HomeMy WebLinkAboutFY02 CAFRComprehensive
Annual Financial
For the
Fiscal Year Ending
June 30, 2002
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of the
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for the
FISCAL YEAR ENDED JUKE 30, 2002
Prepared by the Finance Department
Town Manager
Timothy G. Pickering, CEcD
Town Accountant
Julie A. Ghetti
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED J[JNE 30, 2002
Contents Page
INTRODUCTORY SECTION
Letter of Transmittal i
GFOA Certificate of Achievement xi
Organizational Chart xii
List of Principal Officials xiii
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 Fi_1ND:
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
TOWN OF • AIHILLS,•
lawle
Contents (Cont a) Page
I3FJRF Fund:
Statement of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual 38
Grants Fund:
Statement of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual 39
DEBT SERVICE FUNDS:
Combining Balance Sheet 42
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 43
I31lRF Debt Service Fund:
Statement of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual 44
GO Debt Service Fund:
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:
Statement of Revenues, Expenditures and Changes in
Fund Balance -Budget and Actual 47
MPC Fund:
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 30, 2002
Contents (Concl'd) Page
CAPITAL PROJECTS FUNDS:
Combining Balance Sheet 50
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances 51
Capital Projects Fund:
Statement of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual 52
GENERAL FIXED ASSETS ACCOUNT GROUP:
Comparative Schedules of General
Fixed Assets by Source 54
Schedule of General Fixed Assets by
Function and Activity 55
Schedule of Changes in General Fixed Assets
by Function and Activity 56
STATISTICAL SECTION
General Government Expenditures by Function 58
General Government Revenues by Source 59
General Governmental Tax Revenues By Source 60
Town Transaction Privilege (Sales) Tax Collections 61
Primary and Secondary Taxable Property Assessed Valuation 62
Primary and Secondary Property Tax Rates - All Overlapping Governments 63
Assessed Valuation of Major Taxpayers 64
Computation of Legal Debt Margin 65
Ratio of Net General Bonded Debt to Assessed Value
an
d Net Bonded Debt Per Capita 66
Ratio of Annual Debt Service Expenditures to Total General Expenditures 67
Direct and Overlapping General Obligation Bonded Debt 68
Assessed and Estimated Actual Value of Property 69
Property Tax Levies and Collections 70
Property Tax Rates for all Direct and Overlapping Governments 71
Maricopa County Economic Indicators 72
Demographic and Miscellaneous Statistics 73
TffiS PAGE BLANK
■>, g Town of FOUNTAIN HILLS
�11989 �
December 10, 2002
To the Honorable Mayor, Members of the Governing 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, 2002, 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; Cronstmm & 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 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, 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 and 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. On October 31, 2001 the Town
Council adopted an ordinance to provide fire protection services to all Fountain Hills residents,
farming a municipal fire department. Fire protection was previously provided by a separate legal
entity, the Fountain Hills Fire District, which has been merged with the Town of Fountain Hills.
1683G 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 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. The voters of Fountain Hills
were asked in May 2002 to approve a primary property tax in order to fund the new fire department,
however, the measure failed. Operations continue to be paid for from sales tax, user fees and charges,
licenses and permits and other similar sources, however, a new revenue source will need to be
identified. The secondary property tax of $0.51 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. Couricilmembers are elected at large for staggered
four-year terns. 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 eight department directors and approximately 112 employees. The
Magistrate, Town Attorney and Town Prosecutor are under the direction of the Town Council.
The economic climate of the Town of Fountain Hills is reflective of the national economy with a
slowdown in the local economy, especially relating to sales tax. Construction activity declined 11%
from fiscal year 2000-2001 and the Town does not expect any significant recovery in the current fiscal
year. The Town government is analyzing Fountain Hills reliance on state shared revenues and local
sales tax for operations; therefore, alternative revenue sources are being explored for further
consideration.
During the second quarter of fiscal year 2002-2003 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 is partially offset
by new development of luxury homes in two new subdivisions near the McDowell Mountains.
Residential
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. Eagle Mountain Village Market Place opened in May 2002 at the southeast comer of Shea
Boulevard and Eagle Mountain Parkway and is anchored by a Fry's grocery store.
The Firerock Country Club development begun lot sales and home construction that will include up to 390
single-family homes and 288 condominiums in a gated community. The development has a private country
club that includes an 18-hole golf course.
A major developer in Fountain Hills, MCO Properties, gained final subdivision approval for two large
subdivisions in the northwest comer of Fountain Hills. The Eagle Ridge North (Adero Canyon) and
Eagle's Nest subdivisions were approved for a total of 415 custom lots. These subdivisions are adjacent to
354 acres of mountainous terrain that has been 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. Improvement plans are currently under review for Adero Canyon.
Construction of the "backbone" roadway is projected to begin in February 2003.
As of December 12, 2002 there were a total of 11,016 dwelling units in Fountain Hills. There are 7,435
developed single-family dwelling units, of which 598 are constructed in multi -family zones within the
Town and 3,587 multi -family dwelling units. As of today within the entire Town there are 1,962
undeveloped single-family zoned platted lots. The population of Fountain Hills is estimated at 25,000 as of
December 2002.
r�dTTii=f11
A portion of the Town's downtown cormnercial core has recently been subdivided as the first step in
developing the Town Center area. The Takala Cinemas and Marketplace has been planned for the Town
Center, south of the Community Center, that will host a multiplex cinema, as well as retail and office space.
A Hilton Hotel, an Amenhost Inn, and a Holiday Inn are in various stages of the planning process and, as
of this time, are moving forward. At the southeast entrance to the community, Four Peaks Plaza opened
with Target, Pier I, Famous Footwear, Kentucky Fried Chicken, and Sleep America stores with additional
retail tenants in the improvement process. The Plaza Fountainside is beginning Phase II of the retail center,
with a possibility of adding a residential element to the project.
iii
Industrial
Fountain Hills bas 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
The following are some of the other accomplishments during 2001-2002:
Fountain Hills has good reason to celebrate fiscal year 2001-2002 —the new Town Community Center
and Library/Museum complex, located on a 13 acre site in the downtown area, opened on September
29, 2001. The 31,000 square foot Community Center, consisting of two arts and crafts classrooms,
two seminar rooms, two classrooms, a kinder -care room, a conference room, a game room, lounge and
lobby areas, an 5,000 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.
Fountain Hills Community Center
On October 31, 2001 the Mayor and Town Council of Fountain Hills adopted an Ordinance to provide
fire protection services to all residents. Fire protection and emergency medical services had
previously been provided by the Fountain Hills Volunteer Fire District since 1972 through
ncorporation. With the merger all of the assets and liabilities of the former District were tamed over
to the Town and are hereby incorporated with this report.
iv
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 provide transportation service 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 during fiscal year 2000-2001. 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 has successfully obtained funding for three officers through
federal Justice Department grants and also provided two resource officers to the local high school as
additional security. The Department also sponsors 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.
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.
FINANCIAL INFORMATION
Town Management is responsible for establishing and maintaining an internal 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)
s 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 Towns' location
within the Phoenix metropolitan area, conservative financial management strategies, resulting in
substantial reserves, and a manageable debt profile".
v
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, 2002 and the amount and percentage of increases and decreases in relation to prior
year revenues.
Increase/
FY2001-2002 Percent of (Decrease)
Classification Amount Total from 2000-01
Taxes
07,595,748
40.41
01
$1,507,701
Intergovernmental
$5,895,676
31,36%
$614y520
Fines and forfeitures
$26505
1,41%
($44,754)
Licenses and permits
$1,351,209 -
7.19%
($826;405)
Charges for services $1,067,814 5.68
Rents and royalties $1075613 0,57%
Contributions and donations $12,760 0.07%
Special Assessments,$4,520 0.02%
Interest
$726,441
3.86
Other
$1,771,091
9.42%
Total $18,798,477 100.00%
Percent
Increase/
Decrease
24.76%
11,64%
-14,42%
37,95%
$636,498 147.57
$715832 200 75%
$12,360 3090.00%
($33438) , 43.20%
$1,7899780 168.32%
$1,7605134 16064.01%
All fund revenues total $18,798,477 for fiscal year 2001-2002, which represents an increase of
$5,518,228 or 41.55% from 2000-2001. The $195079701 increase in Taxes is primarily due to
property tax receipts received by the Town from the former Fountain Hills Volunteer Fire District
($1,355,318). When the Town assumed fire operations on November 1, 2001 the property tax that had
been levied by the Fire District was directed to the Town for emergency and medical services.
Fountain Hills' largest, locally generated revenue source is the local sales tax with a rate of 1.6%
(estimated at $4,300,000 for fiscal year 2002-2003). Historically, the two largest components of the
local sales tax revenues has been comprised of construction and retail activity (66% of the total). The
Construction sales tax revenue decreased over the prior year by 30.8% reflecting a slowdown in the
economy and construction activity. Sales tax from the retail trade sector increased by a three year low
of 5.1 %.
Major items included in Intergovernmental (state -shared) revenue include state sales tax, highway user
revenue, state income tax, vehicle license tax and grants. The state income tax distribution to the
Town increased by $422,532 from the prior fiscal year. The Town does not expect this rate of
increase to repeat itself in the next fiscal year. The Town continues to participate in the federal COPS
Universal Hiring program for community policing.
vi
Growth in the area of new home construction in the Town of Fountain Hills has slowed significantly.
