HomeMy WebLinkAboutFY06 CAFRTOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Mr. Wall ace J. Nich o ls
Mayor
Councilmembers
Mr. Edwin Ke he
Vi ce Mayor
Mr. Mike Arch ambault Ms. Gi1my D i ckey
Mr. Hem-y Leger M r. Keit h McMahan
Mr. Jay Schlum
Timothy G. Picke rin g, C Ec D , ICMA-CM
Town Manager
J ul ie A. Gh etti , CPA
Finance Direct or
Prepared by:
F inan ce D epartment
TOWN OF FOUNTAIN HILLS , ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Letter of Transmittal
List of Principal Officials
Organizational Chati
TABLE OF CONTENTS
INTRODUCTORY SECTION
GFOA Certificate of Achievement
FINANCIAL SECTION
Independent Auditor's Repm1
Management's Discussion and Analysis
Statement ofNet Assets
Statement of Activities
Basic Financial Statements
Balance Sheet -Govemmental Funds
Reconciliation of the Balance Sheet to the Statement ofNet Assets-
Governmental Funds
Statement of Revenues, Expenditures and Chm1ges in Fund Balances -
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balat1ces to the Statement of Activities -Governmental Funds
General Fund Statement of Revenues, Expenditures, and Changes in
Fund Balances -Budget and Actual
Notes to the Basic Financial Statements
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TOWN OF FOUNTAIN HILLS , ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
TABLE OF CONTENTS
Combining and Individual Fund
Statements and Schedules
Combining Balance Sheet -Nonmajor Govermnental Funds 56
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances-Nomnajor Goverm11ental Funds 58
General Obligation Debt Service Fund -Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual 60
Municipal Property Corporation Fund-Schedule ofRevenues, Expenditures , and
Changes in Fund Balances -Budget and Actual 61
Development Fees Fund-Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual 62
Capital Projects Fund-Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual 63
HURF Fund -Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual 64
Excise Tax 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
Local Comt Enhancement 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
Eagle Mountain Debt Service Fund -Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual 69
Cottonwoods Special AssessmentFund -Schedule of Revenues, Ex penditures, and
Changes in Fund Balances -Budget and Actual 70
TOWN OF FOUNTAIN HILLS , ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FI SCAL YEAR ENDED JUNE 30, 2006
Financia l Trends :
Net Assets by Component
C h an ges in Net Assets
TABLE OF CONTENTS
STATISTICAL SECTION
Fund Balances of Govenunental Funds
C hanges in Fund Balances of Govemmental Funds
Revenue Capaci ty
General Govenm1ent Tax Revenues by Source
Sales Tax Coll ections by Cat egory
D irect and Overlapping Sal es Tax Rates
Assessed V alue and Estimate d Actual Value of Tax able Prope11y
Property Tax Rates -Direct and Overlapping Govermnents
Principal Property Taxpayers
Property Tax Levi es and Coll ections
Debt Capacity
Ratio of Outstanding Debt by Type
Ratio of General Bonde d Debt Outstanding
Direct a nd Overlapping Governmental Activities Debt
Legal Debt Margin Information
Calc ulation of Legal D e bt Margin
Demographic and Economic Info rmation
Demographic and Economic Statistics
Principal Employer s
Operating Information
Full-time Equivale nt Employees by F unction
O p erating Indicators by Function
Capital Assets Statistics by Function
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INTRODUCTORY SECTION
THIS PAGE BLANK
Town of FOUNTAIN HILLS
September 29, 2006
To the Honorable Mayor , Members of the Governing Council, and Citizens ofthe 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 fmancial statements presented in conformity with Generally
Accepted Accounting Principles (GAAP) and audited in accordance with Generally Accepted
Auditing Standards (GAAS) by a finn of licensed ce1iified public accountants. The Comprehensive
Annual Financial Report (CAFR) of the Town of Fountain Hills, Arizona (Town) for the fiscal year
ended June 30, 2006, is hereby submitted. This document represents a joint effort by Town staff as
well as our auditors , Cronstrom, Osuch & Company, P.C.
Tllis 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 for
making these representations, management of the Town of Fountain Hills has established an internal
control framework that is designed to both protect the government's assets from loss, theft, or nlisuse
and to compile sufficient reliable information for the preparation of the Town of Fountain Hills'
fmancial statements in conformity with GAAP. Because the cost of internal controls should not
outweigh their benefits, the Town of Fountain Hills' framework of internal controls has been
designed to provide reasonable rather than absolute assurance that the financial statements will be
free from material misstatement. As management, we assert that, to the best of our knowledge and
belief, this financial report is complete and reliable in all material respects. All disclosures necessary
for the reader to understand the Town's activities have been included.
The Town of Fountain Hills' financial statements have been audited by Cronstrom, Osuch &
Company, P.C., a firm of licensed ce1tified public accountants. The goal of the independent audit
was to provide reasonable assurance that the financial statements of the Town of Fountain Hills for
the fiscal year ended June 30, 2006, are free of material misstatement. The independent audit
involved examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial
statements; assessing the accounting principles used and sigruficant 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 opinion that the
Town of Fountain Hills ' fmancial statements for the fiscal year ended June 30 , 2006, are fairly
presented in conformity with GAAP . The independent auditor's report is presented as the first
component of the fmancial section of tills report .
166705 E. Avenue ofthe Fountains, Fountain Hills , Arizona 85268
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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 auditors.
Town of Fountain Hills Profile
The Town of Fountain Hill s is a planned, family-
oriented community establi shed in 1970 by
McCulloch Properties (now MCO Properties,
Inc.). Prior to 1970 the area was a cattl e ranch
and was part of one of the largest land and cattle
holdings in Arizona. It was purchased by Robert
McCulloch in the late 1960s and designed by
Charles Wood, Jr. (designer of Disneyland in
southern California). The centerpiece of
Fountain Hills is one of the world's tallest man-
made fountains , a focal point that attracts
thousands of visitors each year.
Located on 13,006 acres of land, and bordering northeast Scottsdale, Fountain Hills is surrounded by
the 3,500-foot McDowell Mountains on the west, the Fort McDowell Indian Reservation on the east ,
the Salt River Indian Reservation on the south and by the McDowell Mountain Regional Park on the
north. E levation is 1,520 feet at the fountain, 3,000 feet on Golden Eagle Boulevard, and is 500 feet
above Phoenix.
Over the past sixteen years Fountain Hills has grown from 10,190 residents to a town of 24,492 in
2 005. The latest estimates for Fountain Hills indicate that the population will continue to grow to
near 36 ,045 by 2025 . Although the rate of growth is slowing as the Town approaches build-out, the
community continues to attract residents building large custom homes to take advantage of the scenic
vistas surrounding its mountain community. On June 5, 2006 the Town of Fountain Hills became
two square miles and about ten percent l arger by annexing 1,300 acres of State Trust Land . T he
process to annex the State Trust Land occurred over a two and one-half year period and development
of the land will occur over the next decade. A public auction has been tentatively planned for Spring
2007 and the property wi ll be sold to the highest bidder for development. Annexing this property into
the Town ensures that its future development will be of the highest quality under such Town's
standards as the cut-and-fill ordinance and strict zoning regulations . Fountain Hills will have an
opportunity to demonstrate that it is truly the best place to live in the Vall ey.
The Town offers a range of living styles, from small community subdivisions to a number of large
custom homes. Fountain Hills also offers recreational, cultural and retirement programs that address
the needs and lifestyles of active families and adults. The community consists of primarily residential
property; of the total 13 ,006 acres of land only 3% of the total is zoned commercial , 31% is reserved
as open space and the remainder is residential.
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The Town's Mission Statement for the Organization
The Town of Fountain Hills' purpose is to serve the best interests of the community by:
providing for its safety and well-being;
respecting its special , small -town character and quality of life ;
providing superior public services;
sustaining the public trust through open and responsive government; and
maintaining the stewardship and preservation of its financial and natural resources.
To serve and respect, and provide trust and stewardship.
The Town of Fountain Hills is an Ariz ona Municipal Corporation, acting as a general law Town as
prescribed in the Arizona Revised statutes. The Town was incorporated on December 5, 1989 with
the governmental and administrative affairs of the Town operating under the Council-Manager form
of government. The Town Counc il is res ponsible, among other things , for the adoption of local
ordinances, budget adoption, the development of citi zen advisory committees and hiring the Town
Manager. The Town Manager is responsible for implementation of the policies ofthe Town Council
and administering the Town's operations through three department directors and approximately 87
FTE employees. The Magistrate, Town Attorney and Town Prosecutor are under the direction of the
Town Council.
The Town provides or administers a full
range of services including public safety (law
enforcement, fire , animal control, building
inspection); community development (code
enforcement, planning, zoning and
engineering); the construction and
maintenance of streets and infrastructure,
municipal court, recreational activities,
community center and cultural events. The
Town does not maintain utility or other
operations that require the establi shment of
enterprise funds. Fountain H ill s Town Hall
The financial reporting entity (the Town) includes all the funds of the primary government (i .e ., the
Town ofFountain 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
goverrunent's operations and are included as part of the primary government. Accordingly, the
Cottonwoods Maintenance District, Eagle Mountain Community Facilities District and Fountain Hills
Municipal Property Corporation are included in the financial reports of the Town.
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The annual budget serves as the foundation for the Town of Fountain Hills' fmancial planning and
control. The Town Council formally adopts the budget and legally allocates, or appropriates, avai lable
monies for the General Fund, Highway User Revenue Fund, Special Revenue Funds, Debt Service
Funds, and Capital Projects Fund. Therefore, these funds have appropriated budgets, and budget to
actual information is presented. On or before the second meeting in May the Town Manager submits to
the Town Council a proposed budget for the fiscal year commencing the fo llowing 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 lat er than June 30, the
close of the Town of Fountain Hills' fiscal year. The budget is legall y 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.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood w hen it is
considered from the broader perspective of the specifi c environment within which the Town of
Fountain H ill s operates.
Local economy. Th e Town of Fountain Hills, similar to other Arizon a municipalities, is overly
dependent upon state revenues and local sales tax as a m ajor source of revenue. D uring fiscal year
200 5-06 the Town benefited from a regional economy fueled by the real estat e and construction
industry. St ate and lo cal sales tax revenues provided 51% of the Town's General Fund budget.
Locally, 31% of the Town's sales tax is from construction activ ity and 39% is generated from retail
activity. T h e construction activity is primarily residential ; in FY05-06 the Town issued permits for
130 si n g le -family homes, 325 multi-family units and 10 commercial proj ects.
Sales Tax Activity by Sector-FY02 thru FY06
Construction Tran.s portntionrutil Wh olesale/Retail Res taurant/Bars
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III FYO I -02
QFY02-03
.FYOJ-04
• FY04-05
Ill FYOS-06
T h e chart to the left is a summary of
local sales tax collections from FY02
through FY06 by category. The
increase in the whole sale/ret a il activity
reflects the opening of a new shopping
center that was constructed in October
2002; the center is now 99% occupied .
The increase in construction sal es t ax is
due to the large number of multi-
family, primarily condo, units during
the past year.
The opportunity to further expand the retail tax base in Fountain Hills is limited by the lack of
available commercial land -75% of the developable lots are already developed. However, in FY05-
06 the Town invested $7.6M in improvements to the downtown area including a streetscape
enhancement project along Avenue of the Fountains and a new Town Hall municipal building. The
building was constructed on Avenue of the Fountains as Phase II of the Civic Center project as a
permanent home to Town Government and the streetscape enhancement was designed to revitalize
the downtown area . The Town completed the Avenue of the Fo untains Enhancement Project Phase
1A and 1B in October 2006, which cost about $1.6 million, and included streetlights, shade
structures, sidewalk enhancements and landscape improvements along the north side of the avenue
from La Montana Drive to Saguaro Boulevard and on the south side in front of the Town Hall. The
enhancements were designed to enhance the main street for residents and visitors alike and to
encourage everyone to shop , dine , discover downtown Fountain Hills . T he goal is to create the
perfect place for citizens to shop and dine while enjoying the enchanting surroundings. Once the
project is complete businesses should expect more foot traffic on the A venue creating a place where
people want to be and businesses want to locate . New lighting, pedestrian walkways, water features
and cultural amenities are planned that will provide interest for adults and children.
A new Holiday Inn Hotel with 104 rooms opened in FY 2006 in the downtown area. The final phase
of the Plaza Fountainside project, also in the downtown area, is scheduled to open by the end of
FY2006. At the west gateway to Town, the Fountain Hills Conference and Resort Spa is planned .
The project, which is currently under design will have a combination of condominium units , and
resort hotel rooms that will expand tourism within the community and could bring additional bed tax
revenue to Fountain Hills .
Long-term financial planning. In December 2005, through a citizen driven process, the Town
initiated the "2006-201 0 Strategic Plan" (visit www.fh.az.gov) where the community identified
amenities and priorities that will guide Fountain Hills Town Council Members and staff as they
establish budgets and priorities over the years . A strategic priority that was identified was to resolve
the Town's projected long-term revenue shortfall by December 31, 2007. The citizens recognize the
need to address future revenue shortfalls that will occur when construction related revenues are
constrained by availability of land or the economy.
In June 2006 the Mayor and Town Council reviewed a Twenty Year Financial Overview and Capital
Projects plan that included projected operating and revenues through the year 2025. The purpose of
the overview was to respond to the strategic priority of resolving the future revenue shortfall and
provide a blueprint for future operating and capital costs. The analysis indicated that operating
expenditures will begin to outpace revenues by the fiscal year ending June 30, 2017 with the decline
in construction revenues and increased operating costs . Through the Strategic Planning Advisory
Committee the Town will be conducting several informed choices workshops that will provide an
opportunity to inform residents about the Town's financial options and allow for citizen input. The
committee will present their findings to the Town Council in December, 2006.
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The Fountain Hills Town Council maintains a fund balance policy that ensures adequate reserves that
will provide financial stability in the event of an unanticipated economic downturn. The policy 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 ( 1 0%) 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 unavailabl e for appropriation.
These amounts will not be programmed for expenditure and are only available for use within the
confines of expenditure limitations imposed by the State. A historical perspective of past General
Fund balances is shown in the following chati. The decline in the General Fund balance from FYOO
through FY03 resulted from an economic downturn, spending for capital projects and the creation of
a municipal fire department. This trend was reversed in FY04 and the Mayor and Town Council and
management are committed to maintaining the $6.5M of reserves in the future. A Capital
Improvement Special Revenue Fund has been created and funded with proceeds from excess
revenues collected over budgeted and unexpended appropriations that are not needed to meet fund
balance requirements or re-appropriation. In order to maintain the General Fund balance at $6.5M
approximately $3M was tran sferred to the Capital Projects Fund in FY2005-06.
--------------
Fund Balance & Reserves
General Fund
(in millions)
$8 .0 ~--------------------------------------------~
$7.0 ~----------------------------------------------------
$6.0
$5.0
$4.0
$3.0 -1-----.-----,-----.----.------,-----.-----,-----,-----,-------l
97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07
Fiscal Years
The Council also adopted financial policies that include guidelines for the is suance of debt for capital
expenditures, Community Facility Di stricts , financing altematives, ex penditure controls and
financial planning. The d e bt policy was prepared with a preference for "pay-as-you-go" financing
for capital spending. An investment policy was adopted and was awarded the Investment Policy
Certification from the Association of Public Treasurers ofUnited States and Canada.
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Cash management policies and practices. State statutes permit municipalities in Arizona to
invest in obligations of the U.S. Treasury, commercial paper, corporate bonds, repurchase
agreements, and the State Treasurer's Local Govemment Investment Pool (LGIP). The Town of
Fountain Hills debt policy restricts investments to securities that are 100% backed by the full faith
and credit of the U.S. govemment. The Town of Fountain Hills invests all idle cash in the State
LGIP -GOV, which consists of government-backed securities. The year-to-date yield on
investments as of June 30, 2006 was 4.5418%. 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 govetmnent 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 is a member of the Ari zona Municipal Risk
Retention Pool. Risk coverage includes general liability, workers compensation, errors and
omissions, property and automobile insurance. The policy insures up to $2,000,000 per incident
occurrence plus any excess liability of up to $13,000,000 per occurrence per year. Coverage is
provided on a claims-made basis.
Pension and other postemployment benefits. The Town of Fountain Hills provides two deferred
compensation plans through the Intemational 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 vo luntary
and funded 100% through employee pruiicipation.
For further information on these plans please refer to Note 4 (C) in the fmancial statements.
Awards and Acknowledgements. The Government Finance Officers Association (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Repmiing to the Town of
Fountain Hills for its comprehensive annual financial report (CAFR) for the fiscal yeru· ended
June 30, 2005. This was the ninth consecutive year that the government has received this
prestigious award. In order to be awru·ded a Certificate of Achievement, the government
published an easily readable and efficiently organized CAFR. This report satisfied both GAAP
and app lic able legal requirements.
A Certificate of Achievement is valid for a period of one yeru· only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eli gibi lity for another cetiificate.
In addition, the govemment also received the GFOA's Distinguished Budget Presentation Award
for its annual budget for the fiscal year ending June 30, 2005. In order to qualify for the
Distinguished Budget Presentation Awru·d, the government's budget document was judged to be
proficient in several categories, including as a policy document, a financial plan, an operations
guide, and a communications device. This is the third consecutive year that the Town has
received the award.
