,500
17,965,000$ 3,686,718$
Governmental Activities
Year Ending June 30,
In prior years, the Town defeased certain general obligation and other bonds by placing
the proceeds of new bonds in an irrevocable trust to provide for all future debt service
payments on the defeased bonds. Accordingly, the trust account assets and the liability
for the defeased bonds are not included in the Town’s financial statements. At year end,
$7,850,000 of defeased bonds are still outstanding.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(50)
NOTE 4 OTHER INFORMATION
A. Prior Period Adjustments
Prior period adjustments were necessary to correct errors in the previously issued
financial statements. The corrections, summarized below, included excise tax revenues
incorrectly accrued in the prior fiscal year, a missposted transfer from the General Fund
to the Capital Projects Fund, an unrecorded year-end payroll accrual, cash with the
trustee was overstated and an adjustment to eliminate an internal service fund that was
incorrectly reported in the financial statements. The internal service fund was eliminated
and the beginning balance was restated in the General Fund and HURF Fund.
Municipal
General Property
Capital Obligation Corporation Nonmajor
Governmental General Projects Debt Service Debt Service Governmental
Activities Fund Fund Fund Fund Funds
Fund Balances at June 30, 2009
(As Previously Reported) 120,514,765$ 6,657,714$ 10,370,395$ 3,763$ 1,252,082$ 4,227,652$
Prior Period Adjustment
Overstated Excise Tax Revenue (173,448) (147,431) - - (19,512) (6,505)
Missposted Transfer - 124,000 (124,000) - - -
Unrecorded Payroll Accrual (109,609) (97,050) - - - (12,559)
Overstated Cash (27,168) - - - (27,168) -
Elimination of Internal Service Fund - 127,916 - - - 95,620
Fund Balances at June 30, 2009
(Restated) 120,204,540$ 6,665,149$ 10,246,395$ 3,763$ 1,205,402$ 4,304,208$
B. Contingent Liabilities
Lawsuits
The Town is a defendant in various lawsuits. Although the outcome of these lawsuits is
not presently determinable, in the opinion of the Town’s legal counsel, the resolution of
these matters will not have a material adverse effect on the financial condition of the
Town.
C. 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, of which
the Town is a participating member. The limit for basic coverage is for $2,000,000 per
occurrence on a claims made basis. Excess coverage is for an additional $13,000,000
per occurrence on a follow form, claims made basis. No significant reduction in
insurance coverage occurred during the year, and no settlements exceeded insurance
coverage during any of the past three fiscal years.
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
(51)
NOTE 4 OTHER INFORMATION (CONTINUED)
C. Risk Management (Continued)
The Town was unable to obtain worker’s compensation insurance at a cost considered
to be economically justifiable. Therefore the Town joined the Arizona Municipal Workers’
Compensation Pool (AMWCP). AMWCP is a public entity risk pool currently operating
as a common worker’s compensation insurance program for 67 member cities and
towns. The Town is responsible for paying a premium, based on an experience rating
formula that allocates pool expenditures and liabilities among members.
D. Retirement Plans
Defined Contribution Pension Plan
All full-time employees of the Town participate in a defined contribution pension plan
administered by the ICMA Retirement Corporation as a 401(a) plan. The payroll for the
Town employees covered by this plan for the year ended June 30, 2010 was
$3,208,298. The Town’s total payroll was $3,987,248.
A defined contribution pension plan provides benefits in return for services rendered,
provides an individual account for each participant, and specifies how contributions to
the individual’s account are to be determined, instead of specifying the amount of
benefit the individual is to receive. Under a defined contribution pension plan, the
benefits a participant will receive depend solely on the amount contributed to the
participant’s account, the returns earned on investment of those contributions, and
forfeitures of other participants’ benefits that may be allocated to such participant’s
account. All non-peace officer full-time Town employees must participate in the pension
plan from the date they are hired. Contributions made by an employee vest immediately
and contributions made by the Town vest after three years of service.
An employee that leaves the employment of the Town is entitled to his or her
contributions and the vested portion of the Town’s contributions, plus interest earned.
Each employee must contribute 11% of his or her gross earnings. The Town must
match the employee contribution of 11%. During fiscal year 2009-10, the Town’s
required and actual contributions amounted to $388,554. The employees’ contributions
totaled $388,554. Employees may also contribute to the lCMA Retirement Corporation
457 plan on a voluntary basis; there is no employee match for those contributions.
During fiscal year 2009-10, employees contributed $498,221 to that plan.
No pension provision changes occurred during the year that affected the required
contributions to be made by the Town or its employees.
The ICMA Retirement Corporation held no securities of the Town or other related
parties during the fiscal year 2009-10 or as of the close of the fiscal year.
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
THIS PAGE BLANK
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
HURF Fund - accounts for the Town’s share of motor fuel tax revenues and lottery proceeds.
Development Fees Fund - accounts for development fees collected from developers restricted for
projects approved by the Town Council.
Local Court Enhancement Fund - accounts for activities of grants from the Arizona Supreme Court.
Grants Fund - accounts for the activities of various grants and contributions received by the Town.
Excise Tax Fund - accounts for the portion of Town sales tax reserved by the Town Council for special
projects including Town beautification and economic development.
Public Art Fund - accounts for the 1% surcharge on commercial and multi-family development
dedicated to purchasing art.
DEBT SERVICE FUNDS
HURF Debt Service Fund - accounts for operating transfers received from the HURF special revenue
fund to pay the debt service of the Street and Highway User Revenue Bonds.
Eagle Mountain Debt Service Fund - accounts for the property tax revenues received to pay the debt
service of the Eagle Mountain Community Facilities District component unit.
Cottonwoods Special Assessment Fund - accounts for all special assessments received to pay the debt
service of the Cottonwoods Special Assessment District.
TOWN OF FOUNTAIN HILLS, ARIZONA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2010
(52)
HURF
Development
Fees
Local Court
Enhancement Grants Excise Tax Public Art
Total Special
Revenue FundsAssets
Cash and Investments 245,700$ 2,437,428$ 218,311$ 13,222$ 1,665,656$ 1,521$ 4,581,838$
Cash with Paying Agent - - - - - - -
Intergovernmental Receivable 128,206 - - - 22,478 - 150,684
Taxes Receivable - - - - - - -
Total Assets 373,906$ 2,437,428$ 218,311$ 13,222$ 1,688,134$ 1,521$ 4,732,522$
Liabilities and Fund Balance
Liabilities
Accounts Payable 44,052$ -$ 2,552$ 8,222$ 2,088$ -$ 56,914$
Accrued Wages and Benefits 11,284 - - - 1,317 - 12,601
Due to Other Funds - - - - - - -
Interest Payable - - - - - - -
Deferred Revenue - - - 5,000 - - 5,000
Matured Debt Principal Payable - - - - - - -
Total Liabilities 55,336 - 2,552 13,222 3,405 - 74,515
Fund Balance
Unreserved, Designated for Vehicle
Replacement 159,484 - - - - - 159,484 Unreserved;, Undesiganted
Reported in:
Nonmajor
Special Revenue Funds 159,086 2,437,428 215,759 - 1,684,729 1,521 4,498,523
Debt Service Funds - - - - - - -
Total Fund Balances 318,570 2,437,428 215,759 - 1,684,729 1,521 4,658,007
Total Liabilities and Balance 373,906$ 2,437,428$ 218,311$ 13,222$ 1,688,134$ 1,521$ 4,732,522$
Special Revenue
(53)
HURF Debt
Service
Eagle Mountain
Debt Service
Cottonwoods
Special
Assessment
Total Debt
Service Funds
Total Nonmajor
Governmental
Funds
-$ 15,597$ 9,365$ 24,962$ 4,606,800$
134,063 306,393 - 440,456 440,456
- - 4 4 150,688
- 9,355 - 9,355 9,355
134,063$ 331,345$ 9,369$ 474,777$ 5,207,299$
-$ -$ -$ -$ 56,914$
- - - - 12,601
388 - - 388 388
4,063 76,393 - 80,456 80,456
- 3,283 - 3,283 8,283
130,000 230,000 - 360,000 360,000
134,451 309,676 - 444,127 518,642
- - - - 159,484
4,498,523
(388) 21,669 9,369 30,650 30,650
(388) 21,669 9,369 30,650 4,688,657
134,063$ 331,345$ 9,369$ 474,777$ 5,207,299$
Debt Service
TOWN OF FOUNTAIN HILLS, ARIZONA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGE IN FUND BALANCES
YEAR ENDED JUNE 30, 2010
(54)
HURF
Development
Fees
Local Court
Enhancement Grants Excise Tax Public Art
Total Special
Revenue Funds
Revenues
TaxesExcise Taxes -$ -$ -$ -$ 285,497$ -$ 285,497$ Property Taxes - - - - - - - Intergovernmental Revenue 1,538,851 - - 224,688 - - 1,763,539
Fines and Forfeits - - 32,667 - - - 32,667
Charges for Services 2,556 243,531 - - - - 246,087 Investment Earnings 173 2,274 433 - 746 - 3,626 Other 19,144 - - - - 194 19,338 Total Revenues 1,560,724 245,805 33,100 224,688 286,243 194 2,350,754