This is reflected in the $826,405 decrease of Licenses and Permit revenue collected, a 37.95%
decrease from the prior year. During calendar year 2000 there were 326 single family residence
permits issued; during 2001 there were 227 permits issued; through June 2002 there were 78 permits
issued. Two major commercial retail construction projects are completed which helped to soften the
economic impact of the slowdown in construction activity.
Revenue received under the Charges for Services category includes Developer Contributions, In Lieu
Payments and Parks & Recreation User Fees. In February 2001 the Town enacted development fees
that are collected with all new building permits for both residential and commercial development. In
fiscal year 2001-2002 the Town collected $791,000 in development fees that are restricted for
appropriation for the particular purpose for which they were imposed.
The Town continues to maintain a reserve fund, primarily invested with the Arizona State Local
Government Investment Pool. The prior fiscal year recognized a reduction in interest earnings for an
investment loss that is expected to be recovered in fiscal year 2002-2003. 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 was completed as scheduled
with expenditures being paid by the General Fund.
The Other category of revenue is used for miscellaneous and not -otherwise -categorized sources of
revenue. There were two significant non -categorized transactions that are included in fiscal year
2001-2002 — the first was the residual cash transferred from the former Fountain Hills Volunteer Fire
District ($1,502,287) to the Town; the second was a reimbursement from the Arizona State Heritage
Grant ($237,300).
The following schedule presents a summary of General Fund, Special Revenue Funds, Debt Service
Funds and Capital Projects Funds expenditures for the fiscal year ended June 30,2002 and the
increases and decreases in relation to prior year amounts.
vii
Increase/ Percent
2002 Percent of (Decrease) Increase/
Department Amount Total from 2000-2001 Decrease
Current
General government $3,859,633 1 1183% $213,133 5,84%
Public safety $5,084,532 15,58% $1,730,495 51.59%
Culture and recreation
$3,06%695
9.41
%
($796,550)
-20,60%
Community development
11$15064,913.'
326%
($110,736)
-9,42%
Capital outlay
$14,7705507
45.27%
$9,5083922
180.72%
Debfservice
Principal retirement
$17229,215
3,77%
$608,807
98,13%
Interest and fiscal charges $1,372,965
4.21 %
$286,757
26.40%
Bond issue costs $3003936
0.92%
$155,950
107,56%
Total $325630,186
100.0%
$11,262,136
52.71%
Expenditures for all operations totaled $32,63Q186, which was $11,262,136 greater than the prior
year. Public safety increased by $1,730,495 due to the establishment of a new Fire Department for
emergency and medical services on November 1, 2001 ($1,819,290). The Fire Department has a
contract with Rural Metro Corporation to provide the emergency services. Public Safety also includes
Building Safety and the Town Marshal Department. The Marshal Department is responsible for all
local law enforcement activities and oversees the annual contract with Maricopa County Sheriff's
Office for outside police services ($93,750 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.
The other significant increase is in the Capital Outlay category, which reflects the expenditure for the
new Library/Museum constructon project ($1,447,033) and the purchase of 354 acres of mountain
preserve for open space ($13,460,000). The mountains were purchased with $7,460,000 in Municipal
Property Corporation Bonds and voter approved $6,000,000 General Obligation bonds. The purchase
of this land provides residents with access to the McDowell Mountain State Park. The increase in
Debt Service payments and bond issuance costs is related to the land purchase.
The General Government function consists of the Administration, Magistrate Court and Town Council
Departments. The Administration Department is responsible for all overhead operations of the Town
including rent, insurance, utilities, etc.
Culture and Recreation
includes the new Community
Center/Library/Museum, four parks (121 acres),
25 acres of landscaped
medians, and 1,450 acres of open space. The costs for the
parks and medians
are mainly for building
maintenance costs, electricity,
water and mowing/landscape
maintenance fees.
Community Development expenditures, which includes the Engineering Department, decreased by
$110,736 due to decreased requirements for outside engineering fees.
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, 2002 compared to the prior year.
General Fund Balance The fund balance of the general Fund increased by $102,309 from
June 30, 2001 to $4,812,370 (34% of Revenues or 136.3 days expenditures). However, without the
transfer from the Fountain Hills Volunteer Fire District ($1,050,969) the fund balance would have
decreased by $948,660 to $3,761,401 (27 % of Revenues or 106.5 days expenditures). Additionally,
the General Fund Balance of $4,812,370 includes $1,400,000 of sales tax that the Town Council has
restricted for Downtown Development and Land Preservation. Without the restricted Downtown
Development and Land Preservation Sales tax and the one-time transfer, the General Fund Balance
would have decreased by $2,348,660 to $2,463,710 (17% of Revenues or 69.8 days expenditures). In
subsequent years a separate fund will be created to account for the restricted sales tax funds.
Debt Administration On June 30, 2002, the Town had one Street and Highway User Revenue Bond,
two Municipal Property Corporation Revenue Bonds and three general obligation bonds issues
outstanding. The outstanding principal totals $810,000 for the Street and Highway User Revenue
Bond, $12,600,000 for the general obligation bonds which includes the new bonds issued for Open
Space and $11,855,000 of Municipal Property Corporation bonds. The Town also has two
Community Facilities District Bonds outstanding totaling $4,905,000 and an Improvement District
Bond outstanding for $22,592.
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 hnvestment 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 2000-01 was 6.0617% and 2.8021 % for fiscal year 2001-2002.
Investments held at LGIP earned interest revenue of $178,691 for the year ended June 30, 2002.
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 $2,000,000 per incident occurrence plus any excess liability of up
to $13,000,000 per occurrence per year. Coverage is provided on a claims -made basis.
During fiscal year 2001-2002 the Town was served with three lawsuits regarding the Town Council
action to assume fire and emergency medical services to the community. The lawsuits were filed on
behalf of former Fire District firefighters who were not offered positions with the Town as well as one
citizen who filed on behalf of the voters right to decide fire services. The citizen lawsuit and one
firefighter lawsuit have subsequently been settled for immaterial amounts; the final lawsuit on behalf
of the firefighters represents a claim for $10 million for breach of contract and interference with
contractual relations. The suit is presently scheduled to go to court in February, 2003. The Town
expects to prevail in this lawsuit but would be covered by the insurance provider if the claim is
determined to be valid.
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.
ix
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 2002 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 and
individual fund 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, 2001. This was the
sixth consecutive year that the government has received this prestigious award. In order to be
awarded a Certificate of Achievement, the government published an easily readable and efficiently
organized CAFR. This report satisfied both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate.
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,
Timothy G.
Town Mana
x
111214,
e! i i
Presented to
!ITT,�.
Arizona
For its Comprehensive l�nnual
Financial Report
for the Fiscal Year Ended
June 30, 2001
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.
Pr sident
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Mayor
Mr.
Jon Beydler
Vice -Mayor
Ms.
Leesa Fraverd
Councilmember
Mr.
Mike Archambault
Councilmember
Dr.
John Kavanagh
Councilmember
Mr.
Rick Melendez
Councilmember
Ms.
Kathleen Nicola
Councilmember
Ms.
Susan Ralphe
Town Manager
Magistrate
Community Development Director (Interim)
Town Clerk/Director of Administration
Public Works Director
Town Marshal (Interim)
Parks & Recreation Director
Community Center Director
Fire Chief
Town Prosecutor
Town Attorney
Timothy G. Pickering
Ted Armbruster
Jesse Drake
Lassie Hansen
Tom Ward
Todd Tate
Mark Mayer
Jim Wipers
Mark Zimmerman
lacovino & Kayler
Andrew McGuire,
Jorden Bischoff McGuire P.L.C.
THIS PAGE BLANK
� ' � 1
THIS PAGE BLANK
C ERTIFIED PUBLIC ACCOUNTANTS
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, 2002, as listed in the table
of contents. These general-purpose financial statements are the responsibility of the Towns
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 U.S. 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
June 30, 2002, and the results of its operations for the year then ended in conformity with U.S.
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.
1
8706
EAST MANZANITA
DPoVE,
SUITE
100 �
sCOTTSDALE,
ARIZONA 85258
(480)
348-1102
FAX
(480)
348-7
104
A PROFESSIONAL
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.
CronstroIn & Trbovich7 P.C.
December 3, 2002
2
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
AS OF JUNE 307 2002
Govemmental Fund Types
Special
Debt
Capital
General
Revenue
Service
Projects
Assets and Other Debits
Assets
Cash and investments
$ 4,8505117
$ 91862
$ 53666,722
$ 678,444
Cash on deposit with paying agent
-
-
1,879,122
2883744
Accounts receivable
27,524
-
-
-
Taxes receivable
1023150
-
65,679
Intergovernmental receivable
606,815
1845280
-
-
Special assessments receivable
-
-
11,700
-
Due from other funds
12%850
-
-
-
Inventories
22859
-
-
-
Prepaid items
3,304
13456
-
-
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
$ 5,722,619
$
195,598
$ 7,623.223
$ 967.188
Liabilities, Equity and Other Credits
Liabilities
Accounts payable
$ 5075269
$ 73,419
$ 540
$ 12,149
Accrued wages and benefits
163,160
21,474
-
-
Due to developer
-
-
43435,000
Interest payable
-
-
8639572
Intergovernmental payable
11 Q641
-
-
16,007
Due to other funds
-
543978
747872
-
Refundable deposits
26,775
-
-
-
Deferred revenue
102,404
45,727
59,757
-
Compensated absences payable
General obligation bonds payable
-
-
775,000
-
Revenuebondspayable
-
-
425,000
-
Community facilities district bonds payable
Special assessment debt with government commitment
-
Total Liabilities
910249
195,598
6.633,741
28,15
Equity and Other Credits
Investment in general fixed assets
Fund balances
Reserved for prepaid items
Reserved for inventory
Unreserved, undesignated
Total Equity and Other Credits
Total Liabilities, Equity and Other Credits
3,304
1,456
-
-
2,859
-
-
-
4.806,207
(L456)
989,482
939,032
4,8124370
989.482
939,032
$ 5,722,619
$ 195.598
$ 74623.223
$ 967.188
The accompanying notes [o financial statements aze an integral part of [his statement.