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The preparation of this report would not have been possible without the efficient and dedicated
services of the entire team of the Finance and Administration Department. I would also like to
extend my apprec iation to the Mayor and Council for th eir leadership and support. Each member
of the department has my sincere apprec iation for the contributions made in the preparation of this
report.
Respectfully submitted,
/) ~··/
1/ / I . •/ ,/; i·~··· ./
.,//···/·z;~t~;t;· 1(>1 A~? t>
,. ~
.. "/
Timothy G . Pickering, ICJ\1k·C~t CEcD
Town Manager /...-·
i ' ~····· v
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TOWN OF FOUNTAIN HILLS, ARIZONA
LIST OF PRINCIPAL OFFICIALS
ELECTED OFFICIALS
Mayor Mr. Wally Nich o ls
Vice-Mayor Mr. Edwin Kehe
Councilmember Mr. Mike Archambault
Councilmember Ms. Ginny Dickey
Councilmember Mr. Henry Leger
Counc ilmember M r. Keith McMahan
Co un ci lmember Mr. Jay Schlum
APPOINTED OFFI CIALS AND DEPARTMENT DIRECTORS
Town Manager
Magistr ate
Finance Director
Publi c Works Director
Parks & Recreation Directo r
Fire Chi ef
Distri ct Commander
Town Prosecutor
Town Attorney
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Timothy G. Pickering
Ted Armbruster
Julie A. Ghetti, CPA
Tom Ward
Mark Mayer
Scott LaGreca,
Rura l Metro Corporation
Captain Jolm Kleinheinz,
Maricopa County Sheriffs Office
Iacovino & Kay ler
Andrew McGuire,
Gust Rosenfeld, P.L.C.
TOWN OF FOUNTAIN HILLS, ARIZONA
ORGANIZATIONAL CHART
JUNE 20, 2006
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Fountain Hills,
Arizona
For its Co mprehens ive Ammal
F inancial Report
for the Fiscal Year Ended
June 30, 2005
A Certificate of Achievement for Excellence in Financ ial
Reporting is presented by the Govenm1ent Finance Offi cers
Association of the United States and Canada to
govenm1ent units and public emp loyee re tirement
sys tems whose comprehensive annua l fina ncial
rep011s (CAFRs) achieve the highes t
standards in govemment accounting
and fmancial reporting.
President
Exec utive D irector
11
THI S PAGE BLANK
12
FINANCIAL SECTION
13
TH IS PAGE BLANK
14
C ronstrom
Osuch & Com]pany
Cerltified Public Accounlta !rlts
8706 E. MANZANITA DRIVE, SUITE 100
SCOTTSDALE, ARI Z ONA 85 25 8
(480) 348-1102 • F AX (480) 348-11 04
INDEPENDENT AUDITOR'S REPORT
Th e Honorable Mayor and the Town Council of t he
Town ofFountain Hills, Arizona
We have audited the accompanying fmanc ia l statements of the governmental activ ities, each
major fun d, and the aggregate remaining fund infmmation of the Town of Fountain Hills ,
Ari z ona (Town), as of and for the year e nd ed June 30, 2006 , w hi ch collective ly comprise the
Town's bas ic finan ci al stat e me nt s a s li st ed in the tabl e of contents . These financial statements
are the respons ibility of the Town's management. Our responsibility is to ex press opini ons on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standard s generally accept ed in the United
States of America. Those standards require that we plan an d perf orm the audit to obtain
rea so nable assurance about whether the financial stat em ents are free of m ate ri al mi sstate ment.
An aud it includes examining, on a test basi s, evidence s upporting the amounts a nd disclos ures in
the fin a ncial statements. An audit al so includes assess ing the accountin g principles used and
significant es timates made by management, as well as evaluatin g the overall financial statement
presentation . We be li eve that our aud it prov ides a reasonable bas is for our opinions .
In our opini on, the fin a nci a l statements referre d to above present fa irl y, in all materi a l re spects,
the respective financial position of the govenunental activit ie s, each m ajor fund, and the
aggregate re maining fund informatio n of t he Town of Fountain Hills, Ari zona, as of June 30,
2006, and the respective chan ges in financial pos ition , thereof and the r espect ive budgetary
comparison for the General Fund for the year the n ended in conformity with accounting
principles generall y accepted in the United States of America.
The manage ment's discuss ion and a naly si s on pages 17 -27 is not a r equired part of the bas ic
financia l stat ements but i s s upp lementary information required b y the Govenm1ental Accounting
Standards Board. We have app li e d certain limited procedures, which consisted principally of
inquiries of management regarding the methods of m eas urement and presentation of the required
s uppl em e ntary infmmation. However, we d id not aud it the infonnat ion and expr ess no opinion
o n it.
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A PROFESSIONAL CORPORATI ON • WWVV.ClWNSTROM0SUCH .COM
Our audit was conducted for the purpo se of forming opinions on the financial stat ements that
collectively comprise the Town's basic financial statements . The introductory section, combining
and individual fund finan c ial statements and schedules and statistical section are presented for
purpo ses of additional analysis and are not a r equired pmt of the basi c financial stat em ents . The
combining and individual fund financial statements and schedules have been subjected to the
auditing procedures applied in the audit of the basic financial stat ements and, in our opinion, are
fairly stated in all material re spects in re lation to the bas ic financia l statements taken as a whol e.
The intro ductory 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.
~t;vrrv,, d)AIA.c~c "r!vm10, jJ c
Cronstrom, Osuch & Company, P.C.
September 29, 2 006
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Management's Discussion and Analysis
We (the Town of Fountain Hills) (Town) are pl eased to provide an overview of our financial
act ivi ties for the fi sca l ye ar ended June 30, 2006. The intend ed purpose of Management's
Discussion and Analysis (MD&A) is to provide an introduction to the basic fina nci a l statements
and notes, that provides an objective a nd easy to read ana lysis of our financial activities b ased o n
currently known facts , dec isions, and conditions, by pro v iding an eas il y rea da bl e sunm1ary o
operating res ults and reasons for changes, which will help to determine if our financial po s ition
improved or deteriorated ove r the past year. This report addresses current operational activiti es,
th e so urces, uses , and changes in resource s, a dherence to budget, serv ice leve ls, limitations,
significa nt economic factors, and th e statu s of infrastructure and its impacts on our debt and
operation. When referTin g to prior yea rs data in this analysis we wi ll be drawing upor
infonnation from last years' audited fin anc ial report.
Financial Highlights
* T he assets of the Town of Fountain H ill s exceeded its liabilities at the close of the most
recent fi scal year by $4 2.3 million (net ass ets). Of tlli s amount $9M (umestri cte d net
assets) may be used to meet the govermnent's ongoin g obli gation s to citizens and
creditors.
* As of the close of the current fi scal year, the Town of Fountain Hill s' gove nm1ental fund s
reported combined e nding fund balances of $19.1 M , an increase of $4 . 7M in co mparison
with the prior year.
* At the end of the current fi scal yea r, umeserved fund balance for the ge nera l fu nd was
$6 .5M or 52 perc ent of tota l ge neral f und expenditure s. The fund ba lance po licy adopted
by the Council requires a minimum of $5 .I M in designated, undesignated and r eserve
fund s . Surplus reve nues from the prior fi sca l year ($2.6M) a nd th e current fisca l year
($2.9M) were transfen ed to th e Capital Proj ects Fund for future appropri atio n.
* Genera l fund revenues (o n a bud getary bas is) exceeded bud geted revenues by $1. 8M for
fi sca l year 2006. Additiona ll y, budgetary bas is expenditu res were only 87% (I3%
savin gs) ofthe fina l budge t in the Gene ra l Fund.
* Genera l Fund reve nu es exceede d expenditures by $5.I, revenues ha d a po s iti ve variance
of$ I.8M from the original bud get.
* T he Town includes t wo types of separa te legal entiti es in its report -the Fountain Hills
Municipal Property Corpor ati on and Co mmunity Facility Districts. Altho ugh legally
separ ate, these "component units" are important becau se the Town i s financially
accou nta bl e for them. A descri ption of these three types of component units is a vai lab le
in Note I on page 37. Separate F in a ncia l Statements a re n ot avail ab le fo r these entities.
I 7
Overview of the basic financial statements
This discuss ion and analysis is intended to serve as an introduction to the Town of Fountain
Hi ll s, Arizona's basic financial statements. The Town of Fountain Hills, Arizona's basic
financial statements are comprised of three components (as illustrated below): 1) government-
wide financial statements, 2) fund financial statements, and 3) notes to the basic financial
statements. This repmi also contains req uired supplementary information in the form of this
management discussion and analysis letter.
I • Management 's
Discussion
and
Ana l ys i s
-···· ..... .... ...... ·········
Gov e rnm e nt-
wide
Financial
Statements
Summa r y
····· ......
Required Components of the
Annual Financial Report
.... ····· ......
Ba s ic
Finan c ial
S tatem en ts
Fun d
Financial
Statements
Government-wide financial statements
Requir e d
S uppl ementary
In formation
Notes
To the
Financial
Statements
D e tail
The goverrnnent-wide financial statements are designed to provide readers with a broad overview
of the Town's finances, in a matmer 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. Changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cas h flows .
Thus, rev enues and expenses are reported in tllis statement for some items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
18
The govenunent-wide financial statements di stin guish functions of the Town that are principally
supporte d by taxes and intergovenunental reve nues (govenunental activities) f rom other
funct ions that are intended to recover a ll or a significant portion of their costs through user fees
and charges (business-type activities). The governmental activities of the Town include general
government, conununity development, public safety, highways and streets, and culture and
rec reation. The Town does not have any business-type activities .
The government-wide financ i a l statements can be found on pages 30 -31 of this report.
Fund financial statements
Al so presented are the traditional fund financia l statements for governmental funds. A fund is a
gro uping of related accounts that is use d to m a intain control over reso urces that have been
segregated for specific activities or objectives. The Town, like other state and local
governments, uses fund accounting to e nsure and demonstrate compliance with finance-related
lega l re quirements. A ll ofthe fund s ofthe Town are included in the governm e ntal funds.
Governmental funds
Govenm1ental funds are used to account for essentially the same functions reported as
governmental act ivities in the gove nm1ent-w ide financial statements. However, unl ike the
govenunent-wide financia l statements, govenm1enta l fund financial statements focus on near-
term inflows and outflows of spendable resources, as well as balances of spendable r esources
available at the end of the fi scal year. Such information may be useful in evaluating a
government's near-te1m financing requirements. Since the govenm1ental fund financial
statements focus on near-term spendable resources, whi le the govenm1ental activities on the
govenunent-wide financ i al statements have a longer tenn focus, a reconciliation of the
differences between the two is provide d following the fund fin ancial statements' balance sheet
and statement of re venues, expenditures a nd changes in fund balances, respectively.
Notes to the basic financial statements
The notes to the basic financia l statem e nts (pages 3 7 -52) provide a ddition a l infmmation that i s
essenti a l to a fu ll underst anding of t he data provided in th e govenm1 ent-wid e and fund financial
statements and should be read with the financia l statements.
Required supplementary information other than MD&A
Governments have an option of including the budgeta ry comparison statements for the General
Fund a nd major special r evenue funds as e ither part of the fund financial statements w ithin the
basic fin ancial statements, or as r equired suppl em e ntary informat ion after the footnotes . The
Town h as chosen to present these budgetary statements as part of the basic financ ia l statements.
Additionally, governments ar e requir ed to disclose certain inforn1at ion about emplo yee pension
funds. The Town has di sclo sed this information in Note 4.C. in the notes to the fin ancia l
st at em ents .
19
Governm ent-wide Fin ancial Analysis
As prev io us ly m entione d , net assets may serve ove r t ime as useful indi cators of a government's
financ ial pos ition. The follo w in g tabl e refl ec ts the co ndensed Stateme nt of Net Assets of the
Town for Jun e 30 , 2006 compared to the pri or year.
Th e combined net asse ts of the T ow n in creased by 26.4% from $33 .5 milli on t o $42.3 million in
fi sca l year 2 006 , a difference of $8 .8 milli on in gove nm1 ental acti v ities . T he Town do es not
currentl y h ave any propriet ary or enterpri se fund s that would oth er wise be cl ass ifie d as bu siness-
ty pe activiti es. A ll Town fund s are co n sid ered gove nunental activ iti es .
T own of F o unta in Hill s , Arizona
Conde n sed S t atem e nt o f Net A sset s
A s of June 30, 200 6 and 200 5
Governmenta l Activ ities
Pe rcent
2006 20 05 Change
Assets
C UtTe nt a nd othe r assets $ 24 ,58 1,68 2 $ 18 ,958,084 29.7%
Capita l assets
Non-de precia b le 23,57 1,668 30,267,560 (22.1)
De precia b le (net) 24 ,947.862 16,256,985 53.5
Tota l assets 73,101.2 12 65,48 2,629 11.6
Li a biliti es
O th er li abiliti es 4 ,828,94 1 4,11 3,074 17.4
Non-c uJTe nt li abilities
Due w ith in o ne year 1,968,496 1,996,478 (1.4)
Due in m ore th an one year 23.997.510 25,9 12.107 (7.4)
Tota l liab il iti es 30 .794 947 32.02 1,659 (3 .8)
Net asset s
In vested in capita l assets,
net of r e lated debt 2 0,80 6,5 07 17,495,539 18.9
Res tric ted 12,446,147 5,144,12 7 141.9
Unrestri cted 9.0 53.61 1 I 0,82 1.304 (16.3)
Tota l net assets $ 42.30 6 .265 $ 33.460.970 26.4%
Ne t Asset s c onsists of tlu·ee co mp on ents. The largest p 011ion of the T own of Fo untai n Hills ne t
assets ( 49%) r efl ec ts its investme nt in capital assets (e .g ., land , build ings, mac hinery and
equi pment), l ess a ny related d e bt use d to acquire tho se assets that is still o utstandi ng. The Town
of Fou ntain Hills uses th ese ca pita l assets to provid e services to cit ize ns; consequentl y, these
assets are not avail a bl e for f ut ure spending . A lt hou gh the Town of Fountai n Hi ll s ' investment in
its ca pi ta l assets is re p011ed net of re lated debt, it sho uld be noted t hat the reso urces needed to
repay this deb t must be provid ed from oth er so m ces , since the capita l assets themselves ca1mot
be used t o liquidate these li a bilities. T hi s categ01y of Net Assets increased $3.3M in FY05
primarily fro m the in vestme nt in th e Fo untain Hill s downtown area, incl uding a new Town Ha ll.
The second porti on of th e T own of Founta in H ill s ' net assets (29%) repr esents reso urces that ar e
subj ect to ex terna l and interna l restriction s on h ow they may be use d . These assets are restri cted
fo r capita l proj ect s .
20
The remaining balance of umestricted net assets ($9.1M) may be used to meet the govenunent's
ongoing obligations to citizens and creditors. This category decreased by $1.8M in FY06 with
t he transfer of surplus revenues to capita l project funds.
At the e nd of the current fiscal year, the Town of Fountain Hills 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 table on the next page compares the revenue and expenses for the current and previous fisca l
year.
The program revenues (charges for services and grants that are clearly identifiable to an operatin g
function) of governmental activ iti es decreased $264,785 ( 4.1%) overall from the previous year;
grants and contributions , ho wever, increased due to additional grant funding. Fees, fines and
charges for service revenues decreased with a reduction of building related fees that are collected
at the time of permit issuance . Local sa les tax from construction is collected during the
construction project, therefore, lag as a n indicator of building permit activity.
Program expenses increased ove ra ll 9.9%, particularly in Commwlity Development and Public
Safety. The increase in Community Development reflects the internal transfer from Building
Safety of two code enforcement officers and hiring of an additional code enforcement officer to
increase compliance with Town ordinances. The increase in public safety reflects the ammal
increase in the contracts for fire and emergency serv ice s with Rural Metro Corporation and
Maricopa County Sheriffs Office for law enforcement. Highways and streets increases are the
result of the installation of new traffic signal.
2 1
Town of Fountain Hill s , Arizona
Changes in Net Assets
For the Fi scal Year Ended June 30 ,2006 and 2005
Governmental Activitie s
Percent
2006 2005 Change
Revenues
Program revenues
Fees, fines a nd charges for services $ 4 ,133,263 $ 4,490,704 (8.0)%
Operating grants and contribu t ion s 2,022 ,675 1,692,7 12 19.5
Capita l grants and contributions 237,307 N/A
General revenues:
Property taxes 1,648,947 2,020,800 (18.4)
Local taxes 11 ,322 ,283 9 ,095,829 24.5
State shared revenues 5,389,55 1 4,756,481 13.3
Inve stment earnings 673 ,35 1 395,124 70.4
Other 200.92 1 120.666 66.5
Total revenues 25 .390.99 1 22.809.623 11.3
Expenses
General government 3,875 ,014 3 ,7 66,5 00 2.9
Public safety 5,403 ,620 5,024,686 7.5
Hi ghways and streets 1,581 ,068 1,2 81 ,061 2 3.4
Cu lture and recreation 2 ,576,406 2 ,362,66 1 9.0
Conununity deve lopment 1,812,469 1,460,181 24.1
Interest on Jong-tem1 debt 1 297 119 1.162.796 11.6
Total expenses 16 .545 .696 15,057.885 9 .9
In crease in net assets 8,845 ,295 7,75 1,738 14 .1
Net assets, beginning of year (as resta ted) 33.460,970 25,709.232 30.2
Net as sets, end of year $ 42.306.265 $ 33.460.970 26.4%
Governmental activities. An a nalys is of govenm1ental fund revenues and expenditures has been
presented in this discus sio n and analysis and comparative analysis of government-wide revenues
and expenditures. Govenm1enta l activities account for 100% of the total revenues and
ex penditures of the Town. The following grap h illustrates that th e largest financing source for
the Town of Fountain Hills is the local sa les tax (45%); state shared revenues combined account
for 2 1% of the govenm1ent-w ide revenue sources.
