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HomeMy WebLinkAboutFY01 ACFRTown of Fountain Hills, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2001 a .�. of the TOWN OF FOUNTAIN HILLS, ARIZONA for the FISCAL YEAR ENDED JUNE 30, 2001 Acting Town Manager/Town Attorney William E. Farrell Town Accountant Julie A. Ghetti TOWN OF FOUNTAIN HILLS, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Contents Page INTRODUCTORY SECTION Letter of Transmittal 1 GFOA Certificate of Achievement x Organizational Chart xi List of Principal Officials xii FINANCIAL SECTION Independent Auditor's Report General -Purpose Financial Statements Combined Balance Sheet - All Fund Types and Account Groups 4 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 7 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Governmental Fund Types 8 Notes to Financial Statements 11 Required Supplementary Information: Public Safety Personnel Retirement System Analysis of Funding Progress 30 Combining, Individual Fund and Account Group Statements and Schedules GENERAL FUND: Statement of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual 34 SPECIAL REVENUE FUNDS: Combining Balance Sheet 36 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 37 �r IRMO FOR THE FISCAL YEAR ENDED302001 Contents (Cont'a) Page I�U70iSfTiT Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 38 Cottonwoods Maintenance District Fund: Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 39 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 40 DEBT SERVICE FUNDS: Combining Balance Sheet 42 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 43 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 44 CK•-MT7.YA Statement of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual 45 Eagle Mountain Debt Service Fund: Statement of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual 46 Cottonwoods Special Assessment Fund: 11Tf�7 Statement of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual 48 TOWN OF FOUNTAIN HILLS, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 3012001 Contents (Concl'd) Page CAPITAL PROJECTS FUNDS: Combining Balance Sheet 50 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 51 Heritage Grant Fund: Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 52 Capital Projects Fund: Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 53 GENERAL FIXED ASSETS ACCOUNT GROUP: Comparative Schedules of General Fixed Assets by Source 56 Schedule of General Fixed Assets by Function and Activity 57 Schedule of Changes in General Fixed Assets by Function and Activity 58 STATISTICAL SECTION General Government Expenditures by Function 60 General Government Revenues by Source 61 General Governmental Tax Revenues By Source 62 Town Transaction Privilege (Sales) Tax Collections 63 Primary and Secondary Taxable Property Assessed Valuation 64 Primary and Secondary Property Tax Rates - All Overlapping Governments 65 Assessed Valuation of Major Taxpayers 66 Computation of Legal Debt Margin 67 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 1 68 Ratio of Annual Debt Service Expenditures to Total General Expenditures 69 Direct and Overlapping General Obligation Bonded Debt 70 Assessed and Estimated Actual Value of Property 71 Property Tax Levies and Collections 72 Property Tax Rates for all Overlapping Governments 73 Maricopa County Economic Indicators 74 Demographic and Miscellaneous Statistics 75 THIS PAGE BLANK ITown of FOUNTAIN HILLS October 29, 2001 To the Honorable Mayor, Members of the Town Council, and Citizens of the Town of Fountain Hills, Arizona The Comprehensive Annual Financial Report (CAFR) of the Town of Fountain Hills for the fiscal year ended June 30, 2001, is hereby submitted. Local ordinances and state statutes require that the Town issue an annual report on its financial position and activity and that this report be audited by an independent firm of certified public accountants. This document represents a joint effort by Town staff as well as our auditors, Cronstrom & Trbovich. It will be submitted to the Government Finance Officers Association of the United States and Canada in an effort to secure a "Certificate of Achievement for Excellence in Financial Reporting". Copies of this report will be sent to elected officials, bond rating agencies, national repositories, and other agencies which have expressed an interest in the Town of Fountain Hills' financial matters. Responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management. Staff believes that the data is accurate in all material respects and is reported in a manner that presents fairly the financial position and operational results of the Town of Fountain Hills' various funds and account groups. All disclosures necessary for the reader to understand the Town's activities have been included. The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The Introductory Section includes the letter of transmittal, the GFOA Certificate of Achievement, an organizational chart and a list of the Town of Fountain Hills' elected officials and department heads. The Financial Section includes the general-purpose financial statements, the combining, individual fund and account group financial statements and schedules, as well as the independent auditor's report on these financial statements and schedules. The Statistical Section includes selected financial and demographic information, generally presented on a ten-year basis. The financial reporting entity (the Town) includes all the funds and account groups 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. The Town provides or administers a full range of services including public safety (police, animal control, building inspection); community development (code enforcement, planning, zoning and engineering); the construction and maintenance of streets and infrastructure, municipal court, recreational activities and cultural events. The Town does not maintain utility or other operations that require the establishment of enterprise funds. i 16836 East Palisades Boulevard, Building A - P.O. Box 17958 -Fountain Hills, Arizona 85269 - (480) 837-2003 -FAX: (480) 837-3145 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 Improvement and Maintenance District, Eagle Mountain Community Facilities District and Fountain Hills Municipal Property Corporation are included in the financial reports of the Town. The Town does not have a primary property tax for operating purposes. Operations are paid for from sales tax, user fees and charges, licenses and permits and other similar sources. The Town property tax of $0.56 per $100 of assessed secondary valuation is used solely for the retirement of debt. GOVERNMENTAL STRUCTURE, LOCAL ECONOMIC CONDITION AND OUTLOOK General Information 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 11,340 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. The U.S. Bureau of the Census Year 2000 revealed a year round population of 20,235. This represents a 43% increase in population from 1995 (14,146) and a 98% increase from the 1990 census (10,190). Governmental Structure 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. Policy making and legislative authority are vested in the Town Council, which consists of a Mayor and six Councilmembers. Councilmembers are elected at large for staggered four-year terms. The Mayor, who also sits on the Town Council, is directly elected bi-annually by the voters and the Vice -Mayor is selected by the Council every eight months on a rotating basis. 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 six department managers and approximately 110 employees. The Magistrate, Town Attorney and Town Prosecutor are under the direction of the Town Council. Fountain Hillssingle largest revenue source is local sales tax generated from construction and retail activity. These two categories experienced gains averaging 37.9% over the past four years (the local sales tax was enacted during FY 1996). However, it is anticipated that this growth rate will not continue in the upcoming fiscal year. The projected forecast for next fiscal year for local sales tax revenue reflects a slight decrease to reflect management's conservatism regarding the current economic climate. During the latter quarter of fiscal year 2001-2002 Fountain Hills expects to see the opening of two large retail shopping centers, one with a large retail anchor and the other with a large grocery anchor. These two shopping centers will add significant sales tax dollars to the Town's General Fund both in terms of construction and retail activity. The declining home construction activity will be offset by the new development of luxury homes in two new subdivisions near the McDowell Mountains. Home construction in the Eagle Mountain community within Fountain Hills is nearing completion. When completed the Eagle Mountain community will consist of approximately 600 single-family homes and 80 condominiums. Construction began in early summer of 2001 on a Fry's grocery store -anchored commercial/retail development at the southeast comer of Shea Boulevard and Eagle Mountain Parkway that is scheduled to open in the summer of 2002. The Firerock Country Club development, which began in 1988, will include up to 390 single- family homes and 288 condominiums in this gated community. The development has a private country club that includes an 18-hole golf course. All of the single-family subdivisions within the Firerock Country Club have been platted and lot sales and home construction have begun. The Town recently approved subdivisions for the development of the remaining undeveloped land east and north of Fountain Park. Diamante Del Lago, a 139 lot single-family development and Bella Lago, a 68-unit condominium development, are located east and north of Fountain Park. These two subdivisions are nearing completion. A general obligation bond issue was issued last fiscal year to purchase 9.25 acres of land that makes up most of the prime viewshed ridgeline in this area. A major developer in Fountain Hills, MCO Properties, recently gained preliminary subdivision approval for two subdivisions in the northwest comer of Fountain Hills, The Eagle Ridge North and Eagles Nest subdivisions were approved for a total of 415 custom lots. This subdivision is adjacent to 354 acres of mountainous terrain that will be acquired from the developer. The Fountain Hills McDowell Mountain Preserve will have access to the McDowell Mountain Regional Park and will be used for development of a trailhead. Subdivision improvement construction is scheduled to begin in the Spring of 2002. As of October 1, 2001 there were 7,055 developed single-family dwelling units within the Town and 3,395 multi -family dwelling units. As of today within the entire Town there are 2,003 undeveloped single-family zoned platted lots. The population of Fountain Hills in the 2000 Census was 20,235, iii Commercial The remainder of the Town's downtown commercial core will soon be subdivided. Anchoring the commercial development in this area is the Town's new Community Center and County Library that opened in September 2001. Construction will soon commence on a new Hilton Hotel, more retail, and office and multi -family developments located at the southwest entrance into Fountain Hills. At the southeast entrance to the community construction has begun on a large retail shopping center that includes plans for a Target store and other large retail tenants. Industrial Fountain Hills has a business park that is partially developed. The Business Park contains individual construction equipment storage and maintenance yards, construction company operation yards, a utility company storage and maintenance yard, a distribution business and several small manufacturing operations. MAJOR INITIATIVES AND ACCOMPLISHMENTS During 2000-2001 the Town continued to maintain a healthy financial reserve despite significant capital outlays. The Town strives to maintain the carry forward balance for times of fiscal uncertainty. The following are some of the accomplishments during 2000-2001: A new Town Community Center and Library/Museum complex, located on a 13 acre site in the downtown area, is nearing completion. The 31,000 square foot Community Center, consisting of two arts and crafts classrooms, two seminar rooms, two regular classrooms, a kinder -care room, a conference room, a game room, lounge and lobby areas, an 8,000 square foot banquet room subdividable into four activity/event rooms, a catering kitchen, office and support facilities, were financed through Municipal Property Corporation