HomeMy WebLinkAboutFinancial Reports-Comprehensive Annual Financial Report (CAFR) - 6/30/2013TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Prepared by:
Finance Department
Stacey Lemos, CPA
Finance Director
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TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS
INTRODUCTORY SECTION Page
Letter of Transmittal i
Organization Chart ix
List of Town Officials x
GFOA Certificate of Achievement xi
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
(Required supplementary information) 5
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position 19
Statement of Activities 20
Fund Financial Statements:
Balance Sheet – Governmental Funds 24
Reconciliation of the Balance Sheet –
Governmental Funds to the Statement of Net position 27
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 28
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances – Governmental Funds to the
Statement of Activities 31
Statement of Net Position – Proprietary Funds 32
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS (Cont’d)
FINANCIAL SECTION (Cont’d) Page
BASIC FINANCIAL STATEMENTS (Concl’d)
Statement of Revenues, Expenses and Changes in Fund Net position –
Proprietary Funds 34
Statement of Cash Flows – Proprietary Funds 36
Notes to Financial Statements 37
SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – BUDGET AND ACTUAL
(Required Supplementary Information)
General Fund 64
Highway User Fund 65
Note to Required Supplementary Information 66
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES
Governmental Funds:
Combining Balance Sheet – All Non-Major Governmental Funds
By Fund Type 70
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – All Non-Major Governmental Funds – By Fund Type 72
Special Revenue Funds:
Combining Balance Sheet 76
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 78
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 80
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS (Cont’d)
FINANCIAL SECTION (Concl’d) Page
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES (Concl’d)
Debt Service Fund:
Combining Balance Sheet 86
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 87
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual 88
Capital Projects Funds:
Combining Balance Sheet 92
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 93
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 94
Internal Service Funds:
Combining Statement of Net Position 100
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position 101
Combining Statement of Cash Flows 102
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS (Cont’d)
STATISTICAL SECTION
Financial Trends:
Net Position by Component 105
Changes in Net Position 106
Fund Balances of Governmental Funds 108
Changes in Fund Balances of Governmental Funds 110
Revenue Capacity:
Principal Employers 112
Principal Sales Taxpayers 113
Taxable Sales by Category 114
Direct and Overlapping Sales Tax Rates 115
Debt Capacity:
Ratio of Outstanding Debt by Type 116
Direct and Overlapping Governmental Activities Debt 117
Legal Debt Margin Information 118
Calculation of Legal Debt Margin 119
Pledged-Revenue Coverage 120
Demographic and Economic Information:
Demographic and Economic Statistics 121
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS (Concl’d)
STATISTICAL SECTION (Concl’d) Page
Operating Information:
Full-Time Equivalent Town Employees by Function 122
Water Utility Revenues by User Type 123
Operating Indicators by Function 124
Water Rates 125
Capital Assets Statistics by Function 126
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INTRODUCTORY SECTION
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Caring for our heritage, our community, our future.
www.orovalleyaz.gov
11000 N. La Cañada Drive • Oro Valley, Arizona 85737
phone: (520) 229-4700 • fax: (520) 229-0428
Town of Oro Valley
October 23, 2013
Honorable Mayor, Members of Town Council and
Citizens of the Town of Oro Valley, Arizona:
State law mandates that cities publish a complete set of financial statements presented in conformity
with accounting principles generally accepted in the United States of America and audited in
accordance with auditing standards generally accepted in the United States of America by a certified
public accounting firm licensed in the State of Arizona. Pursuant to that requirement, we hereby
issue the comprehensive annual financial report of the Town of Oro Valley, Arizona (Town) for the
fiscal year ended June 30, 2013.
This report consists of management’s representations concerning the finances of the Town.
Consequently, management assumes full responsibility for the completeness and reliability of all of
the information presented in this report. To provide a reasonable basis for making these
representations, management of the Town has established a comprehensive internal control
framework that is designed both to protect the Town’s assets from loss, theft, or misuse and to
compile sufficient reliable information for the preparation of the Town’s financial statements in
conformity with accounting principles generally accepted in the United States of America. Because
the cost of internal controls should not outweigh their benefits, the Town’s comprehensive
framework of internal controls has been designed to provide reasonable rather than absolute
assurance that the financial statements will be free of material misstatement. As management, we
assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all
material respects.
The Town’s financial statements have been audited by Heinfeld, Meech & Co., P.C., a certified
public accounting firm. The goal of the independent audit was to provide reasonable assurance that
the financial statements of the Town for the fiscal year ended June 30, 2013, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements; assessing the accounting principles used and
significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors concluded, based upon the audit, that there was a reasonable
basis for rendering an unmodified opinion that the Town’s financial statements for the fiscal year
ended June 30, 2013, are fairly presented in conformity with accounting principles generally
accepted in the United States of America. The independent auditor’s report is presented as the first
component of the financial section of this report.
Accounting principles generally accepted in the United States of America require that management
provide a narrative introduction, overview, and analysis to accompany the basic financial statements
in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is
designed to complement the MD&A and should be read in conjunction with it. The Town of Oro
Valley’s MD&A can be found immediately following the report of the independent auditors.
ii
PROFILE OF THE TOWN
The Town of Oro Valley was incorporated in 1974. It is located in northeastern Pima County, six
miles north of Tucson. The Town currently occupies a land area of 34.95 square miles and serves an
estimated population of 43,070. The population of Oro Valley has increased 45% since the 2000
population of 29,700.
Based on the 2010 Census data, Oro Valley has a median household income of $71,628, compared to
the median household income for the state of Arizona of $50,296. Oro Valley residents enjoy a
comfortable hometown feel with a strong family orientation, excellent education system and
abundant opportunities in a safe environment.
The Town of Oro Valley operates under the Council-Manager form of government. Policymaking
and legislative authority is vested in the Town Council, which consists of a Mayor and six Council
Members. Council Members are elected to four-year staggered terms. The citizens of Oro Valley
elect the Mayor. The Council, from among its members, selects the Vice-Mayor. The Town Council
is responsible, among other things, for the adoption of local ordinances, budget adoption, the
development of citizen advisory committees, the hiring and removal of the Town Manager, the
Police Chief, Town Attorney and Town Magistrate. The Town Manager is responsible for
implementation of the policies of the Town Council. The Town Manager appoints all other
department heads except those mentioned above under Town Council responsibilities.
The Town of Oro Valley provides a full range of services including police protection; the
construction and maintenance of streets and related infrastructure; the provision of water and
stormwater services; public transportation services; recreational activities and cultural events. In
addition to general government activities, the governing body is financially accountable for the
Municipal Property Corporation; therefore, this activity is included in the reporting entity. Additional
information in regards to the Municipal Property Corporation can be found in Note 1 in the notes to
the basic financial statements.
As with all cities in the State of Arizona, the Town of Oro Valley is required to comply with Article
IX, Section 20 (1) of the Arizona Constitution, which sets limits on the Town’s legal budget capacity.
The Town currently operates under the Alternative Expenditure Limitation – Home Rule Option.
This option allows the Town Council to establish the budgetary limits locally, rather than being
restricted by the State-imposed expenditure limitation. The voters must authorize this option every
four years. It was last authorized by the citizens of Oro Valley in March of 2010.
The annual operating budget serves as the foundation for the Town’s financial planning and control.
The objective of these budgetary controls is to ensure compliance with legal provisions embodied in
the annual operating budget approved by the Town Council. The Town’s proposed operating budget
is presented to the Town Council for review throughout the budget cycle starting in January and
approved in May. The Town Council is required to hold a public hearing on the proposed budget and
to adopt the final budget by no later than the second Monday in August. Budget amendments
requiring the approval of the Town Council include the following: budget transfers between funds;
transfers to fund additional personnel or increased expenditures as a result of personnel
reclassifications; transfers that would reduce or eliminate funding for items designated in the adopted
Capital Improvement Plan; and transfers that would reduce or eliminate funding for debt service. All
other operational budget amendments that involve transfers between line items or expenditure
categories require approval by the Town Manager.
iii
MAJOR INITIATIVES AND ACCOMPLISHMENTS FOR THE YEAR
Oro Valley’s Strategic Plan was revised during FY 2012/13 and is grounded in the vision expressed
in the Council-adopted and voter-ratified Oro Valley General Plan. While the Strategic Plan guides
short-term decision-making, the General Plan provides a long-term (up to 20 years) direction
regarding the growth, development and redevelopment of the community. Oro Valley is a
community defined by the highest standard of environmental integrity, education, infrastructure,
services and public safety. It is a community of people working together to create the Town’s future
with a government that is responsive to residents and ensures the long-term financial stability of the
Town. The four main focus areas in the Strategic Plan are listed below. Also shown below are the
Town’s accomplishments in these areas during FY 2012/13.
Fiscal Responsibility
The Town Council and management are focused on efforts to maintain long-term
financial health through diversified revenue sources while investing in community
initiatives.
o Achieved financial sustainability by reducing recurring expenditures through vacancy
savings (approximately $1.8 million)
o Successfully transitioned Library Services to Pima County Library District
o Continued successful partnership with the Regional Transportation Authority (RTA)
for expanded public transit services
o Successfully annexed 107 acres known as the Oracle/Ina area
o Surplus auction program generated over $175,000 in revenue
o Completed the issuance of Town of Oro Valley Excise Tax Refunding Obligations,
Series 2013, resulting in net present value savings of nearly $460,000
o Expanded capital improvement program (CIP) from a 5-year program to a 15-year
program
o Successfully transitioned to a self-funded model for medical insurance coverage for
FY 2012/13 resulting in estimated annual savings of over $300,000
o Issued more than 200 single family residential building permits in FY 2012/13, a
275% increase over FY 2011/12
o Developed a program using the Arizona Department of Corrections (ADC) crew to
assist with town-wide right-of-way vegetation maintenance and minor repairs on
Town equipment and fleet
o Commenced new “hybrid” legal management system with use of outside counsel
o Obtained Nutro Company grant for dog park improvements at James D. Kriegh Park
Communication
The Town will ensure residents are educated about and engaged in moving community
initiatives forward.
o Completed upgrade to Granicus system, which provides the public with meeting
information and video and audio recordings of Council and Board meetings
o Adopted new two-year Oro Valley Strategic Plan
o Completed Public Participation Plan for the General Plan Update
o Completed spring and fall community academies providing training to Boards,
Commissions and town residents
o Received first ever Popular Annual Financial Reporting (PAFR) Award from the
Government Finance Officers Association
o Initiated new customer service training module for Town employees
o Expanded capabilities of the Constant Contact email subscription service for
constituents
iv
o Implemented online Court Calendar thus improving communication with constituents
o Developed and unveiled a new Town brand of “It’s in our nature”
o Launched a new Town website and improved online Business Navigator
Economic Development
The Town Council and management are focused on attracting and retaining globally-
competitive high technology and bioscience employers. Additionally, the Town is
focused on developing recreation and cultural opportunities to promote tourism and
support employee attraction and retention.
o Expanded partnerships with Visit Tucson (formerly Metropolitan Tucson Convention
and Visitors Bureau) and the Greater Oro Valley Chamber of Commerce
o Approved the Economic Expansion Zone (EEZ) for Innovation Park
o Completed draft Development Capability Report addressing Town future
development capacity
o Successfully retained Securaplane, a leading supplier of avionics products for
business, commercial and military aircraft, who is expanding into a 55,000 sq ft
building along Innovation Park
o Hosted numerous regional and state championship swim meets at new Oro Valley
Aquatic Center
o Oro Valley named Playful City Community USA 2013 for third consecutive year
o Oro Valley named “2013 Best Place to Raise Kids in Arizona” by Bloomberg
Businessweek
o Launched virtual art gallery and public art tours
o Completed design on the Canada del Oro Shared Use Path project, a key element to
supporting our bicycle-friendly community
Community Services
The Town Council and management are focused on providing services to enhance
residents’ quality of life.
o Implemented new business licensing application, which will increase efficiency,
reduce costs and provide greater and more reliable economic data
o Approved $2.1 million from General Fund contingency reserves to bury utility lines
for preservation of natural beauty and scenic corridors
o Approved development of an archery range and two archery walking courses at
Naranja Park
o Created Town’s first Oro Valley Youth Advisory Council
o Sun Shuttle Dial-a-Ride service celebrated its first year of service with ridership
exceeding 30,000 passenger trips
o Completed construction of the Lambert Lane Widening Project
o Increased employee participation in the Town’s Wellness Initiative
o Completed $5 million renovation and expansion of the Oro Valley Aquatic Center at
James D. Kriegh Park
o Continued partnership with the Southern Arizona Arts & Cultural Alliance (SAACA)
to provide the 2nd Thursday Concert Series at Oro Valley Marketplace
o Completed improvements at Steam Pump Ranch historic property, including new
restroom, new north main gate entrance and roof repair on Leiber House
o Installed new shade structure over playgrounds at James D. Kriegh Park
o Dispose-A-Med program awarded Common Ground Celebration Award by
Metropolitan Pima Alliance
o Membership in Adopt-A-Business Program includes 155 active businesses
v
o Citizen Volunteer Assistants Program (CVAP) members contributed 14,455
volunteer hours valued in excess of $320,000
o Oro Valley Water Utility replaced 2,498 water meters under the Meter Replacement
Program and Advanced Metering Infrastructure Project
o Oro Valley Water Utility performed 144 residential water use audits, reducing water
usage and costs for customers
o Oro Valley Water Utility completed the Tangerine Hills valve and hydrant
replacement project
ECONOMIC CONDITIONS AND OUTLOOK
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the Town
operates.
Fiscal year 2012/13 in Oro Valley saw continued economic progress and recovery with year-over-
year increases in most of the Town’s revenue categories. The Town continues to provide services
and programs without a property tax to fund operations and, therefore, is dependent upon state shared
revenues and local sales tax as major sources of operating revenue. These sources accounted for
approximately 80% of total General Fund revenue for FY 2012/13.
Most of the major local sales tax categories experienced year-over-year increases compared to
amounts collected in FY 2011/12 as discussed below:
Retail tax collections totaled $5.2 million for FY 12/13, up 4.6%, or $228,000 over last fiscal
year.
Restaurant and bar tax collections totaled just over $1.0 million for the fiscal year, flat to last
year’s collections.
Construction sales tax collections totaled $2.9 million for the fiscal year, up 58%, or $1.1
million over last fiscal year.
Utility tax collections totaled $2.8 million for the fiscal year, up 17%, or $409,000 over last
fiscal year.
The chart below is a look at the past five years’ local sales tax activity by category:
Oro Valley Sales Tax Activity by Sector - FY 09 thru FY 13
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Utility Taxes Retail Taxes Restaurant/Bar
Taxes
Construction
Taxes$MFY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13
vi
In FY 2012/13, the Town received $9.0 million for state shared revenues in the General Fund, up
11%, or $903,000 over last fiscal year. The trend chart below depicts the expected upward
movement of both of these revenue categories for next fiscal year:
Other actions have been taken by the Town Council and management over the past several years to
significantly reduce the Town’s recurring expenditures in order to achieve a structurally balanced
budget. Expenditures have been reduced due to the following:
Transfer of Library Services operations to the Pima County Library District, saving the Town
approximately $600,000 annually
Approximately $1.8 million in vacancy savings realized over the last two fiscal years
Refinanced excise tax refunding obligations to achieve net present value savings of
approximately $460,000
Transitioned to self-funded model for employee medical insurance coverage, eliminating
profit paid to medical provider and implemented enhanced wellness program
Expanded volunteer program throughout Town of Oro Valley
Partnered with Tucson Water for delivery of our Central Arizona Project (CAP) water
through their system
Continued to partner with the Regional Transportation Authority (RTA) to provide expanded
dial-a-ride transit services to the community at a lower subsidy cost to the Town
Future Focus
By achieving the significant savings outlined above, along with a more positive revenue picture
projected for FY 2013/14, the Town will focus its efforts on investing in the very elements of our
operation that provide the highest return on investment for the future – our employees, our
infrastructure and assets, economic development opportunities and quality-of-life programs and
services for the community.
Town of Oro Valley
State Shared Revenues and Local Sales Tax Collections
$-
$2
$4
$6
$8
$10
$12
$14
05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 est 13/14 budget
Fiscal YearAmount In MillionsLocal Sales Tax Collections
State Shared Revenue Collections
vii
These strategies will be fulfilled a number of different ways as highlighted below:
Employee performance merit and step increases have been budgeted for FY 2013/14, along
with funding for employee reclassifications and funding for a salary market study.
FY 2013/14 will be the second year in the Town’s effort to return to a regular fleet
replacement schedule. Not only does the budget include funding to replace several aged
vehicles in the fleet, it also includes $108,000 set aside as a reserve for future replacement of
the new vehicles purchased during FY 2012/13. Also included is funding for the appropriate
replacement of computers and other technology that is critical to maintaining smooth
administrative functions.
The FY 2013/14 budget includes funding for the Oro Valley Water Utility to continue
progress on the installation of Automated Metering Infrastructure (AMI) communications
equipment and the replacement of approximately 3,700 aging meters with new electronic
meters.
Funding has also been included in the FY 2013/14 budget to address the growing need for an
expanded property and evidence storage facility for the Police Department to remediate a
lack of proper storage space and provide a safer working environment for staff assigned to
this area.
Addressing the Town’s growing technology needs will be a focus in the FY 2013/14 budget
with funding dedicated to replacing the Town’s permitting system, telephone system and
updating of the Microsoft Office Suite to a consistent version town-wide.
The FY 2013/14 has dedicated funding for the first full year of operations at the expanded
Oro Valley Aquatic Center. The Town will continue to aggressively recruit large-scale
events, which will generate increased tourism and economic activity in our community.
Additionally, annexation and the expansion of arts and culture will continue to be top priorities in the
future. Extensive annexation outreach has been conducted and will increase in the coming year as
more resources are allocated to this area.
The Town also continues to maintain strong investment grade ratings on its outstanding excise tax
bonds, rated “AA-“ by both Standard and Poor’s and Fitch Ratings. This is largely achieved by the
Council’s goal of continuing to diversify the Town’s revenue base and maintaining strong fund
balance reserves in the General Fund, currently at $13.1 million, or 46% of FY 2013/14 adopted
expenditures of $28.5 million. This is well above the Council-adopted policy threshold of 25% of
adopted expenditures.
AWARDS AND ACKNOWLEDGMENTS
Award. The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Oro
Valley for its comprehensive annual financial report for the year ended June 30, 2012. This was the
nineteenth consecutive year that the Town has achieved this prestigious award. In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and efficiently
organized comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program’s
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
viii
Acknowledgments. The preparation of this Comprehensive Annual Financial Report could not have
been accomplished without the efficient and dedicated services of the entire staff of the Finance
Department who assisted and contributed in its preparation. We thank the Mayor and members of
the Town Council for their interest and support in planning and conducting the financial affairs of the
Town in a responsible and progressive manner.
