HomeMy WebLinkAboutFY04 CAFRTOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
______________________________________________________________________
Mr. Wallace J. Nichols
Mayor
Mr. Mike Archambault
Vice Mayor
Councilmembers
Dr. John Kavanagh
Mr. Edwin Kehe
Mr. Keith McMahan
Ms. Kathleen Nicola
Mr. Jay Schlum
Timo thy G. Pickering, CEcD, CM
Town Manager
Julie A. Ghetti, MPA, CPA
Accounting Supervisor
Prepared by:
Financial Services Department
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal
1
List of Principal Officials
8
Organizational Chart
9
GFOA Certificate of Achievement
10
FINANCIAL SECTION
Independent Auditor's Report
13
Management's Discussion and Analysis
15
Basic Financial Statements
Statement of Net Assets
28
Statement of Activities
29
Balance Sheet - Governmental Funds
30
Reconciliation of the Balance Sheet to the Statement of Net Assets -
Governmental Funds
31
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
32
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities - Governmental Funds
33
General Fund Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual
34
Excise Tax Fund Statement of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual
35
Notes to the Basic Financial Statements
37
Required Supplementary Information:
Public Safety Personnel Retirement System
Schedule of Funding Progress
55
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
TABLE OF CONTENTS
Combining and Individual Fund
Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds
59
Combining St atement of Revenues, Expenditures, and
Changes in Fund Balances - Nonmajor Governmental Funds
61
General Obligation Debt Service Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
63
Eagle Mountain Debt Service Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
64
HURF Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
65
Grants Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
66
Municipal Property Corporation Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
67
HURF Debt Service Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
68
Cottonwoods Special Assessment Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
69
Development Fees Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
70
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
TABLE OF CONTENTS
STATISTICAL SECTION
Government-wide information:
Government-wide Expenses by Function
73
Government-wide Revenues
74
Fund Information:
General Government Expenditures by Function
75
General Government Revenues by Source
76
General Governmental Tax Revenues by Source
77
Town Transaction Privilege (Sales) Tax Collections by Industry Classification
78
Property Tax Levies and Collections
79
Assessed and Estimated Actual Value of Property
80
Primary and Secondary Taxable Property Assessed Valuation
81
Property Tax Rates for All Direct and Overlapping Governments
82
Primary and Secondary Property Tax Rates - All Direct and
Overlapping Governments
83
Assessed Valuation of Major Taxpayers
84
Computation of Legal Debt Margin
85
Ratio of Net General Bonded Debt to Assessed Value
and Net Bonded Debt Per Capita
86
Ratio of Annual Debt Service Expenditures to Total General Expenditures
87
Direct and Overlapping General Obligation Bonded Debt
88
Miscellaneous Statistical Data
89
INTRODUCTORY SECTION
THIS PAGE BLANK
December 10, 2004
To the Honorable Mayor, Members of the Governing Council, and Citizens of the
Town of Fountain Hills, Arizona:
State law requires that all general-purpose local governments publish within 120 days of the close
of each fiscal year a complete set of financial statements presented in conformity with Generally
Accepted Accounting Principles (GAAP) and audited in accordance with Generally Accepted
Auditing Standards (GAAS) by a firm of licensed certified public accountants. The
Comprehensive Annual Financial Report (CAFR) of the Town of Fountain Hills, Arizona (Town)
fo r the fiscal year ended June 30, 2004, is hereby submitted. This document represents a joint
effo rt by Town staff as well as our auditors, Cronstrom & Trbovich, P.C.
This report consists of management's representations concerning the finances of the Town of
Fountain Hills. Responsibility for the accuracy of the data and the completeness and fairness of
the presentation, including all disclosures, rests with management. To provide a reasonable basis
fo r making these representations, management of the Town of Fountain Hills has established an
int ernal control framework that is designed to both protect the government's assets from loss,
theft , or misuse and to compile sufficient reliable information for the preparation of the Town's
financial st atements in conformity with GAAP. Because the cost of internal controls should not
outweigh their benefits, the Town's framework of internal controls has been designed to provide
reasonable rather than absolute assurance that the financial statements will be free from material
misst atement. As management, we assert that, to the best of our knowledge and belief, this
financial report is complete and reliable in all material respects. All disclosures necessary for the
reader to understand the Town's activities have been included.
The Town's financial statements have been audited by Cronstrom & Trbovich, PC, a firm of
licensed certified public accountants. The goal of the independent audit was to provide
reasonable assurance that the financial statements of the Town of Fountain Hills, Arizona for the
fiscal year ended June 30, 2004, are free of material misstatement. The independent audit
invo lved examining, on a test basis, evidence supporting the amounts and disclosures in the
financial st atements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent auditor
concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified
opinio n t hat the Town's financial statements for the fiscal year ended June 30, 2004, are fairly
presented in conformity with GAAP. The independent auditor's report is presented as the first
component of the financial section of this report.
1
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The Town of Fountain Hills' MD&A can be found immediately following the
report of the independent auditor.
Town of Fountain Hills Profile
The Town of Fountain Hills is a planned,
family-o riented 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, the Town is surrounded by the 3,500-foot McDowell
Mountains on the west, the Fort McDowell Indian Reservation on the east, the Salt River Indian
Reservation on the south and by the McDowell Mountain Regional Park on the north. Elevation
is 1,520 feet at the fountain, 3,000 feet on Golden Eagle Boulevard, and is 500 feet above
Phoenix.
Over the past thirteen years the Town has grown from 10,190 residents to a town of over 22,000
in 2004. The Maricopa Association of Governments estimates that the population of Fountain
Hills will co nt inue to grow to near 25,000 by 2010. Although the rate of growth has slowed due
to the general downturn of the national economy, the Town continues to attract residents who are
building large custom homes to take advantage of the scenic vistas surrounding its mountain
communit y.
The Town offers a range of living styles, from small community subdivisions to a number of large
custom homes. The Town also offers recreational, cultural and retirement programs that address
the needs and lifestyles of active families and adults. The community primarily consists of
residential property; of the total 11,700 acres of land only 500 acres are zoned commercial
(approximately 4%) and 3,600 acres are reserved as open space (31%).
The Town's Mission Statement for the Organization
The Town of Fountain Hills' purpose is to serve the best interests of the community by:
providing for its safety and well-being;
respecting its special, small-town character and quality of life;
providing superior public services;
sustaining the public trust through open and responsive government; and
maint aining t he stewardship and preservation of its financial and natural resources.
In four words, serve, respect, trust, stewardship.
2
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
wit h t he governmental and administrative affairs of the Town operating under the Council-
Manager form of government. The Town Council is responsible, among other things, for the
adoption of local ordinances, budget adoption, the development of citizen advisory committees
and hiring the Town Manager. The Town Manager is responsible for implementation of the
policies of the Town Council and administering the Town's operations through five department
directors and approximately 77 employees. The Magistrate, Town Attorney and Town
Prosecutor are under the direction of the Town Council.
The Town provides or administers a full range of services including public safety (police, fire,
animal cont rol, building inspection); community development (code enforcement, planning,
zoning and engineering); the construction and maintenance of streets and infrastructure, municipal
court, recreational activities, community center and cultural events. The Town does not maintain
utilit y o r other operations that require the establishment of enterprise funds. The financial
reporting entity (the Town) includes all the funds of the primary government (i.e., the Town of
Fountain Hills as legally defined) as well as all of its component units. The component units
consist of legally separate entities for which the primary government is financially accountable.
Blended component units, although legally separate entities, are, in substance, part of the primary
government's operations and are included as part of the primary government. Accordingly, the
Cottonwoods Maint enance District, the Eagle Mountain Community Facilities District and
Fountain Hills Municipal Property Corporation are included in the financial reports of the Town.
The annual budget serves as the foundation for the Town's financial planning and control. The
Town Council formally adopts the budget and legally allocates, or appropriates, available monies
fo r the General Fund, Highway User Revenue Fund, Special Revenue Funds, Debt Service Funds,
and Capital Projects Funds. Therefore, these funds have appropriated budgets, and budget to
actual information is presented. On or before the second public meeting in May the Town
Manager submits to the Town Council a proposed budget for the fiscal year commencing the
fo llo wing July 1. The budget includes proposed expenditures and the means of financing them.
The Town Council is then required to hold public hearings on the proposed budget and to adopt a
final budget by no later than June 30, the close of the Town's fiscal year. The budget is legally
enacted through passage of an ordinance and is prepared by fund and department. The ordinance
sets the limit for expenditures during the fiscal year. The Town Manager may authorize transfers
from and within personnel and from operating capital to services or supplies within a department.
Additional expenditures may be authorized for expenditures directly necessitated by a natural or
man-made disaster as prescribed in the State Constitution, Article 9, Section 20. During fiscal
year 2003/2004 there were no supplemental budgetary appropriations to the original budget.
3
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the Town of
Fountain Hills operates.
Local economy. Despite the uncertain economic conditions of the nation and slower growth of
the State's economy, the Town's economy remained stable. Local sales tax receipts increased
10% from FY2003 (excluding the rate increase effective 4/1/2003) and building permit activity
increased 33%. Recent development along the commercial corridor includes a Target Store,
PetCo, Pier One, Ross Clothing, Famous Footwear and other national retailers. Future retail
additions anticipated are Discount Tire, Dollar Tree store and a 35,000 square foot office and
retail co mplex. This increase in retail sales tax base will compensate for the decrease in
construction activit y t hat is anticipated in the next several years as the Town approaches build-
out.
The following chart provides a historical perspective of the local sales tax collections over the last
three fiscal years showing the increase in retail activity.
The downtown area of the community is located on Avenue of the Fountains, which will be
designed to revitalize the downtown area and create connectivity to Phase II of the Civic Center
project. Phase I included the construction of a Library/Museum and Community Center during
FY2000 and 2001. Phase II will be completed during FY2005 and includes a new 32,000 square
fo ot Town Hall facilit y t hat will provide a one stop shop for all municipal services. New lighting,
pedestrian walkways, water features and cultural amenities will provide interest for adults and
children.
4
The Town has approved plans for a Holiday Inn resort with 108 rooms that is scheduled to open
in FY 2005 in the downtown area. Another downtown project is the Fountain Hills Resort Villas
wit h 71 condo units and 250 resort rooms (currently in plan review) that will expand tourism
wit hin t he community and bring additional retail tax revenue to Fountain Hills.
Long-term financial planning. A five-year financial and capital improvement plan process has
been init iat ed that will identify projects to be integrated with the annual budget including sources
of funding to pay for them. Additional sources of revenue are being researched to diversify
resources.
The Town recognizes the need to secure reserves for future revenue shortfalls in case of
economic downturns. A large portion of General Fund operating revenue comes from
construction related activity that eventually will be constrained by availability of land. The
Council has adopted a fund balance policy to provide financial stability and ensure that adequate
future reserves are maintained. The policy states:
1.
A contingency fund of no less than 30 days operating expenditures for the upcoming
fiscal year to be designated for unanticipated expenditure or loss of revenue
(contingency).
2.
A designated unreserved fund balance of a minimum of ten percent (10%) of the
average actual revenues for the preceding five fiscal years designated for "pay-as-you-
go" capital.
3.
A reserved fund balance of twenty percent (20%) of the average actual revenues for
the preceding five fiscal years which is unavailable for appropriation.
These amounts will not be programmed for expenditure and are only available for use within the
confines of expenditure limitations imposed by the State. The contingency fund can be used for
unexpected emergencies and projects upon approval by the Town Council. A historical
perspective of past fund reserves is shown below. The general fund reserves recovered
significant ly aft er three years of decline that is reflective of the growth of the local and national
economies, capital project funding and the establishment of a new municipal fire department.
Town Council and management are committed to maintaining and improving the current level of
reserves in the future.
5
The Town Council also adopted financial policies that include guidelines for the issuance of debt
fo r capital expenditures, Community Facility Districts, financing alternatives, expenditure controls
and financial planning. The debt policy was prepared with a preference for "pay-as-you-go"
financing fo r capital spending. An investment policy was adopted and was awarded the
Investment Policy Certification from the Association of Public Treasurers of United States and
Canada.
Cash management policies and practices. State statutes permit municipalit ies in Arizona to
invest in o bligat io ns of the U.S. Treasury, commercial paper, corporate bonds, repurchase
agreements, and the State Treasurer's Local Government Investment Pool (LGIP). The Town's
debt policy restricts investments to securities that are 100% backed by the full faith and credit of
the U.S. government. The Town invests all idle cash in the State LGIP-GOV, which consists of
government-backed securities. The year-to-date yield on investments as of June 30, 2004 was
1.032%. Investment income includes appreciation in the fair value of investments. Increases in
fair value during the current year, however, do not necessarily represent trends that will continue;
nor is it always possible to realize such amounts, especially in the case of temporary changes in
the fair value of investments that the government intends to hold to maturity.