bonds that will be retired using local sales tax revenue streams. The 21,000 square foot Library/Museum, consisting of separate adult and children reading areas and book stacks, meeting rooms, computer resource center and 5,000 square feet of exhibit space for the museum, will be paid for by the voter -approved general obligation bonds. The groundbreaking ceremony took place June 2, 2000 and the facilities opened in September 2001. The senior population of Fountain Hills benefited from the coordination of joint efforts by the Red Cross, Maricopa County Human Services, RPTA (Regional Public Transportation Association), and the Fountain Hills Senior Services to improve the shuttle service route to and from the Senior Center, Mayo Clinic and neighboring cities. In order to offset the costs associated with a rapidly growing population base the Community Development department successfully developed and instituted a Development Fee for new development within the Town. The fees are allocated among Parks and Recreation, Streets and Highways, Public Safety (Marshal Department), Open Space and General Government and will be used to fund additional parks, open space, etc., as the community grows. The Fountain Hills Marshal Department successfully obtained funding for three officers through federal grants, one officer through a State Gang Task force grant, and also provided two resource officers to the local high school as additional security. The Department also sponsored a wide variety of youth service activities including Special Olympics, "Stranger Danger" presentations, Bicycle Safety Rodeos and a Fountain Hills Law Enforcement Explorer Post program. iv The Town assisted the Arizona Department of Water Resources with a major dam renovation project, raising the Golden Eagle Park dam to meet the standard for a 100-year storm event. This will provide flood protection for the local middle and high school located in a field just below the dam. The remainder of the Town -owned dams were inspected and given favorable grades by the ADWR. The Parks and Recreation Department sponsored a Mayor's Youth Council, the members of which attended the National League of Cities Conference in Boston, Massachusetts last year. The participation of youth members in the Council was increased by almost four times the number from the prior year. Fountain Hills has four community parks for its citizens. The Town's namesake and landmark, Fountain Park, is a 59-acre passive recreation area, which includes: 30-acres of turf, a 29-acre lake with a "world famous fountain" that sends a jet stream 560 feet into the air. The park also includes a pump station, a dam, an 18-hole championship disc golf course, and a children's playground. During last fiscal year there were significant capital costs at Fountain Park last year involving replacement of the liner under the Fountain Lake. In addition, the park was upgraded with proceeds from a grant from the Arizona State Parks Heritage Fund, Town Management is responsible for establishing and maintaining an intemal control structure designed to ensure that the assets of the government are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. In addition, the Town of Fountain Hills maintains extensive budgetary controls. The objective of these controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the government's council. Activities of the general fund, special revenue funds, debt service funds and capital projects funds are included in the annual budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the departmental level for the General Fund and in total by fund for the other funds. In May 2001 the Town's outstanding General Obligation debt was upgraded from A2 to Aa3. The upgrade was based on "substantial tax base and economic growth, driven by the Town's location within the Phoenix metropolitan area, conservative financial management strategies, resulting in substantial reserves, and a manageable debt profile". As demonstrated by the statements and schedules included in the Financial Section of this report, the Town of Fountain Hills continues to meet its responsibility for sound financial management. General Government Functions The following schedule presents a summary of General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds revenues for the fiscal year ended June 30, 2001 and the amount and percentage of increases and decreases in relation to prior year revenues. Increase/ Percent 2001 Percent of (Decrease) Increase/ Classification Amount Total from 1999-2000 (Decrease) Taxes $ 6,088,047 45.84% $ 1,211,581 24.85% Intergovernmental 512817156 39.77% 509,364 10.67% Fines and forfeitures 310,359 2.34 % 16,389 5.58 % Licenses and permits 2,177,614 16.40% (391,858) -15.25% Charges for services 431,316 3.25 % (23,050) -5.07 % Rents and royalties 35,781 0.27 % 8,573 31.51 % Contributions and donations 400 0.00% (10,198) -96.23% Special Assessments 75958 0.06% (11283) -13.88% Net investment income (loss) (1,063,339) -8.01 % (1,806,598) -243.06% Other 10,957 0.08% (105098) -47.96% Total $ 13,280,249 100,00% $ (4973178) -3.61% The General Government revenues total $13,280,249 for fiscal year 2000-2001, which represents a decrease of $497,178 or 3.61% from 1999-00. The $1,211,581 increase in Taxes is primarily due to an increase in local sales tax revenues ($835,660). In November 2000 the Town Council enacted a .4% increase in the local sales tax rate to 1.6% to be used for Land Preservation (.3%) and Downtown Development (.1%). Additionally there was an increase in secondary property tax revenue ($412,474) to cover the debt service on voter -approved General Obligation bonds issued for construction of a new Library/Museum. Local sales tax revenues are generated primarily from construction and retail trade (69% of the total). The increase in Construction tax revenues over last fiscal year was only 3% - the lowest increase since the inception of the local sales tax. Retail trade revenues increased 29%. Major items included in Intergovernmental (state -shared) revenue include state sales tax, highway user revenue, state income tax, vehicle license tax and grants. There was a 10.7% increase in state shared distributions largely due to the Town's population growth. The population increase resulted in an increase in proportionate share of State revenues. The Town also received $229,000 more in grant revenue, primarily from State Heritage Grant funding for Parks. The Town continues to participate in the federal COPS Universal Hiring program for community policing. The increased enforcement and continued growth of the community contributes to the increase in Fines and Forfeitures of $16,389, which consists primarily of traffic citations. The decrease in investment earnings reflects a loss on investments of $2,103,191 (see Note 3 to the financial statements). The investment funds were proceeds from bonds issued by the Municipal Property Corporation for construction of the new Community Center and held by a trustee. Despite the loss, the project will be completed as scheduled with expenditures being paid by the General Fund. vi Growth in the area of new home construction in the Town of Fountain Hills has begun to show signs of slowing. Building Permit revenue collected declined by $280,637, a 13% decrease over the prior year. During fiscal year 1999-2000 there were 390 single-family residence permits issued; during 2000-2001 there were 244 permits issued. However, there are two major commercial retail construction projects underway that will help to soften the economic impact in the event of a possible slowdown in construction activity. There was also a decrease in Encroachment and Improvement Plan Review fees of $115,291. Revenue received under the Charges for Services category includes Developer Contributions, In Lieu Payments and Parks & Recreation User Fees. The decrease in this category reflects the scheduled elimination in contributions from the developer, MCO Properties, as stipulated in the agreement with the Town. The Town continues to maintain a large reserve fund, primarily invested with the Arizona State Local Government Investment Pool. The Library/Museum bond proceeds were invested with the Pool and generated interest earnings during the construction period. The cash reserves generated total interest earnings of $1,031,123 in fiscal year 2000-2001. The Other category of revenue is used for miscellaneous and not -otherwise -categorized sources of revenue. The following schedule presents a summary of General Fund, Special Revetaue Funds, Debt Service Funds and Capital Projects Funds expenditures for the fiscal year ended June 30, 2001 and the increases and decreases in relation to prior year amounts. Increase/ Percent 2001 Percent7of (Decrease) Increase/ Department Amount Totafrom 1999-2000 Decrease Current General government $ 31646,500 17.07% $ 1)117,547 44.19% Public safety 35354,037 15.70% 295M7 9.64% Highways and streets 2,212,432 10.35 % (256,066) -10.37% Culture and recreation 3,866,245 18.09% 506,736 15.08 % Community development 11175,649 5.50% (101,302) -7.93% Capital outlay 5,261,585 24.62% 3,474,116 194,36% Debt service Principal retirement 620,408 2.90% 281,395 83.00% Interest and fiscal charges 1,086,208 5.09% 501,207 85.68% Bond issue costs 144,986 0.68 % 144,986 n/a Total $ 21,368,050 100.0% $ 5,963,636 38.71% Expenditures for general operations totaled $21,368,050, which was $5,963,636 greater than the prior year. The most significant increase is in the Capital Outlay category, which reflects the expenditure for the new Town Community Center and Library/Museum construction projects in the amount of $4,547,492. Additionally, during fiscal year 2000-01 the Town of Fountain Hills received funding from the Arizona State Parks Heritage Fund for Phase I improvements to Fountain Park ($714,093). vii The General Government function consists of the Administration, Magistrate Court and Town Council Departments. Expenditures of the Administration Department account for approximately $900,000 of the difference between last fiscal year and 2000-2001. During the last fiscal year significant leasehold improvements were made to the existing Town Hall ($416,000), which provided improved facilities and service to the citizens. Significant legal costs ($400,000) were incurred as staff negotiated with the property owner to acquire 354 acres of open space. The voters of Fountain Hills approved $6,000,000 in General Obligation bonds for the purchase of this land that will have access to the McDowell Mountain State Park. An agreement between the Town and the property owner has been reached and should be finalized by the end of calendar year 2001. Public Safety includes Building Safety and the Town Marshal Department. The Marshal Department is responsible for all local law enforcement activities, which includes the annual contract with Maricopa County Sheriff's Office for outside police services ($52,587 increase over prior year). The Town also receives federal funding through the U.S. Department of Justice, Office of Community Oriented Policing Services, which stipulates hiring and retaining new police officers. The federal funding of the officers is for a three year period and requires a decreased federal subsidy and increased Town contribution each year. Culture and Recreation includes the new Community Center/Library/Museum under construction, four parks (121 acres), 25 acres of landscaped medians, and 1,100 acres of open space. The costs for the parks and medians are mainly for building maintenance costs, electricity, water and mowing/landscape maintenance fees. Major costs ($1,200,000) were incurred in Fountain Park due to the lake liner replacement project that began in May of 2000. The remainder of the project was completed during October 2000. Community Development expenditures decreased by $101,302 due to decreased requirements for outside engineering fees. Capital Outlay expenditures were for the new Community Center/Library/Museum and Phase I at Fountain Park. There was an increase from the prior year for land acquisition ($1,363,500). General Government Fund Balances Fund balances reflect the accumulated excess of revenues and other financing sources over expenditures and other financing uses for general government functions. Unexpended appropriations lapse at the close of the fiscal year and revert to unreserved fund balance. The following schedule presents increases (decreases) in total fund balances by June 30, 2001, compared to the prior year. General Fund Balance The fund balance