ExpendituresCurrentGeneral Government - - 8,793 183,998 100,088 - 292,879 Highways and Streets 965,633 4,263 - - - - 969,896
Culture and Recreation - - - - - 18,825 18,825
Debt Service
Principal Retirement - - - - - - - Interest on Long-Term Debt - - - - - - -
Capital Outlay - - - 4,616 - - 4,616
Total Expenditures 965,633 4,263 8,793 188,614 100,088 18,825 1,286,216
Excess (Deficiency) of Revenues Over Expenditures 595,091 241,542 24,307 36,074 186,155 (18,631) 1,064,538
Other Financing Sources (Uses)
Transfers In - - - - - 12,325 12,325
Transfers Out (530,203) (129,531) - (36,074) (17,450) - (713,258)Total Other Financing Sources (Uses) (530,203) (129,531) - (36,074) (17,450) 12,325 (700,933)
Net Change in Fund
Balances 64,888 112,011 24,307 - 168,705 (6,306) 363,605
Fund Balance
Beginning of Year, As Restated 253,682 2,325,417 191,452 - 1,516,024 7,827 4,294,402 End of Year 318,570$ 2,437,428$ 215,759$ -$ 1,684,729$ 1,521$ 4,658,007$
Special Revenue
(55)
HURF Debt
Service
Eagle Mountain
Debt Service
Cottonwoods
Special
Assessment
Total Debt
Service Funds
Total Nonmajor
Governmental
Funds
-$ -$ -$ -$ 285,497$ - 410,128 3,323 413,451 413,451 - - - - 1,763,539
- - - - 32,667
- - - - 246,087 3 - - 3 3,629 - - - - 19,338 3 410,128 3,323 413,454 2,764,208
- - - - 292,879 - - 3,850 3,850 973,746
- - - - 18,825
-
130,000 230,000 - 360,000 360,000 6,413 158,760 - 165,173 165,173
- - - - 4,616
136,413 388,760 3,850 529,023 1,815,239
(136,410) 21,368 (527) (115,569) 948,969
136,413 - - 136,413 148,738
- - - - (713,258)
136,413 - - 136,413 (564,520)
3 21,368 (527) 20,844 384,449
(391) 301 9,896 9,806 4,304,208 (388)$ 21,669$ 9,369$ 30,650$ 4,688,657$
Debt Service
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2010
(56)
Variance with
Final Budget Actual Final Budget
REVENUES
Taxes:
Sales Taxes 510,000$ 457,767$ (52,233)$
Intergovernmental 2,537,717 - (2,537,717)
Investment Earnings - 9,817 9,817
Total Revenues 3,047,717 467,584 (2,580,133)
EXPENDITURES
Capital Outlay 12,725,434 1,249,607 11,475,827
Excess (Deficiency) of Revenues Over
Expenditures (9,677,717) (782,023) 8,895,694
OTHER FINANCING SOURCES (USES)
Transfers In 2,981,190 555,964 (2,425,226)
Issuance of Long-Term Debt 4,500,000 - (4,500,000)
Total Other Financing Sources (Uses) 7,481,190 555,964 (6,925,226)
Net Change in Fund Balance (2,196,527) (226,059) 1,970,468
FUND BALANCE
Beginning of Year, As Restated - 10,246,395 10,246,395
End of Year (2,196,527)$ 10,020,336$ 12,216,863$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
GENERAL OBLIGATION DEBT SERVICE FUND
YEAR ENDED JUNE 30, 2010
(57)
Variance with
Final Budget Actual Final Budget
REVENUES
Taxes:
Property Taxes 1,400,000$ 1,475,213$ 75,213$
Investment Earnings 1,500 - (1,500)
Total Revenues 1,401,500 1,475,213 73,713
EXPENDITURES
Debt Service:
Principal Retirement 1,188,057 1,115,000 73,057
Interest on Long-Term Debt 152,307 253,146 (100,839)
Total Expenditures 1,340,364 1,368,146 (27,782)
Excess (Deficiency) of Revenues Over
Expenditures 61,136 107,067 45,931
FUND BALANCE
Beginning of Year - 3,763 3,763
End of Year 61,136$ 110,830$ 49,694$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
MUNICIPAL PROPERTY CORPORATION DEBT SERVICE FUND
YEAR ENDED JUNE 30, 2010
(58)
Variance with
Final Budget Actual Final Budget
REVENUES
Taxes:
Sales Taxes 891,720$ 856,492$ (35,228)$
Investment Earnings 4,458 1,998 (2,460)
Total Revenues 896,178 858,490 (37,688)
EXPENDITURES
Debt Service:
Principal Retirement 985,000 985,000 -
Interest on Long-Term Debt 423,886 424,538 (652)
Total Expenditures 1,408,886 1,409,538 (652)
Excess (Deficiency) of Revenues Over
Expenditures (512,708) (551,048) (38,340)
OTHER FINANCING SOURCES (USES)
Transfers In 387,000 387,000 -
Net Change in Fund Balance (125,708) (164,048) (38,340)
FUND BALANCE
Beginning of Year, As Restated - 1,205,402 1,205,402
End of Year (125,708)$ 1,041,354$ 1,167,062$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
HURF FUND
YEAR ENDED JUNE 30, 2010
(59)
Variance with
Final Budget Actual Final Budget
Revenues:
Intergovernmental 1,593,552$ 1,538,851$ (54,701)$
Charges for Services 2,000 2,556 556
Investment Earnings 4,993 173 (4,820)
Other - 19,144 19,144
Total Revenues 1,600,545 1,560,724 (39,821)
Expenditures:
Current:
Highways and Streets 1,232,746 965,633 267,113
Excess (Deficiency) of Revenues Over
Expenditures 367,799 595,091 227,292
Other Financing Sources (Uses):
Transfers Out (367,799) (530,203) (162,404)
Net Change in Fund Balance - 64,888 64,888
Fund Balance:
Beginning of Year, As Restated - 253,682 253,682
End of Year -$ 318,570$ 318,570$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
DEVELOPMENT FEES FUND
YEAR ENDED JUNE 30, 2010
(60)
Variance with
Final Budget Actual Final Budget
Revenue
Charges for Services $ 145,470 $ 243,531 $ 98,061
Investment Earnings - 2,274 2,274
Total Revenue 145,470 245,805 100,335
Expenditures
Current
Highways and Streets 142,400 4,263 138,137
Excess (Deficiency) of Revenues Over
Expenditures 3,070 241,542 238,472
Other Financing Sources (Uses)
Transfers Out - (129,531) (129,531)
Net Change in Fund Balance 3,070 112,011 108,941
Fund Balance
Beginning of Year - 2,325,417 2,325,417
End of Year 3,070$ 2,437,428$ 2,434,358$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
LOCAL COURT ENHANCEMENT FUND
YEAR ENDED JUNE 30, 2010
(61)
Variance with
Final Budget Actual Final Budget
Revenues:
Taxes:
Fines and Forfeitures 15,500$ 32,667$ 17,167$
Investment Earnings 1,500 433 (1,067)
Total Revenues 17,000 33,100 16,100
Expenditures:
Current:
General Government 8,100 8,793 (693)
Capital Outlay 41,900 - 41,900
Total Expenditures 50,000 8,793 41,207
Excess (Deficiency) of Revenues Over
Expenditures (33,000) 24,307 57,307
Fund Balance:
Beginning of Year - 191,452 191,452
End of Year (33,000)$ 215,759$ 248,759$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
GRANTS FUND
YEAR ENDED JUNE 30, 2010
(62)
Variance with
Final Budget Actual Final Budget
Revenues:
Intergovernmental $ 2,576,850 $ 224,688 $ (2,352,162)
Expenditures:
Current:
General Government 150,000 183,998 (33,998)
Capital Outlay - 4,616 (4,616)
Total Expenditures 150,000 188,614 (38,614)
Excess (Deficiency) of Revenues Over
Expenditures 2,426,850 36,074 (2,390,776)
Other Financing Sources (Uses):
Transfers Out (2,426,850) (36,074) 2,390,776
Net Change in Fund Balance - - -
Fund Balance:
Beginning of Year - - -
End of Year -$ -$ -$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
EXCISE TAX FUND
YEAR ENDED JUNE 30, 2010
(63)
Variance with
Final Budget Actual Final Budget
Revenues:
Taxes:
Sales Taxes 295,859$ 285,497$ (10,362)$
Investment Earnings - 746 746
Total Revenues 295,859 286,243 (9,616)
Expenditures:
Current:
General Government 132,675 100,088 32,587
Excess (Deficiency) of Revenues Over
Expenditures 163,184 186,155 22,971
Other Financing Sources (Uses):
Transfers Out (250,000) (17,450) 232,550
Net Change in Fund Balance (86,816) 168,705 255,521
Fund Balance:
Beginning of Year, As Restated - 1,516,024 1,516,024
End of Year (86,816)$ 1,684,729$ 1,771,545$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
PUBLIC ART FUND
YEAR ENDED JUNE 30, 2010
(64)
Variance with
Final Budget Actual Final Budget
Revenues:
Other $ 2,000 $ 194 $ (1,806)
Expenditures:
Current:
Culture and Recreation 2,500 18,825 (16,325)
Excess (Deficiency) of Revenues Over
Expenditures (500) (18,631) (18,131)
Other Financing Sources (Uses)
Transfers In - 12,325 12,325
Net Change in Fund Balance (500) (6,306) (5,806)
Fund Balance:
Beginning of Year - 7,827 7,827
End of Year (500)$ 1,521$ 2,021$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
HURF DEBT SERVICE FUND
YEAR ENDED JUNE 30, 2010
(65)
Variance with
Final Budget Actual Final Budget
Revenues:
Investment Earnings -$ 3$ 3$
Expenditures:
Debt Service:
Principal Retirement 130,000 130,000 -
Interest on Long-Term Debt 6,413 6,413 -
Total Expenditures 136,413 136,413 -
Excess (Deficiency) of Revenues Over
Expenditures (136,413) (136,410) 3
Other Financing Sources (Uses)
Transfers In - 136,413 136,413
Net Change in Fund Balance (136,413) 3 136,416
Fund Balance:
Beginning of Year - (391) (391)
End of Year (136,413)$ (388)$ 136,025$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
EAGLE MOUNTAIN DEBT SERVICE FUND
YEAR ENDED JUNE 30, 2010
(66)
Variance with
Final Budget Actual Final Budget
Revenues:
Taxes:
Property Taxes 388,500$ 410,128$ 21,628$
Investment Earnings 600 - (600)
Total Revenues 389,100 410,128 21,028
Expenditures:
Debt Service:
Principal Retirement 381,410 230,000 151,410
Interest on Long-Term Debt 7,690 158,760 (151,070)
Total Expenditures 389,100 388,760 340
Excess (Deficiency) of Revenues Over
Expenditures - 21,368 21,368
Fund Balance:
Beginning of Year - 301 301
End of Year -$ 21,669$ 21,669$
Original and
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL
COTTONWOODS SPECIAL ASSESSMENT FUND
YEAR ENDED JUNE 30, 2010
(67)
Variance with
Final Budget Actual Final Budget
Revenue:
Taxes:
Property Taxes -$ 3,323$ 3,323$
Expenditures:
Current:
Highways and Streets 3,850 3,850 -
Excess (Deficiency) of Revenue Over
Expenditures (3,850) (527) 3,323
Fund Balance:
Beginning of Year - 9,896 9,896
End of Year (3,850)$ 9,369$ 13,219$
Original and
THIS PAGE BLANK
STATISTICAL SECTION
(UNAUDITED)
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.