GO\'F:R '\~IJ::\T -"IDE RFH:'\ 1.'£ S.Ot'RO:S
fi;ral Y~.w !00~
l!-:1.11~!.4:.
22
Financial analysis of the Town's funds
The focus of the Town 's governmental funds is to provide infonnation on near-te1111 inflows,
outflows, and balances of resources that are available for spending. Such information is useful in
assessing the Town's financing requirements. In pat1icular, umeserved fund balance may serve
as a useful measure of a gove1nm ent' s net resources avail ab le for spending at the end of the fiscal
year. Types of Govermnental funds reported by the Town include the General Fund , Special
Revenue Funds, Excise Tax 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. The size of the Town 's fund balances
can affect its ability to meet special needs and withstand financial emergencies. Availab l e fund
balance can be used to fund capital purchases without having to bon·ow. General Fund balance
represents 32 percent of total fund expenditures, while total fund balance represents 93 percent of
that same amount. Funds in excess of the policy target are typically progranm1ed in the
subsequ ent year to support the Town's Capital Improvement Program and to fund one-time
expenditures.
The fund balance of the govermnental funds is $19.1 million, an increase of $4.7 million, or
33%, from the previous year. Of this, $14 ,393 is classified as "Reserved" because it i s not
appropriab le for expenditure or is legally segregated for a specific future use. Approximately
34% of thi s total amount ($6.5 million) constitutes General Fund balance. The increase in total
fund balance and r estricted fund balance is l argely due to increased construction related revenues
(sales tax and permit fees).
An additional $6.7 million of the governmental fund balance has been designated or committed
for specific purposes by council policy; these designations include current capital projects and
equipment replacement reserves.
At fiscal year-end 2005-2006 fund balances wer e as follows:
Fund
General Fund
General Ob li gation Debt Service Fund
Municipal Property Corporation Debt
Service Fund
Development Fees Fund
Capital Projects Fund
Nomnajor Govemmental Funds
23
Balance
$ 6,53 0 ,248
202,347
736 ,570
2,749,028
6 ,747,238
2,110,964
Increase
(Decrease)
From 2004-05
$ (2 ,552, 195)
(163 ,432)
458,260
319,803
6,747 ,238
(65 ,122)
During FY2005-06 the Town Council adopted a policy that authorized the tran sfer of any
unreser ved, undesignated or des ignated fund balance to the Capital Projects Fund ; subsequ ently,
the Gene ra l Fun d balance declined by $2.6M of surplus revenue s from the prior fis ca l year and
the Capital Proj ects Fund increased accordingly in add ition to the surp lu s fro m the current fiscal
year (pl ease refer to page 17). An additional $1.6M was transfen·ed from the Excise Tax Fund to
complete a downto wn cap ital project.
Development fees consist of govemmenta l impac t fees for str eets and hi ghways , parks and
recreation , law enforcement, genera l govemment and op en space. This is a restricte d fund and
may only be appropriated for capital items for whic h they were imposed. The fund ba lance as of
June 30, 2006 in this fund is $2.7 million; expenditures were made in FY2005 for traffic signa ls,
open space/tra ilhead des ig n and a recreation splash park at Fountain Park .
All Nonmajor Gove nm1ental Funds of t he Town are combined into one column o n the
govemmen tal fund statem ents. The decrease in fund balance for thi s gro up of funds i s attributed
to the use of accumu lated reserves that were appli ed to a restructurin g d ebt transaction ($1.5M)
within the excise tax fund.
The four-tenth s Exc ise Tax (Sa les Tax) F und is dedicated by the Town Council for downtown
developme nt and debt payments for the M unic ip al Propetiy Corpo ration (transfer s to de bt
service). Rev enues in thi s fund increased over th e prior year w ith the increa se in construction
related activity. Operating expenditures are for the coo rdinator for economic de velopment in the
Town's downtown core.
Nonmajor governmental fund s of the Town a lso include the H ighway User Revenue Fund that is
required by state statute to trac k the state allocation of gasoline taxes and other state revenues
shared w ith local governme nt s. HURF fund s are re quired to be used fo r tran spmiation purpo ses .
Revenue in thi s f und increased $73 ,744 (4%) in fi scal year 2006 with an inc rease in state shared
revenu es. Special Revenue (comi and grants) as we ll a s non-ge nera l obligation debt se r v ice are
a lso includ ed within thi s group.
Budgetary highlights
The Town's annua l budget is the lega ll y adopted ex p enditure contro l doc ument of the Town.
Budgetary com pari son statements are required for the General Fund and all m ajor special
rev enue fund s and may be found on page 36. This statement compares the original adopted
budget, the budget if amended throughout the fi scal year, and the actua l expenditures prepared on
a bud getary basis . The Town d id not amend its budget durin g the fisca l year.
24
General Fund revenues of $17 .7 million, on a budgetary basis , exceeded budgeted revenues by
$1.8 million whi le budgetary basis expenditures of $12.6 million were only 87% of budgeted
expend itures (savings of $1.9 million). The excess of revenues over budgeted revenues is
primarily due to better than expected construction related activity, for both building pem1its and
local sales tax revenues , primarily from condominium construction. The expenditure savings
were derived from withholdin g a sales tax refund claim included in the budget that is being
litigated and included in the FY06-07 budget. Other savings were due to the early payoff of a
development agreement with the Target shoppi n g Center. Addit ionally , an appropriation was
included for a claim by the old Town Hall landlord for rent and property taxes that is also canied
over to the cunent fiscal year.
Capital asset and debt administration
The Town's capital assets for its govenm1ental activities as of June 30 , 2006 amount to $48.5
million (net of accumu lated depreciation), a net increase from 2005 of 4.3%. For govenm1ent-
wide financial statement presentation, a ll depreciable capital assets were depreciated from
acquisition date to the end of the current fiscal year. Fund financial statements record capital
asset purchases as expe nditures . See Note 3 in the Notes to the Basic Financial Statements for
further information regarding capital assets .
Capita l assets include land, buildings and improvements, machinery and equipment, roads and
improvements, vehicles, office and computer equipment. During fiscal year 2005-2006 the
annual depreciation expense was $1,127 ,927 . T he following table provides a comparison of
current and prior year capital assets.
Land
Con struction in progress
Buildin gs and improvements
Town ofFountain Hil ls, Ari zona
Capita l As sets (Net)
June 30, 2006 and 2005
Governmental Activities
2006 2005
$ 23,57 1,668 $ 23 ,571 ,668
6,695 ,892
16 ,448,465 9,128 ,812
Improvements other than buildings 6 ,71 1,069 5,814 ,099
Infrastructure 870,250 483,162
Furniture, machinery and equ ipment 690,231 460,889
Vehicles 227.847 370.023
$ 48.519.530 $ 46.524.545
25
Percent
Change
%
80 .2
15.4
80.1
49.8
(38.4)
4.3%
Long-term debt
The Town 's outstanding non-cunent liabilities, including bonds and compensated absences, were
$26 million at June 30, 2006, all in governmental activities. The Town's outstanding debt
decreased $1.9 million in fiscal year 2006. The Town issued $17M in refunding General
Obligation and Municipal Property bonds in June and July, 2005 in order to take advantage of the
more attractive interest rates. At the end of the cmTent fiscal year, the Town of Fountain Hills
had total long-term obligations outstanding of $26 million. Of the outstanding debt, $8.4 million
is General Obligation bonds backed by the full faith and credit of the Town. All other
outstanding debt is sec ured by pl edges 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 seco ndruy net assessed valuation of the Town. The Town's available
debt margin at June 30,2006 is $19.8 million in the 6% capacity and $68.0 million in the 20%
capacity. Additional infonnation on the debt limitations and capacities may be found in the
statistical section ofthis report (page 89).
The following schedule shows the outstanding debt of the Town (both current and long-term) as
of June 30, 2005 and 2006. Further detail on the Town's outstanding debt may be found in Note
3.C. on pages 48-50.
Town of Fountain Hills, Arizona
Outstanding Debt
General Obligation Debt
Highway User Revenue Bonds
Special Assessment Debt
Community Facilities District
Debt
Municipal Property
Corporation Debt
Compensated Absences
June 30, 2006 and 2005
Governmental Activities
2006 2005
$ 8,434,328 $ 9,607,162
455,000 540,000
9,681 12,909
4,415,000 4,455,000
12 ,434,014 13,108,935
217 983 184.579
$ 25,966.006 $ 27.908.585
Percent
Change
(12.2)%
(15. 7)
(25.0)
(0.9)
(5.1)
18 .1
(7.0)%
The Town cuiTently maintains a rating on its general obligation debt of Aa3 from Moody's
Investor Services.
26
Economic factors and next year's budgets and rates
The regional ec onomy remain s strong, fu e le d by the rea l es tate market , strong popu l at ion growth
a nd inc reased personal income. Within Fountain Hill s, the Town remain s depe ndent on state
share d re ven ue s (29%) and lo cal sa les taxes for re so urces (44%) that are se nsitive to eco nomic
downturns and le gis lative appropr iations. Fountain Hill s' economic activity is fue led primarily
by the construction industry as development of custom homes continues before build-out is
reach ed.
The budget for fi sca l year 2005-2006 includes re so urce s target ed towards econ om ic development
in the do wntown area (Avenu e of the Fountains). A pmiion ofthe local sa les tax is segregated
and intended to focus on deve loping the downtow n area to promote economic development.
Financial contact
This financial report is designed to provide a general overview of the Town's fin ances for all of
those w ith an interest in govenunent's finances and to de monstrate accou ntabili ty for the use of
public fund s. Questions about any of the information provided in thi s report , or requests for
additional financial information should be ad dre ssed to:
Town of Fountain Hill s
Finance Depruiment
16705 E. Avenue ofthe Fountain s
Fountain Hills, AZ 85 26 8
27
Or vi sit our website at:
http:/ /www.fh.a z .gov
THIS PAGE BLANK
28
Basic Financial Statements
29
Assets
Cash and eq ui va lents
Cash with paying agent
Receivab les, net
Accounts receivable
T axes rece i vab le
TOWN OF FOUNTAIN HILLS , ARIZONA
STATEMENT OF NET ASSETS
JUNE 30, 2006
Intergovernmental receivable
Special assessments receivable
In ventories
Prepaid items
Deferred charges
Capital assets
Non-depreciable
Depreciable (ne t)
Tota l assets
Liabilities
Accounts payable
Contracts payab le
Inte res t payable
Deposits payabl e
Due to deve lopers and CFD
Matured debt p rin cipal payab le
Noncurrent li ab iliti es
Due withi n one year
Due in more than one year
Total l iabilities
Net assets
Invested in capital asse ts, net of re lated debt
Restricted for
Publ ic safety
Hi g hways and streets
Deb t service
Capita l outl ay
Other
Un restri c te d
Tota l ne t a ssets
Governmental Activities
$ 19,452,083
2 ,578,729
48 1,320
28,754
1,59 1,418
4,108
12 ,444
1,949
430,877
23 ,57 1,668
24.947.862
73.101.2 12
1,930,24 3
6 1,142
586,562
22,000
263 ,994
1,9 65 ,000
1,968,496
23.997.5 10
30.794.947
20,806,507
163 ,082
1,102 ,905
1,098,447
9,396,266
685,447
9.053.6 11
$ 42.306.265
Th e notes t o the financia l statements are a n in tegr a l patt of th is statement.
30
Functions/Programs
Governmental activities
General government
Public safety
Highways and streets
Culture and recreation
Community deve lopment
Intere st on long-term debt
Totals
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Fees, Fines and
Expenses
$ 3,875,014 $
5,403 ,620
1,581 ,068
2,576,406
1,812,469
1.297.119
$ 16.545.696 $
General revenues
Taxes
Sales taxes
Property taxes
Franchise taxes
Charges for
Services
4,029 ,437
-
16,881
65,798
21.147
4.133.263
Program Revenues
Operating
Grants and
Contributions
$
336,584
1,686,091
-
-
$ 2.022.675
State revenue sharing-unre stricted
State sales tax revenue shari ng -unrestricted
Auto lieu tax rev enue sharing -unrestricted
investment earnings
Other
Total general revenues
Change in net assets
Net assets, beginning of year
Net assets, end of year
Capital Grants
and
Contributions
$ -
-
-
-
-
-
$
The notes to the fmancial statements are an integral part of this statement.
3 I
Net (Expenses)
Revenue and
Changes in Net
Assets
Totals
$ 154,423
(5,067,036)
12l,904
(2 ,51 0,608)
( 1 ,812,469)
( 1.275.972)
(I 0.389. 758)
11 ,007.924
1,648,947
314,359
2,244,159
2,170,940
974,452
673 ,351
200.921
19.235.053
8,845,295
33.460.970
$ 42.306.265
Assets
Cash and eq u ivalents
Cash with paying agent
Accoun ts receivable
Taxes rece ivable
Intergovernmental receivable
Special assessments receivable
In ve ntories
Prepaid items
Total assets
Liabilities a nd F und Bala n ces
Liabilities
Accounts payable
Contracts payable
Intere st payable
Deferred revenue
Deposits payable
Due to developers and C FD
Matured debt principal payable
T otal liabi litie s
Fund balances
Reserved for inventories
Reserved for prepaid items
Unreserved
Unreserved, re ported in n onmaj or
Special revenue funds
Debt service funds
T otal fund balances
Total liabilities and fu nd balances
TOWN OF FOUNTAIN HILLS, ARIZONA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2006
General Municip al
Obl igation Property Development Capital
General Debt Service CO!J20ra ti on Fees Projects
$ 5,938 ,981 $ 205,962 $ 7 14,652 $ 3 ,187,877 $ 7,096,786
1,293 ,429 960,566
3 13 ,083
11 ,929 8 ,541
I, 188 ,570 25,601
12,444
1.949
$ 7.466.956 $ 1.533 .533 $ 1.675.2 18 $ 3.187.877 $ 7 ,0 96.786
$ 72 1,778 $ 648 $ 5,249 $ 278,849 $ 288,406
61 ,142
2 18,429 268 ,399
192,930 37,109
22,000
160,000
1.075 .000 665.000
936.708 1.331.186 938.648 438 849 349.548
12,444
1,949
6,515 ,855 202,347 736,570 2,749,028 6, 747,238
6.530.248 202.347 736.570 2.749 .028 6.747.23 8
$ 7.466.956 $ 1.533.533 $ 1.675.2 18 $ 3.187.877 $ 7.096.786
The note s to the financial statements are an integral part of thi s stateme nt .
32
Nonmajor
Governm ental
Funds T otals
$ 2,307,825 $ 19 ,452,083
324,734 2,578,729
168 ,237 48 1,320
8,284 28,754
377,247 1,59 1,4 18
4,108 4,108
12,444
1.949
$ 3.190.435 $ 24.150.805
$ 635,3 13 $ 1,930,243
6 1,142
99,734 586,562
15,430 245,469
22,000
103 ,994 263 ,994
225.000 1.965.000
1.079.47 1 5.074.4 10
12,444
1,949
16,95 1,038
1,95 1,434 1,95 1,434
159.5 30 159.530
2.110.964 19 .076.395
$ 3.190.435 $ 24.150.805
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
J UNE 30, 2006
Fund balances -tota l go vernm ental funds
Amounts repo rted for governmental acti vities in the statement of net assets are different because:
Property taxes and special assessments not collected within 60 d ays s ubseq uent to fisca l year-end are
deferred in the govem mental fi.mds.
Capital assets used in governmental activitie s are not financia l re so urces and therefore are not reported in
the government al funds.
Governmental capit al assets
Less accumulated depreciation
Capital assets used in govern mental activities
Other long-term assets are not avail ab le to pay for current-period expenditures and are no t s usceptib le to
accrual.
Long-term li abiliti es, including bonds payab le, are not due and payable in the current period an d
therefore are not repo1ied in the governmental funds.
General obligation bonds
Reven ue bonds
Special assessme nt debt with government commitment
Community facili ti es d istrict bonds payable
Defe rred amount on the refunding
Defe1Ted amount on the bond premium
Deferred issuance cost s
Compensated absences
Net assets of governm ental act iv ities
The notes to the financial statem ents are an integra l patt of th is stat ement.