Respectfully submitted,
Greg Caton, ICMA-CM Stacey Lemos, CPA
Town Manager Finance Director
ix
Organizational Chart
Oro Valley Residents
Town MagistrateTown Manager’s Office
Town Council
Finance Human Resources DISParks & RecreationITWater Utility
Communications
Economic Development
Operations
Planning & Engineering
Development Services
Infrastructure Services
Recreation
Parks
Business Application & Development
Technical Services
GIS Services Utility Administration
Appointed Boards & Commissions
Contract Town Attorney
Chief of Police
Field Services
Support Services
Legal Services
Prosecution
Civil
Aquatics
Town Clerk
Trails
Cultural Resources
x
TOWN OF ORO VALLEY, ARIZONA
LIST OF TOWN OFFICIALS
ELECTED OFFICIALS
Mayor Dr. Satish Hiremath
Vice-Mayor Mr. Lou Waters
Council Member Mr. Brendan Burns
Council Member Mr. William Garner
Council Member Mr. Joe Hornat
Council Member Ms. Mary Snider
Council Member Mr. Mike Zinkin
DEPARTMENT HEADS
Town Manager Greg Caton
Finance Director Stacey Lemos, CPA
Human Resources Director Ron Corbin
Town Clerk Julie Bower
Magistrate George Dunscomb
Legal Services Director Tobin Sidles
Water Utility Director Philip Saletta
Chief of Police Daniel G. Sharp
Development & Infrastructure
Services Director/Town Engineer
Paul Keesler
Parks and Recreation Director Kristy Diaz-Trahan
Information Technology Director Chuck Boyer
xi
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FINANCIAL SECTION
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INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and Members of the Town Council
Town of Oro Valley, Arizona
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, business-type
activities, each major fund, and the aggregate remaining fund information of Town of Oro Valley, Arizona
(Town), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which
collectively comprise the Town’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the Town’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, business-type activities, each major fund, and the aggregate
remaining fund information of the Town of Oro Valley, Arizona, as of June 30, 2013, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As described in Note 1, the Town implemented the provisions of the Governmental Accounting Standards
Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position, for the year ended June 30, 2013, which represents a change in accounting
principle. Our opinion is not modified with respect to this matter.
TUCSON • PHOENIX • FLAGSTAFFwww.heinfeldmeech.com
10120 N. Oracle RoadTucson, Arizona 85704Tel (520) 742-2611Fax (520) 742-2718
Page 2
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis on pages 5 through 14 and budgetary comparison information on pages 64 through 66
be presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The introductory section, combining and individual fund
financial statements and schedules, and statistical section are presented for purposes of additional analysis and
are not a required part of the basic financial statements. The combining and individual fund financial
statements and schedules are the responsibility of management and were derived from and relate directly to the
underlying accounting and other records used to prepare the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the combining and individual fund financial statements and
schedules information is fairly stated in all material respects in relation to the basic financial statements as a
whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 23, 2013,
on our consideration of Town of Oro Valley, Arizona’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering Town of Oro Valley, Arizona’s internal control over
financial reporting and compliance.
HEINFELD, MEECH & CO., P.C.
CPAs and Business Consultants
October 23, 2013
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MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
(Required Supplementary Information)
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TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 5
As management of the Town of Oro Valley, Arizona (Town), we offer readers of the Town’s
financial statements this narrative overview and analysis of the financial activities of the Town for
the fiscal year ended June 30, 2013. We encourage readers to consider the information presented
here in conjunction with additional information that we have furnished in our letter of transmittal,
which can be found in the introductory section of this report.
FINANCIAL HIGHLIGHTS
The financial statements which follow the Management’s Discussion and Analysis provide those
significant key financial highlights for 2012-13 as follows.
The Town’s total net position of governmental activities decreased $456,330 to $157.1 million
and business-type activities increased $3.6 million to $68.3 million representing 70 percent and
30 percent respectively, of the total net position of $222.5 million.
General revenues from governmental activities accounted for $24.1 million in revenue, or 65
percent of all revenues from governmental activities. Program specific revenues in the form of
charges for services and grants and contributions accounted for $13.2 million or 35 percent of
total governmental activities revenues. The Town had $17.6 million of program revenues and
$5,471 in general revenues related to business-type activities.
The Town had $35.2 million in expenses related to governmental activities, a decrease of less
than one percent from the prior fiscal year. The Town had $14.0 million in expenses related to
business-type activities, an increase of 11 percent from the prior fiscal year.
Among major funds, the General Fund had $28.1 million in revenues, which primarily consisted
of sales taxes and intergovernmental revenues. The total expenditures of the General Fund were
$25.2 million. The General Fund’s fund balance increased from $11.4 million to $13.1 million.
The Highway User Revenue Fund had $3.9 million in revenues, which primarily consisted of
intergovernmental revenues. The total expenditures of the Highway User Revenue Fund were
$3.4 million.
The Townwide Roadway Development Impact Fee Fund had $3.5 million in revenues, which
primarily consisted of intergovernmental revenues. The total expenditures of the Townwide
Roadway Development Impact Fee Fund were $4.3 million.
The Aquatic Center Project Fund’s fund balance decreased from $3.1 million to $66,638 due
to the construction of the expanded Aquatic Center at James D. Kriegh Park.
The Water Fund operating revenues of $14.8 million exceeded operating expenses of $11.1
million. The increase in net position of $3.7 million was primarily due to revenues from charges
for services exceeding operating expenses.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 6
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Town’s basic
financial statements. The Town’s basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the Town’s finances, in a manner similar to
a private-sector business.
The statement of net position presents information on all of the Town’s assets liabilities, and
deferred inflows/outflows of resources with the difference between the two reported as net
position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the financial position of the Town is improving or deteriorating.
The statement of activities presents information showing how the Town’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated
absences).
In the government-wide financial statements the Town’s activities are presented in the following
categories:
Governmental activities – Most of the Town’s basic services are included here, such as
general government, public safety, highways and streets, and culture and recreation. Sales
taxes, intergovernmental, and charges for services finance most of these activities.
Business-type activities – The services provided by the Town included here are water and
stormwater utilities. The services are primarily financed through user fees and charges.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The Town
uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the Town can be divided into two categories: governmental
funds and proprietary funds.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 7
OVERVIEW OF FINANCIAL STATEMENTS (Concl’d)
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating the Town’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental funds
with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact of the
Town’s near-term financing decision. Both the governmental fund balance sheet and the
governmental fund statement of revenues, expenditures and changes in fund balances provide
a reconciliation to facilitate this comparison between governmental funds and governmental
activities.
Information is presented separately in the governmental fund balance sheet and in the
governmental fund statement of revenues, expenditures and changes in fund balances for the
General, Highway User Revenue (HURF), Oracle Road Debt Service, Townwide Roadway
Development Impact Fees, and Aquatic Center Project Funds, all of which are considered to
be major funds. Data from the other governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these non-major governmental
funds is provided in the form of combining statements and schedules.
Proprietary funds. The Town of Oro Valley maintains two types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in
the government-wide financial statements. The Town of Oro Valley uses enterprise funds to
account for its Oro Valley Water Utility and Stormwater Drainage Utility. The Town uses
internal service funds to account for its fleet maintenance services and to finance its self-
insured employee health benefits. Because these services predominately benefit governmental
rather than business-type functions, the internal service funds have been included within
governmental activities in the government-wide financial statements.
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found immediately following the basic financial
statements.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the Town’s budget
process. The Town adopts an annual expenditure budget for all governmental funds. A schedule
of revenues, expenditures and changes in fund balances – budget and actual has been provided
for the General Fund and major Special Revenue Fund as required supplementary information.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 8
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position may serve over time as a useful indicator of a government’s financial position. In
the case of the Town, assets exceeded liabilities by $225.4 million as of the current fiscal year
end.
The largest portion of the Town’s net position reflects its investment in capital assets (e.g., land,
buildings and improvements, improvements other than buildings, infrastructure, vehicles,
machinery and equipment and construction in progress), less any related outstanding debt used to
acquire those assets. The Town uses these capital assets to provide services to its citizens;
consequently, these assets are not available for future spending. Although the Town’s
investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
The following table presents a summary of the Town’s net position for the fiscal years ended
June 30, 2013 and June 30, 2012.
2013
Governmental
Activities
2012
Governmental
Activities
2013
Business-type
Activities
2012
Business-type
Activities 2013 Total 2012 Total
Current and other assets $ 27,802,041 $ 29,405,939 $ 22,603,794 $ 22,316,206 $ 50,405,835 $ 51,722,145
Capital assets, net 146,102,837 144,898,110 97,911,736 97,550,941 244,014,573 242,449,051
Total assets, net 173,904,878 174,304,049 120,515,530 119,867,147 294,420,408 294,171,196
Current and other liabilities 3,438,012 2,882,086 2,842,130 3,006,139 6,280,142 5,888,225
Long-term liabilities 13,323,348 13,822,115 49,369,457 52,123,740 62,692,805 65,945,855
Total liabilities 16,761,360 16,704,201 52,211,587 55,129,879 68,972,947 71,834,080
Net investment in capital assets 134,512,094 135,336,862 48,802,267 45,669,488 183,314,361 181,006,350
Restricted 3,730,312 11,454,390 3,730,312 11,454,390
Unrestricted 18,901,112 10,808,596 19,501,676 19,067,780 38,402,788 29,876,376
Total net position $157,143,518 $ 157,599,848 $ 68,303,943 $ 64,737,268 $225,447,461 $222,337,116
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 9
GOVERNMENT-WIDE FINANCIAL ANALYSIS (Cont’d)
The Town’s financial position is the product of several financial transactions including the net
results of activities, the acquisition and payment of debt, the acquisition and disposal of capital
assets, and the depreciation of capital assets. The following are significant current year
transactions that have had an impact on the Statement of Net position.
The addition of $6.9 million in business-type activities capital assets through
improvements to the existing water system.
The addition of $11.7 million in governmental activities capital assets, mostly consisting
of street improvements and construction of the aquatic center.
The decrease of $2.8 million in business-type activities long-term debt was due mainly to
the issuance of $6.4 million in revenue refunding bonds to refund $6.3 million of the
2003 Revenue Refunding Bonds; and annual debt service payments of $2.9 million.
The conveyance of the Oro Valley Branch Library to Pima County, which resulted in a
net loss of $2.6 million
Changes in net position. The Town’s total revenues for the current fiscal year were $54.9
million. The total cost of all programs and services was $49.2 million. The following table
presents a summary of the changes in net position for the fiscal years ended June 30, 2013 and
June 30, 2012.
2013
Governmental
Activities
2012
Governmental
Activities
2013
Business-type
Activities
2012
Business-type
Activities
2013
Total
2012
Total
Revenues:
Program revenues:
Charges for services $ 5,007,938 $ 3,524,887 $ 17,546,000 $ 16,569,557 $ 22,553,938 $ 20,094,444
Operating grants and contributions 5,318,097 5,247,844 5,318,097 5,247,844
Capital grants and contributions 2,920,335 7,107,063 48,871 245,607 2,969,206 7,352,670
General revenues:
Sales taxes 14,241,065 12,799,678 14,241,065 12,799,678
Franchise taxes 539,477 525,427 539,477 525,427
Unrestricted state shared revenues 9,048,365 8,145,065 9,048,365 8,145,065
Investment earnings 265,787 189,606 5,471 167,106 271,258 356,712
Total revenues 37,341,064 37,539,570 17,600,342 16,982,270 54,941,406 54,521,840
Expenses:
General government 9,861,131 9,961,376 9,861,131 9,961,376
Public safety 12,770,224 12,349,948 12,770,224 12,349,948
Highways and streets 9,255,004 9,339,062 9,255,004 9,339,062
Culture and recreation 2,783,633 3,227,895 2,783,633 3,227,895
Interest on long-term debt 522,917 654,262 522,917 654,262
Water 13,047,373 11,984,829 13,047,373 11,984,829
Stormwater drainage 983,975 636,966 983,975 636,966
Total expenses 35,192,909 35,532,543 14,031,348 12,621,795 49,224,257 48,154,338
Transfers 2,319 (2,319)
Special item (2,606,804) (2,606,804)
Change in net position (456,330) 2,007,027 3,566,675 4,360,475 3,110,345 6,367,502
Net position, beginning 157,599,848 155,592,821 64,737,268 60,376,793 222,337,116 215,969,614
Net position, ending $ 157,143,518 $ 157,599,848 $ 68,303,943 $ 64,737,268 $225,447,461 $222,337,116
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 10
GOVERNMENT-WIDE FINANCIAL ANALYSIS (Concl’d)
Total revenues increased $419,566, or less than one percent. The increase of $1.4 million in sales tax
was largely due to increases in collections from construction, $1.1 million, and utility taxes,
$394,000. Capital grants and contributions decreased by $4.4 million due to discontinued funding for
loan payments on the ADOT loan which was extinguished in the prior fiscal year. Governmental
activities charges for services increased by $1.5 million due to increases in construction related
revenues such as residential and commercial building permits, $600,000 and development impact
fees, $571,000. The Water Utility fund had an increase of $1.0 million in charges for services
primarily due to development impact fee collections.
Governmental and Business-type activities. The following table presents the cost of the Town’s
major functional activities. The table also shows each function’s net cost (total cost less charges for
services generated by the activities and intergovernmental aid provided for specific programs). The
net cost shows the financial burden that was placed on the State and Town’s taxpayers by each of
these functions.
2013 2012
Governmental Activities
Total
Expenses
Net (Expense)/
Revenue
Total
Expenses
Net (Expense)/
Revenue
General government $ 9,861,131 $ (5,938,649) $ 9,961,376 $ (6,560,335)
Public safety 12,770,224 (11,749,770) 12,349,948 (11,126,636)
Highways and streets 9,255,004 (1,552,733) 9,339,062 1,228,958
Culture and recreation 2,783,633 (2,182,470) 3,227,895 (2,540,474)
Interest on long-term debt 522,917 (522,917) 654,262 (654,262)
Total $ 35,192,909 $ (21,946,539) $ 35,532,543 $ (19,652,749)
Business-type Activities
Water $ 13,047,373 $ 3,726,231 $ 11,984,829 $ 4,037,800
Stormwater drainage 983,975 (162,708) 636,966 155,569
Total $ 14,031,348 $ 3,563,523 $ 12,621,795 $ 4,193,369
The cost of all governmental activities this year was $35.2 million. The decrease of $339,634
from the prior year was due primarily to operation and maintenance cost savings.
The cost of all business-type activities this year was $14.0 million. The increase of $1.4
million from the prior year was primarily due to the following: CAP water delivery charges,
$344,000, water purchased for resale, $408,000 and an overall increase in operational costs in
the Water Utility Fund. In addition, the Stormwater Fund had increased administrative
service costs.
Federal and State governments, developer contributions, and charges for services subsidized
certain governmental programs and business-type programs with revenues of $30.8 million.
Net cost of governmental activities of $21.9 million was financed by general revenues, which
are made up of primarily sales taxes and state shared revenues of $23.3 million.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 11
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds. The focus of the Town’s governmental funds is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the Town’s financing requirements. In particular, unassigned fund balance may
serve as a useful measure of the Town’s net resources available for spending at the end of the
fiscal year.
The financial performance of the Town as a whole is reflected in its governmental funds. As the
Town completed the year, its governmental funds reported a combined fund balance of $21.0
million, a decrease of $2.4 million. This was primarily due to expended proceeds from the
issuance of $2.6 million in revenue bonds for the Town’s aquatic center project.
The General Fund is the principal operating fund of the Town. The fund balance increased by
$1.7 million in the General Fund to $13.1 million for the current fiscal year due to an increase in
local sales tax and license and permit revenues and decreased expenditures related to personnel
vacancy savings.
The fund balance of the Highway User Revenue Fund showed an increase of $500,384 to $3.5
million for the current fiscal year due to an increase in local sales tax and a decrease in
expenditures for street projects.
The Townwide Roadway Development Impact Fees Fund showed a decrease of $767,559 to $1.5
million for the current fiscal year due to planned use of fund balance for the Lambert Lane road
widening project.
The Aquatic Center Project Fund showed a decrease of $3.1 million to $66,638 for the current
fiscal year due to utilization of revenue bond proceeds for the Town’s aquatic center project.
Proprietary funds. Net position of the Enterprise Funds at the end of the year amounted to
$68.3 million. The increase of $3.6 million from the prior fiscal year was primarily due to
operating income of $3.7 million from the Water Utility Fund.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 12
BUDGETARY HIGHLIGHTS
There were no amendments to the Town of Oro Valley’s fiscal year 2012-13 operating and
capital budget. A schedule showing the original and final budget amounts compared to the
Town’s actual financial activity for the General Fund is provided in this report as required
supplementary information. The significant variances are summarized as follows:
The favorable variance of $885,782 in sales tax revenue was primarily a result of
increased sales tax collections from construction.
The favorable variance of $2.5 million in general government expenditures was a result
of personnel vacancy savings and operational cost savings.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. At year end, the Town had invested $244.0 million in capital assets (net of
accumulated depreciation), including buildings, facilities, vehicles, computers, equipment, and
infrastructure assets. This amount represents a net increase of $1.6 million from last year. This
was primarily due to the construction of the Aquatic Center at James D. Kriegh Park and
expansion of the Town’s water system. Total depreciation expense for the year was $10.5
million.
The following schedule presents capital asset balances for the fiscal years ended June 30, 2013
and June 30, 2012.
Governmental Activities
As of
June 30, 2013
As of
June 30, 2012
Land $ 18,878,468 $ 18,878,468
Infrastructure 153,945,765 152,734,484
Buildings and improvements 26,549,988 24,330,218
Machinery, equipment, and vehicles 11,500,475 11,328,666
Construction in progress 9,943,494 6,083,031
Less: Accumulated depreciation (74,715,353) (68,456,757)
Total $ 146,102,837 $144,898,110
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 13
CAPITAL ASSETS AND DEBT ADMINISTRATION (Concl’d)
Business-type Activities
As of
June 30, 2013
As of
June 30, 2012
Land $ 2,410,660 $ 2,410,660
Water rights 8,534,490 8,534,490
Water system 112,874,420 107,415,415
Stormwater system 2,779,503 2,779,503
Equipment and vehicles 4,387,633 3,894,930
Construction in progress 2,572,273
Less: Accumulated depreciation (33,074,970) (30,056,330)
Total $ 97,911,736 $ 97,550,941
Additional information on the Town’s capital assets can be found in Note 5.
Debt Administration. At year end, the Town had $58.5 million in long-term debt outstanding,
$3.4 million due within one year. The following table presents a summary of the Town’s
outstanding long-term debt for the fiscal years ended June 30, 2013 and June 30, 2012.
Governmental Activities
2013 2012
Revenue bonds $ 9,103,050 $ 9,424,960
Special assessment bonds 2,435,000 2,685,000
Total $ 11,538,050 $ 12,109,960
Business-type Activities
2013 2012
Revenue bonds $ 41,386,950 $ 43,843,790
Loan payable 5,575,041 5,893,122
$ 46,961,991 $ 49,736,912
State statutes currently limit the amount of general obligation debt a Town may issue to 20
percent of its total assessed valuation for water, sewer, lights, open space preserves, parks,
playgrounds and recreational facilities. The current debt limitation for the Town is $118.6
million.
The Town of Oro Valley has a bond rating of “AA-” rating from both Standard & Poor’s and
Fitch Ratings on its excise tax revenue bonds and an “AA” rating from Standard & Poor’s on
outstanding water revenue bonds.