Account Groups
Totals
General General (Memorandum
Fixed Assets Long -teen Debt Only)
2,167,866
27,524
167,829
791,095
11,700
12%850
2,859
4,760
45,885,675 - 451885,675
989,482 989,482
29,4784736 29,478-736
$ 45,885,675 $ 30,4681218 $ 90,862,521
- -
184,634
- -
43435,000
8637572
- -
1263648
12%850
26,775
207,888
- 2755626
275,626
- 13,4103000
14,1853000
- 11,8551000
12,2801000
- 4,9055000
4,905,000
22.592
22,592
303468,218
3842354962
45,885,675 - 45,885,675
4,760
2,859
6,733,265
45,885,675 524626,559
$45,885,675 $30468,218 $90,862,521
The awompanying notes to Snancial statements are an integral part of this statement.
5
THIS PAGE BLANK
6
COMBINED STATEMENT OF
TOWN OF FOUNTAIN HILLS, ARIZONA
REVENUES, EXPENDITURES AND CHANGES IN
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 307 2002
Special Debt
General Revenue Service
FUND BALANCES -
Totals
Capital (Memorandum
Projects Only)
Revenues
Taxes
$ 5,841,713
$ -
$ 1,754,035
$ -
$ 73595,748
Intergovernmental
4,337,424
15558,252
-
-
5,895,676
Fines and forfeitures
2653605
-
-
-
265,605
Licenses and permits
1,351,209
-
-
-
153513209
Charges for services
212,230
377422
-
818,162
1,0673814
Rents and royalties
1077613
-
-
-
1077613
Contributions and donations
12,760
-
-
-
125760
Special assessments
-
-
47520
-
43520
Interest
188,681
7,647
303,264
2262849
726441
Other
1,771,091
L771.091
Total Revenues
14,088,326
1,6034321
2.06L819
1,045,011
18,798,477
Expenditures
Current
General government
338057171
545462
-
-
31859,633
Public safety
4,95%258
134,274
-
-
51084,532
Highways and streets
-
17877,790
-
-
13877,790
Culture and recreation
3,069,695
-
-
-
3,069,695
Community development
1,064,913
-
-
-
170647913
Capital outlay
-
-
-
14,7701507
14,77%507
Debt service
Principal retirement
-
-
15229,215
-
152293215
Interest and fiscal charges
-
-
13372,965
-
113727965
Bond issuance costs
300,936
3W936
Total Expenditures
12,8902037
2,066,526
2,602,180
15,071,443
32,630,186
Excess of revenues over (under) expenditures
13198,289
(46322051
(5405361I
(1440264432)
(13,831,709)
Other financing sources (uses)
Operating transfers in
-
588,079
997,595
-
1,5853674
Operating transfers out
(I7095,980)
(134,041)
-
(3557653)
(1,585,674)
Proceeds from sale of bonds
131750,000
13175%000
Total other financing sources (uses)
(11095,980)
454,038
997,595
131394,347
13,7504000
Excess of revenues and other sources
over (under) expenditures and other uses
1023309
(95167)
457,234
(6323085)
(817709)
Fund balance, beginning of year
447104061
9,167
532 248
145717117
61822,593
Fund balance, end of year
$ 4.812,370
$
$ 989 482
$ 939,032
$ 6,740,884
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 DUNE 303 2002
Budget
General
Actual
Variance
Favorable
(Unfavorable)
Budget
Special Revenue
Actual
Variance
Favorable
(Unfavorable)
Revenues
Taxes
$ 4,630,000
$ 4,5143607
$ (1153393)
$ -
$ -
$ -
Intergovernmental
433579200
4,3371424
(19,776)
2,033,956
175587252
(475,704)
Fines and forfeitures
318,700
265,605
(53,095)
-
-
-
Licensesandpemnts
L839,100
13351,209
(4975891)
-
-
-
Charges for services
202,300
212,230
95930
40,000
37,422
(2,578)
Rents and royalties
573300
107,613
50,313
-
-
-
Contributions and donations
-
12,760
12,760
-
-
-
Special assessments
Interest
350,000
1477815
(2023185)
-
73647
77647
Other
12,000
268,804
256.804
500
(5001
Total Revenues
11766600
11218,067
(548,533I
2,074,456
1,6035321
(471,135)
Expenditures
Current
General government
6,3213364
3,8055171
2,516,193
5003000
54,462
445,538
Public safety
33285,440
3,130,968
154,472
223,956
1343274
895682
Highways and streets
-
-
-
158332396
1,8773790
(44,394)
Culture and recreation
35675,378
3,0691695
6057683
-
-
-
Community development
1,2735010
1,064,913
208,097
-
-
-
Capital outlay
Debt service
Principal retirement
Interest and fiscal charges
Bond issuance costs
Total Expenditures
14,5554192
11,070,747
3,484,445
2,557,352
2,066.526
490,826
Excess of revenues over (under) expenditures
Other financing sources (uses)
Operating transfers in
Operating transfers out
Proceeds from sale of bonds
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
(2478845921 147320 2,9354912
(2,673,150) (1,095,980) 1,577,170
(246734150I _(1,095,980) 1,577,170
(5,461,742) (948,660) 4,513,082
(482,896) (46372051 19.691
5593350 5885079 285729
(1357000) (1343041) 959
424.350 4544038 2908
(58,546) (9,167) 4$379
5.461,742 4.710,061
(751011
23,437
91167 (14,270I
The accompanying notes to financial statements are an integral part of this statement.
Ey
Debt Service
Capital Projects
Variance Variance
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
$ 1,733,500 $ 1,754,035 $ 2Q,535 $
4,520 4,520
2,650 303,264 3003614
1.736,150 230614819 3254669
132793228 1,2293215 50,013
1,909,172 13372,965 5362207
3.188,400 2,602,180 586,220
(19452,250) (540,361) 9114889
1,252,000 997,595 (254,405)
1425200 997,595 (2544405)
129,234 129,234
225,053 225,053
15,122,500 14,689,554 432,946
3004936 (300,936)
155122, 500 14,990,490 132.010
IS 122500) (14,636.2031 486,297
- p7o,153) p7o,153)
13,700,000 13.750,000 50.000
13,700.000 13,5794847 (120,153)
(20Q,250)
457,234
657,484
(1,422,500)
(1,056,356)
366,144
200 250
532,248
331.998
11422,500
14470,788
48,288
$ $
989.482 $
9895482
$
$ 414,432
$
414,432
The accompanying notes to financial statements are an integral part of this statement.
9
THIS PAGE BLANK
10
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The general-purpose financial statements of the Town of Fountain Hills, Arizona
(Town) conform to U.S. 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.
12eporting Entity - In evaluafing 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 U.S. 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 governing 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 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.
11
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2002
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Copt 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 the 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-term Debt Account Group accounts
for the unmatured principal balances of bonds and other long-term debt not reported
in proprietary funds.
12
a • a ilk A k A .
•
r I-IBURNIMM�r
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont a)
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 of 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 Recounting -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 comment.
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).
13
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2002
NOTE I -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
4. By Arizona Constitution, expenditures may not legally exceed Lite 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
]imitation 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 StatementNo. 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
WIN
91 U INHWAN1 11
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (UOnt'U)
Inventory of Supplies -Purchases of such inventory items 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, 2002 were immaterial, they are not included
in the balance sheet.
Prepaid Iterxes -Payments made to vendors for services that will benefit periods
beyond June 30, 2002, are recorded as prepaid items. Expenditures for prepaid items
are recorded using the consumption method.
Property, Plant and Equipment -Fixed assets used in governmental 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.
Fund Equity -The unreserved fund balances for governmental funds represent the
amount available for budgeting future operations. The reserved fund balances for
governmental funds represent the amount that has been legally identified for specific
purposes.
Compensated 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 309 2002
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 U.S. generally accepted accounting
principles. Neither are such data comparable to a consolidation. Interfund
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:
Magistrate Court
Special Revenue Funds:
HURF
Debt Service Funds:
HURF Debt Service
Amount of
Overexroenditure
$ 6,819
44,394
861
Cash or receivables were available to meet all of the overexpenditures listed above.
A deficit fund balance of $61,152 existed in the G.O. Debt Service Fund at
June 30, 2002.
16
i t • � � w. ,. J i
to • .