33
$
$
19,076,395
55 ,700
55,656,739
(7.137.209)
48.5 19.530
189 ,769
(I 0,055,000)
( 12 ,3 I 0,000)
(9,681)
(4 ,4 15,000)
1,165,672
(124 ,0 14)
430 ,8 77
(217.983)
42.306.265
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Genera l Municipal Non major
Ob li gation Property Development Capital Govemmental
General Debt Service Coq~oration Fees Proj ects Funds
Rev enues
Taxes
Sales taxes $ 8 ,786,172 $ $ $ $ 528,225 $ 1,693,527 $
Property ta'l:es 1,325,58 1 346,012
Franchi se taxes 314,359
Intergovernmental 5,389,55 1 2 ,022,675
Fi nes and forfei tures 2 14 ,008 2 1,042
Licenses and penn its 1,9 18 ,107
Charges for services 251 ,538 1,424,706 12 ,802
Rents an d royalties 255,527
Special assessments 21 ,147
Investment earnin gs 303,834 29,37 1 34,658 11 3,870 105,176 86,442
Oth er 228.450 1.036 4.079
Total Revenues 17.661.546 1.355.9 88 34.658 1.538.576 633.40 1 4.207.726
Expenditures
Current
Genera l government 3 ,507,216 12,415 649,649 289,903
Public safety 5,203 ,208 5,562
Hi ghways and streets 413 ,595 1,708 ,39 1
Cu lture and recreation 2 ,040,788 542,35 1 959,92 1 64,690
Community development 1,8 12,469
Debt Serv ice
Principa l retirement 1,075,000 665 ,000 228,228
Interest on long-term debt 444,420 546,576 201,418
Issuance costs 232,762
Advance refund ing escrow 300.000
Total Expenditures 12.563.68 1 1.519.420 1.2 11.5 76 973.923 1.609.570 3.025.392
Excess (defi ciency) of rev enues over
expenditures 5.097.865 ( 16 3.432) (1.176 .918) 564.653 (976.169) 1.182.334
Other financing sources (uses)
Transfe rs in 1,652 ,2 40 7,723,407 77 1,0 16
Totals
11,007,924
1,67 1,593
3 14 ,359
7,4 12,226
235 ,050
1,9 18,107
1,689,046
255 ,527
2 1,147
673 ,35 1
233.565
25.43 1.895
4 ,459,183
5 ,208,770
2,12 1,986
3 ,607, 750
I ,8 12,469
1,968,228
1,192,414
232,762
300.000
20.903.562
4 .52 8 .333
10 ,146,663
Transfers out (7 ,650,060) (17 ,062) (244 ,850) (2,234,69 1) (I 0 , 146,663)
Issuance o f refunding debt 4 ,555,000 4 ,555 ,000
Pay me n t to refunded debt e scrow
agen t (4.338.78 1) (4.338.78 1)
Tota l other finan ci ng sources (uses) (7 .650.060) 1.635.178 (244.850) 7.723.407 ( 1.24 7.456) 216.219
Net change in fund balances (2,552, 195) ( 163 ,432) 458,260 3 19 ,803 6 ,747 ,238 (65 ,122) 4 ,744 ,552
Fu n d balances , beginning of year 9.082.443 3 65.77 9 278 .3 10 2.429.225 2.176.086 14.33 1.843
Fun d balances, end of year $ 6.530.248 $ 202.347 $ 736.570 $ 2.749.028 $ 6.747.238 $ 2.1 10.964 $ 19.076.395
The note s to the financial statements are an integral patt of thi s statement.
34
TOWN OF FO UNTAIN HILLS, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES , EX PENDITURES, AN D
C HANGES IN FUND BALANCES TO THE STATEMEN T OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDE D JUNE 30, 2006
Net ch ange in f und bal ances -t otal gove rnmen ta l fu nds
Amounts reported for governmental activ iti es in the stateme nt of act ivities are di fferent because:
Governmental fund s report cap ital outl ays as ex p enditures. However, in the statement of act ivities the
cost of those asset s is allocated over their esti mate d u seful li ves a nd reported as d epreciation ex pen se.
Expend itures for capital a ssets
Less c urrent year deprec iati on
Excess capita l ex pe nditures over d eprec iation
Some revenues re po rted in the st atement o f activ iti es do not p rovid e curre nt fin anc ia l reso urces and
the refo re are not reported as revenu es in governmental fund s.
C ourt fin es
Property taxes
T he issuan c e of long-term debt (e.g. bonds, leases) provid es current financial resources to governmental
funds, wh il e the repayment of th e p rinci pa l o f long-term debt consumes t he curre nt financ ial resources of
governmental fund s. Neither tran sa cti on, howeve r, has a ny effect o n ne t asset s. The issuance of long-
term debt in creases lo ng-te rn1 li ab iliti es o n th e statement of n et assets a nd the repayment of princ ipal o n
long-tenn debt reduces long-te rm d ebt o n th e statement of net assets. Also, governmenta l fun ds report
th e effect of issuan ce costs, premiums, di scounts, and simil ar ite ms wh e n the debt is first issued, w he reas
these it ems are deferred and a morti zed over t he t erm o f th e lo ng -t erm debt in th e statement of acti v it ies.
Principal payments o n lon g-term deb t
Issu ance costs
Proceed s o f ref unding debt issuance
P ayment to refun ded debt escrow agent
Amortizatio n of issuance costs
Amortization of deferred amount on th e premium and th e refunding
Some expenses reported in the statement o f activ iti es do not require the use of current fin a ncial reso urces
and therefore a re not reported as ex penditures in the governmenta l fu nds.
Net in c rease in compensated ab sences
Change in net a ssets of governme ntal acti vi t ies
The not es to the financia l statements are an integra l part of this stateme nt.
35
$ 4,744,5 52
3,122 ,9 12
( 1.1 27.927)
1.994.985
( 18,2 58)
(22 ,646)
1,968 ,228
232,762
( 4,555 ,0 00)
4,638 ,7 8 1
(28 ,679)
(76 ,026)
(33.404)
$.====:f8~. 8::;45;;,;;. 2f:::!9~5
TOWN OF FOUNTAIN HIL LS, ARIZONA
GENERAL FUND
STATEMENT OF REVENUES , EXPENDITURES , AND CHANGES IN FUND
BALANCES -BUDGET AND ACTUAL
FOR T HE FISCAL YEAR ENDED JUNE 30, 2006
Original and Final Variance with Final
Budget Actual Budget
Revenues
Taxes $ 8,092,000 $ 9, I 00 ,53 1 $ 1,008,53 1
I ntergovemme nt a l 4,975,159 5,389,551 414,392
Fines and forfeitures 236,240 2 14,008 (22,232)
Licen ses and permits 1,775,165 1,9 18,107 142,942
Charges for servic es 318,450 25 1,538 (66,9 12)
Rents and royalti es 227,002 255 ,527 28 ,525
Investment earnings 130,000 303,834 173,834
Other 102.148 228.450 126.302
Total Rev enu es 15.856.164 17.661.546 1.805.382
Expendi t ures
Current
General govemment
Mayor and Town Counci l I 10 ,663 79,268 3 1,395
Magistrate Co urt 362,275 340,29 1 2 1,984
General and Administrative 1,284,308 1,265 ,041 19,267
In formation Technology 36 1,455 330,206 3 1,249
Operati onal Support 2.70 1.0 17 1.492.4 10 1.208.607
Total genera l govemment 4.819.718 3.507.2 16 1.3 12.502
Publi c safety
Building Safe ty 652,845 583 ,804 69,04 1
Law Enforcement 1,903 ,894 1,907,0 I 5 (3 , 12 1)
Fire Department 2.698.593 2. 712.389 (13.796)
Total public safety 5.255.332 5.203.208 52.124
Culture and recreation
Parks and Recreation 597,714 557,235 40,479
Desert V ista Park 87,250 38,069 49,18 1
Go lden Eagle Park 396,620 40 1,743 (5 ,123 )
Foun ta in Park 362,700 275 ,442 87,258
Four P eaks /Pal isades Court 225,390 193,6 19 3 1,77 1
Co mmunity Center 484,824 44 1,75 1 43 ,073
Sen ior Services 174.400 132 .929 4 1.4 71
Total cu lture and recreation 2.328.898 2.040.788 288.11 0
Community deve lopment
Planning an d Zoning 742 ,240 745 ,675 (3 ,435)
Public Works 1.36 1.804 1.066.794 295.0 10
T otal co mmunity deve lopment 2.104.044 1.8 12.469 291.575
Total Expenditures 14.507.992 12.563.68 1 1.944.3 11
Excess (deficiency) of revenues over expenditures 1.348.172 5.097 .865 3.749.693
Other financing sources (uses)
Transfers out ( 1.348.172) {7.650.060) ( 6.30 1.888)
Total other financ ing sources (uses) ( 1.348.172) (7.650.060) (6.30 1.888)
Net change in fund balan ces (2 ,552, 19 5) (2 ,552, 195)
Fund ba lances, beginning of yea r 6.392.523 9.082.443 2.689.920
Fund balances, e nd of year $ 6.392.523 $ 6.530.248 $ 137.725
T he notes to the financial statements are an integra l part of this statement.
36
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying basic financial statements of the Town of Fountain Hills, Ari zona
(Town) have been prepared in conformity with U.S. generally accepted accounting
principles applicable to govenm1ental units adopted by the Govenm1ental Accounting
Standards Board (GASB). A smmnary of the Town's more significant accounting
policies follows.
A. Reporting entity
The Town is a municipal govenunent that is governed by a separately elected governing
body. It is legally separate from and fiscally independent of other state and lo cal
goverru11ents . 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
pari of the Town's operations. A separately issued annual financial repmi 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 Prope1iy Corporation's (MPC) board of directors
consists of three members which m·e 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 obli gation" 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 pmi ofthe Town's operations.
37
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
B. Government-wide and fund financial statements
The government-wide financial statements (i.e ., the statement of net assets and the
statement of activities) rep01i inforn1ation on a ll of the nonfiduciary activities of the
primary govermnent 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.
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
govemmental funds are rep01ied as separate colurm1s in the fund basi c financial
statements.
C. Measurement focus, basis of accounting, and fmancial statement presentation
The goverrunent-wide financial statements are rep01ied 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 incuned, 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 liabilities of the current period. For this purpose , the Town
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Expenditures generally are recorded when a liability is incuned, 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-tern1
principal and interest due early in the following year, the expenditures and related
liabilities have been recognized in the Debt Service Fund.
38
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FIS CAL YEAR ENDED JUNE 30, 2006
Propetty taxes, intergovenm1ental g rants and aid, and interest associated with the current
fisca l period are a ll con sid er ed to be s usce ptibl e to accrual and so have been recognized
as revenues of the cunent fiscal p eriod . A ll other revenue items are cons idere d to be
meas urabl e and a vailabl e onl y when cash i s r ece ived by the govern ment.
T he Town repmts the following major governmental fund s:
The General Fund is the Town's prima ry operating fund . It accounts for all
financial r eso urces of the Town, except tho se required to be accounted fo r in
another fund.
The General Obligation Debt Service Fu nd accounts fo r th e To wn's propetty tax
r evenues received to pay the d ebt se r vice of the Town's general obli gation bonds.
The Municipal Property Co rp oration Debt (MPC) Service Fund accounts for the
r evenue s received to pay the debt se rv ice on MPC revenu e bond s .
The Developm ent Fees Fund accounts for development fees coll ected from
developers restricted for proj ects approved by the Town Council.
The Capital Projects Fund account s for the Capital improvements to vari ous
projects ofthe Town.
As a general rul e the effect of inte rfund ac ti vity has been eliminated f rom the
govenunent-wide fin anc ia l statements. H owever , services provided and u sed are not
e li minated in the pro cess of co n solidation.
Amounts reported as prog ram revenues include 1) fees, fi nes and char ges for ser vices,
2) operating grants and co ntributions, and 3) capital g rants a nd contributions. Internally
d edi cated re sources a re reported a s gen er al revenues rather than as program r evenue s .
Likewise, ge neral revenues include all taxes.
When both re stricted an d unrestricted resources are avail ab le for use, for goverrunental
activiti es, it is the Town's policy to use restricted re so urc es first, then unrestricted
r eso urces as they are need ed.
39
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30 , 2006
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
d eposits, cash and investments held by the State Treasurer, and hi ghly liquid investments
with maturities oftlu·ee months or less from the date of acquisition.
Cash and investments are pooled except for funds required to be he ld by fiscal agents or
restricted under provisions of bond ind entures. Interest eamed from investments
purchased with s uch pooled monies is allocated to each of the fund s based on the average
da il y 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 d epositories, repurchase
agreements, obligations of the State of Arizona or an y of its counties or incorporated
cities, towns or duly organized sc hool district s, improvement district s in tllis state and the
State Treasurer's Local Government Investment Pool. Investments are state d at fa ir value.
2. Receivables
All trade and property taxes receivables are shown net of an allowance for uncoll ec tible s .
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 in stallm ent is due on the
first day of October and becomes del inquent after the first bu siness day of November.
The second installment is due on the first da y of March of the next year and becomes
delinquent after the first business day of May. However , a lien against rea l and personal
property assessed attach es on the first day of January preceding assessment and levy
thereof.
3. Short-term interfund receivables/payables
During the course of operations, individua l funds wi tllin the Town's pooled cash accounts
may bonow money from the other funds within the poo l on a short-term basis. These
receivables and payables are class ified as "due from other f und s " or "due to other funds"
on the ba lance sheet of the fund financial statements and are eliminated in the preparation
of th e govemment-wid e fin ancial statements .
4. Inventories and prepaid items
Inventories consist of exp endabl e s uppli es held for consumption. Inventories are valued
at cost using the fir st-in/first-o ut (FIFO) method. Inventories of gove nunental funds are
recorded as expenditure s when consumed rather than when purchased.
40
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30 , 2006
Cetiain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both goverrunent-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 govenm1ent-wide financial statements. Capital
assets are defined by the Town as assets with an initial, individual cost of more than
$10,000 and an estim ated useful life in excess of one year.
Propetiy, plant and equipment purchased or acquired is canied at historical cost or
estimated historical cost. Contributed assets are recorded at fair market valu e 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 repmied in the basic
financial statements . Those assets wi ll be transitioned in over the next two fisca l 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
Improvements other than buildings
Infrastructure
Furniture, machinery and equipment
Vehicles
6. Compensated absences
50 years
20 years
50 years
5 years
5 years
The liability for compensated absences reported in the government-wide statements
consists of unpaid, accumulated l eave balances. The liability has been calculated using
the vesting method , in which leave amounts for both emplo yees who currently are eligible
to receive tennination payments and other employees who are expected to become
eligible in the future to receive such payments upon termination are included.
41
TOWN OF FOUNTAIN HIL LS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FIS CAL YEAR ENDED JUNE 30, 2 006
7. Long-term obligations
In the govenunent-wid e financial statement s, lon g-tenn debt and other long-tem1
obligations are reported as li abilities in the applicable governmenta l activities. Bond
premiums and di scount s, as we ll as issu ance costs, are de fened and a morti ze d over the
li fe 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 ammtized over the term of the re lated d eb t. The Town did not have ·any
premiums, discounts or iss uance costs re lated to any outstanding bonds.
In the fund financial st atements , govenm1ental fund types recognize bond premiums and
disc ounts , as well as bond issuance cos ts, durin g the cunent p eriod . The face amount of
debt iss ued is repmted as other financing source s. Premiums rec eive d on debt iss uances
are reported as other financing sources w hile discounts on debt issuances are reported as
other financ ing u ses . Iss uance costs, whether or not withheld from the actual d ebt
proceeds receive d, are repmted as debt service expenditures.
8. Net assets
In th e goverrunent-wide financial st ate ments, net assets are repmted in tlu·ee categories:
net assets inve sted in capital assets, net of related debt ; re stri cte d n et assets; and
umestricted net assets. Net assets invested in capital assets, net of related debt is
separat ely repmted because the Town repo rts all Town assets which make up a signifi cant
pmiion of tot al net assets. Restricted n et assets account for the portion of net assets
res trict ed by parties outside the Tow n. Um estri cted n et assets are the remaining net
assets not included in the previous two categories.
9. Fund equity
In th e fund financial statements , govenm1 ental funds report reservations of fund bal ance
for amounts that are not availab le for appro pri ation or are legally restricted by outside
parties for use for a specific purpo se. Designations of fund balance represent tentati ve
management plans that are subject to change.
42
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
NOTE 2-STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary information
The Town Council follows these procedures in establishing the budgetary data reflected
in the financial statements :
1. In accordance with Arizona Revised Statutes, the Town Manager submits a
proposed budget for the fiscal year conm1encing the following July 1 to the Town
Council. The operating budget includes proposed expenditures and the means of
financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comment.
3. State law requires that, prior to April 1, the Economic Estimates commission
provides the Town with a final expenditure limit for the coming fiscal year. To
ensure compliance with the expenditure limitation, a uniform expenditure report
must be filed with the State each year. This repmi, issued under a separate cover,
reconciles total Town expenditures from the basic financial statements to total
expenditures for repmiing in accordance with the State's uniform expenditure
repotiing system (A.R.S. §41-1279.07).
4. By Arizona Constitution, expenditures may not legally exceed the expenditure
limitation described below of all fund types as a whole. For management
purposes , the Town adopts a budget by depmiment for the General Fund and in
total by fund for other funds . The Town Manager, subject to Town Council
approval, may at any time transfer any unencumbered appropriation balance or
pmiion thereof between departments. The adopted budget cannot be amended in
a11y way without Town Council approval.
5 . Legal budgets are adopted for the Ge neral , Special Revenue, Debt Service and
Capital Projects Funds on essentiall y the same modified accrual basis of
accounting used to record actual revenues and expenditures, with the exception of
the Criminal Enhm1cement Justice Fund and Capital Projects Fund for which a
budget was not prepm·ed.
The Town is subject to the State of Arizona's Spending Limitation Law for Towns and
Cities. This law does not permit the Town to spend more than budgeted revenues plus
the can-yover umestricted 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.