Additional information on the Town’s long-term debt can be found in Notes 6 through 10.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2013
Page 14
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The unemployment rate for the Town of Oro Valley is currently 6.4%. Pima County’s
and the State of Arizona’s unemployment rates are 7.6% and 8.5%, respectively.
The Town’s secondary assessed valuation for the current year is $592,761,968.
Single family residential (SFR) building permits issued in this fiscal year totaled 217, as
compared to 56 SFR building permits issued last fiscal year. Projections for SFR
building permits are 180 for fiscal year 2013-14.
The adopted combined operating and capital expenditure budget for fiscal year 2013-14 totals
$93.9 million, a decrease of 1.6% over last year’s budget of $95.4 million. This decrease is
primarily attributed to the completion of the Oro Valley Aquatics Center. The budget for fiscal
year 2013-14 continues to place emphasis on the following: investing in our employees and
infrastructure assets, streamlining service delivery, increasing operating efficiencies through
regional partnerships, and capitalizing on economic development opportunities that provide a
significant return on investment for the Town.
CONTACTING THE TOWN’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the Town’s finances and to demonstrate the Town’s
accountability for the resources it receives. If you have questions about this report or need
additional information, contact the Finance Department, Town of Oro Valley, Arizona, 11000
North La Cañada Drive, Oro Valley, Arizona 85737.
Page 15
BASIC FINANCIAL STATEMENTS
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Page 17
GOVERNMENT-WIDE FINANCIAL STATEMENTS
Page 18
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ASSETS
Current assets:
Cash and cash equivalents
Taxes receivable
Accounts receivable
Intergovernmental receivable
Special assessments
Prepaid items
Total current assets
Noncurrent assets:
Deferred bond charges
Capital assets, non-depreciable
Capital assets, depreciable (net)
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Interest payable
Sales tax payable
Unearned revenue
Claims payable
Customer deposits payable
Compensated absences
Capital leases payable
Loans payable
Special assessment bonds
Revenue bonds
Total current liabilities
Noncurrent liabilities:
Compensated absences
Capital leases payable
Loans payable
Special assessment bonds
Revenue bonds
Total noncurrent liabilities
Total liabilities
NET POSITION
Net investment in capital assets
Restricted for:
Public safety
Capital outlay
Debt service
Unrestricted
Total net position
Governmental
Activities
$21,131,631
1,011,408
251,387
2,577,528
2,435,000
67,695
27,474,649
327,392
28,821,962
117,280,875
146,430,229
173,904,878
1,761,996
858,373
149,282
289,105
186,728
87,134
105,394
1,351,432
260,000
444,000
5,493,444
381,173
2,175,000
8,711,743
11,267,916
16,761,360
134,512,094
1,014,490
1,940,759
775,063
18,901,112
$157,143,518
Business-type
Activities
$17,337,908
2,466,621
19,804,529
2,799,265
10,945,150
86,966,586
100,711,001
120,515,530
500,755
115,383
1,009,041
938,509
278,442
171,592
91,713
281,954
2,406,000
5,793,389
88,396
93,594
5,293,087
40,943,121
46,418,198
52,211,587
48,802,267
19,501,676
$68,303,943
Total
$38,469,539
1,011,408
2,718,008
2,577,528
2,435,000
67,695
47,279,178
3,126,657
39,767,112
204,247,461
247,141,230
294,420,408
2,262,751
973,756
1,158,323
938,509
289,105
186,728
87,134
383,836
1,523,024
91,713
281,954
260,000
2,850,000
11,286,833
469,569
93,594
5,293,087
2,175,000
49,654,864
57,686,114
68,972,947
183,314,361
1,014,490
1,940,759
775,063
38,402,788
$225,447,461
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET POSITION
JUNE 30, 2013
The notes to the basic financial statements are an integral part of this statement.
Page 19
Program Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs
Primary Government
Governmental activities:
General government
Public safety
Highway and streets
Culture and recreation
Interest on long-term debt
Total governmental activities
Business-type activities:
Water
Stormwater drainage
Total business-type activities
Total primary government
Expenses
$9,861,131
12,770,224
9,255,004
2,783,633
522,917
35,192,909
13,047,373
983,975
14,031,348
$49,224,257
Charges for
Services
$3,740,046
45,346
1,052,581
169,965
5,007,938
16,732,600
813,400
17,546,000
$22,553,938
Operating
Grants and
Contributions
$182,436
975,108
3,756,584
403,969
5,318,097
$5,318,097
Capital Grants
and
Contributions
$
2,893,106
27,229
2,920,335
41,004
7,867
48,871
$2,969,206
Governmental
Activities
$(5,938,649)
(11,749,770)
(1,552,733)
(2,182,470)
(522,917)
(21,946,539)
(21,946,539)
General revenues:
Taxes:
Sales taxes
Franchise taxes
Unrestricted state shared revenues
Investment earnings
Transfers
Special item - Capital asset conveyance
Total general revenues, transfers and special items
Changes in net position
Net position, beginning of year
Net position, end of year
14,241,065
539,477
9,048,365
265,787
2,319
(2,606,804)
21,490,209
(456,330)
157,599,848
$157,143,518
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2013
Page 20
The notes to the basic financial statements are an integral part of this statement.
Net (Expense) Revenue and
Changes in Net Position
Business-type
Activities
$
3,726,231
(162,708)
3,563,523
3,563,523
Totals
$(5,938,649)
(11,749,770)
(1,552,733)
(2,182,470)
(522,917)
(21,946,539)
3,726,231
(162,708)
3,563,523
(18,383,016)
5,471
(2,319)
3,152
3,566,675
64,737,268
$68,303,943
14,241,065
539,477
9,048,365
271,258
(2,606,804)
21,493,361
3,110,345
222,337,116
$225,447,461
Page 21
Page 22
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Page 23
FUND FINANCIAL STATEMENTS
ASSETS
Cash and cash equivalents
Taxes receivable
Accounts receivable
Intergovernmental receivable
Special assessments
Due from other funds
Prepaid items
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Sales tax payable
Due to other funds
Deferred revenue
Customer deposits payable
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities and fund balances
General Fund
$13,123,264
1,011,408
251,387
479,752
332,635
67,695
$15,266,141
$606,554
791,973
149,282
289,105
186,728
105,394
2,129,036
1,608,035
11,529,070
13,137,105
$15,266,141
HURF
$3,953,094
250,427
$4,203,521
$619,356
66,400
685,756
3,517,765
3,517,765
$4,203,521
Oracle Road
Debt Service
$149
2,435,000
$2,435,149
$
2,435,000
2,435,000
149
149
$2,435,149
TOWN OF ORO VALLEY, ARIZONA
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2013
Page 24
The notes to the basic financial statements are an integral part of this statement.
Townwide
Roadway
Development
Impact Fees
$
1,847,349
$1,847,349
$53,277
332,635
385,912
1,461,437
1,461,437
$1,847,349
Aquatic Center
Project
$405,944
$405,944
$339,306
339,306
66,638
66,638
$405,944
Non-Major
Governmental
Funds
$2,948,100
$2,948,100
$96,959
96,959
2,202,088
649,053
2,851,141
$2,948,100
Total
Governmental
Funds
$20,430,551
1,011,408
251,387
2,577,528
2,435,000
332,635
67,695
$27,106,204
$1,715,452
858,373
149,282
289,105
332,635
2,621,728
105,394
6,071,969
3,730,312
4,166,818
1,608,035
11,529,070
21,034,235
$27,106,204
Page 25
Page 26
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Total governmental fund balances 21,034,235$
Amounts reported for governmental activities in the Statement of Net Position are
different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds.
Governmental capital assets 220,818,190$
Less accumulated depreciation (74,715,353) 146,102,837
Special assessments receivable are not available to pay for current period
expenditures and therefore are not reported in the funds. 2,435,000
Deferred items related to the issuance of bonds are amortized over the life of
the associated issuance in the government-wide statements but not
reported in the funds.
Deferred bond charges 327,392
Deferred bond premium (52,693) 274,699
The Internal Service Funds are used by management to charge the cost of
insurance to the individual funds. The assets and liabilities of the Internal
Service Funds are included in the Statement of Net Position. 567,402
Long-term liabilities are not due and payable in the current period and therefore
are not reported in the funds.
Special assessment bonds (2,435,000)
Revenue bonds (9,103,050)
Compensated absences (1,732,605) (13,270,655)
Net position of governmental activities 157,143,518$
The notes to the basic financial statements are integral part of this statement.
TOWN OF ORO VALLEY, ARIZONA
RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2013
Page 27
Revenues:
Sales taxes
Franchise taxes
Development impact fees
Special assessments
Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Charges for services
Contributions and donations
Investment earnings
Other
Total revenues
Expenditures:
Current -
General government
Public safety
Highway and streets
Culture and recreation
Capital outlay
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
General Fund
$12,713,777
539,477
11,120,347
1,745,974
202,035
1,400,745
205,634
207,879
28,135,868
8,825,094
12,276,845
1,069,458
2,468,129
522,191
25,161,717
2,974,151
106,629
(1,345,324)
(1,238,695)
1,735,456
11,401,649
$13,137,105
HURF
$738,492
2,842,721
67,973
229,493
25,007
16,813
3,920,499
2,444,021
976,144
3,420,165
500,334
500,334
3,017,431
$3,517,765
Oracle Road
Debt Service
$
365,935
365,935
250,000
119,378
369,378
(3,443)
(3,443)
3,592
$149
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2013
Page 28
The notes to the basic financial statements are an integral part of this statement.
Townwide
Roadway
Development
Impact Fees
$
719,927
2,777,171
21,143
18,375
3,536,616
4,304,175
4,304,175
(767,559)
(767,559)
2,228,996
$1,461,437
Aquatic Center
Project
$
27,229
27,229
4,542,923
4,542,923
(4,515,694)
1,460,000
1,460,000
(3,055,694)
3,122,332
$66,638
Non-Major
Governmental
Funds
$788,796
268,415
77,517
349,927
14,003
106,259
1,604,917
464,677
65,504
708,306
321,910
379,351
1,939,748
(334,831)
137,643
(656,629)
(518,986)
(853,817)
3,704,958
$2,851,141
Total
Governmental
Funds
$14,241,065
539,477
988,342
365,935
16,817,756
1,813,947
551,962
1,630,238
27,229
265,787
349,326
37,591,064
9,289,771
12,342,349
3,513,479
2,468,129
11,053,739
571,910
498,729
39,738,106
(2,147,042)
1,704,272
(2,001,953)
(297,681)
(2,444,723)
23,478,958
$21,034,235
Page 29
Page 30
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Net changes in fund balances - total governmental funds (2,444,723)$
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities,
the cost of those assets is allocated over their estimated useful lives as depreciation expense.
Expenditures for capital assets 11,282,715$
Less current year depreciation (7,471,184) 3,811,531
Special assessment revenues in the Statement of Activities do not provide current financial resources
and therefore are not reported as revenues in the governmental funds. (250,000)
Repayment of debt principal are expenditures in the governmental funds, but the repayment reduces
long-term liabilities in the Statement of Net Assets.
Revenue bond principal retirement 321,910
Special assessment bond principal retirement 250,000 571,910
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore are not reported as expenditures in governmental funds.
Amortization of deferred charges (24,188)
Loss on conveyance of capital assets (2,606,804)
Compensated absences (81,458) (2,712,450)
The Internal Service Funds are used by management to charge the cost of insurance to the
individual funds. The changes in net position of the Internal Service Funds are reported with
governmental activities in the Statement of Activities.567,402
Change in net position in governmental activities (456,330)$
YEAR ENDED JUNE 30, 2013
AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
The notes to the basic financial statements are integral part of this statement.
TOWN OF ORO VALLEY, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
Page 31
Enterprise Funds
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable
Total current assets
Noncurrent assets:
Deferred bond charges
Capital assets, non-depreciable
Capital assets, depreciable (net)
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Interest payable
Customer deposits payable
Compensated absences
Capital leases payable
Loans payable
Revenue bonds
Claims payable
Total current liabilities
Noncurrent liabilities:
Compensated absences
Capital leases payable
Loans payable
Revenue bonds
Total noncurrent liabilities
Total liabilities
NET POSITION
Net investment in capital assets
Unrestricted
Total net position
Water
$16,828,140
2,386,508
19,214,648
2,799,265
10,945,150
83,713,495
97,457,910
116,672,558
483,789
96,409
1,009,041
938,509
278,442
159,796
281,954
2,406,000
5,653,940
82,320
5,293,087
40,943,121
46,318,528
51,972,468
45,734,483
18,965,607
$64,700,090
Non-Major
Enterprise Funds
$509,768
80,113
589,881
3,253,091
3,253,091
3,842,972
16,966
18,974
11,796
91,713
139,449
6,076
93,594
99,670
239,119
3,067,784
536,069
$3,603,853
Totals
$17,337,908
2,466,621
19,804,529
2,799,265
10,945,150
86,966,586
100,711,001
120,515,530
500,755
115,383
1,009,041
938,509
278,442
171,592
91,713
281,954
2,406,000
5,793,389
88,396
93,594
5,293,087
40,943,121
46,418,198
52,211,587
48,802,267
19,501,676
$68,303,943
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2013
Page 32
The notes to the basic financial statements are an integral part of this statement.
Governmental
Activities:
Internal Service
Funds
$701,080
701,080
701,080
46,544
87,134
133,678
133,678
567,402
$567,402
Page 33
Enterprise Funds
Operating revenues:
Charges for services
Other
Self insurance premiums
Total operating revenues
Operating expenses:
Costs of sales and services
Depreciation and amortization
Claims payments
Administrative fees
Reinsurance premiums
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Development impact fees
Connection fees
Investment earnings
Interest expense
Total nonoperating revenues (expenses)
Income (loss) before capital contributions and transfers
Capital contributions
Transfers in
Transfers out
Changes in net position
Total net position, beginning of year
Total net position, end of year
Water
$14,748,328
25,058
14,773,386
8,192,830
2,915,506
11,108,336
3,665,050
1,253,055
706,159
(1,939,037)
20,177
3,685,227
41,004
(2,319)
3,723,912
60,976,178
$64,700,090
Non-Major
Enterprise Funds
$750,460
62,940
813,400
861,391
122,584
983,975
(170,575)
5,471
5,471
(165,104)
7,867
(157,237)
3,761,090
$3,603,853
Totals
$15,498,788
87,998
15,586,786
9,054,221
3,038,090
12,092,311
3,494,475
1,253,055
706,159
5,471
(1,939,037)
25,648
3,520,123
48,871
(2,319)
3,566,675
64,737,268
$68,303,943
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION -
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Page 34
The notes to the basic financial statements are an integral part of this statement.
Governmental
Activities:
Internal Service
Funds
$638,787
2,157,847
2,796,634
638,787
1,402,981
57,000
430,464
2,529,232
267,402
267,402
300,000
567,402
$567,402
Page 35
Governmental
Activities
Water
Non-Major
Enterprise Funds Total
Internal Service
Funds
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received from customers 14,772,803$ 797,366$ 15,570,169$ 638,787$
Cash received from premiums 2,157,847
Cash payments to suppliers for goods and services (5,637,239) (559,200) (6,196,439) (1,023,869)
Cash payments to employees for services (2,515,676) (281,305) (2,796,981) (81,593)
Cash payments for claims (1,315,847)
Net cash provided by (used for) operating activities 6,619,888 (43,139) 6,576,749 375,325
Cash flows from noncapital and related financing activities:
Interfund transfers (2,319) (2,319) 300,000
Connection fees 706,159 706,159
Grants received 157,132 157,132
Net cash provided by noncapital financing activities 703,840 157,132 860,972 300,000
Cash flows from capital and related financing activities:
Development impact fees 1,253,055 1,253,055
Acquisition of capital assets (2,789,292) (64,158) (2,853,450)
Proceeds from loans 554,569 554,569
Principal paid on long-term debt (2,536,840) (95,512) (2,632,352)
Interest on long-term debt (2,188,825) (2,188,825)
Net cash used for capital and related
financing activities (5,707,333) (159,670) (5,867,003)
Cash flows from investing activities:
Investment income 5,471 5,471
Net cash provided by investing activities 5,471 5,471
Net increase (decrease) in cash and cash equivalents 1,616,395 (40,206) 1,576,189 675,325
Cash and cash equivalents, beginning of year 15,211,745 549,974 15,761,719 25,755
Cash and cash equivalents, end of year 16,828,140$ 509,768$ 17,337,908$ 701,080$
Reconciliation of Operating Income to
Net Cash Provided by (Used for) Operating Activities
Operating income (loss)3,665,050$ (170,575)$ 3,494,475$ 267,402$
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:
Depreciation and amortization 2,915,506 122,584 3,038,090
Change in assets and liabilities:
Increase in accounts receivable (31,976) (16,034) (48,010)
Increase in accounts payable 18,441 13,762 32,203 20,789
Increase in claims payable 87,134
Increase in accrued payroll and employee benefits 1,949 8,948 10,897
Increase (decrease) in compensated absences payable 19,525 (1,824) 17,701
Increase in deposits held for others 31,393 31,393
Total adjustments 2,954,838 127,436 3,082,274 107,923
Net cash provided by (used for) operating activities 6,619,888$ (43,139)$ 6,576,749$ 375,325$
Non-cash capital and financing activities
Contribution of assets from developers 41,004$ 7,867$ 48,871$
Capital lease agreeemnts 280,819 280,819
Enterprise Funds
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Page 36 The notes to the basic financial statements are an integral part of this statement.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 37
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town of Oro Valley, Arizona have been prepared in
conformity with accounting principles generally accepted in the United States of America as
applied to government units. The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial
reporting principles.
During the year ended June 30, 2013, the Town implemented the provisions of GASB
Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows
of Resources, and Net Position. GASB Statement No. 63 establishes reporting guidance for
certain elements of the financial statements which are distinct from assets and liabilities.
The more significant of the Town’s accounting policies are described below.
A. Reporting Entity
The Town is a municipal entity governed by an elected mayor and council. As required by
accounting principles generally accepted in the United States of America, these financial
statements present the Town and its component units, entities for which the Town is
considered to be financially accountable. Blended component units, although legally separate
entities, are, in substance, part of the Town’s operations and so data from these units are
combined with data of the Town, the primary government. The blended component units
presented have a June 30 year end.
The financial reporting entity consists of a primary government and its component units. A
component unit is a legally separate entity that must be included in the reporting entity in
conformity with generally accepted accounting principles. The Town is a primary
government that has a separately elected governing body, is legally separate, and is fiscally
independent of other state or local governments. Furthermore, component units combined
with the Town for financial statement presentation purposes, and the Town, are not included
in any other governmental reporting entity. Consequently, the Town’s financial statements
include the funds of those organizational entities for which its elected governing body is
financially accountable.
Blended Component Unit – The financial reporting entity presented in these financial
statements consists of the Town and one blended component unit. This component unit,
discussed below, is included in the Town’s reporting entity because of the significance of its
operational relationship or financial relationship with the Town. The component unit is
governed by a board, substantially or wholly, comprised of the Town’s elected council.
Separate financial statements are not prepared for the component unit on a stand-alone basis.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 38
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The Town of Oro Valley Municipal Property Corporation’s (MPC) Board of Directors
consists of the three members which are appointed by the Town of Oro Valley Town Council.