FISCAL YEAR ENDED 1 it
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 30, 2002 consist of the following:
Cash on hand $ 1,360
Cash in bank 3875983
Investments 10155802
Cash on hand with paying agent 22167,866
Total cash and investments 13,373,011
Cash on deposit with paying agent (22167,866)
Total cash and investments on the
combined balance sheet $ 11.205.145
The Town's deposits as of June 30, 2002 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, 2002, 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 Town's 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 JUNE 30, 2002
NOTE 3 - CASH AND INVESTMENTS (Concl 'a)
U.S. government securities
Guaranteed Insurance Contract
State Treasurer's Investment Pool
Cash on deposit with County Treasurer
Investment in Cottonwoods
Improvement Bonds
Cash with Trustee
Total
NOTE 4 -PROPERTY TAXES RECEIVABLE
Carrying Fair
Amount Value
$ 1,141,551
$ 1,141,551
49450,765
4,4503765
4,122,742
4,1221742
1,050,969
11050,969
22,593 221593
27,182 27,182
Property taxes receivable consist of uncollected property taxes as determined from
the records of the County Treasurer's Office, and at June 30, 2002, were as follows.
General Debt Service
Year
Fund
Fund
2001-02
$ 86,199
$ 63,638
2000-01
4,123
15372
1999-00
630
184
1998-99
117
12
1997-98
11,020
-0-
Prior
61
473
Total 102 150 65 679
That portion of property taxes receivable not collected within 60 days after
June 30, 2002, has been deferred and, consequently, is not included in current year
revenues.
EMI
NOTE S - CHANGES IN GENERAL FIXED ASSETS
A summary of the changes in general fixed assets follows.
Balance Completed Balance
July 1, 2001 Additions Deletions Construction June 30, 2002
Land and improvements $ 16,927,627 $ 13,589,823
Buildings and
improvements 1,5869640 890,515
Improvements other than
buildings 166,953 366,839
Furniture, equipment
and vehicles 352865355 1,892,666
Construction in progress 51514,946 1,663,311
7,178
-
257
$ 30,517,450
,
9,655,412
5335792
-0- -0- 5,174,021
-0- (71178,257) -0-
Total $ 27,482.521 $ 18.403.154 $ _0_ $ -0- 45.885,675
NOTE 6 -OBLIGATIONS UNDER LEASES
®pera4ing Lease -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 $371,280 for the year ended June 30, 2002. 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, 2002
NOTE 7 - BONDS PAYABLE
General Obligation Bonds
Bonds payable at June 30, 2002 consisted of the outstanding bonds presented below.
Bonds maturing prior to July 1, 2002 are noncallable. Bonds maturing thereafter are
subject to call. Interest is payable semiannually. Principal and interest requirements
at June 30, 2002 were as follows.
Interest
Descritp ion Rates % Maturity
Street and Highway User
Revenue Refunding Bonds,
Series 1998 3.75-4,625 7/1/01-10
General Obligation Refunding Bonds,
Series 1995 4.6-5.3 7/1/01-2010
Genera] Obligation Bonds,
Series 1999 5.1-6.5 7/1/01-2014
General Obligation Bonds,
Series 2000 5.5-7.0 7/1/01-2014
General Obligation Bonds,
Series 2001 4.125-6.0 7/1/0l-2020
Outstanding
Principal Issues/
July 1, 2001 (Retirements)
$ 9759000 $ (70,000)
2,632,463
1,350,000
3,700,000
(177,463)
(75,000)
(150,000)
-0- 6,000,000
8 657 463 $ 5.527.537
Less: amounts transferred to Debt Service Funds
to retire bonds payable on July I, 2002
Total long-term bonds payable
20
Outstanding
Principal
June 30, 2002
$ 905,000
2,455,000
1,275,000
3,550,000
6.000 000
14,185,000
(775,000)
13.410,000
BMWMW
1 ! i 11
NOTE 7 - BONDS PAYABLE (Conct a)
General obligation bond debt service requirements to maturity, including $5,453,824
of interest, are as follows:
Year ending June 30:
2003
2004
2005
2006
2007
Thereafter
Revenue Bonds
Outstanding
Interest Principal
Description Rates % Maturity July 1, 2001
MPC
Series 2000 4.5-5.625% 7/1/01-10 $ 4,680,000
DO
Series Series 2001 3.0-5.125% 7/1/02-21 -0-
$ 436802000
Less: amounts transferred to Debt Service Funds
to retire bonds payable on July 1, 2002
Total long-term bonds payable
$ 1,508,569
1,481,259
1,485,864
174787149
1,499,409
1 L410,574
18,863,824
Outstanding
Issues/ Principal
(Retirements) June 30, 2002
$ (150,000) $ 4,530,000
7,750,000 7,750,000
$ 7.600.000 127280,000
(425,000�
11.855.000
Revenue bond debt service requirements to maturity, including $6,572,403 of interest,
are as follows:
Year ending June 30:
2003 $ 987,424
2004 971,974
2005 981,374
2006 9885174
2007 983,924
Thereafter J3,514,533
�18.4275403
21
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2002
NOTE 8 - SPECIAL ASSESSMENT DEBT WITH GOVERNMENT COMMITMENT
Special assessment debt with government commitment at June 3Q 2002 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, 2002, were as follows.
Interest
Description Rates
Cottonwoods Improvement
Bond 5.25
Outstanding
Principal
Maturity July 1, 2001
1/1/02-09 25 820
Issues/
(Retirements)
3 228
Outstanding
Principal
June 30.2002
General obligation bond debt service requirements to maturity, including $4,153 of
interest, are as follows:
Year ending June 30:
2003
2004
4,160
2005
3,990
2006
3,821
2007
3,651
Thereafter
6,794
26 745
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 DISTRICI BONDS PAYABLE
Community Facilities District bonds payable at June 30, 2002 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, 2002 were as follows.
Interest
Description Rates
Series 1996-A 5.5-6.5
Series 1996-B 7.25
Total long -teen bonds payable
Outstanding
Principal
Maturity July 1, 2001
7/1/03-21 $ 4,435,000
7/1/03-21 470,000
4,905,000
Outstanding
Issues/ Principal
(Retirements) June 30, 2002
-0- 470,000
Community Facilities District bond debt service requirements to maturity, including
$3,763,100 of interest are as follows:
Year ending June 30
2003
$ 453,350
2004
455,475
2005
456,828
2006
457,403
2007
4525170
Thereafter
6,392,874
Community facilities districts (CFDs) are created only by petition to the Town
Council by property owners within 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 JUNE 30, 2002
NOTE 9 - COMMUNITY FACILITIES DISTRICT BONDS PAYABLE (Concl'd)
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 CFD. Because it is the
intention of the CFD 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 -Term
Debt Account Group. A summary of changes in liabilities for compensated absences
for the year ended June 30, 2002, follows.
Balance at July 1, 2001 $ 253,863
Current year increase in liabilities for
compensated absences 21,763
Balance at June 30, 2002 275 626
NOTE 11 - INTERFUND RECEIVABLES AND PAYABLES
As of June 30, 2002, interfund receivables and payables that resulted from various
interfund transactions were as follows:
Due from Due to
Other Funds Other Funds
General Fund $ 129,850
Special Revenue Fund:
HURF Fund -0-
Debt Service Fund:
General Obligation Debt Service Fund -0-
129 850
24
54,978
74,872
129 850
NOTE 12 -BUDGETARY BASIS OF ACCOUNTING
The adopted budget of the Town was prepared on a basis consistent with U.S.
generally accepted accounting principles, with two exceptions. During the year, the
Town assumed operations of the Fountain Hills Fire District which was not budgeted,
and 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:
General Fund
Revenues Expenditures
Other Fund Balance
Financing at Beginning
Sources (Uses) of Year
Combined Statement of
Revenues, Expenditures
and Changes in Fund
Balances $ 14,0887326 $ 125890,037 $ (1,095,980) $ 4,710,061
Fire department activity
not budgeted (2,870,259) (1,8191290) -0- -0-
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
$ 11.218.067 $ 11,070.747 (1.095.9801 4.710.061
Capital Proiects Fund
Other F
und Balance
Total Total Financing at Beginning
Revenues Expenditures Sources (Uses) of Year
$ 1,045,011 $ 15,071,443 $ I3,394,347 $ 1,571,117
(690,724) (80,953) 185,500 (100,329)
$ 354.287 14,990,490 $ 13.579,847 1.470.788
25
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUKE 30, 2002
NOTE 13 - CONTINGENT LIABILITIES
Accumulated Sick 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, 2002, totaled $443,608,
Lawsuits -During fiscal year 2001-2002 the Town was served with three lawsuits
regarding the Town Council action to assume fire and emergency medical services to
the community. The lawsuits were filed on behalf of former Fire District firefighters
who were not offered positions with the Town as well as one citizen who filed on
behalf of the voters right to decide fire services. The citizen lawsuit and one
firefighter lawsuit have subsequently been settled for immaterial amounts; the final
lawsuit on behalf of the firefighters represents a claim for $10 million for breach of
contract and interference with contractual relations. The suit is presently scheduled to
go to court in February, 2003. The Town expects to prevail in this lawsuit but would
be covered by the insurance provider if the claim is determined to be valid.
NOTE 14 - RISKMANAGEMENT
The Town of Fountain Hills, 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 IS -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, 2002 was $3,142,753. The Town's total payroll was $4,156,753.
26
Al.
NOTE 15 -DEFINED COtVTRIBUTIONPENSIONFLAN (Concl'd)
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.
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 2001-02, the Town's required
and actual contributions amounted to $345,703. The employees' contributions totaled
$345,703.