43
TOWN OF FOUNTAIN HILLS, ARJZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUN E 30, 2 006
No supplementary budgetary appropriations were necessary during the year.
B. Excess of expenditures over appropriations
Expenditures exceeded appro pri ations in the following funds:
General Fund :
Law Enforcement
Fire Depatiment
Golden Eagle Park
Plmming and Zoning
General O bli gations Debt Service Fund
Capital Projects Fund
Local Comi Enhan cem ent Fund
Eagle Mountain Debt Service Fund
Amount of
Over expenditure
$ 3,12 1
13,796
5,123
3,435
136,420
312,070
4,950
193,10 5
During the fiscal year 200 5-06, th e Town refin an ce d Ge neral Obligation bo nd s for
long-term sav in gs; the tran saction resulted in cos ts of issuance over an d abo ve the bud get
for ammal debt serv ice interest.
Capital impro vements for the Downtown area were anticipated to be expended within the
Exci se Tax Fund; ho wever , the project was tra ns fened to th e Capital Projects Fund ,
acco unting for the overexpenditure.
Cash was available to cover all of the overexpenditures li sted abo ve.
44
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
NOTE 3-DETAILED NOTES ON ALL FUNDS
A. Assets
1. Deposits and investments
Deposits and investments at June 30, 2006 con si st of the following:
Deposits
Cash on h and
Cash in bank
Cash on deposit with paying agent
Investments
Money Market Mutual Fund
U.S. Govenunent Securities
State Treas urer's Investment Pool
Cash on deposit with Trustee
Total cash and investments
Cash on deposit with paying agent
Total cash and equivalents
$ 4,594
147,469
2,578,729
396,468
8,751
18 ,790,807
103 994
22,030,812
(2.578.729)
$ 19,4 52.083
Deposits -The Town's deposits at June 30, 2006, were entirely covered by federa l
depo s itory insurance or by coll ater a l he ld by the Town's custodial bank in the Town's
name. The Town's deposits are not subject to custodial credit risk.
Investments -The State Board of Deposit provides oversight for the State Treasurer's
pools, and the Local Govenunent Investment Pool Advisory Conunittee provides
consultation and advice to the Treasurer. The fair value of a participant's position in the
pool approximates the value of that patticipant's pool s hares. The shares are not
identified with specific investments and are not subject to custodial credit risk. In
addition, the money market mutual fund is not s ubject to custodial credit risk. All other
investments of the Town are uninsured and umegistered with the securities held by the
counterpruty's trust department or agent in the Town's nan1e.
Interest rate risk. In accordance with its investment policy, t he govemment manages its
exposure to declines in fair value by limiting the average maturity of its investments to
less than one year.
45
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDE D JUNE 30, 2006
Cus todial credit risk. The U.S . Govenunent Securities and the State Treasurer's
Investment Pool are not subj ect to the custodial cr edit ri sk; the investment in the State
Treasurer's Investment Poo l and the U.S. Government securi ties are not given a quality
cred it rating by a nationa l cre dit r ating agency. The mo ney market mutual funds are
inves ted in Fmmie Mae Sec uriti es and ha ve a AAA Stan d ard and Poor's rating . The
a mount deposited with the Trustee represe nts the Jul y 1 principal and interest payments
due on outstanding bond s. The inves tment does not pose m1y custodial cred it risk as the
funds are invested for less than one day to make the required prin cipal and interest
payments.
Concentrations of credit risk. The Town's investm ent policy does not allow the Town to
invest in securiti es that are not ins ured , umegistered or backed by U.S. government
securiti es.
2. Receivables
Court fines are recorded net of uncoll ec tible atnounts in the govenunent-wid e statements
and are r ecord ed as a r ece ivabl e and a deferred revenue in the fund financia l state m ents
because the comi fin es did not m eet the reve nu e recognition cri teria under the modified
acc ru al bas is of accountin g. T he total receivable at June 30, 2006 was $237,21 1, which
was r educe d by $47 ,442 for unco ll ectible amounts resulting in a net rec eivab le balance at
June 30,2006 of$189 ,769.
Govenunental fund s repmi deferre d revenue in cmmection with receivab les for revenues
that ar e not con sidered to be avai labl e to liqu idate li abi liti es of the cunent period.
Govenm1enta l funds also defer revenue recogniti on in cmmection w it h resources that
h ave been re ce ive d, but not ye t earned . At the end of the cmT ent fisca l year, the vari o us
components of deferre d revenue reporte d in the governmental funds were as fo ll ows:
Delinqu ent prope1iy taxes rece iva bl e
(Ge neral F und)
DefeiTed court r evenu e
(General Fund)
Deli nquent property taxes receivab le
(General Obligation Debt Serv ice F und )
Delinquent property taxes receivable
(Nonmajor Govenm1 e ntal Funds)
Specia l assess ments receivab le
(No nmaj or Government a l F und s)
46
Unava il ab le
$ 3,16 1
189 ,769
37,109
10,948
4 48 2
$ 245.469
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
3. Capital assets
Capital asset activity for the year ended June 30, 2006 was as follows:
Beginning
Balances In creases Decreases
Governmental Activities:
Cap ital assets not being depreciated:
Land $ 23 ,571 ,668 $ $
Constru ction in progress 6,695 .892 959.92 1 (7,655 .813)
Total capital assets,
not being depreciated 30,267,560 959,921 (7,655,813)
Cap ital assets being depreciated:
Buildings and improvements 10 ,098,933 7,655,8 13
Improvements other than
buildings 8,390,993 1,3 19 ,867
Infrastructure 521,8 19 397,525
Furniture, machinery and
equipment 1,5 18,647 35 1,978
Vehicles l, 735,875 93 ,621
Total capita l assets being
depreciated 22,266,267 9.818,804
Less accumulated depreciation for:
Buildings and improvements (970, 121) (336, 160)
Improvements other than
buildings (2 ,576,894) (422,897)
Infrastructure (38,657) (10,437)
Furniture, machinery a nd
equipment (1,057,758 ) (122,636)
Vehicles (1.365 ,852) (235.797)
Total accumul ated depreciation (6.009.282 ) (1,127.927)
Total capital assets,
being dept·eciated, net 16.256,985 8,690,877
Govemmental activities
E nding
Balances
$ 23 ,571 ,668
23,571,668
17,754,746
9,7 10 ,8 60
9 19 ,344
1,870,625
1.829.496
32.085,071
(1,306,281)
(2,999' 791)
(49,094)
(1,180 ,394)
(1.601.649)
(7.137.209)
24,947,862
capital assets, net $ 4635243545 $ 936503798 $ (736553813) $ 4835193530
47
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
Depreciation expense was ch ar ged to functions /programs as fo ll ows:
Governmental activities:
General govenm1ent
Public safety
Highways and streets
Culture and r ecreation
$ 191 ,894
251 ,873
88,504
595.656
Total deprec iation expense-govenunental activities $ 1 J 27.927
B. Interfund transfers
Interfun d transfers for the year ended June 30, 2006 consisted of the following:
Transfer In
Nonmajor
MPC Debt Cap ital Governmen tal
Transfers Out Se rvice Fu nd Projects Fund Funds Tota l
Genera l Fund $ 387,000 $ 6 ,659,192 $ 603,868 $ 7,650,060
MPC Debt Service Fund 17 ,062 17 ,062
Deve lopment Fees Fund 244,850 244,850
Nonmajor Governmenta l Funds 1.265.240 819.365 150 ,086 2.234,69 1
$ 1.652.240 $ 7,723,407 $ 771.0 16 $ I 0, 146 1663
The General Fund transfer of$6,659,192, the Development Fees transfer of$244,850 and
t he Nomnajor Govenm1ental Funds transfer of $8 19,365 to the Capital Projects Fund
were recorded to subsidize the completion of Town Hall faci lity and to subsidize future
proj ects . The transfers of $603,86 8 from the Genera l Fund and $17,062 from the MPC
D ebt Service Fund to the Nonmajor Govenunental Funds was recorded to reimburse
certain expenditures and su bsid ize street improvements. The tr ansfers of $1,265,240 and
$150,086 from the Nom11ajor Governmental Funds as well as the $387,000 from the
Genera l Fund to the MPC Debt Service Fund and the Nom11ajor Govenunental Funds
were recorded to make t he debt service payments during the year on outstanding bonded
in debtedness.
C. Long-term obligations
The Town has long-term bonds and special assessments payable issued to provide funds
for the acquisition and construction of major capital faci liti es. The Town has a lso issued
debt to refund earlier obligations with higher interest rates. The debt is repaid by various
debt service funds. Compensated absences are paid by the applicab l e fund wher e eac h
employee i s regularly paid, primarily the General Fund.
48
TOWN OF FOUNTAIN HILLS , ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
Special Assessment di stricts ar e cr eated only by p etition of the Town Council by property
owners within the Di st rict areas. The Cottonwoods Improvement Distr ict was created so
the Town co uld 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, th e Town
has the responsibility to cover de linquencies of special assessment bonds with other
sources until foreclosure pr oceeds are received.
Conununity faciliti es di stri cts (CFDs) are created only by petition to the Town Counci l by
property owners w ithin t he Di strict areas. As board of directors for the Di strict, the Town
Co uncil has adopted a fmmal policy that CFD debt w ill be pem1itted only when the ratio
of fu ll cash value of th e District prop e1ty (pri or to improvements being install ed), when
compared to proposed Di strict debt, is a minimum of 3 to 1 prior to issuance of debt and
5 to 1 or hi ghe r after construction of improvements. These r atios are verified by an
appraisal paid for by the Di stri ct and admini stere d by the Town. In addition, cumulative
debt of a ll CFDs cannot exceed 5 percent of the To wn's seco nd ary assessed va lu ation.
Changes in long-term ob li gations for the year ended June 30, 2006 are as fo ll ows :
Due w ith in
Jul;i I , 2005 Increases Decreases June 301 2006 One Year
Governmental Activit ies :
Bonds and special assessments
Genera l obligation bonds $ 11 ,2 15,000 $ $ (1,160,000) $ I 0,055,000 $ 1,090,000
Municipal Property
Corporation debt 12,975,000 (665,000) 12 ,3 10,000 7 15,000
Spec ia l assessment debt wi th
government co mmitment 12,909 {3,228 ) 9,681 3,228
Co mmuni ty Fac ilit ies
Di s trict bonds payable 4,455.000 4.555.000 (4.595,000) 4.4 15.000 160 .000
28,657,909 4,5 55,000 (6,423,228) 26,789,68 1 1,968,228
Deferre d amount on:
Refunding (1,067,838) (183,78 1) 85 ,947 (I , I 65,672) (85,947)
Premium 133,935 (9,921) 124.0 14 9.92 1
Tota l bonds and special
assessment debt 27,724 ,006 4 ,37 1,2 19 (6,347,202) 25,748,023 1,892,202
Other li abi lities
Compensated ab sences 184 579 253.047 (219.643) 2 I 7,983 76.294
$ 27.908.585 $ 4.624.?66 $ (6 .566.845) $ 25.966.006 $ 1.968.496
49
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
Debt service requirements on long-te1m debt at June 30, 2006 are as follows:
Goverrunental Activities
Princi12al Interest
Year Ending June 30
2007 $ 1,968,22 8 $ 1,087,408
2008 2,153,227 1,005,049
2009 2,243 ,226 918,286
20 10 2,460,000 825,846
2011 2,115 ,000 728,703
20 12-16 10,4 10,000 2 ,309,750
2017-21 5.440.000 551.190
$ 26.789,681 $ 7.426.232
During the year ended June 30, 2006, the Town issued $4,555,000 in general obligation
bonds with an average interest rate of 3.95 percent to advance refund $4,455,000 of
outstanding general obligation bonds with an average interest rate 6.43 perce nt. The net
proceeds of $4,322,238 (after payment of $232 ,762 in underwriting fees, in s urance, and
other issuance costs) were used to purchase U.S. govenm1ent sec urities. Those securities
were deposited in an in·ev ocable trust w ith an escrow agent to provide for all future debt
service payments of the refunded general obl i gation bonds. As a result, the r efunded
general obligation bonds are considered to be defeased , and the liabi lity for those bonds
has been r emoved from the stat em e nt of net assets .
The Town advance refunded the general obli gation bond s to reduce its total debt service
payments over the next 15 year s by $996,895 and obtain ed an economic gain (i.e .,
difference between the present values of the debt service payments on the old and new
debt) of $790,798.
NOTE 4-OTHER INFORMATION
A. Risk management
The Town of Fountain Hills, Arizona, is exposed to various ri sks 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 whi ch 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 fonn , claims made basis. No significant
reduction in insurance coverage occmTed during the year and no settlements exceeded
ins urance coverage during any of the past three fiscal year s .
50
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2006
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 m ee t
it s expected financial obligations. The Pool has the authority to assess its member s
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 emp loyees and ; therefore , are not accrued. Unvested
accumulated sick leave of Town employees at June 30, 2006, totaled $3 17,338 .
Lawsuits -Th e Town is a defendant in various laws uits. In the opinion of the Town's
attorney , the outcome of these lawsuits is not presently determinable.
C. Retirement plans
Defined Contribution Pension Plan
All full-time employees of the Town participate in a defined contribution pension plan
administered by the ICMA Retirement Corporation as a 401(a) plan. The payroll for the
Town employees covered by this plan the year ended June 30, 2006 was $3,240,448. The
Town's total payroll was $3,613 ,982.
A defined contribution pension plan provides benefits in return for services rendered ,
provides an individual acco unt for each participant, and specifies how contributions to the
individual's account are to be determined instead of specifying the amount of benefit the
individual is to receive. Under a defined contribution pension plan, the benefits a
participant wi ll receive depend so le ly on the amount contributed to the participant's
account, the returns earned on investment of tho se contributions, and forfeitures of other
patticipant's benefits that may be allocated to such patticipant's account. All non-peace
officer full-time Town employees must pm·ticipate in the pension plan from the date they
m·e hired. Contributi ons made by an employee vest inunediately and co ntributions made
by the Town vest after three yem·s of service.
51
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30 , 2006
An emplo yee that leaves the employment of the Town is entitled to his or her
contributions and the vested pm1ion of the Town's contributions, plus interest eamed.
Each employee must contribute 11% of hi s or her gro ss earnings. The Town must
contribute 11% of covered earnings. During fiscal year 2005-06, the Town's required and
actual contributions amounted to $356,076. The empl oyees' contributions totaled
$356,449.
No pension prov ision changes occmTed during t he year that affected the required
contributions to be made by the Town or its employees.
The ICMA Retirement Corporation held no securities of th e Town or other related pru1ies
during the fiscal year 2005-06 or as ofthe close of the fiscal yeru·.
52
Combining and Individual Fund
Statements and Schedules
53
THIS PAGE BLANK
54
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Highw ay User Re venue Fund (HURF) -accounts for the Town's share of motor fuel tax revenues
and lottery proceeds.
Excise Tax Fund-accounts for the pmiion of Town sales tax reserved by the Town Co uncil for
special projects including Town beautification and economic development.
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 Ariz ona Supreme
Court.
DEBT SERVICE FUNDS
HURF Debt Service -accounts for operating transfe rs rece ived from the HURF special revenue
fund to pay the debt service of the Street and Highway User Revenue Bonds.
Eag le Mountain Debt Service Fund -accounts for the propetiy tax revenues received to pay the
debt service of the Eagle Mountain Community Facilities District component unit.
Cottonwoods Special Assessment -accounts for all special as sessments received to pay the debt
service of the Cottonwoods Special Assessment District.