The MPC, a non-profit corporation incorporated under the laws of the State of Arizona, was
originally formed for the purpose of assisting the Town in obtaining financing for acquiring
the Cañada Hills and Rancho Vistoso water companies. The Town has a contractual
obligation for the repayment of the MPC’s Municipal Facilities Revenue Bonds, Series 2003,
2005, and 2007. The activity of the 2003 MPC is reported in the applicable water enterprise
fund and the activity of the Series 2005 and 2007 MPC is reported in the applicable water
enterprise and governmental funds. All related receivables and payables between the Town
and the MPC have been eliminated.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) present financial information about the Town as a whole. The
reported information includes all of the nonfiduciary activities of the Town and its component
units. For the most part, the effect of internal activity has been removed from these
statements. These statements are to distinguish between the governmental and business-type
activities of the Town. Governmental activities normally are supported by sales taxes and
intergovernmental revenues, and are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support.
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. Sales taxes, unrestricted state shared revenues, investment income and other items
not included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds.
Major individual governmental funds and the major individual enterprise fund are reported as
separate columns in the fund financial statements.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 39
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide Financial Statements – The government-wide financial statements are
reported using the economic resources measurement focus and the accrual basis of
accounting. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the grantor or
provider have been met. As a general rule, the effect of internal activity has been eliminated
from the government-wide financial statements; however, the effects of interfund services
provided and used between functions are reported as expenses and program revenues at
amounts approximating their external exchange value.
Fund Financial Statements – Governmental fund financial statements are reported using the
current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the Town considers
revenues to be available if they are collected within 60 days of the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments, are recorded only when payment is due.
Sales taxes, franchise taxes, licenses and permits, charges for services, special assessments
and investment income associated with the current fiscal period are all considered to be
susceptible to accrual and have been recognized as revenues of the current fiscal period.
Grants and similar awards are recognized as revenue as soon as all eligibility requirements
imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible
to accrual because generally they are not measurable until received in cash. Grants and
similar awards are recognized as revenue as soon as all eligibility requirements imposed by
the grantor or provider have been met. Deferred revenue arises when resources are received
by the Town before it has legal claim to them, as when grant monies are received prior to
meeting all eligibility requirements imposed by the provider.
The Council adopts the budget at the fund level as a total amount of expenditures. Financial
control is administered by fund, with budgetary control for operating performance regulated at
the departmental level, e.g., finance, economic development, police, and parks and recreation.
The legal level of budgetary control (i.e. the level at which expenditures may not legally
exceed appropriations) is at the fund level.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 40
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The focus of governmental fund financial statements is on major funds rather than reporting
funds by type. Each major fund is presented in a separate column. Non-major funds are
aggregated and presented in a single column.
The Town reports the following major governmental funds.
General Fund – This fund accounts for all financial resources of the Town, except those
required to be accounted for in other funds.
Highway User Revenue Fund – This fund is used to account for the Town’s share of
motor fuel tax revenues.
Oracle Road Debt Service Fund – This fund accounts for the special assessment
collections and payment of the outstanding Oracle Road bond issue.
Townwide Roadway Development Impact Fees Fund – This fund accounts for the
collection and capital expenditures of the Townwide Roadway Development Impact
Fees.
Aquatic Center Project Fund – This fund accounts for construction of the expanded
Aquatic Center at James D. Kriegh Park.
The Town reports the following major proprietary funds.
Water Fund – This fund accounts for the costs to operate, construct and finance the
Town’s water system.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the Town’s internal service fund are charges for health
benefits and charges to user departments for fleet maintenance services. The principal
operating revenues of the Town’s enterprise fund are charges to customers for water and
stormwater drainage services. Operating expenses for these funds include the cost of sales
and services, administrative expenses, depreciation, and amortization. All revenues and
expenses not meeting this definition are reported as nonoperating revenues and expenses.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 41
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
D. Cash and Investments
For purposes of the Statement of Cash Flows, the Town considers all highly liquid
investments with a maturity of three months or less when purchased to be cash equivalents.
Cash and cash equivalents at June 30, 2013 were cash in bank and investments held by the
County and State Treasurers.
Nonparticipating interest-earning investment contracts are stated at cost. Money market
investments and participating interest investment contracts with a remaining maturity of one
year or less at time of purchase are stated at amortized cost. All other investments are stated
at fair value.
E. Investment Income
Investment income is composed of interest, dividends, and net changes in the fair value of
applicable investments.
F. Receivables and Payables
Activity between funds that is representative of lending/borrowing arrangements outstanding
at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current
portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of
interfund loans). All other outstanding balances between funds are reported as “due to/from
other funds.” Interfund balances between governmental funds are eliminated on the
Statement of Net Position
All trade receivables are shown net of an allowance for uncollectibles.
G. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in the government-wide and fund financial statements. Prepaid
items are recorded as expenses when consumed in the government-wide financial statements
and as expenditures when purchased in the fund financial statements.
H. Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the applicable
governmental or business-type activities columns in the government-wide financial
statements. Capital assets are defined by the Town as assets with an initial, individual cost of
$5,000 or more and an estimated useful life of more than one year. Such assets are recorded
at historical cost or estimated historical cost if actual historical cost is not available. Donated
capital assets are recorded at estimated fair market value at the date of donation.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 42
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Certain capital assets of the Town are depreciated using the straight line method over the
following estimated useful lives:
Assets Years
Buildings 50
Improvements other than buildings 20-30
Infrastructure 20-50
Vehicles 4-6
Machinery and equipment 7-20
I. Compensated Absences
The Town’s employee annual and sick leave policies generally provide for granting annual
and sick leave with pay. Full-time employees accrue annual leave based on the number of
years employed. Employees who terminate employment shall be paid in a lump sum. Full-
time employees accumulate sick leave at the rate of one work day per month. Part-time
employees whose normal week is twenty hours or more receive sick leave at half the rate of
full-time employees. Once an employee has exceeded 480 hours of accrued sick leave, one
half of the sick leave balance in excess of the 480 hours shall be paid to the employee upon
separation from employment. The current and long-term liabilities, including related benefits,
for accumulated vacation and sick leave are reported on the government-wide financial
statements. A liability for these amounts, including related benefits, is reported in
governmental funds only if they have matured, for example, as a result of employee leave,
resignations and retirements. Generally, resources from the General Fund are used to pay for
compensated absences.
J. Long-term Obligations
In the government-wide financial statements and proprietary fund financial statements, long-
term debt and other long-term obligations are reported as liabilities in the applicable business-
type activities and proprietary fund type statement of net position.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 43
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concl’d)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
K. Interfund Activity
Flows of cash from one fund to another without a requirement for repayment are reported as
interfund transfers. Interfund transfers between governmental funds are eliminated in the
Statement of Activities. Interfund transfers in the fund statements are reported as other
financing sources/uses in governmental funds and after nonoperating revenues/expenses in
proprietary funds.
L. Net Position Flow Assumption
In the government-wide and proprietary fund financial statements the District applies
restricted resources first when outlays are incurred for purposes for which either restricted or
unrestricted amounts are available.
M. Estimates
The preparation of the financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates.
NOTE 2 – FUND BALANCE CLASSIFICATIONS
Fund balances of the governmental funds are reported separately within classifications based
on a hierarchy of the constraints placed on the use of those resources. The classifications are
based on the relative strength of the constraints that control how the specific amounts can be
spent. The classifications are nonspendable, restricted, and unrestricted, which includes
committed, assigned, and unassigned fund balance classifications.
Nonspendable. The nonspendable fund balance classification includes amounts that cannot
be spent because they are not in spendable form, or legally or contractually required to be
maintained intact.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 44
NOTE 2 – FUND BALANCE CLASSIFICATIONS (Cont’d)
Restricted. Fund balance is reported as restricted when constraints placed on the use of
resources are either externally imposed by creditors (such as through debt covenants),
grantors, contributors, or laws or regulations of other governments or is imposed by law
through constitutional provisions or enabling legislation.
Committed. The committed fund balance classification includes amounts that can be used
only for the specific purposes imposed by formal action of the Town Council through the
approval of a Town resolution. Those committed amounts cannot be used for any other
purpose unless the Town Council removes or changes the specified use by taking the same
type of action it employed to previously commit those amounts. The committed fund
balance reported in the Bed Tax Fund is to be used for local economic development
purposes. The committed fund balance reported in the Highway User Revenue Fund is to be
used for roadway maintenance and preservation purposes.
Assigned. Amounts in the assigned fund balance classification are intended to be used by the
Town for specific purposes but do not meet the criteria to be classified as restricted or
committed. In governmental funds other than the General Fund, assigned fund balance
represents the remaining amount that is not restricted or committed. In the General Fund,
assigned amounts represent intended uses established by the Town Council or a management
official delegated that authority by the formal Town Council action. This authorization has
been given to the Town Manager through the approval of Resolution No. (R)11-30, which
amended the Town Financial and Budgetary Policies. The assigned fund balance in the
General Fund is set aside for the payout of compensated absences and for unemployment
compensation claims.
Unassigned. Unassigned fund balance is the residual classification for the General Fund and
includes all spendable amounts not contained in the other classifications. In other
governmental funds, the unassigned classification is used only to report a deficit balance
resulting from overspending for specific purposes for which amounts had be restricted,
committed, or assigned.
The Town applies restricted resources first when outlays are incurred for purposes for which
either restricted or unrestricted (committed, assigned, and unassigned) amounts are available.
Similarly, within unrestricted fund balance, committed amounts are reduced first followed by
assigned, and then unassigned amounts when expenditures are incurred for purposes for
which amounts in any of the unrestricted fund balance classifications could be used.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 45
NOTE 2 – FUND BALANCE CLASSIFICATIONS (Concl’d)
The table below provides detail of the major components of the Town’s fund balance
classifications at year end.
General
Fund
Highway
User
Revenue
Fund
Oracle Road
Debt Service
Fund
Townwide
Roadway
Development
Impact Fees
Aquatic
Center
Project
Fund
Non-Major
Governmental
Funds
Fund Balances:
Restricted:
Debt service $ $ $ 149 $ $ $ 774,914
Capital projects 1,461,437 66,638 412,684
Public safety 1,014,490
Committed 3,517,765 649,053
Assigned 1,608,035
Unassigned 11,529,070
Total fund balances $ 13,137,105 $ 3,517,765 $ 149 $ 1,461,437 $ 66,638 $ 2,851,141
NOTE 3 – CASH AND INVESTMENTS
A.R.S. authorize the Town to invest public monies in obligations of the U.S. Government
and its agencies, obligations of the State and certain local government subdivisions, interest-
bearing savings accounts and certificates of deposit, collateralized repurchase agreements,
certain obligations of U.S. corporations, and certain other securities. The statutes do not
include any requirements for credit risk, custodial credit risk, concentration of credit risk,
interest rate risk, or foreign currency risk for the Town’s investments.
The State Treasurer’s pools are external investment pools, the Local Government Investment
Pool (Pool 5) and Local Government Investment Pool-Government (Pool 7), with no
regulatory oversight. The pools are not required to register (and are not registered) with the
Securities and Exchange Commission. The activity and performance of the pools are
reviewed monthly by the State Board of Investment. The fair value of each participant’s
position in the State Treasurer investment pools approximates the value of the participant’s
shares in the pool and the participants’ shares are not identified with specific investments.
No regulatory oversight is provided for the County Treasurer’s investment pool and that
pool’s structure does not provide for shares.
The County Treasurer’s pool is an external investment pool with no regulatory oversight.
The pool is not required to register (and is not registered) with the Securities and Exchange
Commission. The fair value of each participants’ position in the County Treasurer
investment pool approximates the value of the participants’ shares in the pool and the
participants’ shares are not identified with specific investments.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 46
NOTE 3 – CASH AND INVESTMENTS (Cont’d)
Custodial Credit Risk – Deposits. Custodial Credit risk is the risk that in the event of bank
failure the Town’s deposits may not be returned to the Town. The Town does not have a
deposit policy for custodial credit risk. At year end, the carrying value of the Town’s
deposits was $924,060 and the bank balance was $1,942,165.
At year end, the Town’s investments consisted of the following.
Investments Maturities
(in Years)
Investment Type Fair Value Less than 1 1-5
Money Market - U.S. Treasuries $ 4,081,253 $4,081,253 $
Municipal Securities 634,293 634,293
U.S Treasury Bonds/Notes 19,189,217 19,189,217
U.S. Agencies Bonds/Notes 9,835,446 3,075,331 6,760,115
$7,156,584 $ 26,583,625
County Treasurer’s investment pool 1,199,480 248 days average maturities
State Treasurer’s investment pool 5 2,600,140 25 days average maturities
Total $37,539,829
Interest Rate Risk. The Town has implemented an investment policy that will minimize
interest rate risk, which is the risk that the market value of securities in the portfolio will fall
due to changes in market interest rates by the following.
1. Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell securities on
the open market prior to maturity; and
2. Investing operating funds primarily in shorter-term securities, money market mutual
funds, or similar investment pools limiting the average maturity in the portfolio in
accordance with this policy.
Credit Risk. The Town has implemented an investment policy that will minimize credit risk,
which is the risk of loss due to the failure of the security or backer by the following:
1. Limiting investments to the types of securities listed in Section 6 if this investment
policy;
2. Pre-qualifying financial institutions, broker/dealers, intermediaries, and advisers with
which the Town will do business in accordance with Section 5; and
3. Diversifying the investment portfolio so that the impact of potential losses from any
one type of security or from any one individual issuer will be minimized.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 47
NOTE 3 – CASH AND INVESTMENTS (Concl’d)
As of year end, the Town’s investment in the State and County Treasurers’ investment pools
did not receive a credit quality rating from a national rating agency. The State Treasurer’s
investment pool 5 was rated AAAF/S1+ by Standard and Poor’s at year end. The Town’s
investments in U.S. agencies and municipal bonds were rated AA+ and AAA/AA,
respectively, by Standard and Poor’s.
Custodial Credit Risk – Investments. The Town’s investment in the State and County
Treasurer’s investment pools represents a proportionate interest in the pool’s portfolio;
however, the Town’s portion is not identified with specific investments and is not subject to
custodial credit risk.
Concentration of Credit Risk. The Town places no limit on the amount the Town may invest
in any one issuer. More than 5 percent of the Town’s investments are in FHLMC and FNMA
notes. These investments are 11% and 19% of the Town’s total investments, respectively.
NOTE 4 – RECEIVABLES
Receivable balances, net of allowance for uncollectibles, have been disaggregated by type and
presented separately in the financial statements with the exception of intergovernmental
receivables. Intergovernmental receivables, net of allowance for uncollectibles, as of year end
for the Town’s individual major funds in the aggregate, were as follows.
General
Fund
HURF
Fund
Townwide
Roadway
Development
Impact Fees
Intergovernmental receivables:
Due from Federal government $ 129,517 $ $
Due from State government 350,235 250,427
Due from other governments 1,847,349
Net intergovernmental receivables $ 479,752 $ 250,427 $ 1,847,349
Governmental funds report deferred revenue in connection with receivables for revenues that
are not considered to be available to liquidate liabilities of the current period. Governmental
funds also defer revenue recognition in connection with resources that have been received, but
not yet earned. At the end of the current fiscal year, the various components of deferred
revenue reported in the governmental funds were as follows.
Unearned Unavailable
Prepaid developer fees (General Fund) $ 186,728 $
Special assessments (Oracle Road Debt Service Fund) 2,435,000
Total deferred revenue for governmental funds $ 186,728 $ 2,435,000
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 48
NOTE 5 – CAPITAL ASSETS
A summary of capital asset activity for the current fiscal year follows.
Governmental Activities
Beginning
Balance Increase Decrease Ending Balance
Capital assets, not being depreciated:
Land $ 18,878,468 $ $ $ 18,878,468
Construction in progress 6,083,031 4,246,711 386,248 9,943,494
Total capital assets, not being depreciated 24,961,499 4,246,711 386,248 28,821,962
Capital assets, being depreciated:
Infrastructure 152,734,484 1,211,281 153,945,765
Buildings and improvements 24,330,218 5,361,411 3,141,641 26,549,988
Machinery, equipment, and vehicles 11,328,666 849,560 677,751 11,500,475
Total capital assets being depreciated 188,393,368 7,422,252 3,819,392 191,996,228
Less accumulated depreciation for:
Infrastructure (55,238,241) (5,887,557) (61,125,798)
Buildings and improvements (5,566,333) (586,592) (611,040) (5,541,885)
Machinery, equipment, and vehicles (7,652,183) (997,035) (601,548) (8,047,670)
Total accumulated depreciation (68,456,757) (7,471,184) (1,212,588) (74,715,353)
Total capital assets, being depreciated, net 119,936,611 (48,932) 2,606,804 117,280,875
Governmental activities capital assets, net $ 144,898,110 $ 4,197,779 $ 2,993,052 $146,102,837
Business-Type Activities
Beginning
Balance Increase Decrease Ending Balance
Capital assets, not being depreciated:
Land $ 2,410,660 $ $ $ 2,410,660
Water rights 8,534,490 8,534,490
Construction in progress 2,572,273 952,893 3,525,166
Total capital assets, not being depreciated 13,517,423 952,893 3,525,166 10,945,150
Capital assets, being depreciated:
Water system 107,415,415 5,459,005 112,874,420
Stormwater system 2,779,503 2,779,503
Equipment and vehicles 3,894,930 492,703 4,387,633
Total capital assets being depreciated 114,089,848 5,951,708 120,041,556
Less accumulated depreciation for:
Water system (27,427,164) (2,609,994) (30,037,158)
Stormwater system (132,645) (59,291) (191,936)
Equipment and vehicles (2,496,521) (349,355) (2,845,876)
Total accumulated depreciation (30,056,330) (3,018,640) (33,074,970)
Total capital assets, being depreciated, net 84,033,518 2,933,068 86,966,586
Business-type activities capital assets, net $ 97,550,941 $ 3,885,961 $ 3,525,166 $ 97,911,736
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 49
NOTE 5 – CAPITAL ASSETS (Concl’d)
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government $ 728,025
Public Safety 368,650
Highways and streets 5,975,300
Culture and recreation 399,209
Total depreciation expense – governmental activities $7,471,184
Business-type activities:
Water $2,896,056
Stormwater 122,584
Total depreciation expense –business-type activities $3,018,640
Special Item – On January 1, 2013, the Town transferred library operations and management
to the Pima County Free Public Library District. A portion of the library capital assets were
conveyed to the Pima County Free Library District which resulted in a reduction of $3.4
million in the Town’s capital assets.
Construction Commitments – As of year end, the Town was involved in several
construction projects. The estimated cost to complete the construction projects is $5.5
million.
NOTE 6 – LOANS PAYABLE
The Town received two loans from the Water Infrastructure Finance Authority of Arizona for
water system projects. The loans payable at current fiscal year end are presented below.
Business-type activities:
Interest Rate
(Including
Fees)
Remaining
Maturities
Outstanding
Principal
June 30, 2013
Due
Within
One Year
WIFA Loan, 2007 2.04% 7/1/13-24 $ 3,616,397 $ 192,168
WIFA Loan, 2009 2.75% 7/1/13-29 1,958,644 89,786
Total $ 5,575,041 $ 281,954
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 50
NOTE 6 – LOANS PAYABLE (Concl’d)
Principal and interest payments on the business-type activities loans payable at June 30, 2013
are summarized as follows.