See the table of contents for page numbers of the schedules that encompass the above sections.
Due to cost considerations for the accumulation of data, the Town has elected to present less than ten
years of data, or data from less than nine years prior, for certain statistical schedules. This information
will be accumulated and reported each year until the complete ten years of data is presented.
TOWN OF FOUNTAIN HILLS, ARIZONA
NET ASSETS BY COMPONENT
LAST EIGHT FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
(68)
2003 2004 2005 2006
Governmental Activities:
Invested in Capital Assets, Net of Related Debt 11,843,575$ 11,261,256$ 17,495,539$ 20,806,507$
Restricted 6,681,170 6,471,863 5,144,127 12,446,147
Unrestricted 2,638,149 7,976,113 10,821,304 9,053,611
Total Governmental Activities Net Assets 21,162,894$ 25,709,232$ 33,460,970$ 42,306,265$
Fiscal Year
Source: The source of this information is the Town’s financial records.
Note: The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 34
were adopted in fiscal year 2002-03; therefore, only eight years are shown.
(69)
2007 2008 2009 2010
92,508,637$ 94,939,805$ 94,611,110$ 95,467,509$
12,210,966 12,799,502 11,828,137 11,396,116
14,276,126 13,230,726 13,765,293 12,321,090
118,995,729$ 120,970,033$ 120,204,540$ 119,184,715$
Fiscal Year
TOWN OF FOUNTAIN HILLS, ARIZONA
CHANGES IN NET ASSETS
LAST EIGHT FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
(70)
2003 2004 2005 2006
Expenses
Governmental Activities:
General Government 3,479,333$ 3,686,452$ 3,766,500$ 3,875,014$
Public Safety 5,494,708 4,918,280 5,024,686 5,403,620
Highways and Streets 1,310,683 1,419,509 1,281,061 1,581,068
Culture and Recreation 2,363,897 2,068,613 2,362,661 2,576,406
Community Development 1,235,985 1,144,964 1,460,181 1,812,469
Interest on Long-Term Debt 1,576,842 1,499,575 1,162,796 1,297,119
Total Expenses 15,461,448 14,737,393 15,057,885 16,545,696
Program Revenues
Governmental activities:
Fees, Fines, and Charges for Services
General Government 2,738,898 3,388,923 4,431,154 4,029,437
Public Safety - - - -
Highways and Streets - - - -
Culture and Recreation - - - -
Other Activities 43,487 32,209 59,550 103,826
Operating Grants and Contributions 1,697,900 1,590,787 1,692,712 2,022,675
Capital Grants and Contributions 237,307
Total Governmental Activities Program Revenues 4,480,285 5,011,919 6,420,723 6,155,938
Excess of Revenues
Over (Under) Expenditures (10,981,163) (9,725,474) (8,637,162) (10,389,758)
Fiscal Year
Source: The source of this information is the Town’s financial records.
Note: The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 34
were adopted in fiscal year 2002-03; therefore, only eight years are shown.
(71)
2007 2008 2009 2010
4,292,515$ 3,921,588$ 4,231,529$ 3,720,236$
5,935,742 6,532,292 7,312,415 6,293,323
5,225,835 5,981,347 5,051,294 5,202,285
3,282,160 3,092,661 3,336,616 2,927,848
2,512,170 2,861,653 2,218,994 1,612,287
1,163,370 1,132,947 1,033,536 950,484
22,411,792 23,522,488 23,184,384 20,706,463
910,978 830,963 544,753 1,340,457
982,659 746,227 55,042 32,667
- - - 2,556
- - - -
626,431 752,621 888,249 -
- 56,802 - 1,666,498
989,100 835,659 1,353,409 632,617
3,509,168 3,222,272 2,841,453 3,674,795
(18,902,624) (20,300,216) (20,342,931) (17,031,668)
(Continued)
Fiscal Year
TOWN OF FOUNTAIN HILLS, ARIZONA
CHANGES IN NET ASSETS (CONTINUED)
LAST EIGHT FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
(72)
2003 2004 2005 2006
(Concluded)
General Revenues and Other Changes in
Net Assets
Governmental Activities:
Taxes:
Sales Taxes 5,051,872$ 7,733,643$ 8,879,798$ 11,007,924$
Property Taxes 1,905,770 2,195,856 2,020,800 1,648,947
Franchise Taxes 152,542 126,362 216,031 314,359
State Shared Revenues 4,740,758 4,489,844 4,756,481 5,389,551
Investment Earnings 1,976,809 122,082 395,124 673,351
Miscellaneous 79,706 195,978 120,666 200,921
Total Governmental Activities 13,907,457 14,863,765 16,388,900 19,235,053
Change in Net Assets
Governmental Activities 2,926,294 5,138,291 7,751,738 8,845,295
Total Primary Government 2,926,294$ 5,138,291$ 7,751,738$ 8,845,295$
Fiscal Year
Source: The source of this information is the Town’s financial records.
Note: The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 34
were adopted in fiscal year 2002-03; therefore, only eight years are shown.
(73)
2007 2008 2009 2010
11,407,714$ 10,489,591$ 8,932,374$ 7,644,440$
1,385,953 1,635,542 1,531,770 1,928,028
324,318 336,290 321,964 285,881
8,444,731 8,848,199 8,456,552 6,000,923
1,094,994 780,935 258,478 22,831
85,418 183,963 76,300 129,740
22,743,128 22,274,520 19,577,438 16,011,843
3,840,504 1,974,304 (765,493)(1,019,825)
3,840,504$ 1,974,304$ (765,493)$ (1,019,825)$
Fiscal Year
TOWN OF FOUNTAIN HILLS, ARIZONA
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
(74)
2001 2002 2003 2004 2005
General Fund:
Reserved $ - $ - $ - $ 77,485 $ 40,664
Unreserved, Designated for:
Vehicle Replacement - - - - -
Unreserved, Undesignated 4,710,061 4,812,370 4,037,863 6,293,941 9,041,779
Total General Fund $ 4,710,061 $ 4,812,370 $ 4,037,863 $ 6,371,426 $ 9,082,443
All Other Governmental Funds:
Unreserved, Designated for
Vehicle Replacement $ - $ - $ - $ - $ -
Unreserved, Undesignated Reported in:
Special Revenue Funds 9,167 - 3,411,738 5,969,830 2,176,086
Capital Projects Funds 1,571,117 414,432 - - 2,429,225
Debt Service Funds 532,248 1,051,311 1,705,230 530,372 644,089
Total All Other Governmental Funds $ 2,112,532 $ 1,465,743 $ 5,116,968 $ 6,500,202 $ 5,249,400
Fiscal Year
Source: The source of this information is the Town’s financial records.