55
HURF
Assets
Cash and equi valen ts $ 1,3 63 ,690
Cash wi th pay in g agen t
Receivables, net
Accou nts receivable
Taxes receivable
b1tergovernmental rece iva bl e 233 ,224
Spec ial assess men ts receiv abl e
Tot al assets $ 1.5969 14
Liabilities and Fun d Ba la nces
Liabilities
Accounts payable $ 494,009
Interest payabl e
Deferred reve nue
Ma tured debt principal payab le
Due to deve lope rs and CF D
Tota l li abi liti es 494.009
Fund balances
Unreserved 1.102.905
Total fund bal ances 1.1 02.905
Total liabiliti es and fund balances $ 1.596.9 14
TOWN OF FOUNTAIN HLLL S, ARIZONA
COMB INING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2006
SQec ial Revenue
Loca l Cou rt
Excise Tax Grants En hanceme nt Tota l
$ 50 1,57 1 $ 2,473 $ I 78 ,880 $ 2,046,614
168 ,237 168,237
138,672 371,896
$ 640.243 $ 170.710 $ 178.880 $ 2.586.747
$ 509 $ 124,997 $ 15 ,798 $ 635,313
509 124.997 15 .798 635 .3 13
639.734 45.7 13 163.082 1.95 1.434
639.734 45.7 13 163 .082 1.951.434
$ 640.243 $ 170.7 10 $ I 78.880 $ 2.586.747
56
Debt Se rvice
Eag le Cotto nwoo ds
HURFDebt Mou ntai n Special
Service Debt Service As sessmen t
$ $ 257,094 $ 4 ,11 7
97 ,24 1 227,493
7,206 1,078
5 ,35 1
4.108
$ 97.24 1 $ 497.144 $ 9.303
$ $ $
12 ,24 1 87 ,493
10 ,948 4,482
85,000 140 ,000
103.994
97.24 1 342.435 4.482
154.709 4.82 1
I 54.709 4.82 1
$ 97.24 1 $ 497.144 $ 9.303
Debt Service
Total
Non majo r
Governmenta l
Tota l Fu nds
$ 26 1,211 $ 2,3 07 ,825
324,734 324,734
168 ,23 7
8 ,284 8,284
5 ,35 1 377,247
4.108 4.108
$ 603.688 $ 3.190.435
$ $ 635 ,3 13
99,734 99,734
15 ,430 15 ,430
225,000 225 ,000
103 994 103.994
444.158 1.0 79.47 1
159.530 2.110.964
159.530 2.11 0.964
$ 603.688 $ 3.190.435
57
TOWN OF FOUNTA IN HILLS , ARIZONA
COM BIN iNG STATEMENT OF REVENUES , EXPEND ITURES , AND CHANGES IN FUND
BALANCES -NONMA JOR GOVERNMENTAL FUNDS
FOR TH E FISCAL YEA R END ED JUNE 30, 2006
SEecial Reve nue Debt Serv ice
Eag le Cottonwoods
Local Co urt HURF Debt Mountain Special
HURF Exc ise Tax Grants En han ce ment Total Serv ice Debt Se rvice Assess men t
Revenues
Taxes
Sa les taxes $ $ I ,693,527 $ $ $ 1,693,527 $ $ $
Prop erty taxes 346,0 12
Int ergovern mental 1,686,09 1 336,584 2,022,675
Fin es and forfeitures 2 1,042 21,042
Charge s fo r serv ices 12,802 12,802
Special assessments 21 ,147
Inves tm ent eamings 24 ,009 34,807 3 ,245 62,061 24,380 I
Ot her 4.079 4 079
To tal reven ues 1.726.981 1.728.334 336.584 24.287 3.816.186 370.392 21.148
Expendit ures
Current
Ge neral gove mment 107,025 147,928 34,950 289,903
Highways and streets 1,438 ,804 269,587 1,708 ,391
Culture and recreation 64 ,690 64,690
Deb t Serv ice
Princip al retire ment 85 ,000 140,000 3,228
Interes t on long-term deb t 24,882 175 ,943 593
Iss uance cos ts 232,762
Advance refunding escrow 300.000
Tota l expe nditures 1.438.804 10 7.025 482,205 34 950 2.062.984 I 09.882 848.705 3.821
Excess (deficiency) of reve nues ove r
expe nditures 288.177 1.62 1.309 (145.62 1} (10.663) 1.753.202 (I 09.882) (478 .3 13) 17 .327
Other finan cin g so urces (uses)
Transfers in 519,869 17,062 77,6 12 614,543 106 ,473 50 ,000
Tra nsfers out (130,2 17) (2,065,240) (19,365) (2,214,822) (19 ,869)
Issua nce of refundi ng de bt 4,555,000
Paymen t to refund ed deb t escrow
agen t (4 .338.781)
Total other fi nanci ng so urces (uses) 389.652 (2.048.178) 77.6 12 (1 9.365) ( 1.600.279) 106.473 266.2 19 (19.869)
Ne t change in fu nd balances 677,829 (426 ,869) (68,009) (30,0 28) 152 ,923 (3 ,409) (2 12,094) (2 ,542)
Fu nd ba lan ces, beg in ning o f yea r 425 .076 1.066.603 113 722 193 .1 10 1.798.5 11 3 409 366.803 7.363
Fund ba lances, end of yea r $ 1.1 02.905 $ 639.734 $ 45 7 13 $ 163.082 $ 1.95 1 434 $ $ 154.709 $ 4.821
58
Debt Service
Total
No nmaj or
Gove m me ntal
Tota l Fu nds
$ $ 1,693 ,527
346,0 12 346,0 12
2,022,675
2 1,042
12,802
2 1,147 2 1,147
24,3 8 1 86,442
4 .079
391.540 4.207.726
289,903
1,708,39 1
64 ,690
228,228 228,228
20 1,4 18 20 1,4 18
232,762 232,762
300.000 300.000
962.408 3.025.392
(570.868) 1.182.334
156,473 77 1,0 16
(19 ,869) (2 ,234,69 1)
4,555 ,000 4 ,555,000
(4.338.781) (4.338. 78 1)
352.823 ! 1.24 7.456)
(2 18,045) (65 , 122)
3 77.575 2,176.086
$ 159.530 $ 2.110.964
59
TOWN OF FOUNTA IN HILLS, ARIZO NA
GENERA L OBLI GAT ION DEBT SERV ICE FUN D
SC HEDULE OF REV ENUES , EXPEND ITURES, AN D C HANGES IN FUN D BALANCES -BU DGET AN D ACTUA L
FOR THE FISCAL YEA R ENDED JUNE 30, 2006
O ri gi nal and Fi na l Variance with Final
Bu dget Actual Bud!!e t
Revenues
Taxes
Pro perty taxes $ 1,150,000 $ I ,325,58 1 $ 175,58 1
In vest ment earnin gs 1,400 29,37 1 27,97 1
Other 1.036 1.0 36
Tota l Revenues 1.151.400 1.355.988 204.588
Expendit ures
Debt Serv ice
Pri ncipa l re t ire men t 1,075 ,000 I ,0 7 5,000
Interest on long -term de bt 308.000 444.420 { 136.420)
Tota l Expe ndi tures 1.383.000 1.519 420 { 136.420)
Excess (de fi cie ncy) of reven ues over expend itures (23 1,600) ( 163 ,432) 68,168
Fund balances, beginn ing of year 592.020 365 779 {226.24 1)
Fu nd ba lan ces, end of year $ 360.420 $ 202.347 $ { 158.073)
60
TOWN OF FOUNTAJN HILLS , ARIZONA
MUNICIPAL PROPERTY CO RPORA TION FUND
SCHEDU LE OF REV ENUES, EXPEND ITURES, AND CHANGES IN FU ND BALANCES-BUDGE T AND ACTUAL
FOR THE FISCAL YEAR ENDE D JUNE 30, 2006
Original and Final Var iance with Fi nal
Budget Actual Budget
Revenues
Invest ment ean1in gs $ $ 34.658 $ 34.658
Tota l Revenues 34.658 34.658
Expen d itures
Debt Service
Princ ipa l retirement 665 ,000 665 ,000
Interes t on long-tenn debt 598.500 546.576 51.924
Total Expe nditures 1.263.500 1.211.576 51 924
Excess (de fi c iency) of revenues ove r expe ndi tures ( 1.263.5 00) (I, 176.918) 86.582
Ot her fi nanc ing sources (uses)
Tran sfers in 1,263 ,500 1,652,240 388,740
Transfers ou t (17.062) ( 17.062)
Tota l other financing sources (uses) 1.263.500 1.635 178 371.678
Net change in fund bal ances 458,260 458,260
Fund ba lances, begi nning of yea r 278.3 10 278.310
Fund balances, end of year $ $ 736.570 $ 736.570
6 1
TOWN OF FOUNTAIN HIL LS, AR IZONA
DEVELOPMENT FEES FUND
SCHEDULE OF REVENUES, EXPEN DITUR ES, AN D CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Origin al and Fin al Varian ce with Final
Bu doet Act ual Bu dget
Revenues
C harges for services $ 1,345,376 $ 1,424,706 $ 79,330
Investm ent earni ngs 11.500 113.870 I 02.3 70
Total Reven ues 1.356.876 1.538.576 18 1 700
Expen d itures
Current
Gen eral government 12,4 15 (12,4 15)
Pub li c safety 5,562 (5 ,562)
H igh ways and s treets 295,000 4 13,595 ( 1 18,595)
Culture an d rec reati on 733.500 542.35 1 191.149
Total Ex p end it ures 1.028.500 973.923 54.577
Excess (deficien cy) of revenues over expen d itures 328.376 564.653 236.277
Other fi nan cing sou rces (u ses)
Transfers out (261.535) (244.850) 16.685
Total oth er financing sources (uses) (261.535) (244.850) 16.685
Net c han ge in fu n d b alan ces 66,84 1 3 19,803 252,962
Fund balances , begin ni ng of yea r 1.965 .676 2.429.2 25 463.549
Fund b alances , end of year $ 2 .032.5 17 $ 2.749.028 $ 7 16.51 1
62
TOWN OF FOUNTAfN HI LLS , A RIZONA
CAPITAL PR OJ ECTS FUN D
SCHEDULE OF RE VENUES , EXPEN DIT URES. AND C HANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE FISCAL YE AR ENDED JUNE 30, 2006
Ori gi nal and Final Varia nce with Fi n al
Budoet Actual Budget
Revenu es
Taxes
Sales taxes $ 528,225 $ 528,225 $
Investm ent earn in gs 25.000 105.176 80.176
Total Reven ues 553.225 633.40 1 80.176
Expe nditures
C urren t
Genera l government 956,500 649,649 306,85 1
Hi gh ways and streets 135,000 135 ,000
C ulture and rec reatio n 206.000 959 92 1 (753.921)
To tal Expe nd itures 1.297.500 1.609.5 70 {312.070)
Excess (deficiency) o f revenues over ex pend itures (744.275) (976.169) (231.894)
O ther financi ng sources (uses)
Tran sfers in 3 .2 14 .827 7.723.407 4.508.580
Total other fi nancing so urces (uses) 3.214.827 7.723.407 4.508.580
Net change in Fund bala nces 2 ,4 70,552 6,74 7,238 4 ,276 ,686
Fund balan ces , beg inn ing of yea r
Fund balances, e nd o f yea r $ 2.4 70.55 2 $ 6.747.238 $ 4.2 76.686
63
TOWN OF FOUNTAIN HILLS, AR IZONA
HUR FFUND
SCHEDULE OF REVENUES , EX PEN DITURES, AND CHAN GES IN FUND BALANCES -BUDG ET AN D ACTUAL
FO R THE FISCAL YEAR ENDED JUNE 30, 2006
Original and Fina l Vari ance wi th Final
Budge t Actual Budget
Revenues
In tergovernmen tal $ I ,7 12 ,550 $ 1,686,091 $ (26,459)
Charges fo r servi ces 4 ,500 12,802 8,302
Inves tment earnings 8,000 24,009 16,009
Other 1.000 4.079 3.079
Total Revenues 1.726.050 I. 726.981 93 1
Expend it ures
C urren t
Highways and streets 2.226.903 1.438.804 788 099
Total Ex penditures 2.226.903 1.438.804 788.099
Excess (deficie nc y) of revenues over ex penditures (500.8 53) 288 177 789.03 0
Ot her financing so urces (uses)
Transfer s in 500,000 519,869 19,869
Transfers out (160.500) (130.2 17) 30.283
Total o th er fin ancing sources (uses) 339.500 389.652 50.152
Net change in fu nd balances (161 ,353) 677,829 839,182
Fund balan ces, beg inning o f ye ar 42 5.076 425 076
Fund bal ances, end o f year $ '161.353 ) $ I 102.905 $ 1.264.258
64
TOWN OF FOUNTA IN HIL LS , ARIZO NA
EXC ISE TAX FUND
SC HED ULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE FI SCAL YEAR ENDED JUNE 30, 2006
Ori ginal and Fin al Variance wi th Final
Budget Act ual Budget
Rev enues
Taxes
Sa les taxes $ 1,442,179 $ 1,693 ,527 $ 25 1,348
Inve stment earn ings 24.000 34.807 10.807
Total Revenues 1.466.179 I 728.334 262 .155
Ex penditures
Current
Ge neral govern ment 139.283 I 07.025 32.258
Total Ex penditures 139.283 I 07.025 32.258
Excess (defi ciency) of revenues ove r expenditures 1.326.8 96 1.621.309 294.413
Ot her fi nancing sources (uses)
Transfe rs in 17,062 17 ,062
Trans fers out ( 1.676.500) !2.065.240) (388.740)
Total ot he r financi ng so urces (uses) ! 1.676.500) !2.048.178) (371.678)
Net cha nge in fund ba lances (34 9,604) (426,869) (77 ,265)
Fu nd balances, begi nning of year 2.658.448 1.066.603 ! 1.59 1.845)
Fu nd ba lances, end of year $ 2.308.844 $ 639.734 $ p.669.1 10)
65
TOWN OF FOUNTA IN 1-l!LLS , AR IZONA
GRANTS FUND
SCHEDULE OF REV ENUES, EXPEND ITURES, AN D CHANGES IN FUN D BALANCES-BUDGET AND ACTUAL
FOR THE FI SCAL YEAR ENDED JUNE 30, 2006
Original and Final Variance with Final
Budget Actual Bud!let
Revenues
Intergov ernm en tal $ 1.730.125 $ 336.584 $ ( 1.393.541)
Total Reven ues 1.730.125 336.584 ( 1.393.54 I)
Expend itures
Current
Genera l government 1,437 ,000 147 ,928 1,289,072
Public safety 50,000 50,000
Highways and streets 293 ,125 269,587 23 ,538
Cul ture and rec rea ti on 40.000 64.690 (24.690)
Total Expen d itu res 1.820.125 482.205 1.337.920
Excess (deficie ncy) of reve nues ove r expend itures (90.000) (145.62 1) (55 .621)
Ot her financ ing sources (uses)
Transfers in 50.000 77.612 27.612
Total other fi nanci ng sources (uses) 50 .000 77.612 27.612
Net change in fund balances (40 ,000) (68,009) (28 ,009)
Fund ba lances , beg in ning of year 143.937 113.722 (30.2 15)
Fund balances , end of year $ 103.937 $ 45.7 13 $ p8.224)
66
TOWN OF FOUNTA IN HILLS, ARIZONA
LOCAL COURT ENHANCEMENT FUND
SCHEDU LE O F REVENUE S, EX PEN DIT URES , AND C HANGES IN FUND BALANCES -BUDGET AN D ACTUAL
FOR THE F ISCAL YEAR ENDED JUNE 30, 2006
Original a nd Fina l Variance with Final
Bud!!et Actua l Budget
Revenues
Fi nes and fo rfeitures $ 22,300 $ 2 1,042 $ (1,258)
Inve stment earnings 1.000 3.245 2 .245
Total Re venues 23.300 24.287 987
Expenditures
Current
General government 30.000 34.950 (4.950)
Total Expenditures 30.000 34 .950 (4,950)
Excess (de fici e ncy) of revenues over expend itures (6.700) (10.663) (3.963)
Other finan cing sources (uses)
Trans fers o ut (19.365) ( 19.365)
Total o th er financing sou rces (uses) ( 19.365) ( 19 .365)
Net change in fund balances (6,700) (30,028) (23,328)
Fund balances, begin ning of year 193.11 0 193.11 0
Fund balances, end o f year $ 186.41 0 $ 163.082 $ (23.328)
67
TOWN OF FOUN TAIN HIL LS, ARIZONA
HURF DEBT SE RVICE FUN D
SCHEDU LE OF RE VE NUE S, EX PEN DI TURES, AND CHANG ES IN FUN D BALANCES -B UDGET AND AC TUAL
FOR TH E FISCAL YEAR ENDED JU NE 30, 2006
Ori ginal and Final Variance with Fina l
Bud get Ac tua l Budge t
Ex pendi tures
Debt Servi ce
Prin cipal retiremen t $ 85 ,000 $ 85,000 $
Interes t on long-tem1 debt 2 5.500 24.882 6 18
Total Ex pendi tures 110.500 109.882 61 8
Excess (defi ciency) o f revenue s ove r ex penditu res (11 0.5 00) '1 09.8 82 ) 6 18
Oth er finan cin g sou rces (uses)
Tra nsfers in 11 0.500 106.473 (4.027)
To tal oth er fin ancin g sources (uses) 11 0.500 I 06 473 (4 ,027)
Ne t change in fu nd balances (3 ,409) (3,409)
Fu nd balances, beg in ning of year 3.409 3.409
Fund ba lances, end of year $ $ $
68
TOWN OF FOUNTAIN HILLS , ARIZONA
EAGLE MOUNTAIN DEBT SE RV ICE FUND
SCHEDULE OF REVENUES , EXPENDITURES, AND C HANGES IN FUND BALANCES • BUDGET AND ACTUAL
FOR T HE FISCAL YEAR ENDED JUNE 30, 2006
Orig inal and Fina l Variance w ith Final
Budget Actu a l Budoet
Revenues
Taxes
Property taxes $ 353,600 $ 346,012 $ (7,588)
Investmen t camings 2 ,000 24,380 22 ,3 80
Other 50.000 (50.000)
To tal Re ven ue s 405.600 370.392 (35.208)
Ex pe n ditures
Debt Service
Principal retiremen t 140,000 140,000
In terest on long-term debt 2 I 5,600 175,943 39,657
Issuance costs 232 ,762 (232 ,762)
Advance refunding escrow 300.000 (300.000)
Total Expendit ures 355.600 848.705 (493.1 05)
Excess (deficiency) of reven ues over ex pend itu res 50.000 (478.313) (528.313)
Other financ ing sources (uses)
Transfers in 50,000 50,000
Issuan ce o f refunding debt 4 ,5 55,000 4,555,000
Pay ment to refun ded debt escrow agen t (4.338.78 1) (4.338. 781)
T o ta l other finan cing sou rces (uses) 266.219 266.219
Net change in fun d balances 50,000 (212,094) (262,094)
Fund balances, beg inning o f year 306 100 366.803 60.703
Fund ba lances , end of year $ 356.100 $ 154.709 $ (201.39 1)
69
TOWN OF FOUNTAfN HILLS , ARIZONA
COTTONWOODS SPECIAL ASSESSMENT FUND
SCHEDULE OF REVENUES , EXPEND ITURES , AND CHANGES fN FUND BALA NCES -BUDGET AN D ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Revenues
Special assess ments
Investment earn ings
Total Revenues
Expend it ures
Debt Se rvice
Principa l reti remen t
Interes t on long-tenn debt
Total Expenditures
Excess (deficiency) of revenues over expenditures
Other financ ing sources (uses)
Transfers ou t
Total ot her fi nancing sou rces (uses)
Fund ba lances, beg inni ng o f yea r
Fund ba lances, end of yea r
Original and Final
Budget
$ 3,85 0 $
3.850
3,228
622
3.850
$ $
70
Actual
Variance with Fi nal
Budget
2 1,147 $
I
17,297
I
2 1.148 17.298
3,228
593 29
3.821 29
17 ,327 17 ,327
(19.869) (19.869)
(19.869) (19.869)
7.363 7.363
4.821 $ 4.821
STATISTICAL SECTION
This s ection of the Town of Fountain H ill s, Arizona's comprehensive ammal financia l rep01i
presents detai led infom1at ion as a context for understanding what the inf ormation in the financial
statem ents, note disclosures, and required s upp lementary inform ation says about the
govenm1ent's overall financia l healt h.