Daily cash deposits are made with the local bank and are maintained for payroll and payables;
these accounts are fully collateralized to $1 million.
Risk management. The Town of Fountain Hills, Arizona is a member of 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 liabilit y o f up to $13,000,000 per occurrence per year. Coverage is provided on a claims-
made basis.
The Arizona Municipal Workers Compensation Fund is the Town's insurance provider for
Wo rkers' Compensation. The rates vary according to the functions performed by personnel.
Retirement plans. The Town of Fountain Hills, Arizona provides two deferred compensation
plans through the International City/County Management Association (ICMA) in accordance with
Internal Revenue Code Sections 401A and 457. The 401A is funded by mandatory employee
wage deductions and matching Town contributions. The 457 is voluntary and funded 100%
through employee participation.
For further information on these plans please refer to Note 4.D in the financial statements.
Awards and acknowledgements. The Government Finance Officers Association (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of
Fountain Hills, Arizona for its comprehensive annual financial report (CAFR) for the fiscal year
ended June 30, 2003. This was the eighth 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.
6
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
submit ting it to the GFOA to determine its eligibility for another certificate.
In addition, the government also received the GFOA's Distinguished Budget Presentation Award
fo r its annual budget document dated June 19, 2003. In order to qualify for the Distinguished
Budget Presentation Award, the government's budget document was judged to be proficient in
several categories, including as a policy document, a financial plan, an operations guide, and a
communications device.
The preparation of this report would not have been possible without the efficient and dedicated
services of the entire staff of the Finance and Administration Department. I would also like to
extend my appreciation to the Mayor and Council for their leadership and support. Each member
of the department has my sincere appreciation for the contributions made in the preparation of this
report.
Respectfully submitted,
Timo thy G. Pickering, CEcD, CM
Town Manager
7
TOWN OF FOUNTAIN HILLS, ARIZONA
LIST OF PRINCIPAL OFFICIALS
ELECTED OFFICIALS
Mayor
Mr. Wallace J. Nichols
Vice-Mayor
Mr. Mike Archambault
Councilmember
Dr. John Kavanagh
Councilmember
Mr. Edwin Kehe
Councilmember
Mr. Keith McMahan
Councilmember
Ms. Kathleen Nicola
Councilmember
Mr. Jay Schlum
DEPARTMENT DIRECTORS
Town Manager
Timo thy G. Pickering
Magistrate
Ted Armbruster
Public Works Director
Tom Ward
Parks & Recreation Director
Mark Mayer
Fire Chief
Mark Zimmerman,
Rural Metro Corporation
District Commander
Captain John Kleinheinz,
Maricopa County Sheriff's Office
Town Prosecutor
Iacovino & Kayler
Town Attorney
Andrew McGuire,
Jorden Bischoff McGuire
8
org chart
9
GFOA Certificate
10
FINANCIAL SECTION
11
THIS PAGE BLANK
12
INDEPENDENT AUDITOR'S REPORT
The Honorable Mayor and the Town Council of the
Town of Fountain Hills, Arizona
We have audited the accompanying financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information of the Town of Fountain Hills, Arizona
(Town), as of and for the year ended June 30, 2004, which collectively comprise the Town's basic
financial st atements as listed in the table of contents. These financial statements are the
responsibility of the Town's management. Our responsibility is to express an opinion on these
financial st atements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial st atements. An audit also includes assessing the accounting principles used and
significant estimat es made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinio n, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, each major fund, and the aggregate
remaining fund information of the Town of Fountain Hills, Arizona, as of June 30, 2004, and the
respective changes in financial position, thereof and the respective budgetary comparison for the
General and Excise Tax Funds for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
A prior period adjustment is presented in Note 3.A to correct an error in the previously issued
financial st atements.
The management's discussion and analysis on pages 15 - 25 and the Public Safety Personnel
Retirement System Schedule of Funding Progress on page 55 are not a required part of the basic
financial st atements but are supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it.
13
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Town's basic financial statements. The introductory section, combining
and individual fund financial statements and schedules and statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements. The
combining and individual fund financial statements and schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, are
fairly st ated in all mat erial respects in relation to the basic financial statements taken as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion on
them.
Cronstrom & Trbovich, P.C.
December 10, 2004
14
Management's Discussion and Analysis
We (the Town of Fountain Hills, Arizona) are pleased to provide an overview of our financial
activit ies fo r the fiscal year ended June 30, 2004. The intended purpose of the Management's
Discussion and Analysis (MD&A) is to provide an introduction to the basic financial statements
and notes, that provides an objective and easy to read analysis of our financial activities based on
currently known facts, decisions, and conditions, by providing an easily readable summary of
operating results and reasons for changes, which will help to determine if our financial position
improved or deteriorated over the past year. This report addresses current operational activities,
the sources, uses, and changes in resources, adherence to budget, service levels, limitations,
significant economic factors, and the status of infrastructure and its impacts on our debt and
operations. When referring to prior years' data in this analysis we will be drawing upon
info rmation from last years audited financial reports.
Financial Highlights
¨The assets of the Town exceeded its liabilities at the close of the most recent
fiscal year by $25,709,232 (net assets). Of this amount $7,976,113
(unrestricted net assets) may be used to meet the government's ongoing
obligations to citizens and creditors.
¨As of the close of the current fiscal year, the Town's governmental funds
reported combined ending fund balances of $12,871,628, an increase of
$4,308,750 in co mparison with the prior year.
¨At the end of the current fiscal year, unreserved fund balance for the general
fund was $6,293,941 or 61 percent of total general fund expenditures. The
fund balance policy adopted by the Council in May, 2003 requires a minimum
of $4,469,191 in designated, undesignated and reserve funds; the general fund
will co nt ribute $2,333,563 to the fund balance in the upcoming fiscal year.
¨General fund revenues (on a budgetary basis) exceeded budgeted revenues by
$964,938 fo r fiscal year 2004. Additionally, budgetary basis expenditures were
only 85%($1,763,892 (15%) in savings) of the final budget in the General
Fund.
¨General fund revenues exceeded expenditures by $3,243,813; a positive
variance of $2,728,830 from the original budget.
¨The Town includes two types of separate legal entities in its report - a
Municipal Property Corporation and Community Facilities Districts. Although
legally separate, these "component units" are important because the Town is
financially accountable for them. A description of these three component units
is available in Note 1 on page 37. Separate Financial Statements are not
available for these entities.
15
Overview of the Financial Statements
The Town implemented the Governmental Accounting Standards Board (GASB) Statement 34 -
Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments (the new model) with the financial statements for the year ended June 30, 2003.
The new model contained sweeping changes to the requirements for governmental reporting. The
majo r changes were as follows:
¨Government-wide reporting - while governments have traditionally focused
reporting on groupings of funds (i.e. General Fund, Special Revenue Funds,
Capital Project Funds, etc.), the new model also contains financial statements on a
government-wide basis.
¨Fund financial statements - the new model maintains governmental, proprietary and
fiduciary fund financial statements, but the focus is on major funds within each
fund type.
¨New focus for governmental activities - in the government-wide financial
statements all activities, including the governmental activities, are reported using
the economic resources measurement focus and accrual basis of accounting. The
traditional current financial resources focus and modified accrual basis of
accounting are maintained for the governmental fund financial statements in the
new model.
¨Infrastructure reporting - the new model requires governments to report the value
of infrastructure assets of governmental activities (roads, bridges, storm drainage
syst ems, parks, street lighting, etc.). These assets are reported in the governmental
activit ies on the government-wide financial statements. The Town has historically
capitalized assets for governmental activities that were reported in the General
Fixed Assets Account Group and were not depreciated under the old reporting
mo del.
¨Changes in budgetary reporting - the new model requires the display of both the
original adopted budget and the amended budget, if applicable, in the budgetary
comparison schedules. These schedules are only required for the general fund and
majo r special revenue funds, although they may be presented for other funds as
additional information.
¨Required narrative analysis - the new model requires that the financial statements
be accompanied by narrative introduction and analytical overview of the
government's financial activities in the form of "Management's Discussion and
Analysis" (MD&A).
16
Required C omponents of the
Annual Financial Report
Sum mary Detail
Managem ent’s
Discussion
and
Analysis
Basic
Financial
Statem ents
Required
Supplem entary
In fo rm ation
Governm ent-
Wide
Financial
Statem ents
Fund
Financial
Statem ents
Notes
To the
Financial
Statem ents
As pictured above, the financial section of the Comprehensive Annual Financial Report (CAFR)
fo r the Town of Fountain Hills, Arizona consists of this discussion and analysis, the basic financial
statements and the required supplementary schedules presented after the basic financial
statements. The basic financial statements include the government-wide financial statements, fund
financial st atements, including the budgetary statements for the general fund and major special
revenue funds, and notes to the financial statements.
Government-wide financial statements
The government-wide financial statements are designed to provide readers with a broad overview
of the Town's finances, in a manner similar to private-sector business.
The statement of net assets presents information on all of the Town's assets and liabilities, with
the difference between the two reported as net assets. Over time, increases or decreases in net
assets may serve as useful indicators of whether the financial position of the Town is improving or
deteriorating.
The statement of activities presents information showing how the government's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash
flo ws in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide financial statements distinguish functions of the Town that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions
that are int ended to recover all or a significant portion of their costs through user fees and charges
(business-type activities). The governmental activities of the Town include general government,
communit y development, public safety, highways and streets, and culture and recreation. The
Town does not have any business-type activities.
17
The government-wide financial statements can be found on pages 28 - 29 of this report.
Fund financial statements
Also presented are the traditional fund financial statements for governmental funds. The fund
financial st atements now focus on major funds of the Town, rather than fund type used in the old
mo del. A fund is a grouping of related accounts that is used to maintain control over resources
that have been segregated for specific activities or objectives. The Town, like other state and
lo cal governments, uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. All of the funds of the Town are included in the governmental funds.
Governmental funds
Governmental funds - Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike
the government-wide financial statements, governmental fund financial statements focus on near-
term inflo ws and outflows of spendable resources, as well as balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a
government's near-term financing requirements. Since the governmental fund financial statements
fo cus on near-term spendable resources, while the governmental activities on the government-
wide financial statements have a longer term focus, a reconciliation of the differences between the
two is provided following the fund financial statements' balance sheet and statement of revenues,
expenditures and changes in fund balances, respectively.
Notes to the basic financial statements
The notes to the basic financial statements (pages 37 - 53) provide additional information that is
essential to a full understanding of the data provided in the government-wide and fund financial
statements and should be read with the financial statements.
Required supplementary information other than MD&A
Governments have an option of including the budgetary comparison statements for the general
fund and major special revenue funds as either part of the fund financial statements within the
basic financial statements, or as required supplementary information after the footnotes. The
Town has chosen to present these budgetary statements as part of the basic financial statements.
Additionally, governments are required to disclose certain information about employee pension
funds. The Town has disclosed this information in Note 4.D to the basic financial statements.
Government-Wide Financial Analysis
Net assets may serve over time as useful indicators of a government's financial position. The
fo llo wing table reflects the condensed Statement of Net Assets of the Town for June 30, 2004
compared to the prior year.
18
Town of Fountain Hills, Arizona
Condensed Statement of Net Assets
As of June 30, 2004
Governmental Activities
2004
2003
Percent
Change
Assets
Current and other assets
$21,638,047 $16,801,782 %28.8
Capital assets
Non-depreciable
23,571,668 23,571,668 %-
Depreciable (net)
16,485,725 17,071,272 %(3.4)
Total assets
61,695,440 57,444,722 %7.4
Liabilities
Other liabilities
8,338,841 7,307,826 %14.1
Non-current liabilities
Due within one year
1,603,159 1,484,604 %8.0
Due in more than one year
26,044,208 27,489,398 %(5.3)
Total liabilities
35,986,208 36,281,828 %(0.8)
Net assets
Invested in capital assets,
net of related debt
11,261,256 11,843,575 %(4.9)
Restricted
6,471,863 6,681,170 %(3.1)
Unrestricted
7,976,113 2,638,149 %202.3
Total net assets
$25,709,232 $21,162,894 %21.5
The combined net assets of the Town increased by 21.5% from $21.2 million to $25.7 million in
fiscal year 2004, a difference of $4.5 million in governmental activities. The Town does not
currently have any proprietary or enterprise funds that would otherwise be classified as business-
type activities. All Town funds are considered governmental activities.
Net Assets consist of three components. The largest portion of the Town's net assets (44%)
reflects its investment in capital assets (e.g., land, buildings, machinery and equipment), less any
related debt used to acquire those assets that is still outstanding. The Town uses these capital
assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the Town's investment in its capital assets is reported net of related debt, it
should be noted that the resources needed to repay this debt must be provided from other sources,
since the capital assets themselves cannot be used to liquidate these liabilities. This category of
net assets decreased $582,319 in fiscal year 2004 primarily as a result of depreciation of the
capital assets.