of the General Fund decreased by $1,604,400 from June 30, 2000. Without the investment loss the fund balance would have increased by $498,791. The Town of Fountain Hills expects to be successful in the effort to recover the Municipal Property Corporation funds from the trustee. Debt Administration On June 30, 2001, the Town had one Street and Highway User Revenue Bond, one Municipal Property Corporation Revenue Bond and three general obligation bonds issues outstanding. The outstanding principal totals $4,530,000 for the new MPC Revenue Bond and $9,209,873 for the general obligation bonds. The Town also had two Community Facilities District Bonds outstanding totaling $4,905,000 and an Improvement District Bond outstanding for $25,820. Cash Management Policies and Practices The Town uses a system of consolidated cash management. Cash from all funds is pooled in a central disbursement fund. Cash to be used for payment of current expenditures is maintained in a checking account, the balance of cash is maintained on deposit with the Arizona State Treasurer's Local Government Investment Pool. Cash in the Local Government Investment Pool is available upon 24 hours notice. The LGIP invests in U.S. Treasury Notes, U.S. Treasury Bills and federally guaranteed insurance contracts. The average interest rate for fiscal year 1999-00 was 5.907% and 6.0617% for fiscal year 2000- 2001. Investments held at LGIP earned interest revenue of $524,270 for the year ended June 30, 2001. Risk Management The Town of Fountain Hills participates in the Arizona Municipal Risk Retention Pool. Risk coverage includes general liability, errors and omissions, property and automobile insurance. The policy insures up to $7,000,000 per incident occurrence plus any excess liability of up to $8,000,000 per occurrence per year. Coverage is provided on a claims - made basis. The Arizona Municipal Workers Compensation Fund is the Town's insurance provider for Workers' Compensation. The rate varies according to the functions performed by personnel. Other Information Independent Audit Arizona statutes require an annual audit by independent certified public accountants. The firm of Cronstrom and Trbovich P.C., CPAs was retained by the Town to perform the 2000-2001 audit. Generally accepted auditing standards were used by the auditors in conducting the engagement. The auditor's report on the general-purpose financial statements and combining, individual fund and account group statements and schedules is included in the Financial Section of this report. Awards and Acknowledgements 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, 2000. This was the fifth consecutive year that the government has received this prestigious award. hi 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. I would also like to extend my appreciation to the Mayor and Council for their leadership and support. The preparation of this Comprehensive Annual Financial Report was made possible by the hard work of the Finance Department staff. Each member of the department has my sincere appreciation for the contributions made in the preparation of this report. Respectfully submitted, illiam E. Farrell Acting Town Manager/Town Attorney ix Certificate of Achievement for Excellence in Financial Reporting Presented to Town of Fountain Hills, Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2000 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. ' ;' -7 YExecutiv PA sident u 3 U� �y 'aa E E U U E d c y, yy � U .d o = c _ ® o E c ,o o a aU e"n 3 S v T W � e = P. � c c ix s ro � R:U x o e c c a TOWN OF FOUNTAIN HILLS, ARIZONA LIST OF PRINCIPAL OFFICIALS ELECTED OFFICIALS Mayor Ms. Sharon Morgan Vice -Mayor Mr. John Wyman Councihnember Ms. Sharon Hutcheson Councilmember Ms. Leesa Fraverd Councilmember Dr. John Kavanagh Councilmember Mr, John McNeill Councilmember Ms. Susan Ralphe DEPARTMENT HEADS Acting Town Manager/Town Attorney William E. Farrell Magistrate Stuart Shoob Planning & Zoning Director Jeffrey Valder Town Clerk/Director of Administration Cassie Hansen Town Engineer Randy Harrel Director of Public Safety Steve Gendler Parks & Recreation Deputy Directors Don Clark Bryan Hughes Town Prosecutor Iacovino & Kayler Street Superintendent Pat Harvey xii TFIIS PAGE BLANK C ERTIFIED PUBLIC ACCOUNTANTS I1►`I17B1��I►`II]11►`YII\Il1]IIC•]C7GYC�a�S!]:Y1 The Honorable Mayor and the Town Council of the Town of Fountain Hills, Arizona We have audited the accompanying general-purpose financial statements of the Town of Fountain Hills, Arizona (Town), as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Town's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general- purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Fountain Hills, Arizona as of dune 30, 2001, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general-purpose financial statements taken as a whole. The combining, individual fund and account group financial statements and schedules listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general-purpose financial statements taken as a whole. 7 8706 EAST MANZANITA DRIVE, SURE t00 • SCOTTSDALE, ARIZONA 85258 ® (480) 348-1102 ° FAX (480) 348-1104 A PROFE5510 NA1 CORPORATION The other information included in this report, designated as the "Statistical Section" in the table of contents, was not audited by us and, accordingly, we express no opinion on it. CronstrOm & frbOVleh, P.C. October 29, 2001 2 •r ' i �. • � TOWN OF FOUNTAIN HILLS, ARIZONA COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS AS OF JUNE 309 2001 General Governmental Special Revenue Fund Types Debt Service Capital Projects Assets and Other Debits Assets Cash and investments $ 4,832,572 $ 427,125 $ 5,243,341 $ 12838,577 Cash on deposit with paying agent - - 990,452 Accounts receivable 202 - - - Taxes receivable - 221 365433 Intergovernmental receivable 562,362 1892533 - 458,444 Interest receivable 347356 - - - Specialassessmentsreceivable - - 16,138 - Due from other funds 5093180 - - - Prepaid items 33304 11456 - - Fixed assets - - - - Other Debits Amount available in debt service fund - - - - Amount to be provided for retirement of general long-term debt - - - - Total Assets and Other Debits $ 5,941,976 $ 618,335 $ 64286,364 $ 2,297.021 Liabilities, Equity and Other Credits Liabilities Accounts payable $ 858,819 $ 382,788 $ - $ 67,170 Accrued wages and benefits 143,475 32,996 - Contracts payable 839469 1263089 - 271,301 Due to developer - - 4,435,000 - Retainage payable - 8,284 4,472 - 85397 Interest payable - - 550,215 Intergovernmental payable 723967 - - - Due to other funds - 221 129,923 37%036 Refundable deposits 26,775 - - - - Deferred revenue 38,126 623602 41,388 - Compensated absences payable - - - - General obligation bonds payable - - 447,590 - Revenue bonds payable - - 150,000 - Community facilities district bonds payable - - - - Special assessment debt with government commitment - - - - Total Liabilities 12314915 609,168 5,754,116 725 904 Equity and Other Credits Investment in general fixed assets - - - - Fund balances Reserved for prepaid items 31304 1,456 - - Unreserved,undesignated 447064757 7,711 532,248 11571,117 Total Equity and Other Credits 44710,061 94167 532,248 1,5714117 Total Liabilities, Equity and Other Credits $ 5.941,976 $ 618,335 $ 6,286,364 $ 2,297.021 The accompanying notes to fmancia] statements are an integral part of this statement. Account Groups Totals General General (Memorandum Fixed Assets Long-term Debt Only) 990,452 202 36,654 - - 132102339 34,356 16,138 5097180 - 4,760 271482,521 - 2774827521 532,248 532,248 1743925308 17,392, 308 $ 27,4822521 $ 171924,556 $ 60,550,773 176,471 480X9 - - 43435,000 21J53 5503215 72,967 509,180 26,775 142,116 - 253,863 253,863 - 8,209,873 81657,463 - 41530,000 4,680,000 - 4,905,000 49905,000 25,820 25.820 174924,556 269245,659 27,482,521 - 27,482,521 - - 4,760 6,817,833 27,4823521 34,30541 I $ 27,482,521 $17,924,556 $ 60.550,773 The accompanying notes to financial statements are an integral part of this statement. 5 THIS PAGE BLANK 0 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES YEAR ENDED TUNE 30, 2001 Totals Special Debt Capital (Memorandum General Revenue Service Projects Only) Revenues Taxes S 5,049,156 $ 32200 $ 1,0351691 $ - $ 6,088,047 Intergovernmental 3,5847669 174572808 - 238,679 5,281,156 Fines and forfeitures 310,359 - - - 3103359 Licenses and permits 22177,614 - - - 2,177,614 Charges for services 2372008 93,986 - 100,322 431,316 Rents and royalties 35,781 - - - 35,781 Contributions and donations 400 - - - 400 Special assessments - - 73958 - 73958 Net investment income (loss) 3805824 72855 3183982 (1,771,000) (I,0637339) Other 10,957 10,957 Total Revenues 113786,768 11562,849 1,362,631 (L431,999) 13,280,249 Expenditures Current General government 33646,500 - - - 31646,500 Public safety 330963053 2577984 - - 33354,037 Highways and streets - 2,212,432 - - 2,2127432 Culture and recreation 33864,745 17500 - - 3,866,245 Community development 131755649 - - - 1,175,649 Capital outlay - - - 5,261,585 552615585 Debt service Principal retirement - - 620408 - 620,408 Interest and fiscal charges - - 1,086,208 - /30863208 Bond issuance costs 144.986 144,986 Total Expenditures 11,782,947 24471,916 1,706,616 54406.571 21,368,050 Excess of revenues over (under) expenditures 3,821 NK067) (343,985) (64838.570) (8,087,801) Other financing sources (uses) Operating transfers in - 120343234 540,405 258,553 1 ,833 5192 Operating transfers out (1,608,221) (I16,000) (649334) (44,637) (15833,192) Proceeds from sale of bonds 4,641,980 4,6414980 Total other financing sources (uses) (1,6083221) 918,234 476,071 4,855,896 4,641 t980 Excess of revenues and other sources over (under) expenditures and other uses (196043400) 9,167 132,086 (13982,674) (3,445,821) Fund balance, beginning of year 6,314,461 - 4004162 3,5534791 10268,414 Fund balance, end of year $ 4.710,061 $ 9.167 $ 532,248 $ 1.571.117 $ 6,822,593 The accompanying notes to financial statements are an integral part of this statement. 7 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001 Budget General Actual Variance Favorable (Unfavorable) Special Revenue - Budget Actual Variance Favorable (Unfavorable) Revenues Taxes $ 411175000 $ 530493156 $ 932,156 $ 3,200 $ 33200 $ - Intergovernmental 3,491,800 31584,669 929869 3,0212999 11457,808 (I,564,191) Fines and forfeitures 340,500 310,359 (30J41) - - - Licenses and permits 2,5701000 21177,614 (392,386) - - - Charges for services 2547875 2373008 (173867) 807000 937986 13,986 Rents and royalties 25,000 353781 107781 - - - Contributions and donations - 400 400 - - - Special assessments - - - - - Net investment income (loss) 4253000 380,824 (445176) - 73855 7,855 Other 30,000 10,957 (194043) 500 - (500) Total Revenues 11.254,175 11,786,768 532,593 33054699 1,562,849 (1,542,850) Expenditures Current General government 75337,476 336465500 3,690,976 1,475,000 - 1,475,000 Public safety 3,1637260 330963053 67,207 302,399 257,984 447415 Highways and streets - - - 3,170,309 25212,432 957,877 Culture and recreation 4,255,475 3,8645745 3909730 32000 1,500 1,500 Community development 1,516,570 1,175,649 3407921 - - - Capital outlay - - - - - - Debt service Principal retirement - - - - - - Interest and fiscal charges - - - - - - Bond issuance costs - - Total Expenditures 16,2724781 11,782,947 4,489,834 4,950,708 2A71 916 21478,792 Excess of revenues over (under) expenditures (540184606) 3 821 5,022,427 (I 845A9) (909,067) 935 942 Other financing sources (uses) Operating transfers in - - - 1,961,000 19034,234 (926,766) Operating transfers out (I2957,800) (I7608,221) 34%579 (1163000) (1163000) - Proceeds from sale of bonds - - - - Total other financing sources (uses) (149574800) (1.608.221) 349,579 11845,000 918,234 (9264766) Excess of revenues and other sources over (under) expenditures and other uses (6,976,406) (136049400) 5,372,006 (9) 99167 9,176 Fund balance, beginning of year 64976,406 6,314A61 (661,945) 37 - (37) Fund balance, end of year $ - $ 4,7104061 $ 4 710 061 $ 28 $ 9,167 $ 9.139 The accompanying notes to financial statements are an integral part of this statement. �3 Debt Service Capital Projects Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) - 1,400,000 2383679 (111613321) 4,800 7,958 3,158 - - - 97,350 318,982 221,632 1107000 (1,771,007) (I,881,007) 1,05 8,935 1,362,631 303,696 620,428 62Q,408 20 1,113,790 1,086,208 27,582 1,7344218 14706,616 279602 (6754283) (343,985) 3315298 1.510.000 (1,532,328) (3,042,328) 9,61Q000 5,2615585 4,3481415 144,986 (144,986) 91610,000 5,406,571 4.2031429 (83100,000) (61938,899) 11161,101 509,113 54Q,405 31,292 - 256,553 258,553 - (64,334) (64,334) - (44,637) (44,637) 4,600,000 4,6414980 41,980 509.113 476.071 f33,042) 4 600 000 4 855 896 255,896 (166,170) 132,086 298,256 (3,SOQ,000) (2,083,003) 1,416,997 166,170 400162 233,992 3.50000 3553,791 534791 $ $ 532,248 $ 532,248 $ $ 1,470,788 $ 1,470,788 The accompanying notes to £nancial statements are an integral part of this statement. 