Financial Trends
The se schedules contain trend information to help the reader understand how the government's
.financial pe1jormance and well-b eing have changed over time.
Revenue Capacity
The se schedules contain informat ion to help th e reader assess the government's mo st significant
local reve nue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess th e a.ffordability of the
government 's current levels of outstanding debt and the government's ability t o issue additional
debt in th e future.
Demographic and Economic Information
These schedules offer demographic and econo mic indicators to help the reader understand the
environment within which the gove rnment's financial activities take place.
Operating Information
Th ese schedules con tain service and infrastru ct ure da ta to h elp the r eade r under stand how the
information in the government's financial r eport r elates to th e services the go v ernmen t provides
and the activ ities it pe1jorms.
See the table of contents for page numb ers of the schedules that encompass the above sections.
7 1
THIS PAGE BLANK
72
Governmental activities
TOWN OF FOUNTAIN HILLS , ARIZONA
NET ASSETS BY COMPONENT
LAS T TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
Fiscal Year
2003 2004 2005
In ves ted in capital asses t s, net of relate d debt
Res tricte d
$ II ,8 43 ,575
6,68 1,170
2 .6 38.149
$ 2 1.1 62 .894
$ 11 ,26 1,25 6
6 ,47 1,863
7 .976.11 3
$ 25.709.232
$ 17,495 ,539
5,144,127
10 .82 1.3 04
$ 33,460.970
Unrestricted
Tota l govemmental activities net a ssets
So urce: Town of Fountain Hill s, Ariozna's Finan c e Depmtment.
2006
$ 20,806,50 7
12,446,14 7
9.053,6 11
$ 42.306.265
Note 1: 2 002-03 was the Town of Fountain Hill s, Ari zona 's fir st yea r to prepare government-wide fina ncial
statements.
Note 2: The Town of Fo untain Hill s, Arizo na does not have any business-ty pe ac ti viti es .
73
TOWN OF FOUNTAIN HILLS , ARIZONA
CHANGES IN NET ASSETS
LAS T TEN FISCAL YEARS
(ACCRUAL BAS IS OF ACCOUNTING)
(UNAUDITED)
Fiscal Year
2003 2004 2005 2006
Ex pe n ses
Governmenta l act ivities:
General governm en t $ 3,479,333 $ 3,686,4 52 $ 3,766,5 00 $ 3,875,0 14
P ub li c safety 5,494,708 4,9 18,280 5,024,686 5,403 ,620
Hi ghways and streets 1,3 10,683 1,4 19 ,509 I ,28 1,06 1 1,58 1,068
Culture a nd recreat ion 2,363,897 2,068,6 13 2,362,66 1 2,576,406
Com munity developmen t I ,235,985 1,144,964 1,460,18 1 1,8 12,469
Interest on long-term debt 1.576.842 1.499.575 1.162.796 1.297.11 9
Total governm ental activ iti es 15.461.448 14.737.393 15.057.885 16.545.696
Prog ram Revenues
Governme nt a l activ it ie s :
Fines, fees and charges for serv ices:
General governm ent 2,738,898 3,388,923 4,43 1,154 4,0 29,437
Hi ghways and streets 39,185 28,597 58,038 16,88 1
Culture and recreation 65 ,798
Interest on long-term debt 4,302 3 ,6 12 1,5 12 2 1,147
Operati ng grants and contributions 1,697,900 1,590,787 1,692,7 12 2,0 22,675
Capital g rants and contributions 237.307
Tota l governm ental activities pro gram re venues 4.480.285 5.0 11.9 19 6.420.723 6.155.938
Net (ex t>ense)/reven u e
Governmen ta l activities (I 0.981.163) (9. 725.474) (8.637.162) (I 0.389. 758)
Gen eral Revenues and Othe r Cha nges in Ne t Asset s
Governmen ta l activities:
Tax es :
Sales taxes 5,051 ,872 7,733 ,643 8,879,798 11 ,007,924
Property taxes 1,905,770 2,195,856 2,020,800 1,648,947
Franchise taxes 152,542 126,362 2 16,031 3 14,359
State revenue sharing 2,360,879 1,967,973 2,0 16,08 1 2,244,159
State sales tax revenue sharin g I ,582,535 1,702,374 1,874,577 2,170,940
Auto lieu tax revenue shar in g 797,344 819,497 865,823 974,452
Investment earnin gs 1,976,809 122,082 395,124 673,351
Other 79.706 195.978 120.666 200.92 1
Total governm enta l activities 13.907.457 14.863.765 16.388.900 19.235.053
C hange in Net Assets
Governmen ta l activ ities $ 2.926.294 $ 5.138.29 1 $ 7. 75 1.738 $ 8.845.295
So urce: Town of Fountain Hill s, Ari zona's Finance Depmtment.
Note I : 2002-03 was the Town of Fountain Hill s, Arizona's first year to prepare governm ent-wi de finan c ial statement s.
Note 2: Th e Town of Fountain Hill s, Ari zona doe s not have any bu s iness-ty pe acti v ities.
74
TOWN OF FOUNTAIN I-ITLLS, ARIZONA
FUNDBALANCESOFGOVERNMENTALFUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
Fiscal Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
General Fund
Reserved $ -$ -$ -$ -$ $ -$ -$ 77.485 $ 40 ,664 $ 14 ,393
Unreserved 2.494.333 5.126.713 6.331.622 6.3 14.461 4.710.061 4.812.370 4,037,863 6.293.94 1 9 04 1 779 6.515.855
Total General Fund $ 2.494.333 $ 5.126.7 13 $ 6.331.622 $__6d_!_4 .~_6I $ 4.710.061 $ 4.812.370 $ 4.037.863 $ 6.371.426 $ 9.082.443 $ 6.530.248
All other governmental funds
Unreserved, repo rted in:
Special revenue funds $ 286.794 $ 2 ,059 $ 221 ,861 $ 221,861 $ 9,167 $ -$ 3,411 ,738 $ 5,969,830 $ 2,176 ,086 $ 1,951 ,434
Debt service funds 87.644 213 ,225 241 ,259 609 ,351 532 ,248 1,051 ,311 1.705 ,230 530,3 72 644,089 159 ,530
Capital projects funds --1.571.117 414.432 --2.429,225 9.496.266
Total all other governmental funds $ 374.438 $ 215.284 $ 463.120 $ 831.212 $ 2.112.532 $ 1.465.743 $ 5.116.968 $ 6.500.202 $ 5.249.400 $ 11.607.230
Source: Town of Fountain Hills, Arizona's Finance Department.
75
1997
Revenues
Taxes $ -
Intergovernmental -
Fines and forfeitures -
Licen ses and permits -
Charges for services -
Rents and royalties -
Special assessments
Investment earnings
Other -
Total revenues -
Expenditures
General government -
Public safety -
Highways and streets -
Culture and recreation -
Community development
Capital outlay -
Debt service
Principal retirement
Interest on long-tern1 debt -
Issuance costs -
Advance refunding escrow
Total expendi tures -
Excess of revenues
over (under) expenditures -
TOWN OF FOUNTAIN HILLS, ARIZONA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
Fiscal Year
1998 1999 2000 2001 2002 2003
$ 3 ,326,207 $ 3,861,337 $ 4,876,466 $ 6,088,047 $ 7,595,748 $ 7,114,486
4 ,364,859 4 ,929,062 4,771 ,792 5,281 ,156 5,895,676 6,311,458
208,930 259,484 293,970 310,359 265,605 195,091
1,961 ,687 2,472,215 2,569,472 2,177,614 1,351 ,209 1,308,747
795,700 624,744 454,366 431 ,316 1,067,814 810,412
13 ,591 18,140 27,208 35,781 107,613 188 ,745
-14,524 9,241 7,958 4,520 4 ,302
582,757 620,639 743,259 (I ,063 ,339) 726,441 1,976,809
117.487 25.657 31 653 11 357 1.783.851 275.343
11.371.218 12 .825.802 13.777 427 13.280.249 18.798.477 18.185.393
1,964,427 2,631,245 2,528,953 3,646,500 3,859,633 3,318,574
2,074,441 2,205,600 3,059,020 3,354,037 5,084,532 5,174,492
2 ,020,450 1,984.879 2,468,498 2,212,432 1,877,790 I, 198,080
1,471,559 2,334,901 3,359,509 3,866,245 3,069,695 1,815 ,416
947,251 955,451 1,276,951 1,175,649 1,064,913 1,215 ,387
1,352,936 557,374 1,787,469 5,261 ,585 14,770,507 79,427
245,210 223,024 339,013 620,408 1,229,215 1,393,228
554,731 572,064 585,00 I 1,231,194 1,673,901 1,576,842
-- --
- --
10.631.005 11.464.538 15.404.414 21.368.050 32.630.186 15.771.446
740.213 1.361.264 (I ,626,987) (8,087.80 I) ~ 13,831. 709) 2.413.947
76
2004 2005 2006
$ 9,997,706 $ 11,151 ,893 $ 12 ,993,876
6,080,631 6,686,500 7,412,226
361 ,339 249,564 235,050
1,600,934 2 ,230,046 1,918,107
1,038,170 1,834,205 1,689,046
242,704 222,327 255,527
3 ,612 1,512 21 ,147
122 ,082 395,124 673,351
261.561 179 657 233.565
19.708.739 22.950.828 25.431.895
3,614,458 9,547,409 4 ,459,183
4,616,161 4 ,754,523 5,208,770
1,402,502 1,682,563 2 ,121,986
1,597,150 3 ,004.216 3,607.750
1,144,964 1,460,181 1.812.469
101,951
1,423,228 1,308,228 1,968,228
1,499,575 1,164,561 1,192,414
-229.990 232,762
-300 000
15.399.989 23.151.671 20.903.562
4.308.750 (200.843) 4.528.333
Fiscal Year
1997 1998 1999 2000 200 1 2002 2003 2004 2005 2006
Other financing sources (uses)
Transfers in -1,213 ,129 I, 170,732 1,386,793 1,833,192 1,585,674 5,981 ,544 1,630,907 4,805 ,635 10,146,663
Transfers out (I ,213 , 129) (1 ,170,732) (I ,386, 793) (I ,833, 192) (I ,585,674) (5,981 ,544) (I ,630,907) ( 4,805,635) (I 0, 146,663)
Iss uance of refunding debt - - -- - - -
12,555,000 4,555,000
Issuance of long-term debt -1,102,629 5,100,000 4,641,980 13,750,000 3,783 ,896
Payment to refunded debt
escrow agent (I ,0 I 0.489) - - - - -
: 14.677,838) ( 4.3 38. 781)
Total other tinancing sources
(uses) 92 .140 5.100.000 4.641.980 13 .750.000 -1.661.058 216.219
Net change in fund balance $ $ 740.213 $ I .453.404 $ 3.473 .013 $ 0 .445 .821) $ (81.709) $ 2.413 .947 $ 4308.750 $ 1.460.215 $ 4,744.552
Debt service as a percen tage of
noncapital expenditures N/A 8.6% 7.3% 6.8% 11.5% 16 .3% 18.9% 19.1% 11.7% 16 .2%
Source: Town of Fountain Hills, Arizona's Finance Department.
77
TOWN OF FOUNTAIN HILLS , ARIZONA
GENERALGOVERNMENTTAXREVENUESBYSOURCE
LAST TEN FISCAL YEARS
Fiscal
Year
1997
1998
1999
2000
200 1
2002
2003
2 004
2 005
2 006
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
Sales taxes Prope rty taxes Franchise taxes Tota l
$ 2,664,923 $ 350,024 $ 86,840 $ 3,101 ,787
2,920,084 302,375 103 ,748 3,32 6,207
3,394,152 348,778 118,407 3,86 1,337
4,087,5 14 657,026 131 ,926 4,876,466
4 ,923,174 I ,038 ,891 125,982 6,088,047
4 ,355 ,70 1 3 ,109 ,353 130,694 7,595 ,748
5,05 1,872 1,910,072 152,542 7,114,486
7,733,643 2,137,70 1 126,362 9,997,706
8,879,798 2,056,064 2 16 ,03 I 11,151,893
11 ,00 7,924 I ,671 ,5 93 3 14,359 12 ,993,876
Source: The Town of Fountain Hi ll s, Arizona's F ina nce Departme nt.
78
1997 1998
Sales Category
Construction $ 1,004,125 $ 1,227,312 $
Transportation and utilities 210,836 271,577
Wholesale/Retail 695,575 785,563
Restaurants and bars 106,149 108,770
Real estate 161 ,715 105 ,851
Services 276,6 11 304,482
Miscellaneous 43 823 60.794
Total $ 2.498.834 $ 2.864.349 $
City sales tax rate 1.20% 1.20%
Source: Arizona Department of Revenue.
TOWN OF FOUNTAIN HILLS, ARlZONA
SALES TAX COLLECTIONS BY CATEGORY
LAST TEN FISCAL YEARS
(UNAUDITED)
F iscal Year
1999 2000 2001 2002
1,526,063 $ 1,852 ,068 $ 1,9 15 ,206 $ 1,32 5,749
303,507 350,634 4 53 ,2 17 523 ,237
793,367 I ,087,8 19 1,405,560 1,477,424
128,3 30 148 ,668 187 ,000 219,921
133,666 99,155 245,064 192,339
322,428 357,253 398,1 57 370,806
102 153 136 814 195 313 157 818
3.309.5 14 $ 4.032.411 $ 4.799 .51 7 $ 4.267.294
1.20% 1.20% 1.60% 1.60%
79
2003 2004 2005 2006
$ 1,203,706 $ 1,482,98 1 $ I ,83 7,3 17 $ 3,362,079
590,446 916,498 1,124,677 1,240,120
1.930,175 3,212,062 3,536,045 3,796,192
276,664 419,107 524,368 547,276
205,849 341 ,951 604,356 626,364
455,324 423,433 185,8 68 263,239
188 654 706.816 933 ~66 I 030 966
$ 4.850.818 $ 7.502.848 $ 8.745 997 $ 10.866.236
1.60% 2.60 % 2.60% 2.60%
TOWN OF FOUNTAIN HILLS, ARJZONA
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN F ISCAL YEARS
(UNAUDITED)
C ity Direct Maricopa State of
Fi scal Year Rate (a) County Arizona
1997 1.20% 0.75% 5.00%
1998 1.20 0.50 5.00
1999 1.20 0 .70 5.00
2000 1.20 0 .70 5.00
200 1 1.60 0 .70 5.60
2002 1.60 0.70 5.60
2003 1.60 0 .7 0 5.60
2004 2.60 0.70 5.60
2005 2.60 0.70 5.60
2006 2.60 0.70 5.60
Source: A ri zona D e partm e nt of Revenue, T r a nsactio n Privilege (Sales) Tax Rate Tables.
80
Fiscal Residential
Year Pro12erty
1997 $ 69,781
1998 83 ,164
1999 105,890
2000 129,425
2001 151 ,060
2002 173 ,968
2003 189,664
2004 241 ,412
2005 249,982
2006 273 ,093
TOWN OF FOUNT AJN HILLS, ARJZONA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
Commercial Agricultural Less: Tax Total Taxable
and Industrial and Vacant Exempt Real Seconda1y Total Direct Estimated Full
Pro12erty Pro12erty Pro12erty Assessed Value Tax Rate* Cash Value
$ 16,983 $ 22,700 $ (5,519) $ 103,945 $ 0.30 $ 906,495
19,661 20,273 (6,765) 116 ,333 0.23 l ,034,893
22,843 26,996 (8,786) 146 ,943 0.17 1,317,947
27,500 28,616 (10 ,780) 174 ,761 0.26 I ,583,073
29,968 40,895 (9,507) 212 ,416 0.33 1,88 9,0 16
37,443 41,859 (14,555) 238,715 0.56 2,154,929
37,866 57,192 (14, 119) 270,603 0.51 2 ,418,236
49,318 53,317 (20,663) 323,384 0.48 2,942,849
58,132 69,477 (28 ,192) 349,399 0.42 3,162,855
59,876 70,005 (27,791) 375,183 0.35 3,411,461
Source: The Maricopa County Treasurer.