The second portion of the Town's net assets (25%) represents resources that are subject to
external restrictions on how they may be used.
The remaining balance of unrestricted net assets ($7,976,113) may be used to meet the
government's ongoing obligations to citizens and creditors. This category increased $5,337,964
in fiscal year 2004 primarily due to increases to reserves.
19
At the end of the current fiscal year, the Town of Fountain Hills, Arizona is able to report positive
balances in all three categories of net assets for the government as a whole.
Analysis of changes in net assets
The program revenues (charges for services and grants that are clearly identifiable to an operating
function) of governmental activities increased $531,634 (12%) from the previous year, primarily
due to increased building related activity. Total governmental revenues increased $1.5 million
primarily due to increased local sales tax collections derived from an increase in the local tax rate.
Program expenses decreased in public safety with the reduction from a dual law enforcement
syst em t o a single contract provider.
The following table compares the revenue and expenses for the current and previous fiscal year.
Town of Fountain Hills, Arizona
Changes in Net Assets
For the Year Ended June 30, 2004
Governmental Activities
2004
2003
Percent
Change
Revenues
Program revenues
Fees, fines and charges for services
$3,421,132 $2,782,385 %23.0
Operating grants and contributions
1,590,787 1,697,900 %(6.3)
General revenues:
Property taxes
2,195,856 1,905,770 %15.2
Local taxes
7,860,005 5,204,414 %51.0
State shared revenues
4,489,844 4,740,758 %(5.3)
Investment earnings
122,082 1,976,809 %(93.8)
Other
195,978 79,706 %145.9
Total revenues
19,875,684 18,387,742 %8.1
Expenses
General government
3,686,452 3,479,333 %6.0
Public safety
4,918,280 5,494,708 %(10.5)
Highways and streets
1,419,509 1,310,683 %8.3
Culture and recreation
2,068,613 2,363,897 %(12.5)
Community development
1,144,964 1,235,985 %(7.4)
Interest on long-term debt
1,499,575 1,576,842 %(4.9)
Total expenses
14,737,393 15,461,448 %(4.7)
Increase in net assets
5,138,291 2,926,294 %75.6
Net assets, beginning of year (as restated)
20,570,941 18,236,600 %12.8
Net assets, end of year
$25,709,232 $21,162,894 %21.5
20
Governmental activities.The following graph illustrates the Town's government-wide revenue
resources that were previously discussed in a comparative analysis of government-wide revenues,
expenses and changes in net assets. Governmental activities account for 100% of the total
revenues and expenditures of the Town. The largest financing source for the Town is the local
sales tax (38%) and state shared revenues account for 23% of the government-wide revenue
sources.
Financial analysis of the Town's funds
The focus of the Town's governmental funds is to provide information on near-term inflows,
outflo ws, and balances of resources that are available for spending. Such information is useful in
assessing the Town's financing requirements. In particular, unreserved fund balance may serve as
a useful measure of a government's net resources available for spending at the end of the fiscal
year. Types of Governmental funds reported by the Town include the General Fund, Special
Revenue Funds, Debt Service Funds and Capital Project Funds.
As a measure of the general fund's liquidity, it may be useful to compare both general fund
balance and total fund balance to total fund expenditures. General fund balance represents 41
percent of total fund expenditures, while total fund balance represents 83 percent of that same
amo unt.
21
The fund balance of the Town's general fund increased by $2,333,563 during the current fiscal
year. Key factors in this change are as follows:
¨General Fund revenues exceeded projections by $964,938 (primarily due to
building-related activity and state sales tax); expenditures were $1,763,892 less
than projected due to expenditures delayed until next fiscal year.
¨A Budget Reduction Plan was implemented in February 2003 as a result of
declining revenues and the addition of a fire department; the majority of the plan
remains in place.
As of the end of the fiscal year 2004 the Town's governmental funds reported combined ending
fund balances of $12,871,628, an increase of $4,308,750 over the prior year. Approximately 49%
of this t otal amo unt $6,371,426 constitutes general fund balance, which is available for
contribution to the designated, undesignated and reserved fund balance. At fiscal year-end 2003-
2004 fund balances were as follows:
Fund
Balance
Increase
(Decrease)
From 2002-03
General Fund
$6,371,426 $2,333,563
Excise Tax Fund
2,432,170 519,766
General Obligation Debt Service Fund
268,842 204,609
Eagle Mountain Debt Service Fund
261,530 62,770
Nonmajor Governmental Funds
3,537,660 1,188,042
The Excise Tax Fund is a dedicated portion of the local sales tax (0.4%) that can only be used for
debt retirement of Municipal Property Corporation bonds and expenses relating to development
of the downtown area. Revenues have exceeded the expenditures each year; the surplus will
continue to accumulate in the fund for possible future defeasance of outstanding bonds.
All no nmajo r governmental funds of the Town are combined into one column on the
governmental fund statements.
The Highway User Revenue Fund, included with the nonmajor governmental funds of the Town,
is required by state statute to track the state allocation of gasoline taxes and other state revenues
shared with local governments and required to be used for transportation purposes. Revenue in
this fund increased $81,913 (6%) in fiscal year 2004 due to the increase in state shared revenues.
Expenditures increased $127,993 from the prior year due to increased expenses for road
maint enance.
Nonmajor governmental funds of the Town also include the Capital Projects Fund, consisting of
governmental impact (development) fees for streets and highways, parks and recreation, law
enforcement, general government and open space. This is a restricted fund and may only be
appropriated for the particular purpose for which they were imposed. The fund balance as of
June 30, 2004 in this fund is $1,740,295; expenditures were made in FY2004 for open space
(trailhead design) and recreation (Fountain Park Phase II).
22
Budgetary highlights
The Town's annual budget is the legally adopted expenditure control document of the Town.
Budgetary comparison statements are required for the General Fund and all major special revenue
funds and may be found on pages 34 - 35. These statements compare the original adopted
budget, the budget if amended throughout the fiscal year, and the actual expenditures prepared on
a budgetary basis. The Town did not amend its budget during the fiscal year.
General Fund revenues of $13,643,823, on a budgetary basis, exceeded budgeted revenues of
$12,678,885 by $964,938 while budgetary basis expenditures of $10,400,010 were only 85% of
budgeted expenditures (savings of $1,763,892). The excess of revenues over budgeted revenues
is primarily due to better than expected building permit activity and greater State Sales Tax
revenues. The expenditure savings were derived from capital project costs in Fountain Park that
were not completed ($652,468), a budgeted General and Administrative expenditure for a sales
tax refund that has been referred for a tax hearing ($400,000) as well as organizational vacancy
savings ($170,000) and landscape maintenance savings ($55,000). The Town staff is committed
to maint aining t he level of service without jeopardizing future infrastructure or capital.
Capital asset and debt administration
The Town's capital assets for its governmental activities as of June 30, 2004 amount to
$40,057,393 (net of accumulated depreciation), a decrease from 2003 of 1.4%. For government-
wide financial statement presentation, all depreciable capital assets were depreciated from
acquisition date to the end of the current fiscal year. Fund financial statements record capital
asset purchases as expenditures. See Note 3.B.3 in the Notes to the Basic Financial Statements
fo r further information regarding capital assets.
The Town recorded its capital assets as part of the general fixed asset account group in past years
as they were acquired or constructed. Capital assets include land, buildings and improvements,
machinery and equipment, roads and improvements, vehicles, office and computer equipment.
During fiscal year 2003-2004 the annual depreciation expense was $977,496. The following table
provides a comparison of current and prior year capital assets.
Town of Fountain Hills, Arizona
Capital Assets at June 30, 2004
(Net of depreciation)
Governmental Activities
2004
2003
Percent
Change
Land
$23,571,668 $23,571,668 %-
Buildings and improvements
9,559,273 9,514,951 %0.5
Improvements other than buildings
5,397,938 5,711,469 %(5.5)
Infrastructure
451,888 377,221 %19.8
Furniture, machinery and equipment
582,890 728,500 %(20.0)
Vehicles
493,736 739,131 %(33.2)
$40,057,393 $40,642,940 %(1.4)
23
Long-term debt
At the end of the current fiscal year, the Town had total long-term obligations outstanding of
$27,647,367 with no debt issued during the year. Of the outstanding debt, $11,740,000 is general
obligation bonds backed by the full faith and credit of the Town. An additional $4,615,000 of
special assessment bonds are backed by a guaranteed investment contract with the developer of
the district property. All o ther outstanding debt is secured by pledges of specific revenue sources
of the Town.
The State imposes certain debt limitations on the Town of six percent (6%) and twenty percent
(20%) of the outstanding secondary net assessed valuation of the Town. The Town's available
debt margin at June 30,2004 is $16,988,114 in t he 6% capacity and $55,352,046 in t he 20%
capacity. Additional information on the debt limitations and capacities may be found in the
statistical section of this report (page 85).
The following schedule shows the outstanding debt of the Town (both current and long-term) as
of June 30,2003 and 2004. Further detail on the Town's outstanding debt may be found in Note
3.E on pages 49 - 50.
Town of Fountain Hills, Arizona
Outstanding Debt at June 30, 2004
Governmental Activities
2004
2003
Percent
Change
General Obligation Debt
$11,110,000 $11,865,000 %(6.4)
Highway User Revenue Bonds
630,000 720,000 %(12.5)
Special Assessment Debt
16,137 19,365 %(16.7)
Community Facilities District
Debt
4,615,000 4,765,000 %(3.1)
Municipal Property
Corporation Debt
11,005,000 11,430,000 %(3.7)
Compensated Absences
271,230 174,637 %55.3 $27,647,367 $28,974,002 %(4.6)
The Town currently maintains a rating on its general obligation debt of Aa3 from Moody's
Investor Services.
Economic factors and next year's budgets and rates
The Town of Fountain Hills, Arizona, as well as all other Arizona cities, remains dependent on
state shared revenues (33%) and local sales taxes for resources (49%). These revenue sources are
sensitive to economic downturns and legislative appropriations. The Town's economic activity
has remained fairly stable during the national recession and is expected to continue to grow at a
mo derate pace over the next year, fueled primarily by the residential construction industry. The
Town of Fountain Hills, Arizona has a number of high-end properties that are currently being
developed for custom homes.
24
The budget for fiscal year 2004-2005 includes resources targeted towards economic development
in t he downtown area (Avenue of the Fountains). An economic development coordinator has
been hired and capital funds for improvements to the area are included to focus on developing the
area to promote economic development.
Financial contact
This financial report is designed to provide a general overview of the Town's finances for all of
those with an interest in government's finances and to demonstrate accountability for the use of
public funds. Questions about any of the information provided in this report, or requests for
additional financial information should be addressed to:
Town of Fountain Hills
Accounting Department
P.O. Box 17958
Fountain Hills, AZ 85269
Or visit our website at:
ht tp://www.fh.az.gov
25
THIS PAGE BLANK
26
Basic Financial Statements
27
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF NET ASSETS
JUNE 30, 2004
Governmental Activities
Assets
Cash and equivalents
$17,477,529
Cash with paying agent
2,342,129
Receivables, net
Accounts receivable
444,828
Taxes receivable
83,646
Intergovernmental receivable
1,207,303
Special assessments receivable
5,127
Inventories
10,517
Prepaid items
66,968
Capital assets
Non-depreciable
23,571,668
Depreciable (net)
16,485,725
Total assets
61,695,440
Liabilities
Accounts payable
903,465
Accrued wages and benefits
118,419
Interest payable
744,778
Intergovernmental payable
50,000
Deposits payable
25,000
Due to developers
5,077,179
Matured debt principal payable
1,420,000
Noncurrent liabilities
Due within one year
1,603,159
Due in more than one year
26,044,208
Total liabilities
35,986,208
Net assets
Invested in capital assets, net of related debt
11,261,256
Restricted for
Public safety
168,885
Highways and streets
331,560
Debt service
1,018,867
Capital outlay
2,382,386
Other
2,570,165
Unrestricted
7,976,113
Total net assets
$25,709,232
The notes to the financial statements are an integral part of this statement.
28
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Program Revenues
Net (Expenses)
Revenue and
Changes in Net
Assets
Expenses
Fees, Fines and
Charges for
Services
Operating
Grants and
Contributions
Totals
Functions/Programs
Governmental activities
General government
$3,686,452 $3,388,923 $-$(297,529)
Public safety
4,918,280 -75,000 (4,843,280)
Highways and streets
1,419,509 28,597 1,515,787 124,875
Culture and recreation
2,068,613 --(2,068,613)
Community development
1,144,964 --(1,144,964)
Interest on long-term debt
1,499,575 3,612 -(1,495,963)
Totals
$14,737,393 $3,421,132 $1,590,787 (9,725,474)
General revenues
Taxes
Sales taxes
7,733,643
Property taxes
2,195,856
Franchise taxes
126,362
State revenue sharing
1,967,973
State sales tax revenue sharing
1,702,374
Auto lieu tax revenue sharing
819,497
Investment earnings
122,082
Other - not program
195,978
Total general revenues
14,863,765
Change in net assets
5,138,291
Net assets, beginning of year (as restated)
20,570,941
Net assets, end of year
$25,709,232
The notes to the financial statements are an integral part of this statement.