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 2001-02 or as of the close of the fiscal year.
NOTE 16 -RETIREMENT AND 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.
27
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDED RUNE 30, 2002
NOTE 16 - RETIREMENT AND PENSION PLANS (Concl 'd)
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 10.71 % of annual covered payroll.
Annual Pension Cost - During the year ended June 30, 2002, the Town of Fountain
Hill's annual pension cost of $61,102 for police was equal to the Town of Fountain
Hill's required and actual contributions.
The required contribution was determined as part of the June 30, 2001 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, 2002, was 20 years.
The preceding methods comply with the financial reporting standards established by
the Governmental Accounting Standards Board,
Three -Year Trend Information
101
1t3
Fiscal
Annual
Year Ended
Pension
Percent
Net Pension
June 30,
Cost (APCI
Contributed
Obligation
2000
$ 28,639
100.0%
$ -0-
2001
57,277
100.0
-0-
2002
61,102
100.0
-0-
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
llll!I I a I�'• •
29
TOWN OF FOUNTAIN HILLS, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM
ANALYSIS OF FUNDING PROGRESS
Schedule of Funding Progress
Police
Unfunded
Entry Age AAL as a
Valuation Actuarial Actuarial Annual Percentage
Date Value of Accrued Unfunded Funded Covered of Covered
June 30, Assets Liability (AAL) AAL Ratio Payroll Payroll
1996 $ 17,463 $ 163084 $ (1,379) 108.6% $ 777574 %
1997 54,809 48,512 (6,297) 113.0 216,163 -
1998 184,135 1259791 (%344) 148.7 394,005
1999 258,664 263,285 4,621 98.2 412,182 1.1
2000 375,860 401,167 25,307 93.7 556,445 4.5
2001 562,905 409,913 (152,992) 137.3 639,753 -
2002 591,957 557,666 (34,291) 106.1 549,166
30
Statements and Schedules
31
THIS PAGE BLANK
32
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 JUNE 309 2002
Budget
FUND BALANCE
Actual
-
Variance
Favorable
(Unfavorable)
Revenues
Taxes
$ 4,6303000
$ 4,5143607
$ (115,393)
Intergovernmental
4,3571200
4,337,424
(197776)
Fines and forfeitures
318,700
2653605
(53,095)
Licenses and permits
1,839,100
19351,209
(4873891)
Charges for services
202,300
2129230
%930
Rents and royalties
57,300
107,613
503313
Contributions and donations
-
12,760
12,760
Interest
3503000
1473815
(202,185)
Other
12,000
268,804
256,804
Total Revenues
11,766,600
11 218067
(548,5331
Expenditures
Current
General government
Mayor and Town Council
104,660
102,491
2,169
Information Technology
3013190
2135318
87,872
Magistrate Court
330650
337,469
(6,819)
General and Administrative
3,784,100
2,9029894
881,206
Non -departmental
L800,764
248,999
1,551,765
Total General government
6,321,364
34805,171
21516,193
Public safety
Building Safety
60%050
524,116
84,934
Town Marshal
2.6764390
206,852
69,538
Total Public safety
3,285,440
3 130 968
154 472
Culture and recreation
Parks and Recreation
7469940
7407576
67364
Fountain Park
4657690
335,414
130,276
Desert Vista Park
76,500
43,118
335382
Golden Eagle Park
358,230
3177545
40,685
Civic Center
1,0223558
13005,596
163962
Four Peaks/Palisades Court
228,350
116,375
111,975
Community Center
27,100
18,277
8,823
Public Works
680,010
464,587
2153423
Library/Museum
704000
28207
41,793
Total Culture and recreation
3,675,378
3,0694695
6054683
Community development
Engineering Department
8665930
717,332
149,598
Community Development
406,080
347.581
58,499
Total Community development
1,273,010
140645913
208 097
Total Expenditures
14,555,192
11,070,747
34484A45
Excess of revenues over (under) expenditures
_(2,788,5921
147,320
2,935,912
Other financing sources (uses)
Operating transfers out
(2,673,1501
(L095,980)
1,577,170
Total other financing sources (uses)
(2,673,1501
_(L095,9801
15577,170
Excess of revenues and other sources
over (under) expenditures and other uses
(5,4611742)
(948,660)
47513,082
Fund balance, beginning of year
5/4614742
44710,061
(751,6811
Fund balance, end of year
$ -
$_ 3,761,401
$ 3,761401
Highway User Revenue Fund (HURF) -accounts for the Town's share of motor fuel tax revenues
and lottery proceeds.
Grants Fund -accounts for the activities of various grants received by the Town.
35
TOWN OF FOUNTAIN HILLS, ARIZONA
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
AS OF JUNE 303 2002
HURF
Grants Fund
Totals
Assets
Cash and investments
$ -
$
9,862
$ %862
Intergovernmental receivable
141,431
42,849
184,280
Prepaid items
1,456
1.456
Total Assets
$ 142,887
$
52.711
$ 195,598
Liabilities and Fund Balance
Liabilities
Accounts payable
$ 68,299
$
57120
$ 73,419
Accrued wages and benefits
195610
1,864
21,474
Due to other funds
54,978
-
543978
Deferred revenue
45,727
45.727
Total Liabilities
142,887
52,711
195,598
Fund balances
Reserved for prepaid
11456
-
17456
Unreserved, undesignated
(14456)
-
(L456)
Total Fund Balance
Total Liabilities and Fund Balance
$ 142.887
$
52,711
$ 195.598
TOWN OF FOUNTAIN HILLS, ARIZONA
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND
YEAR ENDED JUNE 302 2002
HURF Grants Fund
BALANCES
Totals
Revenues
Intergovernmental
$ 1,369,677
$ 188,575
$ 15558,252
Charges for services
375422
-
371422
Interest
7,647
71647
Total Revenues
11414,746
188,575
116034321
Expenditures
Current
General government
-
54,462
547462
Public safety
-
134,274
134,274
Highways and streets
1,8771790
11877,790
Total Expenditures
1,8774790
188,736
210664526
Excess of revenues over (under) expenditures
(463,044)
(1611
(463,2051
Other financing sources (uses)
Operating transfers in
5885079
-
588,079
Operating transfers out
(134,041)
(134,0411
Total other financing sources (uses)
454,038
-
454,038
Excess of revenues and other sources
over (under) expenditures and other
uses (9,006)
(161)
(%167)
Fund balance, beginning of year
9,006
161
91167
Fund balance, end of year
$
$
$
37
TOWN OF FOUNTAIN HILLS, ARIZONA
HURF SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
BUDGET AND ACTUAL
YEAR ENDED NNE 3% 2002
Budget
IN FUND BALANCE -
Variance
Favorable
Actual (Unfavorable)
Revenues
Intergovernmental
$ 173107000
$ 133693677
$ 593677
Charges for services
405000
37,422
(2,578)
Interest
-
7,647
7,647
Other
500
m
(500)
Total Revenues
1350,500
1,414,746
64,246
Expenditures
Current
Highways and streets
14833396
L877,790
(4443941
Total Expenditures
1,833,396
1,877.790
(44,394)
Excess of revenues over (under) expenditures
(482,896)
(463,044)
19 852
Other financing sources (uses)
Operating transfers in
55%350
588,079
283729
Operating transfers out
(135,000)
(134,041)
959
Total other financing sources (uses)
424350
454,039
29,688
Excess of revenues and other sources
over (under) expenditures and other uses
(589546)
(9,006)
493540
Fund balance, beginning of year
234437
9,006
(14A311
Fund balance, end of year
$ (35,109)
$
$ 35 109
38
TOWN OF FOUNTAIN HILLS, ARIZONA
GRANTS SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
BUDGET AND ACTUAL
YEAR ENDED JUNE 305 2002
Budget
IN FUND BALANCE
Actual
-
Variance
Favorable
(Unfavorable)
Revenues
Intergovernmental
$
7234956
$ 188.575
$ (535.3811
Total Revenues
723,956
188 575
(535,381)
Expenditures
Current
General government
500X0
543462
4452538
Public safety
223,956
134274
89,682
Total Expenditures
723,956
188,736
535,220
Excess of revenues over (under)
expenditures
-
(161)
(161)
Fund balance, beginning of year
161
161
Fund balance, end of year
$
$
$
39
THIS PAGE BLANK
m
r
HURF Debt Service -accounts for operating transfers received from the HgJRF special revenue
fund to pay the debt service of the Street and Highway User Revenue Bonds,
General Obligation (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 305 2002
Eagle Cottonwoods
HURF GO Mountain Special
Debt Service Debt Service Debt Service Assement
MPC
Total
Assets
Cash and investments
$
279182
$ - $
576287810
$
M730
$
-
$
5,666,722
Cash on deposit with paying agent
87,629
11049,451
-
-
7429042
1,879,122
Taxes receivable
-
5L369
14,310
-
-
65,679
Special assessments receivable
-
-
11,700
11,700
Total Assets
$
114.811
$ 1,100.820 $
5,643,120
$
22,430
$
7424042
$
7,623,223
Liabilities and Fund Balance
Liabilities
Accounts payable
$
-
$ 540 $
-
$
-
$
-
$
540
Due to developer
-
-
4,4353000
-
-
434352000
Interest payable
197811
369,451
156,675
593
317,042
8633572
Due to other funds
-
747872
-
-
-
74,872
Deferred revenue
-
373109
105948
11,700
-
597757
General obligation bonds payable
95,000
680,000
-
-
-
775,000
Revenue bonds payable
-
-
-
425.000
425.000
Total Liabilities
114,811
1,1614972
4.602,623
12.293
742 042
64633,741
Fund balances
Unreserved, undesignated
-
(61,152)
14040,497
10,137
989,482
Total Fund Balance
-
(6141521
1,0404497
10,137
989A82
Total Liabilities and Fund Balance
$
114,811
$ L100,820 $
5,643,120
$
22,430
$.