9 THIS PAGE BLANK 10 NOTE I -SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES The general-purpose financial statements of the Town of Fountain Hills, Arizona (Town) conform to generally accepted accounting principles as applicable to governmental units. The Town was incorporated on December 5, 1989 and operates under the Town Council form of government. The more significant of the Town's accounting policies are described below. Reporting Entity - In evaluating how to define the Town, for financial reporting purposes, management has identified two potential component units. The decision to include a potential component unit in the reporting entity has been made by applying criteria set forth in generally accepted accounting principles. Generally, component units are legally separate organizations for which the elected officials of the primary government (i.e., the Town) are financially accountable. The primary government is financially accountable for a potential component unit if it: appoints a voting majority of the potential component unit's governing body; and, either is able to impose its will on the potential component unit or there is a possibility of the potential component unit to provide specific financial benefits to, or impose specific financial burdens on the primary government. In addition, a primary government may be financially accountable for a potential component unit even though the potential component unit may have a separately elected govening board, a board appointed by another government, or a jointly appointed board if the potential component unit is fiscally dependent on the primary government (e.g., the primary government must approve the potential component unit's budget, tax rates, etc.). The following component units have been included in the Town's reporting entity: The Eagle Mountain Community Facilities District and the Cottonwoods Improvement and Maintenance District. As special purpose districts and separate political subdivisions under the Arizona Constitution, the Districts can levy taxes and issue bonds independently of the Town. Property owners in the designated areas are assessed for District 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 Districts are combined together and included as if they were part of the Town's operations. Town of Fountain Hills, Arizona Municipal Property Corporation. The Town of Fountain Hills, Arizona Municipal Property Corporation's (MPC) board of directors consists of three members which are appointed by the Fountain Hills Town Council. The MPC, which is a nonprofit corporation incorporated under the laws of the State of Arizona, was formed for the sole purpose of assisting the Town in obtaining financing for various projects of the Town. The Town has a "moral obligation" for the repayment of the MPC's bonds. Ill TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED DUNE 30, 2001 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Fund Accounting -The accounts of the Town are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the general-purpose financial statements in this report, into generic fund types and broad categories as follows: Governmental Funds General Fund -The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds -Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts, or major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Funds -The Debt Service Funds account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Capital Projects Funds -The Capital Projects Funds are used to account for specific revenue sources that are legally restricted to expenditures for Lite acquisition or construction of general fixed assets. Account Groups General Fixed Assets -The General Fixed Assets Account Group accounts for the fixed assets of the Town. General Long-term Debt -The General Long -teen Debt Account Group accounts for the unmatured principal balances of bonds and other long-term debt not reported in proprietary funds. 12 r NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Measurement Focus - The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All Governmental Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Basis oi' Accounting -Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Governmental Funds are accounted for using the modified accrual basis of accounting. Revenues are recognized when they become measurable and available to finance expenditures of the current period. Expenditures are recognized when the related fund liability is incurred. However, since debt service resources are provided during the current year for payment of general long-term debt principal and interest due early in the following year, the expenditures and related liabilities have been recognized in the Debt Service Funds. Those revenues susceptible to accrual are intergovernmental grants and appropriations, franchise taxes, licenses, interest revenue and charges for services. Sales taxes collected and held by the state at year end on behalf of the government also are recognized as revenue. Fines, permits and parking meter revenues are not susceptible to accrual because generally they are not measurable until received in cash. Budgetary Aceounting -The Town Council follows these procedures in establishing the budgetary data reflected in the general-purpose financial statements: 1. In accordance with Arizona Revised Statutes, the Town Manager submits a proposed budget for the fiscal year commencing the following July 1 to the Town Council. The operating budget includes proposed expenditures and the means of financing them for the upcoming year. 2. Public hearings are conducted to obtain taxpayer continent. 3. State law requires that, prior to April 1, the Economic Estimates commission provides the Town with a final expenditure limit for the coming fiscal year. To ensure compliance with the expenditure limitation, a uniform expenditure report must be filed with the State each year. This report, issued under a separate cover, reconciles total Town expenditures from the audited general-purpose financial statements to total expenditures for reporting in accordance with the State's uniform expenditure reporting system (A.R.S. §41-1279.07). IN TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED JUNE 30, 2001 NOTE I - SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Cont a) 4. By Arizona Constitution, expenditures may not legally exceed the expenditure limitation described below of all fund types as a whole. For management purposes, the Town adopts a budget by department for the General Fund and in total by fund for other funds. The Town Manager, subject to Town Council approval, may at any time transfer any unencumbered appropriation balance or portion thereof between a department or activity. The adopted budget cannot be amended in any way without Town Council approval. 5. Legal budgets are adopted for the General, Special Revenue, Debt Service and Capital Projects Funds on essentially the same modified accrual basis of accounting used to record actual revenues and expenditures. (See Note 12 for exception.) The Town is subject to the State of Arizona's Spending Limitation Law for Towns and Cities. This law does not permit the Town to spend more than budgeted revenues plus the carry-over unrestricted cash balance from the prior fiscal year. The limitation is applied to the total of the combined funds. The Town complied with this law during the year. No supplementary budgetary appropriations were necessary during the year. Encumbrances -Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded to reserve that portion of the applicable fund balance, is not employed by the Town during the year. All appropriations lapse at year-end. Cash Equivalents -Cash equivalents consist of short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash; and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less meet this definition. Investments -Investments in securities are stated at fair value in accordance with GASB Statement No. 31. Short-term Interfund Receivables/Payables - During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheet. 14 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont a) Inventory of Supplies - Purchases of such inventoryitems are recorded at the time of purchase as expenditures in the funds from which the purchases are made; and because the amounts on hand at June 30, 2001 were immaterial, they are not included in the balance sheet. Prepaid Items -Payments made to vendors for services Yhat will benefit per ods beyond June 30, 2001, are recorded as prepaid items. Expenditures for prepaid items are recorded using the consumption method. Property, Plant and Equipment -Fixed assets used in govenunental fund type operations are accounted for in the General Fixed Assets Account Group. Public domain (infrastructure) assets consisting of certain improvements other than buildings, such as roads and sidewalks are not capitalized, as these assets are immovable and of value only to the government. Property, plant and equipment acquired or constructed for general governmental operations are recorded at the time of purchase as expenditures in the funds from which the expenditures were made. Property, plant and equipment is recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair market value on the date donated. Assets in the general fixed assets account group are not depreciated. b'und Equity -The unreserved fund balances for governmental funds represent the amount available for budgeting future operations. The reserved fiend balances for governmental funds represent the amount that has been legally identified for specific purposes. �'ompensated Absences -Because all vested or accumulated vacation leave is not expected to be liquidated with expendable available financial resources, it is reported in the general long-term debt account group. Interfund Transactions - Quasi -external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions, except quasi -external transactions and reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. 15 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED JUNE 3012001 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concl'd) Property Tax Revenues -Property tax revenues are recognized as revenues in the fiscal year they are levied and collected or if they are collected within 60 days subsequent to fiscal year-end. Property taxes not collected within 60 days subsequent to fiscal year-end or collected in advance of the fiscal year for which they are levied, are reported as deferred revenues. The County levies real property taxes on or before the third Monday in August that become due and payable in two equal installments. The first installment is due on the first day of October and becomes delinquent after the first business day of November. The second installment is due on the first day of March of the next year and becomes delinquent after the first business day of May. The County also levies various personal property taxes during the year that are due the second Monday of the month following receipt of the tax notice and become delinquent 30 days thereafter. Total Columns -Total columns on the combined financial statements are captioned "Memorandum Only" to indicate they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfond eliminations have not been made in the aggregation of this data. NOTE 2 -STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Expenditures exceeded the adopted budget in the following funds: Fund General Fund: General and Administrative Town Marshal Debt Service Funds: HURF Debt Service Eagle Mountain Debt Service Amount of Overexpenditure $ 113,098 15 423 5,881 Cash or receivables were available to meet all of the overexpenditures listed above. A deficit fund balance of $122,939 existed in the General Obligation Debt Service Fund at June 30, 2001. 16 NOTE 3 - CASHAND INVESTMENTS Cash and investments are pooled and invested. Interest earned from investments purchased with such pooled monies is allocated to each of the funds based on the average monthly cash balances of the Town. 