29
TOWN OF FOUNTAIN HILLS, ARIZONA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2004
General
Excise Tax
General
Obligation
Debt Service
Eagle
Mountain
Debt Service
Nonmajor
Governmental
Funds
Totals
Assets
Cash and equivalents
$5,853,264 $2,351,692 $253,559 $5,624,482 $3,394,532 $17,477,529
Cash with paying agent
--1,057,064 -1,285,065 2,342,129
Accounts receivable
434,237 ---10,591 444,828
Taxes receivable
12,748 -52,986 17,912 -83,646
Intergovernmental receivable
949,220 137,022 --121,061 1,207,303
Special assessments receivable
----5,127 5,127
Due from other funds
3,514 ----3,514
Inventories
10,517 ----10,517
Prepaid items
66,968 ----66,968
Total assets
$7,330,468 $2,488,714 $1,363,609 $5,642,394 $4,816,376 $21,641,561
Liabilities and Fund Balances
Liabilities
Accounts payable
$460,789 $54,922 $594 $-$387,160 $903,465
Accrued wages and benefits
98,859 1,622 --17,938 118,419
Interest payable
--302,064 152,737 289,977 744,778
Intergovernmental payable
---50,000 -50,000
Due to other funds
----3,514 3,514
Deferred revenue
374,394 -37,109 10,948 5,127 427,578
Deposits payable
25,000 ----25,000
Due to developers
---5,017,179 60,000 5,077,179
Matured debt principal payable
--755,000 150,000 515,000 1,420,000
Total liabilities
959,042 56,544 1,094,767 5,380,864 1,278,716 8,769,933
Fund balances
Reserved for inventories
10,517 ----10,517
Reserved for prepaid items
66,968 ----66,968
Unreserved
6,293,941 2,432,170 268,842 261,530 -9,256,483
Unreserved, reported in nonmajor
Special revenue funds
----666,779 666,779
Debt service funds
----488,495 488,495
Capital projects funds
----2,382,386 2,382,386
Total fund balances
6,371,426 2,432,170 268,842 261,530 3,537,660 12,871,628
Total liabilities and fund balances
$7,330,468 $2,488,714 $1,363,609 $5,642,394 $4,816,376 $21,641,561
The notes to the financial statements are an intergral part of this statement.
30
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
JUNE 30, 2004
Fund balances - total governmental funds
$12,871,628
Amounts reported for governmental activities in the statement of net assets are different because:
Property taxes not collected within 60 days subsequent to fiscal year-end are deferred in the
governmental funds.
113,610
Capital assets used in governmental activities are not financial resources and therefore are not reported
in the governmental funds.
Governmental capital assets
45,082,942
Less accumulated depreciation
(5,025,549)
Capital assets used in governmental activities
40,057,393
Other long-term assets are not available to pay for current-period expenditures and are not susceptible
to accrual.
313,968
Long-term liabilities, including bonds payable, are not due and payable in the current period and
therefore are not reported in the governmental funds.
General obligation bonds
(11,740,000)
Revenue bonds
(11,005,000)
Special assessment debt with government commitment
(16,137)
Community facilities district bonds payable
(4,615,000)
Compensated absences
(271,230)
Net assets of governmental activities
$25,709,232
The notes to the financial statements are an integral part of this statement.
31
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
General
Excise Tax
General
Obligation Debt
Service
Eagle Mountain
Debt Service
Nonmajor
Governmental
Funds
Totals
Revenues
Taxes
Sales taxes
$6,543,988 $1,189,655 $-$-$-$7,733,643
Property taxes
--1,563,508 574,193 -2,137,701
Franchise taxes
126,362 ----126,362
Intergovernmental
4,489,844 ---1,590,787 6,080,631
Fines and forfeitures
192,150 ---169,189 361,339
Licenses and permits
1,600,934 ----1,600,934
Charges for services
167,749 ---870,421 1,038,170
Rents and royalties
242,704 ----242,704
Special assessments
----3,612 3,612
Investment earnings
68,823 23,473 1,415 3,391 24,980 122,082
Other
211,269 ---50,292 261,561
Total Revenues
13,643,823 1,213,128 1,564,923 577,584 2,709,281 19,708,739
Expenditures
Current
General government
3,125,413 96,701 -55,000 337,344 3,614,458
Public safety
4,598,934 ---17,227 4,616,161
Highways and streets
----1,402,502 1,402,502
Culture and recreation
1,530,699 ---66,451 1,597,150
Community development
1,144,964 ----1,144,964
Debt Service
Principal retirement
--755,000 150,000 518,228 1,423,228
Interest on long-term debt
--605,314 309,814 584,447 1,499,575
Capital outlay
----101,951 101,951
Total Expenditures
10,400,010 96,701 1,360,314 514,814 3,028,150 15,399,989
Excess (deficiency) of revenues over expenditures
3,243,813 1,116,427 204,609 62,770 (318,869)4,308,750
Other financing sources (uses)
Transfers in
----1,630,907 1,630,907
Transfers out
(910,250)(596,661)--(123,996)(1,630,907)
Total other financing sources (uses)
(910,250)(596,661)--1,506,911 -
Net change in fund balances
2,333,563 519,766 204,609 62,770 1,188,042 4,308,750
Fund balances, beginning of year (as restated)
4,037,863 1,912,404 64,233 198,760 2,349,618 8,562,878
Fund balances, end of year
$6,371,426 $2,432,170 $268,842 $261,530 $3,537,660 $12,871,628
The notes to the financial statements are an intergral part of this statement.
32
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Net change in fund balances - total governmental funds
$4,308,750
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities the
cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.
Expenditures for capital assets
391,949
Less current year depreciation
(977,496)
Excess capital expenditures over depreciation
(585,547)
Some revenues reported in the statement of activities do not provide current financial resources and
therefore are not reported as revenues in governmental funds.
Court fines
108,790
Property taxes
58,155
The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the current financial resources
of governmental funds. Neither transaction, however, has any effect on net assets. The issuance of
long-term debt increases long-term liabilities on the statement of net assets and the repayment of
principal on long-term debt reduces long-term debt on the statement of net assets. Also, governmental
funds report the effect of issuance costs, premiums, discounts, and similar items when the debt is first
issued, whereas these items are deferred and amortized over the term of the long-term debt in the
statement of activities.
Principal payments on long-term debt
1,423,228
Some expenses reported in the statement of activities do not require the use of current financial
resources and therefore are not reported as expenditures in the governmental funds.
Net increase in compensated absences
(96,593)
Bad debt expense on court fines receivable
(78,492)
Change in net assets of governmental activities
$5,138,291
The notes to the financial statements are an integral part of this statement.
33
TOWN OF FOUNTAIN HILLS, ARIZONA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Taxes
$6,609,293 $6,670,350 $61,057
Intergovernmental
4,250,137 4,489,844 239,707
Fines and forfeitures
213,500 192,150 (21,350)
Licenses and permits
969,005 1,600,934 631,929
Charges for services
203,950 167,749 (36,201)
Rents and royalties
258,000 242,704 (15,296)
Investment earnings
85,000 68,823 (16,177)
Other
90,000 211,269 121,269
Total Revenues
12,678,885 13,643,823 964,938
Expenditures
Current
General government
Mayor and Town Council
85,360 77,106 8,254
Magistrate Court
299,870 296,272 3,598
General and Administrative
3,507,940 2,741,331 766,609
Contingency
50,000 10,704 39,296
Total general government
3,943,170 3,125,413 817,757
Public safety
Building Safety
587,900 548,471 39,429
Law Enforcement
1,743,538 1,708,052 35,486
Fire Department
2,335,830 2,342,411 (6,581)
Total public safety
4,667,268 4,598,934 68,334
Culture and recreation
Parks and Recreation
1,748,910 1,096,442 652,468
Civic Center
469,994 434,257 35,737
Total culture and recreation
2,218,904 1,530,699 688,205
Community development
Community Development
252,000 212,541 39,459
Public Works Dept
1,082,560 932,423 150,137
Total community development
1,334,560 1,144,964 189,596
Total Expenditures
12,163,902 10,400,010 1,763,892
Excess (deficiency) of revenues over expenditures
514,983 3,243,813 2,728,830
Other financing sources (uses)
Transfers out
-(910,250)(910,250)
Total other financing sources (uses)
-(910,250)(910,250)
Net change in fund balances
514,983 2,333,563 1,818,580
Fund balances, beginning of year
3,380,677 4,037,863 657,186
Fund balances, end of year
$3,895,660 $6,371,426 $2,475,766
The notes to the financial statements are an integral part of this statement.
34
TOWN OF FOUNTAIN HILLS, ARIZONA
EXCISE TAX FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Taxes
$1,174,413 $1,189,655 $15,242
Investment earnings
-23,473 23,473
Total Revenues
1,174,413 1,213,128 38,715
Expenditures
Current
General government
958,065 96,701 861,364
Total Expenditures
958,065 96,701 861,364
Excess (deficiency) of revenues over expenditures
216,348 1,116,427 900,079
Other financing sources (uses)
Transfers out
-(596,661)(596,661)
Total other financing sources (uses)
-(596,661)(596,661)
Net change in fund balances
216,348 519,766 303,418
Fund balances, beginning of year
-1,912,404 1,912,404
Fund balances, end of year
$216,348 $2,432,170 $2,215,822
The notes to the financial statements are an integral part of this statement.
35
THIS PAGE BLANK
36
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the Town of Fountain Hills, Arizona (Town)
have been prepared in conformity with U.S. generally accepted accounting principles
applicable to governmental units adopted by the Governmental Accounting Standards
Board (GASB). A summary of the Town's more significant accounting policies follows.
A.
Reporting entity
The Town is a municipal government that is governed by a separately elected governing
body. It is legally separate from and fiscally independent of other state and local
governments. The accompanying financial statements present the Town and its
component units, entities for which the Town is considered to be financially accountable.
Blended component units, although legally separate entities, are, in substance, part of the
Town's operations.
Included within the 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. A separately issued annual financial report was issued for
the Eagle Mountain Community Facilities District and is available at Town Hall.
Town of Fountain Hills, Arizona Municipal Property Corporation. The Town of
Fountain Hills, Arizona Municipal Property Corporation's (MPC) board of directors
consists of three members which are appointed by the Fountain Hills Town Council. The
MPC, which is a nonprofit corporation incorporated under the laws of the State of
Arizona, was formed for the sole purpose of assisting the Town in obtaining financing for
various projects of the Town. The Town has a "moral obligation" for the repayment of
the MPC's bonds. For financial reporting purposes, transactions of the MPC are combined
together and included as if they were part of the Town's operations.
B.
Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net assets and the
statement of changes in net assets) report information on all of the nonfiduciary activities
of the primary government and its component units. The effect of interfund activity has
been removed from these statements. Governmental activities are normally supported by
taxes and intergovernmental revenues.
37
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Program revenues include 1)
charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
C.
Measurement focus, basis of accounting, and financial statement presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they
are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are
recognized as soon as they are both measurable and available. Revenues are considered to
be available when they are collectible within the current period or soon enough thereafter
to pay liabilit ies of the current period. For this purpose, the Town considers revenues to
be available if t hey are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting, except expenditures related to compensated absences and claims and
judgments, which are recorded only when payment is due. However, since debt service
resources are provided during the current year for payment of long-term principal and
int erest due early in the following year, the expenditures and related liabilities have been
recognized in the Debt Service Funds.
Property taxes, intergovernmental grants and aid, and interest associated with the current
fiscal period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when cash is received by the government.
38
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
The Town reports the following major governmental funds:
The General Fund is t he Town's primary operating fund. It accounts for all
financial resources of the Town, except those required to be accounted for in
another fund.
The Excise Tax Fund accounts for the portion of Town sales tax reserved by the
Town Council for special projects including Town beautification and economic
development.
The General Obligation Debt Service Fund accounts for the Town's property tax
revenues received to pay the debt service of the Town's general obligation bonds.
The Eagle Mountain Debt Service Fund accounts for the property tax revenues
received to pay the debt service of the Eagle Mountain Community Facilities
District component unit.
As a general rule the effect of interfund activity has been eliminated from the government-
wide financial statements.
Amo unts reported as program revenues include 1) fees, fines and charges for services, 2)
operating grants and contributions, and 3) capital grants and contributions. Internally
dedicated resources are reported as general revenues rather than as program revenues.
Likewise, general revenues include all taxes.