742,042
$
7,623.223
TOWN OF FOUNTAIN HILLS, ARIZONA
DEBT SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2002
Eagle
Cottonwoods
HURF
GO
Mountain
Special
Debt Service
Debt Service
Debt Service
Assessment
MPC
Totals
Revenues
Taxes
$ -
$ 1,340,073
$ 413,962
$ -
$ -
$ 17754,035
Special assessments
-
-
-
4,520
-
4,520
Interest
952
301532
780
3034264
Total Revenues
1,341.025
715,494
54300
2,0611819
Expenditures
Debt service
Principal retirement
$ 95,000
7059987
-
3,228
425,000
11229,215
Interest and fiscal charges
40,861
573251
321,526
593
436,734
1372,965
Total Expenditures
1354861
142794238
3214526
32821
8614734
21602,180
Excess of revenues over
(under) expenditures
L 5.861)
61,787
3937968
11479
(861,734)
(540,361)
Other financing sources (uses)
Operating transfers in
135 861
-
-
861,734
997 595
Total other financing sources (uses)
135,861
-
-
861,734
997 595
Excess of revenues and other sources
over (under) expenditures and other uses
-
61,787
3931968
12479
-
457,234
Fund balance, beginning of year
-
(122,939)
646,529
8,658
-
5323248
Fund balance, end of year
$ -
$ (611
152)
S
11040,497
$ 10,
137
$ -
$ 989.482
43
TOWN OF FOUNTAIN HILLS, ARIZONA
HURF DEBT SERVICE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2002
Budget
IN FUND BALANCE -
Variance
Favorable
Actual (Unfavorable)
Total Revenues
$
$
$
Expenditures
Debt service
Principal retirement
95,000
953000
Interest and fiscal charges
40,000
40,861
(861)
Total Expenditures
135,000
135,861
(861)
Excess of revenues over (under) expenditures
(1354000)
(135,861)
(861)
Other financing sources (uses)
Operating transfers in
135 000
135,861
861
Total other financing sources (uses)
135.000
1357861
861
Excess of revenues and other sources
over (under) expenditures and other uses
Fund balance, beginning of year
Fund balance, end of year
$
$
$
44
STATEMENT
TOWN OF FOUNTAIN HILLS, ARIZONA
GO DEBT SERVICE FUND
OF REVENUES, EXPENDITURES AND CHANGES
BUDGET AND ACTUAL
YEAR ENDED NNE 30, 2002
Budget
IN FUND BALANCE -
Variance
Favorable
Actual (Unfavorable)
Revenues
Taxes
$ 1,3791000
$ I,340,073
$ (383927)
Interest
24650
952
(11698)
Total Revenues
11381,650
1341,025
(404625)
Expenditures
Debt service
Principal retirement
7313000
705,987
25,013
Interest and fiscal charges
839250
573,251
2654999
Total Expenditures
175707250
1,2794238
2914012
Excess of revenues over (under)
expenditures (188,600)
61,787
250,387
Fund balance, beginning of year
188,600
(122,939)
(311,539)
Fund balance, end of year
$ -
$ (67,152)
$ (61,152)
45
TOWN OF FOUNTAIN HILLS, ARIZONA
EAGLE MOUNTAIN DEBT SERVICE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
YEAR ENDED NNE 3% 2002
Variance
Favorable
Budget Actual (Unfavorable)
Revenues
Taxes $ 350,000 $ 4133962 $ 63,962
Interest 301,532 301,532
Total Revenues 350,000 715,494 3654494
Expenditures
Debt service
Interest and fiscal charges 3614650 321,526 40,124
Total Expenditures 361,650 3214526 40,124
Excess of revenues over (under) expenditures (11,650) 393,968 405,618
Fund balance, beginning of year 114650 646,529 634,879
Fund balance, end of year $ $ 1,04O4497 $ 1,040A97
TOWN OF FOUNTAIN HILLS, ARIZONA
COTTONWOODS SPECIAL ASSESSMENT FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
YEAR ENDED NNE 30, 2002
Variance
Favorable
Budget Actual (Unfavorable)
Revenues
Taxes $ 4,500 $ - $ (4,500)
Special assessments - 4,520 45520
Interest 780 780
Total Revenues 41500 5,300 800
Expenditures
Debt service
Principal retirement 37228 3,228 -
Interest and fiscal charges 1,272 593 679
Total Expenditures 4,500 3,821 679
Excess of revenues over (under) expenditures - 13479 15479
Fund balance, beginning of year - 8,658 8,658
Fund balance, end of year $ - $ 10.137 $ 10,137
47
TOWN OF FOUNTAIN HILLS, ARIZONA
MPCFUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
YEAR ENDED NNE 30, 2002
Variance
Favorable
Budget
Actual
(Unfavorable)
Expenditures
Debt service
Principal retirement
Interest and fiscal charges
$ 4503000
667,000
$ 4255000
436 734
$ 253000
230 266
Total Expenditures
1,117,000
861,734
255266
Excess of revenues over (under) expenditures
(1,117,000)
(861,734)
255266
Other financing sources (uses)
Operating transfers in
1,117,000
861734
(255,266)
Total other financing sources (uses)
1, 117,000
861,734
(255,266)
Excess of revenues and other sources
over (under) expenditures and other uses
Fund balance, beginning of year
Fund balance, end of year
$
_
$
$
m
r
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.
TOWN OF FOUNTAIN HILLS, ARIZONA
CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
AS OF JUNE 303 2002
Capital
Projects Fund
Development
Fees
Total
Assets
Cash and investments
$
1535844
$
5245600
$
678,444
Cash on deposit with paying agent
288,744
2884744
Total Assets
$
442.588
$
524.600
$
967,188
Liabilities and Fund Balance
Liabilities
Accounts payable
$
12,149
$
-
$
12,149
Intergovernmental payable
MX7
16.007
Total Liabilities
28,156
28,156
Fund balances
Unreserved, undesignated
414 432
524,600
9399032
Total Fund Balance
414,432
524,600
939,032
Total Liabilities and Fund Balance
$
442.588
$
524,600
$
967.188
50
TOWN OF FOUNTAIN HILLS, ARIZONA
CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2002
Capital
Development
Projects
Fund
Fees
Total
Revenues
Charges for services
$ 12%234
$ 6883928
$ 818,162
Interest
225,053
1,796
2264849
Total Revenues
354,287
690,724
11045,011
Expenditures
Capital outlay
]4,689,554
80,953
14,77Q,507
Debt service
Bond issuance costs
300.936
3002936
Total Expenditures
14,990,490
80 953
15,071,443
Excess of revenues over (under) expenditures
(14,6365203)
609 771
(14,02614321
Other financing sources (uses)
Operating transfers out
(170,153)
(1852500)
(3553653)
Proceeds from sale of bonds
13,750,000
13,750,000
Total other financing sources (uses)
13,579,847
(185,500)
13,394,347
Excess of revenues and other sources
over (under) expenditures and other uses
(1,0563356)
424,271
(632,085)
Fund balance, beginning of year
14470,788
100,329
13571,117
Fund balance, end of year
$ 414.432
$ 524,600
$ 939.032
51
TOWN OF FOUNTAIN HILLS, ARIZONA
CAPITAL PROJECTS FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2002
Budget
IN FUND BALANCE -
Variance
Favorable
Actual (Unfavorable)
Revenues
Charges for services
$ -
$ 129,234
$ 12%234
Interest
225 053
225,053
Total Revenues
3544287
3544287
Expenditures
Capital outlay
15,122,500
14,6899554
4323946
Debt service
Bond issuance costs
300 936
(300,936)
Total Expenditures
15,122,500
14,9904490
132 010
Excess of revenues over (under) expenditures
(151122,5001
(14,636,203)
486297
Other financing sources (uses)
Operating transfers out
-
(1707153)
(1707153)
Proceeds from sale of bonds
13,700,000
13,7504000
50 000
Total other financing sources (uses)
13,700,000
13,579,847
(120,1531
Excess of revenues and other sources
over (under) expenditures and other uses
(1,422,500)
(13056,356)
3665144
Fund balance, beginning of year
1.422,500
11470,788
48288
Fund balance, end of year
$
$ 414,432
$ 414,432
52
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.