(75)
2006 2007 2008 2009 2010
$ 14,393 $ 2,934,144 $ 3,053,070 $ 3,234,860 $ 3,235,811
- - - 127,916 333,796
6,515,855 3,666,005 3,526,738 3,302,373 3,418,799
$ 6,530,248 $ 6,600,149 $ 6,579,808 $ 6,665,149 $ 6,988,406
$ - $ - $ - $ 95,620 $ 159,484
1,951,434 5,305,432 3,876,927 4,198,782 4,498,523
9,496,266 9,916,670 10,764,857 10,246,395 10,020,336
159,530 1,386,674 1,585,740 1,218,971 1,182,834
$ 11,607,230 $ 16,608,776 $ 16,227,524 $ 15,759,768 $ 15,861,177
Fiscal Year
TOWN OF FOUNTAIN HILLS, ARIZONA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
(76)
2001 2002 2003 2004 2005
Revenues
Taxes 6,088,047$ 7,595,748$ 7,114,486$ 9,997,706$ 11,151,893$
Intergovernmental 5,281,156 5,895,676 6,311,458 6,080,631 6,686,500
Fines and Forfeitures 310,359 265,605 195,091 361,339 249,564
Licenses and Permits 2,177,614 1,351,209 1,308,747 1,600,934 2,230,046
Charges for Services 431,316 1,067,814 810,412 1,038,170 1,834,205
Rents and Royalties 35,781 107,613 188,745 242,704 222,327
Special Assessments 7,958 4,520 4,302 3,612 1,512
Investment Income (Loss)(1,063,339) 726,441 1,976,809 122,082 395,124
Other 11,357 1,783,851 275,343 261,561 179,657
Total Revenues 13,280,249 18,798,477 18,185,393 19,708,739 22,950,828
Expenditures
General Government 3,646,500 3,859,633 3,318,574 3,614,458 9,547,409
Public Safety 3,354,037 5,084,532 5,174,492 4,616,161 4,754,523
Highways and Streets 2,212,432 1,877,790 1,198,080 1,402,502 1,682,563
Culture and Recreation 3,866,245 3,069,695 1,815,416 1,597,150 3,004,216
Community Development 1,175,649 1,064,913 1,215,387 1,144,964 1,460,181
Capital Outlay 5,261,585 14,770,507 79,427 101,951 -
Debt Service
Principal Retirement 620,408 1,229,215 1,393,228 1,423,228 1,308,228
Interest on Long-Term Debt 1,231,194 1,673,901 1,576,842 1,499,575 1,164,561
Other Debt Service - - - - 229,990
Total Expenditures 21,368,050 32,630,186 15,771,446 15,399,989 23,151,671
Excess of Revenues
Over (Under) Expenditures (8,087,801) (13,831,709) 2,413,947 4,308,750 (200,843)
Other Financing
Sources (Uses)
Transfers In 1,833,192 1,585,674 5,981,544 1,630,907 4,805,635
Transfers Out (1,833,192) (1,585,674) (5,981,544) (1,630,907) (4,805,635)
Issuance of Refunding Debt - - - - 12,555,000
Issuance of Long-Term Debt 4,641,980 13,750,000 - - 3,783,896
Payment to Refunded Debt
Escrow Agent - - - - (14,677,838)
Total Other Financing
Sources (Uses)4,641,980 13,750,000 - - 1,661,058
Net Change in Fund Balance (3,445,821)$ (81,709)$ 2,413,947$ 4,308,750$ 1,460,215$
Debt Service as a Percentage of
Noncapital Expenditures 12.99% 19.41% 23.35% 23.62% 13.22%
Fiscal Year
Source: The source of this information is the Town’s financial records.
(77)
2006 2007 2008 2009 2010
12,993,876$ 13,159,087$ 12,457,086$ 10,960,001$ 9,818,985$
7,412,226 8,444,731 9,353,260 9,607,961 7,672,037
235,050 304,214 287,120 339,658 297,030
1,918,107 1,239,318 1,125,957 541,627 399,094
1,689,046 898,955 620,300 316,676 464,036
255,527 267,350 296,434 290,083 215,520
21,147 4,228 4,337 4,037 -
673,351 1,094,994 780,935 258,478 22,831
233,565 85,418 183,963 43,683 129,740
25,431,895 25,498,295 25,109,392 22,362,204 19,019,273
4,459,183 4,024,551 3,548,295 3,514,249 3,186,368
5,208,770 5,689,020 6,321,669 6,624,141 6,200,227
2,121,986 2,028,397 2,214,557 1,199,850 973,746
3,607,750 2,131,374 2,257,007 2,215,065 2,007,737
1,812,469 2,462,643 2,751,740 2,036,295 1,669,449
- 2,002,887 5,239,169 3,708,277 1,254,223
1,968,228 1,968,228 2,153,228 2,240,000 2,460,000
1,192,414 1,058,665 1,025,320 929,134 842,857
532,762 - - - -
20,903,562 21,365,765 25,510,985 22,467,011 18,594,607
4,528,333 4,132,530 (401,593) (104,807) 424,666
10,146,663 4,383,069 2,756,988 3,759,735 1,127,776
(10,146,663) (4,383,069) (2,756,988) (3,950,654) (1,127,776)
4,555,000 - - - -
- - - - -
(4,338,781) - - - -
216,219 - - (190,919) -
4,744,552$ 4,132,530$ (401,593)$ (295,726)$ 424,666$
21.46% 18.53% 18.60% 20.33% 23.53%
Fiscal Year
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
(78)
Fiscal
Year
Sales
Taxes
Property
Taxes
Franchise
Taxes Total
2001 4,979,159$ 435,769$ 291,615$ 5,706,543$
2002 5,019,735 489,358 297,149 5,806,242
2003 5,035,165 468,588 300,495 5,804,248
2004 5,310,375 490,156 304,226 6,104,757
2005 5,602,478 727,678 336,881 6,667,037
2006 7,102,970 593,694 336,399 8,033,063
2007 7,298,346 634,241 348,166 8,280,753
2008 7,214,023 695,245 349,043 8,258,311
2009 8,932,374 1,531,770 321,964 10,786,108
2010 7,644,440 1,888,664 285,881 9,818,985
Source: The source of this information is the Town’s financial records.
TOWN OF FOUNTAIN HILLS, ARIZONA
TAXABLE SALES BY CATEGORY
LAST TEN FISCAL YEARS
(UNAUDITED)
(79)
2001 2002 2003 2004 2005 2006
Sales Category:
Construction 1,915,206$ 1,325,749$ 1,203,706$ 1,482,981$ 1,837,317$ 3,362,079$
Restaurants and Bars 187,000 219,921 276,664 419,107 524,368 547,276
Transportation & Utilities 453,217 523,237 590,446 916,498 1,124,677 1,240,120
Services 398,157 370,806 455,324 423,433 185,868 263,239
Real estate, Rental & Leasing 245,064 192,339 205,849 341,951 604,356 626,364
Wholesale/Retail 1,405,560 1,477,424 1,930,175 3,212,062 3,536,045 3,796,192
Other 195,313 157,818 188,654 706,816 933,366 1,030,966
Total 5,088,789$ 5,130,207$ 5,275,297$ 5,428,531$ 6,109,903$ 7,335,679$
Fiscal Year
Source: The source of this information is the Town’s financial records.
(80)
2007 2008 2009 2010
2,694,700$ 2,062,028$ 1,414,240$ 538,551$
537,596 582,226 493,242 509,624
1,330,052 1,422,158 1,311,735 1,424,827
280,290 327,411 258,138 241,686
792,358 982,198 664,999 650,071
4,144,263 3,912,512 3,687,409 3,555,974
1,296,171 1,182,349 910,561 691,972
7,503,852$ 7,302,294$ 8,740,324$ 7,612,705$
Fiscal Year
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
(81)
Fiscal
Year
2001 1.60 % 0.70 % 5.00 % 7.30 %
2002 1.60 0.70 5.60 7.90
2003 1.60 0.70 5.60 7.90
2004 2.60 0.70 5.60 8.90
2005 2.60 0.70 5.60 8.90
2006 2.60 0.70 5.60 8.90
2007 2.60 0.70 5.60 8.90
2008 2.60 0.70 5.60 8.90
2009 2.60 0.70 5.60 8.90
2010 2.60 0.70 6.60 9.90
Total Tax
Rate
Town Direct
Rate
Maricopa
County
Arizona
State
Source: The source of this information is the Arizona Department of Revenue.
TOWN OF FOUNTAIN HILLS, ARIZONA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(UNAUDITED)
(82)
Fiscal Year
Total Taxable
Assessed Value
(in thousands)
Total Direct Tax
Rate
Estimated Actual
Taxable Value
2001 $ 212,416 0.33 $ 1,889,016 16.71 %
2002 238,715 0.56 2,154,929 11.08
2003 270,603 0.51 2,418,236 11.19
2004 323,384 0.48 2,942,849 10.99
2005 349,399 0.42 3,162,855 11.05
2006 375,183 0.35 3,411,461 11.00
2007 610,738 0.30 5,840,185 10.46
2008 684,742 0.22 6,847,423 10.00
2009 651,218 0.20 6,648,954 9.79
2010 576,535 0.22 6,255,310 9.22
Assessed Value as
a Percentage of
Actual Value
Source: The Maricopa County Treasurer.