When both restricted and unrestricted resources are available for use, for governmental
activit ies, it is the Town's policy to use restricted resources first, then unrestricted
resources as they are needed.
D.
Assets, liabilities, and net assets or equity
1.
Deposits and investments
The Town's cash and cash equivalents are considered to be cash on hand, demand
deposits, cash and investments held by the State Treasurer, and highly liquid investments
wit h mat urities of three months or less from the date of acquisition.
39
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
Cash and investments are pooled except for funds required to be held by fiscal agents or
restricted under provisions of bond indentures. Interest earned from investments
purchased with such pooled monies is allocated to each of the funds based on the average
daily cash balances. State statutes authorize the Town to invest in obligations of the U.S.
Treasury and U.S. agencies, certificates of deposit in eligible depositories, repurchase
agreements, obligations of the State of Arizona or any of its counties or incorporated
cit ies, towns or duly organized school districts, improvement districts in this state and the
State Treasurer's Local Government Investment Pool. Investments are stated at fair value.
2.
Receivables
All t rade and property taxes receivables are shown net of an allowance for uncollectibles.
Maricopa 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. However, a lien against real and personal
property assessed attaches on the first day of January preceding assessment and levy
thereof.
3.
Short-term interfund receivables/payables
During the course of operations, individual funds within the Town's pooled cash accounts
may bo rrow money from the other funds within the pool on a short-term basis. These
receivables and payables are classified as "due from other funds" or "due to other funds"
on the balance sheet of the fund financial statements and are eliminated in the preparation
of the government-wide financial statements.
4.
Inventories and prepaid items
Inventories consist of expendable supplies held for consumption. Inventories are valued at
cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are
recorded as expenditures when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government-wide and fund financial statements.
5.
Capital assets
Capital assets, which include property, plant, and equipment, are reported in the
governmental activities column in the government-wide financial statements. Capital
assets are defined by the Town as assets with an initial, individual cost of more than
$10,000 and an estimated useful life in excess of one year.
40
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
Property, plant and equipment purchased or acquired is carried at historical cost or
estimat ed historical cost. Contributed assets are recorded at fair market value as of the
date received. Additions, improvements and other capital outlays that significantly extend
the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance
are expensed as incurred.
General infrastructure assets acquired prior to July 1,2002 are not reported in t he basic
financial st atements. Those assets will be transitioned in over the next two fiscal years in
accordance with GASB Statement No. 34.
Depreciation on all assets is provided on a straight-line basis over the following estimated
useful lives:
Buildings and improvements
50 years
Improvements other than buildings
20 years
Infrastructure
50 years
Furniture, machinery and equipment
5 years
Vehicles
5 years
6.
Compensated absences
The liabilit y fo r compensated absences reported in the government-wide statements
consists of unpaid, accumulated leave balances. The liability has been calculated using the
vesting method, in which leave amounts for both employees who currently are eligible to
receive termination payments and other employees who are expected to become eligible in
the future to receive such payments upon termination are included.
7.
Long-term obligations
In the government-wide financial statements, long-term debt and other long-term
obligations are reported as liabilities in the applicable governmental activities. Bond
premiums and discounts, as well as issuance costs, are deferred and amortized over the life
of the bonds using the straight line method. Bonds payable are reported net of the
applicable bond premium or discount. Bond issuance costs are reported as deferred
charges and amortized over the term of the related debt. The Town did not have any
premiums, discounts or issuance costs related to any outstanding bonds.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing sources while discounts on debt issuances are reported as
other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
41
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
8.
Net assets
In the government-wide financial statements, net assets are reported in three categories:
net assets invested in capital assets, net of related debt; restricted net assets; and
unrestricted net assets. Net assets invested in capital assets, net of related debt is
separately reported because the Town reports all Town assets which make up a significant
portion of total net assets. Restricted net assets account for the portion of net assets
restricted by parties outside the Town. Unrestricted net assets are the remaining net assets
not included in the previous two categories.
9.
Fund equity
In the fund financial statements, governmental funds report reservations of fund balance
fo r amounts that are not available for appropriation or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance represent tentative
management plans that are subject to change.
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budgetary information
The Town Council follows these procedures in establishing the budgetary data reflected in
the financial st atements:
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 t hem fo r 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 basic financial statements to total
expenditures for reporting in accordance with the State's uniform expenditure
reporting system (A.R.S. §41-1279.07).
42
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
4.
By Arizona Constitution, expenditures may not legally exceed the expenditure
limit ation 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 fo r other funds. The Town Manager, subject to Town Council
approval, may at any time transfer any unencumbered appropriation balance or
portion thereof between departments. The adopted budget cannot be amended in
any way without Town Council approval.
5.
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, with the exception of the
Criminal Enhancement Justice Fund and Capital Projects Fund in which a budget
was not prepared.
The Town is subject to the State of Arizona's Spending Limitation Law for Towns and
Cit ies. This law does not permit the Town to spend more than budgeted revenues plus the
carryover unrestricted cash balance from the prior fiscal year. The limitation is applied to
the total of the combined funds. The Town complied with this law during the year.
No supplementary budgetary appropriations were necessary during the year.
B.
Excess of expenditures over appropriations
Expenditures exceeded appropriations in the following funds:
Amo unt of
Overexpenditure
General Fund:
Fire Department
$6,581
Eagle Mountain Debt Service Fund
314
43
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
NOTE 3 - DETAILED NOTES ON ALL FUNDS
A.
Prior period adjustment
The Town made a prior period adjustment in the Eagle Mountain Debt Service Fund in the
amo unt of $591,953 to correct an error in t he previously issued financial statements.
Interest earned on $4,435,000 of developer contributions the Town holds until the debt
service is repaid was recorded as revenue. However, the Town was contractually liable to
the developers for any amount of interest earned in excess of the interest revenue used to
make the required principal and interest payments. Therefore, the beginning net assets in
the government-wide financial statements and the beginning fund balance of the Eagle
Mountain Debt Service Fund in the fund financial statements were restated to reflect the
int erest due to the developers. The following summary is necessary to reconcile beginning
net assets and beginning fund balance to the government-wide and fund financial
statements, respectively.
Statement of
Activities
Statement of
Revenues,
Expenditures, and
Changes in Fund
Balances
Net assets / fund balance, July 1, 2003
(as previously stated)
$21,162,894
$790,713
Prior period adjustment
(591,953)(591,953)
Net assets / fund balance July 1, 2003
(as restated)
$20,570,941
$198,760
44
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
B.
Assets
1.
Deposits and investments
Deposits and investments at June 30, 2004 consist of the following:
Deposits
Cash on hand
$1,360
Cash in bank
513,944
Cash on deposit with paying agent
2,342,129
Investments
Money Market Mutual Fund
338,015
U.S. Government Securities
16,138
State Treasurer's Investment Pool
10,983,590
Cash on deposit with trustee
5,624,482
Total cash and investments
19,819,658
Cash on deposit with paying agent
(2,342,129)
Total cash and equivalents
$17,477,529
Deposits - The Town's deposits at June 30, 2004, were entirely covered by federal
depository insurance or by collateral held by the Town's custodial bank in the Town's
name.
Investments - 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
wit h specific investments and are not subject to custodial credit risk. In addition, the
mo ney market mutual fund is not subject to custodial credit risk. All other investments of
the Town are uninsured and unregistered with the securities held by the counterparty's
trust department or agent in the Town's name.
45
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
2.
Receivables
Court fines are recorded net of uncollectible amounts in the government-wide statements
and are recorded as a receivable and a deferred revenue in the fund financial statements
because the court fines did not meet the revenue recognition criteria under the modified
accrual basis of accounting. The total receivable at June 30, 2004 was $392,460, which
was reduced by $78,492 for uncollectible amounts for a net receivable balance at June 30,
2004 of $313,968.
Governmental funds report deferred revenue in connection with receivables for revenues
that are not considered to be available to liquidate liabilities of the current period.
Governmental funds also defer revenue recognition in connection with resources that have
been received, but not yet earned. At the end of the current fiscal year, the various
components of deferred revenue reported in the governmental funds were as follows:
Unavailable
Delinquent property taxes receivables
(General Fund)
$60,426
Deferred court revenue
(General Fund)
313,968
Delinquent property taxes receivables
(General Obligation Debt Service Fund)
37,109
Delinquent property taxes receivables
(Eagle Mountain Debt Service Fund)
10,948
Special assessments receivables
(Nonmajor funds)
5,127
$427,578
46
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
3.
Capital assets
Capital asset activity for the year ended June 30, 2004 was as follows:
Beginning
Balances
Increases
Decreases
Ending
Balances
Governmental Activities:
Capital assets not being depreciated:
Land
$23,571,668 $-$-$23,571,668
Total capital assets,
not being depreciated
23,571,668 --23,571,668
Capital assets being depreciated:
Buildings and improvements
10,080,070 246,242 -10,326,312
Improvements other than buildings
7,491,921 62,619 -7,554,540
Infrastructure
397,976 83,088 -481,064
Furniture, machinery and equipment
1,518,647 --1,518,647
Vehicles
1,825,873 -(195,162)1,630,711
Total capital assets being
depreciated
21,314,487 391,949 (195,162)21,511,274
Less accumulated depreciation for:
Buildings and improvements
(565,119)(201,920)-(767,039)
Improvements other than buildings
(1,780,452)(376,150)-(2,156,602)
Infrastructure
(20,755)(8,421)-(29,176)
Furniture, machinery and equipment
(790,147)(145,610)-(935,757)
Vehicles
(1,086,742)(245,395)195,162 (1,136,975)
Total accumulated depreciation
(4,243,215)(977,496)195,162 (5,025,549)
Total capital assets,
being depreciated, net
17,071,272 (585,547)-16,485,725
Governmental activities
capital assets, net
$40,642,940 $(585,547)$-$40,057,393
47
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government
$96,997
Public safety
295,769
Highways and streets
48,376
Culture and recreation
536,354
Total depreciation expense-governmental activities
$977,496
C.
Interfund receivables, payables and transfers
As of June 30, 2004 int erfund receivable and payables were as follows:
Due From
Due To
Nonmajor
General Fund
$3,514
The above interfund receivables and payables are due to a deficit cash balance in the
nonmajor Municipal Property Corporation Debt Service Fund at the end of the fiscal year.
Property tax revenues were received subsequent to June 30, 2004 to cover the deficit.
Interfund transfers for the year ended June 30, 2004 consisted of the following:
Transfers From
Transfers To
General
Fund
Excise Tax
Nonmajor
Total
Nonmajor
$910,250
$596,661
$123,996
$1,630,907
The General Fund transfer of $910,250 to the Nonmajor Capital Projects Fund was to
fund future construction projects. The transfer of $596,661 from the Excise Tax Fund to
the Nonmajor funds was for the debt service requirements on the Municipal Property
Corporation bonds. The nonmajor transfer of $123,996 was a transfer from Highway
User Revenue Fund to the Highway User Debt Service Fund for the annual debt service
payments on outstanding revenue bonds.
48
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
D.
Obligations under operating leases
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 $385,421 for the year ended June 30, 2004. The lease expires June 30, 2005.
Future rental expenditures under the terms of the lease are $401,520 due monthly through
June 30, 2005.
E.
Long-term obligations
The Town has long-term bonds and special assessments payable issued to provide funds
fo r the acquisition and construction of major capital facilities. The Town has also issued
debt to refund earlier obligations with higher interest rates. The debt is being repaid by
various debt service funds. Compensated absences are paid by the applicable fund where
each employee is regularly paid, primarily the General Fund.
Special Assessment 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 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.
Communit y facilit ies 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 o f 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.
49
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
Changes in long-term obligations for the year ended June 30, 2004 are as follows:
July 1, 2003
Increases
Decreases
June 30, 2004
Due within
One Year
Governmental Activities:
Bonds and special assessments
General obligation bonds
$12,585,000 $-$(845,000)$11,740,000 $895,000
Municipal Property
Corporation debt
11,430,000 -(425,000)11,005,000 450,000
Special assessment debt with
government commitment
19,365
-
(3,228)
16,137
3,228
Community facilities district
bonds payable
4,765,000
-
(150,000)
4,615,000
160,000
Total bonds and special
assessment debt
28,799,365
-
(1,423,228)
27,376,137
1,508,228
Other liabilities
Compensated absences
174,637 280,064 (183,471)271,230 94,931
$28,974,002 $280,064 $(1,606,699)$27,647,367 $1,603,159
Debt service requirements on long-term debt at June 30, 2004 are as follows:
Governmental Activities
Year Ending
June 30
Principal
Interest
2005
$1,508,228 $1,419,829
2006
1,583,228 1,344,319
2007
1,673,227 1,265,927
2008
1,788,227 1,182,207
2009
1,798,227 1,095,684
2010-14
8,650,000 4,161,264
2015-19
7,595,000 2,060,488
2020-24
2,780,000 213,594
$27,376,137 $12,743,312
NOTE 4 - OTHER INFORMATION
A.