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. Cash and investments at June 3Q 2001 consist of the following: Cash on hand $ 361 Cash in bank 208,533 Investments 12,132,721 Cash on hand with paying agent 990,452 Total cash and investments 13,332,067 Cash on deposit with paying agent (990A52) Total cash and investments on the combined balance sheet 12,341.615 The Town°s deposits as of June 30, 2001 were entirely insured or collateralized with securities held by the Town°s custodial bank in the Town°s name. The Town's investments at June 30, 2001, consisted of the following. The State Board of Deposit provides oversight for the State Treasurer's pools, and the Local Government Investment Pool Advisory Committee provides consultation 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. The guaranteed insurance contract is also not subject to custodial credit risk. All other investments were insured or registered in the Towns name or were held by the Town or its agent in the Town's name. 17 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED TUNE 307 2001 NOTE 3 - CASH AND INVESTMENTS (Concl'd) U.S. government securities Guaranteed Insurance Contract State Treasurer's Investment Pool Investment in Cottonwoods Improvement Bonds Cash with Trustee Total Carrying Fair Amount Value $ 783,242 $ 783,242 47450,765 4,4505765 698453350 6,845,350 25,820 25,820 27,544 27,544 12.132.721 12.132.721 During the fiscal year 2000-01, the Town realized a loss of $2,103,191 in the fair value of their investments. The loss was recognized on the face of the financial statements net of investment income. The following summary is useful to reconcile the loss to the net investment income (loss) recorded in the general purpose financial statements: Interest on investments $ 1,039,852 Investment loss (2,103,191) Net investment income (loss) $ (1,063,339) NOTE 4 -PROPERTY TAXES RECEIVABLE Property taxes receivable consist of uncollected property taxes as determined from the records of the County Treasurer's Office, and at June 30, 2001, were as follows. General Obligation Eagle Mountain Total Year Debt Service Fund Debt Service Fund Debt Service 2000-01 $ 23,455 $ 10,502 $ 33,957 1999-00 322 5 327 1998-99 95 1,167 13262 1997-98 -0- -0- -0- 1996-97 25 -0- 25 Prior 862 -0- 862 Total &24 759 &264433 That portion of property taxes receivable not collected within 60 days after June 30, 2001, has been deferred and, consequently, is not included in current year revenues. 18 NOTE 5 - CHANGES PN GENERAL FIXED ASSETS A summary of the changes in general fixed assets follows. Balance Completed Balance July 1, 2000 Additions Deletions Construction June 30, 2001 Land and improvements $ 14,668,991 $ 2,258,636 Buildings and improvements 1,465,837 12003 Improvements other than buildings 1662953 -0- Furniture, equipment and vehicles 2,6319501 6549854 Construction in progress 909,759 41605,187 -0- -0- 1,586,640 -0- -0- 166,953 -0- -0- 3,286,355 -0- -0- 5951046 Total $ I9.843.041 $ 7.639.480 $ _0_ $ _0_ 27.482.521 The estimated cost to complete construction at June 3Q, 2001 was $1,746,256. NOTE 6 - OBLPGATIONS UNDER LEASES ®perating i,ease -The Town leases office space under the provisions of a long-term lease agreement classified as an operating lease. Rental expenditures under the terms of the operating lease totaled $357,000 for the year ended June 30, 2001. The operating lease is cancelable with a 90-day notice. 19 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED JUNE 30, 2001 NOTE / - BONDS PAYABLE General Obligation Bonds Bonds payable at June 309 2001 consisted of the outstanding bonds presented below. Bonds maturing prior to July 1, 2001 are noncallable. Bonds maturing thereafter are subject to call. Interest is payable semiannually. Principal and interest requirements at June 30, 2001 were as follows. Outstanding Outstanding Interest Principal Issues/ Principal Description Rates % Maturity July 1, 2000 (Retirements) June 30, 2001 Street and Highway User Revenue Refunding Bonds, Series 1998 3.75-4,625 7/1/00-10 $ 1,045,000 $ (70,000) $ 975,000 General Obligation Bonds, Series 1991 7.0-10.0 7/l/00-2000 175,000 (1755000) -0- General Obligation Refunding Bonds, Series 1995 4.6-5.3 7/l/00-2010 2,6725163 (3%700) 25632,463 General Obligation Bonds, Series 1999 5.1-6.5 7/1/00-2014 1,400,000 (509000) 1,350,000 General Obligation Bonds, Series 2000 5.5-7.0 7/1/O1-2014 3,700,000 -0- 3,700,000 8 992 163 $ (334.700) 8,657,463 Less: amounts transferred to Debt Service Funds to retire bonds payable on July 1, 2001 Total long-term bonds payable 20 (447,590) NOTE 7 - BONDS PAYABLE (Concl'd) General obligation bond debt service requirements to maturity, including $2,895,444 of interest, are as follows: Year ending June 30: 2002 2003 2004 2005 2006 Thereafter Revenue Bonds Outstanding Interest Principal Description Rates % Maturity July 1, 2000 MPC Series 2000 4.5-5.625% 7/1/01-10 $ -0- Less: amounts transferred to Debt Service Funds to retire bonds payable on July 1, 2001 Total long-term bonds payable Issues/ (Retirements) $ 1,011,418 995,263 981,453 9741558 981,843 6JW782 11.105.317 Outstanding Principal June 30, 2001 $ 400,000 (150,000) 4.530.000 Revenue bond debt service requirements to maturity, including $2,839,628 of interest, are as follows: Year ending June 30: 2002 2003 2004 2005 2006 Thereafter 21 $ 389,563 382,513 375,313 392,963 3845388 5.444,888 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED JUNE 30, 2001 NOTE 8 -SPECIAL ASSESSMENT DEBT WITH GOVERNMENT COMMITMENT Special assessment debt with government commitment at June 30, 2001 consisted of the outstanding bond presented below. The bond is owned by the Town. The bond is generally callable with interest payable semiannually. Principal and interest requirements at June 30, 2001, were as follows. Interest Description Rates Cottonwoods Improvement Bond 5.25 Outstanding Principal Maturity July 1, 2000 1/1/O1-09 29 048 Issues/ (Retirements) Outstanding Principal June 30, 2001 General obligation bond debt service requirements to maturity, including $5,423 of interest, are as follows: Year ending June 30: 2002 $ 4,498 2003 4,329 2004 4,160 2005 3,990 2006 3,821 Thereafter 10A45 31 243 Improvement Districts are created only by petition of the Town Council by property owners within the District areas. The Cottonwoods Improvement District was created so the Town could fund the improvements. Each of the 54 homeowners within the District has been assessed taxes by the Town for repayment of the bond. In case of default, the Town has the responsibility to cover delinquencies of special assessment bonds with other sources until foreclosure proceeds are received. 22 NOTE 9 - COMMUNITY FACILITIES DISTRICT BONDS PAYABLE Community Facilities District bonds payable at June 30, 2001 consisted of the outstanding bonds presented below. The bonds are generally callable with interest payable semiannually. Of the total amount originally authorized, $2,095,000 remains unissued. Principal and interest requirements at June 30, 2001 were as follows. Interest Description Rates Series 1996-A 5.5-6.5 Series 1996-B 7.25 Total long-term bonds payable Outstanding Principal Maturity July 1, 2000 7/1/03-21 $ 4,435,000 7/1/03-21 470,000 Outstanding Issues/ Principal (Retirements) June 30, 2001 -0- 470,000 Community Facilities District bond debt service requirements to maturity, including $4,076,450 of interest are as follows: Year ending June 30: 2002 $ 313,350 2003 453,350 2004 455,475 2005 456,828 2006 4573403 Thereafter 6,8451044 Community facilities districts (CFDs) are created only by petition to the Town Council by property owners wn the District areas. As board of directors for the District, the Town Council has adopted a formal policy that CFD debt will be permitted only when the ratio of full cash value of the District property (prior to improvements being installed), when compared to proposed District debt, is a minimum of 3 to 1 prior to issuance of debt and 5 to 1 or higher after construction of improvements. These ratios are verified by an appraisal paid for by the District and administered by the Town. In addition, cumulative debt of all CFDs cannot exceed 5 percent of the Town's secondary assessed valuation. 23 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED DUNE 30, 2001 NOTE 9 - COMMUNITYFACILITIESDISTRICTBONDSPAYABLE (Concl'a) The developer contributed $4,435,000 to the CFD to guarantee the repayment of the Series 1996 A bonds. The District then established a guaranteed investment contract with a trustee as collateral for the Series 1996 A bonds, which provides for an A rating for the bonds from Standard & Poor's Corporation. When property valuation in the Eagle Mountain development is sufficient to establish an A rating on the bonds without the guaranteed contract, the developer may apply to the CFD Board to have the $4,435,000 returned. Until then, all interest earned on the guaranteed investment contract is deposited into the Debt Service Fund of the CID. Because it is the intention of the CID to return this money to the developer as long as property taxes are sufficient to repay the bonds, it has been recorded as due to developer. NOTE 10 -COMPENSATED ABSENCES The liability for vested compensated absences is recorded in the General Long -Tenn Debt Account Group. A summary of changes in liabilities for compensated absences for the year ended June 30, 2001, follows. Balance at July 1, 2000 $ 175,792 Current year increase in liabilities for compensated absences 78,071 Balance at June 30, 2001 253 863 As of June 30, 2001, interfund receivables and payables that resulted from various interfund transactions were as follows: Due from Other Funds General Fund $ 509,180 Special Revenue Fund: Cottonwoods Maintenance District -0- Debt Service Fund: General Obligation Debt Service Fund -0- Capital Projects Fund: Heritage Grant Fund -0- 509 180 24 Due to Other Funds 221 129,923 379,036 509 180 NOTE 12 -BUDGETARY BASIS OF ACCOUNTING The adopted budget of the Town was prepared on a basis consistent with generally accepted accounting principles; with one exception. A budget for the Development Fees Capital Projects Fund was not prepared. The following summary is useful to reconcile the Combined Statement of Revenues, Expenditures and Changes in Fund Balances to the Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Combined Statement of Revenues, Expenditures and Changes in Fund Balances Less: fund with no adopted budget Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual NOTE 13 - C®NTINGENT LIABILITIES Fund Balance Total Total at Beginning Revenues Expenditures of Year $ (1,431,999) $ 5,406,571 $ 3,553,791 -0- $ (1,532,3281 5.406.571 $ 3,553,791 Accumulated Snck Leave -Sick leave benefits provide for ordinary sick pay and are cumulative but do not vest with employees and, therefore, are not accrued. Unvested accumulated sick leave of Town employees at June 30, 2001, totaled $502,069, 25 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED JUNE 30, 2001 NOTE 14 - RISK MANAGEMENT The Town of Fountain 11i11s, Arizona, 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 $7,000,000 per occurrence on a claims made basis. Excess coverage is for an additional $8,000,000 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. The Arizona Municipal Risk Retention Pool is structured such that member premiums are based on an actuarial review that will provide adequate reserves to allow the pool to meet its expected financial obligations. The pool has the authority to assess its members additional premiums should reserves and annual premiums be insufficient to meet the pool's obligations. The Town is also insured by Arizona Municipal Risk Retention Pool for potential worker related accidents. NOTE 1 S -DEFINED CONTRIBUTIONPENSIONPLAN All non -peace officers and 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 Town employees covered by this plan for the year ended June 30, 2001 was $2,918,250. The Town's total payroll was $3,904,491. 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 participant's 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. NOTE 15 -DEFINED CONTRIBUTION PENSION PLAN (Concl'd) 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 contribute 11% of covered earnings. During fiscal year 2000-01, the Town's required and actual contributions amounted to $321,007. The employees' contributions totaled $321,007. 