Business-type Activities
Year ending June 30: Principal Interest
2014 $ 281,954 $ 185,162
2015 290,521 175,372
2016 300,461 165,264
2017 310,740 154,808
2018 321,372 143,995
2019-23 1,779,551 544,312
2024-28 2,004,230 214,344
2029-30 286,212 9,120
Total $ 5,575,041 $ 1,592,377
NOTE 7 – BONDS PAYABLE
Bonds payable at year end, consisted of the following outstanding revenue and refunding
bonds. The bonds are both callable and noncallable with interest payable semiannually.
Taxes and Impact Fees are used to pay bonded debt.
Purpose
Original
Amount
Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2013
Due Within
One Year
Governmental activities:
Revenue Bonds, 2005 $ 4,164,050 3.50-4.25% 7/1/13-25 $ 3,068,600 $ 184,250
Refunding Revenue Bonds, 2007 1,389,180 4.25-5.00% 7/1/13-26 1,269,450 9,750
Excise Tax Revenue Obligations, 2010 2,445,000 3.08-6.59% 7/1/13-27 2,185,000 135,000
Revenue Bonds, 2012 2,580,000 2.00-4.00% 7/1/13-27 2,580,000 115,000
Total $ 9,103,050 $ 444,000
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 51
NOTE 7 – BONDS PAYABLE (Cont’d)
Annual debt service requirements to maturity on revenue and refunding bonds for
governmental activities at year end are summarized as follows.
Governmental Activities
Year ending June 30: Principal Interest
2014 $ 444,000 $ 382,639
2015 479,440 367,991
2016 530,920 350,711
2017 539,960 330,665
2018 554,000 308,392
2019-23 3,324,340 1,126,568
2024-28 3,230,390 330,038
Total $ 9,103,050 $ 3,197,004
Purpose
Original
Amount
Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2013
Due Within
One Year
Business-type activities:
Revenue Bonds, 2003 $ 31,750,000 3.70-5.00% 7/1/13-28 $ 980,000 $ 980,000
Refunding Revenue Bonds, 2003 10,225,080 3.75-5.00% 7/1/13-19 940,000 940,000
Revenue Bonds, 2005 2,050,950 3.50-4.25% 7/1/13-25 1,511,400 90,750
Refunding Revenue Bonds, 2007 16,420,820 4.25-5.00% 7/1/13-26 15,005,550 115,250
Refunding Revenue Bonds, 2012 16,595,000 2.00-5.00% 7/1/13-28 16,595,000 280,000
Refunding Revenue Bonds, 2013 6,355,000 1.45% 7/1/14-19 6,355,000
Total $ 41,386,950 $ 2,406,000
Annual debt service requirements to maturity revenue and refunding bonds for business-type
activities at year end are summarized as follows.
Business-type Activities
Year ending June 30: Principal Interest
2014 $ 2,406,000 $ 2,576,206
2015 2,995,560 1,400,141
2016 3,054,080 1,322,821
2017 3,155,040 1,236,878
2018 3,231,000 1,152,362
2019-23 17,305,660 3,837,443
2024-28 8,874,610 814,728
2029 365,000 6,159
Total $ 41,386,950 $ 12,346,738
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 52
NOTE 7 – BONDS PAYABLE (Concl’d)
Issuance of refunding bonds – business-type activities. On June 26, 2013, the Town
issued $6,355,000 in refunding bonds, with an effective interest rate of 1.4 percent, to
advance refund $6,275,000 of outstanding MPC Excise Tax Revenue Refunding Bonds,
Series 2003, with an average interest rate of 4.0 percent. The net proceeds of $6.3 million,
(after payment of $76,485 in underwriting fees, insurance, and other issuance costs) were
used to purchase U.S. government securities. Those securities were deposited in an
irrevocable trust with an escrow agent, to provide for all future debt service payments of the
refunded revenue bonds. As a result, the refunded revenue bonds are considered to be
defeased, and the liability for those bonds has been removed from both the government-wide
and proprietary funds financial statements. The advanced refunding was undertaken to
reduce total debt service payments over the next 5 years by $145,614 and resulted in an
economic gain (difference between the present values of the old and new debt service
payments) of $458,679.
Pledged revenues – governmental activities. The Town has pledged future sales (excise)
tax revenues to repay outstanding revenue bonds and refunding revenue bonds of $9.1
million as of June 30, 2013. Proceeds from the original bond issuances, including those
subsequently refunded, provided financing for land acquisition and facility construction. The
bonds are paid solely from the Town’s sales taxes and are payable through 2028. Total
annual principal and interest payments for all sales tax revenue bonds are expected to require
less than 7% of gross revenues. The total principal and interest to be paid on the bonds is
$12.3 million. The current total sales tax revenues were $13.5 million and the total principal
and interest paid on the bonds was $693,861, or 5% of gross revenues.
Pledged revenues – business-type activities. The Town has pledged future water revenues
to repay outstanding revenue bonds and refunding revenue bonds of $41.4 million as of
June 30, 2013. Proceeds from the original bond issuances, including those subsequently
refunded, provided financing for the construction and improvements to the Town’s water
systems and infrastructure. The bonds are paid solely from water utility revenues and are
payable through 2029. Total annual principal and interest payments for all water revenue
bond issuances are expected to require approximately 25% of gross revenues. The total
principal and interest to be paid on the bonds is $53.7 million. The current total customer
gross revenues were $16.7 million and the total principal and interest paid on the bonds was
$4.3 million or 26% of gross revenues.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 53
NOTE 8 – SPECIAL ASSESSMENT BONDS
Special assessment bonds at year end consisted of the following outstanding bonds. The
bonds are both callable and noncallable with interest payable semiannually. Special
assessments from the Oracle Road Debt Service Fund are used to pay bonded debt.
Purpose
Original
Amount
Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2013
Due
Within
One Year
Governmental activities:
Special assessments debt $3,945,000 4.20-5.00% 1/1/13-21 $ 2,435,000 $ 260,000
Total $ 2,435,000 $ 260,000
Annual debt service requirements to maturity on special assessment bonds at year end are
summarized as follows.
Governmental Activities
Year ending June 30: Principal Interest
2014 $ 260,000 $ 105,867
2015 270,000 94,602
2016 280,000 82,637
2017 295,000 69,102
2018 310,000 54,674
2019-21 1,020,000 73,345
Total $ 2,435,000 $ 480,227
NOTE 9 – OBLIGATIONS UNDER CAPITAL LEASES
The business-type activities of the Town have acquired a street sweeper and vacuum
excavator under the provisions of long-term lease agreements classified as a capital leases.
The lease agreements qualify as capital leases for accounting purposes and, therefore, have
been recorded at the present value of their future minimum lease payments as of the
inception date. Revenues from the Stormwater Fund are used to pay the capital lease
obligations.
The assets capitalized and acquired through capital leases are as follows.
Business-type
Activities
Asset:
Vehicles $ 280,819
Less: Accumulated depreciation 13,609
Total $ 267,210
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 54
NOTE 9 – OBLIGATIONS UNDER CAPITAL LEASES (Concl’d)
The future minimum lease obligations and the net present value of these minimum lease
payments at year end were as follows.
Year Ending June 30:
Governmental
Activities
2014 $ 95,512
2015 95,512
Total minimum lease payments 191,024
Less: amount representing interest 5,717
Present value of minimum lease payments $ 185,307
Due within one year $ 91,713
NOTE 10 – CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the current fiscal year was as follows.
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Governmental activities:
Revenue bonds payable $ 9,424,960 $ $ 321,910 $ 9,103,050 $ 444,000
Deferred bond premium 61,008 8,315 52,693
Special assessments payable 2,685,000 250,000 2,435,000 260,000
Compensated absences payable 1,651,147 1,535,700 1,454,242 1,732,605 1,351,432
Governmental activity long-term
liabilities $ 13,822,115 $ 1,535,700 $ 2,034,467 $ 13,323,348 $ 2,055,432
Business-type activities:
Revenue bonds payable $ 43,843,790 $ 6,355,000 $ 8,811,840 $ 41,386,950 $ 2,406,000
Deferred bond premium 2,144,541 182,370 1,962,171
Loan payable 5,893,122 318,081 5,575,041 281,954
Capital lease payable 280,819 95,512 185,307 91,713
Compensated absences payable 242,287 240,520 222,819 259,988 171,592
Business-type activities long-term
liabilities $ 52,123,740 $ 6,876,339 $ 9,630,622 $ 49,369,457 $ 2,951,259
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 55
NOTE 11 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
Due to/from other funds – At year end, the Townwide Roadway Development Impact Fees
Fund had interfund borrowing with the General Fund to address temporary cash flow needs.
All interfund balances are expected to be paid within one year.
Interfund transfers:
Transfers in
Transfers out
General
Fund
Aquatic
Center
Project Fund
Non-Major
Governmental
Funds
Internal
Service
Funds Total
General Fund $ $ 910,000 $ 135,324 $ 300,000 $ 1,345,324
Non-Major Governmental Funds 106,629 550,000 656,629
Water Fund 2,319 2,319
Total $ 106,629 $ 1,460,000 $ 137,643 $ 300,000 $ 2,004,272
Transfers were made from the General, Bed Tax, and Townwide Facilities Projects Funds to
the Aquatic Center Project Fund to provide funding for the construction of the Aquatic
Center Facilities at James D. Kriegh Park as approved by the Town Council. In addition,
transfers were made from the General and Water Funds to the Municipal Debt Service Fund
for debt service. The transfer from the General Fund to the Internal Service Funds was to
help establish the Self Insurance Fund. Finally, transfers were made from the Bed Tax Fund
to the General Fund to subsidize the increased operating costs of the new Oro Valley Aquatic
Center as directed by the Town Council.
NOTE 12 – CONTINGENT LIABILITIES
Compliance – Amounts received or receivable from grantor agencies are subject to audit and
adjustment by grantor agencies, principally the federal government. Any disallowed claims,
including amounts already collected, may constitute a liability of the applicable funds. The
amount, if any, of expenditures/expenses that may be disallowed by the grantor cannot be
determined at this time, although the Town expects such amounts, if any, to be immaterial.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 56
NOTE 13 – RISK MANAGEMENT
The Town is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The Town’s insurance protection is provided by the Arizona Municipal Risk Retention Pool,
of which the Town is a participating member. The limit for basic coverage is for $2,000,000
per occurrence on a claims made basis. Excess coverage is for an additional $10,000,000 per
occurrence on a follow form, claims made basis. The aggregate limit is also $10,000,000. No
significant reduction in insurance coverage occurred during the year and no settlements
exceeded insurance coverage during any of the past three fiscal years.
The Arizona Municipal Risk Retention Pool is structured such that member premiums are
based on an actuarial review that will provide adequate reserves to allow the Pool to meet its
expected financial obligations. The Pool has the authority to assess its members’ additional
premiums should reserves and annual premiums be insufficient to meet the Pool’s obligations.
The Town is insured by Arizona Municipal Workers Compensation Pool for potential worker
related accidents.
The Town has established a Self Insurance Fund to account for and finance its employee
health benefits program. The activity is reported in an internal service fund in these financial
statements. Under this program, the Fund provides coverage for up to a maximum of
$100,000 for each claim, not to exceed an annual aggregate of $2,000,000. The Fund
purchases commercial insurance for claims in excess of this coverage. Settled claims have
not exceeded this coverage for the fiscal year.
The Town limits its exposure through specific and aggregate stop-loss coverage. All claims
handling procedures are performed by a third-party claims administrator. Reported unpaid
claims, as well as incurred bur not reported claims, have been accrued as a liability based
upon the claims administrator’s estimate These claims are expected to be fully paid within
one year of the financial statement date.
Claims
Payable
Beginning of
Year
Current Year
Claims and
Changes in
Estimates
Claim
Payments
Claims
Payable at
End of Year
2012-13 - 0 - $ 1,402,981 $ 1,315,847 $ 87,134
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 57
NOTE 14 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Plan Descriptions – The Town contributes to the three plans described below. Benefits are
established by state statute and generally provide retirement, death, long-term disability,
survivor, and health insurance premium benefits.
The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer
defined benefit pension plan; a cost-sharing multiple employer defined benefit health
insurance premium plan; and a cost-staring, multiple-employer defined benefit long-term
disability plan that covers employees of the State of Arizona and employees of participating
political subdivisions and school districts. The ASRS is governed by the Arizona State
Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2.
The Public Safety Personnel Retirement System (PSPRS) administers agent multiple-
employer defined benefit pension plan and an agent multiple-employer defined benefit health
insurance premium plan that covers public safety personnel who are regularly assigned
hazardous duty as employees of the State of Arizona or one of its political subdivisions. The
PSPRS, acting as a common investment and administrative agent, is governed by a five-
member board, known as The Fund Manager, and 162 local boards according to the
provisions of A.R.S. Title 38, Chapter 5, Article 4.
The Corrections Officer Retirement Plan (CORP) administers an agent multiple-employer
defined benefit pension plan and an agent multiple-employer defined benefit health insurance
premium plan that covers certain employees of the State of Arizona’s Department of
Corrections and Department of Juvenile Corrections, and county employees whose primary
duties require direct inmate contact. The CORP is governed by The Fund Manager of PSPRS
and the participating local boards according to the provisions of A.R.S. Title 38, Chapter 5,
Article 6.
Each plan issues a publicly available financial report that includes its financial statements and
required supplementary information. A report may be obtained by writing or calling the
applicable plan. The reports are also available on their websites at www.azasrs.gov and
www.psprs.com.
ASRS PSPRS/CORP
P.O. Box 33910 3010 E. Camelback Road Suite 200
Phoenix, AZ 85012-0250 Phoenix, AZ 85016
(602) 240-2200 or (800) 621-3778 (602) 255-5575
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 58
NOTE 14 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS (Cont’d)
Funding policy – The Arizona State Legislature establishes and may amend active plan
members’ and the Town’s contribution rates.
Cost-sharing plans – The Arizona State Legislature establishes and may amend active plan
members’ and the Town’s contribution rates. For the current fiscal year, active ASRS
members were required by statute to contribute at the actuarially determined rate of 11.14
percent (10.90 percent for retirement and 0.24 percent for long-term disability) of the
members’ annual covered payroll and the Town was required by statute to contribute at the
actuarially determined rate of 11.14 percent (10.25 percent for retirement, 0.65 percent for
health insurance premium, and 0.24 percent for long-term disability) of the members’ annual
covered payroll.
The Town’s contributions for the current and two preceding years, all of which were equal to
the required contributions, were as follows.
Retirement
Fund
Health Benefit
Supplement
Fund
Long-Term
Disability
Fund
Year ending June 30:
2013 $ 1,089,376 $ 69,082 $ 25,507
2012 924,771 59,028 22,487
2011 985,116 77,959 47,248
Agent plan – For the current fiscal year, active PSPRS and CORP members were required by
statute to contribute 9.55 and 7.96 percent of the members’ annual covered payroll, and the
Town was required to contribute at the actuarially determined rate of 18.72 and 11.28 percent.
The health insurance premium portion of the contribution rate was actuarially set at 1.34
percent of covered payroll for PSPRS and 0.89 percent for CORP.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 59
NOTE 14 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS (Cont’d)
Actuarial methods and assumptions – The contribution requirements for the year ended
June 30, 2013 were established by the June 30, 2011 actuarial valuations, and those actuarial
valuations were based on the following actuarial methods and assumptions. Actuarial
valuations involve estimates of the value of reported amounts and assumptions about the
probability of events in the future. The required schedule of funding programs which follows
provides multi-year trend information that shows whether the actuarial value of the plans’
assets are increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
PSPRS CORP
Contribution rates:
Town 18.72% 11.28%
Plan members 9.55% 7.96%
Actuarial valuation date June 30, 2011 June 30, 2011
Actuarial cost method Entry age normal Entry age normal
Actuarial assumptions:
Investment rate of return 8.25% 8.25%
Projected salary increases 5.0% - 8.0% 5.0% - 8.0%
Payroll growth 5.0% 5.0%
Healthcare cost trend rate N/A - flat rate subsidy N/A - flat rate subsidy
Amortization method Level percent-of-pay closed Level percent-of-pay closed
Remaining amortization 25 years for underfunded , 20
years for overfunded
25 years for underfunded , 20 years
for overfunded
Asset valuation method 7-year smoothed market 7-year smoothed market
Annual Pension/OPEB Cost – The Town’s pension/OPEB cost for the agent plans for the
current fiscal year end and related information follows.
PSPRS CORP
Pension
Health
Insurance Pension
Health
Insurance
Annual pension/OPEB cost $ 1,031,650 $ 79,540 $ 44,936 $ 3,849
Contributions made $ 1,031,650 $ 79,540 $ 44,936 $ 3,849
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 60
NOTE 14 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS (Cont’d)
Trend Information – Information for each of the agent plans as of most recent actuarial
valuations follows.
Oro Valley Police Plan (PSPRS):
Year Ended
June 30,
Annual Pension
Cost (APC)
Percentage of APC
Contributed
Net Pension
Obligation
Pension
2013 $1,031,650 100% -0-
2012 914,787 100% -0-
2011 874,605 100% -0-
Health Insurance
2013 $ 79,540 100% -0-
2012 40,410 100% -0-
2011 36,442 100% -0-
Oro Valley Dispatchers Plan (CORP):
Year Ended
June 30,
Annual Pension
Cost (APC)
Percentage of APC
Contributed
Net Pension
Obligation
Pension
2013 $44,936 100% -0-
2012 40,512 100% -0-
2011 47,611 100% -0-
Health Insurance
2013 $ 3,849 100% -0-
2012 2,051 100% -0-
2011 1,925 100% -0-
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Page 61
NOTE 14 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS (Concl’d)
Funding Progress – An analysis of funding progress for each of the agent plans as of the
most recent actuarial valuations follows.