Risk management
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
$2,000,000 per occurrence on a claims made basis. Excess coverage is for an additional
$13,000,000 per occurrence on a follow form, claims made basis. No significant
reduction in insurance coverage occurred during the year and no settlements exceeded
insurance coverage during any of the past three fiscal years.
50
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
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
it s 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 Workers Compensation Fund for potential
worker related accidents.
B.
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, 2004, totaled $206,952.
Lawsuits - The Town is a defendant in various lawsuits. In the opinion of the Town's
attorney the outcome of these lawsuits is not presently determinable.
C.
Subsequent events
Subsequent to June 30, 2004, the Town approved the issuance of $3,685,000 of
Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 2004 to pay a
portion of the costs in connection with the second phase of construction of the Town's
Civic Center, fund a debt services reserve fund or pay a reserve fund surety policy and pay
costs in connection with the issuance of the bond. The term of the loan is fifteen years and
the rate has not yet been determined. The bond is secured by general revenues of the
Town.
D.
Retirement plans
Defined Contribution Pension Plan
All full-t ime emplo yees of the Town, except participants in the Arizona Public Safety
Personnel Retirement System, participate in a defined contribution pension plan
administ ered by the ICMA Retirement Corporation as a 401(a) plan. The payroll for the
Town employees covered by this plan the year ended June 30,2004 was $2,425,022. The
Town's total payroll was $2,843,829.
51
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
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 t o 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 t he 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 2003-04, the Town's required and
actual contributions amounted to $266,752. The employees' contributions totaled
$266,752.
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 2003-04 or as of the close of the fiscal year.
Public Safety Personnel Retirement System (PSPRS)
Plan description - The Town 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
disabilit y benefit s fo r public safety personnel who are regularly assigned hazardous duty in
the employ of the State of Arizona or a political subdivision thereof. All benefit provisions
and other requirements are established by State statute. The Public Safety Personnel
Retirement System issues a publicly available financial report that includes financial
statements and required supplementary information for PSPRS. That report may be
obtained by writing to Public Safety Personnel, 1020 E. Missouri Ave., Phoenix, AZ
85014 or by calling (602) 255-5575.
Funding policy - Covered employees are required to contribute 7.65 percent of their
annual salary to the PSPRS. The Town 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 10.90 percent of annual covered payroll.
52
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2004
Annual pension cost - During the year ended June 30, 2003 (the date of the latest
available information), the Town's annual pension cost of $38,522 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, 2003 actuarial valuation
using an entry age actuarial funding method. Significant actuarial assumptions used in
determining t he 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'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's unfunded actuarial accrued liability is being amortized as a level percentage of
projected payroll o n a closed basis. The remaining amortization period at June 30, 2003,
was 20 years.
The preceding methods comply with the financial reporting standards established by the
Governmental Accounting Standards Board.
Three-Year Trend Information
Police
Fiscal Year
Ended June 30,
Annual Pension
Cost (APC)
Percent
Contributed
Net Pension
Obligation
2001
$57,277
%100.0
$-
2002
61,102
100.0
-
2003
38,522
100.0
-
Additional historical trend information for the Town's PSPRS is disclosed on page 55.
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.
53
Required Supplementary Information
54
TOWN OF FOUNTAIN HILLS, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM
SCHEDULE OF FUNDING PROGRESS
Fountain Hills Police
Valuation
Date
June 30,
Actuarial
Value of
Assets
Entry Age
Actuarial
Accrued
Liability (AAL)
Percent
Funded
Over(Under)
funded
AAL
Annual
Covered
Payroll
Over(Under)
funded AAL
as a Percentage
of Covered
Payroll
1996
$17,463 $16,084
%108.6
$1,379
$77,574
%1.8
1997
54,809 48,512
%113.0
6,297
216,163
%2.9
1998
184,135 125,791
%148.7
58,344
394,005
%14.8
1999
258,664 263,285
%98.2
(4,621)
412,182
%(1.1)
2000
375,860 401,167
%93.7
(25,307)
556,445
%(4.5)
2001
562,905 409,913
%137.3
152,992
639,753
%23.9
2002
591,957 557,666
%106.1
34,291
549,166
%6.2
2003
158,079 225,917
%70.0
(67,838)
172,698
%(39.3)
* Information prior to 1996 is not available.
55
Combining and Individual Fund
Statements and Schedules
56
THIS PAGE BLANK
57
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
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 and contributions received by the
Town.
Local Court Enhancement Fund - accounts for the activities of grants from the Arizona Supreme
Court.
DEBT SERVICE FUNDS
Municipal Property Corporation Debt Service Fund - accounts for the revenues received to pay
the debt service on MPC revenue bonds.
HURF Debt Service - accounts for operating transfers received from the HURF special revenue
fund to pay the debt service of the Street and Highway User Revenue Bonds.
Cottonwoods Special Assessment - accounts for all special assessments received to pay the debt
service of the Cottonwoods Special Assessment District.
CAPITAL PROJECTS FUND
Development Fees Fund - accounts for development fees collected from developers restricted for
projects approved by Council.
Capital Projects Fund - accounts for the Capital improvements to various projects of the Town.
58
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2004
Special Revenue
Debt Service
HURF
Grants
Local Court
Enhancement
Totals
Municipal
Property
Corporation
HURF Debt
Service
Cottonwoods
Special
Assessment
Totals
Assets
Cash and equivalents
$400,801 $186,452 $168,885 $756,138 $-$1,662 $10,259 $11,921
Cash with paying agent
----1,178,999 106,066 -1,285,065
Receivables, net
Accounts receivable
10,591 --10,591 ----
Intergovernmental receivable
121,061 --121,061 ----
Special assessments receivable
------5,127 5,127
Total assets
$532,453 $186,452 $168,885 $887,790 $1,178,999 $107,728 $15,386 $1,302,113
Liabilities and Fund Balances
Liabilities
Accounts payable
$182,955 $20,118 $-$203,073 $-$-$-$-
Accrued wages and benefits
17,938 --17,938 ----
Interest payable
----273,487 16,066 424 289,977
Due to other funds
----3,514 --3,514
Deferred revenue
------5,127 5,127
Matured debt principal payable
----425,000 90,000 -515,000
Due to developers
--------
Total liabilities
200,893 20,118 -221,011 702,001 106,066 5,551 813,618
Fund balances
Unreserved
331,560 166,334 168,885 666,779 476,998 1,662 9,835 488,495
Total fund balances
331,560 166,334 168,885 666,779 476,998 1,662 9,835 488,495
Total liabilities and fund balances
$532,453 $186,452 $168,885 $887,790 $1,178,999 $107,728 $15,386 $1,302,113
59
Capital Projects
Development
Fees
Capital
Projects
Totals
Total
Nonmajor
Governmental
Funds
$1,832,021 $794,452 $2,626,473 $3,394,532
---1,285,065
---10,591
---121,061
---5,127
$1,832,021 $794,452 $2,626,473 $4,816,376
$31,726 $152,361 $184,087 $387,160
---17,938
---289,977
---3,514
---5,127
---515,000
60,000 -60,000 60,000
91,726 152,361 244,087 1,278,716
1,740,295 642,091 2,382,386 3,537,660
1,740,295 642,091 2,382,386 3,537,660
$1,832,021 $794,452 $2,626,473 $4,816,376
60
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - NONMAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Special Revenue
Debt Service
HURF
Grants
Local Court
Enhancement
Totals
Municipal
Property
Corporation
HURF Debt
Service
Cottonwoods
Special
Assessment
Totals
Revenues
Intergovernmental
$1,515,787 $75,000 $-$1,590,787 $-$-$-$-
Fines and forfeitures
--169,189 169,189 ----
Charges for services
28,597 --28,597 ----
Special assessments
------3,612 3,612
Investment earnings
3,700 -846 4,546 6,036 421 10 6,467
Other
-28,601 -28,601 ----
Total revenues
1,548,084 103,601 170,035 1,821,720 6,036 421 3,622 10,079
Expenditures
Current
General government
-33,147 1,150 34,297 ----
Public safety
-17,227 -17,227 ----
Highways and streets
1,280,346 4,094 -1,284,440 ----
Culture and recreation
-66,451 -66,451 ----
Debt Service
Principal retirement
----425,000 90,000 3,228 518,228
Interest on long-term debt
----550,983 32,532 932 584,447
Capital outlay
-18,863 -18,863 ----
Total expenditures
1,280,346 139,782 1,150 1,421,278 975,983 122,532 4,160 1,102,675
Excess (deficiency) of revenues over
expenditures
267,738 (36,181)168,885 400,442 (969,947)(122,111)(538)(1,092,596)
Other financing sources (uses)
Transfers in
----596,661 123,996 -720,657
Transfers out
(123,996)--(123,996)----
Total other financing sources (uses)
(123,996)--(123,996)596,661 123,996 -720,657
Net change in fund balances
143,742 (36,181)168,885 276,446 (373,286)1,885 (538)(371,939)
Fund balances, beginning of year
187,818 202,515 -390,333 850,284 (223)10,373 860,434
Fund balances, end of year
$331,560 $166,334 $168,885 $666,779 $476,998 $1,662 $9,835 $488,495
61
Capital Projects
Development
Fees
Capital
Projects
Totals
Total
Nonmajor
Governmental
Funds
$-$-$-$1,590,787
---169,189
841,824 -841,824 870,421
---3,612
13,819 148 13,967 24,980
-21,691 21,691 50,292
855,643 21,839 877,482 2,709,281
13,049 289,998 303,047 337,344
---17,227
118,062 -118,062 1,402,502
---66,451
---518,228
---584,447
83,088 -83,088 101,951
214,199 289,998 504,197 3,028,150
641,444 (268,159)373,285 (318,869)
-910,250 910,250 1,630,907
---(123,996)
-910,250 910,250 1,506,911
641,444 642,091 1,283,535 1,188,042
1,098,851 -1,098,851 2,349,618
$1,740,295 $642,091 $2,382,386 $3,537,660
62
TOWN OF FOUNTAIN HILLS, ARIZONA
GENERAL OBLIGATION DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Taxes
Property taxes
$1,540,000 $1,563,508 $23,508
Investment earnings
1,000 1,415 415
Total Revenues
1,541,000 1,564,923 23,923
Expenditures
Debt Service
Principal retirement
755,000 755,000 -
Interest on long-term debt
615,000 605,314 9,686
Total Expenditures
1,370,000 1,360,314 9,686
Excess (deficiency) of revenues over expenditures
171,000 204,609 33,609
Fund balances, beginning of year
-64,233 64,233
Fund balances, end of year
$171,000 $268,842 $97,842
63
TOWN OF FOUNTAIN HILLS, ARIZONA
EAGLE MOUNTAIN DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Taxes
Property taxes
$561,500 $574,193 $12,693
Investment earnings
-3,391 3,391
Total Revenues
561,500 577,584 16,084
Expenditures
Current
General government
54,000 55,000 (1,000)
Debt Service
Principal retirement
150,000 150,000 -
Interest on long-term debt
310,500 309,814 686
Total Expenditures
514,500 514,814 (314)
Excess (deficiency) of revenues over expenditures
47,000 62,770 15,770
Fund balances, beginning of year (as restated)
-198,760 198,760
Fund balances, end of year
$47,000 $261,530 $214,530
64
TOWN OF FOUNTAIN HILLS, ARIZONA
HURF FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Intergovernmental
$1,516,400 $1,515,787 $(613)
Charges for services
6,000 28,597 22,597
Investment earnings
500 3,700 3,200
Other
1,000 -(1,000)
Total Revenues
1,523,900 1,548,084 24,184
Expenditures
Current
Highways and streets
1,523,900 1,280,346 243,554
Total Expenditures
1,523,900 1,280,346 243,554
Excess (deficiency) of revenues over expenditures
-267,738 267,738
Other financing sources (uses)
Transfers out
-(123,996)(123,996)
Total other financing sources (uses)
-(123,996)(123,996)
Net change in fund balances
-143,742 143,742
Fund balances, beginning of year
-187,818 187,818
Fund balances, end of year
$-$331,560 $331,560
65
TOWN OF FOUNTAIN HILLS, ARIZONA
GRANTS FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Intergovernmental
$861,600 $75,000 $(786,600)
Other
-28,601 28,601
Total Revenues
861,600 103,601 (757,999)
Expenditures
Current
General government
680,000 33,147 646,853
Public safety
24,150 17,227 6,923
Highways and streets
-4,094 (4,094)
Culture and recreation
320,000 66,451 253,549
Capital outlay
-18,863 (18,863)
Total Expenditures
1,024,150 139,782 884,368
Excess (deficiency) of revenues over expenditures
(162,550)(36,181)126,369
Fund balances, beginning of year
-202,515 202,515
Fund balances, end of year
$(162,550)$166,334 $328,884
66
TOWN OF FOUNTAIN HILLS, ARIZONA
MUNICIPAL PROPERTY CORPORATION FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Investment earnings
$-$6,036 $6,036
Total Revenues
-6,036 6,036
Expenditures
Debt Service
Principal retirement
425,000 425,000 -
Interest on long-term debt
555,500 550,983 4,517
Total Expenditures
980,500 975,983 4,517
Excess (deficiency) of revenues over expenditures
(980,500)(969,947)10,553
Other financing sources (uses)
Transfers in
980,500 596,661 (383,839)
Total other financing sources (uses)
980,500 596,661 (383,839)
Net change in fund balances
-(373,286)(373,286)
Fund balances, beginning of year
-850,284 850,284
Fund balances, end of year
$-$476,998 $476,998
67
TOWN OF FOUNTAIN HILLS, ARIZONA
HURF DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Investment earnings
$1,000 $421 $(579)
Total Revenues
1,000 421 (579)
Expenditures
Debt Service
Principal retirement
90,000 90,000 -
Interest on long-term debt
34,000 32,532 1,468
Total Expenditures
124,000 122,532 1,468
Excess (deficiency) of revenues over expenditures
(123,000)(122,111)889
Other financing sources (uses)
Transfers in
124,000 123,996 (4)
Proceeds of long-term debt issuance
1,540,000 -(1,540,000)
Total other financing sources (uses)
1,664,000 123,996 (1,540,004)
Net change in fund balances
1,541,000 1,885 (1,539,115)
Fund balances, beginning of year
-(223)(223)
Fund balances, end of year
$1,541,000 $1,662 $(1,539,338)
68
TOWN OF FOUNTAIN HILLS, ARIZONA
COTTONWOODS SPECIAL ASSESSMENT FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Special assessments
$4,500 $3,612 $(888)
Investment earnings
-10 10
Total Revenues
4,500 3,622 (878)
Expenditures
Debt Service
Principal retirement
3,228 3,228 -
Interest on long-term debt
1,272 932 340
Total Expenditures
4,500 4,160 340
Excess (deficiency) of revenues over expenditures
-(538)(538)
Fund balances, beginning of year
-10,373 10,373
Fund balances, end of year
$-$9,835 $9,835
69
TOWN OF FOUNTAIN HILLS, ARIZONA
DEVELOPMENT FEES FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Original and Final
Budget
Actual
Variance with Final
Budget
Revenues
Charges for services
$1,021,725 $841,824 $(179,901)
Investment earnings
-13,819 13,819
Total Revenues
1,021,725 855,643 (166,082)
Expenditures
Current
General government
413,170 13,049 400,121
Highways and streets
-118,062 (118,062)
Capital outlay
-83,088 (83,088)
Total Expenditures
413,170 214,199 198,971
Excess (deficiency) of revenues over expenditures
608,555 641,444 32,889
Fund balances, beginning of year
-1,098,851 1,098,851
Fund balances, end of year
$608,555 $1,740,295 $1,131,740
70
THIS PAGE BLANK
71
STATISTICAL SECTION
72
TOWN OF FOUNTAIN HILLS, ARIZONA
GOVERNMENT-WIDE EXPENSES BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
General
Government
Public
Safety
Highways
and
Streets
Culture and
Recreation
Community
Development
Interest on
Long-term
Debt
Totals
2003
$3,479,333
$5,494,708
$1,310,683
$2,363,897
$1,235,985
$1,576,842
$15,461,448
2004
3,686,452
4,918,280
1,419,509
2,068,613
1,144,964
1,499,575
14,737,393
Note: 2002-03 was the Town's first year to prepare government-wide financial statements.