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 2000-01 or as of the close of the fiscal year. NOTE 16 - RETIREMENTAND PENSIONPLANS Plan Description -The Town of Fountain Hills contributes to the Public Safety Personnel Retirement System (PSPRS), an agent multiple -employer, public employee retirement system that acts as a common investment and administrative agent to provide retirement and death and disability benefits for public safety personnel who are regularly assigned hazardous duty in the employ of the State of Arizona or a political subdivision thereof. All benefit provisions and other requirements are established by State statute. The Public Safety Personnel Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for PSPRS. That report may be obtained by writing to Public Safety Personnel, 1020 E. Missouri Ave., Phoenix, AZ 85014 or by calling (602)255-5575. Funding Policy -Covered employees are required to contribute 7.65 percent of their annual salary to the PSPRS. The Town of Fountain Hills is required to contribute the remaining amounts necessary to fund the PSPRS, as determined by the actuarial basis specified by statute. The current rate is 9.44% of annual covered payroll. Annual Pension Cost -During the year ended June 30, 2000 (the date of the last available information), the Town of Fountain Hill's annual pension cost of $28,639 for police was equal to the Town of Fountain Hill's required and actual contributions. 27 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED .TUNE 309 2001 NOTE 17 - RETIREMENTAND PENSIONPLANS (Concl'd) The required contribution was determined asp of the June 30, 2000 actuarial valuation using an entry age actuarial funding method. Significant actuarial assumptions used in determining the entry age actuarial accrued liability include (a) a rate of return on the investment of present and future assets of 9.0% per year compounded annually, (b) projected salary increases of 6.5% per year compounded annually, and (c) additional projected salary increases of 0.0% to 3.0% per year attributable to seniority/merit. The actuarial value of the Town of Fountain Hill's assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a four-year period. The Town of Fountain Hill's unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2000, was 20 years. The preceding methods comply with the financial reporting standards established by the Governmental Accounting Standards Board. Fiscal Year Ended June 30, 1998 1999 2000 Three -Year Trend Information Police Annual Pension Cost (APQ $ 22,869 25,603 28,639 Percent Contributed 100.0% 100.0 100.0 Net Pension Obli ag tion Additional historical trend information for the Town of Fountain Hill's PSPRS is disclosed on page 30. Historical trend information is presented in order for a reader to assess the progress made in accumulating sufficient assets to pay pension benefits as they become payable. 28 l'7�s�1!;7���'i�l�'���I��l,�rr���'al�l�]:a�'aI_��[�P►1 TOWN OF FOUNTAIN HILLS, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM ANALYSIS OF FUNDING PROGRESS Schedule of Funding Progress Police (Underfunded)/ Overfunded Entry Age AAL as a Valuation Actuarial Actuarial (Underfunded)/ Annual Percentage Date Value of Accrued Overfunded Funded Covered of Covered June 30, Assets Liability (AAL) AAL Ratio Payroll Payroll 1996 $ 17,463 $ 16,084 $ 1,379 108.6% $ 77,574 1.78% 1997 54,809 483512 6,297 113.0 216,163 2.91 1998 184,135 125,791 607344 148.7 3945005 15.31 1999 258,664 263,285 (4,621) 98.2 412,182 (1.1) 2000 375,860 4015167 (25,307) 93.7 556,445 (4.5) 30 Statements • Schedules 31 THIS PAGE BLANK 32 x The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. 33 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN GENERAL FUND - BUDGET AND ACTUAL YEAR ENDED DUNE 309 2001 Budget FUND BALANCE Actual - Variance Favorable (Unfavorable) Revenues Taxes $ 4,117,000 $ 5,0493156 $ 932,156 Intergovernmental 334913800 3,584,669 922869 Fines and forfeitures 3403500 3109359 (30,141) Licenses and permits 235707000 2,177,614 (392,386) Charges for services 2549875 237,008 (17,867) Rents and royalties 25,000 355781 10,781 Contributions and donations - 400 400 Net investment income 4255000 3801824 (44, 176) Other 30A00 10,957 (194043) Total Revenues 114254,175 I I JK768 532,593 Expenditures Current General government Mayor and Town Council 845710 58,290 26,420 Magistrate Court 306,120 296,802 91318 General and Administrative 33046,050 3,159,148 (1133098) Non -departmental 3,900,596 132,260 3,768,336 Total General government 7,337,476 31646,500 1690,976 Public safety Building Safety 717,240 6505018 677222 Town Marshal 21446,020 2,446,035 (15) Total Public safety 3,163,260 3,096,053 67,207 Culture and recreation Parks and Recreation 29484,220 2,365,912 1185308 Golden Eagle Park 2972505 291,195 6,310 Civic Center 350,000 322,120 27,880 Community Center 66,490 60,356 61134 Public Works - 1,057260 825,162 232,098 Total Culture and recreation 44255,475 34864,745 390,730 Community development Engineering Department 1,1233990 8373956 286,034 Community Development 3924580 337,693 54,887 Total Community development 14516,570 1,1754649 340,921 Total Expenditures 16,272,781 11,7824947 44489,834 Excess of revenues over (under) expenditures (5A184606) 3,821 5,022A27 Other financing sources (uses) Operating transfers out (1,957,800) (1,6081221) 349,579 Total other financing sources (uses) (19957,800) (1,608221) 349,579 Excess of revenues and other sources over (under) expenditures and other uses (67976,406) (I5604,400) 5,372,006 Fund balance, beginning of year 6,976,406 64314A61 (661,945) Fund balance, end of year $ - $ 4,7I0,061 $ 4,710,061 34 SPECIAL, REVENUE FUNDS Highway User Revenue Fund (HURF) - accounts for the Towns share of motor fuel tax revenues and lottery proceeds. Cottonwoods Maintenance District - accounts for taxes assessed to pay for the maintenance of the Cottonwoods District. Grants Fund -accounts for the activities of various grants received by the Town. TOWN OF FOUNTAIN HILLS, ARIZONA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET AS OF JUNE 30, 2001 Cottonwoods Maintenance HURF District Grants Fund Totals Assets Cash and investments S 406,749 S - S 202376 $ 4273125 Taxes receivable - 221 - 221 Intergovernmental receivable 10%516 - 802017 189,533 Prepaid items L456 - - 1,456 Total Assets $ 517,721 $ 221 $ 1004393 $ 618,335 Liabilities and Fund Balance Liabilities Accounts payable $ 381,842 $ - $ 946 $ 382,788 Accrued wages and benefits 199847 - 13,149 32,996 Contracts payable 1023554 - 232535 126,089 Retainage payable 4,472 - - 4,472 Due to other funds - 221 - 221 Deferred revenue 62,602 62,602 Total Liabilities 508,715 221 100,232 609,168 Fund balances Reserved for prepaid 15456 - - 15456 Unreserved, undesignated 74550 - 161 7 711 Total Fund Balance 9,006 161 9,167 Total Liabilities and Fund Balance $ 517,721 $ 221 $ 100,393 $ 618,335 36 TOWN OF FOUNTAIN HILLS, ARIZONA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 305 2001 Cottonwoods Maintenance HURF District Grants Fund Totals Revenues Taxes $ - - $ 32200 $ - $ 3,200 Intergovernmental Ij71,463 - 286,345 L457,808 Charges for services 937986 - - 937986 Net investment income 7 750 105 71855 Total Revenues 1,273,199 34200 286,450 13562,849 Expenditures Current Public safety Highways and streets Culture and recreation Total Expenditures Excess of revenues over (under) expenditures Other financing sources (uses) Operating transfers in Operating transfers out Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses Fund balance, beginning of year Fund balance, end of year 37 - - 257,984 257,984 2,185,627 - 26,805 21212,432 11500 11500 2, 185,627 286289 21471,916 (9123428) 31200 161 (909,067) 1,034,234 - - 1,034,234 (112,800) (31200) - (116,000) 9214434 (31200I 918,234 9,006 - 161 9,167 TOWN OF FOUNTAIN HILLS, ARIZONA HURF SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2001 Budget IN FUND BALANCE Actual - Variance Favorable (Unfavorable) Revenues Intergovernmental $ 1,1683800 $ 19171,463 $ 27663 Charges for services 80,000 935986 137986 Net investment income - 75750 7,750 Other 500 (500) Total Revenues 1,2494300 1273,199 23,899 Expenditures Current Highways and streets 3.097,509 2,185,627 911,882 Total Expenditures - 34097,509 2.185,627 911 882 Excess of revenues over (under) expenditures _ (11848209) (912,428) 935,781 Other financing sources (uses) Operating transfers in 119617000 11034,234 (926,766) Operating transfers out 012,800) (112,800) Total other financing sources (uses) 11848,200 9214434 (9267766) Excess of revenues and other sources over (under) expenditures and other uses (9) 9,006 91015 Fund balance, beginning of year 37 - (37) Fund balance, end of year $ 28 $ 91006 $ 8.978 38 TOWN OF FOUNTAIN HILLS, ARIZONA COTTONWOODS MAINTENANCE DISTRICT FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 303 2001 V oriance Favorable Budget Actual (Unfavorable) Revenues Taxes $ 34200 $ 3200 $ - Total Revenues 3 200 34200 Total Expenditures - Excess of revenues over (under) expenditures 39200 3200 - Other financing sources (uses) Operating transfers out (31200) (3200) Total other financing sources (uses) (3,200) (33200) Excess of revenues and other sources over (under) expenditures and other uses - - - Fund balance, beginning of year - - - Fund balance, end of year 39 TOWN OF FOUNTAIN HILLS, ARIZONA GRANTS SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES BUDGET AND ACTUAL YEAR ENDED .TUNE 30, 2001 Budget IN FUND BALANCE - Variance Favorable Actual (Unfavorable) Revenues Intergovernmental $ 1,8537199 $ 286,345 $ (13566,854) Net investment income 105 105 Total Revenues 1,853,199 286450 (11566,749I - Expenditures Current General government 1,4755000 - 194753000 Public safety 302,399 257,984 44,415 Highways and streets 72,800 262805 45,995 Culture and recreation 3,000 L500 1 500 Total Expenditures 1,853,199 2864289 11566,910 Excess of revenues over (under) expenditures - 161 161 Fund balance, beginning of year - - - Fund balance, end of year $ - $ 161 $ 161 40 HURF' Debt Service -accounts for operating transfers received from the HURF special revenue fund to pay the debt service of the Street and Highway User revenue Bonds. General Obligattoaz (GO) Debt Service -accounts for the Town's property tax revenues received to pay the debt service of the Town's general obligation bonds. Eagle Mountain Debt Service -accounts for the property tax revenues received to pay the debt service of the Eagle Mountain Community Facilities District component unit. Cottonwoods Special Assessment -accounts for all special assessments received to pay the debt service of the Cottonwoods Special Assessment District, Municipal Property Corporation (MPC) -accounts for the revenues received to pay the debt service on the MPC revenue bonds. 41 TOWN OF FOUNTAIN HILLS, ARIZONA DEBT SERVICE FUNDS COMBINING BALANCE SHEET AS OF JUNE 30, 2001 Eagle Cottonwoods HURF GO Mountain Special In Service Debt Service Debt Service Assement MPC Total Assets Cash and investments S - $ - S 57234,005 $ 93336 $ - $ 53243,341 Cash on deposit with paying agent 91,211 626,085 - - 273,156 990,452 Taxes receivable - 243759 117674 - - 36,433 Special assessments receivable - - - 16,138 16 138 Total Assets $ 91 ,21 1 $ 650,844 $ 5,245.679 $ 25,474 $ 273.156 $ 6,286.364 Liabilities and Fund Balance - Liabilities Due to developer $ - $ - $ 4,435,000 $ - $ - $ 47435,000 Interest payable 21,211 2487495 156,675 678 123,156 5507215 Due to other funds - 129,923 - - - 1297923 Deferred revenue - 179775 7,475 16,138 - 413388 General obligation bonds payable 70,000 377,590 - - - 447,590 Revenue bonds payable - - - - 150,00 150,000 Total Liabilities 914211 773 783 4.599.150 16,816 2734156 51754,116 Fund balances Unreserved, undesignated - (1224939) 6464529 8,658 - 532,248 Total Fund Balance (122,9391 646,529 058 532,248 Total Liabilities and Fund Balance $ 91,211 $ 650.844 $ 5.245.679 $ 25,474 $ 273, 156 $ 6,286.364 42 TOWN OF FOUNTAIN HILLS, ARIZONA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED TUNE 307 2001 Eagle Cottonwoods HURF GO Mountain Special Debt Service Debt Service Debt Service Assessment MPC Totals Revenues Special assessments - - - 77958 - 77958 Net investment income 1,762 305,470 119 114631 318,982 Total Revenues 6974684 645,239 8,077 11,631 1,362,631 Expenditures Debt service Principal retirement $ 703000 397,180 - 3,228 150,000 6203408 Interest and fiscal charges 43.223 4724716 324,231 11439 244,599 11086,208 Total Expenditures 113,223 869,896 324,231 41667 394,599 17706,616 Excess of revenues over (under) expenditures (113,223) (172,212) 3219008 31410 (382,9681 (343,985) Other financing sources (uses) Operating transfers in 1122800 445637 - - 382,968 540,405 Operating transfers out (59334) (5,0001 - - (64,334) Total other financing sources (uses) 53,466 394637 - - 382.968 476,071 Excess of revenues and other sources over (under) expenditures and other uses (5%757) (132,575) 321 AS 3,410 - 132,086 Fund balance, beginning of year 59,757 9.636 325,521 5,248 400A 62 Fund balance, end of year $ - $ (122,9391 $ 646.529 $ 8,658 $ $ 532,248 43 TOWN OF FOUNTAIN HILLS, ARIZONA HURF DEBT SERVICE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED TUNE 302 2001 Budget Actual Variance Favorable (Unfavorable) Total Revenues $ $ $ Expenditures Debt service Principal retirement 70,000 70,000 - Interest and fiscal charges 42,800 43 223 (423) Total Expenditures 112,800 113,223 (423) Excess of revenues over (under) expenditures (11248001 (113,223) (423) Other financing sources (uses) Operating transfers in 112,800 1123800 - Operating transfers out - (59,334) (59,334) Total other financing sources (uses) 1 ] 2.800 53,466 (59.334) Excess of revenues and other sources over (under) expenditures and other uses - (595757) (59,757) Fund balance, beginning of year - 594757 594757 Fund balance, end of year $ - $ - $ - C:1 TOWN OF FOUNTAIN HILLS, ARIZONA GO DEBT SERVICE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES BUDGET AND ACTUAL YEAR ENDED JUNE 302 2001 Budget IN FUND BALANCE - Variance Favorable Actual (Unfavorable) Revenues Taxes $ 731,785 S 6953922 $ (357863) Net investment income 4,000 14762 (2238) Total Revenues 735,785 697,684 (38.101) Expenditures Debt service Principal retirement 397,200 3972180 20 Interest and fiscal charges 504 755 472,716 32,039 Total Expenditures 901,955 869.896 324059 Excess of revenues over (under) expenditures (1669170) (172,212) (6,042) Other financing sources (uses) Operating transfers in - 44,637 44,637 Operating transfers out - (51000) (5,000) Total other financing sources (uses) - 39,637 39,637 Excess of revenues and other sources over (under) expenditures and other uses (166,170) (132,575) 337595 Fund balance, beginning of year 166,170 91636 (156,534) Fund balance, end of year $ - $ (122,939) $ (122,939) 45 STATEMENT TOWN OF FOUNTAIN HILLS, ARIZONA EAGLE MOUNTAIN DEBT SERVICE FUND OF REVENUES, EXPENDITURES AND CHANGES IN BUDGET AND ACTUAL YEAR ENDED TUNE 307 2001 Budget FUND BALANCE - Variance Favorable Actual (Unfavorable) Revenues Taxes $ 2257000 $ 33%769 S 114,769 Net investment income 93,350 305,470 212,120 Total Revenues 318,350 645239 3264889 Expenditures Debt service Interest and fiscal charges 318,350 324,231 (501) Total Expenditures 318,350 324231 (54881) Excess of revenues over (under) expenditures - 3215008 321,008 Fund balance, beginning of year - 325,521 3254521 Fund balance, end of year $ - S. 646, 229 $ 646,529 46 STATEMENT TOWN OF FOUNTAIN HILLS, ARIZONA COTTONWOODS SPECIAL ASSESSMENT FUND OF REVENUES, EXPENDITURES AND CHANGES IN BUDGET AND ACTUAL YEAR ENDED TUNE 30, 2001 Budget FUND BALANCE - Variance Favorable Actual (Unfavorable) Revenues Special assessments $ 4,800 $ 7,958 $ 33159 Net investment income 119 119 Total Revenues 41800 8 077 3,277 Expenditures Debt service Principal retirement 3,228 3,228 - Interest and fiscal cbarges 1 572 11439 133 Total Expenditures 4,800 41667 133 Excess of revenues over (under) expenditures - 3,410 3,410 Fund balance, beginning of year - 5,248 54248 Fund balance, end of year $ - $ 81658 $ 8,658 47 TOWN OF FOUNTAIN HILLS, ARIZONA MPCFUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES BUDGET AND ACTUAL YEAR ENDED NNE 30, 2001 Budget IN FUND BALANCE - Variance Favorable Actual (Unfavorable) Revenues Net investment income $ $ 11,631 $ 11,631 Total Revenues 114631 11,631 Expenditures Debt service Principal retirement 150,000 1509000 - Interest and fiscal charges 246,313 244 599 11714 Total Expenditures 3964313 3944599 1 714 Excess of revenues over (under) expenditures (396,313) (382,968) 13,345 Other financing sources (uses) Operating transfers in 396,313 382,968 (13,345) Total other financing sources (uses) 396,313 3824968 (13,345) Excess of revenues and other sources over (under) expenditures and other uses - - - Fund balance, beginning of year - Fund balance, end of year $ - $ - $ 48 Heritage Grant Fund -accounts for capital improvements through the use of Heritage Grant funds. Capital Projects Fund - accounts for the capital improvements to various projects of the Town. Development Fees Fund - accounts for development fees collected from developers restricted for projects approved by Council. CSl7 TOWN OF FOUNTAIN HILLS, ARIZONA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET AS OF JUNE 30, 2001 Heritage Capital Development Grant Fund Projects Fund Fees Total Assets Cash and investments $ - $ 15738,248 $ 100,329 $ 12838,577 Intergovernmental receivable 458,444 - - 458,444 Total Assets $ 458,444 $ 19738,248 $ 100,329 $ 2,297,021 Liabilities and Fund Balance Liabilities Accounts payable $ - $ 67,170 $ - $ 67,170 Contracts payable 79,408 1919893 - 271,301 Retainage payable - 8,397 - 8,397 Due to other funds 379,036 379,036 Total Liabilities 458,444 2679460 725,904 and balances Unreserved, undesignated - 1A709788 100,329 1,571,117 Total Fund Balance 1,470,788 100,329 1,571,117 Total Liabilities and Fund Balance $ 458,444 $ 1,738,248 $ 100,329 $ 2,297,021 SO TOWN OF FOUNTAIN HILLS, ARIZONA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 303 2001 Heritage Capital Development Grant Fund Projects Fund Fees Total Revenues Intergovemmental $ 238,679 $ - $ - $ 238,679 Charges for services - - 100,322 1007322 Net investment income (loss) - H 1771 ,007 7 (117714000) Total Revenues 2385679 (1,771,007) 100,329 (11431,9991 Expenditures Capital outlay 714,093 4,547,492 - 5,261,585 Debt service Bond issuance costs 144,986 144,986 Total Expenditures 714,093 7T92,478 - 5/4064571 Excess of revenues over (under) expenditures (475,414) (61463,485) 100,329 (67838,570) Other financing sources (uses) Operating transfers in 253,553 5,000 - 258,553 Operating transfers out - (44,637) - (44,637) Proceeds from sale of bonds 416414980 41641,980 Total other financing sources (uses) 253,553 446024343 - 4,8554896 Excess of revenues and other sources over (under) expenditures and other uses (2215861) (158619142) 1003329 (13982,674) Fund balance, beginning of year 221,961 31331,930 - 3,553,791 Fund balance, end of year $ - $ 1,470.788 $ 100,329 $ 1571,117 51 TOWN OF FOUNTAIN HILLS, ARIZONA HERITAGE GRANT FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED DUNE 305 2001 Revenues Intergovernmental Total Revenues Expenditures Capital outlay Total Expenditures Excess of revenues over (under) expenditures Other financing sources (uses) Operating transfers in Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses Fund balance, beginning of year Fund balance, end of year 52 Variance Favorable Budget Actual (Unfavorable) $ 1,400,000 $ 238.679 $ (1.161321I A004000 238,679 (1,16173211 1,400,000 714,093 685,907 1,400,000 714.093 6854907 (475A141 (4754414) 253,553 253,553 253,553 253,553 - (221,861) (221,861) 221,861 221,861 $ $ $ TOWN OF FOUNTAIN HILLS, ARIZONA CAPITAL PROJECTS FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2001 Var ante Favorable Budget Actual (Unfavorable) Revenues Net investment income $ 110,000 $ (1,77120071 $ (11881,0071 Total Revenues 110000 (11771,007) (14881,007) Expenditures Capital outlay 8,2103000 4,547,492 31662,508 Debt service Bond issuance costs 144,986 (144,9861 Total Expenditures 84210,000 4/6924478 3,5174522 Excess of revenues over (under) expenditures (81100,000) (6,463,4851 11636,515 Other financing sources (uses) Operating transfers in - 57000 5,000 Operating transfers out - (445637) (44,637) Proceeds from sale of bonds 41600,000 41641,980 41,980 Total other financing sources (uses) 41600,000 44602,343 2.343 Excess of revenues and other sources over (under) expenditures and other uses (33500,000) (1,8612142) 1,638,858 Fund balance, beginning of year 3,500.000 3,331,930 (168,070) Fund balance, end of year $ - $ 1.470,788 $ 1,470,788 53 THIS PAGE BLANK 54 General fixed assets consist of land and improvements, buildings and improvements, equipment and vehicles. These assets represent a major investment of Town funds. Adequate control and accountability of general fixed assets are essential to the protective custody of Town property. 55 TOWN OF FOUNTAIN HILLS, ARIZONA COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS BY SOURCE JUNE 303 2001 AND 2000 2000 GENERAL FIXED ASSETS Land and improvements $ 16,927,627 $ 14,668,991 Buildings and improvements 175863640 1,4653837 Improvements other than buildings 166,953 1663953 Furniture, equipment and vehicles 3,286,355 216312501 Construction in progress 5/5147946 909,759 Total $ 27,482,521 $ 19.843,041 INVESTMENT IN GENERAL FTJ{ED ASSETS BY SOURCE General Fund $ 8,164,057 $ 5,849,848 Special Revenue Funds 13334,696 1,271,010 Capital Projects Funds 12,75%066 73497,481 Donations 5,224,702 5.224,702 Total $ 27,482,521 $ 19.843,041 56 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY AS OF JUNE 30, 2001 Improvements Furniture, Land and Buildings and Other than Equipment and Construction Improvements Improvements Buildings Vehicles in Progress Total FUNCTION AND ACTIVITY General Govemment Council $ - $ - $ - $ %842 $ - $ 93842 Administration 411552038 303,621 142,270 9725073 173160 5,590,162 Community Development - - - 243960 - 24,960 Magistrate Court - - - 45,631 - 45,631 Total General Government 411554038 303,621 142,270 11052,506 17,160 51670,595 Public Safety Building Safety - - - 1075597 - 107,597 Town Marshal 4884025 4881025 Total Public Safety - - - 595,622 - 595,622 Highways and Streets Engineering - - - 1455673 - 145,673 Maintenance 74,022 3074854 997 774 1,379.650 Total Highways and Streets 74,022 3075854 - 1.143 447 1,525.323 Culture and Recreation Community Center 453,618 4635500 177965 2123500 2,7845500 3,9325083 Library I Museum - - - 423157 237137286 21755,443 Parks and Recreation 111835,993 511,665 67718 1775483 - 12,531,859 Public Works 408,956 62640 471 596 Total Culture and Recreation 124698,567 975 165 24,683 494,780 5,497,786 19,690,981 Total $ 1649274627 $ 11586,640 $ 1665953 $ 3,286355 $ 5,5144946 S 2 4482,521 57 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED JUNE 30, 2001 General Fixed General Fixed Assets Assets July 1, 2000 Additions Deletions Adjustments June 30, 2001 FUNCTION AND ACTIVITY General Government Council $ 9,842 $ - $ - $ - $ 9,842 Administration 63134,480 365,441 - (909,759) 5,590,162 Community Development 183935 6,025 - - 24,960 Magistrate Court 45,631 - - - 451631 Total General Government 61208,888 371 466 (909,759) 51670,595 Public Safety Building Safety 86,011 21,586 - - 107,597 Town Marshal 415374 72 651 488,025 Total Public Safety 50L385 94,237 - - 595 622 Highways and Streets Engineering 145,673 - - - 145,673 Maintenance 14315,964 63 686 13791650 Total Highways and Streets 11461,637 63,686 - - 1525323 Culture and Recreation Community Center 946,434 2,985,649 - - 3,9322083 Library/Museum - 1,8451684 - 909,759 2,7555443 Parks and Recreation 10,5525563 1,97%296 - - 12,531,859 Public Works 172.134 299,462 471 596 Total Culture and Recreation 11,671,131 7,110,091 909,759 19,690,981 TOTAL GENERAL FIXED ASSETS $ 19,843,041 $ 7.639,480 S $ $ 27,482,521 i :tJ r EA O 00 7 C\ V�1 N y b O O O^ h N O\ 69 ccr 0 cr crW N z 0 U vi W w W o N W h m h N a m 06 o F U � c�i ni ri F O d a 7 7 0�o yV dOoho a Obi �D Vim] N' N N z w h O O 00 'dN vt 4 y.. vri vo'i o rn a m O crt FL � cti ri N N Y3 O^ .N-i� V rl 00 1� ti 7 � � vNi .N+ O b N 7 N N �l'J2 69 W 8 ) \ \ \ \ \ \ \ \ \ \ , , /\ \ ® 32 ©) � / a , \ .