81
Seconday
Assessed Value
as a Percentage
of Full Cash
Value
11.467%
11.241
11.149
11.039
11.245
I 1.078
11.190
10.989
I l.047
10.998
Fisca l
Year
1997
1998
1999
2000
200 1
2002
2003
2004
2005
2006
TOWN OF FOUNTAIN HILLS, ARIZONA
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(UNAUDITED)
Direct Rates OverlaEEing Rates
General Loca l
Primaty Obligation Total Direct Schoo l Spec ia l
Rate Debt Service Rate Distr icts (a) D istricts
0 .3 0 0.30 7.3 1 6.20
0.23 0.23 7.37 5.88
0.17 0.17 7.35 5.92
0.26 0.26 5.98 5.72
0.33 0.33 6.4 1 6.83
0.56 0.56 6.45 6.03
0.5 1 0.5 1 6.23 4.29
0.48 0.48 5.80 4.15
0.42 0.42 5.67 3.72
0.35 0.35 5.27 2.49
Source: Arizona Depa1tment of Reven ue and Maricopa Co un ty Depa1tment of Finance.
Total
Overlapping
Co unty Rate
3.38 16.89
2.49 15.74
2.45 15.72
3.43 15.1 3
3.35 16 .59
3.29 15.77
3.28 13.80
3.22 13.1 7
3.09 12.48
3.18 10 .94
(a) Includes tax ra t es for Fountain Hi ll s U nified Schoo l Distri ct No. 98 and East Va ll ey Inst itute of Techno logy
No.40 1.
82
Taxpayer
Qwest Corporation $
Chapmnl City Water Company
inland Westem Fountain Hills Four Peaks
WSL Fountain View Investors V LLC
Target Corporation
MCO Properties LP
Cox Communications Inc.
EnLLC
Four Peaks Limited Partnership
Adero Canyon LLC
$
TOWN OF FOUNTAIN HILLS, ARIZONA
PRINCIPAL PROPERTY TAXPAYERS
JUNE 30, 2006
(UNAUDITED)
2006
Percentage of
Taxable Total Net
Assessed Secondary
Value Assessed Value Taxpayer
3,261,128 0 .87% Chaparral City Water Company
3,180,452 0 .85 U S West Communications
2,946,653 0 .79 MCO Properties lnc .
2,251,544 0 .60 Eagle Mountain investors LLC
2,030,676 0 .54 Safe way Inc . # I29 I
1,873,070 0 .50 Basha's
1,754,079 0.47 Fo urway Properties Limited Partnership
I ,695,043 0.45 City of Scottsdale
1,593,577 0.42 Fountian Hills Old Vine LP
1.585 .520 0.42 Golf lntemational Inc.
22.171.742 5.91%
83
1997
Percentage of
Taxable Total Net
Assessed Secondary
Value Assessed Value
$ 2,112,467 2.03%
2,103,803 2.02
1,769,358 1.70
715,908 0.69
631,287 0.61
589,465 0.57
486,961 0.47
478,720 0.46
371,149 0.36
316.115 0.30
$ 9.575,233 9.21%
TOWN OF FOUNTAIN HILL S, ARIZONA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
Collected within the
Fiscal Year of the Levy Total Collections to Date
Ratio of Total
Tax Collections
Taxes Levied for Percent of Collections in Total Tax to Total Tax
Fiscal Year the Fiscal Year Amount Levy Subsequent Years Collections Levy
1997 $ 313,963 $ 303 ,580 96.69% $ 8,854 $ 312,434 99 .51 %
1998 269,569 261 ,704 97.08 6,556 268,260 99.51
1999 248,422 242,254 97.52 5,384 247,638 99.68
2000 448,242 432,965 96.59 9,581 442,546 98.73
2001 701,275 675,710 96.35 21,422 697,132 99.41
2002 1,335,787 1,282,844 96.04 43,927 1,326,771 99.33
2003 1,384,478 1,329,929 96.06 43,900 1,373 ,829 99.23
2004 1,545,051 1,492,143 96.58 44,041 1,536,184 99.43
2005 1,449,287 1,408,289 97.17 31,632 1,439,921 99.35
2006 1,319,373 1,275,049 96.64 -1,275,049 96 .64
Source : The Maricopa County Treasurer's Office .
Note I : 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.
Note 3: The amount levied and collected is net of resolutions.
84
Outstanding Ratio of
Delinquent Delinquent Taxes
Taxes to Tax Levy -
$ 1,529 0.49%
1,309 0.49
784 0.32
5,696 1.27
4,143 0.59
9,016 0.67
10,649 0.77
8,867 0 .57
9,366 0 .65
44,324 3 .36
Fiscal
Year
1997 $
1998
1999
2000
2001
2002
2 003
2004
2005
2006
TOWN OF FOUNTAIN HILLS , ARIZONA
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(UNAUDITED)
Governmental Activities
General Percentage of
Ob ligat ion Sales Tax HURF Total Primary Perso nal
Bonds Bond s (a) Bonds (b) Government Income
2,930,000 $ $ 1,000,000 $ 3,930,000 5.53%
2,780 ,000 1,075 ,000 3,855,000 4.92
7,730,000 1,045 ,000 8,775,000 10.46
7 ,505,000 4,680,000 975 ,000 13,160,000 14.15
13 ,280,000 12 ,280,000 905,000 26,465,000 27.24
12,600,000 11 ,855,000 810,000 25,265,000 26.00
11 ,865,000 II ,430,000 720,000 24,015,000 22.51
11 ,110,000 13,595 ,000 630,000 25 ,335,000 21.92
10 ,675,000 12,975 ,000 540,000 24,190 ,000 N/A
9,600,000 12 ,3 10 ,000 455 ,000 22,365,000 N/A
Source: The Town of Fountain Hills, Ari zona's Finance Department.
Per Capita
$ 241
223
472
650
1,2 38
I , 151
1,080
1,124
1,042
913
(a) Represents outstanding principal amount of bonds of the Town of Fountain Hills Municipal Property Corporation
(MPC) for which the Town is obligated through a lea se-leaseback anangement with the MPC to make the bond
payments which are sec ured in part by Sales Taxes of the Town.
(b) Represents outstanding princ ipal amount of bond s secured by street and highway user revenues collected by the
State and shared with the Town.
85
Fiscal
Year
TOWN OF FOUNTAIN HILLS, ARIZONA
RATIO OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(UNAUDITED)
Percentage of
Taxa ble Actual
General Net General Assessed Va lue Assessed
Obligation Obligation of Property OR Value of
Bonds Bonded Debt Taxab le Sales Prop erty Population
Net General
Obl igation
Bonded Debt
Per Cap ita
1997 $ 2,930,000 $ 2,930,000 $ 103 ,944,000 2.82% 16 ,275 $ 180
1998 2,780,000 2,78 0,0 00 116 ,333,000 2.39 17 ,2 80 16 1
1999 7,730,000 7,730 ,000 146 ,944,000 5.26 18,595 416
2000 7,505,000 7,505 ,000 174,76 1,000 4.29 20,235 37 1
200 1 13 ,280,000 13 ,28 0,000 212,4 15,000 6.25 21,383 62 1
2002 12,600,000 12 ,6 00 ,000 238,715,000 5.28 21,954 574
2003 11 ,865,000 II ,865,00 0 270,603,000 4.38 22,243 533
2004 11 ,110,00 0 11,1 10,000 323,385,000 3.44 22,541 493
2005 10,675,000 10,675,000 349,3 98 ,000 3.06 23,217 460
2006 9,600,000 9,600,000 375,183,000 2.56 24,492 392
Source: The Town of Fountain Hi ll s, Arizona's F inanc e Depattment.
Note: Detai l regarding the Town's outstanding debt can be found in the notes to the financial stat em ents.
86
TOWN OF FOUNTAIN HILLS , ARIZONA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2006
(UNAUDITED)
Outstanding
Govemmental U n it Debt
Debt repaid with property taxes
Maricopa County $
Maricopa Co unty Community Co ll ege Di strict 399,805,000
Fountain Hill s Sanita ry District
East Va ll ey In s titute of Technology
Fountain Hi ll s Un ifi e d School Di stri ct 25 ,090,000
Eagle Mountain Community Fa ci lities District 4 ,555 ,000
Other debt
Maricopa County (a) 139,075 ,000
Maricopa County Community College District (b) 23,360,000
Subtotal , overlapping debt
Town of Fountain Hills, Arizona direct debt
Total direct a nd overlapping d ebt
So urce: Officia l statements for pub lic offerings of the indicated entities.
Estimated
Percentage
App licab le (I)
0 .00 1 %
0 .00 1 %
97.620%
0 .003%
97.030%
100 .000 %
0.001 %
0.00 1 %
$
Estimated
Share of
Overlapping
Debt
4 ,5 18
24,344,827
4,555 ,000
1,572
264
28 ,906,18 1
26.789,68 1
$ 55.695.862
(a) Inc lud es lease revenu e bo nds, ce1tificates of pmticipation and rev enu e bonds of th e Maricopa County
St ad ium D istri ct.
(b) Includes revenue bonds.
87
122L_
Debt limit (20% and 6% bonding limit) $ 27,025,453
Total applicable to limit 3.055.000
Legal debt margin $ 23.970.453
Total net debt applicab le to the limit as
a percentage of the debt l imit 11.30%
1998
$ 30,246,686
TOWN OF FOUNTAIN HILLS, ARIZONA
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(UNAUDITED)
Fi scal Year
1999 2000 2001 2002
$ 38,205 ,3 70 $ 45,437,792 $ 55,228,024 $ 62 ,065,780
2.930.000 2.780.000 6.330.000 6.155 .000 6.005.000
$ 27.316.686 $ 35.425.370 $ 39.107.792 $ 49.073.024 $ 56.060.780
9.69% 7.28% 13 .93% 11.14% 9.68%
88
2003 2004 2005 2006 -
$ 70,356,745 $ 84,080,160 $ 90,843,567 $ 97,547,62 7
12.585.000 11.740.000 10.225.000 9.600.000
$ 57.771.745 $ 72.340.160 $ 80.618.567 $ 87.947.627
17.89% 13.96% 11.26% 9.84%
TOWN OF FOUNTAIN HILLS, ARIZONA
CALCULATION OF LEGAL D E BT MARGIN
JUNE 30 ,2 0 06
(UN AUDITED)
Net secondary assesse d valu atio n
Water , Sewer , Light , Parks , O pen Space and
Recreationa l Facili ty Bonds
Debt limit -20% ofsecondmy net assessed va luation
Debt appli cable to limit
G enera l obligat ion bonds o utstanding
Less amoun t set aside fo r repayment of debt
N et debt app licab le to limi t
20% lega l debt margin
A ll other gener a l obli gation bonds
Debt li mit-6% of secondaty net assessed va luation
Debt appl icab le to li m it
Ge nera l ob li gation bo nds outstanding
Less amo unt set a side for repayment of deb t
Net debt appli cable to li mit
A ll other ge nera l obl igati o n bo nds debt marg in
Total lega l debt marg in
Source: Mari copa Co unty Assessor's Office.
89
$ 7,2 65 ,000
(325 ,000)
$ 3,4 10,000
(750,000)
$ 375,1 83.18 1
$ 75,036,636
6.940 ,000
68 .096.636
22 ,5 10 ,99 1
2.660 .000
19.850.99 1
$ 87.947.627
TOWN OF FOUNTAIN IDLLS , ARIZONA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(UNAUDITED)
Per Capita
Fiscal Population Personal Personal School Unemployment
Year (I )(2) Income (3) Income (3) Median Age (2) Enrollment (4) Rate (5)
1997 16 ,275 $ 71 ,078,707 $ 23,983 N /A 2 ,139 1.6%
1998 17 ,28 0 78 ,3 10,846 25,471 N/A 2,192 1.5
1999 18 ,595 83 ,860,233 26,385 N /A 2 ,224 1.6
2000 2 0,2 35 92,975 ,77 1 28,3 63 46.4 2,344 1.6
2001 21 ,3 83 97,138,599 28,717 N /A 2 ,411 2.0
2002 2 1,954 I 00,805 ,099 28,900 N /A 2,446 2.7
2003 22,243 106,385 ,325 26,609 N /A 2,456 2.6
2004 22,541 115 ,604, 165 31,133 N /A 2 ,452 2.1
2005 23,217 N/A N/A N/A 2 ,372 2.0
2006 24,492 N/A N/A N/A 2,335 1.8
Sources:
(1) Arizona Department of Economic Security, Research Administration, Population Statistics Unit for 1997 -1999
and 2001 -2005.
(2) U.S. Census Bureau for 2000.
(3) Do ll ars in thousands. U.S. Departmen t of Commerce, Bureau of Economic Statistics. Information for
Metropo litan Statistical Area.
(4) Repre sent s average dail y members hip for Fountain Hill s Unified School, which in c ludes a portion of students
residing outside the Town.
(5) Arizona Department of Economic Securi ty , Research Administration, CES/LAUS UNIT.
90
Employer
Fountain Hills Unified School District No. 98
Monks Construction
Target
MCO Properties, Inc.
Safeway Food Stores
Town of Fountain Hills
Fry's
Basha's
Sun Ridge Canyon Golf Course
Eagle Mountain Golf Course
Golf International
TOWN OF FOUNTAIN HILLS, ARIZONA
PRINCIPAL EMPLOYERS
JUNE 30, 2006
(UNAUDITED)
2006 -
Percentage of
Total Town
Type Employees Employment*
Education 285 2 .26%
Construction 190 1.51
Retail 130 1.03
Property Management 125 0 .99
Grocery Store 110 0 .87
Government 87 0.67
Grocery Store 80 0.63
Grocery Store 70 0.56
Golf Course 70 0.56
Golf Course 70 0.56
Golf Course ~ 0.52
1.282 10 .16%
1997
Percentage of
Total Town
Employees Employment*
235 3.39%
85 1.22
95 1.37
85 1.22
70 1.0 I
70 1.0 I
40 0.58
50 0.72
730 10.52%
Source: The 1998 and 2006 Arizona Industrial Directory; Greater Phoenix Chamber of Commerce; Community Profiles Arizona Depmtment of
Commerce; and an individual employer survey.
* Employment infonnation for 2006 as of May 2006. Arizona Unemployment Statistics Program, Special Unemployment Report, Arizona
Department of Economic Security, Research Administration, CES/LAUS UNIT.
91
TOWN OF FOUNTAIN HILLS, ARIZONA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION
LAST FIVE FISCAL YEARS
(UNAUDITED)
Full-Time Equ ivalent Employees
Function 2002 2003 2004 2005 2006
General govenunent
Municipal CoUI1 6.0 6.0 5.0 5.0 5.5
Administration 18.0 14.5 10.0 11.0 12.5
Planning & Zonin g 5.5 8.0 9 .0 8.0 9.5
Public safety
Building Safety 9.0 8.0 7.0 9.0 9.0
Law Enforcement 26.0 20.0 1.0
Public Works
Engineering 13.0 13.0 10.5 11.5 11.5
Street s 15 .0 14.0 13 .0 11.0 11.0
Parks and recreation 17.5 16.0 13.0 15.0 16 .5
Community Center 5.0 6.5 6 .5 6.5 7.0
Total 115.0 106.0 75.0 77 .0 82 .5
Source: The Town of Fountain Hi ll s, Arizona's Finance Depa1tment.
92
Function
General Government
Building permits issued
Building inspections conducted
Police (contracted)
Physical arrests
Traffic violations
Fire (contracted)
Inspections
Parks amd recreation
Park acreage
Community/Senior Centers
TOWN OF FOUNTAIN HILLS, ARIZONA
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Years
1997 1998 1999 2000 2001 2002
953 936 929 584 351 260
N /A N/A N/A N/A N/A 8,491
N /A 886 895 890 981 503
N/A 4,988 5,64 I 7,907 4,767 3,186
N/A N/A N/A N /A N/A N/A
121 I2I I2I 121 I2I I2 I
I I I 1 I I
Source: The Town of Fountain Hills, Arizona's Finance Department.
93
2003 2004 2005 2006
168 228 430 468
6,389 6,985 8,446 9,377
60I 60I 644 N /A
3,I86 3,I86 2,432 N /A
N /A N /A N /A I,8I5
I21 I2I I2I I2I
I I I I
Function
Public safety
Fire Stations
Other public works
Streets (miles)
Streetlights
Traffic signals
Parks and recreation
Acreage
Playgrounds
Baseball/ softball diamonds
Soccer/football fields
Community centers
TOWN OF FOUNTAIN HILLS, ARIZONA
CAPITAL ASSETS STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Year
1997 1998 1999 2000 2001 2002
N /A N /A N /A N /A N /A 3
178.5 178.5 178.5 178.5 178 .5 178.5
N /A N /A N /A N /A N/A N/A
5 6 6 6 10 10
121 121 121 121 121 121
2 2 2 2 2 3
6 6 6 6 6 6
4 4 4 4 4 4
I I I I I I
Source: The Town of Fountain Hills, Arizona's Finance Department.
94
2003 2004 2005 2006
3 3 3 3
178.5 178.5 178.5 178.5
N/A N /A N /A 34
10 II II 12
121 121 121 121
3 3 ..,
..) 3
6 6 6 6
4 4 4 3
I 1 I I