73
TOWN OF FOUNTAIN HILLS, ARIZONA
GOVERNMENT-WIDE REVENUES
LAST TEN FISCAL YEARS
(UNAUDITED)
Program Revenues
General Revenues
Fiscal
Year
Fees, Fines
and Charges
for Services
Operating
Grants and
Contributions
Taxes
Revenue
Sharing
Investment
Earnings
Other
Totals
2003
$2,782,385 $1,697,900
$7,100,184 $4,740,758 $1,976,809 $79,706 $18,377,742
2004
3,421,132 1,590,787
10,055,861 4,489,844 122,082 195,978 19,875,684
Note: 2002-03 was the Town's first year to prepare government-wide financial statements.
74
TOWN OF FOUNTAIN HILLS, ARIZONA
GENERAL GOVERNMENT EXPENDITURES BY FUNCTION (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
General
Government
Public
Safety
Highways
and
Streets
Culture
and
Recreation
Community
Development
Capital
Outlay
Debt
Service
Total
1995
$1,131,817 $979,482 $610,858 $382,026 $560,325 $843,650 $491,219 $4,999,377
1996
1,617,365 1,241,694 1,687,403 1,196,115 821,796 578,099 524,553 7,667,025
1997
1,757,431 1,499,538 1,627,952 625,928 864,022 5,343,433 1,132,399 12,850,703
1998
1,964,427 2,074,441 2,020,450 1,471,559 947,251 1,352,936 799,941 10,631,005
1999
2,631,245 2,205,600 1,984,879 2,334,901 955,451 557,374 795,088 11,464,538
2000
2,528,953 3,059,020 2,468,498 3,359,509 1,276,951 1,787,469 924,014 15,404,414
2001
3,646,500 3,354,037 2,212,432 3,866,245 1,175,649 5,261,585 1,851,602 21,368,050
2002
3,859,633 5,084,532 1,877,790 3,069,695 1,064,913 14,770,507 2,903,116 32,630,186
2003
3,318,574 5,174,492 1,198,080 1,815,416 1,215,387 79,427 2,970,070 15,771,446
2004
3,614,458 4,616,161 1,402,502 1,597,150 1,144,964 101,951 2,922,803 15,399,989
(1) Includes all governmental fund types.
75
TOWN OF FOUNTAIN HILLS, ARIZONA
GENERAL GOVERNMENT REVENUES BY SOURCE (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
Taxes
Inter-
Governmenta
l
Fines
and
Forfeitures
Licenses
and
Permits
Charges
for
Services
Rents
and
Royalties
Contribution
s
and
Donations
Special
Assessment
s
Net
Investment
Income
(Loss)
Other
Total
1995
$468,503 $2,896,271 $171,675 $1,346,134 $358,657 $21,228 $20,000 $-$150,357 $10,263 $5,443,088
1996
2,024,461 2,762,906 211,289 1,653,561 204,541 14,462 --163,457 18,800 7,053,477
1997
3,101,787 3,988,424 209,485 1,770,347 419,976 14,170 1,500 -464,633 19,477 9,989,799
1998
3,326,207 4,364,859 208,930 1,961,687 795,700 13,591 100,000 -582,757 17,487 11,371,218
1999
3,861,337 4,929,062 259,484 2,472,215 624,744 18,140 -14,524 620,639 25,657 12,825,802
2000
4,876,466 4,771,792 293,970 2,569,472 454,366 27,208 10,598 9,241 743,259 21,055 13,777,427
2001
6,088,047 5,281,156 310,359 2,177,614 431,316 35,781 400 7,958 (1,063,339)10,957 13,280,249
2002
7,595,748 5,895,676 265,605 1,351,209 1,067,814 107,613 12,760 4,520 726,441 1,771,091 18,798,477
2003
7,114,486 6,311,458 195,091 1,308,747 810,412 188,745 127,200 4,302 1,976,809 148,143 18,185,393
2004
9,997,706 6,080,631 361,339 1,600,934 1,038,170 242,704 -3,612 122,082 261,561 19,708,739
(1) Includes all governmental fund types.
76
TOWN OF FOUNTAIN HILLS, ARIZONA
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
Sales
Tax
Property
Tax
Franchise
Tax
Total
1995
$16,622 $357,033 $94,848 $468,503
1996
1,610,116 336,000 78,345 2,024,461
1997
2,664,923 350,024 86,840 3,101,787
1998
2,920,084 302,375 103,748 3,326,207
1999
3,394,152 348,778 118,407 3,861,337
2000
4,087,514 657,026 131,926 4,876,466
2001
4,923,174 1,038,891 125,982 6,088,047
2002
4,355,701 3,109,353 130,694 7,595,748
2003
5,051,872 1,910,072 152,542 7,114,486
2004
7,733,643 2,137,701 126,362 9,997,706
77
TOWN OF FOUNTAIN HILLS, ARIZONA
TOWN TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS
BY INDUSTRY CLASSIFICATION
FISCAL YEAR BASIS
(UNAUDITED)
Business Activity Category
2004
Excise Tax
Collections
Percent
of
Total
Construction
$1,482,981
%19.8
Transportation/Utilities/Communication
916,498
%12.2
Wholesale/Retail
3,212,062
%42.8
Restaurants/Bars
419,107
%5.6
Fire, Insurance and Real Estate
341,951
%4.6
Services
423,433
%5.6
Advertising
101,590
%1.3
All Other Services Not Specified
605,226
%8.1
$7,502,848
%100.0
78
TOWN OF FOUNTAIN HILLS, ARIZONA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Year
(1)
Total
Tax Levy
Current
Tax
Collections
Percent of
Current Taxes
Collected
Delinquent
Tax
Collections
Total Tax
Collections
Ratio of Total
Tax Collections
to Total Tax Levy
Outstanding
Delinquent
Taxes
Ratio of
Delinquent Taxes
to Tax Levy
1995
$339,832 $339,605 %99.9
$9 $339,614 %99.9
$218 %0.06
1996
323,517 323,511 %100.0
6 323,517 %100.0
-%-
1997
312,638 312,489 %100.0
143 312,632 %100.0
6 %-
1998
268,917 261,704 %97.3
7,213 268,917 %100.0
-%-
1999
248,607 235,953 %94.9
12,653 248,606 %100.0
1 %-
2000
444,138 432,965 %97.5
11,171 444,136 %100.0
2 %-
2001
699,006 676,682 %96.8
22,321 699,003 %100.0
3 %-
2002
1,335,787 1,282,844 %96.0
51,532 1,334,376 %99.9
1,411 %0.11
2003
1,378,862 1,329,929 %96.5
46,186 1,376,115 %99.8
2,747 %0.20
2004
1,545,051 1,496,005 %96.8
-1,496,005 %96.8
49,046 %3.17
(1) The amount levied and collected is net of resolutions and does not include component units.
Note 1: Amounts collected are on a cash basis rather than 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.
79
TOWN OF FOUNTAIN HILLS, ARIZONA
ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
PRIMARY
Tax
Year
Total
Assessed
Value
Exempt
Amount
Total
Full Cash
Value
Estimated
Actual Value
Net
Assessed
Value
Ratio of Total
Assessed Value
to Total
Estimated
Actual Value
1995
$99,271,154 $5,082,517
$826,917,659 $992,301,191 $94,288,637 %10.00
1996
105,912,474 5,262,641
884,979,322 1,061,975,186 100,649,833 %9.97
1997
118,888,547 6,602,978
1,002,546,459 1,203,055,751 112,285,569 %9.88
1998
141,077,170 7,355,989
1,208,968,752 1,450,762,502 133,721,181 %9.72
1999
170,258,614 9,255,978
1,467,193,748 1,760,632,498 161,002,636 %9.67
2000
198,224,776 8,578,615
1,713,029,238 2,055,635,086 189,646,161 %9.64
2001
232,442,986 12,213,849
1,997,525,319 2,397,030,383 220,229,137 %9.70
2002
260,635,914 13,484,185
2,240,702,344 2,688,842,813 247,151,729 %9.69
2003
299,743,562 16,942,705
2,565,522,177 3,078,626,612 282,800,857 %9.74
2004
340,673,759 21,460,295
2,899,977,948 3,479,973,538 319,213,464 %9.79
SECONDARY
Tax
Year
Total
Assessed
Value
Exempt
Amount
Total
Full Cash
Value
Estimated
Actual Value
Net
Assessed
Value
Ratio of Total
Assessed Value
to Total
Estimated
Actual Value
1995
$105,660,296 $5,498,728
$866,122,390 $1,039,346,868 $100,161,568 %10.17
1996
109,463,361 5,519,310
906,495,406 1,087,794,487 103,944,051 %10.06
1997
123,097,961 6,764,555
1,034,892,731 1,241,871,277 116,333,406 %9.91
1998
155,729,430 8,785,700
1,317,946,863 1,581,536,236 146,943,730 %9.85
1999
185,540,741 10,575,923
1,583,072,952 1,899,687,542 174,964,818 %9.77
2000
221,922,165 9,894,702
1,889,016,352 2,266,819,622 212,027,463 %9.79
2001
253,269,562 14,555,025
2,154,928,885 2,585,914,662 238,714,537 %9.79
2002
287,891,481 17,288,615
2,418,235,666 2,901,882,799 270,602,866 %9.92
2003
344,047,844 20,662,614
2,842,849,050 3,411,418,860 323,385,230 %10.09
2004
377,590,037 28,191,703
3,162,854,959 3,795,425,951 349,398,334 %9.95
(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 maintenance and operation of school districts, community college
districts, counties, cites, 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.