\ !E ; ) \ \ \ \ \ } ( \ \ m TOWN OF FOUNTAIN HILLS, ARIZONA GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (UNAUDITED) Fiscal property Franchise Year Sales Tax Tax Tax Total 2001 $ 4,923,174 $ 1,038,891 $ 125,982 $ 6,085,047 2000 4,087,514 657,026 131,926 43876,466 1999 3,394,152 348,778 118,407 301,337 1998 2,920,084 302,375 103,748 3,326,207 1997 2,664,923 350,024 86,840 33101,787 1996 1,6103116 336,000 785345 2,024,461 1995 16,622 357,033 94,848 4%503 1994 - 393,654 94,780 488,434 1993 - 423,798 81,956 505,754 1992 - 35%831 76,585 427,416 62 TOWN OF FOUNTAIN HILLS, ARIZONA TOWN TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS BY INDUSTRY CLASSIFICATION FISCAL YEAR BASIS (UNAUDITED) Business Activity Category Construction Transportation/Utilities/Communication Wholesale/Retail Restaurants/Bars Fire, Insurance and Real Estate Services All Other Services Not Specified 63 2001 Percent Excise Tax of Collctions Total $ 231,225 35.4% 94,070 14.4% 199,986 30.6% 311273 4.8% 33,073 5.1% 47,398 7.2% 175027 2.6% $ 654,052 100.0% Fiscal Year 2001 2000 1999 1997 1996 1995 1994 1993 TOWN OF FOUNTAIN HILLS, ARIM PRIMARY AND SECONDARY TAXABLE PROPERTY ASSESSED VALUATION LAST TEN FISCAL YEARS (UNAUDITED) Assessed Valuation Town of Fountain Hills Assessed Valuation Fountain Hills School District P $ 220,2295137 $ 223,1851771 S 2381714,537 24206,985 P 1909102,361 191,5795669 S 212,415,476 214,0371354 P 133,721,181 134,650,036 S 146,9431730 1477884,952 P 112,2857569 113,072,537 S 116,333,406 117,144,929 P 10%649,833 101573,954 S 103,944,051 104,881,097 P 94,1889637 957155,307 S 1007161,568 101,1371745 P 87,383,347 88,978,760 S 88,796,834 9%394,390 P 85,5675821 871353,865 S 87,406,208 8972087873 P 83,486,645 85,445,505 S 84,687,515 861675,510 P 803366,555 839384,340 S 82,825,480 85,878,190 P =Primary assessedvaluation S =Secondary assessed valuafion Source: Maricopa County and Arizona Tax Research Foundation. m Assessed Valuation Maricopa County $ 21,355,326,477 22,9133134,480 1%3621298,255 2%877,7155546 17,4635875,533 18,676,830,848 15,0061270,531 15,7235498,194 13,97508,204 14,343,156, 861 132493,736,826 14,1195434,946 13,302,326,609 13,521,174,915 13,296,0037025 131504,107,816 13,808,814,077 13,60575141589 143132,936,570 14,773,14%205 Assessed Valuation State of Arizona $ 32,518,4317391 $ 31,8371391,782 22,6451463,514 23,547,348,817 21,67%300,013 225533,348,150 21,001,064,273 22,333186I,362 22,811,158,500 231333,678,475 2271092868,588 23,022,330,962 21,688,438,645 22,179,317,949 211349,754,194 215748,04Q 198 21,532,550,403 21,934,2467590 21,670,30%013 22,533,348,150 TOWN OF FOUNTAIN HILLS, ARIZONA PRIMARY AND SECONDARY PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Rate Rate Rate Rate Rate Year Town School District County State Total 2001 P 0.00 4.09 1.18 0.00 5.27 S 0.56 2.25 0.09 0.00 2.90 2000 P 0.00 3.91 1.16 0.00 5.07 S 0.26 2.38 0.12 0.00 2.76 1999 P 0.00 3.89 1.19 0.00 5.08 S 0.17 1.96 0.11 0.00 2.24 1998 P 0.00 4.89 1.68 0.00 6.57 S 0.23 2.32 0.13 0.00 2.68 1997 P 0.00 4.98 1.64 0.00 6.62 S 0.30 2.17 0.16 0.00 2.63 1996 P 0.00 4.96 1.69 0.47 7.12 S 0.32 2.67 0.15 0.00 3.14 1995 P 0.00 5.50 1.77 0.47 7.74 S 0.39 1.69 0.06 0.00 2.08 1994 P 0.00 5.03 1.58 0.47 7.08 S 0.43 1.76 0.19 0.00 2.38 1993 P 0,00 4.29 1.60 0.47 6.36 S 0,47 1.51 0,14 0.00 2.12 1992 P 0,00 4.38 1.51 0.47 6.36 S 0,43 1,66 0.17 0.00 2.26 P =Primary assessed valuation S =Secondary assessed valuation Source: Maricopa County and Arizona Tax Research Foundation. 65 TOWN OF FOUNTAIN HILLS, ARIZONA ASSESSED VALUATION OF MAJOR TAXPAYERS JUNE 30, 2001 (UNAUDITED) Taxpayer MCO Properties Chaparral City Water Co. US West Communications Firerock LLC Four Peaks Vista Safeway Inc. Ridge View Apartments LP G&G Fountain Palisades Southwest Inn at Eagle Mountain Summit Estates Source: Treasurer of Maricopa County Land Description Vacant Land Water Utility Telephone & Telegraph Vacant Land Condominiums Shopping Center Apartments Shopping Center tel Vacant Land As % ofTown's 2000/01 Total Secondary Assessed Assessed Valuation Valuation $ 5,382,604 2.25% 3,058,460 1.28% 2,161,477 0.91% 2,009,110 0.84% 1,562,959 0.65% 703,100 0.29% 825,828 0.35% 669,924 0.28% 652,042 0.27% 756,759 0.32% $17,782,263 7.45% TOWN OF FOUNTAIN HILLS, ARIZONA COMPUTATION OF LEGAL DEBT MARGIN JUNE 30, 2001 (UNAUDITED) Net secondary assessed valuation Water, Sewer, Light, Pazks, Open Space and Recreational Facility Boards Debt ]imiY - 20 % of secondary net assessed valuation $ 238,714,537 $ 47,742,907 Bonds outstanding 4,530,000 Net 20% General Obligation Bonding Capacity 43,212,907 All Other General Obligation Bonds Debt limit - 6 % of secondary net assessed valuation 14,322,872 Bonds outstanding subject to debt linrit 8,209,873 Net 6%General Obligation Bonding Capacity 6,112,999 Tota120%and 6% Bonding Capacity $ 49,325,906 Source: Maricopa County Assessor's Office. 67 TOWN OF FOUNTAIN HILLS, ARIM RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (UNAUDITED) Net Secondary Net Ratio of Net Net Bonded Fiscal Assessed Bonded Bonded Debt to Debt Per Year Population Valuation Debt Assessed Value Capita 2000-01 20,235 * $ 238,7141537 $ 8,209,873 3.44% 406 1999-00 18,595 212,415,476 8,677,053 4.08% 467 1998-99 18,015 146,9437730 3,913,952 2.66% 217 1997-98 16,275 116,3331406 3,883,018 3.34% 239 1996-97 15,220 103,944,051 4,056,473 3.90% 267 1995-96 147146 100,161,566 4,277,315 4.27% 302 1994-95 133100 88,796,834 4,1441881 4.67% 316 1993-94 12,005 8353845908 4,292,389 5A5% 358 1992-93 11,265 841687,515 4,4617875 5.27% 396 1991-92 10,475 80,181,000 4,65%579 5.81% 445 * Year 2000 U.S. Census TOWN OF FOUNTAIN HILLS, ARIZONA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES TO TOTAL GENERAL EXPENDITURES* LAST TEN FISCAL YEARS (UNAUDITED) Interest Bond Fiscal and Fiscal Issuance Year Principal Charges Cost 2000-01 $ 620,408 $ 1,086,208 $ 144,986 1999-00 339,013 585,001 - 1998-99 2237024 517,696 547368 1997-98 245,210 554,731 - 1996-97 222,321 247,311 - 1995-96 209,193 208477 - 1994-95 1252000 3273463 - 1993-94 125000 34%493 - 1992-93 125,000 352,913 - 1991-92 75,000 420,301 - * Includes all Governmental Fund Types. 69 Ratio of Total Debt Service to Debt Total To Total Service Expenditures* Expenditures $ 158517602 $ 211368,050 8.67% 9245014 1554047414 6.00% 795,088 11,464,538 6.940/4 7992941 1016317005 7.52% 4692632 12,850,703 3.65% 4173670 77667,025 5.45% 4527463 41999,377 9.05% 465,493 471137127 11.32% 477,913 67967,798 6.86% 4957301 35731,129 13.27 % TOWN OF FOUNTAIN HILLS, ARIZONA DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT JUNE 30, 2001 (UNAUDITED) Proportion Applicable to Net Town of Fountain Hills 2000-01 Outstanding Net Secondary General Assessed Obligation Approx. Net Debt Overlapping Jurisdiction Valuation(1) Bonded Debt Percent Amount State of Arizona $ 31,8375391,782 $ None 0.75% $ - MaricopaCounty 22,9132134,480 587205,000 1.04% 606,394 Maricopa County Community College District 22,913,134,480 30577503000 1.04% 3,185,377 Fountain Hills Unified School District No. 98 242,086,985 35,305,000 98.61% 34,8137176 East Valley Institute of Technology District No. 401 102225,502,945 22,8053000 2.33% 532,383 Fountain Hills Sanitary District 231M7X5 5,2203000 100.00% 5,2201000 Fountain Hills Fire District 236,0542186 None 100.00% - Fountain Hills Road District None None 100.00% - Tow of Fountain Hills 238,714,537 8,209,873 100.00% 8,20%873 Total Direct and Overlapoping GO Bonded Debt $ 525567,203 (1) Proportion applicable to the Town of Fountain Hills, Arwna is computed on the ratio of secondary assessed valuation for 2000-01. Sowce: Maricopa County Treasurer's Office. 70 TOWN OF FOUNTAIN HILLS, ARIZONA ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY (1) LAST TEN FISCAL YEARS (UNAUDITED) PRIMARY Total Net Assessed Value Tax Assessed Exempt Total Full Estimated Assessed to Total Estimated Year Value - Amount Cash Value Actual Value Value Actual Value 2001 $ 2321442,986 $ 1272133849 $ 199735253319 $ 2,397,0301383 $ 2205229,137 9.70% 2000 198,2245776 82578,615 137137029,238 2,05536355086 190J02,361 9.64% 1999 170,2585614 93255,978 1,467,193,748 127603632,498 161,0023636 9,67% 1998 14190773170 75355,989 11208,9685752 1,450,7621502 1333721,181 9,72% 1997 1182888,547 6,602,978 1300255465459 1,203,055,751 1123285,569 9.88% 1996 10559125474 5,262,641 884,979,322 1,061,9757186 1001649,833 9.97% 1995 9952713154 5,0827517 826,9171659 9923301,191 94,1883637 10.00% 1994 921301,694 43918,347 753,145,358 903,7741430 87,3835347 10.21% 1993 907299,465 43731,644 72822553127 873,906,152 855567,821 10.33% 1992 872376,360 3,889,715 6993538,226 839,445,871 833486,645 10.41% SECONDARY Total Nee Assessed Value Tax Assessed Exempt Tota] Ful] Estimated Assessed [o Total Estimated Year Value Amount Cash Value Actual Value Value Actual Value 2001 $ 253,269,562 $ 14,555,025 $ 2,154,928,885 $ 2,585,914,662 $ 238,714,537 9.79% 2000 221,922,165 9,894,702 1,889,016,352 2,266,819,622 212,415,476 9.79% 1999 185,5403741 10,575,923 17583,072,952 158995687,542 1749641818 9.77% 1998 1555729,430 85783,700 1,31729467863 1,581,5365236 146,943,730 9.85% 1997 123,097961 6,764,555 1,03428922731 1,241,8713277 116,333,406 9.91% 1996 109,4632361 535193310 906j4955406 11087,794,487 1031944,051 10.06% 1995 105,66%296 55498,728 866,122,390 1703953463868 100,161,568 10.17% 1994 94,047,575 5,25%741 764,582,686 917,499,223 88,7963834 10.25% 1993 92,482,352 5,0767144 743,628,593 892,354,312 87,4063208 10,36% 1992 89,0552130 45367,615 709,9867885 851,984,262 841687,515 10.45% (1) Arizona uses two types of property values for taxing proposes. Primary values are used to calculate primary property [axes which are collected to fund the maintenanceand opemfionof school districts, community college districts, counties, cities, and state government Secondary values are used to pay off secondary property taxes which are collected for such things as debt service (bonds), budget ovenides and special districts. Source: Arizona Department of Revenue. 71 TOWN OF FOUNTAIN HILLS, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Ratio of Ratio of Percent of Total Tax Delinquent (1) Current Current Delinquent Total Collections Outstanding Taxes to Fiscal Total Tax Tax Taxes Tax Tax to Total Delinquent Total Year Levy Collections Collected Collections Collections Tax Levy Taxes Tax Levy 2000-01 $ 69%006 $ 676,682 96.81% $ 59977 $ 682,659 97.66% $ 16,347 2.34% 1999-00 4445138 4325965 97.48% 41385 437,350 98.47% 309 0.07% 1998-99 248,607 235,953 94.91% 67301 2423254 97.44% 52 0.02% 1997-98 2685917 261,704 97.32% 7,213 2687917 100.00% - 0.00% 1996-97 3122638 3125489 99.95% 122 3125611 99.99% 27 0.01% 1995-96 323,517 323,511 100.00% 3 323,514 MOM% 0.00% 1994-95 339,832 339,605 99.93% 4 33%609 99.93% 219 0.06% 1993-94 379,779 379,537 99.94% 11 379,548 99.94% 231 0.06% 1992-93 3969610 397,434 100.21% (412) 3975022 100.10% - 0.00% 1991-92 359,371 359,371 100.00% - 3595371 100.00% - 0.00% (1) The amount levied and collected is net ofresolutions. NOTE 1: Amounts collected are on a cash basis rather than the modified accrual basis as in the financial statements. NOTE 2: Unsecured personal property taxes are not included in this schedule. SOURCE: The Maricopa County Treasurer's Office. 72 aCCx C 3 o 6 0 0 0 0 0 0 0 0 F k Ca > � C o aA o 0 0 0 0 0 0 0 0 0 TOWN OF FOUNTAIN HILLS, ARIZONA MARICOPA COUNTY ECONOMIC INDICATORS LAST TEN CALENDAR YEARS (UNAUDITED) Value of Building rui ants (in Thousands) Housing Year Starts Residential Commercial Industrial Other 2000 42,205 $ 4,774,188 $ 2,144,767 $ 253,472 $ 1,493,186 1999 47,106 5,142,869 15878,629 210,676 1,0921337 1998 47,801 49778,571 2,230,445 378041 1,101,269 1997 43,013 3,943,544 1,8407334 233,598 L,133,069 1996 39,630 3,508,538 11422,483 788,083 1,07%458 1995 377091 39199,942 11043,978 413,835 78209 1994 33,862 3,203,144 959,539 145,310 584,029 1993 24,147 2,432,682 547,667 50,139 499,052 1992 20,488 2,159,844 5507345 395244 478,990 1991 17,082 1,613,832 307,566 65,099 515,236 SOURCE: Arizona Real Estate Center, College of Business, Arizona State University FZ! TOWN OF FOUNTAIN HILLS, ARIZONA DEMOGRAPHIC AND MISCELLANEOUS STATISTICS JUNE 307 2001 (UNAUDITED) DATE OF INCORPORATION December 5, 1989 FORM OF GOVERNMENT Council - Manager NUMBER OF EMPLOYEES (No police and fire) Classified - Full time 86 Classified - Part time 26 Exempt 20 AREA 18.27 square miles TOWN OF FOUNTAIN HILLS FACILITIES AND SERVICES Miles of Street Surfaced 178.5 Unsurfaced 2 Population (estimated) 207235 Housing Units 112406 Building Permits Issued 12311 Culture and Recreation Community Centers 1 Parks 4 Park acreage 121 Tennis Courts 6 Senior Center 1 FACILITIES AND SERVICES NOT INCLUDED IN PRIMARY GOVERNMENT Fire Protection: Special District Number of stations 2 Number of fire personnel and officers 42 Number of calls answered Number of inspections conducted 27395 Police Protection: Contracted Number of stations 1 Number of police personnel and officers 23 Number of patrol units 9 Number of law violations Physical arrests 981 Traffic/Parking violations 4,767 Sewerage System Special District Miles of sanitary sewers 182 Number of treatment plants 2 Number of service connections 10,809 Daily average treatment in gallons Maximum daily capacity of treatment plant in gallons 1,67O,OOOmgd Water System Private company Miles of water mains 178 Number of service connections 11,448 Number of fire hydrants 1,217 Daily average consumption in gallons 4,400,OOOmgd Maximum daily capacity of plant in gallons I L570,000 Education: Number of elementary schools 3 Number of secondary schools I Number of students - Primary 1,734 Number of Students - Secondary 766 Source: Town government offices and related districts. 75