Oro Valley Police Plan (PSPRS):
Pension
Valuation
Date
June 30,
Actuarial
Value of
Plan Assets
(a)
Actuarial
Accrued
Liability
(b)
Funding
Liability
(a-b)
Funded
Ratio
(a/b)
Annual
Covered
Payroll
(c)
Unfunded
Liability as
Percentage
of Covered
Payroll
([a-b]/c)
2012 $21,539,446 $29,146,126 $(7,606,680) 73.9% $5,994,297 126.90%
2011 19,281,518 25,262,364 (5,980,846) 76.3% 5,728,605 104.40%
2010 17,152,906 21,796,927 (4,644,021) 78.7% 5,994,879 77.47%
Health Insurance
2012 $ -0- $ 870,374 $ (870,374) 0.0% $ 5,994,297 14.52%
2011 -0- 942,374 (942,374) 0.0% 5,728,605 16.45%
2010 -0- 715,698 (715,698) 0.0% 5,994,879 11.94%
Oro Valley Dispatchers Plan (CORP):
Pension
Valuation
Date
June 30,
Actuarial
Value of
Plan Assets
(a)
Actuarial
Accrued
Liability
(b)
Funding
Liability
(a-b)
Funded
Ratio
(a/b)
Annual
Covered
Payroll
(c)
Unfunded
Liability as
Percentage
of Covered
Payroll
[a-b]/c)
2012 $1,173,314 $1,904,329 $(731,015) 61.6% $451,808 161.80%
2011 1,160,778 1,670,411 (509,633) 69.5% 477,701 106.68%
2010 1,057,358 1,349,198 (291,840) 78.4% 513,337 56.85%
Health Insurance
2012 $ -0- $62,245 $(62,245) 0.0% $451,808 13.78%
2011 -0- 61,474 (61,474) 0.0% 477,701 12.87%
2010 -0- 45,521 (45,521) 0.0% 513,337 8.87%
Page 62
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Page 63
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGET AND ACTUAL
(REQUIRED SUPPLEMENTARY INFORMATION)
Revenues:
Sales taxes
Franchise taxes
Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Charges for services
Investment earnings
Other
Total revenues
Expenditures:
Current -
General government
Public safety
Highway and streets
Culture and recreation
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances (deficits), beginning of year
Fund balances, end of year
Budgeted
Amounts
Original & Final
$ 11,827,995
500,000
11,785,572
936,469
190,000
1,217,556
89,000
134,000
26,680,592
9,591,659
12,667,903
852,520
2,630,112
908,799
26,650,993
29,599
176,747
(135,324)
41,423
71,022
(71,022)
$
Actual
$ 12,713,777
539,477
11,120,347
1,745,974
202,035
1,400,745
205,634
207,879
28,135,868
8,825,094
12,276,845
1,069,458
2,468,129
522,191
25,161,717
2,974,151
106,629
(1,345,324)
(1,238,695)
1,735,456
11,401,649
$13,137,105
Variance with
Final Budget
Positive
(Negative)
$ 885,782
39,477
(665,225)
809,505
12,035
183,189
116,634
73,879
1,455,276
766,565
391,058
(216,938)
161,983
386,608
1,489,276
2,944,552
(70,118)
(1,210,000)
(1,280,118)
1,664,434
11,472,671
$13,137,105
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
YEAR ENDED JUNE 30, 2013
Page 64
See accompanying notes to this schedule.
Revenues:
Sales taxes
Intergovernmental
Licenses, fees & permits
Charges for services
Investment earnings
Other
Total revenues
Expenditures:
Current -
Highway and streets
Capital outlay
Total expenditures
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Budgeted
Amounts
Original & Final
$316,885
2,740,005
43,000
229,493
7,000
10,000
3,346,383
6,108,346
6,108,346
(2,761,963)
2,761,963
$
Actual
$738,492
2,842,721
67,973
229,493
25,007
16,813
3,920,499
2,444,021
976,144
3,420,165
500,334
3,017,431
$3,517,765
Variance with
Final Budget
Positive
(Negative)
$421,607
102,716
24,973
18,007
6,813
574,116
3,664,325
(976,144)
2,688,181
3,262,297
255,468
$3,517,765
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
HURF
YEAR ENDED JUNE 30, 2013
Page 65
See accompanying notes to this schedule.
TOWN OF ORO VALLEY, ARIZONA
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2013
Page 66
NOTE 1 – BUDGETARY BASIS OF ACCOUNTING
The adopted budget of the Town is prepared on the modified accrual basis of accounting.
Page 67
COMBINING AND INDIVIDUAL
FUND FINANCIAL STATEMENTS
AND SCHEDULES
Page 68
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Page 69
GOVERNMENTAL FUNDS
ASSETS
Cash and cash equivalents
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Total liabilities
Fund balances:
Restricted
Committed
Total fund balances
Total liabilities and fund balances
Special Revenue
$1,725,361
$1,725,361
$61,818
61,818
1,014,490
649,053
1,663,543
$1,725,361
Debt Service
$774,914
$774,914
$
774,914
774,914
$774,914
Capital Projects
$447,825
$447,825
$35,141
35,141
412,684
412,684
$447,825
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE
JUNE 30, 2013
Page 70
Total Non-
Major
Governmental
Fund
$2,948,100
$2,948,100
$96,959
96,959
2,202,088
649,053
2,851,141
$2,948,100
Page 71
Revenues:
Sales taxes
Development impact fees
Intergovernmental
Fines, forfeitures & penalties
Investment earnings
Other
Total revenues
Expenditures:
Current -
General government
Public safety
Capital outlay
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Special Revenue
$788,796
349,927
10,302
10,000
1,159,025
464,677
65,504
239,679
769,860
389,165
(406,629)
(406,629)
(17,464)
1,681,007
$1,663,543
Debt Service
$
77,517
23
96,259
173,799
321,910
379,351
701,261
(527,462)
137,643
137,643
(389,819)
1,164,733
$774,914
Capital Projects
$
268,415
3,678
272,093
468,627
468,627
(196,534)
(250,000)
(250,000)
(446,534)
859,218
$412,684
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE
YEAR ENDED JUNE 30, 2013
Page 72
Total Non-
Major
Governmental
Funds
$788,796
268,415
77,517
349,927
14,003
106,259
1,604,917
464,677
65,504
708,306
321,910
379,351
1,939,748
(334,831)
137,643
(656,629)
(518,986)
(853,817)
3,704,958
$2,851,141
Page 73
Page 74
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Page 75
SPECIAL REVENUE FUNDS
The Special Revenue Funds account for the proceeds of specific revenue sources, other than
major capital projects, that are legally restricted to expenditures for specified purposes.
State Seizures and Forfeitures – accounts for state police seizures and forfeitures received by
the Town.
Federal Seizures and Forfeitures – accounts for federal police seizures and forfeitures received
by the Town.
Bed Tax – accounts for the collection of the 6 percent bed tax revenues which funds economic
development and tourism initiatives.
Impound Fee – accounts for the collection of administrative fees for processing vehicles
impounded by the Oro Valley police department.
ASSETS
Cash and cash equivalents
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Total liabilities
Fund balances:
Restricted
Committed
Total fund balances
Total liabilities and fund balances
State Seizures
and Forfeitures
$496,823
$496,823
$1,986
1,986
494,837
494,837
$496,823
Federal Seizures
and Forfeitures
$548,472
$548,472
$28,819
28,819
519,653
519,653
$548,472
Bed Tax
$680,048
$680,048
$30,995
30,995
649,053
649,053
$680,048
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2013
Page 76
Impound Fee
$18
$18
$18
18
$18
Totals
$1,725,361
$1,725,361
$61,818
61,818
1,014,490
649,053
1,663,543
$1,725,361
Page 77
Revenues:
Sales taxes
Fines, forfeitures & penalties
Investment earnings
Other
Total revenues
Expenditures:
Current -
General government
Public safety
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
State Seizures
and Forfeitures
$
118,711
3,075
121,786
61,118
30,014
91,132
30,654
30,654
464,183
$494,837
Federal Seizures
and Forfeitures
$
197,166
3,751
200,917
65,504
209,665
275,169
(74,252)
(74,252)
593,905
$519,653
Bed Tax
$788,796
3,476
10,000
802,272
369,509
369,509
432,763
(406,629)
(406,629)
26,134
622,919
$649,053
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2013
Page 78
Impound Fee
$
34,050
34,050
34,050
34,050
$
Totals
$788,796
349,927
10,302
10,000
1,159,025
464,677
65,504
239,679
769,860
389,165
(406,629)
(406,629)
(17,464)
1,681,007
$1,663,543
Page 79
Total revenues
Revenues:
Sales taxes
Fines, forfeitures & penalties
Investment earnings
Other
Expenditures:
Current -
General government
Public safety
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
State Seizures and Forfeitures
Budget
$
175,000
175,000
467,924
467,924
(292,924)
(292,924)
292,924
$
Actual
$
118,711
3,075
121,786
61,118
30,014
91,132
30,654
30,654
464,183
$494,837
Variance -
Positive
(Negative)
$
(56,289)
3,075
(53,214)
406,806
(30,014)
376,792
323,578
323,578
171,259
$494,837
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2013
Page 80
Federal Seizures and Forfeitures
Budget
$
250,000
250,000
832,189
832,189
(582,189)
(582,189)
582,189
$
Actual
$
197,166
3,751
200,917
65,504
209,665
275,169
(74,252)
(74,252)
593,905
$519,653
Variance -
Positive
(Negative)
$
(52,834)
3,751
(49,083)
766,685
(209,665)
557,020
507,937
507,937
11,716
$519,653
Bed Tax
Budget
$782,283
5,700
787,983
790,091
790,091
(2,108)
(194,810)
(194,810)
(196,918)
196,918
$
Actual
$788,796
3,476
10,000
802,272
369,509
369,509
432,763
(406,629)
(406,629)
26,134
622,919
$649,053
Variance -
Positive
(Negative)
$6,513
(2,224)
10,000
14,289
420,582
420,582
434,871
(211,819)
(211,819)
223,052
426,001
$649,053
Page 81
(Continued)
Total revenues
Revenues:
Sales taxes
Fines, forfeitures & penalties
Investment earnings
Other
Expenditures:
Current -
General government
Public safety
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Impound Fee
Budget
$
47,503
47,503
47,503
47,503
$
Actual
$
34,050
34,050
34,050
34,050
$
Variance -
Positive
(Negative)
$
(13,453)
(13,453)
13,453
13,453
$
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2013
Page 82
Totals
Budget
$782,283
472,503
5,700
1,260,486
1,305,518
832,189
2,137,707
(877,221)
(194,810)
(194,810)
(1,072,031)
1,072,031
$
Actual
$788,796
349,927
10,302
10,000
1,159,025
464,677
65,504
239,679
769,860
389,165
(406,629)
(406,629)
(17,464)
1,681,007
$1,663,543
Variance -
Positive
(Negative)
$6,513
(122,576)
4,602
10,000
(101,461)
840,841
766,685
(239,679)
1,367,847
1,266,386
(211,819)
(211,819)
1,054,567
608,976
$1,663,543
Page 83
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Page 85
MUNICIPAL DEBT SERVICE FUND
Municipal Debt Service - to account for the payments of debt service on the Municipal Property
Corporation Revenue Bonds of 2003 Refunding, 2005 and 2007 Refunding, and Series 2010
Excise Tax Revenue Obligations.
ASSETS
Cash and cash equivalents
Total assets
Fund balances:
Restricted
Total fund balances
Total liabilities and fund balances
Municipal Debt
Service
$774,914
$774,914
$774,914
774,914
$774,914
Totals
$774,914
$774,914
$774,914
774,914
$774,914
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR DEBT SERVICE FUNDS
JUNE 30, 2013
Page 86
Revenues:
Intergovernmental
Investment earnings
Other
Total revenues
Expenditures:
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Municipal Debt
Service
$77,517
23
96,259
173,799
321,910
379,351
701,261
(527,462)
137,643
137,643
(389,819)
1,164,733
$774,914
Totals
$77,517
23
96,259
173,799
321,910
379,351
701,261
(527,462)
137,643
137,643
(389,819)
1,164,733
$774,914
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2013
Page 87
Total revenues
Revenues:
Special assessments
Intergovernmental
Investment earnings
Other
Expenditures:
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Municipal Debt Service
Budget
$
83,784
100,000
183,784
321,910
1,248,238
1,570,148
(1,386,364)
155,706
155,706
(1,230,658)
1,230,658
$
Actual
$
77,517
23
96,259
173,799
321,910
379,351
701,261
(527,462)
137,643
137,643
(389,819)
1,164,733
$774,914
Variance -
Positive
(Negative)
$
(6,267)
23
(3,741)
(9,985)
868,887
868,887
858,902
(18,063)
(18,063)
840,839
(65,925)
$774,914
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2013
Page 88
Oracle Road Debt Service
Budget
$367,578
367,578
250,000
121,693
371,693
(4,115)
(4,115)
4,115
$
Actual
$365,935
365,935
250,000
119,378
369,378
(3,443)
(3,443)
3,592
$149
Variance -
Positive
(Negative)
$(1,643)
(1,643)
2,315
2,315
672
672
(523)
$149
Totals
Budget
$367,578
83,784
100,000
551,362
571,910
1,369,931
1,941,841
(1,390,479)
155,706
155,706
(1,234,773)
1,234,773
$
Actual
$365,935
77,517
23
96,259
539,734
571,910
498,729
1,070,639
(530,905)
137,643
137,643
(393,262)
1,168,325
$775,063
Variance -
Positive
(Negative)
$(1,643)
(6,267)
23
(3,741)
(11,628)
871,202
871,202
859,574
(18,063)
(18,063)
841,511
(66,448)
$775,063
Page 89
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Page 91
CAPITAL PROJECTS FUNDS
Capital Projects Funds are created to account for the purchase or construction of major capital
facilities which are not financed by the general, enterprise, or special revenue funds.
General Impact Fees – accounts for the collection of development impact fees charged for new
residential and nonresidential growth to be used for future general government facilities,
vehicles, equipment, and other necessary general government infrastructure needed as a result of
new growth.
Townwide Facilities Projects – accounts for revenues dedicated to constructing solar facilities,
improvements to Town parks, and historic properties.
Aquatic Center Project – accounts for construction of expanded Aquatic Center at James D.
Kriegh Park.
ASSETS
Cash and cash equivalents
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Total liabilities
Fund balances:
Restricted
Total fund balances
Total liabilities and fund balances
General Impact
Fees
$397,674
$397,674
$
397,674
397,674
$397,674
Townwide
Facilities
Projects
$50,151
$50,151
$35,141
35,141
15,010
15,010
$50,151
Totals
$447,825
$447,825
$35,141
35,141
412,684
412,684
$447,825
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUNDS
JUNE 30, 2013
Page 92
Revenues:
Development impact fees
Investment earnings
Total revenues
Expenditures:
Current -
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
General Impact
Fees
$268,415
3,678
272,093
318,986
318,986
(46,893)
(46,893)
444,567
$397,674
Townwide
Facilities
Projects
$
149,641
149,641
(149,641)
(250,000)
(250,000)
(399,641)
414,651
$15,010
Totals
$268,415
3,678
272,093
468,627
468,627
(196,534)
(250,000)
(250,000)
(446,534)
859,218
$412,684
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2013
Page 93
Total revenues
Revenues:
Development impact fees
Intergovernmental
Contributions and donations
Investment earnings
Other
Expenditures:
Current -
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Townwide Roadway Development Impact Fees
Budget
$414,118
5,979,000
1,600
18,000
6,412,718
7,128,581
7,128,581
(715,863)
(715,863)
715,863
$
Actual
$719,927
2,777,171
21,143
18,375
3,536,616
4,304,175
4,304,175
(767,559)
(767,559)
2,228,996
$1,461,437
Variance -
Positive
(Negative)
$305,809
(3,201,829)
19,543
375
(2,876,102)
2,824,406
2,824,406
(51,696)
(51,696)
1,513,133
$1,461,437
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2013
Page 94
General Impact Fees
Budget
$179,302
179,302
985,765
985,765
(806,463)
(806,463)
806,463
$
Actual
$268,415
3,678
272,093
318,986
318,986
(46,893)
(46,893)
444,567
$397,674
Variance -
Positive
(Negative)
$89,113
3,678
92,791
666,779
666,779
759,570
759,570
(361,896)
$397,674
Townwide Facilities Projects
Budget
$
444,061
444,061
(444,061)
(444,061)
444,061
$
Actual
$
149,641
149,641
(149,641)
(250,000)
(250,000)
(399,641)
414,651
$15,010
Variance -
Positive
(Negative)
$
294,420
294,420
294,420
(250,000)
(250,000)
44,420
(29,410)
$15,010
Page 95
(Continued)
Total revenues
Revenues:
Development impact fees
Intergovernmental
Contributions and donations
Investment earnings
Other
Expenditures:
Current -
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Aquatic Center Project
Budget
$
300,000
300,000
3,350,000
3,350,000
(3,050,000)
(3,050,000)
3,050,000
$
Actual
$
27,229
27,229
4,542,923
4,542,923
(4,515,694)
1,460,000
1,460,000
(3,055,694)
3,122,332
$66,638
Variance -
Positive
(Negative)
$
(272,771)
(272,771)
(1,192,923)
(1,192,923)
(1,465,694)
1,460,000
1,460,000
(5,694)
72,332
$66,638
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2013
Page 96
Totals
Budget
$593,420
5,979,000
300,000
1,600
18,000
6,892,020
11,908,407
11,908,407
(5,016,387)
(5,016,387)
5,016,387
$
Actual
$988,342
2,777,171
27,229
24,821
18,375
3,835,938
9,315,725
9,315,725
(5,479,787)
1,460,000
(250,000)
1,210,000
(4,269,787)
6,210,546
$1,940,759
Variance -
Positive
(Negative)
$394,922
(3,201,829)
(272,771)
23,221
375
(3,056,082)
2,592,682
2,592,682
(463,400)
1,460,000
(250,000)
1,210,000
746,600
1,194,159
$1,940,759
Page 97
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Page 99
INTERNAL SERVICE FUNDS
Self Insurance - to account for the financial activity associated with the Town’s self-insurance
program for employee health care.
Fleet Maintenance - to account for the Town’s fleet maintenance services.
ASSETS
Current assets:
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Claims payable
Total current liabilities
Total liabilities
NET POSITION
Unrestricted
Total net position
Fleet
Maintenance
$32,294
32,294
32,294
32,294
32,294
32,294
$
Self Insurance
$668,786
668,786
668,786
14,250
87,134
101,384
101,384
567,402
$567,402
Totals
$701,080
701,080
701,080
46,544
87,134
133,678
133,678
567,402
$567,402
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF NET POSITION -
ALL INTERNAL SERVICE FUNDS
JUNE 30, 2013
Page 100
Operating revenues:
Charges for services
Self insurance premiums
Total operating revenues
Operating expenses:
Costs of sales and services
Claims payments
Administrative fees
Reinsurance premiums
Total operating expenses
Operating income (loss)
Income (loss) before transfers
Transfers in
Changes in net position
Total net postion, beginning of year
Total net position, end of year
Fleet
Maintenance
$638,787
638,787
638,787
638,787
$
Self Insurance
$
2,157,847
2,157,847
1,402,981
57,000
430,464
1,890,445
267,402
267,402
300,000
567,402
$567,402
Totals
$638,787
2,157,847
2,796,634
638,787
1,402,981
57,000
430,464
2,529,232
267,402
267,402
300,000
567,402
$567,402
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION -
ALL INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Page 101
Fleet Maintenance Self Insurance Total
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received from customers 638,787$ $ 638,787$
Cash received from premiums 2,157,847 2,157,847
Cash payments to suppliers for goods and services (550,655) (473,214) (1,023,869)
Cash payments to employees for services (81,593) (81,593)
Cash payments for claims (1,315,847) (1,315,847)
Net cash provided by operating activities 6,539 368,786 375,325
Cash flows from noncapital and related financing activities:
Interfund transfers 300,000 300,000
Net cash provided by noncapital financing activities 300,000 300,000
Net increase in cash and cash equivalents 6,539 668,786 675,325
Cash and cash equivalents, beginning of year 25,755 25,755
Cash and cash equivalents, end of year 32,294$ 668,786$ 701,080$
Reconciliation of Operating Income to
Net Cash Provided by Operating Activities
Operating income 267,402$ 267,402$
Adjustments to reconcile operating income
to net cash provided by (used for) operating activities:
Change in assets and liabilities:
Increase in accounts payable 6,539 14,250 20,789
Increase in claims payable 87,134 87,134
Total adjustments 6,539 101,384 107,923
Net cash provided by operating activities 6,539$ 368,786$ 375,325$
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF CASH FLOWS
ALL INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Page 102
Page 103
STATISTICAL SECTION
The statistical section presents financial statement trends as well as detailed financial and
operational information not available elsewhere in the report. The statistical section is intended
to enhance the reader’s understanding of the information presented in the financial statements,
notes to the financial statements, and other supplementary information presented in this report.