80
TOWN OF FOUNTAIN HILLS, ARIZONA
PRIMARY AND SECONDARY TAXABLE PROPERTY ASSESSED VALUATION
LAST TEN FISCAL YEARS
(UNAUDITED)
Tax
Year
Assessed
Valuation
Town of
Fountain Hills
Assessed
Valuation
Fountain Hills
School District
Assessed
Valuation
Maricopa
County
Assessed
Valuation
State of
Arizona
1995
P
$94,188,637 $88,978,760 $13,302,326,609 $21,688,438,645
S
100,161,568 90,394,390 13,521,174,915 22,179,317,949
1996
P
100,649,833 95,155,307 13,493,736,826 22,109,868,588
S
103,944,051 101,137,745 14,119,434,946 23,022,330,962
1997
P
112,285,569 101,573,954 13,975,668,204 22,811,158,500
S
116,333,406 104,881,097 14,343,156,861 23,333,678,475
1998
P
133,721,181 113,072,537 15,006,270,531 21,001,064,273
S
146,943,730 117,144,929 15,723,498,194 22,333,861,362
1999
P
190,102,361 134,650,036 17,463,875,533 21,670,300,013
S
212,415,476 147,884,952 18,676,830,848 22,533,348,150
2000
P
189,646,161 191,579,669 19,362,298,255 22,645,463,514
S
212,027,463 214,037,354 20,877,715,546 23,547,348,817
2001
P
220,229,137 192,200,924 19,603,718,629 30,144,285,019
S
238,714,537 214,726,796 21,138,917,389 32,071,738,214
2002
P
247,151,729 223,185,771 21,355,326,477 32,518,431,991
S
270,602,866 242,086,985 22,913,134,480 34,468,574,240
2003
P
282,800,857 288,969,887 25,447,850,971 34,868,596,227
S
323,385,230 331,458,411 27,477,987,528 36,825,660,973
2004
P
319,213,464 326,230,578 28,070,870,413 41,886,818,760
S
349,398,334 358,634,532 30,066,986,670 44,480,893,202
P = Primary assessed valuation
S = Secondary assessed valuation
Source: Maricopa County and Arizona Tax Research Foundation.
81
TOWN OF FOUNTAIN HILLS, ARIZONA
PROPERTY TAX RATES FOR ALL
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
Arizona
Community
College
County
Fountain
Hills
School
District
East Valley
Inst.
of Tech
District
Fire
District
Royalties
Sanitary
District
Road
District
Flood
Control
District
Library
District
Volunteer
Fire
District
Central
Arizona
Project
Town of
Fountain
Hills
Total
1995
0.4700
0.8934
1.7726 7.1976
0.0554
0.9781
1.9097
0.5624 0.3632
0.0417 0.0107
0.1400
0.3852
14.7800
1996
0.4700
1.1130
1.8344 7.6367
0.0693
0.9397
1.8590
0.2626 0.3332
0.0099 0.0108
0.1400
0.3192
14.9978
1997
-
1.0476
1.7929 7.1501
0.1616
0.9826
1.8983
0.3186 0.3425
0.0421 0.0109
0.1400
0.3036
14.1908
1998
-
1.1346
1.7929 7.2466
0.1216
1.0407
1.6619
0.1806 0.3425
0.0421 0.0105
0.1400
0.2330
13.9470
1999
-
1.1125
1.8084 7.2134
0.1320
0.9482
1.9394
0.0370 0.3270
0.0421 0.0103
0.1400
0.1699
13.8802
2000
-
1.1285
1.2816 6.2969
0.1217
0.8933
1.8315
-0.2858
0.0421 0.0096
0.1400
0.2578
12.2888
2001
-
1.4557
1.2732 6.3373
0.1120
0.9739
2.0515
-0.2319
0.0421 0.0091
0.1300
0.5605
13.1772
2002
-
1.6016
1.7682 6.3373
0.1117
-
1.2948
-0.2119
0.0421 0.0076
0.1300
1.5344
13.0396
2003
-
1.0785
1.2808 5.7025
0.0976
-
1.1527
-0.2119
0.0521 0.0070
0.1200
0.4762
10.1793
2004
-
1.0372
1.2108 5.5710
0.1032
-
1.1307
-0.2119
0.0521 0.0069
0.1200
0.4250
9.8688
82
TOWN OF FOUNTAIN HILLS, ARIZONA
PRIMARY AND SECONDARY PROPERTY TAX RATES -
ALL DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
Rate
Town
Rate
School District
Rate
County
Rate
State
Rate
Total
1995
P
-
5.50
1.77
0.47
7.74
S
0.39
1.69
-
-
2.08
1996
P
-
4.96
1.69
0.47
7.12
S
0.32
2.67
0.15
-
3.14
1997
P
-
4.98
1.64
-
6.62
S
0.30
2.17
0.16
-
2.63
1998
P
-
4.89
1.68
-
6.57
S
0.23
2.32
0.13
-
2.68
1999
P
-
3.89
1.19
-
5.08
S
0.17
1.96
0.11
-
2.24
2000
P
-
3.91
1.16
-
5.07
S
0.26
2.38
0.12
-
2.76
2001
P
-
4.09
1.18
-
5.27
S
0.56
2.25
0.09
-
2.90
2002
P
0.97
*
4.33
1.68
-
6.98
S
0.56
2.00
0.09
-
2.65
2003
P
-
3.56
1.21
-
4.77
S
0.48
2.14
0.07
-
2.69
2004
P
-
3.50
1.21
-
4.71
S
0.43
2.07
-
-
2.50
P = Primary assessed valuation
S = Secondary assessed valuation
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.
83
TOWN OF FOUNTAIN HILLS, ARIZONA
ASSESSED VALUATION OF MAJOR TAXPAYERS
JUNE 30, 2002*
(UNAUDITED)
Taxpayer
Land Description
2003/04
Assessed
Valuation
As % of Town's
Total Secondary
Assessed
Valuation
Firerock LLC
Vacant Land
$4,045,273
%1.25
Qwest Corporation
TV Systems
3,385,045
%1.05
MCO Properties
Vacant Land
3,079,071
%0.95
Chaparral Town Water Company
Water Utility
2,931,751
%0.91
Fountain Hills Village LLC
Nursing Home
1,947,937
%0.60
Target Corporation
Shopping Center
1,481,678
%0.46
Cox Communications
TV Systems
1,404,400
%0.43
Four Peaks Limited Partnership
Condominiums
1,353,366
%0.42
Fountain Hills-Old Vine LP
Shopping Center
928,888
%0.29
Sun Tech Development
Condominiums
895,446
%0.28
Kimco Barclay Fountain Hills
Shopping Center
859,491
%0.27
Safeway Inc. #1291
Shopping Center
857,444
%0.27
Inn at Eagle Mountain LLC
Hotel
853,886
%0.26
Southwest Gas
Gas & Electric
840,795
%0.26
$24,864,471
%7.70
Source: Treasurer of Maricopa County.
* M ost recent data available.
84
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPUTATION OF LEGAL DEBT MARGIN
JUNE 30, 2004
(UNAUDITED)
Net secondary assessed valuation
$323,385,230
Water, Sewer, Light, Parks, Open
Space and Recreational Facility Boards
Debt limit - 20% of secondary net
assessed valuation
$64,677,046
Bonds outstanding
9,325,000
Net 20% General Obligation Bonding
Capacity
55,352,046
All Other General Obligation Bonds
Debt limit - 6% of secondary net
assessed valuation
19,403,114
Bonds outstanding subject to debt limit
2,415,000
Net 6% General Obligation Bonding
Capacity
16,988,114
Total 20% and 6% Bonding Capacity
$72,340,160
Source: Maricopa County Assessor's Office.
85
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)
Fiscal
Year
Population
Net
Secondary
Assessed
Valuation
Net
Bonded
Debt
Ratio of Net
Bonded Debt
to Assessed
Value
Net Bonded
Debt Per
Capita
1994-95
13,100
$88,796,834 $4,144,881 %4.67
$316
1995-96
14,160
100,161,566 4,277,315 %4.27
302
1996-97
15,220
103,944,051 4,056,473 %3.90
267
1997-98
16,275
116,333,406 3,883,018 %3.34
239
1998-99
18,015
146,943,730 3,913,952 %2.66
217
1999-00
18,595
212,415,476 8,677,053 %4.08
467
2000-01
20,235
212,027,463 8,209,873 %3.87
406
2001-02
20,235
238,714,537 13,410,000 %5.62
663
2002-03
21,740
270,602,866 12,585,000 %4.65
579
2003-04
22,105 *
323,385,230 11,740,000 %3.63 531
* League of Arizona Cities and Towns.
86
TOWN OF FOUNTAIN HILLS, ARIZONA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES
TO TOTAL GENERAL EXPENDITURES
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
Principal
Interest
and Fiscal
Charges
Bond
Issuance
Cost
Total
Debt
Service
Total
Expenditures
(*)
Ratio of Debt
Service to Total
Expenditures
1994-95
$125,000 $327,463
$-$452,463 $4,999,377 %9.05
1995-96
209,193 208,477
-417,670 7,667,025 %5.45
1996-97
222,321 247,311
-469,632 12,850,703 %3.65
1997-98
245,210 554,731
-799,941 10,631,005 %7.52
1998-99
223,024 517,696
54,368 795,088 11,464,538 %6.94
1999-00
339,013 585,001
-924,014 15,404,414 %6.00
2000-01
620,408 1,086,208
144,986 1,851,602 21,368,050 %8.67
2001-02
1,229,215 1,372,965
300,936 2,903,116 32,630,186 %8.90
2002-03
1,393,228 1,576,842
-2,970,070 15,771,446 %18.83
2003-04
1,423,228 1,499,575
-2,922,803 15,399,989 %18.98
(*)
Includes all Governmental Fund Types.
87
TOWN OF FOUNTAIN HILLS, ARIZONA
DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT
JUNE 30, 2004
(UNAUDITED)
Proportion Applicable to
Town of Fountain Hills
Overlapping Jurisdiction
2003-04
Net Secondary
Assessed
Valuation
Net
Outstanding
General
Obligation
Bonded Debt
Approximate
Percent
Net Debt
Amount
State of Arizona
$44,480,893,202 $-%0.79
$-
Maricopa County
30,066,986,670 -%1.16
-
Maricopa County Community College District
28,070,870,413 234,440,000 %1.24
2,907,056
Eagle Mountain Community Facilities District
22,726,874 4,615,000 %100.00
4,615,000
Fountain Hills Unified School District No. 98
358,634,532 27,990,000 %97.24
27,217,476
East Valley Institute of Technology District
13,339,130,459 6,235,000 %2.62
163,357
Fountain Hills Sanitary District
344,262,269 1,320,000 %100.00
1,320,000
Town of Fountain Hills
323,385,230 11,740,000 %100.00
11,740,000
Total Direct and Overlapping General Obligation Bonded Debt
$47,962,889
Source: Maricopa County Treasurer's Office.
88
TOWN OF FOUNTAIN HILLS, ARIZONA
MISCELLANEOUS STATISTICAL DATA
JUNE 30, 2004
(UNAUDITED)
DATE OF INCORPORATION
December 5, 1989
FORM OF GOVERNMENT
Council - Manager
NUMBER OF EMPLOYEES (no police and fire)
Classified - Full time
59
Classified - Part time
18
Exempt
21
AREA
18.27 sq. miles
TOWN OF FOUNTAIN HILLS FACILITIES AND SERVICES
Miles of Street
Surfaced
178.5
Un surfaced
2
Population
1990 census
10,190
1995 census
14,160
2000 census
20,235
Housing Units
11,601
Building Permits Issued
918
Culture and Recreation
Community Centers
1
Parks
4
Park acreage
121
Tennis courts
6
Senior center
1
FACILITIES AND SERVICES NOT INCLUDED IN PRIMARY
GOVERNMENT
Fire Protection:
Number of stations
2
The Town of Fountain Hills has no fire employees, but contracts with
Rural/Metro Corporation to provide fire services to all residents. The
Town does, however, own the fire station and equipment.
Police Protection:
Number of stations
1
Number of police personnel and officers
29
Number of patrol units
9
Number of law violations
Physical arrests
601
Traffic/Parking violations
3,186
Sewerage System:
Special District
Miles of sanitary sewers
200
Number of treatment plants
1
Maximum daily capacity of treatment plant in gallons
2.6mgd
Water System:
Private
Miles of water mains
178
Number of hydrants
1,217
Maximum daily capacity of plant in gallons
11,570,000
Education:
Number of elementary schools
3
Number of secondary schools
1
Source: Town government offices and related districts.
89