53
TOWN
OF FOUNTAIN HILLS, ARIZONA
COMPARATIVE
SCHEDULES OF GENERAL FIXED ASSETS
BY SOURCE
JUNE 3% 2002 AND 2001
2002
2001
GENERAL FIXED ASSETS
Land and improvements
$ 305517,450
$ 16,927,627
Buildings and improvements
9,6559412
L586,640
Improvements other than buildings
533,792
1667953
Furniture, equipment and vehicles
551795021
39286,355
Construction in progress
-
5.51046
Total
$ 45,885.675
$ 27,4824521
INVESTMENT IN GENERAL FIXED
ASSETS BY SOURCE
General Fund
$1135097821
$ 851647057
Special Revenue Funds
1,639,056
1,334,696
Capital Projects Funds
275121096
122759,066
Donations
5,224,702
54224,702
Total
$ 45.885,675
$ 27.482.521
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
AS OF NNE 30, 2002
Improvements Furniture,
Land and Buildings and Other than Equipment and
Improvements Improvements Buildings Vehicles
Construction
in Progress
Total
FUNCTION AND ACTIVITY
General Government
Council
$ -
$ -
$ -
$ 9,842
$ -
$ 95842
Administration
17,639,098
1753407
436,780
1,0355078
-
193286,363
Community Development
-
-
-
482405
-
48,405
Magistrate Court
-
-
14,399
45,631
-
60.030
Total General Government
17,639,098
175,407
4514179
12138,956
19,404,640
Public Safety
Fire Department
-
8903515
57,930
1,410,844
-
273592289
Building Safety
-
-
-
1075597
-
1073597
Town Marshal
522,405
5221405
Total Public Safety
-
890.515
57,930
2.040.846
-
25989,291
Highways and Streets
Engineering
-
-
-
1637942
-
1637942
Maintenance
74,022
3074854
11035,680
1,417.556
Total Highways and Streets
74,022
307,854
-
L199,622
-
14581,498
Culture and Recreation
Community Center
453,618
41400,251
177965
2123500
-
5,084,334
Library l Museum
-
3,369,720
-
346,974
-
357167694
Parks and Recreation
115909,339
511,665
6,718
177,483
-
12,605,205
Public Works
441,373
62,640
504,013
Total Culture and Recreation
124804,332
81281,636
244683
799,597
215910,246
Total
S30,517,450
$ 9,655Al2
$ 533,792
$ 51179,021
$
$45,885,675
55
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
FOR THE YEAR ENDED JUNE 30, 2002
General Fixed
Assets
July 1, 2001 Additions Deletions
General Fixed
Assets
June 30 2002
FUNCTION AND ACTIVITY
General Government
Council
$ 95842
$ - $ -
$ 93842'
Administration
5,5907162
133696,200 -
l%2867362
Community Development
24,960
235445 -
48,405
Magistrate Court
45,631
14 399
60,030
Total General Government
5,670,595
13 734 044
194404,639
Public Safety
Fire Department
-
2,3597289 -
2,3591289
Building Safety
107,597
- -
107,597
Town Marshal
488,025
344380 -
522,405
Total Public Safety
595,622
23934669
2,989,291
I
Highways and Streets
Engineering
145,673
187269 -
1637942
Maintenance
1379,650
374906
1,417556
Total Highways and Streets
14525,323
56,175
11581,498
Culture and Recreation
Community Center
3,9329083
131523251 -
5,084,334
Library l Museum
2,755,443
961,252 -
337165695
Parks and Recreation
123531,859
73,346 -
127605,205
Public Works
471,596
32,417
504 013
Total Culture and Recreation
19,690,981
22194266
21,910,247
TOTAL GENERAL FIXED ASSETS
$ 27.482,521
$ 18 403,154 $ -
$ 45,885.675
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TOWN OF FOUNTAIN HILLS, ARIZONA
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Properly
Franchise
Year
Sales Tax
Tax
Tax
Total
2002
$ 4,355,701
$ 3,109,353
$ 130,694
$ 7,5955748
2001
4,923,174
1,038,891
125,982
67088,047
2000
4,087,514
657,026
131,926
47876,466
1999
3,394,152
348,778
118,407
35861,337
1998
25920,084
302,375
103,748
33326,207
1997
2,664,923
350,024
86,840
3,101,787
1996
1,610,116
336,000
78,345
2,024,461
1995
16,622
357,033
94,848
468,503
1994
-
393,654
943790
488,434
1993
-
423,798
81,956
505,754
60
TOWN OF FOUNTAIN HILLS, ARIZONA
TOWN TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS
BY INDUSTRY CLASSIFICATION
FISCAL YEAR BASIS
(UNAUDITED)
2001 Percent
Excise Tax of
Business Activity Category Collections Total
Construction
$ 231,225
35.3%
Transportation/Utilities/Communication
94,070
14.4%
Wholesale/Retail
19%986
30.6%
Restaurants/Bars
31,273
4.8%
Fire, Insurance and Real Estate
33,073
5.1
%
Services
47,398
7.2%
All Other Services Not Specified
17,027
2.6%
$ 654,052 100.0%
Note: 2001 was the mostsecent information available to the Town.
61
Fiscal
Year
2002
ill
2000
1999
1998
1997
1996
1995
1994
1993
TOWN OF FOUNTAIN HILLS, ARIZONA
PRIMARY AND SECONDARY TAXABLE PROPERTY ASSESSED VALUATION
LAST TEN FISCAL YEARS
(UNAUDITED)
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
Assessed
Valuation
Town of
Fountain Hills
220,229,137
238,714,537
1891646,161
212,027,463
1907102,361
212,415,476
133,721,181
146,943,730
112,2851569
116,333,406
l OOM9,833
103,944,051
94,188,637
100,1611568
87,383,347
88,796,834
85,567,821
87,406,208
83,486,645
84,687,515
Assessed
Valuation
Fountain Hills
School District
$ 2231185,771
242,086,985
1921200,924
214,726j%
191,57%669
214,037,354
134,650,036
147,884,952
113,072,537
117,144,929
1011573,954
104,8811097
95,155,307
101,137,745
88,978,760
K394,390
87,353,865
8%208,873
85,445,505
86,675,510
P =Primary assessed valuation
S =Secondary assessed valuation
Source: Maricopa County and Arizona Tax Research Foundation.
62
Assessed
Valuation
Maricopa
County
$ 219355,326,477
22,913,134,480
1%603,718,629
21J389917,389
1%362,298,255
20,877,715,546
17,463,875,533
18,676,830,848
15,006,270,531
15,723,498,194
13,975,668,204
14,343,156,861
13,493,736,826
14jl%434,946
13,3022326,609
13,521,174,915
131296,003,025
13,50471071816
13,808,814,077
1305,514,589
Assessed
Valuation
State of
Arizona
$ 32,518,431,991
34,4681574,240
30,1445285,019
32,071,7387214
227645,4637514
23,547,348,817
21,670,300,013
22,533,348,150
21,001,064,273
22,333,861,362
22, 811,158,500
23,333,6787475
221109,868,588
23,022,330,962
21,688,438,645
22,1791317,949
21,349,754,194
21,748104Q 198
21,532,550,403
21,934,246,590
TOWN OF FOUNTAIN HILLS, ARIZZONA
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
2002
P
0.97 *
4.33
1.68
0.00
6.98
S
0.56
2.00
0.09
0.00
2.65
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
0.00
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
L60
0.47
6.36
S
0.47
1.51
0.14
0.00
2.12
P =Primary assessed valuation
S =Secondary assessed valua5on
Source: Maricopa County and Arizona Tax Research Foundation.
* The primary tax rate represents the Fountain Hills Fire District and is included with the Town because the Town took
over operations in November 2001.
63
TOWN OF FOUNPAINHILLS, ARIZONA
ASSESSED VALUATION OF MAJOR TAXPAYERS
JUNE 30, 2002
(UNAUDITED)
Taxpayer
Chaparral City Water Company
MCO Properties
US West Communications Inc.
Firerock LLC
Four Peaks Limited Partnership
Safeway Inc. #f1291
Ridgeview Apartments LP
Fountain Hills -Old Vine LP
on at Eagle Mountain LLC
Sunridge Canyon LLC
Source: Treasurer of Maiicopa County
Land Description
Water Utility
Vacant Land
Telephone & Telegraph
Vacant Land
Condominiums
Shopping Center
Apartments
Shopping Center
tel
Drive-in/Golf Course
64
As % ofTown's
2001/02 Total Secondary
Assessed Assessed
Valuation Valuation
$ 3,604,750
1.51
27832,311
1.19%
2,2837136
0.96%
2,083,988
0.87%
1,381,851
0.58%
881,934
0.37%
856,530
0.36%
8462083
0.35%
714,717
0.30%
617,845
0.26%
$16,103,145 6.750/
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPUTATION OF LEGAL DEBT MARGIN
JCiNE 30, 2002
(UNAUDITED)
Net secondary assessed valuation
Water, Sewer, Light, Parks, Open Space
and Recreational Facility Boards
Debf limit - 20 % of secondary net
assessed valuation
Bonds outstanding
Net 20 % General Obligation Bonding Capacity
All Other General Obligation Bonds
Debt limit - 6 % of secondary net
assessed valuation
Bonds outstanding subjectto debtlimit
Net 6 % General Obligation Bonding Capacity
Tota120 % and 6 % Bonding Capacity
Source: Maricopa County Assessor's Office.