TOWN OF FOUNTAIN HILLS, ARIZONA
PRINCIPAL PROPERTY TAXPAYERS
JUNE 30, 2010 AND 2000
(UNAUDITED)
(83)
Taxpayer
Taxable
Assessed
Value Rank
Taxable
Assessed Value Rank
Qwest Corporation 3,365,809$ 1 0.57 % -$ N/A N/A %
Chaparral City Water Company 3,066,000 2 0.52 2,367,472 1 2.05
Fountain View Village, LLC 1,822,567 3 0.31 - N/A N/A
Kimco Barclay Fountain Hills 1,724,863 4 0.29 - N/A N/A
MCO Properties 1,655,056 5 0.29 1,808,102 3 1.56
Cox Communications 1,507,740 6 0.25 - N/A N/A
Target Corporation 1,441,438 7 0.24 - N/A N/A
EN, LLC 1,347,042 8 0.23 - N/A N/A
Fountain Hills Investment, LLC 1,000,000 9 0.17 - N/A N/A
Fountain Vista Properties, LLC 986,365 10 0.17 - N/A N/A
17,916,880$ 3.04 4,175,574$ 3.41
Percentage of
Total Taxable
Assessed Value
2010 2000
Percentage of
Total Taxable
Assessed Value
Source: The Maricopa County Treasurer.
Note: Information for 2001 was not available.
TOWN OF FOUNTAIN HILLS, ARIZONA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
(84)
Current Delinquent
Total Tax Tax Total Tax
Fiscal Year Tax Levy Collections Collections Collections
2001 $ 701,275 $ 675,710 96.35 %$ 21,422 $ 697,132
2002 1,335,787 1,282,844 96.04 43,927 1,326,771
2003 1,384,478 1,329,929 96.06 43,900 1,373,829
2004 1,545,051 1,492,143 96.58 44,041 1,536,184
2005 1,449,287 1,408,289 97.17 31,632 1,439,921
2006 1,319,373 1,275,049 96.64 16,181 1,291,230
2007 1,775,000 1,410,873 79.49 29,886 1,440,759
2008 1,775,000 1,599,127 90.09 40,120 1,639,247
2009 1,775,000 1,686,484 95.01 6,111 1,692,595
2010 1,892,237 1,806,882 95.49 8,324 1,815,206
Percent of
Current Taxes
Collected
Source: The Maricopa County Treasurer’s Office.
(85)
99.41 %
99.33
99.23
99.43
99.35
97.87
81.17
92.35
95.36
95.93
Ratio of Total
Tax Collections
to Total Tax Levy
THIS PAGE BLANK
TOWN OF FOUNTAIN HILLS, ARIZONA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(UNAUDITED)
(86)
Fiscal Year
General
Obligation
Bond and
Other Bonds
Less: Amounts
Restricted for
Principal
Total Primary
Government Per Capita
2001 26,465,000$ 620,408$ 25,844,592$ 27.80 % 1,209$
2002 25,265,000 1,229,215 24,035,785 24.74 1,095
2003 24,015,000 1,393,228 22,621,772 22.44 1,017
2004 25,335,000 1,423,228 23,911,772 22.48 1,061
2005 24,190,000 1,308,228 22,881,772 19.79 986
2006 22,365,000 1,968,228 20,396,772 16.22 833
2007 26,910,467 1,978,149 24,932,318 18.83 1,018
2008 24,932,318 2,163,146 22,769,172 16.30 892
2009 22,769,172 2,249,921 20,519,251 N/A 770
2010 17,965,000 2,115,000 15,850,000 N/A 624
Governmental Activities
Percentage of
Personal
Income
Source: The source of this information is the Town’s financial records and Maricopa Association of
Governments.
Note: N/A indicates that the information is not available.
TOWN OF FOUNTAIN HILLS, ARIZONA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(UNAUDITED)
(87)
Fiscal Year
General
Obligation
Bonds
Taxable
Assessed Value
of Property Population
Net General
Obligation
Bonded Debt
Per Capita
2001 13,280,000$ $ 212,415,000 6.25% 21,383 621$
2002 12,600,000 238,715,000 5.28% 21,954 574
2003 11,865,000 270,603,000 4.38% 22,243 533
2004 11,110,000 323,385,000 3.44% 22,541 493
2005 10,675,000 349,398,000 3.06% 23,217 460
2006 9,600,000 375,183,000 2.56% 24,492 392
2007 8,620,000 576,535,714 1.50% 24,990 345
2008 7,570,000 684,742,347 1.11% 25,540 296
2009 6,530,000 651,218,464 1.00% 25,388 257
2010 9,045,000 576,535,714 1.57% 25,388 356
Percentage of
Estimated
Actual Value of
Property
Source: Maricopa County Treasurer’s Office and the Town’s Finance Department.
TOWN OF FOUNTAIN HILLS, ARIZONA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2010
(UNAUDITED)
(88)
Governmental Unit Outstanding Debt
Estimated
Percentage
Applicable
Estimated
Share of
Overlapping
Debt
Maricopa County 156,670,000$ 0.15%235,005$
Maricopa County Community College District 668,945,000 0.15%1,003,418
Fountain Hills Unified School District 20,165,000 97.03%19,566,100
Eagle Mountain Community Facilities District 3,630,000 100.00%3,630,000
Subtotal, Overlapping Debt 24,434,522
Direct:
Town of Fountain Hills, Arizona 17,965,000
Total Direct and Overlapping Debt 42,399,522$
Source: The source of this information is the Town’s records and the State and County Abstract of the
Assessment, Arizona Department of Revenue and the applicable governmental unit.
TOWN OF FOUNTAIN HILLS, ARIZONA
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(UNAUDITED)
(89)
6% Debt Limit
2001 2002 2003 2004 2005
Debt Limit 12,744,929$ 14,322,872$ 16,236,172$ 19,403,114$ 20,963,900$
Total Applicable to Limit 6,155,000 6,005,000 5,625,000 5,190,000 3,595,000
Legal Debt Margin 6,589,929$ 8,317,872$ 10,611,172$ 14,213,114$ 17,368,900$
Total Net Debt Applicable to
the Limit as a Percentage
of the Debt Limit 93% 72% 53% 37% 21%
20% Debt Limit
2001 2002 2003 2004 2005
Debt Limit 42,483,095$ 47,742,907$ 54,120,573$ 64,677,046$ 69,879,667$
Total Applicable to Limit 1,350,000 7,275,000 6,975,000 6,675,000 7,515,000
Legal Debt Margin 41,133,095$ 40,467,907$ 47,145,573$ 58,002,046$ 62,364,667$
Total Net Debt Applicable to
the Limit as a Percentage
of the Debt Limit 3% 18% 15% 12% 12%
Fiscal Year
Fiscal Year
Source: The Town’s Finance Department and the Maricopa County Assessor’s Office.
(90)
2006 2007 2008 2009 2010
22,510,991$ 34,592,143$ 41,084,541$ 39,073,108$ 34,592,143$
3,410,000 1,660,000 - 320,000 -
19,100,991$ 32,932,143$ 41,084,541$ 38,753,108$ 34,592,143$
18%5%0%1%0%
2006 2007 2008 2009 2010
75,036,636$ 115,307,143$ 136,948,469$ 130,243,693$ 115,307,143$
7,265,000 5,415,000 6,510,000 6,210,000 5,415,000
67,771,636$ 109,892,143$ 130,438,469$ 124,033,693$ 109,892,143$
11%5%5%5%5%
Fiscal Year
Fiscal Year
TOWN OF FOUNTAIN HILLS, ARIZONA
CALCULATION OF LEGAL DEBT MARGIN
JUNE 30, 2010
(UNAUDITED)
(91)
Net Secondary Assessed Valuation 576,535,714$
Water, Sewer, Light, Parks, Open Space and Recreational Facility Bonds
Debt Limit - 20% of Secondary Net Assessed Valuation 115,307,143$
Net Debt Applicable to Limit 5,415,000
20% Legal Debt Margin 109,892,143
All other general obligation bonds
Debt Limit - 6% of Secondary Net Assessed Valuation 34,592,143
Net Debt Applicable to Limit -
6% Legal Debt Margin 34,592,143
Total legal debt margin 144,484,286
Source: Maricopa County Assessor’s Office.