The statistical section is comprised of the five categories of statistical information presented
below.
Financial Trends
These schedules contain information on financial trends to help the reader understand how
the Town’s financial position and financial activities have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the
Town’s ability to generate property revenue.
Debt Capacity
These schedules present information to help the reader evaluate the Town’s current levels
of outstanding debt as well as assess the Town’s ability to make debt payments and/or issue
additional debt in the future.
Demographic and Economic Information
These schedules present various demographic and economic indicators to help the reader
understand the environment in which the Town’s financial activities take place and to help
make comparisons with other municipalities.
Operating Information
These schedules contain information about the Town’s operations and various resources to
help the reader draw conclusions as to how the Town’s financial information relates to the
services provided by the Town.
Page 104
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Governmental activities Net investment in capital assets 30,546,282$ 92,541,223$ 107,413,486$ 106,644,847$ 115,177,344$ 120,515,962$ 127,712,057$ 132,956,156$ 135,336,862$ 134,512,094$ Restricted 3,958,033 15,360,660 8,919,398 8,326,731 14,072,781 7,537,331 9,580,610 9,048,505 11,454,390 3,730,312 Unrestricted 19,248,712 15,394,707 15,063,081 23,571,109 26,698,611 26,135,593 15,979,093 10,588,160 10,808,596 18,901,112 Total governmental activities net position 53,753,027$ 123,296,590$ 131,395,965$ 138,542,687$ 155,948,736$ 154,188,886$ 153,271,760$ 152,592,821$ 157,599,848$ 157,143,518$ Business-type activities Net investment in capital assets (14,913,572)$ 546,602$ 7,240,791$ 15,534,043$ 21,274,023$ 28,212,750$ 31,383,715$ 40,005,568$ 45,669,488$ 48,802,267$ Restricted 3,492,488 2,310,980 2,331,001 - - - - - - - Unrestricted 33,107,781 24,499,050 22,958,536 23,252,747 24,651,948 24,393,984 24,404,427 20,371,225 19,067,780 19,501,676 Total business-type activities net position 21,686,697$ 27,356,632$ 32,530,328$ 38,786,790$ 45,925,971$ 52,606,734$ 55,788,142$ 60,376,793$ 64,737,268$ 68,303,943$ Primary government Net investment in capital assets 15,632,710$ 93,087,825$ 114,654,277$ 122,178,890$ 136,451,367$ 148,728,712$ 159,095,772$ 172,961,724$ 181,006,350$ 183,314,361$ Restricted 7,450,521 17,671,640 11,250,399 8,326,731 14,072,781 7,537,331 9,580,610 9,048,505 11,454,390 3,730,312 Unrestricted 52,356,493 39,893,757 38,021,617 46,823,856 51,350,559 50,529,577 40,383,520 30,959,385 29,876,376 38,402,788 Total primary government net position 75,439,724$ 150,653,222$ 163,926,293$ 177,329,477$ 201,874,707$ 206,795,620$ 209,059,902$ 212,969,614$ 222,337,116$ 225,447,461$ Source: Town of Oro Valley Finance Department(UNAUDITED)Fiscal YearTOWN OF ORO VALLEY, ARIZONANET POSITION BY COMPONENTLAST TEN FISCAL YEARS(ACCRUAL BASIS OF ACCOUNTING)Page 105
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013ExpensesGovernmental activities:General government 5,971,319$ 5,997,864$ 7,162,732$ 7,529,245$ 9,080,766$ 9,936,639$ 9,950,053$ 9,887,523$ 9,961,376$ 9,861,131$ Public Safety 9,520,219 10,309,453 11,155,542 12,352,671 14,347,250 15,019,980 13,730,593 12,509,201 12,349,948 12,770,224 Highways and streets 2,850,172 4,789,234 5,732,026 7,757,276 7,292,972 9,481,040 9,353,689 8,895,987 9,339,062 9,255,004 Culture and recreation 2,566,173 2,631,306 3,014,341 3,375,314 3,644,973 3,806,555 3,527,949 3,375,281 3,227,895 2,783,633 Interest on long-term debt 456,107 653,331 805,123 996,336 987,074 954,645 1,767,155 430,570 654,262 522,917 Total governmental activities/expenses 21,363,990 24,381,188 27,869,764 32,010,842 35,353,035 39,198,859 38,329,439 35,098,562 35,532,543 35,192,909 Business-type activities:Water 8,957,988 9,642,592 10,438,869 11,446,958 12,676,275 13,495,124 12,830,137 12,527,851 11,984,829 13,047,373 Stormwater drainage 45,551 271,469 111,695 74,235 177,673 494,166 486,994 586,006 636,966 983,975 Total business-type activities expenses 9,003,539 9,914,061 10,550,564 11,521,193 12,853,948 13,989,290 13,317,131 13,113,857 12,621,795 14,031,348 Total primary government expenses 30,367,529$ 34,295,249$ 38,420,328$ 43,532,035$ 48,206,983$ 53,188,149$ 51,646,570$ 48,212,419$ 48,154,338$ 49,224,257$ Program RevenuesGovernmental activities:Fees, Fines and Charges for Services:General government 3,902,024$ 3,784,049$ 4,013,368$ 3,291,983$ 3,830,060$ 2,835,884$ 2,261,815$ 2,455,182$ 3,079,526$ 3,740,046$ Public Safety - - - 229,546 69,256 83,279 28,785 33,976 33,109 45,346 Highways and streets 170,543 396,602 183,842 122,124 211,088 119,847 137,436 400,977 329,420 1,052,581 Culture and recreation - - - 121,358 73,149 110,857 119,273 126,290 82,832 169,965 Operating grants and contributions 3,675,674 4,216,642 4,558,864 4,893,869 5,619,003 5,392,667 4,728,050 4,887,283 5,247,844 5,318,097 Capital grants and contributions 13,437,638 13,834,121 3,994,640 8,321,691 10,264,829 1,781,571 6,514,602 8,980,239 7,107,063 2,920,335 Total governmental activities program revenues 21,185,879 22,231,414 12,750,714 16,980,571 20,067,385 10,324,105 13,789,961 16,883,947 15,879,794 13,246,370 Business-type activities:Charges for services:Water 11,917,546 11,951,413 14,038,391 13,617,336 16,803,950 16,098,086 15,136,784 15,119,065 15,817,345 16,732,600 Stormwater Utility - 14,710 21,401 125 357,602 746,655 927,238 888,391 752,212 813,400 Operating grants and contributions - - - - - - - - - - Capital grants and contributions 840,096 2,934,747 628,501 3,066,170 3,567,083 3,697,229 362,273 1,655,307 245,607 48,871 Total business-type activities program revenues 12,757,642 14,900,870 14,688,293 16,683,631 20,728,635 20,541,970 16,426,295 17,662,763 16,815,164 17,594,871 Total primary government program revenues 33,943,521$ 37,132,284$ 27,439,007$ 33,664,202$ 40,796,020$ 30,866,075$ 30,216,256$ 34,546,710$ 32,694,958$ 30,841,241$ (ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)Fiscal YearTOWN OF ORO VALLEY, ARIZONACHANGES IN NET POSITIONLAST TEN FISCAL YEARSPage 106
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Net (Expense)/RevenuesGovernmental activities (178,111)$ (2,149,774)$ (15,119,050)$ (15,030,271)$ (15,285,650)$ (28,874,754)$ (24,539,478)$ (18,214,615)$ (19,652,749)$ (21,946,539)$ Business-type activities 3,754,103 4,986,809 4,137,729 5,162,438 7,874,687 6,552,680 3,109,164 4,548,906 4,193,369 3,563,523 Total primary government net expenses 3,575,992$ 2,837,035$ (10,981,321)$ (9,867,833)$ (7,410,963)$ (22,322,074)$ (21,430,314)$ (13,665,709)$ (15,459,380)$ (18,383,016)$ General Revenues and Other Changes in Net PositionGovernmental activities:Taxes:Sales taxes 7,924,855$ 9,536,791$ 12,455,609$ 16,873,630$ 17,168,998$ 15,376,408$ 12,970,865$ 11,572,148$ 12,799,678$ 14,241,065$ Franchise taxes 371,697 402,482 435,428 478,175 516,652 506,685 509,285 514,814 525,427 539,477 Impact fees* 1,189,848 1,547,819 1,098,977 1,038,217 910,741 441,020 584,113 - - - Unrestricted state revenue sharing 2,845,866 2,935,615 3,343,471 4,473,305 5,544,763 5,886,132 5,086,953 4,520,935 3,461,359 9,048,365 Unrestricted state sales tax revenue sharing 2,686,614 2,958,376 3,432,007 3,744,864 3,621,016 3,134,789 2,891,386 2,569,666 3,204,612 - Unrestricted auto lieu tax revenue sharing 1,374,464 1,395,094 1,541,560 1,726,149 1,738,875 1,655,875 1,484,125 1,318,989 1,479,094 - Special assessments - 5,433,301 - - - - - - - - Investment earnings (loss) 281,518 557,238 991,151 1,471,641 1,590,654 113,995 95,625 39,124 189,606 265,787 Special item - Capital asset conveyance - - - - - - - - - (2,606,804) Transfers (64,000) (91,194) (79,778) 69,813 1,600,000 - - - - 2,319 Total governmental activities 16,610,862 24,675,522 23,218,425 29,875,794 32,691,699 27,114,904 23,622,352 20,535,676 21,659,776 21,490,209 Business-type activities:Investment earnings (loss) 285,118 591,932 956,189 1,163,837 864,494 128,083 72,244 39,745 167,106 5,471 Transfers 64,000 91,194 79,778 (69,813) (1,600,000) - - - - (2,319) Total business-type activities 349,118 683,126 1,035,967 1,094,024 (735,506) 128,083 72,244 39,745 167,106 3,152 Total primary government 16,959,980$ 25,358,648$ 24,254,392$ 30,969,818$ 31,956,193$ 27,242,987$ 23,694,596$ 20,575,421$ 21,826,882$ 21,493,361$ Change in Net PositionGovernmental activities 16,432,751$ 22,525,748$ 8,099,375$ 14,845,523$ 17,406,049$ (1,759,850)$ (917,126)$ 2,321,061$ 2,007,027$ (456,330)$ Business-type activities 4,103,221 5,669,935 5,173,696 6,256,462 7,139,181 6,680,763 3,181,408 4,588,651 4,360,475 3,566,675 Total primary government 20,535,972$ 28,195,683$ 13,273,071$ 21,101,985$ 24,545,230$ 4,920,913$ 2,264,282$ 6,909,712$ 6,367,502$ 3,110,345$ Source: Town of Oro Valley Finance Department* Impact fees in fiscal year 2011 are now presented in program revenues.Fiscal YearPage 107
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013General FundNonspendable -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Restricted - - - - - - - - - - Committed - - - - - - - - - - Assigned - - - - - - - 1,769,333 1,608,035 1,608,035 Unassigned - - - - - - - 9,237,805 9,793,614 11,529,070 Reserved 7,172 112 7,267 - - - - - - - Unreserved 9,377,367 11,744,160 14,356,224 18,477,706 16,666,388 15,940,438 11,904,429 - - - Total general fund 9,384,539$ 11,744,272$ 14,363,491$ 18,477,706$ 16,666,388$ 15,940,438$ 11,904,429$ 11,007,138$ 11,401,649$ 13,137,105$ All Other Governmental FundsNonspendable -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Restricted - - - - - - - 9,128,505 11,454,390 3,730,312 Committed - - - - - - - 840,704 622,919 4,166,818 Assigned - - - - - - - - - - Unassigned - - - - - - - - - - Reserved 17,912 36,076 80,624 - - - - - - - Unreserved, reported in:Special revenue funds 2,720,472 3,856,925 4,439,573 4,891,095 5,534,192 5,887,082 5,868,523 - - - Capital projects funds 10,573,180 10,972,912 4,985,836 4,520,718 15,396,024 9,071,398 3,933,044 - - - Debt service funds 314,301 403,332 280,055 245,208 263,478 158,816 1,929,635 - - - Total all other governmental funds 13,625,865$ 15,269,245$ 9,786,088$ 9,657,021$ 21,193,694$ 15,117,296$ 11,731,202$ 9,969,209$ 12,077,309$ 7,897,130$ Source: Town of Oro Valley Finance DepartmentNote:(MODIFIED ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 54 were adopted in fiscal year 2011. The standard replaces the previous reserved and unreserved fund balance categorieswith the following five fund balance classifications; nonspendable, restricted, committed, assigned, and unassigned fund balance.Fiscal YearTOWN OF ORO VALLEY, ARIZONAFUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARSPage 108
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013RevenuesTaxes 8,296,552$ 9,939,273$ 12,891,037$ 17,351,805$ 17,685,650$ 15,883,093$ 13,480,150$ 12,086,962$ 13,325,105$ 14,780,542$ Intergovernmental 23,990,005 25,339,848 16,773,215 18,405,713 21,863,875 17,616,213 17,940,749 18,040,619 19,723,086 16,817,756 Fines and forfeitures 463,150 326,427 462,246 429,458 391,921 413,720 612,031 560,941 895,820 551,962 Licenses and permits 2,536,576 2,524,484 2,433,264 2,368,851 2,792,684 1,507,930 1,108,411 1,059,309 1,185,862 1,813,947 Charges for services 823,287 880,582 942,676 1,026,921 1,040,694 1,066,376 965,455 926,135 1,209,814 1,630,238 Contributions and donations 30,251 - 97,327 19,171 249,999 1,000 59 15,000 995 27,229 Special assessments - 1,547,819 - 189,820 193,023 367,539 368,152 365,811 366,028 365,935 Impact fees 1,189,848 1,488,301 1,098,977 1,038,217 910,741 441,020 584,113 481,619 417,742 988,342 Investment earnings 281,518 557,238 991,151 1,471,641 1,590,654 113,995 95,625 39,124 189,606 265,787 Other revenues 229,411 458,034 325,428 135,261 555,790 233,123 216,030 297,109 460,512 349,326 Total revenues 37,840,598$ 43,062,006$ 36,015,321$ 42,436,858$ 47,275,031$ 37,644,009$ 35,370,775$ 33,872,629$ 37,774,570$ 37,591,064$ ExpendituresGeneral government 5,800,477 5,676,217 9,988,956 7,019,030 8,767,496 9,586,029 9,452,778 9,848,393 9,212,866 9,289,771 Public safety 9,426,215 10,089,128 11,636,915 11,808,799 13,549,170 14,289,423 12,979,291 11,928,567 11,993,864 12,342,349 Highways and streets 17,193,322 21,727,223 13,773,561 3,768,851 4,107,871 3,848,725 3,475,556 3,288,349 3,191,654 3,513,479 Culture and recreation 2,540,949 2,640,777 3,868,249 3,109,228 3,324,066 3,416,305 3,157,369 3,031,520 2,954,549 2,468,129 Capital Outlay - - - 10,662,190 13,090,313 11,332,914 3,189,765 7,014,659 6,929,834 11,053,739 Debt ServicePrincipal retirement 541,290 2,559,190 2,856,595 1,077,813 3,403,102 938,900 3,400,877 3,459,970 3,052,953 571,910 Interest and fiscal charges 426,472 589,725 731,358 921,205 907,658 1,034,061 831,580 470,578 554,274 498,729 Payment to bond escrow agent - - - - - - 6,279,112 - - - Bond Issuance costs 93,415 251,327 107,897 28,868 - - 26,550 - 75,800 - Total expenditures 36,022,140 43,533,587 42,963,531 38,395,984 47,149,676 44,446,357 42,792,878 39,042,036 37,965,794 39,738,106 Excess of revenues 1,911,873$ (220,254)$ (6,840,313)$ 4,069,742$ 125,355$ (6,802,348)$ (7,395,553)$ (5,169,407)$ (191,224)$ (2,147,042)$ over (under) expendituresTOWN OF ORO VALLEY, ARIZONACHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)Fiscal YearPage 110
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Other Financing Sources (Uses)Premium on bonds issued - - - 25,719 - - - - 113,835 - Proceeds from loan - - - - - - - - - - Issuance of long-term loan payable 5,000,000 4,030,033 - - 8,000,000 - - - - - Issuance of refunding debt 5,572,700 - - 1,389,180 - - - - - - Payment to bond escrow agent (5,478,016) - - (1,540,438) - - - - - - Issuance of long-term debt - - 4,164,050 - - - - 2,445,000 2,580,000 - Transfers in 1,182,168 1,105,422 1,248,569 2,927,754 8,447,951 1,950,898 10,012,679 860,143 1,003,666 1,704,272 Transfers out (1,246,168) (1,196,616) (1,328,347) (2,857,941) (6,847,951) (1,950,898) (10,012,679) (795,020) (1,003,666) (2,001,953) Total other financing sources (uses) 5,030,684 3,938,839 4,084,272 (55,726) 9,600,000 - - 2,510,123 2,693,835 (297,681) Net change in fund balances 6,942,557$ 3,718,585$ (2,756,041)$ 4,014,016$ 9,725,355$ (6,802,348)$ (7,395,553)$ (2,659,284)$ 2,502,611$ (2,444,723)$ Debt service as a percentage of 4.62% 13.05% 13.02% 7.17% 12.51% 5.88% 10.60% 12.36% 11.55% 3.76%noncapital expendituresSource: Town of Oro Valley Finance DepartmentFiscal YearPage 111
2013 2004Percentage Percentageof Total Town of Total TownEmployerEmployees Rank Employment Employees Rank EmploymentVentana Medical Systems 1,500 1 8.38% 413 2 2.37%Oro Valley Hospital 616 2 3.44%Hilton El Conquistador Golf & Tennis Resort 460 3 2.57% 425 1 2.44%Amphitheater Public Schools 424 4 2.37% 140 7 0.80%Town of Oro Valley 321 5 1.79% 334 3 1.92%Walmart Supercenter 249 6 1.39%Fry's Food & Drug Store 246 7 1.37% 295 4 1.69%Splendido at Rancho Vistoso 176 8 0.98%Kohls 125 9 0.70%Target 120 10 0.67% 150 6 0.86%Hilton El Conquistador Country Club260 5 1.49%Long Realty130 8 0.71%Home Depot124 9 0.67%Stone Canyon Golf/Golf Club at Vistoso117 10 0.67%Total 4,237 23.67% 2,388 13.62%Source: Principal Employers Arizona Workforce InformerTOWN OF ORO VALLEY, ARIZONAPRINCIPAL EMPLOYERS(UNAUDITED)CURRENT FISCAL YEAR AND FISCAL YEAR NINE YEARS PRIORPage 112