$ 238,714,537
$ 47,742,907
10,325,000
37,417,907
14,322,872
3,085,000
11,237,872
$ 48,655,779
TOWN OF FOUNTAIN HILLS, ARIZONA
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
2001-02 205235 $ 2387714,537 $ 13,4101000 5.62% 663
2000-01 20,235 * 212,0277463 8,20%873 3.87% 406
1999-00 18,595 212,4151476 8,6779053 4.08% 467
1998-99 181015 146,943,730 35913,952 2.66% 217
1997-98 16,275 116,333,406 3,883,018 3.34% 239
1996-97 15,220 103,944,051 4,056,473 3.90% 267
1995-96 14,146 100,1611566 4,277,315 4.27% 302
1994-95 13,100 88,796,834 4,1447881 4.67% 316
1993-94 12,005 83,384,908 4,2921389 5.15% 358
1992-93 115265 841687,515 4,461,875 5.27% 396
* Year 2000 U.S. Census
m
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
2001-02
$ 1,229,215
$ 1,372,965
$ 300,936
2000-01
620,408
17086,208
144,986
1999-00
339,013
585,001
-
1998-99
223,024
517,696
54,368
1997-98
245,210
554,731
-
1996-97
222,321
247,311
-
1995-96
209,193
208,477
-
1994-95
125,000
327,463
-
1993-94
1257000
340,493
-
1992-93
125,000
3527913
-
* Includes all Governmental Fund Types.
67
Ratio of
Total
Debt Service to
Debt
Total
To Total
Service
Expenditures*
Expenditures
$ 279037116
$ 325630,186
8.90%
19851,602
21,368,050
8.67%
924,014
15,404,414
6.00%
795,088
11,464,538
6.94%
7993941
106317005
7.52%
4693632
12785%703
3.65%
417,670
7,667,025
5.45%
452,463
49995377
9.05%
465,493
47113,127
11.32%
477,913
61967,798
6.86%
TOWN OF FOUNTAIN HILLS, ARIZONA
DERECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT
JUNE 30, 2002
(UNAUDITED)
Net
2001-02
Outstanding
Net Secondary
General
Assessed
Obligation
Overlapping Jurisdiction
Valuation (1)
Bonded Debt
State of Arizona
$ 34,468,574,240
$ None
Maricopa County
22,91321345480
58,2055000
Maricopa County Community College
District
22,913,134,480
305,750,000
Fountain Hills Unified School
District No. 98
2422086,985
3573053000
East Valley Institute of Technology
District No. 401
11,006,145,846
22,8053000
Fountain Hills Sanitary District
261,895,487
53220,000
Fountain Hills Fire District
None
None
fountain Hills Road District
None
None
Town of Fountain Hills
238,7142537
132410,000
Total Direct and Overlapping GO Bonded Debt
(I) Proportion applicable to the Town of Fountain Hills, Arizona is wmputed on the ratio
of secondazy assessed valuation for 2000-01.
Source: Mazicopa County Treasurers Office.
68
Proportion Applicable to
Town
of Fountain Hills
Approx.
Net Debt
Percent
Amount
0.69%
$
0.98%
570,409
0.98%
2,996350
85.94%
303341417
2.17
100.00%
100.00%
100.00%
100.00%
494,622
5,220,000
13,41Q,000
$ 53,032,499
TOWN OF FOUNTAIN HILLS, ARIZONA
ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
Total
Net
Assessed Value
Tax
Assessed
Exempt
Total Full
Estimated
Assessed
to Total Estimated
Year
Value
Amount
Cash Value
Actual Value
Value
Actual Value
2002
$ 260,635,914
$ 13,4843185
$ 2,2403702,344
$ 23688,8425813
$ 2473151,729
9.69%
2001
23234423986
1232133849
L,9973525,319
2,3973030,383
220,2293137
9.70%
2000
198,224,776
8,578,615
11713,029,238
250553635,086
189,6463161
9.64%
1999
170,2583614
9,255,978
1,4672193,748
1,760632,498
161,0023636
9.67%
1998
1412077,170
71355,989
132082968,752
11450,7623502
133,721,181
9.72%
1997
11828885547
6,6021978
1,00235463459
L2032055,75I
112,285,569
9.88%
1996
1055912,474
5,262,641
89439793322
13061,975,186
10036493833
9.97%
1995
9%2711154
530823517
826,917,659
992,301,191
94,1885637
10.00%
1994
92,301,694
4,918,347
753,1452358
903,774,430
871383,347
10.21%
1993
9032993465
4,731,644
7287255,127
873,9065152
85,5672821
10.33%
SECONDARY
Total
Net
Assessed Value
Tax
Assessed
Exempt
Total Full
Estimated
Assessed
to Total Estimated
Year
Value
Amount
Cash Value
Actual Value
Value
Actual Value
2002
$ 287,891,481
$ 175288,615
$ 27418,2357666
2,901,882,799
$ 2705602,866
9.92%
2001
2533269,562
1425552025
2,154,928,885
25585,9145662
238,714,537
9.79%
2000
2213922,165
918947702
1388930163352
2,266,819,622
2123027,463
9.79%
1999
18535403741
10,575,923
155835072,952
1,89936873542
174,9645818
9.77%
1998
155,729,430
85785,700
1,317,946,863
11581,536,236
146,943,730
9.85%
1997
12320977961
637643555
11034,8927731
L2417871,277
116,3333406
9.91%
1996
109,463,361
515 19,3 10
906,495,406
11087,7943487
1031944,051
10.06%
1995
10536603296
5,4981728
8667122,390
1,039,3463868
10021615568
10.17%
1994
94,047,575
572507741
764,5823686
917,499,223
88,796,834
10.25%
1993
92,4825352
51076,144
74356283593
89233543312
87,4063208
10.36%
(1) Arizona uses two types of property values for taxing purposes. Primary values are used to calculate primary property taxes
which are collected to fund the mainienanceand operafion of school dishicts, community college distdets, 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 overrides and special districts. Source: Arizona Department of Revenue.
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
2001-02
$L335,787
$ 1,2821844
96.04%
$ -
$ 15282,844
96.04%
$ 1495837
11.22%
2000-01
69%006
6765682
96.81%
5,977
682,659
97.66%
51495
0.79%
1999-00
4445138
432,965
97.48%
4,385
437,350
98.47%
814
0,18%
1998-99
2485607
2355953
94.91%
6,301
242,254
97.44%
129
0.05%
1997-98
268,917
2619704
97.32%
7,213
268,917
100.00%
-
0.00%
1996-97
3125638
312,489
99.95%
122
312,611
99.99%
83
0.03%
1995-96
3235517
3235511
100.00%
3
323,514
100.00%
-
0.00%
1994-95
3399832
3395605
99.93%
4
339,609
99.93%
220
0.06%
1993-94
379,779
37%537
99.94%
11
379,548
99.94%
231
0.06%
1992-93
396,610
3973434
100.21%
(412)
3971022
100.10%
-
0.00%
(1) The amount levied and collected is net ofresolukons.
NOTEI: 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.
70
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TOWN OF FOUNTAIN HILLS, ARIZONA
MARICOPA COUNTY ECONOMIC INDICATORS
LAST TEN CALENDAR YEARS
(UNAUDITED)
Value of Building Permits (in Thousands)
Housing
Year Starts Residential Commercial Industrial Other
2001 43,732 $ 5,0881241 $ 2,256,850 $ 345,985 6D 1,641,521
2000 42,205 4,774,188 2,1445767 253,472 1,4935186
1999 47,106 5,142,869 1,8781629 210,676 11092,337
1998 47,801 45778,571 2,230,445 378,141 1,101,269
1997 43,013 3,943,544 1,840,334 233,598 11133,069
1996 3%630 3,508,538 1,422,483 788,083 1,07%458
1995 37,091 3,19%942 1,043,978 413,835 782,609
1994 33,862 3,203,144 959,539 145,310 5847029
1993 24,147 25432,682 54707 50,139 499,052
1992 20,488 2115%844 550,345 39,244 478,990
SOURCE: Arizona Real Estate Center, College of Business, Arizona State University
72
TOWN OF FOUNTAIN H LLS, ARIZONA
DEMOGRAPHIC AND MISCELLANEOUS STATISTICS
JUNE 30, 2002
(UNAUDITED)
DATE OF INCORPORATION
December 5, 1989
FORM OF GOVERNMENT
Council - Manager
NUMBER OF EMPLOYEES (No police and fire)
Classified -Full time
90
Classified - Part time
22
Exempt
19
AREA
18.27 square miles
TOWN OF FOUNTAIN HILLS FACILITIES AND SERVICES
Miles of Street
Surfaced
178.5
Unsurfaced
2
Population (estimated)
20,235
Housing Units
11,601
Building Permits Issued
897
Culture and Recreation
Community Centers
I
Parks
4
Park acreage
121
Tennis Courts
6
Senior Center
I
FACILITIES AND SERVICES NOT INCLUDED IN PRIMARY GOVERNMENT
Fire Protection:
Number of stations
2
Number of fire personnel and officers
26
Number of calls answered
21670
Number of inspections conducted
3,177
Police Protection:
Contracted
Number of stations
I
Number of police personnel and officers
23
Number of patrol units
9
Number of law violations
Physical arrests
503
Traffic/Puking violations
3,186
Sewerage System
Special District
Miles of sanitary sewers
200
Number of treatment plants
1
Number of service connections
10,916
Daily average treatment in gallons
1.7mgd
Maximum daily capacity of treatment plant in gallons
2.6mgd
Water System
Private
Miles of water mains
178
Number of service connections
117448
Number of fire hydrants
11217
Daily average consumption in gallons
4.4mgd
Maximum daily capacity of plant in gallons
11,5709000
Education:
Number of elementary schools
3
Number of secondary schools
1
Number of students - Primary
1,658
Number of Students - Secondary
833
Source: Town government offices and related districts.
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