TOWN OF FOUNTAIN HILLS, ARIZONA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST NINE CALENDAR YEARS
(UNAUDITED)
(92)
Fiscal
Year Population
Personal
Income
Median
Personal
Income Median Age
School
Enrollment
Town of
Fountain Hills
Unemployment
Rate
2001 21,383 97,138,599$ 28,717$ N/A N/A 2.0%
2002 21,954 100,805,099 28,900 N/A N/A 2.7
2003 22,243 106,385,325 26,607 N/A N/A 2.6
2004 22,541 115,604,165 31,133 N/A N/A 2.1
2005 23,217 125,718,070 32,414 N/A N/A 2.0
2006 24,492 132,423,154 35,046 N/A N/A 1.8
2007 25,540 139,665,253 36,135 N/A N/A 1.6
2008 26,633 N/A N/A N/A N/A 2.4
2009 25,388 N/A N/A 49.7 N/A N/A
2010 25,388 N/A N/A 49.7 N/A N/A
Source: The source of the “Personal Income” and “Per Capita” information is the Bureau of Economic
Analysis. The source of the “Population” and “Unemployment Rate” information is State of
Arizona, Department of Economic Security.
Note: N/A indicates that the information is not available.
TOWN OF FOUNTAIN HILLS, ARIZONA
PRINCIPAL EMPLOYERS
CURRENT FISCAL YEAR AND NINE YEARS AGO
(UNAUDITED)
(93)
Employer Employees Rank
Percentage of
Total Town
Employment Employees Rank
Percentage of
Total Town
Employment
Fountain Hills Unified School
District No. 98 278 1 26.86% 250 1 27.00%
Monk Construction 110 2 10.63% 150 2 16%
Target 125 3 12.08% - -
MCO Properties, Inc. 103 4 9.95% 85 5 9%
Safeway Food Stores 91 5 8.79% 95 4 10%
Town of Fountain Hills 61 6 5.89% 115 3 12%
Fry's 76 7 7.34% - -
Basha's 64 8 6.18% 70 6 8%
Sun Ridge Canyon Gold Course 58 9 5.60% 70 7 8%
Eagle Mountain Golf Course 69 10 6.67% 40 9 4%
Golf International N/A 11 N/A 50 8 5%
Total 1035 100%925 100%
20012010
Source: The source of this information is the Town’s records.
TOWN OF FOUNTAIN HILLS, ARIZONA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION
LAST NINE FISCAL YEARS*
(UNAUDITED)
(94)
Function 2002 2003 2004 2005 2006 2007 2008 2009 2010
General Government:
Municipal Court 665565555
City Administration 18 15 10 11 13 12 13 14 11.1
Planning and Zoning 6 8 9 8 10 10 10 8 0
Total General Government 30 29 24 24 29 27 28 27 16.1
Public Safety:
Building Safety 987998860
Law Enforcement 26201000000
Total Public Safety 35288998860
Public Works:
Engineering 131311121212121215
Streets 15141311111010108.5
Total Public Works 282724232322222223.5
Community Development 5 7 7 7 711111019
Parks and Recreation 18 16 13 15 17 20 20 17 2.5
Total 11610776788588898261.1
Full-time Equivalent Employees
Source: The source of this information is the Town’s records.
* Information prior to 2002 is not available.
TOWN OF FOUNTAIN HILLS, ARIZONA
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
(95)
Function/Program 2001 2002 2003 2004 2005 2006
Building Permits:
Building Permits Issued 351 260 168 228 430 468
Building Inspections Conducted N/A 8,491 6,389 6,985 8,446 9,377
Police (Contracted):
Physical Arrests 981 503 601 601 644 N/A
Traffic Violations 4,767 3,186 3,186 3,186 2,432 N/A
Fire (Contracted):
Inspections N/A N/A N/A N/A N/A 1,815
Public Works:
Potholes Repaired N/A N/A N/A N/A N/A N/A
Parks and Recreation:
Park Acreage 121 121 121 121 121 121
Community Centers 111111
Fiscal Years
Source: The source of this information is the Town’s records.
Note: N/A indicates that the information is not available.
(96)
2007 2008 2009 2010
759 716 391 14
7,975 5,692 3,189 1,932
993 524 825 679
2,315 2,504 4,900 2,959
2,570 N/A N/A N/A
N/A N/A N/A N/A
121 121 121 121
1111
Fiscal Years
TOWN OF FOUNTAIN HILLS, ARIZONA
CAPITAL ASSETS STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
(97)
Function/Program 2001 2002 2003 2004 2005 2006
Public Safety:
Number of Fire stations N/A 33333
Other Public Works:
Streets (Miles) 179 179 179 179 179 179
Streetlights N/A N/A N/A N/A N/A 34
Traffic Signals 10 10 10 11 11 12
Parks and Recreation:
Acreage 121 121 121 121 121 121
Playgrounds 233333
Baseball/Softball Diamonds 666666
Soccer/Football Fields 444443
Community Centers 111111
Fiscal Year
Source: The source of this information is the Town’s facilities records.
(98)
2007 2008 2009 2010
3333
179 179 179 178.5
34 34 34 34
12 12 12 12
121 121 121 121
3333
6666
3333
1111
Fiscal Year
THIS PAGE BLANK
Proposed Staff Initiatives
for
DRAFT COUNCIL GOALS FY2011-12
Richard L. Davis, ICMA-CM
Town Manager
Page 1 of 19
INTRODUCTION
On Thursday, October 28, 2010, the Town Council met at the Community Center with senior staff for
Council’s Annual Planning Retreat, which was facilitated by Strategic Planning Advisory Commission
Chair Audra Koester Thomas. From the Values listed in Strategic Plan 2010, Council identified the
following Strategic Directions as Goals for FY2011-12:
CIVILITY
C1 Practice the art of civility in all public settings and encourage those around you to do the same.
C2 Support community events and activities that create opportunities to build community and
friendship.
C3 Genuinely solicit and consider public and stakeholder feedback as part of the decision-making
process.
ENVIRONMENTAL STEWARDSHIP
ES3 Explore and implement new technologies and opportunities that will minimize noise, air, and light
pollution and reduce energy consumption.
CIVIC RESPONSIBILITY
CR2 Discover, recognize, and utilize the talents of our citizens and use these assets to address
community needs.
CR3 Foster a culture of public service and volunteerism.
CR4 Implement a comprehensive communications plan to encourage informed citizen participation in
civic life.
CR7 Communicate the role of local government and clearly define the trade-offs between service
levels and amenities and the associated costs so residents can make informed choices.
EDUCATION, LEARNING AND CULTURE
ELC 2 Support partners in providing arts and cultural opportunities and amenities.
ELC 4 Position the community’s arts and cultural businesses, venues, and amenities as economic drivers
integrated into the Town’s comprehensive economic strategy.
ELC5 Encourage access to higher learning opportunities or the establishment of an educational or
training campus within our community.
Page 2 of 19
ECONOMIC VITALITY
EV1 Develop a comprehensive economic development strategy for the Town’s future and work with
our community partners to forward economic growth and awareness.
EV2 Develop and maintain a balanced, equitable, sustainable, and local financing structure to support
the Town’s core government services at desired service levels.
EV4 Promote retention, expansion, relocation of quality businesses.
EV5 Promote Fountain Hills as a visitor destination.
EV6 Identify a slate of economic development tools and strategies (including tax incentives, fee
abatements, etc.) to stimulate economic growth.
RECREATIONAL OPPORTUNITIES AND AMENITIES
R2 Provide an interconnected, multi-use trail and bicycle system that promotes active living, physical
activity, education, and appreciation of our parks and natural resources.
METHODOLOGY ASSOCIATED WITH THE DEVELOPMENT OF STAFF INITIATIVES
Staff was asked at a retreat on Wednesday, November 10, 2010 to consider each initiative utilizing as a
basis of discussion the answers to the following questions:
What does the realization of this goal look like? (Begin with the end in mind.)
What can we contribute in the coming year to this realization? What are the ideas?
Who should own this goal? Where should it reside? Who is responsible primarily for
implementation?
Who or what departments/divisions would provide additional support?
What resources are necessary?
The following chart captures much of the above information. The first presentation of this
report/proposal was made on November 30, 2010. That first draft was intended to communicate staff
ideas and initiatives related to efforts that could be made in the 2011/2012 Fiscal Year. Based on the
feedback from the Council, this second draft was reformatted to provide a more comprehensive
response to all Council feedback and initiatives. These initiatives and some additional explanations have
been color-coded RED for Council driven initiatives, BLUE for Staff suggested initiatives, and GREEN for
those items that emerged from or were clarified in the November 30, 2010 meeting with Council.
Finally, one will notice that several of the initiatives mentioned in this report are either on-going or are
slated to be addressed in the 2010/2011 fiscal year.
Page 3 of 19
CIVILITY
Strategic
Direction
Council/Staff
Initiative Implementation Additional Explanation
Estimated Cost/
Funding Source
C1 Practice the
art of civility in all
public settings
and encourage
those around you
to do the same.
None. None. Staff supports the
concept and principle
that civility serves as
the foundation of our
interactions and
relationships internally
and externally.
$0
C2 Support
community
events and
activities that
create
opportunities to
build community
and friendship.
Build on success
of current
service events
and
opportunities.
Continue to
expand citizen
participation in
Take Pride Day.
$5,000
General Fund
Provide new
event to
provide
opportunity for
community
service and
camaraderie
building.
Introduce “Keep
Fountain Hills
Beautiful” Day
(in conjunction
with the Keep
America Clean
initiative) to be
pre-sented
spring of 2012.