Fiscal Year 2013 Fiscal Year 2005Percentage of Percentage ofSales Tax Total Sales Sales Tax Total SalesTaxpayerBusiness TypePayments Rank Tax Payments Payments Rank Tax PaymentsTaxpayer A Utility 1,762,418$ 1 12.43%Taxpayer B Retail Trade 839,695 2 5.92%Taxpayer C Retail Trade 588,990 3 4.15% 584,705$ 3 6.27%Taxpayer D Utility 468,554 4 3.30%Taxpayer E Construction 461,178 5 3.25%Taxpayer F Utility 403,076 6 2.84%Taxpayer G Retail Trade 401,374 7 2.83% 532,775 4 5.72%Taxpayer H Retail Trade 325,141 8 2.29%Taxpayer I Accomodation 303,832 9 2.14% 1,086,800 1 11.66%Taxpayer J Construction 301,394 10 2.13%Taxpayer K Retail Trade221,823 5 2.38%Taxpayer L Construction709,681 2 7.61%Taxpayer M Construction214,447 6 2.30%Taxpayer N Construction179,052 7 1.92%Taxpayer O Retail Trade162,693 8 1.75%Taxpayer P Construction157,634 9 1.69%Taxpayer Q Construction123,461 10 1.32%Total 5,855,652$ 41.30% 3,973,071$ 42.63%Source: Arizona Department of RevenueNote: 2005 is the first fiscal year of available data of sales tax payments by business typeTOWN OF ORO VALLEY, ARIZONAPRINCIPAL SALES TAXPAYERSCURRENT FISCAL YEAR AND FISCAL YEAR EIGHT YEARS PRIOR(UNAUDITED)Page 113
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Construction 3,014$ 3,594$ 5,602$ 6,895$ 7,038$ 5,143$ 2,110$ 1,707$ 1,738$ 2,842$ Manufacturing 29 137 165 181 280 230 230 266 258 258 Transportation, Warehousing, Communications & Utilities 50 116 91 226 1,279 1,632 1,554 1,534 2,450 2,785 Wholesale Trade 46 54 56 58 69 54 75 93 106 110 Retail Trade 2,722 2,942 3,229 3,665 4,017 4,264 4,544 4,720 4,925 5,153 Restaurants, Bars & Lodging 1,556 1,888 2,392 2,720 2,775 2,333 2,283 2,314 2,314 2,164 Finance, Insurance & Real Estate 101 142 155 859 496 324 381 324 333 335 Services 393 379 262 313 312 322 378 417 456 456 All Other (13) 68 197 167 337 896 627 102 103 75 Cable Franchise 372 402 435 478 517 507 509 515 525 540 Total 8,270$ 9,722$ 12,584$ 15,562$ 17,120$ 15,705$ 12,691$ 11,992$ 13,208$ 14,718$ Town sales tax rate* 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Source: Arizona Department of Revenue*Note:1% Additional Bed Tax Effective May 1, 19903% Additional Bed Tax Effective September 1, 20014% Construction Sales Tax Effective May 1, 20046% Additional Bed Tax Effective January 1, 20062% Utility Sales Tax Effective April 1, 20072% Additional Utility Sales Tax Effective August 1, 2011Fiscal YearTOWN OF ORO VALLEY, ARIZONATAXABLE SALES BY CATEGORYLAST TEN FISCAL YEARS (UNAUDITED)Page 114
Town of Oro
Town of Oro Town of Oro Valley Town of Oro
Fiscal Valley Valley Construction Valley
Year Sales Tax Bed Tax Sales Tax Utility Sales Tax Pima County
2004 2.00% 3.00% 4.00% 0.00% 5.60%
2005 2.00% 3.00% 4.00% 0.00% 5.60%
2006 2.00% 6.00% 4.00% 0.00% 6.10%
2007 2.00% 6.00% 4.00% 2.00% 6.10%
2008 2.00% 6.00% 4.00% 2.00% 6.10%
2009 2.00% 6.00% 4.00% 2.00% 6.10%
2010 2.00% 6.00% 4.00% 2.00% 7.10%
2011 2.00% 6.00% 4.00% 2.00% 7.10%
2012 2.00% 6.00% 4.00% 4.00% 7.10%
2013 2.00% 6.00% 4.00% 4.00% 6.10%
Source: Arizona Department of Revenue
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 115
Governmental Activities Business-Type ActivitiesCertificates SpecialTotal PercentageFiscal Capital of Loan Excise Tax Assessment Revenue Notes Capital Loan Primary of Personal PerYear Leases Participation Payable Bonds Bonds Bonds Payable Leases Payable Government Income Capita2004- 610,000 6,716,000 9,734,132 - 65,625,010 - - - 82,685,142 6.08% 2,193 2005- 420,000 4,803,100 9,413,909 3,945,000 64,222,360 - - - 82,804,369 5.67% 2,106 2006- 215,000 2,604,143 13,173,254 3,945,000 64,437,008 - - - 84,374,405 5.48% 2,098 2007- - 2,500,000 12,891,148 3,760,000 61,568,852 - - - 80,720,000 4.81% 1,897 2008- - 8,000,000 12,183,046 3,565,000 59,586,954 - - 5,731,766 89,066,766 5.02% 2,040 2009- - 8,000,000 11,449,146 3,360,000 57,575,854 - 107,046 5,788,122 86,280,168 4.72% 1,975 2010- - 5,513,133 4,939,750 3,145,000 52,305,500 - 123,883 6,305,650 72,332,916 3.86% 1,662 2011- - 2,513,133 7,149,780 2,920,000 49,803,970 - 35,392 5,473,096 67,895,371 3.73% 1,656 2012- - - 9,485,968 2,685,000 45,988,331 - - 5,893,122 64,052,421 3.85% 1,550 2013- - - 9,155,743 2,435,000 43,349,121 - 185,307 5,575,041 60,700,212 3.59% 1,409 Source: Town of Oro Valley Finance Department and U.S. Census BureauTOWN OF ORO VALLEY, ARIZONARATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARS (UNAUDITED)Page 116
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable Debt
Pima County 1,349,792,000$ 7.25% 97,859,920$
Pima County Community College District 1,355,000 7.25% 98,238
Amphitheater Unified School District No. 10 75,135,000 18.15% 13,637,003
Total Overlapping 111,595,160
Town of Oro Valley 11,590,743 100.00% 11,590,743
Total Direct 11,590,743
Total direct and overlapping debt 123,185,903$
Source: Pima County, Pima County Community College District and Amphitheater Unified School District No. 10.
(1) Proportion applicable to the Town of Oro Valley, Arizona, is computed on the ratio of secondary
assessed valuation for 2012-13.
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2013
(UNAUDITED)
Page 117
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Debt Limit 84,941,970$ 93,101,081$ 108,807,180$ 120,435,053$ 151,537,994$ 178,543,952$ 180,420,396$ 174,800,436$ 163,628,543$ 154,118,112$ Total net debt applicable to limit -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Legal debt margin 84,941,970$ 93,101,081$ 108,807,180$ 120,435,053$ 151,537,994$ 178,543,952$ 180,420,396$ 174,800,436$ 163,628,543$ 154,118,112$ Total net debt applicable to the limitas a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Source: Town of Oro Valley Finance DepartmentFiscal YearTOWN OF ORO VALLEY, ARIZONALEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS(UNAUDITED)Page 118
Net secondary assessed valuation 592,761,968$
Water, Sewer, Light, Parks, Open Space and
Recreational Facility Bonds
Debt limit - 20% of secondary net assessed valuation 118,552,394$
Debt applicable to limit
General obligation bonds outstanding -$
Less amount set aside for repayment of debt -
Net debt applicable to limit -
20% legal debt margin 118,552,394$
All other general obligation bonds
Debt Limit - 6% of secondary net assessed valuation 35,565,718
Debt applicable to limit
General obligation bonds outstanding -$
Less amount set aside for repayment of debt -
Net debt applicable to limit -
All other general obligation bonds debt margin 35,565,718
Total legal debt margin 154,118,112$
Source: Pima County Assessor's Office
TOWN OF ORO VALLEY
CALCULATION OF LEGAL DEBT MARGIN
JUNE 30, 2013
(UNAUDITED)
Page 119
Water Utility Revenue Bonds
Fiscal Gross
Year Revenues Principal Interest Total Coverage
2004 12,202,664 1,478,710 2,650,195 4,128,905 2.96
2005 12,544,928 1,473,710 2,949,409 4,423,119 2.84
2006 14,989,621 1,907,362 2,888,226 4,795,588 3.13
2007 14,810,173 2,336,330 2,552,081 4,888,411 3.03
2008 17,668,212 1,981,898 2,452,583 4,434,481 3.98
2009 16,223,544 2,011,100 2,784,444 4,795,544 3.38
2010 15,207,113 5,270,354 2,689,427 7,959,781 1.91
2011 15,359,681 2,501,530 2,505,960 5,007,490 3.07
2012 15,983,999 2,370,180 2,190,894 4,561,074 3.50
2013 16,732,600 2,536,840 1,732,008 4,268,848 3.92
Governmental Revenue Bonds
Fiscal Gross
Year Revenues Principal Interest Total Coverage
2004 19,837,894 361,290 386,228 747,518 26.54
2005 21,011,720 456,290 433,108 889,398 23.62
2006 25,018,727 452,638 415,640 868,278 28.81
2007 29,200,152 788,670 642,711 1,431,381 20.40
2008 30,629,130 708,102 501,150 1,209,252 25.33
2009 28,084,482 733,900 486,372 1,220,272 23.01
2010 25,695,598 6,510,516 933,536 7,444,052 3.45
2011 23,921,715 234,970 253,984 488,954 48.92
2012 25,085,767 304,820 314,703 619,523 40.49
2013 28,135,868 321,910 371,951 693,861 40.55
Certificates of Participation
Fiscal Gross
Year Revenues Principal Interest Total Coverage
2004 19,837,894 180,000 15,768 195,768 101.33
2005 21,011,720 190,000 26,690 216,690 96.97
2006 25,018,727 205,000 16,566 221,566 112.92
2007 29,200,152 - - - 0.00
2008 30,629,130 - - - 0.00
2009 28,084,482 - - - 0.00
2010 25,695,598 - - - 0.00
2011 23,921,715 - - - 0.00
2012 25,085,767 - - - 0.00
2013 28,135,868 - - - 0.00
Special Assessment
Fiscal Gross
Year Revenues Principal Interest Total Coverage
2004 - - - - 0.00
2005 - - - - 0.00
2006 - - 176,967 176,967 0.00
2007 379,840 185,000 186,828 371,828 0.00
2008 365,810 195,000 177,577 372,577 0.98
2009 367,539 205,000 248,429 453,429 0.81
2010 368,152 215,000 152,203 367,203 1.00
2011 365,811 225,000 147,548 372,548 0.98
2012 366,028 235,000 132,423 367,423 1.00
2013 365,935 250,000 117,576 367,576 1.00
Source: Town of Oro Valley Finance Department
Debt Service
TOWN OF ORO VALLEY, ARIZONA
PLEDGED-REVENUE COVERAGE
LAST TEN FISCAL YEARS
(UNAUDITED)
Debt Service
Debt Service
Debt Service
Page 120
Personal Per
Income Capita
(thousands Personal Unemployment
Year Population of dollars) Income Rate
2004 37,700 1,360,700,031 36,093 2.6%
2005 39,310 1,461,373,787 37,176 2.5%
2006 40,215 1,539,868,259 38,291 3.0%
2007 42,551 1,678,195,258 39,440 2.6%
2008 43,651 1,773,226,205 40,623 3.0%
2009 43,694 1,828,222,176 41,841 5.1%
2010 43,521 1,875,613,105 43,097 6.2%
2011 41,011 1,820,460,164 44,390 6.0%
2012 41,335 1,661,839,665 40,204 6.4%
2013 43,070 1,692,780,210 39,303 6.4%
Source: US Census Bureau, Arizona Employment statistics and Pima Association of Governments
TOWN OF ORO VALLEY, ARIZONA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 121
2013201220112010200920082007200620052004Function/ProgramAdministrationTown Clerk 4.544.444.604.004.604.604.604.504.504.00Town Manager 7.00 7.10 7.10 8.108.50 8.10 6.00 6.00 5.00 4.00Human Resources 5.005.005.004.004.004.004.003.003.003.00Economic Development 3.00 1.00 1.001.40 1.40 2.25 2.25 2.00 2.00 2.00Finance 7.00 7.00 7.00 7.00 9.00 9.00 8.00 7.50 7.50 7.50Information Systems 6.50 6.50 8.00 8.00 7.008.00 5.00 4.00 4.00 2.00Legal 6.00 8.00 8.00 7.00 10.0010.25 10.25 10.25 6.25 8.00Community DevelopmentBuilding Safety 0.00 0.00 0.00 13.00 16.00 18.00 17.00 16.00 16.00 17.00Community Development Admin. 0.00 0.00 0.00 0.00 0.00 0.000.00 4.00 4.00 4.00Planning & Zoning 0.00 0.00 0.00 13.00 16.00 16.00 14.00 13.50 13.50 13.50Development & Infrastructure Services77.22 73.38 73.10 0.00 0.000.00 0.00 0.00 0.00 0.00Parks and Recreation27.26 20.62 22.70 27.50 27.6028.10 27.00 20.80 20.80 20.30Cultural Resources1.35 1.30 1.30 0.00 0.000.00 0.00 0.00 0.00 0.00Library0.00 18.55 18.40 18.50 18.7019.40 19.30 19.43 14.00 14.00PoliceCivilians 30.25 30.25 29.70 30.7033.00 34.00 34.00 29.00 28.00 29.00Officers 101.44 97.96 95.00 97.90102.40 108.00 105.00 96.00 92.00 88.00Magistrate Court8.00 8.00 9.00 9.00 9.008.50 8.50 8.50 8.50 7.50Public Works0.00 0.00 0.00 47.70 52.9056.10 53.13 54.00 51.50 28.50Water Utility36.00 36.00 34.00 35.00 36.3035.50 35.50 34.00 34.00 33.00Total320.56 325.10 323.90 331.80 356.4369.80 353.53 332.48 314.55 285.30Source: Town of Oro Valley Finance DepartmentTOWN OF ORO VALLEY, ARIZONAFULL-TIME EQUIVALENT EMPLOYEES BY FUNCTIONLAST TEN FISCAL YEARS(UNAUDITED)Full-time Equivalent Employees as of June 30Page 122
Fiscal Irrigation Construction Turf Wholesale/Year Residential Commercial Irrigation Reclaimed Construction Reclaimed Turf Reclaimed Unmetered Total2004 6,396,018 499,034 751,420 - 253,128 - 1,140,124 - 53,346 9,093,070 2005 6,758,806 515,989 833,179 - 401,095 - 1,200,402 - - 9,709,471 2006 7,227,509 614,474 921,364 - 368,784 - 940,753 670,968 1,235 10,745,087 2007 7,187,885 614,404 978,556 1,555 542,879 - 680,833 1,015,709 - 11,021,820 2008 7,511,067 667,910 1,146,222 796 652,446 1,630 666,558 1,039,969 - 11,686,598 2009 7,573,960 749,019 1,093,852 9,007 349,994 3,757 265,413 1,389,783 - 11,434,785 2010 8,040,762 902,432 1,152,529 14,240 222,447 720 354,308 1,383,592 - 12,071,030 2011 8,043,658 921,825 1,166,921 13,258 92,257 814 130,704 1,669,045 - 12,038,482 2012 7,761,639 954,472 1,050,602 13,466 120,830 653 115,568 1,561,750 - 11,578,980 2013 7,752,934 962,824 1,040,793 19,000 196,354 884 135,720 1,507,574 - 11,616,083 Source: Town of Oro Valley Water Utility DepartmentWATER UTILITY REVENUES BY USER TYPELAST TEN FISCAL YEARS(UNAUDITED)TOWN OF ORO VALLEY, ARIZONAPage 123
2004200520062007200820092010201120122013Function/ProgramPoliceBurglaries 94 124 97 112 125 125 120 100 134 105Citations (traffic) 9,413 8,660 8,203 8,183 7,497 9,256 6,736 5,244 5,084 5,456Investigations 3,788 4,216 5,106 6,656 6,892 917 732 746 711 681Total Arrests 2,184 2,076 2,053 2,236 2,254 2,478 2,176 1,932 1,716 1,564Thefts 572 580 568 575 577 528 567 656 571 563Development & Infrastructure ServicesStreet resurfacing (miles) 8.0 17.3 5.4 7.7 10.5 53.4 14.8 13.9 22.4 30.5Parks and RecreationRecreation Programs Held Annually 23 30 38 42 46 46 40 47 37 35Months of Public Pool Operations 10 10 10 10 10 10 12 12 12 10Parks Maintenance Man-Hours Worked 13,520 13,520 13,520 15,600 17,472 16,288 16,120 18,680 16,016 17,000LibraryCollection volume 75,000 80,000 86,000 90,000 96,000 95,750 100,142 100,652 97,364 0WaterNew connections 533 377 508 367 346 196 68 61 97 213Total connections 16,578 16,955 17,463 17,830 18,177 18,373 18,441 18,502 18,599 18,812TransitTotal route miles 177,283 190,609 165,202 165,202 175,841 163,964 138,752 138,333 200,058 353,936Passengers 13,991 15,937 14,387 14,858 16,908 17,101 15,573 14,873 20,119 32,442Source: Town of Oro Valley Finance DepartmentNote: Oro Valley Library was transferred to Pima County Library District on January 1, 2013.TOWN OF ORO VALLEY, ARIZONAOPERATING INDICATORS BY FUNCTIONLAST TEN FISCAL YEARS(UNAUDITED)Page 124
Base Rate Tier 1 Tier 2 Tier 3 Tier 4 GPF
Year monthly per 1,000 per 1,000 per 1,000 per 1,000 per 1,000
2004 12.30 1.92 2.55 3.25 N/A 0.21$
2005 12.65 1.98 2.68 3.58 N/A 0.21
2006 12.65 1.98 2.68 3.58 N/A 0.21
2007 13.25 2.08 2.81 3.76 N/A 0.25
2008 13.25 2.08 2.81 3.76 5.00$ 0.40
2009 13.91 2.18 2.95 3.95 5.25 0.55
2010 14.19 2.20 2.99 4.03 5.38 0.75
2011 14.19 2.20 2.99 4.03 5.38 0.75
2012 14.19 2.20 2.99 4.03 5.38 0.95
2013 14.19 2.20 2.99 4.03 5.38 0.95
Source: Town of Oro Valley Water Utility
TOWN OF ORO VALLEY, ARIZONA
WATER RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 125
2004200520062007200820092010201120122013Function/ProgramPoliceStations 1111111111Substations 3332223333Patrol units 93 103 105 105 113 109 108 53 67 66Other fleet 0000000554243Development & Infrastructure ServicesStreets (miles) 182.7 188.0 191.3 201.9 220.1 220.1 214.0 203.8 203.8 205.1Streetlights 171 187 187 193 218 253 272 234 270 272Traffic signals 8 10 10 15 16 16 18 16 17 19Parks and recreationAcreage 87 87 300 300 300 300 374 374 436 436Playgrounds2222222222Baseball/softball diamonds7777777777WaterWells 21 22 22 22 19 22 18 22 22 22Storage capacity (MG) 16 17 17 17.5 18 19 19 20 20 20Booster capacity 29 28 28 28 27 27 26 25 25 25TransitTransit vans 8999999555Transit mini buses 000000051012Source: Town of Oro Valley Finance DepartmentTOWN OF ORO VALLEY, ARIZONACAPITAL ASSETS STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS(UNAUDITED)Page 126