This day would
provide
opportunities for
citizens to
collaborate in
order to
generally clean-
up the Town.
$2,000
General Fund
Page 4 of 19
Support and
contribute to
state centennial
activities and
incorporate
centennial
activities.
Work in
cooperation with
Centennial
Committee to
implement
and/or
incorporate
Centennial
themes and
activities into
current events
and identify
other
opportunities
and partnerships
to raise
awareness of
Centennial.
This initiative could
include Town
participation on a
Centennial Project –
i.e. – event circle
development at the
Civic Center.
$10,000
General Fund
Investigate
possible
partnerships and
funding options
to participate in
the creation of a
Centennial Event
Circle.
This initiative includes
the Town’s
participation in paving
the event circle as a
Centennial project.
$125,000
CIP Fund
Develop a
proposal to
reduce the cost
of facility use
and rental fees
for residents
and
organizations in
Fountain Hills.
Continue to
examine our fee
schedule policies
in cooperation
with the CCAC to
identify
opportunities to
facilitate local
use of the
community
center. We will
also continue to
meet with
stakeholder
groups to
identify means of
facilitating local
organizational
use of the
center.
The Town is currently
conducting a
comprehensive
examination of the
Town’s fee schedule
to determine to what
degree all fees are
capturing direct and
indirect service
delivery costs. Such
examination may
provide a means /
justification for
adjusting fees.
$0
Page 5 of 19
Develop a
program to
encourage
organizations to
partner with the
Town in facility
maintenance
and upkeep.
Meet with
stakeholder
groups to
determine the
parameters of a
program that
would provide
regular user
groups to
participate in
general
maintenance.
This is likely most
feasible with groups
that regularly use the
center. We will work
or cooperate with
these groups to
identify both the
willingness and
abilities pertaining to
performing light
cleaning/maintenance.
$0
C3 Genuinely
solicit and
consider public
and stakeholder
feedback as part
of the decision-
making process.
Encourage
greater citizen
participation in
Town Halls.
Hold at least two
Town Halls away
from Town Hall.
These meetings,
similar to past
meetings, would
address specific
topics but be
held in locations
such as the
FHUSD Learning
Center, HOAs,
Fountain Park,
etc.
These meetings would
provide citizens with
the opportunity to
meet their elected
officials and would
integrate a “state of
the town” message.
Department heads
would be present to
answer questions as
well.
$200
General Fund
Expand web-
based feedback
instruments to
encourage
public
stakeholder
feedback.
Utilize
technology to
survey citizen
satisfaction with
Town services
and identify
areas for
improvement.
This initiative
includes an
annual citizen
survey and two
other smaller
surveys during
the year focused
on specific
programs
utilizing a web-
based program
known as Survey
Monkey.
It is likely that
sampling would occur
from email lists in
possession of the
Town. These lists
have been gathered
from program
participants and those
subscribing to the
Town’s webpage feed.
$500
General Fund
Page 6 of 19
Consider
strategies that
utilize social
media as a
feedback
instrument.
Conduct an
evaluation of
other
jurisdictional use
of social media
for feedback
gathering and
implement
strategies as
feasible and
practicable.
The Town currently
utilizes Facebook and
Twitter and
communication
devices.
ENVIRONMENTAL SUSTAINABILITY
Strategic
Direction
Council/Staff
Initiative Implementation Additional Explanation
ES3 Explore and
implement new
technologies and
opportunities
that will minimize
noise, air, and
light pollution
and reduce
energy
consumption.
Conduct and
analyze Town
energy audit
and employ
strategies to
reduce energy
consumption.
Utilizing the
results of the
Town’s energy
audit and
existing
strategies, begin
implementing a
strategy
associated with
reducing energy
costs.
$0
Investigate
ways to reduce
energy costs.
See initiative above. $0
Recommend
sustainable
practices.
Reconvene
Environmental
working group.
This group, which has
included participation
from elected officials,
the school district, and
staff, among others,
has been effective in
identifying potential
initiatives and
opportunities for staff
and Council
consideration and
action. Investigate
the possibility of
expanding the scope
of work of an existing
commission.
$0
Page 7 of 19
CIVIC RESPONSIBILITY
Strategic Direction
Council/Staff
Initiative Implementation
Additional
Explanation
Estimated Cost/
Funding Source
CR2 Discover,
recognize, and
utilize the talents
of our citizens and
use these assets to
address
community needs.
Expand “Take Pride”
Day where
volunteers complete
small jobs to
promote facility
maintenance and
upkeep of
amenities, perhaps
as a semi-annual
event or as part of
Centennial activities.
Continue to build on
success of Take
Pride Day, utilizing
early marketing,
facilitating
participation, and
building into the
collection of service
opportunities
smaller tasks
associated with
facility maintenance
and the upkeep of
amenities. Explore
a Certified
Volunteer program.
Possible projects
include public
art cleaning,
Town facility
landscaping
(Town Hall,
Community
Center, Library,
etc.) or even
washing fire
apparatus.
$4,400
General Fund
Establish a senior
mobility program
that uses volunteers
to escort seniors to
doctor’s
appointments,
services, and other
errands.
The Town
continues to
develop the Give
A Lift Program,
our only senior
mobility
program. Give A
Lift volunteers
do accompany
seniors to
various
appointments.
$0
CR3 Foster a
culture of public
service and
volunteerism.
Continue to utilize
Volunteer
Coordinator to
foster volunteerism
for activities and
initiatives.
We will continue
to identify
community
needs that can
be addressed by
volunteers. The
HDM and Give A
Lift programs are
examples of
filling needs with
volunteers.
Continue to
monitor staffing
needs and adjust
as necessary.
$0
Page 8 of 19
Expand on the
Adopt A Street
program to include
citizen stewardship
of community
assets.
Re-introduce the
Park Host program
and seek volunteers
to serve as hosts at
specific parks during
high usage times.
This program
was introduced
in the last fiscal
year, and the
Town failed to
attract enough
volunteer to
make the on-
going use of this
program viable.
The concept
meanwhile is
simple. Park
Hosts serve as
representatives
of the park,
answer
questions about
the facilities,
perform light
maintenance,
interact with
patrons, etc.
$1,000
CR4 Implement a
comprehensive
communications
plan to encourage
informed citizen
participation in
civic life.
Develop a
communications
strategy to
effectively provide
information to
citizens.
Develop a
comprehensive
citizens’
communications
strategy which
identifies how
citizens most often
prefer to receive
information about
the Town and then
prescribe methods/
media by which the
Town can
effectively
communicate with
residents and other
critical publics.
Maximize use of
Channel 11 to the
extent allowed by
licensing.
Such strategy
will include the
continued
expansion of
channel 11 use.
The Town is
currently
working with
FHUSD to
cooperate with
the broadcast
program to
produce new
Channel 11
pieces such as
interviews with
Town officials,
citizens
academy, road
bond
information,
budgetary
information, the
basis for Council
decision making,
etc.. These
could be filmed
$24,000
General Fund
Page 9 of 19
or recorded at
Town Hall, in the
Council
Chambers, etc.
Work has
already been
performed to
revamp our
current Channel
11 policy.
Develop a single
community activities
and events calendar
to showcase Town,
partner, and
regional activities
and serve as a
clearinghouse to
communicate
opportunities.
Design and launch
the “Go Fountain”
site, an interactive
online
clearinghouse for
events, programs,
master calendar,
activities, and
recreational
opportunities in the
Town of Fountain
Hills. Cooperate
Coordinate with
BVAC to avoid
overlapping efforts
on community
calendar.
This site would
not replace the
current
municipal site;
but would serve
in a
complementary
role, providing
an easier way for
residents and
visitors to access
information
about events
and community
amenities.
$0
Close the loop on
citizen inquiries and
inform council
members of final
answers/resolution.
All citizen responses
and staff
determinations
resulting from a
citizen request or
inquiry will be
copied to the
Council. In addition,
the website will
carry a new section
“Since You Asked”
that will feature
responses to citizen
questions –
specifically those
that have a more
global application.
$0
Page 10 of 19
Utilize civic events
to share information
about Town issues.
All civic events,
including volunteer
functions, will
incorporate an
opportunity for the
Town, if feasible, to
share information
about the current
Town issues that
affect citizens.
$0
CR7 Communicate
the role of local
government and
clearly define the
trade-offs between
service levels and
amenities and the
associated costs so
residents can make
informed choices.
Deliver budget
presentations to
identified
community
stakeholder groups.
Finance will identify
specific public
groups to whom
budget information
can be presented
during the budget
cycle.
This information
will include facts
related to
sources of
revenue, facts
about shared
revenue, the
budget structure
itself, the road
bonding
initiative, and
where tax
revenue goes.
$400
General Fund
Continue to present
Citizens Academy.
Departments have
already formatted a
curriculum, and
Community Services
is in the process of
developing an
itinerary related to
this initiative. We
will propose
continuing this
initiative into the
coming fiscal year.
Segments of the
Citizens
Academy will
also be aired on
Channel 11.
(See CR4)
$1,000
General Fund
Page 11 of 19
Create an easy-to-
understand,
meaningful
document that
translates the
budget for public
consumption.
Reformat “Budget
in Brief” to be more
easily read and used
by citizens. Such
publication can be
used in both print
and electronic
formats to
communicate policy
decisions and the
implications of such
decisions.
$500
General Fund
Clearly
communicate policy
decisions and
implications of
decisions.
See initiative
above.
Investigate the
potential of
becoming an
Arizona We Want
pilot community.
This is going
forward in the
current fiscal
year.
$0
EDUCATION, LEARNING AND CULTURE
Strategic Direction
Council/Staff
Initiative Implementation
Additional
Explanation
ELC2 Support
partners in
providing arts and
cultural
opportunities and
amenities.
Identify local talent
and promote
opportunities to
showcase talents at
community events
and activities.
Review current
community events
and incorporate as
practical
opportunities for
local musicians,
dancers, etc.
(particularly youth)
to perform.
Staff is currently
working to
signifi-cantly
simplify the
special event
permitting
process. We
have likewise
communicated
our willingness
to Fort
McDowell to
incorporate
Yavapai cultural
experiences into
our
programming
and utilize our
internal media
to support and
promote
significant
$5,000
General Fund
Page 12 of 19
cultural events.
The Town’s
organizational
culture remains
one which is
supportive of all
partners who
wish to provide
edifying and
wholesome
cultural
opportunities to
our residents.
Support public art
walk.
We are currently
supporting this
program and
plan to continue
this support. We
will however be
able to better
promote the
availability of
this program by
utilizing the Go
Fountain
website as
described below.
$0
ELC4 Position the
community’s arts
and cultural
businesses, venues,
and amenities as
economic drivers
integrated into the
Town’s
comprehensive
economic strategy.
Increase external
awareness of and
interest in public art.
Utilize “Go
Fountain” and social
media as means of
positioning arts and
cultural as
economic drivers –
by providing a
partial virtual tour
of public art in
Fountain Hills and
promoting
awareness of such
via social media and
email lists.
Coordinate with
BVAC to eliminate
duplication of
efforts.
$0
Page 13 of 19
Continue to support
Greening project.
We will continue to
support the
Greening project by
providing support in
a manner as we
have heretofore
done.
$1,000
General Fund
Continue to support
the arts district.
We will continue to
support the
placement and
maintenance of
public art in a
manner as we have
heretofore done.
$0
ELC5 Encourage
access to higher
learning
opportunities or
the establishment
of an educational
or training campus
within our
community.
Broker a
commitment from
an organization to
establish an
educational or
training
facility/program in
Fountain Hills.
Report on activities
to date.
Develop a contact
list of higher
learning and
technical
colleges/institutions
and begin to
cultivate
relationships with
these entities to
promote Fountain
Hills as a candidate
for campus location,
relocation, or
expansion.
As part of this
initiative, we will
schedule a time
within this current
year to report our
findings thus far and
summarize our
efforts to
locate/identify
possibilities.
The Town
continues to
collaborate with
communities
that have been
successful in
attracting higher
education
opportunities to
determine the
feasibility of
such in Fountain
Hills. We will
continue to
maintain contact
with institutions
of higher
learning. It has
appeared from
our research
thus far that
successful
communities are
often dislocated
from population
centers and/or
are willing and
able to
contribute land
and even
$0
Page 14 of 19
bricks/mortar to
bring a learning
institution to
Town. It further
appears that
many learning
institutions are
utilizing the
internet to
promote on-line
learning instead
of establishing
new campuses.
We will
nonetheless
continue to
monitor oppor-
tunities,
cultivate
interest, and
respond
appropriately to
any opportunity.
ECONOMIC VITALITY
Strategic Direction
Council/Staff
Initiative Implementation
Additional
Explanation
EV1 Develop a
comprehensive
economic
development
strategy for the
Town’s future and
work with our
partners to
forward economic
growth and
awareness.
Develop a
comprehensive
community
marketing
plan/campaign.
Conduct research to
determine the
Town’s “brand” and
develop a
comprehensive
branding strategy.
Such strategy will
include the
communication of
quality of life
factors. Coordinate
with BVAC to avoid
competitive
branding and/or
overlapping
marketing.
Any strategy/
campaign must
begin with a
clear under-
standing of what
our brand is (i.e.,
what others
think of us). We
can then identify
a specific
strategy to
address
deficiencies in
that brand,
depending on
the objective(s)
of the branding
strategy.
$0
Page 15 of 19
EV2 Develop and
maintain a
balanced,
equitable,
sustainable, local
financing structure
to support the
Town’s core
government
services at desired
service levels.
Revisit the 2007
Revenue
Enhancement
Analysis Report and
identify potential
strategies for
consideration
and/or
implementation.
Staff has
reviewed the
referenced
report, provided
on-going analysis
of options, and is
available to
discuss options
with the Council
as requested.
$0
Review and consider
implementation of a
storm water
maintenance fee.
This has been
completed in the
current year.
Consider
establishing a
financial
sustainability
commission to
review and
recommend
strategies to ensure
long-term financial
sustainability.
This is a current
year initiative.
$0
EV4 Promote
retention,
expansion, and
relocation of
quality businesses.
Provide
opportunities to
receive feedback
from those investing
in our community.
Hold annual
Business and
Development
meeting to establish
goodwill, provide
forum for
exchanging ideas
and concerns with
businesses and
developers, express
gratitude for their
investment in our
community, and
share community
information.
$93,242
General Fund
Develop strategies
that focus on
business retention
within the
community.
This is a current
year project.
The current
strategy will
attempt to
capitalize off
existing quality
of life factors
that Fountain
Hills can offer.
$177,462
Downtown Fund
Page 16 of 19
Continue to review
codes to identify
opportunities to
relieve businesses of
unnecessary
regulation.
This effort is
underway and will
continue. Signage is
the first area that
will be examined.
We are anticipating
that exchanges with
businesses and
developers will
provide us with
additional
opportun-ities to
examine and revise
policy.
$0
Examine possibilities
associated with
acquisition of
properties not used
by school district for
possible business
location or other
municipal uses.
Staff will review all
such parcels and
provide Council
with determination
of possible
acquisitions, in
concert and
cooperation with
school district.
$0
EV5 Promote
Fountain Hills as a
visitor destination.
Continue to support
and partner with the
Fountain Hills and
Fort McDowell
Tourism Bureau.
Continue funding of
Tourism Bureau and
provide clearly
defined
performance
measures.
The Town will
continue to
support current
tourism efforts.
Staff has also
recommended
an alternative,
additional
website that
may be utilized
to promote
tourism.
$2,050
General Fund
EV6 Identify a
slate of economic
development tools
and strategies
(including tax
incentives, fee
abatements, etc.)
to stimulate
economic growth.
Develop a strategy
to focus new
development and
business relocation
to the Downtown
Core (along Avenue
of the Fountains.)
Provide for Council
consideration the
establishment of a
Downtown Infill
Incentive District
(DIID) or similar
tool. This could
potentially be
fashioned to
contain or provide
various incentives
to those developing
in the downtown
area.
All incentives will
need to be
examined to
ensure that they
are return
driven.
$5,000
Downtown Fund
Page 17 of 19
Analyze and
facilitate necessary
rezoning (and
related activities) to
support future
Lakeside District
development.
This project is
current and on-
going.
$0
RECREATIONAL OPPORTUNITIES AND AMENITIES
Strategic Direction
Council/Staff
Initiative Implementation
Additional
Explanation
R2 Provide an
interconnected,
multi-use trail and
bicycle system that
promotes active
living, physical
activity, education,
and appreciation of
our parks and
natural resources.
Utilizing the Urban
Trails Plan, identify
improvements along
circuits that better
accommodate and
promote multi-
modal use of urban
trails.
Review plan
annually to identify
opportunities to
improve and
encourage use of
urban trail system.
First year
improvements
could include
additional
signage, minor
pavement
modifications,
and trail
marketing.
$10,000
General Fund
Provide analysis of
pedestrian
movements with the
Town and identify
interconnect gaps.
Development
services to provide
analysis as
precursor to future
new sidewalk
construction
Work with Sonoran
Conservancy and
other organizations
to expand and
maintain Preserve
Trails.
Staff is actively
and regularly
engaged in this
effort and will
continue efforts.
$0
TOTAL GENERAL
FUND
$166,292
TOTAL
DOWNTOWN
FUND
$177,462
TOTAL CIP $125,000
Page 18 of 19
CONCLUSION
The preceding table is not intended to present an exhaustive list of every effort that will be expended by
staff to accomplish or realize the goals established by the Council. As the year progresses, opportunities
and ideas will emerge that will be pursued in an appropriate manner. Meanwhile, Council
consideration of these initiatives and deliberate feedback are appreciated and indeed critical if we are to
be successful in fashioning an achievable and effective goal implementation plan.
This report constitutes the second draft of this proposal. This draft, based on feedback from the
Council, is intended to communicate a more comprehensive response to all initiatives, whether they are
part of the current year’s efforts or represent potential programs in the coming fiscal year.